$CWK earnings report

Cushman & Wakefield delivered broad third-quarter growth, with revenue of $2,807.8 million, up 8%. Leasing revenue increased 15% and Capital markets revenue increased 18%, while Services revenue grew 5%. The strongest activity was in the Americas, where Leasing rose 19% and Capital markets rose 24%. Management attributed Leasing momentum to broad-based demand for high-quality assets, including continued strength in office, industrial leasing and data centers. Services growth was supported by global facilities management client wins, mandate expansions and higher project management revenue in EMEA and APAC.

The earnings outcome was stronger on an adjusted basis than on a GAAP basis. Operating income rose 21% to $129.9 million and Adjusted EBITDA rose 15% to $183.7 million. Adjusted net income increased 29% to $87.8 million and Adjusted EPS increased 28% to $0.37. However, GAAP net income rose only 1% to $52.1 million and diluted EPS remained flat at $0.22. The divergence reflected higher tax expense, a higher net unrealized loss on real estate investments, and strategic investments and cost inflation, partially offset by lower interest expense and improved equity-method earnings.

Cost growth broadly tracked revenue in the quarter. Total costs of services rose 8%, including a 13% increase in cost of services provided to clients tied principally to approximately $119.0 million of higher employment costs, commissions associated with brokerage revenue and salaries associated with Services growth. Operating, administrative and other expenses increased 3%, driven by approximately $9.0 million of higher employment costs, strategic investments and cost inflation. Interest expense declined 12% to $49.2 million following debt prepayments, 2028 Notes redemptions and term-loan repricings.

Nine-month operating trends remained positive, with revenue up 10%, operating income up 17% and Adjusted EBITDA up 15%. Yet nine-month net income declined 17% to $92.2 million. The release identified the U.K. pension buy-out settlement loss, the A/R Securitization servicing liability, higher income tax expense, technology and occupancy costs, strategic investments and cost inflation as the principal drags. Nine-month free cash flow was $(34.1) million, compared with $58.7 million in the prior-year period, although trailing-twelve-month free cash flow was $200.2 million.

The balance sheet actions continued to reduce nearer-term debt obligations. The company reported $1.5 billion of liquidity and $2.1 billion of net debt as of September 30, 2026. It subsequently redeemed the remaining $150.0 million principal amount of the 2028 Notes on October 21, 2026, leaving no long-term debt arrangements maturing prior to 2030. Management maintained full-year 2026 Adjusted EPS guidance for 18%-23% growth. The central reported watchpoints are sustained Americas transaction activity, recovery in EMEA Leasing and Capital markets, cost discipline, tax expense, and the effect of credit-loss provisions associated with the Greystone JV and Onewo JV.

Cushman & Wakefield reported second-quarter revenue of $2,762.6 million, up 11% in both USD and local currency. Growth was led by Leasing, which increased 27% to $628.5 million, and Services, which increased 8% to $1,801.3 million. Management attributed Services growth to facilities management, including new client wins and expansions of existing mandates, and to project management in the Americas and EMEA. Leasing growth was driven by the Americas across deal sizes, supported by office, industrial and data-center activity.

The revenue mix was not uniformly positive. Capital markets revenue declined 1% to $206.4 million as a 6% Americas decline, particularly in mid-sized multi-family transactions, outweighed strength in EMEA and APAC. Valuation and other revenue increased 10% to $126.4 million. For the first half, total revenue increased 11% to $5,298.4 million, while first-half Leasing revenue increased 24% and Capital markets revenue increased 6%.

Costs expanded alongside revenue. Total costs of services increased 12% to $2,250.6 million, with cost of services provided to clients up 14%, including approximately $120.0 million of higher employment costs. Operating, administrative and other expense increased 10% to $349.3 million, citing salaries, bonuses, occupancy costs, strategic investments and cost inflation. Despite these costs, operating income increased 9% to $134.2 million and Adjusted EBITDA increased 14% to $183.6 million.

GAAP profitability trailed the operating trend. Net income declined 8% to $52.7 million and diluted EPS declined to $0.22 from $0.25. Interest expense, net of interest income rose 12% to $59.6 million, reflecting $4.5 million of credit agreement amendment costs and a $2.0 million loss on debt extinguishment. Adjusted net income increased 20% to $83.6 million and Adjusted EPS increased 17% to $0.35. First-half GAAP net income decreased 32% to $40.1 million, while first-half Adjusted EBITDA increased 14% and Adjusted EPS increased 28%.

The company amended its credit agreement in June 2026, reducing the term loan interest rate by 50 basis points to 1-month Term SOFR plus 2.25%, extending maturity to 2033 and increasing principal by $352.5 million. It used proceeds, together with a May redemption, to reduce outstanding 2028 senior secured notes principal by $450.0 million in the quarter. Liquidity was $1.5 billion as of June 30, 2026. Management raised 2026 annual Adjusted EPS growth guidance to 18%-23% from 15%-20%, making the durability of leasing and Services growth, expense control and capital-markets recovery central to the outlook.