Colliers International Group Inc.

requires us to advise that the discussion scheduled to take place today may contain forward-looking statements that involve known and unknown risks and uncertainties. Actual results may be materially different from any future results, performance, or achievements contemplated in the forward-looking statements. Additional information concerning factors that could cause actual results to materially differ from those in the forward-looking statements is contained in the company's annual information form, as filed with the Canadian Securities Administrators, and the company's annual report on Form 40-F, as filed with the U.S. Securities and Exchange Commission. As a reminder, today's call is being recorded. Today is Tuesday, May 6th, 2025. And at this time, for opening remarks and introductions, I'd like to turn the call over to the Global Chairman and Chief Executive Officer, Mr. Jay Hennick. Please go ahead, sir.

Thank you, operator. Good morning, and thanks for joining us for the first quarter conference call. As the operator mentioned, I'm Jay Hennick, Chairman and Chief Executive Officer of Collier's. And with me today is Christian Mayer, our Chief Financial Officer. As always, this call is webcast and available in the investor relations section of our website, along with a detailed presentation slide deck. We're pleased with our operating results for the quarter, which met expectations and keep us on track to deliver on our full year targets. We took a cautious outlook at the beginning of the year, given the macroeconomic and political uncertainty at the time, and we're sure glad we did. At Colliers, market volatility has never derailed our focus on creating long-term value. Our leadership team has consistently navigated uncertainty with discipline and has taken the opportunity to seize opportunities when they present themselves. This time is no different. That said, we're seeing significant growth across business segments and geographies, which we expect will continue particularly in the second half of the year. Our newly established engineering segment delivered strong internal growth in the quarter and combined with acquisitions posted meaningful gains over the prior year. With more than 9,000 professionals and over $1.5 billion in annualized revenue. We're now one of the top global players in the industry with additional opportunities for growth. In investment management, AUM exceeded $100 billion for the first time. Fundraising is gaining momentum driven by new vintages and new investment strategies. We're leveraging our scale, our expertise, and our proprietary data and relationships to deliver strong performance and innovative opportunities for our investors. Our real estate services segment is a global leader, ranking among the top three worldwide with a balanced, diversified platform supported by a strong foundation of recurring revenues. With 14,000 professionals globally, this segment has consistently delivered year over year growth and strong cash flows, despite obvious tailwinds in capital markets. Once the market stabilizes, we expect activity levels to rise, which will drive even greater profitability to this division. We also advanced our growth strategy with the acquisition of Ethos Urban, adding best-in-class urban planning capabilities in Australia, the pending acquisition of Triovest, which strengthens our leadership in high-value recurring real estate services in Canada, and the recent acquisition of Terra Consulting, further expanding our infrastructure capabilities in our U.S. engineering platform. With three powerful growth engines, a world-class team, and a 30-year record of performance through all market cycles. Colliers is well positioned to continue delivering exceptional value for shareholders. Now, I'll turn things over to Christian for his financial report, and then we'll open up the call to your questions. Christian?

Thank you, Jay, and good morning, everyone. Please note that the non-GAAP measures discussed here today are as defined in the materials accompanying this call and all references to revenue growth are on a local currency basis. Revenues for our first quarter are $1.1 billion, up 16% relative to the prior year period, with significant growth coming from our engineering segment. Internal growth was 4% overall and was led by engineering, which had robust increases in activity, particularly with public sector clients in all four of our key end markets, property infrastructure, water, and environmental. First quarter adjusted EBITDA was $116 million, up 7% over the prior year with contribution from both internal growth and acquisitions. Overall real estate services net revenue grew modestly for the first quarter. Capital markets activity was up 10% globally. Sales brokerage was up in all geographic regions and all asset classes. Debt finance activity increased nicely, particularly refinancing volume in our U.S. multifamily franchise. Leasing revenues were down 5% relative to a strong prior year first quarter that had a couple of larger specialty asset class transactions. we expect leasing revenues to return to year-over-year growth going forward. The segment's net margin declined modestly to 6.6% for the seasonally slow first quarter, primarily due to continued healthy investments in recruiting as well as revenue mix. Engineering performed strongly in Q1, with net revenue growth of 63%, attributable to both recent acquisitions and low teens percentage internal growth. The net margin increased to 8.4%, up 110 basis points relative to the prior year period due to improvements in staff utilization and operating leverage. We continue to carefully monitor our clients for potential tariff or government policy related impacts, but to date are not aware of any significant issues. Investment management net revenues, excluding pass-through performance fees, were flat as expected. The net margin was 46.2%, up from 44.2% last year, with lower incentive compensation partially offset by higher headcount. We raised $1.2 billion of new capital commitments during the first quarter, which was more than doubled the amount we raised in the prior year period. Notably, three quarters of the capital commitments raised during the quarter were in traditional real estate strategies, indicating increased investor interest as conditions improve. We expect our fundraising to accelerate in the second quarter with new vintages of existing products, as well as new investment strategies entering the market. Assets under management at March 31st were 100.3 billion, up 1.4 billion from year end. Increases came from fundraising and positive mark-to-market adjustments, partially offset by portfolio dispositions that returned capital to investors. Our cash flow from operations and free cash flow for the first quarter improved significantly year over year. On a trailing 12-month basis, our free cash flow exceeded $400 million and represented a conversion rate of 136% of adjusted net earnings. Across each of our business segments, our operations are working capital light and have modest capex, resulting in strong free cash flow that can be reinvested in our growth. Over the long term, we are targeting a conversion rate of approximately 100% of adjusted net earnings. Moving to our balance sheet, our leverage ratio defined as net debt to perform an adjusted EBITDA was 2.2 times as of March 31st. As expected, leverage increased modestly in the first quarter given seasonal operating cash outflows. For the second quarter, we expect leverage to remain in the two times range then decline to approximately 1.5 times by year end. This assumes no material acquisitions. Our full year financial outlook remains unchanged. As Jay noted in his comments, we took a cautious posture when we set our outlook back in February, knowing that international trade tensions and interest rate volatility could impact our clients and our businesses. We currently expect transactional revenue choppiness to continue in the second quarter, but see an improvement in operating conditions in the back half of the year. That concludes my prepared remarks. Operator, can you please open the line for questions?