Colliers International Group Inc.

International Third Quarter Investors Conference Call. Today's call is being recorded. Legal counsel 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 in the company's annual report on Form 40F as filed with the U.S. Securities and Exchange Commission. As a reminder, today's call is being recorded. Today is Tuesday, November 4 of 2025. And at this time, for opening remarks and introduction, I would like to turn the call over to the Global Chairman and Chief Executive Officer, Mr. Jay Hennig. Please go ahead, sir.

Thank you, operator. Good morning, and thank you for joining us for the third quarter conference call. As the operator mentioned, I'm Jay Hennig. Chairman and CEO of Colliers, and with me today is Christian Mayer, CFO. This call is webcast and available in the investor relations section of our website, along with the presentation slide deck. Colliers delivered excellent third quarter results, highlighting our momentum across all segments of our business. In engineering, which includes project management and program management, We achieved impressive growth this quarter. This was driven by both strategic acquisitions, seven completed so far this year, as well as robust organic performance. With a strong pipeline ahead, we are well positioned for continued expansion. In just five years since entering the engineering sector, we have established a significant multi-discipline global platform. This business now generates over 1.7 billion in annualized revenue and employs more than 10,000 professionals. Our unique partnership philosophy and decentralized operating model sets us apart and enables us to continue to capitalize on compelling growth opportunities in this rapidly expanding industry. Real estate services also delivered excellent results. marked by a surge in leasing and capital markets transactions. While capital markets recovery has been gradual, we anticipate an increase in business activity as interest rates stabilize and investor confidence builds. This brings positive tailwinds to our business. We're excited about unifying our operations under the Harrison Street Asset Management brand. And while meaningful change takes time, our plan will strengthen our business and deliver meaningful value to our shareholders. Operationally, our investment management business is highly resilient. Over 85% of our funds are held in long-dated or perpetual investment vehicles, generating long-term and predictable earnings for our shareholders and top-tier investment returns for our investors. Assets under management finished the quarter at 108 billion, a 10% increase from last year, reflecting the success of our acquisition strategy and solid fundraising momentum to date. Harrison Street has multiple products in the market, with new vintages of our flagship funds launching later this quarter and into 2026. These initiatives are expected to drive ongoing revenue growth through next year and beyond. With $9 billion in dry powder across the organization, we are well positioned to deploy significant capital on behalf of our investors. Colliers, with 30 years of visionary leadership and three powerful growth engines, has become a resilient, and highly differentiated professional services and asset management company, a company that is well positioned to continue to seize opportunities and deliver lasting value for our shareholders. Now, let me turn things over to Christian for his financial report, and then we'll open things up to questions. Christian?

Thank you, Jay. And good morning, everyone. As a reminder, All non-GAAP measures referenced today are defined in the materials accompanying this call. Revenue growth figures are presented in local currency terms. Our third quarter revenues were $1.46 billion, up 23% year over year. Our engineering and real estate services segments led the increase from a combination of internal growth and recent acquisitions. Overall internal growth for the quarter was 13%. Adjusted EBITDA was $191 million for the quarter, a 24% increase from last year. Real estate services segment revenues increased 13% overall. Capital markets were up 21%, reflecting sales growth in all geographies and in all asset classes with particular strength in the UK, Japan, and Canada. Debt finance activity was also strong, particularly U.S. multifamily originations. Leasing revenues were up 14%, also led by the U.S., and driven by industrial and office, as well as data centers. Outsourcing revenues increased 8% for the quarter, with their valuation and advisory practice leading the growth. Segment net margin was 11.3%, up 180 basis points year over year, on solid operating leverage from higher transactional revenues, partly offset by continued investments to strengthen our geographic and asset class capabilities. Engineering net revenue was up 36% fueled by acquisitions and internal growth of 6%. The infrastructure and transportation end markets delivered notable revenue gains in the quarter. The net margin was 15.2%, slightly lower than last year, mainly due to service mix. Our backlogs continue to be solid across our geographic markets, giving us visibility and confidence as we look ahead to 2026. Our investment management net revenues increased 5% due to the favorable impact of the round-shield acquisition and higher fee-paying assets under management. However, the net margin declined slightly to 42.3%, primarily due to additional costs incurred as we integrate operations under the Harrison Street Asset Management brand. We expect these costs will continue for the next two to three quarters and will modestly impact our margins as a result. In the third quarter, we raised $1 billion in new capital commitments. Since quarter end, we have raised an additional $1.2 billion, bringing total year-to-date fundraising to $4.4 billion. As Jay mentioned, we have several funds currently in the market, including one significant new vintage launching in the coming weeks. For the full year, we expect to come in near the midpoint of our $5 to $8 billion fundraising target. Asset funder management totaled $108.3 billion as of September 30th, up 5% from June 30th, driven by the recent acquisition and new capital raised, partially offset by asset sales in older vintage funds. Turning to our balance sheet, our leverage ratio was 2.3 times as of September 30th and includes the impact of several acquisitions completed during the third quarter. We continue to expect our leverage to decline to just under two times by year end. This assumes no significant additional acquisitions. We are maintaining our full year consolidated outlook. In our real estate services and engineering segments, we may exceed our previous full year guidance. Well, in investment management, we expect to be off slightly given the timing of fundraising and costs associated with unifying our operations under the HSAM brand. Putting it all together on a consolidated basis, we remain confident we will meet our full year outlook. That concludes my prepared remarks. Operator, can you please open the line for questions?