Colliers International Group Inc.

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 Thursday, February 6th, 2025. And at this time, for opening remarks and introduction, I would now like to turn the call over to the Global Chairman and Chief Executive Officer, Mr. Jay Hennig, Thank you. Please go ahead, sir.

Thank you, operator. Good morning, and thanks for joining us for the fourth quarter year-end conference call. As the operator mentioned, I'm Jerry Hennick, Chairman and Chief Executive Officer, 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 the presentation slide deck. In the fourth quarter, Collier's delivered robust growth with strength and momentum across all business segments. Engineering revenues recorded the highest percentage increase driven by recent acquisitions in Canada, the U.S., and Australia. Real estate services performed strongly in both capital markets and leasing, while investment management experienced modest growth compared to the previous year. Over the past few years, Collier's has become stronger and more resilient, driven by three high-value growth engines, real estate services, engineering, and investment management, all supported by recurring revenues that now account for more than 70% of our earnings. Looking ahead to 2025, we expect another solid year of growth, and we're quite excited about our future prospects. Our enterprising culture continues to thrive thanks to our experienced leadership that is fully aligned with shareholders. Our global teams have long tenure. They operate in a decentralized way that is supported by long-term incentive programs that foster an owner's mindset. This unique culture provides significant competitive advantages to colliers that is extremely difficult to replicate. Our new engineering platform now boasts 8,000 professionals, is underpinned by a strong recurring revenue base and robust contractual backlogs, offering significant growth opportunities on a global basis, both internally and through acquisition. We also see three near-term catalysts that drive even stronger growth in 2025 and beyond. In real estate services, our capital markets business is showing cyclical recovery as interest rates and asset valuation stabilize, albeit slower than we expected. While performance hasn't yet reached the 2021 peak, our significantly larger scale now positions us extremely well to deliver even stronger results in the future as the market recovers. in investment management, improved fundraising efforts, and the launch of several new vintages of our proven investment products set the stage for robust revenue growth and a new step up in growth and profitability as we strategically deploy new capital in new investments going forward. Finally, as always, our 2025 outlook does not include the potential upside from additional acquisitions. which we might complete during the year and have historically been very accretive. Our pipelines remain strong, and we expect to continue to scale and diversify each of our three business segments throughout the year. This year, we have also decided to accelerate our plans to streamline our investment management operations to take advantage of the synergies much faster than anticipated. This move will set the stage for future opportunities and create increased optionality as we continue to build out one of the world's largest mid-market alternative asset managers with about $100 billion of assets under management. Supported by visionary leadership, significant inside ownership, and a proven 30-year track record of delivering 20% annualized returns for shareholders, Colliers is extremely well positioned to continue to create value for shareholders for many years to come. Now let me ask Christian to provide his financial report, then we'll open things up for 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. Revenues for the fourth quarter are $1.5 billion, up 22%, relative to the prior year period. Local currency internal growth was 10% overall and was led by capital markets, which was up meaningfully against the low base in the prior year, and engineering, which had strong gains in both the engineering and project management disciplines. The fourth quarter's adjusted EBITDA was $225 million, up 14% over the prior year. with internal growth and acquisitions contributing in roughly even proportions. Our real estate services operations had 13% revenue growth led by capital markets, which was up 25%. Europe and the Americas drove the capital markets gain with sharp increase in transaction activity in office and industrial asset classes. In Asia Pacific, strong year-over-year capital markets growth in Australia was offset by macroeconomically driven declines in China, Hong Kong and South Korea. Leasing revenues were up 14%, with notable increases in activity in the office, industrial and retail asset classes globally. The segment's margin remained flat versus the prior year quarter, with operating leverage from higher revenues offset by ongoing investments to recruit brokerage professionals. Engineering performed well in Q4 with overall revenue growth of 61% with the bulk from acquisitions as well as high single digit percentage internal growth. The net revenue margin decreased slightly to 12.8% relative to 13.5% in the prior year period due mainly to weather related seasonality inherent in recently acquired businesses. Investment management revenues were up 6% overall and up 1%, excluding pass-through performance fees, as expected. Q4 EBITDA was also up 1%, while the margin was flat relative to the comparable period, driven by ongoing investments in our fundraising capabilities and costs to launch new fund products and strategies. We raised $1.3 billion of new capital commitments during the quarter, bringing full-year fundraising to $3.8 billion, as we expected. We are in the process of deploying capital raised and have started to raise for new ventages launching in 2025. Assets under management at year-end were $98.9 billion, up slightly from September 30th. AUM gains came from fundraising and positive mark-to-market adjustments in almost all asset classes, but were largely offset by asset realizations at older vintage funds with capital returned to investors. Redemption activity, which is permitted with certain restrictions in our perpetual funds, was modest. Turning to our balance sheet. During the quarter, we upsized and locked in our revolving credit facility for a new five-year term. We currently have over $1.2 billion of capacity to fund future growth. Our leverage ratio, defined as net debt to pro forma adjusted EBITDA, was two times at December 31st. As expected, we delevered during the fourth quarter through a combination of EBITDA growth and seasonally strong free cash flows. For the first half of 2025, we expect leverage to remain in the two times range, then to decline to approximately 1.5 times in the second half. This, of course, assumes no material acquisitions. We are introducing our outlook for 2025 with commentary by segment to provide additional clarity. The outlook reflects currently prevailing foreign exchange rates, which are closely tied to international trade uncertainty and are a headwind to our US dollar reported results. We expect our real estate services revenues to grow at mid single digit percentage rate with a modest margin increase. We expect engineering revenues to be up about 30% with about one fifth of that growth attributable to internal sources. Engineering margins are expected to increase nicely from the impact of higher margin acquisitions as well as margin expansion in our base business. Our investment management division is beginning a new cycle of fundraising with several new flagship long-date advantages launching in 2025, which should result in higher revenue streams as we progress through the year and into 2026. Given our continuing investments, in fundraising and our accelerated operational integration plans, 2025 margins are expected to remain flat or modestly down relative to 2024. We are expecting a significant step change in investment management EBITDA and margins in 2026 as capital formation strengthens. On a consolidated basis for the full year 2025, we expect high single-digit to low teens percentage revenue growth and low teens adjusted EBITDA and adjusted EPS growth. That concludes my prepared remarks. We'll now open the call to questions. Operator, can you please open the line?