Newmark Group, Inc.

Good morning, and welcome to Newmark's first quarter 2022 financial results conference call. At this time, all participants will be in a listen-only mode. After the speaker presentation, there will be a question and answer session. Please be advised that today's conference is being recorded. I would now like to turn the call over to Jason McGruder, head of investor relations. Thank you, and please go ahead.

Thank you, operator, and good morning. Newmark issued its first quarter 2022 financial results press release in a presentation summarizing these results this morning. The results provided on today's call compare only the first quarter of 2022 with the year earlier period unless otherwise stated. Any figures with respect to cash flow from operations discussed on today's call refer to net cash provided by operating activities, excluding loan origination and sales. We will be referring to our results on this call only on a non-GAAP basis unless otherwise stated. Please see the section in today's press release for completed and or updated definitions of any non-GAAP terms, reconciliations of these items to the corresponding GAAP results, and how, when, and why management uses them. Additional information with respect to our GAAP and non-GAAP results mentioned on today's call is available on our website, in supplemental Excel tables, and in the quarterly financial results presentation. Any outlook discussed on today's call assumes no material acquisitions, share repurchases, or meaningful changes in the company's stock price. These expectations are subject to change based on various macroeconomic, social, political, and other factors, including the COVID-19 pandemic and the Russia-Ukraine conflict. While our 2025 financial operational targets do assume acquisitions, they are also subject to change for these same reasons. None of our targets or goals through 2025 should be considered formal guidance. I also remind you that information on this call regarding our business that are not historical facts are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 as amended and Section 21E of the Securities Exchange Act of 1934 as amended. Such statements involve risks and uncertainties. These include statements about the effect of the COVID-19 pandemic on the company's business results, financial position, liquidity, and outlook, which may constitute forward-looking statements and are subject to the risk that that the actual impact may differ materially from what is currently expected. Except as required by law, Newmark undertakes no obligation to update any forward-looking statements. For discussion of additional risks and uncertainties which could cause actual results to differ from those contained in the forward-looking statements, see Newmark Securities and Exchange Commission filings including, but not limited to, the risk factors set forth in our most recent Form 10-K, Form 10-Q, or form 8K filings. I'm now happy to turn the call over to our host, Barry Gossin, Chief Executive Officer of Newmark Group, Inc.

Good morning, everyone, and thank you all for joining us. With me today are Newmark's Chief Financial Officer, Mike Rispoli, our Chief Strategy Officer, Jeff Day, and our Chief Revenue Officer, Lou Alvarado. I'm proud to report that our revenues increased 35% resulting in our fourth consecutive quarter of record revenues. This included a record first quarter for management services, servicing fees, and other. These businesses increased by 24%. We are on track for our recurring revenue businesses to represent over 40% of our total revenue by 2025, compared with 31% currently. We had our best ever first quarter in leasing revenues, which improved by 35%. This reflected significant increases in office transactions as tenants continue with their plans to return to the workplace. Newmark generated 50% growth in revenues from investment sales and a 40% increase from commercial mortgage origination, including multifamily. After the end of the quarter, we acquired two companies, BH2, a well-known firm in the London market that specializes in investment sales on the sell side and buy side, Leasing, and Occupier Advisory, and McCall and Almy, which strengthens our multi-market tenant representation business. These firms strategically enhance our business, adding best-in-class talent and client relationships. Historically, the companies we have acquired benefited from our platform and grown their top line by more than 50%. In addition, we launched operations in Hong Kong this month, where we hired some of the industry's leading capital markets and leasing professionals. we remain confident that we will meet our goal of generating over 10% of our revenues from outside the U.S. well before our prior target of 2025. Despite the current macroeconomic conditions, we believe that the fundamentals of our business and our industry-leading growth remain strong and that we will meet our previously issued guidance. We are in a very strong financial position with virtually no net debt and remain confident and on track to achieve our 2025 goal of $900 million of adjusted EBITDA. With that, I'm happy to turn the call over to Mike.