Newmark Group (NASDAQ:NMRK) reported first-quarter financial results on Thursday. The transcript from the company’s first-quarter earnings call has been provided below.
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The full earnings call is available at https://event.webcasts.com/starthere.jsp?ei=1758449&tp_key=12af26fa8a
Summary
Newmark Group reported significant year-over-year cash flow growth, aligning with adjusted EPS expectations, maintaining strong financial flexibility.
The company is actively expanding into data center opportunities despite concerns about CapEx and power availability, noting continued strength and client interest in this sector.
Recent acquisitions have enhanced cross-selling opportunities, particularly in fund administration, property accounting, and related services, contributing to growth.
Geographic expansion is progressing, with notable growth in Europe and other international markets, outpacing U.S. revenue growth.
Management expressed confidence in raising guidance despite a turbulent market, citing strong pipelines and continued transaction closings.
AI and infrastructure management are strategic focus areas, with AI enhancing productivity and infrastructure management expanding into technical facilities and energy sectors.
The company sees significant opportunities in advanced manufacturing and is aligning with hyperscalers despite community pushback on data centers.
The affordable housing sector is gaining traction, driven by strategic hires and investor interest in alternative asset classes.
Full Transcript
OPERATOR
With that, I would now like to open the call for questions. Thank you. If you are dialed in via the telephone and would like to ask a question, please Signal by pressing STAR 1 on your telephone keypad. If you are using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Again, please press STAR 1 to ask a question and we will take our first question from Alex Goldfarb with Piper Sandler.
Alex Goldfarb (Equity Analyst)
Hey, morning. Good morning. Two questions. First Mike, you know the guidance increase. Great. You know it’s impressive. Curious how your expectation for cash flow growth, you know, has changed. Is it mirroring growth that you now expect in the adjusted EPS or is cash flow expected to grow differently from earnings?
Mike
Morning, Alex. Yeah, I think our cash, our cash flow is going to grow in line with earnings as we said. And as you can see in the release, it’s up significantly year-over-year on a trailing twelve-month basis. And we continue to just generate a lot of cash flow from the business which gives us a significant amount of flexibility.
Barry
Okay, and the second question is, Barry, you guys have expanded into data centers. Obviously there’s a lot of leasing from AI and office spaces, but there are all these stories that we read about, you know, CapEx loads you can see with the big tech have increased their capex. There’s concern about power availability and whether or not there’s too much capital chasing data centers or not. But as you work with your clients and data centers are the, are the power and CapEx concerns, you know, playing out and affecting how data centers are being invested in or how your clients are looking at them? Or are these headlines that we read sort of, I don’t want to say noise, but sort of noise around the edges and it hasn’t changed the velocity at which people are, you know, investing and breaking ground on new data centers. Yeah, the behind the change from using the grid to behind the meter and developing distributed power requires additional expertise in structuring these transactions, which is good for us because we’ve been involved in the more complex transactions around structuring credit and the ability to get money for compute. And we think the velocity as we see it now, the pipeline looks really, really good and it’s still people are aggressively pursuing opportunities and some of the deck chairs are changing. Some more of the power companies are getting involved closer up into the hyperscaler side of the business because they’re holding the cards. So understanding how to navigate in this environment is really interesting and good for us. And we’re really actively pursuing today, powered land where you were next to the grid or next to an oil or gas basin is almost any piece of dirt is available, subject to the community pushback to be created into either some form of digital infrastructure and hyperscaling, as opposed to the limited supply of land that was available right next to the grid and the ability for the grid to provide power. So it actually opens it up and requires people to be more expert about this. So we think it’s good for us. Okay, so Net, you are not seeing any slowdown in the appetite as people face these challenges? You’re seeing continued strength in your data center business. Yes. Okay, cool. Thank you.
OPERATOR
Thank you. And we will take our next question from Mitch Germain with Citizens Bank.
Mitch Germain (Analyst)
Thank you and congrats on the quarter. Just curious, obviously a couple acquisitions. I think you even mentioned one …
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