Earning Date, Transcript Summary & Report

Quarterly Revenue Increase: 1. Strong Revenue Growth: Colliers reported third quarter revenues of $1.2 billion, reflecting an 11% increase compared to the prior year period, with all segments showing solid growth.

Capital Markets Revenue Surge: 2. Significant Capital Markets Performance: Capital markets revenues rose by 17%, exceeding expectations and marking consecutive periods of growth, with notable increases in office (77%), retail (53%), and industrial (90%) asset classes.

Assets Under Management Growth: 3. Increase in Assets Under Management: Assets under management grew by $2.4 billion during the quarter, reaching nearly $99 billion, driven by fundraising and positive market adjustments.

Recurring Revenue Stability: 4. Recurring Revenue Contribution: Over 70% of Colliers' earnings now come from recurring revenues, providing exceptional balance and predictability for future growth.

Corporate Recognition and Awards: 5. Recognition and Awards: Colliers was named one of the world's best companies and recognized in Forbes' world's best employers ranking for the second consecutive year, highlighting its strong corporate reputation and employee satisfaction.

Fundraising Shortfall: 1. Declining Fundraising Expectations: Fundraising for the investment management segment fell below expectations, with a total of $2.6 billion raised year-to-date, while the full-year target was revised down to $3.5 billion, indicating a 15% increase over 2023 but still below initial projections for 2024.

Engineering Segment Performance: 2. Flat Internal Growth in Engineering: The engineering segment reported flat internal growth for the quarter due to the completion of several large project management contracts in the prior year, resulting in a challenging comparison.

Profitability Pressure: 3. Margin Compression: Adjusted EBITDA margin declined slightly to 13.1% due to higher captive insurance reserves and the margin-dilutive effect of pass-through performance fees in the investment management segment, indicating pressure on profitability.

Depreciation Expense Impact: 4. Increased Depreciation Expense: The expectation for adjusted earnings per share growth is being negatively impacted by higher than planned depreciation expenses, primarily due to technology investments, which could hinder overall earnings performance.

Financial Leverage Concerns: 5. High Financial Leverage: The financial leverage ratio stood at 2.5 times net debt to perform adjusted EBITDA as of September 30, with expectations to only slightly improve to just over two times by year-end, indicating a concerning level of debt relative to earnings.