CBRE Group, Inc. (CBRE) | The Buildout — AI Infrastructure
The Verdict
CBRE is a commercial real estate services and investments firm whose role in the AI buildout is physical, not computational. It advises, leases, finances, manages, builds, entitles, and develops the land, facilities, and infrastructure that data centers and power networks occupy. The company sits across the decision chain: it helps hyperscalers locate and entitle data center sites, manages construction through Turner & Townsend, then operates, maintains, and refits the facilities through its Critical Infrastructure Services and Data Center Solutions lines. That downstream operating role is what ties CBRE to AI infrastructure beyond any single construction wave.
| Market Cap | — |
| Revenue (TTM) | $43.6B |
| Revenue Growth | +14.5% |
| EBITDA Margin (TTM) | 5.2% |
| Net Debt | $9.1B |
| Earnings Beats | 7 of 7 |
| P/E (TTM) | — |
| EV/EBITDA (TTM) | — |
What We Like
- Data center services revenue surpassed $700 million in Q2 2026, up nearly 30%, excluding land sales.
- Management expects data center services revenue to grow about 25% annually over the next five years, then above 15%.
- Critical Infrastructure Services revenue reached $1.7 billion in 2025 and is expected to grow more than 60% in 2026.
- More than half of data center revenue is downstream work — managing, refitting, and project work — making it more recurring-like.
- Management sees infrastructure as a potential $10 billion revenue business with over $1 billion of EBITDA by 2030.
What We’re Watching
- Labor shortages: management says it can't hire enough skilled people, especially in critical infrastructure.
- Power, water, NIMBYism, and supply chain constraints could slow data center buildout and land monetization.
- Project Management SOP grew 28% in Q2, but management expects moderation in the second half.
- Q4 2026 core EPS is expected to be comparable to prior year, which included significant data center land profits.
The thesis is strengthening but not uncomplicated. CBRE now has a quantified multi-year infrastructure and data center growth frame, and it delivered Q2 with all four segments growing SOP more than 25%, core EBITDA up 34%, and a fifth straight quarter of at least 18% core EPS growth. The open question is whether hiring, power, and supply constraints cap conversion of that demand before the five-year data center services algorithm and 2030 target are tested.
Earnings Beat
Q2 2026 revenue was $11.2 billion, up 16%, with an 18.6% gross margin. Core EBITDA rose 34% and core EPS was $1.56, up 30%.
| Metric | Q2 FY2026 | Q1 FY2026 | Q2 FY2025 | YoY |
|---|---|---|---|---|
| Revenue | $11.2B | $10.5B | $9.8B | +15.1% |
| Gross margin | 18.6% | 17.6% | 93.7% | -7510bps |
| EBITDA | $555M | $693M | $556M | −0.2% |
| EPS | $0.69 | $1.07 | $0.71 | −3.2% |
| Data center services revenue | >$700M | n/a | n/a | nearly +30% |
| Critical Infrastructure Services growth | 68% | n/a | n/a | 68% |
CBRE's strong second quarter saw revenue increase by 16% as both resilient and transactional businesses delivered double-digit growth. Results exceeded our expectations with core EBITDA up 34% and core EPS up 30%. This is the fifth consecutive quarter that we achieved at least 18% core EPS growth.— Emma Giamartino, CFO, 2026-07-29
Management tone: Management's Q2 tone was more expansive than Q1: it added explicit 2027 guidance, a 2030 infrastructure target, and said data center revenue synergies were stronger than any other business area it had seen. It also volunteered that buybacks would taper and that investment management fundraising came in below expectations.
Management Guidance
Management raised FY2026 core EPS guidance to $7.80–$7.90 after Q2, implying about 23% growth at the midpoint. It guided Q3 2026 core EPS growth above 20% and said Q4 should be comparable to the prior year, which included significant data center land profits. Management also initiated FY2027 guidance of at least 15% core EPS growth, contingent on no material macroeconomic or interest-rate deterioration, and reaffirmed free cash flow conversion near the high end of 75–85%.
Trajectory
Revenue has accelerated: trailing four-quarter average revenue growth reached 14.6%, and Q2 2026 revenue of $11.2 billion rose 16% year over year, with resilient revenue up 15% and transactional up 19%. Gross margin is roughly stable, while operating and EBITDA margins are compressing; Q2 2026 EBITDA margin was 4.9%. The company's own disclosure shows Q1 cost of revenue excluding pass-through costs rose to 40.2% of total revenue from 39.1% as it spent to support growth. Trailing-twelve-month free cash flow conversion is 72% of net income.
The Model
The model projects FY+1 revenue of $46,707 million and EBITDA of $3,241 million, a 6.94% EBITDA margin. For FY+2, the model projects revenue of $52,500 million and EBITDA of $3,885 million, a 7.4% margin. Near-term revenue is anchored by the infrastructure buildout and a recovering transactional business; FY+2 adds continued scale in critical infrastructure and downstream data center services.
| Metric | FY2025 | Next FY (E) | Following FY (E) |
|---|---|---|---|
| Revenue | $40.5B | $46.7B | $52.5B |
| YoY Growth | — | +15.2% | +12.4% |
| EBITDA | $2.1B | $3.2B | $3.9B |
| EBITDA Margin | 5.1% | 6.9% | 7.4% |
Projections are the median of 5 independent model runs. The model’s revenue sits 2.8% above analyst consensus.
Management raised FY2026 core EPS guidance to $7.80–$7.90 after Q2, implying about 23% growth at the midpoint. It guided Q3 2026 core EPS growth above 20% and said Q4 should be comparable to the prior year, which included significant data center land profits. Management also initiated FY2027 guidance of at least 15% core EPS growth, contingent on no material macroeconomic or interest-rate deterioration, and reaffirmed free cash flow conversion near the high end of 75–85%.
What Could Go Right — and Wrong
- Data center services sustain about 25% annual growth for five years.
- Critical Infrastructure Services grows more than 60% in 2026 and keeps scaling beyond.
- Power, water, and labor constraints ease enough to accelerate conversion of demand.
- Turner & Townsend expands U.S., energy, and infrastructure work after a decade of over 30% data center-related growth.
- Embedded development gains of about $900 million monetize on a steadier cadence.
- Labor shortages persist and cap critical infrastructure services growth.
- Power, water, NIMBYism, and supply chain issues slow data center delivery and land monetization.
- A hyperscaler capex pause reduces demand for data center services and project management.
- A sustained interest-rate spike above management's 4%–4.5% comfort band cools transaction revenue.
- Data center land profits remain lumpy, leaving REI uneven despite the land bank.
Looking Ahead
Over the next twelve months, the signposts are the quarterly data center and infrastructure disclosures. Management expects Q3 2026 core EPS growth above 20%, then a Q4 that is comparable to a prior-year period boosted by data center land profits. Full-year 2026 guidance calls for $7.80–$7.90 core EPS, critical infrastructure revenue growth above 60%, and free cash flow conversion near the high end of 75–85%. The 2027 commitment of at least 15% core EPS growth also becomes a live target.
- Q3 2026Q3 earnings test — Tests more than 20% core EPS growth expectation.
- Q4 2026Q4 tough comparison — Compares to prior-year quarter with significant data center land profits.
- FY2026Critical infrastructure growth — Confirms whether Critical Infrastructure Services grows more than 60%.
- FY2026Data center land monetization — Tests approximately $900M embedded gains and Q4 land contribution.
- FY20272027 EPS commitment — Tests at least 15% core EPS growth, conditional on macro and rates.
- 2030Infrastructure target — Checks progress toward $10B revenue and over $1B EBITDA.
Financials
Annual Summary
| Metric | FY2024 | FY2025 | TTM | YoY |
|---|---|---|---|---|
| Revenue | $35.8B | $40.5B | $43.6B | +13.4% |
| Gross Margin | 19.4% | 36.7% | 17.7% | +1,728bps |
| EBITDA | $2.2B | $2.1B | $18.5B | -3.8% |
| EBITDA Margin | 6.0% | 5.1% | 5.2% | 91bps |
| Net Income | $968M | $1.2B | $1.3B | +19.5% |
| Free Cash Flow | $1.5B | $1.2B | $10.8B | — |
| Net Cash | — | — | — | — |
Key Ratios (Trailing)
- P/E TTM—
- EV/EBITDA TTM—
- EV/Revenue TTM—
- Price/FCF TTM—
- Gross Margin (TTM)17.7%
- EBITDA Margin (TTM)5.2%
- Net Margin (TTM)3.0%
- ROIC7.1%
- FCF Conversion41.3%
- SBC / Revenue0.5%
The Company
CBRE is the world's largest commercial real estate services and investments firm based on 2025 revenue. It operates in more than 100 countries and served nearly 90% of Fortune 100 companies in 2025. In the AI buildout, it is a physical-layer services and development firm: it helps locate, entitle, power, and provide water to data center sites, manages construction through Turner & Townsend, builds and maintains data center assets through Critical Infrastructure Services, and leases data center space through Advisory.
CBRE reports through four segments: Advisory Services; Building Operations & Experience; Project Management; and Real Estate Investments. It operates a global services platform rather than manufacturing capacity. BOE includes the dedicated Critical Infrastructure Services line, Project Management runs through majority-owned Turner & Townsend, and REI includes the Trammell Crow development platform. No factories or owned industrial production capacity are disclosed.
Business Segments
Competitive Landscape
CBRE describes itself as the world's largest commercial real estate services and investments firm based on 2025 revenue. The supplied sources do not name specific competitors, so no peer-specific competitor views are reported. Management points to scale, global footprint, and integrated delivery as advantages.
Supply Chain
CBRE sits between hyperscalers and data center operators on one side and the physical work of site selection, construction, operations, and maintenance on the other. No neighbor call in the source mentions CBRE by name, but neighbor demand and constraint disclosures corroborate the same buildout.
More on CBRE: Earnings recap