Newmark Group, Inc. (NMRK) | The Buildout — AI Infrastructure
The Verdict
Newmark Group is a commercial real estate advisor and service provider to institutional investors, corporations and occupiers. It owns no data centers and sells no AI product. Its part in the AI buildout is as an intermediary: arranging debt for data center projects, selling and advising on powered land, and structuring power arrangements and leases for hyperscalers, neoclouds and power developers. That work sits inside capital markets and, in a smaller and earlier way, inside management services.
| Market Cap | — |
| Revenue (TTM) | $3.6B |
| Revenue Growth | +20.8% |
| EBITDA Margin (TTM) | 12.8% |
| Net Debt | $1.9B |
| Earnings Beats | 7 of 7 |
| P/E (TTM) | — |
| EV/EBITDA (TTM) | — |
What We Like
- Double-digit year-on-year revenue growth in all three service lines: capital markets 11 consecutive quarters, management and servicing 8, leasing 7.
- Recurring management and servicing revenue of $1.3 billion over the trailing twelve months, against a stated goal of over $2 billion by 2029.
- A record servicing and asset management portfolio of $222.1 billion as of March 31, 2026, up 19.2% year-on-year.
- Trailing adjusted free cash flow of $391.1 million, equal to 85.3% of adjusted earnings — the high end of management's 65%–85% target.
- Externally verified share gains: #2 in overall U.S. investment sales for H1 2026 (MSCI) and #4 in real estate M&A for 2025 (Real Estate Alert).
What We’re Watching
- Management held FY2026 guidance unchanged at a record quarter and committed to update it at the Q3 2026 call.
- Capital markets growth slowed from +45.5% in Q1 to +16% in Q2, against a prior-year quarter that contained a $7 billion transaction.
- Second-half comparisons get harder: management says it was up 20% in the second half of last year.
The operating thesis is intact but the near-term signal softened. Newmark still grows double digits across all three service lines and its recurring servicing base keeps compounding, but growth decelerated on every line between Q1 and Q2, and management held guidance after a record quarter rather than raising it again. The data center and powered-land story is real but unquantified — no revenue, backlog or deal count is disclosed. The open question is whether the second-half pipeline converts as described and whether the Q3 2026 guidance update is a raise, a hold or a cut.
Earnings Beat
Newmark reported Q2 FY2026 revenue of $888.4 million, up 17% year-on-year and an all-time second-quarter best, at a gross margin of 94.8%. Adjusted EBITDA rose 22.1% to $139.2 million, and adjusted earnings per share rose 25.8% to $0.39. Management said adjusted EBITDA margin expanded 65 basis points year-on-year, slightly ahead of the midpoint of its full-year guidance range.
| Metric | Q2 FY2026 | Q1 FY2026 | Q2 FY2025 | YoY |
|---|---|---|---|---|
| Revenue | $888M | $847M | $759M | +17.0% |
| Gross margin | 94.8% | 94.5% | — | — |
| EBITDA | $86M | $73M | $83M | +3.7% |
| EPS | $0.08 | $0.06 | $0.08 | −5.4% |
| Adjusted EPS | $0.39 | $0.33 | $0.31 | +25.8% |
our guidance remains unchanged. At the midpoint for each metric, we expect total revenues to improve by approximately 16%, adjusted EPS to be up by approximately 19% and for adjusted EBITDA to grow by approximately 20%.— Michael Rispoli, Chief Financial Officer, 2026-07-29
Management tone: Management's tone moved from momentum-framed in Q1 2026, when it raised guidance and doubled the dividend, to cautiously forward-looking in Q2 2026, when it held guidance unchanged at a record quarter. It pointed to harder second-half comparisons, the timing of sizable transactions and the current macro environment, while staying positive on results and citing record quarters and growth streaks. It committed to update the outlook on the next call.
Management Guidance
Management raised its FY2026 outlook in Q1 2026 and held it unchanged in Q2 2026. The guide is total revenues of $3.775–$3.875 billion (+15%–18%), adjusted EBITDA of $656–$694 million (+17%–23%), adjusted earnings per share of $1.87–$1.98 (+15%–22%) and an adjusted earnings tax rate of 13%–15% versus 11.4% in FY2025. Management said the revised guidance assumes no meaningful change in the share price from the closing price on April 29, 2026. It expects margin expansion through the back half of the year, most in the fourth quarter, and said it would update the outlook next quarter.
Trajectory
Revenue keeps growing double digits but at a slowing pace. Year-on-year growth was 27.2% in Q1 FY2026 and 17% in Q2, with capital markets slowing from +45.5% to +16% against a prior-year quarter that included a $7 billion transaction. In absolute dollars, Q2 revenue of $888.4 million was higher than Q1's $847.2 million. On the audited basis, EBITDA margin was 17.2% in Q4 FY2025, 8.6% in Q1 FY2026 and 9.7% in Q2 FY2026; management reports adjusted EBITDA margin expansion of 91 basis points in Q1 and 65 basis points in Q2 and says the figure would have been about 100 basis points better without pass-through, recent M&A and international growth investment.
The Model
The model projects FY+1 revenue of $3,875 million and EBITDA of $523 million, a 13.5% margin. For FY+2 it projects revenue of $4,350 million and EBITDA of $609 million, a 14.0% margin. The near-term figure rests on the compounding management and servicing base; FY+2 assumes the large-transaction pipeline converts and margin expands.
| Metric | FY2025 | Next FY (E) | Following FY (E) |
|---|---|---|---|
| Revenue | $3.3B | $3.9B | $4.3B |
| YoY Growth | — | +17.6% | +12.3% |
| EBITDA | $415M | $523M | $609M |
| EBITDA Margin | 12.6% | 13.5% | 14.0% |
Projections are the median of 5 independent model runs. The model’s revenue sits 6.4% above analyst consensus.
Management raised its FY2026 outlook in Q1 2026 and held it unchanged in Q2 2026. The guide is total revenues of $3.775–$3.875 billion (+15%–18%), adjusted EBITDA of $656–$694 million (+17%–23%), adjusted earnings per share of $1.87–$1.98 (+15%–22%) and an adjusted earnings tax rate of 13%–15% versus 11.4% in FY2025. Management said the revised guidance assumes no meaningful change in the share price from the closing price on April 29, 2026. It expects margin expansion through the back half of the year, most in the fourth quarter, and said it would update the outlook next quarter.
What Could Go Right — and Wrong
- Large data center, digital infrastructure and large office transactions in the pipeline close on schedule, lifting capital markets growth.
- The management and servicing line keeps compounding toward the over-$2 billion-by-2029 target at mid-teens growth.
- The GSE and affordable housing pipelines convert in the second half as management expects.
- Margin expansion exceeds the roughly 100 basis points being consumed by pass-through, recent M&A and international growth investment.
- International continues to outgrow the U.S., with the non-U.S./U.K. business up 37.9% in Q1 2026 off a small base.
- Second-half comparisons bite harder than expected; management flagged it was up 20% in the second half of last year.
- Data center financings stay lumpy or slip — an analyst noted fewer large deals year-to-date and management did not dispute it.
- Capital markets growth stays in low single digits or turns negative, removing the comparisons-not-demand explanation.
- Guidance is cut, or held a second time, on decelerating growth.
Looking Ahead
The next twelve months turn on whether the second-half pipeline converts. Management has committed to update guidance at the Q3 2026 call, expects margin expansion through the back half of the year, and describes its GSE and data center pipelines as robust. The clearest documented, sized data center financing remains the $975 million Northern Virginia financing announced in June 2026, and management still declines to size its digital infrastructure revenue.
- Q3 2026Guidance update — Management committed to update full-year guidance on the next call.
- H2 2026GSE pipeline conversion — Management expects its GSE pipeline to be strong in the back half.
- Q4 2026Margin expansion — Management expects margin expansion, most in the fourth quarter.
- Latter part of 2026Capital allocation pivot — Capital goes to M&A if deals close, buybacks if they do not.
- 2029Recurring revenue target — Management and servicing revenue goal of over $2 billion.
Financials
Annual Summary
| Metric | FY2024 | FY2025 | TTM | YoY |
|---|---|---|---|---|
| Revenue | $2.7B | $3.3B | $3.6B | +20.3% |
| Gross Margin | — | 95.3% | 94.9% | — |
| EBITDA | $337M | $415M | $463M | +23.1% |
| EBITDA Margin | 12.3% | 12.6% | 12.8% | +29bps |
| Net Income | $61M | $126M | $148M | +106.2% |
| Free Cash Flow | −$42M | $155M | $798M | — |
| Net Cash | — | — | — | — |
Key Ratios (Trailing)
- P/E TTM—
- EV/EBITDA TTM—
- EV/Revenue TTM—
- Price/FCF TTM—
- Gross Margin (TTM)94.9%
- EBITDA Margin (TTM)12.8%
- Net Margin (TTM)4.1%
- ROIC6.5%
- FCF Conversion172.3%
- SBC / Revenue6.0%
The Company
Newmark Group is a commercial real estate advisor and service provider to large institutional investors, global corporations and other owners and occupiers. It owns no data centers and sells no AI product. Its revenue comes from fees — investment sales, mortgage origination, leasing, valuation and advisory, property management and recurring loan servicing. For the year ended December 31, 2025 it generated revenues of approximately $3.3 billion.
It runs as a people-and-relationships business with no meaningful real estate of its own. Its only named facility is its principal office at 125 Park Avenue, New York, about 150,000 square feet under a lease expiring in 2042. The 10-K reports two segments — Investor/Owner Services and Corporate/Occupier Services — while the 10-Q presents a single reportable segment and the earnings calls report three service lines: management services and servicing, leasing, and capital markets. Its U.K. Business Rates unit processes over £1 billion in rates each year for about 1,800 corporate clients.
Business Segments
Competitive Landscape
Newmark competes with large multinational brokers, specialized finance firms, outsourcing providers and flexible-workspace operators. Its 10-K names CBRE Group, Colliers International, Cushman & Wakefield, Jones Lang LaSalle and Savills among the large multinationals, and Berkadia, Eastdil Secured, Knight Frank, NAI Global, Marcus & Millichap, SitusAMC, Trimont and Walker & Dunlop among specialized firms. Management frames Newmark's growth as market-share gains, citing a move to #2 in overall U.S. investment sales for H1 2026 (MSCI).
- CBRE GroupNamed in filings; Newmark's Q2 2026 call cited CBRE's reported GSE volume weakness, which an analyst said Newmark appeared to buck.
- Jones Lang LaSalleNamed in filings; not discussed.
- Cushman & WakefieldNamed in filings; not discussed.
- Colliers InternationalNamed in filings; not discussed.
- Walker & DunlopNamed in filings as a specialized large firm; not discussed.
Supply Chain
Newmark sits in the middle of the commercial real estate capital chain: it originates and arranges loans, sells them to agencies, and keeps the servicing fees. No neighbor in the source's read-through mentions Newmark by name.
More on NMRK: Earnings recap