Cushman & Wakefield Reports Financial Results for the First Half and Second Quarter 2022

Rhea-AI Summary

Cushman & Wakefield (NYSE: CWK) reported strong financial results for the first half and second quarter of 2022. The company achieved revenue of $4.9 billion and a net income of $142.7 million, both representing significant increases of 18% and 84% respectively compared to the previous year. Adjusted earnings per share rose to $1.10 from $0.61. Notably, Adjusted EBITDA increased by 49% to $477.1 million with a margin expansion of 240 basis points. The firm had a robust liquidity position of $1.6 billion as of June 30, 2022, supporting its growth strategy.

Positive

• Revenue growth of 18% year-over-year, totaling $4.9 billion.
• Net income increased by 84% to $142.7 million.
• Adjusted earnings per share rose to $1.10, up from $0.61.
• Adjusted EBITDA increased by 49% to $477.1 million, with a margin expansion of 240 basis points.

Negative

• Unfavorable foreign currency movements impacted revenue by 2% ($75.7 million).
• Other expense decreased by $57.9 million due to unrealized losses mainly from WeWork investments.

CHICAGO--(BUSINESS WIRE)-- Cushman & Wakefield (NYSE: CWK) today reported financial results for the first half and second quarter of 2022:

First Half Results:

• Revenue of $4.9 billion and service line fee revenue of $3.6 billion for the first half of 2022 increased 18% and 22%, respectively, from the first half of 2021.
  • Growth momentum continued across all segments and service lines, led by the Americas.
• Net income and earnings per share for the first half of 2022 were $142.7 million and $0.62, respectively.
  • Adjusted earnings per share of $1.10 was significantly ahead of the first half of 2021 of $0.61.
  • Adjusted EBITDA of $477.1 million increased 49% with Adjusted EBITDA margin of 13.2% expanding 240 basis points from the first half of 2021.
• Liquidity as of June 30, 2022 was $1.6 billion, consisting of availability on the Company's undrawn revolving credit facility of $1.1 billion and cash and cash equivalents of $0.5 billion.

Second Quarter Results:

• Revenue of $2.6 billion and service line fee revenue of $1.9 billion for the second quarter of 2022 increased 16% and 18%, respectively, from the second quarter of 2021.
  • Leasing and Capital markets grew 22% and 30%, respectively.
  • Property, facilities and project management grew 13%.
• Net income and earnings per share for the second quarter of 2022 were $97.2 million and $0.43, respectively.
  • Adjusted earnings per share of $0.63 was up 26% versus the second quarter of 2021.
  • Adjusted EBITDA of $262.8 million increased 20% with Adjusted EBITDA margin of 13.7% expanding 22 basis points from the second quarter of 2021.

"We continued to experience tremendous momentum in our business through the first half of the year as we progress on our multi-year strategy of investing in long-term, fast growing sectors in our industry. Our record first half results are a testament to this strategy and reflect the strength of our ongoing transformation into a diversified global business as well as the hard work and commitment of our teams around the world. We are in an excellent position with a strong balance sheet and significant liquidity to continue to execute our growth strategy and further enhance the value we deliver to both our clients and shareholders,” said John Forrester, Cushman & Wakefield Chief Executive Officer.

Consolidated Results (unaudited)

	Three Months Ended June 30,											Six Months Ended June 30,
(in millions, except per share data)	2022			2021			% Change in USD		% Change in Local Currency(4)			2022			2021			% Change in USD		% Change in Local Currency(4)
Revenue:
Property, facilities and project management	$	868.8		$	769.8		13	%	16	%		$	1,709.8		$	1,537.9		11	%	13	%
Leasing		552.8			453.5		22	%	24	%			1,007.5			745.2		35	%	37	%
Capital markets		367.3			282.2		30	%	33	%			656.3			448.6		46	%	49	%
Valuation and other		127.5			124.2		3	%	8	%			247.6			235.6		5	%	9	%
Total service line fee revenue(1)		1,916.4			1,629.7		18	%	21	%			3,621.2			2,967.3		22	%	24	%
Gross contract reimbursables(2)		696.2			618.6		13	%	14	%			1,322.4			1,204.8		10	%	11	%
Total revenue	$	2,612.6		$	2,248.3		16	%	19	%		$	4,943.6		$	4,172.1		18	%	21	%
Costs and expenses:
Cost of services provided to clients	$	1,381.3		$	1,163.8		19	%	22	%		$	2,615.6		$	2,167.1		21	%	23	%
Cost of gross contract reimbursables		696.2			618.6		13	%	14	%			1,322.4			1,204.8		10	%	11	%
Total costs of services		2,077.5			1,782.4		17	%	19	%			3,938.0			3,371.9		17	%	19	%
Operating, administrative and other		317.5			284.2		12	%	15	%			610.9			565.0		8	%	10	%
Depreciation and amortization		39.7			42.5		(7	) %	(4	) %			80.3			85.6		(6	) %	(4	) %
Restructuring, impairment and related charges		1.3			14.7		(91	) %	(90	) %			2.5			32.3		(92	) %	(92	) %
Total costs and expenses		2,436.0			2,123.8		15	%	17	%			4,631.7			4,054.8		14	%	16	%
Operating income		176.6			124.5		42	%	45	%			311.9			117.3		166	%	171	%
Interest expense, net of interest income		(46.1	)		(43.8	)	5	%	8	%			(89.3	)		(86.2	)	4	%	6	%
Earnings from equity method investments		17.5			5.1		n.m.		n.m.				34.4			7.5		n.m.		n.m.
Other (expense) income, net		(25.0	)		10.1		n.m.		n.m.				(57.9	)		12.1		n.m.		n.m.
Earnings before income taxes		123.0			95.9		28	%	31	%			199.1			50.7		n.m.		n.m.
Provision for income taxes		25.8			43.2		(40	) %	(39	) %			56.4			15.2		n.m.		n.m.
Net income	$	97.2		$	52.7		84	%	88	%		$	142.7		$	35.5		n.m.		n.m.
Adjusted EBITDA(3)	$	262.8		$	219.9		20	%	23	%		$	477.1		$	319.6		49	%	53	%
Adjusted EBITDA margin(3)		13.7	%		13.5	%							13.2	%		10.8	%
Adjusted net income(3)		142.9			112.6		27	%					252.2			138.0		83	%
Weighted average shares outstanding, basic		225.6			223.0								225.1			222.7
Weighted average shares outstanding, diluted		228.0			226.3								228.6			225.1
Earnings per share, basic	$	0.43		$	0.24							$	0.63		$	0.16
Earnings per share, diluted	$	0.43		$	0.23							$	0.62		$	0.16
Adjusted earnings per share, diluted(3)	$	0.63		$	0.50							$	1.10		$	0.61

n.m. not meaningful

(1) Service line fee revenue represents revenue for fees generated from each of our service lines.

(2) Gross contract reimbursables reflects revenue from clients which have substantially no margin.

(3) See the end of this press release for reconciliations of (i) Net income to Adjusted EBITDA and (ii) Net income to Adjusted net income and for explanations on the calculations of Adjusted EBITDA margin and Adjusted earnings per share, diluted. See also the definition of, and a description of the purposes for which management uses these non-GAAP measures under the Use of Non-GAAP Financial Measures section in this press release.

(4) In order to assist our investors and improve comparability of results, we present the period-over-period changes in certain of our non-GAAP financial measures, such as Fee-based operating expenses and Adjusted EBITDA, in "local" currency. The local currency change represents the period-over-period change assuming no movement in foreign exchange rates from the prior period. We believe that this presentation provides our management and investors with a better view of comparability and trends in the underlying operating business.

Second Quarter Results (unaudited)

Revenue

Revenue of $2.6 billion, an increase of $364.3 million or 16% compared to the three months ended June 30, 2021, reflects strong revenue growth across all segments. Americas, EMEA and APAC revenue growth was 20%, 3% and 8%, respectively, compared to the three months ended June 30, 2021. Partially offsetting these trends were unfavorable foreign currency movements of $52.7 million or 3% as compared to the prior year. Service line fee revenue growth was led by our Leasing and Capital markets service lines which were up 22% and 30%, respectively. Leasing revenue growth was principally driven by steady momentum in the office sector, as well as the continued strength in the industrial sector. Capital markets revenue continued to demonstrate broad-based growth as investment fundamentals in commercial real estate assets remain favorable, including multi-family and industrial. Property, facilities and project management grew 13% driven by growth in our project management and facilities management businesses. Valuation and other and Gross contract reimbursables also grew 3% and 13%, respectively.

Costs of services

Costs of services of $2.1 billion increased $295.1 million or 17% compared to the three months ended June 30, 2021. Cost of services provided to clients increased 19% principally due to higher variable costs, including commissions, as a result of higher brokerage revenue. Cost of gross contract reimbursables increased 13% driven by the continued growth in our Property, facilities and project management service line.

Operating, administrative and other

Operating, administrative and other expenses of $317.5 million increased by $33.3 million or 12% compared to the three months ended June 30, 2021, principally due to higher salaries and wages, as well as other compensation costs.

Restructuring, impairment and related charges

Restructuring, impairment and related charges were $1.3 million, a decrease of $13.4 million compared to the three months ended June 30, 2021. This decrease principally reflects the reduction of severance-related costs and impairment charges in connection with the Company's previously announced strategic realignment of the business, which was substantially complete at the end of 2021.

Earnings from equity method investments

Earnings from equity method investments of $17.5 million increased by $12.4 million compared to the three months ended June 30, 2021, primarily due to the earnings recognized from our equity method investment with Greystone in the Americas, which was finalized in December 2021.

Other (expense) income, net

Other expense during the three months ended June 30, 2022 reflects net unrealized losses on fair value investments of $27.3 million, primarily related to our investment in WeWork, which closed in the fourth quarter of 2021, partially offset by royalty income. Comparatively, other income recognized during the three months ended June 30, 2021 reflects unrealized gains on fair value investments along with royalty income.

Provision for income taxes

Provision for income taxes for the second quarter of 2022 was $25.8 million on earnings before income taxes of $123.0 million. For the second quarter of 2021, the provision for income taxes was $43.2 million on earnings before income taxes of $95.9 million. The decrease in income tax expense from the prior period was primarily driven by a lower effective tax rate in the three months ended June 30, 2022 compared to the same period last year, due to changes in the jurisdictional mix of earnings.

Net income and Adjusted EBITDA

Net income of $97.2 million increased 84% compared to the three months ended June 30, 2021, principally due to the strong performance of brokerage activity as Leasing and Capital markets fee revenue increased 22% and 30%, respectively, as well as an increase in earnings recognized from our equity method investment with Greystone in the Americas.

Adjusted EBITDA of $262.8 million increased by $42.9 million or 20%. Adjusted EBITDA margin, measured against service line fee revenue, of 13.7% for the three months ended June 30, 2022, increased 22 basis points as compared to 13.5% in the three months ended June 30, 2021.

First Half Results (unaudited)

Revenue

Revenue of $4.9 billion, an increase of $771.5 million or 18% compared to the six months ended June 30, 2021, reflects strong revenue growth across all segments. Americas, EMEA and APAC revenue growth was 22%, 4% and 10%, respectively, compared to the six months ended June 30, 2021. Partially offsetting these trends were unfavorable foreign currency movements of $75.7 million or 2% as compared to the prior year. Service line fee revenue growth was led by Leasing and Capital markets service lines which were up 35% and 46%, respectively. Leasing revenue growth was principally driven by steady momentum in the office sector, as well as the continued strength in the industrial sector. Capital markets revenue grew as investment fundamentals in commercial real estate assets continued to be favorable across most sectors, including multi-family and industrial. Property, facilities and project management grew 11% driven by growth in our project management and facilities management businesses. Valuation and other and Gross contract reimbursables also grew 5% and 10%, respectively. Geographically, Americas, EMEA and APAC contributed 89%, 3% and 8%, respectively, of the consolidated revenue growth.

Costs of services

Costs of services of $3.9 billion increased $566.1 million or 17% compared to the six months ended June 30, 2021. Cost of services provided to clients increased 21% principally due to higher variable costs, including commissions, as a result of higher brokerage revenue. Cost of gross contract reimbursables increased 10% driven by the continued growth in our Property, facilities and project management service line.

Operating, administrative and other

Operating, administrative and other expenses of $610.9 million increased by $45.9 million or 8% compared to the six months ended June 30, 2021, principally driven by higher salaries and wages, as well as other compensation costs. Operating, administrative and other costs as a percentage of total revenue were 12% for the six months ended June 30, 2022 as compared to 14% for the six months ended June 30, 2021.

Restructuring, impairment and related charges

Restructuring, impairment and related charges were $2.5 million, a decrease of $29.8 million compared to the six months ended June 30, 2021. This decrease principally reflects the reduction of severance-related costs and impairment charges in connection with the Company's previously announced strategic realignment of the business, which was substantially complete at the end of 2021.

Earnings from equity method investments

Earnings from equity method investments of $34.4 million increased by $26.9 million compared to the six months ended June 30, 2021, primarily due to the earnings recognized from our equity method investment with Greystone in the Americas, which was finalized in December 2021.

Other (expense) income, net

Other expense was $57.9 million in the six months ended June 30, 2022, compared to other income of $12.1 million recognized in the six months ended June 30, 2021. This decline is primarily due to the net unrealized losses on fair value investments of $54.9 million, principally related to our investment in WeWork, which closed in the fourth quarter of 2021. In addition, the Company recognized a loss of $13.8 million in the first quarter of 2022 related to the disposal of operations in Russia.

Provision for income taxes

Provision for income taxes for the six months ended June 30, 2022 was $56.4 million on earnings before income taxes of $199.1 million. For the six months ended June 30, 2021, the provision for income taxes was $15.2 million on earnings before income taxes of $50.7 million. The increase in income tax expense from the prior year was primarily driven by higher pre-tax earnings, partially offset by a lower effective tax rate, due to changes in the jurisdictional mix of earnings.

Net income and Adjusted EBITDA

Net income of $142.7 million increased by $107.2 million compared to the six months ended June 30, 2021, principally due to the strong performance of brokerage activity as Leasing and Capital markets fee revenue increased 35% and 46%, respectively, as well as an increase in earnings recognized from our equity method investment with Greystone in the Americas.

Adjusted EBITDA of $477.1 million increased by $157.5 million or 49%. As a result, Adjusted EBITDA margin, measured against service line fee revenue, of 13.2% for the six months ended June 30, 2022, increased 240 basis points as compared to 10.8% in the six months ended June 30, 2021.

Balance Sheet

Liquidity at the end of the second quarter was $1.6 billion, including availability on the Company's undrawn revolving credit facility of $1.1 billion and cash and cash equivalents of $0.5 billion.

Net debt as of June 30, 2022 was $2.7 billion including the Company's outstanding term loan of $2.6 billion and senior secured notes of $0.6 billion, net of cash and cash equivalents of $0.5 billion. See the Use of Non-GAAP Financial Measures section in this press release for the definition of, and a description of the purposes for which management uses this non-GAAP measure.

Conference Call

The Company’s Second Quarter 2022 Earnings Conference Call will be held today, August 4, 2022, at 5:00 p.m. Eastern Time. A webcast, along with an associated slide presentation, will be accessible through the Investor Relations section of the Company’s website at http://ir.cushmanwakefield.com.

The direct dial-in number for the conference call is 1-866-652-5200 for U.S. callers and 1-412-317-6060 for international callers. The Conference ID is 10168288. A replay of the call will be available approximately two hours after the conference call by accessing http://ir.cushmanwakefield.com. A transcript of the call will be available on the Investor Relations section of the Company's website at http://ir.cushmanwakefield.com.

About Cushman & Wakefield

Cushman & Wakefield (NYSE: CWK) is a leading global real estate services firm that delivers exceptional value for real estate occupiers and owners. Cushman & Wakefield is among the largest real estate services firms with approximately 50,000 employees in over 400 offices and approximately 60 countries. In 2021, the firm had revenue of $9.4 billion across core services of property, facilities and project management, leasing, capital markets, and valuation and other services. To learn more, visit www.cushmanwakefield.com or follow @CushWake on Twitter.

Cautionary Note on Forward-Looking Statements

All statements in this release other than historical facts are forward-looking statements, which rely on a number of estimates, projections and assumptions concerning future events. Such statements are also subject to a number of uncertainties and factors outside Cushman & Wakefield’s control. Such factors include, but are not limited to, uncertainty regarding and changes in global economic or market conditions and changes in government policies, laws, regulations and practices. Should any Cushman & Wakefield estimates, projections and assumptions or these other uncertainties and factors materialize in ways that Cushman & Wakefield did not expect, there is no guarantee of future performance and the actual results could differ materially from the forward-looking statements in this press release, including the possibility that recipients may lose a material portion of the amounts invested. While Cushman & Wakefield believes the assumptions underlying these forward-looking statements are reasonable under current circumstances, recipients should bear in mind that such assumptions are inherently uncertain and subjective and that past or projected performance is not necessarily indicative of future results. No representation or warranty, express or implied, is made as to the accuracy or completeness of the information contained in this press release, and nothing shall be relied upon as a promise or representation as to the performance of any investment. You are cautioned not to place undue reliance on such forward-looking statements or other information in this press release and should rely on your own assessment of an investment or a transaction. Any estimates or projections as to events that may occur in the future are based upon the best and current judgment of Cushman & Wakefield as actual results may vary from the projections and such variations may be material. Any forward-looking statements speak only as of the date of this press release and, except to the extent required by applicable securities laws, Cushman & Wakefield expressly disclaims any obligation to update or revise any of them, whether as a result of new information, future events or otherwise. Additional information concerning factors that may influence the Company’s results is discussed under “Risk Factors” in Part I, Item 1A of its Annual Report on Form 10-K for the year ended December 31, 2021.

Cushman & Wakefield plc Condensed Consolidated Statements of Operations (unaudited)
	Three Months Ended June 30,							Six Months Ended June 30,
(in millions, except per share data)	2022			2021				2022			2021
Revenue	$	2,612.6		$	2,248.3			$	4,943.6		$	4,172.1
Costs and expenses:
Costs of services (exclusive of depreciation and amortization)		2,077.5			1,782.4				3,938.0			3,371.9
Operating, administrative and other		317.5			284.2				610.9			565.0
Depreciation and amortization		39.7			42.5				80.3			85.6
Restructuring, impairment and related charges		1.3			14.7				2.5			32.3
Total costs and expenses		2,436.0			2,123.8				4,631.7			4,054.8
Operating income		176.6			124.5				311.9			117.3
Interest expense, net of interest income		(46.1	)		(43.8	)			(89.3	)		(86.2	)
Earnings from equity method investments		17.5			5.1				34.4			7.5
Other (expense) income, net		(25.0	)		10.1				(57.9	)		12.1
Earnings before income taxes		123.0			95.9				199.1			50.7
Provision for income taxes		25.8			43.2				56.4			15.2
Net income	$	97.2		$	52.7			$	142.7		$	35.5
Basic earnings per share:
Earnings per share attributable to common shareholders, basic	$	0.43		$	0.24			$	0.63		$	0.16
Weighted average shares outstanding for basic earnings per share		225.6			223.0				225.1			222.7
Diluted earnings per share:
Earnings per share attributable to common shareholders, diluted	$	0.43		$	0.23			$	0.62		$	0.16
Weighted average shares outstanding for diluted earnings per share		228.0			226.3				228.6			225.1

Cushman & Wakefield plc Condensed Consolidated Balance Sheets
	As of
(in millions, except per share data)	June 30, 2022			December 31, 2021
Assets	(unaudited)
Current assets:
Cash and cash equivalents	$	476.7		$	770.7
Trade and other receivables, net of allowance of $79.8 million and $72.2 million, as of June 30, 2022 and December 31, 2021, respectively		1,540.4			1,446.0
Income tax receivable		35.4			30.0
Short-term contract assets, net		431.4			318.9
Prepaid expenses and other current assets		277.5			264.7
Total current assets		2,761.4			2,830.3
Property and equipment, net		180.6			194.6
Goodwill		2,050.4			2,081.9
Intangible assets, net		899.0			922.2
Equity method investments		657.2			641.3
Deferred tax assets		62.7			65.5
Non-current operating lease assets		377.9			413.5
Other non-current assets		744.6			741.1
Total assets	$	7,733.8		$	7,890.4
Liabilities and Shareholders' Equity
Current liabilities:
Short-term borrowings and current portion of long-term debt	$	44.5		$	42.4
Accounts payable and accrued expenses		1,091.0			1,106.2
Accrued compensation		886.0			976.3
Income tax payable		55.4			105.1
Other current liabilities		234.9			204.5
Total current liabilities		2,311.8			2,434.5
Long-term debt, net		3,212.2			3,220.5
Deferred tax liabilities		5.2			48.7
Non-current operating lease liabilities		359.8			394.6
Other non-current liabilities		258.4			343.5
Total liabilities		6,147.4			6,441.8
Shareholders' equity:
Ordinary shares, nominal value $0.10 per share, 800,000,000 shares authorized; 225,663,686 and 223,709,308 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively		22.6			22.4
Additional paid-in capital		2,892.0			2,896.6
Accumulated deficit		(1,135.5	)		(1,278.2	)
Accumulated other comprehensive loss		(193.5	)		(193.0	)
Total equity attributable to the Company		1,585.6			1,447.8
Non-controlling interests		0.8			0.8
Total equity		1,586.4			1,448.6
Total liabilities and shareholders' equity	$	7,733.8		$	7,890.4

Cushman & Wakefield plc Condensed Consolidated Statements of Cash Flows (unaudited)
	Six Months Ended June 30,
(in millions)	2022			2021
Cash flows from operating activities
Net income	$	142.7		$	35.5
Reconciliation of net income to net cash (used in) provided by operating activities:
Depreciation and amortization		80.3			85.6
Impairment charges		0.1			13.8
Unrealized foreign exchange (gain) loss		(9.7	)		3.2
Stock-based compensation		20.5			17.8
Lease amortization		49.8			51.0
Amortization of debt issuance costs		3.5			4.7
Earnings from equity method investments, net of dividends received		(21.9	)		(6.4	)
Change in deferred taxes		(38.7	)		13.7
Provision for loss on receivables and other assets		9.9			21.4
Loss on disposal of business		14.0			—
Unrealized loss (gain) on equity securities		48.8			(6.1	)
Other operating activities, net		(6.8	)		(11.3	)
Changes in assets and liabilities:
Trade and other receivables		(159.6	)		52.4
Income taxes payable		(54.1	)		(29.8	)
Short-term contract assets and Prepaid expenses and other current assets		(146.9	)		(67.3	)
Other non-current assets		(94.9	)		(33.1	)
Accounts payable and accrued expenses		13.1			(7.0	)
Accrued compensation		(85.0	)		10.6
Other current and non-current liabilities		(11.4	)		(61.8	)
Net cash (used in) provided by operating activities		(246.3	)		86.9
Cash flows from investing activities
Payment for property and equipment		(30.5	)		(20.9	)
Acquisitions of businesses, net of cash acquired		(19.2	)		—
Investments in equity securities and equity method joint ventures		(18.3	)		(20.6	)
Collection on beneficial interest in a securitization		80.0			—
Other investing activities, net		(9.4	)		—
Net cash provided by (used in) investing activities		2.6			(41.5	)
Cash flows from financing activities
Shares repurchased for payment of employee taxes on stock awards		(26.6	)		(7.6	)
Payment of contingent consideration		(0.1	)		(1.2	)
Repayment of borrowings		(13.3	)		(13.3	)
Payment of finance lease liabilities		(7.7	)		(6.3	)
Other financing activities, net		2.4			0.8
Net cash used in financing activities		(45.3	)		(27.6	)
Change in cash, cash equivalents and restricted cash		(289.0	)		17.8
Cash, cash equivalents and restricted cash, beginning of the period		890.3			1,164.1
Effects of exchange rate fluctuations on cash, cash equivalents and restricted cash		(18.6	)		(2.2	)
Cash, cash equivalents and restricted cash, end of the period	$	582.7		$	1,179.7

Segment Results

The following tables summarize our results of operations for our operating segments for the three and six months ended June 30, 2022 and 2021.

Americas Results

	Three Months Ended June 30,											Six Months Ended June 30,
(in millions) (unaudited)	2022			2021			% Change in USD		% Change in Local Currency			2022			2021			% Change in USD		% Change in Local Currency
Revenue:
Property, facilities and project management	$	605.3		$	533.0		14	%	14	%		$	1,196.5		$	1,073.8		11	%	12	%
Leasing		446.0			341.0		31	%	31	%			814.2			560.7		45	%	45	%
Capital markets		308.9			239.6		29	%	29	%			550.3			373.0		48	%	48	%
Valuation and other		53.1			44.6		19	%	19	%			100.3			81.9		22	%	23	%
Total service line fee revenue(1)		1,413.3			1,158.2		22	%	22	%			2,661.3			2,089.4		27	%	28	%
Gross contract reimbursables(2)		598.1			522.0		15	%	15	%			1,135.5			1,015.7		12	%	12	%
Total revenue	$	2,011.4		$	1,680.2		20	%	20	%		$	3,796.8		$	3,105.1		22	%	22	%
Costs and expenses:
Americas Fee-based operating expenses	$	1,219.7		$	1,002.3		22	%	22	%		$	2,306.4		$	1,856.5		24	%	24	%
Cost of gross contract reimbursables		598.1			522.0		15	%	15	%			1,135.5			1,015.7		12	%	12	%
Segment operating expenses	$	1,817.8		$	1,524.3		19	%	19	%		$	3,441.9		$	2,872.2		20	%	20	%
Adjusted EBITDA	$	210.5		$	157.1		34	%	34	%		$	386.5		$	234.9		65	%	65	%
Adjusted EBITDA margin(3)		14.9	%		13.6	%							14.5	%		11.2	%

(1)		Service line fee revenue represents revenue for fees generated from each of our service lines
(2)		Gross contract reimbursables reflects revenue from clients which have substantially no margin
(3)		Adjusted EBITDA margin is measured against Total service line fee revenue

EMEA Results

	Three Months Ended June 30,											Six Months Ended June 30,
(in millions) (unaudited)	2022			2021			% Change in USD		% Change in Local Currency			2022			2021			% Change in USD		% Change in Local Currency
Revenue:
Property, facilities and project management	$	95.3		$	91.4		4	%	18	%		$	188.9		$	175.1		8	%	18	%
Leasing		64.3			59.7		8	%	21	%			113.6			102.3		11	%	22	%
Capital markets		45.5			33.0		38	%	56	%			74.3			55.3		34	%	49	%
Valuation and other		43.5			45.4		(4	) %	8	%			87.1			89.9		(3	) %	6	%
Total service line fee revenue(1)		248.6			229.5		8	%	22	%			463.9			422.6		10	%	21	%
Gross contract reimbursables(2)		23.3			34.6		(33	) %	(25	) %			45.6			65.4		(30	) %	(24	) %
Total revenue	$	271.9		$	264.1		3	%	16	%		$	509.5		$	488.0		4	%	15	%
Costs and expenses:
EMEA Fee-based operating expenses	$	213.9		$	199.2		7	%	21	%		$	414.4		$	391.5		6	%	16	%
Cost of gross contract reimbursables		23.3			34.6		(33	) %	(24	) %			45.6			65.4		(30	) %	(24	) %
Segment operating expenses	$	237.2		$	233.8		1	%	14	%		$	460.0		$	456.9		1	%	10	%
Adjusted EBITDA	$	35.3		$	31.9		11	%	29	%		$	52.0		$	34.3		52	%	76	%
Adjusted EBITDA margin(3)		14.2	%		13.9	%							11.2	%		8.1	%

(1)		Service line fee revenue represents revenue for fees generated from each of our service lines
(2)		Gross contract reimbursables reflects revenue from clients which have substantially no margin
(3)		Adjusted EBITDA margin is measured against Total service line fee revenue

APAC Results

	Three Months Ended June 30,											Six Months Ended June 30,
(in millions) (unaudited)	2022			2021			% Change in USD		% Change in Local Currency			2022			2021			% Change in USD		% Change in Local Currency
Revenue:
Property, facilities and project management	$	168.2		$	145.4		16	%	22	%		$	324.4		$	289.0		12	%	17	%
Leasing		42.5			52.8		(20	) %	(15	) %			79.7			82.2		(3	) %	0	%
Capital markets		12.9			9.6		34	%	47	%			31.7			20.3		56	%	67	%
Valuation and other		30.9			34.2		(10	) %	(6	) %			60.2			63.8		(6	) %	(4	) %
Total service line fee revenue(1)		254.5			242.0		5	%	11	%			496.0			455.3		9	%	13	%
Gross contract reimbursables(2)		74.8			62.0		21	%	29	%			141.3			123.7		14	%	21	%
Total revenue	$	329.3		$	304.0		8	%	14	%		$	637.3		$	579.0		10	%	15	%
Costs and expenses:
APAC Fee-based operating expenses	$	239.0		$	217.4		10	%	16	%		$	461.8		$	413.5		12	%	16	%
Cost of gross contract reimbursables		74.8			62.0		21	%	29	%			141.3			123.7		14	%	21	%
Segment operating expenses	$	313.8		$	279.4		12	%	19	%		$	603.1		$	537.2		12	%	17	%
Adjusted EBITDA	$	17.0		$	30.9		(45	) %	(40	) %		$	38.6		$	50.4		(23	) %	(20	) %
Adjusted EBITDA margin(3)		6.7	%		12.8	%							7.8	%		11.1	%

(1)		Service line fee revenue represents revenue for fees generated from each of our service lines
(2)		Gross contract reimbursables reflects revenue from clients which have substantially no margin
(3)		Calculated as a percentage of Total service line fee revenue

Cushman & Wakefield plc
Use of Non-GAAP Financial Measures

We have used the following measures, which are considered "non-GAAP financial measures" under SEC guidelines:

		i.		Segment operating expenses and Fee-based operating expenses;
		ii.		Adjusted earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA") and Adjusted EBITDA margin;
		iii.		Adjusted net income and Adjusted earnings per share;
		iv.		Local currency; and
		v.		Net debt.

Our management principally uses these non-GAAP financial measures to evaluate operating performance, develop budgets and forecasts, improve comparability of results and assist our investors in analyzing the underlying performance of our business. These measures are not recognized measurements under GAAP. When analyzing our operating results, investors should use them in addition to, but not as an alternative for, the most directly comparable financial results calculated and presented in accordance with GAAP. Because the Company’s calculation of these non-GAAP financial measures may differ from other companies, our presentation of these measures may not be comparable to similarly titled measures of other companies.

The Company believes that these measures provide a more complete understanding of ongoing operations, enhance comparability of current results to prior periods, and may be useful for investors to analyze our financial performance. The measures eliminate the impact of certain items that may obscure trends in the underlying performance of our business. The Company believes that they are useful to investors for the additional purposes described below.

Segment operating expenses and Fee-based operating expenses: Consistent with GAAP, reimbursed costs for certain customer contracts are presented on a gross basis in both revenue and operating expenses for which the Company recognizes substantially no margin. Total costs and expenses include segment operating expenses as well as other expenses such as depreciation and amortization, integration and other costs related to merger, pre-IPO stock-based compensation, and acquisition related costs and efficiency initiatives. Segment operating expenses includes Fee-based operating expenses and Cost of gross contract reimbursables.

We believe Fee-based operating expenses more accurately reflects the costs we incur during the course of delivering services to our clients and is more consistent with how we manage our expense base and operating margins.

Adjusted EBITDA and Adjusted EBITDA margin: We have determined Adjusted EBITDA to be our primary measure of segment profitability. We believe that investors find this measure useful in comparing our operating performance to that of other companies in our industry because these calculations generally eliminate integration and other costs related to merger, pre-IPO stock-based compensation, unrealized (gains) / losses on investments, acquisition related costs and efficiency initiatives and other items. Adjusted EBITDA also excludes the effects of financings, income tax and the non-cash accounting effects of depreciation and intangible asset amortization. Adjusted EBITDA margin, a non-GAAP measure of profitability as a percent of revenue, is measured against service line fee revenue.

Adjusted net income and Adjusted earnings per share: Management also assesses the profitability of the business using Adjusted net income. We believe that investors find this measure useful in comparing our profitability to that of other companies in our industry because this calculation generally eliminates integration and other costs related to merger, pre-IPO stock-based compensation, unrealized (gains) / losses on investments, acquisition related costs and efficiency initiatives, depreciation and amortization related to merger and acquisition activity and other items. Income tax, as adjusted, reflects management’s expectation about our long-term effective rate as a public company. The Company also uses Adjusted earnings per share ("EPS") as a significant component when measuring operating performance. Management defines Adjusted EPS as Adjusted net income, divided by total basic and diluted weighted average outstanding shares.

Local currency: In discussing our results, we refer to percentage changes in local currency. These metrics are calculated by holding foreign currency exchange rates constant in year-over-year comparisons. Management believes that this methodology provides investors with greater visibility into the performance of our business excluding the effect of foreign currency rate fluctuations.

Net debt: Net debt is used as a measure of our liquidity and is calculated as total debt minus cash and cash equivalents.

The interim financial information for the three and six months ended June 30, 2022 and 2021 is unaudited. All adjustments, consisting of normal recurring adjustments, except as otherwise noted, considered necessary for a fair presentation of the unaudited interim condensed consolidated financial information for these periods have been included. Users of all of the aforementioned unaudited interim financial information should refer to the audited Consolidated Financial Statements of the Company and notes thereto for the year ended December 31, 2021 in the Company's 2021 Annual Report on Form 10-K.

Please see the following tables for reconciliations of our non-GAAP financial measures to the most closely comparable GAAP measures.

Adjustments to GAAP financial measures used to calculate non-GAAP financial measures

Reconciliation of Net income to Adjusted EBITDA:

	Three Months Ended June 30,							Six Months Ended June 30,
(in millions) (unaudited)	2022			2021				2022			2021
Net income	$	97.2		$	52.7			$	142.7		$	35.5
Add/(less):
Depreciation and amortization		39.7			42.5				80.3			85.6
Interest expense, net of interest income		46.1			43.8				89.3			86.2
Provision for income taxes		25.8			43.2				56.4			15.2
Unrealized loss (gain) on investments, net(1)		27.3			(6.1	)			48.8			(6.1	)
Integration and other costs related to merger(2)		4.3			5.6				7.9			21.8
Pre-IPO stock-based compensation(3)		1.0			1.5				1.7			3.1
Acquisition related costs and efficiency initiatives(4)		17.8			33.3				35.0			73.5
Other(5)		3.6			3.4				15.0			4.8
Adjusted EBITDA	$	262.8		$	219.9			$	477.1		$	319.6

(1)		Represents net unrealized losses on fair value investments during the six months ended June 30, 2022 primarily related to our investment in WeWork, which closed during the fourth quarter of 2021. An unrealized gain on investments of $6.1 million was recorded in the six months ended June 30, 2021.
(2)		Integration and other costs related to merger include certain direct and incremental integration and restructuring efforts.
(3)		Pre-IPO stock-based compensation represents non-cash compensation expense associated with our pre-IPO equity compensation plans.
(4)		Acquisition related costs and efficiency initiatives reflect costs incurred to implement operating efficiency initiatives to allow the Company to be a nimbler and more agile partner to its clients, as well as incremental costs related to in-fill M&A.
(5)		Other includes a loss of $13.8 million related to the disposal of operations in Russia recorded during the first quarter of 2022.

Reconciliation of Net income to Adjusted net income:

	Three Months Ended June 30,							Six Months Ended June 30,
(in millions, except per share data) (unaudited)	2022			2021				2022			2021
Net income	$	97.2		$	52.7			$	142.7		$	35.5
Add/(less):
Merger and acquisition-related depreciation and amortization		18.7			20.6				38.0			41.4
Unrealized loss (gain) on investments, net		27.3			(6.1	)			48.8			(6.1	)
Integration and other costs related to merger		4.3			5.6				7.9			21.8
Pre-IPO stock-based compensation		1.0			1.5				1.7			3.1
Acquisition related costs and efficiency initiatives		17.8			33.3				35.0			73.5
Other		3.6			3.4				15.0			4.8
Income tax adjustments(1)		(27.0	)		1.6				(36.9	)		(36.0	)
Adjusted net income	$	142.9		$	112.6			$	252.2		$	138.0
Weighted average shares outstanding, basic		225.6			223.0				225.1			222.7
Weighted average shares outstanding, diluted(2)		228.0			226.3				228.6			225.1
Adjusted earnings per share, basic	$	0.63		$	0.50			$	1.12		$	0.62
Adjusted earnings per share, diluted	$	0.63		$	0.50			$	1.10		$	0.61

(1)		Reflective of management's estimation of an adjusted effective tax rate (adjusted for certain items) of 27% for both the three and six months ended June 30, 2022, and 27% for both the three and six months ended June 30, 2021.
(2)		Weighted average shares outstanding ("WACS"), diluted is calculated by taking WACS, basic and adding in dilutive shares of 2.4 million and 3.3 million for the three months ended June 30, 2022 and 2021, respectively, and dilutive shares of 3.5 million and 2.4 million for the six months ended June 30, 2022 and 2021, respectively, which is used to calculate Adjusted earnings per share, diluted.

Summary of Total costs and expenses:

	Three Months Ended June 30,							Six Months Ended June 30,
(in millions) (unaudited)	2022			2021				2022			2021
Americas Fee-based operating expenses	$	1,219.7		$	1,002.3			$	2,306.4		$	1,856.5
EMEA Fee-based operating expenses		213.9			199.2				414.4			391.5
APAC Fee-based operating expenses		239.0			217.4				461.8			413.5
Cost of gross contract reimbursables		696.2			618.6				1,322.4			1,204.8
Segment operating expenses		2,368.8			2,037.5				4,505.0			3,866.3
Depreciation and amortization		39.7			42.5				80.3			85.6
Integration and other costs related to merger(1)		4.3			5.6				7.9			21.8
Pre-IPO stock-based compensation(2)		1.0			1.5				1.7			3.1
Acquisition related costs and efficiency initiatives(3)		17.8			33.3				35.0			73.2
Other		4.4			3.4				1.8			4.8
Total costs and expenses	$	2,436.0		$	2,123.8			$	4,631.7		$	4,054.8

(1)		Integration and other costs related to merger include certain direct and incremental integration and restructuring efforts.
(2)		Pre-IPO stock-based compensation represents non-cash compensation expense associated with our pre-IPO equity compensation plans.
(3)		Acquisition related costs and efficiency initiatives reflect costs incurred to implement operating efficiency initiatives to allow the Company to be a nimbler and more agile partner to its clients, as well as incremental costs related to in-fill M&A.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20220803006032/en/

INVESTOR RELATIONS

Len Texter

Investor Relations

+1 312 338 7860

IR@cushwake.com

MEDIA CONTACT

Aixa Velez

Corporate Communications

+1 312 424 8195

aixa.velez@cushwake.com

Source: Cushman & Wakefield

FAQ

What were Cushman & Wakefield's earnings for the second quarter of 2022?

Cushman & Wakefield reported net income of $97.2 million and earnings per share of $0.43 for the second quarter of 2022.

How much did Cushman & Wakefield's revenue grow in the first half of 2022?

Cushman & Wakefield's revenue grew by 18% in the first half of 2022, reaching $4.9 billion.

What is the adjusted EBITDA for Cushman & Wakefield for the first half of 2022?

The adjusted EBITDA for the first half of 2022 was $477.1 million, a 49% increase compared to the previous year.

What is the liquidity position of Cushman & Wakefield as of June 30, 2022?

Cushman & Wakefield had a liquidity position of $1.6 billion, including $1.1 billion in available credit and $0.5 billion in cash.