Cushman & Wakefield Reports Financial Results for the Second Quarter 2024
Cushman & Wakefield (NYSE: CWK) reported Q2 2024 financial results. Revenue for the quarter was $2.3 billion, a 5% decline from Q2 2023. Leasing revenue grew 2%, driven by the Americas and APAC, while Services, Capital Markets, and Valuation saw declines of 3%, 15%, and 4% respectively.
Net income was $13.5 million, an increase of $8.4 million compared to Q2 2023. Adjusted EBITDA was $138.9 million, a 5% decrease, and diluted EPS was $0.06. The company also improved net cash flow from operations and free cash flow by over $130 million year-to-date compared to 2023.
Significant events included repricing $1 billion in term loans, reducing the interest rate, and electing to prepay $45 million in term loans due in 2025. A non-core business sale was announced to accelerate strategic growth investments. Liquidity was $1.7 billion as of June 30, 2024.
For the first half of 2024, revenue was $4.5 billion, a 4% decline from 2023, while net loss improved by 79% to $15.3 million.
Cushman & Wakefield (NYSE: CWK) ha riportato i risultati finanziari del Q2 2024. I ricavi per il trimestre sono stati di 2,3 miliardi di dollari, con una diminuzione del 5% rispetto al Q2 2023. I ricavi da locazione sono cresciuti del 2%, sostenuti dalle Americhe e dall'APAC, mentre i servizi, i mercati dei capitali e la valutazione hanno visto cali rispettivamente del 3%, 15% e 4%.
Il reddito netto è stato di 13,5 milioni di dollari, un aumento di 8,4 milioni rispetto al Q2 2023. L'EBITDA rettificato è stato di 138,9 milioni di dollari, con una diminuzione del 5%, e l'EPS diluito era di 0,06 dollari. L'azienda ha anche migliorato il flusso di cassa netto dalle operazioni e il flusso di cassa libero di oltre 130 milioni di dollari dall'inizio dell'anno rispetto al 2023.
Tra gli eventi significativi c'era la rinegoziazione di 1 miliardo di dollari in prestiti a termine, riducendo il tasso d'interesse, e la decisione di ripagare anticipatamente 45 milioni di dollari in prestiti a termine in scadenza nel 2025. È stata annunciata la vendita di un'attività non strategica per accelerare gli investimenti nella crescita strategica. La liquidità ammontava a 1,7 miliardi di dollari al 30 giugno 2024.
Per il primo semestre del 2024, i ricavi erano di 4,5 miliardi di dollari, con un calo del 4% rispetto al 2023, mentre la perdita netta è migliorata del 79% a 15,3 milioni di dollari.
Cushman & Wakefield (NYSE: CWK) reportó los resultados financieros del Q2 2024. Los ingresos para el trimestre fueron de 2.3 mil millones de dólares, una disminución del 5% en comparación con el Q2 2023. Los ingresos por arrendamiento crecieron un 2%, impulsados por las Américas y APAC, mientras que los servicios, los mercados de capitales y la valoración experimentaron caídas del 3%, 15% y 4% respectivamente.
El ingreso neto fue de 13.5 millones de dólares, un aumento de 8.4 millones en comparación con el Q2 2023. El EBITDA ajustado fue de 138.9 millones de dólares, una disminución del 5%, y el EPS diluido fue de 0.06 dólares. La compañía también mejoró el flujo de caja neto de las operaciones y el flujo de caja libre en más de 130 millones de dólares desde el inicio del año en comparación con 2023.
Los eventos significativos incluyeron la reestructuración de 1 mil millones de dólares en préstamos a plazo, reduciendo la tasa de interés, y la decisión de prepagar 45 millones de dólares en préstamos a plazo que vencen en 2025. Se anunció la venta de un negocio no central para acelerar las inversiones en crecimiento estratégico. La liquidez era de 1.7 mil millones de dólares a 30 de junio de 2024.
Para la primera mitad de 2024, los ingresos fueron de 4.5 mil millones de dólares, una disminución del 4% respecto a 2023, mientras que la pérdida neta mejoró un 79% a 15.3 millones de dólares.
Cushman & Wakefield (NYSE: CWK)는 2024년 2분기 재무 실적을 발표했습니다. 이번 분기 매출은 23억 달러로, 2023년 2분기 대비 5% 감소했습니다. 임대 수익은 미주와 아시아 태평양 지역의 성장 덕분에 2% 증가했지만, 서비스, 자본 시장 및 평가 부문은 각각 3%, 15%, 4% 감소했습니다.
순이익은 1350만 달러로, 2023년 2분기 대비 840만 달러 증가했습니다. 조정된 EBITDA는 1억 3890만 달러로 5% 감소했으며, 희석 주당 순이익은 0.06달러였습니다. 또한, 회사는 2023년 대비 연초부터 운영 현금 흐름 및 자유 현금 흐름을 1억 3000만 달러 이상 개선했습니다.
주요 사건으로는 10억 달러의 기한이 정해진 대출의 재가격 책정, 이자율 인하, 2025년에 만기가 있는 4500만 달러의 기한이 정해진 대출 조기 상환 결정이 포함되었습니다. 전략적 성장 투자를 가속화하기 위해 비핵심 사업 매각이 발표되었습니다. 2024년 6월 30일 기준 유동성은 17억 달러였습니다.
2024년 첫 반기 동안 수익은 45억 달러로, 2023년 대비 4% 감소했으며, 순손실은 1530만 달러로 79% 개선되었습니다.
Cushman & Wakefield (NYSE: CWK) a rapporté les résultats financiers du deuxième trimestre 2024. Les revenus pour le trimestre se sont élevés à 2,3 milliards de dollars, soit une baisse de 5 % par rapport au deuxième trimestre 2023. Les revenus locatifs ont augmenté de 2 %, soutenus par les Amériques et l'APAC, tandis que les Services, les Marchés de Capitaux et l'Évaluation ont enregistré des baisses respectives de 3 %, 15 % et 4 %.
Le revenu net était de 13,5 millions de dollars, soit une augmentation de 8,4 millions par rapport au deuxième trimestre 2023. L'EBITDA ajusté était de 138,9 millions de dollars, soit une baisse de 5 %, et le BPA dilué était de 0,06 dollar. L'entreprise a également amélioré son flux de trésorerie net provenant des opérations et son flux de trésorerie disponible de plus de 130 millions de dollars depuis le début de l'année par rapport à 2023.
Les événements significatifs comprenaient une réévaluation de 1 milliard de dollars de prêts à terme, la réduction du taux d'intérêt et la décision de rembourser par anticipation 45 millions de dollars de prêts à terme arrivant à maturité en 2025. Une vente d'activités non essentielles a été annoncée pour accélérer les investissements de croissance stratégique. La liquidité était de 1,7 milliard de dollars au 30 juin 2024.
Pour le premier semestre de 2024, les revenus s'élevaient à 4,5 milliards de dollars, avec une baisse de 4 % par rapport à 2023, tandis que la perte nette s'est améliorée de 79 % à 15,3 millions de dollars.
Cushman & Wakefield (NYSE: CWK) hat die finanziellen Ergebnisse des 2. Quartals 2024 veröffentlicht. Der Umsatz im Quartal betrug 2,3 Milliarden US-Dollar, was einem Rückgang von 5% gegenüber dem 2. Quartal 2023 entspricht. Die Mietumsätze stiegen um 2%, unterstützt durch die Regionen Amerika und APAC, während die Dienstleistungen, die Kapitalmärkte und die Bewertung Rückgänge von 3%, 15% und 4% verzeichneten.
Der Nettogewinn betrug 13,5 Millionen US-Dollar, was einem Anstieg von 8,4 Millionen im Vergleich zum 2. Quartal 2023 entspricht. Das bereinigte EBITDA lag bei 138,9 Millionen US-Dollar, ein Rückgang von 5%, und der verwässerte Gewinn pro Aktie betrug 0,06 Dollar. Das Unternehmen verbesserte zudem den Netto-Cashflow aus dem operativen Geschäft und den Freien Cashflow um über 130 Millionen US-Dollar seit Jahresbeginn im Vergleich zu 2023.
Zu den bedeutenden Ereignissen gehörte die Neuausrichtung von 1 Milliarde US-Dollar an Terminkrediten, die Senkung des Zinssatzes und die Entscheidung, 45 Millionen US-Dollar an Terminkrediten, die 2025 fällig sind, vorzeitig zurückzuzahlen. Ein Verkauf eines nicht zum Kerngeschäft gehörenden Bereichs wurde angekündigt, um strategische Wachstumsinvestitionen zu beschleunigen. Die Liquidität betrug am 30. Juni 2024 1,7 Milliarden US-Dollar.
Für das erste Halbjahr 2024 betrugen die Einnahmen 4,5 Milliarden US-Dollar, ein Rückgang von 4% im Vergleich zu 2023, während der Nettoverlust um 79% auf 15,3 Millionen US-Dollar verbessert wurde.
- Net income increased by $8.4 million YoY to $13.5 million.
- Improved net cash flow from operations and free cash flow by over $130 million YTD.
- Repriced $1 billion of term loans, reducing the interest rate.
- Adjusted EBITDA for the first half of 2024 increased by 5% to $217 million.
- Liquidity of $1.7 billion as of June 30, 2024.
- Revenue for Q2 2024 decreased by 5% YoY.
- Adjusted EBITDA for Q2 2024 decreased by 5% YoY to $138.9 million.
- Capital Markets revenue declined by 15% in Q2 2024.
- Net loss for the first half of 2024 was $15.3 million.
- Year-to-date revenue for the first half of 2024 decreased by 4%.
Insights
Cushman & Wakefield's Q2 2024 results present a mixed picture. While revenue declined
- Leasing revenue grew
2% , marking the third consecutive quarter of growth in this segment. - Net income increased to
$13.5 million from$5.1 million in Q2 2023. - Free cash flow improved by over
$130 million year-to-date compared to 2023.
However, challenges remain:
- Capital markets revenue declined
15% , reflecting ongoing uncertainty in the interest rate environment. - Adjusted EBITDA decreased
5% to$138.9 million , with margins slightly contracting.
The company's strategic moves, including repricing
Cushman & Wakefield's Q2 results offer valuable insights into the current state of the commercial real estate market:
- The
2% growth in leasing revenue, driven by the Americas and APAC regions, suggests a gradual recovery in office and retail space demand. - However, the
15% decline in capital markets revenue, particularly the19% drop in the Americas, indicates persistent challenges in the investment sales market due to interest rate volatility. - The
3% decrease in Services revenue points to potential shifts in client needs or increased competition in property management and facility services.
The company's mention of "increase in market optimism" is noteworthy, potentially signaling a turning point in market sentiment. However, this optimism has yet to translate into significant improvements in capital markets activity.
The planned sale of a non-core business aligns with industry trends of focusing on core competencies and streamlining operations. This move could position Cushman & Wakefield to better capitalize on emerging opportunities in the evolving commercial real estate landscape.
Overall, these results reflect a commercial real estate market in transition, with pockets of growth amidst ongoing challenges. The sector appears to be adapting to a new normal characterized by selective leasing activity and cautious capital deployment.
Third consecutive quarter of global leasing growth
Net cash flow from operations and free cash flow both improved by more than
Announces sale of small non-core business to accelerate strategic growth investments
“Our solid second quarter results, highlighted by our third consecutive quarter of leasing revenue growth and a meaningful improvement in free cash flow, are evidence of our execution against our strategic priorities,” said Michelle MacKay, Chief Executive Officer of Cushman & Wakefield. “We are confident in our position and energized about the increase in market optimism. We continue to pursue our growth strategy from a place of strength and stability in our core business, combined with our fortified balance sheet.”
Second Quarter Results:
-
Revenue of
$2.3 billion 5% from the second quarter of 2023.-
Leasing grew
2% driven by theAmericas and APAC. -
Services, Capital markets and Valuation and other declined
3% ,15% and4% , respectively.
-
Leasing grew
-
Net income of
$13.5 million $8.4 million $5.1 million $0.06 -
Adjusted EBITDA of
$138.9 million 5% from the second quarter of 2023, with Adjusted EBITDA margin of8.8% declining 18 basis points from the second quarter of 2023. -
Adjusted diluted earnings per share was
$0.20
-
Adjusted EBITDA of
-
In June 2024, we repriced
$1.0 billion 3.00% . In addition, we elected to prepay$45.0 million -
On June 18, 2024, we signed a definitive agreement to sell a non-core business that provides a third-party supplier network to support a small portion of our Services clients in the
U.S. andCanada . This transaction will further the Company’s strategic focus on core long-term growth opportunities and is expected to accelerate optional debt repayment. The deal is expected to close during the third quarter.
Year-to-Date Results:
-
Revenue of
$4.5 billion 4% from the first half of 2023.-
Solid Leasing growth of
3% was driven by broad strength across all segments. -
Services, Capital markets and Valuation and other declined
3% ,9% and1% , respectively.
-
Solid Leasing growth of
-
Net loss of
$15.3 million 79% compared to net loss of$71.3 million $0.07 -
Adjusted EBITDA of
$217.0 million 5% from the first half of 2023, with Adjusted EBITDA margin of7% expanding 44 basis points from the first half of 2023. -
Adjusted diluted earnings per share of
$0.20 $0.18
-
Adjusted EBITDA of
-
Net cash used in operating activities was
$103.3 million -
Free cash flow for the first half of 2024 was a use of
$125.6 million $258.9 million
-
Free cash flow for the first half of 2024 was a use of
-
Liquidity as of June 30, 2024 was
$1.7 billion $1.1 billion $0.6 billion
Consolidated Results (unaudited)
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
||||||||||||||||||
(in millions, except per share data) |
|
2024 |
|
|
2023 |
|
% Change in USD |
% Change in Local Currency(5) |
|
|
2024 |
|
|
2023 |
|
% Change in USD |
% Change in Local Currency(5) |
||||
Revenue: |
|
|
|
|
|
|
|
|
|
||||||||||||
Services |
$ |
864.5 |
|
$ |
888.9 |
|
(3 |
)% |
(2 |
)% |
|
$ |
1,735.6 |
|
$ |
1,785.7 |
|
(3 |
)% |
(2 |
)% |
Leasing |
|
450.3 |
|
|
441.8 |
|
2 |
% |
2 |
% |
|
|
832.0 |
|
|
804.4 |
|
3 |
% |
4 |
% |
Capital markets |
|
163.2 |
|
|
191.9 |
|
(15 |
)% |
(14 |
)% |
|
|
304.8 |
|
|
334.8 |
|
(9 |
)% |
(9 |
)% |
Valuation and other |
|
105.7 |
|
|
110.3 |
|
(4 |
)% |
(3 |
)% |
|
|
208.9 |
|
|
212.0 |
|
(1 |
)% |
(1 |
)% |
Total service line fee revenue(1) |
|
1,583.7 |
|
|
1,632.9 |
|
(3 |
)% |
(2 |
)% |
|
|
3,081.3 |
|
|
3,136.9 |
|
(2 |
)% |
(1 |
)% |
Gross contract reimbursables(2) |
|
704.3 |
|
|
773.1 |
|
(9 |
)% |
(9 |
)% |
|
|
1,391.5 |
|
|
1,518.4 |
|
(8 |
)% |
(8 |
)% |
Total revenue |
$ |
2,288.0 |
|
$ |
2,406.0 |
|
(5 |
)% |
(4 |
)% |
|
$ |
4,472.8 |
|
$ |
4,655.3 |
|
(4 |
)% |
(4 |
)% |
|
|
|
|
|
|
|
|
|
|
||||||||||||
Costs and expenses: |
|
|
|
|
|
|
|
|
|
||||||||||||
Cost of services provided to clients |
$ |
1,170.5 |
|
$ |
1,205.0 |
|
(3 |
)% |
(2 |
)% |
|
$ |
2,315.8 |
|
$ |
2,367.3 |
|
(2 |
)% |
(2 |
)% |
Cost of gross contract reimbursables |
|
704.3 |
|
|
773.1 |
|
(9 |
)% |
(9 |
)% |
|
|
1,391.5 |
|
|
1,518.4 |
|
(8 |
)% |
(8 |
)% |
Total costs of services |
|
1,874.8 |
|
|
1,978.1 |
|
(5 |
)% |
(5 |
)% |
|
|
3,707.3 |
|
|
3,885.7 |
|
(5 |
)% |
(4 |
)% |
Operating, administrative and other |
|
294.2 |
|
|
328.9 |
|
(11 |
)% |
(10 |
)% |
|
|
590.2 |
|
|
644.8 |
|
(8 |
)% |
(8 |
)% |
Depreciation and amortization |
|
31.2 |
|
|
35.7 |
|
(13 |
)% |
(12 |
)% |
|
|
63.7 |
|
|
72.6 |
|
(12 |
)% |
(12 |
)% |
Restructuring, impairment and related charges |
|
17.4 |
|
|
7.0 |
|
n.m. |
n.m. |
|
|
22.4 |
|
|
14.2 |
|
58 |
% |
57 |
% |
||
Total costs and expenses |
|
2,217.6 |
|
|
2,349.7 |
|
(6 |
)% |
(5 |
)% |
|
|
4,383.6 |
|
|
4,617.3 |
|
(5 |
)% |
(5 |
)% |
Operating income |
|
70.4 |
|
|
56.3 |
|
25 |
% |
27 |
% |
|
|
89.2 |
|
|
38.0 |
|
n.m. |
n.m. |
||
Interest expense, net of interest income |
|
(60.8 |
) |
|
(57.9 |
) |
5 |
% |
5 |
% |
|
|
(119.5 |
) |
|
(134.7 |
) |
(11 |
)% |
(11 |
)% |
Earnings from equity method investments |
|
4.3 |
|
|
12.8 |
|
(66 |
)% |
(66 |
)% |
|
|
16.0 |
|
|
24.7 |
|
(35 |
)% |
(35 |
)% |
Other income (expense), net |
|
3.3 |
|
|
(4.8 |
) |
n.m. |
n.m. |
|
|
5.0 |
|
|
(10.8 |
) |
n.m. |
n.m. |
||||
Earnings (loss) before income taxes |
|
17.2 |
|
|
6.4 |
|
n.m. |
n.m. |
|
|
(9.3 |
) |
|
(82.8 |
) |
(89 |
)% |
(89 |
)% |
||
Provision for (benefit from) income taxes |
|
3.7 |
|
|
1.3 |
|
n.m. |
n.m. |
|
|
6.0 |
|
|
(11.5 |
) |
n.m. |
n.m. |
||||
Net income (loss) |
$ |
13.5 |
|
$ |
5.1 |
|
n.m. |
n.m. |
|
$ |
(15.3 |
) |
$ |
(71.3 |
) |
(79 |
)% |
(79 |
)% |
||
Net income (loss) margin |
|
0.6 |
% |
|
0.2 |
% |
|
|
|
|
(0.3 |
)% |
|
(1.5 |
)% |
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||||||
Adjusted EBITDA(3) |
$ |
138.9 |
|
$ |
146.1 |
|
(5 |
)% |
(4 |
)% |
|
$ |
217.0 |
|
$ |
207.0 |
|
5 |
% |
6 |
% |
Adjusted EBITDA margin(3) |
|
8.8 |
% |
|
8.9 |
% |
|
|
|
|
7.0 |
% |
|
6.6 |
% |
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||||||
Adjusted net income(3) |
$ |
45.7 |
|
$ |
50.5 |
|
(10 |
)% |
|
|
$ |
46.3 |
|
$ |
41.1 |
|
13 |
% |
|
||
|
|
|
|
|
|
|
|
|
|
||||||||||||
Weighted average shares outstanding, basic |
|
229.0 |
|
|
227.1 |
|
|
|
|
|
228.5 |
|
|
226.7 |
|
|
|
||||
Weighted average shares outstanding, diluted(4) |
|
231.5 |
|
|
227.1 |
|
|
|
|
|
231.3 |
|
|
227.2 |
|
|
|
||||
Earnings (loss) per share, basic |
$ |
0.06 |
|
$ |
0.02 |
|
|
|
|
$ |
(0.07 |
) |
$ |
(0.31 |
) |
|
|
||||
Earnings (loss) per share, diluted |
$ |
0.06 |
|
$ |
0.02 |
|
|
|
|
$ |
(0.07 |
) |
$ |
(0.31 |
) |
|
|
||||
Adjusted earnings per share, diluted(3)(4) |
$ |
0.20 |
|
$ |
0.22 |
|
|
|
|
$ |
0.20 |
|
$ |
0.18 |
|
|
|
||||
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 (loss) to Adjusted EBITDA and (ii) Net income (loss) to Adjusted net income and for explanations of the calculation 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 financial measures under the Use of Non-GAAP Financial Measures section in this press release. |
|||||||||||||||||||||
(4) For all periods with a GAAP net loss, weighted average shares outstanding, diluted is only used to calculate Adjusted earnings per share, diluted. For all periods with a GAAP net loss, all potentially dilutive shares would be anti-dilutive; therefore, both basic and diluted loss per share are calculated using weighted average shares outstanding, basic. |
|||||||||||||||||||||
(5) 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 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
Costs of services
Costs of services of
Operating, administrative and other
Operating, administrative and other expenses of
Restructuring, impairment and related charges
Restructuring, impairment and related charges of
Earnings from equity method investments
Earnings from equity method investments of
Other income (expense), net
Other income, net was
Provision for income taxes
Provision for income taxes for the second quarter of 2024 was
Net income and Adjusted EBITDA
Net income of
Adjusted EBITDA of
Year-to-Date Results (unaudited)
Revenue
Revenue of
Costs of services
Costs of services of
Operating, administrative and other
Operating, administrative and other expenses of
Restructuring, impairment and related charges
Restructuring, impairment and related charges of
Interest expense, net of interest income
Interest expense of
Earnings from equity method investments
Earnings from equity method investments of
Other income (expense), net
Other income, net was
Provision for (benefit from) income taxes
Provision for income taxes for the six months ended June 30, 2024 was
Net loss and Adjusted EBITDA
Net loss of
Adjusted EBITDA of
Balance Sheet
Liquidity at the end of the second quarter was
Net debt as of June 30, 2024 was
Conference Call
The Company’s Second Quarter 2024 Earnings Conference Call will be held today, July 29, 2024, 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 1-844-825-9789 for
About Cushman & Wakefield
Cushman & Wakefield (NYSE: CWK) is a leading global commercial real estate services firm for property owners and occupiers with approximately 52,000 employees in nearly 400 offices and approximately 60 countries. In 2023, the firm reported revenue of
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, disruptions in general macroeconomic conditions and global and regional demand for commercial real estate; our ability to attract and retain qualified revenue producing employees and senior management; the failure of our acquisitions and joint ventures to perform as expected or the lack of similar future opportunities; our ability to preserve, grow and leverage the value of our brand; the concentration of business with specific corporate clients; our ability to appropriately address actual or perceived conflicts of interest; our ability to maintain and execute our information technology strategies; interruption or failure of our information technology, communications systems or data services; our vulnerability to potential breaches in security related to our information systems; our ability to comply with current and future data privacy regulations and other confidentiality obligations; the extent to which infrastructure disruptions may affect our ability to provide our services; the potential impairment of our goodwill and other intangible assets; our ability to comply with laws and regulations and any changes thereto; changes in tax laws or tax rates and our ability to make correct determinations in complex tax regimes; our ability to successfully execute on our strategy for operational efficiency; the failure of third parties performing on our behalf to comply with contract, regulatory or legal requirements; risks associated with the climate change and ability to achieve our sustainability goals; foreign currency volatility; social, geopolitical and economic risks associated with our international operations; risks associated with sociopolitical polarization; restrictions imposed on us by the agreements governing our indebtedness; our amount of indebtedness and its potential adverse impact on our available cash flow and the operation of our business; our ability to incur more indebtedness; our ability to generate sufficient cash flow from operations to service our existing indebtedness; our ability to compete globally, regionally and locally; the seasonality of significant portions of our revenue and cash flow; our exposure to environmental liabilities due to our role as a real estate services provider; potential price declines resulting from future sales of a large number of our ordinary shares; risks related to our capital allocation strategy including current intentions to not pay cash dividends; risks related to litigation; the fact that the rights of our shareholders differ in certain respects from the rights typically offered to shareholders of a
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) |
|
2024 |
|
|
2023 |
|
|
|
2024 |
|
|
2023 |
|
Revenue |
$ |
2,288.0 |
|
$ |
2,406.0 |
|
|
$ |
4,472.8 |
|
$ |
4,655.3 |
|
Costs and expenses: |
|
|
|
|
|
||||||||
Costs of services (exclusive of depreciation and amortization) |
|
1,874.8 |
|
|
1,978.1 |
|
|
|
3,707.3 |
|
|
3,885.7 |
|
Operating, administrative and other |
|
294.2 |
|
|
328.9 |
|
|
|
590.2 |
|
|
644.8 |
|
Depreciation and amortization |
|
31.2 |
|
|
35.7 |
|
|
|
63.7 |
|
|
72.6 |
|
Restructuring, impairment and related charges |
|
17.4 |
|
|
7.0 |
|
|
|
22.4 |
|
|
14.2 |
|
Total costs and expenses |
|
2,217.6 |
|
|
2,349.7 |
|
|
|
4,383.6 |
|
|
4,617.3 |
|
Operating income |
|
70.4 |
|
|
56.3 |
|
|
|
89.2 |
|
|
38.0 |
|
Interest expense, net of interest income |
|
(60.8 |
) |
|
(57.9 |
) |
|
|
(119.5 |
) |
|
(134.7 |
) |
Earnings from equity method investments |
|
4.3 |
|
|
12.8 |
|
|
|
16.0 |
|
|
24.7 |
|
Other income (expense), net |
|
3.3 |
|
|
(4.8 |
) |
|
|
5.0 |
|
|
(10.8 |
) |
Earnings (loss) before income taxes |
|
17.2 |
|
|
6.4 |
|
|
|
(9.3 |
) |
|
(82.8 |
) |
Provision for (benefit from) income taxes |
|
3.7 |
|
|
1.3 |
|
|
|
6.0 |
|
|
(11.5 |
) |
Net income (loss) |
$ |
13.5 |
|
$ |
5.1 |
|
|
$ |
(15.3 |
) |
$ |
(71.3 |
) |
|
|
|
|
|
|
||||||||
Basic earnings (loss) per share: |
|
|
|
|
|
||||||||
Earnings (loss) per share attributable to common shareholders, basic |
$ |
0.06 |
|
$ |
0.02 |
|
|
$ |
(0.07 |
) |
$ |
(0.31 |
) |
Weighted average shares outstanding for basic earnings (loss) per share |
|
229.0 |
|
|
227.1 |
|
|
|
228.5 |
|
|
226.7 |
|
Diluted earnings (loss) per share: |
|
|
|
|
|
||||||||
Earnings (loss) per share attributable to common shareholders, diluted |
$ |
0.06 |
|
$ |
0.02 |
|
|
$ |
(0.07 |
) |
$ |
(0.31 |
) |
Weighted average shares outstanding for diluted earnings (loss) per share |
|
231.5 |
|
|
227.1 |
|
|
|
228.5 |
|
|
226.7 |
|
Cushman & Wakefield plc |
||||||
Condensed Consolidated Balance Sheets |
||||||
|
||||||
|
As of |
|||||
(in millions, except share data) |
June 30, 2024 |
December 31, 2023 |
||||
Assets |
(unaudited) |
|
||||
Current assets: |
|
|
||||
Cash and cash equivalents |
$ |
567.3 |
|
$ |
767.7 |
|
Trade and other receivables, net of allowance of |
|
1,283.7 |
|
|
1,468.0 |
|
Income tax receivable |
|
67.5 |
|
|
67.1 |
|
Short-term contract assets, net |
|
296.7 |
|
|
311.0 |
|
Prepaid expenses and other current assets |
|
229.1 |
|
|
189.4 |
|
Assets held for sale |
|
147.7 |
|
|
— |
|
Total current assets |
|
2,592.0 |
|
|
2,803.2 |
|
Property and equipment, net |
|
148.2 |
|
|
163.8 |
|
Goodwill |
|
2,024.0 |
|
|
2,080.9 |
|
Intangible assets, net |
|
711.9 |
|
|
805.9 |
|
Equity method investments |
|
710.5 |
|
|
708.0 |
|
Deferred tax assets |
|
109.3 |
|
|
67.4 |
|
Non-current operating lease assets |
|
307.8 |
|
|
339.0 |
|
Other non-current assets |
|
739.3 |
|
|
805.8 |
|
Total assets |
$ |
7,343.0 |
|
$ |
7,774.0 |
|
|
|
|
||||
Liabilities and Shareholders’ Equity |
|
|
||||
Current liabilities: |
|
|
||||
Short-term borrowings and current portion of long-term debt |
$ |
141.7 |
|
$ |
149.7 |
|
Accounts payable and accrued expenses |
|
1,032.4 |
|
|
1,157.7 |
|
Accrued compensation |
|
671.9 |
|
|
851.4 |
|
Income tax payable |
|
27.6 |
|
|
20.8 |
|
Other current liabilities |
|
238.7 |
|
|
217.6 |
|
Liabilities associated with assets held for sale |
|
23.0 |
|
|
— |
|
Total current liabilities |
|
2,135.3 |
|
|
2,397.2 |
|
Long-term debt, net |
|
3,001.7 |
|
|
3,096.9 |
|
Deferred tax liabilities |
|
29.6 |
|
|
13.7 |
|
Non-current operating lease liabilities |
|
283.8 |
|
|
319.6 |
|
Other non-current liabilities |
|
253.1 |
|
|
268.6 |
|
Total liabilities |
|
5,703.5 |
|
|
6,096.0 |
|
|
|
|
||||
Shareholders’ equity: |
|
|
||||
Ordinary shares, nominal value |
|
22.9 |
|
|
22.7 |
|
Additional paid-in capital |
|
2,959.4 |
|
|
2,957.3 |
|
Accumulated deficit |
|
(1,132.5 |
) |
|
(1,117.2 |
) |
Accumulated other comprehensive loss |
|
(210.9 |
) |
|
(185.4 |
) |
Total equity attributable to the Company |
|
1,638.9 |
|
|
1,677.4 |
|
Non-controlling interests |
|
0.6 |
|
|
0.6 |
|
Total equity |
|
1,639.5 |
|
|
1,678.0 |
|
Total liabilities and shareholders’ equity |
$ |
7,343.0 |
|
$ |
7,774.0 |
|
Cushman & Wakefield plc |
||||||
Condensed Consolidated Statements of Cash Flows |
||||||
(unaudited) |
||||||
|
||||||
|
Six Months Ended June 30, |
|||||
(in millions) |
|
2024 |
|
|
2023 |
|
Cash flows from operating activities |
|
|
||||
Net loss |
$ |
(15.3 |
) |
$ |
(71.3 |
) |
Reconciliation of net loss to net cash used in operating activities: |
|
|
||||
Depreciation and amortization |
|
63.7 |
|
|
72.6 |
|
Impairment charges |
|
1.2 |
|
|
2.1 |
|
Unrealized foreign exchange gain |
|
(3.4 |
) |
|
(3.5 |
) |
Stock-based compensation |
|
11.9 |
|
|
25.3 |
|
Lease amortization |
|
45.4 |
|
|
48.5 |
|
Loss on debt extinguishment |
|
— |
|
|
8.7 |
|
Amortization of debt issuance costs |
|
3.7 |
|
|
3.9 |
|
Earnings from equity method investments, net of distributions received |
|
(5.3 |
) |
|
(10.4 |
) |
Change in deferred taxes |
|
(30.1 |
) |
|
(4.1 |
) |
Provision for loss on receivables and other assets |
|
7.7 |
|
|
1.8 |
|
Loss on disposal of business |
|
12.5 |
|
|
1.4 |
|
Unrealized loss on equity securities, net |
|
1.7 |
|
|
18.9 |
|
Other operating activities, net |
|
(15.9 |
) |
|
9.4 |
|
Changes in assets and liabilities: |
|
|
||||
Trade and other receivables |
|
115.4 |
|
|
114.4 |
|
Income taxes payable |
|
5.7 |
|
|
(67.4 |
) |
Short-term contract assets and Prepaid expenses and other current assets |
|
(2.8 |
) |
|
(19.2 |
) |
Other non-current assets |
|
(25.0 |
) |
|
(38.7 |
) |
Accounts payable and accrued expenses |
|
(79.0 |
) |
|
(72.2 |
) |
Accrued compensation |
|
(167.4 |
) |
|
(227.7 |
) |
Other current and non-current liabilities |
|
(28.0 |
) |
|
(30.8 |
) |
Net cash used in operating activities |
|
(103.3 |
) |
|
(238.3 |
) |
Cash flows from investing activities |
|
|
||||
Payment for property and equipment |
|
(22.3 |
) |
|
(20.6 |
) |
Investments in equity securities and equity method joint ventures |
|
(0.9 |
) |
|
(5.5 |
) |
Return of beneficial interest in a securitization |
|
(200.0 |
) |
|
(40.0 |
) |
Collection on beneficial interest in a securitization |
|
280.0 |
|
|
210.0 |
|
Other investing activities, net |
|
0.1 |
|
|
1.5 |
|
Net cash provided by investing activities |
|
56.9 |
|
|
145.4 |
|
Cash flows from financing activities |
|
|
||||
Shares repurchased for payment of employee taxes on stock awards |
|
(9.7 |
) |
|
(7.4 |
) |
Payment of deferred and contingent consideration |
|
(14.3 |
) |
|
(12.6 |
) |
Proceeds from borrowings |
|
— |
|
|
1,000.0 |
|
Repayment of borrowings |
|
(100.0 |
) |
|
(1,000.0 |
) |
Debt issuance costs |
|
— |
|
|
(23.5 |
) |
Payment of finance lease liabilities |
|
(15.5 |
) |
|
(13.6 |
) |
Other financing activities, net |
|
(1.0 |
) |
|
2.1 |
|
Net cash used in financing activities |
|
(140.5 |
) |
|
(55.0 |
) |
|
|
|
||||
Change in cash, cash equivalents and restricted cash |
|
(186.9 |
) |
|
(147.9 |
) |
Cash, cash equivalents and restricted cash, beginning of the period |
|
801.2 |
|
|
719.0 |
|
Effects of exchange rate fluctuations on cash, cash equivalents and restricted cash |
|
(9.4 |
) |
|
1.7 |
|
Cash, cash equivalents and restricted cash, end of the period |
$ |
604.9 |
|
$ |
572.8 |
|
Segment Results
The following tables summarize the results of operations for the Company’s segments for the three and six months ended June 30, 2024 and 2023.
Americas Results
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|||||||||||||||
(in millions) (unaudited) |
|
2024 |
|
2023 |
% Change in USD |
% Change in Local Currency |
|
|
2024 |
|
2023 |
|
% Change in USD |
% Change in Local Currency |
||||
Revenue: |
|
|
|
|
|
|
|
|
|
|||||||||
Services |
$ |
606.5 |
$ |
628.7 |
(4 |
)% |
(3 |
)% |
|
$ |
1,205.9 |
$ |
1,257.0 |
|
(4 |
)% |
(4 |
)% |
Leasing |
|
352.2 |
|
345.5 |
2 |
% |
2 |
% |
|
|
651.8 |
|
640.9 |
|
2 |
% |
2 |
% |
Capital markets |
|
132.3 |
|
163.5 |
(19 |
)% |
(19 |
)% |
|
|
243.4 |
|
282.4 |
|
(14 |
)% |
(14 |
)% |
Valuation and other |
|
38.7 |
|
38.4 |
1 |
% |
2 |
% |
|
|
74.2 |
|
71.8 |
|
3 |
% |
4 |
% |
Total service line fee revenue(1) |
|
1,129.7 |
|
1,176.1 |
(4 |
)% |
(4 |
)% |
|
|
2,175.3 |
|
2,252.1 |
|
(3 |
)% |
(3 |
)% |
Gross contract reimbursables(2) |
|
583.7 |
|
660.4 |
(12 |
)% |
(11 |
)% |
|
|
1,159.1 |
|
1,304.6 |
|
(11 |
)% |
(11 |
)% |
Total revenue |
$ |
1,713.4 |
$ |
1,836.5 |
(7 |
)% |
(6 |
)% |
|
$ |
3,334.4 |
$ |
3,556.7 |
|
(6 |
)% |
(6 |
)% |
|
|
|
|
|
|
|
|
|
|
|||||||||
Costs and expenses: |
|
|
|
|
|
|
|
|
|
|||||||||
Americas Fee-based operating expenses |
$ |
1,026.3 |
$ |
1,067.0 |
(4 |
)% |
(4 |
)% |
|
$ |
2,019.4 |
$ |
2,093.2 |
|
(4 |
)% |
(3 |
)% |
Cost of gross contract reimbursables |
|
583.7 |
|
660.4 |
(12 |
)% |
(11 |
)% |
|
|
1,159.1 |
|
1,304.6 |
|
(11 |
)% |
(11 |
)% |
Segment operating expenses |
$ |
1,610.0 |
$ |
1,727.4 |
(7 |
)% |
(7 |
)% |
|
$ |
3,178.5 |
$ |
3,397.8 |
|
(6 |
)% |
(6 |
)% |
|
|
|
|
|
|
|
|
|
|
|||||||||
Net income (loss) |
$ |
17.5 |
$ |
9.6 |
82 |
% |
86 |
% |
|
$ |
0.8 |
$ |
(30.9 |
) |
n.m. |
n.m. |
||
|
|
|
|
|
|
|
|
|
|
|||||||||
Adjusted EBITDA |
$ |
109.0 |
$ |
116.4 |
(6 |
)% |
(6 |
)% |
|
$ |
173.4 |
$ |
173.1 |
|
0 |
% |
1 |
% |
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. |
||||||||||||||||||
EMEA Results
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
||||||||||||||||||
(in millions) (unaudited) |
|
2024 |
|
|
2023 |
|
% Change in USD |
% Change in Local Currency |
|
|
2024 |
|
|
2023 |
|
% Change in USD |
% Change in Local Currency |
||||
Revenue: |
|
|
|
|
|
|
|
|
|
||||||||||||
Services |
$ |
80.0 |
|
$ |
94.3 |
|
(15 |
)% |
(15 |
)% |
|
$ |
161.0 |
|
$ |
181.2 |
|
(11 |
)% |
(12 |
)% |
Leasing |
|
53.9 |
|
|
54.0 |
|
0 |
% |
0 |
% |
|
|
107.6 |
|
|
94.4 |
|
14 |
% |
13 |
% |
Capital markets |
|
19.2 |
|
|
18.0 |
|
7 |
% |
7 |
% |
|
|
34.7 |
|
|
31.6 |
|
10 |
% |
9 |
% |
Valuation and other |
|
40.6 |
|
|
41.8 |
|
(3 |
)% |
(3 |
)% |
|
|
84.2 |
|
|
83.8 |
|
0 |
% |
(1 |
)% |
Total service line fee revenue(1) |
|
193.7 |
|
|
208.1 |
|
(7 |
)% |
(7 |
)% |
|
|
387.5 |
|
|
391.0 |
|
(1 |
)% |
(2 |
)% |
Gross contract reimbursables(2) |
|
28.2 |
|
|
31.8 |
|
(11 |
)% |
(11 |
)% |
|
|
56.7 |
|
|
54.2 |
|
5 |
% |
3 |
% |
Total revenue |
$ |
221.9 |
|
$ |
239.9 |
|
(8 |
)% |
(7 |
)% |
|
$ |
444.2 |
|
$ |
445.2 |
|
0 |
% |
(1 |
)% |
|
|
|
|
|
|
|
|
|
|
||||||||||||
Costs and expenses: |
|
|
|
|
|
|
|
|
|
||||||||||||
EMEA Fee-based operating expenses |
$ |
181.7 |
|
$ |
191.4 |
|
(5 |
)% |
(5 |
)% |
|
$ |
367.3 |
|
$ |
377.0 |
|
(3 |
)% |
(4 |
)% |
Cost of gross contract reimbursables |
|
28.2 |
|
|
31.8 |
|
(11 |
)% |
(11 |
)% |
|
|
56.7 |
|
|
54.2 |
|
5 |
% |
3 |
% |
Segment operating expenses |
$ |
209.9 |
|
$ |
223.2 |
|
(6 |
)% |
(6 |
)% |
|
$ |
424.0 |
|
$ |
431.2 |
|
(2 |
)% |
(3 |
)% |
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net loss |
$ |
(4.5 |
) |
$ |
(5.2 |
) |
(13 |
)% |
(15 |
)% |
|
$ |
(14.9 |
) |
$ |
(29.5 |
) |
(49 |
)% |
(47 |
)% |
|
|
|
|
|
|
|
|
|
|
||||||||||||
Adjusted EBITDA |
$ |
13.2 |
|
$ |
16.9 |
|
(22 |
)% |
(20 |
)% |
|
$ |
22.2 |
|
$ |
14.8 |
|
50 |
% |
52 |
% |
|
|||||||||||||||||||||
(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. |
|||||||||||||||||||||
APAC Results
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
||||||||||||||||
(in millions) (unaudited) |
|
2024 |
|
2023 |
% Change in USD |
% Change in Local Currency |
|
|
2024 |
|
|
2023 |
|
% Change in USD |
% Change in Local Currency |
||||
Revenue: |
|
|
|
|
|
|
|
|
|
||||||||||
Services |
$ |
178.0 |
$ |
165.9 |
7 |
% |
9 |
% |
|
$ |
368.7 |
|
$ |
347.5 |
|
6 |
% |
8 |
% |
Leasing |
|
44.2 |
|
42.3 |
4 |
% |
7 |
% |
|
|
72.6 |
|
|
69.1 |
|
5 |
% |
8 |
% |
Capital markets |
|
11.7 |
|
10.4 |
13 |
% |
19 |
% |
|
|
26.7 |
|
|
20.8 |
|
28 |
% |
35 |
% |
Valuation and other |
|
26.4 |
|
30.1 |
(12 |
)% |
(10 |
)% |
|
|
50.5 |
|
|
56.4 |
|
(10 |
)% |
(7 |
)% |
Total service line fee revenue(1) |
|
260.3 |
|
248.7 |
5 |
% |
7 |
% |
|
|
518.5 |
|
|
493.8 |
|
5 |
% |
7 |
% |
Gross contract reimbursables(2) |
|
92.4 |
|
80.9 |
14 |
% |
16 |
% |
|
|
175.7 |
|
|
159.6 |
|
10 |
% |
12 |
% |
Total revenue |
$ |
352.7 |
$ |
329.6 |
7 |
% |
9 |
% |
|
$ |
694.2 |
|
$ |
653.4 |
|
6 |
% |
9 |
% |
|
|
|
|
|
|
|
|
|
|
||||||||||
Costs and expenses: |
|
|
|
|
|
|
|
|
|
||||||||||
APAC Fee-based operating expenses |
$ |
247.9 |
$ |
240.7 |
3 |
% |
5 |
% |
|
$ |
502.9 |
|
$ |
486.9 |
|
3 |
% |
5 |
% |
Cost of gross contract reimbursables |
|
92.4 |
|
80.9 |
14 |
% |
16 |
% |
|
|
175.7 |
|
|
159.6 |
|
10 |
% |
12 |
% |
Segment operating expenses |
$ |
340.3 |
$ |
321.6 |
6 |
% |
8 |
% |
|
$ |
678.6 |
|
$ |
646.5 |
|
5 |
% |
7 |
% |
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income (loss) |
$ |
0.5 |
$ |
0.7 |
(29 |
)% |
41 |
% |
|
$ |
(1.2 |
) |
$ |
(10.9 |
) |
(89 |
)% |
(94 |
)% |
|
|
|
|
|
|
|
|
|
|
||||||||||
Adjusted EBITDA |
$ |
16.7 |
$ |
12.8 |
30 |
% |
34 |
% |
|
$ |
21.4 |
|
$ |
19.1 |
|
12 |
% |
16 |
% |
(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. |
|||||||||||||||||||
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:
- Adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”) and Adjusted EBITDA margin;
- Segment operating expenses and Fee-based operating expenses;
- Adjusted net income and Adjusted earnings per share;
- Free cash flow;
- Local currency; and
- Net debt.
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.
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 unrealized loss on investments, net, loss on disposal group, integration and other costs related to merger, acquisition related costs and efficiency initiatives, cost savings initiatives, CEO transition costs, servicing liability fees and amortization, certain legal and compliance matters, and other non-recurring 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.
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, loss on disposal group, integration and other costs related to merger, acquisition related costs and efficiency initiatives, cost savings initiatives, CEO transition costs, servicing liability fees and amortization, certain legal and compliance matters, and other non-recurring items. 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 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 depreciation and amortization related to merger, unrealized loss on investments, net, financing and other facility fees, loss on disposal group, integration and other costs related to merger, acquisition related costs and efficiency initiatives, cost savings initiatives, CEO transition costs, servicing liability fees and amortization, certain legal and compliance matters, and other non-recurring 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 component when measuring operating performance. Management defines Adjusted EPS as Adjusted net income divided by total basic and diluted weighted average shares outstanding.
Free cash flow: Free cash flow is a financial performance metric that is calculated as net cash provided by (used in) operating activities, less capital expenditures (reflected as Payment for property and equipment in the investing section of the Condensed Consolidated Statements of Cash Flows).
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.
Adjustments to
During the periods presented in this earnings release, the Company had the following adjustments:
Unrealized loss on investments, net represents net unrealized losses on fair value investments. Prior to 2024, this primarily reflected unrealized losses on our investment in WeWork.
Loss on disposal group reflects the loss of
Integration and other costs related to merger reflects the non-cash amortization expense of certain merger related retention awards that will be amortized through 2026, and the non-cash amortization expense of merger related deferred rent and tenant incentives which will be amortized through 2028.
Acquisition related costs and efficiency initiatives includes internal and external consulting costs incurred to implement certain distinct operating efficiency initiatives designed to realign our organization to be a more agile partner to our clients. These initiatives vary in frequency, amount and occurrence based on factors specific to each initiative. In addition, this includes certain direct costs incurred in connection with acquiring businesses.
Cost savings initiatives primarily reflects severance and other one-time employment-related separation costs related to actions to reduce headcount across select roles to help optimize our workforce given the challenging macroeconomic conditions and operating environment, as well as property lease rationalizations. These actions continued in the first half of 2024.
CEO transition costs in 2024 reflects certain payroll taxes associated with compensation for John Forrester, the Company’s former Chief Executive Officer. In 2023, CEO transition costs reflects accelerated stock-based compensation expense associated with stock awards granted to Mr. Forrester, who stepped down from the position of CEO as of June 30, 2023, but who remained employed by the Company as a Strategic Advisor until December 31, 2023. The requisite service period under the applicable award agreements was satisfied upon Mr. Forrester’s retirement from the Company on December 31, 2023. We believe the accelerated expense for these stock awards, as well as the payroll taxes associated with such compensation, are similar in nature to one-time severance benefits and are not normal, recurring operating expenses necessary to operate the business.
Servicing liability fees and amortization reflects the additional non-cash servicing liability fees accrued in connection with the A/R Securitization amendments in prior years. The liability will be amortized through June 2026.
The interim financial information for the three and six months ended June 30, 2024 and 2023 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, 2023 in the Company’s 2023 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.
Reconciliations of Non-GAAP financial measures
Reconciliation of Net income (loss) to Adjusted EBITDA:
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|||||||||
(in millions) (unaudited) |
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
Net income (loss) |
$ |
13.5 |
|
$ |
5.1 |
|
$ |
(15.3 |
) |
$ |
(71.3 |
) |
Add/(less): |
|
|
|
|
|
|||||||
Depreciation and amortization |
|
31.2 |
|
|
35.7 |
|
|
63.7 |
|
|
72.6 |
|
Interest expense, net of interest income |
|
60.8 |
|
|
57.9 |
|
|
119.5 |
|
|
134.7 |
|
Provision for (benefit from) income taxes |
|
3.7 |
|
|
1.3 |
|
|
6.0 |
|
|
(11.5 |
) |
Unrealized loss on investments, net |
|
0.7 |
|
|
8.2 |
|
|
1.7 |
|
|
18.9 |
|
Loss on disposal group |
|
14.0 |
|
|
1.8 |
|
|
14.0 |
|
|
1.8 |
|
Integration and other costs related to merger |
|
1.5 |
|
|
2.0 |
|
|
2.8 |
|
|
4.4 |
|
Acquisition related costs and efficiency initiatives |
|
— |
|
|
5.1 |
|
|
— |
|
|
11.7 |
|
Cost savings initiatives |
|
10.2 |
|
|
12.2 |
|
|
17.4 |
|
|
27.2 |
|
CEO transition costs |
|
1.9 |
|
|
2.3 |
|
|
1.9 |
|
|
2.3 |
|
Servicing liability fees and amortization |
|
(0.5 |
) |
|
11.6 |
|
|
(0.9 |
) |
|
11.6 |
|
Other(1) |
|
1.9 |
|
|
2.9 |
|
|
6.2 |
|
|
4.6 |
|
Adjusted EBITDA |
$ |
138.9 |
|
$ |
146.1 |
|
$ |
217.0 |
|
$ |
207.0 |
|
|
||||||||||||
(1) For the three months ended June 30, 2024, Other primarily reflects one-time consulting costs associated with certain legal entity reorganization projects and a secondary offering of our ordinary shares by our former shareholders. For the six months ended June 30, 2024, Other also includes non-cash stock-based compensation expense associated with certain one-time retention awards which vested in February 2024 and bad debt expense driven by a sublessee default. For the three and six months ended June 30, 2023, Other primarily reflects non-cash stock-based compensation expense associated with certain one-time retention awards. |
||||||||||||
Reconciliation of Net income (loss) to Adjusted net income:
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
||||||||||
(in millions, except per share data) (unaudited) |
|
2024 |
|
|
2023 |
|
|
|
2024 |
|
|
2023 |
|
Net income (loss) |
$ |
13.5 |
|
$ |
5.1 |
|
|
$ |
(15.3 |
) |
$ |
(71.3 |
) |
Add/(less): |
|
|
|
|
|
||||||||
Merger and acquisition related depreciation and amortization |
|
12.8 |
|
|
17.7 |
|
|
|
26.7 |
|
|
35.8 |
|
Unrealized loss on investments, net |
|
0.7 |
|
|
8.2 |
|
|
|
1.7 |
|
|
18.9 |
|
Financing and other facility fees(1) |
|
2.9 |
|
|
— |
|
|
|
2.9 |
|
|
21.6 |
|
Loss on disposal group |
|
14.0 |
|
|
1.8 |
|
|
|
14.0 |
|
|
1.8 |
|
Integration and other costs related to merger |
|
1.5 |
|
|
2.0 |
|
|
|
2.8 |
|
|
4.4 |
|
Acquisition related costs and efficiency initiatives |
|
— |
|
|
5.1 |
|
|
|
— |
|
|
11.7 |
|
Cost savings initiatives |
|
10.2 |
|
|
12.2 |
|
|
|
17.4 |
|
|
27.2 |
|
CEO transition costs |
|
1.9 |
|
|
2.3 |
|
|
|
1.9 |
|
|
2.3 |
|
Servicing liability fees and amortization |
|
(0.5 |
) |
|
11.6 |
|
|
|
(0.9 |
) |
|
11.6 |
|
Other |
|
1.9 |
|
|
2.9 |
|
|
|
6.2 |
|
|
4.6 |
|
Tax impact of adjusted items(2) |
|
(13.2 |
) |
|
(18.4 |
) |
|
|
(11.1 |
) |
|
(27.5 |
) |
Adjusted net income |
$ |
45.7 |
|
$ |
50.5 |
|
|
$ |
46.3 |
|
$ |
41.1 |
|
Weighted average shares outstanding, basic |
|
229.0 |
|
|
227.1 |
|
|
|
228.5 |
|
|
226.7 |
|
Weighted average shares outstanding, diluted(3) |
|
231.5 |
|
|
227.1 |
|
|
|
231.3 |
|
|
227.2 |
|
Adjusted earnings per share, basic |
$ |
0.20 |
|
$ |
0.22 |
|
|
$ |
0.20 |
|
$ |
0.18 |
|
Adjusted earnings per share, diluted(3) |
$ |
0.20 |
|
$ |
0.22 |
|
|
$ |
0.20 |
|
$ |
0.18 |
|
(1) Financing and other facility fees reflects costs related to the refinancing of a portion of the borrowings under our 2018 Credit Agreement in April 2024, June 2024 and January 2023, including |
|||||||||||||
(2) Reflective of management’s estimation of an adjusted effective tax rate of |
|||||||||||||
(3) Weighted average shares outstanding, diluted is calculated by taking basic weighted average shares outstanding and adding dilutive shares of 2.5 million and 0.0 million for the three months ended June 30, 2024 and 2023, respectively, and dilutive shares of 2.8 million and 0.5 million for the six months ended June 30, 2024 and 2023, respectively. |
|||||||||||||
Reconciliation of Net cash used in operating activities to Free cash flow:
|
Six Months Ended June 30, |
|||||
(in millions) (unaudited) |
|
2024 |
|
|
2023 |
|
Net cash used in operating activities |
$ |
(103.3 |
) |
$ |
(238.3 |
) |
Payment for property and equipment |
|
(22.3 |
) |
|
(20.6 |
) |
Free cash flow |
$ |
(125.6 |
) |
$ |
(258.9 |
) |
Summary of Total costs and expenses:
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
||
(in millions) (unaudited) |
2024 |
2023 |
|
2024 |
2023 |
Americas Fee-based operating expenses |
|
|
|
|
|
EMEA Fee-based operating expenses |
181.7 |
191.4 |
|
367.3 |
377.0 |
APAC Fee-based operating expenses |
247.9 |
240.7 |
|
502.9 |
486.9 |
Cost of gross contract reimbursables |
704.3 |
773.1 |
|
1,391.5 |
1,518.4 |
Segment operating expenses |
2,160.2 |
2,272.2 |
|
4,281.1 |
4,475.5 |
Depreciation and amortization |
31.2 |
35.7 |
|
63.7 |
72.6 |
Loss on disposal group |
14.0 |
1.8 |
|
14.0 |
1.8 |
Integration and other costs related to merger |
1.5 |
2.0 |
|
2.8 |
4.4 |
Acquisition related costs and efficiency initiatives |
— |
5.1 |
|
— |
11.7 |
Cost savings initiatives |
10.2 |
12.2 |
|
17.4 |
27.2 |
CEO transition costs |
1.9 |
2.3 |
|
1.9 |
2.3 |
Servicing liability fees and amortization |
(0.5) |
11.6 |
|
(0.9) |
11.6 |
Other, including foreign currency movements(1) |
(0.9) |
6.8 |
|
3.6 |
10.2 |
Total costs and expenses |
|
|
|
|
|
(1) For the three months ended June 30, 2024, Other primarily reflects one-time consulting costs associated with certain legal entity reorganization projects and a secondary offering of our ordinary shares by our former shareholders, and the effects of movements in foreign currency. For the six months ended June 30, 2024, Other also includes non-cash stock-based compensation expense associated with certain one-time retention awards which vested in February 2024 and bad debt expense driven by a sublessee default. For the three and six months ended June 30, 2023, Other primarily reflects non-cash stock-based compensation expense associated with certain one-time retention awards and the effects of movements in foreign currency. |
|||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20240729038189/en/
INVESTOR RELATIONS
Megan McGrath
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 was Cushman & Wakefield's revenue for Q2 2024?
How did Cushman & Wakefield's leasing revenue perform in Q2 2024?
What was Cushman & Wakefield's net income for Q2 2024?
What was the Adjusted EBITDA for Cushman & Wakefield in Q2 2024?
How did Cushman & Wakefield's Capital Markets revenue perform in Q2 2024?
What was Cushman & Wakefield's liquidity as of June 30, 2024?
What is Cushman & Wakefield's stock symbol?
