Third consecutive quarter of global leasing growth
Net cash flow from operations and free cash flow both improved by more than $130 million year-to-date vs. 2023
Announces sale of small non-core business to accelerate strategic growth investments
CHICAGO--(BUSINESS WIRE)--
Cushman & Wakefield (NYSE: CWK) today reported financial results for the second quarter of 2024.
“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 for the second quarter of 2024 decreased 5% from the second quarter of 2023.
-
Leasing grew 2% driven by the Americas and APAC.
-
Services, Capital markets and Valuation and other declined 3%, 15% and 4%, respectively.
-
Net income of $13.5 million for the second quarter of 2024 increased $8.4 million compared to net income of $5.1 million for the second quarter of 2023. Diluted earnings per share was $0.06 for the quarter.
-
Adjusted EBITDA of $138.9 million decreased 5% from the second quarter of 2023, with Adjusted EBITDA margin of 8.8% declining 18 basis points from the second quarter of 2023.
-
Adjusted diluted earnings per share was $0.20 for the quarter.
-
In June 2024, we repriced $1.0 billion of the Company’s term loans due in 2030, reducing the applicable interest rate by 35 basis points to 1-month Term SOFR plus 3.00%. In addition, we elected to prepay $45.0 million of the Company’s term loans due in 2025.
-
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. and Canada. 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 for the first half of 2024 decreased 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% and 1%, respectively.
-
Net loss of $15.3 million for the first half of 2024 improved 79% compared to net loss of $71.3 million for the first half of 2023. Diluted loss per share for the first half of 2024 was $0.07.
-
Adjusted EBITDA of $217.0 million increased 5% from the first half of 2023, with Adjusted EBITDA margin of 7% expanding 44 basis points from the first half of 2023.
-
Adjusted diluted earnings per share of $0.20 was up from $0.18 in the first half of 2023.
-
Net cash used in operating activities was $103.3 million for the first half of 2024.
-
Free cash flow for the first half of 2024 was a use of $125.6 million compared to a use of $258.9 million in the first half of 2023.
-
Liquidity as of June 30, 2024 was $1.7 billion, consisting of availability on the Company’s undrawn revolving credit facility of $1.1 billion and cash and cash equivalents of $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 $2.3 billion decreased $118.0 million or 5% compared to the three months ended June 30, 2023, primarily driven by the Americas, which decreased 7%. This decline was principally driven by decreases in Services and Gross contract reimbursables revenue of 3% and 9%, respectively, due to changes in client mix. Capital markets revenue declined 15%, driven by a 19% decline in the Americas, as volatility and uncertainty in the interest rate environment continued to challenge investment sales activity. Valuation and other revenue also declined 4%. Partially offsetting these trends was 2% growth in Leasing revenue compared to the three months ended June 30, 2023, driven by the Americas and APAC.
Costs of services
Costs of services of $1.9 billion decreased $103.3 million or 5% compared to the three months ended June 30, 2023, principally driven by a decrease in third-party consumables of approximately $75.0 million and a decrease in employment costs of approximately $23.0 million. Cost of services provided to clients decreased 3% and Cost of gross contract reimbursables decreased 9%, driven by the Americas, due to changes in client mix.
Operating, administrative and other
Operating, administrative and other expenses of $294.2 million decreased $34.7 million or 11% compared to the three months ended June 30, 2023, driven by the impact of our cost savings initiatives, primarily realized as a reduction in employment costs. In addition, during June 2023, the Company incurred an $11.3 million servicing liability fee in connection with the amendment and extension of the A/R Securitization.
Restructuring, impairment and related charges
Restructuring, impairment and related charges of $17.4 million increased $10.4 million compared to the three months ended June 30, 2023. In June 2024, we signed a definitive agreement to sell a non-core business in the Americas (the “Disposal Group”) which was classified as held for sale as of June 30, 2024. The increase compared to the three months ended June 30, 2023 was driven by a loss of $12.5 million recognized in the second quarter of 2024 to reduce the carrying value of the Disposal Group to its fair value less costs to sell, partially offset by a decrease in severance and employment-related costs of $1.9 million. In 2023, the Company actioned certain cost savings initiatives, including a reduction in 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 into the first half of 2024.
Earnings from equity method investments
Earnings from equity method investments of $4.3 million decreased $8.5 million compared to the three months ended June 30, 2023, primarily due to a decline of $6.5 million in earnings recognized from our equity method investment Cushman Wakefield Greystone LLC (the “Greystone JV”) due to lower transaction volumes as a result of tighter lending conditions given the volatility in interest rates.
Other income (expense), net
Other income, net was $3.3 million for the three months ended June 30, 2024 compared to other expense, net of $4.8 million for the three months ended June 30, 2023, driven by lower net unrealized losses on our fair value investments, primarily related to our investment in WeWork, as well as higher royalty fee income.
Provision for income taxes
Provision for income taxes for the second quarter of 2024 was $3.7 million on earnings before income taxes of $17.2 million. For the second quarter of 2023, the provision for income taxes was $1.3 million on earnings before income taxes of $6.4 million. The increase in income tax expense compared to the three months ended June 30, 2023 was primarily driven by higher earnings before income taxes and changes in the jurisdictional mix of earnings resulting in higher non-deductible losses when compared to the same period in 2023.
Net income and Adjusted EBITDA
Net income of $13.5 million increased $8.4 million compared to the three months ended June 30, 2023. Net income margin was 0.6% compared to net income margin of 0.2% for the three months ended June 30, 2023. The increase in net income was driven by the impact of our cost savings initiatives, including lower employment costs, growth in our Leasing service line, lower net unrealized losses on our fair value investments and fewer one-time, non-recurring expenses. In addition, a servicing liability fee associated with the amendment and extension of the A/R Securitization in the second quarter of 2023 also contributed to the year-over-year increase. These favorable trends were partially offset by declines in our Services and Capital markets service lines, and the loss on the Disposal Group recognized in the second quarter of 2024.
Adjusted EBITDA of $138.9 million decreased $7.2 million or 5% compared to the three months ended June 30, 2023, driven by the same factors impacting Net income above, with the exception of the loss on the Disposal Group, net unrealized losses on our fair value investments and the A/R Securitization servicing liability fee incurred in the prior year period. Adjusted EBITDA margin, measured against service line fee revenue, of 8.8% declined 18 basis points from the second quarter of 2023.
Year-to-Date Results (unaudited)
Revenue
Revenue of $4.5 billion decreased $182.5 million or 4% compared to the six months ended June 30, 2023, driven by the Americas, which decreased 6%. This decline was principally driven by decreases in Services and Gross contract reimbursables revenue of 3% and 8%, respectively, due to changes in client mix. Capital markets revenue declined 9%, driven by a 14% decline in the Americas, as volatility and uncertainty in the interest rate environment continued to challenge investment sales activity. Valuation and other revenue also declined 1%. Partially offsetting these trends was 3% growth in Leasing revenue compared to the six months ended June 30, 2023, driven by broad strength across all segments.
Costs of services
Costs of services of $3.7 billion decreased $178.4 million or 5% compared to the six months ended June 30, 2023, principally driven by a decrease in third-party consumables of approximately $145.0 million and a decrease in employment costs of approximately $30.0 million. Cost of services provided to clients decreased 2% and Cost of gross contract reimbursables decreased 8%, driven by the Americas, due to changes in client mix. Total costs of services as a percentage of total revenue was 83% for the six months ended June 30, 2024 compared to 83% for the six months ended June 30, 2023.
Operating, administrative and other
Operating, administrative and other expenses of $590.2 million decreased $54.6 million or 8% compared to the six months ended June 30, 2023, driven by the impact of our cost savings initiatives, primarily realized as a reduction in employment costs. In addition, during June 2023, the Company incurred an $11.3 million servicing liability fee in connection with the amendment and extension of the A/R Securitization. Operating, administrative and other expenses as a percentage of total revenue was 13% for the six months ended June 30, 2024 compared to 14% for the six months ended June 30, 2023.
Restructuring, impairment and related charges
Restructuring, impairment and related charges of $22.4 million increased $8.2 million compared to the six months ended June 30, 2023, which reflected a loss of $12.5 million recognized in the second quarter of 2024 to reduce the carrying value of the Disposal Group to its fair value less costs to sell, partially offset by a decrease in severance and employment-related costs of $3.3 million, as well as a decrease in right-of-use asset impairment charges of $0.9 million. In 2023, the Company actioned certain cost savings initiatives, including a reduction in 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 into the first half of 2024.
Interest expense, net of interest income
Interest expense of $119.5 million decreased $15.2 million or 11% compared to the six months ended June 30, 2023, primarily related to a loss on debt extinguishment of $16.9 million, as well as $4.7 million of new transaction costs expensed in the first quarter of 2023 in connection with the refinancing of a portion of the borrowings under our 2018 Credit Agreement (see Note 10: Long-Term Debt and Other Borrowings in the Notes to the Condensed Consolidated Financial Statements in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2024 for further information). The decrease in interest expense was partially offset by higher variable interest rates on our term loans compared to the prior year period.
Earnings from equity method investments
Earnings from equity method investments of $16.0 million decreased $8.7 million compared to the six months ended June 30, 2023, primarily due to a decline of $5.6 million in earnings recognized from the Greystone JV due to lower transaction volumes as a result of tighter lending conditions given the volatility in interest rates.
Other income (expense), net
Other income, net was $5.0 million for the six months ended June 30, 2024 compared to other expense, net of $10.8 million for the six months ended June 30, 2023, driven by lower net unrealized losses on our fair value investments, primarily related to our investment in WeWork.
Provision for (benefit from) income taxes
Provision for income taxes for the six months ended June 30, 2024 was $6.0 million on a loss before income taxes of $9.3 million. For the six months ended June 30, 2023, the benefit from income taxes was $11.5 million on a loss before income taxes of $82.8 million. The change from income tax benefit to income tax expense was driven by a lower loss before income taxes and changes in the jurisdictional mix of earnings resulting in higher non-deductible losses when compared to the same period in 2023.
Net loss and Adjusted EBITDA
Net loss of $15.3 million improved $56.0 million compared to net loss of $71.3 million in the six months ended June 30, 2023. Net loss margin was 0.3% compared to net loss margin of 1.5% for the six months ended June 30, 2023. The improvement in net loss was driven by the impact of our cost savings initiatives, including lower employment costs, growth in our Leasing service line and lower net unrealized losses on our fair value investments. In addition, a loss on debt extinguishment incurred in the first quarter of 2023 and a servicing liability fee associated with the amendment and extension of the A/R Securitization in the second quarter of 2023 also contributed to the improvement from the prior year period. These favorable trends were partially offset by declines in our Services and Capital markets service lines, and the loss on the Disposal Group recognized in the second quarter of 2024.
Adjusted EBITDA of $217.0 million increased $10.0 million or 5% compared to the six months ended June 30, 2023, driven by the same factors impacting Net loss above, with the exception of the loss on the Disposal Group, net unrealized losses on our fair value investments, and the loss on debt extinguishment and A/R Securitization servicing liability fee incurred in the prior year period. Adjusted EBITDA margin, measured against service line fee revenue, of 7.0% expanded 44 basis points from the six months ended June 30, 2023.
Balance Sheet
Liquidity at the end of the second quarter was $1.7 billion, consisting of availability on the Company’s undrawn revolving credit facility of $1.1 billion and cash and cash equivalents of $0.6 billion.
Net debt as of June 30, 2024 was $2.5 billion reflecting the Company’s outstanding term loans of $2.0 billion and senior secured notes totaling $1.1 billion, net of cash and cash equivalents of $0.6 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 financial measure.
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 U.S. callers and 1-412-317-5180 for international callers. 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 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 $9.5 billion across its core service lines of (i) Services, (ii) Leasing, (iii) Capital markets, and (iv) Valuation and other. It also receives numerous industry and business accolades for its award-winning culture and commitment to Diversity, Equity and Inclusion (DEI), sustainability and more. For additional information, visit
www.cushmanwakefield.com
.
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 Delaware corporation; the fact that U.S. investors may have difficulty enforcing liabilities against us or be limited in their ability to bring a claim in a judicial forum they find favorable in the event of a dispute; and the possibility that English law and provisions in our articles of association may have anti-takeover effects that could discourage an acquisition of us by others or require shareholder approval for certain capital structure decisions. 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, such assumptions are inherently uncertain and subjective and 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, 2023 and in its other periodic reports filed with the Securities and Exchange Commission (the “SEC”).
|
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 $87.8 and $85.2, as of June 30, 2024 and December 31, 2023, respectively
|
|
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 $0.10 per share, 800,000,000 shares authorized; 229,191,378 and 227,282,173 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively
|
|
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
|