Cushman & Wakefield plc (CWK) Earnings

Management highlights

- Overall Quarterly Performance * Achieved the highest Q2 total revenue, highest Q2 leasing and services revenue, and lowest gross debt balance in company history * Delivered sixth consecutive quarter of double-digit adjusted EPS growth; Q2 2026 adjusted EPS hit 35 cents, up 17% YoY, with year-to-date adjusted EPS up 28% YoY * Adjusted EBITDA was $184 million, up 13% YoY, with operating leverage achieved across the global platform * 12-month trailing free cash flow was $249 million, up $123 million YoY, with a 79% conversion rate of adjusted net income, at the high end of the company's 60-80% target range - Balance Sheet and Capital Structure Progress * Ended Q2 with 3.0x net leverage, down from 3.7x YoY; cumulative debt repayment since early 2024 totals ~$650 million * Amended and extended an $850 million term loan to 2033, repriced to SOFR + 225 bps (the lowest pricing spread in company history), upsized by $350 million to redeem an equal amount of 2028 senior secured notes * Ended the quarter with ~$500 million in cash and $1.5 billion in total liquidity - Strategic Growth Initiatives * Organic growth is driving current performance, with significant remaining expansion opportunity across the global platform * Data center-related business is a high-growth priority: data center revenue is up 83% year-to-date, with integrated facilities management (IFM) as the largest data center segment, and 25% of the broader IFM pipeline now tied to data centers * Proprietary AI tools are scaling the project management business to improve internal efficiency and deliver client cost savings * The company is positioned to serve the entire expanding real asset ecosystem (beyond traditional commercial real estate, including infrastructure, energy, and public assets) which has deep structural demand - Cross-Business Operational Improvements * On-going de-siloing efforts are driving efficiency gains and cross-selling opportunities across service lines, with a cultural shift toward platform-wide growth rather than siloed performance

Guidance

- Revenue growth for full-year 2026 is now expected to land at the mid-to-high end of the prior 6-8% guidance range - Adjusted EPS growth guidance for 2026 was raised from the previous 15-20% range to a new 18-23% range - Full-year guidance contemplates moderated growth in the second half of 2026, reflecting a pragmatic approach following stronger-than-expected first-half outperformance - The company reaffirmed its prior long-term target of 150 basis points of total margin expansion over the three-year growth plan launched in December 2025 - The company expects to reach mid-2x net leverage by the end of 2026, on track for its investment grade credit rating goal

Segment performance

Geographic segments: All three regions delivered double-digit revenue growth year-over-year. Adjusted EBITDA was up 23% in the Americas and 17% in APAC, while adjusted EBITDA in EMEA declined due to the non-recurrence of prior-year foreign exchange gains. By service line (contribution to total Q2 2026 revenue of $2.8 billion, up 11% YoY): - Brokerage (leasing + capital markets): +19% revenue growth YoY. Global leasing revenue grew 27% YoY (Americas +35%, APAC +6%, EMEA -6% due to deal timing variance and regional macro uncertainty). Global capital markets revenue declined 1% YoY (Americas -6%, APAC +50%, EMEA +11%). - Services: +7% revenue growth YoY (Americas +5%, EMEA +21%, APAC +10%). Project management grew 20% YoY and facilities management grew 8% YoY globally. - Valuation and other: +8% revenue growth YoY.

Risks & headwinds

- EMEA faces heightened macroeconomic and geopolitical uncertainty that has suppressed leasing activity, with no expectation of rapid recovery in the region in Q3 2026 - US capital markets saw softness in Q2 2026 driven by concentrated market activity in large institutional portfolio trades, where the company's footprint is still in early development - Industry softness in office and mid-sized multifamily transactions in the Americas negatively impacted Q2 2026 capital markets revenue - Leasing commissions were slightly higher than normal in early 2026, though this impact is expected to moderate through the remainder of the year

Analyst Q&A

• Q: How does management plan to grow the high-performing data center business, and is an acquisition of additional capabilities on the table? /

  A: Data center growth opportunity exists across the full asset lifecycle: transactional business is strong today, but long-term sustainable growth is centered on the services side (especially IFM). The company has already invested organically in expanding sales, delivery capabilities, and leadership for data center work. Inorganic growth via acquisition of additional expertise is also an option and remains on the table.

• Q: What explains Q2 capital markets softness, what is the outlook for H2, and will the company accelerate hiring to address this gap? /

  A: Q2 softness stemmed from an unusual 12-week period of highly concentrated activity in large institutional portfolio trades, where the company's footprint is still early in development. This concentration is seen as a temporary anomaly, not a long-term shift. Management will continue to gradually add proven talent to capture missed share, and the raised 2026 guidance does not depend on this capital markets expansion, so the company is not forced to hire quickly.

• Q: What is the outlook for sustained growth and profitability in the services segment, and what are the company's capital allocation priorities now that leverage has been substantially reduced? /

  A: Services has strong resiliency, with healthy 12-month pipelines across IFM, property management, and project management. Services margins are currently at expected target levels, with recent operational improvements in EMEA driving margin gains. With progress on deleveraging, the company now has multiple capital allocation options: further leverage reduction to hit the investment grade goal, increased organic growth investment, accretive M&A (such as in data centers), or returning capital to shareholders, all of which are under consideration.

• Q: How much more efficiency gain can come from the company's ongoing de-siloing efforts, and what phase of the initiative is the company in currently? /

  A: Management estimates it is in the 7th inning of the 9-inning de-siloing process. Meaningful efficiency gains and cross-selling (such as capital markets deals flowing to leasing and property management services) are already being realized. A key cultural shift is also underway, encouraging employees to prioritize platform-wide growth rather than just individual silo performance, with significant remaining opportunity for additional gains.