CBRE GROUP, INC. Q1 FY2025 earnings call

Bob noted CBRE had a strong start to 2025, with Project Management and BOE segments performing well, showing operational and strategic gains. Emma discussed core EBITDA up 27% and core EPS up 10% compared to last year's first quarter, excluding a large one-time tax benefit core EPS grew 39%. Strong consolidated results included a currency headwind. Resilient businesses had 17% net revenue growth, transactional up 18%, with advisory services having strong start, BOE strong in various areas, project management and REI also showing positive performance.

Advisory Services had net revenue growth of 16%, led by strong leasing and capital markets activity. Global leasing revenue growth accelerated to 19% in Q1. Capital markets activity was strong with property sales revenue up 13% and mortgage origination fees up 53%. BOE segment had net revenue growth of 22%, strong in facilities management and property management. Project Management segment revenue grew 9%, with legacy Turner & Townsend having strong wins and project management SOP margin improving. REI segment had investment management operating profit up 43%, AUM ended Q1 at $149 billion. Resilient businesses generated net revenue growth of 17% for the quarter, nearly matching the 18% increase in transactional businesses. Trailing 12-month, resilient businesses accounted for over 60% of total SOP.

Heading into Q2, strong Q1 performance would have prompted raising full year guidance, but due to tariff uncertainty, maintained 2025 core EPS guidance range of $5.80 to $6.10. Confident in strategic positioning for sustained resilient growth despite market uncertainty.

Uncertainty created by tariff situation impacting outlook. Corporate uncertainty due to tariffs slowing some big programs. Potential recession impact on earnings, but CBRE's resilient business mix means declines would be materially lower than in GFC.

Q: Can you give more color on pipeline changes due to tariffs?

A: Bob Sulentic said capital raising in investment management slowed, project management saw corporate uncertainty slowing big programs, but office leasing still strong.

Q: How does recession impact earnings?

A: Emma Giamartino said CBRE's resilient business mix means declines would be materially lower than GFC.

Q: Thoughts on capital markets activity in April?

A: Emma said investment sales activity strong in April, loan origination had increase in rate locks when 10-year fell, pipelines remain strong.