Newmark Cuts 2026 Outlook Despite Strong Q3 Growth

Newmark Group reported double-digit revenue and adjusted earnings growth for the third quarter of 2026, supported by record leasing activity and continued expansion in recurring service lines. However, the commercial real estate adviser lowered its full-year outlook, citing reduced visibility into the timing and certainty of deal closings in a challenging macroeconomic environment.

The Nasdaq-listed company (Nasdaq: NMRK) now expects 2026 revenue of $3.70 billion to $3.80 billion, compared with its previous range of $3.775 billion to $3.875 billion. It forecast adjusted earnings per share of $1.80 to $1.90, down from $1.87 to $1.98, and adjusted EBITDA of $629 million to $667 million, compared with the prior $656 million to $694 million range.

Newmark said it expects full-year Capital Markets growth to be below the midpoint assumed in its outlook, while Management Services and Servicing growth should be generally in line with the midpoint. Leasing growth is expected to exceed the midpoint.

Revenue and adjusted earnings advance

Third-quarter revenue rose 12.7% year over year to $973.2 million, marking Newmark’s ninth consecutive quarter of double-digit top-line growth. Revenue for the first nine months increased 18.4% to $2.71 billion.

GAAP diluted earnings per share increased 8% to $0.27, while GAAP net income for fully diluted shares rose 5.3% to $67.4 million. The year-over-year GAAP comparison was affected by $42.3 million of insurance proceeds recorded in other income during the third quarter of 2025 in connection with a previously disclosed stockholder derivative litigation settlement.

Post-tax adjusted earnings increased 15.3% to $122.1 million, and adjusted EPS rose 14.3% to $0.48. Adjusted EBITDA grew 14.6% to $166.4 million, with the adjusted EBITDA margin expanding 28 basis points to 17.1%. Excluding recent acquisitions and international growth initiatives, Newmark said the margin would have increased by nearly 60 basis points.

U.S. revenue increased 12.1%, while U.K. revenue declined 0.2%. Revenue from the rest of the world rose 39.9% as Newmark continued expanding across continental Europe, Asia and the rest of the Americas. The company attributed U.S. growth primarily to productivity gains because revenue-generating headcount increased only modestly. International headcount and the company’s non-U.S. office presence grew by mid-double digits, although management noted that new revenue-producing hires typically require six to 18 months to reach full productivity.

Leasing leads segment growth

Leasing and Other Commissions revenue climbed 26.5% to $308.6 million, producing Newmark’s strongest third quarter for the business. The company cited activity from clients in artificial intelligence, data centers and other technology industries, as well as manufacturing, legal services, aerospace and defense, and healthcare. Higher industrial and office leasing fees across markets including the San Francisco Bay Area, Greater Los Angeles, the Pacific Northwest and Texas also supported growth.

Management Services, Servicing Fees and Other revenue rose 18.3% to $376.3 million, delivering a fifth consecutive record quarter for those businesses. Growth came from outsourcing services for occupiers, owners and lenders, improved same-store performance in Valuation & Advisory, and six acquisitions completed since the third quarter of 2025.

The servicing portfolio generated $76.9 million of servicing and other revenue, up 1.3%. Growth in servicing fees was partly offset by lower interest income on loans held for sale and escrow balances. Newmark’s primary servicing portfolio increased 19.7% year over year, while its total Servicing and Asset Management portfolio expanded 23.2% to $228.3 billion.

Capital Markets was the only major segment to contract, with revenue declining 4.4% to $288.2 million. Investment Sales fees rose 7.5% as sales volume increased about 33%, including gains in multifamily, industrial and retail transactions. That improvement was more than offset by a 21.1% drop in origination fees.

Total debt volume fell 36.8% to $15.84 billion following unusually strong growth in the prior-year period, while GSE and FHA origination volume decreased 15.9%. Total Capital Markets volume declined 8.1% to $38.88 billion, although it remained 115% above the third quarter of 2024.

Cash generation and capital position

Trailing-12-month adjusted free cash flow increased 15.9% to $336.8 million. Excluding the $42.3 million legal-settlement proceeds received in the prior-year period, the company calculated growth at 35.7%. Third-quarter adjusted free cash flow declined to $108.7 million from $163 million.

Newmark ended September with $240 million in cash and cash equivalents, total corporate debt of $877.5 million and net debt of $637.5 million. Its net leverage ratio remained at 1.0 times trailing-12-month adjusted EBITDA, with no debt maturities before January 2029. The company said its long-term net leverage target remains at or below 1.5 times.

Management plans to allocate 50% to 60% of available capital to growth over the long term, including acquisitions, while returning 30% to 40% to shareholders and directing 10% to 20% toward maintenance investment. Newmark’s board declared a quarterly dividend of $0.06 per share, payable November 30 to shareholders of record on November 13.

The revised outlook highlights uncertainty surrounding transaction closings, particularly in Capital Markets. Newmark also faces lower industry multifamily agency lending activity, while the continuing buildout of its international operations and acquisition strategy may require time before new hires and offices reach full productivity and contribute positively to margins.