Colliers (CIGI) Q4 2025 earnings review
Capital Markets Awake; M&A Fuels 2026 Optimism
Colliers closed 2025 with a solid beat, delivering 7% revenue growth (5% organic) and 9% Adjusted EBITDA growth. The narrative shift is distinct: the high-flying Engineering segment optically decelerated (3% headline growth) as pass-through costs fell, while the legacy Commercial Real Estate (CRE) business is finally participating in the cycle recovery, with Capital Markets surging 15%. Management's 2026 outlook is aggressive—mid-teens growth across the board—heavily underpinned by the impending acquisition of Ayesa Engineering.
🐂 Bull Case
The cyclical engine is restarting. Capital Markets revenue grew 15% YoY (accelerating from 10% earlier in the year) with robust growth in the US. As interest rates stabilize, this high-margin vertical provides significant operating leverage.
The acquisition of Ayesa Engineering (closing late Q2 2026) is a game-changer, adding scale in Spain/Europe. Alongside smaller tuck-ins, this supports the 'mid-teens' 2026 growth guidance despite organic moderation.
🐻 Bear Case
While Adjusted EPS grew 4%, GAAP EPS fell 19% ($1.19 vs $1.47), weighed down by FX ($0.06 impact) and likely higher interest expenses. Quality of earnings requires monitoring as adjustments widen.
Headline Engineering revenue growth collapsed to 3% in Q4 from 36% in Q3 and 70% in Q2. While Net Revenue (ex-pass-throughs) held up better (+10%), the massive optical growth phase from prior M&A lapping is over.
⚖️ Verdict: 🟢
Bullish. The rotational strength is working exactly as designed: as Engineering growth normalizes, CRE is accelerating. The 2026 guidance suggests management is confident in bridging any organic gaps with the Ayesa deal.
Key Themes
Capital Markets: The Sleeping Giant Wakes
After quarters of drag, Capital Markets revenue jumped 15% YoY (acceleration from previous quarters). Growth was 'robust' in the US and solid in most other markets. This high-margin revenue stream drove CRE Adjusted EBITDA margin expansion (+50bps) via operating leverage.
Engineering: Optical Deceleration vs. Net Reality
Engineering revenue growth slowed dramatically to 3% YoY (1% in Local Currency). However, this is noisy: Net Revenue (excluding pass-through costs) grew 10% (8% LC). While the segment is healthy, the days of 50%+ headline growth driven by easy M&A comps are finished until Ayesa closes.
Ayesa Acquisition & 2026 M&A Pipeline
Management announced the acquisition of Ayesa Engineering (Spain), expecting a close in late Q2 2026. This deal is the primary bridge to the aggressive 'mid-teens' growth guidance for 2026. Pro forma leverage will rise to 2.7x, indicating aggressive capital deployment.
Investment Management Stabilization
Investment Management (IM) is steadying. Revenue grew 5% (4% LC) and Net Revenue grew 7%. AUM was flat sequentially at $108.2B but up 9% YoY. The segment is no longer a drag, but growth is modest compared to the rebound in CRE.
FX Headwinds Persist
Currency remains a thorn. Q4 Adjusted EPS was hit by ~$0.06 due to FX. Revenue growth gap was 200bps (7% USD vs 5% LC). With significant operations in Canada, Europe, and Australia, a strong USD continues to mute reported growth.
Leasing Activity Improving
Leasing revenue grew 4% (12% in the US), driven by office and industrial. While not as explosive as Capital Markets, the return to positive growth in the US helps stabilize the base of the CRE segment.
Other KPIs
Stable. Up slightly from 15.0% a year ago. Operating leverage in Commercial Real Estate (margin +50bps) offset lower productivity in Engineering (margin down slightly).
Healthy conversion. FCF represents 105% of adjusted net earnings, exceeding company targets. This cash generation capability supports the rapid deleveraging expectation (from pro forma 2.7x post-Ayesa).
Stable at 2.0x, well within the 3.5x covenant. However, pro forma leverage (including the Ayesa deal) jumps to 2.7x, signaling the balance sheet is being stretched to fund growth.
Guidance
Accelerating. 2025 full-year revenue growth was 15%, but organic was only 5%. The 2026 mid-teens target relies heavily on the Ayesa acquisition (closing Q2) and continued CRE recovery.
Accelerating significantly from Q4's 3% pace. This is almost entirely inorganic, driven by the Ayesa acquisition and recent tuck-ins.
Accelerating. Implies a sustained recovery in Capital Markets and Leasing, improving from the 7% full-year growth seen in 2025.
Accelerating. A significant step up from the 4% growth achieved in 2025, implying better fundraising traction and realization fees.
Key Questions
Engineering Organic Growth Health
Q4 Engineering revenue growth slowed to 1% in local currency. While net revenue was better (+8%), is the 1% headline number a signal of pass-through project delays or cancellations?
Ayesa Integration Risk
With Ayesa pushing leverage to 2.7x and adding 3,200 professionals in new geographies (Spain), what are the execution risks and integration costs expected in H2 2026?
Gap Between Adjusted and GAAP EPS
GAAP EPS fell 19% while Adjusted EPS rose 4%. Aside from FX, what specific 'adjustments' are widening, and is interest expense rising faster than anticipated?