Newmark (NMRK) Q3 2026 earnings review
Newmark's leasing fees jump, but deal delays force outlook cut
Newmark, the commercial real estate broker and property manager, grew its leasing and recurring management businesses while its deal-making unit shrank. Total revenue rose 13% from a year ago, carried by a record third quarter in leasing, while capital markets revenue fell on lower mortgage volumes. Chief executive Barry Gosin cut the full-year outlook because economic volatility is delaying deal closings, and by our math the new plan has revenue growth slowing to about 4% in the fourth quarter.
| Fee revenue (excluding pass-throughs and non-cash gains) | $817.2M +11.6% from a year ago |
|---|---|
| Leasing and other commissions | $308.6M +26.5% from a year ago |
| Profit per share, excluding one-offs | $0.48 +14.3% from a year ago |
| Full-year revenue outlook | Cut $75M middle of the range: 13.8% growth |
⚖️ Verdict: 🔴 Bearish
The story got worse because management gave back the entire full-year outlook raise it made in the first quarter. Last quarter, the team kept its plan unchanged and blamed tough second-half comparisons, but cutting the targets in late October shows that slower deal closings are hurting results beyond base effects. The good news: leasing demand from technology and artificial intelligence tenants accelerated, and the property management unit won a 21 million square foot office contract.
The question now is whether the fourth-quarter slowdown is just a timing delay on big property and debt deals or the start of a broader lending freeze. If deals merely slipped across year-end, early 2027 capital markets fees will rebound; if high interest rates are stopping transactions, fee growth will stay muted. Fourth-quarter closing volumes and the 2027 outlook in February will tell.
🐂 Bull Case
Leasing Hit a Record on Tech Demand
Leasing and Other Commissions — fees Newmark earns for representing landlords and tenants — grew 26.5% from a year ago to $308.6 million. The commercial real estate advisor achieved its best third quarter on record for the division, accelerating from 17.2% growth in the second quarter.
Newmark said clients increased their demand across "artificial intelligence, data centers, and other technology sectors", alongside manufacturing, legal services, defense, and health care. Higher fees from industrial and office clients in Texas and several West Coast markets carried the result, proving that technology tenants are signing larger space commitments despite broader economic caution.
What to watch: fourth-quarter leasing revenue against last year's $313.2 million fourth-quarter peak. Another double-digit gain would show that corporate space demand can offset slower property sales.
Management and Servicing Hit a Fifth Record
Management Services, Servicing Fees, and Other — Newmark's recurring property management, loan servicing, and valuation businesses — rose 18.3% to $376.3 million. Chief executive Barry Gosin cited "progress towards our goal of over $2 billion in annual Management and Servicing revenues by 2029". In this quarter, the group won a contract to manage over 21 million square feet of US offices for 601W Companies.
- Fee revenue excluding pass-throughs: $257.1 million, up 13.0% from a year ago
- Pass-through revenue (reimbursed client costs with no profit): $119.2 million, up 31.7%
- Total loan servicing and asset management portfolio: up 23.2% from a year ago
- Other non-compensation overhead: down 2.1 percentage points of revenue by our math
The division's growth reflects "six acquisitions completed since the third quarter of last year" alongside underlying gains in outsourcing and valuation. Because pass-through non-compensation costs rose 1.7 percentage points of revenue, Newmark needed strict overhead discipline to expand its Adjusted EBITDA margin by 0.3 percentage points to 17.1%.
What to watch: the quarterly filing's breakdown of pure loan servicing fees versus the 23.2% portfolio increase. If servicing fees still trail portfolio growth, the 2029 target remains heavily reliant on acquisitions.
🐻 Bear Case
Deal Delays Forced a Full-Year Outlook Cut
"Our transaction pipelines remain active and robust," Gosin said. In the very next paragraph, he cut the full-year plan: "However, the volatility in the macroeconomic environment creates challenges with regard to the timing and certainty of deal closings, and as a result, we are revising our 2026 outlook."
Last quarter, Newmark held its full-year targets and pointed to tough second-half comparisons as the reason for caution. Cutting the revenue midpoint by $75 million and the profit-per-share midpoint by 7.5 cents after nine months of the year shows that buyers and lenders are delaying closings beyond normal seasonal patterns.
By our math, the lowered plan leaves fourth-quarter revenue growing just 3.6% at the middle of the range, down from 12.7% in the third quarter. It also points to fourth-quarter profit per share, excluding one-offs, falling 4.4% from a year ago, which undercuts Gosin's reassurance about the pipeline.
What to watch: fourth-quarter revenue against the $1.04 billion implied by the middle of the new full-year range. A finish near the bottom of the range would show that delayed deals are cancelling rather than slipping into 2027.
Lower Debt Volumes Pulled Capital Markets Down
Capital Markets revenue — fees from brokering property sales and arranging commercial mortgages — fell 4.4% from a year ago to $288.2 million. A year ago, the division's revenue jumped 60% on massive one-off deals, including a $4 billion joint venture for an artificial intelligence data center in Pennsylvania.
- Commercial mortgage origination fees, net: $79.6 million, down 21.1% from a year ago
- Originated mortgage servicing rights (OMSR, non-cash gains on new loans): $36.7 million, down 9.4%
- Investment sales fees: $171.9 million, up 7.5% on a 33% rise in global sales volume
- US investment sales volume: up 31%, beating the 25% US industry gain
Newmark kept gaining market share: its 16% drop in government-sponsored multifamily loan originations beat a 28% industry decline. Even so, a 37% drop in total global debt volume overpowered the 33% gain in property sales volume, showing how much last year's mega-deals flattered the comparison.
What to watch: commercial mortgage origination fees in the fourth quarter against last year's $112.7 million. Continued double-digit declines would confirm that higher interest rates are choking off refinancing activity.
Risks this quarter didn't answer
Four standing concerns around leadership, broker loans, related-party ties, and artificial intelligence got little or no new detail in the earnings release.
- Chief executive succession: Gosin steps down on December 31, 2026, and the release named no replacement; a board announcement before year-end will settle who leads the broker workforce.
- Forgivable loans to employees and partners: the balance rose to $887.5 million from $862.2 million at year-end, though third-quarter cash outlays slowed to $10.9 million; the quarterly filing will show any write-offs.
- Cantor related-party payments: fees to related parties rose 12.7% to $9.2 million and payables jumped to $6.4 million; the filing's related-party note will detail the new commission-sharing arrangements.
- Brokerage fee pressure from artificial intelligence: the release did not address whether automated tools are squeezing fees on smaller, standard deals; the call transcript will show if management defended its pricing.
👓 Other Themes
Buybacks Resumed While Corporate Debt Rose
After pausing buybacks in May and June to save cash for acquisitions, Newmark bought back 3.9 million shares for $59.4 million in the third quarter, and its board restored the buyback authorization to $400 million. Meanwhile, credit-facility borrowing pushed total corporate debt up to $877.5 million from $671.7 million at year-end, though net debt stayed at 1.0 times trailing Adjusted EBITDA and S&P upgraded Newmark to BBB-.
💲 Other KPIs
Adjusted Free Cash Flow — operating cash flow excluding short-term mortgage warehouse lending, minus equipment purchases — fell 33.3% from $163.0 million a year ago. Last year's figure included $42.3 million from an insurance settlement. Excluding that one-off by our math, cash flow fell 9.9% as capital spending more than doubled to $17.4 million.
Money owed by clients for completed services rose 18.4% from $628.4 million at the end of December and jumped 27.2% from $584.8 million a year ago, by our math. That growth outpaced the 12.7% rise in third-quarter revenue, tying up working capital as leasing and management billings expanded.
The weighted-average fully diluted share count rose 0.4% from 251.7 million a year ago, staying well inside the commercial real estate group's target of 2% or less annual growth. GAAP equity-based compensation fell 25.6% to $60.4 million, or 3.2 percentage points of revenue by our math, helping limit dilution alongside the $59.4 million of third-quarter buybacks.
🔮 Guidance
Cut. Management lowered the range by $75 million, returning the plan to its initial February target of 12% to 15% growth (13.8% at the middle of the range). By our math, that leaves fourth-quarter revenue at $1,042 million at the middle of the range, or 3.6% growth from a year ago, after 18.4% growth over the first nine months. The sequence of midpoint moves this year is +$75M, $0M, -$75M.
Cut. The company trimmed the profit-per-share outlook by 7.5 cents at the middle of the range, to 11% to 17% full-year growth. By our math, with $1.20 already earned in the first nine months, the new midpoint of $1.85 leaves $0.65 for the fourth quarter — a 4.4% decline from $0.68 a year ago. The sequence of midpoint moves this year is +$0.055, $0.00, -$0.075.
Cut. The middle of the range dropped by $27 million to $648 million, or 15.2% full-year growth. By our math, that leaves $221.3 million for the fourth quarter, up 3.4% from $214.0 million a year ago, and points to a fourth-quarter margin of 21.2% against 21.3% last year. The sequence of midpoint moves across the year is +$20M, $0M, -$27M.
Unchanged. Newmark kept its full-year tax-rate plan at 13% to 15%, compared with 11.4% in 2025. The rate for the first nine months was 14.0%, and the third-quarter rate was 12.9%, sitting comfortably inside the target band.
❓ Key Questions
When will the board name Barry Gosin's successor?
Gosin steps down as chief executive on December 31, 2026, just two months away. Because commercial real estate brokerages rely on personal relationships to retain top fee-producers, investors need to know who will run the company and whether retention packages are in place.
Are delayed fourth-quarter deals cancelling or slipping into 2027?
Management cut the full-year revenue midpoint by $75 million because economic volatility is slowing deal closings. Knowing how much of that shortfall is already under contract for early 2027 versus paused indefinitely will show whether the capital markets recovery has stalled.
How fast did pure loan servicing fees grow this quarter?
The total servicing and asset management portfolio expanded 23.2% from a year ago, but in the second quarter lower-fee limited servicing drove most of the asset growth while fee growth lagged at 9.8%. The quarterly filing's fee breakdown will show if conversion improved.
How much of the 13% management fee growth was bought?
Fees from management services and servicing rose 13.0% excluding pass-throughs, helped by six acquisitions completed over the past year. Separating acquired revenue from underlying growth will show how much Newmark must spend on deals to reach its $2 billion target by 2029.