• Revenue: $1.5 billion for Q4, up 22% year-over-year.
• Adjusted EBITDA: $225 million for Q4, up 14% year-over-year.
• Real Estate Services Revenue Growth: 13%, led by Capital Markets with a 25% increase.
• Engineering Revenue Growth: 61%, with a slight decrease in net revenue margin to 12.8%.
• Investment Management Revenue Growth: 6% overall, with a 1% increase excluding pass-through performance fees.
• Assets Under Management (AUM): $98.9 billion at year-end.
• New Capital Commitments Raised: $1.3 billion in Q4, $3.8 billion for the full year.
• Leverage Ratio: 2 times net debt to pro forma adjusted EBITDA at December 31.
• Revolving Credit Facility Capacity: Over $1.2 billion.

• Warning! GuruFocus has detected 8 Warning Signs with CIGI.

Release Date: February 06, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Colliers International Group Inc (NASDAQ:CIGI) reported a 22% increase in revenues for the fourth quarter, reaching $1.5 billion.
• The company experienced robust growth across all business segments, with Engineering revenues seeing a 61% increase, largely driven by acquisitions.
• Real Estate Services saw a 13% revenue growth, led by a 25% increase in Capital Markets, particularly in Europe and the Americas.
• Investment Management raised $1.3 billion in new capital commitments during the quarter, with a full-year total of $3.8 billion.
• Colliers International Group Inc (NASDAQ:CIGI) has a strong balance sheet with over $1.2 billion of capacity to fund future growth and a leverage ratio of 2 times net debt to pro forma adjusted EBITDA.

Negative Points

• The Engineering segment experienced a slight decrease in net revenue margin due to weather-related seasonality in newly acquired businesses.
• Investment Management's EBITDA growth was modest at 1%, with flat margins due to ongoing investments in fundraising and new product launches.
• Foreign exchange rates are expected to negatively impact reported results by 2% to 3% in 2025.
• The Capital Markets business is recovering slower than expected, with performance not yet reaching the 2021 peak.
• The company anticipates a flat or modestly down margin in the Investment Management division for 2025 due to continued investments and integration efforts.

Q & A Highlights

Q: Can you provide more details on the integration of the Engineering segment and any potential headwinds? A: Integration has been straightforward, especially with Englobe in Canada, as there was no overlap with the US business. The focus is on building out the platform in Australia and New Zealand, with results exceeding expectations. Investments in technology are planned to align with operations in Canada and the US. (Jay Hennick, CEO)

Q: What are your capital-raising goals for the Investment Management segment, and how do you see AUM evolving? A: We raised $3.8 billion in 2024 and expect to raise between $5 billion and $8 billion in 2025. This is a building year with new fundraising cycles starting, and we anticipate significant growth in late 2025 and into 2026. (Christian Mayer, CFO)

Q: Can you elaborate on the margin dynamics and expectations for the Engineering segment in 2025? A: The Q4 margin was impacted by newly-acquired businesses with weather-related seasonality. We expect a 150-basis-point margin increase in 2025 due to higher-margin acquisitions and organic improvements. On a net revenue basis, margins are 200 to 300 basis points higher. (Christian Mayer, CFO)

Q: How do you plan to integrate the Investment Management segment, and what are the expected benefits? A: Integration will focus on back-office functions and fundraising efforts, not on the investment strategies themselves. This will streamline operations and create synergies, positioning us for better financial contributions and potential margin improvements. (Jay Hennick, CEO)

Q: What are the underlying assumptions for the Real Estate Services segment's growth in 2025? A: We anticipate mid-single-digit growth, with high single-digit growth in Capital Markets and mid-single digits in Leasing and Outsourcing. Current trade policy and FX conditions are influencing these expectations. (Christian Mayer, CFO)

For the complete transcript of the earnings call, please refer to the full earnings call transcript.