• Total Transaction Volume: $13.4 billion in Q4 2024, up 45% year over year.
• Diluted Earnings Per Share (EPS): $1.32 for Q4 2024, up 42% from Q4 2023.
• Agency Loan Originations: $4.9 billion in Q4 2024.
• Revenue from Mortgage Servicing Rights: Up 62% from Q4 2023.
• Adjusted EBITDA: $95 million in Q4 2024, up 8% year over year.
• Adjusted Core EPS: $1.34 in Q4 2024, down 6% from last year.
• Full Year Diluted EPS: $3.19, flat from 2023.
• Full Year Adjusted Core EPS: $4.97, up 6% from 2023.
• Full Year Adjusted EBITDA: $329 million, up 9% from 2023.
• Fannie Mae Lending: $3.2 billion in Q4 2024, up 91% from Q4 2023.
• Freddie Mac Loan Originations: $1.6 billion in Q4 2024, up 19% year over year.
• Property Sales Transactions: $3.5 billion in Q4 2024, up 20% year over year.
• Full Year Property Sales: $9.8 billion, up 11% from 2023.
• Apprise Revenues: $13.3 million for 2024, up 43% year over year.
• Small Balance Lending Revenue Growth: 20% in 2024.
• Total Revenues: $1.1 billion for 2024, up 7% from 2023.
• Servicing Portfolio: $135 billion at year-end 2024.
• Quarterly Dividend: Increased to $0.67 per share, a 3% increase.
• Cash on Balance Sheet: $279 million at year-end 2024.

• Warning! GuruFocus has detected 6 Warning Signs with WD.

Release Date: February 13, 2025

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

Positive Points

• Walker & Dunlop Inc (NYSE:WD) closed 2024 with a strong performance, achieving a total transaction volume of $13.4 billion in Q4, up 45% year over year.
• The company maintained its position as Fannie Mae's largest dust partner for the sixth consecutive year, with a 91% increase in Fannie Mae lending in Q4.
• Walker & Dunlop Inc (NYSE:WD) achieved a record adjusted EBITDA of $329 million for the full year, up 9% from 2023.
• The company's small balance lending business grew total revenues by 20% in 2024, ending the year as the number-4 small balance GSE lender in the country.
• Walker & Dunlop Inc (NYSE:WD) expanded its capital markets business into the hospitality sector and Europe, indicating strategic growth and diversification.

Negative Points

• Adjusted core EPS for Q4 was $1.34, down 6% from the previous year, indicating some pressure on earnings.
• The company faced challenges with loan buybacks from GSEs due to mistakes made during the pandemic, leading to significant repurchase-related expenses.
• Walker & Dunlop Inc (NYSE:WD) experienced a $13 million downward adjustment in realization revenues from its affordable housing investment portfolio due to a slow sales market.
• The company reported $24 million in provision and repurchase-related expenses associated with loan buybacks in 2024.
• Despite strong performance, Walker & Dunlop Inc (NYSE:WD) lagged in total shareholder return in 2024 compared to its competitors.

Q & A Highlights

Q: Do you see opportunities to align with an alternative asset manager to drive asset needs and increase fee revenue for Walker & Dunlop? A: William Walker, CEO, mentioned that while Walker & Dunlop has been scaling its asset management business independently, partnerships are always a potential. They have partnered with firms in the past and continue to work with them daily.

Q: Can you provide an update on the outlook for the low-income housing tax credit syndication business? A: William Walker, CEO, stated that management changes have been made, and they are confident in the continued growth of the business. The potential expansion of the low-income housing tax credit budget allocation is important for growth, and the integration of the Alliant business is progressing well.

Q: Why was there a significant concentration in Fannie Mae business in Q4? A: William Walker, CEO, explained that the concentration was due to standard deal flow rather than a few large transactions. Both Fannie Mae and Freddie Mac increased their market activity in the second half of the year, with Fannie Mae doing $55 billion and Freddie Mac $65 billion in 2024.

Q: Is the Walker & Dunlop business model now complete, or are there other capabilities you plan to add? A: William Walker, CEO, emphasized that while they are well-positioned, they are never satisfied and continue to evolve. The competitive landscape requires them to focus on market areas where they can compete effectively and continue to innovate.

Q: Are clients accepting higher rates, and will this lead to more asset turnover in 2025? A: William Walker, CEO, noted that while some clients are accepting higher rates, refinancing often requires additional equity, which some clients are reluctant to provide. This may lead to asset sales or refinancing challenges, but the market has ample equity and debt capital to manage distressed opportunities.

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