Newmark Group Inc.
03/02/2026 | Press release | Distributed by Public on 03/02/2026 14:52
Annual Report for Fiscal Year Ending December 31, 2025 (Form 10-K)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion of Newmark's financial condition and results of operations should be read together with Newmark's accompanying consolidated financial statements and related notes, as well as the "Special Note Regarding Forward-Looking Information" relating to forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act, included elsewhere in this Annual Report on Form 10-K and the cautionary statements relating to forward-looking statements below.
This discussion summarizes the significant factors affecting our results of operations and financial condition during the years ended December 31, 2025, 2024 and 2023. We operate in one reportable segment, real estate services. This discussion is provided to increase the understanding of, and should be read in conjunction with, our accompanying consolidated financial statements and the notes thereto included elsewhere in this Annual Report on Form 10-K.
Forward-Looking Cautionary Statements
Our actual results and the outcome and timing of certain events may differ significantly from the expectations discussed in the forward-looking statements. Factors that might cause or contribute to such a discrepancy include, but are not limited to, the factors set forth below:
•macroeconomic and other challenges and uncertainties, including those resulting from the conflict between Ukraine and Russia, conflicts in the Middle East and other ongoing or new conflicts in those or other regions, downgrades of U.S. Treasuries, fluctuating global interest rates, current or expected inflation rates and the Federal Reserve's responses thereto, stagflation, fluctuations in the value of global currencies, including the U.S. dollar, liquidity concerns regarding and changes in capital requirements for banking and financial institutions, changes in the economy, the commercial real estate services industry and the global financial markets, employment levels, global trade relations, volatility in tariffs imposed by the U.S. and foreign governments and other factors driving trade uncertainty, supply chain disruptions, changes in government spending, recession fears, infrastructure spending, and energy costs, including such changes' effect on demand for commercial real estate and capital markets transaction volumes, office space, levels of new lease activity and renewals, distressed non-GSE commercial mortgages, frequency of loan defaults and forbearance and associated losses, and fluctuations in the mortgage-backed securities markets, as well as potential changes in these factors;
•challenges relating to our repositioning of certain aspects of our business to adapt to and better address the needs of our clients in the future as a result of the acceleration of pre-existing long-term social and economic trends, fluctuating interest rates and market uncertainty, and other legal, cultural and political events and conflicts, and governmental measures taken in response thereto, uncertainty in the timing of stabilization of interest rates and the recovery of transaction volumes, changes in the mix of demand for commercial real estate space, decreased demand for urban office and retail space generally which may not be offset by increased demand for suburban office, data center, fulfillment, and distribution centers and life sciences facilities or otherwise, and which could materially reduce demand for commercial space and have a material adverse effect on the nature of and demand for our commercial real estate services, including the time and expense related to such repositioning, as well as risks related to declines in real estate values, including due to sales of loans previously held by failed financial institutions, increases in commercial real estate lending rates, and the volume of committed investment capital;
•market conditions and volatility, fluctuations in transaction volumes, including changes in leasing and lending activity and debt volumes, the level of worldwide governmental debt issuances, austerity programs, government stimulus packages, increases or decreases in deficits and the impact of changing government tax rates, repatriation rules, changes to U.S. trade or immigration policy and the impact of such policy changes on our and our clients' businesses, deductibility of interest, and other changes to monetary policy, changing regulatory requirements or changes in legislation, regulations and priorities, possible turmoil across regional banks and certain global investment banks, possible disruptions in transactions, and potential downturns including recessions, and similar effects, which may not be predictable in future periods;
•potential deterioration of equity and debt capital markets for commercial real estate and related services, potential unavailability of traditional sources of financing and a need for alternative sources, and our ability to access the capital markets as needed or on reasonable terms and conditions;
•pricing, commissions and fees, and market position with respect to any of our products and services and those of our competitors, some of which may have greater financial and operational resources than we do;
•the effect of industry concentration and reorganization, reduction of customers and consolidation;
•uncertainties related to our integration of any businesses, including their systems, technology and employees, that we may acquire and the synergies and revenue growth generated from these and other acquisitions as we build out our international and domestic businesses;
•liabilities in connection with our business, including appraisal and valuation, sales and leasing and property and facilities management activities, that exceed our insurance coverage;
•liquidity, regulatory requirements and the impact of credit market events, political events and conflicts and actions taken by governments and businesses in response thereto on the credit markets and interest rates;
•our relationship and transactions with Cantor and its affiliates, including CF&Co and CCRE, Newmark's structure, including Newmark Holdings, which is owned by Newmark, Cantor, Newmark's employee partners and other partners, and Newmark OpCo, which is owned by Newmark and Newmark Holdings, the timing and impact of any actual or future changes to our organization or structure, any challenges to our interpretation or application of tax laws to our structure, any related party transactions, conflicts of interest, or loans to or from Newmark or Cantor, Newmark Holdings or Newmark OpCo, including the balances and interest rates thereof from time to time and any convertible or equity features of any such loans, repurchase agreements and joint ventures, and CF&Co's acting as our placement agent in connection with certain capital markets transactions;
•competition for and retention of brokers and other producers, managers and key employees, our ability to integrate newly hired producers, and the duration of the period between when we hire producers and when they achieve full productivity;
•the impact on our stock price from any future reduction of our dividend or future changes in our capital deployment priorities, including repurchases of shares, purchases of limited partnership interests, and our dividend policy, and in Newmark Holdings' distributions to partners;
•the effect of any layoffs, furloughs, salary cuts, and lower commissions or bonuses on the repayment of partner loans;
•our ability to maintain or develop relationships with independently owned offices or partners in our businesses;
•the effect on our businesses of any extraordinary transactions, mergers, acquisitions, business combinations, dispositions, divestitures, restructurings, or reorganizations, including potential dilution, taxes, costs, and other impacts;
•our ability to effectively deploy our sources of liquidity to repurchase shares or limited partnership interests, pay any excise tax that may be imposed on the repurchase of shares, reduce our debt, and invest in growing our business;
•risks related to changes in our relationships with the GSEs and HUD and related changes in the credit markets;
•risks related to changes in the administration of the GSEs, including changes in the terms of or removal from applicable conservatorships and changes in their capabilities, and in their requirements for participating in their programs and any impact on transaction volume;
•risks related to any reduction or elimination of governmental programs that provide support for mortgage loans;
•risks related to the reduction in staffing at U.S. governmental agencies;
•risks inherent in doing business in and expanding into international markets or with international partners, including economic or geopolitical conditions or uncertainties, the actions of governments or central banks, the risks of possible nationalization and/or foreign ownership restrictions, compliance with anti-corruption laws, import and export control laws, economic and trade sanctions programs and impacts to cross-border trade and travel, expropriation, price controls, capital controls, foreign currency fluctuations, regulatory and tax requirements, economic and/or political instability, geographic, time zone, language and cultural differences among personnel in different areas of the world, exchange controls and other restrictive government actions, the outbreak of hostilities, the pursuit of trade, border control or other related policies by the U.S. and/or other countries, economic volatility in the U.K. and Europe, political and other tensions between the U.S. and China, the conflict between Ukraine and Russia, conflicts in the Middle East and other ongoing or new conflicts or other international tensions, hostilities and instability in those or other regions, as well as potential changes in these factors;
•political and/or civil unrest in the U.S. or abroad, including demonstrations, riots, boycotts, and tensions with law enforcement, the impact of elections, or other social and political developments, labor unrest, the impact of U.S. government shutdowns, including the shutdown that began on October 1, 2025 or political impasses, and uncertainties regarding the debt ceiling, the federal budget, and the deployment of federal funds, including on HUD, as well as potential changes in these factors;
•the impact of terrorist acts, acts of war or other violence, as well as disasters or weather-related or similar events, including hurricanes, and heat waves as well as power failures, communication and transportation disruptions, and other interruptions of utilities or other essential services, and the impact of pandemics and other international health incidents;
•the effect on our businesses, our clients, the markets in which we operate and the economy in general of changes in U.S. and foreign tax and other laws, including but not limited to the OBBBA, changes in tax rates, interpretations of tax law, the impact of potential changes to U.K. tax rates and amendments to the application of National Insurance rules which may impact our subsidiaries organized as limited liability partnerships in the U.K. and their members, repatriation rules, and deductibility of interest, potential policy and regulatory changes in other
countries, sequestrations, responses to global inflation rates, and other potential changes to tax and other policies resulting from elections and changes in governments;
•the impact of any claims or litigation related to compensation, or other transactions with our current and former executive officers;
•the effect on our business of leadership changes and the resulting transition following the confirmation of Mr. Howard Lutnick, our former Executive Chairman and principal executive officer, as U.S. Secretary of Commerce, our dependence upon our key employees, as well as the competing demands on the time of certain of our key employees who also provide services to Cantor, BGC and various other ventures and investments sponsored by Cantor or otherwise, our ability to build out successful succession plans, the impact of absence due to illness or leave of certain officers or employees and our ability to attract, retain, motivate and integrate new employees, and our ability to enforce post-employment restrictive covenants on awards previously granted to certain of our key employees and future awards or otherwise;
•extensive regulation of our business and clients, changes in regulations relating to commercial real estate and other industries, changes in environmental regulations, including regulations relating to climate change and greenhouse gas emissions, and risks relating to U.S. and foreign tax and compliance matters, including regulatory examinations, inspections, audits, investigations and enforcement actions, unavailability of certain tax credits or reliefs or additional tax liabilities or assessments, and any resulting costs, increased financial and capital requirements, enhanced oversight, remediation, fines, penalties, sanctions, and changes to or restrictions or limitations on specific activities, operations, and compensatory arrangements, and growth opportunities, including acquisitions, hiring, and new businesses, products, or services, as well as risks related to our taking actions to deliver that we and our subsidiaries are not deemed investment companies under the Investment Company Act;
•factors related to specific transactions or series of transactions as well as risks related to potential counterparty failure;
•costs and expenses of developing, maintaining and protecting our intellectual property, utilizing third-party software licensed under "open source" licenses, as well as employment, regulatory and other litigation and proceedings and their related costs, including costs and expenses related to acquisitions and other matters, including judgments, fines, or settlements paid, reputational risk, requirements that we stop selling or redesign affected products or services, rebrand or restrict our products or services or pay damages to satisfy indemnification commitments with our customers, and the impact thereof on our financial results and cash flows in any given period;
•certain other financial risks, including the possibility of future losses, indemnification obligations, assumed liabilities, reduced cash flows from operations, increased leverage, reduced availability under our various credit facilities, and the need for short- or long-term borrowings, including from Cantor, our ability to refinance our indebtedness, including in the credit markets, on acceptable rates, and our ability to satisfy eligibility criteria for government-sponsored loan programs and changes to interest rates and market liquidity or our access to other sources of cash relating to acquisitions, dispositions, or other matters, potential liquidity and other risks relating to our ability to maintain continued access to credit and the availability of financing necessary to support ongoing business needs on terms acceptable to us, if at all, and risks associated with the resulting leverage, including potentially causing a reduction in our credit ratings and associated outlooks and increased borrowing costs;
•risks associated with the temporary or longer-term investment of our available cash, including in Newmark OpCo, defaults or impairments of the Company's investments (including investments in non-marketable securities), joint venture interests, stock loans or cash management vehicles and collectability of loan balances owed to us by partners, employees, Newmark OpCo or others;
•the impact of any reduction in the willingness of commercial property owners to outsource their property management needs;
•our ability to enter and succeed in new markets or develop new products or services and to induce clients to use these products or services and to secure and maintain market share;
•our ability to enter into marketing and strategic alliances or business combinations and attract investors or partners or engage in restructuring, rebranding or other transactions, including mergers, acquisitions, dispositions, divestitures, reorganizations, partnering opportunities and joint ventures, the anticipated benefits of any such transactions, relationships or growth and the future impact of any such transactions, relationships or growth on other businesses and financial results for current or future periods, the integration of any completed acquisitions and the use of proceeds of any completed dispositions or divestitures, the impact of amendments and/or terminations of any strategic arrangements, and the value of any hedging entered into in connection with consideration received or to be received in connection with such dispositions and any transfers thereof;
•our estimates or determinations of potential value with respect to various assets or portions of the Company's business, including with respect to the accuracy of the assumptions or the valuation models or multiples used;
•the impact of near- or off-shoring on our business, including on our ability to manage turnover and hire, train, integrate and retain personnel, including brokerage professionals, salespeople, managers, and other professionals;
•our ability to effectively manage any growth that may be achieved, including outside of the U.S., while ensuring compliance with all applicable financial reporting, internal control, legal compliance, and regulatory requirements;
•our ability to identify and remediate any material weaknesses or significant deficiencies in internal controls that could affect our ability to properly maintain books and records, prepare financial statements and reports in a timely manner, control policies, practices and procedures, operations and assets, assess and manage the Company's operational, regulatory and financial risks, and integrate acquired businesses and brokers, salespeople, managers and other professionals;
•information technology risks, including capacity constraints, failures, or disruptions in our systems or those of clients, counterparties, or other parties with which we interact, increased demands on such systems and on the telecommunications infrastructure from remote working, including cyber security risks and incidents, compliance with regulations requiring data minimization and protection and preservation of records of access and transfers of data, privacy risk and exposure to potential liability and regulatory focus;
•the expansion of our cybersecurity processes to include new businesses, or the integration of the cybersecurity processes of acquired businesses, including internationally;
•the impact of AI on the economy, our industry, our business and the businesses of our clients and vendors;
•the effectiveness of our governance, risk management, and oversight procedures and the impact of any potential transactions or relationships with related parties;
•the impact of our Corporate Responsibility or "sustainability" ratings on decisions by clients, investors, potential clients and other parties with respect to our business, investments in us, our borrowing opportunities or the market for and trading price of our Class A common stock or Company debt securities, or other matters, as well as the impact and potential cost to us of any policies, legislation, or initiatives in opposition to our Corporate Responsibility or "sustainability" policies;
•the fact that the prices at which shares of our Class A common stock are or may be sold in offerings or other transactions may vary significantly, and purchasers of shares in such offerings or other transactions, as well as existing stockholders, may suffer significant dilution if the price they paid for their shares is higher than the price paid by other purchasers in such offerings or transactions; and
•the effect on the markets for and trading prices of our Class A common stock due to market factors, as well as of various offerings and other transactions, including offerings of our Class A common stock and convertible or exchangeable debt or other securities, repurchases of shares of our Class A common stock and purchases or redemptions of Newmark Holdings limited partnership interests or other equity interests in us or our subsidiaries, any exchanges by Cantor of shares of our Class A common stock for shares of our Class B common stock, any exchanges or redemptions of limited partnership units and issuances of shares of our Class A common stock in connection therewith, including in corporate or partnership restructurings, payment of dividends on our Class A common stock and distributions on limited partnership interests of Newmark Holdings and Newmark OpCo, convertible arbitrage, hedging, and other transactions engaged in by us or holders of outstanding shares, debt or other securities, share sales and stock pledges, stock loans, and other financing transactions by holders of shares or units (including by Cantor executive officers, partners, employees or others), including of shares acquired pursuant to employee benefit plans, unit exchanges and redemptions, corporate or partnership restructurings, acquisitions, conversions of shares of our Class B common stock and other convertible securities into shares of our Class A common stock, and distributions of our Class A common stock by Cantor to its partners.
The foregoing risks and uncertainties, as well as those risks and uncertainties discussed under the headings "Item 1A-Risk Factors," and "Item 7A-Quantitative and Qualitative Disclosures About Market Risk" and elsewhere in this Annual Report on Form 10-K, may cause actual results and events to differ materially from the forward-looking statements.
Overview
Newmark is a leading commercial real estate advisor and service provider to large institutional investors, global corporations, and other owners and occupiers. We offer a diverse array of integrated services and products designed to meet the full needs of our clients.
Business Environment
There are several factors that impact results across our three main revenue sources (Management Services, Servicing Fees and Other; Leasing and Other Commissions; and Capital Markets), including both secular and cyclical industry trends as well as macroeconomic dynamics and our investments in growth. These factors are discussed below.
Key Business Drivers
The key drivers of our business include our ability to attract and retain revenue generating headcount across our service lines, the productivity of these employees, and industry volumes in these areas. Volumes are largely a factor of economic and job growth, interest rates, and the demand for commercial real estate as an investment and for debt financing. In addition, demand for our services is influenced by secular trends with respect to outsourcing and other services we provide.
Attracting and Retaining Revenue-Generating Headcount. During 2025, we continued to solidify what we believe is our position as the platform of choice for many top professionals. In countries including the U.S., U.K., France, Germany, India, South Korea, and Singapore, we attracted some of the most prolific and experienced client-facing professionals. We believe that these additions further demonstrate the strength of our global brand, and the value of our substantial investments in data, analytics, and talent. Our revenue-generating headcount across Capital Markets, Leasing and Other Commissions, and V&A in the U.S. was flat or up modestly year-on-year on a net basis at the end of each of the five quarters ended December 31, 2024, through December 31, 2025. Therefore, productivity gains were the primary driver of our strong quarterly and year-to-date U.S. commission-based revenue growth. We increased both the number of non-U.S. offices and our international revenue-generating headcount by double-digit percentages year-on-year in more recent quarters, albeit from smaller bases. As with nearly all newly hired professionals, these international additions are expected to take at least 6 to 18 months to produce meaningful fees, although we generally record related expenses beginning in their first quarter with the Company. As more of Newmark's recently added team members ramp up, we expect to further improve our productivity and earnings over time, all else equal.
Continued Trends with Respect to Management Services, Servicing Fees and Other.Many of our Management Services offerings continue to benefit from increased outsourcing by corporations and other occupiers, owners of real estate, lenders, and investment funds. We expect these outsourcing trends to persist for the foreseeable future, which should benefit our recurring revenue businesses as we continue to invest in areas including property, project, and facilities management, as well across our growing suite of managed services offerings. Our most recent investments in recurring revenue businesses include the Company's acquisitions of Catella and RealFoundations and the launch of our property and facilities management businesses in India, all in the fourth quarter of 2025, as well as starting our new fund administration business in September 2025. We believe these newest offerings in Management Services, Servicing Fees and Other will help drive stable and predictable revenue and earnings growth over time.
Additionally, we operate a high margin and growing loan servicing and asset management business focused on GSE/FHA loans, as well as on bank, private credit, and commercial mortgage-backed securities clients. We expect this business to benefit as the overall amount of commercial and multifamily debt outstanding increases, we continue to gain origination market share, and we drive further cross selling between service lines. As of December 31, 2025, our loan servicing and asset management portfolio grew by 15.2% year-on-year to a record $211.2 billion (of which 63.6% was limited servicing and asset management, 35.6% was higher margin primary servicing, and 0.8% was special servicing). We expect our overall portfolio to continue providing a steady stream of income and cash flow over the life of the serviced loans.
These factors, combined with our ability to increase revenue synergies between our service lines, enabled us to grow Management Services, Servicing Fees and Other revenues by a double digit CAGR between 2017 and 2025, and to increase these recurring revenues by 12.4% over the twelve months ended December 31, 2025.
Trends in GDP and Job Growth. Commercial real estate leasing activity has historically been positively correlated with job creation, particularly with respect to office-based employment, and with GDP growth. Unless otherwise noted, all of the following economic statistics are from Bloomberg, including consensus estimates based on their respective February 16, 2026 U.K. and February 20, 2026 U.S. surveys of economists.
According to the Bureau of Economic Analysis, U.S. GDP increased by 2.2% in 2025 after having expanded by 2.8% in 2024 and 2.9% in 2023. The Bureau stated that: "The increase in real GDP in 2025 primarily reflected increases in consumer spending and investment." With respect to the latter, investments in artificial intelligence, particularly in data centers, made up 39% of all U.S. GDP growth over the first nine months of 2025, according to the Federal Reserve Bank of St. Louis. According to the Office for National Statistics, U.K. GDP increased by 1.4% year-on-year in 2025, after having expanded by 1.1% and 0.3% in 2024 and 2023.
According to the Bureau of Labor Statistics, seasonally adjusted monthly average of U.S. non-farm payroll employment increased by approximately 15,000 in 2025. In comparison, the monthly average grew by 122,000 and 210,000 in full years 2024 and 2023. The December 2025 U.S. unemployment rate (based on U-3) was 4.4% compared with 4.1% a year earlier. Per the Office for National Statistics, the comparable U.K. unemployment rate as of December 2025 was 5.2% versus 4.4% a year earlier.
Interest Rate Environment.Commercial real estate capital markets transactions involving financing generally utilize medium- or long-term debt, and the interest rates for such debt are influenced by movements in benchmark rates with similar tenors, including U.S. Treasuries. Such benchmark rates can often be meaningfully impacted by actual or anticipated movements in key short-term rates, such as the Fed Funds Target rate. In addition, a portion of commercial and multifamily mortgages involve floating interest rates tied to short-term benchmarks. Sudden changes in short term interest rates can therefore have pronounced effects on commercial mortgage origination and investment sales volumes.
The ten-year U.S. Treasury yield increased by approximately two basis points quarter-on-quarter and decreased by 40 basis points year-on-year to 4.2% as of December 31, 2025. The ten-year U.K. Gilt yield decreased by approximately 20 basis points quarter-on-quarter and by 6 basis points year-on-year to 4.5% over the same timeframe. For context, ten-year U.S. Treasury and ten-year U.K. Gilt yields still remain below their 50-year average through December 31, 2025 of approximately 5.8% and 7.0%, respectively.
For the month ending December 31, 2025, the most commonly cited U.S. and U.K. inflation measures were up 2.7% and 3.6%, respectively, versus a year earlier. They both remained higher than the 2% targets set by both the FOMC and MPC. The surveyed economists expect inflation to remain above these targets for at least the next two calendar years. Concerns about expectations for strong GDP growth, above-target inflation, and a possibly stagnant job market may present a challenge to the FOMC's dual mandate. This have reduced clarity in terms of how fast the central bank will lower short term rates. The U.K. has experienced many of these same issues, albeit with lower GDP and labor productivity growth. As a result, both economists and the futures markets expect short-term yields in both countries to be higher for the foreseeable future compared with the ultra-low interest rate period from the fourth quarter of 2008 through the first quarter of 2022.
In addition, other metrics that are inversely correlated with easier availability of credit for real estate investors remain well below long term averages, which is positive for commercial real estate capital markets transactions. These metrics include interest rate volatility as measured by the ICE BofA MOVE Index and credit spreads as indicated by the Bloomberg U.S. Corp BBB/Baa - Treasury 10 Year Spread, as well as similar metrics with respect to the U.K. and Eurozone. Given the stable interest rate environment and historically narrow credit spreads in the major markets in which Newmark operates, we believe current market conditions remain favorable for a continued recovery of industry capital markets volumes.
Industry Leasing Activity. Unless otherwise stated, all industry leasing data is from Newmark Research and/or CoStar. While industrial and retail have increased as a percentage of leasing revenues since 2019, office remains the majority of activity for both Newmark and the industry.
U.S. new office leasing activity (for deals above 10,000 square feet and excluding lease renewals) improved by approximately 7% and 10%, respectively in the fourth quarter and full year 2025. This recovery was relatively uneven, with New York City, Dallas-Fort Worth, Houston, and the San Francisco Bay Area driving much of this national improvement, although San Francisco continues to have one of the highest vacancy rates among major U.S. markets. Class A leasing activity continued to be strongest nationally, although demand edged higher among Class B and Class C buildings in the second half of 2025, indicating demand for space may be broadening. With respect to the U.K., fourth quarter 2025 was among the strongest in the past three years with respect to new office leasing activity, with London leading the demand recovery. U.K. net absorption was up by 4.5 million square feet for full year 2025, after having been negative every period from the first quarter of 2020 through the second quarter of 2025. With the pipeline of new office construction expected to drop off dramatically beginning this year in Newmark's key markets, the ongoing enhancement of Class B office properties, and the conversion of obsolete space into multifamily and other uses, we expect office fundamentals to continue to improve.
We expect demand for office space to continue to be supported by the reset in values due to near-term debt maturities. We also continue to see increased need for high quality office space in an increasing number of markets, led by new demand driven by companies in technology, including AI, and financial services, as well as ongoing return-to-workplace plans. Placer.ai data for December 2025 indicates that in-person attendance in the U.S. increased to an average of 66.9% of December 2019 pre-pandemic levels versus 60.8% a year earlier. This represented a year-on-year improvement in attendance of 10.0%. While Miami, Dallas, and New York City continue to lead in terms of in-person attendance, the national year-on-year improvement was led by San Francisco, Dallas, and Boston among major markets.
New U.S. industrial leasing activity continued its momentum in the fourth quarter of 2025, growing by more than 20% year-on-year, led by large modern warehouses and distribution centers. Net absorption was stronger in the second half of 2025 and was 62 million square feet in the fourth quarter, which was the best quarterly performance in two years. Tenants in many metropolitan areas are consolidating and upgrading to newer facilities. The national industrial vacancy rate inched up only two basis points quarter-over-quarter, which was the smallest increase since 2022, signaling the market may be near peak vacancy, with some markets already posting consistent quarterly declines amid robust absorption and slowing deliveries. For full year 2025, U.S. new industrial lease activity improved by 6%. The U.K. industrial vacancy rate improved by approximately 20 basis points year-on-year to 7.6% in the fourth quarter of 2025, while quarterly leasing activity was 15% higher than the 10-year pre-pandemic quarterly average. Annual U.K. industrial leasing activity for 2025 improved by 1% over 2024, supported by falling supply and improving occupier confidence and led by logistics and e-commerce operator requirements along with new overseas entrants and defense-related manufacturers.
Overall U.S. retail leasing activity for centers and properties of at least 20,000 square feet remained muted in 2025, with fourth quarter volumes approximately 33% below the trailing ten year average. Lower activity was largely driven by the lack of availably of prime space in many key markets after years of low construction and conversions of retail into other property types, as well as by the rise of e-commerce allowing for fewer locations in given markets. Centers built in 2000 or later have significantly better occupancy rates versus older properties, and account for most of the absorbed space over the last year. In addition, retailers and retail occupiers are taking less space, with average lease size down 7.4% year on year in 2025 and lower by 2.1% versus 2019. The strongest major markets as measured by annual absorption were Dallas-Fort Worth, Houston, and Phoenix. However, the U.S. retail vacancy rate remained well below the ten year average as of December 31, 2025.
Against this improving market backdrop, Newmark's revenues from Leasing and Other Commissions increased by 16.9% for the year ended December 31, 2025.
Industry Capital Markets Activity.We believe that we once again gained share in Capital Markets in 2025, even as overall industry volumes continued to improve. For example, based on their analysis of the most recently available data from MSCI and/or the MBA, Newmark Research estimates that U.S. notional investment sales volumes were up by approximately by 20% year-on-year in 2025. Growth was led by the New York City, San Francisco, and Los Angeles metro regions for the year, while activity improved by double digit percentages nationally across nearly every major property type. Full year U.S. industry sales volumes were 7% below their 2017 to 2019 average. Preliminary MSCI data indicates that European investment sales volumes grew by at least 12% in 2025, although this source often revises such figures upwards at a later date.
Based on their analysis of historical figures from the MBA and MSCI lending data, Newmark Research estimates that U.S. commercial and multifamily originations increased by 43% in 2025. Annual activity improved by double digit percentages for all major property types other than data center lending, which was just over triple the amount in 2024. With respect to lender types, banks and debt funds increased originations faster than the overall market, while CMBS lending was up by 3% versus 2024. Full year U.S. industry origination volumes were 21% above their 2017 to 2019 average, with every major property type other than office being well above this pre-pandemic average.
Against this positive backdrop, Newmark's full year 2025 Investment Sales and Total Debt volumes were up by approximately 56% and 67% year, respectively.
We have gained considerable Capital Markets share over the past several years. According to data or estimates from MSCI, the MBA, and/or Newmark Research, our U.S. Total Debt volumes were 9.7% of total U.S. commercial and multifamily mortgage originations over the twelve months ended December 31, 2025, up approximately 100 basis points year-on-year and by over six times compared with 1.5% of such originations in 2015. Newmark's U.S. investment sales volumes were 11.4% of overall U.S. volumes over the twelve months ended December 31, 2025, which was an increase of approximately 260 basis points versus 2024 and more than 3 times our 3.3% share of U.S. volumes in 2015.
Commercial And Multifamily Mortgage Maturities and Other Drivers.We continue to benefit from the ongoing need for our clients to both refinance existing properties owned by them and to finance investments in properties they seek to own. We expect record amounts of medium-term commercial and multifamily mortgage maturities and interest rate stabilization to together lead to continued improvement in industry debt volumes, as well as increased investment sales activity. For example, the MBA expects approximately $2.1 trillion of U.S. commercial and multifamily mortgage maturities between 2026 and 2028 alone, and approximately $5.0 trillion in total.
Given Newmark's investments in talent, deep relationships with clients, and the strength of our brand, we anticipate further market share gains over time.
Financial Overview
Revenues
We generally derive revenues from the following three sources:
•Management Services, Servicing Fees and Other. We provide commercial services to tenants and landlords. In this business, we provide property and facilities management services along with project management, V&A services, and other consulting and managed services, as well as technology services, to customers who may also utilize our commercial real estate brokerage services, and flexible workspace solutions. Servicing fees are derived from the servicing of loans originated by us as well as loans originated by third parties.
•Leasing and Other Commissions. We offer a diverse range of commercial real estate brokerage and advisory services, including tenant and landlord (or agency) representation, which includes comprehensive lease negotiations, strategic planning, site selection, lease auditing, and other financial and market analysis.
•Capital Markets. This consists of investment sales and commercial mortgage origination, net. Our investment sales business specializes in the arrangement of acquisitions and dispositions of commercial properties, as well as equity placement and other related services. Our commercial mortgage origination business offers services and products to facilitate debt financing for our clients and customers. Commercial mortgage origination revenue is comprised of commissions generated from mortgage brokerage and debt placement services, as well as the origination fees and premiums derived from the origination of GSE/FHA loans with borrowers. Our commercial mortgage origination revenue also includes the revenue recognized for the fair value of expected net future cash flows from servicing recognized at commitment.
Fees for real estate lease brokerage transactions are generally earned when a lease is signed. In many cases, landlords are responsible for paying the fees. In capital markets, fees are earned and recognized when the sale of a property closes, and title passes from seller to buyer for investment sales and when debt or equity is funded to a vehicle for debt and equity transactions. Loan originations related fees and sales premiums, net, are recognized when a derivative asset is recorded upon the commitment to originate a loan with a borrower and sell the loan to an investor. The derivative is recorded at fair value and includes loan origination fees, sales premiums and the estimated fair value of the expected net servicing cash flows. Loan originations related fees and sales premiums, net, are recognized net of related fees and commissions to affiliates or third-party brokers. For loans we broker, revenues are recognized when the loan is closed.
Servicing fees are recognized on an accrual basis over the lives of the related mortgage loans. We typically receive monthly management fees based upon a percentage of monthly rental income generated from the property under management, or in some cases, the greater of such percentage or a minimum agreed upon fee. We are often reimbursed for our administrative and payroll costs, as well as certain out-of-pocket expenses, directly attributable to properties under management. We follow U.S. GAAP, which provides guidance when accounting for reimbursements from clients and when accounting for certain contingent events for leasing and capital markets transactions. See Note 3 - "Summary of Significant Accounting Policies" to our accompanying consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for a more detailed discussion.
Expenses
(i) Compensation and Employee Benefits
The majority of our operating costs consist of cash and non-cash compensation expenses, which include base salaries, producer commissions based on production, forgivable loans for term contracts, discretionary and other bonuses and all related employee benefits and taxes. Our employees consist of commissioned producers, executives and other administrative support. Our producers are largely compensated based on the revenue they generate for the firm, keeping these costs variable in nature.
As part of our compensation plans, certain employees have been granted limited partnership units in Newmark Holdings and, prior to the Newmark IPO, BGC Holdings, which generally receive quarterly allocations of net income and are generally contingent upon services being provided by the unit holders. As a result of the Corporate Conversion, there are no longer any limited partnership units in BGC Holdings outstanding. Certain Newmark employees also hold N Units that do not participate in quarterly partnership distributions and are not allocated any items of profit or loss. N Units become distribution earning limited partnership units either on a discretionary basis or ratably over a vesting term, if certain revenue thresholds are met at the end of each vesting term. As prescribed in U.S. GAAP guidance, the quarterly allocations of net income on such limited partnership units are reflected as a component of compensation expense under "Equity-based compensation and allocations of net income to limited partnership units and FPUs" in our accompanying consolidated statements of operations.
Newmark has granted certain conversion rights on limited partnership units in Newmark Holdings and, prior to the Corporate Conversion, then-outstanding limited partnership units in BGC Holdings, to Newmark employees to convert the
limited partnership units to a capital balance within Newmark Holdings or BGC Holdings. Generally, such units are not considered share-equivalent limited partnership units and are not in the fully diluted share count.
Certain of these limited partnership units entitle the holders to receive post-termination payments. These limited partnership units are accounted for as post-termination liability awards under U.S. GAAP guidance, which requires that we record an expense for such awards based on the change in value at each reporting period and include the expense in our accompanying consolidated statements of operations as part of "Equity-based compensation and allocations of net income to limited partnership units and FPUs." The liability for limited partnership units with a post-termination payout amount is included in "Other long-term liabilities" on our accompanying consolidated balance sheets.
Certain limited partnership units are granted exchangeability into Newmark Class A common stock or may be redeemed in connection with the grant of shares of Newmark Class A common stock. At the time exchangeability is granted, or the shares are issued, Newmark recognizes an expense based on the fair value of the award on that date, which is included in "Equity-based compensation and allocations of net income to limited partnership units and FPUs" in our accompanying consolidated statements of operations.
Certain of our employees have been awarded Preferred Units in Newmark Holdings and, prior to the Corporate Conversion, BGC Holdings. Each quarter, the net profits of Newmark Holdings and BGC Holdings are or were allocated to such units at a rate of either 0.6875% (which is 2.75% per calendar year) or such other amount as set forth in the award documentation, which is deducted before the calculation and distribution of the quarterly partnership distribution for the remaining partnership units in Newmark Holdings. The Preferred Units are not entitled to participate in partnership distributions other than with respect to the Preferred Distribution. Preferred Units may not be made exchangeable into our Class A common stock and are only entitled to the Preferred Distribution, and accordingly they are not included in our fully diluted share count. The quarterly allocations of net income on Preferred Units are also reflected in compensation expense under "Equity-based compensation and allocations of net income to limited partnership units and FPUs" in our accompanying consolidated statements of operations. After deduction of the Preferred Distribution, the remaining partnership units generally receive quarterly allocation of net income based on their weighted-average pro rata share of economic ownership of the operating subsidiaries. In addition, Preferred Units are granted in connection with the grant of certain limited partnership units, such as PSUs, that may be granted exchangeability to cover the withholding taxes owed by the unit holder upon such exchange. This is an acceptable alternative to the common practice among public companies of issuing the gross number of shares to employees, subject to cashless withholding of shares to pay applicable withholding taxes.
We have also entered into various agreements with certain of our employees and partners whereby these individuals receive loans, which may be either wholly or in part repaid from the distribution earnings that the individual receives on their limited partnership interests or from the proceeds of the sales of the employees' shares of our Class A common stock. The forgivable portion of these loans is recognized as compensation expense over the service period.
From time to time, we may also enter into agreements with employees and partners to grant bonus and salary advances or other types of loans. These advances and loans are repayable in the timeframes outlined in the underlying agreements. In addition, we also enter into deferred compensation agreements with employees providing services to us. The costs associated with such plans are generally amortized over the period in which they vest. See Note 27 - "Compensation" and Note 28 - "Commitments and Contingencies" to our accompanying consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.
(ii) Other Operating Expenses
We have various other operating expenses. We incur leasing, equipment and maintenance expenses. We also incur selling and promotion expenses, which include entertainment, marketing and travel-related expenses. We incur communication expenses, professional and consulting fees for legal, audit and other special projects, and interest expense related to short-term operational funding needs, and notes payable and collateralized borrowings.
We pay fees to Cantor for performing certain administrative and other support, including charges for occupancy of office space, utilization of fixed assets and accounting, operations, human resources, legal services and technology infrastructure support. Management believes that these charges are a reasonable reflection of the utilization of services rendered. However, the expenses for these services are not necessarily indicative of the expenses that would have been incurred if we had not obtained these services from Cantor. In addition, these charges may not reflect the costs of services we may receive from Cantor in the future.
(iii) Other Income (loss), Net
Other income (loss), net is comprised of gains (losses) on equity method investments which represent our pro rata share of the net gains (losses) on investments over which we have significant influence but which we do not control, mark-to-
market gains or losses on marketable and non-marketable investments, and settlements from litigation unrelated to our operations.
(iv) Provision for Income Taxes
We incur income tax expenses based on the location, legal structure, and jurisdictional taxing authorities of each of our subsidiaries. Certain of the Company's entities are taxed as U.S. partnerships and are primarily subject to the UBT in New York City. U.S. federal and state income tax liability or benefit related to the partnership income or loss, with the exception of the UBT, rests with the partners rather than the partnership entity. See Note 2 - "Limited Partnership Interests in Newmark Holdings and BGC Holdings" to our accompanying consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K. Our accompanying consolidated financial statements include U.S. federal, state and local income taxes on Newmark's allocable share of the U.S. results of operations. Outside of the U.S., we operate principally through subsidiary corporations subject to local income taxes.
Newmark is subject to the tax laws and regulations of the U.S. and various non-U.S. jurisdictions. The OECD Pillar Two Framework provides for a minimum global effective tax rate of 15%. The EU member states formally adopted the EU's Pillar Two Directive with a subset of rules that became effective January 1, 2024. Other countries are also expected to implement similar legislation. The minimum global effective tax did not have a material impact on our 2024 and 2025 tax rates.
On July 4, 2025, President Trump signed the OBBBA into law, which, among other things, introduces a broad range of changes to existing tax rules, including significant modifications to certain incentives previously introduced or expanded by the Inflation Reduction Act of 2022, as well as extensions and modifications of certain provisions of the Tax Cuts and Jobs Act of 2017. OBBBA tax provisions did not have a material impact on the Company, including with respect to its future financial condition, results of operations or liquidity.
Business Mix and Seasonality
Our pre-tax margins are affected by the mix of revenues generated. For example, servicing revenues tend to have higher pre-tax margins than Newmark as a whole, and margins from originating GSE/FHA loans, which are included in "Capital markets" in our consolidated statement of operations, tend to be lower, as we retain rights to service loans over time, and because this item includes non-cash GAAP gains attributable to OMSRs, which represent the fair value of expected net future cash flows from servicing recognized at commitment, net. Capital markets transactions tend to have higher pre-tax margins than leasing transactions. Pre-tax earnings margins on our property management and parts of our other OS businesses are at the lower end of margins for the Company as a whole because they include some revenues that equal their related expenses. These revenues represent fully reimbursable compensation and non-compensation costs and may be referred to as "pass through revenues."
Due to the strong desire of many market participants to close real estate transactions prior to the end of a calendar year, our business exhibits certain seasonality, with our revenue tending to be lowest in the first quarter and strongest in the fourth quarter. For the five years from 2020 through 2025, we generated an average of approximately 21% of our revenues in the first quarter and 30% of our revenues in the fourth quarter. Because approximately 30% of our expenses are fixed in a typical year, this seasonality generally leads to higher profitability in the fourth quarter and lower margins in the first quarter, all else equal.
Results of Operations
The following table sets forth our consolidated statements of operations data expressed as a percentage of total revenues for the periods indicated (in thousands):
| Year Ended December 31, | ||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||||||||||||||||||||
| Actual Results | Percentage of Total Revenues | Actual Results | Percentage of Total Revenues | Actual Results | Percentage of Total Revenues | |||||||||||||||||||||||||||||||||
| Revenues: | ||||||||||||||||||||||||||||||||||||||
|
Management Services, Servicing Fees and Other
|
$ | 1,244,233 | 37.8 | % | $ | 1,106,699 | 40.4 | % | $ | 970,877 | 39.3 | % | ||||||||||||||||||||||||||
|
Leasing and Other Commissions
|
1,002,562 | 30.4 | 857,617 | 31.3 | 839,595 | 34.0 | ||||||||||||||||||||||||||||||||
|
Capital Markets
|
1,047,229 | 31.8 | 774,186 | 28.3 | 659,896 | 26.7 | ||||||||||||||||||||||||||||||||
| Total revenues | 3,294,024 | 100.0 | 2,738,502 | 100.0 | 2,470,368 | 100.0 | ||||||||||||||||||||||||||||||||
| Expenses: | ||||||||||||||||||||||||||||||||||||||
| Compensation and employee benefits | 1,947,473 | 59.1 | 1,598,400 | 58.4 | 1,489,138 | 60.3 | ||||||||||||||||||||||||||||||||
|
Equity-based compensation and allocations of net income to limited partnership units and FPUs (1)
|
282,045 | 8.6 | 185,398 | 6.8 | 139,747 | 5.7 | ||||||||||||||||||||||||||||||||
| Total compensation and employee benefits | 2,229,518 | 67.7 | 1,783,798 | 65.1 | 1,628,885 | 65.9 | ||||||||||||||||||||||||||||||||
| Operating, administrative and other | 658,940 | 20.0 | 597,594 | 21.8 | 536,697 | 21.7 | ||||||||||||||||||||||||||||||||
| Fees to related parties | 33,310 | 1.0 | 26,446 | 1.0 | 27,204 | 1.1 | ||||||||||||||||||||||||||||||||
| Depreciation and amortization | 181,303 | 5.5 | 174,299 | 6.4 | 166,221 | 6.7 | ||||||||||||||||||||||||||||||||
| Total operating expenses | 3,103,071 | 94.2 | 2,582,137 | 94.3 | 2,359,007 | 95.5 | ||||||||||||||||||||||||||||||||
| Other income (loss), net | 43,049 | 1.3 | 6,677 | 0.2 | 13,854 | 0.6 | ||||||||||||||||||||||||||||||||
|
Income (loss) from operations
|
234,002 | 7.1 | 163,042 | 6.0 | 125,215 | 5.1 | ||||||||||||||||||||||||||||||||
| Interest expense, net | (32,482) | (1.0) | (31,768) | (1.2) | (21,737) | (0.9) | ||||||||||||||||||||||||||||||||
|
Income (loss) before income taxes and noncontrolling interests
|
201,520 | 6.1 | 131,274 | 4.8 | 103,478 | 4.2 | ||||||||||||||||||||||||||||||||
|
Provision (benefit) for income taxes
|
46,074 | 1.4 | 45,783 | 1.7 | 41,103 | 1.7 | ||||||||||||||||||||||||||||||||
|
Consolidated net income (loss)
|
155,446 | 4.7 | 85,491 | 3.1 | 62,375 | 2.5 | ||||||||||||||||||||||||||||||||
|
Less: Net income (loss) attributable to noncontrolling interests
|
29,260 | 0.9 | 24,257 | 0.9 | 19,800 | 0.8 | ||||||||||||||||||||||||||||||||
|
Net income (loss) available to common stockholders
|
$ | 126,186 | 3.8 | % | $ | 61,234 | 2.2 | % | $ | 42,575 | 1.7 | % | ||||||||||||||||||||||||||
(1)The components of Equity-based compensation and allocations of net income to limited partnership units and FPUs are as follows (in thousands):
| Year Ended December 31, | ||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||||||||||||||||||||
| Actual Results | Percentage of Total Revenues | Actual Results | Percentage of Total Revenues | Actual Results | Percentage of Total Revenues | |||||||||||||||||||||||||||||||||
| Issuance of common stock and exchangeability expenses | $ | 165,797 | 5.0 | % | $ | 110,973 | 4.1 | % | $ | 85,918 | 3.5 | % | ||||||||||||||||||||||||||
| Limited partnership units amortization | 34,308 | 1.0 | 23,203 | 0.8 | 14,267 | 0.6 | ||||||||||||||||||||||||||||||||
| RSU amortization | 51,084 | 1.6 | 29,568 | 1.1 | 24,620 | 1.0 | ||||||||||||||||||||||||||||||||
|
Total equity compensation
|
251,189 | 7.6 | % | 163,744 | 6.0 | % | 124,805 | 5.1 | % | |||||||||||||||||||||||||||||
| Allocations of net income to limited partnership units and FPUs | 30,857 | 0.9 | 21,654 | 0.8 | 14,942 | 0.6 | ||||||||||||||||||||||||||||||||
| Equity-based compensation and allocations of net income to limited partnership units and FPUs | $ | 282,046 | 8.5 | % | $ | 185,398 | 6.8 | % | $ | 139,747 | 5.7 | % | ||||||||||||||||||||||||||
Year ended December 31, 2025 compared to the year ended December 31, 2024
Revenues
Management Services, Servicing Fees and Other
Management Services, Servicing Fees and Other revenues increased by $137.5 million, or 12.4%, to $1,244.2 million for the year ended December 31, 2025compared to the year ended December 31, 2024. This increase was led by a 22.9% growth from Valuation and Advisory, solid improvement in revenues from Newmark'sgrowing suite of other Management Services businesses, continued growth in our servicing and asset management platform, and to a lesser extent, fourth quarter acquisitions.
Leasing and Other Commissions
Leasing and Other Commission revenues increased by $144.9 million, or 16.9%, to $1,002.6 million for the year ended December 31, 2025compared to the year ended December 31, 2024, which was driven by strong activity across industrial, office, and retail.
Capital Markets
Capital Markets revenues increased by $273.0 million, or 35.3%, to $1,047.2 million for the year ended December 31, 2025compared to the year ended December 31, 2024. The increase reflects a 33.9% improvement in investment sales fees and a 42.4% increase in commercial mortgage origination, net, both of which reflected significant volume improvement across office, multifamily (led by senior and student housing), industrial (including data centers), and retail, as well as market share gains.
Expenses
Compensation and Employee Benefits
Compensation and employee benefits expense increased by $349.1 million, or 21.8%, to $1,947.5 million for the year ended December 31, 2025compared to the year ended December 31, 2024. The increase reflects higher commission-based revenues, expenses related to global growth initiatives and costs recorded by recently acquired companies.
Equity-based compensation and allocations of net income to limited partnership units and FPUs
Equity-based compensation and allocations of net income to limited partnership units and FPUs increased by $96.6 million, or 52.1%, to $282.0 million for the year ended December 31, 2025compared to the year ended December 31, 2024. This increase was principally due to the approximately 21% year-on-year rise in Newmark's average closing stock price, as well the previously disclosed $21.1 million of charges related to the exchange and redemption of units held by Newmark's former Executive Chairman. Additionally, there was a $9.4 million increase in allocations of net income to limited partnership units due to higher pre-tax income.
Operating, Administrative and Other
Operating, administrative and other expenses increased by $61.3 million, or 10.3%, to $658.9 million for the year ended December 31, 2025compared to the year ended December 31, 2024 due to higher pass through costs and other items related to increased revenues. Additionally, there was a $15.3 million increase in non-cash expense related to CECL, of which $6.2 million related to the Company's financial guarantee liability related to a 37.6% increase in Fannie Mae origination volumes. The remainder of the non-cash CECL expense relates to the Company's efforts to improve working capital, which resulted in a 15% improvement in days sales outstanding to 67 days for the year ended December 31, 2025.
Fees to Related Parties
Fees to related parties increased by $6.9 million, or 26.0%, to $33.3 million for the year ended December 31, 2025compared to the year ended December 31, 2024, primarily due to a 2024 credit received of approximately $7.5 million.
Depreciation and Amortization
Depreciation and amortization for the year ended December 31, 2025increased by $7.0 million, or 4.0%, to $181.3 million compared to the year ended December 31, 2024 primarily due to a $4.3 million increase in expenses related to MSR amortization, and $2.2 million increase in fixed asset impairment related to terminated leases.
Other Income (loss), Net
Other income (loss), net was $43.0 million of income for the year ended December 31, 2025consisted primarily of $42.3 million received from insurers pursuant to the previously disclosed settlement of Consolidated Shareholder Action (as defined below). See "- Legal Proceedings" below. Other income (loss), net of $6.7 million of income for the year ended December 31, 2024 primarily consisted of recoveries from forfeited shares of restricted Newmark Class A common stock.
Interest Expense, Net
Interest expense, net increased by $0.7 million, or 2.2%, to $32.5 million during the year ended December 31, 2025compared to the year ended December 31, 2024.
Provision for Income Taxes
Provision for income taxes increasedby $0.3 million, or 0.6%,to $46.1 millionfor the year ended December 31, 2025 compared to the year ended December 31, 2024 primarily due to the impact of change in the level and geographic mix of pre-tax earnings, lower section 162(m) compensation deduction limitation in 2025 and a tax benefit from revaluation of deferred tax assets due to an increase in ownership of Newmark as compared to Newmark Holdings.In general, our consolidated effective
tax rate can vary from period to period depending on, among other factors, the level, geographic and business mix of our earnings.
Net income (loss) attributable to noncontrolling interests
Net income attributable to noncontrolling interests increased by $5.0 million, or 20.6%, to $29.3 million for the year ended December 31, 2025compared to the year ended December 31, 2024. This increase was primarily driven by higher pre-tax income.
Year ended December 31, 2024 compared to the year ended December 31, 2023
Revenues
Management Services, Servicing Fees and Other
Management services, servicing fees and other revenue increased by $135.8 million, or 14.0%, to $1,106.7 million for the year ended December 31, 2024 compared to the year ended December 31, 2023. This increase reflects growth from OS, our servicing and asset management business, as well as V&A fees.
Leasing and Other Commissions
Leasing and other commission revenues increased by $18.0 million, or 2.1%, to $857.6 million for the year ended December 31, 2024 compared to the year ended December 31, 2023 which was driven primarily by growth in office leasing.
Capital Markets
Capital markets increased by $114.3 million, or 17.3%, to $774.2 million for the year ended December 31, 2024 compared to the year ended December 31, 2023. The increase reflects a 30.4% increase in commercial mortgage origination, net, and a 9.5% improvement in investment sales fees, both of which reflected strength across every major property type.
Expenses
Compensation and Employee Benefits
Compensation and employee benefits expense increased by $109.3 million, or 7.3%, to $1,598.4 million for the year ended December 31, 2024 compared to the year ended December 31, 2023. The increase reflects higher commission-based revenues and other costs related to acquisitions and the hiring of revenue generating professionals.
Equity-based compensation and allocations of net income to limited partnership units and FPUs
Equity-based compensation and allocations of net income to limited partnership units and FPUs increased by $45.7 million, or 32.7%, to $185.4 million for the year ended December 31, 2024 compared to the year ended December 31, 2023. This increase was primarily attributable to the year-on-year improvement in Newmark's average stock price as compensation expense related to the grant of exchangeability for limited partnership units is related to the stock price of Newmark Class A common stock.
Operating, Administrative and Other
Operating, administrative and other expenses increased by $60.9 million, or 11.3%, to $597.6 million for the year ended December 31, 2024 compared to the year ended December 31, 2023 due to higher pass through costs and increased warehouse interest expense, both of which were offset by associated revenues.
Fees to Related Parties
Fees to related parties decreased by $0.8 million, or 2.8%, to $26.4 million for the year ended December 31, 2024 compared to the year ended December 31, 2023.
Depreciation and Amortization
Depreciation and amortization for the year ended December 31, 2024 increased by $8.1 million, or 4.9%, to $174.3 million compared to the year ended December 31, 2023 due to increased fixed asset depreciation of $0.5 million, intangible asset amortization of $2.8 million, as well as a $4.4 million change in MSR valuation allowance.
Other Income (loss), Net
Other income (loss), net of $6.7 million in the year ended December 31, 2024 consisted primarily of recoveries from forfeited restricted Newmark Class A common stock.
Other income (loss), net of $13.9 million in the year ended December 31, 2023 consisted of equity income on the Real Estate LP joint venture described below under "-Certain Related Party Transactions-Investment in CF Real Estate Finance Holdings, L.P." and proceeds from a legal settlement, partially offset by losses on certain investments.
Interest Expense, Net
Interest expense, net increased by $10.0 million, or 46.1%, to $31.8 million during the year ended December 31, 2024 compared to the year ended December 31, 2023 primarily due to higher interest expense on our corporate debt.
Provision (benefit) for Income Taxes
Provision for income taxes increased by $4.7 million, or 11.4%, to $45.8 million for the year ended December 31, 2024 compared to the year ended December 31, 2023. In general, our consolidated effective tax rate can vary from period to period depending on, among other factors, the level, geographic and business mix of our earnings.
Net income (loss) attributable to noncontrolling interests
Net income attributable to noncontrolling interests increased by $4.5 million, or 22.5%, to $24.3 million for the year ended December 31, 2024 compared to the year ended December 31, 2023. This increase was primarily driven by a higher pre-tax income.
Financial Position, Liquidity and Capital Resources
Overview
The primary sources of liquidity for our business are the cash on our balance sheet, cash flow provided by operations, and the $600.0 million revolving Credit Facility.
Our future capital requirements will depend on many factors, including our growth, the expansion of our sales and marketing activities, our expansion into other markets, our acquisitions of other companies and hiring of teams of producers, and our results of operations. To the extent that existing cash, cash from operations and credit facilities are insufficient to fund our future activities, we may need to raise additional funds through public equity or debt financing. As of December 31, 2025, our debt consisted of $600.0 million aggregate principal amount of 7.500% Senior Notes with a carrying amount of $596.7 million and $75.0 million outstanding under the Credit Facility with a carrying amount of $75.0 million, in each case exclusive of our warehouse facilities described under "-Warehouse Facilities Collateralized by U.S. Government Sponsored Enterprises."
Financial Position
Total assets were $5.0 billion as of December 31, 2025 and $4.7 billion as of December 31, 2024.
Total liabilities were $3.3 billion as of December 31, 2025 and $3.2 billion as of December 31, 2024.
Liquidity
As of December 31, 2025, we had cash and cash equivalents of $229.1 million. Additionally, we had $525.0 million available under our committed senior unsecured revolving Credit Facility. We expect to generate cash flows from operations to fund our business and use those funds, and our Credit Facility, to meet our short-term liquidity requirements, which we define as those arising within the next twelve months, and our long-term liquidity requirements, which we define as those beyond the next twelve months.
Debt
The carrying value of our debt, excluding our warehouse facilities, consisted of the following as of December 31, 2025 and December 31, 2024 (in thousands):
| December 31, 2025 | December 31, 2024 | ||||||||||
|
7.500% Senior Notes
|
$ | 596,746 | $ | 595,673 | |||||||
|
Credit Facility
|
75,000 | 75,000 | |||||||||
| Total corporate debt | $ | 671,746 | $ | 670,673 | |||||||
Delayed Draw Term Loan Credit Agreement
On August 10, 2023, Newmark entered into a Delayed Draw Term Loan Credit Agreement, by and among the Company, the several financial institutions from time to time party thereto, as Lenders, and Bank of America, N.A., as Administrative Agent (as such terms are defined in the Delayed Draw Term Loan Credit Agreement), pursuant to which the Lenders committed to provide to the Company a senior unsecured Delayed Draw Term Loan in an aggregate principal amount of $420.0 million, which could be increased, subject to certain terms and conditions, to up to $550.0 million. The proceeds of
the Delayed Draw Term Loan could only be used to repay the 6.125% Senior Notes at their maturity. The Delayed Draw Term Loan had a maturity date of November 14, 2026.
As set forth in the Delayed Draw Term Loan Credit Agreement, the Delayed Draw Term Loan could bear interest at a per annum rate equal to, at the Company's option, either (a) Term SOFR for interest periods of one or three months (as selected by the Company) or upon the consent of all Lenders, such other period that is 12 months or less (in each case, subject to availability), as selected by the Company, plus an applicable margin or (b) a base rate equal to the greatest of (i) the federal funds rate plus 0.50%, (ii) the prime rate as established by the Administrative Agent, and (iii) Term SOFR plus 1.00%, in each case plus an applicable margin. Upon funding, the applicable margin was 2.625% with respect to Term SOFR borrowings in (a) above and 1.625% with respect to base rate borrowings in (b) above. Depending on the Company's credit ratings, the applicable margin could range, with respect to Term SOFR borrowings, from 2.125% to 3.375% through and including August 10, 2024, and 2.5% to 3.875% thereafter; and base rate borrowings, from 1.125% to 2.375% through and including August 10, 2024, and 1.5% to 2.875% thereafter.
The Delayed Draw Term Loan Credit Agreement contained financial covenants with respect to minimum interest coverage and maximum leverage ratio. The Delayed Draw Term Loan Credit Agreement also contained certain other customary affirmative and negative covenants and events of default. The covenants in the Delayed Draw Term Loan Credit Agreement were consistent with those within the Company's existing $600.0 million Credit Facility, which matures on April 26, 2027 and remains available to the Company.
On November 8, 2023, Newmark provided notice to Bank of America, N.A., as Administrative Agent, to borrow the $420.0 million available under the Delayed Draw Term Loan Credit Agreement with the funds made available on November 14, 2023. The Company used the $420.0 million of proceeds of the Delayed Draw Term Loan draw to pay a portion of the matured principal and interest of the Company's $550.0 million 6.125% Senior Notes due November 15, 2023. On January 12, 2024, the outstanding balance under the Delayed Draw Term Loan was repaid with the proceeds of the offering of the 7.500% Senior Notes. The Delayed Draw Term Loan was terminated and the remaining unamortized debt issuance costs of $2.7 million were expensed.
Credit Facility
On November 28, 2018, Newmark entered into the Credit Agreement by and among Newmark, the several financial institutions from time to time party thereto, as lenders, and Bank of America, N.A., as administrative agent. The Credit Agreement provided for a $250.0 million Credit Facility.
On February 26, 2020, Newmark entered into an amendment to the Credit Agreement, increasing the size of the Credit Facility to $425.0 million and extending the maturity date to February 26, 2023. The interest rate on the Credit Facility was reduced to LIBOR plus 1.75% per annum, subject to a pricing grid linked to Newmark's credit ratings from S&P Global Ratings and Fitch.
On March 16, 2020, Newmark entered into a second amendment to the Credit Agreement, increasing the size of the Credit Facility to $465.0 million. The interest rate on the Credit Facility was LIBOR plus 1.75% per annum, subject to a pricing grid linked to Newmark's credit ratings from S&P Global Ratings and Fitch.
On March 10, 2022, Newmark amended and restated the Credit Agreement, as amended. Pursuant to the amended and restated Credit Agreement, the lenders agreed to: (a) increase the amount available to the Company under the Credit Facility to $600.0 million, (b) extend the maturity date of the Credit Facility to March 10, 2025, and (c) improve pricing to 1.50% per annum with respect to Term SOFR (as defined in the amended and restated Credit Agreement) borrowings.
Borrowings under the Credit Facility bear interest at a per annum rate equal to, at the Company's option, either (a) Term SOFR for interest periods of one or three months, as selected by the Company, or upon the consent of all lenders, such other period that is 12 months or less (in each case, subject to availability), as selected by the Company, plus an applicable margin, or (b) a base rate equal to the greatest of (i) the federal funds rate plus 0.50%, (ii) the prime rate as established by the Administrative Agent (as such term is defined in the amended and restated Credit Agreement), and (iii) Term SOFR plus 1.00%, in each case plus an applicable margin. The applicable margin was initially 1.50% with respect to Term SOFR borrowings in (a) above and 0.50% with respect to base rate borrowings in (b) above. The applicable margin with respect to Term SOFR borrowings in (a) above could range from 1.00% to 2.125% depending upon the Company's credit rating, and with respect to base rate borrowings in (b) above could range from 0.00% to 1.125% depending upon the Company's credit rating. The Credit Agreement also provides for certain upfront and arrangement fees and for an unused facility fee.
On November 8, 2023, Newmark provided notice to Bank of America, N.A., as Administrative Agent, to borrow $130.0 million under the Credit Facility with the funds made available on November 14, 2023. The Company used the proceeds of the Credit Facility draw to pay the remaining maturing principal and interest of the Company's $550.0 million 6.125% Senior Notes due November 15, 2023 that was not paid for with the proceeds of the Delayed Draw Term Loan.
On December 20, 2023, Newmark drew $130.0 million of Newmark Revolving Loans under the Cantor Credit Agreement to repay the $130.0 million balance then outstanding under the Credit Facility.
On April 26, 2024, Newmark amended and restated the Credit Agreement, which amendment and restatement, among other things, extends the maturity date of the Credit Facility to April 26, 2027. The borrowing rates and financial covenants under the Credit Agreement are substantially consistent with the Credit Agreement prior to such amendment and restatement.
During the year ended December 31, 2025, there were $520.0 million of borrowings and $520.0 million of repayments under the Credit Facility. As of December 31, 2025, there were $75.0 million of borrowings outstanding under the Credit Facility. As of December 31, 2025, borrowings under the Credit Facility carried an interest rate of 5.33%, with a weighted-average interest rate of 5.84% for the year ended December 31, 2025. As of December 31, 2024, there were no borrowings under the Credit Facility.
7.500% Senior Notes
On January 12, 2024, Newmark closed its offering of $600.0 million aggregate principal amount of the 7.500% Senior Notes. The notes are general senior unsecured obligations of Newmark. Cantor purchased $125.0 million aggregate principal amount of 7.500% Senior Notes in the offering, and still holds such notes as of March 2, 2026. The Company received net proceeds from the offering of the 7.500% Senior Notes of approximately $594.7 million after deducting the initial purchasers' discounts and estimated offering expenses. The notes bear interest at a rate of 7.500% per year, payable in cash on January 12 and July 12 of each year, commencing July 12, 2024. The 7.500% Senior Notes will mature on January 12, 2029. The Company used the net proceeds of the offering of the 7.500% Senior Notes to repay all of the $420.0 million outstanding under its Delayed Draw Term Loan Credit Agreement. Additional net proceeds were used to repay all $130.0 million of then-outstanding revolving debt, including with respect to borrowings under the Cantor Credit Agreement.
The 7.500% Senior Notes were initially offered and sold in a private offering exempt from the registration requirements under the Securities Act. Customary registration rights were provided to purchasers of the 7.500% Senior Notes. On May 10, 2024, we filed a Registration Statement on Form S-4, which was declared effective by the SEC on June 6, 2024. On June 10, 2024, we launched an exchange offer in which holders of the 7.500% Senior Notes which were issued in the January 12, 2024 private placement could exchange such notes for new registered notes with substantially identical terms. The exchange offer expired on July 17, 2024, at which point the tendered 7.500% Senior Notes were exchanged for new registered notes with substantially identical terms.
See Note 24 - "Related Party Transactions - 7.500% Senior Notes" and "- Market-Making Registration Statement for CF&Co" to our accompanying consolidated financial statements included in Part II, Item 8, of this Annual Report on Form 10-K for further discussion.
Cantor Credit Agreement
On November 30, 2018, Newmark entered into an unsecured credit agreement with Cantor. The Cantor Credit Agreement provides for each party to issue loans to the other party in the lender's discretion. Pursuant to the Cantor Credit Agreement, the parties and their respective subsidiaries (with respect to Cantor, other than BGC and its subsidiaries) may borrow up to an aggregate principal amount of $250.0 million from each other from time to time at an interest rate which is the higher of Cantor or Newmark's short-term borrowing rate then in effect, plus 1.0%.
On December 20, 2023, Newmark entered into a first amendment to the Cantor Credit Agreement. Pursuant to the First
Cantor Credit Agreement Amendment, Cantor agreed to make certain loans to Newmark from time to time in an aggregate outstanding principal amount of up to $150.0 million under the Cantor Credit Agreement. The Newmark Revolving Loans have
substantially the same terms as other loans under the Cantor Credit Agreement, except that until April 15, 2024, the Newmark Revolving Loans would bear interest at a rate equal to 25 basis points less than the interest rate borne by the revolving loans made pursuant to the Credit Facility. Unlike other loans made under the Cantor Credit Agreement, Cantor may demand repayment of the Newmark Revolving Loans prior to the final maturity date of the Cantor Credit Agreement upon three business days' prior written notice. As of December 31, 2025 and December 31, 2024, there were no borrowings outstanding under the Cantor Credit Agreement.
Warehouse Facilities Collateralized by U.S. Government Sponsored Enterprises
As of December 31, 2025, Newmark had $1.9 billion of committed loan funding, $1.1 billion of uncommitted loan funding available through three commercial banks, and an uncommitted $500.0 million Fannie Mae loan repurchase facility. Consistent with industry practice, these warehouse facilities are short-term, requiring annual renewal. These warehouse facilities are collateralized by an assignment of the underlying mortgage loans originated under various lending programs and third-party purchase commitments and are recourse only to our wholly owned subsidiary, Berkeley Point Capital, LLC. As of
December 31, 2025 and December 31, 2024 we had $0.9 billion and $0.8 billion, respectively, outstanding under "Warehouse facilities collateralized by U.S. Government Sponsored Enterprises" on our accompanying consolidated balance sheets.
Leases
Total lease liability as of December 31, 2025 was $538.6 million, of which $304.1 million of lease liability was within our flexible workspace business. In addition, Newmark had contracted future customer revenues and sub-lease income primarily related to its flexible workspace business as of December 31, 2025 amounting to approximately $157.2 million.
Debt Repurchase Authorization
On June 16, 2020, the Board and the Audit Committee authorized a debt repurchase program for the repurchase by the Company in the amount of up to $50.0 million of Company debt securities. Repurchases of Company debt securities, if any, are expected to reduce future cash interest payments, as well as future amounts due at maturity or upon redemption.
Under the authorization, the Company may make repurchases of Company debt securities for cash from time to time in the open market or in privately negotiated transactions upon such terms and at such prices as management may determine. Additionally, the Company is authorized to make any such repurchases of Company debt securities through CF&Co (or its affiliates), in its capacity as agent or principal, or such other broker-dealers as management shall determine to utilize from time to time upon customary market terms or commissions.
As of December 31, 2025, the Company had $50.0 million remaining from its debt repurchase authorization.
Cash Flows
Cash flows from operations excluding activity from loan originations and sales, net were as follows (in thousands):
| Year Ended December 31, | ||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
| Net cash provided by (used in) operating activities | $ | 172,001 | $ | (9,936) | $ | (265,961) | ||||||||||||||
| Add back: | ||||||||||||||||||||
| Net activity from loan originations and sales | 126,226 | 235,722 | 363,937 | |||||||||||||||||
|
Net cash provided by (used in) operating activities excluding activity from loan originations and sales (1)
|
$ | 298,227 | $ | 225,786 | $ | 97,976 | ||||||||||||||
(1)Includes loans, forgivable loans and other receivables from employees and partners in the amount of $220.2 million, $211.9 million and $243.3 million for the years ended December 31, 2025, 2024 and 2023. Excluding these loans, net cash provided by (used in) operating activities excluding loan originations and sales would be $518.4 million, $437.6 million and $341.2 million for the years ended December 31, 2025, 2024 and 2023.
Cash Flows for the Year Ended December 31, 2025
For the year ended December 31, 2025, we generated $172.0 million of cash from operating activities. Excluding activity from loan originations and sales, cash provided by operating activities for the year ended December 31, 2025 was $298.2 million. Cash provided by operating activities included $220.2 million of loans, forgivable loans and other receivables from employees and partners primarily for the hiring of revenue generating professionals. Cash used in investing activities was $198.1 million, consisting of $115.4 million of net purchases of short-term investments set aside to secure the Company's financial guarantee liability in its GSE business, $53.4 million of payments for acquisitions, net of cash acquired, and $29.4 million of cash paid for the purchases of fixed assets. Cash used in financing activities of $44.8 million primarily related to net proceeds from warehouse facilities of $138.1 million. This was offset by payments to shareholders and partners for dividends and distributions (including tax distributions) of $53.3 million and treasury stock repurchases of $127.1 million.
Cash Flows for the Year Ended December 31, 2024
For the year ended December 31, 2024, we used $9.9 million of cash in operations. Excluding activity from loan originations and sales, cash provided by operating activities for the year ended December 31, 2024 was $225.8 million. Cash used in operations included $211.9 million of loans, forgivable loans and other receivables from employees and partners primarily for the hiring of revenue generating professionals. Cash used in investing activities was $33.4 million, consisting primarily of cash paid for the purchases of fixed assets. Cash provided by financing activities of $89.5 million primarily related to net borrowings of $125.0 million of corporate debt and net proceeds from warehouse facilities of $255.7 million. This was offset by treasury stock repurchases and unit purchases of $224.9 million, payments to shareholders and partners for dividends and distributions of $59.3 million, and payments of deferred financing costs of $7.0 million.
Cash Flows for the Year Ended December 31, 2023
For the year ended December 31, 2023, we used $266.0 million of cash from operations. Excluding activity from loan originations and sales, cash used from operating activities for the year ended December 31, 2023 was $98.0 million. Cash used in investing activities was $49.7 million, consisting of cash paid for acquisitions and purchases of fixed assets, offset by proceeds from the redemption of Newmark's equity method investment in Real Estate LP. Cash provided by financing activities
of $261.5 million primarily related to net principal borrowings on warehouse facilities of $361.2 million, offset by treasury stock repurchases and payments to shareholders and partners for dividends and distributions.
Commitments and Contingencies
See Note 28 - "Commitments and Contingencies" in Part II, Item 8 of this Annual Report on Form 10-K for information responsive to Item 303(b)(1) of Regulation S-K regarding cash requirements from known contractual and other obligations. This includes contractual obligations relating to operating leases, warehouse facilities, debt, the commitment to fund construction loans and any associated interest.
Acquisitions
See Note 4 - "Acquisitions" to our accompanying consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for additional information.
Credit Ratings
As of December 31, 2025, our public long-term credit ratings and associated outlooks are as follows:
| Rating | Outlook | |||||||||||||
| Fitch Ratings Inc. | BBB- | Stable | ||||||||||||
| JCRA | BBB+ | Stable | ||||||||||||
| Kroll Bond Rating Agency | BBB- | Positive | ||||||||||||
|
S&P Global Ratings
|
BB+ |
Stable
|
||||||||||||
Credit ratings and associated outlooks are influenced by several factors including, but not limited to: operating environment, earnings and profitability trends, the prudence of funding and liquidity management practices, balance sheet size composition and resulting leverage, cash flow coverage of interest, composition and size of the capital base, available liquidity, outstanding borrowing levels and the firm's competitive position in the industry. A credit rating and/or the associated outlook can be revised upward or downward at any time by a rating agency if such rating agency decides that circumstances warrant such a change. Any reduction in our credit ratings and/or the associated outlook could adversely affect the availability of debt financing on terms acceptable to us, as well as the cost and other terms upon which we are able to obtain any such financing. In addition, credit ratings and associated outlooks may be important to customers or counterparties when we compete in certain markets and when we seek to engage in certain transactions. The interest rate on our 7.500% Senior Notes may increase by up to 2% in the event of credit ratings downgrades.
Certain Related Party Transactions
The following related party disclosure relates to the period subsequent to December 31, 2025. See Note 24 - "Related Party Transactions" to our accompanying consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for related party transactions prior to December 31, 2025.
Transactions with Executive Officers and Directors
On February 25, 2026, the Company repurchased an aggregate of 59,601 shares of its Class A common stock from Stephen M. Merkel, Chairman of the Board of Directors and Chief Legal Officer. The sale price per share was the closing price per share of a share of the Class A common stock on the Nasdaq Global Select Market on February 25, 2026. The transaction was approved by the Audit Committee and Compensation Committee of the Company pursuant to the Company's stock buyback authorization and is exempt pursuant to Rule 16b-3 under the Securities Exchange Act of 1934, as amended.
Cantor Rights to Purchase Cantor Units from Newmark Holdings
As of March 2, 2026, there were 114,135 Founding Partner interests in Newmark Holdings remaining which Newmark Holdings had the right to redeem or exchange and with respect to which Cantor had the right to purchase an equivalent number of Cantor Units following such redemption or exchange. See Note 24 - "Related Party Transactions Cantor Rights to Purchase Cantor Units from Newmark Holdings" to our accompanying consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for more information regarding Cantor's rights to purchase Cantor Units pursuant to the terms of the Newmark Holdings limited partnership agreement.
Regulatory Requirements
See Note 8 - "Capital and Liquidity Requirements" to our accompanying consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for discussion relating to the impact of Newmark's capital requirements and requirements to maintain sufficient collateral to meet operational liquidity requirements.
Regulatory Environment
See "-Regulation" in Part I, Item 1, "Business," of our Annual Report on Form 10-K for the year ended December 31, 2025, for information related to our regulatory environment.
Equity
Share Repurchase Program
See Note 6 - "Stock Transactions and Unit Purchases" to our accompanying consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.
On February 18, 2026, Newmark's Board increased Newmark's Share Repurchase and Unit Purchase Authorization, which has no expiration date, to $400.0 million.
Fully Diluted Share Count
Our fully diluted weighted-average share counts for the years ended December 31, 2025 and 2024 were as follows (in thousands):
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
|
Common stock outstanding(1)
|
178,456 | 172,179 | |||||||||
|
Partnership units(2)
|
69,773 | - | |||||||||
| RSUs (Treasury stock method) | 4,871 | 5,110 | |||||||||
| Newmark exchange shares | 350 | 402 | |||||||||
|
Total(3)
|
253,450 | 177,691 | |||||||||
(1)Common stock consisted of Newmark Class A common stock and Newmark Class B common stock. For the year ended December 31, 2025, the weighted-average number of shares of Newmark Class A common stock and Newmark Class B common stock that were included in our fully diluted EPS computation was 157.2 million shares and 21.3 million shares, respectively.
(2)Partnership units collectively include FPUs, limited partnership units, and Cantor Units. See Note 2 - "Limited Partnership Interests in Newmark Holdings and BGC Holdings" to our accompanying consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K for more information. In general, these partnership units are potentially exchangeable into shares of Newmark Class A common stock. In addition, the 20.3 million partnership units held by Cantor as of December 31, 2025 were generally exchangeable into up to 18.8 million shares of Newmark Class A common stock and/or Newmark Class B common stock at the then-current Exchange Ratio of 0.9264. These partnership units also generally receive quarterly allocations of net income, after the deduction of the Preferred Distribution, based on their weighted-average pro rata share of economic ownership of the operating subsidiaries. As a result, these partnership units are included in the fully diluted share count calculation shown above.
(3)For the years ended December 31, 2025 and 2024, the weighted-average share count included 184.8 thousand and 77.7 million anti-dilutive securities, respectively, which were excluded in the computation of fully diluted earnings per share.
Our fully diluted period-end (spot) common stock, limited partnership unit, RSU and Newmark exchange share count as of each of December 31, 2025 and 2024 was as follows (in thousands):
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
|
Common stock outstanding
|
181,942 | 170,792 | |||||||||
|
Partnership units
|
66,333 | 75,937 | |||||||||
| RSUs (Treasury stock method) | 5,756 | 5,808 | |||||||||
| Newmark exchange shares | 372 | 346 | |||||||||
|
Total
|
254,403 | 252,883 | |||||||||
Registration Statements
We have an effective registration statement on Form S-4 with respect to the offer and sale of up to 20.0 million shares and rights to acquire shares of our Class A common stock from time to time in connection with business combination transactions, including acquisitions of other businesses, assets, properties or securities. As of December 31, 2025, we have issued 3.1 million shares of our Class A common stock under this registration statement.
Contingent Payments Related to Acquisitions
As of December 31, 2025, our contingent cash consideration balance related to acquisitions was $11.1 million. The contingent equity instruments and cash liability is recorded at fair value in "Accounts payable, accrued expenses and other liabilities" on Newmark's accompanying consolidated balance sheets.
Legal Proceedings
See the discussion under the heading "Transactions with Executive Officers and Directors - Mr. Howard Lutnick, Former Executive Chairman - Other Related Party Transactions," in Note 24 - "Related Party Transactions" to our accompanying consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-Kfor information regarding Mr. Howard Lutnick's December 2021 bonus award.
On August 5, 2022, Robert Garfield filed a complaint in the Delaware Court of Chancery, captioned Robert Garfield v. Howard Lutnick, et al. (Case No. 2022-0687) (the "Garfield action"), against the members of the Board and Mr. Lutnick in his capacity as Chairman of the Board and controlling stockholder. This derivative complaint alleges that in connection with the December 2021 bonus award, payable over a three-year period, granted to Mr. Lutnick: (i) the Board breached its fiduciary duty, (ii) neither the award nor the approval process employed by the Compensation Committee were entirely fair to the Company and its stockholders, and (iii) the members of the Compensation Committee did not exercise independent judgment. The complaint alleges that Mr. Lutnick breached his fiduciary duty as Chairman and controlling shareholder by forcing the Company to grant the award and by accepting it. The complaint seeks rescission of the award and other compensation, as well as damages and other relief.
On October 7, 2022, Cardinal Capital Management, LLC filed a complaint in the Delaware Court of Chancery, captioned Cardinal Capital Management, LLC v. Howard Lutnick, et al. (Case No. 2022-0909-SG) (the "Cardinal action"), against Mr. Lutnick, the members of the Compensation Committee in 2021, who were Virginia S. Bauer, Kenneth A. McIntyre and Michael Snow as members of the Compensation Committee, and Barry Gosin, Michael Rispoli and Stephen Merkel, as Newmark's executive officers. The derivative complaint alleges that in connection with the Company's June 2021 partnership units exchange for Mr. Lutnick and Officers (as such term is defined in the Cardinal action) and the December 2021 bonus award, payable over a three-year period, granted to Mr. Lutnick: (i) the Compensation Committee and Officers breached their fiduciary duties and wasted corporate assets; and (ii) Mr. Lutnick and the Officers were unjustly enriched. The complaint also alleges that Mr. Lutnick breached his fiduciary duty as Chairman and controlling shareholder, and wasted corporate assets, by forcing the Company to grant the award and by accepting it. The complaint seeks recoupment of the partnership units exchange and the bonus award, as well as damages and other relief.
On December 13, 2022, the Delaware Court of Chancery entered an order consolidating the Garfield and Cardinal actions into a single, consolidated action (Consolidated C.A. No. 2022-0687, hereinafter the "Consolidated Shareholder Action") deemed to have commenced on August 5, 2022, when the Garfield action was filed. On January 10, 2023, the plaintiffs filed a consolidated amended complaint, whose claims, as well as requested relief, mirror the claims and relief sought in the Cardinal action in all material respects. The Company's position is that the partnership units exchange was appropriate and in the best interests of the Company, and that the bonus award was properly approved by the Compensation Committee comprised of independent directors (which did not include Mr. Howard Lutnick) after careful consideration of his contributions to the Company, including the Company's superior financial results, and following an extensive process that included advice from independent legal counsel and an independent compensation consultant.
On December 21, 2024, the parties to the Consolidated Shareholder Action agreed to settle the matter for a cash payment of $50 million to Newmark less any fees awarded to the plaintiffs' counsel by the Court following a hearing, to be paid by Newmark's directors' and officers' insurance carriers, within 15 business days after entry of judgment. The settlement, which required the Court of Chancery's approval, is intended to fully settle and release, with prejudice, any and all actual or potential claims between the parties to the settlement that arise out of or otherwise relate to the claims asserted in the Consolidated Shareholder Action. The settlement is not evidence of the validity or invalidity of any claims or defenses in this action or any other actions or proceedings, or of any wrongdoing by any of the defendants, or of any damages or injury to Newmark or the plaintiffs. The defendants in this action have denied, and continue to deny, all allegations of wrongdoing, fault, liability or damage with respect to all claims asserted or that could be asserted in the Consolidated Shareholder Action.
The Court of Chancery approved the proposed settlement and dismissed the case after a hearing held on August 13, 2025. The Company received $50.0 million from insurers, net of $7.7 million of plaintiff's counsel legal fees.
On March 9, 2023, a purported class action complaint was filed against Cantor, BGC Holdings, and Newmark Holdings in the U.S. District Court for the District of Delaware (Civil Action No. 1:23-cv-00265). The collective action, which was filed by seven former limited partners on their own behalf and on behalf of other similarly situated limited partners, alleges a claim for breach of contract against all defendants on the basis that the defendants failed to make payments due under the relevant partnership agreements. Specifically, the plaintiffs allege that the non-compete and economic forfeiture provisions upon which the defendants relied to deny payment are unenforceable under Delaware law. The plaintiffs allege a second claim against Cantor and BGC Holdings for antitrust violations under the Sherman Antitrust Act of 1890, as amended, on the basis
that the Cantor and BGC Holdings partnership agreements constitute unreasonable restraints of trade. In that regard, the plaintiffs allege that the non-compete and economic forfeiture provisions of the Cantor and BGC Holdings partnership agreements, as well as restrictive covenants included in partner separation agreements, cause anticompetitive effects in the labor market, insulate Cantor and BGC Holdings from competition, and limit innovation. The plaintiffs seek a determination that the case may be maintained as a class action, an injunction prohibiting the allegedly anticompetitive conduct, and monetary damages of at least $5,000,000. The defendants filed a motion to dismiss and in response, on May 31, 2023, the plaintiffs filed an Amended Class Action Complaint alleging similar allegations as a basis for claims for breach of contract and violation of the Sherman Act. The defendants moved to dismiss the Amended Complaint. On February 23, 2024, the plaintiffs filed a Second Amended Complaint, repleading claims for violation of federal antitrust laws and challenging economic forfeiture and non-compete obligations as violative of federal competition law. On December 2, 2024, the District Court granted the defendants' motion to dismiss the Second Amended Complaint. On December 16, 2024, the plaintiffs filed a notice of appeal to the U.S. Court of Appeals for the Third Circuit. The appeal was fully briefed in early 2025 and the Third Circuit held oral argument on September 17, 2025.On December 15, 2025, the Third Circuit affirmed the District Court's judgment dismissing the case.
Critical Accounting Policies and Estimates
The preparation of our accompanying consolidated financial statements in conformity with U.S. GAAP guidance requires management to make estimates and assumptions that affect the reported amounts of the assets and liabilities, revenues and expenses, and the disclosure of contingent assets and liabilities in our accompanying consolidated financial statements. These accounting estimates require the use of assumptions about matters, some which are highly uncertain at the time of estimation. To the extent actual experience differs from the assumptions used, our accompanying consolidated balance sheets, consolidated statements of operations and consolidated statements of cash flows could be materially affected. We believe that of our significant accounting policies, the following policies involve a higher degree of judgment and complexity.
Revenue Recognition
We derive our revenues primarily through commissions from brokerage services, commercial mortgage origination, net, revenues from real estate management services, servicing fees and other revenues. Revenue from contracts with customers is recognized when, or as, we satisfy our performance obligations by transferring the promised goods or services to the customers as determined by when, or as, the customer obtains control of that good or service. A performance obligation may be satisfied over time or at a point in time. Revenue from a performance obligation satisfied over time is recognized by measuring our progress in satisfying the performance obligation as evidenced by the transfer of the goods or services to the customer. Revenue from a performance obligation satisfied at a point in time is recognized at the point in time when the customer obtains control over the promised good or service.
The amount of revenue recognized reflects the consideration we expect to be entitled to in exchange for those promised goods or services (i.e., the "transaction price"). In determining the transaction price, we consider consideration promised in a contract that includes a variable amount, referred to as variable consideration, and estimate the amount of consideration due to us. Additionally, variable consideration is included in the transaction price only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur. In determining when to include variable consideration in the transaction price, we consider all information (historical, current and forecast) that is available, including the range of possible outcomes, the predictive value of past experiences, the time period of when uncertainties are expected to be resolved and the amount of consideration that is susceptible to factors outside of our influence.
We also use third-party service providers in the provision of services to our customers. In instances where a third-party service provider is used, we perform an analysis to determine whether we are acting as a principal or an agent with respect to the services provided. To the extent that we are acting as a principal, the revenue and the expenses incurred are recorded on a gross basis. In instances where we are acting as an agent, the revenue and expenses are presented on a net basis within the revenue line item.
In some instances, we perform services for customers and incur out-of-pocket expenses as part of delivering those services. Our customers agree to reimburse us for those expenses, and those reimbursements are part of the contract's transaction price. Consequently, these expenses and the reimbursements of such expenses from the customer are presented on a gross basis because the services giving rise to the out-of-pocket expenses do not transfer a good or service. The reimbursements are included in the transaction price when the costs are incurred, and the reimbursements are due from the customer.
MSRs, Net
We initially recognize and measure the rights to service mortgage loans at fair value and subsequently measure them using the amortization method. We recognize rights to service mortgage loans as separate assets at the time the underlying originated mortgage loan is sold, and the value of those rights is included in the determination of the gains on loans held for sale. Purchased MSRs, including MSRs purchased from CCRE, are initially recorded at fair value, and subsequently measured using the amortization method.
We receive up to a three-basis point servicing fee and/or up to a one-basis point surveillance fee on certain Freddie Mac loans after the loan is securitized in a Freddie Mac pool. The Freddie Mac Strip is also recognized at fair value and subsequently measured using the amortization method, but is recognized as a MSR at the securitization date.
MSRs are assessed for impairment, at least on an annual basis, based upon the fair value of those rights as compared to the amortized cost. Fair values are estimated using a valuation model that calculates the present value of the future net servicing cash flows. In using this valuation method, we incorporate assumptions that management believes market participants would use in estimating future net servicing income. The fair value estimates are sensitive to significant assumptions used in the valuation model such as prepayment rates, cost of servicing, escrow earnings rates, discount rates and servicing multiples, which are affected by expectations about future market or economic conditions derived, in part, from historical data. It is reasonably possible that such estimates may change. We amortize the MSRs in proportion to, and over the period of, the projected net servicing income. For purposes of impairment evaluation and measurement, we stratify MSRs based on predominant risk characteristics of the underlying loans, primarily by investor type (Fannie Mae/Freddie Mac, FHA/Ginnie Mae, commercial mortgage-backed securities and other). To the extent that the carrying value exceeds the fair value of a specific MSR strata, a valuation allowance is established, which is adjusted in the future as the fair value of MSRs increases or decreases. Reversals of valuation allowances cannot exceed the previously recognized impairment up to the amortized cost.
Equity-Based and Other Compensation
Discretionary Bonus: A portion of our compensation and employee benefits expense comprises discretionary bonuses, which may be paid in cash, equity, partnership awards or a combination thereof. We accrue expense in a period based on revenues in that period and on the expected combination of cash, equity and partnership units. Given the assumptions used in estimating discretionary bonuses, actual results may differ.
RSUs: We account for equity-based compensation under the fair value recognition provisions of U.S. GAAP guidance. RSUs provided to certain employees are accounted for as equity awards, and in accordance with U.S. GAAP guidance, we are required to record an expense for the portion of the RSUs that is ultimately expected to vest. Further, the Company estimates forfeitures at the time of grant and revises, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Because significant assumptions are used in estimating employee turnover and associated forfeiture rates, actual results may differ from our estimates under different assumptions or conditions.
The fair value of RSU awards to employees is determined on the date of grant, based on the fair value of our Class A common stock. Generally, RSUs granted by us as employee compensation do not receive dividend equivalents; as such, we adjust the fair value of the RSUs for the present value of expected forgone dividends, which requires us to include an estimate of expected dividends as a valuation input. This grant-date fair value is amortized to expense ratably over the awards' vesting periods. For RSUs with graded vesting features, we have made an accounting policy election to recognize compensation cost on a straight-line basis. The amortization is reflected as non-cash equity-based compensation expense in our accompanying consolidated statements of operations.
Restricted Stock: Restricted stock provided to certain employees is accounted for as an equity award, and as per U.S. GAAP guidance, we are required to record an expense for the portion of the restricted stock that is ultimately expected to vest. We have granted restricted stock that is not subject to continued employment or service; however, transferability is subject to compliance with our and our affiliates' customary non-compete obligations. Such shares of restricted stock are generally saleable by partners in five to 10 years. Because the restricted stock is not subject to continued employment or service, the grant-date fair value of the restricted stock is expensed on the date of grant. The expense is reflected as non-cash equity-based compensation expense in our accompanying consolidated statements of operations.
Limited Partnership Units: Limited partnership units in Newmark Holdings are held by Newmark employees and receive quarterly allocations of net income and are generally contingent upon services being provided by the unit holders. As discussed above, Preferred Units in Newmark Holdings are not entitled to participate in partnership distributions other than with respect to a distribution at a rate of either 0.6875% (which is 2.75% per calendar year) or such other amount as set forth in the award documentation. The quarterly allocations of net income to such limited partnership units are reflected as a component of compensation expense under "Equity-based compensation and allocations of net income to limited partnership units and FPUs" in our accompanying consolidated statements of operations. Prior to the Corporate Conversion, certain Newmark employees held BGC Holdings limited partnership units with similar entitlements.
Certain of these limited partnership units entitle the holders to receive post-termination payments equal to the notional amount in four equal yearly installments after the holder's termination. These limited partnership units are accounted for as post-termination liability awards under U.S. GAAP guidance, which requires that Newmark record an expense for such awards based on the change in value at each reporting period and include the expense in our accompanying consolidated statements of operations as part of "Equity-based compensation and allocations of net income to limited partnership units and FPUs." The liability for limited partnership units with a post-termination payout is included in "Other long-term liabilities" on our accompanying consolidated balance sheets.
Certain limited partnership units held by Newmark employees are granted exchangeability into Newmark Class A common stock or may be redeemed in connection with the grant of shares of Newmark Class A common stock. At the time exchangeability is granted, or the shares are issued, Newmark recognizes an expense based on the fair value of the award on that date, which is included in "Equity-based compensation and allocations of net income to limited partnership units and FPUs" in our accompanying consolidated statements of operations.
Employee Loans: We have entered into various agreements with certain of our employees and partners whereby these individuals receive loans that may be either wholly or in part repaid from distributions that the individuals receive on some or all of their limited partnership interests and from proceeds of the sale of the employees' shares of our Class A common stock or may be forgiven over a period of time. Cash advance distribution loans are documented in formal agreements and are repayable in timeframes outlined in the underlying agreements. We intend for these advances to be repaid in full from the future distributions on existing and future awards granted or the proceeds of the sales of the employees' shares. The allocations of net income to the awards are treated as compensation expense and the proceeds from distributions are used to repay the loan. The forgivable portion of any loan is recognized as compensation expense in our accompanying consolidated statements of operations over the life of the loan. We review the loan balances each reporting period for collectability. If we determine that the collectability of a portion of the loan balances is not expected, we recognize a reserve against the loan balances. Actual collectability of loan balances may differ from our estimates. As of December 31, 2025 and December 31, 2024, the aggregate balance of employee loans, net of reserve, was $862.2 million and $769.4 million, respectively, and is included as "Loans, forgivable loans and other receivables from employees and partners, net" in our accompanying consolidated balance sheets. Compensation expense for the above-mentioned employee loans was for the years ended December 31, 2025, 2024 and 2023, was $127.4 million, $123.9 million and $92.9 million, respectively. The compensation expense related to these loans was included as part of "Compensation and employee benefits" in our accompanying consolidated statements of operations.
Goodwill
Goodwill is the excess of the purchase price over the fair value of identifiable net assets acquired in a business combination. As prescribed in U.S. GAAP guidance, Intangibles - Goodwill and Other Intangible Assets, goodwill is not amortized, but instead is periodically tested for impairment. We review goodwill for impairment on an annual basis during the fourth quarter of each fiscal year or whenever an event occurs, or circumstances change that could reduce the fair value of a reporting unit below its carrying amount.
When reviewing goodwill for impairment, we first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, including goodwill. If the results of the qualitative assessment indicate that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, or if we choose to bypass the qualitative assessment, we perform a quantitative goodwill impairment analysis as follows.
The quantitative goodwill impairment test, used to identify both the existence of impairment and the amount of impairment loss, compares the fair value of a reporting unit with its carrying amount, including goodwill. If the carrying amount of a reporting unit exceeds its fair value, an impairment loss should be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. If the estimated fair value of a reporting unit exceeds its carrying value, goodwill is deemed not to be impaired. To estimate the fair value of the reporting unit, we use a discounted cash flow model and data regarding market comparables. The valuation process requires significant judgment and involves the use of significant estimates and assumptions. These assumptions include cash flow projections, estimated cost of capital and the selection of peer companies and relevant multiples. Because significant assumptions and estimates are used in projecting future cash flows, choosing peer companies and selecting relevant multiples, actual results may differ from our estimates under different assumptions or conditions.
Credit Losses
The CECL methodology requires us to estimate lifetime expected credit losses by incorporating historical loss experience, as well as current and future economic conditions over a reasonable and supportable period beyond the balance sheet date.
The expected credit loss is modeled based on our historical loss experience adjusted to reflect current conditions. A significant amount of judgment is required in the determination of the appropriate reasonable and supportable period, the methodology used to incorporate current and future macroeconomic conditions, determination of the probability of and exposure at default, all of which are ultimately used in measuring the quantitative components of our reserves. Beyond the reasonable and supportable period, we estimate expected credit losses using our historical loss rates. We also consider whether to adjust the quantitative reserves for certain external and internal qualitative factors, which consequentially may increase or decrease the reserves for credit losses and receivables. In order to estimate credit losses, assumptions about current and future economic conditions are incorporated into the model using multiple economic scenarios that are weighted to reflect the conditions at each measurement date.
During the year ended December 31, 2025, there was an increase of $2.7 million in our reserve balance. Additionally, there was $11.0 million of receivables expensed, totaling $13.7 million of "Operating, administrative and other" expense on the accompanying consolidated statements of operations. These reserves were based on macroeconomic forecasts which are critical inputs into our model and material movements in variables such as the U.S. unemployment rate and U.S. GDP growth rate which could significantly affect our estimated expected credit losses. These macroeconomic forecasts, under different conditions or using different assumptions or estimates, could result in significantly different changes in reserves for credit losses. It is difficult to estimate how potential changes in specific factors might affect the overall reserves for credit losses and current results may not reflect the potential future impact of macroeconomic forecast changes.
Income Taxes
Newmark accounts for income taxes using the asset and liability method as prescribed in U.S. GAAP guidance, Income Taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to basis differences between our accompanying consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Certain of Newmark's entities are taxed as U.S. partnerships and are primarily subject to the UBT in New York City. Therefore, the tax liability or benefit related to the partnership income or loss except for the UBT rests with the partners, rather than the partnership entity. As such, the partners' tax liability or benefit is not reflected in our accompanying consolidated financial statements. The tax-related assets, liabilities, provisions or benefits included in our accompanying consolidated financial statements also reflect the results of the entities that are taxed as corporations, either in the U.S. or in foreign jurisdictions.
Newmark provides for uncertain tax positions based upon management's assessment of whether a tax benefit is more likely than not to be sustained upon examination by tax authorities. Management is required to determine whether a tax position is more likely than not to be sustained upon examination by tax authorities, including resolution of any related appeals or litigation processes, based on the technical merits of the position. Because significant assumptions are used in determining whether a tax benefit is more likely than not to be sustained upon examination by tax authorities, actual results may differ from Newmark's estimates under different assumptions or conditions. Newmark recognizes interest and penalties related to uncertain tax positions in "Provision for income taxes" in our accompanying consolidated statements of operations.
A valuation allowance is recorded against deferred tax assets if it is deemed more likely than not that those assets will not be realized. In assessing the need for a valuation allowance, Newmark considers all available evidence, including past operating results, the existence of cumulative losses in the most recent fiscal years, estimates of future taxable income and the feasibility of tax planning strategies.
The measurement of current and deferred income tax assets and liabilities is based on provisions of enacted tax laws and involves uncertainties in the application of tax regulations in the U.S. and other tax jurisdictions. Because Newmark's interpretation of complex tax law may impact the measurement of current and deferred income taxes, actual results may differ from these estimates under different assumptions regarding the application of tax law.
Derivative Financial Instruments
We have loan commitments to extend credit to third parties. The commitments to extend credit are for mortgage loans at a specific rate (rate lock commitments). These commitments generally have fixed expiration dates or other termination clauses and may require a fee. We are committed to extend credit to the counterparty as long as there is no violation of any condition established in the commitment contracts. Whenever we commit to extend credit, we simultaneously enter into a Forward Sales Contract.
Both the commitment to extend credit and the forward sale commitment qualify as derivative financial instruments. We recognize all derivatives on our accompanying consolidated balance sheets as assets or liabilities measured at fair value. The change in the derivatives fair value is recognized in current period earnings.
Recent Accounting Pronouncements
See Note 1 - "Organization and Basis of Presentation" to our accompanying consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K, for information regarding recent accounting pronouncements.
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