Jones Lang LaSalle Inc.

11/05/2025 | Press release | Distributed by Public on 11/05/2025 13:14

Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis should be read in conjunction with the Consolidated Financial Statements, including the notes thereto, for the nine months ended September 30, 2025, and our audited Consolidated Financial Statements, including the notes thereto, for the fiscal year ended December 31, 2024, which are included in our 2024 Annual Report on Form 10-K, filed with the SEC and also available on our website (www.jll.com). You should also refer to Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations contained in our 2024 Annual Report on Form 10-K.
The following discussion and analysis contains certain forward-looking statements generally identified by the words anticipates, believes, estimates, expects, forecasts, plans, intends and other similar expressions. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause JLL's actual results, performance, achievements, plans and objectives to be materially different from any future results, performance, achievements, plans and objectives expressed or implied by such forward-looking statements. See the Cautionary Note Regarding Forward-Looking Statements included within this section for further information.
We present our quarterly Management's Discussion and Analysis in the following sections:
(1)A summary of our critical accounting policies and estimates;
(2)Certain items affecting the comparability of results and certain market and other risks we face;
(3)The results of our operations, first on a consolidated basis and then for each of our business segments; and
(4)Liquidity and capital resources.
SUMMARY OF CRITICAL ACCOUNTING POLICIES AND ESTIMATES
An understanding of our accounting policies is necessary for a complete analysis of our results, financial position, liquidity and trends. See Note 2, Summary of Significant Accounting Policies, of the Notes to Consolidated Financial Statements in our 2024 Annual Report on Form 10-K for a complete summary of our significant accounting policies.
The preparation of our financial statements requires management to make certain critical accounting estimates and judgments that impact (i) the stated amount of assets and liabilities, (ii) disclosure of contingent assets and liabilities at the date of the financial statements and (iii) the reported amount of revenue and expenses during the reporting periods. These accounting estimates are based on management's judgment. We consider them to be critical because of their significance to the financial statements and the possibility that future events may differ from current judgments or that the use of different assumptions could result in materially different estimates. We review these estimates on a periodic basis to ensure reasonableness. Although actual amounts likely differ from such estimated amounts, we believe such differences are not likely to be material.
A discussion of our critical accounting policies and estimates used in the preparation of our Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q can be found in Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations of our Annual Report on Form 10-K for the year ended December 31, 2024. There have been no material changes to these critical accounting policies and estimates during the nine months ended September 30, 2025.
ITEMS AFFECTING COMPARABILITY
Macroeconomic Conditions
Our results of operations and the variability of these results are significantly influenced by (i) macroeconomic trends, (ii) the geopolitical environment, (iii) the global and regional real estate markets and (iv) the financial and credit markets. These macroeconomic and other conditions have had, and we expect will continue to have, a significant impact on the variability of our results of operations.
Acquisitions and Dispositions
The timing of acquisitions and dispositions may impact the comparability of our results on a year-over-year basis. Our results include incremental revenues and expenses following the completion date of an acquisition. Relating to dispositions, comparable results will include the revenues and expenses of recent dispositions and results may also include gains (losses) on the disposition. In addition, there is generally an initial adverse impact on net income from an acquisition as a result of pre-acquisition due diligence expenditures, transaction/deal costs and post-acquisition integration costs, such as fees from third-party advisors engaged to assist with onboarding and process alignment, retention and severance expense, early lease termination costs and other integration expenses. For dispositions, we may also incur such incremental costs during the disposition process and these costs could have an adverse impact on net income.
Transaction-Based Revenues and Equity Earnings
Transaction-based revenues are impacted by the size and timing of our clients' transactions. Such revenues include investment sales and other capital markets activities, agency and tenant representation leasing transactions, incentive fees, and other services/offerings, which increase the variability of the revenue we earn. Specifically for Investment Management, the magnitude and timing of recognition of incentive fees are driven by one or a combination of the following: changes in valuations of the underlying investments, dispositions of managed assets and the contractual measurement periods with clients. The timing and the magnitude of transaction-based revenues can vary significantly from year to year and quarter to quarter and also vary geographically.
Equity earnings may vary substantially from period to period for a variety of reasons, including as a result of (i) valuation increases (decreases) on investments reported at fair value, (ii) gains (losses) on asset dispositions and (iii) impairment charges. The timing of recognition of these items may impact comparability between quarters, in any one year or compared to a prior year.
The comparability of these items can be seen in Note 4, Business Segments, of the Notes to Consolidated Financial Statements and is discussed further in Segment Operating Results included herein.
Foreign Currency
We conduct business using a variety of currencies, but we report our results in U.S. dollars. As a result, the volatility of currencies against the U.S. dollar may positively or negatively impact our results. This volatility can make it more difficult to perform period-to-period comparisons of the reported U.S. dollar results of operations, because such results may indicate a growth or decline rate that might not have been consistent with the real underlying growth or decline rates in the local operations. Consequently, we provide information about the impact of foreign currencies in the period-to-period comparisons of the reported results of operations in our discussion and analysis of financial condition in the Results of Operations section below.
Seasonality
Historically, we have reported a relatively smaller revenue and profit in the first quarter with both measures increasing each of the following three quarters. This is a result of a general focus in the real estate industry on completing or documenting transactions by calendar year end and the fact that certain expenses are constant through the year. Our seasonality excludes the recognition of investment-generated performance fees and realized and unrealized investment equity earnings and losses. Specifically, we recognize incentive fees when assets are sold or as a result of valuation increases in the portfolio, the timing of which may not be predictable or recurring. In addition, investment equity gains and losses are primarily dependent on valuations of underlying investments, and the direction and magnitude of changes to such valuations are not predictable. Non-variable operating expenses, which we treat as expenses when incurred during the year, are relatively constant on a quarterly basis.
A significant portion of our Compensation and benefits expense is from incentive compensation plans, which we generally accrue throughout the year based on progress toward annual performance targets. This quarterly estimation can result in significant fluctuations in quarterly Compensation and benefits expense from period to period. Consequently, the results for the periods ended September 30, 2025 and 2024 are not fully indicative of the results we expect to realize for the full fiscal year.
RESULTS OF OPERATIONS
Definitions
•Assets under management data for Investment Management is primarily reported on a one-quarter lag.
•n.m.: not meaningful, typically represented by a percentage change of greater than 1,000%, favorable or unfavorable.
•Effective January 1, 2025, we report Project Management in Resilient revenue. Prior period financial information was recast to conform with this presentation.
•We define "Resilient" revenue as (i) Workplace Management, Project Management and Property Management, within Real Estate Management Services, (ii) Value and Risk Advisory, and Loan Servicing, within Capital Markets Services, (iii) Advisory Fees, within Investment Management, and (iv) Software and Technology Solutions. In addition, we define "Transactional" revenue as (i) Portfolio Services and Other, within Real Estate Management Services, (ii) Leasing Advisory, (iii) Investment Sales, Debt/Equity Advisory and Other, within Capital Markets Services, and (iv) Incentive fees and Transaction fees and other, within Investment Management.
•Gross contract costs represent certain costs associated with client-dedicated employees and third-party vendors and subcontractors and are directly or indirectly reimbursed through the fees we receive. These costs are presented on a gross basis in Operating expenses (with the corresponding fees in Revenue).
•We define "MENA" as Middle East and North Africa.
Consolidated Operating Results
Three Months Ended September 30, Change in % Change in Local Currency
($ in millions) 2025 2024 U.S. dollars
Real Estate Management Services $ 4,982.4 4,520.5 461.9 10 % 10 %
Leasing Advisory 741.9 691.5 50.4 7 7
Capital Markets Services 612.1 498.8 113.3 23 22
Investment Management 115.4 101.3 14.1 14 12
Software and Technology Solutions 58.6 56.7 1.9 3 3
Revenue $ 6,510.4 5,868.8 641.6 11 % 10 %
Platform compensation and benefits(1)
$ 1,569.1 1,406.9 162.2 12 % 11 %
Platform operating, administrative and other expenses 329.6 315.1 14.5 5 3
Depreciation and amortization 57.6 65.5 (7.9) (12) (13)
Total platform operating expenses 1,956.3 1,787.5 168.8 9 9
Gross contract costs 4,268.7 3,861.8 406.9 11 10
Restructuring and acquisition charges 11.7 (8.8) 20.5 n.m. n.m.
Total operating expenses $ 6,236.7 5,640.5 596.2 11 % 10 %
Operating income $ 273.7 228.3 45.4 20 % 20 %
Equity earnings (losses) $ 27.4 (0.9) 28.3 n.m. n.m.
Net non-cash MSR and mortgage banking derivative activity $ (0.2) (5.1) 4.9 96 % 97 %
Adjusted EBITDA $ 347.3 298.1 49.2 17 % 16 %
(1) Included in Platform compensation and benefits is carried interest expense of $4.3 million and $2.2 million for the three months ended September 30, 2025 and 2024, respectively. Carried interest expense/benefit is associated with Equity earnings/losses on Proptech Investments.
Consolidated Operating Results (continued)
Nine Months Ended September 30, Change in % Change in Local Currency
($ in millions) 2025 2024 U.S. dollars
Real Estate Management Services $ 14,445.8 12,959.6 1,486.2 11 % 11 %
Leasing Advisory 2,004.8 1,854.1 150.7 8 8
Capital Markets Services 1,567.7 1,334.0 233.7 18 17
Investment Management 317.0 307.3 9.7 3 2
Software and Technology Solutions 171.6 167.0 4.6 3 3
Revenue $ 18,506.9 16,622.0 1,884.9 11 % 11 %
Platform compensation and benefits(1)
$ 4,288.0 3,916.2 371.8 9 % 9 %
Platform operating, administrative and other expenses 980.4 909.8 70.6 8 7
Depreciation and amortization 196.9 188.8 8.1 4 4
Total platform operating expenses 5,465.3 5,014.8 450.5 9 9
Gross contract costs 12,397.8 11,107.9 1,289.9 12 12
Restructuring and acquisition charges 52.7 4.4 48.3 n.m. n.m.
Total operating expenses $ 17,915.8 16,127.1 1,788.7 11 % 11 %
Operating income $ 591.1 494.9 96.2 19 % 19 %
Equity losses $ (25.6) (20.0) (5.6) (28) % (29) %
Net non-cash MSR and mortgage banking derivative activity $ (17.3) (25.9) 8.6 33 % 33 %
Adjusted EBITDA $ 863.8 731.5 132.3 18 % 18 %
(1) Included in Platform compensation and benefits is a carried interest benefit of $0.6 million and a carried interest expense of $4.3 million for the nine months ended September 30, 2025 and 2024. Carried interest expense/benefit is associated with Equity earnings/losses on Proptech Investments.
Non-GAAP Financial Measures
Management uses certain non-GAAP financial measures to develop budgets and forecasts, measure and reward performance against those budgets and forecasts, and enhance comparability to prior periods. These measures are believed to be useful to investors and other external stakeholders as supplemental measures of core operating performance and include the following:
•Adjusted EBITDA attributable to common shareholders ("Adjusted EBITDA") and
•Percentage changes against prior periods, presented on a local currency basis.
However, non-GAAP financial measures should not be considered alternatives to measures determined in accordance with U.S. GAAP. Any measure that eliminates components of a company's capital structure, cost of operations or investments, or other results has limitations as a performance measure. In light of these limitations, management also considers U.S. GAAP financial measures and does not rely solely on non-GAAP financial measures. Because our non-GAAP financial measures are not calculated in accordance with U.S. GAAP, they may not be comparable to similarly titled measures used by other companies.
Adjustments to U.S. GAAP Financial Measures Used to Calculate non-GAAP Financial Measures
Net non-cash MSR and mortgage banking derivative activity consists of the balances presented within Revenue composed of (i) derivative gains/losses resulting from mortgage banking loan commitment and warehousing activity and (ii) gains recognized from the retention of MSR upon origination and sale of mortgage loans, offset by (iii) amortization of MSR intangible assets over the period that net servicing income is projected to be received. Non-cash derivative gains/losses resulting from mortgage banking loan commitment and warehousing activity are calculated as the estimated fair value of loan commitments and subsequent changes thereof, primarily represented by the estimated net cash flows associated with future servicing rights. MSR gains and corresponding MSR intangible assets are calculated as the present value of estimated net cash flows over the estimated mortgage servicing periods. The above activity is reported entirely within Revenue of the Capital Markets Services segment. Excluding net non-cash MSR and mortgage banking derivative activity reflects how we manage and evaluate performance because the excluded activity is non-cash in nature.
Restructuring and acquisition chargesprimarily consist of (i) severance and employment-related charges, including those related to external service providers, incurred in conjunction with a structural business shift, which can be represented by a notable change in headcount, change in leadership or transformation of business processes; (ii) acquisition, transaction and integration-related charges, including fair value adjustments, which are generally non-cash in the periods such adjustments are made, to assets and liabilities recorded in purchase accounting such as earn-out liabilities and intangible assets; and (iii) other restructuring, including lease exit charges. Such activity is excluded as the amounts are generally either non-cash in nature or the anticipated benefits from the expenditures would not likely be fully realized until future periods. Restructuring and acquisition charges are excluded from segment operating results and therefore not a line item in the segments' reconciliation to Adjusted EBITDA.
Gain/loss on disposition reflects the gain or loss recognized on the sale or disposition of businesses. Given the low frequency of business disposals by the Company historically, the gain or loss directly associated with such activity is excluded as it is not considered indicative of core operating performance.
Interest on employee loans, net of forgiveness reflects interest accrued on employee loans less the amount of accrued interest forgiven. Certain employees (predominantly in Leasing Advisory and Capital Markets Services) receive cash payments structured as loans, with interest. Employees earn forgiveness of the loan based on performance, generally calculated as a percentage of revenue production. Such forgiven amounts are reflected in Compensation and benefits expense. Given the interest accrued on these employee loans and subsequent forgiveness are non-cash and the amounts perfectly offset over the life of the loan, the activity is not indicative of core operating performance and is excluded from non-GAAP measures.
Equity earnings/losses (Investment Management and Proptech Investments)primarily reflects valuation changes on investments reported at fair value, which are increased or decreased each reporting period as fair value changes. Where the measurement alternative has been elected, our investment is increased or decreased upon observable price changes. Such activity is excluded as the amounts are generally non-cash in nature and not indicative of core operating performance.
Note: Equity earnings/losses for segments other than Investment Management represent the results of unconsolidated operating ventures (not investments), and therefore, the amounts are included in Adjusted EBITDA on both a segment and consolidated basis.
Credit losses on convertible note investmentsreflects credit impairments associated with pre-equity convertible note investments in early-stage proptech enterprises. Such losses are similar to the equity investment-related losses included in equity earnings/losses for Proptech Investments and are therefore consistently excluded from adjusted measures.
Reconciliation of Non-GAAP Financial Measures
Below is a reconciliation of Net income attributable to common shareholders to Adjusted EBITDA.
Three Months Ended September 30, Nine Months Ended September 30,
(in millions) 2025 2024 2025 2024
Net income attributable to common shareholders $ 222.8 155.1 $ 390.4 305.6
Add:
Interest expense, net of interest income 29.2 38.1 89.1 110.3
Income tax provision 52.6 37.4 93.3 73.8
Depreciation and amortization(1)
56.7 64.5 194.1 185.9
Adjustments:
Restructuring and acquisition charges 11.7 (8.8) 52.7 4.4
Net non-cash MSR and mortgage banking derivative activity 0.2 5.1 17.3 25.9
Interest on employee loans, net of forgiveness (1.5) (1.8) (5.1) (4.1)
Equity (earnings) losses - Investment Management and Proptech Investments(1)
(26.6) 2.2 29.1 23.4
Credit losses on convertible note investments 2.2 6.3 2.9 6.3
Adjusted EBITDA $ 347.3 298.1 $ 863.8 731.5
(1) This adjustment excludes the noncontrolling interest portion which is not attributable to common shareholders.
In discussing our operating results, we report percentage changes in local currency, unless otherwise noted. Amounts presented on a local currency basis are calculated by translating the current period results of our foreign operations to U.S. dollars using the foreign currency exchange rates from the comparative period. We believe this methodology provides a framework for assessing performance and operations excluding the effect of foreign currency fluctuations.
The following table reflects the reconciliation to local currency amounts for consolidated (i) Revenue, (ii) Operating income and (iii) Adjusted EBITDA.
Three Months Ended September 30, Nine Months Ended September 30,
($ in millions) 2025 % Change 2025 % Change
Revenue:
At current period exchange rates $ 6,510.4 11 % $ 18,506.9 11 %
Impact of change in exchange rates (40.9) n/a (19.7) n/a
At comparative period exchange rates $ 6,469.5 10 % $ 18,487.2 11 %
Operating income:
At current period exchange rates $ 273.7 20 % $ 591.1 19 %
Impact of change in exchange rates (0.2) n/a (3.6) n/a
At comparative period exchange rates $ 273.5 20 % $ 587.5 19 %
Adjusted EBITDA:
At current period exchange rates $ 347.3 17 % $ 863.8 18 %
Impact of change in exchange rates (0.9) n/a (3.8) n/a
At comparative period exchange rates $ 346.4 16 % $ 860.0 18 %
Revenue
Revenue increased 10% compared with the prior-year quarter. Collectively, Transactional revenues grew 13%, led by (i) Investment Sales, Debt/Equity Advisory and Other, within Capital Markets Services, up 26% (excluding the impact of non-cash MSR and mortgage banking derivative activity), (ii) Leasing, within Leasing Advisory, up 8%, and (iii) Incentive fees, within Investment Management, which were $16.5 million this quarter compared with no activity in the prior-year quarter. The collective 9% increase in Resilient revenues was highlighted by Project Management, up 24%, and Workplace Management, up 8%, both within Real Estate Management Services.
On a year-to-date basis, revenue increased 11%. Resilient revenues grew 11% collectively, highlighted by Project Management, up 21%, and Workplace Management, up 11%. Transactional revenues increased 11% collectively, led by Investment Sales, Debt/Equity Advisory and Other, up 21% (excluding the impact of non-cash MSR and mortgage banking derivative activity), and Leasing, within Leasing Advisory, up 9%.
The following highlights Revenue by segment, for the third quarter and first nine months of 2025 and 2024. Refer to segment operating results for further detail.
Revenue by Segment (in millions)
Operating Expenses
Consolidated operating expenses were $6.2 billion for the third quarter, up 10% from the same period in 2024. Gross contract costs were $4.3 billion, up 10% from the prior-year quarter, attributable to growth from businesses with higher client pass-through expenses such as Workplace Management and Project Management, both within Real Estate Management Services. Platform operating expenses were $2.0 billion for the third quarter, a 9% increase from the prior-year quarter, largely due to revenue-related expense growth.
On a year-to-date basis, operating expenses were $17.9 billion, up 11%. Gross contract costs were $12.4 billion, up 12%, while Platform operating expenses were $5.5 billion, up 9%. The drivers of the increases are consistent with the quarterly narrative above.
The year-over-year change in Restructuring and acquisition charges for the third quarter was largely driven by an expense credit in the prior-year quarter associated with a lower expected earn-out payout related to a 2021 U.S. property management joint venture. For September year to date, the change was primarily attributable to i) the impact of expense credits in the prior year associated with lower expected earn-out payouts and ii) higher severance and other employment-related charges in 2025 associated with restructuring programs, notably restructuring associated with the 2025 change in segments.
Three Months Ended September 30, Nine Months Ended September 30,
(in millions) 2025 2024 2025 2024
Severance and other employment-related charges $ 5.4 6.1 $ 30.8 17.8
Restructuring, pre-acquisition and post-acquisition charges 5.9 6.0 25.0 20.1
Fair value adjustments that resulted in a net decrease to earn-out liabilities from prior-period acquisition activity 0.4 (20.9) (3.1) (33.5)
Restructuring and acquisition charges $ 11.7 (8.8) $ 52.7 4.4
Interest Expense
Interest expense, net of interest income, for the three and nine months ended September 30, 2025, was $29.2 million and $89.1 million, respectively, compared with $38.1 million and $110.3 million in the prior-year periods. Lower expense was primarily due to a lower effective interest rate and lower average borrowings compared with the respective prior-year periods.
Equity Earnings/Losses
The following details Equity earnings/losses by investment type. Equity earnings/losses for the third quarter and first nine months of 2025 largely reflect net valuation changes for Investment Management and Proptech Investments.
Three Months Ended September 30, Nine Months Ended September 30,
(in millions) 2025 2024 2025 2024
Investment Management $ 9.3 (13.8) $ 1.9 (25.0)
Proptech Investments 17.2 11.6 (31.7) 1.6
Other 0.9 1.3 4.2 3.4
Equity earnings (losses) $ 27.4 (0.9) $ (25.6) (20.0)
Income Taxes
The following details Income tax provision and our effective tax rate.
Three Months Ended September 30, Nine Months Ended September 30,
($ in millions) 2025 2024 2025 2024
Income tax provision $ 52.6 37.4 $ 93.3 73.8
Effective tax rate 19.1 % 19.5 % 19.3 % 19.5 %
On July 4, 2025, the United States enacted the One Big Beautiful Bill Act ("OBBBA"). The OBBBA includes provisions altering the timing of deduction from certain depreciable assets, research and experimental expenses, and interest expense, with some effective in 2025 and some in 2026. The OBBBA further alters the determination and rates of taxation of international earnings, primarily effective in 2026. The current period's financial statements include the impact of the OBBBA provisions effective for 2025, which are not material to income tax expense or the financial statements as a whole.
Net Income and Adjusted EBITDA
The following details Net income attributable to common shareholders and Adjusted EBITDA for the three and nine months ended September 30, 2025, and comparable prior-year periods.
Three Months Ended September 30, Nine Months Ended September 30,
(in millions) 2025 2024 2025 2024
Net income attributable to common shareholders $ 222.8 155.1 $ 390.4 305.6
Adjusted EBITDA $ 347.3 298.1 $ 863.8 731.5
For the third quarter of 2025, higher Adjusted EBITDA was largely driven by Transactional revenue growth, most notably within Capital Markets Services and Investment Management, with contributions from Resilient revenue growth, predominantly within Real Estate Management Services, together with enhanced platform leverage and continued cost discipline. These drivers outpaced the unfavorable impact on the current quarter associated with the timing of incentive compensation accruals and certain discrete expenses in the quarter.
The following chart reflects segment Adjusted EBITDA for the third quarter and first nine months of 2025 and 2024. As noted in the Segment Operating Results section, Proptech Investments are reflected outside of the reporting segments in "All Other;" Adjusted EBITDA for the segments, therefore, does not sum to the consolidated total.
Aggregation of Segment Adjusted EBITDA (in millions)
Segment Operating Results
Effective January 1, 2025, we report Property Management (historically included in Markets Advisory, which was renamed Leasing Advisory) within Real Estate Management Services (formerly referred to as Work Dynamics). Additionally, Capital Markets, LaSalle and JLL Technologies were renamed to Capital Markets Services, Investment Management, and Software and Technology Solutions, respectively.
Effective July 1, 2025, we report the balances and activity associated with the investments historically reported within Software and Technology Solutions in "All Other." These investments (inclusive of convertible notes receivable) in proptech funds and early to mid-stage proptech companies ("Proptech Investments") do not constitute an operating or reporting segment.
Prior period financial information was recast to conform with the presentation changes described above.
We manage and report our operations as five business segments: Real Estate Management Services, Leasing Advisory, Capital Markets Services, Investment Management, and Software and Technology Solutions. Our Real Estate Management Services business provides a broad suite of integrated services to occupiers of real estate, including facility and property management, project management, and portfolio and other services. We consider "Property Management" to be services provided to non-occupying property investors and "Workplace Management" to be services provided to facility occupiers. Leasing Advisory offers agency leasing and tenant representation, as well as advisory and consulting services. Our Capital Markets Services offerings include investment sales, debt and equity advisory, value and risk advisory, and loan servicing. Investment Management provides services on a global basis to institutional investors and high-net-worth individuals, while our Software and Technology Solutions segment offers various software products and services to our clients.
Segment operating expenses comprise Gross contract costs and Segment platform operating expenses, which includes Platform compensation and benefits; Platform operating, administrative and other expenses; and Depreciation and amortization. Our measure of segment results excludes Restructuring and acquisition charges.
Real Estate Management Services
% Change
Three Months Ended September 30, Change in in Local
($ in millions) 2025 2024 U.S. dollars Currency
Workplace Management $ 3,423.6 3,164.6 259.0 8 % 8 %
Project Management 967.9 771.3 196.6 25 24
Property Management 461.1 452.3 8.8 2 2
Portfolio Services and Other 129.8 132.3 (2.5) (2) (3)
Revenue $ 4,982.4 4,520.5 461.9 10 % 10 %
Platform compensation and benefits $ 475.2 436.4 38.8 9 % 8 %
Platform operating, administrative and other 148.4 159.5 (11.1) (7) (8)
Depreciation and amortization 26.0 33.0 (7.0) (21) (22)
Segment platform operating expenses 649.6 628.9 20.7 3 2
Gross contract costs 4,255.5 3,829.9 425.6 11 11
Segment operating expenses $ 4,905.1 4,458.8 446.3 10 % 9 %
Equity earnings $ 0.1 1.1 (1.0) (91 %) (80) %
Adjusted EBITDA $ 102.2 94.5 7.7 8 % 8 %
Real Estate Management Services (continued)
% Change
Nine Months Ended September 30, Change in in Local
($ in millions) 2025 2024 U.S. dollars Currency
Workplace Management $ 10,036.3 9,057.4 978.9 11 % 11 %
Project Management 2,687.0 2,215.8 471.2 21 21
Property Management 1,361.1 1,318.6 42.5 3 4
Portfolio Services and Other 361.4 367.8 (6.4) (2) (2)
Revenue $ 14,445.8 12,959.6 1,486.2 11 % 11 %
Platform compensation and benefits $ 1,372.6 1,253.4 119.2 10 % 9 %
Platform operating, administrative and other 435.1 434.9 0.2 - -
Depreciation and amortization 87.7 91.2 (3.5) (4) (4)
Segment platform operating expenses 1,895.4 1,779.5 115.9 7 6
Gross contract costs 12,358.8 11,016.1 1,342.7 12 12
Segment operating expenses $ 14,254.2 12,795.6 1,458.6 11 % 11 %
Equity earnings $ 1.0 2.5 (1.5) (60 %) (57) %
Adjusted EBITDA $ 275.1 254.5 20.6 8 % 7 %
Real Estate Management Services revenue growth for the third quarter and first nine months of 2025 was partially driven by continued strong performance in Workplace Management. Client wins outpaced mandate expansions for the quarter and for the first nine months of 2025. For both periods, incremental pass-through costs augmented mid single-digit management fee increases. Project Management revenue also meaningfully contributed to growth for both the three and nine months ended September 30, 2025, driven by new and expanded contracts primarily in the U.S. and Asia Pacific. Low double-digit management fee increases were supplemented by higher pass-through costs.
Operating expenses for the segment increased for the quarter and the year to date, primarily due to revenue-related expense growth and higher gross contract costs from increased client pass-through expenses. Higher expenses in 2025 also reflected the impact of incentive compensation accruals timing and certain discrete items, including incremental bad debt expense, which had a more significant impact on the third quarter than the nine-month period. Partially offsetting these drivers, the current-year quarter benefited from $8.2 million in lower gross receipts tax expense compared to 2024.
The increases in Adjusted EBITDA for both the current quarter and year-to-date periods were primarily driven by the strong top-line performance described above, which outpaced the aforementioned expense growth.
Leasing Advisory
% Change
Three Months Ended September 30, Change in in Local
($ in millions) 2025 2024 U.S. dollars Currency
Leasing $ 719.1 665.4 53.7 8 % 8 %
Advisory, Consulting and Other 22.8 26.1 (3.3) (13) (13)
Revenue $ 741.9 691.5 50.4 7 % 7 %
Platform compensation and benefits $ 538.3 494.9 43.4 9 % 8 %
Platform operating, administrative and other 64.2 55.5 8.7 16 15
Depreciation and amortization 10.9 9.1 1.8 20 20
Segment platform operating expenses 613.4 559.5 53.9 10 9
Gross contract costs 3.1 9.7 (6.6) (68) (68)
Segment operating expenses $ 616.5 569.2 47.3 8 % 8 %
Adjusted EBITDA $ 136.9 131.7 5.2 4 % 4 %
% Change
Nine Months Ended September 30, Change in in Local
($ in millions) 2025 2024 U.S. dollars Currency
Leasing $ 1,936.7 1,781.8 154.9 9 % 9 %
Advisory, Consulting and Other 68.1 72.3 (4.2) (6) (6)
Revenue $ 2,004.8 1,854.1 150.7 8 % 8 %
Platform compensation and benefits $ 1,444.4 1,337.4 107.0 8 % 8 %
Platform operating, administrative and other 198.8 174.4 24.4 14 14
Depreciation and amortization 33.9 27.2 6.7 25 25
Segment platform operating expenses 1,677.1 1,539.0 138.1 9 9
Gross contract costs 8.4 24.4 (16.0) (66) (65)
Segment operating expenses $ 1,685.5 1,563.4 122.1 8 % 8 %
Equity earnings $ - 0.1 (0.1) (100) % (145) %
Adjusted EBITDA $ 354.3 318.6 35.7 11 % 11 %
Compared with the prior-year periods, broad-based Leasing revenue increased across major asset classes, led by continued momentum in office, with the most significant growth in the U.S. as well as notable contributions from Germany and Canada. U.S. expansion was primarily driven by growth in office, from both higher volume and deal size, as well as increased industrial deal volume. Office Leasing revenue growth outperformed global office volumes (up 14% compared with market volumes up 2% according to JLL Research), highlighted by U.S. outperformance (revenue up 14% compared with market volumes up 4% according to JLL Research). Year-to-date revenues, compared to overall and U.S. office market volume, mirrored our third-quarter outperformance.
The third-quarter and year-to-date increases in segment operating expenses were primarily due to higher commissions, correlated to revenue growth, and the year-over-year unfavorable impact from the timing of incentive compensation accruals.
The increases in Adjusted EBITDA for the third quarter and first nine months were driven by the revenue growth described above, net of associated commissions. For the quarter, this growth was meaningfully offset by the aforementioned impact from the timing of incentive compensation accruals.
Capital Markets Services
% Change
Three Months Ended September 30, Change in in Local
($ in millions) 2025 2024 U.S. dollars Currency
Investment Sales, Debt/Equity Advisory and Other $ 479.5 371.8 107.7 29 % 28 %
Value and Risk Advisory 89.9 86.0 3.9 5 3
Loan Servicing 42.7 41.0 1.7 4 4
Revenue $ 612.1 498.8 113.3 23 % 22 %
Platform compensation and benefits $ 436.8 365.5 71.3 20 % 19 %
Platform operating, administrative and other 85.8 62.3 23.5 38 36
Depreciation and amortization 9.8 16.6 (6.8) (41) (42)
Segment platform operating expenses 532.4 444.4 88.0 20 19
Gross contract costs 1.5 11.5 (10.0) (87) (87)
Segment operating expenses 533.9 455.9 78.0 17 % 16 %
Equity earnings $ 0.8 0.2 0.6 300 % 195 %
Net non-cash MSR and mortgage banking derivative activity $ (0.2) (5.1) 4.9 96 % 97 %
Adjusted EBITDA $ 89.9 65.7 24.2 37 % 36 %
Capital Markets Services (continued)
% Change
Nine Months Ended September 30, Change in in Local
($ in millions) 2025 2024 U.S. dollars Currency
Investment Sales, Debt/Equity Advisory and Other $ 1,172.7 950.8 221.9 23 % 23 %
Value and Risk Advisory 269.2 262.0 7.2 3 2
Loan Servicing 125.8 121.2 4.6 4 4
Revenue $ 1,567.7 1,334.0 233.7 18 % 17 %
Platform compensation and benefits $ 1,140.4 994.2 146.2 15 % 14 %
Platform operating, administrative and other 251.5 206.4 45.1 22 21
Depreciation and amortization 46.2 50.3 (4.1) (8) (8)
Segment platform operating expenses 1,438.1 1,250.9 187.2 15 14
Gross contract costs 4.3 36.9 (32.6) (88) (88)
Segment operating expenses 1,442.4 1,287.8 154.6 12 % 11 %
Equity earnings $ 3.2 0.8 2.4 300 % 276 %
Net non-cash MSR and mortgage banking derivative activity $ (17.3) (25.9) 8.6 33 % 33 %
Adjusted EBITDA $ 193.2 124.5 68.7 55 % 54 %
For the third quarter and first nine months of 2025, Capital Markets Services top-line growth was fueled by debt advisory, investment sales and equity advisory transactions across nearly all sectors, with the most significant contributions coming from multifamily and retail. Geographically, revenue growth was led by the U.S. for both the third quarter and first nine months of 2025, augmented by strong contributions from Japan and Australia for the quarter and India and MENA for the year to date. Globally, investment sales were up 22% for the quarter, significantly outpacing the broader investment sales market, which grew 12% over the same period according to JLL Research.
The increases in segment operating expenses for the third quarter and first nine months of 2025 were largely driven by higher commission expense, correlated to the revenue growth described above. In addition, $7.2 million of incremental expense associated with loan-related losses, including an increase in loan loss reserves, was recorded in the current quarter. In October 2025, the underlying asset for the loan repurchased in August 2024 was sold; the $3.6 million expense impact - reflecting final pricing and expected closing costs - was included in the aforementioned loan-related losses recognized this quarter.
On a year-to-date basis, in addition to the loan-related losses described above, we recognized approximately $14.0 million of incremental expense associated with an enhanced loss-share agreement with Fannie Mae for a specific three-loan portfolio. The impact of this item is more than offset by the $18.0 million of loan-related expenses recognized in the first half of 2024.
Adjusted EBITDA increases for the quarter and first nine months of 2025 were primarily attributable to the revenue growth described above, net of associated commission expenses, partially offset by the impact of incremental loan-related losses.
Investment Management
% Change
Three Months Ended September 30, Change in in Local
($ in millions) 2025 2024 U.S. dollars Currency
Advisory fees $ 93.0 92.7 0.3 - % (1) %
Transaction fees and other 5.9 8.6 (2.7) (31) (30)
Incentive fees 16.5 - 16.5 n.m. n.m.
Revenue $ 115.4 101.3 14.1 14 % 12 %
Platform compensation and benefits $ 68.0 59.8 8.2 14 % 12 %
Platform operating, administrative and other 16.1 18.7 (2.6) (14) (15)
Depreciation and amortization 2.7 1.9 0.8 42 46
Segment platform operating expenses 86.8 80.4 6.4 8 6
Gross contract costs 7.8 9.3 (1.5) (16) (17)
Segment operating expenses $ 94.6 89.7 4.9 5 % 4 %
Adjusted EBITDA(1)
$ 23.7 14.0 9.7 69 % 62 %
Equity earnings (losses) $ 9.3 (13.8) 23.1 n.m. n.m.
Investment Management (continued)
% Change
Nine Months Ended September 30, Change in in Local
($ in millions) 2025 2024 U.S. dollars Currency
Advisory fees $ 275.6 278.1 (2.5) (1) % (2) %
Transaction fees and other 20.9 24.4 (3.5) (14) (15)
Incentive fees 20.5 4.8 15.7 327 300
Revenue $ 317.0 307.3 9.7 3 % 2 %
Platform compensation and benefits $ 187.2 180.1 7.1 4 % 3 %
Platform operating, administrative and other 49.9 52.1 (2.2) (4) (5)
Depreciation and amortization 8.4 5.9 2.5 42 43
Segment platform operating expenses 245.5 238.1 7.4 3 2
Gross contract costs 24.3 26.5 (2.2) (8) (8)
Segment operating expenses $ 269.8 264.6 5.2 2 % 1 %
Adjusted EBITDA(1)
$ 55.8 57.7 (1.9) (3) % (6) %
Equity earnings (losses) $ 1.9 (25.0) 26.9 n.m. n.m.
(1) Adjusted EBITDA excludes Equity earnings (losses) attributable to common shareholders for Investment Management.
Investment Management revenue growth for the third quarter and first nine months of 2025 was fueled by higher incentive fees. Advisory fees were largely steady compared to the prior-year periods, as strong performance in U.S. core open-end funds offset the impact to assets under management ("AUM") from client asset dispositions in Q4 2024.
The increases in segment platform operating expenses for the third quarter and first nine months of 2025 were largely driven by higher incentive compensation expense, correlated to the incentive fee growth described above.
Third-quarter Adjusted EBITDA growth primarily reflected higher incentive fees, net of related incentive compensation costs. In addition to the aforementioned third-quarter impact, the change in Adjusted EBITDA for the first nine months of 2025 compared to prior year was influenced by the absence of the $8.2 million gain recognized in Q2 2024 following the purchase of a controlling interest in a fund managed by the company, which outpaced the revenue growth (net of related incentive compensation expense) described above.
AUM increased 4% in USD (1% in local currency) during the quarter, and increased 5% in USD (1% in local currency) over the trailing twelve months. Changes in AUM are detailed in the tables below (in billions):
Quarter-to-date
Beginning balance (June 30, 2025)
$ 84.9
Asset acquisitions/takeovers 1.0
Asset dispositions/withdrawals (1.1)
Valuation changes 0.5
Foreign currency translation 2.4
Change in uncalled committed capital and cash held 0.8
Ending balance (September 30, 2025)
$ 88.5
Trailing Twelve Months
Beginning balance (September 30, 2024)
$ 84.6
Asset acquisitions/takeovers 6.1
Asset dispositions/withdrawals (7.2)
Valuation changes 2.6
Foreign currency translation 3.2
Change in uncalled committed capital and cash held (0.8)
Ending balance (September 30, 2025)
$ 88.5
Software and Technology Solutions
% Change
Three Months Ended September 30, Change in in Local
($ in millions) 2025 2024 U.S. dollars Currency
Revenue $ 58.6 56.7 1.9 3 % 3 %
Platform compensation and benefits $ 46.4 48.1 (1.7) (4) % (4) %
Platform operating, administrative and other 13.0 12.8 0.2 2 2
Depreciation and amortization 8.2 4.9 3.3 67 66
Segment platform operating expenses 67.6 65.8 1.8 3 2
Gross contract costs 0.8 1.4 (0.6) (43) (45)
Segment operating expenses $ 68.4 67.2 1.2 2 % 1 %
Adjusted EBITDA $ (1.1) (5.6) 4.5 80 % 84 %
% Change
Nine Months Ended September 30, Change in in Local
($ in millions) 2025 2024 U.S. dollars Currency
Revenue $ 171.6 167.0 4.6 3 % 3 %
Platform compensation and benefits $ 143.9 146.8 (2.9) (2) % (2) %
Platform operating, administrative and other 42.3 35.7 6.6 18 19
Depreciation and amortization 20.7 14.2 6.5 46 45
Segment platform operating expenses 206.9 196.7 10.2 5 5
Gross contract costs 2.0 4.0 (2.0) (50) (49)
Segment operating expenses $ 208.9 200.7 8.2 4 % 4 %
Adjusted EBITDA $ (15.2) (19.5) 4.3 22 % 22 %
For the third quarter and first nine months of 2025, Software and Technology Solutions revenue increased due to double-digit growth in software, offset by declines in technology solutions as certain large existing clients reduced their discretionary technology spend.
Segment operating expense growth for the third quarter and first nine months of 2025 was driven by increased revenue-related expenses. In the third quarter, this increase was partially offset by cost management actions.
The improvement in Adjusted EBITDA was driven by the increased revenue described above and cost management actions.
LIQUIDITY AND CAPITAL RESOURCES
We finance our operations, co-investment activity, share repurchases, capital expenditures and business acquisitions with internally generated funds, borrowings on our Facility, and through issuance of Long-term debt and commercial paper.
Cash Flows from Operating Activities
Operating activities provided $182.3 million of cash in the first nine months of 2025, compared with $142.0 million of cash used in operating activities during the same period in 2024. Cash inflow in 2025 was primarily attributable to higher cash provided by earnings and improved collection of receivables, partially offset by higher commissions paid.
Cash Flows from Investing Activities
We used $251.6 million of cash for investing activities during the first nine months of 2025, compared with $219.0 million used during the same period in 2024. The increase in cash used for investing activities was primarily attributable to our $100.0 million contribution to JLL Income Property Trust ("JLL IPT"), an Investment Management core open-end flagship fund, in January 2025, partially offset by lower cash paid for acquisitions. We discuss other drivers of investing activity below in further detail.
Cash Flows from Financing Activities
Financing activities provided $72.8 million of cash during the first nine months of 2025, compared with $349.0 million provided during the same period in 2024. The change was driven by an increase in cash flow from operating activities reducing borrowing needs, offset by higher share repurchases in 2025. We discuss these drivers in further detail below.
Debt
Our $3.3 billion Facility matures on November 3, 2028, and bears a variable interest rate. Outstanding borrowings, including the balance of the Facility, Short-term borrowings (financing lease obligations, overdrawn bank accounts and local overdraft facilities) and the balance outstanding under the Program are presented below.
(in millions) September 30, 2025 December 31, 2024
Outstanding borrowings under the Facility $ 186.0 100.0
Short-term borrowings 141.3 153.8
Outstanding commercial paper 389.0 200.0
In addition to our Facility, we had the capacity to borrow up to $59.5 million under local overdraft facilities as of September 30, 2025.
The following table provides additional information on our Facility, Uncommitted Facility and the Program, collectively.
Three Months Ended September 30, Nine Months Ended September 30,
($ in millions) 2025 2024 2025 2024
Average outstanding borrowings $ 1,152.8 1,575.7 $ 1,243.7 1,446.6
Average effective interest rate 4.9 % 5.9 % 5.0 % 6.1 %
We will continue to use the Facility for working capital needs (including payment of accrued incentive compensation), co-investment activities, share repurchases, capital expenditures and acquisitions.
Refer to Note 8, Debt, in the Notes to Consolidated Financial Statements for additional information on our debt.
Investment Activity
As of September 30, 2025, we had a carrying value of $895.1 million in Investments, primarily related to Investment Management co-investments and investments in early to mid-stage proptech companies as well as proptech funds ("Proptech Investments"). For the first nine months ended September 30, 2025 and 2024, funding of investments exceeded return of capital by $106.2 million (notably, the $100.0 million invested in JLL IPT as described above) and $54.9 million, respectively. We have maximum potential unfunded commitments to direct investments or investment vehicles of $210.1 million and $7.7 million as of September 30, 2025 for our Investment Management business and Proptech Investments, respectively.
See Note 6, Investments, in the Notes to Consolidated Financial Statements for additional information on our investment activity.
Capital Expenditures
Net capital additions for the nine months ended September 30, 2025 and 2024 were $138.4 million and $126.3 million, respectively. Our capital expenditures in 2025 were primarily for purchased/developed software, technology hardware and leasehold improvements.
Business Acquisitions
The following table details cash payments relating to acquisitions. Payments for current-year acquisitions are included in cash used in investing activities, while payments for prior-year acquisitions are primarily reflected in cash used in financing activities.
Nine Months Ended September 30,
(in millions) 2025 2024
Payments relating to current-year acquisitions $ 6.1 $ 40.8
Payments for deferred business acquisition and earn-out obligations 16.3 5.1
Total paid for business acquisitions $ 22.4 $ 45.9
Terms for many of our past acquisitions have typically included cash paid at closing with provisions for additional deferred consideration and earn-out payments subject to certain contract requirements, including the passage of time and performance, respectively. Deferred business acquisition obligations totaled $23.6 million as of September 30, 2025. These obligations represent the current discounted values of payments due to sellers of businesses for which our acquisition had been completed as of the balance sheet date and for which the only remaining condition on those payments is the passage of time. As of September 30, 2025, we had the potential to make earn-out payments for a maximum of $75.2 million on 12 completed acquisitions subject to the achievement of certain performance conditions. Refer to Note 5, Business Combinations, Goodwill and Other Intangible Assets, in the Notes to the Consolidated Financial Statements for further information on Business Acquisitions.
We will continue to consider acquisitions that we believe will strengthen our market position, increase our profitability and supplement our organic growth.
Share Repurchase and Dividend Programs
The number of shares repurchased and cash paid for repurchases is noted in the following table.
Three Months Ended September 30, Nine Months Ended September 30,
($ in millions) 2025 2024 2025 2024
Total number of shares repurchased (in 000's) 239.4 83.5 491.2 297.9
Total paid for shares repurchased $ 70.0 20.1 $ 131.2 60.3
As of September 30, 2025, $882.0 million remained authorized for repurchases under our share repurchase program.
Repatriation of Foreign Earnings
Based on our historical experience and future business plans, we do not expect to repatriate our foreign-sourced earnings to the United States. We believe our policy of permanently investing earnings of foreign subsidiaries does not significantly impact our liquidity. As of September 30, 2025 and December 31, 2024, we had total Cash and cash equivalents of $428.9 million and $416.3 million, respectively, of which approximately $337.5 million and $314.4 million, respectively, was held by foreign subsidiaries.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This report, including this Management's Discussion and Analysis of Financial Condition and Results of Operations, contains "forward-looking statements" within the meaning of the federal securities laws. All such statements are qualified by this cautionary note, which is provided pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements may also be included in our other public filings, press releases, our website, and oral and written presentations by management.
Statements in the future tense, and all statements accompanied by terms such as "believe," "will," "may," "could," "project," "expect," "estimate," "assume," "intend," "anticipate," "target," "plan" and variations thereof and similar terms, are intended to be forward-looking statements. Such statements do not relate strictly to historical or current facts as they relate to our intent, belief and current expectations about our strategic direction, prospects and future results, and give our current expectations or forecasts of future events. Management believes that these forward-looking statements are reasonable as and when made. However, caution should be taken not to place undue reliance on any such forward-looking statements because such statements speak only as of the date when made.
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