Newmark Group, Inc. (NASDAQ:NMRK) Q4 2020 Results Conference Call February 18, 2021 10:00 AM ET
Company Participants
Jason Harbes - VP, IR
Barry Gosin - CEO
Mike Rispoli - CFO
Jeff Day - Chief Strategy Officer
Lou Alvarado - Chief Revenue Officer
Conference Call Participants
Alexander Goldfarb - Piper Sandler
Jade Rahmani - KBW
Rick Skidmore - Goldman Sachs
Michael Funk - Bank of America
Patrick O'Shaughnessy - Raymond James
Operator
Good morning. May name is Matt. I'll be the conference operator today. At this time, I would like to welcome everyone to the Newmark Fourth Quarter 2020 Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note, this event is being recorded.
I would now like to turn the call over to Jason Harbes, VP of Investor Relations. Sir, you may begin when you're ready.
Jason Harbes
Thank you, and good morning.
We issued our fourth quarter and full year 2020 financial results press release and our presentation summarizing these results this morning. The results provided on today's call compare only the fourth quarter of 2020 with the year earlier period, unless otherwise stated. Any figures with respect to cash flow from operations discussed on today's call refer to net cash provided by operating activities, excluding loan originations and sales. We will be referring to our results on this call only on an adjusted earnings basis, unless otherwise stated. We may also refer to adjusted EBITDA. Please see today's press release for results under Generally Accepted Accounting Principles or GAAP. So, you see the sections in the back of today's press release with the complete definitions of any such non-GAAP terms, reconciliations of these items to the corresponding GAAP results and how, when and why management uses them. Additional information with respect to our GAAP and non-GAAP results mentioned on today's call is available on our website and in our investor presentation.
Any outlook discussed on today's call assumes no material acquisitions, share repurchases or meaningful changes in the Company's stock price. These expectations are subject to change based on various macroeconomic, social, political, and other factors, including the COVID-19 pandemic. I also remind you that information on this call regarding our business that are not historical facts are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 as amended and Section 21E of the Securities Exchange Act of 1934 as amended. Such statements involve risks and uncertainties. These include statements about the effects of the COVID-19 pandemic on the Company's business results, financial position, liquidity and outlook, which may constitute forward-looking statements and are subject to risks. But, the actual impact may differ, perhaps material from what is expected.
Except as required by law, Newmark undertakes no obligation to update any forward-looking statements. For a discussion of additional risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see Newmark’s Securities and Exchange Commission filings, including, but not limited to the risk factors set forth in our most recent Form 10-K, Form 10-Q or Form 8-K filings. With respect to the NASDAQ earn-out, the number of shares received by Newmark will depend on the timing of the closing of the closing of NASDAQ’s recently announced sale of its U.S. fixed income business and NASDAQ stock price at the time. NASDAQ has stated that the closing is subject to the satisfaction of customary closing conditions, including the receipt of required regulatory approvals. Newmark can provide no assurance as to when or if the closing will occur.
I'm now happy to turn the call over to our host, Barry Gosin, CEO of Newmark Group, Inc.
Barry Gosin
Thank you, Jason. Good morning. And thank you for joining us for Newmark's fourth quarter 2020 conference call.
Joining me virtually on the call today are Newmark’s Chief Financial Officer, Mike Rispoli; our Chief Strategy Officer, Jeff Day; and our Chief Revenue Officer, Lou Alvarado.
Newmark's 2020 results demonstrate the resilience of our commercial real estate services platform. We reported record quarterly revenues in Valuation & Advisory, capital markets, and mortgage banking.
Our capital markets and debt volumes totaled $32 billion. In 2020, Newmark gained 192 basis points of market share in U.S. investment sales and improved its ranking to third overall. We also gained 83 basis points in our GSE originations business and ranked fifth overall.
Newmark's leadership position in alternative property types, such as life science, seniors housing, medical office, self storage and student housing helped propel our record-setting capital markets performance.
We continue to focus on the growth of our recurring revenue businesses, such as valuation advisory, mortgage servicing, global corporate services, and property management. We recently hired a Head of Global Corporate Services to expand this critical offering for occupiers as they formulate their plans for returning to the workplace.
Additionally, we continue to expand our presence in key growth markets that are benefiting from demographic tailwinds. Based on the strong foundation we have built, Newmark expects to outperform as industry volumes recover.
Newmark recently acquired all of the first and second lien debt of Knotel. On January 31st, we announced an agreement to provide approximately $20 million of debtor-in-possession financing and acquired the assets of Knotel through his Chapter 11 sales process. We believe that co-working and flexible offices will be an increasingly important offering to owners and occupiers in the post-pandemic world.
Newmark’s financial position is strong, and Mike is going to discuss the NASDAQ transaction in a minute. But, I would like to point out that we generated more than $100 million of cash from operations and paid down $200 million of debt in the quarter.
With that, I'm happy to turn the call over to Mike.
