JLL Reports Financial Results for Third-Quarter 2024
Double-digit revenue growth, coupled with ongoing cost discipline, drove strong bottom-line performance
CHICAGO, Nov. 6, 2024 /PRNewswire/ -- Jones Lang LaSalle Incorporated (NYSE:JLL) today reported operating performance for the third quarter of 2024. Transactional6 revenue growth accelerated to double digits and complemented continued momentum in Resilient6 business line revenues. Diluted earnings per share were $3.20, up from $1.23 last year; adjusted diluted earnings per share1 were $3.50, up from $2.19.
Third-quarter revenue was $5.9 billion, up 15% in local currency1
Resilient6 revenues grew 16% in local currency and Transactional6 revenues were up 11% in local currency
Leasing, within Markets Advisory, increased 21% with broad-based geographic and asset class growth led by U.S. office
Capital Markets delivered 14% growth as momentum grew in investment sales and debt/equity advisory
Work Dynamics extended its growth momentum, highlighted by a 20% increase in Workplace Management
Continued profitability improvement led by Transactional6 revenue growth and the combination of cost discipline and platform leverage
JLL enhanced digital leasing capabilities, closing on the acquisition of Raise Commercial Real Estate in mid-October
"JLL achieved strong third-quarter revenue and profit growth fueled by continued high demand for our outsourcing services and an acceleration in transactional activity," said Christian Ulbrich, JLL CEO. "Amidst a dynamic macro backdrop, our combination of data insights, talented people, and investments in our platform and technology is enhancing the way we work, delivering innovative capabilities our clients value. We are excited by significant opportunities in front of us and expect to continue to capitalize on them, driving meaningful and increasingly resilient top and bottom-line growth, financial returns, and cash flow generation."
Summary Financial Results
($ in millions, except per share data, "LC" = local currency)
Three Months Ended September 30,
Nine Months Ended September 30,
2024
2023
% Change in USD
% Change in LC
2024
2023
% Change in USD
% Change in LC
Revenue
$ 5,868.8
$ 5,111.4
15 %
15 %
$ 16,622.0
$ 14,879.4
12 %
12 %
Net income attributable to common shareholders
$ 155.1
$ 59.7
160 %
161 %
$ 305.6
$ 53.0
477 %
492 %
Adjusted net income attributable to common shareholders1
170.0
106.3
60
60
379.2
242.7
56
60
Diluted earnings per share
$ 3.20
$ 1.23
160 %
160 %
$ 6.32
$ 1.10
475 %
492 %
Adjusted diluted earnings per share1
3.50
2.19
60
60
7.84
5.02
56
59
Adjusted EBITDA1
$ 298.1
$ 217.3
37 %
37 %
$ 731.5
$ 555.3
32 %
33 %
Cash flows from operating activities
$ 261.6
$ 325.7
(20) %
n/a
$ (142.0)
$ (153.6)
8 %
n/a
Free Cash Flow5
216.7
276.2
(22) %
n/a
(268.3)
(291.3)
8 %
n/a
Note:
For discussion and reconciliation of non-GAAP financial measures, see the Notes following the Financial Statements in this news release.
Consolidated Third-Quarter 2024 Performance Highlights:
Consolidated
($ in millions, "LC" = local currency)
Three Months Ended September 30,
% Change in USD
% Change in LC
Nine Months Ended September 30,
% Change in USD
% Change in LC
2024
2023
2024
2023
Markets Advisory
$ 1,143.8
$ 992.4
15 %
15 %
$ 3,172.7
$ 2,924.2
8 %
9 %
Capital Markets
498.8
435.8
14
14
1,334.0
1,240.9
8
8
Work Dynamics
4,068.2
3,514.2
16
16
11,641.0
10,165.0
15
15
JLL Technologies
56.7
58.9
(4)
(4)
167.0
180.9
(8)
(8)
LaSalle
101.3
110.1
(8)
(8)
307.3
368.4
(17)
(16)
Total revenue
$ 5,868.8
$ 5,111.4
15 %
15 %
$ 16,622.0
$ 14,879.4
12 %
12 %
Gross contract costs5
$ 3,861.8
$ 3,327.1
16 %
16 %
$ 11,107.9
$ 9,666.2
15 %
15 %
Platform operating expenses
1,787.5
1,633.6
9
9
5,014.8
4,848.0
3
3
Restructuring and acquisition charges4
(8.8)
31.6
(128)
(128)
4.4
79.1
(94)
(95)
Total operating expenses
$ 5,640.5
$ 4,992.3
13 %
13 %
$ 16,127.1
$ 14,593.3
11 %
11 %
Net non-cash MSR and mortgage banking derivative activity1
$ (5.1)
$ (7.1)
28 %
29 %
$ (25.9)
$ (9.5)
(173) %
(172) %
Adjusted EBITDA1
$ 298.1
$ 217.3
37 %
37 %
$ 731.5
$ 555.3
32 %
33 %
Note: For discussion and reconciliation of non-GAAP financial measures, see the Notes following the Financial Statements in this news release. Percentage variances in the Performance Highlights below are calculated and presented on a local currency basis, unless otherwise noted.
Revenue
Revenue increased 15% compared with the prior-year quarter.
The collective 11% increase in Transactional6 revenue was led by Leasing, within Markets Advisory, up 21%, and Investment Sales, Debt/Equity Advisory and Other, within Capital Markets, up 18% excluding the impact of non-cash MSR and mortgage banking derivative activity.
Several businesses with Resilient6 revenues continued to deliver strong revenue growth, collectively up 16%, highlighted by Workplace Management, within Work Dynamics, up 20%, and Property Management, within Markets Advisory, up 8%. Growth in these businesses outpaced declines in LaSalle Advisory Fees, down 10%, and JLL Technologies, down 4%.
Refer to segment performance highlights for additional detail.
The following chart reflects the year-over-year change in revenue for each of the trailing eight quarters (QTD revenues, on a local currency basis). The chart shows the change in Transactional, Resilient and total revenue.
Net income and Adjusted EBITDA
Net income attributable to common shareholders for the third quarter was $155.1 million, compared with $59.7 million in 2023, and Adjusted EBITDA was $298.1 million, compared with $217.3 million last year.
Diluted earnings per share for the third quarter were $3.20 compared with $1.23 in the prior year. The $40.4 million change in Restructuring and acquisition charges, which are excluded from adjusted measures, reflected (i) an expense credit in the current quarter associated with a lower expected earn-out payout related to a 2021 U.S. property management joint venture as well as (ii) lower employment-related costs given the significant cost-out actions in 2023. Adjusted diluted earnings per share were $3.50 for the third quarter compared with $2.19 in 2023. The effective tax rates for the third quarters of 2024 and 2023 were 19.5% and 19.6%, respectively.
The growth in consolidated profit was primarily attributable to (i) higher revenues, both Transactional and certain Resilient revenues, including Workplace Management within Work Dynamics, and (ii) cost discipline and enhanced leverage of the company's platform. These drivers notably outpaced the timing of revenue-related expense accruals in Work Dynamics and lower contributions from LaSalle. Refer to the segment performance highlights for additional detail.
Net income attributable to common shareholders was $305.6 million for the nine months ended September 30, 2024, compared with income of $53.0 million last year, and Adjusted EBITDA was $731.5 million this year, compared with $555.3 million in 2023. Diluted earnings per share was $6.32 for the nine months ended September 30, 2024, up from diluted earnings per share of $1.10 in 2023; adjusted diluted earnings per share were $7.84, compared with $5.02 last year.
The following chart reflects the aggregation of segment Adjusted EBITDA for the third quarter of 2024 and 2023.
Cash Flows and Capital Allocation:
Net cash provided by operating activities was $261.6 million for the third quarter of 2024, compared with $325.7 million in the prior-year quarter. Free Cash Flow5 was an inflow of $216.7 million this quarter, compared with $276.2 million in the prior year. In the current quarter, and as disclosed last quarter, the company repurchased a loan from Fannie Mae, negatively impacting operating cash flows. In addition, lower cash flow performance was partially due to nearly $30.0 million of higher cash taxes paid (approximately $117.0 million of incremental cash taxes paid on a year-to-date basis) as well as a $21.0 million headwind from Net reimbursables driven by growth in Workplace Management. Partially offsetting these items was higher cash provided by earnings, driven by improved business performance.
The number of shares repurchased and cash paid for repurchases is noted in the following table:
Three Months Ended September 30,
Nine Months Ended September 30, 2024
($ in millions)
2024
2023
2024
2023
Total number of shares repurchased (in 000's)
83.5
123.2
297.9
262.5
Total paid for shares repurchased
$ 20.1
20.1
$ 60.3
40.1
As of September 30, 2024, $1,033.3 million remained authorized for repurchase.
Net Debt, Leverage and Liquidity5:
September 30, 2024
June 30, 2024
September 30, 2023
Total Net Debt (in millions)
$ 1,597.3
1,752.0
1,698.6
Net Leverage Ratio
1.4x
1.7x
1.9x
Corporate Liquidity (in millions)
$ 3,392.8
2,449.4
2,139.5
The decrease in Net Debt from June 30, 2024, reflected incremental cash flows from operating activities during the third quarter of 2024. The Net Debt reduction from September 30, 2023, was largely attributable to improved cash flows from operations over the trailing twelve months ended September 30, 2024, compared with the twelve-month period ended September 30, 2023.
In addition to the Corporate Liquidity detailed above, the company maintains a commercial paper program (the "Program") with $2.5 billion authorized for issuance. As of September 30, 2024, there was $800.0 million outstanding under the Program.
Markets Advisory Third-Quarter 2024 Performance Highlights:
Markets Advisory
($ in millions, "LC" = local currency)
Three Months Ended September 30,
% Change in USD
% Change in LC
Nine Months Ended September 30,
% Change in USD
% Change in LC
2024
2023
2024
2023
Revenue
$ 1,143.8
$ 992.4
15 %
15 %
$ 3,172.7
$ 2,924.2
8 %
9 %
Leasing
665.4
547.7
21
21
1,781.8
1,626.1
10
10
Property Management
452.3
419.2
8
8
1,318.6
1,229.3
7
8
Advisory, Consulting and Other
26.1
25.5
2
2
72.3
68.8
5
5
Segment operating expenses
$ 1,008.4
$ 923.0
9 %
9 %
$ 2,845.7
$ 2,715.2
5 %
5 %
Segment platform operating expenses
687.5
634.6
8
8
1,907.2
1,863.4
2
3
Gross contract costs5
320.9
288.4
11
11
938.5
851.8
10
11
Adjusted EBITDA1
$ 151.9
$ 85.1
78 %
77 %
$ 376.8
$ 256.1
47 %
46 %
Note: For discussion and reconciliation of non-GAAP financial measures, see the Notes following the Financial Statements in this news release. Percentage variances in the Performance Highlights below are calculated and presented on a local currency basis, unless otherwise noted.
The broad-based increase in Markets Advisory revenue was primarily driven by Leasing and was led by the office sector. Most geographies achieved double-digit growth, notably the U.S., India, UK, Australia and Greater China. Globally, industrial was flat to the prior-year quarter, ending a multi-quarter trend of declines in the sector as deal size rebounded. In addition, the number of larger-scale Leasing deals, where JLL has historically had a greater presence, increased over the prior-year quarter in nearly all asset classes. Property Management revenue growth was led by expansion in the U.S. and several countries in Asia Pacific, including incremental revenue in the U.S. associated with pass-through expenses.
Higher Adjusted EBITDA was largely driven by transactional revenue growth and continued cost discipline. In addition, the timing of prior-year incentive compensation accruals positively impacted the year-over-year profit performance.
Capital Markets Third-Quarter 2024 Performance Highlights:
Capital Markets
($ in millions, "LC" = local currency)
Three Months Ended September 30,
% Change in USD
% Change in LC
Nine Months Ended September 30,
% Change in USD
% Change in LC
2024
2023
2024
2023
Revenue
$ 498.8
$ 435.8
14 %
14 %
$ 1,334.0
$ 1,240.9
8 %
8 %
Investment Sales, Debt/Equity Advisory and Other, excluding Net non-cash MSR(a)
376.9
317.3
19
18
976.7
879.8
11
11
Net non-cash MSR and mortgage banking derivative activity (a)
(5.1)
(7.1)
28
29
(25.9)
(9.5)
(173)
(172)
Value and Risk Advisory
86.0
87.5
(2)
(3)
262.0
256.1
2
2
Loan Servicing
41.0
38.1
8
8
121.2
114.5
6
6
Segment operating expenses
$ 455.9
$ 410.0
11 %
11 %
$ 1,287.8
$ 1,209.1
7 %
7 %
Segment platform operating expenses
444.4
398.5
12
11
1,250.9
1,175.2
6
6
Gross contract costs5
11.5
11.5
—
(1)
36.9
33.9
9
10
Equity earnings
$ 0.2
$ 0.7
(71) %
(67) %
$ 0.8
$ 6.1
(87) %
(86) %
Adjusted EBITDA1
$ 65.7
$ 50.3
31 %
30 %
$ 124.5
$ 97.0
28 %
29 %
Note:
For discussion and reconciliation of non-GAAP financial measures, see the Notes following the Financial Statements in this news release. Percentage variances in the Performance Highlights below are calculated and presented on a local currency basis, unless otherwise noted.
(a)
Historically, net non-cash MSR and mortgage banking derivative activity was included in the Investment Sales, Debt/Equity Advisory and Other caption. Effective beginning Q2 2024, the net non-cash MSR and mortgage banking derivative activity revenue is separately presented in the above table and prior period financial information recast to conform with this presentation
Capital Markets revenue growth was led by Investment Sales, Debt/Equity Advisory and Other, excluding Net non-cash MSR, as investor sentiment strengthened. This revenue growth was geographically broad-based, most notably in the United States and Europe, and was across nearly all asset classes, with hotels, office and industrial leading the way. Investment sales in the U.S. grew approximately 30%, meaningfully outperforming the broader market for investment sales, which grew 23% according to JLL Research.
The Adjusted EBITDA improvement was largely attributable to the transactional revenue growth described above and continued cost discipline.
Work Dynamics Third-Quarter 2024 Performance Highlights:
Work Dynamics
($ in millions, "LC" = local currency)
Three Months Ended September 30,
% Change in USD
% Change in LC
Nine Months Ended September 30,
% Change in USD
% Change in LC
2024
2023
2024
2023
Revenue
$ 4,068.2
$ 3,514.2
16 %
16 %
$ 11,641.0
$ 10,165.0
15 %
15 %
Workplace Management
3,164.6
2,637.1
20
20
9,057.4
7,687.7
18
18
Project Management
771.3
747.0
3
3
2,215.8
2,126.5
4
4
Portfolio Services and Other
132.3
130.1
2
1
367.8
350.8
5
4
Segment operating expenses
$ 4,019.6
$ 3,472.4
16 %
16 %
$ 11,513.3
$ 10,081.3
14 %
14 %
Segment platform operating expenses
500.9
455.9
10
10
1,411.3
1,333.8
6
6
Gross contract costs5
3,518.7
3,016.5
17
17
10,102.0
8,747.5
15
16
Adjusted EBITDA1
$ 74.3
$ 61.6
21 %
20 %
$ 196.3
$ 143.5
37 %
37 %
Note: For discussion and reconciliation of non-GAAP financial measures, see the Notes following the Financial Statements in this news release. Percentage variances in the Performance Highlights below are calculated and presented on a local currency basis, unless otherwise noted.
Work Dynamics revenue growth was led by continued strong performance in Workplace Management, largely from U.S. mandate expansions. Project Management revenue performance varied across geographies given shifts in business mix as lower pass-through costs partially offset management fees increases in the mid-single digits. Greater activity in Portfolio Services and Other was largely offset by the absence of fees associated with a large transaction on behalf of a U.S. client in 2023.
Adjusted EBITDA expansion was driven by the top-line performance described above with enhanced platform leverage, which more than offset nearly $10 million of expense associated with the timing of accruals related to gross receipts taxes in a handful of U.S. states.
JLL Technologies Third-Quarter 2024 Performance Highlights:
JLL Technologies
($ in millions, "LC" = local currency)
Three Months Ended September 30,
% Change in USD
% Change in LC
Nine Months Ended September 30,
% Change in USD
% Change in LC
2024
2023
2024
2023
Revenue
$ 56.7
$ 58.9
(4) %
(4) %
$ 167.0
$ 180.9
(8) %
(8) %
Segment operating expenses
$ 75.7
$ 68.5
11 %
10 %
$ 211.3
$ 218.0
(3) %
(3) %
Segment platform operating expenses(a)
74.3
65.2
14
14
207.3
207.0
—
—
Gross contract costs5
1.4
3.3
(58)
(59)
4.0
11.0
(64)
(64)
Adjusted EBITDA1
$ (7.8)
$ (5.7)
(37) %
(39) %
$ (23.8)
$ (25.2)
6 %
6 %
Note: For discussion and reconciliation of non-GAAP financial measures, see the Notes following the Financial Statements in this news release. Percentage variances in the Performance Highlights below are calculated and presented on a local currency basis, unless otherwise noted.
(a) Included in Segment platform operating expenses is carried interest expense of $2.2 million and $4.3 million for the three and nine months ended September 30, 2024, and a carried interest benefit of $0.1 million and $9.4 million for the three and nine months ended September 30, 2023, related to Equity earnings (losses) of the segment.
The decline in JLL Technologies revenue was due to lower contract signings over the trailing twelve months in services offerings, partially offset by continued growth in software offerings.
The increase in segment operating expenses is primarily driven by 1) $6.3 million of non-cash losses from convertible notes associated with JLL Technologies investments, which are excluded from Adjusted EBITDA consistent with equity earnings/losses from investments, 2) an approximate $5 million reduction to incentive compensation in the prior-year quarter attributable to achievement against certain targets, and 3) an incremental $2.3 million of carried interest expense associated with net equity earnings on Spark Venture Funds investments.
The lower Adjusted EBITDA was primarily attributable to lower revenue as well as the incentive compensation and carried interest expenses items described above, which overshadowed the benefits of cost discipline and improved operating efficiency over the trailing twelve months.
LaSalle Third-Quarter 2024 Performance Highlights:
LaSalle
($ in millions, "LC" = local currency)
Three Months Ended September 30,
% Change in USD
% Change in LC
Nine Months Ended September 30,
% Change in USD
% Change in LC
2024
2023
2024
2023
Revenue
$ 101.3
$ 110.1
(8) %
(8) %
$ 307.3
$ 368.4
(17) %
(16) %
Advisory fees
92.7
102.7
(10)
(10)
278.1
306.3
(9)
(8)
Transaction fees and other
8.6
7.4
16
17
24.4
22.8
7
10
Incentive fees
—
—
n.m.
n.m.
4.8
