Executive Summary / Key Takeaways

• Cushman & Wakefield has successfully executed a multi-year strategic transformation, achieving the majority of its three-year targets within a two-year window, demonstrating robust operational discipline and a renewed focus on growth.
• The company delivered strong financial results in the first half of 2025, marked by double-digit revenue growth in Capital Markets and Leasing, and an accelerated turnaround in its Services business, exceeding prior expectations.
• Significant deleveraging efforts have fortified the balance sheet, with gross debt reduced by $400 million over the last 18 months and over $45 million in annual interest savings, positioning the company for further strategic investments.
• Management has raised its full-year 2025 guidance, projecting 6-8% growth in Leasing revenue, mid-to-high teens growth in Capital Markets, mid-single-digit organic growth in Services, and a substantial 25-35% increase in adjusted EPS.
• Strategic investments in top-tier talent, operational rigor, and the application of data and technology are driving market share gains and are expected to fuel sustained earnings acceleration into 2026 and 2027.

A Legacy Reimagined: Cushman & Wakefield's Strategic Ascent

Cushman & Wakefield plc (NYSE:CWK), a global leader in commercial real estate services, traces its roots back to 1784. This deep history provides a foundational understanding of its enduring presence in the industry. More recently, the company underwent significant structural changes, including its 2018 public listing and the strategic acquisition of the DTZ Group in 2014, which expanded its global footprint. The early 2020s presented a challenging macroeconomic environment, marked by a two-year period of market recalibration to higher interest rates that impacted capital markets.

In response, Cushman & Wakefield initiated a pivotal strategic transformation around the third quarter of 2023. This new course was grounded in three clear pillars: protecting core strengths, operating with discipline, and cultivating avenues for growth. This involved accelerating growth investments, particularly in its brokerage segments, and a concerted effort to strengthen the balance sheet and improve cash flow. This disciplined approach has allowed the company to achieve the majority of its three-year targets within a two-year window, setting the stage for a compelling new chapter.

The broader macroeconomic environment is now largely favorable for commercial real estate. The economy is growing, jobs are being created, and corporate profits remain healthy, contributing to a robust backdrop for leasing activity. Lenders are increasingly willing to deploy capital, offering borrowers more flexibility and better terms, which is providing a significant boost to capital markets. These factors collectively suggest that the commercial real estate sector is in the early innings of a multi-year upcycle, a trend Cushman & Wakefield is strategically positioned to capitalize on.

Leveraging Data and Operational Excellence for Competitive Advantage

Cushman & Wakefield's competitive differentiation is not rooted in a single proprietary technology, but rather in its strategic application of data, analytics, and integrated systems to enhance operational efficiency and client solutions. The company is actively investing in "early stage proptech companies" and making "targeted investments to connect talent, data, and technology across our platform to drive both efficiencies and revenue opportunities." This includes initiatives like "labor management improvements" and "cross-pollinating best practices across Services business," which instill greater operational rigor and directly contribute to improved financial outcomes, such as the roughly $145 million improvement in free cash flow from enhanced receivables collections.

A notable operational shift is seen in the CW Services business, which has transformed from primarily janitorial services to 70% mechanical and engineering services following a major contract win. This strategic pivot towards more technical and higher-value offerings aligns with the company's focus on providing sophisticated, integrated solutions. While Cushman & Wakefield is actively investing in technology, larger rivals like CBRE Group and Jones Lang LaSalle Incorporated are generally perceived to have more advanced technological integration and digital platforms, particularly in transaction management and valuation tools. This represents a competitive vulnerability for CWK, which it aims to address through its ongoing strategic investments.

Competitive Landscape and Strategic Positioning

Cushman & Wakefield operates in a highly competitive global market, directly contending with firms like CBRE Group (CBRE), Jones Lang LaSalle Incorporated (JLL), and Colliers International Group Inc. (CIGI). Each of these rivals possesses distinct strengths. CBRE, for instance, is recognized for its extensive global network and innovation in digital tools, often demonstrating stronger operating margins and a more aggressive growth trajectory. JLL emphasizes innovative consulting and robust cash flow generation, while Colliers is known for its regional expertise and agile, tech-driven solutions.

A review of recent TTM financial ratios highlights some of these dynamics. Cushman & Wakefield's Gross Profit Margin of 13.81% trails CBRE's 19%, JLL's 53%, and Colliers' 40%. Operating and Net Profit Margins for CWK (4.29% and 2.11% respectively) are broadly comparable to CBRE and JLL, but lower than Colliers. However, CWK's Debt/Equity ratio of 0.22 is significantly lower than CBRE (0.68), JLL (0.43), and Colliers (1.55), indicating a stronger balance sheet and greater financial flexibility.

Cushman & Wakefield's competitive advantages stem from its strong global brand, extensive network, and strategic partnerships, such as with Vanke Service in China. These assets foster customer loyalty and recurring revenue, particularly in property management and consulting. The company's "flat organizational culture" and focus on "solutioning, problem-solving and trust" also differentiate its service delivery. However, CWK's competitive disadvantages include a perceived lag in technological integration and innovation speed compared to some rivals, which could hinder its ability to capture market share in rapidly evolving segments like AI-driven data center demand, where indirect competitors like MYR Group Inc. (MYRG) are also active. To counter these challenges, CWK is strategically accelerating investments in talent, data, and technology, alongside pursuing tuck-in acquisitions with low integration risk.

Financial Performance: A Story of Resurgence

Cushman & Wakefield's recent financial performance underscores the success of its strategic pivot. In the second quarter of 2025, the company reported revenue of $2.48 billion, a 9% increase year-over-year (8% in local currency). Net income surged to $57.3 million, a significant improvement from $13.5 million in the prior-year period, resulting in diluted earnings per share of $0.25, up from $0.06. Adjusted EBITDA rose 16% to $161.7 million, with the Adjusted EBITDA margin expanding by 75 basis points to 9.5%.

For the first half of 2025, total revenue reached $4.77 billion, a 7% increase year-over-year. Net income improved dramatically to $59.2 million, compared to a net loss of $15.3 million in the first half of 2024, driving diluted EPS to $0.25 from a loss of $0.07. Adjusted EBITDA for the six-month period increased 19% to $257.9 million, with the Adjusted EBITDA margin expanding by 92 basis points to 8.0%. This robust performance reflects the company's ability to generate operating leverage and effectively manage expenses.

Performance across key service lines was particularly strong:

• Capital Markets: Revenue soared 27% in Q2 2025 to $207.0 million and 20% in H1 2025 to $365.6 million. This was primarily driven by strong activity across all asset classes in the Americas, benefiting from improved debt availability and more rational asset pricing.
• Leasing: This core strength of the platform grew 8% in Q2 2025 to $486.9 million and 8% in H1 2025 to $899.5 million. Growth was robust in the Americas, particularly in office and industrial sectors, with a higher number of large transactions. The industrial sector, in particular, has "surprised to the upside," showing high single-digit growth year-to-date.
• Services: The turnaround in this segment is "in full swing," with organic growth of 6% in Q2 2025 (excluding a divestiture) and 4% in H1 2025. This was driven by new client wins and expanded mandates, with the Global Occupier Services (GOS) business achieving an impressive 96% annualized client retention rate year-to-date.
• Valuation & Other: This segment saw an 8% revenue increase in Q2 2025 to $114.2 million and 4% in H1 2025 to $219.7 million, supported by a 30% increase in bid volume in Q1 2025.

Geographically, the Americas segment demonstrated strong performance in Capital Markets and Leasing. EMEA returned to growth, benefiting from new project management wins and central bank rate cuts. APAC delivered strong revenue growth, bolstered by a significant facilities management contract and continued investments in the region.

The company's liquidity position remains robust, with $1.7 billion as of June 30, 2025, including $1.1 billion in undrawn revolving credit facilities and $0.6 billion in cash and cash equivalents. A key highlight of the financial strategy has been aggressive debt reduction. Over the last 18 months, Cushman & Wakefield has prepaid $400 million in debt, reducing its gross debt from $3.2 billion to $2.8 billion. This includes a $25 million prepayment in Q2 2025 and an additional $150 million prepaid on August 5, 2025. These deleveraging efforts, combined with five successful repricings of its term loans, have resulted in over $45 million in annual interest savings. The company's net leverage stood at 3.7x as of Q2 2025, with a target of 2x-3x. Importantly, there are no funded long-term debt maturities prior to 2028, providing significant financial flexibility. Free cash flow for the trailing twelve months was $126 million, representing a 50% conversion rate, with expectations to reach approximately 60% by year-end, aligning with its 60-80% target.

Outlook and Strategic Momentum

Cushman & Wakefield's management is highly confident in its forward trajectory, having raised its full-year 2025 guidance across key metrics. The company now expects full-year Leasing revenue to grow 6% to 8%, slightly above its previous forecast. Capital Markets revenue is projected to grow in the mid-to-high teens for the year, also an increase from prior expectations. The Services segment remains on track for mid-single-digit organic top-line growth, a target achieved ahead of schedule.

Crucially, the company anticipates full-year 2025 adjusted EPS growth of 25% to 35%, a significant acceleration and "well ahead of our initial expectations." While management expects margins in the second half of 2025 to be "slightly below the margin we saw in the first half as a result of a slight increase in investment spend," they still project overall margin expansion for the full year. This reflects a strategic balance between driving top-line growth and making targeted investments for long-term returns. Management anticipates that these investments will fuel sustainable growth, with even stronger earnings growth projected for 2026 and 2027.

The underlying assumptions for this optimistic outlook include continued growth in global leasing markets, ongoing progress in capital markets activity, and increased opportunities for market share gains in services. The market is believed to be largely past the recalibration to higher interest rates, with property values having corrected and central banks initiating rate reductions. While a "hockey stick recovery" is not expected, a "good bounce" in activity is anticipated as confidence in the sector continues to grow. Client decision-making remains robust, with the vast majority of clients proceeding with their real estate plans despite macroeconomic uncertainties, indicating no "freeze" in activity.

Risks and Considerations

Despite the positive momentum, several risks warrant investor attention. Macroeconomic uncertainty, including potential impacts from international trade policy and tariffs, could negatively affect demand for services. While management currently sees no material impact, the fluidity of such policies remains a watchpoint.

Legal and contingent liabilities also present potential risks. The Greystone JV, in which CWK holds a 40% equity interest, is subject to an indemnity agreement with Freddie Mac, which could result in a "potentially material" liability, though the likelihood is currently deemed remote. The company is also engaged in a dispute with a non-U.S. tax authority over payroll taxes, with a reasonably possible loss of up to $43 million in excess of accrued amounts. Furthermore, a civil lawsuit from the U.S. Department of Justice regarding revenue management software, while not currently seeking monetary fines from CWK, could lead to monetary relief sought by Co-Plaintiffs under state laws, though these are not expected to be material.

Finally, the proposed redomiciliation of the parent company to Bermuda, aimed at optimizing corporate structure, faces shareholder and UK court approvals. Meetings scheduled for July 2025 were adjourned indefinitely to engage further with shareholders on governance changes. There is no guarantee that the redomiciliation will be completed or yield the anticipated benefits, and delays could divert management attention.

Conclusion

Cushman & Wakefield's journey from strategic recalibration to accelerated growth presents a compelling investment thesis. The company's disciplined execution of its three-pillar strategy—protecting core strengths, operating with discipline, and cultivating avenues for growth—has yielded tangible results, evidenced by robust financial performance in the first half of 2025 and significantly improved profitability. The strategic focus on deleveraging has fortified its balance sheet, providing the financial flexibility to invest in talent, operational rigor, and the application of data and technology, which are crucial for enhancing its competitive standing against formidable rivals.

As the commercial real estate market enters a multi-year upcycle, Cushman & Wakefield's refined operational model and targeted investments position it to capture increasing market share. The raised full-year 2025 guidance, particularly the strong adjusted EPS growth forecast, signals management's confidence in sustained momentum. While macroeconomic uncertainties and specific legal risks persist, the company's proactive approach to talent acquisition, operational efficiency, and strategic capital allocation underscores its commitment to delivering progressively improving earnings growth and long-term value for shareholders.