Newmark Delivers Its Best Third Quarter Ever — and Immediately Prices In a Bad 2027
Record leasing, a fifth straight record in management and servicing, and a fresh $400M buyback... met with a ±10% earnings bracket for next year and a stock already 42% below its peak
NMRK · Earnings Call · 2026-10-29
A record with a warning label stapled to it
Newmark's third quarter was, on the numbers, the best third quarter the firm has ever produced. Revenue rose 12.7% to $973.2 million, leasing jumped 26.5% to an all-time Q3 high, and the management-and-servicing book grew 18.3% — the fifth consecutive record quarter for what management calls its resilient businesses. Adjusted EPS climbed 14.3% to $0.48 and adjusted EBITDA 14.6% to $166.4 million, on roughly 1x net leverage. Then Mike Rispoli revised the full-year outlook down — revenue of $3.7–3.8 billion, adjusted EPS of $1.80–$1.90 — and, more strikingly, sketched a 2027 that could land anywhere within ±10% of that record. The company's own keyword table tells you where the argument moved: Capital Markets now sits at the very top of Newmark's thematic list, while the data center theme that ranked second, fourth and eighth across the preceding three quarters has vanished from the top thirty entirely. What management stopped emphasising matters as much as what it started saying.The wide range, and the rate regime behind it
The scenario work was unusually blunt for a company that has spent five quarters telling analysts its pipeline was robust.Jade Rahmani of KBW pushed back hard — “Wow, down 20%-30%. That seems quite stark” — Jade Rahmani, Analyst · 2026-10-29 — noting that office has already been through a multi-year cycle and industrial, retail and hospitality are healthy. Rispoli retreated to the base case. But the mechanics Lou Alvarado described are mundane and unforgiving: “when rates moved up another 50 basis points and the 10-year went up, it gives people either an opportunity to retrade deals or to wonder whether they should go to the market” — Lou Alvarado, Chief Operating Officer (COO) · 2026-10-29 — and cap rates move with the 10-year, so values fall just as sellers arrive. This is not an isolated Newmark problem. The market's own editor-curated keyword set for the quarter is saturated with exactly this anxiety: Fed rate hike, impact of high rates, lending rates, cost of deposits. Banks reporting alongside Newmark this week — from regional lenders to the European majors — spent their calls on funding costs and rate curves. Newmark is simply the purest listed expression of that stress, because a third of its revenue is transactional and priced off the long end. The contrast with Newmark's own recent rhetoric is the story. In July, asked why guidance was not being raised, Lou Alvarado said “we just thought we wanted to see a little bit more data, and we'll update you on that next quarter” — Lou Alvarado, Chief Operating Officer · 2026-07-29. The data arrived, and the update went the other way. In April, Rispoli insisted “We don't see transactions falling out of the pipeline. They're closing, maybe they take a few more days to close” — Michael Rispoli, Executive, likely CFO or similar · 2026-04-30 — precisely the framing that has now hardened into a 20–30% downside case. Two brand-new concepts entered the company's vocabulary this quarter: wide range of outcomes, and an explicit downside scenario. Those are the words of a management team that has lost confidence in its own visibility.A downside scenario would be a sustained interest rate, volatile environment, continued increase in the 10-year treasury... That could drive Capital Markets down probably in the 20%-30% range.
Data centers: the theme that walked away from the table
Barry Gosin's answer on the AI infrastructure pipeline was the most quotable thing on the call, and it deserves to be read carefully rather than cheered.He called the NIMBY backlash temporary. He may be right. But the equity tape is not waiting to find out: across the global theme universe, AI data center is one of the largest 90-day decliners, with just 7 advancers against 49 decliners among the companies driving it. Companies that spent this week's calls selling into that buildout — the electrical equipment makers, the cooling and modular-datacenter names, the utilities taking contracted load — are the same names the market has been quietly de-rating. Newmark's exposure is second-derivative, fee income on financings and powered-land trades, which is why the company could post record leasing even as its data center keyword disappeared: asked to quantify the leasing contribution, Alvarado conceded “we haven't put any specific numbers around it at this point” — Lou Alvarado, Chief Operating Officer (COO) · 2026-10-29. This is a theme with six quarters of history at Newmark. Gosin has been consistently bullish on it since at least last autumn — “if you believe in AI, you believe in the future. And so there is runway” — Barry Gosin, CEO · 2025-10-30 — and in April he described the pipeline as looking “really, really good” — Barry Gosin, CEO · 2026-04-30 as power shifted from the grid to behind-the-meter. Nothing in the current call contradicts that. What changed is that the theme is no longer doing any work in the equity story, because rates now dominate everything else.Our pipeline is incredibly robust. The pipeline is there. Obviously, the macro environment is a little confusing, so we're just being conservative about what the certainty is. But nothing has been. Nobody's walked from the table. They've just moved the table.