Jones Lang LaSalle Q2 2026 Earnings Call Transcript

Quartr
Provided by Quartr
July 30, 2026

Key Takeaways

  • Strong Q2 performance and raised outlook: Revenue increased 10% in local currency, adjusted EBITDA rose 33%, and adjusted EPS increased 61%. JLL significantly raised its full-year 2026 adjusted EPS target to $24.60–$25.90, implying 34% growth at the midpoint.
  • Advisory momentum accelerated: Advisory revenue grew 21%, led by U.S. leasing and capital markets. Leasing revenue growth was supported by office, industrial, and data center activity, while capital markets benefited from strong debt, investment sales, and equity advisory performance.
  • Recurring businesses and operating leverage remain key growth drivers: Real estate management services grew 8%, with strong workplace management demand, contract renewals, and new wins. Management also reported continued margin expansion from platform investments, automation, data, and AI.
  • Cash generation supports shareholder returns: Free cash flow rose 52% to $438 million, net leverage improved to 0.7 times, and JLL repurchased $410 million of shares in the first half—nearly double the full-year 2025 amount. The company said it intends to remain active under its $2.6 billion remaining repurchase authorization.
  • Risks remain in international markets and investment management: Europe continues to experience elongated transaction timelines amid geopolitical uncertainty, while investment management expects low-single-digit advisory fee growth and incentive fees toward the lower end of its historical range. Management said capital raising has been slower but cited substantial dry powder and pent-up demand.
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Earnings Conference Call
Jones Lang LaSalle Q2 2026
00:00 / 00:00

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Operator

Hello, everyone. Thank you for joining us, welcome to the second quarter 2026 earnings conference call for Jones Lang LaSalle Incorporated. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. I will now hand the conference over to Sean Coghlan, Head of Investor Relations. Sean, please go ahead.

Sean Coghlan
Head of Investor Relations at JLL

Thank you, good morning. Welcome to the second quarter 2026 earnings conference call for Jones Lang LaSalle Incorporated. Earlier this morning, we issued our earnings release, along with a slide presentation and Excel file intended to supplement our prepared remarks. These materials are available on the investor relations section of our website. Please visit ir.jll.com. During the call, as well as in our slide presentation and supplemental Excel file, we reference certain non-GAAP financial measures which we believe provide useful information for investors. We include reconciliations of non-GAAP financial measures to GAAP in our earnings release and slide presentation. We also reference resilient and advisory revenues, which we define in the footnotes of our earnings release. As a reminder, today's call is being webcast live and recorded. A transcript and recording of this conference call will be posted to our website.

Sean Coghlan
Head of Investor Relations at JLL

Any statements made about future results and performance, plans, expectations, and objectives are forward-looking statements. Actual results and performance may differ from those forward-looking statements as a result of factors discussed in our annual report on Form 10-K and in other reports filed with the SEC. The company disclaims any undertaking to publicly update or revise any forward-looking statements. Finally, a reminder that % variances are against the prior year period in local currency, unless otherwise noted. I will now turn the call over to Christian Ulbrich, our President and Chief Executive Officer, for opening remarks.

Christian Ulbrich
Christian Ulbrich
President and CEO at JLL

Thank you, Sean. Hello, welcome to our second quarter 2026 earnings call. Q2 was a big quarter for JLL. We grew revenue by double digits profit gains accelerated with adjusted EBITDA up 33% adjusted earnings per share up 61%. At our investor briefing in March, we told you why we felt good about where JLL was headed, this quarter is a proof of that. We are now a few months into Accelerate 2030, I'm pleased with how the strategy is taking hold across the organization. I want to spend my time today on three parts of our business that give me continued conviction in our future. First, our resilient business lines, which represent nearly 80% of our revenue, are built for consistent growth and margin expansion. Multi-year client relationships, recurring revenue, and a business model amplified by scale.

Christian Ulbrich
Christian Ulbrich
President and CEO at JLL

That was evident again this quarter with real estate management services growing 80%, in line with the level of growth we have delivered over recent quarters while margin expansion also continued. These businesses sit at the center of long-term secular tailwinds in the global economy as occupiers and investors increasingly choose to outsource more parts of their real estate operations rather than run it themselves. Within workplace management, most corporate real estate globally is still managed in-house today, underscoring how much runway remains. Project management sits at the intersection of our clients' evolving needs. From multi-site project management to capital planning to new development, and our ability to execute that work end to end around the world. The longer we work with a client, the deeper we understand their current portfolio and strategic priorities, and the more value we can create together through a One JLL approach.

Christian Ulbrich
Christian Ulbrich
President and CEO at JLL

Our resilient businesses show what durable organic growth looks like in real estate services. High client retention, deeper enterprise relationships, and a platform that becomes more efficient and resilient as it scales. We firmly believe continued investment in data and AI will make these businesses even more scalable and valuable to our clients. Second, across our advisory businesses, the U.S. led a broad-based pickup in activity across leasing advisory and capital market services. Together, our advisory revenue growth accelerated to 21% this quarter, and profit grew even faster, a reflection of the operating leverage building across our platform. Our performance in our advisory businesses reflects client trust built over years in our people, data, and ability to execute at scale. That is why JLL has continued to take share over the past several years.

Christian Ulbrich
Christian Ulbrich
President and CEO at JLL

Clients are choosing and expanding their relationship with JLL because we deliver intelligence and outcomes that are difficult to replicate. Our brand signals to the world's most sophisticated investors and occupiers that we are the partner for the most complex work. The investments we are making in data AI and our core businesses under Accelerate 2030 are designed to deepen our value proposition. None of this happens in isolation. Clients want an integrated partner who can advise them across the full real estate life cycle, backed by the intelligence of our entire firm. That is One JLL. It is the reason leading investors and occupiers are choosing to deepen their relationships with JLL. Third, when it comes to capital allocation, our deployment decisions are being made with rigor. Top-line growth is most valuable to us if it converts into profitability, cash generation, and returns that justify the investment behind it.

Christian Ulbrich
Christian Ulbrich
President and CEO at JLL

This quarter alone, we generated $438 million of free cash flow, up 52% from a year ago. That gives us flexibility in how we deploy capital and reflects healthy margin expansion, greater capital efficiency, and improving returns on our investments across the company. We maintain a strong and agile balance sheet and are continuously assessing opportunities, including returning capital to shareholders. Our disciplined and through-cycle approach to capital allocation is central to how we intend to keep building value for our clients, our people, and our shareholders over the long term. Put together, these factors give me high confidence in the outlook for JLL. At our investor briefing in March, we said we have the foundation, platform, and culture to compound value over the long term. While we are early days in our Accelerate 2030 strategy, the quarterly results and progress on our strategic initiatives reaffirm my conviction.

Christian Ulbrich
Christian Ulbrich
President and CEO at JLL

With that, I will now turn the call over to Kelly Howe, our Chief Financial Officer, to provide more detail on our results for the quarter.

Kelly Howe
CFO at JLL

Thank you, Christian. Our strong second quarter results demonstrate the progress we are making on our key operating initiatives and reflect continued business momentum. Revenue growth of 11%, as reported in U.S. dollars, and 10% in local currency, was almost entirely organic and was led by our advisory businesses, particularly in the U.S. We also continue to generate healthy margin expansion and robust profit growth. The combination of our financial strength and cash generation supported continued capital return to shareholders, which is already nearly double the full year 2025 amount. Looking ahead, we remain encouraged by the breadth of demand we see across our business lines and are well positioned to build on our momentum. Now, a review of our operating performance by segment. The following commentary is in local currency to best reflect underlying operating performance.

Kelly Howe
CFO at JLL

Beginning with real estate management services, revenue growth was broad-based across all business lines. The global service capabilities of our workplace management business continue to drive strong revenue growth, led by mandate expansions and complemented by new client wins. Our contract renewal rates and pipelines remain strong. Within project management, the increase in revenue was driven by mid-single-digit management fee growth, led by double-digit growth in the Americas, including momentum from data centers. Given a shift in contract mix, higher management fees were moderated by lower growth in pass-through costs. Following the strong increase in the prior year quarter, project management grew 25% on a two-year stacked basis, inclusive of 3% growth in the current quarter. Client activity remains healthy, positioning us for continued momentum over the near term.

Kelly Howe
CFO at JLL

For property management, core business growth and new wins continue to be offset by the strategic contract exits as mentioned in the past two quarters. We expect this growth headwind to largely dissipate over the coming quarters. Considering the varied business line trends within the segment, we affirm our mid-to-high single-digit revenue growth target for the full year, with our second half weighted to the fourth quarter. We continue to focus on driving incremental platform leverage, which we anticipate outpacing continued investment for growth. Moving next to leasing advisory, revenue growth was driven by accelerated momentum across office, industrial, and data centers. A meaningful increase in deal size was complemented by healthy volume growth globally, most notably the U.S., and in part due to research and demand from the technology sector, including from AI companies.

Kelly Howe
CFO at JLL

Our global office leasing revenue growth of 20% materially outpaced the 2% increase in market volume. On a two-year stacked basis, global leasing advisory revenue growth was 28%, inclusive of 24% in the current quarter, reflecting strong ongoing and broadening demand. The increases in leasing advisory adjusted EBITDA and margin were driven by revenue growth, net of higher commission expense from both higher tiers being met sooner compared to a year ago, business mix, and incremental platform leverage. We expect the commission tier headwind to moderate as the year progresses. Looking ahead, occupier demand and market fundamentals continue to strengthen, supported by improving net absorption trends across major markets and near record low new supply.

Kelly Howe
CFO at JLL

Given the constructive global GDP growth outlook, increasing business confidence, and our strong leasing pipeline, we are targeting mid-to-high teens revenue growth for the full year as we start to lap higher growth comparables in the fourth quarter. We continue to execute our multi-year strategic investment plan to drive long-term growth with attractive returns. Shifting to our capital market services segment, rising bid activity and highly liquid credit markets fueled strong growth across sectors and most geographies, led by the U.S., Japan, and Australia, which significantly outpaced softness from elongated investment sales timelines in parts of Europe. Debt advisory revenue led the growth of 44%, while investment sales revenue increased 20%, and equity advisory revenue grew 53%. The continuation of robust underlying business momentum amidst the dynamic macro environment is reflected in the two-year stacked growth rates for debt advisory and investment sales of 71% and 30%, respectively.

Kelly Howe
CFO at JLL

U.S. investment sales revenue growth of 53% for the quarter was nearly double the broader market, reflecting our talent, platform, and data advantages. Higher revenue net of increased commissions, lower loan-related expenses versus prior year, and continued platform leverage drove the adjusted EBITDA growth and margin expansion in the quarter. Looking ahead, capital markets fundamentals remain healthy overall as global direct investment activity has accelerated and credit markets remain competitive and diverse. Our global investment sales, debt, and equity advisory pipeline, and conversion rates continue to be strong, most notably in the U.S. For the full year, we are targeting mid-teens revenue growth, mindful of the robust growth comparables in the second half of last year.

Kelly Howe
CFO at JLL

Turning to investment management, advisory fee growth associated with the ongoing deployment of the $3.7 billion of capital raised over the past year was mostly offset by anticipated declines driven largely by dispositions in Asia Pacific. We continue to target advisory fee growth in the low single digits through the full year as the factors impacting the quarter results are expected to persist in the near term. Additionally, we anticipate incentive and transaction fees toward the lower end of our historical range and weighted to the fourth quarter. Shifting to free cash flow, balance sheet, and capital allocation, free cash flow totaled $438 million in the quarter, up 52% from a year ago. The improvement was primarily attributable to higher cash earnings.

Kelly Howe
CFO at JLL

Considering the strength of our cash flow to date, business mix, and ongoing initiatives to improve capital efficiency, our free cash flow conversion ratio is trending comfortably above our long-term average of over 80% for the full year. Growth in our adjusted EBITDA plus lower borrowings resulted in an improvement in our reported net leverage to 0.7x. Our investment-grade balance sheet remains a source of strength with $3.4 billion of corporate liquidity, providing us with ample flexibility to invest in the business while continuing to return capital to shareholders. We repurchased $110 million of shares in the quarter, bringing first half repurchases to $410 million and reducing the share count by nearly 3% from a year earlier.

Kelly Howe
CFO at JLL

Looking ahead, we intend to remain active on the $2.6 billion remaining on our repurchase authorization, with the total annual amount dependent on the broader operating environment, our leverage outlook, valuation, and relative returns to other investment opportunities, inclusive of M&A. We are encouraged by the underlying business momentum in the first half of the year and the strength of our pipelines across the business, particularly in the U.S., albeit mindful of the strong growth rates in the back half of last year. With the segment revenue growth targets I outlined earlier as a basis, we are meaningfully increasing our full year 2026 adjusted EPS target range to $24.60-$25.90, reflecting 34% growth at the midpoint. We enter the second half of the year with momentum and confidence in our ability to deliver healthy growth, robust margin expansion, and meaningful cash flow. Christian, back to you.

Christian Ulbrich
Christian Ulbrich
President and CEO at JLL

Thank you, Kelly. Looking ahead to the second half of the year, our pipelines across the business and broader indicators are encouraging. We expect the U.S. to keep leading as capital deployment builds, credit markets remain active, and demand for our core services grows. The broader environment globally will likely remain uneven, but the strength of our people, platform, and client relationships gives us conviction. We have built a very resilient business that can perform through evolving markets. With our Accelerate 2030 strategy execution underway, we intend to keep building on the momentum we have generated over the last several quarters. The updated targets that Kelly just outlined, including higher revenue growth outlooks for our leasing, advisory, and capital market services segment, and a notable raised adjusted EPS range for the year, reflect our confidence in the underlying momentum of our business as well as our strategy.

Christian Ulbrich
Christian Ulbrich
President and CEO at JLL

Before I close, I would like to thank our colleagues around the world for their commitment to our strategy and continued dedication to our clients. Your work is what makes results like this possible. Operator, please explain the Q&A process.

Operator

We will now begin the question and answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Tony Paolone from JPMorgan. Your line is open. Please go ahead.

Tony Paolone
Tony Paolone
Executive Director at JPMorgan

Great. Thank you. My first question is on the margin side. The significant growth in transactional revenue obviously drove a lot of that, but can you maybe help parse out what you think was more company specific to JLL, and talk perhaps about the leverage you might continue to see that could help margins even further going forward, just less related to the market and more around JLL?

Kelly Howe
CFO at JLL

Sure. Thanks, Tony, for the question. Yes, mix and kind of ongoing EBITDA growth and revenue growth clearly drove a set of the margin expansion. I would say that in addition to that, we've, as you know from our investor presentation and briefings, have been very focused on investing against a platform that is providing pretty meaningful operating leverage. We're seeing the benefits of that operating leverage come through as well. We look at fixed cost as it relates to our fee revenue. We look at variable costs, including commissions and other variable costs, and we're very happy with the performance of our fixed cost base against our fee revenue as well. We're seeing a lot of improvement there. We have more runway as well, so we feel very confident we'll be able to continue to deliver on that margin expansion.

Tony Paolone
Tony Paolone
Executive Director at JPMorgan

Okay. Thank you. My follow-up is just, I guess, related to capital markets, but also investment management. It seems like it's been a slow first half of the year for everybody in raising capital for commercial real estate. Is there a risk that at some point that has implications back to capital markets and just the less robust fundraising just creates less transactional activity going forward? Or is there any way to think about that?

Kelly Howe
CFO at JLL

We can't hear you.

Christian Ulbrich
Christian Ulbrich
President and CEO at JLL

[inaudible]

Tony Paolone
Tony Paolone
Executive Director at JPMorgan

Did my question go through?

Operator

Please hold.

Kelly Howe
CFO at JLL

Tony, can you repeat the question? I'll take it.

Tony Paolone
Tony Paolone
Executive Director at JPMorgan

Yeah, sure. The question is basically capital raising for commercial real estate just seems to be running at a slow pace so far this year for everybody, wondering if we should think about that as having any implications back to just broader transaction activity going forward if it just remains muted and there's not a lot of new capital perhaps coming in to just CRE broadly.

Kelly Howe
CFO at JLL

Yeah. Thanks for the question. You've seen our capital raise numbers for our investment management business, which are $2.3 billion year-to-date. We are continuing, of course, to focus on capital raise. We do see continued dry powder on the sidelines. There's a lot of pent-up demand, there is a lot of demand to reposition portfolios. We do think that that demand is going to kind of continue to build. You're right. The first part of the year has been a little bit slower, I think across the board, across the market. We expect that demand to flow through.

Kelly Howe
CFO at JLL

In the meantime, as you look at our capital markets business, our debt advisory business has been performing quite well because even as transactions are maybe a little bit slower for the first part of the year because of the capital raise, the debt portion of the business is doing very strong.

Tony Paolone
Tony Paolone
Executive Director at JPMorgan

Okay. Thank you.

Operator

Your next question comes from the line of Jade Rahmani from KBW. Your line is open. Please go ahead.

Jason Sabshon
Jason Sabshon
Analyst at KBW

Hi, this is Jason Sabshon on for Jade. Thanks for taking the questions. To start, what impact do you think the shifting interest rate outlook will have on capital markets pipelines? Do you see any deals moving to the sidelines or potential for repricing in lower cap rate areas like multifamily? Thanks.

Kelly Howe
CFO at JLL

When we look at the interest rate environment, one of the things that we pay most attention to is stability of rates. We can withstand fluctuations up or down a bit without a huge amount of impact. As we look at the interest rate environment kind of through the rest of the year, we don't expect a meaningful impact to our transaction business for the remainder of the year. The other thing that I would just say is that, like I said, there's a lot of pent-up demand on the sidelines, and there's a lot of capital. The debt markets are very liquid at the moment, we don't have huge concerns about kind of the interest rate environment going through the rest of the year.

Jason Sabshon
Jason Sabshon
Analyst at KBW

Do you see any risk of unbundling of services within the outsourcing businesses as a result of it?

Kelly Howe
CFO at JLL

Unbundling of services in the outsourcing business?

Jason Sabshon
Jason Sabshon
Analyst at KBW

Yes.

Kelly Howe
CFO at JLL

One of the things as we've articulated through our Accelerate 2030 strategy is a real focus on targeting and serving clients in a very holistic way, and we're seeing a huge amount of demand for that honestly. When we look at outsourcing, clients are actually coming to us because they don't want to manage individual tasks or individual pieces of the offering. They're looking for somebody that can provide a more integrated offer to them to help them with their outsourcing. Again, we continue to see tailwinds in that space. You can see the healthy growth that we're posting particularly in our Work Dynamics, or sorry, our facilities management business. Unbundling has not been a particular trend that we have been observing in the market.

Jason Sabshon
Jason Sabshon
Analyst at KBW

Thanks.

Operator

Your next question comes from the line of Julien Blouin from Goldman Sachs. Your line is open. Please go ahead.

Julien Blouin
Julien Blouin
VP of Real Estate Global Investment Research at Goldman Sachs

Thank you for the question, congrats on the strong quarter. Christian, I think you mentioned last quarter that you expected that the longer the conflict went on, the worse the impacts would get to the back half of the year. We've definitely seen the performance gap between the U.S. and your other markets sort of widen. Wondering where we stand today, how are you feeling about the likely impacts of the Middle East on Asia and Europe in the back half?

Kelly Howe
CFO at JLL

Julien, Christian's having some trouble with his line, we've spent a lot of time talking about that from this side. I can address many of the conversations that we've had amongst our leadership team here, which is obviously we continue to monitor the conflict quite carefully. I think the biggest impact associated with the conflict is on the broader macro outlook, both GDP growth and inflation. We're not seeing immediate and direct impacts to our business in a material way today. I think you have touched on the fact that in Europe, I think there's maybe a bit more concern. We have seen, as we noted in our remarks, a bit of elongation around transactions on the capital market side in Europe. Again, we're not seeing those fall out of the pipeline. We're just seeing some elongation of deal closing.

Kelly Howe
CFO at JLL

I would say in the U.S. in particular, we've seen continued strength. While we monitor the conflict, we're not seeing impact in our business, nor do we anticipate if things don't get worse, that there will be meaningful impact through the rest of the year.

Julien Blouin
Julien Blouin
VP of Real Estate Global Investment Research at Goldman Sachs

Got it. Thank you, Kelly. I guess, focusing on U.S. investment sales, it was pretty impressive just the amount by which you outpaced the broader market this quarter. I was wondering if you could sort of dig into the drivers of that, whether it's specific markets that were particularly strong or property types.

Kelly Howe
CFO at JLL

Sure. We're very happy with our investment sales performance for the quarter, it has been relatively broad-based across asset classes. We've seen some uptick in office, which has been nice to see as I think those valuations start to work themselves out. We've seen strength in industrial and logistics. Those volumes grew quite significantly. Retail hotels have both been up. Multifamily continues to grow. It's been a little bit slower this year but continues to grow. I would say from a geographic perspective, the U.S. has been a huge driver of the business, but we've also seen activity in parts of Asia as well. Like I mentioned, the capital markets business and investment sales in particular in Europe, we've seen some elongation in timelines there.

Julien Blouin
Julien Blouin
VP of Real Estate Global Investment Research at Goldman Sachs

Got it. Thank you very much.

Operator

Your next question comes from the line of Mitch Germain from Citizens Bank. Your line is open. Please go ahead.

Mitch Germain
Managing Director at Citizens Bank

Kelly, I'm just curious about what you're seeing in the M&A side and what's the biggest hesitation on your part or your company's part with regards to possibly considering closing or doing some sort of transaction.

Christian Ulbrich
Christian Ulbrich
President and CEO at JLL

It's Christian now. They unmuted my line, so I'm allowed to say something. Sorry for that.

Mitch Germain
Managing Director at Citizens Bank

Yeah.

Christian Ulbrich
Christian Ulbrich
President and CEO at JLL

On the-

Mitch Germain
Managing Director at Citizens Bank

Congrats on the quarter, Christian.

Christian Ulbrich
Christian Ulbrich
President and CEO at JLL

Thank you. On the M&A side nothing has really changed. We are very disciplined in pruning in our underwriting investment approach, and so we are constantly looking at opportunities, and I'm certain that at some point we will do a bit more M&A again. Obviously in 2024, we did SKAE and Raise, and in both of those acquisitions we surpassed very, very significantly our own plans for those transactions, and so we like to have more of those going forward. On the other hand, we will not do something which is not driving value for our shareholders. It's not that we are unwilling, it's just that we keep the bar as high as we placed it now for many years, the last couple of years. At some point we will find and identify targets which will pass that bar.

Mitch Germain
Managing Director at Citizens Bank

I think you cited or maybe Kelly cited some really strong pipelines in capital markets, particularly in the U.S. When do we see Europe, Asia return to a more normalized level of activity rather than seeing just kind of volatility across quarters?

Christian Ulbrich
Christian Ulbrich
President and CEO at JLL

I couldn't respond to that earlier question around the Middle Eastern conflict. Obviously, when you are in Europe, you have the war in Ukraine on one side, and you have the Middle Eastern conflict, and that has very significant impact also from a psychological point of view on investors in Europe. This is all very close and very immediate. We saw some signs of return before that war in the Middle East started in February, that was immediately coming down. Talking about Asia, actually Asia had some very interesting transactions this year, so some good momentum on actually large transactions. Asia is not one region really. You have a couple of relevant countries who are making up Asia's Capital Markets business.

Christian Ulbrich
Christian Ulbrich
President and CEO at JLL

When you look, for example, how significantly India is impacted by the war in the Middle East, it's no surprise that people are more cautious there. I think this is very much correlating with those two conflicts, and if they were to disappear, you would see those markets to recover quite significantly because there's clearly pent-up interest, which is currently still on the sideline.

Mitch Germain
Managing Director at Citizens Bank

Thank you.

Operator

Your next call comes from the line of Seth Bergey from Citibank Group. Your line is open. Please go ahead.

Seth Bergey
Senior Analyst at Citibank Group

Hey, thanks for taking my question. I think JLL is just kind of outpacing the market data everywhere that you disclosed it in terms of leasing investment sales. Just curious how much of that is kind of a durable share gain versus a mix of deal size and large deal timing. I guess just how does the guide kind of assume that spread persists or compress? Maybe along with that, you attribute some of the share gain to kind of the data and the AI platform, and what would we see in the numbers to kind of prove that in terms of win rates, revenue per producer, or just anything non-cost ratios?

Christian Ulbrich
Christian Ulbrich
President and CEO at JLL

Well, listen, we are obviously very focused on our own platform, I cannot provide you with any type of comparison to other players in the market. Just the last point you made about revenue per producer, when we talk about the capital markets business, we have been able to grow our capital markets revenue over the last two years since it started to recover in 2024 very significantly, without adding any additional brokers. This is all being digested by the existing teams because our technology platform is enabling them to be just much more productive than within any other platform. Even going forward, we believe that our colleagues have significant room to further grow their revenues per head within our existing environment.

Christian Ulbrich
Christian Ulbrich
President and CEO at JLL

As long as the clients of us appreciate the intelligence we are bringing to them and the quality of our brokers, we believe that this trend will continue on the capital markets side as well as on the leasing side. Maybe, Kelly, do you want to add anything on the leasing side?

Kelly Howe
CFO at JLL

Yeah. I guess the only other thing I would say is, we are confident when we look at the market data that we're gaining share in the space. I do think that per some of the comments that we made earlier about what clients are actually looking for, they're looking for full service providers that actually can bring a range of capabilities to them, and our leasing businesses and capability is one of them. We do see that in our share data that we review.

Kelly Howe
CFO at JLL

The other thing that I would say around the data and AI piece, as you look to link it back specifically to performance, we don't have numbers we disclose on this, but I will say we track very carefully where our lead flow comes from and where we're generating leads from, and what that connects through to in terms of actually closing deals. We feel very good about the investments we're making around data, and AI specifically, and the support to the momentum that that is providing.

Seth Bergey
Senior Analyst at Citibank Group

Great. Thanks. Just as a follow-up, I think last quarter you mentioned that the commission tier headwinds would kind of peak early and moderate throughout the year, and in this quarter they were consistent with the first quarter. I guess, what changed there, and how should we think about that through the back half of the year, and then do they reset kind of cleanly next January?

Kelly Howe
CFO at JLL

Yeah. Thanks. It's a really good question. In both our capital markets and in our leasing business, we've had really outsized performance the first half of the year, the first and the second quarter. It's also been driven by larger deal sizes, which has the impact of pushing a set of our producers up into higher commission tiers earlier in the year. That just had a bigger impact on the first and the second quarter than we thought it would because of top-line performance. The second element, I would say, is since a lot, not all, but a lot of the growth has been driven from the U.S. which is a much more variable compensated environment. In terms of overall geo mix, it's had a bigger impact than it might normally have in a typical year where we have a bit more balance across our geos.

Kelly Howe
CFO at JLL

We do expect that to moderate as we go through the second half of the year. In January, we'll reset again.

Seth Bergey
Senior Analyst at Citibank Group

Thanks.

Operator

Your next question comes from the line of Stephen Sheldon with William Blair. Your line is open. Please go ahead.

Stephen Sheldon
Stephen Sheldon
Analyst at William Blair

Hey, thanks. I wanted to circle back to the guidance increase just because it's very notable. It sounds like things are broadly trending better than expected, but would just love to get some more detail on what's giving you the confidence to increase the guidance for adjusted EPS by this much. Specifically, are there two to three main drivers to call out that I guess are boosting your expectations for the year?

Kelly Howe
CFO at JLL

Thanks for the question. There are a couple of drivers that are driving our confidence such that we are increasing our adjusted EPS. First is just performance in the first half of the year, which we're very pleased with. That would be number one. I think second, when we look at the mix of our business, and particularly the advisory business, we see continued strength as we move through the second half of the year. The pipelines are good. The kind of broader indicators about business confidence, GDP growth, et cetera, are good, and we're seeing continued momentum around the advisory businesses, so that is giving us confidence as we go into the second half of the year.

Kelly Howe
CFO at JLL

When we put, I guess, all of that together, the other piece that is really compelling is we're making a lot of progress on, like I said earlier, our platform investments. Just the amount of operating leverage that we expect to get from the revenue that we are looking at for the year, we're quite pleased with and has given us confidence to increase those targets for the year.

Stephen Sheldon
Stephen Sheldon
Analyst at William Blair

Makes sense. Thank you. Just as a follow-up, maybe for Christian, assuming you're still there. Welcome back. Would be great to get an update on the progress towards that One JLL approach. Where are you seeing successes more holistically serving client needs across the different business lines? I guess, yeah, are you starting to see any notable improvements in cross-sell, I guess, as you prioritize it more? Is that becoming a bigger driver of the strong growth that you're delivering?

Christian Ulbrich
Christian Ulbrich
President and CEO at JLL

Well, we are working very hard on that. This is a muscle which you are training, as you know, when you go into the gym, you don't see the results immediately. You have to go there over a longer period of time. I wouldn't put our performance in the second quarter necessarily down that we have already trained that muscle to the extent where we want it to end up. There's an overall culture within our organization about sharing information and about working together with clients.

Christian Ulbrich
Christian Ulbrich
President and CEO at JLL

What we are doing is we are working very hard to support that also from a platform point of view, from a technology point of view, to make that very easy for our colleagues to cross-sell to each other, not only within business line and not only within country, but what we are very focused on to do that seamlessly across service lines and across geographies. We just recently had a very nice transaction coming from Asia, sourced in Asia, and executed in Europe. Those are the things where we can really differentiate against our competitors and service our clients well. That's where we are working on. I would say the whole Accelerate 2030 strategy, the earliest gains, because it is more immediate, is clearly the progress which Kelly mentioned on the overall platform efficiency.

Christian Ulbrich
Christian Ulbrich
President and CEO at JLL

It's not only AI, it's also general automation where we are making very significant progress which allows us to be so confident about our forward performance. The whole topic around data and AI, because we were investing, as you know, into that topic for a very long time, we are starting from a very strong base. The acceleration on these two things are already a part of our Q2 result. The piece about cross-selling and this One JLL notion, it is an evolvement. We have some of those deals coming in, but there will be many more to come over the next couple of years.

Stephen Sheldon
Stephen Sheldon
Analyst at William Blair

Great to hear. Thank you.

Operator

Your next question comes from the line of Brendan Lynch with Barclays. Your line is open. Please go ahead.

Brendan Lynch
Brendan Lynch
Analyst at Barclays

Can you talk a little bit about the pace of adoption for your software and tech solutions and the outlook for these initiatives to accelerate profitability this year?

Christian Ulbrich
Christian Ulbrich
President and CEO at JLL

Well, as you know, we moved our software and technology business into our overall rents P&L. We promised to the street that this will be now profitable in 2027. It was profitable in the first quarter of 2026. After the two quarters, we are well ahead of our own plan. The move has turned out to be absolutely the right move. A lot of friction points which we had before have disappeared. From a profitability point of view, it's going really well, and we are also expecting a bit more revenue growth in that whole sector coming into the second half of the year.

Brendan Lynch
Brendan Lynch
Analyst at Barclays

Great. Thank you. Just on global office leasing volume. It's now on pace to come pretty close to the peak in 2019 and also the peak in 2007. The question is, how much runway do you think is left for growth over the next couple of years?

Christian Ulbrich
Christian Ulbrich
President and CEO at JLL

I will take that question. We have around the world something which is really interesting and didn't have a precedent in previous times. We see new rent records for office space in almost every city around the world whenever a new product is coming to market. Even in those geographies where the economic environment is weak, we have that situation that we see new record rents. At the same time, you go half a mile down the road, and you have vacant buildings, and no one wants to pick up that space. This bifurcation between the most successful companies who are working on bringing their people into the best available spaces and those who are not that focused on spaces and the employee experience, this is ongoing. Overall, I would see that as the ongoing trend of the market.

Christian Ulbrich
Christian Ulbrich
President and CEO at JLL

Whether that drives ongoing higher absolute volumes, I would say for the foreseeable future, overall volumes will continue to grow. At least for our business, that is not as relevant as that trend of bifurcation, because as you know, we are very, very focused on the grade A space, so that's where we have the majority of our market share. For us, this trend is more important compared to whether the overall volume is 2% up or down.

Brendan Lynch
Brendan Lynch
Analyst at Barclays

Very good. Thank you, Christian.

Operator

Your next question comes from the line of Tony Paolone with JPMorgan. Your line is open. Please go ahead.

Tony Paolone
Tony Paolone
Executive Director at JPMorgan

Yeah, thanks for some follow-ups here. Just, you talked about free cash flow running above your target conversion rate. I guess besides buying back stock, where do you see the biggest opportunities to invest in the business, or where do you see there may be capabilities you might want to add?

Christian Ulbrich
Christian Ulbrich
President and CEO at JLL

Well, I want to start off with saying that buying back stock is a very important element of our capital allocation because we believe that this is a great investment to buy our own stock back. Putting that to the side, we still have an ongoing long list, and it will probably never get much shorter, of potential investments into our platform. At the moment, we are significantly increasing, literally month by month, our investment into our AI tools. That is something where we see really nice progress on not only adoption but also on the value creation around that. There's also just very basic, there are always areas in our business where we have geographies where we, in a certain asset class, would like to add more capacity, where we invest into new teams, which is something where some of that money flows into.

Christian Ulbrich
Christian Ulbrich
President and CEO at JLL

The good thing is you are never running short of ideas how you can and where you can invest into the platform to drive value for our shareholders. On that end, I'm not concerned that we will run short of ideas.

Tony Paolone
Tony Paolone
Executive Director at JPMorgan

Got it. I guess on the data center side, can you maybe give us a sense as to where the largest revenue and profit buckets lie today across the business lines? Maybe what the growth rates look like or just, again, what kinds of capabilities do you see yourselves having the most strength or opportunity to build there?

Christian Ulbrich
Christian Ulbrich
President and CEO at JLL

Yeah. As you know, this is a super dynamic market. At the moment, we had, at the end of the quarter, 340 data centers in our facility management. From a gigabit point of view, because we have contracted now numerous very large data centers, we expect from a just gigabit perspective, that number to grow by a third within the next two quarters because we have already signed those contracts, and those data centers will be finished over the next couple of months. This is ongoing recurring revenue, which, as you know, we are very focused on. That is, from our point of view, obviously very good revenue, and that is complemented by revenue on the transactional side with data centers, and that drives, obviously in that very moment, higher margins and profits. Once that is booked, then it's over.

Christian Ulbrich
Christian Ulbrich
President and CEO at JLL

You kind of said you almost made the distinction, what is the more attractive one? Longer term, it's a mix of both things. Our overall mix is 80% recurring and 20% transactional, that's probably also what we like to see on the data center side.

Tony Paolone
Tony Paolone
Executive Director at JPMorgan

Okay. Thank you.

Operator

We have reached the end of the Q&A session. I will now turn the call back to Christian Ulbrich, President and Chief Executive Officer, for the closing remarks.

Christian Ulbrich
Christian Ulbrich
President and CEO at JLL

Thank you, operator. With no further questions, we will close today's call. On behalf of the entire JLL team, we thank you all for joining our call today. We look forward to speaking with you again following the third quarter.

Executives
Analysts
    • Sean Coghlan
      Head of Investor Relations at JLL
    • Kelly Howe
      CFO at JLL
    • Tony Paolone
      Executive Director at JPMorgan
    • Jason Sabshon
      Analyst at KBW
    • Julien Blouin
      VP of Real Estate Global Investment Research at Goldman Sachs
    • Mitch Germain
      Managing Director at Citizens Bank
    • Seth Bergey
      Senior Analyst at Citibank Group
    • Stephen Sheldon
      Analyst at William Blair
    • Brendan Lynch
      Analyst at Barclays
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