Colliers International Group Q1 Earnings Call Highlights

Key Points

• Colliers reported Q1 consolidated net revenues up 12% to $1.15 billion, adjusted EBITDA of $125 million (up 8%) and adjusted EPS of $0.91, and reiterated a full-year outlook for mid‑teens revenue, EBITDA and EPS growth despite a near‑term European tax headwind.
• Transaction momentum is accelerating in commercial real estate, with capital markets revenue up 43% and combined transaction services (capital markets + leasing) growth of 25%, supported by accelerated recruiting and increased IT/AI spending to boost producer productivity.
• Colliers is moving ahead with the planned Ayesa engineering acquisition (backed by a $400 million long‑term debt raise), which management says will open several major markets but lift Q2 leverage to roughly 2.9–3.0x before declining later in the year.

Colliers International Group NASDAQ: CIGI reported first-quarter 2026 results that management said demonstrated “durability” amid what it described as an “uneven market,” pointing to improving commercial real estate activity and continued strength in more recurring and resilient service lines.

Global Chairman and CEO Jay Hennick said Colliers’ strategy centers on “3 growth engines across the built environment: commercial real estate, engineering and project management, and investment management.” He added that “more than 70% of our earnings come from resilient businesses,” including engineering and project management, investment management, property management, and mortgage servicing.

First-quarter financial results and outlook

Global CFO and CEO of Commercial Real Estate Christian Mayer said consolidated revenues rose 12% in the first quarter, while net revenues also increased 12% to $1.15 billion. Adjusted EBITDA was $125 million, up 8%, and adjusted EPS increased 5% to $0.91.

Mayer said adjusted EPS growth was “tempered by a higher than expected tax rate related to certain European operations,” adding that the company expects its tax rate “to moderate in the coming quarters.” He also said the company is maintaining its full-year outlook for “mid-teens revenue, EBITDA, and EPS growth,” supported by transaction pipelines and momentum in its more resilient businesses.

While acknowledging “recent increases in geopolitical risk and macroeconomic volatility,” Mayer said those factors are not expected to “materially impact” 2026 results at this point due to Colliers’ diversification across geographies, service lines, and clients.

Commercial real estate: transaction growth and recruiting investments

In the commercial real estate segment, Mayer said first-quarter net revenue rose 13%. Capital markets revenue increased 43%, led by market share gains in the U.S. and parts of Europe across both sales and debt finance. He said Colliers posted sales growth across property types, “most notably data center development land and office,” and noted year-over-year gains in the U.K., Germany, and Japan in office and industrial sales.

Leasing revenue increased 9%, with U.S. industrial property leading growth. Segment net margin was 6.3%, up 20 basis points, driven by operating leverage on higher transaction revenue and partially offset by recruiting investment.

On where the company is investing in the CRE business, Mayer told analysts the focus is primarily on “people,” citing accelerated recruiting in capital markets and leasing across major markets. He added that Colliers is also increasing IT spending, both operating and capital, “to enable AI and technology,” with the goal of improving efficiency and producer productivity.

Asked about the strength in capital markets, Mayer characterized the quarter as a continuation of a multi-quarter rebound, saying it was the company’s “seventh quarter of capital markets growth on a quarter-over-quarter basis.” He cited improving conditions including credit availability, tightening bid-ask spreads, and improving willingness to transact. He added that Colliers believes it is in the “early to mid-innings of a recovery,” with “a couple of years at least” to return to prior peak transaction levels.

Hennick underscored the transaction momentum, pointing to combined transaction services growth of 25% (capital markets and leasing), which he described as “industry-leading.”

On leasing trends, Hennick said he is seeing a “bifurcated” market, with longer durations in “triple A type properties,” while suburban properties are “about the same as it’s always been.” He attributed some suburban demand to return-to-office trends and lower suburban office lease rates, which he said have made additional space more attractive.

Engineering and project management: utilization, backlog, and Ayesa

Engineering segment net revenue rose 13% on a mix of acquisitions and internal growth, according to Mayer, who said demand remains strong “especially in infrastructure and related areas.” Net margin was 9.5%, slightly below the prior year, reflecting lower workforce utilization in residential development and telecommunications. Mayer said he expects both areas to improve as the year progresses and added that overall engineering backlog “continues to be robust.”

Addressing questions about margin management amid shifting end-market demand, Mayer emphasized the segment’s diversification across Canada, the U.S., and Australia, and across end markets such as infrastructure, transportation, property and buildings, residential development, telecommunications, and program management. He said the mix between public and private sector clients is “intentional” to help manage “ebbs and flows,” and reiterated that the company expects residential development and telecom to “rebound in the coming quarters.”

Colliers also discussed preparations for its planned acquisition of Ayesa Engineering. Hennick said Colliers raised $400 million in long-term debt financing and extended its revolving credit facility to support the deal, which the company expects to close later in the quarter. Mayer said the acquisition is expected to be funded from available credit.

Mayer said leverage stood at 2.3x as of March 31, reflecting seasonal working capital usage, and the company had $1.5 billion in total credit availability. He added that after Ayesa closes, Q2 leverage is expected to rise to “the 2.9 to 3 times level” due to seasonality, with leverage then expected to decline “meaningfully” in Q3 and Q4.

Hennick said Ayesa would open “four or five major markets” for Colliers’ engineering business and that, since announcing the transaction, both Colliers and Ayesa have been approached about potential partner additions to the Ayesa business. He also said Ayesa’s backlogs are “stronger than ever.”

Investment management: fundraising, integration, and data centers

In investment management, Mayer said net revenues increased 8%, supported by a recent acquisition and internal growth from new capital deployed. He said net margin declined to 37.4% due to planned investments to integrate and streamline under the Harrison Street Asset Management brand. Mayer said these costs are expected to pressure margins for “the next couple of quarters,” with a return to a “low 40s net margin profile” expected afterward.

The segment raised “just under $1 billion” in new capital commitments in the first quarter, and management maintained its 2026 fundraising target of $6 billion to $9 billion. Hennick said fundraising is “quite unpredictable” quarter to quarter, but he added that pipelines are larger than in the past and he expects key fundraises to be “substantially completed before the end of the year,” even if timing of commitments remains uncertain.

On confidence in the fundraising target, Hennick said pipelines are “way ahead of last year,” citing new strategies in the market and investor interest in infrastructure-related products, including data centers. He noted Harrison Street has owned data centers for several years and said the firm is considering selling some assets early due to strong buyer demand.

Responding to a question on credit exposure, Mayer said the business has “no corporate credit exposure at all,” while noting certain real estate asset-backed credit strategies tied directly to real estate. Hennick and Mayer indicated this credit exposure represents a small portion of assets under management, estimating roughly 8% to 10% of AUM, and said it is backed primarily by multifamily real estate. They also said they were not seeing redemptions related to that exposure.

Technology and cross-platform collaboration

Hennick said Colliers has increased IT spending, with “a significant portion” focused on AI. He also said the company has partnered with Google in what he described as a “very deep partnership,” highlighting cloud capabilities and engineering talent, along with property databases intended to support differentiation and back-office streamlining.

Management also described collaboration among its business lines. Mayer said engineers are working with capital markets professionals on activities such as environmental and property condition assessments, land qualification, and design-related work. Hennick expanded on that idea, describing scenarios where Colliers can help clients find and assemble land, support entitlement through engineering work (roads, power, and water), project manage construction, and potentially involve investment management in related opportunities.

On regional trends, Hennick said North America drove much of the company’s first-quarter strength, while “Europe is slowing” and the company is “watching it very carefully,” citing geopolitical factors and reduced financing availability. He added that Asia-Pacific performance is mixed, with some markets strong and others “stalled,” and said the company’s geographic diversification helps manage variability across markets and service lines.

About Colliers International Group NASDAQ: CIGI

Colliers International Group Inc is a global commercial real estate services and investment management firm offering a full suite of solutions to occupiers, owners and investors. The company's real estate services encompass brokerage and agency leasing, capital markets advisory, property and facility management, valuation and advisory, project and development services, workplace and corporate real estate solutions, and market research. Through these offerings, Colliers supports clients across the entire real estate life cycle, from site selection to asset disposition.

The firm operates through two principal segments: real estate services and investment management.

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