Jones Lang LaSalle Q1 Earnings Call Highlights

Key Points

• Very strong Q1 performance: JLL reported record first-quarter revenue and earnings with revenue up ~11% (mostly organic), adjusted EBITDA +24% and adjusted EPS +56%, and management said results are trending toward the high end of full‑year guidance ($21.80–$23.50).
• Active capital allocation: The firm repurchased $300 million of shares in Q1 (including a $200 million ASR) with ~2% fewer shares outstanding and $2.7 billion remaining on the buyback authorization, while also committing firm capital to LaSalle strategies (including an incremental €100 million to Encore+ and an initial ~$300 million decarbonization fund target).
• AI and data as a competitive edge: JLL says decade‑long investment in its data platform is driving productivity and market‑share gains, with ~75% adoption of core enablement products and 25,000 employees using enterprise AI applications daily.

Jones Lang LaSalle NYSE: JLL executives used the company’s first-quarter 2026 earnings call to highlight what CEO Christian Ulbrich called a “very strong quarter” to start the year, citing record first-quarter revenue and earnings driven by broad-based strength in its advisory businesses and continued growth in resilient, outsourcing-oriented revenue streams.

Ulbrich said momentum in Leasing Advisory was led by the office and industrial sectors, while capital markets performance benefited from growth “across nearly all sectors and geographies.” He also attributed productivity gains and market share progress to the firm’s “data and AI advantage,” adding that increased revenue alongside “disciplined operating rigor” helped drive profit growth and margin expansion. CFO Kelly Howe said adjusted EBITDA increased 24% and adjusted EPS rose 56% versus the prior year period.

First-quarter performance and segment drivers

Howe reported revenue increased 11% (including a 200-basis-point foreign currency benefit) and was “almost entirely organic,” with margin expansion year over year. She walked through results by segment, emphasizing that her commentary reflected local-currency underlying performance.

In Real Estate Management Services, Howe said revenue growth was led by workplace management and project management. Workplace management grew at a high single-digit rate due to mandate expansions and, to a lesser extent, new client wins. Project management revenue rose at a double-digit rate, supported by higher U.S. volumes—including new data center wins—and a high single-digit increase in management fees. Property management core growth was “tempered” by elevated contract turnover actions, with management fees declining mid-single digits.

In Software and Technology Solutions, Howe said high single-digit software revenue growth “mostly offset” continued pullbacks in discretionary technology solution spending from certain large existing clients. She said the company is targeting mid- to high-single-digit revenue growth in that segment for the full year, “weighted to the second half.”

Leasing Advisory revenue growth was driven by office momentum, an acceleration in industrial, and a “meaningful contribution” from data centers, Howe said. She noted office leasing growth “notably outpaced” a 1% decline in market volumes, and cited two-year stacked global Leasing Advisory revenue growth of 29%.

In capital markets services, Howe described resilient investor bidding activity supported by “robust liquidity in debt markets,” an uptick in larger transactions, and stable pricing. She reported investment sales revenue grew 27%, debt advisory rose 30%, and equity advisory increased 75%. On a two-year stacked basis, she cited growth of 42% for investment sales and 81% for debt advisory.

Investment management results reflected advisory fee growth tied to capital raised over the prior 12 months, partly offset by the impact of “meaningful disposition activity” in Asia Pacific, Howe said. She added that because new capital takes several quarters to deploy, advisory fee growth is expected to “gradually pick up” as the year progresses, supporting low single-digit growth for the year. Incentive and transaction fees are expected to be toward the lower end of the historical range and weighted to the fourth quarter.

Property management contract actions in Asia Pacific

Ulbrich and Howe both addressed the ongoing reshaping of the property management portfolio in Asia Pacific. Ulbrich said JLL has “strategically exited or repositioned nearly 60%” of targeted contracts. Howe said a portion of the targeted contracts have been renegotiated, which “partially” limits the revenue headwind but also “lengthen[s] the timeline and negotiations with clients.”

Later in the Q&A, Howe said the effort was initially expected to be largely completed around midyear, but the process is now expected to extend “through the end of the year,” largely because more clients than expected have been willing to renegotiate terms. She described many of the targeted contracts as financially unattractive due to “very high pass through costs” and low value-add fee revenue. Howe added that roughly “a third” of the targeted contracts have shown willingness to renegotiate to terms she characterized as more attractive for both sides.

Capital markets and leasing outlook amid a fluid macro backdrop

Management repeatedly emphasized strong pipelines, while also noting uncertainty tied to the broader macro and geopolitical environment. In response to a question about potential impacts later in the year, Howe said company guidance reflects “a range of scenarios” and that results were “trending towards the high end” at the time of the call. She said the back half of 2026 includes difficult comparisons, with strong prior-year quarters in leasing (fourth quarter) and capital markets (third and fourth quarters).

Ulbrich said capital markets entered the year with “very significant momentum” globally, and that momentum continued into the second quarter. He said the U.S. market has been “pretty much unimpressed” by geopolitical developments so far, while Europe has seen some deals canceled or delayed. Asia Pacific, he added, has had “very strong momentum” with “a lot of large transactions” continuing.

Howe addressed leasing margins, saying quarterly incremental margins can be volatile and are better assessed on a trailing 12-month basis. She said leasing producers hit higher commission tiers earlier than expected due to business strength and geographic mix, but the commission-tier headwind should moderate. Still, she said JLL expects the leasing business’s overall margin rate in 2026 to be “relatively flat” versus the prior year.

For capital markets, Howe said JLL expects “a strong incremental margin” for the year and, when asked for a range, indicated “mid-30s” as a general expectation for incremental margin performance.

AI adoption and management’s view on disintermediation

Ulbrich said JLL has been investing in technology and its data platform for more than a decade and argued it has “by far the best data platform within our industry.” He said adoption internally is “incredibly high,” with “several agents becoming live per week” on the citizen-development side, and described AI as a “tailwind” for the organization.

Howe added specific usage metrics, saying JLL is seeing “75% adoption across JLL” across core enablement products. She said 25,000 employees are working on enterprise AI applications every day, representing a 60% year-over-year increase, and that the company expects usage to continue growing.

On concerns about potential disintermediation, Ulbrich said management is “not concerned” at present, pointing to the company’s proprietary data platform and the role of brand trust—particularly in areas like valuation—where, he said, “the brand aspect is absolutely significant.”

Capital allocation: share repurchases and LaSalle investments

JLL also emphasized capital deployment actions. Ulbrich said the company repurchased $300 million of shares during the first quarter at an average price of about $301, including a $200 million accelerated share repurchase (ASR). Howe said the quarter’s activity reduced share count by nearly 2%, and noted that most ASR shares were delivered in the quarter at an average price of about $290, with remaining shares to be delivered in the second quarter. Management said $2.7 billion remains under the expanded repurchase authorization, and Howe said the company intends to be “programmatically active,” with amounts dependent on operating conditions, leverage, valuation, and competing uses of capital including M&A.

On LaSalle Investment Management, Ulbrich highlighted a revamped strategy focused on client investment outperformance and profitable growth with margin expansion. He pointed to the first close of a global decarbonization fund (Lp3F) in the quarter, describing a retrofit-led approach including deep retrofits of vacant buildings, lighter retrofits, and ground-up developments aimed at meeting demand for energy-efficient properties. In response to a question, Ulbrich said the initiative is starting with identified projects and an “initial size” outlook of $300 million, with fundraising efforts intended to scale the fund.

Ulbrich also announced a commitment of an incremental EUR 100 million investment in the LaSalle Encore+ Fund, one of the firm’s flagship European products, following a $100 million incremental gross capital investment made last year into JLL Income Property Trust. Howe described Encore+ as a core European open-ended fund and said JLL expects “meaningful” third-party capital raising, but did not provide a specific target amount. Ulbrich said using firm capital to “kickstart” funds can build investor confidence and attract additional capital. Addressing how JLL evaluates these LaSalle investments, Ulbrich said each use of capital is assessed rigorously and must clear a hurdle of being “better than share repurchases,” adding that proposed LaSalle investments were “well above” expected repurchase returns and can also create cross-selling benefits across JLL.

On the balance sheet and cash flow, Howe said higher cash earnings were largely offset by growth-related working capital headwinds, particularly in net reimbursables, while higher CapEx more than offset operating cash flow improvement. She said seasonal free cash flow outflow was largely in line with the year-ago period, and reaffirmed a full-year target consistent with the company’s long-term free cash flow conversion goal of over 80%. Howe said net leverage improved to 1.0x at quarter-end.

For full-year 2026, Howe said JLL is targeting adjusted EPS of $21.80 to $23.50, representing 20% growth at the midpoint. She said first-quarter performance puts the company on a trend toward the upper end of the range, though “fluidity of the macro environment limits late year visibility” in more economically sensitive businesses.

Ulbrich also addressed the ongoing conflict in the Middle East, noting JLL has operated in the region for more than 20 years, anchored in Saudi Arabia and the UAE, and that it represents a low single-digit percentage of revenue. He said there has been “no material impact” on consolidated results to date and pipelines continued to build through and after the first quarter, while the company remains focused on safety, client support, and scenario planning.

About Jones Lang LaSalle NYSE: JLL

Jones Lang LaSalle Incorporated NYSE: JLL is a leading professional services firm specializing in real estate and investment management. The company provides a broad range of services including leasing, advisory, property and asset management, capital markets, project and development services, and valuation. Through its integrated platform, JLL serves corporate occupiers, institutional investors, real estate owners and developers, offering tailored solutions that span the entire real estate lifecycle.

Founded in 1783 in London as Jones Lang Wootton, the firm established a reputation for expertise in property management and brokerage.

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