Walker & Dunlop (WD) Financials

Walker & Dunlop (NYSE: WD) has shown varied financial performance over the last few years, with recent quarterly results indicating some key trends in profitability, cash flow, and balance sheet strength.

Positive aspects:

• Walker & Dunlop posted a net income of $2.73 million in Q1 2025, showing profitability despite a challenging quarter compared to previous quarters where net income was substantially higher.
• The company maintained consistent cash dividends to common shareholders at $0.65 - $0.67 per share in recent quarters, reflecting steady capital return to shareholders.
• Total common equity increased from approximately $1.69 billion in Q2 2024 to $1.73 billion in Q1 2025, indicating a solid equity base.
• Cash and due from banks remains strong, around $181 million in Q1 2025, close to historical levels, supporting liquidity.
• Operating cash flows, while volatile, remain substantial in earlier quarters (e.g., $548 million in Q3 2023), showing operational cash generation capability during better market conditions.

Neutral factors:

• Total revenue and interest income/expense were reported as zero across many quarters, which may reflect reporting classification or the nature of the company’s business model focused on fee income rather than net interest.
• Salaries and employee benefits expense fluctuated between $111 million and $169 million in recent quarters, suggesting staffing and compensation costs remain a significant, but controlled, expense.
• Depreciation expense hovered near $55-$58 million per quarter consistently, indicating a stable level of fixed assets and amortization schedules.
• Walking & Dunlop’s shares outstanding show little change, maintaining stability in share count — roughly 33 million shares basic and diluted.

Negative aspects:

• The Q1 2025 quarter saw a significant net cash outflow from operating activities at -$281 million and investing activities at -$39 million, indicating cash burn which can pressure liquidity if continued.
• Total non-interest expenses were negative and quite volatile quarter-to-quarter, reflecting expense classification but also underlying operational cost fluctuations, including special charges up to $19 million in Q1 2025.
• Other operating expenses were negative and large, such as -$203 million in Q1 2025, highlighting ongoing high overhead or non-recurring costs.
• Net income dropped sharply from tens of millions in recent quarters to just $2.7 million in Q1 2025, suggesting a rough start to 2025 and possibly tougher market conditions.
• Debt levels remain elevated with total liabilities around $2.77 billion as of Q1 2025; while manageable, maintaining or reducing this in volatile environments is important.

Summary: Walker & Dunlop has demonstrated solid equity and historical profitability, but recent quarters including Q1 2025 reveal some challenges with shrinking net income and negative cash flow from operations. The company maintains good liquidity and returns dividends steadily, yet investors should monitor expense volatility, cash outflows, and the ability to sustain earnings growth amid changing market conditions.