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DATE

Tuesday, Nov. 4, 2025, at 11 a.m. ET

CALL PARTICIPANTS

  • Chairman and Chief Executive Officer — Jay Hennick
  • Chief Financial Officer — Christian Mayer

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RISKS

  • Investment management margin—Net margin for the investment management segment declined to 42.3% in Q3 2025, with management stating that integration costs from unifying operations under the Harrison Street Asset Management brand “will continue for the next two to three quarters and will modestly impact our margins as a result” (as discussed on the Q3 2025 earnings call).
  • Engineering net margin—Engineering segment net margin was “slightly lower than last year” at 15.2% in Q3 2025, according to Christian Mayer, primarily due to service mix, with CFO Christian Mayer noting a 20 to 30 basis point decline.
  • Ongoing cost pressures—Incremental hiring and integration activity, especially in new geographies and asset classes, are cited by management as continuing sources of margin pressure.

TAKEAWAYS

  • Revenue -- $1.46 billion, up 23% year over year in Q3 2025, led by growth in the Engineering and Real Estate Services segments.
  • Internal growth -- 13% internal growth across operations in the third quarter, excluding acquisitions.
  • Adjusted EBITDA -- Adjusted EBITDA was $191 million, up 24% in Q3 2025, with margin expansion driven by operating leverage in Real Estate Services.
  • Engineering revenues -- $1.7 billion annualized run-rate; segment net revenue rose 36%, including 6% internal growth, in Q3 2025, with seven acquisitions completed so far in the year.
  • Engineering net margin -- 15.2%, marginally down year over year, attributed to service mix as explained by the CFO, for the Engineering segment in Q3 2025.
  • Real Estate Services revenue -- Increased 13%, with segment net margin of 11.3%, up 180 basis points year over year, reflecting operating leverage despite continued investment in capability expansion in Q3 2025.
  • Leasing revenue -- Up 14% in Q3 2025, led by the U.S. and driven by growth in industrial, office, and data centers.
  • Capital Markets revenue -- Up 21% year over year in Q3 2025, with sales growth across all geographies and asset classes, and notable strength in the U.K. Japan, and Canada.
  • Outsourcing revenue -- Increased 8% in Q3 2025, led by valuation and advisory services, with recurring revenue seeing positive momentum.
  • Investment Management net revenue -- Investment Management net revenue grew 5% in the third quarter, primarily due to the RoundShield acquisition and higher fee-paying assets under management.
  • Assets Under Management (AUM) -- $108.3 billion in assets under management as of September 30, up 10% from last year and 5% from June 30, 2025.
  • New capital raised -- $1 billion in new capital commitments in Q3 2025, with an additional $1.2 billion raised since quarter-end; Year-to-date fundraising reached $4.4 billion as of Q3 2025.
  • Dry powder -- $9 billion organization-wide, available for future investment deployment.
  • Leverage ratio -- 2.3x as of September 30; management expects this to fall to "just under two times by year-end," according to Christian Mayer, assuming no significant additional acquisitions.
  • Fundraising target -- Management expects full-year fundraising to “come in near the midpoint of our $5 billion to $8 billion target.”
  • Operating leverage -- CFO stated, “We had about 22% operating leverage on an incremental revenue dollar in Q3 2025.”

SUMMARY

The call detailed segment-level outperformance in both Engineering and Real Estate Services in Q3 2025, indicating positive operating leverage and successful execution of recent acquisitions. Management emphasized proactive recruitment and integration efforts as ongoing strategies, spotlighting both margin impacts and the pursuit of additional scale in key regions. Plans to unify investment management under the Harrison Street Asset Management brand are underway, with integration costs acknowledged as lasting several more quarters. The robust fundraising pace and increased AUM were supported by both organic capital flows and continued acquisition activity, positioning Colliers International Group (CIGI 1.99%) to deploy significant invested capital through $9 billion of dry powder. Guidance for the remainder of the year targets strong growth in leasing and capital markets, with pipelines described as solid across geographies and asset classes.

  • CEO Jay Hennick said, "Our unique partnership philosophy and decentralized operating model set us apart and enable us to continue to capitalize on compelling growth opportunities in this rapidly expanding industry."
  • The company reported that “Over 85% of our funds are held in long-dated or perpetual investment vehicles,” according to Jay Hennick during the Q3 2025 earnings call, which management claims provide predictable returns for both shareholders and clients.
  • CFO Christian Mayer confirmed, “On a full-year basis, organic growth would be in the mid to high single-digit range and will be firmly in that range for the year.”
  • Management expects the Real Estate Services and Engineering segments “may exceed our previous full-year guidance,” according to Christian Mayer, while Investment Management is “expected to be off slightly,” according to Christian Mayer
  • On capital markets, management described the recovery as "broad-based" according to Christian Mayer but stressed that activity remains below historic highs, with substantial pent-up demand yet to materialize.
  • Integration of recent acquisitions in Australia and Canada (such as Triovest and Asterisk) is reported as proceeding smoothly, with early indications of incremental recurring revenue and new cross-border opportunities.

INDUSTRY GLOSSARY

  • Dry powder: Uncommitted capital on hand, available for immediate investment, often cited as a measure of deployable resources in private funds or investment vehicles.
  • Operating leverage: The impact on profitability of changes in revenue, illustrating how much income increases per incremental dollar of revenue given a cost structure.
  • Net margin: Segment-specific profit as a percentage of net revenue after allocating both direct and indirect costs.
  • Assets Under Management (AUM): The total market value of assets that an investment management firm manages on behalf of clients.
  • Recurring revenue: Revenue that is stable and predictable, typically resulting from long-term service contracts or subscription-based offerings.
  • Basis point: One one-hundredth of a percentage point (0.01%), commonly used to compare changes in margin or interest rates.
  • Closed-end fund: An investment fund with a fixed pool of capital, typically invested over a specified period and often subject to lock-up periods.
  • Open-ended fund: An investment vehicle that accepts new capital and permits redemptions regularly, often with ongoing subscriptions and withdrawals.

Full Conference Call Transcript

Jay Hennick: Thank you, operator. Good morning, and thank you for joining us for the third quarter conference call. As the operator mentioned, I'm Jay Hennick, Chairman and CEO of Colliers. With me today is Christian Mayer, CFO. This call is webcast and available in the Investor Relations section of our website along with the presentation slide deck. Colliers delivered excellent third quarter results highlighting our momentum across all segments of our business. In engineering, which includes project management and program management, we achieved impressive growth this quarter. This was driven by both strategic acquisitions—seven completed so far this year—as well as robust organic performance. With a strong pipeline ahead, we are well-positioned for continued expansion.

In just five years since entering the engineering sector, we have established a significant multi-disciplined global platform. This business now generates over $1.7 billion in annualized revenue and employs more than 10,000 professionals. Our unique partnership philosophy and decentralized operating model set us apart and enable us to continue to capitalize on compelling growth opportunities in this rapidly expanding industry. Real estate services also delivered excellent results marked by a surge in leasing and capital markets transactions. While capital markets recovery has been gradual, we anticipate an increase in business activity as interest rates stabilize and investor confidence builds. This brings positive tailwinds to our business. We're excited about unifying our operations under the Harrison Street Asset Management brand.

And while meaningful change takes time, our plan will strengthen our business and deliver meaningful value to our shareholders. Operationally, our investment management business is highly resilient. Over 85% of our funds are held in long-dated or perpetual investment vehicles, generating long-term and predictable earnings for our shareholders and top-tier investment returns for our investors. Assets under management finished the quarter at $108 billion, a 10% increase from last year, reflecting the success of our acquisition strategy and solid fundraising momentum to date. Harrison Street has multiple products in the market, with new vintages of our flagship funds launching later this quarter and into 2026. These initiatives are expected to drive ongoing revenue growth through the year and beyond.

With $9 billion in dry powder across the organization, we are well-positioned to deploy significant capital on behalf of our investors. Colliers, with thirty years of visionary leadership and three powerful growth engines, has become a resilient and highly differentiated professional services and asset management company—a company that is well-positioned to continue to seize opportunities and deliver lasting value for our shareholders. Now let me turn things over to Christian for his financial report. And then we'll open things up to questions. Christian?

Christian Mayer: Thank you, Jay. And good morning, everyone. As a reminder, all non-GAAP measures referenced today are defined in the materials accompanying this call. Revenue growth figures are presented in local currency terms. Our third quarter revenues were $1.46 billion, up 23% year over year. Our Engineering and Real Estate Services segments led the increase from a combination of internal growth and recent acquisitions. Overall internal growth for the quarter was 13%. Adjusted EBITDA was $191 million for the quarter, a 24% increase from last year. Real Estate Services segment revenues increased 13% overall. Capital markets were up 21%, reflecting sales growth in all geographies and in all asset classes, with particular strength in the UK, Japan, and Canada.

Debt finance activity was also strong, particularly U.S. multifamily originations. Leasing revenues were up 14%, also led by the U.S., and driven by industrial and office, as well as data centers. Outsourcing revenues increased 8% for the quarter, with our valuation and advisory practice leading the growth. Segment net margin was 11.3%, up 180 basis points year over year on solid operating leverage from higher transactional revenues, partly offset by continued investments to strengthen our geographic and asset class capabilities. Engineering net revenue was up 36%, fueled by acquisitions and internal growth of 6%. We delivered notable revenue gains in the quarter. The net margin was 15.2%, slightly lower than last year, mainly due to service mix.

Our backlogs continue to be solid across our geographic markets, giving us visibility and confidence as we look ahead to 2026. Our investment management net revenues increased 5% due to the favorable impact of the RoundShield acquisition and higher fee-paying assets under management. However, the net margin declined slightly to 42.3%, primarily due to additional costs incurred as we integrate operations under the Harrison Street Asset Management brand. We expect these costs will continue for the next two to three quarters and will modestly impact our margins as a result. In the third quarter, we raised $1 billion in new capital commitments. Since quarter end, we have raised an additional $1.2 billion, bringing total year-to-date fundraising to $4.4 billion.

As Jay mentioned, we have several funds currently in the market, including one significant new vintage launching in the coming weeks. For the full year, we expect to come in near the midpoint of our $5 billion to $8 billion fundraising target. Assets under management totaled $108.3 billion as of September 30, up 5% from June 30, driven by the recent acquisition and new capital raised, partially offset by asset sales in older vintage funds. Turning to our balance sheet, our leverage ratio was 2.3 times as of September 30, and includes the impact of several acquisitions completed during the third quarter. We continue to expect our leverage to decline to just under two times by year-end.

This assumes no significant additional acquisitions. In our Real Estate Services and Engineering segments, we may exceed our previous full-year guidance. While in Investment Management, we expect to be off slightly. Putting it all together, on a consolidated basis, we remain confident we will meet our full-year outlook. That concludes my prepared remarks. Operator, can you please open the line for questions? Thank you.

Operator: Ladies and gentlemen, we will now conduct the question and answer session. Tone phone. You will hear a one-stop prompt acknowledging your request. Your question will be pulled in the order they are received. If you would like to decline from the polling process, please press the pound key. Please ensure you lift your handset if you're using a speaker before pressing any keys. One moment for your first question. Your first question comes from the line of Stephen MacLeod from BMO. Your line is open.

Stephen MacLeod: Thank you. Good morning, guys. Just wanted to sort

Jay Hennick: Hi, Jay. Just wanted to circle in on a couple of things. Just with respect to the engineering margins in the quarter, you noted some service mix headwind. I'm just curious if you could give a little bit of color around sort of what you saw in the quarter and how that weighed on your numbers or weighed on the margin, I suppose?

Christian Mayer: Well, Steve, you gotta look at the on a net revenue basis. We have a lot of pass-through costs in engineering, and those are at low or very low margins. On a net basis, our margin was down very slightly. We're talking 20 to 30 basis points. And it really just is some service mix across our geographic markets.

Stephen MacLeod: Okay. That's helpful. Thanks, Christian. And then just on the investment management business, obviously strong fundraising on a year-to-date basis and you guided sort of being in the midpoint for your target for 2025, which is great. Just as we think about the additional costs, again, sort of weighing on that net margin this quarter, can you talk a little bit about sort of how you see that evolving as you get into 2026? Or is it maybe too soon to talk about 2026 margins at this point?

Christian Mayer: Well, look, Steve. We don't want to talk about 2026 until year-end. We'll give a full outlook for 2026 at that point. But as it relates to investment management, in my prepared remarks, I did

Jay Hennick: that we will have two or three quarters of headwinds from cost to unify the segment. So that will be a modest impact on the margin. And let me add something to that, Steve. You know, we are a public company. We have, over the years, brought together some pretty exceptional investment management platforms. And now we're taking steps to bring some of them together to really create a powerhouse under the Harrison Street brand. That takes costs, that takes time, that takes effort, and it will definitely translate into shareholder value over time. And, you know, other people just leave things alone. You've seen us do this before.

And so we're doing some pretty interesting things to really solidify that business for the long term. And you'll see fundraising growth, which is wonderful, but that comes on new programs, new strategies, and a lot of that has to do with unifying the teams and sharing the best of the best across the board. So you know, if we were a private company, you would never see this. But in a public company situation, which we've done before, there's some modest impact on margin here or there. As we invest in our business. And we're going to continue to do that because for Colliers, it's about creating long-term value for shareholders.

Stephen MacLeod: Okay. That's great. Incremental color, Jay. Thank you. I'll turn it back to the line.

Operator: Our next question is from Tony Paolone from JPMorgan. Your line is open.

Tony Paolone: Yes. Thank you. Just on engineering, can you talk about what you think organic growth has looked like? It's so hard to see just given all the acquisitions and such in there. And along the same lines, like when you do underwrite, on these acquisitions, how do you think about what you expect from, say, the producers that you're bringing on in terms of growth and the top line there?

Jay Hennick: Tony, year-to-date organic growth in engineering is around 8%. And I think for the year, we guided to sort of mid-high single-digit areas. So we're fully on track with our organic growth ambitions for the year, and we expect that to continue. We play in rapidly growing markets, infrastructure-oriented markets, transportation, energy, communications, public sector, investments that are being made by governments, frankly, around the world. So when we look for acquisitions, we look for businesses that are playing in these sectors. And, where there are long-term tailwinds for growth in this highly fragmented industry. So that's the way we think about it.

Tony Paolone: Okay. And then just to follow-up on that as it relates to the investment pipeline, can you talk about just how that looks size is of the deals like any larger type of transactions? And is it still skewed toward engineering? Or are there other areas that you're seeing activity in?

Jay Hennick: Well, so far this year, we've made acquisitions in each one of our segments. But engineering, by far, has been in terms of number of transactions, not necessarily size, but in terms of number of transactions. And Christian made a point. This is a massive industry that's highly fragmented, multiple areas of specialty. In even our most mature businesses, we have white space. We might have white space in one part of the country and strong expertise in that same area in a different part of the country, all of those create opportunity acquisition.

So for a company like Colliers that has been in the internal growth and acquisition or consolidation business for thirty years successfully, this is exactly what we look for in terms of a segment that we can grow. And so our philosophy is, as you've seen and others have seen over the past five years, has been to enter a market in a dominant way as one of the top players. And then to fill out and strengthen that platform as we've done in Canada, as we've done in The US, and as we've done continuing to do in Australia. So there's a whole big world out there in the engineering space.

That creates just staggering amounts of opportunity in that area. And, you know, I'm hopeful over the next few years that we can double this business again in terms of both revenue and profitability. And our unique way of with our partnership philosophy and decentralized operations which we apply across the board and have forever, is really a difference maker for the targets. So we're excited about this space. And, we think it'll provide us with a huge growth opportunity in the years to come.

Tony Paolone: Okay. Thank you.

Operator: Our next question is from Himanshu Gupta from Scotiabank. Your line is open.

Himanshu Gupta: Thank you and good morning. So just on fundraising,

Christian Mayer: mean, you have done almost $4.4 billion this year. What is the mix of that? Like, ended versus close-ended? And is that also impacting the margins apart from the integration cost?

Jay Hennick: Hey, Manju. That's a good question. And you're talking about fundraising in the mix of open-ended funds versus closed-end funds. And then we also have now credit which is a much bigger part of our business. And when you raise closed-end capital, the fees turn on immediately. And typically at a higher fee rate than an open-ended fund or a credit vehicle would. So that type of fundraising has more immediate impact on our revenues, and we are seeing that a little bit in 2025 as we have been very successful raising open fund capital. This year. We've also raised some pretty significant credit capital.

And that open-ended in credit capital does not start generating fees until such time as we deploy that capital, which can take three to six months. Dave referenced we have $9 billion of dry powder and that is capital that's ready and waiting to be deployed. So our teams are focused on that. And once that capital is deployed, it will start to earn fees.

Himanshu Gupta: Got it. Thank you, Krishna. And the next question is, you know, you're working on the integration of I'm under this Harrison Street platform. Have you received any initial client feedback so far? I mean, as you integrate Rockford and versus the Harrison Street. I know it's early days, but still only if any client feedback on this process.

Jay Hennick: Yeah. The client feedback has been terrific. In fact, that's been a major part of the efforts in bringing these operations together. You know, what it really means is we can now use our debt capacity in areas that we have expertise in, in seniors and students and so on. So there's a lot of opportunity to do more with the same investments. So client feedback has been great. Also, what the clients like is a more streamlined fundraising capability. They want to understand what are the investment opportunities for them. They'll choose which ones they have interest in, and then we can bring in the expertise to help satisfy their investment desires.

So feedback has been very good to date. And our investors are responding by increasing the amount of capital they're allocating to us. It's never enough as always. But it's a lot better than it has been in past years.

Himanshu Gupta: Thanks, Jay. Very helpful, and clearly, it's in the right direction. And then just switching gears on the leasing side, mean, it looks like industrial leasing was strong. Any particular geography which is impacting that? And how much is tariff for discussion now compared to the first half of the year?

Jay Hennick: Well, Himanshu, leasing was led by The US in the third quarter. Industrial and office

Christian Mayer: particularly strong. And if you recall, in the first half of the year, leasing was challenged. We had some tariff and trade impacts in the second quarter, which caused clients to pause, particularly on the industrial

Jay Hennick: side of things. So we're feeling good about our leasing trajectory. And we expect leasing to be up nicely year over year as we finish the year in Q4 here.

Himanshu Gupta: Got it. Thank you, guys. And I'll turn it back.

Operator: Thank you. Our next question is from Julien Blouin from Goldman Sachs. Your line is open.

Julien Blouin: Thank you for taking my question. Just wanted to go back to investment management. I mean,

Jay Hennick: touched on all the work you're doing to integrate the back office and the market-facing brands. Within investment management. I guess beyond the 23% to 50% margin that we've talked about in the past. And will you wait until you get to those margin levels before considering any of the strategic options you've talked about in the past, for realizing the value of that segment?

Jay Hennick: Well, you know, for to be honest, for us, what's more important is growing out this platform and making it as strong as possible. So we over the next couple of quarters, we sort of have a clear view of where our margin may go to. But we're gonna continue to invest in our platform to make it as strong as possible. We are open we continue to be open for acquisition opportunities in this segment. There's tons of white space and there's tons of opportunity right now, as you probably know, with lots of lots of players in this particular segment. Talking to each other about potential hookups in one form or another.

So we're active all over the place. And we'll have to see how the next few quarters roll out. But from my perspective, we're building this business for the long term. And if we have to give up a few points of margin, to continue to build our business and, you know, and 20% plus growth internally, we're gonna do it. It's just that simple. So I don't know if that answers your question, but that's sort of the way in which we would be looking at that business going forward.

Julien Blouin: Okay. Thank you, Jay. That's helpful. And then maybe digging into capital markets, can you give us a sense of how October and the fourth quarter is shaping up and maybe where pipelines of activity stand versus this time last year?

Jay Hennick: Yeah. Good question, Julian. We had, last year, a very strong quarter. In capital markets. And this year, pipelines are looking solid. And we feel, you know, confident at this point. In our prospects for the fourth quarter. We should be able to exceed our performance of last which as I said will be a relatively tough comp to the comps we've seen so far year to date.

Julien Blouin: Okay. Great. And when you say exceed your performance from last year, you mean just, it should grow year over year?

Christian Mayer: Absolutely.

Julien Blouin: Okay, great. Thank you.

Operator: Our next question is from Erin Kyle from CIBC. Your line is open.

Erin Kyle: Hi, good morning and thanks for taking my questions. I just wanted to tag on to that last question there and see if you can maybe elaborate a bit more on the pace and breadth of the capital markets recovery? And if there's any particular regions, I know you called out The U.S. Or asset classes that are leading the improvement.

Christian Mayer: Yeah. I think the capital markets recovery is broad-based. And we highlighted a few asset classes where sales brokerage has been strong or sorry, a few geographic markets where capital markets growth has been strong. But Aaron, I really would make the comment that this is a multiyear recovery. It is really a global recovery. If you recall, 2023 was a very challenging year in Europe in particular. Our European business is really well-positioned to capture the rebound in activity, and that's been evident in the numbers year to date, and that's going to continue as we look ahead to Q4 and into 2026. So I think it's really as I said broad-based across all geographies.

Jay Hennick: But I would also say, Christian, if I could add something there, capital markets isn't back yet anywhere. There's strength, as Christian said, in The US. But I would say in Europe and Asia, even to some degree in Canada, there's more transactions happening. But it's taking time. I don't think there's the stability yet around interest rates, debt costs, etcetera. And investor confidence is not where it needs to be. All of that is, to my way of thinking, tailwinds because even in our own fund business, Christian made a point of saying that we've sold a whole bunch of assets which is a normal it's normal course in the fund business.

You redeploy assets and to investors on an ongoing basis when it's opportune to do it. So there's a lot of pent-up demand around capital markets. But we haven't seen it yet. We've seen some of it. It has not come back to where it used to be, and that to us is just upside for the future.

Erin Kyle: Okay. Thank you. That's very helpful. And then you started answering my second question there, but I just in investment management, could you remind us how many funds are going through the disposition phase and then what percentage of those funds are typically recycled?

Jay Hennick: Well, most funds are always looking at disposing of assets at opportune times. Usually, you'll see the older funds, the older closed-end vehicles selling out their assets faster, but it's a function of what they generate in terms of returns. If a particular asset is not yet fully developed, not yet fully leased, upside still to be gained. You won't see our asset managers wanting to sell those assets. Because they know there's inherent value in them.

So it's really part of the art of managing and delivering top-tier returns to investors, when is the opportune time to sell, which assets within the portfolio do you want to sell, you want to put together two or three assets so that you're actually selling a portfolio so that a larger player can buy it. And get a and hopefully pay a higher price, of course, netting our funds and investors more in returns. So it's really the art of the asset managers, and we have one of the unique advantages we have, and it really applies across our business, is that our key players own an equity stake in the business.

So not only are they incentivized to deliver great returns for their investors, they also were incentivized to deliver great returns for shareholders. So that's how I would answer your question.

Erin Kyle: Okay. Thank you. That's helpful color. I will pass the line.

Operator: Our next question is from Mitchell Bradley Germain from Citizens Bank. Your line is open.

Mitchell Bradley Germain: Thank you very much, guys. Jay, I'm curious, you've done some M&A across the services platform, I think, Greystone, Trivest or a couple of deals that you've announced the last couple of months. How do you kind of how does that fit in the puzzle when you consider hiring as well? I'm curious about the pace of hiring that you're doing. Or is it really just more on the M&A side that you're investing there?

Jay Hennick: Well, each of our businesses are active recruiters of top talent. And, you know, I know on these calls, we talk about M&A. But in our numbers, and you probably know this, and I'm sure you've discussed it with Christian over the years. We have significant expenditures around recruiting top talent to fill white space in different geographic regions, which has an impact a negative impact on our margins. And so I would say and we have specific goals. We have a large group of or large department within each of our regions that are we think very good at what they do.

And so recruiting and retention especially in areas of white space, is a key part of what we do. It gets lost somewhat in the discussion around, you know, internal growth. So internal growth, for example, in residential business this quarter was 8%, I think. 13%. How much? 13%. 13%. So it was actually much higher than that, but you know, we would've borne some of the costs of recruiting. In that 13%.

Mitchell Bradley Germain: Appreciate that. J. Doug, that's the right

Christian Mayer: yeah.

Jay Hennick: Sorry. That was the revenue number.

Mitchell Bradley Germain: But so but I would add that in terms of our margin,

Christian Mayer: it does impact our margin. Mitch, on an ongoing basis.

Jay Hennick: And we've seen that year to date in the third quarter, we had tremendous operating leverage from higher revenues.

Mitchell Bradley Germain: But notwithstanding that, we still have a margin pressure from recruiting, and that's a cost we're prepared to bear because we're recruiting top professionals and adding new capabilities in asset classes and in geographies. And that's something we're going to continue to do.

Jay Hennick: Yeah. I was thinking margin. I'm sorry, Mitch. I was thinking about margin. And the impact on the margin. So thanks, Christian, for clarifying that.

Mitchell Bradley Germain: Yeah. I and Jay, I understood where you were headed there. A lot of your peers, Jay, talking about you know, capturing this enormous data center opportunity. You cited it in your earnings release. I'm curious if say it differently. I'm curious how you're positioning Colliers to potentially benefit you know, down the road from this growing sector?

Jay Hennick: Well, that's a great question, and I'm glad you asked it because I've been listening to some of the other players in the real estate services space who've been very vocal about data centers, portraying them as some sort of new major growth engine. And for most of these players, data centers is just another asset class. They help clients buy, sell, lease, finance, data centers, when they're able to do that. At Colliers, we do much more than that. In addition to those services, which are significant for us, call what Colliers also designs we entitle land for development.

We do project management and program management on both construction and maintenance through our engineering group and through our investment management segment, we also invest in data centers creating really a full cycle capability. And so while data centers getting a lot of attention these days, and they're strategically important to us at Colliers because for us, it's not just the real estate services piece of it. It includes so much more. And you know, as I listen to some of our other peers, I smile because they're really just providing traditional real estate services around another asset class that happens to be hot right now.

There are only a few Colliers included, that are actively involved in the entire life cycle of data centers and so much more than just data centers. So a big part of our business, it's strategically important. It will continue to grow. It's probably our rapidly growing our fastest growing segment across the board although still not material to us you know, from a percentage of revenue point of view. I hope that sort of puts it into perspective for you, but that's how we see it.

Mitchell Bradley Germain: Perfect. Thank you. Best of luck on the rest of the year.

Operator: Our next question is from Daryl Young from Stifel. Your line is open.

Daryl Young: Hey, good morning everyone. Just one question for me. Related to commercial real estate services. Wanted to get a sense of whether you're seeing any green shoots on construction activity or if we're still early in the cycle? I guess just the magnitude of what you would see as upside from that over the next couple of years?

Jay Hennick: Well, it depends on what construction activity you're talking about and in what markets. So I would say that the construction of condominiums in Canada and US is soft. You're seeing some construction in multifamily or build to rent. There's obviously lots of activity around data centers and related infrastructure assets. And it's a little bit the same in Europe, although it's smaller numbers. So new construction is really at a pause from our perspective. Right now, which is creating a lot of pressure for companies that were traditionally focused on this type of construction. From the ground up.

Daryl Young: Got it. Okay. Thanks very much.

Operator: Your next question is from Jimmy Shan from RBC Capital Markets. Your line is open.

Jimmy Shan: Thank you. A couple of questions on the operating leverage within real estate services. So this quarter, we did see roughly $100 million year over year revenue growth, and then we saw EBITDA grow by $23 million. So I think that's the leverage math that you've spoken about before. Is that how we should be thinking about the leverage as we look out to '26 I guess, number one. And then secondly, maybe if you could speak generally about sort of the excess capacity that you see within the organization. Like, if volume continues to come back the way it has been, how well staffed are you today?

Christian Mayer: Well, Jimmy, the operating leverage math that you quoted there, is absolutely correct. So we had about 22% operating leverage on an incremental revenue dollar. In Q3, and that's in line with what we've telegraphed over the last several quarters in terms of what were our expectations. Are. And as revenues continue to grind higher here and this is a gradual recovery in capital markets and leasing is also on a growth trajectory. As those revenues increase, we should hopefully continue to see that 20 plus percent operating leverage through 2026.

Jimmy Shan: Okay. So in general, you say there's a lot of excess capacity still?

Christian Mayer: Yes. I mean, we have a tremendous amount of productive workforce on the ground. 4,500. Productive brokers around the world. And we continue to invest and add new brokers and new geographies and new asset classes. So these folks are primed and ready and highly, highly motivated. To generate additional commissions for themselves and for the firm. So we expect that these folks will contribute more and become more productive as the market improves. And as I said earlier, I mean, the market hasn't even returned to where it used to be. And the number of brokers that we have in the organization is up probably 15% from our high capital markets production number. Globally, I'm talking about.

So I think as capital markets continues to gain strength, we'll be able to do substantially more revenue at high margins with a workforce that's larger today than it was at the high.

Jimmy Shan: Right. And then just on that topic in terms of kind of future tailwind, with respect to office leasing, and capital markets, the recovery so far, it seems to have been a little bit more weighted towards the major markets in The U.S. And I could be wrong here, but I think your footprint in The US tends to be a little bit more secondary markets. So is it fair to assume that to the extent we see the same sort of recovery in those noncoastal, nonmajor markets, we should expect a little bit better upside in the future.

Jay Hennick: So first of all, let me put, our business in The US into perspective. We are one, two, or three in virtually every market large, small, with one or two exceptions in the in The US. So we're one of the top players everywhere. And so, you know, from the standpoint of where the revenue will come from and where we can translate it, yes, major markets generally generate higher revenues in part because the lease rates within those markets are significantly higher than they might be in a secondary market. So it's really all over the map for those.

If for those of our competitors that might have a much bigger business in, say, New York City than we do in terms of number of brokers, they would obviously generate more revenue on leasing. In New York you know, when the leasing revenues are up versus you know, versus us relative to size. But I think we're Colliers is one I would say one of two well-balanced globally real estate services firms with strong market positions everywhere. We would like to be bigger in certain markets. Of course. But we're a well-balanced business.

And as if you look back over the past couple of years at a time when real estate services has gone through some very soft times, Colliers continued to perform quarter after quarter after quarter. Which has just shown the resilience of our business. And we're waiting for and we're continuing to strengthen making our business better. And as markets continue to get stronger, we expect our results to follow.

Jimmy Shan: Okay. Helpful. Thank you.

Operator: Our next question is from Stephen Sheldon from William Blair. Your line is open.

Stephen Sheldon: Hi, Jay and Christian. You've got Pat on first. Steven today. Thank you for taking my questions. My first one, with the relative strength you're seeing in leasing and capital markets, can you just touch on the puts and takes in terms of maintaining your real estate services revenue guide for the year? You know, were there any overly significant deals that came through this quarter or any dynamics we should be thinking about across those three services sub-segments heading into the fourth quarter?

Christian Mayer: No. There's nothing, you know, no lumpy transactions, in the third quarter. Of note. And to achieve our full-year guidance we do want to see an increase in capital markets activity year over year. And as I mentioned, capital markets had a very strong fourth quarter in 2024, so it was a tougher compare. But we do see the pipeline there for continued growth. Leasing should trend positively for the fourth quarter as well. That's really a global thing across all of our services. And in our outsourcing business, that's the recurring part of our real estate services business.

We've got very strong trajectory in our valuation and advisory business, and we expect that to continue as well as increasing property management and loan servicing revenues. So I know we feel pretty good about all of these services, there's nothing lumpy or unusual to note.

Stephen Sheldon: Okay. Thanks, Christian. And Jay, just to piggyback off of a prior question and your prior commentary on data centers, understand you all have including in the investment management business. But wanted to ask is you expand your platform through continued M&A. Is it of interest to build out more technical capabilities on the services side? And as you think about that, what are you seeing in terms of the valuations for that type of asset?

Jay Hennick: Well, first of all, across the engineering segment, which is, you know, as I mentioned, it's about $1 billion now on a global basis. We do a lot of technical services today as do most engineering firms. So you know, I don't know how many data centers we're doing globally now in some form or another, but it's a substantial number. Having said that, the acquisition costs of any firm that is around data centers right now whether they're constructing them, whether they're project managing them, etcetera, servicing them or managing after the fact. Are very high. And from our perspective, we are you know, we can't see a return in investing at those kinds of valuations.

We're very happy continuing to build out our engineering segment that serves it. And continuing to look for more opportunities to finance and own data centers because that creates opportunities for us to potentially do more. In the future. But valuations are high in that space as you would expect.

Stephen Sheldon: Mhmm. Okay. That's helpful context. Thank you. And if I could just ask one more quick clarification, Christian. Unless I'm looking at this incorrectly, I think the guidance for engineering implies that the 4Q growth takes a step down organically unless there's some sort of volatility in the pass-through costs there. Am I looking at that correctly? Or is there anything we should be thinking about there?

Christian Mayer: Yeah. You're looking at that, correctly. There could be a small step down in organic growth in the fourth quarter. I'll remind you that we did indicate on a full-year basis that organic growth would be in the mid to high single-digit range and it will be firmly in that range for the full year. And we've been outperforming to that for the first three quarters.

Stephen Sheldon: Okay. That's helpful. Thank you both.

Operator: Our next question is from Maxim Sytchev from National Bank Capital Markets. Your line is open.

Maxim Sytchev: Hi, good morning, gentlemen. Hey, guys. Jay, I wanted to go back to your prepared remarks, and I think you made a comment, and unless I misunderstood, but the $9 billion of dry powder across the organization, do you mind maybe a little bit on that figure unless I again misinterpreted it? Thanks.

Jay Hennick: Really hear that. I didn't hear it. He's asking about the $9 billion of dry powder we have the organization and if we have any more details on what that is. We do. All the details. But you know, I think it's an aggregate number that you know, we feel comfortable giving you. It's made up of all of the available capital across the funds, including alternatives, debt, etcetera, etcetera. So it's an amalgam of all the capital available. And even if I gave you the breakdown, it wouldn't add much value because it's when you deploy that capital that it translates into returns.

So as Christian said, in the debt space, our fee structure is lower than it is in our open-ended and closed-ended funds. So it really depends upon putting that money to work and in what area and what kind of revenue we'll generate once that money is put to work. So I think $9 billion is a good number way back way more than it was last year. And we're just looking for the right opportunities to deploy that capital virtually across the board.

Maxim Sytchev: Okay. No, thank you for clarifying. And I apologize for my connection. And another question I had in relation to the Australian foray on the engineering side. Do you mind maybe talking a little bit about the reason why you went into that geography? I mean, it has been a bit sluggish. So is it some process that right now you're kind of picking it up in a trough? Maybe any call would be very helpful there. Thank you.

Christian Mayer: Max, yeah, the acquisition we announced last night, you know, is a well-established urban development consultancy and engineering firm operating in Adelaide. It's a market that is of significant size in the Australian sort of geography and a place we want to expand to. It's a relatively small firm with 65 staff. We were able to do this transaction add these folks to our established platform, which I think I believe we've got well north of 500 people now. Our Australian engineering business and these folks will tuck into that business. They will be nicely accretive for us. Able to do these tuck-in acquisitions, as you know, very attractive valuations. That makes this all the more compelling for us.

Maxim Sytchev: Okay. That's great. Thank you so much.

Operator: Question is from Frederic Bastien from Raymond James. Your line is open.

Frederic Bastien: On Max's question on engineering, really excited to see this segment perform strongly, and you continue to partner with industry leaders, both you saw that in Canada and Australia, but it really feels like it's the real deal here. And it feels like you're only scratching the surface. You've got good scale right now in Canada with ENGLO, but can you comment on the potential for additional growth in U.S? Australia and Europe? Europe seems like there's massive opportunity there that you're still waiting to tap.

Jay Hennick: You've sort of summed it up beautifully. The US, we'd like to be we'd like to be growing fast. We're growing nicely there, but we'd like to be growing faster. So that's a big opportunity for us. Canada, we're doing phenomenally well there, and we're excited about that. Australia is doing nicely. As you can see, a lot of these smaller deals. There's not a lot of big players in Australia. So we're putting together our platform one step at a time. Europe is a big opportunity. We're spending a lot of time there. And there's some very interesting platforms that we've been considering.

And again, our partnership philosophy and our operation is attractive to large partnerships that don't really want to be acquired 100% by somebody else. They want to continue to own an equity stake in the business. And be participate in the future growth in this segment. And take advantage of relationships that we might have across the platform, whether it's in real estate or it's in investment management. So you know, as you've seen so many times, Fred, over the years as you've followed other engineering firms, the segment is so massive. It's bigger than I even thought initially. And the white space keeps expanding. So we think that this is a great growth engine for us for many years.

To come, and we're just gonna continue to build. We don't have to be the biggest. We just have to be one of the best. And we have to have a unique differentiated strategy and we believe we have that. So, you know, one step at a time, got us to $1.7 billion in five years. Hopefully, we can follow the same format and double the size of it over the next couple, three years.

Frederic Bastien: Great. That's exciting. Thanks. Last question for me. Regarding the Asterisk and Triovest deals that you completed on the RES side, they've only been contributing for a few months, but I was wondering if you could provide an update on how these businesses are performing under your the cup? Colliers umbrella.

Jay Hennick: You know, still early still too early to say. TrioVest is has been an asset that we've sought after for a lot of years. It's highly it's almost entirely recurring revenue. And we're in the process of integrating that into our Canadian property management operations. Interestingly, there's some clients Canadian clients that have assets in The U.S. that have asked us to take over some of those assets. So that's in process. So we're quite excited about TrioVest, and we're also in the process of rebranding it. And just to make the point one more time, whenever you do these things, it takes cost, it takes time, it takes effort. When you make acquisitions, you have to integrate those acquisitions.

And somebody commented on our engineering margin down 20 basis points in the quarter. Like it's 20 basis points. Give me a break. You know? So TrioVest as I said, is going well, and we're excited about what that can do for us. And there was another acquisition in real estate, a company called Asterisk, which is so far been overperforming. We had a bit of an advantage with that acquisition because they had already had relationships with our investment management platforms in a couple of different areas. So we had a good sense for the quality of the professionals. And we're seeing increased potential opportunity around financing infrastructure, mid-market infrastructure businesses through the Asterisk Professional.

So we're cautiously optimistic that, that will be another successful business and service offering that we can build over the next few years.

Frederic Bastien: Thanks. That's great. I'll pass it back.

Operator: There are no further questions at this time. I would now like to turn the conference back to Mr. Hennick. Please continue.

Jay Hennick: Well, thank you, operator, for passing it back, and thank you to everyone for participating. And we look forward to speaking again in fourth quarter results in February. So thank you. Have a great day.

Operator: Ladies and gentlemen, this concludes the conference call. Thank you for your participation and have a nice day.