• Total Transaction Volume: $7 billion, up 10% from last year.
• Total Revenue Growth: 4% increase in Q1 2025.
• GAAP EPS: $0.08, down significantly due to increased personnel costs and loan loss reserves.
• Adjusted EBITDA: $65 million.
• Adjusted Core EPS: $0.85.
• Fannie Mae Originations: Up 67% from Q1 last year.
• Investment Sales Volume: Up 58% from a slow start last year.
• Debt Brokerage Volume: $2.6 billion, down from $3.3 billion in Q1 2024.
• Capital Markets Segment Revenue: Grew 25% to $103 million.
• Zelman Revenue Growth: 129% increase to $11 million.
• Capital Markets Segment Net Income: $2 million, a $9 million improvement from Q1 2024.
• Servicing and Asset Management Revenue: Declined 7% from Q1 2024.
• At-Risk Loan Portfolio: $64 billion, with 17 basis points in default.
• Quarterly Dividend: $0.67 per share.
• Appraisal Business Revenue Growth: 50% increase in Q1 over last year.
• Small Balance Lending Volume Growth: 28% increase in Q1 with 58% revenue growth.

• Warning! GuruFocus has detected 7 Warning Signs with WD.

Release Date: May 01, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Walker & Dunlop Inc (NYSE:WD) reported a 10% increase in total transaction volume to $7 billion, driving a 4% revenue growth in Q1 2025.
• The company saw a significant 67% increase in Fannie Mae originations, indicating strong performance in the multifamily sector.
• Investment sales volume increased by 58% from the previous year, showcasing the strength of the Walker & Dunlop Inc (NYSE:WD) brand.
• Walker & Dunlop Inc (NYSE:WD) expanded its strategic footprint by opening a new office in London and entering the hospitality investment sales space.
• The company successfully refinanced its corporate debt, reducing the weighted average cost of capital and adding over $50 million of liquidity to the balance sheet.

Negative Points

• GAAP EPS dropped significantly to $0.08 due to increased personnel costs and fees associated with debt offerings.
• Adjusted EBITDA declined to $65 million, and adjusted core earnings per share fell to $0.85.
• The debt brokerage team experienced a decline in Q1 volume to $2.6 billion from $3.3 billion in Q1 2024, primarily due to timing issues.
• Walker & Dunlop Inc (NYSE:WD) incurred $10 million in expenses related to refinancing, loan loss provisions, and personnel separations.
• The Servicing and Asset Management segment saw a 7% decline in total segment revenues due to lower investment management fees and placement fees.

Q & A Highlights

Q: In today's current market, could you provide further insight into what you're seeing from investors? Are they underwriting more conservative assumptions due to the macro-outlook? A: William Walker, CEO: We have not seen deal flow fall out due to market volatility, which is surprising given the massive gyrations in the 10-year treasury. Larger transactions are being questioned, but unless someone plans to wait 4 years, they might as well go into the market today. The 10-year treasury's movement is more determinative for volumes than tariffs.

Q: Do you expect Fannie Mae and Freddie Mac to hit their caps this year? A: Gregory Florkowski, CFO: We have not seen Fannie and Freddie competing in the market like they have been for the last 2 months in 3 years. Both are very engaged and working to win deals, which is a welcome sign.

Q: Regarding non-interest expenses, you mentioned severance. Did you exit any business lines? A: William Walker, CEO: We did not exit any business lines. The expenses were related to the write-off of signing bonuses and compensation to remove underperformers.

Q: Operating expenses have averaged 60% of total revenues in the last 2 years. Will this year be more expensive, and when might this ratio drop? A: William Walker, CEO: The 60% is directly related to volumes. We are focused on increasing average producer production to $200 million per producer in 2025, which should lower this ratio. The need for refinancing and capital deployment is driving volumes.

Q: What are the odds that Fannie Mae and Freddie Mac will hit their caps this year? A: Gregory Florkowski, CFO: While I won't give odds, both Fannie and Freddie are very engaged in the market, which is a positive sign for hitting their caps.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.