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Colliers International Group (NASDAQ:CIGI) reported mixed first-quarter 2025 results on May 6, showing strong overall revenue growth driven primarily by its Engineering segment, while facing pressure on GAAP operating margins. The company’s assets under management (AUM) exceeded $100 billion for the first time in its history, marking a significant milestone.
Quarterly Performance Highlights
Colliers reported Q1 2025 revenue of $1,141.2 million, up 14% from $1,002.0 million in the same period last year (16% growth in local currency). Adjusted EBITDA increased 7% to $116.0 million, while adjusted EPS rose 13% to $0.87. However, GAAP operating earnings declined 27% to $31.6 million, with GAAP operating margin falling to 2.8% from 4.3% a year earlier.
"Strong growth led by Engineering segment" was highlighted in the company’s presentation, with the full-year outlook remaining unchanged despite the mixed quarterly performance.
As shown in the following chart of quarterly financial highlights:
The company’s business mix continues to shift toward more recurring revenue streams, which now represent 63% of total revenue and 72% of adjusted EBITDA on a trailing twelve-month basis. This strategic shift aims to provide more stable and predictable financial performance.
Detailed Financial Analysis
Colliers’ Engineering segment was the standout performer, with revenue surging 59% (61% in local currency) to $377.9 million. The segment’s adjusted EBITDA grew even faster, up 84% to $24.0 million, with net margin improving to 6.4% from 5.5% in Q1 2024.
The consolidated revenue breakdown by segment illustrates the growing importance of Engineering to Colliers’ overall business:
Real Estate Services, still the largest segment by revenue, experienced a slight decline of 1% in USD terms to $637.0 million, though it showed 1% growth in local currency. More concerning was the 12% drop in adjusted EBITDA to $39.1 million, with margin compression to 6.1% from 6.9% a year earlier.
The Investment Management segment delivered modest growth, with revenue up 3% to $126.2 million and adjusted EBITDA increasing 4% to $55.1 million. Net margin improved slightly to 43.7% from 43.1%. The company noted that AUM exceeded $100 billion for the first time, representing a significant milestone for this growing business line.
Strategic Initiatives
Colliers highlighted robust acquisition activity in the quarter, including Ethos (NSE:ETHO) Urban (completed in March 2025) and Terra Consulting (May 2025). The company also expects to close the Triovest acquisition in Q2, further expanding its capabilities and geographic reach.
The company’s capital allocation strategy shows increasing debt levels, with total debt rising to $1,666.8 million as of March 31, 2025, compared to $1,508.5 million at the end of 2024 and $1,350.4 million a year earlier. Net debt to pro forma adjusted EBITDA stands at 2.2x, indicating the company maintains financial flexibility for further acquisitions despite the increased leverage.
The following chart details Colliers’ capitalization and capital allocation:
Forward-Looking Statements
Colliers maintained its full-year 2025 outlook across all segments. For Real Estate Services, the company expects mid-single-digit revenue growth with a modest increase in adjusted EBITDA margin. The Engineering segment is projected to deliver approximately 30% revenue growth including completed acquisitions, with an increase in EBITDA margin.
The Investment Management segment is forecast to achieve mid-single-digit revenue growth given the launch of a new fundraising cycle, with potential for acceleration later in the year. However, the company expects flat to modest decreases in adjusted EBITDA margin due to continued investments in fundraising, new products, and operational integration.
On a consolidated basis, Colliers projects high single-digit to low-teens percentage revenue growth, low-teens adjusted EBITDA growth, and low-teens adjusted EPS growth for the full year 2025.
Market Context
In premarket trading on May 6, Colliers shares were down 2.41% to $119.20, suggesting investors may be concerned about the declining GAAP operating margins despite the strong revenue growth. The stock had closed at $122.14 on May 5, near the middle of its 52-week range of $100.86 to $156.96.
The Q1 results follow a strong performance in Q3 2023, when the company reported an 11% increase in revenues to $1.2 billion and a 6% rise in adjusted EBITDA to $155 million. At that time, the company was seeing improving capital markets activity and anticipated a strong fundraising environment for 2025, expectations that appear to be materializing with the AUM milestone achieved in Q1.
The company’s financial reconciliations provide further insight into the gap between GAAP and adjusted metrics, highlighting acquisition-related items, restructuring costs, and amortization of intangible assets as key factors:
Overall, Colliers’ Q1 2025 results demonstrate the company’s continued transformation toward a more diversified business model with greater emphasis on Engineering and Investment Management to complement its traditional Real Estate Services. While the declining GAAP margins warrant attention, the strong growth in adjusted metrics and maintenance of full-year guidance suggest management remains confident in the company’s strategic direction.
Full presentation:
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