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Introduction & Market Context
Walker & Dunlop (NYSE:WD) presented its third-quarter 2025 earnings results on November 6, showcasing robust financial performance across key metrics despite a significant stock decline on the same day. The company's shares fell 8.74% to $73.00 from the previous close of $79.98, even as the presentation highlighted substantial growth in transaction volumes and revenues.
The commercial real estate finance company reported a 16% year-over-year increase in total revenues to $337.7 million, surpassing analyst expectations of $327.25 million. This performance comes amid a shifting market landscape characterized by accelerating GSE loan maturities and changing loan term preferences.
Quarterly Performance Highlights
Walker & Dunlop's Q3 2025 results demonstrated solid growth across key financial metrics. Total revenues increased by 16% year-over-year, while diluted earnings per share rose 15% to $0.98 from $0.85 in Q3 2024. The company's adjusted EBITDA grew 4% to $82.1 million, and adjusted core EPS increased 3% to $1.22, exceeding analyst expectations of $1.15.
As shown in the following chart of consolidated key financial metrics:
The company's transaction volumes showed impressive growth across all categories. Total transaction volume surged 34% year-over-year to $15.5 billion, with particularly strong performance in Freddie Mac transactions, which increased by 137% to $3.66 billion. Fannie Mae transactions grew by 7% to $2.14 billion, while property sales increased by 30% to $4.67 billion.
The following chart illustrates the transaction volume growth across different execution types:
Segment Performance
Walker & Dunlop's Capital Markets segment demonstrated exceptional performance in Q3 2025. The segment's total transaction volume increased by 34% year-over-year to $15.5 billion, driving a 26% increase in total revenues to $180.8 million. Net income for the segment grew by 28% to $27.9 million, reflecting the strong transaction environment.
The Capital Markets segment's performance is detailed in the following financial metrics comparison:
Meanwhile, the Servicing & Asset Management segment showed more modest growth, with total revenues increasing by 4% to $150.6 million. Net income for this segment decreased slightly by 1% to $37.0 million, while adjusted EBITDA increased by 2% to $119.4 million. The company's total managed portfolio stood at $157.8 billion at the end of Q3 2025.
The Servicing & Asset Management segment's performance is illustrated in the following chart:
Strategic Initiatives
Walker & Dunlop continues to invest in technology-enabled services, which are showing strong growth. Apprise, the company's appraisal business, saw revenues increase by 21% to $4.0 million, while Small Balance Lending revenues surged by 69% to $8.9 million.
The growth in these technology-enabled services is demonstrated in the following chart:
The company is also positioning itself to capitalize on the changing market dynamics, particularly the shift toward shorter-term loans. There has been a dramatic change in GSE loan term preferences, with 5-year loans now accounting for 60% of the company's loan portfolio in YTD 2025, compared to just 1% in 2020. Conversely, loans with terms of 10+ years have decreased from 82% in 2020 to 23% in YTD 2025.
This significant market shift is illustrated in the following chart:
Forward-Looking Statements
Walker & Dunlop's presentation highlighted significant future opportunities in the form of accelerating GSE loan maturities. According to data from the Mortgage Banker's Association, GSE loan maturities are projected to increase from $31 billion in 2025 to $144 billion by 2029, representing a substantial pipeline of refinancing opportunities.
The accelerating GSE maturities are shown in the following chart:
Additionally, the company noted substantial capital deployment pressures in the market, with $646 billion in unrealized value exceeding 5 years hold and $402 billion in dry powder nearing the end of investment periods. This suggests significant transaction activity potential in the coming years as these funds seek deployment or exit opportunities.
The company is well-positioned to capitalize on these market dynamics, with its bankers and brokers already exceeding productivity targets. The current transaction volume per banker/broker stands at $220 million on an annualized basis for YTD 2025, surpassing the 2025 goal of $200 million.
Despite the strong quarterly performance and positive outlook, investors responded negatively on the day of the presentation, with the stock declining 8.74%. This disconnect between operational performance and stock price movement suggests investors may be focusing on broader market concerns or specific aspects of the company's guidance not highlighted in the presentation materials.
As Walker & Dunlop navigates the evolving commercial real estate landscape, its strong transaction growth and strategic positioning for future opportunities provide a solid foundation for continued performance, even as the market digests the latest results.
Full presentation:
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