Real estate firm JLL (NYSE: JLL) missed Wall Street’s revenue expectations in Q2 CY2025, but sales rose 11% year on year to $6.25 billion. Its non-GAAP profit of $3.30 per share was 3% above analysts’ consensus estimates.

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StockStory’s Take

JLL’s second quarter results reflected ongoing momentum in its resilient business lines, even as revenue came in slightly below Wall Street expectations. Management attributed the quarter’s performance to continued strength in Workplace Management and Project Management, with CEO Christian Ulbrich highlighting that “the double-digit growth across our resilient businesses in the current market demonstrates the resilience and scalability of our platform.” Transactional businesses saw a moderate uptick, supported by robust debt advisory activity, though larger transactions in capital markets were delayed due to policy and macroeconomic uncertainty.

Looking ahead, JLL’s management is cautiously optimistic about the remainder of the year, driven by stable pipelines and a constructive market backdrop. Ulbrich pointed to signals of stability and growing tenant demand, while CFO Kelly Howe flagged that margin expansion may not be linear as the company balances investment and profitability. Management remains focused on organic growth in recurring revenue streams, ongoing investments in technology, and selective M&A, noting, “We are increasing our share buybacks for the third and fourth quarter,” but continue to prioritize platform investment over larger acquisitions.

Key Insights from Management’s Remarks

Management cited strong results in Workplace and Project Management as central to this quarter’s performance, while highlighting ongoing investments in technology and operational efficiency.

• Workplace Management momentum: Growth in Workplace Management was driven by client wins and high renewal rates, with management fees rising at a high single-digit pace. Ulbrich noted that revenue growth in this area is supported by strong demand for integrated real estate solutions and contract expansion.
• Project Management restructuring: The global unification of Project Management enabled broader geographic and sector coverage, resulting in broad-based contract wins, particularly in the U.S. and Asia Pacific. Management credited recent investments in talent and process improvements for accelerating growth and client satisfaction.
• Capital Markets mix shift: Capital Markets Services saw growth led by mid-sized transactions, especially in debt advisory and residential sectors. However, delays in larger deals due to geopolitical and fiscal policy uncertainty weighed on overall growth. CFO Kelly Howe cited a strong debt advisory pipeline, but noted that large investment sales were postponed.
• Leasing Advisory trends: Industrial leasing, particularly in the U.S., outperformed the broader market, while office leasing tracked market volume and benefited from demand in professional services and finance. Management observed that limited new office supply is pushing tenants to upgrade older buildings, supporting future Project Management activity.
• Operational discipline and technology investment: Margin improvement and earnings growth were attributed to disciplined cost management and continued investment in data, technology, and artificial intelligence. Management emphasized these investments are critical for driving efficiency and meeting client demand for end-to-end solutions.

Drivers of Future Performance

JLL’s outlook is shaped by stable pipelines, organic growth in recurring businesses, and ongoing investment in technology, though management highlights some near-term macroeconomic uncertainty.

• Organic growth focus: Management aims to drive high single-digit organic growth in Real Estate Management Services, particularly through Workplace and Project Management, supported by contract wins and stable renewal rates. Project Management growth may normalize from exceptional levels but is expected to remain healthy.
• Capital Markets and Leasing sensitivity: Future performance in Capital Markets depends on the return of large transactions, which management links to easing geopolitical and policy uncertainty. Leasing trends are likely to be impacted by limited new office supply, with tenants shifting demand to upgraded, existing properties.
• Margin trajectory and investment: Management expects margin expansion to be stronger in the second half, but not linear, as profitability is balanced against ongoing investment in technology and select infill acquisitions. They also flagged ongoing review of Property Management contracts, which could lead to elevated turnover in the near term.

Catalysts in Upcoming Quarters

Our team will be watching (1) the pace of contract wins and renewal rates in Workplace and Project Management, (2) the return of large transactions in Capital Markets as policy uncertainty potentially abates, and (3) the impact of ongoing investments in technology and operational efficiency on margins. Execution on selective M&A and property management contract transitions will also be key signposts for progress.

JLL currently trades at $275.79, up from $272.71 just before the earnings. In the wake of this quarter, is it a buy or sell? See for yourself in our full research report (it’s free).

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