Earnings

JLL's Third-Quarter Cash Flow Slipped While Adjusted EBITDA Jumped 33%, And Another $500 Million Buyback Is Coming

Operating cash flow fell to $609.7 million from $617.1 million as profit surged, and the company plans a new $500 million accelerated repurchase.

Jones Lang LaSalle, the commercial real estate services and investment management firm, posted third-quarter operating cash flow of $609.7 million, down from $617.1 million a year earlier, even as Adjusted EBITDA jumped 33% to $460.2 million. The company also said Wednesday it intends to execute a new $500 million accelerated share repurchase imminently.

Profit up, cash flow flat

Free cash flow for the quarter was $556.0 million against $567.6 million a year earlier. Net income attributable to common shareholders rose to $319.8 million from $222.8 million, and diluted earnings per share reached $6.85 from $4.61. Revenue climbed 12% to $7.3 billion.

Over the first nine months, operating cash flow improved to $342.8 million from $182.3 million. The 10-Q attributes the gain to higher earnings, partly offset by higher trade receivables that tracked revenue growth and the timing of reimbursables. The reimbursable receivables-and-payables line drew $293.9 million, against $128.2 million a year earlier.

The profit came mainly from Leasing Advisory, whose revenue rose 27%, and Capital Markets Services, up 21% in local currency. Investment sales grew 33%. Investment Management revenue fell 9%, on lower incentive and transaction fees.

Buybacks outrun cash generation

Financing activities used $179.3 million in the first nine months, against $72.8 million provided a year earlier. Share buybacks, which exceeded last year's by over $400 million, were the main driver, while higher net borrowings cushioned the effect.

Repurchases totaled $551.7 million for the nine months. Shares outstanding fell to 45,678,955 from 46,945,754 at year-end. The new accelerated repurchase would bring full-year buybacks to over $1 billion, the company said, and $2,450.0 million of authorization remained at September 30.

JLL, which earns fees from leasing, property sales, facility management and the LaSalle investment arm, has leaned on buybacks all year, including a $200.0 million accelerated repurchase it began in March.

Debt down, but a 2027 maturity looms

Net debt fell to $858.7 million from $1,190.3 million at June 30. The filing also lists $198.6 million of euro senior notes due June 2027, now classified as current, and $113.5 million of commercial paper outstanding.

CEO Christian Ulbrich said the company is optimistic about a strong finish to 2026 and has raised its full-year Adjusted EPS target range. Commercial Observer reported that management said on the call that deal-making slowed slightly and could stay slower through the fourth quarter. JLL shares rose 11.4% to $334.13 in Wednesday trading, as of 2:03 p.m. ET.

The new $500 million repurchase should show up in fourth-quarter share counts, and the euro notes due June 2027 will need to be repaid or refinanced.