What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-05-07 compared with 2024-11-06 · 147 added, 268 removed, 257 unchanged (62% of the section changed)

Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read in conjunction with the Consolidated Financial Statements, including the notes thereto, for the three and nine months ended September 30, 2024, and our audited Consolidated Financial Statements, including the notes thereto, for the fiscal year ended December 31, 2023, which are included in our 2023 Annual Report on Form 10-K, filed with the SEC and also available on our website ( www.jll.com ).

The following discussion and analysis should be read in conjunction with the Consolidated Financial Statements, including the notes thereto, for the three months ended March 31, 2025, and our audited Consolidated Financial Statements, including the notes thereto, for the fiscal year ended December 31, 2024, which are included in our 2024 Annual Report on Form 10-K, filed with the SEC and also available on our website ( www.jll.com ).

You should also refer to Item 7.

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Management's Discussion and Analysis of Financial Condition and Results of Operations of our Annual Report on Form 10-K for the year ended December 31, 2024.

There have been no material changes to these critical accounting policies and estimates during the nine months ended September 30, 2024.

There have been no material changes to these critical accounting policies and estimates during the three months ended March 31, 2025.

ITEMS AFFECTING COMPARABILITY

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Such revenues include investment sales and other capital markets activities, agency and tenant representation leasing transactions, incentive fees, and other services/offerings, increase the variability of the revenue we earn.

Specifically for LaSalle, the magnitude and timing of recognition of incentive fees are driven by one or a combination of the following:

Specifically for Investment Management, the magnitude and timing of recognition of incentive fees are driven by one or a combination of the following:

changes in valuations of the underlying investments, dispositions of managed assets and the contractual measurement periods with clients.

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Non-variable operating expenses, which we treat as expenses when incurred during the year, are relatively constant on a quarterly basis.

Other factors may affect seasonality.

For example, we experienced disruption to our historical seasonality trends due to rising interest rates and widespread economic uncertainty in 2022 and 2023.

A significant portion of our Compensation and benefits expense is from incentive compensation plans, which we generally accrue throughout the year based on progress toward annual performance targets.

This quarterly estimation can result in significant fluctuations in quarterly Compensation and benefits expense from period to period.

Consequently, the results for the periods ended September 30, 2024 and 2023 are not fully indicative of the results we expect to realize for the full fiscal year.

Consequently, the results for the periods ended March 31, 2025 and 2024 are not fully indicative of the results we expect to realize for the full fiscal year.

RESULTS OF OPERATIONS

• Assets under management data for LaSalle is reported on a one-quarter lag.

• Assets under management data for Investment Management is primarily reported on a one-quarter lag.

not meaningful, represented by a percentage change of greater than 1,000%, favorable or unfavorable.

• We define "Resilient" revenue as (i) Property Management, within Markets Advisory, (ii) Value and Risk Advisory, and Loan Servicing, within Capital Markets, (iii) Workplace Management, within Work Dynamics, (iv) JLL Technologies and (v) Advisory Fees, within LaSalle.

In addition, we define "Transactional" revenue as (i) Leasing and Advisory, Consulting and Other, within Markets Advisory, (ii) Investment Sales, Debt/Equity Advisory and Other, within Capital Markets, (iii) Project Management and Portfolio Services and Other, within Work Dynamics and (iv) Incentive fees and Transaction fees and other, within LaSalle.

• Effective January 1, 2025, we report Project Management in Resilient revenue.

Prior period financial information was recast to conform with this presentation.

• We define "Resilient" revenue as, (i) Workplace Management, Project Management and Property Management, within Real Estate Management Services, (ii) Value and Risk Advisory, and Loan Servicing, within Capital Markets Services, (iii) Advisory Fees, within Investment Management, and (iv) Software and Technology Solutions.

In addition, we define "Transactional" revenue as (i) Portfolio Services and Other, within Real Estate Management Services, (ii) Leasing Advisory, (iii) Investment Sales, Debt/Equity Advisory and Other, within Capital Markets Services, and (iv) Incentive fees and Transaction fees and other, within Investment Management.

• Gross contract costs represent certain costs associated with client-dedicated employees and third-party vendors and subcontractors and are directly or indirectly reimbursed through the fees we receive.

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Consolidated Operating Results

Three Months Ended September 30, Change in % Change in Local Currency

($ in millions) 2024 2023 U.S.

Markets Advisory $ 1,143.8 992.4 151.4 15 % 15 %

Capital Markets 498.8 435.8 63.0 14 14

Work Dynamics 4,068.2 3,514.2 554.0 16 16

JLL Technologies 56.7 58.9 (2.2) (4) (4)

LaSalle 101.3 110.1 (8.8) (8) (8)

Revenue $ 5,868.8 5,111.4 757.4 15 % 15 %

Platform compensation and benefits $ 1,406.9 1,299.8 107.1 8 % 8 %

Platform operating, administrative and other expenses 315.1 274.7 40.4 15 14

Depreciation and amortization 65.5 59.1 6.4 11 10

Total platform operating expenses 1,787.5 1,633.6 153.9 9 9

Gross contract costs 3,861.8 3,327.1 534.7 16 16

Restructuring and acquisition charges (8.8) 31.6 (40.4) (128) (128)

Total operating expenses $ 5,640.5 4,992.3 648.2 13 % 13 %

Operating income $ 228.3 119.1 109.2 92 % 92 %

Equity losses $ (0.9) (11.2) 10.3 92 % 92 %

Net non-cash MSR and mortgage banking derivative activity $ (5.1) (7.1) 2.0 28 % 29 %

Adjusted EBITDA $ 298.1 217.3 80.8 37 % 37 %

Consolidated Operating Results (continued)

Nine Months Ended September 30, Change in % Change in Local Currency

Three Months Ended March 31, Change in % Change in Local Currency

($ in millions) 2025 2024 U.S.

Markets Advisory $ 3,172.7 2,924.2 248.5 8 % 9 %

Capital Markets 1,334.0 1,240.9 93.1 8 8

Work Dynamics 11,641.0 10,165.0 1,476.0 15 15

JLL Technologies 167.0 180.9 (13.9) (8) (8)

LaSalle 307.3 368.4 (61.1) (17) (16)

Real Estate Management Services $ 4,569.4 4,069.2 500.2 12 % 14 %

Leasing Advisory 586.1 520.4 65.7 13 13

Capital Markets Services 435.3 377.6 57.7 15 16

Investment Management 98.5 103.4 (4.9) (5) (4)

Software and Technology Solutions 57.1 53.9 3.2 6 6

Revenue $ 5,746.4 5,124.5 621.9 12 % 13 %

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Gross contract costs 3,942.3 3,498.7 443.6 13 14

Restructuring and acquisition charges 4.4 79.1 (74.7) (94) (95)

Restructuring and acquisition charges 19.7 1.7 18.0 n.m.

Total operating expenses $ 5,626.4 5,010.3 616.1 12 % 14 %

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GAAP, they may not be comparable to similarly titled measures used by other companies.

Effective January 1, 2024, we updated the definition of Adjusted EBITDA to exclude certain equity earnings/losses as further described below.

Comparable periods have been recast to conform to the revised presentation.

Also effective with first-quarter 2024 reporting, we no longer report the non-GAAP measures "Fee revenue" and "Fee-based operating expenses" following the conclusion of a comment letter from the Securities and Exchange Commission Staff in February 2024.

Adjustments to U.S.

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MSR gains and corresponding MSR intangible assets are calculated as the present value of estimated net cash flows over the estimated mortgage servicing periods.

The above activity is reported entirely within Revenue of the Capital Markets segment.

The above activity is reported entirely within Revenue of the Capital Markets Services segment.

Excluding net non-cash MSR and mortgage banking derivative activity reflects how we manage and evaluate performance because the excluded activity is non-cash in nature.

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Given the low frequency of business disposals by the Company historically, the gain or loss directly associated with such activity is excluded as it is not considered indicative of core operating performance.

In 2023, the $0.5 million net loss included $1.8 million of loss related to the disposition of a business in Markets Advisory, partially offset by a $1.3 million gain related to the disposition of a business in Markets Advisory and Capital Markets.

Interest on employee loans, net of forgiveness reflects interest accrued on employee loans less the amount of accrued interest forgiven.

Certain employees (predominantly in Leasing and Capital Markets) receive cash payments structured as loans, with interest.

Certain employees (predominantly in Leasing Advisory and Capital Markets Services) receive cash payments structured as loans, with interest.

Employees earn forgiveness of the loan based on performance, generally calculated as a percentage of revenue production.

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Given the interest accrued on these employee loans and subsequent forgiveness are non-cash and the amounts perfectly offset over the life of the loan, the activity is not indicative of core operating performance and is excluded from non-GAAP measures.

Equity earnings/losses (JLL Technologies and LaSalle) primarily reflects valuation changes on investments reported at fair value.

Equity earnings/losses (Investment Management and Software and Technology Solutions) primarily reflects valuation changes on investments reported at fair value.

Investments reported at fair value are increased or decreased each reporting period by the change in the fair value of the investment.

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Credit losses on convertible note investments reflects credit impairments associated with pre-equity convertible note investments in early-stage proptech enterprises.

Such losses are similar to the equity investment-related losses included in equity earnings/losses for JLL Technologies' investments and are therefore consistently excluded from adjusted measures.

Such losses are similar to the equity investment-related losses included in equity earnings/losses for Software and Technology Solutions' investments and are therefore consistently excluded from adjusted measures.

Reconciliation of Non-GAAP Financial Measures

Below is a reconciliation of Net income attributable to common shareholders to Adjusted EBITDA.

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31,

(in millions) 2025 2024

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Depreciation and amortization (1)

64.5 58.1 185.9 173.6

Restructuring and acquisition charges 19.7 1.7

Net (gain) loss on disposition — (1.3) — 0.5

Net non-cash MSR and mortgage banking derivative activity 12.9 9.0

Interest on employee loans, net of forgiveness (1.6) (1.0)

Equity losses - JLL Technologies and LaSalle 2.2 12.1 23.4 125.0

Equity losses - Investment Management and Software and Technology Solutions (1)

Credit losses on convertible note investments 0.5 —

Adjusted EBITDA $ 224.8 187.1

(1) This adjustment excludes the noncontrolling interest portion of amortization of acquisition-related intangibles which is not attributable to common shareholders.

(1) This adjustment excludes the noncontrolling interest portion which is not attributable to common shareholders.

In discussing our operating results, we report percentage changes in local currency, unless otherwise noted.

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The following table reflects the reconciliation to local currency amounts for consolidated (i) Revenue, (ii) Operating income and (iii) Adjusted EBITDA.

Three Months Ended September 30, Nine Months Ended September 30,

($ in millions) 2024 % Change 2024 % Change

Three Months Ended March 31,

($ in millions) 2025 % Change

At current period exchange rates $ 5,746.4 12 %

Impact of change in exchange rates (8.5) n/a 29.5 n/a

Impact of change in exchange rates 60.4 n/a

At comparative period exchange rates $ 5,806.8 13 %

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At current period exchange rates $ 120.0 5 %

Impact of change in exchange rates 0.2 n/a 8.3 n/a

Impact of change in exchange rates (1.3) n/a

At comparative period exchange rates $ 118.7 4 %

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At current period exchange rates $ 224.8 20 %

Impact of change in exchange rates (0.1) n/a 7.9 n/a

Impact of change in exchange rates (0.5) n/a

At comparative period exchange rates $ 224.3 20 %

Revenue increased 13% compared with the prior-year quarter.

The collective 11% increase in Transactional revenue was led by Leasing, within Markets Advisory, up 21%, and Investment Sales, Debt/Equity Advisory and Other, within Capital Markets, up 19%.

Several businesses with Resilient revenues continued to deliver strong revenue growth, collectively up 16%, highlighted by Workplace Management, within Work Dynamics, up 20%, and Property Management, within Markets Advisory, up 8%.

Growth in these businesses outpaced declines in LaSalle Advisory Fees, down 10%, and JLL Technologies, down 4%.

For the first nine months of 2024, consolidated revenue was up 12% compared with 2023.

The year-to-date drivers were largely consistent with the quarter-to-date drivers noted above.

The following highlights Revenue by segment, for the third quarter and first nine months of 2024 and 2023 ($ in millions).

Several businesses with Resilient revenues, collectively up 13%, continued to deliver strong growth, highlighted by (i) Workplace Management, up 15%, and (ii) Project Management, up 16%, both within Real Estate Management Services, as well as (iii) Software and Technology Solutions, up 6%.

The collective 14% increase in Transactional revenue was led by Leasing, within Leasing Advisory, up 15%, and Investment Sales, Debt/Equity Advisory and Other, within Capital Markets Services, up 22% (excluding the impact of non-cash MSR and mortgage banking derivative activity).

The following highlights Revenue by segment, for the first quarter of 2025 and 2024 ($ in millions).

Refer to segment operating results for further detail.

Operating Expenses

Consolidated operating expenses were $5.6 billion for the third quarter, up 13% from the same period in 2023.

Gross contract costs were $3.9 billion, up 16% from the prior-year quarter, attributable to growth from businesses with higher client pass-through expenses such as Workplace Management, within Work Dynamics, and Property Management, within Markets Advisory.

Platform operating expenses were $1.8 billion for the third quarter, a 9% increase from the prior-year quarter, largely due to revenue-related expense growth as well as a couple discrete items, including:

(i) nearly $10 million of expense associated with the timing of accruals related to gross receipts taxes in a handful of U.S.

states, associated with Work Dynamics, and (ii) $6.3 million of non-cash credit losses from convertible notes associated with JLL Technologies investments (which are excluded from Adjusted EBITDA consistent with equity earnings/losses from investments).

Expense growth was largely offset by the benefit of continued cost discipline and enhanced leverage of our platform.

For the third quarter of 2024, Restructuring and acquisition charges reflected (i) an expense credit in the current quarter associated with a lower expected earn-out payout related to a 2021 U.S.

property management joint venture as well as (ii) lower employment-related costs given the significant cost-out actions in 2023.

Consolidated operating expenses were $5.6 billion for the first quarter, up 14% from the same period in 2024.

Gross contract costs were $3.9 billion, up 14% from the prior-year quarter, attributable to growth from businesses with higher client pass-through expenses such as Workplace Management and Property Management, within Real Estate Management Services.

Platform operating expenses were $1.7 billion for the first quarter, an 11% increase from the prior-year quarter, largely due to revenue-related expense growth and incremental investments in the platform (notably technology and artificial intelligence capabilities) across segments to drive future business growth.

For the first quarter of 2025, Restructuring and acquisition charges increased primarily due to the year-over-year change in non-cash charges/benefit associated with expected achievement of acquisition-related earn-outs.

Refer to the following table for detail on Restructuring and acquisition charges.

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31,

(in millions) 2025 2024

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Restructuring, pre-acquisition and post-acquisition charges 8.4 7.7

Fair value adjustments that resulted in a net (decrease) increase to earn-out liabilities from prior-period acquisition activity (20.9) 0.1 (33.5) (0.5)

Fair value adjustments that resulted in a net increase (decrease) to earn-out liabilities from prior-period acquisition activity 3.9 (10.5)

Restructuring and acquisition charges $ 19.7 1.7

Specific to severance and restructuring charges, the current quarter and first nine months of 2024 reflect the impact of lower cost-out actions compared to 2023.

Interest Expense

Interest expense, net of interest income, for the three and nine months ended September 30, 2024 was $38.1 million and $110.3 million, respectively, compared with $37.1 million and $103.9 million in the prior-year periods.

Interest expense, net of interest income, for the three months ended March 31, 2025 was $24.6 million, compared with $30.5 million in the prior-year period.

Lower expense resulted primarily from a lower effective interest rate and also lower average borrowings for the current quarter.

Equity (Losses) Earnings

The following details Equity (losses) earnings by relevant segment.

In the prior year, the significant equity losses were largely attributable to valuation declines in two JLL Technologies investments.

In the current period, equity losses were largely attributable to valuation declines of investments within Software and Technology Solutions.

Refer to the segment discussions for additional details.

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31,

(in millions) 2025 2024

JLL Technologies $ 11.6 (3.0) $ 1.6 (102.0)

LaSalle (13.8) (9.1) (25.0) (23.0)

Investment Management $ (6.1) (3.9)

Software and Technology Solutions (21.5) (1.0)

Other 2.0 1.2

Equity losses $ (25.6) (3.7)

The Income tax provision was $37.4 million and $73.8 million for the three and nine months ended September 30, 2024, respectively, representing an effective tax rate ("ETR") of 19.5% for both periods.

For the three and nine months ended September 30, 2023, the income tax provision was $14.5 million and $13.0 million, representing an ETR of 19.6% and 19.3%, respectively.

The Income tax provision was $14.0 million for the three months ended March 31, 2025, representing an effective tax rate ("ETR") of 19.5%.

For the three months ended March 31, 2024, the income tax provision was $15.9 million, also representing an ETR of 19.5%.

A number of countries in which we have a taxable presence have enacted legislation effective in 2024 correlated to the Organization for Economic Co-operation and Development (OECD) guidance for a global minimum tax rate of 15%, referred to as "Pillar Two" taxation.

Such legislation enacted through September 30, 2024 did not have a material impact on our effective tax rate for the first nine months of 2024 and is not presently expected to have a material impact for the full year 2024.

Such legislation enacted through March 31, 2025 did not have a material impact on our effective tax rate for the first three months of 2025 and is not presently expected to have a material impact for the full year 2025.

Net Income and Adjusted EBITDA

Net income attributable to common shareholders was $155.1 million for the three months ended September 30, 2024, compared with $59.7 million in the prior-year quarter.

For the first nine months of 2024, net income attributable to common shareholders was $305.6 million, compared with $53.0 million in 2023.

Adjusted EBITDA was $298.1 million and $731.5 million for the third quarter and first nine months of 2024, compared with $217.3 million and $555.3 million in the respective prior-year periods.

The growth in consolidated profit was primarily attributable to (i) higher revenues, both Transactional and certain Resilient revenues, including Workplace Management within Work Dynamics, and (ii) cost discipline and enhanced leverage of the company's platform.

These drivers notably outpaced outsized the timing of revenue-related expense accruals in Work Dynamics this quarter and lower contributions from LaSalle.

The following charts reflects the aggregation of segment Adjusted EBITDA for the third quarter and first nine months of 2024 and 2023.

Net income attributable to common shareholders was $55.3 million for the three months ended March 31, 2025, compared with $66.1 million in the prior-year quarter.

Adjusted EBITDA was $224.8 million for the first quarter of 2025, compared with $187.1 million in the prior-year period.

The change in net income attributable to common shareholders reflected higher equity losses from Software and Technology Solutions and Investment Management investments as well as an increase in restructuring and acquisition charges.

These items are excluded from Adjusted EBITDA.

The following chart reflects the aggregation of segment Adjusted EBITDA for the first quarter of 2025 and 2024.

Segment Operating Results

Effective January 1, 2025, we report Property Management (historically included in Markets Advisory, which was renamed Leasing Advisory) within Real Estate Management Services (formerly referred to as Work Dynamics).

Additionally, Capital Markets, LaSalle and JLL Technologies were renamed to Capital Markets Services, Investment Management and Software and Technology Solutions, respectively.

We manage and report our operations as five business segments:

Markets Advisory, Capital Markets, Work Dynamics, JLL Technologies and LaSalle.

Markets Advisory offers a wide range of real estate services, including agency leasing and tenant representation, property management, and advisory and consulting services.

Our Capital Markets service offerings include investment sales, debt and equity advisory, value and risk advisory, and loan servicing.

Our Work Dynamics business provides a broad suite of integrated services to occupiers of real estate, including facility and project management, as well as portfolio and other services.

Real Estate Management Services, Leasing Advisory, Capital Markets Services, Investment Management and Software and Technology Solutions.

Our Real Estate Management Services business provides a broad suite of integrated services to occupiers of real estate, including facility and property management, project management, and portfolio and other services.

We consider "Property Management" to be services provided to non-occupying property investors and "Workplace Management" to be services provided to facility occupiers.

Our JLL Technologies segment offers software products, solutions and services, while LaSalle provides investment management services on a global basis to institutional investors and high-net-worth individuals.

Leasing Advisory offers agency leasing and tenant representation, as well as advisory and consulting services.

Our Capital Markets Services offerings include investment sales, debt and equity advisory, value and risk advisory, and loan servicing.

Investment Management provides services on a global basis to institutional investors and high-net-worth individuals, while our Software and Technology Solutions segment offers various software products and services to our clients.

Segment operating expenses comprise Gross contract costs and Segment platform operating expenses, which includes Platform compensation and benefits;

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Our measure of segment results excludes Restructuring and acquisition charges.

Markets Advisory

Three Months Ended September 30, Change in in Local

Real Estate Management Services

Three Months Ended March 31, Change in in Local

($ in millions) 2025 2024 U.S.

dollars Currency

Leasing $ 665.4 547.7 117.7 21 % 21 %

Workplace Management $ 3,263.6 2,871.7 391.9 14 % 15 %

Project Management 747.5 656.4 91.1 14 16

Property Management 445.6 429.7 15.9 4 5

Advisory, Consulting and Other 26.1 25.5 0.6 2 2

Portfolio Services and Other 112.7 111.4 1.3 1 2

Revenue $ 4,569.4 4,069.2 500.2 12 % 14 %

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Adjusted EBITDA $ 66.3 71.4 (5.1) (7) % (9) %

Markets Advisory (continued)

Nine Months Ended September 30, Change in in Local

Real Estate Management Services revenue growth was driven by continued strong performance in Workplace Management, largely from a balanced mix of client wins and mandate expansions, as incremental pass-through costs augmented high single-digit management fee growth.

Project Management revenue increase was led by the U.S.

and Asia Pacific, as a near-double-digit management fee increase was supplemented by higher pass-through costs.

Increased segment platform operating expenses were driven by i) continued investments in our technology platform (including in artificial intelligence and project management capabilities) and ii) incremental human capital investments in the latter half of 2024, most notably in Project Management, to support future business growth.

Higher gross contract costs correlated to top-line performance in the Resilient business lines (Workplace Management, Project Management and Property Management).

The change in Adjusted EBITDA and margin was primarily due to the technology platform and human capital investments described above, which outpaced revenue growth.

Leasing Advisory

Three Months Ended March 31, Change in in Local

($ in millions) 2025 2024 U.S.

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Leasing $ 566.1 497.3 68.8 14 % 15 %

Property Management 1,318.6 1,229.3 89.3 7 8

Advisory, Consulting and Other 20.0 23.1 (3.1) (13) (12)

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Segment operating expenses $ 501.2 454.9 46.3 10 % 11 %

Equity earnings $ 0.5 0.3 0.2 67 % 112 %

Adjusted EBITDA $ 97.0 74.8 22.2 30 % 29 %

For the third quarter and first nine months of 2024, the broad-based increase in Markets Advisory revenue was primarily driven by Leasing and was led by the office sector.

Most geographies achieved double-digit growth for the quarter and first nine months of 2024, notably the U.S., India, UK, Australia and Greater China.

Globally, industrial was flat to the prior-year quarter (versus down double-digits on a year-to-date basis), ending a multi-quarter trend of declines in the sector as deal size rebounded.

In addition, the number of larger-scale Leasing deals, where JLL has historically had a greater presence, increased over the prior-year quarter in nearly all asset classes.

Property Management revenue growth was led by expansion in the U.S.

and several countries in Asia Pacific, including incremental revenue in the U.S.

associated with pass-through expenses.

The net increases in segment platform operating expenses for the quarter and first nine months of the year were due to an increase in revenue-related variable compensation expense, offset by continued cost discipline.

Higher gross contract costs over the prior-year periods was largely due to Property Management.

The Adjusted EBITDA increases for the third quarter and first nine months of the year were predominantly driven by revenue growth and cost discipline described above.

In addition, the timing of incentive compensation accruals positively impacted profit performance for the third quarter.

Capital Markets

Three Months Ended September 30, Change in in Local

($ in millions) 2024 2023 U.S.

dollars Currency

Investment Sales, Debt/Equity Advisory and Other $ 371.8 310.2 61.6 20 % 19 %

Value and Risk Advisory 86.0 87.5 (1.5) (2) (3)

Loan Servicing 41.0 38.1 2.9 8 8

Revenue $ 498.8 435.8 63.0 14 % 14 %

Platform compensation and benefits $ 365.5 323.8 41.7 13 % 12 %

Platform operating, administrative and other 62.3 58.3 4.0 7 6

Depreciation and amortization 16.6 16.4 0.2 1 1

Segment platform operating expenses 444.4 398.5 45.9 12 11

Gross contract costs 11.5 11.5 — — (1)

Segment operating expenses $ 455.9 410.0 45.9 11 % 11 %

Equity earnings $ 0.2 0.7 (0.5) (71) % (67) %

Net non-cash MSR and mortgage banking derivative activity $ (5.1) (7.1) 2.0 28 % 29 %

Adjusted EBITDA $ 65.7 50.3 15.4 31 % 30 %

Capital Markets (continued)

Nine Months Ended September 30, Change in in Local

Compared with the prior-year quarter, increased revenue was driven by broad-based Leasing growth across asset classes, led by growth in office together with accelerated momentum from industrial.

Many geographies achieved double-digit Leasing revenue growth for the quarter, most notably the U.S., Canada, Greater China and Germany.

office leasing increased for the fifth consecutive quarter, exceeding first-quarter 2019 levels, partially driven by an increase in the number of large leasing deals across nearly all asset classes.

Globally, office leasing grew 18% over the prior-year quarter, outperforming market volume growth of 9% according to JLL Research.

The increase in segment platform operating expenses was due to higher commissions correlated to revenue growth, partially offset by continued improvement in platform leverage.

Higher Adjusted EBITDA was largely driven by the revenue growth and improved platform leverage described above.

Capital Markets Services

Three Months Ended March 31, Change in in Local

($ in millions) 2025 2024 U.S.

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Segment operating expenses $ 420.2 378.4 41.8 11 % 12 %

Equity earnings $ 0.8 6.1 (5.3) (87) % (86) %

Net non-cash MSR and mortgage banking derivative activity $ (25.9) (9.5) (16.4) (173) % (172) %

Adjusted EBITDA $ 124.5 97.0 27.5 28 % 29 %

For the third quarter and first nine months of the year, Capital Markets revenue growth was led by Investment Sales, Debt/Equity Advisory and Other, as investor sentiment strengthened.

This revenue growth was geographically broad-based, most notably in the United States and Europe, and was across nearly all asset classes, with hotels, office and industrial leading the way.

Investment sales in the U.S.

grew approximately 30% over the prior-year quarter, outperforming the broader market for investment sales, which grew 23% according to JLL Research.

On a year-to-date basis, revenue growth, driven by Investment Sales, overcame a headwind of $16.4 million related to the impact of net non-cash MSR and mortgage banking derivative activity.

The current-quarter and year-to-date increases in operating expenses were largely driven by higher variable compensation expense compared with the prior-year periods, as segment profit grew.

The increase in variable compensation overshadowed the impact of continued cost discipline.

Further, segment platform operating expenses for the first nine months of 2024 reflected a $17.8 million impact associated with the August 2024 repurchase of a loan originated and sold to Fannie Mae, for which the associated expenses were predominantly recognized in the second quarter of 2024.

This impact included the amount of the repurchase price in excess of unpaid principal balance, for items such as unpaid interest, as well as estimated losses associated with the repurchased loan, reflecting the underlying value of the collateral.

The Adjusted EBITDA improvement was largely attributable to the transactional revenue growth described above and continued cost discipline.

These drivers overcame the headwind attributable to the expenses associated with the finalization of the loan repurchase described above.

Work Dynamics

Three Months Ended September 30, Change in in Local

($ in millions) 2024 2023 U.S.

dollars Currency

Workplace Management $ 3,164.6 2,637.1 527.5 20 % 20 %

Project Management 771.3 747.0 24.3 3 3

Portfolio Services and Other 132.3 130.1 2.2 2 1

Revenue $ 4,068.2 3,514.2 554.0 16 % 16 %

Platform compensation and benefits $ 348.8 332.9 15.9 5 % 5 %

Platform operating, administrative and other 127.3 103.3 24.0 23 24

Depreciation and amortization 24.8 19.7 5.1 26 25

Segment platform operating expenses 500.9 455.9 45.0 10 10

Gross contract costs 3,518.7 3,016.5 502.2 17 17

Segment operating expenses $ 4,019.6 3,472.4 547.2 16 % 16 %

Equity earnings $ 1.6 0.1 1.5 n.m.

Adjusted EBITDA $ 74.3 61.6 12.7 21 % 20 %

Work Dynamics (continued)

Nine Months Ended September 30, Change in in Local

($ in millions) 2024 2023 U.S.

dollars Currency

Workplace Management $ 9,057.4 7,687.7 1,369.7 18 % 18 %

Project Management 2,215.8 2,126.5 89.3 4 4

Portfolio Services and Other 367.8 350.8 17.0 5 4

Revenue $ 11,641.0 10,165.0 1,476.0 15 % 15 %

Platform compensation and benefits $ 1,002.4 958.9 43.5 5 % 5 %

Platform operating, administrative and other 342.6 316.0 26.6 8 9

Depreciation and amortization 66.3 58.9 7.4 13 12

Segment platform operating expenses 1,411.3 1,333.8 77.5 6 6

Gross contract costs 10,102.0 8,747.5 1,354.5 15 16

Segment operating expenses $ 11,513.3 10,081.3 1,432.0 14 % 14 %

Equity earnings $ 2.1 1.3 0.8 62 % 58 %

Adjusted EBITDA $ 196.3 143.5 52.8 37 % 37 %

For the third quarter, Work Dynamics revenue growth was led by continued strong performance in Workplace Management, largely from U.S.

mandate expansions.

In addition, Workplace Management also drove year-to-date growth from the onboarding of new contracts won in 2023 as well as the mandate expansions driving current quarter revenue performance.

Project Management revenue performance varied across geographies given shifts in business mix as lower pass-through costs partially offset management fees increases in the mid-single digits.

Greater activity in Portfolio Services and Other was largely offset by the absence of fees associated with a large transaction on behalf of a U.S.

client in the third quarter of 2023.

The increases in segment operating expenses for the third quarter and first nine months of the year, compared with the prior-year periods, were primarily due to revenue-related expense growth, including gross contract costs, partially tempered by continued cost discipline and the timing of incentive compensation accruals.

The current quarter increase was also driven by nearly $10 million of expense associated with the timing of accruals related to gross receipts taxes in a handful of U.S.

The increase in Adjusted EBITDA for the third quarter and first nine months of 2024 was primarily attributable to the top-line performance described above.

JLL Technologies

Three Months Ended September 30, Change in in Local

($ in millions) 2024 2023 U.S.

dollars Currency

Revenue $ 56.7 58.9 (2.2) (4) % (4) %

Platform compensation and benefits (1)

$ 50.3 48.7 1.6 3 % 3 %

Platform operating, administrative and other 19.1 12.6 6.5 52 52

Depreciation and amortization 4.9 3.9 1.0 26 26

Segment platform operating expenses 74.3 65.2 9.1 14 14

Gross contract costs 1.4 3.3 (1.9) (58) (59)

Segment operating expenses $ 75.7 68.5 7.2 11 % 10 %

Adjusted EBITDA (2)

$ (7.8) (5.7) (2.1) (37) % (39) %

Equity earnings (losses) $ 11.6 (3.0) 14.6 487 % 490 %

JLL Technologies (continued)

Nine Months Ended September 30, Change in in Local

($ in millions) 2024 2023 U.S.

dollars Currency

Revenue $ 167.0 180.9 (13.9) (8) % (8) %

Platform compensation and benefits (1)

$ 151.1 155.3 (4.2) (3) % (3) %

Platform operating, administrative and other 42.0 39.8 2.2 6 5

Depreciation and amortization 14.2 11.9 2.3 19 19

Segment platform operating expenses 207.3 207.0 0.3 — —

Gross contract costs 4.0 11.0 (7.0) (64) (64)

Segment operating expenses $ 211.3 218.0 (6.7) (3) % (3) %

Net non-cash MSR and mortgage banking derivative activity $ (12.9) (9.0) (3.9) (43) % (43) %

Adjusted EBITDA $ 48.6 25.0 23.6 94 % 90 %

$ (23.8) (25.2) 1.4 6 % 6 %

Equity earnings (losses) $ 1.6 (102.0) 103.6 102 % 102 %

(1) Included in Platform compensation and benefits expense is carried interest expense of $2.2 million and $4.3 million for the three and nine months ended September 30, 2024, and a carried interest benefit of $0.1 million and $9.4 million for the three and nine months ended September 30, 2023, related to Equity earnings (losses) of the segment.

(2) Adjusted EBITDA excludes Equity earnings (losses) for JLL Technologies.

The decline in JLL Technologies revenue for the current quarter and first nine months of 2024 was due to lower contract signings over the trailing twelve months in services offerings.

This impact was partially offset in the third quarter by continued growth in software offerings.

Segment operating expenses includes carried interest, which was a $0.1 million reduction to expense in the prior-year quarter ($9.4 million reduction to expense for the first nine months of 2023), versus incremental expense of $2.2 million this quarter (incremental expense of $4.3 million for the first nine months of 2024).

Carried interest expense is associated with equity earnings/losses on certain investments within the JLL Technologies Spark Venture Funds.

The incremental expense in the current quarter and first nine months of 2024 were due to net equity earnings from the investments, while the reduction to expense in the prior year periods reflected equity losses on certain investments in 2023.

The increase in segment operating expenses is primarily driven by 1) $6.3 million of non-cash credit losses from convertible notes associated with JLL Technologies investments, which are excluded from Adjusted EBITDA consistent with equity earnings/losses from investments, 2) an approximate $5 million reduction to incentive compensation in the prior-year quarter for true-ups related to performance against certain targets, and 3) the incremental carried interest expense described above.

These discrete items more than offset the impact of cost management actions over the trailing twelve months and ongoing cost discipline.

Third-quarter Adjusted EBITDA contraction was primarily attributable to lower revenue as well as the bonus and carried interest expenses items described above, which overshadowed the benefits of cost discipline and improved operating efficiency over the trailing twelve months.

Year-to-date, those cost management actions and improved operating efficiency drove margin improvement, as the results of the ongoing cost discipline outpaced the impact of carried interest and lower revenue.

Equity losses for the first nine months of 2023 were due to subsequent financing rounds at decreased per-share values and were predominantly driven by two investments for which we previously recognized significant equity earnings.

Three Months Ended September 30, Change in in Local

Capital Markets Services top-line growth was fueled by debt advisory and investment sales, most notably in the United States.

Debt advisory grew over 45% for the quarter while investment sales were up approximately 15%.

The residential sector demonstrated the most significant improvement over the prior-year quarter, while hotels and industrial also contributed to the current-quarter growth.

Specifically, Investment sales in the U.S.

grew approximately 46% for the quarter, outperforming the broader market volume for U.S.

investment sales, which grew 42% for the quarter, according to JLL Research.

The increase in segment platform operating expenses was largely driven by higher commission expense, correlated to the growth in Investment Sales, Equity & Debt Advisory.

Higher platform operating and administrative costs were offset by lower gross contract costs.

As such, the revenue growth outpaced the increase in segment operating expenses.

Adjusted EBITDA improvement for the quarter was largely attributable to transactional revenue growth described above, together with continued improvement in platform leverage.

Investment Management

Three Months Ended March 31, Change in in Local

($ in millions) 2025 2024 U.S.

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Transaction fees and other 8.5 8.9 (0.4) (4) (4)

Incentive fees — — — n.m.

Incentive fees 0.7 2.2 (1.5) (68) (67)

Revenue $ 98.5 103.4 (4.9) (5) % (4) %

8 unchanged sentences

Equity losses $ (6.1) (3.9) (2.2) (56) % (60) %

LaSalle (continued)

Nine Months Ended September 30, Change in in Local

(1) Adjusted EBITDA excludes Equity losses attributable to common shareholders for Investment Management.

Investment Management advisory fees declined primarily due to lower assets under management ("AUM"), reflecting asset dispositions on behalf of certain clients in the fourth quarter of 2024.

The net increase in segment operating expenses was driven primarily by foreign currency transaction losses in the current quarter, and the timing of certain expenses.

The change in Adjusted EBITDA was attributable to the overall reduction in revenue, coupled with the expense drivers described above.

AUM decreased 7% in USD (4% in local currency) during the quarter, and decreased 8% in USD (6% in local currency) over the trailing twelve months.

Changes in AUM are detailed in the tables below (in billions):

Quarter-to-date

Beginning balance (December 31, 2024)

Asset acquisitions/takeovers 2.2

Asset dispositions/withdrawals (3.7)

Valuation changes 0.2

Foreign currency translation (2.8)

Change in uncalled committed capital and cash held (2.4)

Ending balance (March 31, 2025)

Trailing Twelve Months

Beginning balance (March 31, 2024)

Asset acquisitions/takeovers 5.3

Asset dispositions/withdrawals (7.0)

Valuation changes (0.1)

Foreign currency translation (2.2)

Change in uncalled committed capital and cash held (3.4)

Ending balance (March 31, 2025)

Software and Technology Solutions

Three Months Ended March 31, Change in in Local

($ in millions) 2025 2024 U.S.

dollars Currency

Advisory fees $ 278.1 306.3 (28.2) (9) % (8) %

Transaction fees and other 24.4 22.8 1.6 7 10

Incentive fees 4.8 39.3 (34.5) (88) (87)

Revenue $ 57.1 53.9 3.2 6 % 6 %

Platform compensation and benefits (1)

$ 45.5 47.3 (1.8) (4) % (3) %

Platform operating, administrative and other 14.5 10.5 4.0 38 38

5 unchanged sentences

$ (2.9) (5.1) 2.2 43 % 37 %

Equity losses $ (25.0) (23.0) (2.0) (9) % (8) %

(1) Adjusted EBITDA excludes Equity losses for LaSalle.

For the third quarter and first nine months of 2024, LaSalle’s decrease in revenue was largely attributable to declines in assets under management ("AUM") over the trailing twelve months, most notably in North America and Europe, and lower fees in Europe as a result of structural changes to a lower-margin business, as discussed in previous quarters this year.

Further, on a year-to-date basis, incentive fees decreased considerably, as fees earned in 2023 in Japan and the United States did not reoccur.

Operating expenses were nearly flat for the third quarter of 2024, and declined on a year-to-date basis, due to lower variable compensation accruals in 2024 as well as continued cost discipline.

In addition, the prior-year quarter included a one-time reduction to a legacy incentive compensation accrual upon final determination of performance relative to target.

The Adjusted EBITDA contraction over the prior-year quarter and first nine months of 2023 was driven by lower revenues and the expense activity described above.

On a year-to-date basis, 2024 results included an $8.2 million gain recognized following the purchase of a controlling interest in a LaSalle-managed fund during the second quarter.

As of September 30, 2024, LaSalle had $84.6 billion of AUM.

Compared with AUM of $92.9 billion as of September 30, 2023, the AUM as of September 30, 2024, decreased 9% in USD (7% in local currency).

The net decrease in AUM over the trailing twelve months resulted from (i) $5.4 billion of dispositions and withdrawals, (ii) $3.9 billion of net valuation decreases, (iii) $1.7 billion of foreign currency decreases, and (iv) a $0.8 billion decrease in uncalled committed capital and cash held, partially offset by (v) $3.5 billion of acquisitions and takeovers.

Equity losses $ (21.5) (1.0) (20.5) n.m.

(1) Included in Platform compensation and benefits expense is a reduction in carried interest expense of $2.4 million and $0.1 million for the three months ended March 31, 2025 and 2024, respectively.

Carried interest expense (benefit) is associated with equity earnings/losses on Spark Venture Funds investments.

(2) Adjusted EBITDA excludes Equity losses for Software and Technology Solutions.

Software and Technology Solutions revenue growth was due to increased bookings from software, partially offset by technology solutions.

The increase in segment operating expenses was driven by growth in revenue-related expenses, partially offset by the higher year-over-year carried interest benefit.

The improvement in Adjusted EBITDA was a product of the change in carried interest benefit and higher revenue, partially tempered by the revenue-related expense growth.

LIQUIDITY AND CAPITAL RESOURCES

1 unchanged sentence

Cash Flows from Operating Activities

Operating activities used $142.0 million of cash in the first nine months of 2024, compared with $153.6 million of cash used in operating activities during the same period in 2023.

The incremental cash inflows associated with higher cash provided by earnings and lower incentive compensation payments in 2024, compared with 2023, were more than offset by (i) $117.0 million higher cash taxes paid for the first nine months of 2024, (ii) cash paid to repurchase a loan from Fannie Mae (refer to Note 10, Commitments and Contingencies, in the Notes to Consolidated Financial Statements for additional information) and (iii) nearly $50.0 million of headwind from Net reimbursables driven by growth in Workplace Management.

Operating activities used $767.6 million of cash in the first three months of 2025, compared with $677.5 million of cash used in operating activities during the same period in 2024.

Incremental cash outflow in the first quarter was primarily attributable to (i) the timing of Net reimbursables activity, (ii) higher commission payments in the first quarter of 2025 compared with the prior-year quarter (reflecting higher transactional revenue activity in Q4 2024 compared with Q4 2023).

These drivers outpaced the increase in cash provided by earnings.

Cash Flows from Investing Activities

We used $219.0 million of cash for investing activities during the first nine months of 2024, compared with $220.4 million used during the same period in 2023.

Lower net capital contributions to investments and net capital additions were largely offset by higher cash paid for acquisitions.

We discuss these drivers, along with other investing activities, individually below in further detail.

We used $152.8 million of cash for investing activities during the first three months of 2025, compared with $54.3 million used during the same period in 2024.

The increase in cash used for investing activities was attributable to our $100 million contribution to JLL Income Property Trust ("JLL IPT"), an Investment Management flagship fund, in January 2025.

We discuss other drivers of investing activity below in further detail.

Cash Flows from Financing Activities

Financing activities provided $349.0 million of cash during the first nine months of 2024, compared with $231.2 million provided during the same period in 2023.

This increase in cash provided by financing activities reflected greater net borrowings.

On June 27, 2024, we established a commercial paper program (the “Program”) in which we may issue up to $2.5 billion of short-term, unsecured and unsubordinated commercial paper notes at any time, under the exemption from registration contained in Section 4(a)(2) of the Securities Act of 1933, as amended.

Financing activities provided $900.7 million of cash during the first three months of 2025, compared with $703.4 million provided during the same period in 2024.

This increase in cash provided by financing activities was driven by utilization of our commercial paper program, launched in the second quarter of 2024, to support the $100 million investment in JLL IPT as well as the higher cash flow used in operating activities, both noted above.

Our $3.3 billion Facility matures on November 3, 2028, and bears a variable interest rate.

Outstanding borrowings, including the balance of the Facility, Short-term borrowings (financing lease obligations, overdrawn bank accounts and local overdraft facilities) and the balance outstanding under the Program are presented below.

(in millions) September 30, 2024 December 31, 2023

(in millions) March 31, 2025 December 31, 2024

Outstanding borrowings under the Facility $ 420.0 100.0

1 unchanged sentence

Outstanding commercial paper 900.0 200.0

In addition to our Facility, we had the capacity to borrow up to $55.5 million under local overdraft facilities as of September 30, 2024.

In addition to our Facility, we had the capacity to borrow up to $44.1 million under local overdraft facilities as of March 31, 2025.

The following table provides additional information on our Facility, Uncommitted Facility and the Program, collectively.

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31,

($ in millions) 2025 2024

4 unchanged sentences

Investment Activity

As of September 30, 2024, we had a carrying value of $866.5 million in Investments, primarily related to investments by JLL Technologies in early to mid-stage proptech companies as well as proptech funds, and LaSalle co-investments.

For the first nine months ended September 30, 2024 and 2023, funding of investments exceeded return of capital by $54.9 million and $65.3 million, respectively.

We expect continued investment activity by both JLL Technologies and LaSalle.

As of March 31, 2025, we had a carrying value of $902.4 million in Investments, primarily related to Investment Management co-investments and investments by Software and Technology Solutions in early to mid-stage proptech companies as well as proptech funds.

For the first three months ended March 31, 2025 and 2024, funding of investments exceeded return of capital by $108.0 million (notably, the $100.0 million invested in JLL IPT as described above) and $11.7 million, respectively.

We expect continued investment activity by both Investment Management and Software and Technology Solutions.

See Note 6, Investments, in the Notes to Consolidated Financial Statements for additional information on our investment activity.

Capital Expenditures

Net capital additions for the nine months ended September 30, 2024 and 2023 were $126.3 million and $137.7 million, respectively.

Our capital expenditures in 2024 were primarily for purchased/developed software and leasehold improvements.

Net capital additions for the three months ended March 31, 2025 and 2024 were $44.5 million and $43.2 million, respectively.

Our capital expenditures in 2025 were primarily for purchased/developed software and technology hardware.

Business Acquisitions

During the nine months ended September 30, 2024, we paid $45.9 million for business acquisitions.

This included $40.8 million of payments relating to acquisitions in 2024 and $5.1 million for deferred business acquisition and earn-out obligations related to acquisitions completed in prior years, which are primarily reflected in cash flow from financing activities.

During the three months ended March 31, 2025, we paid $0.6 million for deferred business acquisition and earn-out obligations related to acquisitions completed in prior years, which are primarily reflected in cash flow from financing activities.

Terms for many of our past acquisitions have typically included cash paid at closing with provisions for additional deferred consideration and earn-out payments subject to certain contract requirements, including the passage of time and performance, respectively.

Deferred business acquisition obligations totaled $14.1 million as of September 30, 2024.

Deferred business acquisition obligations totaled $23.0 million as of March 31, 2025.

These obligations represent the current discounted values of payments due to sellers of businesses for which our acquisition had been completed as of the balance sheet date and for which the only remaining condition on those payments is the passage of time.

As of September 30, 2024, we had the potential to make earn-out payments for a maximum of $108.9 million on 13 completed acquisitions subject to the achievement of certain performance conditions.

As of March 31, 2025, we had the potential to make earn-out payments for a maximum of $84.5 million on 12 completed acquisitions subject to the achievement of certain performance conditions.

Refer to Note 5, Business Combinations, Goodwill and Other Intangible Assets, in the Notes to the Consolidated Financial Statements for further information on Business Acquisitions.

2 unchanged sentences

The number of shares repurchased and cash paid for repurchases is noted in the following table.

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31,

($ in millions) 2025 2024

1 unchanged sentence

Total paid for shares repurchased $ 19.8 20.1

As of September 30, 2024, $1,033.3 million remained authorized for repurchases under our share repurchase program.

As of March 31, 2025, $993.4 million remained authorized for repurchases under our share repurchase program.

Repatriation of Foreign Earnings

1 unchanged sentence

We believe our policy of permanently investing earnings of foreign subsidiaries does not significantly impact our liquidity.

As of September 30, 2024, and December 31, 2023, we had total Cash and cash equivalents of $437.8 million and $410.0 million, respectively, of which approximately $328.2 million and $310.1 million, respectively, was held by foreign subsidiaries.

Restricted Net Assets

We face regulatory restrictions in certain countries that limit or prevent the transfer of funds to other countries or the exchange of the local currency to other currencies.

However, we generally face no such restrictions with regard to the use or application of funds for ordinary course business activities within such countries.

The assets of these countries aggregated to approximately 4% of our total assets as of both September 30, 2024, and December 31, 2023.

As of March 31, 2025 and December 31, 2024, we had total Cash and cash equivalents of $432.4 million and $416.3 million, respectively, of which approximately $338.6 million and $314.4 million, respectively, was held by foreign subsidiaries.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

7 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis