What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-08-06 compared with 2025-05-07 · 218 added, 100 removed, 304 unchanged (51% 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 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 ).

The following discussion and analysis should be read in conjunction with the Consolidated Financial Statements, including the notes thereto, for the six months ended June 30, 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 three months ended March 31, 2025.

There have been no material changes to these critical accounting policies and estimates during the six months ended June 30, 2025.

ITEMS AFFECTING COMPARABILITY

10 unchanged sentences

Transaction-based revenues are impacted by the size and timing of our clients' transactions.

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

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

Consequently, the results for the periods ended June 30, 2025 and 2024 are not fully indicative of the results we expect to realize for the full fiscal year.

RESULTS OF OPERATIONS

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These costs are presented on a gross basis in Operating expenses (with the corresponding fees in Revenue).

• We define "Greater China" as China, Hong Kong, Macau and Taiwan.

• We define "MENA" as Middle East and North Africa.

Consolidated Operating Results

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

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

($ in millions) 2025 2024 U.S.

10 unchanged sentences

Gross contract costs 4,186.8 3,747.4 439.4 12 11

Restructuring and acquisition charges 19.7 1.7 18.0 n.m.

Restructuring and acquisition charges 21.3 11.5 9.8 85 87

Total operating expenses $ 6,052.7 5,476.3 576.4 11 % 10 %

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Adjusted EBITDA $ 291.7 246.3 45.4 18 % 17 %

Consolidated Operating Results (continued)

Six Months Ended June 30, Change in % Change in Local Currency

($ in millions) 2025 2024 U.S.

Real Estate Management Services $ 9,463.4 8,439.1 1,024.3 12 % 12 %

Leasing Advisory 1,262.9 1,162.6 100.3 9 9

Capital Markets Services 955.6 835.2 120.4 14 14

Investment Management 201.6 206.0 (4.4) (2) (3)

Software and Technology Solutions 113.0 110.3 2.7 2 3

Revenue $ 11,996.5 10,753.2 1,243.3 12 % 12 %

Platform compensation and benefits $ 2,718.9 2,509.3 209.6 8 % 8 %

Platform operating, administrative and other expenses 650.8 594.7 56.1 9 9

Depreciation and amortization 139.3 123.3 16.0 13 13

Total platform operating expenses $ 3,509.0 3,227.3 281.7 9 % 9 %

Gross contract costs 8,129.1 7,246.1 883.0 12 13

Restructuring and acquisition charges 41.0 13.2 27.8 211 213

Total operating expenses $ 11,679.1 10,486.6 1,192.5 11 % 12 %

Operating income $ 317.4 266.6 50.8 19 % 18 %

Equity losses $ (53.0) (19.1) (33.9) (177) % (179) %

Net non-cash MSR and mortgage banking derivative activity $ (17.1) (20.8) 3.7 18 % 18 %

Adjusted EBITDA $ 516.5 433.4 83.1 19 % 19 %

Non-GAAP Financial Measures

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

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(in millions) 2025 2024 2025 2024

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Depreciation and amortization (1)

66.7 61.4 137.4 121.4

Restructuring and acquisition charges 21.3 11.5 41.0 13.2

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

27.0 16.3 55.7 21.2

Credit losses on convertible note investments 0.2 — 0.7 —

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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 March 31,

($ in millions) 2025 % Change

Three Months Ended June 30, Six Months Ended June 30,

($ in millions) 2025 % Change 2025 % Change

At current period exchange rates $ 6,250.1 11 % $ 11,996.5 12 %

Impact of change in exchange rates 60.4 n/a

Impact of change in exchange rates (39.2) n/a 21.2 n/a

At comparative period exchange rates $ 6,210.9 10 % $ 12,017.7 12 %

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At current period exchange rates $ 197.4 30 % $ 317.4 19 %

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

Impact of change in exchange rates (2.0) n/a (3.3) n/a

At comparative period exchange rates $ 195.4 28 % $ 314.1 18 %

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At current period exchange rates $ 291.7 18 % $ 516.5 19 %

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

Impact of change in exchange rates (2.4) n/a (2.9) n/a

At comparative period exchange rates $ 289.3 17 % $ 513.6 19 %

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

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).

For the second quarter, revenue increased 10% compared with the prior-year quarter.

Resilient revenues were collectively up 11%, highlighted by Project Management, up 22%, and Workplace Management, up 10%, both within Real Estate Management Services.

The collective 7% increase in Transactional revenue was led by Investment Sales, Debt/Equity Advisory and Other, within Capital Markets Services, up 14% (excluding the impact of non-cash MSR and mortgage banking derivative activity).

On a year-to-date basis, revenue increased 12%.

Resilient revenues grew 12% collectively, highlighted by Workplace Management, up 13%, and Project Management, up 19%.

Transactional revenues increased 10% collectively, led by Investment Sales, Debt/Equity Advisory and Other, up 18% (excluding the impact of non-cash MSR and mortgage banking derivative activity), and Leasing, within Leasing Advisory, up 9%.

The following highlights Revenue by segment, for the second quarter and first half of 2025 and 2024.

Refer to segment operating results for further detail.

Revenue by Segment (in millions)

Operating Expenses

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.

Consolidated operating expenses were $6.1 billion for the second quarter, up 10% from the same period in 2024.

Gross contract costs were $4.2 billion, up 11% from the prior-year quarter, attributable to growth from businesses with higher client pass-through expenses such as Workplace Management and Project Management, within Real Estate Management Services.

Platform operating expenses were $1.8 billion for the second quarter, a 6% increase from the prior-year quarter, largely due to revenue-related expense growth.

For the second quarter and first half of 2025, Restructuring and acquisition charges increased primarily due to higher severance and other employment-related charges, including expenses associated with the change in reporting segments.

These second-quarter and year-to-date increases were also driven by changes 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 March 31,

Three Months Ended June 30, Six Months Ended June 30,

(in millions) 2025 2024 2025 2024

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Restructuring, pre-acquisition and post-acquisition charges 10.7 6.4 19.1 14.1

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

Fair value adjustments that resulted in a net decrease to earn-out liabilities from prior-period acquisition activity (7.4) (2.1) (3.5) (12.6)

Restructuring and acquisition charges $ 21.3 11.5 $ 41.0 13.2

Interest Expense

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

Interest expense, net of interest income, for the three and six months ended June 30, 2025, was $35.3 million and $59.9 million, respectively, compared with $41.7 million and $72.2 million in the prior-year periods.

Lower expense resulted primarily from a lower effective interest rate and lower average borrowings compared with the respective prior-year periods.

Equity Earnings/Losses

The following details Equity earnings/losses by relevant segment.

In the second quarter and first half of 2025, 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 March 31,

Three Months Ended June 30, Six Months Ended June 30,

(in millions) 2025 2024 2025 2024

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Equity losses $ (27.4) (15.4) $ (53.0) (19.1)

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 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.

The Income tax provision was $26.7 million and $40.7 million for the three and six months ended June 30, 2025, representing an effective tax rate ("ETR") of 19.5% for both periods.

For the three and six months ended June 30, 2024, the income tax provision was $20.5 million and $36.4 million, respectively, also representing an ETR of 19.5% for both periods.

On July 4, 2025, the United States enacted the One Big Beautiful Bill Act (“OBBBA”).

The OBBBA includes provisions altering the timing of deduction from certain depreciable assets, research and experimental expenses, and interest expense, with some effective in 2025 and some in 2026.

The OBBBA further alters the determination and rates of taxation of international earnings, primarily effective in 2026.

The current period’s financial statements do not reflect any impact of the OBBBA provisions due to its enactment occurring in July 2025.

We are presently assessing the impact of the OBBBA on our consolidated financial statements.

Net Income and Adjusted EBITDA

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.

The following details Net income attributable to common shareholders and Adjusted EBITDA for the three and six months ended June 30, 2025, and comparable prior-year periods.

Three Months Ended June 30, Six Months Ended June 30,

(in millions) 2025 2024 2025 2024

Net income attributable to common shareholders 112.3 84.4 167.6 150.5

Adjusted EBITDA 291.7 246.3 516.5 433.4

For the quarter and first half of 2025, higher Adjusted EBITDA was largely driven by Resilient revenue growth (primarily within Real Estate Management Services) as well as Transactional revenue growth from Investment Sales, Debt/Equity Advisory and Other (within Capital Markets Services), together with enhanced platform leverage and continued cost discipline (partially enabled by increased use of technology and shared service centers).

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

Aggregation of Segment Adjusted EBITDA (in millions)

Segment Operating Results

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Real Estate Management Services

Three Months Ended March 31, Change in in Local

Three Months Ended June 30, Change in in Local

($ in millions) 2025 2024 U.S.

13 unchanged sentences

Adjusted EBITDA $ 106.6 88.6 18.0 20 % 19 %

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.

Real Estate Management Services (continued)

Six Months Ended June 30, Change in in Local

($ in millions) 2025 2024 U.S.

dollars Currency

Workplace Management $ 6,612.7 5,892.8 719.9 12 % 13 %

Project Management 1,719.1 1,444.5 274.6 19 19

Property Management 900.0 866.3 33.7 4 4

Portfolio Services and Other 231.6 235.5 (3.9) (2) (2)

Revenue $ 9,463.4 8,439.1 1,024.3 12 % 12 %

Platform compensation and benefits $ 897.4 817.0 80.4 10 % 10 %

Platform operating, administrative and other 286.7 275.4 11.3 4 5

Depreciation and amortization 61.7 58.2 3.5 6 6

Segment platform operating expenses 1,245.8 1,150.6 95.2 8 9

Gross contract costs 8,103.3 7,186.2 917.1 13 13

Segment operating expenses $ 9,349.1 8,336.8 1,012.3 12 % 12 %

Equity earnings $ 0.9 1.4 (0.5) (36 %) (41) %

Adjusted EBITDA $ 172.9 160.0 12.9 8 % 7 %

Real Estate Management Services revenue growth for the second quarter and first half of 2025 were primarily driven by continued strong performance in Workplace Management, with client wins slightly outpacing mandate expansions in the second quarter of 2025 (nearly evenly balanced for the first half of 2025), as incremental pass-through costs augmented high single-digit management fee growth.

Higher Project Management revenue was led by new or expanded contracts in the U.S.

and Asia Pacific, as management fee increases were supplemented by higher pass-through costs.

Increased segment platform operating expenses for the second quarter and first half of 2025 were primarily driven by revenue-related expense growth, partially offset by continued cost discipline.

These drivers overcame headwinds from the prior-year favorable impact of incentive compensation accruals timing.

Gross contract costs grew as a result of higher client pass-through costs.

The current-quarter and year-to-date increases in Adjusted EBITDA were primarily attributable to the top-line performance described above, coupled with continued cost discipline.

Leasing Advisory

Three Months Ended March 31, Change in in Local

Three Months Ended June 30, Change in in Local

($ in millions) 2025 2024 U.S.

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Segment operating expenses $ 567.8 539.3 28.5 5 % 5 %

Equity earnings $ — 0.1 (0.1) (100) % (149) %

Adjusted EBITDA $ 120.4 112.1 8.3 7 % 6 %

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.

Six Months Ended June 30, Change in in Local

($ in millions) 2025 2024 U.S.

dollars Currency

Leasing $ 1,217.6 1,116.4 101.2 9 % 9 %

Advisory, Consulting and Other 45.3 46.2 (0.9) (2) (2)

Revenue $ 1,262.9 1,162.6 100.3 9 % 9 %

Platform compensation and benefits $ 906.1 842.5 63.6 8 % 8 %

Platform operating, administrative and other 134.6 118.9 15.7 13 14

Depreciation and amortization 23.0 18.1 4.9 27 28

Segment platform operating expenses 1,063.7 979.5 84.2 9 9

Gross contract costs 5.3 14.7 (9.4) (64) (64)

Segment operating expenses $ 1,069.0 994.2 74.8 8 % 8 %

Equity earnings $ — 0.1 (0.1) (100) % (87) %

Adjusted EBITDA $ 217.4 186.9 30.5 16 % 15 %

Compared with the prior-year periods, increased revenue was driven by Leasing growth across major asset classes, led by continued momentum in industrial and office.

Geographically, Leasing revenue grew most significantly in the United States, with notable contributions from France, Australia and Singapore for the quarter (most significant growth in the U.S., complemented by growth in Canada and Germany for the first half of 2025).

In the second quarter, the U.S.

was primarily driven by growth in industrial, both from higher volume and deal size, while a notable increase in deal size for U.S.

office was largely offset by lower volume as the asset class was up low single digits.

With the backdrop of decelerating growth in the broader market, Leasing performed in line with global office volumes and outperformed U.S.

office volumes (decline of 3%) in the second quarter, while office Leasing nominally outperformed these market benchmarks in the first-half 2025, according to JLL Research.

The second-quarter and full-year increases in segment platform operating expenses were primarily due to higher commissions, correlated to revenue growth, as well as incremental discrete variable operating expenses in the second quarter.

The increases in Adjusted EBITDA for the second quarter and first half of the year were largely driven by the revenue growth described above, tempered by the aforementioned discrete variable operating, administrative and other expenses in the second quarter, as compensation and benefits expenses as a percentage of revenue improved year-over-year for the quarter (enabled by increased use of technology and shared service centers).

Capital Markets Services

Three Months Ended March 31, Change in in Local

Three Months Ended June 30, Change in in Local

($ in millions) 2025 2024 U.S.

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Segment operating expenses 488.3 453.5 34.8 8 % 6 %

Equity earnings $ 1.6 0.1 1.5 n.m.

Equity earnings $ 0.8 0.5 0.3 60 % 78 %

Net non-cash MSR and mortgage banking derivative activity $ (4.2) (11.8) 7.6 64 % 64 %

Adjusted EBITDA $ 54.7 33.8 20.9 62 % 61 %

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.

Capital Markets Services (continued)

Six Months Ended June 30, Change in in Local

($ in millions) 2025 2024 U.S.

dollars Currency

Investment Sales, Debt/Equity Advisory and Other $ 693.2 579.0 114.2 20 % 19 %

Value and Risk Advisory 179.3 176.0 3.3 2 2

Loan Servicing 83.1 80.2 2.9 4 4

Revenue $ 955.6 835.2 120.4 14 % 14 %

Platform compensation and benefits $ 703.6 628.7 74.9 12 % 12 %

Platform operating, administrative and other 165.7 144.1 21.6 15 15

Depreciation and amortization 36.4 33.7 2.7 8 8

Segment platform operating expenses 905.7 806.5 99.2 12 12

Gross contract costs 2.8 25.4 (22.6) (89) (89)

Segment operating expenses 908.5 831.9 76.6 9 % 9 %

Equity earnings $ 2.4 0.6 1.8 300 % 311 %

Net non-cash MSR and mortgage banking derivative activity $ (17.1) (20.8) 3.7 18 % 18 %

Adjusted EBITDA $ 103.3 58.8 44.5 76 % 73 %

For the second quarter and first half of 2025, Capital Markets Services top-line growth was fueled by debt advisory and investment sales.

For both the second quarter and first half of 2025, the residential sector delivered the most significant contribution to the year-over-year increase, with notable second-quarter contributions also coming from the office, industrial and retail sectors.

Geographically, the U.S., Japan and MENA led the revenue growth for the quarter (year-to-date growth was led by the U.S., India and the UK).

The increases in segment platform operating expenses for the second quarter and first half of 2025 were largely driven by higher commission expense, correlated to the growth in Investment Sales, Equity & Debt Advisory.

In the current quarter, JLL recognized approximately $14.0 million of incremental expense associated with an enhanced loss-share agreement with Fannie Mae for a specific three-loan portfolio.

The impact of this item on year-over-year performance is more than offset by the $18.0 million expense recognized in the prior-year quarter associated with the August 2024 repurchase of a loan which JLL originated and then sold to Fannie Mae.

Adjusted EBITDA improvements for the quarter and first half of 2025 were primarily attributable to the revenue growth described above and the net impact of year-over-year loan-related losses.

In addition, compensation and benefits expense as a percentage of revenue modestly improved for both the current quarter and first six months of 2025 (enabled by increased use of technology and shared service centers), with the segment achieving significant Adjusted EBITDA growth for both the quarter and half year.

Investment Management

Three Months Ended March 31, Change in in Local

Three Months Ended June 30, Change in in Local

($ in millions) 2025 2024 U.S.

13 unchanged sentences

Equity losses $ (1.3) (7.3) 6.0 82 % 83 %

Investment Management (continued)

Six Months Ended June 30, Change in in Local

($ in millions) 2025 2024 U.S.

dollars Currency

Advisory fees $ 182.6 185.4 (2.8) (2) % (2) %

Transaction fees and other 15.0 15.8 (0.8) (5) (6)

Incentive fees 4.0 4.8 (0.8) (17) (19)

Revenue $ 201.6 206.0 (4.4) (2) % (3) %

Platform compensation and benefits $ 119.2 120.3 (1.1) (1) % (2) %

Platform operating, administrative and other 33.8 33.4 0.4 1 —

Depreciation and amortization 5.7 4.0 1.7 43 42

Segment platform operating expenses 158.7 157.7 1.0 1 —

Gross contract costs 16.5 17.2 (0.7) (4) (4)

Segment operating expenses $ 175.2 174.9 0.3 — % — %

Adjusted EBITDA (1)

$ 32.1 43.7 (11.6) (27) % (28) %

Equity losses $ (7.4) (11.2) 3.8 34 % 33 %

(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.

The slight decline in Investment Management advisory fees for the second quarter and first half of 2025 was primarily due to lower assets under management ("AUM"), reflecting asset dispositions on behalf of certain clients in the fourth quarter of 2024.

The changes in second-quarter and first-half-of-the-year Adjusted EBITDA were largely driven by the absence of the $8.2 million gain recognized in the prior-year quarter following the purchase of a controlling interest in a fund managed by the company.

AUM increased 3% in USD (2% in local currency) during the quarter, and decreased 2% in USD and 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)

Beginning balance (March 31, 2025) $ 82.3

Asset acquisitions/takeovers 1.3

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Change in uncalled committed capital and cash held 0.7

Ending balance (March 31, 2025)

Ending balance (June 30, 2025) $ 84.9

Trailing Twelve Months

Beginning balance (March 31, 2024)

Beginning balance (June 30, 2024) $ 86.6

Asset acquisitions/takeovers 5.8

3 unchanged sentences

Change in uncalled committed capital and cash held (2.0)

Ending balance (March 31, 2025)

Ending balance (June 30, 2025) $ 84.9

Software and Technology Solutions

Three Months Ended March 31, Change in in Local

Three Months Ended June 30, Change in in Local

($ in millions) 2025 2024 U.S.

1 unchanged sentence

Revenue $ 55.9 56.4 (0.5) (1) % (1) %

Platform compensation and benefits (1)

Platform compensation and benefits, excluding Carried interest $ 49.6 51.3 (1.7) (3) % (4) %

Carried interest (benefit) expense (2.5) 2.2 (4.7) (214) (217)

Platform operating, administrative and other 15.5 12.4 3.1 25 25

Depreciation and amortization 6.2 4.8 1.4 29 31

Segment platform operating expenses 68.8 70.7 (1.9) (3) (3)

Gross contract costs 0.5 1.4 (0.9) (64) (64)

Segment operating expenses $ 69.3 72.1 (2.8) (4) % (4) %

Adjusted EBITDA (2)

$ (6.3) (10.9) 4.6 42 % 43 %

Equity losses $ (27.4) (9.0) (18.4) (204) % (206) %

Six Months Ended June 30, Change in in Local

($ in millions) 2025 2024 U.S.

dollars Currency

Revenue $ 113.0 110.3 2.7 2 % 3 %

Platform compensation and benefits, excluding Carried interest $ 97.5 98.7 (1.2) (1) % (1) %

Carried interest (benefit) expense (4.9) 2.1 (7.0) (333) (336)

Platform operating, administrative and other 30.0 22.9 7.1 31 31

5 unchanged sentences

$ (9.2) (16.0) 6.8 43 % 41 %

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.

Equity losses $ (48.9) (10.0) (38.9) (389) % (389) %

(1) 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.

Lower Software and Technology Solutions revenue for the second quarter was primarily due to reduced technology spend from certain large existing clients, partially offset by low double-digit growth in software services.

For the first half of 2025, net revenue growth was due to increased bookings from software, which outpaced the decline in technology solutions.

Carried interest expense is associated with equity earnings/losses on certain investments within the segment's Spark Venture Funds and the reduction to expense in the current year reflected the equity losses on certain investments in 2025.

Excluding the impact of carried interest, segment operating expense growth for the second quarter and first half of 2025 was driven by increased revenue-related expenses.

For both the quarter-over-quarter and year-over-year, the favorable swings in carried interest offset increases in segment operating expenses.

The improvement in Adjusted EBITDA for the second quarter and first half of the year was primarily attributable to the favorable change in carried interest expense/benefit described above.

LIQUIDITY AND CAPITAL RESOURCES

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Cash Flows from Operating Activities

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.

Operating activities used $434.8 million of cash in the first six months of 2025, compared with $403.6 million of cash used in operating activities during the same period in 2024.

Incremental cash outflow in the first half was primarily attributable to higher commission payments in the first six months of 2025 compared with the prior-year period and the timing of Net reimbursables activity, partially offset by lower cash taxes paid in 2025.

Cash Flows from Investing Activities

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 used $200.4 million of cash for investing activities during the first six months of 2025, compared with $154.1 million used during the same period in 2024.

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

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

Cash Flows from Financing Activities

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.

Financing activities provided $617.5 million of cash during the first six months of 2025, compared with $566.6 million provided during the same period in 2024.

The proceeds from increased borrowings were used to support the $100 million investment in JLL IPT and higher share repurchases in 2025.

We discuss these drivers in further detail below.

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) March 31, 2025 December 31, 2024

(in millions) June 30, 2025 December 31, 2024

Outstanding borrowings under the Facility $ 380.0 100.0

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Outstanding commercial paper 690.0 200.0

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.

In addition to our Facility, we had the capacity to borrow up to $46.1 million under local overdraft facilities as of June 30, 2025.

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

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

($ in millions) 2025 2024 2025 2024

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Investment Activity

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.

As of June 30, 2025, we had a carrying value of $878.8 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 six months ended June 30, 2025 and 2024, funding of investments exceeded return of capital by $104.5 million (notably, the $100.0 million invested in JLL IPT as described above) and $31.4 million, respectively.

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

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Capital Expenditures

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

Net capital additions for the six months ended June 30, 2025 and 2024 were $88.9 million and $81.4 million, respectively.

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

Business Acquisitions

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.

During the six months ended June 30, 2025, we paid $18.7 million for business acquisitions.

This included $6.1 million of payments relating to acquisitions in 2025 and $12.6 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.

During the six months ended June 30, 2024, we paid $44.2 million for business acquisitions.

This included $39.3 million of payments relating to acquisitions in 2024 and $4.9 million for deferred business acquisition and earn-out obligations related to acquisitions completed in prior years.

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 $23.0 million as of March 31, 2025.

Deferred business acquisition obligations totaled $23.6 million as of June 30, 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 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.

As of June 30, 2025, we had the potential to make earn-out payments for a maximum of $78.2 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.

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

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

($ in millions) 2025 2024 2025 2024

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Total paid for shares repurchased $ 41.4 20.1 $ 61.2 40.2

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

As of June 30, 2025, $952.0 million remained authorized for repurchases under our share repurchase program.

Repatriation of Foreign Earnings

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

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.

As of June 30, 2025 and December 31, 2024, we had total Cash and cash equivalents of $401.4 million and $416.3 million, respectively, of which approximately $313.1 million and $314.4 million, respectively, was held by foreign subsidiaries.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

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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