Walker & Dunlop reported fourth‑quarter 2025 results with revenue of $340 million and an adjusted earnings per share of $0.28, both falling short of consensus estimates of $1.23 to $1.40 for EPS and $343.66 million to $353.97 million for revenue.
The miss was driven by substantial one‑time charges totaling $46.1 million in the quarter and $53.3 million for the full year. These charges included $26.1 million in asset impairment for underperforming affordable‑housing assets and $35.5 million for indemnified and repurchased loan expenses and credit losses, turning the quarter into a net loss and eroding profitability.
Segment results show the Capital Markets business leading the recovery, with transaction volume up 36% to $18.3 billion and revenue up 5% to $191 million. The Servicing & Asset Management segment, however, faced headwinds, contributing to the overall revenue miss despite the underlying volume growth.
"We did not achieve The Drive to '25 due in large part to interest rate spikes and challenging market conditions from 2022 to 2025. Yet we begin 2026 with the Journey to '30, another bold plan that has everyone at Walker & Dunlop excited about where we are going and how we get there," said Chairman and CEO Willy Walker. "While loan buybacks and additional provision expenses are never welcome, we are taking several charges this quarter to set W&D up for growth and success in 2026 and beyond." "Our Q1 2026 pipeline currently sits at $15 billion, over two times our Q1 2025 production total and includes several large portfolio transactions," Walker added. "As a result, as shown on slide 11, our full year 2026 guidance is for diluted earnings per share of $3.50 to $4.00, adjusted EBITDA of $300 million to $325 million, and adjusted core earnings per share of $4.50 to $5.00," CFO Greg Florkowski said.
The company’s guidance for 2026 signals confidence in a recovery: diluted EPS of $3.50 to $4.00, adjusted EBITDA of $300 million to $325 million, and adjusted core EPS of $4.50 to $5.00. These targets reflect expectations of stronger commercial real‑estate activity and a normalization of the extraordinary charges that weighed on the quarter.
Investors reacted negatively to the earnings miss, citing the significant one‑time charges that drove the adjusted EPS down. Nonetheless, the underlying Capital Markets business continues to expand, with transaction volume up 36% year‑over‑year and a 5% revenue increase, indicating resilience amid tight MSR margins and a challenging macro environment.
Despite the quarter’s miss, Walker & Dunlop remains optimistic. The company closed 2025 with strong momentum, having grown total transaction volume from $7 billion in Q1'25 to $18 billion in Q4'25, up 161%. With $299 million in cash and a clear five‑year plan to deepen its presence in commercial real‑estate capital markets, the firm is positioning itself for a rebound in 2026.
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