# Cushman & Wakefield Ltd. (CWK) FY 2024 MD&A

Verbatim Item 7 Management's Discussion and Analysis from Cushman & Wakefield Ltd.'s 10-K for fiscal year 2024.

SEC filing source: https://www.sec.gov/Archives/edgar/data/1628369/000162836925000005/cwk-20241231.htm
Accession: 0001628369-25-000005
Filing date: 2025-02-21
Report date: 2024-12-31
Extracted structurally from real Item 7 body heading to real Item 7A/8 boundary.
Confidence: high

Company profile: /company/CWK/
All MD&A years: /company/CWK/mda/
Previous year: /company/CWK/mda/fy2023/ (FY 2023)
Next year: /company/CWK/mda/fy2025/ (FY 2025)

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our Consolidated Financial Statements and related notes thereto included elsewhere in this Annual Report.

As discussed in “Cautionary Note Regarding Forward-Looking Statements,” the following discussion and analysis contains forward-looking statements that involve risks and uncertainties. Our actual results may materially differ from those discussed in such forward-looking statements. Factors that could cause or contribute to these differences include, but are not limited to, those identified below and those discussed in “Risk Factors” in Part I, Item 1A in this Annual Report. Our fiscal year ends December 31. With respect to presentation, all statements asserting an “increase” or “decrease” relate to changes from prior applicable periods of comparison.

Overview

Cushman & Wakefield is a leading global commercial real estate services firm that makes a meaningful impact for our people, clients, communities and world. Led by an experienced executive team and driven by approximately 52,000 employees in nearly 400 offices and approximately 60 countries, we deliver exceptional value for real estate occupiers and owners, managing approximately 6.0 billion square feet of commercial real estate space globally and offering a broad suite of services through our integrated and scalable platform. Our business is focused on meeting the increasing demands of our clients through comprehensive service offerings including (i) Services, (ii) Leasing, (iii) Capital markets and (iv) Valuation and other services.

Recent Developments and Outlook

Highlights from the year ended December 31, 2024:

•Revenue of $9.4 billion for the year ended December 31, 2024 decreased $47.2 million from the year ended December 31, 2023.

◦Leasing revenue increased 7% driven by office and industrial leasing in the Americas and APAC.

◦Capital markets revenue increased 4% driven by the industrial, retail and office sectors and across all segments.

◦Valuation and other revenue increased 1% and Services revenue declined 3%.

•Net income of $131.3 million for the year ended December 31, 2024 increased $166.7 million compared to a net loss of $35.4 million for the year ended December 31, 2023. Diluted earnings per share was $0.56 for the year ended December 31, 2024 compared to a diluted loss per share of $0.16 for the year ended December 31, 2023.

◦Adjusted EBITDA (as defined below) of $581.9 million increased 2% from the year ended December 31, 2023.

•Liquidity as of December 31, 2024 was $1.9 billion, consisting of availability on the Company’s undrawn revolving credit facility of $1.1 billion and cash and cash equivalents of $0.8 billion.

2025 Debt Activity

In January 2025, we repriced the 2030 Tranche-1 (as defined below) of our Term Loans, reducing the applicable interest rate by 25 basis points to 1-month Term Secured Overnight Financing Rate (“SOFR”) plus 2.75%.

Macroeconomic Trends and Uncertainty

Demand for our services is largely dependent on the relative strength of the global and regional commercial real estate markets, which are highly sensitive to general macroeconomic conditions. In 2024, macroeconomic uncertainty continued in many markets around the world, and our business continued to be negatively impacted by elevated inflation and increased volatility in interest rates, among other macroeconomic challenges, which led to ongoing volatility within global capital and credit markets. This has resulted in delays in certain real estate transaction decisions, but we believe it has also led to an increase in available capital ready to be deployed for real estate investments once market conditions become more favorable. While our brokerage revenues increased in 2024 compared to the prior year, transaction volumes were still low compared to 2022. Further, although borrowing costs remain elevated and transaction volumes have not fully stabilized, the commercial real estate industry overall showed signs of improvement in 2024, for example, as evidenced by our Leasing revenue growth of 7% compared

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to the year ended December 31, 2023, primarily driven by strength in the office and industrial sectors. However, a delay or stall in any economic recovery, any future uncertainty, weakness or volatility in the credit markets, a decline in the U.S. or global economy, or the public perception that any of these events may occur, could further affect global and regional demand for commercial real estate, which would negatively affect the performance of some or all of our service lines.

Critical Accounting Policies and Estimates

Our Consolidated Financial Statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP” or “GAAP”), which requires us to make estimates and assumptions that affect reported amounts. The estimates and assumptions are based on historical experience, current facts and circumstances, and on other factors that we believe to be reasonable. Actual results may differ from those estimates and assumptions. We review these estimates on a periodic basis to ensure reasonableness. We have identified all significant accounting policies in Note 2: Summary of Significant Accounting Policies of the Notes to the Consolidated Financial Statements. The following are the critical accounting policies where estimates and assumptions could materially affect the application of the policies.

Goodwill

Goodwill is not amortized, but rather tested for impairment at least annually, typically in the fourth quarter. The Company will test more frequently if there are indicators of impairment or whenever business and economic circumstances change, suggesting the carrying value of goodwill may not be recoverable. These indicators may include sustained significant decline in our share price and market capitalization, a decline in our expected future cash flows, or a significant adverse change in legal factors or in the business climate, among others.

The Company performs impairment reviews at the reporting unit (“RU”) level. U.S. GAAP defines an RU as a component of an operating segment if the component constitutes a business, for which discrete financial information is available, and segment management regularly reviews the operating results of that component. When evaluating these assets for impairment, the Company may first perform a qualitative assessment to determine whether it is more likely than not that the RU is impaired. If the Company does not perform a qualitative assessment, or if the Company determines that it is not more likely than not that the fair value of the RU exceeds its carrying amount, then the goodwill impairment test becomes a quantitative analysis. If the fair value of an RU is determined to be greater than the carrying value of the RU, goodwill is recoverable. If the fair value of an RU is less than the carrying value, a goodwill impairment loss is recognized for the amount that the carrying amount of the RU, including goodwill, exceeds its fair value, limited to the total amount of the goodwill allocated to the reporting unit.

In determining the fair value of our RUs, the Company uses a discounted cash flow (“DCF”) model based on our most current forecasts. The Company discounts the related cash flow forecasts using the weighted average cost of capital method at the date of evaluation. Preparation of forecasts and selection of certain assumptions, including the discount rate, forecasted short term and long term revenue growth rates, and forecasted profitability margins, for use in the DCF model involve significant judgments, and changes in these estimates could affect the estimated fair value of one or more of our RUs and could result in a goodwill impairment charge in a future period. The long term revenue growth rate, or terminal value growth rate, is often the assumption that creates the most sensitivity in the estimated fair value and is based on expectations of future macroeconomic outcomes, such as gross domestic product, inflation, interest rates and the geopolitical environment. We also use market multiples which are obtained from quoted prices of comparable companies to corroborate our DCF model results. The combined estimated fair value of our reporting units from our DCF model often results in a premium over our market capitalization, commonly referred to as a control premium.

The Company identified four reporting units consisting of Americas, C&W Services, EMEA and APAC. In 2024, we performed a qualitative assessment for C&W Services, EMEA and APAC, and a quantitative assessment for Americas. In 2023, we performed a quantitative assessment for all four RUs.

In both 2024 and 2023, to further validate the reasonableness of the initial quantitative assessment and evaluation, a reconciliation of our market capitalization to the carrying value of our shareholders’ equity was performed by calculating an implied control premium. We concluded that the implied control premium was reasonable based on a comparison to actual control premiums realized in recent comparable market transactions. If our share price declines and such decline is sustained, further evaluation would be necessary and an impairment of our goodwill may result. Additionally, for all RUs in which the Company performed a quantitative assessment in the current and prior year, we performed sensitivity analyses over the key assumptions and concluded that no reasonably possible change to the assumptions used in estimating the fair value of the RU would cause the RUs’ carrying value to equal

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or exceed their respective fair values, and there is substantial headroom between the estimated fair value of each RU and its carrying value.

In both 2024 and 2023, we performed our goodwill impairment evaluation over the four RUs, resulting in no impairment charges. For additional discussion on our goodwill impairment assessment, refer to Note 6: Goodwill and Other Intangible Assets of the Notes to the Consolidated Financial Statements.

Income Taxes

Income taxes are accounted for under the asset and liability method in accordance with ASC Topic 740, Income Taxes. Deferred tax assets and liabilities are determined based on temporary differences between the financial reporting and tax basis of assets and liabilities and operating loss and tax credit carry forwards. The carrying values of deferred tax assets and liabilities are measured by applying enacted tax rates and laws to taxable income in the years in which we expect those temporary differences to be recovered or settled. We recognize into income the effect on deferred tax assets and liabilities of a change in tax rates in the period that includes the enactment date.

Deferred tax assets are reduced by valuation allowances if, based on the consideration of all available evidence, it is more likely than not that some portion of the deferred tax asset will not be realized. Considerations with respect to the realizability of deferred tax assets include the period of expiration of the deferred tax asset, historical earnings or losses and projected future taxable income by jurisdiction as well as tax liabilities for the tax jurisdiction to which the tax asset relates. Significant management judgment is required in determining the assumptions and estimates related to the amount and timing of future taxable income, including forecasted short term and long term revenue growth rates and forecasted profitability margins, as well as the expectations of future macroeconomic conditions that impact these assumptions, reversal of existing temporary differences, the ability to carryback losses, and certain tax planning strategies. Valuation allowances are evaluated periodically and will be subject to change in each future reporting period as a result of changes in various factors.

Our future effective tax rate is sensitive to changes in the mix of our geographic earnings, changes in local statutory tax rates, changes in the valuation of deferred taxes, or changes in tax laws, regulations or accounting principles in material jurisdictions, and could be adversely affected by these items.

Items Affecting Comparability

When reading our financial statements and the information included in this Annual Report, it should be considered that we have experienced, and continue to experience, several material trends and uncertainties that have affected our financial condition and results of operations and could affect future performance. We believe that the following material trends and uncertainties are important to understand the variability of our historical earnings and cash flows and any potential future variability.

Macroeconomic Conditions

Our results of operations are significantly impacted by economic trends, government policies and the global and regional real estate markets. These include the following: overall economic activity, volatility of the financial markets, interest rates and inflation, demand for commercial real estate, the impact of tax and regulatory policies, the cost and availability of credit, changes in employment rates and the geopolitical environment. Similarly, economic conditions in certain countries such as the United States or China can have significant influence on the commercial real estate sector across an entire region, impacting supply chains, cross-border investments and development activity in key markets.

Our diversified operating model helps to partially mitigate the negative effect of difficult market conditions on our margins as a substantial portion of our costs are variable compensation expenses, specifically commissions and bonuses paid to our professionals in our Leasing and Capital markets service lines. Nevertheless, ongoing adverse economic trends could pose significant risks to our operating performance and financial condition.

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Acquisitions and Dispositions

Our results may include the incremental impact of completed transactions, which could impact the comparability of our results on a year-over-year basis. Our results could include incremental revenues and expenses following the completion of an acquisition, or comparable results could include revenues and expenses of recent dispositions. Additionally, there could be an adverse impact on net income for a period of time after the completion of an acquisition driven by transaction-related and integration expenses. From time to time, we use strategic and in-fill acquisitions, as well as joint ventures, to add new service capabilities, to increase our scale within existing capabilities and to expand our presence in new or existing geographic regions globally. As it relates to dispositions, results may include gains or losses on the disposition and we may incur incremental transaction-related costs that could have an adverse impact on net income.

International Operations

Our business consists of service lines operating in multiple regions inside and outside of the U.S. Our international operations expose us to global economic trends, as well as foreign government tax, regulatory and policy measures.

Additionally, outside of the U.S., we generate earnings in other currencies and are subject to fluctuations relative to the U.S. dollar (“USD”). These currency fluctuations, most notably the Australian dollar, euro and British pound sterling, have positively and adversely affected our operating results measured in USD in the past and are likely to do so in the future. It can be difficult to compare period-over-period financial statements when the movement in currencies against the USD does not reflect trends in the local underlying business as reported in its local currency.

In order to assist our investors and improve comparability of results, we present the year-over-year changes in certain of our non-GAAP financial measures, such as Fee-based operating expenses and Adjusted EBITDA, in “local” currency. The local currency figures represent the year-over-year change assuming no movement in foreign exchange rates from the prior year. We believe that this provides our management and investors with another important view of comparability and trends in the underlying operating business.

Seasonality

A significant portion of our revenue is seasonal, especially for service lines such as Leasing and Capital markets. This impacts the comparison of our financial condition and results of operations on a quarter-by-quarter basis. Generally, our industry is focused on completing transactions by calendar year-end with a high concentration of activity in the last quarter of the calendar year while certain expenses are recognized more evenly throughout the calendar year. Historically, our revenue and operating income typically tend to be lowest in the first quarter, and highest in the fourth quarter of each year. Our Services business partially mitigates this intra-year seasonality, due to the recurring nature of this service line which generates more stable revenues throughout the year.

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Use of Non-GAAP Financial Measures

We have used the following measures, which are considered “non-GAAP financial measures” under SEC guidelines:

i.Adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”) and Adjusted EBITDA margin;

ii.Segment operating expenses and Fee-based operating expenses; and

iii.Local currency.

Management principally uses these non-GAAP financial measures to evaluate operating performance, develop budgets and forecasts, improve comparability of results and assist our investors in analyzing the underlying performance of our business. These measures are not recognized measurements under GAAP. When analyzing our operating results, investors should use them in addition to, but not as an alternative for, the most directly comparable financial results calculated and presented in accordance with GAAP. Because the Company’s calculation of these non-GAAP financial measures may differ from other companies, our presentation of these measures may not be comparable to similarly titled measures of other companies.

The Company believes that these measures provide a more complete understanding of ongoing operations, enhance comparability of current results to prior periods and may be useful for investors to analyze our financial performance. The measures eliminate the impact of certain items that may obscure trends in the underlying performance of our business. The Company believes that they are useful to investors for the additional purposes described below.

Adjusted EBITDA and Adjusted EBITDA margin: We have determined Adjusted EBITDA to be our primary measure of segment profitability. We believe that investors find this measure useful in comparing our operating performance to that of other companies in our industry because these calculations generally eliminate unrealized loss on investments, net, loss on dispositions, integration and other costs related to merger, acquisition related costs and efficiency initiatives, cost savings initiatives, Chief Executive Officer (“CEO”) transition costs, servicing liability fees and amortization, certain legal and compliance matters, gains from insurance proceeds and other non-recurring items. Adjusted EBITDA also excludes the effects of financings, income tax and the non-cash accounting effects of depreciation and intangible asset amortization. Adjusted EBITDA margin, a non-GAAP measure of profitability as a percent of revenue, is measured against service line fee revenue.

Segment operating expenses and Fee-based operating expenses: Consistent with GAAP, reimbursed costs for certain customer contracts are presented on a gross basis in both revenue and operating expenses for which the Company recognizes substantially no margin. Total costs and expenses include segment operating expenses, as well as other expenses such as depreciation and amortization, loss on dispositions, integration and other costs related to merger, acquisition related costs and efficiency initiatives, cost savings initiatives, CEO transition costs, servicing liability fees and amortization, certain legal and compliance matters and other non-recurring items. Segment operating expenses includes Fee-based operating expenses and Cost of gross contract reimbursables. We believe Fee-based operating expenses more accurately reflects the costs we incur during the course of delivering services to our clients and is more consistent with how we manage our expense base and operating margins.

Local currency: In discussing our results, we refer to percentage changes in local currency. These metrics are calculated by holding foreign currency exchange rates constant in year-over-year comparisons. Management believes that this methodology provides investors with greater visibility into the performance of our business excluding the effect of foreign currency rate fluctuations.

Adjustments to U.S. GAAP Financial Measures Used to Calculate Non-GAAP Financial Measures

During the periods presented in this Annual Report, we had the following adjustments:

Unrealized loss on investments, net represents net unrealized gains and losses on fair value investments. Prior to 2024, this primarily reflected unrealized losses on our investment in WeWork Inc. (“WeWork”).

Loss on dispositions reflects losses on the sale or disposition of businesses as well as other transaction costs associated with the sales, which are not indicative of our core operating results given the low frequency of business dispositions by the Company.

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Integration and other costs related to merger reflects the non-cash amortization expense of certain merger related retention awards that will be amortized through 2026, and the non-cash amortization expense of merger related deferred rent and tenant incentives which will be amortized through 2028.

Acquisition related costs and efficiency initiatives includes internal and external consulting costs incurred to implement certain distinct operating efficiency initiatives designed to realign our organization to be a more agile partner to our clients. These initiatives vary in frequency, amount and occurrence based on factors specific to each initiative. In addition, this includes certain direct costs incurred in connection with acquiring businesses.

Cost savings initiatives primarily reflects severance and other one-time employment-related separation costs related to actions to reduce headcount across select roles to help optimize our workforce given the challenging macroeconomic conditions and operating environment, as well as property lease rationalizations. These actions continued through September 30, 2024.

CEO transition costs in 2024 reflects certain payroll taxes associated with compensation for John Forrester, the Company’s former CEO. In 2023, CEO transition costs reflects accelerated stock-based compensation expense associated with stock awards granted to Mr. Forrester, who stepped down from the position of CEO as of June 30, 2023, but who remained employed by the Company as a Strategic Advisor until December 31, 2023. The requisite service period under the applicable award agreements was satisfied upon Mr. Forrester’s retirement from the Company on December 31, 2023. In 2023, CEO transition costs also included Mr. Forrester’s salary and bonus accruals for the second half of 2023. We believe the accelerated stock-based compensation expense, salary and bonus accruals, as well as the payroll taxes associated with such compensation, are similar in nature to one-time severance benefits and are not normal, recurring operating expenses necessary to operate the business.

Servicing liability fees and amortization reflects the additional non-cash servicing liability fees accrued in connection with the A/R Securitization (as defined below) amendments in prior years. The liability will be amortized through June 2026.

Legal and compliance matters includes estimated losses and settlements for certain legal matters which are not considered ordinary course legal matters given the infrequency of similar cases brought against the Company, complexity of the matter, nature of the remedies sought and/or our overall litigation strategy. We exclude such losses from the calculation of Adjusted EBITDA to improve the comparability of our operating results for the current period to prior and future periods.

Gains from insurance proceeds represents one-time gains related to certain contingent events, such as insurance recoveries, which are not considered ordinary course and which are only recorded once realized or realizable, net of related legal fees. We exclude such net gains from the calculation of Adjusted EBITDA to improve the comparability of our operating results for the current period to prior and future periods.

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Results of Operations

In accordance with Item 303 of Regulation S-K, the Company has excluded the discussion of 2022 results in “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” as this discussion can be found in our 2023 Annual Report on Form 10-K filed with the SEC under “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

The following table sets forth items derived from our Consolidated Statements of Operations for the years ended December 31, 2024 and 2023 (in millions):

[[GREPCENT_TABLE]]
[["","Year Ended December 31,"],["","2024","2023","% Change in USD","% Change in Local Currency"],["Revenue:"],["Services","$","3,480.1","$","3,573.0","(3)","%","(2)","%"],["Leasing","1,947.5","1,826.7","7","%","7","%"],["Capital markets","721.8","695.0","4","%","4","%"],["Valuation and other","439.8","436.7","1","%","1","%"],["Total service line fee revenue(1)","6,589.2","6,531.4","1","%","1","%"],["Gross contract reimbursables(2)","2,857.3","2,962.3","(4)","%","(3)","%"],["Total revenue","$","9,446.5","$","9,493.7","0","%","0","%"],["Costs and expenses:"],["Cost of services provided to clients","$","4,862.9","$","4,879.3","0","%","0","%"],["Cost of gross contract reimbursables","2,857.3","2,962.3","(4)","%","(3)","%"],["Total costs of services","7,720.2","7,841.6","(2)","%","(1)","%"],["Operating, administrative and other","1,224.1","1,262.8","(3)","%","(3)","%"],["Depreciation and amortization","122.2","145.6","(16)","%","(16)","%"],["Restructuring, impairment and related charges","41.1","38.1","8","%","8","%"],["Total costs and expenses","9,107.6","9,288.1","(2)","%","(2)","%"],["Operating income","338.9","205.6","65","%","65","%"],["Interest expense, net of interest income","(229.9)","(281.1)","(18)","%","(18)","%"],["Earnings from equity method investments","37.4","58.1","(36)","%","(36)","%"],["Other income (expense), net","29.4","(12.6)","n.m.","n.m."],["Earnings (loss) before income taxes","175.8","(30.0)","n.m.","n.m."],["Provision for income taxes","44.5","5.4","n.m.","n.m."],["Net income (loss)","$","131.3","$","(35.4)","n.m.","n.m."],["Net income (loss) margin","1.4","%","(0.4)","%"],["Adjusted EBITDA","$","581.9","","$","570.1","","2","%","3","%"],["Adjusted EBITDA margin(3)","8.8","%","8.7","%"]]
[[/GREPCENT_TABLE]]

n.m. not meaningful

(1) Service line fee revenue represents revenue for fees generated from each of our service lines.

(2) Gross contract reimbursables reflects revenue from clients which have substantially no margin.

(3) Adjusted EBITDA margin is measured against Total service line fee revenue.

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Reconciliation of Net income (loss) to Adjusted EBITDA (in millions):

[[GREPCENT_TABLE]]
[["","Year Ended December 31,"],["","2024","2023"],["Net income (loss)","$","131.3","","$","(35.4)"],["Adjustments:"],["Depreciation and amortization","122.2","","145.6"],["Interest expense, net of interest income","229.9","","281.1"],["Provision for income taxes","44.5","","5.4"],["Unrealized loss on investments, net","0.8","","27.8"],["Loss on dispositions","18.4","","1.8"],["Integration and other costs related to merger","4.9","","11.2"],["Acquisition related costs and efficiency initiatives","\u2014","","14.2"],["Cost savings initiatives","28.9","","55.6"],["CEO transition costs","1.9","","8.3"],["Servicing liability fees and amortization","(1.7)","","11.7"],["Legal and compliance matters","\u2014","","23.0"],["Gain from insurance proceeds, net of legal fees","(16.5)","","1.1"],["Other(1)","17.3","","18.7"],["Adjusted EBITDA","$","581.9","","$","570.1"]]
[[/GREPCENT_TABLE]]

(1) For the year ended December 31, 2024, Other primarily reflects one-time consulting costs associated with the Company rebranding, professional services fees associated with discrete offshoring, legal fees and costs associated with an antitrust matter (see Note 17: Commitments and Contingencies of the Notes to the Consolidated Financial Statements), non-cash stock-based compensation expense associated with certain one-time retention awards which vested in February 2024, one-time bad debt expense driven by a sublessee default and one-time legal and consulting costs associated with a secondary offering of our ordinary shares by our former shareholders. For the year ended December 31, 2023, Other primarily reflects non-cash stock-based compensation expense associated with certain one-time retention awards, one-time consulting costs associated with certain legal entity reorganization projects and a one-time impairment of certain customer relationship intangible assets.

Reconciliation of Total costs and expenses to Segment operating expenses and Fee-based operating expenses (in millions):

[[GREPCENT_TABLE]]
[["","Year Ended December 31,"],["","2024","2023"],["Total costs and expenses","$","9,107.6","","$","9,288.1"],["Depreciation and amortization","(122.2)","","(145.6)"],["Loss on dispositions","(18.4)","","(1.8)"],["Integration and other costs related to merger","(4.9)","","(11.2)"],["Acquisition related costs and efficiency initiatives","\u2014","","(14.2)"],["Cost savings initiatives","(28.9)","","(55.6)"],["CEO transition costs","(1.9)","","(8.3)"],["Servicing liability fees and amortization","1.7","","(11.7)"],["Legal and compliance matters","\u2014","","(23.0)"],["Other, including foreign currency movements(1)","(23.9)","","(28.7)"],["Segment operating expenses","8,909.1","","8,988.0"],["Cost of gross contract reimbursables","(2,857.3)","","(2,962.3)"],["Fee-based operating expenses","$","6,051.8","","$","6,025.7"]]
[[/GREPCENT_TABLE]]

(1) For the year ended December 31, 2024, Other primarily reflects one-time consulting costs associated with the Company rebranding, professional services fees associated with discrete offshoring, legal fees and costs associated with an antitrust matter (see Note 17: Commitments and Contingencies of the Notes to the Consolidated Financial Statements), non-cash stock-based compensation expense associated with certain one-time retention awards which vested in February 2024, one-time bad debt expense driven by a sublessee default, one-time legal and consulting costs associated with a secondary offering of our ordinary shares by our former shareholders and the effects of movements in foreign currency. For the year ended December 31, 2023, Other primarily reflects non-cash stock-based compensation expense associated with certain one-time retention awards, one-time consulting costs associated with certain legal entity reorganization projects, a one-time impairment of certain customer relationship intangible assets and the effects of movements in foreign currency.

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Year ended December 31, 2024 compared to year ended December 31, 2023

Revenue

Revenue of $9.4 billion was relatively flat compared to the year ended December 31, 2023. The decrease of $47.2 million was driven by declines in the Americas and EMEA, which both decreased 2%, partially offset by growth in APAC of 7%. The decline was principally driven by decreases in Services and Gross contract reimbursables revenue of 3% and 4%, respectively, primarily due to lower project management revenue and the impact of the sale of a non-core Services business on August 1, 2024, which reduced facilities management revenue by $57.1 million. Additionally, the Company made a proactive effort, most notably in EMEA, to exit certain low margin contracts to improve company wide margin as we focus on sustainable growth, which also contributed to these revenue declines. Partially offsetting these trends was Leasing revenue growth of 7% compared to the year ended December 31, 2023, primarily driven by office and industrial sector leasing in the Americas and APAC. Capital markets revenue increased 4% due to broad strength across all segments, within the industrial, retail and office sectors specifically, as rate stability and further clarity in the interest rate environment in the fourth quarter of 2024 contributed to increased investment sales activity in that period. Favorable trends in e-commerce and supply chain centralization also helped drive industrial property leasing and sales volumes, while office property leasing and sales volumes increased due to demand for premium-quality buildings. Valuation and other revenue also increased 1% from the prior year.

Costs of services

Costs of services of $7.7 billion decreased $121.4 million or 2% compared to the year ended December 31, 2023, principally driven by a decrease in third-party consumables and sub-contractor costs of approximately $246.0 million as a result of declines in our Services business, partially offset by an increase in direct employment costs of approximately $139.0 million, primarily due to higher commissions as a result of higher brokerage revenues and higher bonus costs. Cost of services provided to clients was flat compared to the prior year and Cost of gross contract reimbursables decreased 4%, driven by the Americas, due to changes in client mix. Total costs of services as a percentage of total revenue was 82% for 2024 compared to 83% for 2023.

Operating, administrative and other

Operating, administrative and other expenses of $1.2 billion, which represents indirect and overhead costs such as employment, occupancy and information technology costs, decreased $38.7 million or 3% compared to the year ended December 31, 2023. The decrease was driven by the impact of our cost savings initiatives, primarily realized as a reduction in employment costs of approximately $20.0 million. Stock-based compensation expense also declined $15.0 million as a result of the modification of our non-executive chairman’s awards in 2024 and the accelerated expense associated with our former CEO’s transition in 2023. In addition, in June 2023, the Company incurred an $11.3 million servicing liability fee in connection with the amendment and extension of the A/R Securitization. These trends were partially offset by cost inflation. Operating, administrative and other expenses as a percentage of total revenue was 13% for both the year ended December 31, 2024 and 2023.

Restructuring, impairment and related charges

Restructuring, impairment and related charges of $41.1 million increased $3.0 million compared to the year ended December 31, 2023, primarily driven by a loss on disposition of $15.8 million related to the sale of a non-core Services business in the Americas, partially offset by a decrease in severance and employment-related costs of $3.0 million and a decrease in impairment charges of $9.8 million. In 2023, the Company actioned certain cost savings initiatives, including a reduction in headcount across select roles to help optimize our workforce given the challenging macroeconomic conditions and operating environment, as well as property lease rationalizations.

Interest expense, net of interest income

Interest expense of $229.9 million decreased $51.2 million or 18% compared to the year ended December 31, 2023, primarily related to an aggregate loss on debt extinguishment of $41.9 million as well as $8.7 million of new transaction costs expensed in 2023 in connection with the refinancing of a portion of the borrowings under our 2018 Credit Agreement. The Company was also able to decrease interest expense by actively managing our debt costs through repricings in 2024, resulting in lower interest rates, and making voluntary principal prepayments on our term loan due in 2025 (see Note 11: Long-Term Debt and Other Borrowings of the Notes to the Consolidated Financial Statements for further information).

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Earnings from equity method investments

Earnings from equity method investments of $37.4 million decreased $20.7 million compared to the year ended December 31, 2023, primarily due to a decline of $17.5 million in earnings recognized from our equity method investment in Cushman Wakefield Greystone LLC (the “Greystone JV”) due to lower transaction volumes as a result of tighter lending conditions in 2024.

Other income (expense), net

Other income, net was $29.4 million for the year ended December 31, 2024 compared to other expense, net of $12.6 million for the year ended December 31, 2023, driven by a $19.2 million gain from insurance proceeds recognized in 2024 (see Note 17: Commitments and Contingencies of the Notes to the Consolidated Financial Statements for further information), as well as lower net unrealized losses on our fair value investments of $27.0 million, primarily related to our investment in WeWork, and higher royalty fee income from our CWVS Holding Limited joint venture of $0.7 million.

Provision for income taxes

Provision for income taxes for the year ended December 31, 2024 was $44.5 million on earnings before income taxes of $175.8 million. For the year ended December 31, 2023, the provision for income taxes was $5.4 million on a loss before income taxes of $30.0 million. The increase in income tax expense was driven by an improvement in earnings before income taxes compared to a loss before income taxes in the prior year, predominately in the U.S., which improved $149.6 million, as well as changes in the jurisdictional mix of those earnings as a greater percentage of the earnings before income taxes generated from non-U.S. jurisdictions in 2024 compared to 2023 was taxed at a rate higher than the U.S. statutory tax rate of 21.0%. Additionally, the negative effective tax rate for the year ended December 31, 2023 was principally driven by an increase in the valuation allowance the Company placed on a portion of our deferred tax assets and permanent nondeductible items.

Net income (loss) and Adjusted EBITDA

Net income was $131.3 million for the year ended December 31, 2024 compared to a net loss of $35.4 million for the year ended December 31, 2023. Net income margin was 1.4% compared to net loss margin of 0.4% for the prior year. The improvement was driven by the impact of our cost savings initiatives, including lower employment costs, growth in our Leasing service line, one-time gains from insurance proceeds and lower net unrealized losses on our fair value investments. Additionally, an aggregate loss on debt extinguishment and a servicing liability fee associated with the amendment and extension of the A/R Securitization in 2023 contributed to the improvement from the prior year. These favorable trends were partially offset by declines in Services revenue, the loss on disposition recognized in 2024 and cost inflation.

Adjusted EBITDA of $581.9 million increased $11.8 million or 2% compared to the year ended December 31, 2023, driven by the same factors impacting Net income above, with the exception of the gains from insurance proceeds, net unrealized losses on our fair value investments, loss on disposition and the aggregate loss on debt extinguishment and A/R Securitization servicing liability fee incurred in the prior year. Adjusted EBITDA margin, measured against service line fee revenue, of 8.8% remained relatively flat compared to the year ended December 31, 2023.

Segment Results

We report our operations through the following segments: (1) Americas, (2) EMEA and (3) APAC. The Americas consists of operations located in the United States, Canada and other markets in North and South America. EMEA includes operations in the United Kingdom, France, Netherlands and other markets in Europe and the Middle East. APAC includes operations in Australia, Singapore, India and other markets in the Asia Pacific region.

For segment reporting, Service line fee revenue represents revenue for fees generated from each of our service lines. Gross contract reimbursables reflects revenue from clients which have substantially no margin. Our measure of segment profitability, Adjusted EBITDA, excludes the effects of financings, income taxes and depreciation and amortization, as well as unrealized loss on investments, net, loss on dispositions, integration and other costs related to merger, acquisition related costs and efficiency initiatives, cost savings initiatives, CEO transition costs, servicing liability fees and amortization, certain legal and compliance matters, gains from insurance proceeds and other non-recurring items.

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Americas Results

The following table summarizes the results of operations of our Americas reportable segment for the years ended December 31, 2024 and 2023 (in millions):

[[GREPCENT_TABLE]]
[["","Year Ended December 31,"],["","2024","2023","% Change in USD","% Change in Local Currency"],["Revenue:"],["Services","$","2,420.4","","$","2,494.7","","(3)","%","(3)","%"],["Leasing","1,536.2","","1,420.9","","8","%","9","%"],["Capital markets","564.7","","556.5","","1","%","2","%"],["Valuation and other","161.9","","150.0","","8","%","9","%"],["Total service line fee revenue(1)","4,683.2","","4,622.1","","1","%","2","%"],["Gross contract reimbursables(2)","2,314.8","","2,506.9","","(8)","%","(8)","%"],["Total revenue","$","6,998.0","","$","7,129.0","","(2)","%","(2)","%"],["Costs and expenses:"],["Americas Fee-based operating expenses","$","4,279.6","","$","4,237.5","","1","%","1","%"],["Cost of gross contract reimbursables","2,314.8","","2,506.9","","(8)","%","(8)","%"],["Segment operating expenses","$","6,594.4","","$","6,744.4","","(2)","%","(2)","%"],["Net income","$","126.7","","$","17.8","","n.m.","n.m."],["Adjusted EBITDA","$","436.4","","$","429.6","","2","%","2","%"]]
[[/GREPCENT_TABLE]]

n.m. not meaningful

(1) Service line fee revenue represents revenue for fees generated from each of our service lines.

(2) Gross contract reimbursables reflects revenue from clients which have substantially no margin.

Americas: Year ended December 31, 2024 compared to year ended December 31, 2023

Americas revenue for 2024 was $7.0 billion, a decrease of $131.0 million or 2% from the prior year. The decline in revenue was principally driven by lower Services and Gross contract reimbursables revenue which were down 3% and 8%, respectively, primarily due to declines in facilities management, which includes the impact of the sale of a non-core Services business in the third quarter of 2024 of $57.1 million, as well as lower project management and facilities services revenue of approximately $20.0 million and $15.0 million, respectively. Partially offsetting these declines was Leasing revenue growth of 8% driven by higher tenant representation revenue as a result of more favorable market conditions than 2023 and improved business confidence, with strength in the office and industrial sectors. Capital markets and Valuation and other revenue also grew 1% and 8%, respectively.

Fee-based operating expenses of $4.3 billion increased 1% principally due to higher direct employment costs of approximately $163.0 million, including commissions associated with higher brokerage revenue, partially offset by lower sub-contractor and third-party consumable costs of approximately $122.0 million associated with revenue decreases in Services, as well as the impact of our cost savings initiatives.

Adjusted EBITDA of $436.4 million increased $6.8 million or 2% compared to the prior year, primarily driven by increases in our Leasing and Valuation and other service lines, as well as the impact of our cost savings initiatives. These favorable trends were partially offset by declines in Services, the impact of the sale of a non-core Services business in the third quarter of 2024, cost inflation and lower earnings recognized from the Greystone JV of $17.5 million.

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EMEA Results

The following table summarizes the results of operations of our EMEA reportable segment for the years ended December 31, 2024 and 2023 (in millions):

[[GREPCENT_TABLE]]
[["","Year Ended December 31,"],["","2024","2023","% Change in USD","% Change in Local Currency"],["Revenue:"],["Services","$","331.3","","$","371.4","","(11)","%","(12)","%"],["Leasing","227.0","","229.6","","(1)","%","(2)","%"],["Capital markets","91.5","","83.3","","10","%","10","%"],["Valuation and other","177.7","","174.2","","2","%","1","%"],["Total service line fee revenue(1)","827.5","","858.5","","(4)","%","(4)","%"],["Gross contract reimbursables(2)","125.7","","115.2","","9","%","8","%"],["Total revenue","$","953.2","","$","973.7","","(2)","%","(3)","%"],["Costs and expenses:"],["EMEA Fee-based operating expenses","$","752.0","","$","779.3","","(4)","%","(5)","%"],["Cost of gross contract reimbursables","125.7","","115.2","","9","%","8","%"],["Segment operating expenses","$","877.7","","$","894.5","","(2)","%","(3)","%"],["Net loss","$","(3.4)","","$","(46.5)","","(93)","%","(94)","%"],["Adjusted EBITDA","$","74.5","","$","77.4","","(4)","%","(2)","%"]]
[[/GREPCENT_TABLE]]

(1) Service line fee revenue represents revenue for fees generated from each of our service lines.

(2) Gross contract reimbursables reflects revenue from clients which have substantially no margin.

EMEA: Year ended December 31, 2024 compared to year ended December 31, 2023

EMEA revenue for 2024 was $953.2 million, a decrease of $20.5 million or 2% from the prior year. Excluding the favorable impact of foreign currency of $9.3 million, EMEA revenue decreased 3% on a local currency basis. The decrease was principally driven by lower Services revenue which was down 12%, on a local currency basis, due to declines in project management of approximately $42.0 million as the Company made a proactive effort to exit certain low margin contracts as we focus on sustainable growth. Leasing revenue also declined 2% on a local currency basis. Partially offsetting these trends was growth in Capital markets and Valuation and other revenue which were up 10% and 1%, respectively, on a local currency basis, due to more favorable market conditions than 2023 driving momentum in trading across most markets.

Fee-based operating expenses of $752.0 million decreased 5% on a local currency basis principally due to lower sub-contractor and third-party consumable costs of approximately $38.0 million associated with revenue decreases in Services, partially offset by higher incentive compensation of approximately $11.0 million and cost inflation.

Adjusted EBITDA of $74.5 million decreased $2.9 million or 4% compared to the prior year, primarily driven by decreases in our Services and Leasing service lines, higher incentive compensation and cost inflation. These unfavorable trends were partially offset by the impact of our cost savings initiatives and increases in Capital markets and Valuation and other revenue.

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APAC Results

The following table summarizes the results of operations of our APAC reportable segment for the years ended December 31, 2024 and 2023 (in millions):

[[GREPCENT_TABLE]]
[["","Year Ended December 31,"],["","2024","2023","% Change in USD","% Change in Local Currency"],["Revenue:"],["Services","$","728.4","","$","706.9","","3","%","3","%"],["Leasing","184.3","","176.2","","5","%","6","%"],["Capital markets","65.6","","55.2","","19","%","23","%"],["Valuation and other","100.2","","112.5","","(11)","%","(9)","%"],["Total service line fee revenue(1)","1,078.5","","1,050.8","","3","%","4","%"],["Gross contract reimbursables(2)","416.8","","340.2","","23","%","23","%"],["Total revenue","$","1,495.3","","$","1,391.0","","7","%","8","%"],["Costs and expenses:"],["APAC Fee-based operating expenses","$","1,020.2","","$","1,008.9","","1","%","2","%"],["Cost of gross contract reimbursables","416.8","","340.2","","23","%","23","%"],["Segment operating expenses","$","1,437.0","","$","1,349.1","","7","%","7","%"],["Net income (loss)","$","8.0","","$","(6.7)","","n.m.","n.m."],["Adjusted EBITDA","$","71.0","","$","63.1","","13","%","15","%"]]
[[/GREPCENT_TABLE]]

n.m. not meaningful

(1) Service line fee revenue represents revenue for fees generated from each of our service lines.

(2) Gross contract reimbursables reflects revenue from clients which have substantially no margin.

APAC: Year ended December 31, 2024 compared to year ended December 31, 2023

APAC revenue for 2024 was $1.5 billion, an increase of $104.3 million or 7% from the prior year. Excluding the unfavorable impact of foreign currency of $13.6 million, APAC revenue increased 8% on a local currency basis. The increase was principally driven by growth in Services and Gross contract reimbursables revenue which were up 3% and 23%, on a local currency basis, respectively, due to increases in facilities management, facilities services and project management of approximately $11.0 million, $5.0 million and $4.5 million, respectively. Gross contract reimbursables increased due to one significant project management client in Australia. In addition, Leasing and Capital markets revenue increased 6% and 23%, respectively, on a local currency basis, due to more favorable market conditions than 2023 and improved business confidence. Partially offsetting these trends was a decline in Valuation and other revenue of 9%, on a local currency basis, and a decline in total revenues for Greater China of approximately $6.3 million. Although Greater China does not represent a significant portion of our APAC segment, a slowdown in China’s economy can significantly impact supply chains, cross-border investments and development activity in key markets across APAC.

Fee-based operating expenses of $1.0 billion increased 2% on a local currency basis principally due to higher sub-contractor and third-party consumable costs of approximately $15.0 million associated with revenue increases in Services and higher incentive compensation of approximately $5.0 million, partially offset by the impact of our cost savings initiatives.

Adjusted EBITDA of $71.0 million increased $7.9 million or 13% compared to 2023, primarily driven by growth in our Services, Leasing, and Capital markets services lines and the impact of our cost savings initiatives. These favorable trends were partially offset by a decline in our Valuation and other service line and higher incentive compensation.

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Liquidity and Capital Resources

Our primary sources of liquidity are cash flows from operations, available cash reserves, debt capacity under our Revolver and funding from our accounts receivables securitization program, which we have amended periodically (the “A/R Securitization”). Our primary uses of liquidity are operating expenses, acquisitions, investments and debt payments.

While macroeconomic challenges and uncertainty continue to be present, we believe that we have maintained sufficient liquidity to satisfy our working capital and other funding requirements, including capital expenditures, and expenditures for human capital and contractual obligations, with operating cash flow and cash on hand and, as necessary, borrowings under our Revolver or funding from our A/R Securitization. Over the last two years we have been focused on managing the balance sheet and improving operating cash flows through working capital efficiencies. We also continually evaluate opportunities to obtain, retire or restructure our debt, credit facilities or financing arrangements for strategic reasons or to obtain additional financing to fund investments, operations and obligations to further strengthen our financial position.

We have historically relied on our operating cash flow to fund our working capital needs and ongoing capital expenditures on an annual basis. Our operating cash flow is seasonal—typically lowest in the first quarter of the year, when revenue is lowest, and greatest in the fourth quarter of the year, when revenue is highest. The seasonal nature of our operating cash flow can result in a mismatch with funding needs, which we manage using available cash on hand and, as necessary, borrowings under our Revolver or funding from our A/R Securitization.

In the absence of a large strategic acquisition or other extraordinary events, we believe our cash on hand, cash flow from operations and availability under our Revolver will be sufficient to meet our anticipated cash requirements for the foreseeable future, and at a minimum for the next 12 months. We may seek to take advantage of opportunities to refinance existing debt instruments, as we have done in the past, with new debt instruments at interest rates, maturities and terms we consider attractive.

As of December 31, 2024, the Company had $1.9 billion of liquidity, consisting of cash and cash equivalents of $0.8 billion and availability on our undrawn Revolver of $1.1 billion.

As of December 31, 2024, the Company’s amounts outstanding under its Term Loans, 2028 Notes and 2031 Notes were $2.0 billion, $0.6 billion and $0.4 billion, respectively. Our level of indebtedness increases the possibility that we may be unable to make required principal and interest payments and satisfy our other obligations when they become due. In addition, we may incur additional debt from time to time to finance strategic acquisitions, investments or joint ventures or for other strategic purposes, subject to the restrictions contained in the agreements governing our indebtedness. Incurring additional indebtedness would increase the risks associated with our leverage, including our ability to service our debt. See “Risk Factors” included in Part I, Item 1A in this Annual Report for further discussion.

We have actively managed our indebtedness through additional refinancings and repricings and continued to reduce leverage. During 2024, the Company repriced the Term Loans due in 2030 to reduce the applicable interest rates and elected to prepay the entire $192.9 million principal balance outstanding under the term loan due in 2025. This optional principal prepayment, along with the required principal payments of $7.5 million, brought the Company’s aggregate debt repayments to $200.4 million for the year ended December 31, 2024. As of the date of this Annual Report, there are no funded long-term debt arrangements maturing prior to 2028.

As a professional services firm, funding our operating activities is not capital intensive. Total capital expenditures for the year ended December 31, 2024 were $41.0 million.

Off-Balance Sheet Arrangements

The Company is party to an off-balance sheet revolving A/R Securitization, whereby we continuously sell eligible trade receivables to an unaffiliated financial institution. Receivables are derecognized from our balance sheet upon sale, for which we receive cash payment and record a deferred purchase price receivable which is realized after collection of the underlying receivables. This program also provides funding from a committed purchaser against receivables sold into the program with a maximum facility limit of $200.0 million. As of December 31, 2024, the Company had aggregate capital outstanding under this facility of $100.0 million. This amount was repaid in full in January 2025. The A/R Securitization expires on June 19, 2026, unless extended or an earlier termination event occurs. Refer to Note 20: Accounts Receivable Securitization of the Notes to the Consolidated Financial Statements for further information.

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Contractual Obligations and Other Commitments

Debt obligations. As of December 31, 2024, the Company elected to use an annual rate equal to (i) 1-month Term SOFR (subject to a minimum floor of 0.50%), plus 3.00% for the $990.0 million term loan due January 2030 (the “2030 Tranche-1”) and (ii) 1-month Term SOFR (subject to a minimum floor of 0.50%), plus 3.25% for the $997.5 million term loan due January 2030 (the “2030 Tranche-2”) (the 2030 Tranche-1 and the 2030 Tranche-2 together make up our current outstanding Term Loans). In January 2025, we repriced the 2030 Tranche-1 of our Term Loans, reducing the applicable interest rate by 25 basis points to 1-month Term SOFR plus 2.75%. Because the 2018 Credit Agreement bears interest at a variable interest rate, the amount of expected future annual interest payments cannot be determined. Our 2028 Notes bear interest at a rate of 6.75% per annum and expected annual interest payments would be approximately $43.9 million until the notes mature in May 2028. Our 2031 Notes bear interest at a rate of 8.88% per annum and expected annual interest payments would be approximately $35.5 million until the notes mature in September 2031.

The 2018 Credit Agreement requires quarterly principal payments equal to 0.25% of the aggregate principal amount of outstanding borrowings under the 2030 Tranche-1 and the 2030 Tranche-2, including any incremental borrowings. The 2018 Credit Agreement amendment entered into in the fourth quarter of 2024 deferred the mandatory principal payments for the 2030 Tranche-2 for two quarters, with such principal payments re-commencing in June 2025. Additionally, the 2018 Credit Agreement amendment entered into in January 2025 deferred the mandatory principal payments for the 2030 Tranche-1 for two quarters, with such principal payments recommencing in September 2025. Refer to Note 11: Long-Term Debt and Other Borrowings and Note 10: Derivative Financial Instruments and Hedging Activities of the Notes to the Consolidated Financial Statements for further discussion.

Lease obligations. Our lease obligations primarily consist of operating leases of office space in various buildings for our own use. As of December 31, 2024, the Company had operating lease obligations of $422.0 million, with $114.4 million due within 12 months. Refer to Note 16: Leases of the Notes to the Consolidated Financial Statements for further discussion.

Defined benefit plan obligations. Benefits to be paid out by our defined benefit plans will be funded from the assets held by these plans. In 2022, the trustees for two of our defined benefit plans in the U.K. purchased a bulk annuity insurance policy, under which the insurer is committed to pay the plans’ cash flows intended to match the benefit payments under those plans. We have historically funded pension costs as actuarially determined and as applicable laws and regulations require. Refer to Note 12: Employee Benefits of the Notes to the Consolidated Financial Statements for further discussion.

Deferred and contingent earn-out obligations. Our material cash requirements require long-term liquidity to facilitate the payment of obligations related to acquisitions. Acquisitions are often structured with deferred and/or contingent payments in future periods that are subject to the passage of time, achievement of certain performance metrics and/or other conditions. As of December 31, 2024, the maximum potential payment for contingent earn-outs was $16.5 million, subject to the achievement of certain performance conditions. The final amount of related payments cannot be determined due to their nature as estimates or outcomes having connection to future events. As of December 31, 2024, we had accrued total deferred consideration and contingent earn-outs payable of $8.1 million in Accounts payable and accrued expenses and $16.0 million in Other non-current liabilities in the accompanying Consolidated Balance Sheets.

Income tax liabilities. As of December 31, 2024, our current and non-current tax liabilities, including interest and penalties, totaled $47.7 million. Of this amount, we can reasonably estimate that $19.8 million will require cash settlement in less than one year. In December 2024, the Company made significant tax payments for U.S. federal income taxes which totaled $21.5 million. We are unable to reasonably estimate the timing of the effective settlement of tax positions for the remaining $27.9 million.

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Cash Flow Summary

[[GREPCENT_TABLE]]
[["","Year Ended December 31,"],["Cash Flow Summary","2024","2023"],["Net cash provided by operating activities","$","208.0","","$","152.2"],["Net cash provided by investing activities","81.2","","48.9"],["Net cash used in financing activities","(253.4)","","(120.8)"],["Effects of exchange rate fluctuations on cash, cash equivalents and restricted cash","(22.4)","","1.9"],["Total change in cash, cash equivalents and restricted cash","$","13.4","","$","82.2"]]
[[/GREPCENT_TABLE]]

Operating Activities

We generated $208.0 million of cash from operating activities during the year ended December 31, 2024, an increase of $55.8 million compared to the year ended December 31, 2023, primarily driven by an improvement from net loss to net income of $166.7 million offset by lower non-cash charges of $96.8 million from the prior year. For the year ended December 31, 2024, we used net working capital for operations of $138.6 million, an increase of $14.1 million compared to the year ended December 31, 2023. The increase in our use of net working capital was principally driven by higher trade receivables and contract assets of approximately $170.0 million as a result of higher collections in 2023, as well as higher recruiting and retention payments of approximately $30.0 million. These trends in working capital were offset by higher net bonus accruals and commissions payable of approximately $75.0 million and $68.0 million, respectively.

Investing Activities

We generated $81.2 million of cash from investing activities during the year ended December 31, 2024, an increase of $32.3 million compared to the year ended December 31, 2023, primarily driven by proceeds from the sale of a non-core Services business in the third quarter of 2024 of $122.6 million and lower capital expenditures, offset by a decrease in the net capital funding from the facility limit secured by our A/R Securitization of $100.0 million.

Financing Activities

We used $253.4 million in cash for financing activities during the year ended December 31, 2024, an increase of $132.6 million compared to the year ended December 31, 2023, primarily driven by repayment of borrowings under our 2018 Credit Agreement of $200.4 million as leverage reduction continues to be an important part of our capital allocation strategy, partially offset by payment of debt issuance costs of $65.1 million in the year ended December 31, 2023.