ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis contains certain forward-looking statements generally identified by the words: anticipates, believes, estimates, expects, forecasts, plans, intends and other similar expressions. Such forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause our actual results, performance, achievements, plans, and objectives to be materially different from any future results, performance, achievements, plans, and objectives expressed or implied by such forward-looking statements. See the Cautionary Note Regarding Forward-Looking Statements after Part IV, Item 15. Exhibits and Financial Statement Schedules.
We present our Management's Discussion and Analysis in the following sections:
(1) A summary of our critical accounting policies and estimates;
(2) Certain items affecting the comparability of results;
(3) Certain market and other risks we face;
(4) The results of our operations, first on a consolidated basis and then for each of our business segments; and
(5) Liquidity and capital resources.
In this Item, we discuss results for the years ended December 31, 2025 and 2024 and the comparison between these years. Discussions of results for the year ended December 31, 2023 and comparisons between 2024 and 2023 results can be found in Item 7 "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 .
SUMMARY OF CRITICAL ACCOUNTING POLICIES AND ESTIMATES
An understanding of our accounting policies is necessary for a complete analysis of our results, financial position, liquidity and trends. The preparation of our financial statements requires management to make certain critical accounting estimates and judgments that impact (i) the stated amount of assets and liabilities, (ii) disclosure of contingent assets and liabilities as of the date of the financial statements and (iii) the reported amounts of revenue and expenses during the reporting periods. These accounting estimates are based on management's judgment. We consider them to be critical because of their significance to the financial statements and the possibility future events may differ from current judgments, or that the use of different assumptions could result in materially different estimates. We review these estimates on a periodic basis to ensure reasonableness. Although actual amounts may differ from such estimated amounts, we believe such differences are not likely to be material. For additional detail regarding our critical accounting policies and estimates discussed below, see Note 2, Summary of Significant Accounting Policies, of the Notes to Consolidated Financial Statements, included in Item 8.
Revenue Recognition
We earn revenue from the following services (segments are bolded).
• Real Estate Management Services
◦ Workplace Management
◦ Project Management
◦ Property Management
◦ Portfolio Services and Other
• Leasing Advisory
◦ Leasing
◦ Advisory, Consulting and Other
• Capital Markets Services
◦ Investment Sales, Debt/Equity Advisory and Other
◦ Loan Servicing
◦ Value and Risk Advisory
• Investment Management
• Software and Technology Solutions
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Our services are generally earned and billed in the form of transaction commissions, advisory and management fees, and incentive fees. Some of the contractual terms related to the services we provide, and thus the revenue we recognize, can be complex, requiring us to make judgments about our performance obligations and the timing and extent of revenue to recognize. In addition, a significant portion of our revenue represents the reimbursement of costs we incur on behalf of clients.
Goodwill and Other Intangible Assets
Consistent with the services nature of the businesses we have acquired, the largest asset on the Consolidated Balance Sheets is goodwill. We do not amortize goodwill; instead, we evaluate goodwill for impairment at least annually, or as events or changes in circumstances indicate the carrying value may be impaired.
In addition, we may record intangible assets as a result of acquisitions, which are primarily composed of customer relationships, management contracts and customer backlog, and are amortized on a straight-line basis over their estimated useful lives. We generally use the income approach to determine fair value, which requires management to make significant estimates and assumptions. These estimates and assumptions primarily include discount rates, terminal growth rates, forecasts of revenue, operating income and capital expenditures. The discount rates reflect the risk factors, from the perspective of a market participant, associated with forecasts of cash flows. In addition, we establish an intangible upon closing on the sale of a mortgage loan we originated, concurrent with the retention of its servicing rights and amortize the intangible over the estimated period net servicing income is projected to be received.
Although we believe our intangible asset estimates of fair value are reasonable, actual financial results could differ from those estimates due to the inherent uncertainty involved in making such estimates. Changes in assumptions concerning future financial results or other underlying assumptions could have a significant impact on the determination of the fair value of the identified intangible assets acquired. Judgment is also required in determining the useful life of a finite-lived intangible asset. We evaluate our identified intangibles for impairment at least annually, or as events or changes in circumstances indicate the carrying value may be impaired.
Investments
Substantially all of our investments are grouped within one of the following two categories.
First, we invest in certain real estate ventures that primarily own and operate commercial real estate, historically through co-investments in funds that Investment Management establishes in the ordinary course of business for its clients. These investments include non-controlling ownership interests generally ranging from less than 1% to 10% of the respective ventures. We account for these investments at fair value or under the equity method of accounting.
Second, we invest in proptech funds and early to mid-stage companies through the JLL Spark Global Ventures Funds. We account for a majority of these investments at fair value. Certain investments are accounted for under the measurement alternative, defined as cost minus impairment, plus or minus adjustments resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer.
Where applicable, we estimate fair value of our investments using the net asset value ("NAV") per share (or its equivalent) our investees provide. Critical inputs to NAV estimates include fund financial statements, valuations of the underlying real estate assets and borrowings, which incorporate investment-specific assumptions such as discount rates, capitalization rates, rental and expense growth rates and asset-specific market borrowing rates. In circumstances where the NAV provided by the investee has a reporting date different than ours or when the NAV is not calculated consistent with U.S. GAAP measurement principles, we adjust the NAV accordingly.
For investments in proptech companies, we primarily estimate the fair value based on the per-share pricing. Subsequent funding rounds or changes in the companies' business strategy/outlook are indicators of a change in fair value. The fair value of certain investments is estimated using significant unobservable inputs which requires judgment due to the absence of market data. In determining the estimated fair value of these investments, we utilize appropriate valuation techniques including discounted cash flow analyses, scorecard method, Black-Scholes models and other methods as appropriate. Key inputs include projected cash flows, discount rates, peer group multiples and volatility.
For all investments reported at fair value, other than such investments where the measurement alternative has been elected, our investment is increased or decreased each reporting period by the difference between the fair value of the investment and
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the carrying value as of the balance sheet date. Investments for which the measurement alternative has been elected are remeasured if a qualifying observable price change occurs. We reflect these fair value adjustments as gains or losses on the Consolidated Statements of Comprehensive Income within Equity earnings/losses.
Income Taxes
We account for income taxes under the asset and liability method. We recognize deferred tax assets and liabilities for the expected future tax consequences attributable to (i) differences between the consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax bases and (ii) operating loss and tax credit carryforwards. We measure deferred tax assets and liabilities using the enacted tax rates expected to apply 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 including the enactment date.
Because of the global and cross-border nature of our business, our corporate tax position is complex. We generally provide for taxes in each tax jurisdiction in which we operate based on local tax regulations and rules. Such taxes are provided on pre-tax earnings and include the provision for taxes on substantively all differences between financial statement amounts and amounts used in tax returns, excluding certain non-deductible items and permanent differences.
Our global effective tax rate is sensitive to the complexity of our operations as well as to changes in the mix of our geographic profitability. We evaluate our estimated effective tax rate on a quarterly basis to reflect forecast changes in our geographic mix of income and legislative actions on statutory tax rates.
Based on our historical experience and future business plans, we do not expect to repatriate our foreign source earnings to the U.S. As of December 31, 2025, we have therefore not provided for withholding tax, dividend distribution tax, capital gains taxes, or other taxes which could arise upon such distribution. We believe our policy of permanently reinvesting earnings of foreign subsidiaries does not significantly impact our liquidity.
We have established valuation allowances against deferred tax assets where expected future taxable income does not support their realization on a more-likely-than-not basis. We formally assess the likelihood of being able to utilize current tax losses in the future on a country-by-country basis, commensurate with the determination of each quarter’s income tax provision. We establish or increase valuation allowances upon specific indications the carrying value of a tax asset may not be recoverable. Alternatively, we reduce valuation allowances upon (i) specific indications the carrying value of the related tax asset is more-likely-than-not recoverable or (ii) the implementation of tax planning strategies which allow an asset we previously determined to be not realizable to be viewed as realizable.
Estimations and judgments relevant to the determination of tax expense, assets, and liabilities require analysis of the tax environment and the future profitability, for tax purposes, of local statutory legal entities rather than business segments. Our statutory legal entity structure generally does not mirror the way we organize, manage and report our business operations. For example, the same legal entity may include Capital Markets Services, Real Estate Management Services and Leasing Advisory businesses in a particular country.
In situations where we believe that there may be uncertainty with respect to the recognition of tax benefits, we provide reserves for those benefits. Changes to the amounts of our unrecognized tax benefits may occur as a result of ongoing operations, the outcomes of audits or other examinations by tax authorities, or the passing of statutes of limitations. We do not expect changes to our unrecognized tax benefits to have a significant impact on net income, the financial position, or the cash flows of JLL. We do not believe we have material tax positions for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility.
NEW ACCOUNTING STANDARDS
Refer to Note 2, Summary of Significant Accounting Policies of the Notes to Consolidated Financial Statements, included in Item 8.
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ITEMS AFFECTING COMPARABILITY
Macroeconomic Conditions
Our results of operations and the variability of these results are significantly influenced by (i) macroeconomic trends, (ii) geopolitical environment, (iii) global and regional real estate markets and (iv) financial and credit markets. These macroeconomic and other conditions have had, and we expect will continue to have, a significant impact on the variability of our results of operations.
Acquisitions and Dispositions
The timing of acquisitions may impact the comparability of our results on a year-over-year basis. Our results include incremental revenues and expenses following the completion date of an acquisition. Relating to dispositions, comparable results will include the revenues and expenses of recent dispositions, and may also include gains (losses) on the disposition. In addition, there is generally an initial adverse impact on net income from an acquisition as a result of pre-acquisition due diligence expenditures, transaction/deal costs and post-acquisition integration costs, such as fees from third-party advisors engaged to assist with onboarding and process alignment, retention and severance expense, early lease termination costs, and other integration expenses. For dispositions, we may also incur such incremental costs during the disposition process and these costs could have an adverse impact on net income.
Transaction-Based Revenues and Equity Earnings/Losses
Transaction-based revenues are impacted by the size and timing of our clients' transactions. Such revenues include investment sales, debt/equity advisory fees and other capital markets activities, agency and tenant representation leasing transactions, incentive fees, and other services/offerings, which 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: changes in valuations of the underlying investments; dispositions of managed assets; and the contractual measurement periods with clients. The timing and the magnitude of transaction-based revenues can vary significantly from year to year and quarter to quarter, and also vary geographically.
Equity earnings/losses may vary substantially from period to period for a variety of reasons, including as a result of (i) valuation increases (decreases) on investments reported at fair value, (ii) gains (losses) on asset dispositions and (iii) impairment charges. The timing of recognition of these items may impact comparability between quarters, in any one year, or compared to a prior year.
The comparability of these items can be seen in Note 3, Business Segments, of the Notes to Consolidated Financial Statements, included in Item 8, and is discussed further in Segment Operating Results included herein.
Foreign Currency
We conduct business using a variety of currencies, but we report our results in U.S. dollars. As a result, the volatility of currencies against the U.S. dollar may positively or negatively impact our results. This volatility can make it more difficult to perform period-to-period comparisons of the reported U.S. dollar results of operations because such results may indicate a rate of growth or decline that might not have been consistent with the real underlying rate of growth or decline in the local operations. Consequently, we provide information about the impact of foreign currencies in the period-to-period comparisons of the reported results of operations in our discussion and analysis of financial condition in the Results of Operations section below.
MARKET RISKS
The principal market risks we face due to the risk of loss arising from adverse changes in market rates and prices are:
• Interest rates on our unsecured credit facility (the "Facility"); and
• Foreign exchange risks.
In the normal course of business, we manage these risks through a variety of strategies, including hedging transactions using various derivative financial instruments such as foreign currency forward contracts. We enter into derivative instruments with high credit-quality counterparties and diversify our positions across such counterparties in order to reduce our exposure to credit losses. We do not enter into derivative transactions for trading or speculative purposes.
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Interest Rates
We centrally manage our debt, considering investment opportunities and risks, tax consequences and overall financing strategies. Our overall interest rate risk management objectives are to limit the impact of interest rate changes on earnings and cash flows and to lower our overall borrowing costs. We are primarily exposed to interest rate risk on our Facility, which had a maximum borrowing capacity of $3.30 billion as of December 31, 2025. We had no outstanding borrowings under the Facility as of December 31, 2025. The Facility bears a variable rate of interest that fluctuates based on market rates.
Our $400.0 million of senior unsecured notes are due December 2028 and bear interest at a fixed annual rate of 6.875%. Our €350.0 million face value of Euro Notes is split between €175.0 million due in June 2027 and €175.0 million due in June 2029, bearing interest at fixed annual rates of 1.96% and 2.21%, respectively. The issuance of the senior notes and Euro Notes at fixed interest rates has helped to limit our exposure to future movements in interest rates.
We maintain a commercial paper program (the "Program") in which we may issue up to $2.5 billion of short-term, unsecured and unsubordinated commercial paper notes at any time. We had no outstanding borrowings under the Program as of December 31, 2025. Our Program provides us with another source of short-term capital, which may help us mitigate interest rate risk.
We assess interest rate sensitivity to estimate the potential effect of rising interest rates on our variable rate debt. For the year ended December 31, 2025, if interest rates were 50 basis points higher, Interest expense, net of interest income, would have been $3.5 million higher.
Foreign Exchange
Foreign exchange risk is the risk we will incur economic losses due to adverse changes in foreign currency exchange rates. Our revenue from outside of the U.S. approximated 38% and 39% of our total revenue for the years ended December 31, 2025 and 2024, respectively, as outlined in the table below. Operating in international markets means we are exposed to movements in foreign exchange rates, most significantly the British pound and the euro.
We mitigate our foreign currency exchange risk principally by (i) establishing local operations in the markets we serve and (ii) invoicing customers in the same currency as the source of the costs. The impact of translating expenses incurred in foreign currencies into U.S. dollars reduces the impact of translating revenue earned in foreign currencies into U.S. dollars. In addition, British pound and Singapore dollar expenses incurred as a result of our regional employee hubs being located in London and Singapore, respectively, act as ongoing partial operational hedges against our translation exposures to those currencies.
We enter into cross-currency swaps and foreign currency forward contracts to manage currency risks associated with net investments in foreign operations and intercompany loan balances, respectively. As of December 31, 2025, we had cross-currency swap contracts with a gross notional value of $805.8 million and forward contracts with a gross notional value of $2.04 billion. For forward contracts, the corresponding net carrying gain/loss is generally offset by a carrying gain/loss in associated intercompany loans.
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Although we operate globally, we report our results in U.S. dollars. As a result, the strengthening or weakening of the U.S. dollar in relation to currencies we are exposed to may positively or negatively impact our reported results. The following table sets forth the revenue derived from our most significant currencies.
Year Ended December 31,
($ in millions)
% of Total
% of Total
United States dollar
British pound
Euro
Australian dollar
Indian rupee
Canadian dollar
Hong Kong dollar
Chinese yuan
Singapore dollar
Japanese yen
Other currencies
Total revenue
Had British pound-to-U.S. dollar exchange rates been 10% higher throughout the course of 2025, we estimate our reported operating income would have increased by $11.8 million. Had euro-to-U.S. dollar exchange rates been 10% higher throughout the course of 2025, we estimate our reported operating income would have increased by $7.4 million. These hypothetical calculations estimate the impact of translating results into U.S. dollars and do not include an estimate of the impact a 10% increase in the U.S. dollar against other currencies would have on our foreign operations.
Seasonality
Historically, we have reported a relatively smaller revenue and profit in the first quarter with both measures increasing during each of the following three quarters. This is a result of a general focus in the real estate industry on completing or documenting transactions by calendar year end and the fact that certain expenses are constant throughout the year. Our seasonality excludes the recognition of investment-generated performance fees and realized and unrealized investment equity earnings and losses. Specifically, we recognize incentives fees when assets are sold or as a result of valuation increases in the portfolio, the timing of which may not be predictable or recurring. In addition, investment equity gains and losses are primarily dependent on underlying valuations, and the direction and magnitude of changes to such valuations are not predictable. Non-variable operating expenses, which we treat as expenses when incurred during the year, are relatively constant on a quarterly basis. Other factors may affect seasonality.
Inflation
Our operating expenses fluctuate with our revenue and general economic conditions, including inflation. However, we do not believe inflation had a material impact on our results of operations for the twelve months ended December 31, 2025.
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RESULTS OF OPERATIONS
Definitions
• Assets under management data for Investment Management is primarily reported on a one-quarter lag.
• "n.m.": not meaningful, typically represented by a percentage change of greater than 1,000%, favorable or unfavorable.
• Effective January 1, 2025, we report Project Management in Resilient revenue. Prior period financial information was recast to conform with this presentation.
• We define "Resilient" revenue as (i) Workplace Management, Project Management and Property Management, within Real Estate Management Services, (ii) Value and Risk Advisory, and Loan Servicing, within Capital Markets Services, (iii) Advisory Fees, within Investment Management and (iv) Software and Technology Solutions. In addition, we define "Transactional" revenue as (i) Portfolio Services and Other, within Real Estate Management Services, (ii) Leasing Advisory, (iii) Investment Sales, Debt/Equity Advisory and Other, within Capital Markets Services and (iv) Incentive fees and Transaction fees and other, within Investment Management.
• Gross contract costs represent certain costs associated with client-dedicated employees and third-party vendors and subcontractors and are directly or indirectly reimbursed through the fees we receive. These costs are presented on a gross basis in Operating expenses (with the corresponding fees in Revenue).
Year Ended December 31, 2025 compared with Year Ended December 31, 2024
Year Ended December 31,
Change in
% Change in Local Currency
($ in millions)
U.S. dollars
Real Estate Management Services
Leasing Advisory
Capital Markets Services
Investment Management
Software and Technology Solutions
Revenue
Platform compensation and benefits
Platform operating, administrative and other expenses
Depreciation and amortization
Total platform operating expenses
Gross contract costs
Restructuring and acquisition charges
Total operating expenses
Operating income
Equity losses
Net non-cash MSR and mortgage banking derivative activity
Adjusted EBITDA
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Non-GAAP Financial Measures
Management uses certain non-GAAP financial measures to develop budgets and forecasts, measure and reward performance against those budgets and forecasts, and enhance comparability to prior periods. These measures are believed to be useful to investors and other external stakeholders as supplemental measures of core operating performance and include the following:
• Adjusted EBITDA attributable to common shareholders ("Adjusted EBITDA") and
• Percentage changes against prior periods, presented on a local currency basis.
However, non-GAAP financial measures should not be considered alternatives to measures determined in accordance with U.S. GAAP. Any measure that eliminates components of a company’s capital structure, cost of operations or investments, or other results has limitations as a performance measure. In light of these limitations, management also considers U.S. GAAP financial measures and does not rely solely on non-GAAP financial measures. Because our non-GAAP financial measures are not calculated in accordance with U.S. GAAP, they may not be comparable to similarly titled measures used by other companies.
Adjustments to U.S. GAAP Financial Measures Used to Calculate non-GAAP Financial Measures
Net non-cash MSR and mortgage banking derivative activity consists of the balances presented within Revenue composed of (i) derivative gains/losses resulting from mortgage banking loan commitment and warehousing activity and (ii) gains recognized from the retention of MSR upon origination and sale of mortgage loans, offset by (iii) amortization of MSR intangible assets over the period that net servicing income is projected to be received. Non-cash derivative gains/losses resulting from mortgage banking loan commitment and warehousing activity are calculated as the estimated fair value of loan commitments and subsequent changes thereof, primarily represented by the estimated net cash flows associated with future servicing rights. MSR gains and corresponding MSR intangible assets are calculated as the present value of estimated net cash flows over the estimated mortgage servicing periods. The above activity is reported entirely within Revenue of the Capital Markets Services segment. Excluding net non-cash MSR and mortgage banking derivative activity reflects how we manage and evaluate performance because the excluded activity is non-cash in nature.
Restructuring and acquisition charges primarily consist of (i) severance and employment-related charges, including those related to external service providers, incurred in conjunction with a structural business shift, which can be represented by a notable change in headcount, change in leadership or transformation of business processes; (ii) acquisition, transaction and integration-related charges, including fair value adjustments, which are generally non-cash in the periods such adjustments are made, to assets and liabilities recorded in purchase accounting such as earn-out liabilities and intangible assets; and (iii) other restructuring, including lease exit charges. Such activity is excluded as the amounts are generally either non-cash in nature or the anticipated benefits from the expenditures would not likely be fully realized until future periods. Restructuring and acquisition charges are excluded from segment operating results and therefore not a line item in the segments’ reconciliation to Adjusted EBITDA.
Interest on employee loans, net of forgiveness reflects interest accrued on employee loans less the amount of accrued interest forgiven. Certain employees (predominantly in Leasing Advisory and Capital Markets Services) receive cash payments structured as loans, with interest. Employees earn forgiveness of the loan based on performance, generally calculated as a percentage of revenue production. Such forgiven amounts are reflected in Compensation and benefits expense. Given the interest accrued on these employee loans and subsequent forgiveness are non-cash and the amounts perfectly offset over the life of the loan, the activity is not indicative of core operating performance and is excluded from non-GAAP measures.
Equity earnings/losses (Investment Management and Proptech Investments) primarily reflects valuation changes on investments reported at fair value, which are increased or decreased each reporting period as fair value changes. Where the measurement alternative has been elected, our investment is increased or decreased upon observable price changes. Such activity is excluded as the amounts are generally non‑cash in nature and not indicative of core operating performance.
Note: Equity earnings/losses for segments other than Investment Management represent the results of unconsolidated operating ventures (not investments), and therefore, the amounts are included in Adjusted EBITDA on both a segment and consolidated basis.
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Credit losses on convertible note investments reflects credit impairments associated with pre-equity convertible note investments in early-stage proptech enterprises. Such losses are similar to the equity investment-related losses included in equity earnings/losses for Proptech Investments and are therefore consistently excluded from adjusted measures.
Reconciliation of Non-GAAP Financial Measures
Below is a reconciliation of Net income attributable to common shareholders to Adjusted EBITDA.
Year Ended December 31,
(in millions)
Net income attributable to common shareholders
Add:
Interest expense, net of interest income
Income tax provision
Depreciation and amortization (1)
Adjustments:
Restructuring and acquisition charges
Net non-cash MSR and mortgage banking derivative activity
Interest on employee loans, net of forgiveness
Equity losses - Investment Management and Proptech Investments (1)
Credit losses on convertible note investments
Adjusted EBITDA
(1) This adjustment excludes the noncontrolling interest portion which is not attributable to common shareholders.
In discussing our operating results, we refer to percentage changes in local currency, unless otherwise noted. Amounts presented on a local currency basis are calculated by translating the current period results of our foreign operations to U.S. dollars using the foreign currency exchange rates from the comparative period. We believe this methodology provides a framework for assessing performance and operations excluding the effect of foreign currency fluctuations.
The following table reflects the reconciliation to local currency amounts for consolidated (i) Revenue, (ii) Operating income and (iii) Adjusted EBITDA.
Year Ended December 31,
($ in millions)
% Change
Revenue:
At current period exchange rates
Impact of change in exchange rates
At comparative period exchange rates
Operating income:
At current period exchange rates
Impact of change in exchange rates
At comparative period exchange rates
Adjusted EBITDA:
At current period exchange rates
Impact of change in exchange rates
At comparative period exchange rates
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Revenue
Consolidated revenue increased 11% compared with 2024. Transactional revenues increased 13% collectively, led by Investment Sales, Debt/Equity Advisory and Other, up 23% (excluding the impact of non-cash MSR and mortgage banking derivative activity) and Leasing, up 11%. Resilient revenues grew 11%, highlighted by Project Management, up 20%, and Workplace Management, up 10%.
The following highlights Revenue by segment and type (Transactional versus Resilient), for the current and prior year ($ in millions). Refer to segment operating results for further detail.
Operating Expenses
Operating expenses increased 10% to $25.0 billion in 2025. Generally, the increase in operating expenses was largely driven by growth in revenue-related expenses, including pass-through costs (gross contract costs) and commission expense, and also reflected higher restructuring and acquisition charges. Greater platform leverage mitigated the revenue-related growth, as evidenced by the, lower, 8% increase in platform operating expenses. Refer to segment operating results for additional detail.
Restructuring and acquisition charges were higher, compared with 2024, primarily due to significantly lower net decreases to earn-out liabilities as well as higher severance and other employment-related charges. Refer to the following table for further detail.
Year Ended December 31,
(in millions)
Severance and other employment-related charges
Restructuring, pre-acquisition and post-acquisition charges
Fair value adjustments to earn-out liabilities
Restructuring and acquisition charges
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Interest Expense
Interest expense, net of interest income, for 2025 was $107.3 million, compared to $136.9 million in 2024. The improvement was primarily due to lower average borrowings with meaningful contributions from a lower average interest rate. The average outstanding borrowings under our credit facilities and commercial paper program was $1,119.7 million this year, with an average effective interest rate of 4.9%, in 2025, compared with $1,381.4 million, with an average effective interest rate of 5.9%, during 2024.
Equity Earnings/Losses
The following table details Equity earnings (losses) by category of investment. Specific to Proptech Investments, lower equity losses in 2025 were attributable to modest valuation increases across several investments and less significant valuation declines compared with 2024. Refer to the Investment Management segment discussion for additional details.
Year Ended December 31,
(in millions)
Investment Management
Proptech Investments
Other
Equity losses
Income Taxes
The provision for income taxes increased for the year as higher earnings before taxes outpaced the slight decline in our effective tax rate. The following details our Income tax provision and effective tax rate.
Year Ended December 31,
($ in millions)
Income tax provision
Effective tax rate
Refer to the Income Tax discussion in the Summary of Critical Accounting Policies and Estimates and Note 8, Income Taxes, of the Notes to Consolidated Financial Statements, included in Item 8, for a further discussion of our effective tax rate.
On July 4, 2025, the United States enacted the One Big Beautiful Bill Act ("OBBBA"). The OBBBA includes provisions altering the timing of deduction associated with 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 include the impact of the OBBBA provisions effective for 2025, which are not material to either income tax expense or the financial statements as a whole.
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Net Income and Adjusted EBITDA
The following details Net income attributable to common shareholders, earnings per share and Adjusted EBITDA.
Year Ended December 31,
(in millions, except per share data)
Net income attributable to common shareholders
Basic earnings per common share
Diluted earnings per common share
Adjusted EBITDA
Higher profits were primarily driven by Leasing Advisory and Capital Markets Services, fueled by strong Transactional revenue growth, with incremental contributions from Real Estate Management Services. All segments reflected enhanced platform leverage and continued cost discipline. In addition, an approximate $25 million adverse impact associated with U.S. employee healthcare actuarial deficit was largely offset by discrete cost management actions. Refer to the segment performance highlights for additional detail.
In addition to the aforementioned segment drivers, Net income attributable to common shareholders was favorably impacted by lower Interest expense, net of interest income, and lower equity losses, and unfavorably impacted by higher Restructuring and acquisition charges. These additional drivers are discussed above in further detail.
Segment Operating Results
Effective January 1, 2025, we report Property Management (historically included in Markets Advisory, which was renamed Leasing Advisory) within Real Estate Management Services (formerly referred to as Work Dynamics). Additionally, Capital Markets, LaSalle and JLL Technologies were renamed to Capital Markets Services, Investment Management, and Software and Technology Solutions, respectively.
Effective July 1, 2025, we report the balances and activity associated with the investments historically reported within Software and Technology Solutions in "All Other." These investments (inclusive of convertible notes receivable) in proptech funds and early to mid-stage proptech companies ("Proptech Investments") do not constitute an operating or reporting segment.
Prior period financial information was recast to conform with the presentation changes described above.
Through December 31, 2025, we managed and reported our operations as five business segments: Real Estate Management Services, Leasing Advisory, Capital Markets Services, Investment Management, and Software and Technology Solutions. Our Real Estate Management Services business provides a broad suite of integrated services to occupiers of real estate, including facility and property management, project management, and portfolio and other services. We consider "Property Management" to be services provided to non-occupying property investors and "Workplace Management" to be services provided to facility occupiers. Leasing Advisory offers agency leasing and tenant representation, as well as advisory and consulting services. Our Capital Markets Services offerings include investment sales, debt and equity advisory, value and risk advisory, and loan servicing. Investment Management provides services on a global basis to institutional investors and other sources of private capital, while our Software and Technology Solutions segment offers various software products and services to our clients.
Segment operating expenses comprise Gross contract costs and Segment platform operating expenses, which includes Platform compensation and benefits; Platform operating, administrative and other expenses; and Depreciation and amortization. Our measure of segment results excludes Restructuring and acquisition charges.
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Real Estate Management Services
% Change
Year Ended December 31,
Change in
in Local
($ in millions)
U.S. dollars
Currency
Workplace Management
Project Management
Property Management
Portfolio Services and Other
Revenue
Platform compensation and benefits
Platform operating, administrative and other
Depreciation and amortization
Segment platform operating expenses
Gross contract costs
Segment operating expenses
Equity earnings
Adjusted EBITDA
Higher Real Estate Management Services revenue was primarily driven by Workplace Management and Project Management. Within Workplace Management, growth reflected a largely balanced mix of mandate expansions and new client wins. Management fees within Workplace Management were unfavorably impacted by approximately $12 million of higher pass-through costs, compared with the prior year, associated with the U.S. employee healthcare actuarial surplus/deficit. Project Management delivered 20% growth, with broad-based contributions from most geographies, as higher pass-through costs augmented a low double-digit management fee increase.
The increase in Segment platform operating expenses was primarily driven by higher compensation and benefits expense to support business growth, partially mitigated by enhanced platform leverage. The difference between the lower 4% increase in segment platform operating expenses compared with the 11% increase in total segment operating expenses was driven by incremental gross contract costs. In addition, an approximate $22 million adverse bottom-line impact associated with the U.S. medical actuarial surplus/deficit was largely offset by discrete cost management actions.
Adjusted EBITDA expansion was largely attributable to revenue growth described above together with the enhanced platform leverage.
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Leasing Advisory
% Change
Year Ended December 31,
Change in
in Local
($ in millions)
U.S. dollars
Currency
Leasing
Advisory, Consulting and Other
Revenue
Platform compensation and benefits
Platform operating, administrative and other
Depreciation and amortization
Segment platform operating expenses
Gross contract costs
Segment operating expenses
Adjusted EBITDA
The increase in Leasing Advisory revenue was attributable to Leasing, led by continued momentum in the office sector. Many geographies achieved double-digit Leasing revenue increases, with the most significant growth coming from the U.S., Germany and Canada. Broad-based growth across the U.S. was primarily driven by office — as a meaningful increase in average deal size complemented higher volume — and industrial, largely due to higher deal volume.
The increase in Segment platform operating expenses was driven by higher commissions, a direct result of the revenue growth, partially mitigated by greater platform leverage.
Higher Adjusted EBITDA was driven by the revenue growth coupled with incremental platform leverage.
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Capital Markets Services
% Change
Year Ended December 31,
Change in
in Local
($ in millions)
U.S. dollars
Currency
Investment Sales, Debt/Equity Advisory and Other
Value and Risk Advisory
Loan Servicing
Revenue
Platform compensation and benefits
Platform operating, administrative and other
Depreciation and amortization
Segment platform operating expenses
Gross contract costs
Segment operating expenses
Equity earnings
Net non-cash MSR and mortgage banking derivative activity
Adjusted EBITDA
Capital Markets Services top-line growth was fueled by investment sales and debt advisory transactions across nearly all sectors, with the most significant contributions coming from multifamily and office. Geographically, the growth was led by the U.S., UK and Spain. Globally, investment sales revenues were up 21%, outpacing the broader investment sales market, which grew 18% over the same period according to JLL Research. The current-year performance complemented a strong 2024 to achieve 43% and 57% top-line growth for investment sales and debt advisory, respectively, on a two-year stacked basis.
The increase in Segment platform operating expenses was primarily driven by higher commissions and other revenue-related costs.
The Adjusted EBITDA improvement was largely attributable to the transactional revenue growth, net of higher commissions, described above, together with enhanced platform leverage.
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Investment Management
% Change
Year Ended December 31,
Change in
in Local
($ in millions)
U.S. dollars
Currency
Advisory fees
Transaction fees and other
Incentive fees
Revenue
Platform compensation and benefits
Platform operating, administrative and other
Depreciation and amortization
Segment platform operating expenses
Gross contract costs
Segment operating expenses
Adjusted EBITDA (1)
Equity earnings (losses)
(1) Adjusted EBITDA excludes Equity earnings (losses) attributable to common shareholders for Investment Management.
The decrease in Investment Management revenue was predominantly attributable to the lower incentive fees, as expected. Transaction fees increased compared with the prior year, especially during the fourth quarter, reflecting improved transaction volume in multiple geographies, while Advisory fees remained relatively steady, as growth in North America offset lower contributions from Asia Pacific.
The decrease in Segment platform operating expenses was largely driven by lower variable incentive compensation expense as a result of the decrease in incentive fees.
The change in Adjusted EBITDA primarily reflected (i) the expected, lower incentive fees noted above, net of variable compensation costs and (ii) the absence of a prior-year $8.2 million benefit from the gain recognized in the second quarter of 2024 following the purchase of a controlling interest in a LaSalle-managed fund.
Investment Management reported equity earnings for the year, versus equity losses in the prior year, as property valuation adjustments stabilized and in some cases rose.
AUM decreased 3% in USD and local currency over the trailing twelve months. Changes in AUM are detailed in the table below (in billions):
Beginning balance (December 31, 2024)
Asset acquisitions/takeovers
Asset dispositions/withdrawals
Valuation changes
Foreign currency translation
Change in uncalled committed capital and cash held
Ending balance (December 31, 2025)
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Software and Technology Solutions
% Change
Year Ended December 31,
Change in
in Local
($ in millions)
U.S. dollars
Currency
Revenue
Platform compensation and benefits
Platform operating, administrative and other
Depreciation and amortization
Segment platform operating expenses
Gross contract costs
Segment operating expenses
Adjusted EBITDA
The increase in Software and Technology Solutions revenue reflected double-digit growth in software outpacing declines in technology solutions, the result of lower activity associated with large existing clients.
Segment platform operating expense growth was driven by increased revenue-related expenses and higher depreciation and amortization expense, largely associated with purchased and developed software. These drivers were partially offset by cost management actions.
The improvement in Adjusted EBITDA was driven by the increased revenue and cost management actions described above.
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LIQUIDITY AND CAPITAL RESOURCES
Cash Flows from Operating Activities
Operating activities provided $1,194.1 million of cash in 2025, compared with $785.3 million provided in 2024. Improved cash flow performance was primarily driven by (i) higher cash provided by earnings, (ii) the absence of cash outflow associated with a 2024 loan repurchased from Fannie Mae together with cash proceeds in 2025 from the sale of the repurchased loan's underlying asset, and (iii) lower cash taxes paid.
Cash Flows from Investing Activities
We used $336.6 million of cash for investing activities during 2025, compared with $316.8 million used in 2024. The increase in cash used for investing activities was primarily attributable to our $100.0 million contribution to JLL Income Property Trust ("JLL IPT"), an Investment Management core open-end flagship fund, in January 2025, and higher net capital additions, partially offset by lower cash paid for acquisitions. We discuss key drivers, along with other investing activities, individually below in further detail.
Cash Flows from Financing Activities
Financing activities used $643.2 million of cash during 2025, compared with $451.2 million used during 2024. The change was driven by higher share repurchases and incremental net reductions on short-term borrowings in 2025. We discuss these drivers in further detail below.
Debt
We maintain a commercial paper program (the "Program") in which we may issue up to $2.5 billion of short-term, unsecured and unsubordinated commercial paper notes at any time.
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.
December 31,
(in millions)
Outstanding borrowings under the Facility
Short-term borrowings
Outstanding commercial paper
In addition to our Facility, we had the capacity to borrow up to $58.6 million under local overdraft facilities as of December 31, 2025.
The following table provides additional information on our Facility, commercial paper, and our uncommitted credit agreement ("Uncommitted Facility"), which allows for discretionary short-term liquidity of up to $400.0 million, collectively.
Year Ended December 31,
($ in millions)
Average outstanding borrowings
Average effective interest rate
As of December 31, 2025, we had €350.0 million of Euro Notes, evenly divided between maturities of June 2027 (with a fixed interest rate of 1.96%) and June 2029 (with a fixed interest rate of 2.21%), and $400.0 million of Senior Notes due December 2028 with a fixed interest rate of 6.875%.
We will continue to use the Facility for working capital needs (including payment of accrued incentive compensation), co-investment activities, share repurchases, capital expenditures and acquisitions.
Refer to Note 9, Fair Value Measurements in the Notes to Consolidated Financial Statements, included in Item 8, for additional information on our debt.
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Investment Activity
As of December 31, 2025, we had a carrying value of $892.9 million in Investments, primarily related to Investment Management co-investments and investments in early to mid-stage proptech companies as well as proptech funds ("Proptech Investments"). In 2025 and 2024, funding of investments exceeded returns of capital by $111.1 million (which notably included $100.0 million invested in JLL IPT as described above) and $69.4 million, respectively. We have maximum potential unfunded commitments to direct investments or investment vehicles of $203.5 million and $7.3 million as of December 31, 2025 for our Investment Management business and Proptech Investments, respectively.
See Note 5, Investments, of the Notes to Consolidated Financial Statements, included in Item 8, for additional information on our investment activity.
Share Repurchase and Dividend Programs
As of December 31, 2025, $801.7 million remained authorized for repurchases under our repurchase program. The following table outlines share repurchase activity for the last two years.
Year Ended December 31,
Total number of shares repurchased (in thousands)
Total paid for shares repurchased (in millions)
Capital Expenditures
Net capital additions were $215.6 million and $185.5 million in 2025 and 2024, respectively. Expenditures in both years were primarily related to office leasehold improvements, hardware and purchased/developed software.
Business Acquisitions
The following table details cash payments relating to acquisitions. Payments for current-year acquisitions are included in cash used in investing activities, while payments for prior-year acquisitions are primarily reflected in cash used in financing activities.
Year Ended December 31,
(in millions)
Payments relating to current-year acquisitions
Payments for deferred business acquisition and earn-out obligations
Total paid for business acquisitions
Terms for our acquisitions have typically included cash paid at closing with provisions for additional consideration and earn-out payments subject to certain contract provisions and performance. Deferred business acquisition obligations totaled $21.3 million and $20.8 million on the Consolidated Balance Sheets as of December 31, 2025 and 2024, respectively. These obligations represent the current discounted values of payments to sellers of businesses for which our acquisition has closed as of the balance sheet dates and for which the only remaining condition on those payments is the passage of time. As of December 31, 2025, we had the potential to make earn-out payments on 11 acquisitions subject to the achievement of certain performance conditions, representing $17.2 million accrued for potential earn-out payments, of a potential maximum of $75.5 million (undiscounted). These earn-outs will come due at various times over the next five years, assuming the achievement of the applicable performance conditions.
We will continue to consider acquisitions we believe will strengthen our market position, increase our profitability and supplement our organic growth.
Refer to Note 4, Business Combinations, Goodwill and Other Intangible Assets, of the Notes to the Consolidated Financial Statements, included in Item 8, for further information on business acquisitions.
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Repatriation of Foreign Earnings
Based on our historical experience and future business plans, we do not expect to repatriate our foreign source earnings to the U.S. We believe our policy of permanently reinvesting earnings of foreign subsidiaries does not significantly impact our liquidity. As of December 31, 2025 and 2024, we had total cash and cash equivalents of $599.1 million and $416.3 million, respectively, of which $386.0 million and $314.4 million, respectively, was held by our foreign subsidiaries.
Leases
Our lease obligations primarily consist of operating leases of office space in various buildings for our own use as well as operating leases for equipment. The total minimum rentals to be received in the future as sublessor under noncancelable operating subleases as of December 31, 2025 was $27.9 million.
Refer to Note 11, Leases, of the Notes to the Consolidated Financial Statements, included in Item 8, for further information on our lease obligations.
Deferred Compensation
Deferred compensation obligations are inclusive of amounts attributable to service conditions satisfied as of December 31, 2025, as well as service conditions expected to be satisfied in future periods. We invest directly in insurance contracts which yield returns to fund these deferred compensation obligations. These plans allow employees and members of our Board of Directors to defer portions of their compensation, and plan balances predominantly relate to U.S. employees. We recognize an asset for the amount that could be realized under these insurance contracts at the balance sheet date, and the deferred compensation obligation is adjusted to reflect the changes in the fair value of the amount owed to the employees. The timing of payments to employees is, in part, dependent on their employment with JLL and, therefore, cannot be determined with precision.
Refer to the Consolidated Balance Sheets, of the Consolidated Financial Statements, and Note 9, Fair Value Measurements, of the Notes to the Consolidated Financial Statements, included in Item 8, for further information on our deferred compensation.
Defined Benefit Plans
The defined benefit plan obligations represent estimates of the expected benefits to be paid out by our defined benefit plans. We will fund these obligations from the assets held by these plans. If the assets these plans hold are not sufficient to fund these payments, JLL will fund the remaining obligations. We have historically funded pension costs as actuarially determined and as applicable laws and regulations require. We expect to make immaterial contributions to our defined benefit pension plans in 2026. As payments to recipients are based on their retirement date, age and other factors, we cannot determine the timing of such payments with precision.
Refer to Note 7, Retirement Plans, of the Notes to the Consolidated Financial Statements, included in Item 8, for further information on our defined benefit plans.
