Walker & Dunlop, Inc. (NYSE:WD) Q1 2024 Earnings Call Transcript May 2, 2024

Walker & Dunlop, Inc. misses on earnings expectations. Reported EPS is $0.35 EPS, expectations were $0.83. Walker & Dunlop, Inc. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).

Operator: Good day, and welcome to the Q1 2024 Walker & Dunlop Earnings Call. Today's conference is being recorded. At this time, I would like to turn the conference over to [Jenna Simms]. Please go ahead.

Unidentified Company Representative: Thank you, Ruth. Good morning everyone. Thank you for joining Walker & Dunlop's first quarter 2024 earnings call. I have with me this morning our Chairman and CEO, Willy Walker; and our CFO, Greg Florkowski. This call is being webcast live on our website and a recording will be available later today. Both our earnings press release and website provide details on accessing the archived webcast. This morning, we posted our earnings release and presentation to the Investor Relations section of our website, www.walkerdunlop.com. These slides serve as a reference point for some of what Willy and Greg will touch on during the call. Please also note that we will reference the non-GAAP financial metrics, adjusted EBITDA and adjusted core EPS during the course of this call.

Please refer to the appendix of the earnings presentation for a reconciliation of these non-GAAP financial metrics. Investors are urged to carefully read the forward-looking statements language in our earnings release. Statements made on this call, which are not historical facts, may be deemed forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements describe our current expectations and actual results may differ materially. Walker & Dunlop is under no obligation to update or alter our forward-looking statements, whether as a result of new information, future events, or otherwise. We expressly disclaim any obligation to do so. More detailed information about risk factors can be found in our annual and quarterly reports filed with the SEC.

I will now turn the call over to Willy.

Willy Walker: Thank you, Jenna, and good morning everyone. As we outlined in our February earnings call, the strong January jobs report pushed back expectations for a March rate cut and the 10-year treasury rose from 3.88% at year-end to a high of 4.34% during the first quarter. Market uncertainty and rising rates disrupted the transaction market, and according to RCA, first quarter 2024 multifamily property sales volume was the lowest level since Q2 of 2020, when the pandemic shut down the market. Yet within this context, the W&D team closed $6.4 billion of total transaction volume, down only 5% from Q1 of last year. Given slightly lower volumes and no one-time benefits that we earned in Q1 last year, which we pointed out on our last earnings call, Q1 diluted earnings per share were $0.35, down 56% year-over-year.

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