Walker & Dunlop Inc (WD) Reports Robust Revenue Growth and Strong Capital Position.

Walker & Dunlop Inc (WD) reported a 12% increase in revenues to $556.6 million for the six months ended June 30, 2025, driven by higher loan origination and debt brokerage fees, and increased servicing fees. Net income rose to $36.7 million from $34.5 million in 2024. The company's strong capital structure, market leadership, and brand recognition are key strengths, but its dependence on Agency lending represents a potential weakness.

Walker & Dunlop Inc. (WD), a leading commercial real estate finance company, reported robust financial results for the second quarter of 2025, highlighting a 65% increase in total transaction volume to $14.0 billion. The company's total revenues surged by 18% to $319.2 million, while net income jumped by 50% to $34.0 million, or $0.99 per diluted share, reflecting a 48% year-over-year increase [1].

The company's strong performance was driven by a significant increase in debt financing volumes, particularly with Fannie Mae and Freddie Mac (collectively, the GSEs), which increased by 83% year over year. Fannie Mae debt financing volume alone surged by 106%, contributing to the company's market share gains. HUD debt financing volumes also increased by 55%, while brokered debt financing volume rose by 64% [1].

Walker & Dunlop's servicing portfolio continued to grow, with the addition of $1.7 billion of net loans during the second quarter of 2025. The company's total servicing portfolio stood at $137.3 billion as of June 30, 2025, with assets under management totaling $18.6 billion. The company's mortgage servicing rights (MSRs) associated with its servicing portfolio had a fair value of $1.4 billion [1].

The company's key performance metrics also reflected strong growth. Adjusted EBITDA decreased by 5% to $76.8 million, while adjusted core EPS decreased by 7% to $1.15. However, net income and diluted EPS increased by 50% and 48%, respectively, driven by the growth in total transaction volume. The company's operating margin expanded to 15% from 10% in the previous year [1].

Despite the strong performance, Walker & Dunlop's dependence on Agency lending represents a potential weakness. The company's at-risk servicing portfolio increased by 9% to $65.4 billion, while the maximum exposure to at-risk portfolio rose by 9% to $13.4 billion. Defaulted loans increased by 123% to $108.5 billion, highlighting the risks associated with Agency lending [1].

In summary, Walker & Dunlop's strong Q2 2025 performance was driven by growth in Agency lending and a significant increase in total transaction volume. However, the company's dependence on Agency lending and the associated risks should be closely monitored by investors.

References:
[1] https://www.businesswire.com/news/home/20250807042234/en/Walker-Dunlop-Reports-Second-Quarter-2025-Financial-Results