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What factors drove the changes in Walker & Dunlop's revenue and profit?

- **Record Transaction Volume**: $15.5B Q3 total volume (+34% YoY), driven by 137% Freddie Mac growth and 30% investment sales beat.
- **Tech-Driven Growth**: Small balance lending (+69%) and appraisal (+21%) lead digital transformation with 2,700+ active clients on Client Navigator.
- **Shorter-Duration Opportunity**: 60% of GSE loans now 5-year vs. 0% in 2020, setting up $144B 2029 refinancing wave.
- **Credit Resilience**: 21bp default rate vs. 7% CMBS average; $1M Q3 loan loss provision (-65% YoY).
- **Share Price Outlook**: CEO cites 2026+ capital markets reflation as key driver for revaluation despite 2025 share price decline.

**【CEO Summary Section】**
- Q3 2025 total transaction volume reached $15.5 billion, up 34% YoY, driven by Freddie Mac lending growth (+137% to $3.7 billion) and Fannie Mae volumes (+7% to $2.1 billion). 
- Revenues rose 16% YoY to $338 million, with adjusted EBITDA up 4% to $82 million and adjusted core EPS increasing 3% to $1.22.
- Shift to 5-year loans (60% of 2025 GSE volume vs. 0% in 2020) pressures MSR valuations but sets up 2-5 year refinancing wave for $31 billion in 2025 agency maturities and $144 billion in 2029 maturities.
- Investment sales volume grew 30% YoY to $4.7 billion, outpacing market growth of 17%.
- Small balance lending and appraisal revenues increased 69% and 21% respectively, supported by tech platforms like Client Navigator (2,700 active clients) and WDSuite.

【CFO Financial Commentary】**
- Capital Markets segment revenue grew 26% YoY to $206 million, with adjusted EBITDA improving 83% to -$0.9 million.
- SAM segment revenue rose 4% YoY to $139 million, with adjusted EBITDA up 2% to $119 million.
- Credit performance remained strong with only 10 defaulted loans (21 basis points), vs. 7% CMBS multifamily default rate.
- Q3 saw $1 million provision for loan losses vs. $2.9 million YoY, driven by 2023-2025 vintage fraud investigations.
- Company expects to use $20 million of capital to collateralize Freddie Mac indemnification for $100 million in fraudulent loans.

【Q&A Key Highlights】**
- **Credit Quality**: At-risk portfolio default rate of 21 basis points vs. 7% CMBS multifamily default rate; 2025 Q3 provision for loan losses ($1M) down 65% YoY.
- **Loan Repurchase Risk**: Isolated to 2023-2025 vintages; no other GSE investigations underway.
- **Fannie/Freddie Dynamics**: W&D #1 with both agencies; expect 2025 GSE caps to be hit, with potential 2026 cap increase.
- **New Client Growth**: 16% of 2025 transaction volume with new clients, 68% of refinancing volume new to W&D.
- **Share Price Disconnect**: CEO attributes to 2023-2024 market softness and competitor non-cyclical businesses; 2026+ capital markets growth expected to drive revaluation.

Walker & Dunlop, Inc. (WD) Q3 2025 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

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Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

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Income Tax Expense

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Income Tax Adjustments

Net Income from Continuing Operations

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Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

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Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

WD

WD fundamentals

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