Colliers reported $1.14 billion in revenue during the first quarter of 2025, up 14% year over year and 7% quarter over quarter, as the result of strong performance from its recently formed engineering segment, the firm Tuesday said in its earnings report.
Despite market volatility caused by tariffs, the company maintained its outlook for 2025, due in part to the firm taking a “cautious outlook at the beginning of the year, given the macroeconomic and political uncertainty at the time,” Hennick said. “And we're sure glad we did.”
One possible cloud is President Donald Trump's recent announcement about imposing tariffs on movies made outside the United States, which opens the door to tariffs on services that could impact Colliers’ business.
“Up until yesterday, tariffs were essentially on hard products. And yesterday, for the first time, our president has decided to put tariffs on movies, which are actually a service. But Colliers operations are decentralized. They're country-specific. We deliver the services that we deliver within the country, so as an organization, we're not impacted directly by tariffs,” Hennick noted.
“But indirectly, tariffs could drive up the cost of construction in that component of our business, and that, therefore, slow down new developments that could happen,” he added.
The engineering segment’s revenue grew 59% year over year to $377.9 million, with overall real estate services revenue down 1% year over year at $588.2 million. Direct engineering revenue grew over 60% during that time to $286.2 million, attributable to recent acquisitions and low-teens percentage internal growth, with subconsultant and other direct costs increasing 54% to $91.7 million, the company said in its earnings presentation.
Over the past 12 months, 72% of Colliers’ earnings were generated from recurring service revenues, including the engineering, outsourcing and investment management service lines, per the report.
Colliers’ leasing business revenue fell more than 6% year over year, declining modestly against a strong prior year comparison, the firm says. Pulling out “massive transactions in two consecutive years,” however, “our leasing is up actually 6.5% year over year,” Hennick said.
“There is still an uncertainty in the marketplace, which is preventing clients from making longer-term decisions on leases in non-key markets,” Jay Hennick, Colliers global chairman and CEO, said on the company’s Q1 earnings call. While the market began to stabilize at the beginning of the quarter, “all the tariff stuff started and all of a sudden transactions that were close to closing had financing tied up and [a] variety of other things were put on delay,” he said.
“All of this to say is we're still in a market, in my view, that's uncertain and unclear. And only a select number of transactions are getting completed,” Hennick said.
“We have strong pipelines,” CFO Christian Mayer said. “We are seeing the public sector clientele, particularly, engaging on new and enhanced projects and assignments -- so feel very good about that segment.”
Colliers has made moves to bolster the engineering segment in the past year, including the acquisition of commercial architecture, interior design and branding firm MG2 in December and Canada-based, multi-discipline engineering and environmental firm Englobe last June. On Monday, the company also announced acquiring Terra Consulting Group, a specialty telecommunications infrastructure engineering firm based in Chicago.
Hennick noted that the U.S. engineering business operates as “one large partnership,” providing a large differentiator for the business. “These are larger platforms that operate in a centralized way, in partnership with the people that make it happen day-to-day. There's huge synergies in the business. You can add product specialties. There's strong organic growth opportunities,” he said.
The engineering segment also includes Colliers’ project management and program management capabilities, which are also consolidating, providing further cross-selling opportunities to the same client base, Hennick said.
