Revenues from Contracts with Customers

9 Months Ended

Sep. 30, 2022

Revenue from Contract with Customer [Abstract]

Revenues from Contracts with Customers

Revenues from Contracts with Customers

The following table presents Newmark’s total revenues separately for its revenues from contracts with customers and other sources of revenues (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Revenues from contracts with customers:
Leasing and other commissions	$	219,903	$	231,532	$	631,681	$	563,311
Investment sales	131,731		208,786		492,898		452,565
Mortgage brokerage and debt placement	41,792		43,308		138,407		105,688
Management services	163,831		198,539		530,220		524,519
Total	557,257		682,165		1,793,206		1,646,083
Other sources of revenue(1):
Fair value of expected net future cash flows from servicing recognized at commitment, net	27,386		33,644		88,357		88,175
Loan originations related fees and sales premiums, net	21,455		26,386		57,719		60,508
Servicing fees and other	58,548		45,930		158,963		127,211
Total	$	664,646	$	788,125	$	2,098,245	$	1,921,977

(1)Although these items have customers under contract, they were recorded as other sources of revenue as they were excluded from the scope of ASU No. 2014-9.

Disaggregation of revenues

Newmark’s chief operating decision-maker, regardless of geographic location, evaluates the operating results, including revenues, of Newmark as total real estate services (see Note 3 — “Summary of Significant Accounting Policies” for further discussion).

Contract balances

The timing of Newmark’s revenue recognition may differ from the timing of payment by its customers. Newmark records a receivable when revenue is recognized prior to payment and Newmark has an unconditional right to payment. Alternatively, when payment precedes the provision of the related services, Newmark records deferred revenue until the performance obligations are satisfied.

Newmark’s deferred revenue primarily relates to customers paying in advance or billed in advance where the performance obligation has not yet been satisfied. Deferred revenue is recorded as a contract liability. Deferred revenue at September 30, 2022 and December 31, 2021 was $2.4 million and $3.7 million, respectively. During the nine months ended September 30, 2022 and 2021, Newmark recognized revenue of $2.5 million and $1.6 million, respectively, that was recorded as deferred revenue at the beginning of the period.

For Knotel and Deskeo, the Company’s remaining performance obligations that represent contracted customer revenues that have not yet been recognized as revenue as of September 30, 2022, that will be recognized as revenue in future periods over the life of the customer contracts, in accordance with ASC 606, is approximately $173.9 million. Over half of the remaining performance obligation as of September 30, 2022 is scheduled to be recognized as revenue within the next twelve months, with the remaining to be recognized over the remaining life of the customer contracts, which extends through 2030.

Approximate future cash flows to be received over the next five years at September 30, 2022 are as follows (in thousands):

2022	$	31,919
2023	76,835
2024	35,168
2025	14,949
2026	7,071
Thereafter	7,922
Total	$	173,864