Earnings Per Share and Weighted-Average Shares Outstanding

9 Months Ended

Sep. 30, 2023

Earnings Per Share and Weighted-Average Shares Outstanding

U.S. GAAP guidance — Earnings (Loss) Per Share provides guidance on the computation and presentation of earnings (loss) per share. Basic EPS excludes dilution and is computed by dividing Net income available to common stockholders by the weighted-average number of shares of common stock outstanding and contingent shares for which all necessary conditions have been satisfied except for the passage of time. Net income (loss) is allocated to Newmark’s outstanding common stock, FPUs, limited partnership units and Cantor Units (see Note 2 — “Limited Partnership Interests in Newmark Holdings and BGC Holdings”). In addition, in relation to the Newmark OpCo Preferred Investment, the EPUs issued in June 2018 and September 2018 were entitled to a preferred payable-in-kind dividend which is recorded as accretion to the carrying amount of the EPUs and was a reduction to net income available to common stockholders for the calculation of Newmark’s basic EPS and fully diluted EPS.

The following is the calculation of Newmark’s basic EPS (in thousands, except per share data):


	Three Months Ended September 30,		Nine Months Ended September 30,
	2023		2022		2023		2022
Basic earnings per share:
Net income available to common stockholders	$	9,947	$	27,964	$	6,027	$	76,848
Basic weighted-average shares of common stock outstanding	174,129		177,231		173,549		183,311
Basic earnings per share	$	0.06	$	0.16	$	0.03	$	0.42

Fully diluted EPS is calculated utilizing net income available to common stockholders plus net income allocations to the limited partnership interests in Newmark Holdings as the numerator. The denominator comprises Newmark’s weighted-average number of outstanding shares of Newmark Common Stock to the extent the related units are dilutive and, if dilutive, the weighted-average number of limited partnership interests and other contracts to issue shares of common stock, stock options and RSUs. The limited partnership interests generally are potentially exchangeable into shares of Newmark Class A common stock and are entitled to remaining earnings after the deduction for the Preferred Distribution; as a result, they are included in the fully diluted EPS computation to the extent that the effect would be dilutive.

The following is the calculation of Newmark’s fully diluted EPS (in thousands, except per share data):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022			2023		2022
Fully diluted earnings per share:
Net income available to common stockholders	$	9,947	$	27,964		$	6,027	$	76,848
Allocations of net income to limited partnership interests in Newmark Holdings, net of tax	4,128		9,710			2,266		23,635
Net income for fully diluted shares	$	14,075	$	37,674		$	8,293	$	100,483
Weighted-average shares:
Common stock outstanding	174,129		177,231			173,549		183,311


Partnership units (1)	71,125		61,501			68,658		58,899
RSUs (Treasury stock method)	1,463		2,604			1,193		3,809
Newmark exchange shares	523		2,133			482		2,048
Fully diluted weighted-average shares of common stock outstanding	247,240		243,469			243,882		248,067
Fully diluted earnings per share	$	0.06	$	0.15		$	0.03	$	0.41

(1)Partnership units collectively include FPUs, limited partnership units, and Cantor Units (see Note 2 — “Limited Partnership Interests in Newmark Holdings and BGC Holdings” for more information).

For the three and nine months ended September 30, 2023, 3.5 million and 4.8 million potentially dilutive securities, respectively, were excluded from the computation of fully diluted EPS because their effect would have been anti-dilutive. For the three and nine months ended September 30, 2022, 0.9 million and 0.9 million potentially dilutive securities, respectively, were excluded from the computation of fully diluted EPS because their effect would have been anti-dilutive.