Revenues from Contracts with Customers

9 Months Ended

Sep. 30, 2023

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,
	2023		2022		2023		2022
Revenues from contracts with customers:
Leasing and other commissions	$	203,268	$	219,903	600,185		$	631,681
Investment sales	94,707		131,731		244,304		492,898
Mortgage brokerage and debt placement	24,479		41,792		60,955		138,407
Management services	192,877		163,831		533,142		530,220
Total	515,331		557,257		1,438,586		1,793,206
Other sources of revenue(1):
Fair value of expected net future cash flows from servicing recognized at commitment, net	20,997		27,386		58,142		88,357
Loan originations related fees and sales premiums, net	19,083		21,455		52,639		57,719
Servicing fees and other	60,872		58,548		173,559		158,963
Total	$	616,283	$	664,646	$	1,722,926	$	2,098,245

(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, 2023 and December 31, 2022 was $2.3 million and $2.9 million, respectively. For the three and nine months ended September 30, 2023, Newmark recognized revenue of $0.2 million and $1.7 million, respectively, that was recorded as deferred revenue in a previous period. For the three and nine months ended September 30, 2022, Newmark recognized revenue of $0.7 million and $2.5 million, respectively, that was recorded as deferred revenue in a previous 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, 2023, that will be recognized as revenue in future periods over the life of the customer contracts, in accordance with ASC 606, are approximately $164.1 million. Over half of the remaining performance obligation as of September 30, 2023 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 as of September 30, 2023 are as follows (in thousands):

2023	$	33,350
2024	77,324
2025	35,691
2026	13,119
2027	3,166
Thereafter	1,430
Total	$	164,080