Marcus & Millichap, Inc. Reports Results for Second Quarter 2024

Rhea-AI Summary

Marcus & Millichap (NYSE: MMI) reported its Q2 2024 results. Total revenue was $158.4 million, down 2.8% from Q2 2023. Brokerage commissions declined by 3.5% to $135.4 million. However, Middle Market and Larger Transaction Market revenue rose by 14.8% to $45.3 million. Financing fees increased by 2.2% to $18.3 million.

Net loss improved to $5.5 million ($0.14 per share), compared to a loss of $8.7 million ($0.23 per share) in Q2 2023. Adjusted EBITDA was $1.4 million, up from $(1.1) million. Operating expenses fell by 4.1% to $166.4 million.

For the first half of 2024, revenue declined by 9.5% to $287.5 million, and net loss was $15.5 million ($0.40 per share). The company declared a semi-annual dividend of $0.25 per share, totaling $10.2 million, payable on October 4, 2024. Shares repurchased amounted to 16,900 at $32.77 per share.

Positive

• Middle Market and Larger Transaction Market revenue increased by 14.8% to $45.3 million.
• Financing fees increased by 2.2% to $18.3 million.
• Net loss improved to $5.5 million ($0.14 per share) from $8.7 million ($0.23 per share).
• Adjusted EBITDA was $1.4 million, up from $(1.1) million.
• Operating expenses decreased by 4.1% to $166.4 million.
• Declared a semi-annual dividend of $0.25 per share, totaling $10.2 million.

Negative

• Total revenue decreased by 2.8% to $158.4 million.
• Brokerage commissions declined by 3.5% to $135.4 million.
• Private Client Market revenue fell by 11.9% to $84.8 million.
• Net loss for the first half of 2024 increased to $15.5 million ($0.40 per share) from $14.6 million ($0.37 per share).

Financial Analyst

Marcus & Millichap's Q2 2024 results show mixed signals. While total revenue decreased 2.8% year-over-year to $158.4 million, there are signs of improvement. The 27% sequential increase in brokerage transaction volume from Q1 is encouraging, indicating potential market stabilization.

The company's net loss narrowed to $5.5 million ($0.14 per share) from $8.7 million ($0.23 per share) last year. Adjusted EBITDA turned positive at $1.4 million, compared to $(1.1) million in Q2 2023. This suggests improving operational efficiency despite challenging market conditions.

However, the decline in Private Client Market revenue by 11.9% is concerning, as this segment is important for MMI. The increase in Middle Market and Larger Transaction Market revenue partially offsets this, but overall brokerage commissions still decreased.

Real Estate Market Analyst

The real estate market remains challenging, with MMI's results reflecting broader industry trends. The 4.9% decrease in total sales volume underscores ongoing market disruption due to high interest rates and constrained lending. However, the slight increase in average commission rates suggests MMI is maintaining pricing power.

Positive signs include the pull-back in 10-year treasury yields and expectations of an upcoming interest rate easing cycle. This could stimulate transaction activity in the coming quarters. The company's focus on opportunistic capital re-entering the market and internal initiatives to boost business are strategic moves to capitalize on potential market improvements.

The decrease in investment sales and financing professionals (1,726 vs. 1,865 last year) may impact future growth but could also reflect efforts to optimize the workforce in a challenging environment. Investors should monitor how this affects market share and revenue generation capacity.

Corporate Strategy Expert

MMI's strategy appears focused on weathering the current market downturn while positioning for future growth. The company's strong capital position and continued investment in proprietary technology and strategic initiatives demonstrate a long-term perspective. This approach could enhance MMI's competitive position as market conditions improve.

The decision to maintain the semi-annual dividend of $0.25 per share signals confidence in the company's financial stability. Additionally, the ongoing share repurchase program (with $71.0 million still available) provides flexibility in capital allocation and potential support for the stock price.

Management's outlook acknowledges ongoing challenges but highlights potential catalysts such as price adjustments, distressed situations and maturing loans. The company's focus on the fragmented Private Client Market, which accounts for over 80% of U.S. commercial property transactions, presents a significant long-term growth opportunity through market consolidation.

CALABASAS, Calif.--(BUSINESS WIRE)-- Marcus & Millichap, Inc. (the “Company”, “Marcus & Millichap”, or “MMI”) (NYSE: MMI), a leading national real estate services firm specializing in commercial real estate investment sales, financing, research and advisory services, reported its second quarter results today.

Second Quarter 2024 Highlights Compared to Second Quarter 2023

• Total revenue of $158.4 million, compared to $162.9 million
  • Brokerage commissions of $135.4 million, compared to $140.3 million
  • Private Client Market brokerage revenue of $84.8 million, compared to $96.2 million
  • Middle Market and Larger Transaction Market brokerage revenue of $45.3 million, compared to $39.4 million
  • Financing fees of $18.3 million, compared to $17.9 million
• Net loss of $5.5 million, or $0.14 per common share, diluted, compared to net loss of $8.7 million, or $0.23 per common share, diluted
• Adjusted EBITDA of $1.4 million, compared to $(1.1) million¹

Six Months 2024 Highlights Compared to Six Months 2023

• Total revenue of $287.5 million, compared to $317.7 million
  • Brokerage commissions of $244.9 million, compared to $275.4 million
  • Private Client Market brokerage revenue of $158.0 million, compared to $186.7 million
  • Middle Market and Larger Transaction Market brokerage revenue of $76.8 million, compared to $78.9 million
  • Financing fees of $32.7 million, compared to $33.8 million
• Net loss of $15.5 million, or $0.40 per common share, diluted, compared to net loss of $14.6 million, or $0.37 per common share, diluted
• Adjusted EBITDA of $(8.6) million, compared to $(8.5) million¹

“We are encouraged by the progress in the second quarter, with sequential improvement in our results compared to the first quarter. Our brokerage transaction volume increased 27%, reflecting more realistic pricing, opportunistic capital gradually re-entering the market and internal initiatives to increase business. The pull-back in the 10-year treasury yield and conviction of the upcoming interest rate easing cycle is also encouraging,” stated Hessam Nadji, Marcus & Millichap’s president and chief executive officer.

Mr. Nadji continued, “The market still faces uncertainty related to the prospects of a soft landing and the Fed’s balancing act. However, we believe lower interest rates and pent-up buyer demand with record capital still on the sideline bode well for healthier sales and financing volumes ahead. Our strong capital position and unwavering commitment to innovation, productivity and talent acquisition and retention continue to guide us. Our focus on investing in proprietary technology and strategic initiatives ensures that Marcus & Millichap remains on the offense as we emerge from this cycle.”

_________________________
¹ Please refer to the reconciliation of GAAP measures to non-GAAP measures at the end of this release for more information.

Second Quarter 2024 Results Compared to Second Quarter 2023

Total revenue for the second quarter 2024 was $158.4 million, a decrease of 2.8% compared to $162.9 million for the same period in the prior year.

For real estate brokerage commissions, revenue was $135.4 million, a decrease of 3.5% compared to the same period in the prior year. The decline was primarily attributed to a 4.9% decrease in total sales volume, reflecting the ongoing market disruption driven by high interest rates and constrained lending. The decrease was partially offset by a three basis point increase in the average commission rate earned compared to the second quarter 2023. Private Client Market revenue decreased by 11.9%, while the combined Middle Market and Larger Transaction Market revenue increased by 14.8%.

For financing fees, revenue was $18.3 million, an increase of 2.2% compared to the same period in the prior year. The increase was primarily attributed to an 11.0% increase in total financing volume, partially offset by a 14 basis point decrease in the average fee rate compared to second quarter of 2023.

Total operating expenses for the second quarter 2024 were $166.4 million, compared to $173.5 million for the same period in the prior year. The change was primarily due to reductions of 3.0% in cost of services and 5.7% in selling, general and administrative expenses. Cost of services as a percentage of total revenue decreased by 20 basis points to 61.9% compared to the same period during the prior year.

Selling, general and administrative expenses for the second quarter 2024 were $65.0 million, compared to $68.9 million for the same period in the prior year. The change was primarily due to a reduction in marketing support and corporate bonus attributable to the lower revenue.

Net loss for the second quarter 2024 was $5.5 million, or $0.14 per common share, diluted, compared to a net loss of $8.7 million, or $0.23 per common share, diluted, for the same period in the prior year. Adjusted EBITDA for the second quarter 2024 was $1.4 million, compared to $(1.1) million for the same period in the prior year, primarily as a result of the decrease in operating loss.

Six Months 2024 Results Compared to Six Months 2023

Total revenues for the six months ended June 30, 2024 were $287.5 million, compared to $317.7 million for the same period in the prior year, a decrease of $30.2 million, or 9.5%. Total operating expenses for the six months ended June 30, 2024 decreased by 8.4% to $315.6 million compared to $344.4 million for the same period in the prior year. Cost of services as a percent of total revenues decreased to 60.9%, down 100 basis points compared to the first six months of 2023. The Company’s net loss for the six months ended June 30, 2024 was $15.5 million, or $0.40 per common share, diluted, compared to $14.6 million, or $0.37 per common share, diluted, for the same period in the prior year. Adjusted EBITDA for the six months ended June 30, 2024 decreased to $(8.6) million, from $(8.5) million for the same period in the prior year. As of June 30, 2024, the Company had 1,726 investment sales and financing professionals, compared to 1,865 at the end of the same period last year.

Capital Allocation

On August 1, 2024, the Board of Directors declared a semi-annual regular dividend of $0.25 per share, or approximately $10.2 million, with a payment date of October 4, 2024, to stockholders of record at the close of business on September 16, 2024.

During the six months ended June 30, 2024, the Company repurchased 16,900 shares of common stock at an average price of $32.77 per share for a total price of $0.6 million. Since August 2022, the Company has repurchased and retired 2,141,422 shares of common stock at an average price of $32.24 per share for a total price of $69.0 million.

After accounting for shares repurchased through August 2, 2024, Marcus & Millichap has approximately $71.0 million available to repurchase shares under its program. No time limit has been established for the completion of the program, and the repurchases are expected to be executed from time-to-time, subject to general business and market conditions and other investment opportunities, through open market purchases or privately negotiated transactions, including through Rule 10b5-1 plans.

Business Outlook

The market is still working through the ongoing price discovery, wider than normal bid/ask spreads, and a prolonged downturn in transaction volume due to the Federal Reserve’s decision to delay interest rate reductions. While these conditions are likely to persist through much of 2024, price adjustments, distressed situations and maturing loans could drive additional transactions in the quarters ahead. Over the long term, real estate demand is expected to return sales and financing volumes to higher than current levels given the record capital on the sideline and key advantages of real estate investments. Accordingly, the Company believes it remains well-positioned to achieve long-term growth.

The Company benefits from its experienced management team, infrastructure investments, industry-leading market research and proprietary technology. The size and fragmentation of the Private Client Market continues to offer long-term growth opportunities through consolidation. This highly fragmented market segment consistently accounts for over 80% of all U.S. commercial property transactions and over 60% of the commission pool. The top 10 brokerage firms led by MMI had an estimated 22% share of this segment by transaction count in 2023.

Key factors that may influence the Company’s business during 2024 include:

• Volatility in transactional activity and investor sentiment driven by:
  • The elevated cost of debt capital
  • Interest rate uncertainty and the heightened bid-ask spread between buyers and sellers
  • Risks of a potential recession and its unfavorable impact to commercial real estate space demand
  • Possible impact to market sentiment related to the presidential election, potential tax and other policy changes which may influence transaction velocity and/or future fluctuations in sales and financing activity
  • Increase in operating expenses driven by labor costs, insurance, taxes and cost of materials
• Volatility in each of the Company’s markets
• Increase in costs related to in-person events, client meetings, and conferences
• Global geopolitical uncertainty, which may cause investors to refrain from transacting
• The potential for acquisition activity and subsequent integration

Webcast and Call Information

Marcus & Millichap will host a live webcast today to discuss the financial results at 7:30 a.m. Pacific Time/10:30 a.m. Eastern Time. The webcast will be accessible through the Investor Relations section of Marcus & Millichap's website at ir.marcusmillichap.com and will be archived upon completion of the call. The Company encourages the use of the webcast due to potential extended wait times to access the conference call via dial-in.

For those unable to access the webcast, callers from the United States and Canada should dial 1-877-407-9208 ten minutes prior to the scheduled call time. International callers should dial 1-201-493-6784.

Replay Information

For those unable to participate during the live broadcast, a telephonic replay of the call will also be available from 1:30 p.m. Eastern Time on Wednesday, August 7, 2024 through 11:59 p.m. Eastern Time on Wednesday, August 21, 2024 by dialing 1-844-512-2921 in the United States and Canada or 1-412-317-6671 internationally and entering passcode 13746778.

About Marcus & Millichap, Inc.

Marcus & Millichap, Inc. is a leading national real estate services firm specializing in commercial real estate investment sales, financing services, research and advisory services. As of June 30, 2024, the Company had 1,726 investment sales and financing professionals in more than 80 offices who provide investment brokerage and financing services to sellers and buyers of commercial real estate. The Company also offers market research, consulting and advisory services to its clients. Marcus & Millichap closed 3,364 transactions during the six months ended June 30, 2024, with a sales volume of $19.2 billion. For additional information, please visit www.MarcusMillichap.com.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This release includes forward-looking statements, including our expectations regarding the long-term outlook of the commercial real estate transaction market, and our positioning within it, our belief relating to the Company’s long-term growth, our assessment of the key factors influencing the Company’s business outlook for 2024 and the execution of our capital return program, including a semi-annual dividend and stock repurchase program. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends affecting the financial condition of our business. Forward-looking statements should not be read as a guarantee of future performance or results and will not necessarily be accurate indications of the times at, or by, which such performance or results may be achieved. Forward-looking statements are based on information available at the time those statements are made and/or management’s good faith belief as of that time with respect to future events and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. Important factors that could cause such differences include, but are not limited to:

• general uncertainty in the capital markets, a worsening of economic conditions, and the rate and pace of economic recovery following an economic downturn;
• changes in our business operations;
• market trends in the commercial real estate market or the general economy, including the impact of inflation and increased interest rates;
• our ability to attract and retain qualified senior executives, managers, and investment sales and financing professionals;
• the impact of forgivable loans and related expense resulting from the recruitment and retention of agents;
• the effects of increased competition on our business;
• our ability to successfully enter new markets or increase our market share;
• our ability to successfully expand our services and businesses and to manage any such expansions;
• our ability to retain existing clients and develop new clients;
• our ability to keep pace with changes in technology;
• any business interruption or technology failure, including cybersecurity risks and ransomware attacks, and any related impact on our reputation;
• changes in interest rates, availability of capital, tax laws, employment laws, or other government regulation affecting our business, in each case as may be impacted by the 2024 presidential election;
• our ability to successfully identify, negotiate, execute, and integrate accretive acquisitions; and
• other risk factors included under “Risk Factors” in our most recent Annual Report on Form 10-K.

In addition, in this release, the words “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “goal,” “expect,” “predict,” “potential,” “should,” and similar expressions, as they relate to our Company, our business and our management, are intended to identify forward-looking statements. In light of these risks and uncertainties, the forward-looking events and circumstances discussed in this release may not occur and actual results could differ materially from those anticipated or implied in the forward-looking statements.

Forward-looking statements speak only as of the date of this release. You should not put undue reliance on any forward-looking statements. We assume no obligation to update forward-looking statements to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking information, except to the extent required by applicable laws. If we update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements. We have not filed our Quarterly Report on Form 10-Q (“Form 10-Q”) for the quarter ended June 30, 2024. As a result, all financial results described in this release should be considered preliminary, and are subject to change to reflect any necessary adjustments or changes in accounting estimates, that are identified prior to the time we file our Form 10-Q.

MARCUS & MILLICHAP, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share amounts) (Unaudited)
		Three Months Ended June 30,								Six Months Ended June 30,
		2024				2023				2024				2023
Revenue:
Real estate brokerage commissions		$	135,423			$	140,330			$	244,898			$	275,376
Financing fees			18,294				17,896				32,721				33,764
Other revenue			4,650				4,640				9,852				8,518
Total revenue			158,367				162,866				287,471				317,658
Operating expenses:
Cost of services			98,081				101,163				174,949				196,590
Selling, general and administrative			65,003				68,910				133,919				141,129
Depreciation and amortization			3,329				3,468				6,751				6,675
Total operating expenses			166,413				173,541				315,619				344,394
Operating loss			(8,046	)			(10,675	)			(28,148	)			(26,736	)
Other income, net			4,812				4,890				10,380				9,700
Interest expense			(204	)			(216	)			(403	)			(431	)
Loss before provision (benefit) for income taxes			(3,438	)			(6,001	)			(18,171	)			(17,467	)
Provision (benefit) for income taxes			2,100				2,728				(2,646	)			(2,905	)
Net loss		$	(5,538	)		$	(8,729	)		$	(15,525	)		$	(14,562	)
Net loss per share:
Basic		$	(0.14	)		$	(0.23	)		$	(0.40	)		$	(0.37	)
Diluted		$	(0.14	)		$	(0.23	)		$	(0.40	)		$	(0.37	)
Weighted average common shares outstanding:
Basic			38,675				38,538				38,561				38,867
Diluted			38,675				38,538				38,561				38,867

MARCUS & MILLICHAP, INC.
KEY OPERATING METRICS SUMMARY
(Unaudited)

Total sales volume was approximately $9.5 billion for the three months ended June 30, 2024, encompassing 1,800 transactions consisting of $7.2 billion for real estate brokerage (1,272 transactions), $1.8 billion for financing (272 transactions) and $0.5 billion in other transactions, including consulting and advisory services (256 transactions). Total sales volume was approximately $19.2 billion for the six months ended June 30, 2024, encompassing 3,364 transactions consisting of $12.8 billion for real estate brokerage (2,374 transactions), $3.5 billion for financing (506 transactions) and $2.9 billion in other transactions, including consulting and advisory services (484 transactions). As of June 30, 2024, the Company had 1,625 investment sales professionals and 101 financing professionals. Key metrics for real estate brokerage and financing activities (excluding other transactions) are as follows:

		Three Months Ended June 30,								Six Months Ended June 30,
Real Estate Brokerage		2024				2023				2024				2023
Average Number of Investment Sales Professionals			1,620				1,757				1,629				1,769
Average Number of Transactions per Investment Sales Professional			0.79				0.81				1.46				1.53
Average Commission per Transaction		$	106,465			$	98,686			$	103,159			$	101,954
Average Commission Rate			1.89	%			1.86	%			1.91	%			1.88	%
Average Transaction Size (in thousands)		$	5,636			$	5,303			$	5,404			$	5,433
Total Number of Transactions			1,272				1,422				2,374				2,701
Total Sales Volume (in millions)		$	7,169			$	7,542			$	12,830			$	14,674
		Three Months Ended June 30,								Six Months Ended June 30,
Financing (1)		2024				2023				2024				2023
Average Number of Financing Professionals			100				95				100				94
Average Number of Transactions per Financing Professional			2.72				2.99				5.06				5.99
Average Fee per Transaction		$	51,184			$	52,166			$	49,331			$	49,382
Average Fee Rate			0.76	%			0.90	%			0.72	%			0.82	%
Average Transaction Size (in thousands)		$	6,705			$	5,786			$	6,885			$	5,986
Total Number of Transactions			272				284				506				563
Total Financing Volume (in millions)		$	1,824			$	1,643			$	3,484			$	3,370

(1)	Operating metrics exclude certain financing fees not directly associated to transactions.

The following table sets forth the number of transactions, sales volume and revenue by commercial real estate market segment for real estate brokerage:

		Three Months Ended June 30,
		2024								2023											Change
Real Estate Brokerage		Number		Volume			Revenue			Number		Volume			Revenue			Number			Volume				Revenue
				(in millions)			(in thousands)					(in millions)			(in thousands)						(in millions)				(in thousands)
<$1 million		207		$	116		$	5,352		209		$	120		$	4,665		(2	)		$	(4	)		$	687
Private Client Market ($1 – <$10 million)		922			2,899			84,816		1,070			3,571			96,238		(148	)			(672	)			(11,422	)
Middle Market ($10 – <$20 million)		79			1,082			19,135		77			1,021			17,425		2				61				1,710
Larger Transaction Market (≥$20 million)		64			3,072			26,120		66			2,830			22,002		(2	)		$	242			$	4,118
		1,272		$	7,169		$	135,423		1,422		$	7,542		$	140,330		(150	)		$	(373	)		$	(4,907	)
		Six Months Ended June 30,
		2024								2023											Change
Real Estate Brokerage		Number		Volume			Revenue			Number		Volume			Revenue			Number			Volume				Revenue
				(in millions)			(in thousands)					(in millions)			(in thousands)						(in millions)				(in thousands)
<$1 million		393		$	219		$	10,116		392		$	236		$	9,703		1			$	(17	)		$	413
Private Client Market ($1 – <$10 million)		1,730			5,489			157,979		2,040			6,825			186,741		(310	)			(1,336	)			(28,762	)
Middle Market ($10 – <$20 million)		138			1,884			34,228		143			1,921			34,793		(5	)			(37	)			(565	)
Larger Transaction Market (≥$20 million)		113			5,238			42,575		126			5,692			44,139		(13	)		$	(454	)		$	(1,564	)
		2,374		$	12,830		$	244,898		2,701		$	14,674		$	275,376		(327	)		$	(1,844	)		$	(30,478	)

MARCUS & MILLICHAP, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except for shares and par value)
		June 30, 2024 (unaudited)				December 31, 2023
Assets
Current assets:
Cash, cash equivalents, and restricted cash		$	161,993			$	170,753
Commissions receivable			15,731				16,171
Prepaid expenses			7,843				8,813
Income tax receivable			9,724				9,299
Marketable debt securities, available-for-sale (amortized cost of $120,308 and $169,018
at June 30, 2024 and December 31, 2023, respectively, and $0 allowance for credit
losses)			119,807				168,881
Advances and loans, net			11,125				3,574
Other assets, current			17,795				16,203
Total current assets			344,018				393,694
Property and equipment, net			27,366				27,450
Operating lease right-of-use assets, net			89,256				90,058
Marketable debt securities, available-for-sale (amortized cost of $55,493 and $69,538 at
June 30, 2024 and December 31, 2023, respectively, and $0 allowance for credit losses)			53,700				67,459
Assets held in rabbi trust			11,686				10,838
Deferred tax assets, net			49,595				46,930
Goodwill and other intangible assets, net			48,970				51,183
Advances and loans, net			185,612				175,827
Other assets, non-current			15,226				14,972
Total assets		$	825,429			$	878,411
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable and accrued expenses		$	10,036			$	8,126
Deferred compensation and commissions			46,644				55,769
Operating lease liabilities			17,858				18,336
Accrued bonuses and other employee related expenses			10,760				19,119
Other liabilities, current			7,791				3,919
Total current liabilities			93,089				105,269
Deferred compensation and commissions			28,188				47,771
Operating lease liabilities			70,590				69,407
Other liabilities, non-current			6,892				10,690
Total liabilities			198,759				233,137
Commitments and contingencies			—				—
Stockholders’ equity:
Preferred stock, $0.0001 par value:
Authorized shares – 25,000,000; issued and outstanding shares – none at June 30, 2024 and
December 31, 2023, respectively			—				—
Common stock, $0.0001 par value:
Authorized shares – 150,000,000; issued and outstanding shares – 38,729,323 and
38,412,484 at June 30, 2024 and December 31, 2023, respectively			4				4
Additional paid-in capital			161,895				153,740
Retained earnings			466,132				492,298
Accumulated other comprehensive loss			(1,361	)			(768	)
Total stockholders’ equity			626,670				645,274
Total liabilities and stockholders’ equity		$	825,429			$	878,411

MARCUS & MILLICHAP, INC.
OTHER INFORMATION
(Unaudited)

Adjusted EBITDA Reconciliation

Adjusted EBITDA, which the Company defines as net loss before (i) interest income and other, including net realized gains (losses) on marketable debt securities, available-for-sale and cash, cash equivalents, and restricted cash, (ii) interest expense, (iii) provision (benefit) for income taxes, (iv) depreciation and amortization, and (v) stock-based compensation. The Company uses Adjusted EBITDA in its business operations to evaluate the performance of its business, develop budgets and measure its performance against those budgets, among other things. The Company also believes that analysts and investors use Adjusted EBITDA as a supplemental measure to evaluate its overall operating performance. However, Adjusted EBITDA has material limitations as a supplemental metric and should not be considered in isolation or as a substitute for analysis of the Company’s results as reported under U.S. generally accepted accounting principles (“U.S. GAAP”). The Company finds Adjusted EBITDA to be a useful management metric to assist in evaluating performance, because Adjusted EBITDA eliminates items related to capital structure, taxes and non-cash items. Considering the foregoing limitations, the Company does not rely solely on Adjusted EBITDA as a performance measure and also considers its U.S. GAAP results. Adjusted EBITDA is not a measurement of the Company’s financial performance under U.S. GAAP and should not be considered as an alternative to net loss, operating income or any other measures calculated in accordance with U.S. GAAP. Because Adjusted EBITDA is not calculated in the same manner by all companies, it may not be comparable to other similarly titled measures used by other companies.

A reconciliation of the most directly comparable U.S. GAAP financial measure, net loss, to Adjusted EBITDA is as follows (in thousands):

		Three Months Ended June 30,								Six Months Ended June 30,
		2024				2023				2024				2023
Net loss		$	(5,538	)		$	(8,729	)		$	(15,525	)		$	(14,562	)
Adjustments:
Interest income and other(1)			(4,543	)			(4,090	)			(9,308	)			(8,480	)
Interest expense			204				216				403				431
Provision (benefit) for income taxes			2,100				2,728				(2,646	)			(2,905	)
Depreciation and amortization			3,329				3,468				6,751				6,675
Stock-based compensation			5,889				5,351				11,684				10,362
Adjusted EBITDA		$	1,441			$	(1,056	)		$	(8,641	)		$	(8,479	)

(1)	Other includes net realized losses on marketable debt securities, available-for-sale.

Glossary of Terms

• Private Client Market: transactions with values from $1 million to up to but less than $10 million
• Middle Market: transactions with values from $10 million to up to but less than $20 million
• Larger Transaction Market: transactions with values of $20 million and above
• Acquisitions: acquisition of businesses accounted for as a business combination in accordance with generally accepted accounting standards

Certain Adjusted Metrics

Real Estate Brokerage

Following are actual and as adjusted metrics excluding any large transactions in our real estate brokerage business in excess of $300 million:

			Three Months Ended June 30, 2024				Six Months Ended June 30, 2024
			(actual)		(as adjusted)		(actual)		(as adjusted)
	Total Sales Volume Decrease		(4.9)%		(4.9)%		(12.6)%		(12.6)%
	Average Commission Rate Increase		1.6%		1.6%		1.6%		1.6%
	Average Transaction Size Increase (Decrease)		6.3%		6.3%		(0.5)%		(0.5)%

 

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Investor Relations:

Investor Relations

InvestorRelations@marcusmillichap.com

Source: Marcus & Millichap, Inc.

FAQ

What were the Q2 2024 earnings results for MMI?

Marcus & Millichap reported Q2 2024 revenue of $158.4 million, a net loss of $5.5 million ($0.14 per share), and adjusted EBITDA of $1.4 million.

How did MMI's brokerage commissions perform in Q2 2024?

MMI's brokerage commissions were $135.4 million in Q2 2024, down 3.5% from Q2 2023.

What is the declared dividend for MMI in 2024?

MMI declared a semi-annual dividend of $0.25 per share, payable on October 4, 2024.

How much did MMI's Middle Market and Larger Transaction Market revenue increase in Q2 2024?

Middle Market and Larger Transaction Market revenue rose by 14.8% to $45.3 million in Q2 2024.

What was MMI's financing fee revenue for Q2 2024?

MMI's financing fee revenue was $18.3 million in Q2 2024, up by 2.2% compared to Q2 2023.

What was MMI's net loss for the first half of 2024?

MMI's net loss for the first half of 2024 was $15.5 million ($0.40 per share).