Marcus & Millichap, Inc. Reports Results for Fourth Quarter and Full Year 2024

Associated Press

14-02-2025

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 fourth quarter and full year 2024 financial results today.
Fourth Quarter 2024 Highlights Compared to Fourth Quarter 2023
Total revenue of $240.1 million, compared to $166.2 million
Brokerage commissions of $202.8 million, compared to $144.6 million
Private Client Market brokerage revenue of $120.4 million, compared to $94.8 million
Middle Market and Larger Transaction Market brokerage revenue of $76.7 million, compared to $44.1 million
Financing fees of $31.2 million, compared to $15.9 million
Net income of $8.5 million, or $0.22 per common share, diluted, compared to net loss of $10.2 million, or $0.27 loss per common share, diluted
Adjusted EBITDA 1 of $18.0 million, compared to $(4.5) million
Full Year 2024 Highlights Compared to Full Year 2023
Total revenue of $696.1 million, compared to $645.9 million
Brokerage commissions of $589.7 million, compared to $559.8 million
Private Client Market brokerage revenue of $365.8 million, compared to $373.0 million
Middle Market and Larger Transaction Market brokerage revenue of $202.8 million, compared to $165.9 million
Financing fees of $84.5 million, compared to $66.9 million
Net loss of $12.4 million, or $0.32 loss per common share, diluted, compared to net loss of $34.0 million, or $0.88 loss per common share, diluted
Adjusted EBITDA 1 of $9.4 million, compared to $(19.6) million
'We are pleased to report an exceptionally strong fourth quarter, achieving our highest quarterly revenue in two years. Our performance was driven by our efforts to increase exclusive inventory and elevate client outreach throughout the year and a favorable interest rate environment in the Fall of 2024 that spurred transactions. It also underscores the positive benefits of our strategic initiatives and the resilience of our business model,' stated Hessam Nadji, Marcus & Millichap's president and chief executive officer.
Mr. Nadji continued, 'Looking forward, while we believe that price adjustments and higher motivations to transact will continue to result in increased transaction activity year over year, we continue to face the headwind of higher and still-volatile interest rates. Our focus remains on increasing client outreach, investing in experienced talent and raising the production levels of our existing salesforce. Strategic acquisitions and an ongoing focus on technology and further adoption of A.I. are also key priorities in our quest to maximize long-term shareholder value.'
_________________________________
1 Please refer to the reconciliation of GAAP measures to non-GAAP measures at the end of this release for more information.
Fourth Quarter 2024 Results Compared to Fourth Quarter 2023
Total revenue for the fourth quarter 2024 was $240.1 million, an increase of 44.4% compared to $166.2 million for the fourth quarter 2023.
For real estate brokerage commissions, revenue was $202.8 million, an increase of 40.3% compared to the same period in the prior year. The increase was primarily attributed to a 40.8% increase in total sales volume compared to the fourth quarter 2023. Private Client Market revenue increased by 27.0%, and the combined Middle Market and Larger Transaction Market revenue increased by 74.0%.
For financing fees, revenue was $31.2 million, an increase of 96.6% compared to the same period in the prior year. The increase was primarily attributed to a 139.4% increase in total financing volume, partially offset by a 17 basis point decrease in the average fee rate earned, compared to the fourth quarter 2023.
Total operating expenses for the fourth quarter 2024 were $233.4 million compared to $183.4 million for the same period in the prior year. The change was primarily due to an increase of $46.3 million in cost of services. Cost of services as a percentage of total revenue decreased by 20 basis points to 63.2% compared to the same period during the prior year primarily due to our senior investment sales and financing professionals earning a lower amount of additional commissions.
Selling, general and administrative expenses for the fourth quarter 2024 were $76.3 million compared to $74.7 million for the same period in 2023. The increase was primarily due to an increase in personnel costs, partially offset by a reduction in marketing support provided to our investment sales and financing professionals.
Net income for the fourth quarter 2024 was $8.5 million, or $0.22 per common share, diluted, compared to a net loss of $10.2 million, or $0.27 loss per common share, diluted, for the same period in 2023. Adjusted EBITDA for the fourth quarter 2024 was $18.0 million, compared to $(4.5) million for the same period in the prior year, primarily as a result of the increase in operating income.
Full Year 2024 Results Compared to Full Year 2023
Total revenue for 2024 was $696.1 million compared to $645.9 million for 2023, an increase of $50.1 million, or 7.8%. Total operating expenses for 2024 increased by 3.4% to $729.0 million compared to $705.3 million for 2023. Cost of services as a percent of total revenues decreased to 62.0%, down 100 basis points compared to 2023. The Company's net loss for 2024 was $12.4 million, or $0.32 loss per common share, diluted, compared to a net loss of $34.0 million, or $0.88 loss per common share, diluted, for 2023. Adjusted EBITDA for 2024 increased to $9.4 million from $(19.6) million for 2023. As of December 31, 2024, the Company had 1,712 investment sales and financing professionals, compared to 1,783 at the end of 2023.
Capital Allocation
During the twelve months ended December 31, 2024, the Company declared two semi-annual regular dividends aggregating $20.3 million and repurchased 16,900 shares of common stock for an aggregate purchase price of $0.6 million.
After accounting for shares repurchased through February 11, 2025, the Company has approximately $70.5 million authorized to repurchase shares under its share repurchase 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
Notwithstanding the ongoing price discovery and wider than normal bid/ask spreads, the commercial real estate transaction market is poised over the long term to overcome the near-term challenges which are currently expected to extend for the first half of 2025. 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 commercial property sales transactions and over 60% of the commission pool. The top 10 brokerage firms led by MMI have an estimated 20% share of this segment by transaction count.
Key factors that may influence the Company's business during 2025 include:
Volatility in transactional activity and investor sentiment driven by:
The elevated cost of debt capital
Interest rate uncertainty, the potential for rising inflation and the heightened bid-ask spread between buyers and sellers
Risks of a potential recession and its unfavorable impact to CRE space demand
Possible impact to market sentiment related to the new administration's potential tariff, immigration and other policy changes which may influence transaction velocity and/or future fluctuations in interest rates, sales and financing activity
Increase in operating expenses driven by labor costs, insurance, taxes and construction 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 Friday, February 14, 2025 through 11:59 p.m. Eastern Time on Friday, February 28, 2025 by dialing 1-844-512-2921 in the United States and Canada or 1-412-317-6671 internationally and entering passcode 13750435.
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 December 31, 2024, the Company had 1,712 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, and leasing services to our clients. Marcus & Millichap closed 7,836 transactions in 2024, with a sales volume of $49.6 billion. For additional information, please visit www.MarcusMillichap.com.
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, including the expectation for future interest rates and likely impact of potential rate cuts on commercial real estate demand, 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 changes to 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 new U.S. administration;
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 Form 10-K for the year ended December 31, 2024. As a result, all financial results described in this earnings 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-K.
MARCUS & MILLICHAP, INC.
KEY OPERATING METRICS SUMMARY
(Unaudited)
Total sales volume was approximately $18.4 billion for the three months ended December 31, 2024, encompassing 2,485 transactions consisting of $12.3 billion for real estate brokerage (1,742 transactions), $3.5 billion for financing (425 transactions) and $2.6 billion in other transactions, including consulting and advisory services (318 transactions). Total sales volume was $49.6 billion for the year ended December 31, 2024, encompassing 7,836 transactions consisting of $33.6 billion for real estate brokerage (5,447 transactions), $9.1 billion for financing (1,249 transactions) and $6.9 billion in other transactions, including consulting and advisory services (1,140 transactions). As of December 31, 2024, the Company had 1,610 investment sales professionals and 102 financing professionals. Key metrics for real estate brokerage and financing activities (excluding other transactions) are as follows:
Three Months Ended
December 31,
Years Ended
December 31,
Real Estate Brokerage
2024
2023
2024
2023
Average Number of Investment Sales Professionals
1,593
1,705
1,610
1,744
Average Number of Transactions per Investment Sales Professional
1.09
0.83
3.38
3.14
Average Commission per Transaction
$
116,433
$
102,306
$
108,261
$
102,238
Average Commission Rate
1.65
%
1.66
%
1.75
%
1.82
%
Average Transaction Size (in thousands)
$
7,045
$
6,168
$
6,174
$
5,630
Total Number of Transactions
1,742
1,413
5,447
5,475
Total Sales Volume (in millions)
$
12,273
$
8,716
$
33,630
$
30,823
Three Months Ended
December 31,
Years Ended
December 31,
Financing (1)
2024
2023
2024
2023
Average Number of Financing Professionals
103
98
101
96
Average Number of Transactions per Financing Professional
4.13
2.42
12.37
11.21
Average Fee per Transaction
$
59,219
$
54,468
$
52,955
$
50,677
Average Fee Rate
0.72
%
0.89
%
0.73
%
0.81
%
Average Transaction Size (in thousands)
$
8,184
$
6,133
$
7,283
$
6,254
Total Number of Transactions
425
237
1,249
1,076
Total Financing Volume (in millions)
$
3,478
$
1,453
$
9,096
$
6,729
(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 for real estate brokerage:
Three Months Ended December 31,
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
223
$
118
$
5,735
209
$
125
$
5,680
14
$
(7
)
$
55
Private Client Market
($1 – <$10 million)
1,280
4,276
120,364
1,043
3,447
94,772
237
829
25,592
Middle Market
($10 – <$20 million)
118
1,651
30,556
85
1,194
19,567
33
457
10,989
Larger Transaction
Market (≥$20 million)
121
6,228
46,172
76
3,950
24,540
45
2,278
21,632
1,742
$
12,273
$
202,827
1,413
$
8,716
$
144,559
329
$
3,557
$
58,268
Years Ended December 31,
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
819
$
446
$
21,034
809
$
483
$
20,894
10
$
(37
)
$
140
Private Client Market
($1 – <$10 million)
3,967
12,802
365,837
4,097
13,616
372,979
(130
)
(814
)
(7,142
)
Middle Market
($10 – <$20 million)
344
4,764
84,186
303
4,117
73,007
41
647
11,179
Larger Transaction
Market (≥$20 million)
317
15,618
118,638
266
12,607
92,872
51
3,011
25,766
5,447
$
33,630
$
589,695
5,475
$
30,823
$
559,752
(28
)
$
2,807
$
29,943
MARCUS & MILLICHAP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except for shares and par value)
(Unaudited)
December 31,
2024
2023
Assets
Current assets:
Cash, cash equivalents, and restricted cash
$
153,445
$
170,753
Commissions receivable
18,804
16,171
Prepaid expenses
9,311
8,813
Income tax receivable
6,030
9,299
Marketable debt securities, available-for-sale (amortized cost of $189,667 and $169,018
at December 31, 2024 and December 31, 2023, respectively, and $0 allowance for
credit losses)
189,667
168,881
Advances and loans, net
17,519
3,574
Other assets, current
15,543
16,203
Total current assets
410,319
393,694
Property and equipment, net
26,139
27,450
Operating lease right-of-use assets, net
81,120
90,058
Marketable debt securities, available-for-sale (amortized cost of $52,366 and $69,538 at
December 31, 2024 and December 31, 2023, respectively, and $0 allowance for credit
losses)
51,147
67,459
Assets held in rabbi trust
12,191
10,838
Deferred tax assets, net
48,080
46,930
Goodwill and other intangible assets, net
43,521
51,183
Advances and loans, net
173,657
175,827
Other assets, non-current
23,626
14,972
Total assets
$
869,800
$
878,411
Liabilities and stockholders' equity
Current liabilities:
Accounts payable and accrued expenses
$
13,737
$
8,126
Deferred compensation and commissions
67,197
55,769
Operating lease liabilities
18,522
18,336
Accrued bonuses and other employee related expenses
25,485
19,119
Other liabilities, current
8,076
3,919
Total current liabilities
133,017
105,269
Deferred compensation and commissions
33,257
47,771
Operating lease liabilities
65,701
69,407
Other liabilities, non-current
7,007
10,690
Total liabilities
238,982
233,137
Commitments and contingencies
—
—
Stockholders' equity:
Preferred stock, $0.0001 par value:
Authorized shares – 25,000,000; issued and outstanding shares – none at December 31, 2024
and 2023, respectively
—
—
Common stock, $0.0001 par value:
Authorized shares – 150,000,000; issued and outstanding shares – 38,856,790 and
38,412,484 at December 31, 2024 and 2023, respectively
4
4
Additional paid-in capital
173,340
153,740
Retained earnings
458,907
492,298
Accumulated other comprehensive loss
(1,433
)
(768
)
Total stockholders' equity
630,818
645,274
Total liabilities and stockholders' equity
$
869,800
$
878,411
MARCUS & MILLICHAP, INC.
OTHER INFORMATION
(Unaudited)
Adjusted EBITDA Reconciliation
Adjusted EBITDA, which the Company defines as net income (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 income (loss), operating income (loss) 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 income, to Adjusted EBITDA is as follows (in thousands):
Three Months Ended December 31,
Years Ended December 31,
2024
2023
2024
2023
Net income (loss)
$
8,548
$
(10,233
)
$
(12,362
)
$
(34,035
)
Adjustments:
Interest income and other (1)
(4,987
)
(4,689
)
(18,793
)
(17,890
)
Interest expense
201
216
812
888
Provision (benefit) for income taxes
2,947
(1,451
)
(666
)
(6,366
)
Depreciation and amortization
5,288
3,315
16,589
13,627
Stock-based compensation
6,037
8,338
23,792
24,146
Adjusted EBITDA
$
18,034
$
(4,504
)
$
9,372
$
(19,630
)
(1)
Other includes net realized gains (losses) on marketable debt securities available-for-sale.
Glossary of Terms
Private Client Market segment: transactions with values from $1 million to up to but less than $10 million
Middle Market segment: transactions with values from $10 million to up to but less than $20 million
Larger Transaction Market segment: transactions with values of $20 million and above
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
December 31, 2024
Year Ended
December 31, 2024
(actual)
(as adjusted)
(actual)
(as adjusted)
Total Sales Volume Increase
40.8
%
40.8
%
9.1
%
9.1
%
Average Commission Rate Decrease
(0.6
)%
(0.6
)%
(3.8
)%
(3.8
)%
Average Transaction Size Increase
14.2
%
14.2
%
9.7
%
9.7
%
View source version on businesswire.com: https://www.businesswire.com/news/home/20250214672105/en/
CONTACT: Investor Relations Contact:
Investor Relations
[email protected]
KEYWORD: UNITED STATES NORTH AMERICA CALIFORNIA
INDUSTRY KEYWORD: PROFESSIONAL SERVICES OTHER CONSTRUCTION & PROPERTY COMMERCIAL BUILDING & REAL ESTATE FINANCE CONSTRUCTION & PROPERTY CONSULTING
SOURCE: Marcus & Millichap, Inc.
Copyright Business Wire 2025.
PUB: 02/14/2025 08:00 AM/DISC: 02/14/2025 08:00 AM