Marcus & Millichap, Inc. Q1 FY2026 earnings call

• Revenue grew 18% year-over-year with brokerage up 12% and financing up 48%. Adjusted EBITDA improved to nearly $3 million from a loss of nearly $9 million a year ago.
• MMI completed nearly 1,400 brokerage transactions in the first quarter, a 15% increase. Transactions per agent increased 11%. Seven of 11 property types serviced had brokerage revenue growth. Office, multifamily, etc. had strong activity.
• Private client brokerage revenue improved 13% year-over-year. Larger transaction segment had a 25% revenue increase in the quarter, reversing last year's decline.
• Financing revenue was $27 million, a 48% increase, with total financing volume up 60% across nearly 400 transactions. Average deal size increased 36%.
• Auction revenue nearly doubled year-over-year, and revenue from loan sales and IPA capital markets increased 39%. Headcount ended the quarter with 1,621 investment brokers, up 87 from the first quarter of 2025.
• Technology investments in AI to drive efficiency; balance sheet strong with $335 million in cash and no debt.

Real estate brokerage commissions for the first quarter were $138 million, an increase of 12% year-over-year and accounted for 81% of total revenue. They completed 1,348 brokerage transactions with a total volume of $7.9 billion, up 15% and 19% respectively. Within brokerage, the core private client market accounted for 64% of brokerage revenue, $88 million, up 13% year-over-year. Revenue from the larger transaction segment (deals above $20 million) was $25 million, a 25% increase year-over-year. Financing revenue was $27 million in the first quarter, an increase of 48% compared to the prior year quarter, driven by 60% growth in dollar volume to $3.1 billion across 398 financing transactions. Other revenue, including leasing, consulting, etc., was $6.5 million in the first quarter, an increase of 98% compared to the prior year, primarily reflecting growth in loan sales and advisory services.

• Second quarter revenue expected to reflect continued year-over-year improvement building on Q1 momentum.
• Cost of services in the second quarter is expected to remain in the range of 62 to 63.5% of revenue.
• SG&A in the second quarter should reflect modest year-over-year growth in absolute dollars driven by continued investment in agent support programs and technology infrastructure.
• Tax expense is anticipated to be in the range of $500,000 to $1.5 million for the second quarter.

• General economic conditions and commercial real estate market conditions.
• Ability to retain and attract transactional professionals.
• Retaining business philosophy and partnership culture amid competitive pressures.
• Integrating new agents and sustaining growth.
• Geopolitical and macroeconomic variables which could moderate the pace of activity.

Q: Isama, are your customers more immune to rate movements, given that it seems to be kind of part of their everyday life at this point?

A: No, they're not immune, and they're actually very sensitive to it. The pent-up demand for transactions is trumping the interest rate volatility effect.

Q: I think you mentioned 188 unique lenders, if I'm not mistaken, this quarter. I know you probably don't have the number in front of you, but I'm just curious, kind of where did that stand, maybe two, three years ago?

A: It tightened down quite a bit in 2023 and 2024, but saw significant improvement in the last two quarters with banks and credit unions returning.

Q: Larger transaction activity, clearly pretty decent amount of growth this quarter. Was that a function of your hiring, or do you think that just the price expectations amongst the sellers have become a bit more reasonable, or did both basically contribute to that?

A: Contributions from both factors. Predominantly, transactions that didn't consummate last year due to a pricing gap cleared the market in Q1, and a number of our clients that had been hesitant to bring product to market because the pricing expectation just wasn't going to be met, capitulated to more realistic price expectations.