Marcus & Millichap — Third Quarter 2026 Earnings Summary

Financial Performance:

• Total revenue for the third quarter of 2026 was $208.4 million, a 7.5% increase compared to $193.9 million in the third quarter of 2025.
• Brokerage commissions increased 7.4% to $174.1 million in Q3 2026 from $162.2 million in Q3 2025.
• Financing fees increased 2.6% to $27.0 million in Q3 2026 from $26.3 million in Q3 2025.
• Pre-tax income increased to $2.6 million in Q3 2026 from $1.5 million in Q3 2025.
• Net income was $1.0 million ($0.03 per diluted share) in Q3 2026, compared to $0.2 million ($0.01 per diluted share) in Q3 2025.
• Adjusted EBITDA was $8.2 million in Q3 2026, an increase of $1.3 million from $6.9 million in Q3 2025.
• For the nine months ended September 30, 2026, total revenue was $582.8 million, a 14.0% increase from $511.2 million in the same period in 2025.
• Brokerage commissions for the nine months were $479.2 million, up 12.2% from $427.2 million in 2025.
• Financing fees for the nine months were $84.1 million, up 19.0% from $70.7 million in 2025.
• Pre-tax income for the nine months was $6.7 million, a turnaround from a pre-tax loss of $16.2 million in 2025.
• Net income for the nine months was $1.8 million ($0.05 per diluted share), compared to a net loss of $15.2 million ($0.39 per diluted share) in 2025.
• Adjusted EBITDA for the nine months was $23.3 million, compared to a loss of $0.4 million in 2025.
• Cost of services as a percentage of total revenue increased to 64.0% in Q3 2026 from the prior year, and to 62.4% for the nine months 2026 from the prior year.
• Total operating expenses were $209.3 million in Q3 2026 compared to $196.3 million in Q3 2025.
• Total operating expenses were $587.2 million for the nine months 2026 compared to $540.3 million for the nine months 2025.

Guidance and Future Outlook:

• Management expects near-term challenges, including interest rate volatility and wider bid/ask spreads, to extend through 2026.
• The Company anticipates increased sales activity in 2027 as loans mature and previously postponed transactions reach their deadlines.
• Price adjustments over the past three years and lenders' increased ability to dispose of underperforming assets are expected to drive future sales.
• The Company plans to pursue strategic acquisitions in 2027 and beyond, leveraging its strong balance sheet.
• The Company believes it is well-positioned to return to long-term growth despite ongoing price discovery and market fragmentation.

Business Segments and Product Lines:

• Private Client Market brokerage revenue grew 3.6% to $106.0 million in Q3 2026 from $102.3 million in Q3 2025.
• Middle Market and Larger Transaction Market brokerage revenue grew 18.1% to $62.0 million in Q3 2026 from $52.5 million in Q3 2025.
• For the nine months, Private Client Market brokerage revenue increased 9.8% to $300.3 million, while Middle Market and Larger Transaction Market revenue increased 18.9% to $161.3 million.
• Total sales volume for the three months ended September 30, 2026, was approximately $13.8 billion across 2,316 transactions.
• Total sales volume for the nine months ended September 30, 2026, was $40.0 billion across 6,644 transactions.
• The Company had 1,670 investment sales and financing professionals as of September 30, 2026, compared to 1,669 in the prior year.
• As of September 30, 2026, the Company employed 1,568 investment sales professionals and 102 financing professionals.

Market and Competitive Landscape:

• The Private Client Market segment 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 Marcus & Millichap, held an estimated 18% share of the Private Client Market by transaction count in 2025.
• The market is characterized by a highly fragmented Private Client Market offering long-term growth opportunities through consolidation.
• Total brokerage sales volume increased 12.6% in Q3 2026, partially offset by a nine basis point decrease in the average commission rate.
• Financing volume increased 0.7% in Q3 2026, accompanied by a five basis point increase in the average fee rate.

Risks and Challenges:

• Volatility in transactional activity and investor sentiment driven by potentially volatile cost of debt capital and interest rate uncertainty.
• Heightened bid/ask spreads between buyers and sellers.
• Risks of a potential recession impacting commercial real estate space demand.
• Potential impacts of U.S. administration policy changes, including tariffs, immigration, and geopolitical issues.
• Increases in operating expenses due to labor costs, insurance, taxes, and construction material costs.
• Global geopolitical uncertainty causing investors to refrain from transacting.
• Risks related to the implementation of new tax laws and volatility in operating markets.

Management Commentary and Tone:

• Hessam Nadji, President and CEO, stated the Company delivered revenue growth and improved financial results despite rising interest rates and pressure on real estate valuations.
• Nadji noted that Private Client activity grew at a moderate pace due to widened bid-ask spreads following an 80 basis point increase in the 10-year Treasury yield during the quarter.
• Management highlighted that increased penetration of the middle market and larger transactions drove stronger revenue growth.
• The tone regarding the near-term outlook is described as "somewhat tempered" due to interest rate volatility, but optimistic about 2027 activity driven by loan maturities and price adjustments.
• Management emphasized a continued focus on platform improvements, talent acquisition, and supporting the sales force.

Other Key Points:

• On July 31, 2026, the Board declared a semi-annual regular dividend of $0.25 per share, paid on October 6, 2026.
• During the nine months ended September 30, 2026, the Company repurchased 912,957 shares at an average price of $26.22 for a total of $23.9 million.
• Since August 2022, the Company has repurchased and retired 3,987,494 shares at an average price of $30.06 for a total of $119.9 million.
• As of November 3, 2026, approximately $90.1 million remained available for share repurchases under the existing program.
• The Company closed 8,818 transactions in 2025 with a sales volume of $50.8 billion.
• The Company operates 80 offices with 1,808 investment sales and financing professionals as of December 31, 2025.