Marcus & Millichap — Second Quarter 2026 Earnings Summary

Financial Performance

• Total revenue for the second quarter of 2026 increased 17.8% year-over-year to $202.9 million, compared to $172.3 million in the second quarter of 2025.
• Brokerage commissions rose 18.1% to $167.0 million, driven by an 18.4% increase in total sales volume.
• Financing fees increased 15.3% to $30.3 million, attributed to a 5.4% rise in financing volume and a 10 basis point increase in average fee rates.
• Pre-tax income improved to $6.3 million from a pre-tax loss of $3.7 million in the prior year period.
• Net income was $3.9 million ($0.10 per diluted share), reversing a net loss of $11.0 million ($0.28 per diluted share) in the second quarter of 2025.
• Adjusted EBITDA increased to $12.1 million from $1.5 million in the prior year period.
• Total operating expenses for the quarter were $200.7 million, up from $181.3 million, primarily due to a $20.0 million increase in cost of services.
• Cost of services as a percentage of revenue increased 50 basis points to 62.4%, reflecting higher commissions paid to senior investment sales and financing professionals.
• Selling, general, and administrative expenses remained flat at $71.7 million compared to $71.6 million in the prior year.
• For the six months ended June 30, 2026, total revenue was $374.4 million (up 18.0% from $317.3 million), and net income was $0.8 million ($0.02 per diluted share) versus a net loss of $15.5 million ($0.40 per diluted share).
• Adjusted EBITDA for the six-month period was $15.1 million, compared to a loss of $7.3 million in the prior year.

Guidance and Future Outlook

• The Company anticipates near-term challenges, including wider bid/ask spreads and price discovery, are expected to extend through 2026.
• Management believes the commercial real estate transaction market is poised to overcome these challenges and return to long-term growth.
• The Private Client Market, which accounts for over 80% of U.S. commercial property transactions and over 60% of the commission pool, is viewed as offering long-term growth opportunities through consolidation.
• The top 10 brokerage firms, led by Marcus & Millichap, held an estimated 18% share of the Private Client Market segment by transaction count in 2025.

Business Segments and Product Lines

• Private Client Market brokerage revenue grew 13.6% to $106.2 million in the second quarter of 2026.
• Middle Market and Larger Transaction Market brokerage revenue increased 29.4% to $54.7 million in the second quarter of 2026.
• The Larger Transaction Market revenue specifically increased 43.2% in the second quarter.
• Total sales volume for the second quarter was approximately $14.1 billion across 2,306 transactions, including $9.5 billion in real estate brokerage and $3.6 billion in financing.
• As of June 30, 2026, the Company employed 1,677 investment sales and financing professionals, up from 1,640 in the prior year.
• Key operating metrics for the second quarter included an average of 1,590 investment sales professionals and 103 financing professionals.
• Average commission per transaction for real estate brokerage was $109,151 in the second quarter of 2026, compared to $102,849 in the prior year.
• Average fee rate for financing was 0.74% in the second quarter of 2026, up from 0.64% in the prior year.

Market and Competitive Landscape

• The market is currently influenced by repricing of CRE assets in response to higher interest rates and the passage of time since the market bottom.
• Recent geopolitical events, including the resurgence of the Middle East conflict, and inflation pressures are challenging bid/ask spreads.
• Volatility in the cost of debt capital, interest rates, and potential inflation are key factors influencing transactional activity and investor sentiment.
• Risks include potential recession impacts on space demand and the effects of U.S. administration policy changes on market sentiment.

Risks and Challenges

• Potential volatility in transactional activity and investor sentiment driven by cost of debt capital, interest rate uncertainty, and inflation.
• Risks of a potential recession and its unfavorable impact on commercial real estate space demand.
• Possible impacts of U.S. administration tariffs, immigration policies, and geopolitics on transaction velocity.
• Increases in operating expenses driven by labor costs, insurance, taxes, and construction material costs.
• Global geopolitical uncertainty may cause investors to refrain from transacting.
• Risks related to the implementation of new tax laws and volatility in operating markets.

Management Commentary and Tone

• CEO Hessam Nadji described the second quarter as the culmination of internal initiatives to expand client outreach and favorable catalysts for CRE sales and financing.
• Management noted that the private client recovery gained momentum as banks and credit unions became more active, alongside significant progress in larger institutional sales and financing volumes.
• The Company leverages its size, scale, and focus on client connectivity to continue revenue growth and service expansion despite market challenges.
• Management highlighted a "fortress balance sheet" enabling continued investment in the platform and talent while returning capital to shareholders.

Other Key Points

• On July 31, 2026, the Board declared a semi-annual regular dividend of $0.25 per share, payable on October 6, 2026, to stockholders of record on September 15, 2026.
• During the six months ended June 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 per share for a total of $119.9 million.
• On April 30, 2026, the Board approved an additional $70 million to the stock repurchase program; approximately $90.1 million remained available as of August 3, 2026.
• The Company closed 8,818 transactions in 2025 with a sales volume of $50.8 billion.
• As of December 31, 2025, the Company had 1,808 investment sales and financing professionals in more than 80 offices.