Marcus & Millichap, Inc. · NYSE:MMI
Marcus & Millichap — Q1 2025 Earnings Presentation
32 slides from Marcus & Millichap's earnings presentation, May 7, 2025
Slide 1: First Quarter 2025 Earnings Conference Call
2025 Earnings Conference Call May 7, 2025 First Quarter 2025 1
Slide 2: Forward-Looking Statements
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 fac
Slide 3: Conference Call Participants
CONFERENCE CALL PARTICIPANTS Hessam Nadji President, Chief Executive Officer and Director Steve DeGennaro Chief Financial Officer 3
Slide 4: MMI Financial Highlights
MMI Financial Highlights
Slide 5: 2025 First Quarter Highlights
2025 FIRST QUARTER HIGHLIGHTS Financial Highlights YoY Revenue $145.0 million 12.3% Net Loss $(4.4) million 55.7% Adjusted EBITDA(1) $(8.7) million 13.3% Operational Highlights YoY Sales Volume $9.4 billion (3.5)% Transaction Closings 1,706 9.1% Number of Investment Sales and Financing 1,668 (3.1)%
Slide 6: 2025 First Quarter Brokerage Highlights
2025 FIRST QUARTER BROKERAGE HIGHLIGHTS YoY Sales Volume $6.7 billion 17.6% Transaction Closings 1,175 6.6% Number of Investment Sales Professionals as 1,568 (3.4)% of March 31, 2025 Real Estate Brokerage Commissions Revenue $123.6 million 12.9% Revenue by Transactions by Transactions by Transaction
Slide 7: 2025 First Quarter Financing Highlights
2025 FIRST QUARTER FINANCING HIGHLIGHTS YoY Sales Volume $1.9 billion 16.1% Transaction Closings 337 44.0% Number of Financing Professionals as of 100 2.0% March 31, 2025 Financing Fees Revenue $18.1 million 25.7% Transactions by Transactions by Property Type Region Northeast / Other, 19% Mid-Atlant
Slide 8: Market Highlights
Market Highlights
Slide 9: Job Gains Have Slowed in Alignment with Fed's Strategy
JOB GAINS HAVE SLOWED IN ALIGNMENT WITH FED’S STRATEGY; RECENT TRADE-RELATED CONCERNS MAY CAUSE MORE DECELERATION Annual Employment Growth Unemployment Rate 10 7% 2023: 2.6M 2024: 2.0M 2025*: 832K 5 6% Employment Growth (Millions) Unemployment Rate 0 5% -5 4% -10 3% ** 21 24 23 22 18 17 16 15 14 13
Slide 10: Fed Taking Cautious Approach in 2025
FED TAKING CAUTIOUS APPROACH IN 2025 AS THEY AWAIT POLICY CLARITY; 10-YEAR TREASURY LIKELY TO REMAIN RANGE-BOUND 10-Year Treasury vs. Fed Funds Rate Inflation Adjusted Fed Balance Sheet 10-Year Treasury Fed Funds Rate Notes & Bonds MBS 6.0% TIPS/TIPS Inflation Compensation/Agencies/Bills Fed Holding
Slide 11: Inflation Has Trended Lower; Some Federal Policies Pose Inflation Risk
INFLATION HAS TRENDED LOWER; SOME FEDERAL POLICIES POSE INFLATION RISK Inflation vs. 10-Year Treasury CPI Inflation 10-Year Treasury Core PCE 10.0% 7.5% Rate 5.0% 2.5% 0.0% 21 19 17 24 22 20 18 16 * 23 25 20 20 20 20 20 20 20 20 20 20 * Through March; Core PCE through February 11 Sources: BLS, Feder
Slide 12: Private Investors Dominate U.S. Commercial Real Estate
PRIVATE PRIVATEINVESTORS DOMINATE INVESTORS DOMINATE U.S. U.S. COMMERCIAL COMMERCIAL REAL REAL ESTATE; ESTATE; INSTITUTIONAL INVESTORSGRADUALLY INSTITUTIONAL INVESTORS MORE HESITANT IN CURRENT RE-ENTERNING WINDOW THE MARKET 100% 3% 5% 4% 4% 4% 4% 4% 5% 3% 6% 7% 7% 8% 10% 7% 90% 9% 9% 7% 13% 12% 10%
Slide 13: Employment Remains Positive; Space Demand Varies by Property Type
EMPLOYMENT REMAINS POSITIVE; SPACE DEMAND VARIES BY PROPERTY TYPE Employment Growth vs. Unemployment Rate • Fed-engineered slowing achieved: 2.6 million jobs added in 2023, 2.0 million Employment Growth Unemployment Rate in 2024, and 832,000 expected in 2025. 12.0 8% Employment Growth (Mil.) • Wage
Slide 14: Property Fundamentals Generally Sound by Historical Standards
PROPERTY FUNDAMENTALS GENERALLY SOUND BY HISTORICAL STANDARDS; Occupancy Trends HOWEVER, VARIATIONS WIDENING 100% • Multifamily and industrial aggressively delivering record new completions as the economy slows. Risk of 95% over-supply limited to select local markets with heavy Occupancy (%) constru
Slide 15: Maturing CRE Loan Volumes Concerning but Unlikely to Become Disruptive
MATURING CRE LOAN VOLUMES CONCERNING BUT UNLIKELY TO BECOME DISRUPTIVE AS LENDERS Commercial Real Estate Loan Maturities* CONTINUE WORKOUTS; RISKS VARY WIDELY BY PROPERTY TYPE 1,000 • With the exception of office properties, rent Other Dollar Volume (Billions) 750 growth and appreciation has been he
Slide 16: Bid/Ask Spread Began to Tighten in First Quarter
BID/ASK SPREAD BEGAN TO TIGHTEN IN FIRST QUARTER, BUT RECENT WAVE OF UNCERTAINTY MAY BE WIDENING Annual U.S. Commercial Real Estate Sales Trends(1) THE GAP AGAIN 60 • Transaction count in 2024 was essentially flat, Total Transactions (000s) 45 while dollar volume increased by 14% year- over-year. 30
Slide 17: Commercial Real Estate Yield Spreads Challenged; Pricing Recalibrating
COMMERCIAL REAL ESTATE YIELD SPREADS CHALLENGED; PRICING Cap Rate/10-Year Treasury Spreads RECALIBRATING TO HIGHER CRE Cap Rate 10-Year Treasury Rate INTEREST RATES 12% • Rapid rise of interest rates, tightened lender 10% underwriting, and slowing economic growth 8% ahead fueled uncertainty in valua
Slide 18: MMI Market Position
MMI Market Position
Slide 19: MMI Well-Aligned with the CRE Market
MMI WELL-ALIGNED WITH THE CRE MARKET Private Client Segment Boasts Largest Transaction and Commission Pool Opportunity • Private client market typically consists of sales $1 million to • Influenced by personal drivers that result in buying/selling/ <$10 million. refinancing properties, as well as ma
Slide 20: MMI Financial Details
MMI Financial Details
Slide 21: Total Revenue
TOTAL REVENUE ($ IN MILLIONS) Q1 ‘24 vs Q1 ‘25 200 12.3% 150 $145.0 $129.1 100 50 0 Q1'24 Q1'25 21
Slide 22: Brokerage Operating Metrics
BROKERAGE OPERATING METRICS Q1 2024 vs Q1 2025 Total Sales Volume Total Number of Transactions ($ in billions) 15 2,000 1,500 6.6% 10 1,102 1,175 17.6% $6.7 1,000 $5.7 5 500 0 0 Q1'24 Q1'25 Q1'24 Q1'25 Average Number of Investment Sales Professionals Average Commission Per Transaction ($ in thousand
Slide 23: Brokerage Revenue by Market Segment
BROKERAGE REVENUE BY MARKET SEGMENT Q1 2024 vs Q1 2025 <$1 million Private Client Market ($1 - <$10 million) ($ in thousands) ($ in thousands) 6,000 150,000 5.5% $5,026 $4,764 4,000 100,000 6.2% $73,163 $77,705 2,000 50,000 0 0 Q1'24 Q1'25 Q1'24 Q1'25 Middle Market ($10 - <$20 million) Larger Transa
Slide 24: Operating Expense
OPERATING EXPENSE ($ IN MILLIONS) Q1 2024 vs Q1 2025 175 162.7 149.2 150 125 $88.3 60.9% of Rev 59.5% of Rev $76.9 100 75 53.4% of Rev $68.9 $71.6 49.3% of Rev 50 25 2.7% of Rev $3.4 $2.8 2.0% of Rev 0 Q1'24 Q1'25 Depreciation SG&A COS 24
Slide 25: Net Loss and Adjusted EBITDA Performance
NET LOSS AND ADJUSTED EBITDA PERFORMANCE Q1 2024 vs Q1 2025 Net Loss Adjusted EBITDA ($ in millions) ($ in millions) $— $— $(2.0) $(2.0) $(4.0) $(4.0) $(4.4) 55.7% $(6.0) $(6.0) $(8.0) $(8.0) 13.3% $(8.7) $(10.0) $(10.0) $(10.0) $(10.1) $(12.0) $(12.0) Q1'24 Q1'25 Q1'24 Q1'25 25
Slide 26: Cash Flow Used in Operating Activities
CASH FLOW USED IN OPERATING ACTIVITIES QTD Cash Flow Used In Operating Activities (1) ($ in millions) $— $(10.0) $(20.0) $(30.0) $(40.0) (3.6)% $(50.0) $(51.0) $(52.8) $(60.0) Q1'24 Q1'25 (1) Cash flows used in operating activities were $52.8 million for the three months ending March 31, 2025 compar
Slide 27: Liquidity Position
LIQUIDITY POSITION Cash and Cash Equivalents and Marketable Debt Securities, Available-For-Sale ($ in millions) 500 (16.2)% $394.2 400 $330.2 300 $240.8 $180.5 200 100 $153.4 $149.7 0 12/31/2024 3/31/2025 Cash and Cash Equivalents Marketable Debt Securities, Available-For-Sale Liquidity position as
Slide 28: Appendix
Appendix
Slide 29: Adjusted EBITDA Reconciliation
ADJUSTED EBITDA RECONCILIATION Adjusted EBITDA, which the Company defines as net loss before (i) Three Months Ended interest income and other, including net realized gains (losses) on March 31, marketable debt securities, available-for-sale and cash, cash equivalents, and restricted cash; (ii) inter
Slide 30: Company Overview
NATIONAL PLATFORM FOCUSED ON REAL ESTATE INVESTMENT BROKERAGE • Over 50 years of experience dedicated to perfecting real estate investment brokerage • Designed to maximize real estate value, facilitate investment options by geography and property type, and create liquidity for investors MARKET LEADE
Slide 31: Illustrative MMI Earnings Model
ILLUSTRATIVE MMI EARNINGS MODEL Investment Productivity Transaction Commission Sales Agents Value Rate Revenue Investment Financing & Cost of Sales Other SG&A(1) EBITDA(2) Services Revenue Revenue 1. Includes stock-based compensation 2. EBITDA is not a measurement of our financial performance under
Slide 32: First Quarter 2025
Marcus ¢ Millichap First Quarter 2025