Marcus & Millichap (MMI) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue was $158.4 million, down 2.8% year-over-year, with net loss improving to $5.5 million from $8.7 million in Q2 2023 and adjusted EBITDA rising to $1.4 million from a $1.1 million loss.

• Six-month revenue declined 9.5% to $287.5 million, with a net loss of $15.5 million, up from $14.6 million loss in the prior year period.

• Brokerage transaction volume increased 27% sequentially from Q1 2024, but year-over-year sales and transaction volumes declined, reflecting ongoing market headwinds.

• Middle market and larger transactions showed revenue growth, while private client activity remained challenged by limited financing and slow price discovery.

• Dividend of $0.25 per share declared, payable in October 2024; no significant share repurchases in Q2.

Financial highlights

• Q2 2024 brokerage commissions were $135.4 million (down 3.5% year-over-year); financing fees were $18.3 million (up 2.2%).

• Q2 2024 operating expenses decreased to $166.4 million from $173.5 million, with cost of services at 61.9% of revenue and SG&A at $65 million.

• Q2 2024 adjusted EBITDA was $1.4 million; six-month adjusted EBITDA was negative $8.6 million.

• Cash, cash equivalents, and marketable securities totaled $162.0 million as of June 30, 2024.

• Q2 2024 total sales volume was $9.5 billion across 1,800 transactions.

Outlook and guidance

• Management expects market uncertainty to persist through 2024 due to high interest rates, tight credit, and delayed Fed rate cuts.

• Anticipates that price adjustments, distressed assets, and maturing loans could drive more transactions in coming quarters.

• Long-term outlook remains positive, with expectations for higher sales and financing volumes as capital re-enters the market.

• Liquidity is expected to be sufficient for at least the next 12 months, with $325 million in cash and marketable securities available.

• Cost of services and SG&A are expected to rise in Q3 due to seasonal and internal factors; tax rate expected at 15%-17% for the remainder of the year.