What is the breakdown of the 50-person year-over-year increase in professionals, specifically between new hires and experienced individuals?

Approximately 25% of hires are experienced, and this number is increasing as MMI shifts towards internship/fellowship programs for organic growth, which improves quality but slows nominal headcount. Efforts to recruit very experienced individuals and teams, especially in finance, continue. “Generally, Mitch, somewhere around 25% of our hires are coming in with some experience. That number is increasing because of the fact that we're actually slowing down our top of the funnel, traditional inexperienced individual recruiting.”

Is MMI exploring other business lines like leasing, property management, or appraisal for diversification and revenue stabilization?

Yes, MMI is interested in expanding leasing capabilities, particularly for multi-tenant retail and industrial, and exploring tech-enabled appraisal and consultation groups, and investment management. These are seen as synergistic with the core business and target underserved markets. “the expansion of our current leasing capabilities and footprint can be one of the most effective and largest needle-moving ways that the can leverage his existing brand infrastructure and essentially boots on the ground to ramp up additional revenue from a new business line.”

What percentage of overall operations could new business lines like leasing, appraisal, and investment management potentially contribute?

Management did not provide a specific percentage but stated that these channels are expected to contribute a significant amount of nominal growth and diversification over the next five to seven years. They emphasized that MMI remains committed to its core brokerage and finance intermediary role. “it's fair to say that over the next five to seven years, a significant amount of our nominal growth and of course, degree of diversification is going to come from these channels that I just summarized.”

MMI

Marcus & Millichap (MMI) Q2 FY26 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q2 FY26)· Real Estate· Aug 6, 2026

Source: earnings call transcript

Executive summary

Marcus & Millichap Q2 FY26 — Broad-Based Recovery and Profitability Improvement

Marcus & Millichap delivered a strong second quarter, marking its best first half since 2022, driven by broad-based revenue growth across all segments and significant profitability improvement. The company is strategically investing in talent and infrastructure while navigating interest rate volatility and extended transaction timelines. Management remains confident in the long-term recovery of the commercial real estate transaction market and is exploring synergistic business lines for future growth and diversification.

Highlights

Total revenue increased 18% in Q2 FY26.
Brokerage revenue grew 18% year-over-year.
Financing business revenue was up 15% year-over-year.
Adjusted EBITDA improved to $12 million from $1.5 million a year ago.
Private client and middle market brokerage segments posted more than 13% revenue growth, while larger transaction revenue jumped 43%.

Concerns

10-year Treasury yield is 50 basis points higher than the start of the year and 70 basis points higher than the low point prior to the start of the military conflict in February.
Interest rate volatility challenges deal underwriting and extends transaction timelines.
Pipeline entered Q3 with modest year-over-year growth due to latest period of interest rate volatility.

Guidance & targets

Category	Target	Timeline	Confidence
Cost of services as % of revenue	Sequentially higher than Q2 medium materiality	Q3 · FY26	Medium
SG&A expense	Modestly increase over Q2 medium materiality	Q3 · FY26	Medium
Income tax expense	$1.5 million to $2 million medium materiality	Q3 · FY26	High

Segment performance

Segment	Revenue	YoY	QoQ	Margin
Real Estate Brokerage Accounted for 82% of total revenue. Transaction count increased 11%, and dollar volume increased 18% compared to Q2 FY25. Transactions: 1,530Volume: $10 billion	$167 million	18%	—	—
Brokerage - Private Client Market Core private client market business.	$106 million	14%	—	—
Brokerage - Middle Market	$22 million	13%	—	—
Brokerage - Larger Transaction Segment (>$20M) Strongest growth since Q4 FY24, following extended institutional softness.	$33 million	43%	—	—
Financing Business Driven by a 17% increase in transaction count and a 5% increase in dollar volume. Transaction count: 480 loansDollar volume: $4 billion	$30 million	15%	—	—
Other Revenue Compared to $5 million in Q2 FY25.	$6 million	—	—	—

Deals & partnerships

M&T Bank Partnership for multifamily debt origination

This partnership enables MMI to expand agency financing and drive growth in its financing business.

Risks & headwinds

Lingering uncertainty and higher interest rates current

10-year Treasury yield is 50 basis points higher than the start of the year and 70 basis points higher than the low point prior to the start of the military conflict in February.

Mitigation:Leveraging ample liquidity in the market with investors eager to act on realistically priced assets; improving property fundamentals.

Interest rate volatility challenging deal underwriting current

making it more difficult to keep buyers, sellers, and lenders aligned

Mitigation:Bid-ask spreads narrowing and net proceeds for borrowers improving thanks to more accommodating lenders.

Extended transaction timelines current

We continue to experience extended transaction timelines.

Mitigation:Management team is leveraging market liquidity and investor eagerness for realistically priced assets.

Market recovery remains choppy near-term

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Mitigation:Belief in market's positive long-term trajectory due to improving property fundamentals.

What to watch in Q3 FY26

Cost of services as % of revenue

Q3 FY26

Current 62.4%

Target Sequentially higher than Q2

Why it matters

Indicates operating leverage and profitability trends as revenue builds through the year.

Cost of services as a percentage of revenue in the third quarter is expected to follow the usual pattern as revenue builds through the year and be sequentially higher than the second quarter.

Find out whether MMI delivers this. Inve re-checks your case every morning.

Q&A highlights

Is MMI seeing increased competition or competitive pressures in its private client network?

Management stated that competition is typical, mainly from local and regional firms, with nothing unusual. They are attracting more semi-experienced professionals from these boutiques due to the benefits of MMI's larger platform, training, and support systems.

“Nothing unusual. We have the usual competitive forces, predominantly local, small firms, and maybe some regional boutiques.”

asked by Mitch Germain · answered by Hessam Nadji

2 min read 6 chapters

Detailed narrative

Q2 FY26 Performance Highlights

Marcus & Millichap reported an 18% increase in total revenue to $203 million, marking its best first half since 2022. Brokerage revenue also grew 18% year-over-year, with the financing business up 15%. Profitability significantly improved, with net income reaching $4 million and adjusted EBITDA increasing to $12 million from $1.5 million in the prior year.

This growth was broad-based, with private client and middle market segments up over 13%, and larger transactions jumping 43%.

Strategic Investments and Operating Leverage

The company maintained its commitment to strengthening its brand, attracting talent, and enhancing infrastructure during market disruption, which pressured near-term earnings. This strategy is now enabling operating leverage as the market recovers, with management focused on maximizing revenue growth per producer and gaining market share. The goal is to achieve more ambitious margin improvements as market conditions normalize.

Financing Business Expansion

The financing business delivered a strong quarter, with revenue up 15% on top of 43.5% growth in Q2 FY25. This was driven by expansion into IPA Capital Markets, progress in agency financing, and technology investments. MMI has become Freddie Mac and Fannie Mae's largest non-direct multifamily debt originator through its partnership with M&T Bank, closing with 207 separate lenders in the quarter.

Refinancing activity increased, accounting for 47% of revenue, up from 39% a year ago.

Sales Force Composition and Productivity

The company ended the quarter with 1,575 investment sales professionals, a modest year-over-year increase. There's an intentional shift towards expanded internship and fellowship programs as primary sources of organic growth, which are slower for nominal headcount but show higher productivity and retention.

Recruiting experienced professionals and teams also remains a focus, particularly for the finance division, with semi-experienced brokers increasingly recognizing the value of MMI's training and platform.

Market Dynamics and Outlook

The market continues to balance lingering uncertainty and higher interest rates with increased seller motivation and narrowing bid-ask spreads. The 10-year Treasury yield is 50 basis points higher than the start of the year, contributing to interest rate volatility and extended transaction timelines.

However, improving property fundamentals and ample market liquidity for realistically priced assets support a positive long-term trajectory, despite a choppy recovery in the transaction cycle.

Diversification and M&A Strategy

MMI is actively exploring new business lines beyond its core brokerage and financing, including expanding leasing capabilities, appraisal and consultation (especially tech-enabled groups), and investment management. These initiatives aim to leverage existing infrastructure, provide synergistic services to clients, and contribute to revenue diversification and profit growth, particularly within the underserved private client and middle quasi-institutional markets.

The company maintains a strong balance sheet and liquidity for strategic acquisitions.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.