Marcus & Millichap Q2 FY26 earnings call MMI

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%.

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.

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.

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.

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.

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.