Q2 2026 Marcus & Millichap Inc Earnings Call Transcript
Key Points
- Total revenue increased 18% year-over-year in Q2 2026, with all business segments registering growth, marking the company's best first half since 2022.
- Brokerage revenue grew 18% and financing revenue rose 15%, with larger transaction revenue jumping 43%, indicating broad-based recovery across the platform.
- Adjusted EBITDA improved significantly to $12 million in Q2 2026, up from $1.5 million in the prior year, reflecting strong operating leverage and cost discipline.
- The financing business continues to expand, becoming Freddie Mac and Fannie Mae's largest non-direct multi-family debt originator through the M&T Bank partnership, with refinancing activity picking up meaningfully.
- The company maintains a strong balance sheet with $345 million in cash and marketable securities, returning $251 million to shareholders over the past four years through dividends and buybacks.
- Private client and middle market brokerage segments posted over 13% revenue growth, while larger transactions grew 43%, showing balanced growth across price points.
- The company is seeing improved market dynamics with more realistic seller pricing, increased lender engagement, and a narrowing bid-ask spread, supporting future transaction growth.
- Interest rate volatility, exacerbated by the Middle East war and rising inflation, has led to extended transaction timelines and a choppy recovery in the transaction cycle.
- The 10-year Treasury yield is 50 basis points higher than at the start of 2026 and 70 basis points higher than pre-conflict lows, creating headwinds for deal underwriting and closing.
- Cost of services as a percentage of revenue increased 50 basis points year-over-year in Q2 2026, reflecting higher commissions paid to more senior professionals, which could pressure margins.
- Headcount remained flat year-over-year at 1,575 investment sales professionals, with intentional attrition of underperformers and a slower path to nominal growth through internship programs.
- The company faces ongoing competitive pressures in recruiting and retaining talent, with increased costs for talent acquisition and retention impacting near-term profitability.
- Net income of $4 million remains well below peak levels, and the effective tax rate is elevated at 38%, which could fluctuate and impact future earnings.
- The company enters Q3 2026 with only modest year-over-year growth in its pipeline due to recent interest rate volatility, indicating potential near-term revenue softness.
Greetings and welcome to the Marcus and Miller Shop second quarter 2026 earnings conference call.
As a reminder, this call is being recorded.
I would now like to turn the conference over to your host, Jacques Cornay.
Thank you may begin.
Thank you, operator.
Good morning and welcome to Marcus and Millichap's second quarter 2026 earnings conference call.
With us today are President and Chief Executive Officer Hassam Naji, and Chief Financial Officer, Steve De Janeiro.
Before I turn the call over to management, please remember that our prepared remarks and the responses to questions may contain forward-looking statements.
Words such as may will expect, believe, estimate, anticipate, goal, variations of these words and similar expressions are intended to identify forwardl statements.
Actual results can differ materially from those implied by such forward-looking statements.
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