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Introduction & Market Context
Marcus & Millichap (NYSE:MMI) released its second quarter 2025 earnings presentation on August 7, showing continued revenue growth amid challenging market conditions. The commercial real estate services firm reported an 8.8% year-over-year revenue increase while transaction volume jumped nearly 30%, though net losses widened significantly compared to the same period last year.
The presentation highlighted a commercial real estate market that continues to recalibrate to higher interest rates, with private investors dominating transaction activity while institutional investors gradually return to the market. The Federal Reserve’s cautious approach and range-bound treasury yields have created an environment where pricing adjustments are still in progress.
As shown in the following chart of key financial metrics, the company achieved revenue growth while maintaining positive adjusted EBITDA:
Quarterly Performance Highlights
Marcus & Millichap reported Q2 2025 revenue of $172.3 million, an 8.8% increase from $158.4 million in Q2 2024. This growth builds on the momentum seen in Q1 2025, when the company reported a 12% year-over-year revenue increase. However, the company’s net loss widened to $11.0 million, a 99.3% increase from the $5.5 million loss in the same period last year, reversing the improvement trend noted in Q1.
Transaction (JO:NTUJ) volume showed strong growth, increasing 29.9% year-over-year to $12.3 billion, while transaction closings rose 15.0% to 2,070. This acceleration in transaction activity outpaced the 18% volume growth reported in Q1 2025, suggesting improving market liquidity despite persistent challenges.
Year-to-date performance shows similar trends, with revenue up 10.4% to $317.3 million and transaction volume up 13.0% to $21.7 billion, as illustrated in the following chart:
Segment Performance Analysis
The company’s financing segment was the standout performer in Q2 2025, with sales volume surging 86.0% year-over-year to $3.4 billion and transaction closings increasing 50.4% to 409. Financing fees revenue grew 43.5% to $26.3 million, significantly outpacing overall company revenue growth. Multifamily properties dominated the financing segment, accounting for 50% of transactions.
The following chart details the financing segment’s strong performance:
Meanwhile, the brokerage segment, which represents the majority of the company’s business, showed more modest growth with sales volume increasing 11.8% to $8.0 billion and transaction closings up 8.1% to 1,375. Real estate brokerage commissions revenue grew 4.4% to $141.4 million.
The brokerage segment’s performance was driven primarily by the private client market ($1-10 million transaction size), which accounted for 66% of revenue and grew 10.3% year-over-year to $93.5 million. However, the large transaction segment ($20 million or greater) declined 11.8% to $23.0 million, indicating continued challenges in the institutional market.
The following chart illustrates the brokerage segment’s performance metrics:
Market Positioning and Outlook
Marcus & Millichap’s business model remains well-aligned with market opportunities, particularly in the private client segment which represents the largest transaction and commission pool. The company’s strategic focus on this segment has positioned it favorably as private investors continue to dominate commercial real estate transactions.
As shown in the following chart, private investors account for 59% of commercial real estate investment volume, while institutional investors represent just 7%:
The broader commercial real estate market shows mixed signals, with retail sales growth remaining positive and space demand gaining in most property types. Property fundamentals are generally sound by historical standards, though variations are widening across different sectors.
The company’s presentation highlighted that the bid/ask spread began to tighten in the first quarter, but a recent wave of uncertainty is slowing progress. Pricing continues to recalibrate to higher interest rates, as illustrated in the following chart showing cap rate spreads over treasury yields:
Financial Position and Cash Flow
Despite the widening net loss, Marcus & Millichap showed significant improvement in cash flows from operating activities, which grew from $0.8 million in Q2 2024 to $21.0 million in Q2 2025, a 2,522.4% increase. Year-to-date, the company reduced cash used in operations by 36.6%, from $(50.2) million to $(31.8) million.
The company maintained a strong liquidity position with $332.6 million in cash and marketable securities as of June 30, 2025, though this represents a decrease from $394.2 million at the end of 2024. This reduction likely reflects the company’s continued investments in its platform and talent acquisition strategy mentioned in previous communications.
Operating expenses increased in line with revenue growth, with cost of services remaining stable at 61.9% of revenue in Q2 2025, unchanged from the prior year. SG&A expenses increased slightly as a percentage of revenue, from 41.1% to 41.5%.
The company’s adjusted EBITDA for Q2 2025 was $1.5 million, a modest 1.0% increase from $1.4 million in Q2 2024. Year-to-date adjusted EBITDA improved 15.7% to $(7.3) million from $(8.6) million, indicating progress toward profitability despite continued challenges.
Marcus & Millichap’s Q2 2025 results demonstrate the company’s ability to drive transaction volume and revenue growth in a challenging market environment, though profitability remains elusive as the commercial real estate market continues its adjustment to higher interest rates and evolving investor preferences.
Full presentation:
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