Marcus & Millichap’s third quarter results aligned with expectations on revenue but fell short on earnings per share, as profitability was affected by a one-time legal reserve and ongoing investments in talent and technology. CEO Hessam Nadji pointed to a 25% transaction growth rate, driven by strength in the private client segment and improved engagement from banks and credit unions. Nadji highlighted that the company’s focus on maintaining strong client relationships and expanding its service offerings helped outperform broader market trends despite lingering market disruption.
Is now the time to buy MMI? Find out in our full research report (it’s free for active Edge members).
Marcus & Millichap (MMI) Q3 CY2025 Highlights:
- Revenue: $193.9 million vs analyst estimates of $193.8 million (15.1% year-on-year growth, in line)
- Adjusted EPS: $0.01 vs analyst estimates of $0.01 (in line)
- Adjusted EBITDA: $6.89 million vs analyst estimates of $600,000 (3.6% margin, significant beat)
- Operating Margin: -1.2%, up from -6.8% in the same quarter last year
- Market Capitalization: $1.14 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Marcus & Millichap’s Q3 Earnings Call
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Mitch Germain (Citizens) asked about efforts to accelerate large deal activity as hiring has focused on experienced producers; CEO Hessam Nadji explained that comparisons were skewed by last year’s outsized number of very large deals and outlined a steady strategy of targeted recruiting and platform expansion.
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Mitch Germain (Citizens) questioned whether customers have accepted new pricing dynamics and are more willing to transact; Nadji stated motivation is increasing due to realistic pricing, loan maturities, and operational requirements, though alignment is not yet complete.
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Mitch Germain (Citizens) inquired about improving profitability at current revenue levels; Nadji and CFO Steven DeGennaro emphasized that recent investments in talent and technology are expected to deliver operating leverage as market conditions normalize.
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Blaine Heck (Wells Fargo) asked about the scale of lending expansion from banks and credit unions; Nadji noted that more lenders are active and providing usable quotes, especially regional banks, though overall market activity remains below normal in some regions.
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Blaine Heck (Wells Fargo) sought clarification on the auction business’s growth potential and profitability; Nadji described the auction platform’s internal and client benefits, highlighting its growing contribution and fee structure advantages.
Catalysts in Upcoming Quarters
In the coming quarters, our analysts will watch (1) whether private client and financing momentum can be sustained as market conditions evolve, (2) the pace and profitability improvements as recent investments in talent and technology translate into operating leverage, and (3) continued expansion of the IPA and auction platforms. The impact of future Federal Reserve actions and shifting investor sentiment will also be key drivers.
Marcus & Millichap currently trades at $29.23, in line with $29.41 just before the earnings. In the wake of this quarter, is it a buy or sell? See for yourself in our full research report (it’s free for active Edge members).
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