Slides
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Fourth Quarter 2024 Earnings Conference Call February 14, 2025 2024
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This presentation includes forward-looking statements, including our expectations regarding the long-term outlook of the commercial real estate transaction market, and our positioning within it, our belief relating to the Company’s long- term growth, our assessment of the key factors influencing the Company’s business outlook, including the expectation for future interest rates and likely impact of potential rate cuts on commercial real estate demand, and the execution of our capital return program, including a semi-annual dividend and stock repurchase program. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends affecting the financial condition of our business. Forward-looking statements should not be read as a guarantee of future performance or results and will not necessarily be accurate indications of the times at, or by, which such performance or results may be achieved. Forward-looking statements are based on information available at the time those statements are made and/or management’s good faith belief as of that time with respect to future events and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. Statements about our beliefs and expectations and statements containing the words “may,” “could,” “would,” “should,” “will,” “continue,” “predict,” “potential,” “believe,” “expect,” “anticipate,” “plan,” “estimate,” “target,” “project,” “intend,” “goal,” “well-positioned,” and similar expressions constitute forward-looking statements. Important factors that could cause such differences include, but are not limited to: (1) general uncertainty in the capital markets, a worsening of economic conditions, and the rate and pace of economic recovery following an economic downturn; (2) changes in our business operations; (3) market trends in the commercial real estate market or the general economy, including the impact of inflation and changes to interest rates; (4) our ability to attract and retain qualified senior executives, managers and investment sales and financing professionals; (5) the impact of forgivable loans and related expense resulting from the recruitment and retention of agents; (6) the effects of increased competition on our business; (7) our ability to successfully enter new markets or increase our market share; (8) our ability to successfully expand our services and businesses and to manage any such expansions; (9) our ability to retain existing clients and develop new clients; (10) our ability to keep pace with changes in technology; (11) any business interruption or technology failure, including cybersecurity risks and ransomware attacks, and any related impact on our reputation; (12) changes in interest rates, availability of capital, tax laws, employment laws or other government regulation affecting our business, in each case as may be impacted by the new U.S. administration; (13) our ability to successfully identify, negotiate, execute and integrate accretive acquisitions; and (14) other risk factors included under “Risk Factors” in our most recent Annual Report on Form 10-K. FORWARD-LOOKING STATEMENTS 2
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CONFERENCE CALL PARTICIPANTS Hessam Nadji President, Chief Executive Officer and Director Steve DeGennaro Chief Financial Officer 3
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MMI Financial Highlights
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2024 FOURTH QUARTER HIGHLIGHTS Financial Highlights YoY Revenue $240.1 million 44.4 % Net Income $8.5 million 183.5 % Adjusted EBITDA $18.0 million 500.4 % Operational Highlights YoY Sales Volume $18.4 billion 53.6 % Transaction Closings 2,485 27.6 % Number of Investment Sales and Financing Professionals as of December 31, 2024 1,712 (4.0) % 5
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FULL-YEAR 2024 HIGHLIGHTS Financial Highlights YoY Revenue $696.1 million 7.8 % Net Loss $(12.4) million 63.7 % Adjusted EBITDA $9.4 million 147.7 % Operational Highlights YoY Sales Volume $49.6 billion 13.7 % Transaction Closings 7,836 3.8 % Number of Investment Sales and Financing Professionals as of December 31, 2024 1,712 (4.0) % 6
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2024 FOURTH QUARTER BROKERAGE HIGHLIGHTS YoY Sales Volume $12.3 billion 40.8% Transaction Closings 1,742 23.3% Number of Investment Sales Professionals as of December 31, 2024 1,610 (4.4)% Real Estate Brokerage Commissions Revenue $202.8 million 40.3% Revenue by Transaction Size Transactions by Property Type Transactions by Region 7 <$1M, 3% $1-$10M, 59% $10- $20M, 15% $20M+, 23% Multifamily, 31% Retail, 40% Office, 6% Other, 23% Western, 36% Midwest / Mountain / South / Southwest, 37% Southeast, 17% Northeast / Mid-Atlantic, 10%
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FULL-YEAR 2024 BROKERAGE HIGHLIGHTS YoY Sales Volume $33.6 billion 9.1% Transaction Closings 5,447 (0.5)% Number of Investment Sales Professionals as of December 31, 2024 1,610 (4.4)% Real Estate Brokerage Commissions Revenue $589.7 million 5.3% Revenue by Transaction Size Transactions by Property Type Transactions by Region 8 <$1M, 4% $1-$10M, 62% $10- $20M, 14% $20M+, 20% Multifamily, 30% Retail, 39% Office, 6% Other, 25% Western, 36% Midwest / Mountain / South / Southwest, 36% Southeast, 18% Northeast / Mid-Atlantic, 10%
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2024 FOURTH QUARTER FINANCING HIGHLIGHTS Transactions by Property Type Transactions by Region YoY Sales Volume $3.5 billion 139.4% Transaction Closings 425 79.3% Number of Financing Professionals as of December 31, 2024 102 3.0% Financing Fees Revenue $31.2 million 96.6% 9 Multifamily, 52% Retail, 24% Office, 5% Other, 19% Western, 47% Midwest / Mountain / South / Southwest, 30% Southeast, 10% Northeast / Mid-Atlantic, 13%
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FULL-YEAR 2024 FINANCING HIGHLIGHTS Transactions by Property Type Transactions by Region YoY Sales Volume $9.1 billion 35.2% Transaction Closings 1,249 16.1% Number of Financing Professionals as of December 31, 2024 102 3.0% Financing Fees Revenue $84.5 million 26.3% 10 Multifamily, 50% Retail, 26% Office, 6% Other, 18% Western, 47% Midwest / Mountain / South / Southwest, 33% Southeast, 10% Northeast / Mid-Atlantic, 10%
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Market Highlights
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2010201120122013201420152016201720182019202020212022202320242025* -10 -5 0 5 10 Employment Growth (Millions) * Forecast per Economy.com ** Through January Source: BLS, Moody’s Analytics Annual Employment Growth Unemployment Rate JOB GAINS SLOWING IN ALIGNMENT WITH FED’S STRATEGY; UNEMPLOYMENT RATE REMAINS STABLE 2021 2022 2023 2024 2025** 3% 4% 5% 6% 7% Unemployment Rate 12 2023: 2.6M 2024: 2.0M 2025*: 1.2M
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Rate Fed Holdings (Trillions December 2024 Dollars) 10-Year Treasury Fed Funds Rate 2016201720182019202020212022202320242025* 0.0% 1.5% 3.0% 4.5% 6.0% Notes & Bonds MBS TIPS/TIPS Inflation Compensation/Agencies/Bills 200820092010201120122013201420162017201820192020202120222024 0.0 2.5 5.0 7.5 10.0 10-Year Treasury vs. Fed Funds Rate Inflation Adjusted Fed Balance Sheet * Through January 31st Adjusted for inflation using Core PCE Sources: Real Capital Analytics, Federal Reserve FED TAKING CAUTIOUS APPROACH IN 2025 AS THEY AWAIT POLICY CLARITY; 10-YEAR TREASURY REMAINS ELEVATED 13
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Rate Sources: BLS, Federal Reserve, BEA INFLATION HAS TRENDED LOWER, PAVING THE WAY FOR GRADUAL FED EASING; SOME FEDERAL POLICIES POSE INFLATION RISK 14 Inflation vs. 10-Year Treasury CPI Inflation 10-Year Treasury Core PCE 2016 2017 2018 2019 2020 2021 2022 2023 2024 0.0% 2.5% 5.0% 7.5% 10.0%
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Percent of Dollar Volume 41% 39% 45% 47% 45% 50% 52% 52% 59% 61% 56% 10% 17% 14% 12% 18% 9% 9% 9% 6% 9% 6% 27% 27% 28% 24% 25% 28% 24% 26% 24% 18% 22% 17% 13% 9% 12% 8% 9% 10% 10% 7% 6% 9% 5% 4% 4% 4% 4% 4% 5% 3% 3% 6% 7% User/Other REIT/Listed Institutional Cross-Border Private 14 15 16 17 18 19 20 21 22 23 24 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Includes sales $2.5 million and greater for multifamily, retail, office, industrial, hotel, seniors housing, and land Source: Real Capital Analytics PRIVATE INVESTORS DOMINATE U.S. COMMERCIAL REAL ESTATE; INSTITUTIONAL INVESTORS MORE HESITANT IN CURRENT WINDOW PRIVATE INVESTORS DOMINATE U.S. COMMERCIAL REAL ESTATE; INSTITUTIONAL INVESTORS RE-ENTERING THE MARKET 15
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• Labor shortage still restraining employment growth; 4.5 million jobs added in 2022, 3.0 million in 2023, and 2.2 million in 2024. • Wage gains and robust savings have sustained retail sales; despite expectations of a slowdown, consumer strength remains positive. • Uncertainty surrounding inflation, interest rates, and economic slowing weighs on space demand for most property types. • Office leasing impaired by hybrid models. Market variation widening by property class and urban vs. suburban location. • Apartment rental demand accelerated in second half of 2024. Record new construction pulling back in 2025, affordability gap driving renter demand. • Retail absorption inhibited by limited available space, keeping retail a favored investment choice. Industrial demand moderating, but still positive. Employment Growth (Mil.) Unemployment Rate Employment Growth vs. Unemployment Rate Net Absorption (000s of Units.) Space Absorption Trends Sources: BLS, CoStar Group, Inc., RealPage, Inc. Employment Growth Unemployment Rate 2019 2020 2021 2022 2023 2024 -12.0 -6.0 0.0 6.0 12.0 0% 2% 4% 6% 8% Multifamily -200 0 200 400 600 800 EMPLOYMENT REMAINS POSITIVE; SPACE DEMAND VARIES BY PROPERTY TYPE 19 20 21 22 23 24 Retail Office Industrial -200 0 200 400 600 Net Absorption (Mi. of SqFt) 16
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PROPERTY FUNDAMENTALS GENERALLY SOUND BY HISTORICAL STANDARDS; HOWEVER, VARIATIONS WIDENING • Multifamily and industrial aggressively delivering record new completions as the economy slows. Risk of over-supply limited to select local markets with heavy construction. • Pullback in multifamily construction in 2025 a positive force, especially in growth markets such as Texas, Florida, and Georgia. Operations challenged by insurance and labor costs. • Companies have reduced their inventories to mitigate recession risk, but industrial space demand remains positive. Some overbuilding evident in key metros. • Hospitality sector approaching full recovery led by limited-service segments. • Shopping centers remain a top choice thanks to limited new supply, years of recalibration; single- tenant values still under pressure from high interest rates. • Office occupancy may have stabilized; plans to return to the office remain in question and economic uncertainty restrains commitments. • Retail and office new supply pipeline remain low by historical standards. Occupancy Trends Occupancy (%) Construction Trends Completions as % of Inventory Sources: CoStar Group, Inc., RealPage, Inc. 08-18 Avg.2019 2020 2021 2022 2023 2024 Multifamily Retail Office Industrial 80% 85% 90% 95% 100% 08-18 Avg.2019 2020 2021 2022 2023 2024 Multifamily Retail Office Industrial 0.0% 0.8% 1.6% 2.4% 3.2% 17
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• With the exception of office properties, rent growth and appreciation has been healthy in most segments over the past 5-7 years. • These factors should mitigate systemic risk to banks and other lenders. • Office experiencing the greatest uncertainty as the segment still faces significant maturities this year, while rent growth lags. • FDIC/Federal Reserve guidance still urges lenders to favor workouts and extensions of loans in good standing, but lenders becoming more assertive with borrowers. • Nonetheless loan performance limit banks’ ability to provide normal levels of CRE capital. Short-term loans issued in the past three years with aggressive underwriting face the greatest challenge. Dollar Volume (Billions) Commercial Real Estate Loan Maturities* Five-Year Rent Growth: 2019 to 2024** * For loans outstanding as of 2023 ** Trailing 12-month ADR for Hotel from Dec. 2019 through Dec. 2024 Sources: CoStar Group, Inc., RealPage, Inc., Yardi Matrix, Mortgage Bankers Association MATURING CRE LOAN VOLUMES CONCERNING BUT UNLIKELY TO BECOME DISRUPTIVE AS LENDERS CONTINUE WORKOUTS; RISKS VARY WIDELY BY PROPERTY TYPE Other Healthcare Hotel Industrial Office Retail Multifamily 24 25 26 27 28 29 30 31 32 33 Later 0 250 500 750 1,000 40.5% 28.1% 20.6% 15.0% 2.6% 1.7% IndustrialApartment Hotel Retail Self- Storage Office 0% 10% 20% 30% 40% 50% 60% Rent Growth 18
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LENDER CAUTION AND TIGHTENED UNDERWRITING, WIDENED BID/ASK SPREAD STILL WEIGH ON CRE SALES/ FINANCING • Transaction count in 2024 estimated to have dipped 3% year-over-year; dollar volume increased by 9% year-over-year. • The ‘higher for longer’ outcome of the Federal Reserve’s policy has brought down values, with more realistic seller expectations emerging. • Tighter credit markets making price discovery more challenging, particularly for office properties. • Financing generally available for most property types, but underwriting remains tight. Loan-to- values and debt service coverage ratios have adjusted, weighing on trading activity. • As the Federal Reserve completes tightening cycle as inflation declines, capital flows into commercial real estate are expected to improve. • Well-priced assets are garnering healthy buyer demand as values adjust. Quarterly U.S. Commercial Real Estate Sales and Interest Rates(1) Annual U.S. Commercial Real Estate Sales Trends(1) Total Transactions (000s)Total Transactions (000s) 10-Year Treasury Sources: Real Capital Analytics, Federal Reserve * Preliminary estimate for market sales Excludes STORE Capital acquisition in 1Q 2023; Realty Income merger with Spirit Realty Capital in 1Q 2024 (1) Includes sales $2.5 million and greater for multifamily, retail, office, industrial, hotel, seniors housing, and land 200420052006200720082009201020112012201320142015201620172018201920202021202220232024* 0 15 30 45 60 Market Transactions10-Year Treasury 4Q 20184Q 20194Q 20204Q 20214Q 20224Q 20234Q 2024* 0 5 10 15 20 0.0% 1.5% 3.0% 4.5% 6.0% 19
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Dry Powder in Closed-End Funds (Bil.) CRE Cap Rate 10-Year Treasury Rate 199019921994199619982000200220042006200820102012201420162018202020222024 0% 2% 4% 6% 8% 10% 12% COMMERCIAL REAL ESTATE YIELD SPREADS CHALLENGED; PRICING RECALIBRATING TO HIGHER INTEREST RATES • Rapid rise of interest rates, tightened lender underwriting, and slowing economic growth ahead fueled uncertainty in valuations and widened the bid/ask spreads. This continues to hinder the short-to-mid term transactional outlook, although buyers and sellers are moving closer into alignment. • Market calibrating to higher-rate environment, active price discovery underway in many areas and property types. Current values compelling against replacement cost in most segments/markets. • Appropriately priced assets are seeing ample buyer demand, and offer activity, reflecting healthy capital availability. • A growing conviction of a soft landing for the economy and healthy real estate fundamentals bode well for capital flows in the long-run. Significant capital on the sideline waiting for federal policy clarity and further value adjustment, Federal Reserve’s easing is encouraging. * Through January Cap rates for sales $1 million and greater Sources: CoStar Group, Inc., Real Capital Analytics, Federal Reserve, Prequin Pent-up Capital Demand Remains Significant Cap Rate/10-Year Treasury Spreads 201120122013201420152016201720182019202020212022202320242025* 0 100 200 300 400 Average Rate 20
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MMI Market Position
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87% 7%6% 88% 6%6% 64%15% 21% 67% 12% 21% MMI WELL-ALIGNED WITH THE CRE MARKET Private Client Segment Boasts Largest Transaction and Commission Pool Opportunity • Private client market typically consists of sales $1 million to <$10 million. • Largest and most active market, accounting for 80%+ of transactions. • Primarily driven by high-net worth individuals, partnerships and smaller private fund managers. • Influenced by personal drivers that result in buying/selling/ refinancing properties, as well as market conditions. Should be a major factor in increased sales activity once current market constraints begin to ease. • Market features the highest commission rates. Transactions by Investor Segment (1) Commercial Real Estate Market Marcus & Millichap Commission Pool by Investor Segment (1) (2) Commercial Real Estate Total Commission Pool Marcus & Millichap Revenue Sources: CoStar Group, Inc., Real Capital Analytics (1) Includes apartment, retail, office, and industrial sales $1 million and greater for 2024; 4Q 2024 preliminary estimate for market total. (2) Estimate based on industry averages: 2.7% commission rate for Private Client Market, 1.7% rate for Middle Market and 0.7% for Larger Transaction Market. Private Client Market ($1M - <$10M) Middle Market ($10M - <$20M) Larger Transaction Market (≥$20M) 22
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MMI Financial Details
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TOTAL REVENUE ($ IN MILLIONS) Q4'23 vs Q4'24 $166.2 $240.1 Q4'23 Q4'24 0 50 100 150 200 250 300 44.4 % Full-Year ‘23 vs ‘24 $645.9 $696.1 '23 '24 0 150 300 450 600 750 900 7.8% 24
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BROKERAGE OPERATING METRICS Q4 2023 vs Q4 2024 Total Sales Volume ($ in billions) Total Number of Transactions Average Number of Investment Sales Professionals Average Commission Per Transaction ($ in thousands) $8.7 $12.3 Q4'23 Q4'24 0 5 10 15 20 1,413 1,742 Q4'23 Q4'24 0 1,000 2,000 1,705 1,593 Q4'23 Q4'24 0 300 600 900 1,200 1,500 1,800 2,100 $102.3 $116.4 Q4'23 Q4'24 0 50 100 150 40.8% 23.3% (6.6) % 13.8% 25
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$30.8 $33.6 '23 '24 0 10 20 30 40 50 60 BROKERAGE OPERATING METRICS FULL-YEAR 2023 vs 2024 Total Number of Transactions Average Number of Investment Sales Professionals 5,475 5,447 '23 '24 0 2,000 4,000 6,000 8,000 10,000 1,744 1,610 '23 '24 0 300 600 900 1,200 1,500 1,800 2,100 $102.2 $108.3 '23 '24 0 50 100 150 9.1% (0.5)% (7.7) % 5.9% Total Sales Volume ($ in billions) Average Commission Per Transaction ($ in thousands) 26
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$24,540 $46,172 Q4'23 Q4'24 0 20,000 40,000 60,000 $19,567 $30,556 Q4'23 Q4'24 0 10,000 20,000 30,000 40,000 50,000 $5,680 $5,735 Q4'23 Q4'24 0 1,500 3,000 4,500 6,000 7,500 BROKERAGE REVENUE BY MARKET SEGMENT Q4 2023 vs Q4 2024 Private Client Market ($1 - <$10 million) ($ in thousands) <$1 million ($ in thousands) Middle Market ($10 - <$20 million) ($ in thousands) Larger Transaction Market (≥ $20 million) ($ in thousands) $94,772 $120,364 Q4'23 Q4'24 0 50,000 100,000 150,000 200,000 1.0% 27.0% 56.2% 88.1% 27
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$92,872 $118,638 '23 '24 0 20,000 40,000 60,000 80,000 100,000 120,000 140,000 $73,007 $84,186 '23 '24 0 20,000 40,000 60,000 80,000 100,000 120,000 $20,894 $21,034 '23 '24 0 5,000 10,000 15,000 20,000 25,000 30,000 BROKERAGE REVENUE BY MARKET SEGMENT $372,979 $365,837 '23 '24 0 100,000 200,000 300,000 400,000 500,000 0.7% (1.9)% 15.3% 27.7% FULL-YEAR 2023 vs 2024 Private Client Market ($1 - <$10 million) ($ in thousands) <$1 million ($ in thousands) Middle Market ($10 - <$20 million) ($ in thousands) Larger Transaction Market (≥ $20 million) ($ in thousands) 28
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OPERATING EXPENSE ($ IN MILLIONS) Q4'23 vs Q4'24 $183.4 $233.4 $3.3 $5.3 $74.7 $76.3 $105.4 $151.8 Depreciation SG&A COS Q4'23 Q4'24 0 50 100 150 200 250 63.4% of Rev 44.9% of Rev 2.0% of Rev 63.2% of Rev 31.8% of Rev 2.2% of Rev FY ‘23 vs FY ‘24 $705.2 $729.0 $13.6 $16.6 $285.0 $280.9 $406.6 $431.5 Depreciation SG&A COS '23 '24 0 200 400 600 800 62.9% of Rev 44.1% of Rev 2.1% of Rev 62.0% of Rev 40.3% of Rev 2.4% of Rev 29
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$(4.5) $18.0 Q4'23 Q4'24 $(10.0) $(5.0) $— $5.0 $10.0 $15.0 $20.0 $(10.2) $8.5 Q4'23 Q4'24 $(15.0) $(10.0) $(5.0) $— $5.0 $10.0 NET INCOME AND ADJUSTED EBITDA PERFORMANCE Q4 2023 vs Q4 2024 Adjusted EBITDA ($ in millions) Net Income ($ in millions) 183.5% 500.4% 30
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$(19.6) $9.4 '23 '24 $(30.0) $(20.0) $(10.0) $— $10.0 $20.0 $(34.0) $(12.4) '23 '24 $(40.0) $(30.0) $(20.0) $(10.0) $— $10.0 $20.0 NET INCOME AND ADJUSTED EBITDA PERFORMANCE FULL-YEAR 2023 vs 2024 63.7% 147.7% Net Loss ($ in millions) Adjusted EBITDA ($ in millions) 31
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CASH FLOWS PROVIDED BY (USED IN) OPERATING ACTIVITIES (1) Cash flows provided by operating activities were $21.7 million in 2024 compared to cash flow used in operating activities of $72.4 million in 2023. The $94.1 million increase in cash flows from operating activities in 2024 compared to 2023 was primarily due to (a) a reduction in net losses as a result of increases in real estate brokerage commissions and financing fees, (b) a reduction in bonus payments as the 2023 payment for bonuses related to amounts accrued in 2022 based in part on 2022 profits and (c) a reduction in payments in deferred compensation and commissions. The cash flows from operating activities are also affected by timing of certain cash receipts and payments. Q4 Cash Flows Provided By Operating Activities ($ in millions) $14.7 $56.6 Q4'23 Q4'24 $— $10.0 $20.0 $30.0 $40.0 $50.0 $60.0 285.5% Annual Cash Flows Provided By (Used In) Operating Activities (1) ($ in millions) $(72.4) $21.7 '23 '24 $(100.0) $(75.0) $(50.0) $(25.0) $— $25.0 $50.0 130.0% 32
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$407.1 $394.2 $170.8 $153.4 $236.3 $240.8 Cash and Cash EquivalentsMarketable Debt Securities, Available-For-Sale 12/31/2023 12/31/2024 0 100 200 300 400 500 Cash and Cash Equivalents and Marketable Debt Securities, Available-For-Sale ($ in millions) LIQUIDITY POSITION (3.2)% (1) Including the payment of $20.2 million of dividends and $0.8 million in stock repurchases. Liquidity position as of December 31, 2024 was $394.2 million, which includes $10.7 million in restricted cash and after return of capital to shareholders of $21.0 million for the year (1). 33
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Appendix
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ADJUSTED EBITDA RECONCILIATION Adjusted EBITDA as net income (loss) before (i) interest income and other, including net realized gains (losses) on marketable debt securities, available-for-sale and cash, cash equivalents, and restricted cash, (ii) interest expense, (iii) provision (benefit) for income taxes, (iv) depreciation and amortization, and (v) stock- based compensation. We use Adjusted EBITDA in our business operations to evaluate the performance of our business, develop budgets and measure our performance against those budgets, among other things. We also believe that analysts and investors use Adjusted EBITDA as a supplemental measure to evaluate our overall operating performance. However, Adjusted EBITDA has material limitations as a supplemental metric and should not be considered in isolation, or as a substitute for analysis of our results as reported under U.S. GAAP. We find Adjusted EBITDA to be a useful management metric to assist in evaluating performance, because Adjusted EBITDA eliminates items related to capital structure, taxes and non-cash items. In light of the foregoing limitations, we do not rely solely on Adjusted EBITDA as a performance measure and also consider our U.S. GAAP results. Adjusted EBITDA is not a measurement of our financial performance under U.S. GAAP and should not be considered as an alternative to net income (loss), operating income (loss) or any other measures calculated in accordance with U.S. GAAP. Because Adjusted EBITDA is not calculated in the same manner by all companies, it may not be comparable to other similarly titled measures used by other companies. (1) Other includes net realized gains (losses) on marketable debt securities available-for-sale. Three Months Ended December 31, Twelve Months Ended December 31, 2024 2023 2024 2023 Net income (loss) $8,548 $(10,233) $(12,362) $(34,035) Adjustments: Interest income and other (1) (4,987) (4,689) (18,793) (17,890) Interest expense 201 216 812 888 Provision (benefit) for income taxes 2,947 (1,451) (666) (6,366) Depreciation and amortization 5,288 3,315 16,589 13,627 Stock-based compensation 6,037 8,338 23,792 24,146 Adjusted EBITDA $18,034 $(4,504) $9,372 $(19,630) 35
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COMPANY OVERVIEW PLATFORM BUILT FOR MAXIMIZING INVESTOR VALUE • Marcus & Millichap Capital Corporation (“MMCC”), Research & Advisory support client dialogue, financing, strategy, and sales execution • Culture and policy of information sharing is key to maximizing investor value MANAGEMENT WITH SIGNIFICANT INVESTMENT BROKERAGE EXPERIENCE • Non-competitive management with extensive investment brokerage experience, committed to training, coaching, and supporting investment sales professionals • Culture creates a competitive advantage through agent retention and better client results WELL-POSITIONED TO EXECUTE ON STRATEGIC GROWTH PLAN • Positioned to increase Private Client Market segment share, expand presence in specialty niches/larger transaction business, and grow the MMCC division • Strong balance sheet with no debt provides financial flexibility to pursue strategic acquisitions MARKET LEADER IN THE PRIVATE CLIENT MARKET SEGMENT • Only national brokerage firm predominantly focused on servicing the Private Client Market segment which consistently accounts for 80%+ of CRE transactions in the U.S. • Private client business has been supplemented with penetration in larger transactions and institutional clients for over a decade NATIONAL PLATFORM FOCUSED ON REAL ESTATE INVESTMENT BROKERAGE • Over 50 years of experience dedicated to perfecting real estate investment brokerage • Designed to maximize real estate value, facilitate investment options by geography and property type, and create liquidity for investors 36
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ILLUSTRATIVE MMI EARNINGS MODEL Investment Sales Revenue EBITDA(2) Investment Sales Revenue Financing & Other Revenue Cost of Services SG&A(1) 1. Includes stock-based compensation 2. EBITDA is not a measurement of our financial performance under U.S. GAAP and should not be considered as an alternative to net income, operating income or any other measure derived in accordance with U.S. GAAP Agents Productivity Transaction Value Commission Rate 37
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Fourth Quarter 2024