NYSE$MMI

Marcus & Millichap · Q2 2022 earnings

Q2 2022 earnings · · Investor relations

Briefing

Reported a record second quarter with revenue growth driven by increases in real estate brokerage commissions and financing fees.

Marcus & Millichap reported a record second quarter with total revenues increasing by 39% year-over-year to $396 million and net income rising 34% to $1.04 per diluted share. The company benefited from ongoing investments into the business and increased activity across the board.

  • Total revenues grew by 39.0% to $396.0 million.
  • Net income increased to $42.2 million, or $1.04 per common share, diluted.
  • Brokerage commissions increased to $354.7 million, up 40.2% from prior year.
  • Financing fees improved 30.5% to $36.8 million.

Headline financials

Total Revenue

$396M

Previous: $285M+39.0%
EPS (adj)

$1.04

Previous: $0.78+33.3%
Capital Expenditures

-$5.02M

Previous: -$2.77M-81.3%
Free Cash Flow

$37.1M

Previous: $28.8M+29.1%
Net Income

$42.2M

Previous: $31.5M+33.7%
Operating Income

$56.7M

Previous: $41.6M+36.4%
Gross Profit

$140M

Previous: $19K+736294.7%
Cash & Equivalents

$212M

Previous: $230M-8.1%
Total Assets

$967M

Previous: $818M+18.2%
Stock-Based Comp

$4.28M

Previous: $2.66M+60.6%

Revenue & EPS history

Marcus & Millichap · Revenue · Quarterly

$396M

Q2 2022+39%vs Q2 2021
Beat estimate in 9 of 14 quarters(64%)
ActualEstimate

Revenue by segment

Marcus & Millichap · $163M total across 4 segments · Q1 2021

  • Private Client Market
    $105M
  • Larger Transaction Market
    $30.6M
  • Middle Market
    $20.6M
  • Less than $1 million
    $6.14M

Forward guidance

The company anticipates that the effect of rapid interest rate increases, and expectations of additional rate hikes will further widen the bid/ask spread and tighten lender underwriting. Capital is still attracted to commercial real estate as an inflation hedge with healthy supply-demand fundamentals and solid long-term growth prospects.

Tailwinds

  • Experienced management team
  • Recent infrastructure investments
  • Industry-leading market research
  • Proprietary technology
  • Size and fragmentation of the Private Client Market segment

Headwinds

  • Volatility in sales and financing activity and investor sentiment
  • Slowdown in sales and financing activity of asset types impacted by COVID-19, elevated inflation, interest rate fluctuations
  • An increasing bid-ask spread between buyers and sellers, and economic trends including a potential recession
  • Potential higher cost of services resulting from more experienced investment sales and financing professionals closing a larger share of revenue and surpassing revenue thresholds earlier in the year
  • High variability in the Larger Transaction Market segment from quarter to quarter, particularly due to changes in the macro economy and capital market conditions

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 20 quarterly earnings reports · overlaid with Q2 2022

Historical avgQ2 2022

+1.5%

Avg return

Earnings day

-0.1%

Avg return

5 days after

-0.7%

Avg return

30 days after

66%

33 / 50 earnings

Positive

+16.9%

Q1 2015

Best reaction

-29.3%

Q3 2015

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q1 2026+1.2%+3.6%+3.7%
Q4 2025+3.4%+2.9%+1.6%
Q3 2025-0.5%+2.8%-1.9%
Q1 2025+2.6%+4.2%+1.1%
Q4 2024+5.4%+3.6%-7.2%
Q3 2024+4.3%+2.5%+2.4%
Q2 2024-0.5%-5.6%-1.9%
Q1 2024+2.0%+1.0%-8.3%
Q4 2023-3.4%-7.5%-17.4%
Q3 2023+8.7%+3.9%+17.9%
Q2 2023+0.5%-2.8%-9.8%
Q1 2023-4.9%-8.7%-0.0%
Q4 2022-2.2%-1.8%-12.8%
Q3 2022+2.3%-1.9%+7.9%
Q2 2022+0.1%-2.3%-9.4%
Q1 2022-5.2%-9.4%-8.4%
Q4 2021+5.4%+0.4%+3.3%
Q3 2021+6.5%+1.9%-2.4%
Q2 2021-1.1%-1.2%+0.1%
Q1 2021+3.0%-0.1%+6.3%
Q4 2020+4.2%+4.0%-10.4%
Q3 2020+2.1%+10.7%+17.1%
Q2 2020-0.1%+3.0%+8.2%
Q1 2020+9.5%-5.4%+21.2%
Q4 2019+1.0%-9.5%-34.9%
Q3 2019-7.3%-4.1%+1.9%
Q2 2019+10.0%+12.5%+15.7%
Q1 2019-15.1%-18.0%-28.7%
Q4 2018+1.0%-2.3%-4.2%
Q3 2018+5.1%+5.4%-0.8%
Q2 2018-3.0%-3.8%-10.2%
Q1 2018+6.6%+6.0%+9.9%
Q4 2017+9.3%+10.1%+5.9%
Q3 2017+5.5%+3.7%+7.8%
Q2 2017+5.4%-0.6%+0.5%
Q1 2017-3.7%-6.4%-0.7%
Q4 2016-1.0%-2.4%-8.7%
Q3 2016+2.0%+4.4%+18.0%
Q2 2016+5.2%+4.9%-1.7%
Q1 2016+10.5%
Q4 2015+2.9%
Q3 2015-29.3%
Q2 2015-4.3%
Q1 2015+16.9%
Q4 2014-6.1%
Q3 2014+2.1%
Q2 2014+8.2%
Q1 2014+11.0%
Q4 2013-3.0%
Q3 2013+1.6%
Q2 2013
Q1 2013
Q4 2012
Q3 2012

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