NYSE$MMI

Marcus & Millichap · Q4 2022 earnings

Q4 2022 earnings · · Investor relations

Briefing

Reported financial results for the fourth quarter and the year ended December 31, 2022.

Marcus & Millichap reported a challenging fourth quarter due to Fed-induced market disruption, but delivered record revenue for the full year 2022. The company outperformed the market with nearly 2,700 closings in the quarter.

  • Total revenue was $262.4 million, compared to $495.1 million.
  • Net income was $7.9 million, or $0.20 per common share, diluted, compared to $62.0 million, or $1.53 per common share, diluted.
  • Brokerage commissions were $235.8 million, compared to $455.5 million.
  • Financing fees were $21.6 million, compared to $34.2 million.

Headline financials

Total Revenue

$262M

Previous: $495M-47.0%
EPS (adj)

$0.20

Previous: $1.53-86.9%
Total Sales Volume

$13.1B

No prior period
Avg Commission per Transaction

$115K

No prior period
Average Commission Rate

1.8%

No prior period
Capital Expenditures

$3.1M

Previous: $2.62M+18.4%
Free Cash Flow

$22.3M

Previous: $154M-85.5%
Net Income

$7.91M

Previous: $62M-87.2%
Operating Income

$5.86M

Previous: $81.9M-92.8%
Gross Profit

$81.7M

Previous: $162M-49.5%
Cash & Equivalents

$236M

Previous: $382M-38.3%
Total Assets

$1B

Previous: $1.05B-4.0%
Stock-Based Comp

$4.64M

Previous: $2.71M+71.2%

Revenue & EPS history

Marcus & Millichap · Revenue · Quarterly

$262M

Q4 2022-47%vs Q4 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 economy and commercial real estate transaction market will likely remain choppy for the first half of 2023. However, the Company believes it remains well positioned to achieve long-term growth.

Tailwinds

  • Experienced management team
  • Infrastructure investments
  • Industry-leading market research
  • Proprietary technology
  • Size and fragmentation of the Private Client Market segment continues to offer long-term growth opportunities through consolidation.

Headwinds

  • Volatility in market sales and investor sentiment driven by the elevated cost of debt capital
  • Interest rate fluctuations and the heightened bid-ask spread between buyers and sellers
  • Risks of an impending recession and the resulting reduction of CRE space demand that results from uncertainty
  • Possible impact to investor sentiment related to potential tax and other policy changes which may contribute to transaction acceleration and/or future fluctuations in sales and financing activity
  • Rising operating costs driven by wages, insurance, taxes and construction materials

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 Q4 2022

Historical avgQ4 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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