Marcus & Millichap Q2 2026 Earnings: Revenue Growth Restores Profitability

Marcus & Millichap (NYSE: MMI) reported preliminary Q2 2026 revenue of $202.9 million, up 17.8% from $172.3 million, while diluted EPS improved to $0.10 from a loss of $0.28. Net income swung to $3.9 million from an $11.0 million loss as stronger brokerage and financing activity lifted adjusted EBITDA, although higher commissions paid to senior professionals increased cost of services as a percentage of revenue.

Core earnings data

For the quarter ended June 30, revenue increased by $30.6 million while operating expenses rose by $19.4 million. That difference allowed MMI to return to operating profitability, with selling, general and administrative expenses remaining nearly unchanged year over year.

The August 6 results are preliminary because the company had not yet filed its quarterly report on Form 10-Q.

Adjusted EBITDA is a non-GAAP measure. The increase primarily reflected improved operating income.

Brokerage and financing performance

Real estate brokerage remained the largest growth driver. Brokerage sales volume increased 18.4%, supported by more transactions and a higher average transaction size, while larger transactions grew considerably faster than the private client business.

Financing fee revenue rose faster than financing volume. The company attributed this partly to a 10-basis-point increase in its average financing fee rate, which offset a lower average financing transaction size.

Within brokerage, the Private Client Market continued to account for most revenue, but the Larger Transaction Market supplied the fastest growth. Larger-transaction revenue increased as transaction count rose to 82 from 60 and sales volume reached $4.43 billion, compared with $3.62 billion a year earlier.

Financing transactions increased to 480 from 409, even though the average transaction size fell to $7.45 million from $8.29 million. The combination of higher activity and a better average fee rate drove financing fee growth.

Transaction recovery restored profit, but commission costs limited margins

Cost of services increased 18.8% to $126.7 million, broadly matching the pace of revenue growth. It reached 62.4% of revenue, up 50 basis points, because senior investment sales and financing professionals earned higher commissions during the quarter.

In contrast, SG&A was nearly flat at $71.7 million versus $71.6 million. Revenue growth therefore provided operating leverage against fixed overhead, helping operating income turn positive and lifting adjusted EBITDA to $12.1 million. However, the approximately 1.1% operating margin shows that profitability remained relatively narrow despite the year-over-year recovery.

Balance sheet and capital allocation

MMI ended June with $153.5 million of cash, cash equivalents and restricted cash, compared with $161.9 million at the end of 2025. Current and non-current marketable debt securities totaled approximately $191.7 million, down from $236.3 million at year-end.

During the first six months of 2026, the company repurchased 912,957 shares for $23.9 million at an average price of $26.22. After repurchases through August 3, approximately $90.1 million remained available under the authorization. The board also declared a semiannual dividend of $0.25 per share, payable October 6 to shareholders of record on September 15.

Management’s view

CEO Hessam Nadji said the private client recovery gained momentum as banks and credit unions became more active, while larger institutional sales and financing volumes also advanced. Management attributed the broader increase in transaction activity to commercial real estate asset repricing after higher interest rates and the passage of time since the market bottom.

The outlook remained cautious. Management expects unusually wide buyer-seller bid-ask spreads and other near-term challenges to extend through 2026, citing renewed Middle East conflict, inflation pressure and higher rates. At the same time, the company intends to continue investing in its platform, talent and client outreach.

Risks investors should watch

• Interest rates and inflation: Higher or more volatile borrowing costs can widen bid-ask spreads, delay price discovery and reduce commercial real estate sales and financing activity.
• Narrow operating profitability: Cost of services already increased to 62.4% of revenue. A continued shift toward higher-paid senior professionals could limit margin expansion even if transaction revenue grows.
• Economic weakness: A recession could reduce demand for commercial real estate space and weaken investor willingness to complete transactions.
• Geopolitical and policy uncertainty: Tariffs, immigration policy, geopolitical developments and other government actions may affect market sentiment, interest rates and transaction velocity.
• Preliminary reporting status: The reported figures remain subject to possible adjustments before MMI files its Form 10-Q.

Summary

Marcus & Millichap returned to quarterly profitability as higher brokerage and financing activity produced double-digit revenue growth, with larger transactions expanding faster than the core private client business. Flat SG&A helped create operating leverage, but higher commission costs kept the operating margin modest. The main factors to monitor are whether transaction recovery continues through persistent rate and bid-ask spread pressure, and whether additional revenue growth translates into wider margins.