Marcus & Millichap Q3 2026 Earnings: Larger Deals Drive 7.5% Revenue Growth

Marcus & Millichap (NYSE: MMI) reported Q3 2026 revenue of $208.4 million, up 7.5% from $193.9 million a year earlier, while diluted EPS increased to $0.03 from $0.01. Larger middle-market and major transactions led growth, but higher commissions paid to senior professionals raised the cost-of-services ratio. The operating loss narrowed, and adjusted EBITDA increased to $8.2 million.

Core Earnings Data

Revenue increased by $14.5 million year over year, while total operating expenses rose by $13.0 million to $209.3 million. That allowed MMI to reduce its operating loss to $0.9 million from $2.4 million despite continued pressure on operating profitability.

The company recorded $3.7 million of other income, net, which more than offset the operating loss and interest expense. As a result, pre-tax income reached $2.6 million and GAAP net income rose to $1.0 million.

Adjusted EBITDA is a non-GAAP measure. MMI also said the results were preliminary and unaudited pending the filing of its Form 10-Q.

Business and Segment Performance

Real estate brokerage remained the primary growth contributor, with commission revenue increasing 7.4%. Performance differed materially by transaction size: Private Client Market revenue rose 3.6%, while combined Middle Market and Larger Transaction Market revenue increased 18.1%.

Financing revenue grew more slowly because total financing volume was nearly unchanged. A five-basis-point improvement in the average financing fee rate helped fees increase 2.6%.

Middle-market and larger transactions together generated approximately $9.5 million of the $11.9 million increase in total brokerage commissions, making higher-value transactions the main source of brokerage growth.

Larger Deals, Not More Transactions, Drove Brokerage Growth

MMI completed 1,584 brokerage transactions during the quarter, almost unchanged from 1,586 a year earlier. However, brokerage sales volume increased 12.6% to $9.41 billion as the average transaction size rose to $5.94 million from $5.27 million.

The larger average deal size helped offset a decline in the average commission rate to 1.85% from 1.94%. Average commission per transaction still increased to $109,915 from $102,248. This combination explains why brokerage revenue grew despite a slightly lower transaction count and commission rate.

The shift was especially visible among properties valued at $20 million or more. Revenue from this category rose to $31.5 million from $26.3 million, while sales volume increased to $3.82 billion from $3.04 billion.

Profitability and Balance Sheet

Cost of services increased by $12.5 million to $133.5 million, outpacing revenue growth. Management attributed the increase primarily to senior investment sales and financing professionals earning higher commissions in 2026. This pushed cost of services to 64.0% of revenue and limited the operating leverage generated by higher transaction volume.

Selling, general and administrative expenses increased modestly to $73.5 million from $72.5 million. Higher information technology costs were partly offset by lower litigation costs; the prior-year quarter included a $4.0 million legal accrual.

Cash, cash equivalents and restricted cash increased to $189.2 million at September 30 from $161.9 million at the end of 2025. Available-for-sale marketable debt securities declined to approximately $183.6 million from $236.3 million over the same period.

During the first nine months of 2026, MMI repurchased 912,957 shares for $23.9 million at an average price of $26.22. The company also declared a semiannual dividend of $0.25 per share, which was paid on October 6, after the quarter ended. After repurchases through November 3, approximately $90.1 million remained under the authorization.

Management’s View

CEO Hessam Nadji said an 80-basis-point increase in the 10-year Treasury yield during the quarter widened bid-ask spreads and slowed Private Client activity. Greater penetration of middle-market and larger transactions nevertheless supported overall revenue growth.

Management expects interest-rate volatility and price discovery challenges to continue through the remainder of 2026. Looking toward 2027, it anticipates that loan maturities, previously postponed transactions and lenders’ increased ability to sell underperforming assets could lead to more commercial property sales. MMI also plans to continue platform investments, recruiting and the evaluation of strategic acquisitions.

Recent Insider Transactions

The reported six-month aggregate showed 50,547 shares purchased through 10 transactions and 500 shares sold through one transaction, resulting in net purchases of 50,047 shares. Total insider holdings were approximately 1.47 million shares, with net purchases representing 3.5% of that amount.

The latest entries with both a disclosed transaction action and reported value are shown below. Records without a transaction description or amount are omitted, and the activity does not by itself indicate insiders’ outlook for the company.

Risks Investors Need to Watch

• Interest-rate volatility: Higher Treasury yields widened bid-ask spreads during the quarter and moderated Private Client transaction activity. Continued volatility could delay sales and financing transactions.
• Dependence on larger transactions: Brokerage growth came from higher average deal sizes rather than more transactions. A decline in middle-market or larger deals could therefore have an outsized revenue effect.
• Higher compensation costs: Cost of services grew faster than revenue and reached 64.0% of sales. Continued increases in commission expense could constrain operating-margin improvement.
• Commercial real estate uncertainty: Recession risk, inflation, tariffs, policy changes and higher property operating costs could affect investor sentiment, financing availability and transaction velocity.

Summary

Marcus & Millichap’s Q3 2026 results showed continued recovery in commercial real estate transaction value, led by middle-market and larger properties. Revenue, net income and adjusted EBITDA improved, but nearly flat transaction counts and a higher cost-of-services ratio show that the recovery has not yet produced substantial operating profitability. The key issues ahead are whether deal activity broadens beyond larger transactions and whether MMI can convert higher revenue into stronger operating margins as interest-rate volatility continues.