Marcus & Millichap (NYSE:MMI) executives said the company continued to recover in 2025 from what management described as a prolonged and complex commercial real estate disruption, delivering full-year revenue growth of 8.5% and a sharp improvement in profitability as transaction activity in its core Private Client and Middle Market segments picked up.
On the company’s fourth-quarter and year-end 2025 earnings call, President and CEO Hessam Nadji said the fourth quarter “beat the tough comp” from the prior year—when results benefited from a significant drop in interest rates—despite entering the quarter “without the benefit of lower interest rates.” CFO Steve DeGennaro reported fourth-quarter revenue of $244 million, up 2% year over year, and adjusted EBITDA of $25 million, up 39% from the same period last year.
2025 results highlighted revenue growth and improved profitability
Fourth-quarter net income was $13 million, or $0.34 per share, compared with $8.5 million, or $0.22 per share, in the prior-year period. For the full year, the company posted a net loss of $1.9 million, or $0.05 per share. DeGennaro noted that full-year results included an $0.08 per share charge tied to a legal reserve recorded in the third quarter, adding there was “no material update” on the matter and that the company remained committed to pursuing relief through an appeal.
DeGennaro also emphasized expense discipline. Total operating expenses in the fourth quarter were $229 million, down 2% from last year despite higher revenue. For the year, operating expenses increased 5.5% to $769 million, below the 8.5% revenue growth rate. Fourth-quarter SG&A was $71 million, down 7% year over year; full-year SG&A was $286 million, improving to 38% of revenue from 40% the prior year.
Brokerage shift toward Private Client activity
Management pointed to a shifting mix toward smaller transactions as private client activity strengthened. In the fourth quarter, real estate brokerage commissions were $205 million and accounted for 84% of total revenue. The company completed 1,902 brokerage transactions totaling $11.8 billion in volume; while dollar volume fell 4% year over year, deal count rose more than 9%. DeGennaro said the average commission rate was 1.7% and that a higher mix of smaller private client deals contributed to a 7% decrease in average fee per transaction.
For full-year 2025, brokerage commissions totaled $633 million, up 7% from $590 million in 2024. The company completed 6,038 brokerage transactions, up 11%, with total volume of $35 billion, up 3.5%. Average transaction size was $5.8 million versus $6.2 million a year earlier, reflecting the pickup in Private Client activity.
Private Client accounted for 65% of brokerage revenue in the fourth quarter, or $133 million, up from 59% and $120 million a year earlier. DeGennaro said private client transactions grew 13% in volume and 10% in transaction count in the quarter. For the year, Private Client contributed $406 million of brokerage revenue, up 11% year over year.
In contrast, middle market and larger transaction segments together represented 31% of fourth-quarter brokerage revenue at $65 million, down from 38% and $77 million in the prior-year quarter. DeGennaro attributed the decline to fewer large transactions, citing a tough comparison after large transactions “significantly outpaced the market” last year.
Nadji added that transactions of $20 million or more declined 13% in 2025, and he described some volatility in institutional markets as certain metros contend with multifamily oversupply and higher vacancies. He said underperforming assets in those markets were “not yet priced to clear the market.”
Financing business grew again, with increased lender access
Management highlighted continued growth in financing. DeGennaro said financing revenue was $33 million in the fourth quarter, up 6% from $31 million, on an 8% increase in transaction volume to $3.7 billion across 507 transactions (up 19% year over year). For the full year, financing revenue increased 23% to $104 million, driven by a 33% rise in transaction count and a 31% increase in volume to $11.9 billion.
Nadji said the financing business benefited from an expanded team of experienced professionals and broader lender access, noting the company accessed more than 420 separate lenders in 2025. He said MMCC and IPA Capital Markets closed more than 1,600 transactions totaling nearly $12 billion, including $2.3 billion placed with Fannie Mae and Freddie Mac primarily through a strategic alliance with M&T Bank. Nadji also described agency financing as a fast-growing segment driven by talent acquisition and collaboration between finance professionals and sales teams.
In response to an analyst question about cross-selling, Nadji said collaboration between financing and sales had increased, pointing to activity within IPA Capital Markets multifamily and relationships involving the loan sales division Mission Capital and the company’s auction business.
Hiring, AI strategy, and 2026 outlook
Nadji said 2025 produced the strongest sales force growth in seven years, with nearly 100 net additions of brokerage and financing professionals. He attributed improved hiring and retention to multi-year initiatives designed to address elevated dropout rates following pandemic-era disruptions to training and market volatility. He cited campus recruiting, an expanded internship program with a national curriculum, and growth in the William A. Millichap Fellowship Program. He said the company entered 2026 with a strong candidate pipeline and expected benefits in 2026 from experienced hires made in 2025, given a typical six- to nine-month transition period.
On technology, Nadji said the company’s Brokerage Transaction Services back-office and marketing center was increasing reliance on lower-cost third-party services while also leveraging AI for financial analysis, document generation, underwriting, and lead scoring. He said the company sees “massive efficiency” potential but does not expect AI to disintermediate value-added brokers given the relationship and deal-management aspects of commercial real estate.
Looking to 2026, Nadji said he was more optimistic due to stabilized interest rates and ongoing price adjustments, citing cap rates up 85–110 basis points on average since 2022 and prices down roughly 20% on average. He also pointed to reduced lender spreads and a pullback in new construction as supportive of investment opportunities. At the same time, he said inflation and trade-related variables could limit the Federal Reserve’s ability to cut rates significantly.
DeGennaro said first-quarter revenue was expected to follow normal seasonality and be sequentially lower than the fourth quarter, while also noting macroeconomic and geopolitical uncertainties. He guided first-quarter cost of services to 60%–61% of revenue, and said SG&A would rise year over year in absolute dollars due to higher agent support and continued investment in technology and central services. He also said the effective tax rate for the quarter and year was expected to be 50%–60%.
Balance sheet and shareholder returns
DeGennaro said the company ended the quarter with no debt and $398 million in cash, cash equivalents, and marketable securities, up $17 million from the prior quarter. He said the company returned $29 million to shareholders during the quarter through a $10 million dividend and $19 million of share repurchases. The board declared a semiannual dividend of $0.25 per share, payable April 3, 2026, to shareholders of record March 13, 2026.
For 2025, DeGennaro said the company repurchased $27 million of shares at a weighted average price of $28.77 per share, and Nadji said the company provided $47 million through dividends and repurchases during the year. Since initiating its dividend and repurchase programs nearly four years ago, DeGennaro said Marcus & Millichap has returned approximately $217 million to shareholders.
About Marcus & Millichap (NYSE:MMI)
Marcus & Millichap (NYSE: MMI) is a leading commercial real estate brokerage firm focused on investment sales, financing, research and advisory services. Founded in 1971 by George M. Marcus and William A. Millichap, the company has grown to specialize in the marketing of multifamily, retail, office, industrial, hospitality and other commercial property types. Through an extensive network of investment specialists, Marcus & Millichap connects property owners and investors with tailored transactions across a range of asset classes.
The firm offers comprehensive capital markets solutions, including debt and equity placement, structured finance, and customized financing programs.
