Real estate brokerage and services firm Marcus & Millichap (NYSE: MMI) announced better-than-expected revenue in Q4 CY2025, with sales up 1.6% year on year to $244 million. Its non-GAAP profit of $0.34 per share was 58.1% above analysts’ consensus estimates.

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StockStory’s Take

Marcus & Millichap’s fourth quarter results were met with a positive market reaction, as the company delivered revenue and profitability above Wall Street expectations. Management attributed this performance to a late-quarter surge in deal closings, increased urgency from private clients seeking to utilize tax incentives, and successful outreach efforts across its lender network. CEO Hessam Nadji highlighted the strategic importance of growing the brokerage and financing teams, as well as the company’s resilience despite lacking a boost from lower interest rates. The company’s emphasis on expanding private client and middle market activity was a key driver, with Nadji noting, “A larger-than-expected resurrection and closing of deals that had been delayed or canceled early in the quarter, and a lift in urgency among our private clients... were key factors in the late-stage rally.”

Looking ahead, Marcus & Millichap’s management is cautiously optimistic about continued momentum, citing a more stable interest rate environment and recalibrated property values. The company’s forward strategy includes growing its private client and financing businesses, leveraging technology and AI applications, and pursuing acquisitions as market clarity improves. Nadji explained, “We entered 2026 with greater clarity on the path to achieving this, thanks to a largely recalibrated marketplace and our unwavering conviction in our client value proposition.” Management also emphasized that while AI will drive operational efficiency, the broker’s role in relationship management and nuanced deal execution remains central to the firm’s long-term outlook.

Key Insights from Management’s Remarks

Marcus & Millichap’s management linked the quarter’s outperformance to renewed transaction activity among private clients, operational efficiencies, and targeted hiring, while also pointing to advances in technology and cross-platform collaboration.

• Private client growth: The private client segment, which includes deals in the $1 million to $20 million range, saw both transaction count and revenue increase by double digits. Management cited improved activity as prices adjusted and regional banks became more active, helping to unlock pent-up supply from previously reluctant sellers.
• Broker and finance team expansion: The firm added nearly 100 net brokerage and financing professionals, marking the strongest sales force growth in seven years. CEO Nadji emphasized that new hires included both experienced teams and fresh talent, supported by strengthened recruiting programs and internship initiatives.
• Financing platform momentum: The financing division delivered revenue growth, supported by expanded lender relationships and proprietary technology. Notably, the division closed over 1,600 transactions and nearly $12 billion in volume, with a growing share of agency financing through alliances such as M&T Bank.
• AI and operational efficiency: The company is intensifying its use of AI and third-party services within its Brokerage Transaction Services center, aiming to reduce costs and boost productivity. Management highlighted AI’s ability to streamline financial analysis, document generation, and lead scoring, while maintaining that broker expertise remains essential.
• Shift in deal mix: While private client and middle market activity accelerated, larger transactions over $20 million declined, attributed to tough comparisons versus the prior year’s surge in institutional sales. Management expects some volatility in this segment as certain metros deal with oversupply and high vacancies, especially in multifamily properties.

Drivers of Future Performance

Management anticipates that stable interest rates, expanded brokerage capacity, and further adoption of technology and AI will drive gradual improvement in transaction activity and profitability.

• Interest rate stabilization and price recalibration: Management expects steadier interest rates and the completion of price corrections to create a more predictable investment environment. CEO Nadji noted that cap rates have risen and prices have adjusted, making valuations more attractive to investors and supporting future deal flow.
• Brokerage and financing synergy: The company plans to capitalize on its expanded sales force and closer collaboration between brokerage and financing teams. Management believes that improved cross-selling and integration of new hires should lead to increased transaction volume, especially as experienced recruits build their pipelines.
• Technology and AI integration: Marcus & Millichap is investing in AI to enhance property analysis, underwriting, and client targeting. While AI is viewed as a tool for efficiency, management does not expect it to displace the broker’s role in complex deal-making, citing the need for local market knowledge and relationship management.

Catalysts in Upcoming Quarters

In the coming quarters, our team will be watching (1) the pace at which private client and middle market transaction volumes continue to recover, (2) progress in integrating new brokers and realizing productivity improvements from recent hires, and (3) the tangible impact of AI adoption on operating efficiency and deal throughput. The company’s ability to execute on targeted acquisitions and further expand financing partnerships will also be key indicators of strategy execution.

Marcus & Millichap currently trades at $25.99, up from $25.01 just before the earnings. At this price, is it a buy or sell? The answer lies in our full research report (it’s free).

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