[Management View]
Marcus & Millichap management highlighted key metrics including total revenue of $172 million for Q2 2025, an 8.8% YoY increase. Strategic priorities focused on expanding client outreach, enhancing marketing efforts, and leveraging the auction platform for growth.

[Outlook]
Management provided performance guidance indicating continued investment in talent, technology, and capital markets capabilities. Future plans include pursuing M&A opportunities and maintaining a balanced capital allocation strategy.

[Financial Performance]
Total revenue for Q2 2025 was $172 million, up 8.8% YoY. Brokerage revenue grew 4.4%, while financing revenue surged 44%. Adjusted EBITDA was $1.5 million, showing modest improvement despite higher expenses.

[Q&A Highlights]
Question 1: Can you talk more about the shifting trends in transaction volume and different size segments, especially in the private market segments? Do you expect this trend to continue? What factors contributed to this uplift?

Answer: The market is finding more alignment on adjusted pricing, and the finance market has shown improvement. Persistent client outreach and realistic price expectations have led to more successful conversions of client dialogues into transactions. The strategy remains focused on expanding both private client and larger institutional segments. The temporary pause in larger transactions post-tariff announcements is not expected to continue.

Question 2: The press release noted a decrease in commission rates despite increased private market revenue. Can you explain the dynamics behind this?

Answer: The decline in commission rates was due to a significant increase in $100 million plus transactions, which carry lower-margin fees. The mix of larger transactions impacted the average fee more than other factors.

Question 3: Regarding the tax accounting change, is this a one-time hit or will it continue to impact results?

Answer: The change to the year-to-date tax methodology was deemed more appropriate due to potential volatility in tax rates. This method will normalize in Q4, and the effective tax rate for the six-month period was 12.5%, compared to 14.6% last year.

Question 4: Can you provide commentary on external growth opportunities and pricing for acquisitions?

Answer: Active dialogues are ongoing with potential acquisitions in core business and advisory spaces. Valuations have improved, and confidence in the market outlook has returned, easing previous uncertainties.

Question 5: How do you prioritize capital deployment between share repurchases, dividends, and M&A opportunities?

Answer: The strategy remains balanced, with continued share repurchases, dividends, and aggressive pursuit of M&A opportunities. The strong balance sheet supports diverse capital deployment without compromising strategic growth.

[Sentiment Analysis]
Analysts and management maintained a constructive tone, focusing on strategic growth and market stabilization. Management expressed confidence in long-term potential and balanced capital allocation.

[Quarterly Comparison]
| Metric | Q2 2025 | Q2 2024 | YoY Change |
|---------------------------|---------------|---------------|--------------|
| Total Revenue | $172 million | $158 million | +8.8% |
| Brokerage Revenue | $141 million | $135 million | +4.4% |
| Financing Revenue | $26 million | $18 million | +44% |
| Adjusted EBITDA | $1.5 million | $1.4 million | +7.1% |
| Net Loss | $11 million | $5.5 million | +100% |
| Cash Position | $333 million | $330 million | +0.9% |

[Risks and Concerns]
Risks include ongoing market volatility, sensitivity to tariff announcements, and higher operating expenses. The change in tax methodology resulted in a disproportionate quarterly tax expense.

[Final Takeaway]
Marcus & Millichap demonstrated resilience amid market volatility, with strategic investments driving growth in key segments. The company remains well-capitalized, balancing capital returns with aggressive pursuit of M&A opportunities. Management's focus on talent, technology, and client outreach positions the company for sustained recovery and long-term growth.