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What changed in Marcus & Millichap, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Marcus & Millichap, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+264 added−292 removedSource: 10-K (2026-02-26) vs 10-K (2025-02-27)

Top changes in Marcus & Millichap, Inc.'s 2025 10-K

264 paragraphs added · 292 removed · 199 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeThese commission percentages are typically inversely correlated with sales price and thus are generally higher for smaller transactions. 5 Table of Contents Financing Services Marcus & Millichap Capital Corporation (“MMCC”) is a financial intermediary that provides commercial real estate capital markets solutions to commercial real estate owners, developers, and investors.
Biggest changeWe collect commissions upon the sale of each property based on a percentage of sales price. 5 Table of Contents These commission percentages are typically inversely correlated with sales price and thus are generally higher for smaller transactions.
MMCC partners with an assortment of capital providers including national and regional banks, credit unions, private equity funds, insurance companies, government agencies, including the Federal National Mortgage Association (“Fannie Mae”), the Federal Home Loan Mortgage Corporation (“Freddie Mac”), the Federal Housing Administration (“FHA”), conduit lenders, debt funds, hard money lenders, and structured debt facilitators (including preferred equity and mezzanine providers).
MMCC partners with an assortment of capital providers including national and regional banks, credit unions, private equity funds, insurance companies, government agencies, including the Federal National Mortgage Association (“Fannie Mae”), the Federal Home Loan Mortgage Corporation (“Freddie Mac”), the Federal Housing Administration, conduit lenders, debt funds, hard money lenders, and structured debt facilitators (including preferred equity and mezzanine providers).
Our investment sales and financing professionals hold applicable real estate sales licenses or other licenses for their functions and execute “Salespersons Agreements” setting out the relationship between the professional and us. Each professional is obligated to provide services exclusively to us, and is provided access to our information technology, research, business forms and other support.
Our investment sales and financing professionals hold applicable real estate sales licenses or other licenses for their functions. We execute “Salespersons Agreements” setting out the relationship between the professional and us. Each investment sales and financing professional is obligated to provide services exclusively to us, and is provided access to our information technology, research, business forms and other support.
Our website features MyMMI, which allows investors to register for an account and create personalized criteria for inventory, research, and events notifications. Since its launch, over 130,000 visitors have created MyMMI accounts. We actively qualify leads generated from the saved search preferences and share those leads with our agents via our customer relationship management platform.
Our website features MyMMI, which allows investors to register for an account and create personalized criteria for inventory, research, and events notifications. Since its launch, over 170,000 visitors have created MyMMI accounts. We actively qualify leads generated from the saved search preferences and share those leads with our agents via our customer relationship management platform.
In 2024, we launched several facilitator-led managerial training programs across our footprint to support the development of leaders. We offer the William A. Millichap Fellowship Program (the "Fellowship Program"), a comprehensive two-year training and development initiative designed to prepare participants for successful careers in commercial real estate. The Fellowship Program also sponsors real estate internships at various universities nationally.
In 2025, we launched several facilitator-led managerial training programs across our footprint to support the development of leaders. We offer the William A. Millichap Fellowship Program (the "Fellowship Program"), a comprehensive two-year training and development initiative designed to prepare participants for successful careers in commercial real estate. The Fellowship Program also sponsors real estate internships at various universities nationally.
In 2021, MMCC entered into a strategic alliance with M&T Realty Capital Corporation (“MTRCC”) enabling MMCC to provide clients with increased access to MTRCC’s affordable and conventional multifamily agency financing through a highly streamlined process with dedicated resources.
In 2021, MMCC entered into a strategic alliance (“Strategic Alliance”) with M&T Realty Capital Corporation (“MTRCC”) enabling MMCC to provide clients with increased access to MTRCC’s affordable and conventional multifamily agency financing through a highly streamlined process with dedicated resources.
The program is committed to promoting an inclusive environment, actively seeking interns from diverse backgrounds, experiences, and perspectives to foster a dynamic and innovative workforce. To support the development of our leaders, we continue to partner with a global research and workplace consulting advisory company to implement a robust leadership training program for our leaders including our regional managers.
The program is committed to promoting an inclusive environment, actively seeking interns from diverse backgrounds, experiences, and perspectives to foster a dynamic and innovative workforce. To support the development of our leaders, we continue to partner with a global research and workplace consulting advisory company to implement a robust leadership training program for our leaders including our market leaders.
One of our wholly-owned subsidiaries is subject to certain human resource, data security, information technology, and other compliance requirements due to its loan sale and consulting contracts with certain U.S. government agencies. Available Information Our website address is www.MarcusMillichap.com .
One of our wholly-owned subsidiaries is subject to certain human resource, data security, information technology, and other compliance requirements due to its loan sale and consulting contracts with certain U.S. government agencies. 9 Table of Contents Available Information Our website address is www.MarcusMillichap.com .
By combining these resources with the latest property and capital markets data and information, we believe we have differentiated ourselves in the marketplace and deliver tailored financial solutions that meet our clients’ investing and financial objectives. These sales and financing professionals are empowered by our proprietary system, MNet, which enables real-time buyer-seller matching throughout North America.
By combining these resources with the latest property and capital markets data and information, we believe we have differentiated ourselves in the marketplace and deliver tailored financial solutions that meet our clients’ investing and 6 Table of Contents financial objectives. These sales and financing professionals are empowered by our proprietary system, MNet, which enables real-time buyer-seller matching throughout North America.
Item 1. Business Company Overview Marcus & Millichap, Inc. (“MMI”) is a leading national real estate services firm specializing in commercial real estate investment sales, financing services, research and advisory services. We are the leading national investment 4 Table of Contents brokerage company in the $1 million to $10 million private client market.
Item 1. Business Company Overview Marcus & Millichap, Inc. (“MMI”) is a leading national real estate services firm specializing in commercial real estate investment sales, financing services, research and advisory services. We are the leading national investment brokerage company in the $1 million to $10 million private client market.
Each investment sales and financing professional generally reports on their activities to either the local regional manager, or in some cases, to product specialty managers. Our investment sales professionals are classified as independent contractors under state and Internal Revenue Service guidelines.
Each investment sales and financing professional generally reports on their activities to either the local market leader, or in some cases, to product specialty managers. Our investment sales professionals are classified as independent contractors under state and Internal Revenue Service guidelines.
Our Competitive Strengths Research Our research division produces more than 2,000 publications and client presentations per year and is a leading source of information for the real estate industry as well as the general business media.
Our Competitive Strengths Research Our research division produces more than 1,500 publications and client presentations per year and is a leading source of information for the real estate industry as well as the general business media.
As of December 31, 2024, we had 1,712 investment sales and financing professionals who are primarily exclusive commission-based independent contractors who provide real estate investment brokerage and financing services to sellers and buyers of commercial real estate in over 80 offices in the United States and Canada.
As of December 31, 2025, we had 1,808 investment sales and financing professionals who are primarily commission-based independent contractors who provide real estate investment brokerage and financing services to sellers and buyers of commercial real estate in over 80 offices in the United States and Canada.
In 2024, approximately 62% of our brokerage commissions came from this market. Properties in this market are characterized by higher asset turnover rates due to the type of investor as compared to other markets.
In 2025, approximately 64% of our brokerage commissions came from this market. Properties in this market are characterized by higher asset turnover rates due to the type of investor as compared to other markets.
During 2024, our websites averaged approximately 132,000 new visitors per month and approximately 203,000 page views per month and served as a portal for delivery of online marketing materials and deal collaboration. Intellectual Property We hold various trademarks and trade names, which include the “Marcus & Millichap” name.
During 2025, our websites averaged approximately 95,000 new visitors per month and approximately 165,000 page views per month and served as a portal for delivery of online marketing materials and deal collaboration. Intellectual Property We hold various trademarks and trade names, which include the “Marcus & Millichap” name.
In 2024, we closed 7,836 sales, financing, and other transactions with total sales volume of approximately $49.6 billion. Marcus & Millichap, Inc was formed in June 2013 in preparation for the spin-off of Marcus & Millichap Real Estate Investment Services, Inc. (“MMREIS”), which was founded in 1971.
In 2025, we closed 8,818 sales, financing, and other transactions with total sales volume of approximately $50.8 billion. Marcus & Millichap, Inc was formed in June 2013 in preparation for the spin-off of Marcus & Millichap Real Estate Investment Services, Inc. (“MMREIS”), which was founded in 1971.
Real estate brokerage commissions are typically based upon the value of the property and financing fees are typically based upon the size of the loan. In 2024, approximately 85% of our revenues were generated from real estate brokerage commissions, 12% from financing fees, and 3% from other revenue, including consulting and advisory services.
Real estate brokerage commissions are typically based upon the value of the property and financing fees are typically based upon the size of the loan. In 2025, approximately 84% of our revenues were generated from real estate brokerage commissions, 14% from financing fees, and 2% from other revenue, including consulting and advisory services.
We offer a paid summer internship program for college and university students that provides valuable hands-on experience in our industry, allowing participants to contribute to impactful projects and engage with leadership throughout the organization. In 2024, we hired 101 interns across 33 offices in the U.S. and Canada.
We offer a paid summer internship program for college and university students that provides valuable hands-on experience in our industry, allowing participants to contribute to impactful projects and engage with leadership throughout the organization. In 2025, we expanded our internship program by 43%, from 101 to 144 hires, across 37 offices in the U.S. and Canada.
Sales are generated by maintaining relationships with property owners, providing market information and trends to them during their investment or “hold” period, and being selected as their representative when they decide to sell, buy additional property, or exchange their property for another property. We collect commissions upon the sale of each property based on a percentage of sales price.
Sales are generated by maintaining relationships with property owners, providing market information and trends to them during their investment or “hold” period, and being selected as their representative when they decide to sell, buy additional property, or exchange their property for another property.
Talent Acquisition We aim to attract top talent by offering competitive salaries and benefit programs for our employees, along with competitive commissions and strong business support for our investment sales and financing professionals.
Talent Acquisition We seek to attract top talent by offering competitive salaries and benefits for our employees, along with competitive commission structures and business support for our investment sales and financing professionals.
Additionally, our reputation as the leading broker in the $1 million to $10 million private client market with high transaction volume further strengthens our appeal to attract top talent. 7 Table of Contents Investment Sales and Financing Professionals Investment sales and financing professionals are the key service providers to our clients.
Our established position as the leading broker in the $1 million to $10 million private client market, combined with high transaction volume, further enhances our ability to attract top talent. Investment Sales and Financing Professionals Investment sales and financing professionals are the key service providers to our clients.
Our human capital strategy focuses on attracting, retaining, and nurturing talented individuals that share our Company's priorities, driving long-term value. In June 2024, we appointed a new Chief People Officer to lead our human capital initiatives.
Our human capital strategy focuses on attracting, retaining, and nurturing talented individuals that share our Company's priorities, driving long-term value. These initiatives are led by our Chief People Officer, who was appointed in 2024 and continues to oversee these efforts.
This program includes a leadership strengths assessment, a leadership development program, and an employee engagement survey. We also have a variety of training programs available to our employees through LinkedIn Learning, as well as other training resources.
This program includes a leadership strengths assessment, and a leadership development program. We also have a variety of training programs available to our employees through Harvard Business Review content and other training resources.
The decline in the overall headcount is attributable to a reduction of unproductive investment sales and financing professionals and the challenge of recruiting and retaining investment sales and financing professionals in the current market environment. 8 Table of Contents Market Environment Seasonality Our real estate brokerage commissions and financing fees have tended to be seasonal and, combined with other factors, can affect an investor's ability to compare our financial condition and results of operations on a quarter-by-quarter basis.
Market Environment Seasonality Our real estate brokerage commissions and financing fees have tended to be seasonal and, combined with other factors, can affect an investor's ability to compare our financial condition and results of operations on a quarter-by-quarter basis.
We use a proactive marketing campaign that leverages 6 Table of Contents the investor relationships of our entire sales force, direct marketing and a suite of proprietary web-based tools that connects each asset with the right buyer pool.
We use a proactive marketing campaign that leverages the investor relationships of our entire sales force, direct marketing and a suite of proprietary web-based tools that connects each asset with the right buyer pool. Technology Our proprietary internal marketing system, MNet, allows our investment sales professionals to share listing information with investors across the United States and Canada.
A key benefit of our Company for prospective investment sales and financing professionals is that our management team does not compete with our investment sales and financing professionals. Instead, they focus on enhancing technical and client service skills, while also supporting the establishment, development, and strengthening of client relationships.
A key aspect of our operating model is that our management team does not compete with our investment sales and financing professionals and instead focuses on supporting their professional development, enhancing technical skills and client service capabilities.
The Fellowship Program is currently offered in 17 major U.S. cities, a key part of our commitment to developing diverse talent. We believe our training, development, and mentoring initiatives have set us apart from competitors and delivered superior results for our clients.
We expanded the Fellowship Program from 17 to 22 major U.S. cities in 2025, reinforcing our commitment to cultivating and developing diverse talent. We believe our training, development, and mentoring initiatives not only distinguish us from competitors but also drive superior results for our clients.
Information on our website does not constitute part of this report and inclusions of our internet address in this Annual Report on Form 10-K are inactive textual references only.
Information on our website does not constitute part of this report and inclusions of our internet address in this Annual Report on Form 10-K are inactive textual references only. We are required to file current, annual and quarterly reports, proxy statements, and other information required by the Securities Exchange Act of 1934, as amended (the "Exchange Act"), with the SEC.
This system is an essential part of connecting sellers to the largest pool of qualified buyers through our platform. A function of MNet, called Buyer Needs, enables our sales force to register the investment needs of various buyers, which are then matched to our available inventory on a real-time basis.
A function of MNet, called Buyer Needs, enables our sales force to register the investment needs of various buyers, which are then matched to our available inventory on a real-time basis. MNet-Launch, a related application, is a web-based system for automating the production of property marketing materials and launching marketing campaigns.
Key Metrics As of December 31, 2024, we had 897 employees, consisting of 92 employees who serve as financing professionals, 62 employees in communications and marketing, 21 employees in research and 722 employees in management, support and general and administrative functions. A key strategic factor to growing our business is recruiting, hiring, training, and developing investment sales and financing professionals.
Key Metrics As of December 31, 2025, we had 854 employees, consisting of 91 employees who serve as financing professionals, 70 employees in communications and marketing, 21 employees in research and 672 employees in management, support and general and administrative functions.
Technology Our proprietary internal marketing system, MNet, allows our investment sales professionals to share listing information with investors across the United States and Canada. MNet is an integrated tool that contains our entire property inventory, allowing our investment sales professionals to find listings with targeted criteria.
MNet is an integrated tool that contains our entire property inventory, allowing our investment sales professionals to find listings with targeted criteria. This system is an essential part of connecting sellers to the largest pool of qualified buyers through our platform.
MMCC generates revenue from fees collected from capital placement services including senior debt, mezzanine debt, joint venture, preferred equity, and securitization services. Our financing division provides other services such as loan sales and due diligence, and receives recurring loan performance fees from certain lenders.
Our financing division provides other services such as loan sales and due diligence, and receives recurring loan performance fees from certain lenders. During 2025, approximately 42% of MMCC’s revenue came from placing acquisition financing, 33% from refinancing activities, and 25% from other financing activities.
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During 2024, approximately 46% of MMCC’s revenue came from placing acquisition financing, 28% from refinancing activities, and 26% from other financing activities.
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Financing Services Marcus & Millichap Capital Corporation (“MMCC”) is a financial intermediary that provides commercial real estate capital markets solutions to commercial real estate owners, developers, and investors. MMCC generates revenue from fees collected from capital placement services including senior debt, mezzanine debt, joint venture, preferred equity, and securitization services.
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MNet-Launch, a related application, is a web-based system for automating the production of property marketing materials and launching marketing campaigns.
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In 2025, we appointed a new Senior Director, National Sales Recruiter, and expanded the sales recruiting team to accelerate 7 Table of Contents the hiring of sales professionals. By providing a supportive environment where professionals can focus on delivering value to clients while advancing their careers, we create a workplace that promotes individual success and organizational excellence.
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As of December 31, 2024, we had 1,712 investment sales and financing professionals, a 4.0% decrease compared to December 31, 2023.
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A key strategic factor to growing our business is recruiting, hiring, training, and developing investment sales and financing professionals. 8 Table of Contents As of December 31, 2025, we had 1,808 investment sales and financing professionals, a 5.6% increase compared to December 31, 2024. The increase is attributable to the Company's strategy to invest in talent acquisition and retention.
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We are required to file current, annual and quarterly reports, proxy statements, and other information required by the Securities 9 Table of Contents Exchange Act of 1934, as amended (the "Exchange Act"), with the SEC.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeAdditionally, in economic downturns sales are often further concentrated among our top investment sales and financing professionals who have negotiated high commission splits that further reduce our profits and could have a material adverse impact on our business and financial condition.
Biggest changeLosing them could materially harm our business and financial condition. Many professionals work in teams; if a team leader or manager leaves, team members may leave with them. Additionally, during economic downturns, sales are often further concentrated among top professionals with high commission splits, reducing profits and increasing risk to our business and financial condition.
Negative economic conditions, changes in interest rates, credit and the availability of capital, both debt and/or equity, disruptions in capital markets, uncertainty of the tax and regulatory environment and/or declines in the demand for commercial real estate investment and related services in international and domestic markets or in significant markets in which we do business, had a significant impact to our financial results in 2024 and 2023 and could have in the future a material adverse effect on our business, results of operations and/or financial condition.
Negative economic conditions, changes in interest rates, credit and the availability of capital, both debt and/or equity, disruptions in capital markets, uncertainty of the tax and regulatory environment and/or declines in the demand for commercial real estate investment and related services in international and domestic markets or in significant markets in which we do business, had a significant impact to our financial results in 2025, 2024 and 2023 and could have in the future a material adverse effect on our business, results of operations and/or financial condition.
In the ordinary course of our business, we collect and store sensitive data, including our proprietary business information and intellectual property and that of our clients and personally identifiable information of our employees and contractors, in our data centers and on our networks. The secure processing, maintenance and transmission of this information is critical to our operations.
In the ordinary course of our business, we collect and store sensitive data, including our proprietary business information and intellectual property and that of our clients and personally identifiable information of our employees and contractors, in third-party data centers and on our networks. The secure processing, maintenance and transmission of this information is critical to our operations.
This historical trend can be disrupted both positively and negatively by major economic, regulatory or political events impacting investor sentiment for a particular property type or location, current and future projections of interest rates and tax rates, attractiveness of other asset classes, market liquidity and the extent of limitations or availability of capital allocations for larger institutional buyers, to name a few.
This historical trend can be disrupted both positively and negatively by major economic, regulatory or political events impacting 13 Table of Contents investor sentiment for a particular property type or location, current and future projections of interest rates and tax rates, attractiveness of other asset classes, market liquidity and the extent of limitations or availability of capital allocations for larger institutional buyers, to name a few.
We may also not have sufficient logging available to fully investigate the scope of a cyber-attack. Additionally, a portion of our workforce works remotely in some capacity. This arrangement exposes us to additional threat vectors and vulnerabilities.
We may also not have sufficient logs available to fully investigate the scope of a cyber-attack. Additionally, a portion of our workforce works remotely in some capacity. This arrangement exposes us to additional threat vectors and vulnerabilities.
We must adapt our strategies, offerings and portfolio management approaches to stay ahead of market trends, identify emerging opportunities, and mitigate risks associated with the changing dynamics of the office real estate landscape. 11 Table of Contents Increases in prevailing interest rates may place downward pressure on commercial real estate prices and could potentially reduce commercial real estate investment activity, negatively impacting our business.
We must adapt our strategies, offerings and portfolio management approaches to stay ahead of market trends, identify emerging opportunities, and mitigate risks associated with the changing dynamics of the office real estate landscape. Increases in prevailing interest rates may place downward pressure on commercial real estate prices and could potentially reduce commercial real estate investment activity, negatively impacting our business.
We plan our capital and operating expenditures based on our expectations of future revenue and, if revenues are below expectations in any given quarter or year, we may be unable to adjust capital or operating expenditures in a timely manner to compensate for any unexpected revenue shortfall, which could have an immediate material adverse effect on our business, financial condition and results of operation.
We plan our capital and operating expenditures based on our expectations of future revenue and, if revenues are below expectations in any given quarter or year, we may be unable to adjust capital or operating expenditures in a timely 22 Table of Contents manner to compensate for any unexpected revenue shortfall, which could have an immediate material adverse effect on our business, financial condition and results of operation.
In addition, these third parties face their own technology, operating and economic risks, and any significant failures by them, including the improper use or disclosure of confidential information, could cause damage to our reputation and harm to our business. 18 Table of Contents Failure to comply with confidentiality obligations could damage our reputation and materially harm our operating results.
In addition, these third parties face their own technology, operating and economic risks, and any significant failures by them, including the improper use or disclosure of confidential information, could cause damage to our reputation and harm to our business. Failure to comply with confidentiality obligations could damage our reputation and materially harm our operating results.
We invest part of our available cash and cash equivalents in a variety of short-term, investment-grade securities, some of which may qualify as “investment securities” under the Investment Company Act. Investment companies are subject to registration under the Investment Company Act and compliance with a variety of restrictions and requirements.
We invest part of our available cash and cash equivalents in a variety of short-term, investment-grade securities, some of which may qualify as “investment 20 Table of Contents securities” under the Investment Company Act. Investment companies are subject to registration under the Investment Company Act and compliance with a variety of restrictions and requirements.
Sales of substantial amounts of our common stock (including shares of our common stock issued in connection with an acquisition), or the perception that such sales could occur, may adversely affect prevailing market prices for our common stock. Item 1B. Unresolved Staff Comments Not applicable. 24 Table of Contents
Sales of substantial amounts of our common stock (including shares of our common stock issued in connection with an acquisition), or the perception that such sales could occur, may adversely affect prevailing market prices for our common stock. Item 1B. Unresolved Staff Comments Not applicable.
Market interest rates are affected by many factors outside of our control, including governmental monetary policies, domestic and international economic conditions, inflation, deflation, recession, changes in unemployment, the money supply, international disorder and instability in domestic and foreign financial markets.
Market interest rates are affected by many factors outside of our control, including governmental monetary policies, domestic and international economic conditions, inflation, deflation, recession, changes in unemployment, the money 11 Table of Contents supply, international disorder and instability in domestic and foreign financial markets.
Marcus, our Chair and founder beneficially owns 15.0 million shares, or approximately 39% of our outstanding common stock as of December 31, 2024. Because of Mr.
Marcus, our Chair and founder beneficially owns approximately 15.0 million shares, or approximately 39% of our outstanding common stock as of December 31, 2025. Because of Mr.
Risks of legislative changes, including as a result of interpretive guidance or other directives from the current administration, and new laws, regulations and interpretations may also come into effect. The impact of any new or revised legislation or regulations under the current administration is unknown.
Risks of legislative changes, including as a result of interpretive guidance or other directives from the current administration, and new laws, regulations and interpretations may also come into effect. 14 Table of Contents The impact of any new or revised legislation or regulations under the current administration is unknown.
Historically, commercial real estate markets and, in particular, the U.S. commercial real estate market, have tended to be cyclical and related to the flow of capital to the sector, the condition 10 Table of Contents of the economy as a whole, and to the perceptions and confidence of market participants to the economic outlook.
Historically, commercial real estate markets and, in particular, the U.S. commercial real estate market, have tended to be cyclical and related to the flow of capital to the sector, the condition of the economy as a whole, and to the perceptions and confidence of market participants to the economic outlook.
George M. Marcus serves as the Chair of our Board of Directors and is Chair of the Board of Directors of MMC. In addition, Mr. Marcus beneficially owns substantially all of the outstanding stock of MMC.
Marcus serves as the Chair of our Board of Directors and is Chair of the Board of Directors of MMC. In addition, Mr. Marcus beneficially owns substantially all of the outstanding stock of MMC.
Future sales, issuances of shares under our Amended and Restated 2013 Omnibus Equity Incentive Plan, as amended (the "2013 Plan"), and 2013 Employee Stock Purchase Plan (the "ESPP") or the availability of a substantial amount of our common stock in the public market could adversely affect the prevailing market price of our common stock and could impair our ability to raise capital through the future sales of equity securities.
Future sales, issuances of shares under our Amended and Restated 2013 Omnibus Equity Incentive Plan, as amended (the “2013 Plan”), and 2013 Employee Stock Purchase Plan (the “ESPP”) or the availability of a substantial amount of our common stock in the public market could adversely affect the prevailing market price of our common stock and could impair our ability to raise capital through the future sales of equity securities.
Marcus’ shares may also be sold in a public or private sale which could adversely affect the prevailing market price of our common stock and could impair our ability to raise capital through the future sales of equity securities. 22 Table of Contents Our Chair may have actual or potential conflicts of interest because of his position with MMC.
Marcus’ shares may also be sold in a public or private sale which could adversely affect the prevailing market price of our common stock and could impair our ability to raise capital through the future sales of equity securities. Our Chair may have actual or potential conflicts of interest because of his position with MMC. George M.
The current market consensus is that the Federal Reserve will further decrease the federal funds rate interest rates during 2025.
The current market consensus is that the Federal Reserve will further decrease the federal funds rate interest rates during 2026.
In 2024, we earned approximately 26% of our revenue from offices in California. In particular, as a result of this concentration, we are subject to heightened risks related to the California economy and real estate markets more than in other geographic markets.
In 2025, we earned approximately 27% of our revenue from offices in California. In particular, as a result of this concentration, we are subject to heightened risks related to the California economy and real estate markets more than in other geographic markets.
A continued decline in the number of transactions completed or in the value of the commercial real estate we sell could significantly decrease our revenue further, which would adversely affect our business, financial condition and results of operations. If we are unable to retain existing clients and develop new clients, our financial condition may be adversely affected.
A continuous decline in the number of transactions completed or in the value of the commercial real estate we sell could significantly decrease our revenue, which would adversely affect our business, financial condition and results of operations. 17 Table of Contents If we are unable to retain existing clients and develop new clients, our financial condition may be adversely affected.
If we are unable to find suitable acquisition 17 Table of Contents candidates, if we are unable to attract the interest of such candidates, or if we are unable to successfully negotiate and complete such acquisitions, that could limit our ability to grow.
Furthermore, if we are unable to find suitable acquisition candidates, if we are unable to attract the interest of such candidates, or if we are unable to successfully negotiate and complete such acquisitions, that could limit our ability to grow.
Historically, a global economic downturn and weaknesses in the markets in which our clients and potential clients compete have led to a lower volume of transactions and fewer real estate clients generally, which makes it more difficult to maintain existing and establish new client relationships.
Historically, a global economic downturn and weaknesses in the markets in which our clients and potential clients compete have led to a lower volume of transactions and fewer real estate clients generally, hindering our ability to maintain existing and establish new client relationships.
Human Resource and Personnel Risks If we are unable to attract and retain qualified and experienced managers, investment sales and financing professionals, our growth may be limited, and our business and operating results could suffer. Our most important asset is people, and our continued success is highly dependent upon the efforts of our managers and investment sales and financing professionals.
Human Resource and Personnel Risks If we are unable to attract and retain qualified and experienced managers, investment sales and financing professionals, our growth may be limited, and our business and operating results could suffer. Our most important asset is people, and our continued success depends on our managers and investment sales and financing professionals.
Furthermore, our clients are also affected by inflation and increased interest rates. A significant and continued increase in interest rates and inflation would be expected to have a further negative impact on client demand for commercial real estate and demand for our services, which would, in turn, affect our profitability.
A significant and continued increase in interest rates and inflation would be expected to have a further negative impact on client demand for commercial real estate and demand for our services, which would, in turn, affect our profitability.
Our information technology and infrastructure have been subject to, and may in the future be vulnerable to various cyber-attacks, such as hacking, spoofing and phishing attacks and ransomware attacks, exploitation of 20 Table of Contents system or application vulnerabilities or our systems may be breached due to employee error, malfeasance or other disruptions.
Our security measures vary in maturity across our business. Our information technology and infrastructure have been subject to, and may in the future be vulnerable to various cyber-attacks, such as hacking, spoofing and phishing attacks and ransomware attacks, exploitation of system or application vulnerabilities or our systems may be breached due to employee error, malfeasance or other disruptions.
If interest rates continue at current rates or increase further, the resulting reduction in commercial real estate transactions and subsequent price reduction of commercial real estate may result in us continuing to close fewer brokerage, financing and other transactions, which would result in further decreased revenue and adversely impact our business.
If interest rates begin to increase, the resulting reduction in commercial real estate transactions and subsequent price reduction of commercial real estate may result in us closing fewer brokerage, financing and other transactions, which would result in decreased revenue and adversely impact our business.
The planned expansion of services and platforms requires significant resources, and there can be no assurance we will be able to continue to expand or compete effectively, attract or train a sufficient number of professionals to support the expansion, or operate these businesses profitably.
We expect to incur expenses relating to acquisitions, recruitment, training, and expanding our markets and services. The planned expansion of services and platforms requires significant resources, and there can be no assurance we will be able to continue to expand or compete effectively, attract or train a sufficient number of professionals to support the expansion, or operate these businesses profitably.
Further, the value of otherwise valid claims we hold under insurance policies could become uncollectible in the event of the covering insurance company’s insolvency, although we seek to limit this risk by placing our commercial insurance only with highly-rated companies. Any of these events could negatively impact our business, financial condition or results of operations.
Further, the value of otherwise valid claims we hold under insurance policies could become uncollectible in the event of the covering insurance company’s insolvency, although we seek to limit this risk by placing our commercial insurance only with highly-rated companies.
As a result of these factors, investors in our common stock may not be able to resell their shares at or above the price paid to acquire the stock or may not be able to resell them at all.
As a result of these factors, investors in our common stock may not be able to resell their shares at or above the price paid to acquire the stock or may not be able to resell them at all. These broad market and industry factors may materially reduce the market price of our common stock, regardless of our operating performance.
Negative public opinion could result from actual or alleged conduct in any number of activities or circumstances, including the personal conduct of individuals associated with our brand, handling of client complaints, regulatory compliance, the use and protection of client and other sensitive information, and from actions taken by regulators or others in response to any such conduct.
Negative public opinion could result from actual or alleged conduct in any number of activities or circumstances, including the personal conduct of individuals associated with our brand, handling of client complaints, regulatory compliance, the use and protection of client and other sensitive information, and from actions taken by regulators or others in response to any such conduct. 21 Table of Contents The protection of our brand, including related trademarks and other intellectual property, may require the expenditure of significant financial and operational resources.
Additionally, given the rigors of the competitive marketplace in which we operate, there is the risk we may not be able to continue to find ways to operate more productively and more cost-effectively, including by achieving economies of scale, or we will be limited in our ability to further reduce the costs required to operate on a nationally coordinated platform.
Additionally, given the rigors of the competitive marketplace in which we operate, there is the risk we may not be able to continue to find ways to operate more productively and more cost-effectively, including by achieving economies of scale, or we will be limited in our ability to further reduce the costs required to operate on a nationally coordinated platform. 16 Table of Contents Our continued efforts to expand our services and businesses may not be successful, and we may expend significant resources without corresponding returns.
Internal Business Risks We may fail to successfully differentiate our brand from those of our competitors, which could adversely affect our revenue. The value of our brand and reputation is one of our most important assets.
These events could materially harm our business and financial condition. Losses exceeding insurance coverage could further materially affect our business. Internal Business Risks We may fail to successfully differentiate our brand from those of our competitors, which could adversely affect our revenue. The value of our brand and reputation is one of our most important assets.
Such new or revised legislation or regulations applicable to our business may impact transaction volumes and values, increase the costs of compliance or prevent us from providing certain types of services in certain jurisdictions or in connection with certain transactions or clients.
Such new or revised legislation or regulations applicable to our business may impact transaction volumes and values, increase the costs of compliance or prevent us from providing certain types of services in certain jurisdictions or in connection with certain transactions or clients. For example, legislation which limits or prohibits dual agency could have an adverse impact on our revenue.
Any unauthorized use by third parties of our brand may adversely affect our business. In preparing our financial statements we make certain assumptions, judgments, and estimates that affect amounts reported in our consolidated financial statements, which, if not accurate, may significantly impact our financial results. We make assumptions, judgments, and estimates that affect amounts reported in our consolidated financial statements.
In preparing our financial statements we make certain assumptions, judgments, and estimates that affect amounts reported in our consolidated financial statements, which, if not accurate, may significantly impact our financial results. We make assumptions, judgments, and estimates that affect amounts reported in our consolidated financial statements.
The concentration of sales among our top investment sales and financing professionals could lead to losses if we are unable to retain them or if there is an economic downturn. Our most successful investment sales and financing professionals are responsible for a significant percentage of our revenue.
The concentration of sales among our top investment sales and financing professionals could lead to losses if we are unable to retain them or if there is an economic downturn. Our most successful investment sales and financing professionals generate a significant portion of our revenue. They also serve as mentors and provide training for younger professionals, supporting our culture.
We may need to secure additional sources of financing to satisfy our loss sharing indemnification obligations under these programs. We cannot make any assurances that such financing would be available on attractive terms, if at all, or that any indemnification obligations might be material or would not have an adverse effect on our business, financial condition and results of operations.
We cannot make any assurances that such financing would 12 Table of Contents be available on attractive terms, if at all, or that any indemnification obligations might be material or would not have an adverse effect on our business, financial condition and results of operations.
A downturn in investment real estate demand or economic conditions in California and other regions could result in a further decline in our total gross commission income which could have an adverse effect on our business, financial condition and results of operations. 13 Table of Contents Seasonal fluctuations and other market data in the investment real estate industry could adversely affect our business and make comparisons of our quarterly results difficult.
A downturn in investment real estate demand or economic conditions in California and other regions could result in a further decline in our total gross commission income which could have an adverse effect on our business, financial condition and results of operations.
We disclose our information collection and dissemination practices in a published privacy statement on our websites, which we may modify from time to time.
We rely on the collection and use of personally identifiable information from clients to conduct our business. We disclose our information collection and dissemination practices in a published privacy statement on our websites, which we may modify from time to time.
We may not be able to offset the impact on our business of the loss of the services of our senior-level management team or other key officers or employees or be able to recruit additional or replacement talent, which could negatively impact our business, financial condition and results of operations.
We may not be able to offset the impact of losing senior management or other key employees or recruit replacements, which could negatively affect our business, financial condition and results of operations.
Increased interest rates can apply downward pressure on commercial real estate prices and reduce activity in the commercial real estate industry, which have recently and may continue to have an adverse impact on our business. Interest rates remained at historically low levels through much of 2020 and 2021, with the U.S.
Increased interest rates can apply downward pressure on commercial real estate prices and reduce activity in the commercial real estate industry, which have recently and may continue to have an adverse impact on our business.
In addition, it is more difficult to recruit and retain less experienced professionals because the industry is less attractive during downturns from an income opportunity perspective. If we lose the services of our executive officers or certain other members of our senior management team, we may not be able to execute our business strategy.
Recruiting and retaining less experienced professionals also becomes more difficult as the industry is less attractive during downturns. If we lose the services of our executive officers or certain other members of our senior management team, we may not be able to execute our business strategy.
Our revenue and profits have historically tended to be significantly higher in the second half of each year than in the first half of the year. This is a result of a general focus in the real estate industry on completing or documenting transactions by calendar year end and because certain of our expenses are relatively constant throughout the year.
This is a result of a general focus in the real estate industry on completing or documenting transactions by calendar year end and because certain of our expenses are relatively constant throughout the year.
If securities analysts do not publish research or reports about our business or if they downgrade our Company or our sector, or we do not meet expectations of the analysts the price of our common stock could decline.
In addition, price volatility may be greater if the public float and trading volume of our common stock is low. If securities analysts do not publish research or reports about our business or if they downgrade our Company or our sector, or we do not meet expectations of the analysts the price of our common stock could decline.
If these managers or investment sales and financing professionals depart, we will lose the substantial time and resources we have invested in training and developing those individuals and our business, financial condition and results of operations may suffer.
If these people depart, we will lose the time and resources invested in training and developing them, and our business, financial condition and results of operations may suffer.
Our investment sales professionals are independent contractors, not employees, and if laws, regulations or rulings mandate that they be employees, our business would be adversely impacted. Our investment sales professionals are retained as independent contractors, and we are subject to the Internal Revenue Service regulations and applicable state law guidelines regarding independent contractor classification.
Our investment sales professionals are independent contractors, not employees, and if laws, regulations or rulings mandate that they be employees, our business would be adversely impacted. Our investment sales professionals are retained as independent contractors, and we are subject to IRS and state independent contractor regulations. These regulations may be interpreted to reclassify some or all professionals as employees.
During 2023, the Federal Reserve raised rates by an additional 100 basis points, which further contributed to the market slowdown. In 2024, the Federal Reserve reduced rates three times, reducing the federal funds target by a cumulative 100 basis points to a range of 4.25%-4.5%.
In 2024, the Federal Reserve reduced rates three times, reducing the federal funds target by a cumulative 100 basis points to a range of 4.25%-4.5%. In 2025, the Federal Reserve reduced rates another three times, reducing the federal funds target by a cumulative 75 basis points to a range of 3.5%-3.75%.
Failure to appropriately deal with actual or perceived conflicts of interest could adversely affect our businesses. Outside of our employees and investment sales and financing professionals, our reputation is one of our most important assets.
Any of these events could negatively impact our business, financial condition or results of operations. 18 Table of Contents Failure to appropriately address actual or perceived conflicts of interest could adversely affect our businesses. Outside of our employees and investment sales and financing professionals, our reputation is one of our most important assets.
Technology and Cybersecurity Risks If we do not respond to technological innovations or changes or upgrade our technology systems, our growth prospects and results of operations could be adversely affected. To remain competitive, we must continue to enhance and improve the functionality, features and security of our technology infrastructure.
Technology and Cybersecurity Risks If we do not respond to technological innovations or changes or upgrade our technology systems, our growth prospects and results of operations could be adversely affected. To stay competitive, we need to continuously upgrade our technology infrastructure, which may require significant investment.
Under the agreement with MTRCC, MMCC provides loan opportunities to MTRCC, and 12 Table of Contents for those loans closed under the DUS Agreement by MTRCC, MMCC has the option to assume a portion of the indemnification obligation of MTRCC to Fannie Mae.
Under the agreement with MTRCC, MMCC provides loan opportunities to MTRCC, and for those loans closed under the DUS Agreement by MTRCC, MMCC has the option to assume a portion of the indemnification obligation of MTRCC to Fannie Mae. We may need to secure additional sources of financing to satisfy our loss sharing indemnification obligations under these programs.
Failure to maintain the security of our information and technology networks, including personally identifiable and client information could adversely affect us. Security breaches and other disruptions could compromise our and our clients' information and expose us to liability, which could cause our business and reputation to suffer.
Security breaches and other disruptions could compromise our and our clients' information and expose us to liability, which could cause our business and reputation to suffer.
Such an event could additionally disrupt our operations and the services we provide to clients, damage our reputation, and cause a loss of confidence in our services, which could adversely affect our business, revenue and competitive position. Additionally, we increasingly rely on third-party data storage providers, including cloud storage solution providers, resulting in less direct control over our data.
Such an event could additionally 19 Table of Contents disrupt our operations and the services we provide to clients, damage our reputation, and cause a loss of confidence in our services, which could adversely affect our business, revenue and competitive position.
Our continued efforts to expand our services and businesses may not be successful, and we may expend significant resources without corresponding returns. We intend to continue to expand our specialty groups, particularly multi-tenant retail, office, industrial and hospitality, as well as various niche markets, including multifamily tax credit, affordable housing, student housing, manufactured housing, seniors housing and self-storage.
We intend to continue to expand our specialty groups, particularly multi-tenant retail, office, industrial and hospitality, as well as various niche markets, including multifamily tax credit, affordable housing, student housing, manufactured housing, seniors housing and self-storage. We also plan to further grow our financing services provided through our subsidiary, MMCC.
We rely on third parties, including subcontractors, to perform activities on behalf of our organization to improve quality, increase efficiencies and lower operational risks across our business and the services we provide.
A failure by third parties to comply with service agreements or regulatory or legal requirements could result in economic and reputational harm to us. We rely on third parties, including subcontractors, to perform activities on behalf of our organization to improve quality, increase efficiencies and lower operational risks across our business and the services we provide.
The trend of hybrid work and lower office real estate occupancy rates may have material impacts on our business.
This may lead to a decline in revenues generated from such property transactions. The trend of hybrid work and lower office real estate occupancy rates may continue to have material impacts on our business.
Federal Reserve maintaining the federal funds target range at 0.0% to 0.25%. During 2022, the Federal Reserve raised interest rates by an aggregate of 425 basis points. These increases resulted in a slowdown in activity during the second half of 2022.
During 2022, the Federal Reserve raised interest rates by an aggregate of 425 basis points, which resulted in a slowdown in activity during the second half of 2022. During 2023, the Federal Reserve raised rates by an additional 100 basis points, which further contributed to the market slowdown.
Such third parties are also vulnerable to security breaches and compromised security systems, for which we may not be indemnified and which could materially adversely affect us and our reputation. Investment Risks Our investments in marketable debt securities, available-for-sale are subject to certain risks which could affect our overall financial condition, results of operations or cash flows.
Investment Risks Our investments in marketable debt securities, available-for-sale are subject to certain risks which could affect our overall financial condition, results of operations or cash flows.
Our success depends in a large part upon the continued service of our senior management team, who are important to our vision, strategic direction and culture. Our current long-term business strategy was developed in large part by our senior-level management team and depends in part on their skills and knowledge to implement.
Our success depends on our senior management team, who are important to our vision, strategic direction and culture. Our current long-term strategy was developed by this team and depends on their skills and knowledge to 15 Table of Contents implement. Growth and investment initiatives may require additional management expertise.
The annual inflation rate in the U.S. increased to 9.1% in June 2022, the highest annual inflation rate since November 1981, but decreased to 3.4% in December 2023 and further declined to 2.9% as of December 2024. Inflation has increased the wages paid to our employees and commissions paid to independent contractors.
The annual inflation rate in the U.S. increased to 9.1% in June 2022, the highest annual inflation rate since November 1981, but decreased to 3.4% in December 2023 and further declined to 2.9% as of December 2024. In 2025, the U.S. imposed numerous tariffs, potentially risking a new inflationary cycle. At year end 2025, the inflation rate was 2.7%.
The impact of these factors has led to uncertainty in the financial markets, inflation, increased interest rates, which has adversely impacted the commercial real estate industry. The commercial real estate industry, in particular, has seen significant slowing, and we experienced a significant decline in revenues in 2024 and 2023 compared to 2022, resulting in operating losses.
The impact of these factors has led to uncertainty in the financial markets, inflation, and elevated interest rates, which has adversely impacted the commercial real estate industry.
Fraud, or theft, which is difficult to detect and deter, could harm us by impairing our ability to attract and retain clients and subjecting us to significant legal liability and reputational harm. If our employees or investment sales and financing professionals engage in misconduct, our business could be adversely affected.
Any of these outcomes could materially harm our financial condition, operations, reputation, and ability to attract clients and professionals. Fraud, or theft, which is difficult to detect and deter, could harm us by impairing our ability to attract and retain clients and subjecting us to significant legal liability and reputational harm.
Interruption, data security breaches, or failure of our information technology, communications systems or data services could hurt our ability to effectively provide our services, which could damage our reputation and harm our operating results. Our business requires the continued operation of information technology and communication systems and network infrastructure.
Investing in technology infrastructure will demand substantial resources without guaranteed returns, but is essential to maintain our market position. Interruption, data security breaches, or failure of our information technology, communications systems or data services could hurt our ability to effectively provide our services, which could damage our reputation and harm our operating results.
Many of these laws and regulations are subject to change and uncertain interpretation and could result in claims, increased cost of operations or otherwise harm our business. We are subject to numerous laws and regulations regarding privacy, data protection and cybersecurity that govern the processing of certain data (including personal information, sensitive information, health information, and other regulated data).
Many of these laws and regulations are subject to change and uncertain interpretation and could result in claims, increased cost of operations or otherwise harm our business. We face complex and expanding laws on privacy, data protection, and cybersecurity that often conflict across jurisdictions, raising our compliance risks and costs.
Our competitors frequently attempt to recruit our investment sales and financing professionals or change commission structures in the marketplace. For a variety of reasons, the exclusive independent contractor and employment arrangements we have entered into or may enter into with these professionals may not prevent these professionals from departing and competing against us.
Departures of senior people or those in key revenue-generating markets could have a disproportionate adverse effect. Competitors frequently attempt to recruit our investment sales and financing professionals. Our independent contractor and employment arrangements may not prevent these people from departing and competing against us.
The protection of our brand, including related trademarks and other intellectual property, may require the expenditure of significant financial and operational resources. Moreover, the steps we take to protect our brand may not adequately protect our rights or prevent third parties from infringing or misappropriating our trademarks.
Moreover, the steps we take to protect our brand may not adequately protect our rights or prevent third parties from infringing or misappropriating our trademarks. Any unauthorized use by third parties of our brand may adversely affect our business.
If companies continue to adopt hybrid work models, the demand for traditional office spaces may decrease resulting in lower transaction volumes and property values for property sales, acquisitions, and financing. This may lead to a decline in revenues generated from such property transactions.
Our business has been and may continue to be materially affected by the trend of hybrid work and hoteling arrangements resulting in lower office real estate occupancy rates. If companies continue to adopt hybrid work models, the demand for traditional office spaces may decrease resulting in lower transaction volumes and property values for property sales, acquisitions, and financing.
During 2024 and 2023, seasonal fluctuations were disrupted by continued volatility in overall market conditions and interest rates.
During 2024 and 2023, seasonal fluctuations were disrupted by continued volatility in overall market conditions and interest rates. In 2025, federal policies regarding tariffs, trade and immigration, among others, weighed on investor decision making and disrupted the normal seasonal fluctuations.
Similarly, most key employees in sales leadership roles, which includes our experienced managers, currently do not have employment agreements, and there is no assurance that we will be able to retain their services. An important component of maintaining and growing our business includes the recruiting, training and retention of new and experienced investment sales and financing professionals.
Because most of our professionals are independent contractors and most key employees, including sales leadership, do not have employment agreements, we may be unable to retain these people. An important component of maintaining and growing our business is recruiting, training and retaining new and experienced professionals.
If our employees or investment sales and financing professionals were to engage in unethical business practices, improperly use, disseminate, fail to disseminate or disclose information provided by our clients, we could be subject to regulatory sanctions, suffer serious harm to our reputation, financial position and current client relationships and significantly impair our ability to attract future clients.
If our employees or investment sales and financing professionals engage in misconduct, we could suffer serious consequences. Misconduct may occur despite our preventive measures. If they engage in unethical practices, misuse or fail to disclose client information, we could face regulatory sanctions, reputational harm, financial losses, and damage to client relationships, reducing our ability to attract new clients.
Such third parties may also be vulnerable to security breaches and compromised security systems, which could adversely affect our reputation. In the past several years, supply chain attacks have increased in frequency and severity. As we are a consumer of information systems and technology, we are at risk of being impacted either directly or indirectly by these attacks.
Additionally, we increasingly rely on third-party data storage providers, including cloud storage solution providers, resulting in less direct control over our data. Such third parties may also be vulnerable to security breaches and compromised security systems, which could adversely affect our reputation. In the past several years, supply chain attacks have increased in frequency and severity.
The control systems, cybersecurity program, infrastructure, physical facilities of, and personnel associated with third parties that we rely on are beyond our control. We rely on the collection and use of personally identifiable information from clients to conduct our business.
As we are a consumer of information systems and technology, we are at risk of being impacted either directly or indirectly by these attacks. The control systems, cybersecurity program, infrastructure, physical facilities of, and personnel associated with third parties that we rely on are beyond our control.
If we are forced to classify these investment sales professionals as employees, we would also become subject to laws regarding employee classification and compensation, and to claims regarding overtime, minimum wage, and meal and rest periods.
Changes in classification could require modifying compensation or reimbursing expenses. If we are forced to classify these professionals as employees, we would also be subject to employment laws regarding overtime, minimum wage, and meal and rest periods. We could incur substantial costs, penalties and damages from challenges by current or former professionals to our classification or compensation practices.
We depend on our business relationships and our reputation for integrity and high-caliber professional services to attract and retain clients.
Refer to Item 3 – “Legal Proceedings” for a description of the TwinRock Holdings, LLC et al. v. Southside Ventures, LLC et al. case and its potential impacts on our business. We depend on our business relationships and our reputation for integrity and high-caliber professional services to attract and retain clients.
The recruitment and retention of key experienced professionals may require substantial investments, such as lucrative compensation packages, support agreements, and commission splits.
Future growth depends on the availability of qualified candidates who fit our culture and can be retained on favorable economic terms. However, competitors may offer compensation packages and commission splits we cannot economically match. The recruitment and retention of key experienced professionals may require significant investments, including compensation packages, support agreements and commission splits.
Removed
Our business has been and may continue to be materially affected by the trend of hybrid work and hoteling arrangements resulting in lower office real estate occupancy rates. The adoption of hybrid work arrangements, where employees split their time between working remotely and working from the office, has gained significant momentum due to advancements in technology and changing employee preferences.
Added
The commercial real estate industry, in particular, has seen significant slowing, and we experienced a significant decline in revenues in 2024 and 2023 compared to 2022, resulting in 10 Table of Contents operating losses. Although revenue increased in 2025, it remains below 2022 levels, and we continue to experience operating losses.
Removed
The reduced investor interest in traditional office assets may limit the availability of capital for commercial real estate investments, affecting our ability to close deals and generate fees. Lower office occupancy rates and concerns about the long-term viability of traditional office spaces may affect market sentiment and property valuations, reducing liquidity and making it more challenging to execute property transactions.
Added
Although activity levels increased in 2025, the investment market remains fluid as it adapts to the broader economic and financial market climate.
Removed
Decreased demand for traditional office spaces also could affect the performance of office-focused real estate investment portfolios. Lower occupancy rates may result in decreased rental income, impacting property valuations and investment returns. Additionally, the shift in investor preferences towards alternative property types may affect capital flows into funds with significant allocations to office.
Added
Inflation has increased the wages paid to our employees and commissions paid to independent contractors. Furthermore, our clients are also affected by inflation and increased interest rates.
Removed
For example, legislation which limits or prohibits dual agency could have an adverse impact 14 Table of Contents on our revenue.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeAdditionally, we generally require those third parties that could introduce significant cybersecurity risk to us to agree by contract to manage their cybersecurity risks in specified ways, and to agree to be subject to cybersecurity audits, which we conduct as appropriate. 25 Table of Contents We describe whether and how risks from identified cybersecurity threats, including as a result of any previous cybersecurity incidents, have materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations, or financial condition, under the heading “Item 1.A – Risk Factors – Technology and Cybersecurity Risks,” which disclosure is incorporated by reference herein.
Biggest changeWe describe whether and how risks from identified cybersecurity threats, including as a result of any previous cybersecurity incidents, have materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations, or financial condition, under the heading “Item 1.A – Risk Factors – Technology and Cybersecurity Risks,” which disclosure is incorporated by reference herein.
As part of this process, and our processes to provide for the availability of critical data and systems, maintain regulatory compliance, identify and manage our risks from cybersecurity threats, and to protect against, detect, and respond to cybersecurity incidents, as such term is defined in Item 106(a) of Regulation S-K, we undertake the below listed activities, among others: • periodic comparison of our processes to standards set by the National Institute of Standards and Technology; • closely monitor emerging data protection laws and implement changes to our processes designed to comply; • undertake an annual review of our consumer-facing policies and statements related to cybersecurity; • conduct regular phishing email simulations for all employees and all contractors with access to corporate email systems to enhance awareness and responsiveness to such possible threats; • conduct annual cybersecurity training for all employees and contractors, along with targeted training on a quarterly basis for specific subsets of employees identified through our phishing simulations; • through policy, practice and contract (as applicable) require employees, as well as third-parties who provide services on our behalf, to treat customer information and data with care; • conduct regular network and endpoint monitoring and vulnerability assessments to improve our information systems, as such term is defined in Item 106(a) of Regulation S-K; • carry information security risk insurance that provides protection against the potential losses arising from a cybersecurity incident; • conduct vulnerability scans and leverage the scan results to continuously patch and manage our network as new threats emerge; and • constant active monitoring by our contracted Security Operations Center.
As part of this process, and our processes to provide for the availability of critical data and systems, maintain regulatory compliance, identify and manage our risks from cybersecurity threats, and to protect against, detect, and respond to cybersecurity incidents, as such term is defined in Item 106(a) of Regulation S-K, we undertake the below listed activities, among others: • periodic comparison of our processes to standards set by the National Institute of Standards and Technology; • closely monitor emerging data protection laws and implement changes to our processes designed to comply; • undertake an annual review of our consumer-facing policies and statements related to cybersecurity; • conduct regular phishing email simulations for all employees and all contractors with access to corporate email systems to enhance awareness and responsiveness to such possible threats; • conduct annual cybersecurity training for all employees and contractors, along with targeted training on a quarterly basis for specific subsets of employees identified through our phishing simulations; • through policy, practice and contract (as applicable) require employees, as well as third-parties who provide services on our behalf, to treat customer information and data with care; • conduct regular network and endpoint monitoring and vulnerability assessments to improve our information systems, as such term is defined in Item 106(a) of Regulation S-K; 23 Table of Contents • carry information security risk insurance that provides protection against the potential losses arising from a cybersecurity incident; • conduct vulnerability scans and leverage the scan results to continuously patch and manage our network as new threats emerge; and • constant active monitoring by our contracted Security Operations Center.
In the CIO's most recent role, the CIO established and led a dedicated Cybersecurity Department, developing comprehensive security strategies, implementing cutting-edge cybersecurity tools, and designing response plans to support the entire company. At our Company, the CIO continues to drive proactive risk management, regulatory compliance, and a culture of cybersecurity awareness.
In the CIO's most recent role, the CIO established and led a dedicated Cybersecurity Department, developing comprehensive security strategies, implementing cutting-edge cybersecurity tools, and designing response plans to support the entire company.
The firm’s senior executive team, inclusive of the CEO, CFO, COOs, CAO and CLO, are informed about and monitor the prevention, mitigation, detection, and remediation of cybersecurity incidents through their management of, and participation in, the cybersecurity risk management and strategy processes described above, including the operation of our incident response plan.
At our company, the CIO continues to drive proactive risk management, regulatory compliance, and a culture of cybersecurity awareness. 24 Table of Contents The firm’s senior executive team, inclusive of the CEO, CFO, COO, CAO and CLO, are informed about and monitor the prevention, mitigation, detection, and remediation of cybersecurity incidents through their management of, and participation in, the cybersecurity risk management and strategy processes described above, including the operation of our incident response plan.
Added
Additionally, we generally require those third parties that could introduce significant cybersecurity risk to us to agree by contract to manage their cybersecurity risks in specified ways, and to agree to be subject to cybersecurity audits, which we conduct as appropriate.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe believe that our current facilities are adequate to meet our needs through the end of 2025; however, as we continue to evaluate our office footprint, our lease needs could change during the year.
Biggest changeWe believe that our current facilities are adequate to meet our needs through the end of 2026; however, as we continue to evaluate our office footprint, our lease needs could change during the year.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

2 edited+7 added−1 removed1 unchanged
Biggest changeSuch litigation and other proceedings may include, but are not limited to, actions relating to commercial relationships, standard brokerage disputes such as the alleged failure to disclose physical or environmental defects or property expenses or contracts, the alleged inadequate disclosure of matters relating to the transaction such as the relationships among the parties to the transaction, potential claims or losses pertaining to the asset, vicarious liability based upon conduct of individuals or entities outside of our control, general fraud claims, conflicts of interest claims, employment law claims, including claims challenging the classification of our sales professionals as independent contractors, claims alleging violations of state consumer fraud statutes, and intellectual 26 Table of Contents property.
Biggest changeSuch litigation and other proceedings may include, but are not limited to, actions relating to commercial relationships, standard brokerage disputes like the alleged failure to disclose physical or environmental defects or property expenses or contracts, the alleged inadequate disclosure of matters relating to the transaction like the relationships among the parties to the transaction, potential claims or losses pertaining to the asset, vicarious liability based upon conduct of individuals or entities outside of our control, general fraud claims, conflicts of interest claims, employment law claims, including claims challenging the classification of our sales professionals as independent contractors, claims alleging violations of state consumer fraud statutes and intellectual property.
While the ultimate liability for these legal proceeding cannot be determined, we review the need for an accrual for loss contingencies quarterly, and record an accrual for litigation related losses where the likelihood of loss is both probable and estimable.
While the ultimate liability for these legal proceedings cannot be determined, we review the need for an accrual for loss contingencies quarterly and record an accrual for litigation related losses where the likelihood of loss is both probable and estimable.
Removed
We do not believe, based on information currently available to us, that the final outcome of these proceedings will have a material adverse effect on our consolidated financial position, results of operations, or cash flows. Item 4. Mine Safety Disclosures Not applicable. 27 Table of Contents PART II
Added
On October 1, 2025, a jury in Boone County, Missouri returned a verdict against our subsidiary, MMREIS, in connection with the 2019 sale of a student-housing property near the University of Missouri.
Added
The jury awarded MO Murrayfield, LLC, the purchaser of the property, $4.075 million in actual damages and $20.0 million in punitive damages and awarded TwinRock Holdings, LLC $10.0 million in punitive damages with $0 in actual damages. On October 24, 2025, the Circuit Court entered judgments in the above amounts in favor of the purchaser and the other party.
Added
On February 14, 2026, the Circuit Court granted the Company’s motion for judgment notwithstanding the verdict with respect to the verdict in favor of TwinRock Holdings, LLC, vacating the $10 million punitive damages award and directing that judgment be entered in favor of the Company.
Added
The Company filed its appeal as to the judgment in favor of MO Murrayfield, LLC on February 23, 2026. The Company denies wrongdoing and believes there are strong grounds for reversal or significant reduction of the remaining judgment.
Added
In light of the February 14, 2026 ruling, the Company has revised its estimate of the range of reasonably possible loss to $0 to approximately $24.1 million, pending appellate outcomes. We have recorded an accrual of $4.0 million, representing approximately the actual damages awarded.
Added
If our post-trial motions or appeals are not successful in reversing or significantly reducing the award, we could be required to record significant additional charges, which could have a material impact on our financial results.
Added
For additional information regarding legal proceedings, see Note 16 — “Commitments and Contingencies” of the Notes to Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K. Item 4. Mine Safety Disclosures Not applicable. 25 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeWe selected our Peer Group based on companies that represent our primary competitors with certain business lines reasonably comparable to ours and based on the length of time they have been publicly-traded. 28 Table of Contents COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN Among Marcus & Millichap, Inc, the S&P 500 Index, and a Peer Group Base Period 12/31/19 12/31/20 12/31/21 12/31/22 12/31/23 12/31/24 Marcus & Millichap, Inc. 100.00 99.95 138.15 95.58 123.12 109.31 S&P 500 Index 100.00 118.40 152.39 124.79 157.59 197.02 Peer Group 100.00 92.84 162.59 106.05 127.38 171.53 Purchases of Equity Securities by the Issuer Share repurchase activity during the three months ended December 31, 2024 was as follows: Periods Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs October 1, 2024 - October 31, 2024 — $ — — $ 70,951,742 November 1, 2024 - November 30, 2024 — — — 70,951,742 December 1, 2024 - December 31, 2024 — — — 70,951,742 Total — — $ 70,951,742 Recent Sales of Unregistered Securities None.
Biggest changeWe selected our Peer Group based on companies that represent our primary competitors with certain business lines reasonably comparable to ours and based on the length of time they have been publicly-traded. 26 Table of Contents COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN Among Marcus & Millichap, Inc, the S&P 500 Index, and a Peer Group Base Period 12/31/20 12/31/21 12/31/22 12/31/23 12/31/24 12/31/25 Marcus & Millichap, Inc. 100.00 138.22 95.63 123.18 109.36 79.18 S&P 500 Index 100.00 128.71 105.40 133.10 166.40 196.16 Peer Group 100.00 175.12 114.22 137.20 184.75 227.11 Purchases of Equity Securities by the Issuer Share repurchase activity during the three months ended December 31, 2025 was as follows: Periods Total Number of Shares Purchased (1) Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs (2) October 1, 2025 - October 31, 2025 136,269 $ 28.44 136,269 $ 59,052,231 November 1, 2025 - November 30, 2025 95,650 28.83 95,650 56,294,938 December 1, 2025 - December 31, 2025 436,642 27.96 436,642 44,084,256 Total 668,561 668,561 $ 44,084,256 (1) Excludes shares withheld for employee taxes upon vesting of stock-based awards.
The graph assumes that $100 was invested at the market close on December 31, 2019 in the common stock of Marcus & Millichap Inc., the S&P 500 Index and the peer group, and assumes reinvestment of dividends. The stock price performance of the following graph is not necessarily indicative of future stock price performance.
The graph assumes that $100 was invested at the market close on December 31, 2020 in the common stock of Marcus & Millichap Inc., the S&P 500 Index and the peer group, and assumes reinvestment of dividends. The stock price performance of the following graph is not necessarily indicative of future stock price performance.
The following graph shows a comparison from December 31, 2019 through December 31, 2024 of the cumulative total return for our common stock, the Standard & Poor’s 500 Stock Index (“S&P 500 Index”) and an industry peer group for this period.
The following graph shows a comparison from December 31, 2020 through December 31, 2025 of the cumulative total return for our common stock, the Standard & Poor’s 500 Stock Index (“S&P 500 Index”) and an industry peer group for this period.
As of February 11, 2025, there were 59 stockholders of record, and the closing price of our common stock was $37.51 per share as reported on the NYSE.
As of February 10, 2026, there were 51 stockholders of record, and the closing price of our common stock was $27.22 per share as reported on the NYSE.
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Stock repurchases under our program may be made through open market and privately negotiated transactions at times and in such amounts as management deems appropriate. The timing and actual number of shares repurchased will depend on a variety of factors including price, corporate and regulatory requirements, capital availability, and other market conditions.
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The stock repurchase program does not have an expiration date and may be limited or terminated at any time without prior notice.
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(2) As of December 31, 2025, the Company had outstanding authorization to purchase up to $140 million of the Company's common stock under its common stock repurchase program announced on August 2, 2022, of which $95.9 million had been utilized. 27 Table of Contents Recent Sales of Unregistered Securities None. Item 6. [RESERVED]

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeSuch key metrics for real estate brokerage and financing activities (excluding other transactions) are as follows: Years Ended December 31, Real Estate Brokerage 2024 2023 2022 Average Number of Investment Sales Professionals 1,610 1,744 1,817 Average Number of Transactions per Investment Sales Professional 3.38 3.14 5.01 Average Commission per Transaction $ 108,261 $ 102,238 $ 128,450 Average Commission Rate 1.75 % 1.82 % 1.72 % Average Transaction Size (in thousands) $ 6,174 $ 5,630 $ 7,473 Total Number of Transactions 5,447 5,475 9,111 Total Sales Volume (in millions) $ 33,630 $ 30,823 $ 68,088 Years Ended December 31, Financing (1) 2024 2023 2022 Average Number of Financing Professionals 101 96 86 Average Number of Transactions per Financing Professional 12.37 11.21 24.92 Average Fee per Transaction $ 52,955 $ 50,677 $ 44,546 Average Fee Rate 0.73 % 0.81 % 0.74 % Average Transaction Size (in thousands) $ 7,283 $ 6,254 $ 5,984 Total Number of Transactions 1,249 1,076 2,143 Total Financing Volume (in millions) $ 9,096 $ 6,729 $ 12,823 (1) Operating metrics exclude certain financing fees not directly associated to transactions. 35 Table of Contents The following table sets forth the number of transactions, sales volume and revenue by commercial real estate market for real estate brokerage: Years Ended December 31, 2024 2023 Change Real Estate Brokerage Number Volume Revenue Number Volume Revenue Number Volume Revenue (in millions) (in thousands) (in millions) (in thousands) (in millions) (in thousands) 819 $ 446 $ 21,034 809 $ 483 $ 20,894 10 $ (37) $ 140 Private Client Market ($1 – 3,967 12,802 365,837 4,097 13,616 372,979 (130) (814) (7,142) Middle Market ($10 – 344 4,764 84,186 303 4,117 73,007 41 647 11,179 Larger Transaction Market (≥$20 million) 317 15,618 118,638 266 12,607 92,872 51 3,011 25,766 5,447 $ 33,630 $ 589,695 5,475 $ 30,823 $ 559,752 (28) $ 2,807 $ 29,943 Comparison of Years Ended December 31, 2024 and 2023 Below are key operating results for the year ended December 31, 2024 compared to the results for the year ended December 31, 2023 (dollars in thousands): Year Ended December 31 2024, Percentage of Revenue Year Ended December 31 2023, Percentage of Revenue Change Dollars Percentage Revenue: Real estate brokerage commissions $ 589,695 84.7 % $ 559,752 86.6 % $ 29,943 5.3 % Financing fees 84,512 12.1 66,898 10.4 17,614 26.3 % Other revenue 21,853 3.2 19,277 3.0 2,576 13.4 % Total revenue 696,060 100 645,927 100 50,133 7.8 % Operating expenses: Cost of services 431,471 62.0 406,645 63.0 24,826 6.1 % Selling, general and administrative 280,909 40.3 285,023 44.1 (4,114) (1.4) % Depreciation and amortization 16,589 2.4 13,627 2.1 2,962 21.7 % Total operating expenses 728,969 104.7 705,295 109.2 23,674 3.4 % Operating (loss) income (32,909) (4.7) (59,368) (9.2) 26,459 (44.6) % Other income, net 20,693 2.9 19,855 3.0 838 4.2 % Interest expense (812) (0.1) (888) (0.1) 76 (8.6) % Loss before benefit for income taxes (13,028) (1.9) (40,401) (6.3) 27,373 (67.8) % Benefit for income taxes (666) (0.1) (6,366) (1.0) 5,700 (89.5) % Net loss $ (12,362) (1.8) % $ (34,035) (5.3) % $ 21,673 (63.7) % Adjusted EBITDA (1) $ 9,372 1.3 % $ (19,630) (3.0) % $ 29,002 147.7 % (1) Adjusted EBITDA is not a measurement of our financial performance under U.S.
Biggest changeThe following table sets forth the number of transactions, sales volume and revenue by commercial real estate market for real estate brokerage: Years Ended December 31, 2025 2024 Change Real Estate Brokerage Number Volume Revenue Number Volume Revenue Number Volume Revenue (in millions) (in thousands) (in millions) (in thousands) (in millions) (in thousands) 931 $ 556 $ 25,945 819 $ 446 $ 21,034 112 $ 110 $ 4,911 Private Client Market ($1 – 4,435 14,607 406,316 3,967 12,802 365,837 468 1,805 40,479 Middle Market ($10 – 381 5,195 96,498 344 4,764 84,186 37 431 12,312 Larger Transaction Market (≥$20 million) 291 14,462 103,757 317 15,618 118,638 (26) (1,156) (14,881) 6,038 $ 34,820 $ 632,516 5,447 $ 33,630 $ 589,695 591 $ 1,190 $ 42,821 34 Table of Contents Comparison of Years Ended December 31, 2025 and 2024 Below are key operating results for the year ended December 31, 2025 compared to the results for the year ended December 31, 2024 (dollars in thousands): Year Ended December 31, 2025 Percentage of Revenue Year Ended December 31, 2024 Percentage of Revenue Change Dollars Percentage Revenue: Real estate brokerage commissions $ 632,516 83.8 % $ 589,695 84.7 % $ 42,821 7.3 % Financing fees 103,916 13.8 84,512 12.1 19,404 23.0 % Other revenue 18,724 2.4 21,853 3.2 (3,129) (14.3) % Total revenue 755,156 100 696,060 100 59,096 8.5 % Operating expenses: Cost of services 470,486 62.3 431,471 62.0 39,015 9.0 % Selling, general and administrative 286,283 37.9 280,909 40.3 5,374 1.9 % Depreciation and amortization 12,098 1.6 16,589 2.4 (4,491) (27.1) % Total operating expenses 768,867 101.8 728,969 104.7 39,898 5.5 % Operating loss (13,711) (1.8) (32,909) (4.7) 19,198 (58.3) % Other income, net 17,504 2.3 20,693 2.9 (3,189) (15.4) % Interest expense (773) (0.1) (812) (0.1) 39 (4.8) % Income (loss) before provision (benefit) for income taxes 3,020 0.4 (13,028) (1.9) 16,048 (123.2) % Provision (benefit) for income taxes 4,929 0.7 (666) (0.1) 5,595 (840.1) % Net loss $ (1,909) (0.3) % $ (12,362) (1.8) % $ 10,453 (84.6) % Adjusted EBITDA (1) $ 24,611 3.3 % $ 9,372 1.3 % $ 15,239 162.6 % (1) Adjusted EBITDA is not a measurement of our financial performance under U.S.
Interest Expense Interest expense primarily consists of interest expense associated with the stock appreciation rights (“SARs”) liability, and our credit agreement. (Benefit) Provision for Income Taxes We are subject to U.S. and Canadian federal taxes and individual state and local taxes based on the income generated in the jurisdictions in which we operate.
Interest Expense Interest expense primarily consists of interest expense associated with the stock appreciation rights (“SARs”) liability, and our Credit Agreement. Provision (benefit) for Income Taxes We are subject to U.S. and Canadian federal taxes and individual state and local taxes based on the income generated in the jurisdictions in which we operate.
Our (benefit) provision for income taxes includes the windfall tax benefits and shortfall expenses, net, from shares issued in connection with our Amended Plan and Amended ESPP. We record deferred taxes, net based on the tax rate expected to be in effect at the time those items are expected to be recognized for tax purposes.
Our provision (benefit) for income taxes includes the windfall tax benefits and shortfall expenses, net, from shares issued in connection with our Amended Plan and Amended ESPP. We record deferred taxes, net based on the tax rate expected to be in effect at the time those items are expected to be recognized for tax purposes.
GAAP and should not be considered as an alternative to net income, operating income or any other measures derived in accordance with U.S. GAAP. For a definition of Adjusted EBITDA and a reconciliation of Adjusted EBITDA to net (loss) income, which is the most directly comparable U.S. GAAP financial measure, see “Non-GAAP Financial Measure” below.
GAAP and should not be considered as an alternative to net income, operating income or any other measures derived in accordance with U.S. GAAP. For a definition of Adjusted EBITDA and a reconciliation of Adjusted EBITDA to net loss, which is the most directly comparable U.S. GAAP financial measure, see “Non-GAAP Financial Measure” below.
We define Adjusted EBITDA as net (loss) income before (i) interest income and other, including net realized gains (losses) on marketable debt securities, available-for-sale and cash, cash equivalents, and restricted cash, (ii) interest expense, (iii) (benefit) provision for income taxes, (iv) depreciation and amortization, and (v) stock-based compensation.
We define Adjusted EBITDA as net loss before (i) interest income and other, including interest on marketable debt securities, available-for-sale and cash, cash equivalents, and restricted cash, and net realized gains (losses) on marketable debt securities, available-for-sale, (ii) interest expense, (iii) provision (benefit) for income taxes, (iv) depreciation and amortization, and (v) stock-based compensation.
This historical trend can be disrupted both positively and negatively by major economic events, political events, natural disasters, or public health crises, which may impact, among other things, investor sentiment for a particular property type or location, volatility in financial markets, current and future projections of interest rates, attractiveness of other asset classes, market liquidity, and the extent of limitations or availability of capital allocations for larger property buyers, among others.
This historical trend can be disrupted both positively and negatively by major economic events, political events, geopolitical events, natural disasters, or public health crises, which may impact, among other things, investor sentiment for a particular property type or location, volatility in financial markets, current and future projections of interest rates, attractiveness of other asset classes, market liquidity, and the extent of limitations or availability of capital allocations for larger property buyers, among others.
(5) Relates to contingent and deferred consideration in connection with our business acquisitions. See Note 6 – “Acquisitions, Goodwill and Other Intangible Assets” and Note 9 – “Fair Value Measurements” of our accompanying Notes to Consolidated Financial Statements. (6) Relates to amounts that may be advanced to sales and financing professionals.
(5) Relates to contingent consideration in connection with our business acquisitions. See Note 6 – “Acquisitions, Goodwill and Other Intangible Assets” and Note 9 – “Fair Value Measurements” of our accompanying Notes to Consolidated Financial Statements. (6) Relates to amounts that may be advanced to sales and financing professionals.
Credit Agreement We have a credit agreement with Wells Fargo Bank, National Association (as amended, the “Credit Agreement”) which provides for a $10 million principal amount senior secured revolving credit facility that is guaranteed by all of our domestic subsidiaries and matures on June 1, 2025. As of December 31, 2024, there were no amounts outstanding under the Credit Agreement.
Credit Agreement We have a credit agreement with Wells Fargo Bank, National Association (as amended, the “Credit Agreement”) which provides for a $10 million principal amount senior secured revolving credit facility that is guaranteed by all of our domestic subsidiaries and matures on June 1, 2026. As of December 31, 2025, there were no amounts outstanding under the Credit Agreement.
Other than operating expenses, including those accrued and payable as December 31, 2024, cash requirements for 2025 are expected to consist primarily of capital expenditures for the future acquisitions, if any, payment of dividends, if any, payments for stock repurchases, if any, and advances to our investment sales and financing professionals.
Other than operating expenses, including those accrued and payable as December 31, 2025, cash requirements for 2026 are expected to consist primarily of capital expenditures for the future acquisitions, if any, payment of dividends, if any, payments for stock repurchases, if any, and advances to our investment sales and financing professionals.
Unrealized losses aggregated $1.6 million and $2.6 million as of December 31, 2024 and 2023, respectively. We review our investment portfolio quarterly for all securities in an unrealized loss position to determine if an impairment charge or credit reserve is required.
Unrealized losses aggregated $1.2 million and $1.6 million as of December 31, 2025 and 2024, respectively. We review our investment portfolio quarterly for all securities in an unrealized loss position to determine if an impairment charge or credit reserve is required.
Our effective tax rate fluctuates as a result of (i) changes in our annual effective tax rate applied to current pre-tax income (loss), (ii) the change in the mix of our activities in the jurisdictions in which we 34 Table of Contents operate due to differing tax rates in those jurisdictions and (iii) the impact of permanent items, including compensation charges, qualified transportation fringe benefits, uncertain tax positions, meals and entertainment and tax-exempt deferred compensation plan assets.
Our effective tax rate fluctuates as a result of (i) changes in our annual effective tax rate applied to current pre-tax income (loss), (ii) the change in the mix of our activities in the jurisdictions in which we operate due to differing tax rates in those jurisdictions and (iii) the impact of permanent items, including compensation charges, qualified transportation fringe benefits, uncertain tax positions, meals and entertainment and tax-exempt deferred compensation plan assets.
Results of Operations The following is a discussion of our results of operations for the years ended December 31, 2024 and 2023. The tables included in the period comparisons below provide summaries of our results of operations. The period-to-period comparisons of financial results are not necessarily indicative of future results.
Results of Operations The following is a discussion of our results of operations for the years ended December 31, 2025 and 2024. The tables included in the period comparisons below provide summaries of our results of operations. The period-to-period comparisons of financial results are not necessarily indicative of future results.
The policy 42 Table of Contents requires substantially all investments to be investment grade, with the primary objective of minimizing the potential risk of principal loss and matching long-term liabilities. Unrealized losses on our marketable securities, available-for-sale, fluctuate based on changes in market interest rates due the fixed interest rates of most of the securities.
The policy requires substantially all investments to be investment grade, with the primary objective of minimizing the potential risk of principal loss and matching long-term liabilities. Unrealized losses on our marketable securities, available-for-sale, fluctuate based on changes in market interest rates due the fixed interest rates of most of the securities.
Payments for deferred compensation liability are based on the participants’ elections at the time of deferral and may not begin before separation from service. The ultimate resolution depends 40 Table of Contents on many factors and assumptions. Certain amounts advanced to sales and financing professionals are contingent upon reaching specified performance criteria.
Payments for deferred compensation liability are based on the participants’ elections at the time of deferral and may not begin before separation from service. The ultimate resolution depends on many factors and assumptions. Certain amounts advanced to sales and financing professionals are contingent upon reaching specified performance criteria.
The weighted average incremental borrowing rate was 5.2% in 2024 and 4.7% in 2023. Any payments for completed improvements, determined to be owed by the lessor, net of incentives received, are recorded as an increase to the ROU asset and considered in the determination of the lease cost.
The weighted average incremental borrowing rate was 5.4% in 2025 and 5.2% in 2024. Any payments for completed improvements, determined to be owed by the lessor, net of incentives received, are recorded as an increase to the ROU asset and are considered in the determination of the lease cost.
The Company estimated the probability of achievement of contractual performance targets was between 0% to 100% based on each acquisition’s historical and estimated future performance and risk adjusted discount rates of between 4.8% to 6.1%, which resulted in a recorded fair value for the contingent consideration of $4.7 million and $5.5 million as of December 31, 2024, and 2023, respectively.
The Company estimated the probability of achievement of contractual performance targets was between 0% to 100% based on each acquisition’s historical and estimated future performance and risk adjusted discount rates of between 4.8% to 6.1%, which resulted in a recorded fair value liability for the contingent consideration of $0.7 million and $4.7 million as of December 31, 2025, and 2024, respectively.
We use Adjusted EBITDA in our business operations to evaluate the performance of our business, develop budgets and measure our performance against those budgets, among other things. We also believe that analysts and investors use Adjusted EBITDA as a supplemental measure to evaluate our overall operating performance.
We use Adjusted EBITDA in our business operations to evaluate the 36 Table of Contents performance of our business, develop budgets and measure our performance against those budgets, among other things. We also believe that analysts and investors use Adjusted EBITDA as a supplemental measure to evaluate our overall operating performance.
Comparison of Years Ended December 31, 2023 and 2022 A discussion regarding our results of operations for the year ended December 31, 2023 compared to the results for the year ended December 31, 2022 can be found under Item 7 – “Management’s Discussion and Analysis of Financial 37 Table of Contents Condition and Results of Operations – Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on February 27, 2024, which is available on the SEC’s website at www.sec.gov.
Comparison of Years Ended December 31, 2024 and 2023 A discussion regarding our results of operations for the year ended December 31, 2024 compared to the results for the year ended December 31, 2023 can be found under Item 7 – “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on February 27, 2025, which is available on the SEC’s website at www.sec.gov.
Calculating some of the amounts involves a high degree of judgment. Our state taxes, net of federal benefit, has ranged from 1.5% to 4.5% over the past 3 years. We evaluate our tax positions quarterly.
Calculating some of the amounts involves a high degree of judgment. Our state taxes, net of federal benefit, has ranged from 1.5% to 10.3% over the past three years. We evaluate our tax positions quarterly.
Historically, this seasonality has generally caused our revenue, operating income, net income, and cash flows from operating activities to be lower in the first half of the year and higher in the second half of the year, particularly in the 32 Table of Contents fourth quarter.
Historically, this seasonality has generally caused our revenue, operating income, net income, and cash flows from operating activities to be lower in the first half of the year and higher in the second half of the year, particularly in the fourth quarter.
We hold assets in a rabbi trust of $12.2 million to settle outstanding amounts when they become due. Amounts assume no increase or decrease in the liability due to future returns or losses. See Note 7 – “Selected Balance Sheet Data” of our accompanying Notes to the Consolidated Financial Statements.
We hold assets in a rabbi trust of $13.5 million to settle outstanding amounts when they become due. Amounts assume no increase or decrease in the liability due to future returns or losses. See Note 7 – “Selected Balance Sheet Data” of our accompanying Notes to the Consolidated Financial Statements.
As of December 31, 2024, we had 1,712 investment sales and financing professionals that are primarily exclusive independent contractors operating in more than 80 offices, who provide real estate brokerage and financing services to sellers and buyers of commercial real estate assets.
As of December 31, 2025, we had 1,808 investment sales and financing professionals that are primarily exclusive independent contractors operating in more than 80 offices, who provide real estate brokerage and financing services to sellers and buyers of commercial real estate assets.
We do not believe any of the other accounting pronouncements listed in that note will have a significant impact on our business. 43 Table of Contents
We do not believe any of the other accounting pronouncements listed in that note will have a significant impact on our business.
(2) Forecasted principal payments are based on each participant’s estimated retirement age and current contractual interest rate of 5.95% as of January 1, 2024 and reflect required payments that resulted from the retirement of certain executives. See Note 7 – “Selected Balance Sheet Data” of our accompanying Notes to Consolidated Financial Statements.
(2) Forecasted principal payments are based on each participant’s estimated retirement age and current contractual interest rate of 6.57% as of January 1, 2025 and reflect required payments that resulted from the retirement of certain executives. See Note 7 – “Selected Balance Sheet Data” of our accompanying Notes to Consolidated Financial Statements.
The maximum undiscounted future settlements of contingent and deferred consideration was $12.0 million at December 31, 2024, and the Company is uncertain as to the extent of the volatility in the judgments and unobservable inputs will have on the ultimate settlement of these amounts in the foreseeable future.
The maximum undiscounted future settlements of contingent consideration was $6.8 million at December 31, 2025, and the Company is uncertain as to the extent of the volatility in the judgments and unobservable inputs will have on the ultimate settlement of these amounts in the foreseeable future.
Real estate brokerage commissions are typically based upon the value of the property and financing fees are typically based upon the size of the loan. During the year ended December 31, 2024, approximately 85% of our revenue was generated from real estate brokerage commissions, 12% from financing fees and 3% from other revenue, including consulting and advisory services.
Real estate brokerage commissions are typically based upon the value of the property and financing fees are typically based upon the size of the loan. During the year ended December 31, 2025, approximately 84% of our revenue was generated from real estate brokerage commissions, 14% from financing fees and 2% from other revenue, including consulting and advisory services.
Revenue Our total revenue was $696.1 million in 2024 compared to $645.9 million in 2023, an increase of $50.1 million, or 7.8%. Total revenue primarily increased as a result of increases in real estate brokerage commissions and financing fees, as described below. See "Factors Affecting Our Business" section for additional market information. Real estate brokerage commissions.
Revenue Our total revenue was $755.2 million in 2025 compared to $696.1 million in 2024, an increase of $59.1 million, or 8.5%. Total revenue primarily increased as a result of increases in real estate brokerage commissions and financing fees, as described below. See "Factors Affecting Our Business" section for additional market information. Real estate brokerage commissions.
Future results of operations of the Canadian business will impact valuation allowances in the future. 41 Table of Contents Due to the nature of our business, which includes activity in the U.S. and Canada, incorporating numerous states and provinces as well as local jurisdictions, our tax position can be complex.
Our valuation allowance is related principally to losses incurred in our Canadian operations. Future results of operations of the Canadian business will impact valuation allowances in the future. Due to the nature of our business, which includes activity in the U.S. and Canada, incorporating numerous states and provinces as well as local jurisdictions, our tax position can be complex.
Financing Fees We earn financing fees by securing financing on purchase transactions or by securing refinancing of our clients’ existing mortgage debt. We recognize financing fee revenue at the time the loan closes, and we have no remaining significant obligations in connection with the transaction.
Revenue from real estate brokerage commissions is recognized at the close of escrow. Financing Fees We earn financing fees by securing financing on purchase transactions or by securing refinancing of our clients’ existing mortgage debt. We recognize financing fee revenue at the time the loan closes, and we have no remaining significant obligations in connection with the transaction.
During the years ended December 31, 2024, 2023, and 2022, we closed more than 7,800, 7,500 and 12,200 investment sales, financing and other transactions, respectively, with total sales volume of approximately $49.6 billion, $43.6 billion and $86.3 billion, respectively.
During the years ended December 31, 2025, 2024, and 2023, we closed more than 8,800, 7,800 and 7,500 investment sales, financing and other transactions, respectively, with total sales volume of approximately $50.8 billion, $49.6 billion and $43.6 billion, respectively.
During the year ended December 31, 2024, we closed 7,836 investment sales, financing and other transactions with total sales volume of approximately $49.6 billion. During the year ended December 31, 2023, we closed 7,546 investment sales, financing and other transactions with total sales volume of approximately $43.6 billion.
During the year ended December 31, 2025, we closed 8,818 investment sales, financing and other transactions with total sales volume of approximately $50.8 billion. During the year ended December 31, 2024, we closed 7,836 investment sales, financing and other transactions with total sales volume of approximately $49.6 billion.
On a loan-by-loan basis, the Company, at its option, can assume a portion of MTRCC’s guarantee obligation to Fannie Mae of loan opportunities presented to and closed by MTRCC. As of December 31, 2024, the Company has agreed to a maximum aggregate guarantee obligation of $296.3 million relating to loans with an unpaid balance of $1,831.8 million.
On a loan-by-loan basis, the Company, at its option, can assume a portion of MTRCC’s guarantee obligation to Fannie Mae of loan opportunities presented to and closed by MTRCC. As of December 31, 2025, the Company has agreed to a maximum aggregate guarantee obligation of $444.9 million relating to loans with an unpaid balance of $2,723.4 million.
GAAP financial measure, net income, to Adjusted EBITDA is as follows (in thousands): Years Ended December 31, 2024 2023 2022 Net (loss) income $ (12,362) $ (34,035) $ 104,225 Adjustments: Interest income and other (1) (18,793) (17,890) (7,951) Interest expense 812 888 708 (Benefit) provision for income taxes (666) (6,366) 37,804 Depreciation and amortization 16,589 13,627 13,406 Stock-based compensation 23,792 24,146 17,312 Adjusted EBITDA $ 9,372 $ (19,630) $ 165,504 (1) Other includes net realized gains (losses) on marketable debt securities, available-for-sale.
GAAP financial measure, net loss, to Adjusted EBITDA is as follows (in thousands): Years Ended December 31, 2025 2024 2023 Net loss $ (1,909) $ (12,362) $ (34,035) Adjustments: Interest income and other (1) (15,506) (18,793) (17,890) Interest expense 773 812 888 Provision (benefit) for income taxes 4,929 (666) (6,366) Depreciation and amortization 12,098 16,589 13,627 Stock-based compensation 24,226 23,792 24,146 Adjusted EBITDA $ 24,611 $ 9,372 $ (19,630) (1) Other includes net realized gains (losses) on marketable debt securities, available-for-sale.
The Company estimated the fair value of the deferred consideration using a discounted cash flow estimate using market rates, with the only remaining condition on such payments being the passage of time which resulted in a recorded fair value of $0.4 million and $1.6 million as of December 31, 2024, and 2023, respectively.
The Company estimated the fair value of the deferred consideration using a discounted cash flow estimate using market rates, with the only remaining condition on such payments being the passage of time which resulted in a recorded fair value liability of $0.4 million as of December 31, 2024. As of December 31, 2025, there was no deferred consideration balance outstanding.
The $84.8 million decrease in cash from investing activities in 2024 compared to 2023 was primarily due to a decrease in net proceeds of $86.3 million from sales, purchases, and maturities of securities in 2024 compared to the same period in 2023.
The $6.1 million decrease in cash used in investing activities in 2025 compared to 2024 was primarily due to a decrease in net proceeds of $6.1 million from sales, purchases, and maturities of securities in 2025 compared to the same period in 2024.
During 2024, seasonal fluctuations were disrupted by changes in overall market conditions and interest rates, and going forward our historical pattern of seasonality may or may not continue to the same degree experienced in prior years. Key Financial Measures and Indicators Revenue Our revenue is primarily generated from our real estate investment sales business.
In 2025, the seasonal fluctuations were disrupted by tax law changes and federal policies related to trade, tariffs and immigration. Going forward, our historical pattern of seasonality may or may not continue to the same degree experienced in prior years. Key Financial Measures and Indicators Revenue Our revenue is primarily generated from our real estate investment sales business.
The following table sets forth our summary cash flows for the years ended December 31, 2024, 2023, and 2022 (in thousands): Years Ended December 31, 2024 2023 2022 Net cash provided by (used in) operating activities $ 21,714 $ (72,430) $ 13,629 Net cash (used in) provided by investing activities (9,902) 74,867 (53,975) Net cash used in financing activities (28,755) (67,679) (105,555) Effect of currency exchange rate changes on cash, cash equivalents, and restricted cash (365) 122 (366) Net decrease in cash, cash equivalents, and restricted cash (17,308) (65,120) (146,267) Cash, cash equivalents, and restricted cash at beginning of period 170,753 235,873 382,140 Cash, cash equivalents, and restricted cash at end of period $ 153,445 $ 170,753 $ 235,873 Operating Activities Cash flows provided by operating activities were $21.7 million in 2024 compared to cash flows used in operating activities of $72.4 million in 2023.
The following table sets forth our summary cash flows for the years ended December 31, 2025, 2024, and 2023 (in thousands): Years Ended December 31, 2025 2024 2023 Net cash provided by (used in) operating activities $ 66,657 $ 21,714 $ (72,430) Net cash (used in) provided by investing activities (3,824) (9,902) 74,867 Net cash used in financing activities (54,576) (28,755) (67,679) Effect of currency exchange rate changes on cash, cash equivalents, and restricted cash 219 (365) 122 Net increase (decrease) in cash, cash equivalents, and restricted cash 8,476 (17,308) (65,120) Cash, cash equivalents, and restricted cash at beginning of period 153,445 170,753 235,873 Cash, cash equivalents, and restricted cash at end of period $ 161,921 $ 153,445 $ 170,753 37 Table of Contents Operating Activities Cash flows provided by operating activities were $66.7 million in 2025 compared to $21.7 million in 2024.
Leases Our leases consist of purpose built-out office space, which reverts to the lessor upon termination of the lease and operating leases for autos. We determine if an arrangement is a lease at inception.
See Note 12 – “Income Taxes” of our accompanying Notes to Consolidated Financial Statements for additional information. Leases Our leases consist of purpose built-out office space, which reverts to the lessor upon termination of the lease and operating leases for autos. We determine if an arrangement is a lease at inception.
The increase primarily relates to accelerated amortization and impairment of certain intangible assets resulting from changes in estimates. Other Income, Net Other income, net increased to $20.7 million in 2024 from $19.9 million in 2023.
The decrease primarily relates to accelerated amortization and impairment of certain intangible assets in 2024 resulting from changes in estimates. Other Income, Net Other income, net decreased to $17.5 million in 2025 from $20.7 million in 2024.
The combined Middle Market and Larger Transaction Market revenue increased by 22.3%, while Private Client Market revenue decreased by 1.9%. Financing fees . Revenue from financing fees increased to $84.5 million in 2024 from $66.9 million in 2023, an increase of $17.6 million, or 26.3%.
The Private Client Market revenue increased by 11.1%, while the combined Middle Market and Larger Transaction Market revenue decreased by 1.3%. Financing fees . Revenue from financing fees increased to $103.9 million in 2025 from $84.5 million in 2024, an increase of $19.4 million, or 23.0%.
We generated mortgage servicing fees through the provision of collection, remittance, recordkeeping, reporting, and other related mortgage servicing functions, activities, and services. 33 Table of Contents Other Revenue Other revenue includes fees generated from consulting and advisory services, leasing, as well as referral fees from other real estate brokers, and are recognized when services are provided, upon closing of the transaction or when we have no further obligations.
Other Revenue Other revenue includes fees generated from consulting and advisory services, leasing, as well as referral fees from other real estate brokers, and are recognized when services are provided, upon closing of the transaction or when we have no further obligations.
Impairment that has not been recorded as a credit loss is recorded through other comprehensive (loss) income, net of applicable taxes. We made an accounting policy election to not measure an allowance for credit losses for accrued interest receivable.
Impairment that has not been recorded as a credit loss is recorded through other comprehensive loss, net of applicable taxes. We made an accounting policy election to not measure an allowance for credit losses for accrued interest receivable. We evaluate write-off of accrued interest receivable by the major security-type level at the time credit loss exists for the underlying security.
In addition, our private clients, who make up the largest source of revenue, are often motivated to buy, sell and/or refinance properties due to personal circumstances, such as death, divorce, partnership breakups and estate planning.
In addition, our private clients, who make up the largest source of revenue, are often motivated to buy, sell and/or refinance properties due to personal circumstances, such as death, divorce, partnership breakups and estate planning. Commercial real estate transaction activity increased by 17% in 2025 compared to 2024, led by velocity gains in retail and office property sales.
The annual CPI inflation rate in the U.S. peaked at 9.1% in June 2022, the highest annual inflation rate since November 1981. CPI inflation has since fallen to 2.9% as of December 2024.
The annual CPI inflation rate in the U.S. peaked at 9.1% in June 2022, the highest annual inflation rate since November 1981. CPI inflation fell to 2.4% as of March 2025 and ended 2025 at 2.7%.
Seasonality Our real estate brokerage commissions and financing fees have tended to be seasonal and, combined with other factors, can affect an investor’s ability to compare our financial condition and results of operations on a quarter-by-quarter basis.
If trade policy stabilizes, uncertainty abates and investor sentiment rises, we believe commercial real estate investment activity could gain additional momentum. Seasonality Our real estate brokerage commissions and financing fees have tended to be seasonal and, combined with other factors, can affect an investor’s ability to compare our financial condition and results of operations on a quarter-by-quarter basis.
The increase was a result of a 35.2% increase in the total financing volume, partially offset by a decrease of eight basis points in the average fee rate earned compared to 2023. Other revenue . Other revenue increased to $21.9 million in 2024 from $19.3 million in 2023, an increase of $2.6 million, or 13.4%.
The increase was a result of a 31.2% increase in the total financing volume, partially offset by a decrease of four basis points in the average fee rate earned compared to 2024. Other revenue . Other revenue decreased to $18.7 million in 2025 from $21.9 million in 2024, a decrease of $3.1 million, or 14.3%.
In light of the foregoing limitations, we do not rely solely on Adjusted EBITDA as a performance measure and also consider our U.S. GAAP results. Adjusted EBITDA is not a measurement of our financial performance under U.S.
In light of the foregoing limitations, we do not rely solely on Adjusted EBITDA as a performance measure and also consider our U.S. GAAP results. Adjusted EBITDA is not a measurement of our financial performance under U.S. GAAP and should not be considered as an alternative to net loss, operating loss or any other measures calculated in accordance with U.S.
Although we have historically funded our operations through operating cash flows, there can be no assurance that we can continue to meet our cash requirements entirely through our operations, cash and cash equivalents, proceeds from the sale of marketable debt securities, available-for-sale or availability under the Credit Agreement. 38 Table of Contents Cash Flows Our total cash, cash equivalents, and restricted cash balance decreased by $17.3 million to $153.4 million at December 31, 2024, compared to $170.8 million at December 31, 2023.
Although we have historically funded our operations through operating cash flows, there can be no assurance that we can continue to meet our cash requirements entirely through our operations, cash and cash equivalents, proceeds from the sale of marketable debt securities, available-for-sale or availability under the Credit Agreement.
Commercial Real Estate Supply and Demand Our business is dependent on the willingness of investors to invest in or sell commercial real estate, which is affected by many factors beyond our control.
Should policy uncertainty abate, the underlying strength of the U.S. economy could support a stronger economic outlook. Commercial Real Estate Supply and Demand Our business is dependent on the willingness of investors to invest in or sell commercial real estate, which is affected by many factors beyond our control.
We monitor covenant compliance on a regular basis to ensure continued compliance with the Credit Agreement. Our ability to borrow under the Credit Agreement is limited by our ability to comply with its covenants or 39 Table of Contents obtain necessary waivers.
We monitor covenant compliance on a regular basis to ensure continued compliance with the Credit Agreement. Our ability to borrow under the Credit Agreement is limited by our ability to comply with its covenants or obtain necessary waivers. See Note 16 – “Commitments and Contingencies” of our accompanying Notes to Consolidated Financial Statements for additional information on the Credit Agreement.
These changes directly influence investor demand for commercial real estate investments and what they are willing to pay. Furthermore, the use of debt or loan-to-value ratios can shift along with 31 Table of Contents lender confidence and underwriting standards.
These changes directly influence investor demand for commercial real estate investments and what they are willing to pay. Furthermore, the use of debt or loan-to-value ratios can shift along with lender confidence and underwriting standards. At times of heightened uncertainty or liquidity issues, loan-to-values decline, requiring buyers to provide more equity and take more risk to close deals.
As a percentage of revenue, selling, general and administrative expense decreased due to the fixed nature of certain of these expenses. Depreciation and amortization expense. Depreciation and amortization expense increased to $16.6 million in 2024 from $13.6 million in 2023, an increase of $3.0 million, or 21.7%.
As a percentage of revenue, selling, general and administrative expense decreased due to the fixed nature of certain of these expenses. Depreciation and amortization expense. Depreciation and amortization expense decreased to $12.1 million in 2025 from $16.6 million in 2024, a decrease of $4.5 million, or 27.1%.
These senior investment sales and financing professionals are on a graduated commission schedule that resets annually, pursuant to which higher commissions are paid for higher sales volumes.
These senior investment sales and financing professionals are on a graduated commission schedule that resets annually, pursuant to which higher commissions are paid for higher sales volumes. During 2024, seasonal fluctuations were disrupted by changes in overall market conditions and interest rates.
See the notes to our consolidated financial statements for a summary of our significant accounting policies. Income Taxes We account for income taxes under the asset and liability method.
Accordingly, these are the policies we believe are the most critical to aid in fully understanding and evaluating our consolidated financial condition and results of operations. See the notes to our consolidated financial statements for a summary of our significant accounting policies. Income Taxes We account for income taxes under the asset and liability method.
These factors include the supply of commercial real estate, coupled with user demand for these properties, and the performance of real estate assets, when compared with other investment alternatives, such as stocks and bonds. All four major property types saw positive space demand in the fourth quarter of 2024 and in the year ended December 31, 2024.
These factors include the supply of commercial real estate, coupled with user demand for these properties, and the performance of real estate assets, when compared with other investment alternatives, such as stocks and bonds.
The above factors create volatility in our effective tax rate from quarter to quarter and have caused our effective tax rates to range from 5.1% to 26.6% over the past three years. We recognize interest and penalties incurred as income tax expense. See Note 12 – “Income Taxes” of our accompanying Notes to Consolidated Financial Statements for additional information.
The above factors create volatility in our effective tax rate from quarter to quarter and have caused our effective tax rates to range from 5.1% to 163.2% over the past three years. 40 Table of Contents We recognize interest and penalties incurred as income tax expense.
The increase was primarily due to increased commission expenses driven by the related increased revenue discussed above. Cost of services as a percentage of total revenue decreased by 100 basis points to 62.0% compared to 2023 primarily due to our senior investment sales and financing professionals earning a lower amount of commissions. Selling, general, and administrative expense.
Cost of services as a percentage of total revenue increased by 30 basis points to 62.3% compared to 2024 primarily due to our senior investment sales and financing professionals earning a higher amount of additional commissions. Selling, general, and administrative expense.
The Company would be liable for this amount only if all of the loans for which it is providing a guarantee to MTRCC were to default and all of the collateral underlying these loans was determined to be without value at the time of settlement, and the Company has recorded an allowance for losses of $174,000 as of December 31, 2024 related to these guarantee obligations.
The maximum guarantee obligation is not representative of the actual loss we would incur. The Company would be liable for this amount only if all of the loans for which it is providing a guarantee to MTRCC were to default and all of the collateral underlying these loans was determined to be without value at the time of settlement.
In applying many of these accounting principles, we make assumptions, estimates and/or judgments that affect the reported amounts of assets, liabilities, revenues and expenses in our consolidated financial statements. We base our estimates and judgments on historical experience and other assumptions that we believe are reasonable under the circumstances.
Critical Accounting Estimates We prepare our financial statements in accordance with U.S. GAAP. In applying many of these accounting principles, we make assumptions, estimates and/or judgments that affect the reported amounts of assets, liabilities, revenues and expenses in our consolidated financial statements.
Other Income, Net Other income, net primarily consists of interest income, realized gains and losses on our marketable debt securities, available-for-sale, net gains or losses on our deferred compensation plan assets, foreign currency gains and losses and other non-operating income and expenses.
Amortization expense consists of amortization recorded on intangible assets amortized on a straight-line basis using a useful life between one and seven years. 32 Table of Contents Other Income, Net Other income, net primarily consists of interest income, realized gains and losses on our marketable debt securities, available-for-sale, net gains or losses on our deferred compensation plan assets, foreign currency gains and losses and other non-operating income and expenses.
Transactions that are terminated before completion will sometimes generate breakage fees, which are usually calculated as a set amount or a percentage of the fee we would have received had the transaction closed.
Transactions that are terminated before completion will sometimes generate breakage fees, which are usually calculated as a set amount or a percentage of the fee we would have received had the transaction closed. 31 Table of Contents Real Estate Brokerage Commissions We earn real estate brokerage commissions by acting as a broker for commercial real estate owners seeking to sell or investors seeking to buy properties.
In the latter part of 2024, the Federal Reserve lowered the overnight rate by 100 basis points to the 4.25%-4.5% range, which was a positive trend for investors, but the 10-year treasury has remained range-bound in the mid- to upper-4% range keeping the cost of debt capital elevated.
In the latter part of 2024, the Federal Reserve lowered the overnight rate by 100 basis points to the 4.25%-4.5% range, and by year-end 2025 the rate was 3.5%-3.75%, the lowest level since 2022. 39 Table of Contents Nonetheless, the 10-year treasury rate has remained range-bound in the low- to mid-4% range, keeping the cost of debt capital elevated.
Financing Activities Cash flows used in financing activities were $28.8 million in 2024 compared to $67.7 million in 2023. The decrease of $38.9 million in cash flows used in financing activities in 2024 compared to 2023 was primarily due to a decrease of $38.7 million in stock repurchases.
Financing Activities Cash flows used in financing activities were $54.6 million in 2025 compared to $28.8 million in 2024. The increase of $25.8 million in cash flows used in financing activities in 2025 compared to 2024 was primarily due to an increase of $24.6 million in stock repurchases.
GAAP and should not be considered as an alternative to net (loss) income, operating (loss) income or any other measures calculated in accordance with U.S. GAAP. Because Adjusted EBITDA is not calculated in the same manner by all companies, it may not be comparable to other similarly titled measures used by other companies.
GAAP. Because Adjusted EBITDA is not calculated in the same manner by all companies, it may not be comparable to other similarly titled measures used by other companies. A reconciliation of the most directly comparable U.S.
As of December 31, 2024, cash, cash equivalents, and restricted cash and marketable debt securities, available-for-sale, aggregated $394.2 million, which includes $10.7 million in restricted cash.
As of December 31, 2025, cash, excluding restricted cash, cash equivalents, and marketable debt securities, available-for-sale, aggregated $386.9 million.
We evaluate our intent to sell, or whether we will more likely than not be required to sell, the security before recovery of its amortized cost basis.
Determining whether a credit loss exists requires a high degree of judgment, and we consider both qualitative and quantitative factors in making our determination. We evaluate our intent to sell, or whether we will more likely than not be 41 Table of Contents required to sell, the security before recovery of its amortized cost basis.
The $0.8 million increase was primarily driven by an increase in interest income as a result of rebalancing the Company's investments to take advantage of higher yields. Interest Expense Interest expense increased by an immaterial amount in 2024 compared to 2023, and primarily relates to interest expense on our SARs liability.
Interest Expense Interest expense decreased by an immaterial amount in 2025 compared to 2024, and primarily relates to interest expense on our SARs liability. Provision (benefit) for Income Taxes The provision for income taxes was $4.9 million in 2025, compared to a benefit for income taxes of $0.7 million in 2024.
These assumptions, estimates and/or judgments, however, are often subjective and our actual results may change based on changing circumstances or changes in our analyses. If actual amounts are ultimately different from our estimates, the revisions are included in our results of operations for the period in which the actual amounts become known.
We base our estimates and judgments on historical experience and other assumptions that we believe are reasonable under the circumstances. These assumptions, estimates and/or judgments, however, are often subjective and our actual results may change based on changing circumstances or changes in our analyses.
Economic indicators and projections related to job growth, unemployment, interest rates, retail spending and consumer confidence trends can have a positive or negative impact on our business. Overall market conditions, including global trade, interest rate changes, inflation, job creation, and global events can affect investor sentiment and, ultimately, the demand for our services from investors in real estate.
Overall market conditions, including global trade, interest rate changes, inflation, job creation, and global events can affect investor sentiment and, ultimately, the demand for our services from investors in real estate. Ongoing changes in U.S. trade and tariff policies combined with uncertainty in geopolitical and fiscal policies have sustained elevated economic headwinds.
We believe that the critical accounting policies discussed below involve a greater degree of judgment or complexity than our other accounting policies. Accordingly, these are the policies we believe are the most critical to aid in fully understanding and evaluating our consolidated financial condition and results of operations.
If actual amounts are ultimately different from our estimates, the revisions are included in our results of operations for the period in which the actual amounts become known. We believe that the critical accounting policies discussed below involve a greater degree of judgment or complexity than our other accounting policies.
The cash flows from operating activities were also affected by the timing of certain cash receipts and payments. Investing Activities Cash flows used in investing activities were $9.9 million in 2024 compared to cash flows provided by investing activities of $74.9 million in 2023.
The $45.0 million increase in cash flows from operating activities in 2025 compared to 2024 was primarily due to a reduction in net losses, as discussed above, and a reduction in advances and loans granted in 2025 compared to 2024. The cash flows from operating activities were also affected by the timing of certain cash receipts and payments.
Ultimately, the market velocity will be dictated by a combination of the economic outlook, geopolitical forces, Federal Reserve action, interest rates and the narrowing of the buyer/seller expectation gap. If interest rates trend lower, we believe commercial real estate investment activity could gain additional momentum.
Accelerated depreciation, pass-through entity deductions, increases in Low Income Housing Tax Credit (LIHTC) allocations, increased SALT deductions and the renewal of Opportunity Zones could benefit commercial real estate investment. Ultimately, market velocity will be dictated by a combination of the economic outlook, financial market trends, geopolitical forces, Federal Reserve action, interest rates and the buyer/seller expectation gap.
Revenue from real estate brokerage commissions increased to $589.7 million in 2024 from $559.8 million in 2023, an increase of $29.9 million, or 5.3%.
Revenue from real estate brokerage commissions increased to $632.5 million in 2025 from $589.7 million in 2024, an increase of $42.8 million, or 7.3%. The increase was primarily attributed to a 3.5% increase in total sales volume and a seven basis point increase in the average commission rate earned.
Cost of services. Cost of services are variable commissions paid to our investment sales professionals and compensation-related costs in connection with our financing activities. Cost of services increased to $431.5 million in 2024 from $406.6 million in 2023, an increase of $24.8 million, or 6.1%.
Cost of services increased by $39.0 million and selling, general, and administrative expenses increased by $5.4 million, partially offset by a decrease of $4.5 million in depreciation and amortization expense as described below. Cost of services. Cost of services are variable commissions paid to our investment sales professionals and compensation-related costs in connection with our financing activities.
The increase was primarily driven by increases in leasing fees during 2024 compared to 2023. Total Operating Expenses Our total operating expenses were $729.0 million in 2024 compared to $705.3 million in 2023, an increase of $23.7 million, or 3.4%. Cost of services increased by $24.8 million and selling, general, and administrative expenses decreased by $4.1 million, as described below.
The decrease was primarily driven by decreases in leasing fees during 2025 compared to 2024. 35 Table of Contents Total Operating Expenses Our total operating expenses were $768.9 million in 2025 compared to $729.0 million in 2024, an increase of $39.9 million, or 5.5%.
Selling, general and administrative expense decreased to $280.9 million in 2024 from $285.0 million in 2023, a decrease of $4.1 million or 1.4%. The decrease was primarily due to a reduction in marketing support costs, partially offset by an increase in compensation-related costs.
Selling, general and administrative expense increased to $286.3 million in 2025 from $280.9 million in 2024, an increase of $5.4 million or 1.9%.
Several of the policies in consideration such as tariffs and more stringent immigration controls have the potential to be inflationary in nature, so future inflation risk may depend on when and how assertively the proposed policies are implemented. Critical Accounting Estimates We prepare our financial statements in accordance with U.S. GAAP.
The Federal Reserve has communicated that they remain cautious pending additional clarity on federal fiscal, trade, tax, regulatory and domestic policies. Several of these policies, such as tariffs and more stringent immigration controls, have the potential to be inflationary in nature. Future inflation risk may depend on the timing and implementation of the proposed policies.
The combination of strengthening space demand and reduced construction suggests key commercial real estate fundamentals could improve steadily in the coming year, supporting investment activity. Capital Markets Credit and liquidity issues in the financial markets have a direct impact on the flow of capital to the commercial real estate market.
If policy clarity emerges, commercial real estate space demand could be reinvigorated. Nonetheless, all commercial real estate property types aside from office properties entered the new cycle on sound footing, suggesting a durable performance outlook. Capital Markets Credit and liquidity issues in the financial markets have a direct impact on the flow of capital to the commercial real estate market.
Material Cash Requirements The following table summarizes current and long-term material cash requirements as of December 31, 2024, which we expect to fund primarily with operating cash flows (in thousands): Total Less than 1 Year 1-3 Years 3-5 Years More Than 5 Years Other (7) Operating lease liabilities, including imputed interest (1) $ 96,645 $ 22,183 $ 36,533 $ 20,976 $ 16,953 $ — SARs liability (principal and interest) (2) 17,545 2,603 3,743 980 10,219 — Deferred commissions payable (3) 40,110 24,502 12,554 1,931 1,123 — Deferred compensation liability (4) 8,304 173 240 238 489 7,164 Contingent consideration (5) 4,731 4,614 117 — — — Deferred consideration (5) 411 411 — — — — Other (6) 16,775 6,980 7,850 550 75 1,320 $ 184,521 $ 61,466 $ 61,037 $ 24,675 $ 28,859 $ 8,484 (1) See Note 4 – “Operating Leases” of our accompanying Notes to Consolidated Financial Statements.
The Company is required to provide cash collateral to MTRCC for this obligation and this is reflected as $1.3 million of restricted cash as of December 31, 2025, which is included in cash, cash equivalents, and restricted cash on the consolidated balance sheet. 38 Table of Contents Material Cash Requirements The following table summarizes current and long-term material cash requirements as of December 31, 2025, which we expect to fund primarily with operating cash flows (in thousands): Total Less than 1 Year 1-3 Years 3-5 Years More Than 5 Years Other (7) Operating lease liabilities, including imputed interest (1) $ 89,304 $ 22,456 $ 34,492 $ 19,903 $ 12,453 $ — SARs liability (principal and interest) (2) 14,647 2,800 1,395 596 9,856 — Deferred commissions payable (3) 32,612 13,992 15,213 2,274 1,133 — Deferred compensation liability (4) 9,786 14 295 617 1,857 7,003 Contingent consideration (5) 720 718 2 — — — Other (6) 9,793 2,600 7,125 — — 68 $ 156,862 $ 42,580 $ 58,522 $ 23,390 $ 25,299 $ 7,071 (1) See Note 4 – “Operating Leases” of our accompanying Notes to Consolidated Financial Statements.
Removed
The economic landscape entering 2025 may change significantly due to the U.S. presidential and congressional elections in 2024 resulting in Republican control of both houses of Congress and the executive branch of government. Dramatic policy changes have the potential to reshape both growth and inflation outlooks, in turn spurring increased uncertainty.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeThe following table sets forth the impact on the fair value of our investments as of December 31, 2024 from changes in interest rates based on the weighted average duration of the debt securities in our portfolio (in thousands): Change in Interest Rates Approximate Change in Fair Value of Investments Increase (Decrease) 2% Decrease ….................. $ 3,555 1% Decrease ….................. $ 1,778 1% Increase ….................. $ (1,778) 2% Increase ….................. $ (3,555) Due to the nature of our business and the manner in which we conduct our operations, we believe we do not face any material interest rate risk with respect to other assets and liabilities, equity price risk or other market risks.
Biggest changeThe following table sets forth the impact on the fair value of our investments as of December 31, 2025 from changes in interest rates based on the weighted average duration of the debt securities in our portfolio (in thousands): Change in Interest Rates Approximate Change in Fair Value of Investments Increase (Decrease) 2% Decrease ….................. $ 6,357 1% Decrease ….................. $ 3,306 1% Increase ….................. $ (3,561) 2% Increase ….................. $ (7,377) Due to the nature of our business and the manner in which we conduct our operations, we believe we do not face any material interest rate risk with respect to other assets and liabilities, equity price risk or other market risks.
We do not use derivatives or similar instruments to manage our interest rate risk. We seek to invest in high quality investments. The weighted average credit rating of our portfolio investments (exclusive of cash, cash equivalents, and restricted cash) was A+ as of December 31, 2024. Maturities are maintained consistent with our short-, medium- and long-term liquidity objectives.
We do not use derivatives or similar instruments to manage our interest rate risk. We seek to invest in high quality investments. The weighted average credit rating of our portfolio investments (exclusive of cash, cash equivalents, and restricted cash) was A+ as of December 31, 2025. Maturities are maintained consistent with our short-, medium- and long-term liquidity objectives.
Changes in prevailing interest rates may adversely or positively impact their fair market value should interest rates generally rise or fall. Accordingly, we also may have interest rate risk with variable interest rate debt securities as the income produced may decrease if interest rates fall.
Changes in prevailing interest rates may adversely or positively 42 Table of Contents impact their fair market value should interest rates generally rise or fall. Accordingly, we also may have interest rate risk with variable interest rate debt securities as the income produced may decrease if interest rates fall.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk We maintain a portfolio of investments in a variety of fixed and variable debt rate securities, including U.S. Treasuries, U.S. government sponsored entities, corporate debt, asset-backed securities and others. As of December 31, 2024, the fair value of investments in marketable debt securities, available-for-sale was $240.8 million.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk We maintain a portfolio of investments in a variety of fixed and variable debt rate securities, including U.S. Treasuries, U.S. government sponsored entities, corporate debt, asset-backed securities and others. As of December 31, 2025, the fair value of investments in marketable debt securities, available-for-sale was $236.3 million.

Other MMI 10-K year-over-year comparisons