Financial Performance - Revenue reached $145 million, a 12.3% increase year-over-year[13] - Net loss was $(4.4) million, a 55.7% improvement year-over-year[13] - Adjusted EBITDA was $(8.7) million, a 13.3% improvement year-over-year[13] Operational Highlights - Sales volume totaled $9.4 billion, a decrease of 3.5% year-over-year[13] - Transaction closings numbered 1,706, a 9.1% increase year-over-year[13] - The number of investment sales and financing professionals was 1,668 as of March 31, 2025, a 3.1% decrease year-over-year[13] Brokerage Performance - Brokerage sales volume was $6.7 billion, a 17.6% increase year-over-year[14] - Brokerage transaction closings numbered 1,175, a 6.6% increase year-over-year[14] - Real estate brokerage commissions revenue reached $123.6 million, a 12.9% increase year-over-year[14] Financing Performance - Financing sales volume was $1.9 billion, a 16.1% increase year-over-year[16] - Financing transaction closings numbered 337, a 44.0% increase year-over-year[16] - Financing fees revenue reached $18.1 million, a 25.7% increase year-over-year[16]

[Financial & Operational Highlights for Q1 2025](index=1&type=section&id=Marcus%20%26%20Millichap%2C%20Inc.%20Reports%20Results%20for%20First%20Quarter%202025) Marcus & Millichap reported a 12.3% revenue increase to $145.0 million in Q1 2025, narrowing net loss and improving Adjusted EBITDA [Overview of Q1 2025 Performance](index=1&type=section&id=First%20Quarter%202025%20Highlights%20Compared%20to%20First%20Quarter%202024) Q1 2025 saw a 12.3% revenue increase to $145.0 million, with net loss narrowed and Adjusted EBITDA loss improved Q1 2025 vs Q1 2024 Key Financial Metrics | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total Revenue | $145.0 million | $129.1 million | | Brokerage Commissions | $123.6 million | $109.5 million | | Financing Fees | $18.1 million | $14.4 million | | Net Loss | $(4.4) million | $(10.0) million | | Diluted Net Loss per Share | $(0.11) | $(0.26) | | Adjusted EBITDA | $(8.7) million | $(10.1) million | [Management Commentary](index=1&type=section&id=Management%20Commentary) Management attributes improved performance to strategic execution, focusing on client value, talent, and productivity tools - Performance was driven by the expansion of **exclusive inventory**, narrowing of the **bid/ask spread**, and targeted investments in **talent and business development**[3](index=3&type=chunk) - Management acknowledges **market uncertainty** due to **trade policy's** potential impact on inflation and job growth but sees continued **strong capital demand**[3](index=3&type=chunk) - The company's top priorities are enhancing **client value**, investing in **experienced talent**, and deploying tools to increase **sales force productivity**[3](index=3&type=chunk) [Detailed Financial Results](index=2&type=section&id=Detailed%20Financial%20Results) This section analyzes the company's revenue, operating expenses, and profitability for the quarter [Revenue Analysis](index=2&type=section&id=First%20Quarter%202025%20Results%20Compared%20to%20First%20Quarter%202024) Total revenue rose 12.3% to $145.0 million, driven by brokerage commissions and financing fees growth - Real estate brokerage commissions increased by **12.9% YoY**, primarily due to a **17.6% increase in total sales volume**, partially offset by a **7 basis point decrease** in the average commission rate[6](index=6&type=chunk) - Revenue from the combined Middle Market and Larger Transaction Market segments increased by **29.6%**, while Private Client Market revenue grew by **6.2%**[6](index=6&type=chunk) - Financing fees increased by **25.7% YoY**, attributed to a **16.1% increase in financing volume** and an **8 basis point rise** in the average fee rate[7](index=7&type=chunk) [Operating Expenses](index=2&type=section&id=Operating%20Expenses) Total operating expenses increased to $162.7 million, driven by higher cost of services and SG&A - Total operating expenses increased to **$162.7 million**, mainly due to an **$11.5 million rise** in cost of services and a **$2.6 million increase** in SG&A[8](index=8&type=chunk) - Cost of services as a percentage of total revenue increased by **140 basis points** to **60.9%** compared to Q1 2024[8](index=8&type=chunk) - The increase in SG&A was primarily due to **higher compensation-related costs** and increased **investment in business development, marketing, and support for talent acquisition and retention**[9](index=9&type=chunk) [Profitability](index=2&type=section&id=Profitability) The company significantly narrowed its net loss to $4.4 million and improved Adjusted EBITDA loss Profitability Comparison (Q1 2025 vs Q1 2024) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Loss | $(4.4) million | $(10.0) million | | Diluted Net Loss per Share | $(0.11) | $(0.26) | | Adjusted EBITDA | $(8.7) million | $(10.1) million | [Capital Allocation](index=2&type=section&id=Capital%20Allocation) This section details the company's capital return approach through dividends and share repurchases [Dividends and Share Repurchases](index=2&type=section&id=Dividends%20and%20Share%20Repurchases) The company declared a $0.25 semi-annual dividend and repurchased shares, with $65.5 million remaining for buybacks - A semi-annual regular dividend of **$0.25 per share** was declared on February 6, 2025, and paid on April 4, 2025[11](index=11&type=chunk) - In Q1 2025, the Company repurchased **12,538 shares** of common stock for a total of **$0.4 million**[12](index=12&type=chunk) - Approximately **$65.5 million** remains available for share repurchases under the existing program with no set time limit[13](index=13&type=chunk) [Business Outlook and Risk Factors](index=2&type=section&id=Business%20Outlook%20and%20Risk%20Factors) This section outlines market expectations and identifies key factors and risks influencing future business performance [Market Outlook](index=2&type=section&id=Business%20Outlook) The company anticipates near-term market challenges through 2025 but sees long-term growth in Private Client Market consolidation - The company expects **near-term market challenges**, including **price discovery** and **wide bid/ask spreads**, to extend through **2025**[14](index=14&type=chunk) - **Long-term growth opportunities** exist through **consolidation** in the fragmented **Private Client Market**, which represents over **80% of U.S. commercial property transactions** and over **60% of the commission pool**[15](index=15&type=chunk) - In 2024, the **top 10 brokerage firms**, led by **MMI**, had an estimated **19% share** of the **Private Client Market** by transaction count, indicating **significant room for market share gains**[15](index=15&type=chunk) [Key Influencing Factors & Risks](index=4&type=section&id=Key%20factors%20that%20may%20influence%20the%20Company%27s%20business%20during%20the%20remainder%20of%202025) Key risks for 2025 include debt capital volatility, interest rate uncertainty, recession, policy changes, rising expenses, and geopolitical instability - Key factors include **volatility in debt capital costs**, **interest rate uncertainty**, the **heightened bid-ask spread**, and risks of a **potential recession**[20](index=20&type=chunk) - Potential market impact from the **new U.S. presidential administration's tariff, immigration, and other policy changes** is a noted risk[20](index=20&type=chunk) - Other risks include **increases in operating expenses** (labor, insurance, taxes), **global geopolitical uncertainty**, and the ability to **attract and retain qualified professionals**[20](index=20&type=chunk)[25](index=25&type=chunk) [Financial Statements](index=6&type=section&id=Financial%20Statements) This section presents the company's consolidated statements of operations, key operating metrics, and balance sheets [Condensed Consolidated Statements of Operations](index=6&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) The company reported Q1 2025 total revenues of $145.0 million, a net loss of $4.4 million, and a narrowed operating loss Q1 2025 Statement of Operations (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | **Total Revenue** | **$145,038** | **$129,104** | | Real estate brokerage commissions | $123,622 | $109,475 | | Financing fees | $18,130 | $14,427 | | **Total Operating Expenses** | **$162,749** | **$149,206** | | Cost of services | $88,348 | $76,868 | | Selling, general and administrative | $71,552 | $68,916 | | **Operating Loss** | **$(17,711)** | **$(20,102)** | | **Net Loss** | **$(4,422)** | **$(9,987)** | | **Net Loss Per Share, Diluted** | **$(0.11)** | **$(0.26)** | [Key Operating Metrics](index=7&type=section&id=KEY%20OPERATING%20METRICS%20SUMMARY) Q1 2025 saw total sales volume of $9.4 billion across 1,706 transactions, with increased brokerage and financing volumes Real Estate Brokerage Metrics (Q1 2025 vs Q1 2024) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total Number of Transactions | 1,175 | 1,102 | | Total Sales Volume | $6,659 million | $5,661 million | | Average Commission Rate | 1.86% | 1.93% | | Average Transaction Size | $5.67 million | $5.14 million | Financing Metrics (Q1 2025 vs Q1 2024) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total Number of Transactions | 337 | 234 | | Total Financing Volume | $1,928 million | $1,660 million | | Average Fee Rate | 0.75% | 0.67% | | Average Transaction Size | $5.72 million | $7.09 million | Brokerage Revenue by Market Segment (Q1 2025, in thousands) | Market Segment | Revenue | Change vs Q1 2024 | | :--- | :--- | :--- | | Private Client Market ($1-<$10M) | $77,705 | +$4,542 | | Middle Market ($10-<$20M) | $20,889 | +$5,796 | | Larger Transaction Market (≥$20M) | $20,003 | +$3,548 | [Condensed Consolidated Balance Sheets](index=8&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) As of March 31, 2025, total assets were $802.0 million, liabilities $184.5 million, and stockholders' equity $617.6 million Balance Sheet Summary (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash, cash equivalents, and restricted cash | $149,704 | $153,445 | | **Total Current Assets** | **$325,103** | **$410,319** | | **Total Assets** | **$802,024** | **$869,800** | | **Total Current Liabilities** | **$86,247** | **$133,017** | | **Total Liabilities** | **$184,471** | **$238,982** | | **Total Stockholders' Equity** | **$617,553** | **$630,818** | [Non-GAAP Financial Measures & Other Information](index=9&type=section&id=OTHER%20INFORMATION) This section provides reconciliation of non-GAAP financial measures and defines key terms and adjusted metrics [Adjusted EBITDA Reconciliation](index=9&type=section&id=Adjusted%20EBITDA%20Reconciliation) The reconciliation shows Q1 2025 Adjusted EBITDA loss improved to $8.7 million from a net loss of $4.4 million Reconciliation of Net Loss to Adjusted EBITDA (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | **Net loss** | **$(4,422)** | **$(9,987)** | | Interest income and other | $(4,038) | $(4,765) | | Interest expense | $187 | $199 | | Benefit for income taxes | $(9,497) | $(4,746) | | Depreciation and amortization | $2,849 | $3,422 | | Stock-based compensation | $6,179 | $5,795 | | **Adjusted EBITDA** | **$(8,742)** | **$(10,082)** | [Glossary and Adjusted Metrics](index=9&type=section&id=Glossary%20of%20Terms) This section defines key market segments and confirms adjusted brokerage metrics were not impacted by large transactions - The report defines its key transaction markets by value: **Private Client ($1M-<$10M)**, **Middle Market ($10M-<$20M)**, and **Larger Transaction Market (≥$20M)**[37](index=37&type=chunk) - Adjusted metrics for Q1 2025 confirm that there were **no real estate brokerage transactions in excess of $300 million**, meaning the **actual and adjusted metrics for sales volume, commission rate, and transaction size changes are identical**[38](index=38&type=chunk)

Financial Performance - The company experienced a significant decline in revenues in 2024 and 2023 compared to 2022, resulting in operating losses [67]. - The annual inflation rate in the U.S. peaked at 9.1% in June 2022, but decreased to 3.4% in December 2023 and further to 2.9% as of December 2024, impacting client demand for commercial real estate [80]. - Significant fluctuations in revenue and net income may hinder the company's ability to achieve steady earnings growth, impacting stock price stability [148]. - The company plans capital and operating expenditures based on future revenue expectations, which may lead to adverse effects if revenues fall short [149]. Market Conditions - The Federal Reserve raised interest rates by an aggregate of 425 basis points in 2022 and an additional 100 basis points in 2023, contributing to a market slowdown [77]. - Increased interest rates may place downward pressure on commercial real estate prices, negatively impacting investment activity [76]. - The commercial real estate market is cyclical and sensitive to general economic conditions, which have shown significant volatility recently [67]. - The trend of hybrid work has led to lower office real estate occupancy rates, potentially decreasing demand for traditional office spaces [72]. - The availability of debt and equity capital is restricted, which has significantly reduced the volume of commercial real estate transactions since the second half of 2022 [78]. Competition - The company faces intense competition in the commercial real estate industry, particularly in the $1 million to $10 million private client market [56]. - The company faces competition from larger firms and local service providers, which may affect its ability to maintain current fee arrangements and margin levels [84]. Regulatory Environment - The company is subject to numerous federal, state, and local regulations, and non-compliance could result in fines or loss of licenses, impacting operations [89]. - Changes in tax laws, particularly regarding like-kind exchanges, could adversely affect client transactions and subsequently reduce commission income [87]. - The company must continuously enhance its technology infrastructure to remain competitive; failure to do so could negatively impact growth prospects and operational results [122]. - The company is subject to complex and evolving privacy and cybersecurity regulations, which could increase operational costs and compliance risks [131]. Human Resources - The recruitment and retention of qualified investment sales and financing professionals are critical for growth, with competition for talent increasing [95]. - A downturn in the commercial real estate market could lead to a temporary reduction in experienced professionals, complicating recruitment efforts [100]. - The loss of senior management could hinder the execution of the company's business strategy and negatively impact financial performance [101]. - The concentration of sales among top investment sales and financing professionals poses a risk, as they are responsible for a significant percentage of revenue, which could adversely impact the company's financial condition if they leave or if an economic downturn occurs [103]. Client Relationships - Retaining existing clients and developing new ones is critical, as long-term client relationships are essential for revenue generation; failure to do so could adversely affect financial condition [115]. Technology and Cybersecurity - Cybersecurity breaches or disruptions to information technology systems could harm the company's ability to provide services effectively, damaging its reputation and operating results [124]. - The company has experienced an increase in cyber-attack vulnerabilities, including hacking and ransomware, which could compromise sensitive data and impact operations [126]. - The company relies significantly on third-party technologies and data, which may lead to potential disruptions and affect its ability to provide services [125]. - The company's reliance on third-party data storage providers increases exposure to security breaches, which could adversely affect its reputation [129]. Corporate Governance - The founder, George M. Marcus, owns approximately 39% of the company's outstanding common stock, potentially limiting other shareholders' influence on corporate decisions [138]. Growth and Acquisitions - The company plans to expand its specialty groups and financing services, but there is no assurance that these efforts will yield corresponding returns, potentially harming financial condition [108]. - The company’s ability to grow through acquisitions depends on the availability of suitable candidates, and failure to find or successfully negotiate these acquisitions could limit growth [110]. - The company may incur high transaction and integration costs from future acquisitions, which could disrupt business operations and affect financial results [112]. - If the company experiences significant growth, it may face challenges in managing additional demands on its administrative, operational, and financial resources [109]. Financial Risks - The company may need to secure additional financing to meet indemnification obligations under agreements with M&T Realty Capital Corporation, which could impact financial condition [81]. - The company has invested in marketable debt securities, which are subject to risks that could affect its financial condition and cash flows [136]. - Future sales of common stock could depress the market price of shares, impacting the company's ability to raise capital [150]. - The company may issue shares as consideration for future acquisitions, potentially leading to substantial share issuance [151]. - The size of future common stock issuances is unpredictable, and significant sales could adversely affect market prices [152].

Financial Data and Key Metrics Changes - Revenue for Q4 2024 was $240 million, up 44% from $166 million in Q4 2023, with adjusted EBITDA of $18 million and net income of $8.5 million [9][29] - For the full year, revenue grew 8% to approximately $700 million, with adjusted EBITDA of $9.4 million and a net loss of $12 million, an improvement from a net loss of $34 million in the previous year [9][37] Business Line Data and Key Metrics Changes - Brokerage revenue increased by 40% in Q4, with transaction count up 23% and volume growth of 41% [10][30] - Financing revenue nearly doubled in Q4 to $31 million, a 97% increase from $16 million in the previous year [12][33] - The private client business contributed 59% of brokerage revenue in Q4, down from 66% the previous year, while middle market and larger transactions accounted for 38% of brokerage revenue, up from 31% [33] Market Data and Key Metrics Changes - The company closed 7,800 transactions in 2024, reflecting gains of 4% in transaction count and 14% in volume over 2023 [16] - Average transaction size increased to approximately $7 million in Q4 from $6.2 million a year ago, driven by a greater mix of revenue from larger transactions [31] Company Strategy and Development Direction - The company aims to increase investor outreach and client contact while focusing on individual producer productivity and business plans [23][24] - Investments in technology, including AI, are being made to enhance underwriting and support processes [24] - The company is pursuing strategic acquisitions in core and adjacent business lines, although valuation concerns have hindered some potential deals [25][62] Management's Comments on Operating Environment and Future Outlook - Management noted that interest rate volatility remains a significant challenge, impacting buyer and seller engagement [18] - There is cautious optimism for incremental growth in transactions, driven by situational distress and realistic pricing as sellers adjust to market conditions [19][20] - The company expects Q1 2025 revenue to be sequentially lower than Q4 2024, following typical seasonal trends [40] Other Important Information - The company has a strong balance sheet with no debt and $394 million in cash and marketable securities, having returned $170 million to shareholders since 2022 [27][39] - A semi-annual dividend of $0.25 per share was declared, payable on April 4, 2025 [39] Q&A Session Summary Question: Can you discuss the different transaction size buckets for commission revenue and any notable changes in buyers and sellers? - Management highlighted a trend of increased capital in larger transactions, driven by institutional investors and entrepreneurial private investors seeking higher returns [46][48] Question: What impact have the recent fires in Greater LA had on multifamily transactions? - Management noted that insurance costs have risen significantly, affecting operating costs and market sentiment, but overall, the macro view remains favorable for pricing in California [52][54][59] Question: Can you provide updates on external growth opportunities and strategic initiatives? - Management indicated ongoing discussions for strategic acquisitions but noted valuation concerns as a barrier; however, they continue to attract experienced individuals to the firm [60][62] Question: How does the company approach capital allocation between share repurchases, dividends, and investments? - Management stated that their strategy is multi-pronged, balancing investments in technology, M&A, dividends, and share repurchases based on cash flow generation [66][69]

2024 Fourth Quarter 2024 Earnings Conference Call February 14, 2025 FORWARD-LOOKING STATEMENTS This presentation includes forward-looking statements, including our expectations regarding the long-term outlook of the commercial real estate transaction market, and our positioning within it, our belief relating to the Company's long- term growth, our assessment of the key factors influencing the Company's business outlook, including the expectation for future interest rates and likely impact of potential rate ...

Financial Data and Key Metrics Changes - Revenue for the fourth quarter was $240 million, up 44% compared to $166 million last year, with adjusted EBITDA of $18 million and net income of $8.5 million [5][18] - For the full year, revenue grew 8% to approximately $696 million, with a net loss of $12.4 million, significantly improved from a net loss of $34 million last year [5][24] - Adjusted EBITDA for the full year was $9.4 million, compared to a negative $19.6 million in the prior year [24] Business Line Data and Key Metrics Changes - Brokerage revenue increased 40% in the fourth quarter, with transaction count up 23% and volume growth of 41% [5][6] - Financing revenue nearly doubled in the fourth quarter to $31 million, a 97% increase year-over-year [20][21] - The core private client business contributed 59% of brokerage revenue in the fourth quarter, down from 66% the previous year [19][20] Market Data and Key Metrics Changes - The company closed 7,800 transactions with a total volume of $43.6 billion for the year, reflecting gains of 414% in transaction count [10] - Average transaction size increased to approximately $7 million in the fourth quarter, up from $6.2 million a year ago [19] - The ten-year treasury yield dropped to a low of 3.6% in September, which contributed to increased market activity [8] Company Strategy and Development Direction - The company aims to increase investor outreach and client contact while focusing on individual producer productivity [15][16] - Investments in technology, including AI, are being made to enhance underwriting and support processes [15][39] - The company is pursuing strategic acquisitions and partnerships to extend market penetration and enhance service offerings [16][38] Management's Comments on Operating Environment and Future Outlook - Management noted that interest rate volatility remains a significant challenge for closing deals [11] - There is cautious optimism for incremental growth in transactions, driven by situational distress and realistic pricing [12] - The company expects first-quarter revenue to follow seasonal trends and be sequentially lower than Q4 [25][26] Other Important Information - The company has a strong balance sheet with no debt and $394 million in cash and marketable securities [24][17] - A semi-annual dividend of $0.25 per share was declared, amounting to approximately $10 million [25] Q&A Session Summary Question: Can you discuss the different transaction size buckets for commission revenue? - Management highlighted a trend of increased capital in larger transactions, driven by institutional investors and entrepreneurial private investors [30][31] Question: What impact have the recent fires in Greater LA had on multifamily transactions? - Management noted that insurance costs have increased and that there is pressure on operating costs, affecting market sentiment and inventory availability [33][34] Question: Any updates on external growth opportunities or strategic initiatives? - Management indicated ongoing discussions for potential acquisitions but noted valuation concerns as a barrier [37][38] Question: How does the company balance capital allocation between share repurchase and dividends? - Management stated that capital allocation decisions are made opportunistically, with a focus on long-term growth investments [41][42]

Financial Performance - Total revenue for Q4 2024 was $240.1 million, an increase of 44.4% compared to $166.2 million in Q4 2023[6] - Net income for Q4 2024 was $8.5 million, or $0.22 per diluted share, compared to a net loss of $10.2 million, or $0.27 loss per diluted share, in Q4 2023[11] - Total revenue for the full year 2024 was $696.1 million, a 7.8% increase from $645.9 million in 2023[12] - The Company reported a net loss of $12.4 million for 2024, an improvement from a net loss of $34.0 million in 2023[12] - Adjusted EBITDA for Q4 2024 was $18.0 million, compared to $(4.5) million in Q4 2023, reflecting improved operating income[11] - Adjusted EBITDA for Q4 2024 was $18,034,000, compared to a loss of $4,504,000 in Q4 2023[38] - Net income for Q4 2024 was $8,548,000, a significant improvement from a net loss of $10,233,000 in Q4 2023[38] Brokerage and Sales Performance - Brokerage commissions for Q4 2024 reached $202.8 million, a 40.3% increase year-over-year, driven by a 40.8% rise in total sales volume[7] - Total sales volume for Q4 2024 reached approximately $18.4 billion, with 2,485 transactions, including $12.3 billion from real estate brokerage[30] - Total sales volume in the real estate brokerage business increased by 40.8% for the three months ended December 31, 2024[40] - For the year ended December 31, 2024, total sales volume increased by 9.1%[40] Transaction Metrics - The average commission per transaction in real estate brokerage increased to $116,433 in Q4 2024, up from $102,306 in Q4 2023[30] - The average transaction size in real estate brokerage was $7.0 million in Q4 2024, compared to $6.2 million in Q4 2023[30] - Average transaction size in the real estate brokerage business increased by 14.2% for the three months ended December 31, 2024[40] - For the year ended December 31, 2024, average transaction size increased by 9.7%[40] Operating Expenses and Financial Metrics - Total operating expenses for Q4 2024 were $233.4 million, up from $183.4 million in Q4 2023[27] - Interest income and other for Q4 2024 was $(4,987,000), compared to $(4,689,000) in Q4 2023[38] - Depreciation and amortization for Q4 2024 was $5,288,000, up from $3,315,000 in Q4 2023[38] - Stock-based compensation for Q4 2024 was $6,037,000, compared to $8,338,000 in Q4 2023[38] Market and Strategic Focus - The Private Client Market continues to represent over 80% of all commercial property sales transactions, providing long-term growth opportunities[17] - The Company plans to focus on strategic acquisitions and technology investments, including further adoption of A.I., to enhance long-term shareholder value[5] Workforce and Assets - The company had 1,610 investment sales professionals and 102 financing professionals as of December 31, 2024[30] - Total assets decreased to $869.8 million as of December 31, 2024, from $878.4 million in 2023[34] - The total stockholders' equity was $630.8 million as of December 31, 2024, down from $645.3 million in 2023[34]

Core Insights - Probe Gold Inc. has reported successful results from its 2024 MMI soil sampling program at the Detour Quebec Project, identifying strong gold and gold-copper trends extending 15 kilometers southeast of Agnico Eagle's Zone 58N gold deposit [2][4] - The company plans to expand its soil sampling program, conduct follow-up geophysics, and drill-test new targets identified in 2025, emphasizing the project's district-scale potential [2][4] Company Overview - Probe Gold Inc. is focused on the acquisition, exploration, and development of gold properties, owning 100% of the multimillion-ounce Novador Gold Project and the early-stage Detour Gold Quebec project [10] - The Detour Quebec Project covers an area of 777 square kilometers along the Detour Gold Trend, located 190 kilometers north of Rouyn-Noranda, Quebec [5] Exploration Activities - The 2024 MMI soil sampling program involved 2,451 samples taken systematically to identify additional zones of gold mineralization along the Lower Detour Deformation Zone and Zone 58N shear splay [2][4] - The soil sampling results have delineated numerous subparallel trends correlating with IP anomalies from the company's 2023 geophysical survey, which have not yet been drill-tested [2][3] Structural Analysis - SRK Consulting is conducting a magnetic structural interpretation over the extension of the Zone 58N shear splay and soil sampling grid, aiming to improve the geological understanding of the Au mineralized zone [3] - The structural analysis has established fault structures of various orders, which will assist in identifying highly prospective areas for the upcoming drilling program [3] Future Plans - The company intends to prioritize the Detour project in its regional exploration strategy for 2025, with plans for an expanded soil program and follow-up drilling based on the promising results obtained [2][4]

Financial Performance - As of September 30, 2024, the company closed 1,987 investment sales and financing transactions with a total sales volume of approximately $12.0 billion for the three months ended, and 5,351 transactions with a total sales volume of approximately $31.2 billion for the nine months ended [131]. - Total revenue for the three months ended September 30, 2024, was $168.5 million, an increase of $6.5 million, or 4.0%, compared to $162.0 million for the same period in 2023 [177]. - Total revenue for the nine months ended September 30, 2024, was $456.0 million, a decrease of $23.7 million, or 4.9%, compared to $479.7 million for the same period in 2023 [192]. - The operating loss for the three months ended September 30, 2024, was $(11.5) million, a decrease of $3.966 million, or 25.7%, compared to $(15.4) million for the same period in 2023 [182]. - Net loss for the three months ended September 30, 2024, was $(5.4) million, a decrease of $3.855 million, or 41.7%, compared to $(9.2) million for the same period in 2023 [182]. Revenue Breakdown - Approximately 84% of the company's revenue during the three months ended September 30, 2024, was generated from real estate brokerage commissions, 12% from financing fees, and 4% from other real estate-related services [132]. - Revenue from real estate brokerage commissions increased to $142.0 million, up $2.2 million, or 1.5%, driven by a 14.7% increase in total sales volume [178]. - Financing fees revenue rose to $20.6 million, an increase of $3.3 million, or 19.3%, due to a 12.0% increase in total financing volume [179]. - Other revenue increased to $6.0 million, up $1.0 million, or 20.3%, primarily from an increase in consulting fees [180]. Market Trends - The private client market (properties priced from $1 million to less than $10 million) contributed approximately 62% of real estate brokerage commissions during the three months ended September 30, 2024 [134]. - The company reported a decrease in the number of transactions in the private client market, with 957 transactions in Q3 2024 compared to 1,014 in Q3 2023, reflecting a decline of 5.6% [136]. - The total revenue from the private client market for the nine months ended September 30, 2024, was $245.5 million, down from $278.2 million in the same period of 2023, representing a decrease of 11.8% [137]. - The commercial real estate sector experienced below-average sales activity in Q3 2024, with total sales volume of approximately $12.0 billion, compared to $11.4 billion in Q3 2023 [171]. Economic Outlook - The company anticipates modest economic growth through the remainder of 2024 and into 2025, driven by a "soft landing" economic forecast [142]. - The Consumer Price Index (CPI) registered 2.4% and the Personal Consumption Expenditure (PCE) index was at 2.1% in September 2024, indicating a downward trend in inflation [143]. Operational Metrics - The average commission per transaction increased to $106,664 in Q3 2024 from $102,731 in Q3 2023, while the average commission rate decreased to 1.66% from 1.88% [171]. - The total number of transactions closed in Q3 2024 was 1,331, slightly down from 1,361 in Q3 2023 [171]. - The average number of financing professionals increased to 103 in Q3 2024 from 96 in Q3 2023, with total financing volume rising to $2,134 million from $1,906 million [174]. - The average transaction size for real estate brokerage increased to $6,407, compared to $5,462 in Q3 2023 [171]. Expenses and Losses - Total operating expenses for the three months ended September 30, 2024, were $180.0 million, an increase of $2.5 million, or 1.4%, compared to $177.5 million for the same period in 2023 [182]. - Revenue from real estate brokerage commissions for the nine months ended September 30, 2024, decreased to $386.9 million, down $28.3 million, or 6.8% [193]. - Adjusted EBITDA for the nine months ended September 30, 2024, was $(8.7) million, an improvement of $6.464 million, or 42.7%, compared to $(15.1) million for the same period in 2023 [191]. Cash Flow and Investments - Cash flows used in operating activities were $34.9 million for the nine months ended September 30, 2024, compared to $87.1 million for the same period in 2023, a decrease of $52.2 million [206]. - Cash flows provided by investing activities were $55.3 million for the nine months ended September 30, 2024, compared to $128.7 million for the same period in 2023, a decrease of $73.4 million [209]. - Cash flows used in financing activities were $18.3 million for the nine months ended September 30, 2024, compared to $53.3 million for the same period in 2023, a decrease of $35.0 million [210]. - As of September 30, 2024, cash, excluding restricted cash, cash equivalents, and marketable debt securities, aggregated $338.3 million [211]. Interest Rate and Market Risks - The market liquidity has been restrained due to sustained higher interest rates and tighter lender underwriting, impacting investor demand and transaction activity [149]. - The Federal Reserve's 50 basis point rate reduction in September improved investor sentiment, but the subsequent increase in the 10-year treasury rate negatively impacted borrowing rates [151]. - The company does not face material interest rate risk with respect to other assets and liabilities, equity price risk, or other market risks [220]. - The investment portfolio predominantly consists of fixed interest rate debt securities, with some variable interest rate debt securities [220]. Foreign Currency and Investment Strategy - The functional currency of the Canadian operations is the Canadian dollar, exposing the company to foreign currency exchange rate risk [222]. - The primary objective of the investment activity is to maintain the safety of principal while maximizing yields without significantly increasing risk [219]. - The company may choose to sell securities for strategic reasons, including anticipated capital requirements and yield management [219].

Financial Data and Key Metrics Changes - Revenue for Q3 2024 was $169 million, up 4% year-over-year, marking the first quarter of year-over-year revenue growth since the market disruption began two years ago [11][31] - Adjusted EBITDA improved to breakeven compared to a loss of $6.6 million in the prior year [44] - The net loss for the quarter was $5.4 million or $0.14 per share, an improvement from a net loss of $9.2 million or $0.24 per share last year [43] Business Line Data and Key Metrics Changes - Real estate brokerage commissions for Q3 were $142 million, accounting for 84% of total revenue, a 2% increase year-over-year [32] - Financing segment revenue grew 19% to $21 million during Q3, with 318 financing transactions totaling $2.1 billion in volume [37] - Private Client segment contributed 62% of brokerage revenue, down from 65% last year, with a 9% decrease in dollar volume [34] Market Data and Key Metrics Changes - Private client revenue declined 4.3% year-over-year, while middle market and larger transaction revenue increased by 4% and 23.5%, respectively [15] - The average transaction size during Q3 was approximately $6.4 million, up 17% from $5.5 million a year ago [33] - Total sales volume for the nine-month period was $21.4 billion across 3,705 transactions, down 3% year-over-year [33] Company Strategy and Development Direction - The company is focused on a dual strategy of acquiring experienced talent and organic hiring to strengthen its market position [23][29] - Continued investment in proprietary technology and client services is a priority, alongside pursuing strategic acquisition targets [30][47] - The company aims to enhance its platform and maximize productivity to drive growth and increase market share [29] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about a market recovery, despite challenges from interest rate volatility and restrictive lending [48] - The effective tax rate for the quarter was 15%, with expectations for the full year between 13% and 16% [45] - The company anticipates productivity improvements as interest rates stabilize, supporting a positive outlook for commercial real estate demand [26][28] Other Important Information - The company closed over 1,300 brokerage transactions totaling $8.5 billion in volume during the quarter [19] - Total operating expenses for Q3 were $180 million, a 1% increase year-over-year, while year-to-date expenses were down 5% [39] - The company maintains a strong balance sheet with no debt and $349 million in cash and marketable securities [45] Q&A Session Summary Question: Can you talk about the financing environment for commercial real estate deals, especially for the Private Client markets? - Management noted a gradual easing by banks and credit unions, but obtaining financing for smaller transactions remains challenging due to conservative lending practices [51][52] Question: Do you think we can get back to a long-term average run rate sometime in 2025? - Management believes the market is currently 35% to 40% below long-term averages but is confident it will recover, albeit gradually [59][60] Question: Are there any potential changes to laws or regulations specific to commercial real estate that could impact the sector? - Management highlighted ongoing discussions around the 1031 Exchange Tax and expressed optimism about the election outcome being favorable for real estate and economic growth [68][70] Question: Can you give an update on the opportunity set with respect to M&A? - Management is focused on acquiring teams and boutiques that fit into their brokerage operations and is also exploring complementary businesses such as appraisal and investment management [75][76]