Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-36155 MARCUS & MILLICHAP, INC. (Exact name of registrant as specified in its Charter) (State or Other Juris ...

Marcus & Millichap, Inc. (NYSE:MMI) Q3 2020 Earnings Conference Call November 5, 2020 5:00 PM ET Company Participants Evelyn Infurna - Managing Director, ICR Hessam Nadji - President & Chief Executive Officer Steve Degennaro - Chief Financial Officer Conference Call Participants Blaine Heck - Wells Fargo Operator Thank you for standing by. This is the conference operator. Welcome to Marcus & Millichap's Third Quarter 2020 Earnings Conference Call. As a reminder all participants are in a listen mode and the ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-36155 MARCUS & MILLICHAP, INC. (Exact name of registrant as specified in its Charter) Delaware 35-2478370 (State ...

Financial Data and Key Metrics Changes - Total revenue for Q2 2020 declined 44% year-over-year to $117 million, reflecting a broad-based decline across all business lines due to the health crisis [38][11] - Revenue from real estate brokerage commissions, which accounted for 88% of total revenue, fell 45% to $103 million, while financing fees decreased 28% to approximately $13 million [38][11] - Adjusted EBITDA decreased by 87% to $4.2 million, with an adjusted EBITDA margin of 3.5% [51][38] - The company finished the quarter with approximately $322 million in cash and cash equivalents, indicating strong liquidity levels [52] Business Line Data and Key Metrics Changes - Private client brokerage revenue declined 45% to approximately $71 million, with transactions falling by 43% [39] - Revenue from larger brokerage transactions contracted to $16.4 million, reflecting a smaller decrease of 37% [39] - Financing fees from private client and middle market segments reflected moderate declines of 2.6% and 6.5% respectively, while financing fees from larger transactions declined 50% [42][41] Market Data and Key Metrics Changes - Overall transaction volume in the marketplace dropped by 60% year-over-year, with total sales volume for the quarter at $6.9 billion, a 47% decline from last year [11][44] - Occupancy and rent collections were better than expected, particularly for apartments, industrial, and office properties [24] - The bid/ask spread has widened significantly across various property types, with single-tenant and necessity retail performing better than shopping centers and hotels [23] Company Strategy and Development Direction - The company is focused on preserving its strong balance sheet while pursuing strategic acquisitions and infrastructure investments [13][20] - Ongoing hiring through virtual means has added 83 professionals, a 4% increase in the sales force over the past year [19] - The company is actively pursuing strategic acquisitions with adjusted underwriting to accommodate current market conditions [20] Management's Comments on Operating Environment and Future Outlook - The health crisis has created significant uncertainty in the commercial real estate market, impacting asset valuations and transaction volumes [10] - Management believes that the eventual release of pent-up demand will lead to a robust recovery in real estate transactions [18] - The company anticipates that the cadence of transactions will be slightly lower in the third quarter due to ongoing market disruptions [55] Other Important Information - The company has launched a comprehensive internal training program to support brokers during the pandemic [15] - The CFO transition is set to occur with Steve Degennaro taking over effective August 17, bringing a technology-oriented skill set to the leadership team [35][36] Q&A Session Summary Question: Competition faced by agents in the current market - Management noted that competition is constant, but the company has maintained strong client relationships, allowing them to complete nearly 1,600 transactions in the quarter, indicating market share gains [61][62] Question: Opportunities for business acquisitions - Management indicated that many companies previously hesitant to engage are now reconsidering due to the company's leadership role and branding during the crisis [63][66] Question: Headcount retention and recruitment post-pandemic - Management acknowledged that while they are seeing better net headcount growth, the challenging environment may increase turnover rates among newer agents [78] Question: Client outreach and marketing efforts - Management reported that client engagement has been strong, with record attendance at webcasts, indicating a continued need for information and guidance [81][82] Question: Impact of 1031 exchanges on transactions - Management confirmed that 1031 exchanges remain an important part of their business, typically accounting for about 25% of transactions, and they are not overly concerned about potential changes to this tax benefit [84][86]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-36155 MARCUS & MILLICHAP, INC. (Exact name of registrant as specified in its Charter) Delaware 35-2478370 (Stat ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2019 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to . Commission File Number 001-36155 MARCUS & MILLICHAP, INC. (Exact name of registrant as specified in its charter) Delaware 35-2478370 (State ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2019 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-36155 MARCUS & MILLICHAP, INC. (Exact name of registrant as specified in its Charter) Delaware 35-2478370 ( ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2019 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-36155 MARCUS & MILLICHAP, INC. (Exact name of registrant as specified in its Charter) Delaware 35-2478370 (State ...

PART I [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) For Q1 2019, Marcus & Millichap reported total revenues of **$160.7 million**, a 7.9% decrease, and net income of **$15.6 million**, a 13.2% decrease, with cash and cash equivalents declining by **$16.6 million** due to operating activities and the balance sheet reflecting new lease accounting standards [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2019, total assets increased to **$603.5 million** from **$566.4 million** at year-end 2018, primarily due to the adoption of a new lease accounting standard which added **$83.9 million** in operating lease right-of-use assets, while total liabilities rose to **$177.4 million** and stockholders' equity grew to **$426.1 million** Condensed Consolidated Balance Sheet Highlights (in thousands) | Balance Sheet Item | March 31, 2019 (Unaudited) | December 31, 2018 | | :--- | :--- | :--- | | Cash and cash equivalents | $198,132 | $214,683 | | Operating lease right-of-use assets, net | $83,913 | $— | | **Total assets** | **$603,516** | **$566,380** | | Operating lease liabilities | $75,852 | $— | | **Total liabilities** | **$177,424** | **$156,806** | | **Total stockholders' equity** | **$426,092** | **$409,574** | - The significant increase in assets and liabilities is primarily due to the adoption of a **new lease accounting standard**, resulting in the recognition of **operating lease right-of-use assets** and corresponding **lease liabilities** on the balance sheet for the first time[11](index=11&type=chunk)[38](index=38&type=chunk) [Condensed Consolidated Statements of Net and Comprehensive Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Net%20and%20Comprehensive%20Income) For Q1 2019, total revenues decreased **7.9%** to **$160.7 million**, operating income fell **22.1%** to **$18.3 million**, and net income declined **13.2%** to **$15.6 million**, resulting in diluted earnings per share of **$0.40** Q1 2019 vs Q1 2018 Performance (in thousands, except per share amounts) | Metric | Three Months Ended March 31, 2019 | Three Months Ended March 31, 2018 | % Change | | :--- | :--- | :--- | :--- | | Real estate brokerage commissions | $144,937 | $162,525 | (10.8)% | | Financing fees | $13,732 | $9,724 | 41.2% | | **Total revenues** | **$160,707** | **$174,541** | **(7.9)%** | | Operating income | $18,269 | $23,464 | (22.1)% | | **Net income** | **$15,638** | **$18,011** | **(13.2)%** | | Diluted EPS | $0.40 | $0.46 | (13.0)% | [Condensed Consolidated Statements of Stockholders' Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders%27%20Equity) Total stockholders' equity increased from **$409.6 million** at year-end 2018 to **$426.1 million** as of March 31, 2019, primarily driven by **$15.6 million** in net income and **$2.3 million** in stock-based compensation - Stockholders' equity increased by **$16.5 million** during Q1 2019, primarily due to **$15.6 million** in net income and **$0.8 million** in other comprehensive income[16](index=16&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For Q1 2019, net cash used in operating activities was **$38.6 million**, a significant increase from the prior year, while net cash provided by investing activities was **$24.1 million**, leading to an overall **$16.6 million** decrease in cash and cash equivalents Summary of Cash Flows (in thousands) | Cash Flow Activity | Three Months Ended March 31, 2019 | Three Months Ended March 31, 2018 | | :--- | :--- | :--- | | Net cash used in operating activities | $(38,598) | $(12,989) | | Net cash provided by (used in) investing activities | $24,073 | $(6,777) | | Net cash used in financing activities | $(2,026) | $(1,650) | | **Net decrease in cash and cash equivalents** | **$(16,551)** | **$(21,416)** | | Cash and cash equivalents at end of period | $198,132 | $199,370 | [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes detail the company's accounting policies, including the significant adoption of the **new lease standard (ASU 2016-02)**, which materially impacted the balance sheet, and highlight the **$60 million credit facility** which remained undrawn - The company adopted the **new lease standard ASU 2016-02** effective January 1, 2019, resulting in the recognition of Right-of-Use (ROU) assets and lease liabilities of **$76.7 million** upon adoption[38](index=38&type=chunk) - As of March 31, 2019, the company had a **$60.0 million** senior secured revolving credit facility, with no amounts outstanding[117](index=117&type=chunk)[118](index=118&type=chunk) - The company's effective tax rate for Q1 2019 was **26.6%**, an increase from **25.9%** in Q1 2018[112](index=112&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes the **7.9%** decline in Q1 2019 revenue to a **10.8%** decrease in real estate brokerage commissions, partially offset by a **41.2%** increase in financing fees, while net income and Adjusted EBITDA declined by **13.2%** and **15.6%** respectively, with liquidity remaining strong at **$198.1 million** in cash Q1 2019 vs Q1 2018 Key Financial Results (in thousands) | Metric | Q1 2019 | Q1 2018 | % Change | | :--- | :--- | :--- | :--- | | Total revenues | $160,707 | $174,541 | (7.9)% | | Operating income | $18,269 | $23,464 | (22.1)% | | Net income | $15,638 | $18,011 | (13.2)% | | Adjusted EBITDA | $23,159 | $27,433 | (15.6)% | - The decrease in real estate brokerage commissions was primarily driven by a **10.3%** decrease in sales volume, as the average commission rate remained relatively stable[161](index=161&type=chunk) - Financing fees increased by **41.2%**, driven by a **19.8%** increase in the number of financing transactions and a **21.0%** increase in average transaction size[162](index=162&type=chunk) - The company's strength remains in the private client market (**$1-$10 million** properties), which contributed approximately **66%** of real estate brokerage commissions during the quarter[128](index=128&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=36&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is interest rate risk on its **$196.1 million** investment portfolio, where a **1%** increase in interest rates would decrease fair value by approximately **$2.5 million**, while foreign currency risk is not material - The company's main market risk is interest rate risk on its **$196.1 million** portfolio of marketable securities[198](index=198&type=chunk) Interest Rate Sensitivity on Investment Portfolio (as of March 31, 2019) | Change in Interest Rates | Approximate Change in Fair Value of Investments (in thousands) | | :--- | :--- | | 1% Increase | $(2,451) | | 2% Increase | $(4,902) | | 1% Decrease | $2,452 | | 2% Decrease | $4,904 | [Item 4. Controls and Procedures](index=37&type=section&id=Item%204.%20Controls%20and%20Procedures) As of March 31, 2019, the CEO and CFO concluded that disclosure controls and procedures were effective, with no material changes in internal control over financial reporting during Q1 2019 - Management, including the CEO and CFO, concluded that as of March 31, 2019, the company's disclosure controls and procedures were **effective**[201](index=201&type=chunk) - **No changes** in internal control over financial reporting occurred during the quarter ended March 31, 2019, that have materially affected, or are reasonably likely to materially affect, internal controls[203](index=203&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=38&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various ordinary course legal actions, which management does not expect to have a material adverse effect on its financial position, results of operations, or cash flows - The company is involved in ordinary course legal actions, but does not expect them to have a **material adverse effect** on its financial condition[205](index=205&type=chunk) [Item 1A. Risk Factors](index=38&type=section&id=Item%201A.%20Risk%20Factors) No material changes have occurred to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2018 - **No material changes** from the risk factors described in the Annual Report on Form 10-K for the year ended December 31, 2018 have occurred[206](index=206&type=chunk) [Item 6. Exhibits](index=39&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including amendments to the credit agreement and CEO/CFO certifications required by the Sarbanes-Oxley Act - Exhibits filed include the **Fourth Amendment to the Credit Agreement** and **CEO/CFO certifications** pursuant to **Sarbanes-Oxley Sections 302 and 906**[211](index=211&type=chunk)

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2018 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to . Commission File Number 001-36155 MARCUS & MILLICHAP, INC. (Exact name of registrant as specified in its charter) (State or other jurisdictio ...