Marcus & Millichap (MMI) Q1 2025 Earnings Call May 07, 2025 10:30 AM ET Company Participants None - ExecutiveHessam Nadji - President and CEOSteve Degennaro - Executive VP & CFO Conference Call Participants Young Ku - Equity Research Analyst Operator Greetings, and welcome to Marcus and Millichap's first quarter twenty twenty five earnings conference call. As a reminder, this call is being recorded. I would now like to turn the conference over to your host, Yac Korne. Thank you. You may begin. None Thank yo ...

Marcus & Millichap (MMI) Q1 2025 Earnings Call May 07, 2025 10:30 AM ET Speaker0 Greetings, and welcome to Marcus and Millichap's first quarter twenty twenty five earnings conference call. As a reminder, this call is being recorded. I would now like to turn the conference over to your host, Yac Korne. Thank you. You may begin. Speaker1 Thank you, operator. Good morning, and welcome to Marcus and Millichap's First Quarter twenty twenty five Earnings Conference Call. With us today are President and Chief Exec ...

Core Insights - The company reported a slight improvement in its second quarter results, reflecting some recovery in the Capital Markets industry, although still below 2023 levels [2][3] - The company plans to pursue initiatives to expand its business portfolio while growing its Wealth Management, Commercial Lending, and Capital Markets operations [2][3] Financial Performance - Q2 revenue reached $2,854,000, marking a 53% increase year-over-year [8] - The company reported a net loss of $(1,312,000) or $(0.02) per share for Q2 [8] - Adjusted net loss for Q2 was $(421,000) or $(0.01) per share, with EBITDA at $(690,000) compared to $(441,000) in the same quarter last year [8] Corporate Developments - The company is exploring opportunities to diversify revenue sources through strategic investments in both complementary and non-core sectors [9] - The purchase of subordinate voting shares by the Executive Chairman constitutes a related party transaction but is exempt from shareholder approval due to the fair market value being less than 25% of the company's market capitalization [5]

Financial Data and Key Metrics Changes - The company reported diluted earnings per share of $7.94, a 34.8% increase year-over-year, and adjusted diluted earnings of $7.66, a 25.4% increase, marking the first quarterly year-over-year adjusted earnings increase since Q4 2022 [7][10]. - Total revenues grew to a record $9.2 billion, a 7% increase from Q1 of the previous year [10]. - Adjusted SG&A as a percentage of gross profit was 68.2%, a 120 basis point decline from the prior year [42]. Business Line Data and Key Metrics Changes - New vehicle units increased by 3.6% year-over-year, while total unit sales increased by 1.5% [33]. - After-sales gross profit increased by 7.5%, with warranty work showing a 19.7% year-over-year increase [37][38]. - Financing operations delivered income of $12.5 million compared to a loss of $1.7 million in the same period last year [44]. Market Data and Key Metrics Changes - The company operates within one of the largest and least consolidated industries, with a current market share of just over 1% and a target of reaching 5% [24][17]. - The diversified omnichannel ecosystem spans retail, digital, and fleet channels across North America and the UK, with offerings ranging from new vehicles to twenty-year-old value autos [13]. Company Strategy and Development Direction - The focus for 2025 is on executing the strategy to build customer loyalty and expand market share, with a commitment to achieving $2 in EPS for every $1 billion in revenue [10][20]. - The company aims to maintain a balanced capital allocation strategy, targeting a minimum after-tax return of 15% on acquisitions [21][23]. - The strategy includes optimizing the network by acquiring larger automotive retail stores in profitable regions and leveraging digital channels [24][26]. Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to deliver sustainable performance and capture market share despite potential tariff impacts [10][12]. - The management noted that the operational success is driven by store leaders' autonomy to adapt quickly to local demand [11][12]. - The company remains focused on disciplined cost management and enhancing efficiencies across the business [41][43]. Other Important Information - The company repurchased $146 million, or nearly 2% of its outstanding shares, at attractive valuations during the first quarter [23]. - The company ended the quarter with a net leverage of 2.5 times, in line with its long-term target [51]. Q&A Session Summary Question: Current tariff environment and its impact - Management noted that over 45% of inventory is not impacted by current tariffs, positioning the company favorably compared to peers [59]. - Inventory levels have decreased significantly, with a drop of almost ten days supply quarter-over-quarter [60]. Question: Communication with factory partners and M&A environment - There has been clear communication from manufacturers regarding pricing stability through the 2025 model year, with no major changes in the M&A environment noted [74]. Question: Expectations for front-end gross profit and market share - Management indicated that the design of the ecosystem allows for a potential upward price inflection rather than downward, with expectations for used vehicle gross profit to grow over time [80][82]. Question: Impact of tariffs on after-sales business - Management believes that most customers will need to repair their cars regardless of tariffs, minimizing the impact on the after-sales business [110][112]. Question: Capital allocation and acquisition targets - The company is targeting $2 billion in acquired revenues for the year, with ongoing evaluations of share repurchases and acquisitions [114].

Marcus & Millichap (MMI) Q4 2024 Earnings Call February 14, 2025 10:30 AM ET Company Participants Jacques Cornet - PartnerHessam Nadji - President and CEOSteve Degennaro - Executive VP & CFO Conference Call Participants Jason Belcher - Analyst Operator Greetings, and welcome to Marcus and Millichap's Fourth Quarter and Year End twenty twenty four Earnings Conference Call. As a reminder, this call is being recorded. I would now like to turn the conference over to your host, Jacques Cornet. Thank you. You may ...