Marcus & Millichap, Inc. (MMI) Earnings Call Transcript & Summary

Welcome to the Annual Stockholders Meeting of the Marcus & Millichap, Inc., which will now come to order. I am George Marcus, and as the Chairman of the Board of Directors, I will be presiding over the meeting. We are holding a virtual meeting again this year as courtesy to those who may be unable to travel to the annual meeting. Let me begin by introducing our directors who are all here in attendance. Hessam Nadji, Colette Dixon, Norma Lawrence, Nick McClanahan, Lauralee Martin, George Shaheen, and the famous Don Watters. I also present on the call are the number of our company officers and representatives from Ernst & Young and the company's independent accountants. This afternoon, our program will proceed as follows. First, I will conduct the official business of the 2023 Annual Meeting. There are certain formalities that we need to fulfill at this time. I ask that you bear with me so that we'll meet these formalities. Next, after the formal business of the meeting, Hessam Nadji, our Chief Executive Officer, will provide a short review of our business. The first order of business is an affidavit from American Stock Transfer and Trust AST, the company transfers agent, certifying that each stockholder of record as of March 7, 2023, has mailed an official notice -- has been mailed an official notice of this meeting, together with the proxy statement, proxy card, annual report and other materials necessary to vote at this meeting. Steve Hoffman of AST has been appointed to serve our inspector -- to serve as our inspector of elections. He is responsible for the tabulating and the results of the voting. Let me now call on Steve Hoffman.

Thank you, Mr. Chairman. We have examined the proxies received as of this morning, and over 95.5% of the shares of common stock entitled to vote at this meeting are represented by proxy.

Thank you. We have a quorum, and this meeting may now proceed. We will address the matters in the agenda shown on your screen. The first matter to be voted upon is the election of the Class I members of the Board of Directors. Norma Lawrence and Hessam Nadji have been nominated to serve for 3 years -- 3-year term expiring at the 2026 Annual Meeting of Stockholders or until their successors are duly elected and qualified. The second matter to be voted on concerns the appointment of the company's independent auditors. The Board of Directors has appointed Ernst & Young as the company's independent public accounting firm for the year ending December 1, 2023. Ernst & Young has been ably serving our auditors for many years as our auditors. Thirdly, we ask our shareholders on an advisory basis to approve the compensation of the company's named executive officers, as discussed in the proxy statement. We will now open the meeting to any questions about any of the 3 matters before the stockholders. If you register with your 11-digit voting control number previously approved by AST and wish to ask questions, you may do so by clicking that chat box icon located at the top of your screen and then type your question into the question box found at the bottom of the screen to submit your written question. I will return after waiting a minute for questions, if any. There were no questions received. We will now proceed to vote on each of these matters. We will be opening for further Internet voting for the next few minutes. It is not necessary for stockholders to vote today if they have already sent in their proxy cards or voted electronically over the Internet or telephonically, unless they wish to change their vote. Those shareholders who wish to vote today should have received a required 11-digit control number from AST. If you would like to vote today, please click on the proxy voting site link located on the left-hand side of your screen and the following -- and follow the instructions as we will provide additional time for voting, and I will return shortly. I declare that the polls are closed. I ask that the Inspector of the Election, Steve Hoffman to present the preliminary results of the voting.

Upon tabulation of the preliminary votes, Norma J. Lawrence and Hessam Nadji have been elected as directors until the 2026 Annual Meeting. The appointment of Ernst & Young as the company's independent auditor has also been ratified. Additionally, the stockholders approved on an advisory basis, the compensation of the company's named executive officers.

Thank you, and congratulations to our directors on their reelection. I will ask that the report of the Inspector of Elections be filed with the Secretary. The final result will also be reported in a Form 8-K to be filed with the SEC following this meeting. Let me now call on Hessam Nadji, the CEO, to provide a brief update on our business. Hessam, please proceed.

Thank you, George, and good afternoon, everyone. As we reported, 2022 was another record year for MMI with $1.3 billion of revenue, up slightly from the prior record year. We generated adjusted EBITDA of $166 million, the second best in our 52-year history. With over 12,000 transactions and $86.3 billion in sales volume, Marcus Millichap was once again the top investment brokerage firm by transaction count with a leading brand throughout North America. Our tradition of focusing on our clients first and foremost, fostering an internal culture of support and collaboration and maintaining a strong balance sheet, continue to drive our management philosophy. In 2022, we expanded our capital allocation plan by launching a dividend policy and initiating a share repurchase program, resulting in the return of approximately $90 million to our shareholders. Our success can be attributed to various strategic initiatives that have been implemented over the past several years. These include continued dominance of the Private Client segment, which consistently accounts for over 83% of all transactions in the United States; expansion of our institutional and Capital Markets segments; industry-leading research and advisory services that help clients with actionable strategy; substantial advancements in proprietary technology; retention and productivity of our experienced professionals; and last, but certainly not least, accretive acquisition of like-minded boutique brokerage and finance firms. As we face a significant market dislocation caused by the most aggressive financial tightening in 40 years, our focus on long-term success is unwavering. We will continue to invest in the platform and strategic talent acquisition while balancing prudent cost management with capital deployment that enhances our competitive position. As with every market cycle, we are confident that our value-added services and client-centric business model will once again lead to share gains and long-term shareholder value. With that, let me turn it back over to you, George.

Thank you, Hessam. There being no further business to come before the meeting, the 2023 Annual Meeting of Stockholders of Marcus & Millichap, Inc. is now adjourned. That concludes our meeting today. Thank you for attending this stockholder meeting.