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

Hello, and welcome to the Marcus & Millichap, Inc. Annual Meeting of Stockholders. Please note that this meeting is being recorded. [Operator Instructions] The meeting is about to begin. I would like to now turn the meeting over to George Marcus, Chairman of the Board of Directors of Marcus & Millichap, Inc.

Thank you. Welcome to the Annual Stockholders Meeting of Marcus & Millichap, which will now come to order. I am George Marcus, Chairman of the Board of Directors. And as you know, we are holding a virtual meeting again this year. At this time, please allow me to introduce Hessam Nadji, our CEO and a member of the Board of Directors, who will be presiding over the meeting. Hessam has been CEO since 2016 and a key member of the senior management since 1996.

Thank you, George. Let me begin by introducing our directors who are in attendance at this meeting. Of course, George Marcus, our Chairman; Collete English Dixon, Norma Lawrence, Nick McClanahan, Laura Martin -- Lauralee Martin, George Shaheen and Don Watters. Also present on this call are a number of our company officers and representatives from Ernst & Young, the company's independent accountant. This afternoon, our program will proceed as follows: First, I will conduct the official business of the 2025 Annual Meeting. There are certain formalities that we need to fulfill at this meeting. I ask that you bear with us as we go through them. Next, I will provide a short review of our business. The first order of business is an affidavit from Equiniti Trust Company, the company's transfer agent, certifying that each stockholder of record as of March 12, 2025, was 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 has been appointed to serve as Inspector of Elections responsible for the tabulation of the results of the voting. Let me now call on Steve.

Thank you, Mr. Nadji. We have examined the proxies received as of this morning and over 97% of the shares of common stock entitled to vote at this meeting are represented by proxies.

We have a quorum, and this meeting may now proceed. We will address the matters on the agenda shown on your screen. The first matter to be voted upon is the election of the Class III members of the Board of Directors. George Marcus, George Shaheen and Don Watters have been nominated to serve for a 3-year term expiring at the 2028 Annual Meeting of the 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. Board of Directors has appointed Ernst & Young as the company's independent public accounting firm for the year ending December 31, 2025. Ernst & Young has served as our auditors for many years. 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. Finally, we ask our shareholders on an advisory basis to approve the frequency of an advisory vote on executive compensation. We will now open the meeting to any questions about any of the 4 matters placed to be voted on before the stockholders. If you registered with your 11-digit voting control number previously provided by Equiniti and wish to ask questions, you may do so by clicking the chat box located at the top of your screen. Type your questions into the question box found at the bottom of that screen to submit your questions. I will return after waiting a moment for questions if there are any. There are no questions, then we will move forward. We will now proceed to vote on each of these matters. We will be open for further online voting for the next few minutes. It's not necessary for stockholders to vote today if they have already sent in their proxy cards or voted electronically or telephonically, unless they wish to change their vote. Those stockholders who wish to vote today should have received the required 11-digit control number from Equiniti. If you would like to vote today, please click on the proxy voting link located on the left side of your screen and follow the instructions. We will provide additional time for voting, and I will return shortly. [Voting]

I declare the polls closed. I ask the inspector of election, Steve Hoffman, to present the preliminary results of the voting.

Upon tabulation of the preliminary votes, George M. Marcus, George T. Shaheen and Don C. Watters, have been elected as Directors until the 2028 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. And finally, the stockholders approved, on an advisory basis, the frequency of an advisory vote on executive compensation.

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 results will also be reported in a Form 8-K to be filed with the SEC following this meeting. I will now provide a brief update on our business. As we shared on our fourth quarter 2024 earnings call, commercial real estate investment and financing volumes remain hampered by interest rate volatility and constrained lending. These conditions once again challenged our sales force productivity as marketing time lines were extended and many of our transactions required multiple rounds of price adjustments. The company achieved total revenue of nearly $700 million, while our adjusted EBITDA came in at $9.4 million, largely due to expenses related to strategic investments made over the past several years. These include capital invested in top talent retention and acquisition, service expansion such as our auction and loan service and sales division and proprietary technology. Our team closed 7,800 transactions and nearly $50 billion in sales and financing volume last year, keeping MMI the top investment brokerage firm in the industry by transaction count. Our financing team closed transactions with 367 separate lenders, highlighting our ability to add value and solve problems for investors in a challenging market environment. Throughout the market disruption, we've stayed on offense by leveraging our industry-leading research to advise clients on strategy, expanding the MMI brand and helping clients leverage market opportunities. We're also actively pursuing strategic acquisitions in our core business and select adjacent business lines while continuing to invest in the MMI platform and remaining very diligent on cost controls. As of year-end 2024, our capital allocation strategy has resulted in the return of $172 million to shareholders through dividends and share repurchases since the start of these programs in 2022. MMI is positioned very well to leverage the eventual market recovery empowered by our strong balance sheet, tenured sales force and the addition of numerous expenses and teams over the past 3 years. We are confident that our unique client services and long-term focus will lead to share gains and long-term [indiscernible] back over to our Chairman, George Martin. George?

Thank you, Hessam. As always, your presentation is informative and exciting and your extraordinary leadership is much appreciated. And now there being no further business, I come to the meeting of the 2025 Annual Meeting of the Stockholders of Marcus & Millichap is now adjourned. That concludes our meeting today. Thank you for attending the stockholders' meeting.