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Mar 31, 2020
Marcus & Millichap Q1 2020 Earnings Report
Marcus & Millichap's first quarter results were reported, showing revenue increase but net income decrease due to higher commission payouts and the onset of the health crisis.
Key Takeaways
Marcus & Millichap reported an 18.7% increase in total revenues to $190.7 million for the first quarter of 2020. However, net income decreased to $13.1 million, or $0.33 per share, due to higher commission payouts and the impact of the COVID-19 pandemic in March. The company is implementing expense reductions to maintain financial strength amid the uncertainty.
Total revenues increased by 18.7% to $190.7 million.
Net income was $13.1 million, or $0.33 per diluted common share.
Revenue from financing fees increased by 11.8% to $15.4 million.
Private Client brokerage revenue increased by 19.0% and Larger Transaction brokerage revenue increased 45.7%.
Forward Guidance
The company anticipates that the health crisis will hamper transaction activity for the foreseeable future until the economy gradually re-opens and more clarity emerges.
Positive Outlook
- Leading national brand and market position within the Private Client Market segment.
- Growth opportunities in the Middle Market and Larger Transaction Market segments.
- Significant growth potential in financing division, Marcus & Millichap Capital Corporation.
- Supplementing organic growth through incremental strategic acquisitions.
- Further expansion of investment brokerage services in office, industrial and various specialty property types.
Challenges Ahead
- Slower transaction velocity as a result of the impact of COVID-19.
- Volatility in market sales and investor sentiment.
- Slowdown in market sales in the short- to mid-term.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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