# Marcus & Millichap, Inc.: Form 10-Q for the period ended Sep 30, 2025

- Company: [Marcus & Millichap, Inc.](/companies/mmi.md) (CIK 1578732)
- Form: 10-Q
- Filed: 2025-11-07
- Accepted by EDGAR: Nov 7, 2025, 17:06 ET
- Period: 2025-09-30
- Accession: 0001628280-25-050707
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1578732/000162828025050707/mmi-20250930.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1578732/000162828025050707/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2025-09-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2025-07-01 to 2025-09-30 | $193.9m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Revenue | 9 months, 2025-01-01 to 2025-09-30 | $511.2m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Selling, general and administrative | 3 months, 2025-07-01 to 2025-09-30 | $72.5m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Selling, general and administrative | 9 months, 2025-01-01 to 2025-09-30 | $215.6m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Operating income | 3 months, 2025-07-01 to 2025-09-30 | −$2.4m | us-gaap:OperatingIncomeLoss |
| Operating income | 9 months, 2025-01-01 to 2025-09-30 | −$29.1m | us-gaap:OperatingIncomeLoss |
| Interest expense | 3 months, 2025-07-01 to 2025-09-30 | $197.0k | us-gaap:InterestExpenseNonoperating |
| Interest expense | 9 months, 2025-01-01 to 2025-09-30 | $584.0k | us-gaap:InterestExpenseNonoperating |
| Income tax | 3 months, 2025-07-01 to 2025-09-30 | $1.2m | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 9 months, 2025-01-01 to 2025-09-30 | −$979.0k | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2025-07-01 to 2025-09-30 | $240.0k | us-gaap:NetIncomeLoss |
| Net income | 9 months, 2025-01-01 to 2025-09-30 | −$15.2m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2025-07-01 to 2025-09-30 | $0.01 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 9 months, 2025-01-01 to 2025-09-30 | −$0.39 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2025-07-01 to 2025-09-30 | $0.01 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 9 months, 2025-01-01 to 2025-09-30 | −$0.39 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2025-07-01 to 2025-09-30 | 39,175,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 9 months, 2025-01-01 to 2025-09-30 | 38,982,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 9 months, 2025-01-01 to 2025-09-30 | $20.4m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 9 months, 2025-01-01 to 2025-09-30 | $5.5m | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Dividends paid | 9 months, 2025-01-01 to 2025-09-30 | $10.8m | us-gaap:PaymentsOfDividends |
| Share repurchases | 9 months, 2025-01-01 to 2025-09-30 | $8.0m | us-gaap:PaymentsForRepurchaseOfCommonStock |
| Current assets | at 2025-09-30 | $309.8m | us-gaap:AssetsCurrent |
| Total assets | at 2025-09-30 | $812.5m | us-gaap:Assets |
| Current liabilities | at 2025-09-30 | $113.2m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2025-09-30 | $210.3m | us-gaap:Liabilities |
| Shareholders' equity | at 2025-09-30 | $602.2m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 61,342 characters.

*Unless the context requires otherwise, the words “Marcus & Millichap,” “MMI,” “we,” the “Company,” “us” and “our” refer to Marcus & Millichap, Inc., and its consolidated subsidiaries.*

### Forward-Looking Statements

This Quarterly Report on Form 10-Q includes forward-looking statements, including our expectations regarding the long-term outlook of the commercial real estate transaction market and our positioning within it, our belief relating to the Company’s long-term growth, our assessment of the key factors influencing the Company’s business outlook, including the expectation for future interest rate cuts or rising inflation and likely impact of such cuts or inflation on commercial real estate demand, and the execution of our capital return program, including a semi-annual dividend and stock repurchase program. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends affecting the financial condition of our business. Forward-looking statements should not be read as a guarantee of future performance or results and will not necessarily be accurate indications of the times at, or by, which such performance or results may be achieved. Forward-looking statements are based on information available at the time those statements are made and/or management’s good faith belief as of that time with respect to future events and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. Important factors that could cause such differences include, but are not limited to:

- general uncertainty in the capital markets, a worsening of economic conditions, and the rate and pace of economic recovery following an economic downturn;
- changes in our business operations;
- market trends in the commercial real estate market or the general economy, including the impact of inflation and changes to interest rates;
- our ability to attract and retain qualified senior executives, managers, and investment sales and financing professionals;
- the impact of forgivable loans and related expense resulting from the recruitment and retention of agents;
- the effects of increased competition on our business;
- our ability to successfully enter new markets or increase our market share;
- our ability to successfully expand our services and businesses and to manage any such expansions;
- our ability to retain existing clients and develop new clients;
- our ability to keep pace with changes in technology;
- any business interruption or technology failure, including cybersecurity risks and ransomware attacks, and any related impact on our reputation;
- changes in interest rates, availability of capital, tax laws, employment laws, tariffs and trade regulations, executive orders, or other government regulation affecting our business;
- the impact of litigation and our success in appealing any judgments entered against us;
- our ability to successfully identify, negotiate, execute, and integrate accretive acquisitions; and
- other risk factors included under “Risk Factors” in our most recent Annual Report on Form 10-K.

In addition, in this Quarterly Report, the words “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “goal,” “expect,” “predict,” “potential,” “should,” and similar expressions, as they relate to our Company, our business and our management, are intended to identify forward-looking statements. In light of these risks and uncertainties, the forward-looking events and circumstances discussed in this Quarterly Report on Form 10-Q may not occur and actual results could differ materially from those anticipated or implied in the forward-looking statements.

Forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q. You should not put undue reliance on any forward-looking statements. We assume no obligation to update forward-looking statements to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking information, except to the extent required by applicable laws. If we update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements.

The results of operations for the nine months ended September 30, 2025 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2025, or for any other future period. The following discussion should be read in conjunction with the unaudited condensed consolidated financial statements and the notes thereto included in Item 1 of this Quarterly Report on Form 10-Q and in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on February 27, 2025, including the “Risk Factors” section and the consolidated financial statements and notes included therein.

### Overview

We are a leading national real estate services firm specializing in commercial real estate investment sales, financing services, research and advisory services. We have been the top commercial real estate investment broker in the United States based on the number of investment transactions for more than 15 years. As of September 30, 2025, we had 1,669 investment sales and financing professionals that are primarily exclusive independent contractors operating in more than 80 offices, who provide real estate brokerage and financing services to sellers and buyers of commercial real estate assets. During the three and nine months ended September 30, 2025, we closed 2,289 and 6,065 investment sales, financing and other transactions with total sales volume of approximately $12.2 billion and $33.9 billion, respectively. During the year ended December 31, 2024, we closed 7,836 investment sales, financing and other transactions with total sales volume of approximately $49.6 billion.

We generate revenue by collecting real estate brokerage commissions upon the sale, and financing fees upon the financing of commercial properties, by providing equity advisory services and loan sales, loan guarantees and by providing leasing, consulting and advisory services. Real estate brokerage commissions are typically based upon the value of the property and financing fees are typically based upon the size of the loan. During the three months ended September 30, 2025, approximately 84% of our revenue was generated from real estate brokerage commissions, 13% from financing fees and 3% from other real estate related services.

We divide commercial real estate into four major markets, characterized by price:

- Properties priced less than $1 million;
- Private Client Market: properties priced from $1 million to up to but less than $10 million;
- Middle Market: properties priced from $10 million to up to but less than $20 million; and
- Larger Transaction Market: properties priced from $20 million and above.

We are the industry leader in serving private clients in the $1 million - $10 million Private Client Market, which contributed approximately 63% and 62% of our real estate brokerage commissions during the three months ended September 30, 2025 and 2024, respectively, and approximately 64% and 63% of our real estate brokerage commissions during the nine months ended September 30, 2025 and 2024, respectively. The following table sets forth the number of transactions, sales volume and revenue by each commercial real estate market for real estate brokerage:

*(in millions)*

*(in thousands)*

*(in millions)*

*(in thousands)*

*(in millions)*

*(in thousands)*

| Real Estate Brokerage | Three Months Ended September 30, 2025 Number | Volume | Revenue | 2024 Number | Volume | Revenue | Change Number | Volume | Revenue |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| \<$1 million | 244 | $151 | $7,356 | 203 | $109 | $5,183 | 41 | $42 | $2,173 |
| Private Client Market ($1 – \<$10 million) | 1,164 | 3,758 | 102,323 | 957 | 3,037 | 87,494 | 207 | 721 | 14,829 |
| Middle Market ($10 – \<$20 million) | 106 | 1,405 | 26,139 | 88 | 1,229 | 19,402 | 18 | 176 | 6,737 |
| Larger Transaction Market (≥$20 million) | 72 | 3,044 | 26,348 | 83 | 4,152 | 29,891 | (11) | (1,108) | (3,543) |
|  | 1,586 | $8,358 | $162,166 | 1,331 | $8,527 | $141,970 | 255 | $(169) | $20,196 |

*(in millions)*

*(in thousands)*

*(in millions)*

*(in thousands)*

*(in millions)*

*(in thousands)*

| Real Estate Brokerage | Nine Months Ended September 30, 2025 Number | Volume | Revenue | 2024 Number | Volume | Revenue | Change Number | Volume | Revenue |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| \<$1 million | 657 | $396 | $18,032 | 596 | $328 | $15,299 | 61 | $68 | $2,733 |
| Private Client Market ($1 – \<$10 million) | 3,026 | 9,791 | 273,542 | 2,687 | 8,526 | 245,473 | 339 | 1,265 | 28,069 |
| Middle Market ($10 – \<$20 million) | 262 | 3,540 | 66,251 | 226 | 3,113 | 53,630 | 36 | 427 | 12,621 |
| Larger Transaction Market (≥$20 million) | 191 | 9,306 | 69,380 | 196 | 9,390 | 72,466 | (5) | (84) | (3,086) |
|  | 4,136 | $23,033 | $427,205 | 3,705 | $21,357 | $386,868 | 431 | $1,676 | $40,337 |

### Factors Affecting Our Business

Our business and our operating results, financial condition and liquidity are significantly affected by the number and size of commercial real estate investment sales and financing transactions that we close in any period. The number and size of these transactions are affected by our ability to recruit and retain investment sales and financing professionals, identify and contract properties for sale, and identify those that need financing and refinancing. We principally monitor the commercial real estate market through four factors, which generally drive our business. The factors are the economy, commercial real estate supply and demand, capital markets, and investor sentiment and investment activity.

### The Economy

Our business is dependent on economic conditions within the markets in which we operate. Changes in the economy on a global, national, regional, or local basis can have a positive or negative impact on our business. Economic indicators and projections related to job growth, unemployment, interest rates, retail spending and consumer confidence trends can have a positive or negative impact on our business. Overall market conditions, including global trade, interest rate changes, inflation, job creation, and global events can affect investor sentiment and, ultimately, the demand for our services from investors in real estate.

The fluidity of U.S. trade and tariff policies since April has sustained elevated economic uncertainty, restraining some investor and business leader decision making and impacting job creation. The policy-driven uncertainty has been exacerbated by the government shutdown which has stalled government data releases. Broad-based expectations of an inflation surge have not flowed through to the market, and though inflation has increased to 3.0% as of September, interest rates have remained range-bound with the 10-year treasury rate, remaining near 4%. Year-to-date hiring through August, the most recent reading available, totaled 598,000 new jobs with a downward trend in monthly job creation over the course of the year. Unemployment in August had ticked up to 4.3%, which is still low by historical standards, but the upward trend has raised some concerns. To mitigate the slackening employment market, the Federal Reserve lowered the overnight rate by 25 basis points at their meetings in September and October, taking the rate to the 3.75% - 4.0% range, its lowest levels since November 2022. As of the last available data in August, retail sales were up 5.4% year-over-year, suggesting that tariffs had yet to weigh on consumption. Nonetheless, the growth in retail sales appears to be bifurcated, with high earning households contributing nearly 50% of the total. This suggests that lower income households may be facing greater economic headwinds which could ultimately weigh on household formations and spending in some retail categories.

Although the economy remains generally sound, the lack of clarity from the U.S. presidential administration regarding tariffs and trade policy together with the limited economic data available due to the government shutdown has made it increasingly difficult to predict the economic outlook. Recession risk remains modestly elevated, and inflation risk continues to be a top concern. The Federal Reserve has remained cautious, but a third 25 basis point rate reduction in December is expected. The U.S. presidential administration announced a variety of trade deals in recent weeks, most notably with Japan and South Korea, while committing to a tariff détente with China. However, additional tariffs on pharmaceuticals, Canadian lumber and other goods could impact some segments of the economy. The end of the government shutdown and a stabilization of trade and tariff policies could strengthen the economic outlook.

### Commercial Real Estate Supply and Demand

Our business is dependent on the willingness of investors to invest in or sell commercial real estate, which is affected by many factors beyond our control. These factors include the supply of commercial real estate, coupled with user demand for these properties, and the performance of real estate assets, when compared with other investment alternatives, such as stocks and bonds.

Although the pace of apartment and industrial construction has begun to abate, markets where the new additions were concentrated, predominantly in the Sun Belt, continue to face an overhang of inventory that is affecting fundamentals. Markets with limited new supply continue to generate modest performance gains. Oversupply risks are beginning to diminish as elevated capital costs join rising tariffs on building materials and construction labor shortages to increase construction costs. Retail and office development was already low entering 2025, with little sign of a revival. Apartment starts have fallen by 76% from their peak in 2022, and industrial completions in 2025 are expected to fall to approximately 250 million square feet, their lowest level since 2015. As a result, receding new supply risks should aid commercial real estate performance in the coming quarters.

While many Sun Belt markets face multifamily oversupply challenges, other metropolitan areas experienced only modest vacancy rate increases. Nationally, the vacancy rate increased 20 basis points to 4.6%, with unit absorption thinning to just 57,000 units in the third quarter. This follows the strongest 12-month total in more than 30 years which ended in the second quarter of 2025. Office demand has continued to improve, achieving a sixth consecutive quarter of positive space absorption. Though vacancy rates remain elevated for the sector as a whole, select sub-segments of office properties in a variety of markets continue to draw tenant demand. Retail space demand was positive in the third quarter, sustaining a vacancy rate below 5% led by neighborhood and community retail centers which maintained vacancy rates near 4%. Hotel demand remains down from last year as international travel to the United States has been impacted by trade policies. In addition, elevated uncertainty and weakened consumer confidence have impacted leisure travel. Should trade deals be established and policies normalized, confidence could improve and hotel room demand could quickly revive.

The commercial real estate space demand outlook remains difficult to discern amid the dramatic policy shifts enacted by the U.S. presidential administration and the limited data available due to the government shutdown. Increased uncertainty, weakened sentiment and risks of a recession and higher inflation could slow decision making, causing commercial real estate space demand to falter. If policy clarity emerges, commercial real estate space demand could be reinvigorated. Nonetheless, all commercial real estate property types aside from office properties entered the new cycle on sound footing, suggesting a durable performance outlook.

### Capital Markets

Credit and liquidity issues in the financial markets have a direct impact on the flow of capital to the commercial real estate market. Real estate purchases are often financed with debt, and as a result, credit and liquidity impact transaction activity and prices. Movements of interest rates in one direction, whether increasing or decreasing, could adversely or positively affect the operations and income potential of commercial real estate properties, as well as lender and equity underwriting for real estate investments. These changes directly influence investor demand for commercial real estate investments and what they are willing to pay. Furthermore, the use of debt or loan-to-value ratios can shift along with lender confidence and underwriting standards. At times of heightened uncertainty or liquidity issues, loan-to-values decline, requiring buyers to provide more equity and take more risk to close deals.

Interest rates appear to have stabilized, with the 10-year treasury rate holding relatively steady in the 4% range. While interest rate risks remain, the Federal Reserve has initiated a series of rate reductions that could restrain upward movement in lending rates. Lender spreads have tightened, taking commercial real estate lending rates to their lowest level since 2022, but the rate outlook is fluid. Debt capital liquidity remains healthy and regional banks have begun to reengage the market as they have stabilized their balance sheets and are encouraged by the prospect of looser banking regulation.

Although economic uncertainty together with financial market and interest rate volatility normally tend to increase investor caution, capital flows into commercial real estate could potentially be bolstered. As a “hard asset” with some level of resistance to inflation, recessions and financial market volatility, investment into commercial real estate could benefit from the current economic climate. The repricing of commercial real estate assets over the last three years has enhanced the yield profile, supporting positive or neutral leverage in many markets and property types. In addition, the passage of the new tax act provides some benefits and additional clarity to the commercial real estate market. Bonus depreciation rules, increased state and local tax (“SALT”) allowances, and increased deductibility of interest paid on commercial real estate could bolster investment activity. Furthermore, by making many of the new tax rules permanent, investors can rely on greater tax policy certainty, allowing them to deploy longer-term investment strategies. Whether capital migrates to commercial properties will likely depend on the risk perception of the broader financial market, but other hard assets have already experienced increased demand in the wake of the rapid policy shifts

### Investor Sentiment and Investment Activity

We facilitate investors buying, selling, and financing properties in order to generate commissions. Investors’ desires and need to engage in real estate transactions are dependent on many factors that are beyond our control. The economy, supply and demand for properly positioned properties, available credit and market events impact investor sentiment and, therefore, transaction velocity. In addition, our private clients, who make up the largest source of revenue, are often motivated to buy, sell and/or refinance properties due to personal circumstances, such as death, divorce, partnership breakups and estate planning.

In the third quarter of 2025, commercial real estate transaction activity increased by 8% compared to the same quarter last year, led by velocity gains in office and multi-tenant retail property sales. Apartment transactions increased by 8% on a year-over-year basis, while industrial, single-tenant retail and hotel property sales activity was modestly positive. The uptick in transactions reflects activity initiated in the second quarter when economic and financial market volatility were elevated. If the economy avoids a major disruption, increased stability and lower interest rates could bolster investment activity in coming quarters. Clarity on investor expectations in the new trade and economic climate have yet to fully emerge.

Several metrics traditionally associated with rising transaction activity velocity, including increased exclusive inventory being brought to market and rising requests for Broker Opinions of Value, suggest that transactional momentum could be sustained in the coming quarters. Nonetheless, the variety of potential headwinds facing the sector including the economy, interest rates, financial market trends, geopolitical and commercial real estate pricing clarity could ultimately suppress activity. In the current uncertain climate, defensive assets such as single-tenant net lease properties backed by high-credit tenants and medical office assets continue to receive buyer interest. Apartment properties, supported by positive long-term drivers including robust demographics of the renter-aged population and the high cost of homeownership is also a favored property segment. Another important factor influencing the investor outlook is the renewal of many of the 2017 Tax Cuts and Jobs Act provisions. Accelerated depreciation, pass-through entity deductions, increases in Low Income Housing Tax Credit (LIHTC) allocations, increased SALT deductions and the renewal of Opportunity Zones could benefit commercial real estate investment. Ultimately, market velocity will be dictated by a combination of the economic outlook, financial market trends, geopolitical forces, Federal Reserve action, interest rates and the buyer/seller expectation gap. If trade policy stabilizes, uncertainty abates and investor sentiment rises, we believe commercial real estate investment activity could gain additional momentum.

### Key Financial Measures and Indicators

### Revenue

Our revenue is primarily generated from our real estate investment sales business. In addition to real estate brokerage commissions, we generate revenue from financing fees and from other revenue, which are primarily comprised of leasing, consulting and advisory fees.

Because our business is transaction oriented, we rely on investment sales and financing professionals to continually develop leads, identify properties to sell and finance, market those properties and close the sale timely to generate a consistent flow of revenue. While our sales volume is impacted by seasonality factors, the timing of closings is also dependent on many market and personal factors unique to a particular client or transaction, particularly clients transacting in the $1 million to $10 million Private Client Market. These factors can cause transactions to be accelerated or delayed beyond our control. Further, commission rates earned are generally inversely related to the value of the property sold. As a result of our expansion into the middle and larger transaction markets, we have seen our overall commission rates fluctuate from period-to-period as a result of changes in the relative mix of the number and volume of investment sales transactions closed in the middle and larger transaction markets as compared to the $1 million to $10 million Private Client Market. These factors may result in period-to-period variations in our revenue that differ from historical patterns.

A small percentage of our transactions include retainer fees and/or breakage fees. Retainer fees are credited against a success-based fee paid upon the closing of a transaction or a breakage fee. Transactions that are terminated before completion will sometimes generate breakage fees, which are usually calculated as a set amount or a percentage of the fee we would have received had the transaction closed.

#### Real Estate Brokerage Commissions

We earn real estate brokerage commissions by acting as a broker for commercial real estate owners seeking to sell or investors seeking to buy properties. Revenue from real estate brokerage commissions is recognized at the close of escrow.

#### Financing Fees

We earn financing fees by securing financing on purchase transactions or by securing refinancing of our clients’ existing mortgage debt. We recognize financing fee revenue at the time the loan closes, and we have no remaining significant obligations in connection with the transaction.

To a lesser extent, we also earn fees on loan performance, equity advisory services, loan sales, loan guarantees and ancillary services associated with financing activities. We recognize guarantee fees over the term of the guarantee and other fees when we have no further performance obligations, generally upon the closing of a transaction.

#### Other Revenue

Other revenue includes fees generated from leasing, consulting and advisory services, as well as ancillary fees from other real estate brokers, and are recognized when services are provided, upon closing of the transaction or when we have no further performance obligations.

### Operating Expenses

Our operating expenses consist of cost of services, selling, general and administrative expenses and depreciation and amortization. The significant components of our expenses are further described below.

#### Cost of Services

The majority of our cost of services expense is variable commissions paid to our investment sales and financing professionals and compensation-related costs related to our financing activities. Commission expenses are directly attributable to providing services to our clients for investment sales and financing services. Most of our investment sales and financing professionals are independent contractors and are paid commissions; however, because there are some who are initially paid a salary and certain of our financing professionals are employees, costs of services also include employee-related compensation, employer taxes and benefits for those employees. The commission rates we pay to our investment sales and financing professionals vary based on individual contracts negotiated and are generally higher for the more experienced professionals. Some of our most senior investment sales and financing professionals can also earn additional commissions after meeting certain annual financial thresholds. These additional commissions are recognized as cost of services in the period in which they are earned. Payment of a portion of these additional commissions are generally deferred for a period of three years, at our election, and paid at the end of the third calendar year. Cost of services also includes referral fees paid to other real estate brokers where we are the principal service provider. Cost of services, therefore, can vary based on the commission structure of the independent contractors that closed transactions in any particular period.

#### Selling, General and Administrative Expenses

The largest expense component within selling, general and administrative expenses is personnel expenses for our management team and sales and support staff, as well as business development, marketing, and expensing of forgivable loans over the retention period of our sales and financing professionals. In addition, these costs include facilities costs (excluding depreciation and amortization), staff related expenses, sales, marketing, legal, telecommunication, network, data sources, changes in fair value for contingent and deferred consideration and other administrative expenses. Also included in selling, general and administrative are expenses for stock-based compensation to non-employee directors, employees and independent contractors (i.e. investment sales and financing professionals) under the Amended and Restated 2013 Omnibus Equity Incentive Plan (the “Amended Plan”) and the Amended and Restated 2013 Employee Stock Purchase Plan (the “Amended ESPP”).

#### Depreciation and Amortization Expense

Depreciation expense consists of depreciation recorded on our computer software and hardware, as well as our furniture, fixtures and equipment. Depreciation is recognized over estimated useful lives ranging from three to seven years for assets. Amortization expense consists of amortization recorded on intangible assets amortized on a straight-line basis using a useful life between one and seven years.

#### Other Income, Net

Other income, net primarily consists of interest income, realized gains and losses on our marketable debt securities, available-for-sale, net gains or losses on our deferred compensation plan assets, foreign currency gains and losses and other non-operating income and expenses.

#### Interest Expense

Interest expense primarily consists of interest expense associated with the stock appreciation rights (“SARs”) liability, and our Credit Agreement.

#### Provision (Benefit) for Income Taxes

We are subject to U.S. and Canadian federal taxes and individual state and local taxes based on the income generated in the jurisdictions in which we operate. Our effective tax rate fluctuates as a result of (i) the impact of applying the discrete method in the third quarter of 2025, (ii) the change in the mix of our activities in the jurisdictions in which we operate due to differing tax rates in those jurisdictions and (iii) the impact of permanent items, including compensation charges, qualified transportation fringe benefits, uncertain tax positions, meals and entertainment and tax-exempt deferred compensation plan assets. Our provision (benefit) for income taxes includes the windfall tax benefits and shortfall expenses, net, from shares issued in connection with our Amended Plan and Amended ESPP. For a discussion of our determination to change from the application of the AETR method for quarterly periods to the discrete method, please see Note 10 – “Income Taxes” in the Notes to Condensed Consolidated Financial Statements in Item 1, Part I of this Quarterly Report on Form 10-Q.

We record deferred taxes, net based on the tax rate expected to be in effect at the time those items are expected to be recognized for tax purposes.

On July 4, 2025, the “One Big Beautiful Bill Act” was signed into law in the U.S. This bill contains a broad range of tax reform provisions. The Company has assessed the legislation enacted during the quarter and does not anticipate a material impact on our consolidated financial statements.

### Results of Operations

The following is a discussion of our results of operations for the three and nine months ended September 30, 2025 and 2024. The tables included in the period comparisons below provide summaries of our results of operations. The period-to-period comparisons of financial results are not necessarily indicative of future results.

### Key Operating Metrics

We regularly review a number of key metrics to evaluate our business, measure our performance, identify trends affecting our business, formulate financial projections and make strategic decisions. We also believe these metrics are relevant to investors’ and others’ assessment of our financial condition and results of operations. During the three months ended September 30, 2025 and 2024, we closed 2,289 and 1,987 investment sales, financing and other transactions, respectively, with total sales volume of approximately $12.2 billion and $12.0 billion, respectively. During the nine months ended September 30, 2025 and 2024, we closed 6,065 and 5,351 investment sales, financing and other transactions, respectively, with total sales volume of approximately $33.9 billion and $31.2 billion, respectively. Such key metrics for real estate brokerage and financing activities (excluding other transactions) are as follows:

| Real Estate Brokerage | Three Months Ended September 30, 2025 | 2024 | Nine Months Ended September 30, 2025 | 2024 |
| --- | ---: | ---: | ---: | ---: |
| Average Number of Investment Sales Professionals | 1,554 | 1,589 | 1,558 | 1,616 |
| Average Number of Transactions per Investment Sales Professional | 1.02 | 0.84 | 2.65 | 2.29 |
| Average Commission per Transaction | $102,248 | $106,664 | $103,289 | $104,418 |
| Average Commission Rate | 1.94% | 1.66% | 1.85% | 1.81% |
| Average Transaction Size (in thousands) | $5,270 | $6,407 | $5,569 | $5,764 |
| Total Number of Transactions | 1,586 | 1,331 | 4,136 | 3,705 |
| Total Sales Volume (in millions) | $8,358 | $8,527 | $23,033 | $21,357 |

| Financing (1) | Three Months Ended September 30, 2025 | 2024 | Nine Months Ended September 30, 2025 | 2024 |
| --- | ---: | ---: | ---: | ---: |
| Average Number of Financing Professionals | 101 | 103 | 101 | 101 |
| Average Number of Transactions per Financing Professional | 4.02 | 3.09 | 11.41 | 8.16 |
| Average Fee per Transaction | $50,246 | $50,351 | $49,176 | $49,725 |
| Average Fee Rate | 0.71% | 0.75% | 0.69% | 0.73% |
| Average Transaction Size (in thousands) | $7,065 | $6,712 | $7,108 | $6,818 |
| Total Number of Transactions | 406 | 318 | 1,152 | 824 |
| Total Financing Volume (in millions) | $2,868 | $2,134 | $8,188 | $5,618 |

(1) Operating metrics exclude certain financing fees not directly associated with transactions.

### Comparison of Three Months Ended September 30, 2025 and 2024

Below are key operating results for the three months ended September 30, 2025 compared to the three months ended September 30, 2024 (dollars in thousands):

| Revenue: | Three Months Ended September 30, 2025 | Percentage of Revenue Dollar | Three Months Ended September 30, 2024 Percentage | Percentage of Revenue | Change |  |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Real estate brokerage commissions | $162,166 | 83.6% | $141,970 | 84.2% | $20,196 | 14.2% |
| Financing fees | 26,292 | 13.6 | 20,582 | 12.2 | 5,710 | 27.7% |
| Other revenue | 5,434 | 2.8 | 5,959 | 3.6 | (525) | (8.8)% |
| Total revenue | 193,892 | 100 | 168,511 | 100 | 25,381 | 15.1% |
| Operating expenses: |  |  |  |  |  |  |
| Cost of services | 120,996 | 62.4 | 104,754 | 62.2 | 16,242 | 15.5% |
| Selling, general and administrative | 72,527 | 37.4 | 70,672 | 41.9 | 1,855 | 2.6% |
| Depreciation and amortization | 2,743 | 1.4 | 4,550 | 2.7 | (1,807) | (39.7)% |
| Total operating expenses | 196,266 | 101.2 | 179,976 | 106.8 | 16,290 | 9.1% |
| Operating loss | (2,374) | (1.2) | (11,465) | (6.8) | 9,091 | (79.3)% |
| Other income, net | 4,041 | 2.0 | 5,321 | 3.1 | (1,280) | (24.1)% |
| Interest expense | (197) | (0.1) | (208) | (0.1) | 11 | (5.3)% |
| Income (loss) before provision (benefit) for income taxes | 1,470 | 0.7 | (6,352) | (3.8) | 7,822 | (123.1)% |
| Provision (benefit) for income taxes | 1,230 | 0.6 | (967) | (0.6) | 2,197 | (227.2)% |
| Net Income (loss) | $240 | 0.1% | $(5,385) | (3.2)% | $5,625 | (104.5)% |
| Adjusted EBITDA(1) | $6,889 | 3.6% | $(21) | 0.0% | $6,910 | (2) |

(1) Adjusted EBITDA is not a measurement of our financial performance under U.S. GAAP and should not be considered as an alternative to net loss, operating income or any other measures derived in accordance with U.S. GAAP. For a definition of Adjusted EBITDA and a reconciliation of Adjusted EBITDA to net loss, which is the most directly comparable U.S. GAAP financial measure, see “Non-GAAP Financial Measure” below.

(2) Percentage not meaningful.

#### Revenue

Total revenue was $193.9 million for the three months ended September 30, 2025 compared to $168.5 million for the same period in 2024, an increase of $25.4 million, or 15.1%. Total revenue increased as a result of increases in real estate brokerage commissions and financing fees, partially offset by a reduction in other revenue, as described below. See “Factors Affecting Our Business” for additional market information.

*Real estate brokerage commissions.* Revenue from real estate brokerage commissions increased to $162.2 million for the three months ended September 30, 2025 from $142.0 million for the same period in 2024, an increase of $20.2 million, or 14.2%. The increase was the result of the total number of transactions increasing by 19.2% and the average commission rate earned increasing by 28 basis points, partially offset by a decrease of 2.0% in the total sales volume during the three months ended September 30, 2025 compared to the same period in 2024. The increase in the average commission rate is due to the shift in revenue from the Middle Market and Larger Transaction Market to the Private Client Market, which generally earns higher commission. The Private Client Market revenue increased by 16.9%, while the combined Middle Market and Larger Transaction Market revenue increased by 6.5%.

*Financing fees*. Revenue from financing fees increased to $26.3 million for the three months ended September 30, 2025 from $20.6 million for the same period in 2024, an increase of $5.7 million, or 27.7%, resulting primarily from a 34.4% increase in total financing volume, partially offset by a four basis point decrease in the average fee rate earned during the three months ended September 30, 2025 compared to the same period in 2024. This decrease in average fee rate was primarily due to the 5.3% increase in average transaction size, as larger transactions tend to earn smaller commission rates.

*Other revenue*. Other revenue decreased to $5.4 million for the three months ended September 30, 2025 from $6.0 million for the same period in 2024, a decrease of $0.6 million, or 8.8%, resulting primarily from a decrease in leasing fees.

#### Total Operating Expenses

Total operating expenses were $196.3 million for the three months ended September 30, 2025 compared to $180.0 million for the same period in 2024, an increase of $16.3 million, or 9.1%. The change was primarily due to an increase of $16.2 million in cost of services, as well as an increase of $1.9 million in selling, general and administrative expense, partially offset by a decrease of $1.8 million in depreciation and amortization expense as described below.

*Cost of services.* Cost of services are variable commissions paid to our investment sales professionals and compensation-related costs in connection with our financing activities. Cost of services increased to $121.0 million for the three months ended September 30, 2025 from $104.8 million for the same period in 2024 as a result of increased revenue. Cost of services as a percentage of total revenue increased by 20 basis points to 62.4% compared to 62.2% for the same period during prior year.

*Selling, general, and administrative expense.* Selling, general and administrative expense for the three months ended September 30, 2025 increased to $72.5 million, from $70.7 million for the same period in 2024, an increase of $1.8 million or 2.6%. The increase was primarily due to a $4.0 million accrual related to an ongoing litigation matter, partially offset by a decrease in compensation related costs.

*Depreciation and amortization expense.* Depreciation and amortization expense decreased to $2.7 million for the three months ended September 30, 2025 from $4.5 million for the same period in 2024, a decrease of $1.8 million, or 39.7%. The decrease primarily relates to accelerated amortization and impairment of certain intangible assets recorded in the second half of 2024 resulting from changes in estimates.

#### Other Income, Net

Other income, net decreased to $4.0 million for the three months ended September 30, 2025 from $5.3 million for the same period in 2024. The decrease of $1.3 million was primarily driven by a decrease in interest income due to a decreased average yield on the Company's investments during the period compared to the same period in prior year.

#### Interest Expense

Interest expense decreased by an immaterial amount for the three months ended September 30, 2025 compared to the same period in 2024, and primarily relates to interest expense on the Company’s SARs liability.

#### Provision (benefit) for Income Taxes

The provision for income taxes was $1.2 million for the three months ended September 30, 2025, compared to a benefit for income taxes of $1.0 million for the same period in 2024. The effective income tax rate for the three months ended September 30, 2025, was 83.7% compared to 15.2% for the same period in 2024. The 83.7% effective income tax rate resulted primarily from non-deductible items, state income taxes, and income before the provision for income taxes that is relatively close to breakeven. The change in the effective tax rate is also impacted by the application of the discrete method for the three months ended September 30, 2025, compared to the annual effective tax rate method for the three months ended September 30, 2024, as discussed in Note 10 – “Income Taxes” in the Notes to Condensed Consolidated Financial Statements in Item 1, Part I of this Quarterly Report on Form 10-Q.

### Comparison of Nine Months Ended September 30, 2025 and 2024

Below are key operating results for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 (dollars in thousands):

| Revenue: | Nine Months Ended September 30, 2025 | Percentage of Revenue Dollar | Nine Months Ended September 30, 2024 Percentage | Percentage of Revenue | Change |  |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Real estate brokerage commissions | $427,205 | 83.6% | $386,868 | 84.8% | $40,337 | 10.4% |
| Financing fees | 70,681 | 13.8 | 53,303 | 11.7 | 17,378 | 32.6% |
| Other revenue | 13,320 | 2.6 | 15,811 | 3.5 | (2,491) | (15.8)% |
| Total revenue | 511,206 | 100 | 455,982 | 100 | 55,224 | 12.1% |
| Operating expenses: |  |  |  |  |  |  |
| Cost of services | 315,962 | 61.8 | 279,703 | 61.3 | 36,259 | 13.0% |
| Selling, general and administrative | 215,629 | 42.2 | 204,591 | 44.9 | 11,038 | 5.4% |
| Depreciation and amortization | 8,745 | 1.7 | 11,301 | 2.5 | (2,556) | (22.6)% |
| Total operating expenses | 540,336 | 105.7 | 495,595 | 108.7 | 44,741 | 9.0% |
| Operating loss | (29,130) | (5.7) | (39,613) | (8.7) | 10,483 | (26.5)% |
| Other income, net | 13,518 | 2.6 | 15,701 | 3.4 | (2,183) | (13.9)% |
| Interest expense | (584) | (0.1) | (611) | (0.1) | 27 | (4.4)% |
| Loss before benefit for income taxes | (16,196) | (3.2) | (24,523) | (5.4) | 8,327 | (34.0)% |
| Benefit for income taxes | (979) | (0.2) | (3,613) | (0.8) | 2,634 | (72.9)% |
| Net loss | $(15,217) | (3.0)% | $(20,910) | (4.6)% | $5,693 | (27.2)% |
| Adjusted EBITDA(1) | $(397) | (0.1)% | $(8,662) | (1.9)% | $8,265 | 95.4% |

(1) Adjusted EBITDA is not a measurement of our financial performance under U.S. generally accepted accounting principles (“U.S. GAAP”) and should not be considered as an alternative to net loss, operating income or any other measures derived in accordance with U.S. GAAP. For a definition of Adjusted EBITDA and a reconciliation of Adjusted EBITDA to net loss, which is the most directly comparable U.S. GAAP financial measure, see “Non-GAAP Financial Measure” below.

#### Revenue

Total revenue was $511.2 million for the nine months ended September 30, 2025 compared to $456.0 million for the same period in 2024, an increase of $55.2 million, or 12.1%. Total revenue increased as a result of increases in real estate brokerage commissions and financing fees, partially offset by a reduction in other revenue, as described below. See “Factors Affecting Our Business” for additional market information.

*Real estate brokerage commissions.* Revenue from real estate brokerage commissions increased to $427.2 million for the nine months ended September 30, 2025 from $386.9 million for the same period in 2024, an increase of $40.3 million, or 10.4%. The increase was the result of total sales volume increasing by 7.8% and a four basis point increase in the average commission rate earned during the nine months ended September 30, 2025 compared to the same period in 2024. The increase in the average commission rate earned is due to the shift in revenue from the Middle Market and Larger Transaction Market to the Private Client Market, which generally earns higher commissions. The Private Client Market revenue increased by 11.4% and the combined Middle Market and Larger Transaction Market revenue increased by 7.6%.

*Financing fees*. Revenue from financing fees increased to $70.7 million for the nine months ended September 30, 2025 from $53.3 million for the same period in 2024, an increase of $17.4 million, or 32.6%, resulting primarily from a 45.7% increase in total financing volume, partially offset by a four basis point decrease in the average fee rate during the nine months ended September 30, 2025 compared to the same period in 2024. The reduction in the average fee rate is due to the shift from the smaller transactions to larger transactions, which generally earn smaller commission rates.

*Other revenue*. Other revenue decreased to $13.3 million for the nine months ended September 30, 2025 from $15.8 million for the same period in 2024, a decrease of $2.5 million, or 15.8%, resulting primarily from a decrease in leasing fees.

#### Total Operating Expenses

Total operating expenses were $540.3 million for the nine months ended September 30, 2025 compared to $495.6 million for the same period in 2024, an increase of $44.7 million, or 9.0%. The change was primarily due to an increase of $36.3 million in cost of services and an increase of $11.0 million in selling, general and administrative expenses as described below.

*Cost of services.* Cost of services are variable commissions paid to our investment sales professionals and compensation-related costs in connection with our financing activities. Cost of services increased to $316.0 million for the nine months ended September 30, 2025 from $279.7 million for the same period in 2024 as a result of increased revenue. Cost of services as a percentage of total revenue increased by 50 basis points to 61.8% compared to 61.3% for the same period in 2024 primarily due to our senior investment sales and financing professionals earning a higher amount of additional commissions.

*Selling, general, and administrative expense.* Selling, general and administrative expense for the nine months ended September 30, 2025 increased to $215.6 million, from $204.6 million for the same period in 2024, an increase of $11.0 million or 5.4%. The increase was primarily due to (i) an increase in compensation related costs and (ii) increased investment in business development, marketing and other support related to the long-term talent acquisition and retention of our investment sales and financing professionals and (iii) a legal accrual related to an ongoing litigation matter.

*Depreciation and amortization expense.* Depreciation and amortization expense decreased to $8.7 million for the nine months ended September 30, 2025 from $11.3 million compared to the same period in 2024, a decrease of $2.6 million, or 22.6%. The decrease primarily relates to accelerated amortization and impairment of certain intangible assets recorded in the second half of 2024 resulting from changes in estimates.

#### Other Income, Net

Other income, net decreased to $13.5 million for the nine months ended September 30, 2025 from $15.7 million for the same period in 2024. The decrease of $2.2 million was primarily driven by a decrease in interest income due to a decreased average yield on the Company's investments during the period compared to the same period in prior year.

#### Interest Expense

Interest expense decreased by an immaterial amount for the nine months ended September 30, 2025 compared to the same period in 2024, and primarily relates to interest expense on the Company’s SARs liability.

#### Benefit for Income Taxes

The benefit for income taxes was $1.0 million for the nine months ended September 30, 2025, compared to $3.6 million for the same period in 2024. The effective income tax rate for the nine months ended September 30, 2025, was 6.0% compared to 14.7% for the same period in 2024. The determination of the applicable tax rate was based on the discrete method for the nine months ended September 30, 2025, compared to the annual effective tax rate method for the same period in 2024 as discussed in Note 10 – “Income Taxes” in the Notes to Condensed Consolidated Financial Statements in Item 1, Part I of this Quarterly Report on Form 10-Q.

### Non-GAAP Financial Measure

In this Quarterly Report on Form 10-Q, we include a non-GAAP financial measure, Adjusted EBITDA. We define Adjusted EBITDA as net income (loss) before (i) interest income and other, including net realized gains (losses) on marketable debt securities, available-for-sale and cash, cash equivalents, and restricted cash, (ii) interest expense, (iii) provision (benefit) for income taxes, (iv) depreciation and amortization, and (v) stock-based compensation. We use Adjusted EBITDA in our business operations to evaluate the performance of our business, develop budgets and measure our performance against those budgets, among other things. We also believe that analysts and investors use Adjusted EBITDA as a supplemental measure to evaluate our overall operating performance. However, Adjusted EBITDA has material limitations as a supplemental metric and should not be considered in isolation, or as a substitute for analysis of our results as reported under U.S. GAAP. We find Adjusted EBITDA to be a useful management metric to assist in evaluating performance, because Adjusted EBITDA eliminates items related to capital structure, taxes and non-cash items. In light of the foregoing limitations, we do not rely solely on Adjusted EBITDA as a performance measure and also consider our U.S. GAAP results. Adjusted EBITDA is not a measurement of our financial performance under U.S. GAAP and should not be considered as an alternative to net income (loss), operating income (loss) or any other measures calculated in accordance with U.S. GAAP. Because Adjusted EBITDA is not calculated in the same manner by all companies, it may not be comparable to other similarly titled measures used by other companies. A reconciliation of the most directly comparable U.S. GAAP financial measure, net loss, to Adjusted EBITDA is as follows (in thousands):

|  | Three Months Ended September 30, 2025 | 2024 | Nine Months Ended September 30, 2025 | 2024 |
| --- | ---: | ---: | ---: | ---: |
| Net income (loss) | $240 | $(5,385) | $(15,217) | $(20,910) |
| Adjustments: |  |  |  |  |
| Interest income and other(1) | (3,487) | (4,498) | (11,898) | (13,806) |
| Interest expense | 197 | 208 | 584 | 611 |
| Provision (benefit) for income taxes | 1,230 | (967) | (979) | (3,613) |
| Depreciation and amortization | 2,743 | 4,550 | 8,745 | 11,301 |
| Stock-based compensation | 5,966 | 6,071 | 18,368 | 17,755 |
| Adjusted EBITDA | $6,889 | $(21) | $(397) | $(8,662) |

(1) Other includes net realized gains (losses) on marketable debt securities, available-for-sale.

### Liquidity and Capital Resources

Our primary sources of liquidity are cash, cash equivalents, and restricted cash, cash flows from operations, marketable debt securities, available-for-sale and, if necessary, borrowings under our Credit Agreement (as defined herein). In order to enhance yield to us, we have invested a portion of our cash in money market funds and fixed and variable income debt securities, in accordance with our investment policy approved by the Board of Directors. Certain of our investments in money market funds may not maintain a stable net asset value and may impose a discretionary liquidity fee. To date, the Company has not experienced any restrictions on its ability to redeem funds from money market funds. Although we have historically funded our operations through operating cash flows, there can be no assurance that we can continue to meet our cash requirements entirely through our operations, cash, net of restricted cash, cash equivalents, and proceeds from the sale of marketable debt securities, available-for-sale or availability under our Credit Agreement.

### Cash Flows

Our total cash, cash equivalents, and restricted cash balance decreased by $36.0 million to $117.4 million at September 30, 2025, compared to $153.4 million at December 31, 2024. The following table sets forth our summary cash flows for the nine months ended September 30, 2025 and 2024 (in thousands):

|  | Nine Months Ended September 30, 2025 | 2024 |
| --- | ---: | ---: |
| Net cash provided by (used in) operating activities | $20,389 | $(34,941) |
| Net cash (used in) provided by investing activities | (29,211) | 55,307 |
| Net cash used in financing activities | (27,425) | (18,346) |
| Effect of currency exchange rate changes on cash, cash equivalents, and restricted cash | 162 | (56) |
| Net (decrease) increase in cash, cash equivalents, and restricted cash | (36,085) | 1,964 |
| Cash, cash equivalents, and restricted cash at beginning of period | 153,445 | 170,753 |
| Cash, cash equivalents, and restricted cash at end of period | $117,360 | $172,717 |

42

#### Operating Activities

Cash flows provided by operating activities were $20.4 million for the nine months ended September 30, 2025 compared to cash flows used in operating activities of $34.9 million for the same period in 2024. The $55.3 million increase in cash flows from operating activities for the nine months ended September 30, 2025 compared to the same period in 2024 primarily relates to loan reimbursements and a reduction in the advances and loans granted in the current year compared to the same period in prior year and the effect of the timing of certain cash receipts and payments.

#### Investing Activities

Cash flows used in investing activities were $29.2 million for the nine months ended September 30, 2025 compared to cash flows provided by investing activities of $55.3 million for the same period in 2024. The $84.5 million increase in cash flows used in investing activities for the nine months ended September 30, 2025 compared to the same period in 2024 was primarily due to an increase of $85.3 million in the amount of purchases of securities, net of proceeds from sales and maturities of securities in 2025 compared to the same period in 2024.

#### Financing Activities

Cash flows used in financing activities were $27.4 million for the nine months ended September 30, 2025 compared to $18.3 million for the same period in 2024. The $9.1 million increase in cash flows used in financing activities is primarily due to the $7.4 million increase in cash paid for stock repurchases in 2025 compared to the same period in 2024 along with $1.1 million in principal payments for deferred and contingent consideration in 2025 compared to no such payments in the same period in 2024.

#### Liquidity

We believe that our existing balances of cash, cash equivalents, cash flows expected to be generated from our operations, and proceeds from the maturities and possible sales of marketable debt securities, available-for-sale will be sufficient to satisfy our operating requirements for at least the next 12 months and the foreseeable future. If we need to raise additional capital through public or private debt or equity financings, strategic relationships or other arrangements, this capital might not be available to us in a timely manner, on acceptable terms, or at all. Our failure to raise sufficient capital when needed could prevent us from funding acquisitions or otherwise financing our growth or operations. As of September 30, 2025, cash, excluding restricted cash, cash equivalents, and marketable debt securities, available-for-sale, aggregated $370.5 million.

### Credit Agreement

Our credit agreement with Wells Fargo Bank, National Association (as amended, the “Credit Agreement”) provides for a $10 million principal amount senior secured revolving credit facility that is guaranteed by all of our domestic subsidiaries and matures on June 1, 2026. The Company maintains a $10 million restricted cash balance in support of the Credit Agreement. The Company is monitoring covenant compliance on a regular basis to ensure continued compliance with the Credit Agreement. Our ability to borrow under our Credit Agreement is limited by our ability to comply with its covenants or obtain necessary waivers. See Note 12 – “Commitments and Contingencies” of our Notes to Condensed Consolidated Financial Statements in Item 1, Part I of this Quarterly Report on Form 10-Q for additional information on the Credit Agreement.

### Off Balance Sheet Arrangements

The Company, in connection with the Strategic Alliance with M&T Realty Capital Corporation (“MTRCC”), has agreed to provide loan opportunities that may be funded through MTRCC’s agreement with Fannie Mae, which requires MTRCC to guarantee a portion of each funded loan. On a loan-by-loan basis, the Company, at its option, can assume a portion of MTRCC’s guarantee obligation to Fannie Mae of loan opportunities presented to and closed by MTRCC. As of September 30, 2025, the Company has agreed to a maximum aggregate guarantee obligation of $402.7 million relating to loans with an unpaid balance of $2,470.7 million. The maximum guarantee obligation is not representative of the actual loss we would incur. The Company would be liable for this amount only if all of the loans for which it is providing a guarantee to MTRCC were to default and all of the collateral underlying these loans was determined to be without value at the time of settlement, and the Company has recorded an allowance for losses of $271,000 as of September 30, 2025 related to these guarantee obligations. The Company is required to provide cash collateral to MTRCC for this obligation, and this is reflected as $1.0 million of restricted cash as of September 30, 2025, which is included in cash, cash equivalents, and restricted cash on the condensed consolidated balance sheets.

### Material Cash Requirements

There have been no material changes in our commitments under contractual obligations, as disclosed in our Annual Report on Form 10-K for the year ended December 31, 2024 through the date the condensed consolidated financial statements were issued, other than commitments that are already disclosed in the accompanying notes to the condensed consolidated financial statements.

### Inflation

Our commissions and other variable costs related to revenue are primarily affected by real estate market supply and demand, which may be affected by uncertain or changing economic and market conditions, including inflation/deflation arising in connection with and in response to various macroeconomic factors and impact of increased interest rates on the broader economy.

The annual CPI inflation rate in the U.S. peaked at 9.1% in June 2022, the highest annual inflation rate since November 1981. CPI inflation fell to 2.4% as of March 2025, but has since risen to 3.0%. In 2022 through 2023, the Federal Reserve increased the federal funds rate to the 5.25%-5.5% range in an effort to combat inflation, which had an adverse impact on commercial real estate transactions. In the latter part of 2024, the Federal Reserve lowered the overnight rate by 100 basis points to the 4.25%-4.5% range, which was a positive trend for investors, but the 10-year treasury rate has remained range-bound in the low- to mid-4% range keeping the cost of debt capital elevated. The rate reductions by the Federal Reserve in September and October of this year could support lower interest rates, but because the rate cuts were in response to a weakening labor market, economic headwinds could offset the lower interest rate climate.

Looking forward, inflation could rise as the impact of tariffs flow-through to consumers, and the Federal Reserve has communicated that they remain cautious pending additional clarity on federal fiscal, trade, tax, regulatory and domestic policies. Several of the policies such as tariffs and more stringent immigration controls have the potential to be inflationary in nature, so future inflation risk may depend on when and how assertively the proposed policies are ultimately implemented.

### Critical Accounting Estimates

We prepare our financial statements in accordance with U.S. GAAP. In applying many of these accounting principles, we make assumptions, estimates and/or judgments that affect the reported amounts of assets, liabilities, revenues and expenses in our condensed consolidated financial statements. We base our estimates and judgments on historical experience and other assumptions that we believe are reasonable under the circumstances. These assumptions, estimates and/or judgments, however, are often subjective and our actual results may change based on changing circumstances or changes in our analyses. If actual amounts are ultimately different from our estimates, the revisions are included in our results of operations for the period in which the actual amounts become known. There were no significant changes in our critical accounting policies, as disclosed in our Annual Report on Form 10-K for the year ended December 31, 2024 filed with the SEC on February 27, 2025.

## Market risk

As filed, 3,510 characters.

We maintain a portfolio of investments in a variety of fixed and variable debt rate securities, including U.S. Treasuries, U.S. government sponsored entities, corporate debt, asset-backed securities and others. As of September 30, 2025, the fair value of investments in marketable debt securities, available-for-sale was $264.1 million. The primary objective of our investment activity is to maintain the safety of principal and to provide for future liquidity requirements while maximizing yields without significantly increasing risk. While some investments may be securities of companies in foreign countries, all investments are denominated and payable in U.S. dollars. We do not enter into investments for trading or speculative purposes. While our intent is not to sell these investment securities prior to their stated maturities, we may choose to sell any of the securities for strategic reasons including, but not limited to, anticipated capital requirements, anticipation of credit deterioration, duration management, yield management and because a security no longer meets the criteria of our investment policy. We do not use derivatives or similar instruments to manage our interest rate risk. We seek to invest in high quality investments. The weighted average credit rating of our portfolio investments (exclusive of cash, cash equivalents, and restricted cash) was AA- as of September 30, 2025. Maturities are maintained consistent with our short-, medium- and long-term liquidity objectives.

Currently, our portfolio of investments predominantly consists of fixed interest rate debt securities; however, a portion of our investment portfolio may consist of variable interest rate debt securities. Our investments in fixed interest rate debt securities are subject to various market risks. Changes in prevailing interest rates may adversely or positively impact their fair market value should interest rates generally rise or fall. Accordingly, we also may have interest rate risk with variable interest rate debt securities as the income produced may decrease if interest rates fall. Contraction in market liquidity may adversely affect the value of portions of our portfolio and affect our ability to sell securities in the time frames required and at acceptable prices. Uncertainty in future market conditions may raise market participant’s expectations of returns, thus impacting the value of securities in our portfolio as well. The following table sets forth the impact on the fair value of our investments as of September 30, 2025 from changes in interest rates based on the weighted average duration of the debt securities in our portfolio (in thousands):

| Change in Interest Rates | Approximate Change in Fair Value of Investments Increase (Decrease) |
| --- | ---: |
| 2% Decrease ….................. | $6,653 |
| 1% Decrease ….................. | $3,378 |
| 1% Increase ….................. | $(3,481) |
| 2% Increase ….................. | $(7,064) |

Due to the nature of our business and the manner in which we conduct our operations, we believe we do not face any material interest rate risk with respect to other assets and liabilities, equity price risk or other market risks. The functional currency of our Canadian operations is the Canadian dollar. We are exposed to foreign currency exchange rate risk for the settlement of transactions of the Canadian operations as well as unrealized translation adjustments. Historically foreign exchange rate risk has not been material.

## Controls and procedures

As filed, 2,442 characters.

### Evaluation of Disclosure Controls and Procedures

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f), including maintenance of (i) records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets, and (ii) policies and procedures that provide reasonable assurance that (a) transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America, (b) our receipts and expenditures are being made only in accordance with authorizations of management and our Board of Directors, and (c) we will prevent or timely detect unauthorized acquisition, use, or disposition of our assets that could have a material effect on the financial statements.

Our management, with the supervision and participation of our chief executive officer (“CEO”) and chief financial officer (“CFO”), has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a- 15(e) and 15d- 15(e) under the Exchange Act), as of the end of the period covered by this Quarterly Report on Form 10-Q, based on the criteria established under the Internal Control Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013. Based on such evaluation, our management has concluded that as of September 30, 2025, our disclosure controls and procedures are designed at a reasonable assurance level and are effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the SEC, and that such information is accumulated and communicated to our management, including our CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure.

### Changes in Internal Control over Financial Reporting

There have not been any changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended September 30, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

## Risk factors

As filed, 3,742 characters.

Except as set forth below, there have been no material changes from the risk factors described in our Annual Report on Form 10-K for the year ended December 31, 2024.

***We may face significant liabilities and/or damage to our professional reputation as a result of litigation allegations and negative publicity.***

As a licensed real estate broker, we and our licensed professionals and brokers are subject to regulatory due diligence, disclosure and standard-of-care obligations. The actual or perceived failure to fulfill these obligations could subject us or our professionals and brokers to litigation from parties who attempted to or in fact financed, purchased or sold properties that we or they brokered, managed or had some other involvement. We have and, in the future, could become subject to claims by those who either wished to participate or did participate in real estate transactions alleging that we did not fulfill our regulatory, contractual or other legal obligations. We also face potential conflicts of interest claims when we represent both the buyer and the seller in a transaction.

We depend on our business relationships and our reputation for integrity and high-caliber professional services to attract and retain clients. As a result, allegations by private litigants or regulators, whether the ultimate outcome is favorable or unfavorable to us, as well as negative publicity and press speculation about us or our investment activities, whether or not valid, may harm our reputation and damage our business prospects. In addition, if any lawsuits were brought against us and resulted in a finding of substantial legal liability, it could materially, adversely affect our business, financial condition or results of operations or cause significant reputational harm to us, which could materially impact our business.

For example, on October 1, 2025, a jury in Boone County, Missouri returned a verdict against our subsidiary, Marcus & Millichap Real Estate Investment Services, Inc., in connection with the 2019 sale of a student-housing property near the University of Missouri. The jury awarded the purchaser of the property $4.075 million in actual damages and $20.0 million in punitive damages and awarded another party $10.0 million in punitive damages with $0 in actual damages. On October 24, 2025, the judge entered judgments in the above amounts in favor of the purchaser and the other party. We deny wrongdoing and believe the verdict was rendered in error and contrary to Missouri law. The judgments are subject to post-trial motions and appeal. A hearing has been scheduled for January 6, 2026 to consider post-trial motions.

Management has estimated a range of possible loss from $0 to approximately $34.1 million, exclusive of any pre-judgment interest or costs. We recorded an accrual of $4.0 million, representing approximately the actual damages awarded. If our post-trial motions or appeals are not successful in reversing or significantly reducing the awards, we could be required to record significant additional charges, which could have a material impact on our financial results.

In the event of a substantial loss, our commercial insurance coverage and/or self-insurance reserve levels might not be sufficient to pay the full damages, or the scope of available coverage may not cover certain types of claims. Further, the value of otherwise valid claims we hold under insurance policies could become uncollectible in the event of the covering insurance company’s insolvency, although we seek to limit this risk by placing our commercial insurance only with highly-rated companies. Any of these events could negatively impact our business, financial condition or results of operations.

Filed Nov 7, 2025.
Source: SEC EDGAR, the filing index for accession 0001628280-25-050707. Last ingested by Listed: Oct 27, 2026, 17:32 ET. No prices; not investment advice.