Marcus & Millichap surges after Q4 profit beats, buybacks expand
Real estate brokerage posts 57% EPS jump as commercial property market recovery gains momentum
Marcus & Millichap shares jumped in Thursday trading after the commercial real estate brokerage reported fourth-quarter earnings that blew past analyst expectations, signaling resilience in a property market still recovering from a prolonged downturn.
The Calabasas, California-based company reported diluted earnings per share of $0.34 for the fourth quarter of 2025, a 57% increase from $0.34 in the same period last year, according to regulatory filings. Revenue reached $244 million, up 1.6% from $240.1 million in the prior-year quarter, while adjusted EBITDA surged 38.7% to $25 million.
The results represent a significant beat against Wall Street expectations, with analysts forecasting EPS around $0.21 to $0.24 and revenue near $229.5 million. Shares of Marcus & Millichap rose 3.4% to $25.85 following the announcement, building on momentum that has seen the stock climb from a 52-week low of $24.43 reached earlier in February.
"We delivered solid fourth quarter results against a tough comparison thanks to a late-stage acceleration of transaction closings," said Hessam Nadji, president and chief executive officer, in the earnings announcement. "Our ongoing cost controls and focus on efficiency resulted in a meaningful improvement in profitability."
The strong quarter capped a year of recovery for Marcus & Millichap, which generates revenue primarily through commissions on commercial property sales and fees from financing placements. Full-year 2025 revenue increased 8.5% to $755.2 million, while the company narrowed its net loss to $1.9 million from $12.4 million in 2024. Adjusted EBITDA for the full year soared 162.6% to $24.6 million.
A key driver of the performance was the company's Private Client business, which Nadji described as "the cornerstone of our business." Private client revenue accounted for 65% of brokerage revenue in the fourth quarter, totaling $133 million, up from 59% in the same period last year, according to the earnings call transcript. For the full year, private client contributions grew 11% to $406 million.
"Our Private Client business in particular is showing positive momentum thanks to price adjustments and many lenders becoming active again," Nadji said.
Marcus & Millichap returned $47 million to shareholders in 2025 through dividends and share repurchases, demonstrating its commitment to capital returns even as it invests in growth. The company declared two semi-annual dividends totaling $20.4 million during the year and repurchased 933,115 shares for $26.9 million. As of February 10, the company had approximately $42 million remaining under its share repurchase authorization.
The company also declared a semi-annual dividend of $0.25 per share, payable April 3 to shareholders of record as of March 13, representing an annualized yield of about 1.9% at current prices.
Marcus & Millichap enters 2026 with a strong balance sheet, holding $398 million in cash, cash equivalents, and marketable securities with no debt. This financial flexibility comes as the commercial real estate sector shows signs of stabilization after facing headwinds from rising interest rates and economic uncertainty.
"We enter 2026 with solid momentum," Nadji said. "Market fundamentals continue to strengthen as lowered prices become more compelling, especially compared to replacement cost. While we remain mindful of lingering economic uncertainty and elevated geopolitical factors, the improving investor sentiment and trading environment we are seeing is encouraging."
The company completed nearly 9,000 transactions totaling over $50 billion in 2025, maintaining its leadership position in transaction count across the commercial real estate brokerage industry. The sales force grew by nearly 100 brokerage and financing professionals during the year, marking the strongest expansion in seven years.
Despite the positive earnings beat and improved outlook, Marcus & Millichap still trades below its 52-week high of $39.00, reflecting ongoing investor caution about the commercial real estate sector. The stock has a market capitalization of approximately $975 million and carries a price-to-book ratio of 1.62.
Analysts have set a target price of $28.00 for the shares, representing modest upside from current levels, with ratings split between hold and sell recommendations amid concerns about the broader commercial property market recovery.