Core Insights - Marcus & Millichap, Inc. (MMI) reported an earnings per share (EPS) of $0.01, significantly below the estimated $0.23, indicating lower profitability than expected [2][6] - The company achieved a 15.1% increase in revenue year-over-year, reaching $193.9 million, although this was below the anticipated $253.2 million [2][3][6] - MMI's financial health is characterized by a low debt-to-equity ratio of 0.14 and a current ratio of 3.47, indicating a stable financial position despite earnings challenges [5][6] Financial Performance - MMI's revenue of $193.9 million represents a 15.1% increase compared to the same quarter in 2024, showcasing strong performance in its core services [2][3] - The company's revenue fell short of market expectations, which were set at $253.2 million, highlighting challenges in meeting financial forecasts [3][6] Valuation Metrics - MMI's price-to-sales ratio is approximately 1.60, indicating that investors are willing to pay $1.60 for every dollar of sales [4] - The enterprise value to sales ratio also stands at roughly 1.60, reflecting the company's valuation in relation to its sales [4] - The enterprise value to operating cash flow ratio is about 16.11, suggesting how many times the operating cash flow can cover the enterprise value [4]

Financial Data and Key Metrics Changes - Total revenue for Q3 2025 was $194 million, a 15% increase from $169 million in Q3 2024, marking the fifth consecutive quarter of year-over-year revenue growth [5][19] - Adjusted EBITDA for the quarter was $6.9 million compared to break-even in the prior year, indicating a notable return to profitability [26][27] - Net income for the quarter was $240,000, or $0.01 per share, compared to a net loss of $5.4 million, or $0.14 per share in the prior year [25][26] Business Line Data and Key Metrics Changes - Real estate brokerage commissions accounted for 84% of total revenue, or $162 million, a 14% year-over-year increase [19] - Private client transactions grew 24% in volume and 22% in transaction count, contributing 63% of brokerage revenue for the quarter [20] - Financing revenue grew 28% year-over-year to $26 million, driven by a 34% increase in transaction volume totaling $2.9 billion [22] Market Data and Key Metrics Changes - Transaction volume declined 2% to $8.4 billion, with nearly 1,600 transactions closed at an average commission rate of 1.9% [19] - The overall brokerage volume posted a 2% gain compared to a 17% increase in market volume, indicating a challenging comparison due to outsized growth in larger deals last year [9][19] - The market is still estimated to be 15%-20% below normal activity levels, with some regions closer to pre-pandemic trading velocities [46][47] Company Strategy and Development Direction - The company aims to expand market coverage through improved hiring and synergistic acquisitions, focusing on retail and industrial sectors for growth [16][17] - Continued investments in technology and talent retention are prioritized to enhance long-term competitiveness [25][40] - The auction division is gaining traction, accounting for an estimated 25% share of total commercial property auctions in the U.S. [12] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about a new sales and financing cycle as the market resets, driven by expected interest rate reductions and improved lending conditions [14][15] - The company anticipates continued sequential improvement in business as transaction activity drivers improve, despite challenging comparisons to last year's exceptional fourth quarter [28][29] - Ongoing uncertainty around global macro conditions and inflation remains, but a more accommodative Fed is expected to drive transactional activity [28] Other Important Information - The company reported a $4 million legal reserve impacting net income, which management intends to appeal [25][26] - The balance sheet remains strong with no debt and $382 million in cash and marketable securities, reflecting a $49 million increase over the last quarter [27] Q&A Session Summary Question: Discussion on larger transaction segment dynamics - Management noted that while larger deals faced tough comparisons due to an outsized number last year, the business in the $20 million-$50 million range has remained steady [31][32] Question: Customer motivations and market alignment - Management observed increased motivation among private clients to sell due to loan maturities and operational issues, with improved price alignment in the market [35][36] Question: Auction business growth potential - The auction business is expected to grow significantly, leveraging specialized teams and pre-qualified bidders to enhance transaction efficiency [48][49] Question: Nature of litigation and future implications - Management clarified that the litigation matter is an outlier and not indicative of broader issues within the business, with strong grounds for appeal [52][53]

Financial Performance - Revenue for the third quarter of 2025 was $193.9 million, a 15.1% increase year-over-year[11] - Net income for the third quarter of 2025 was $0.2 million, a 104.5% increase year-over-year[11] - Sales volume for the third quarter of 2025 was $12.2 billion, a 1.7% increase year-over-year[11] - Year-to-date revenue reached $511.2 million, up 12.1% year-over-year[12] - Year-to-date net loss was $(15.2) million, a 27.2% decrease year-over-year[12] Brokerage Operations - Real estate brokerage commissions revenue for the third quarter of 2025 was $162.2 million, up 14.2% year-over-year[13] - Brokerage sales volume for the third quarter of 2025 was $8.4 billion, a 2.0% decrease year-over-year[13] - Financing fees revenue for the third quarter of 2025 was $26.3 million, up 27.7% year-over-year[17] - Financing sales volume for the third quarter of 2025 was $2.9 billion, a 34.4% increase year-over-year[17] Market Trends - Private investors dominate the U S commercial real estate market, accounting for 57% of dollar volume[34]

Revenue Performance - Total revenue for Q3 2025 was $193.9 million, a 15.1% increase from $168.5 million in Q3 2024[6] - The company reported a total revenue of $511.2 million for the nine months ended September 30, 2025, a 12.1% increase from $456.0 million in the same period of 2024[12] - Total revenue for the three months ended September 30, 2025, was $193.892 million, a 15% increase from $168.511 million in the same period of 2024[29] Brokerage Commissions - Brokerage commissions reached $162.2 million, up 14.2% from $142.0 million year-over-year[5] - Real estate brokerage commissions increased to $162.166 million for the three months ended September 30, 2025, compared to $141.970 million in 2024, reflecting a 14.2% growth[29] - Private Client Market brokerage revenue increased by 16.9% to $102.3 million, while Middle Market and Larger Transaction Market revenue rose by 6.5% to $52.5 million[5] Financing and Fees - Financing fees grew by 27.7% to $26.3 million, driven by a 34.4% increase in total financing volume[8] Net Income and Loss - Net income for Q3 2025 was $0.2 million, or $0.01 per diluted share, compared to a net loss of $5.4 million, or $0.14 per diluted share, in Q3 2024[11] - Net income for the three months ended September 30, 2025, was $240, compared to a net loss of $5.385 million in the same period of 2024[29] - The company reported a net loss of $15,217,000 for the nine months ended September 30, 2025, compared to a net loss of $20,910,000 for the same period in 2024[37] Operating Expenses - Total operating expenses for Q3 2025 were $196.3 million, an increase from $180.0 million in Q3 2024, with cost of services as a percentage of total revenue rising to 62.4%[9] - Total operating expenses for the three months ended September 30, 2025, were $196.266 million, up from $179.976 million in 2024, representing an increase of 9.0%[29] Adjusted EBITDA - Adjusted EBITDA for Q3 2025 was $6.9 million, a significant improvement from approximately breakeven in the prior year[11] - Adjusted EBITDA for Q3 2025 was $6,889,000, compared to a loss of $21,000 in Q3 2024[37] - The company uses Adjusted EBITDA as a key performance metric, which excludes items related to capital structure, taxes, and non-cash items[36] - Adjusted EBITDA is not a measurement of financial performance under U.S. GAAP and should not be considered an alternative to net income or operating income[36] - The company emphasizes that Adjusted EBITDA may not be comparable to similar measures used by other companies due to different calculation methods[36] Transaction Volume and Size - Total sales volume reached approximately $12.2 billion for the three months ended September 30, 2025, with 2,289 transactions, including $8.3 billion in real estate brokerage[31] - The average commission per transaction in real estate brokerage was $102,248 for the three months ended September 30, 2025, down from $106,664 in 2024[31] - The average transaction size in real estate brokerage was $5.270 million for the three months ended September 30, 2025, compared to $6.407 million in 2024[31] Assets and Share Repurchase - Total assets decreased to $812.494 million as of September 30, 2025, from $869.800 million at the end of 2024[34] - The company has approximately $59.0 million available for share repurchases under its program, with no established time limit for completion[15] Future Outlook - The company anticipates overcoming near-term challenges in the commercial real estate transaction market, positioning itself for long-term growth[16] Personnel - The company had 1,569 investment sales professionals and 100 financing professionals as of September 30, 2025[31] Interest Income and Expenses - Interest income and other for Q3 2025 was a loss of $3,487,000, compared to a loss of $4,498,000 in Q3 2024[37] - Interest expense for the nine months ended September 30, 2025, was $584,000, slightly down from $611,000 in 2024[37] Depreciation and Stock-Based Compensation - Depreciation and amortization expenses for Q3 2025 were $2,743,000, compared to $4,550,000 in Q3 2024[37] - Total adjustments to net income included $5,966,000 in stock-based compensation for Q3 2025, up from $6,071,000 in Q3 2024[37]

Core Insights - Canada One Mining Corp. is focusing on the Boundary Zone at its Copper Dome Project, which shows significant copper-gold mineralization and is adjacent to the Copper Mountain Mine [1][3][18] Exploration Review - The Boundary Zone features a broad copper-gold system with copper values exceeding 10,000 ppb, indicating porphyry-style mineralization [3][4] - The anomalous zone measures approximately 1,000 meters in width and 1,750 meters in length, extending towards the Copper Mountain Mine, which is 1,500 meters away [3][6] - Rock samples within the zone have shown high-grade results, including 1.06% Cu, 0.17 g/t Au, and 0.46 g/t Pd [6] Geological Features - The area is characterized by a depletion of zinc, lead, and cadmium, which is consistent with the core of a copper porphyry system [5][6] - Elevated potassium values indicate potassic alteration, a common feature associated with porphyry copper deposits [5][6] Historical Context - The Copper Dome Project is located in the lower Quesnel Trough porphyry belt, a prolific mining district in British Columbia, and is adjacent to Hudbay Minerals' Copper Mountain Mine [18][19] - Historical drilling has confirmed high-grade copper associated with northeast-trending structures similar to those at Copper Mountain [18] Infrastructure and Development - The project benefits from excellent infrastructure, allowing for year-round access and cost-efficient exploration [19] - Canada One Mining Corp. has a five-year drill permit in place and is focused on advancing the project towards drill-ready target definition [20]

Core Insights - Institutional Property Advisors successfully brokered a $44 million sale of a multifamily asset in Los Angeles and arranged $27.4 million in financing for the same property [1] Group 1 - The sale price of the multifamily asset was $44 million, indicating strong demand in the Los Angeles real estate market [1] - The financing arranged for the property amounted to $27.4 million, showcasing the financial backing available for multifamily investments [1]

Core Viewpoint - Marcus & Millichap, Inc. will report its financial results for Q3 2025 on November 7, 2025, before market open [1] Company Announcement - The company specializes in commercial real estate investment sales, financing, and research and advisory services [1] - A webcast and conference call will be held on the same day at 10:30 a.m. Eastern Time to discuss the results [1]

Financial Data and Key Metrics Changes - The company reported a significant turnaround in underlying performance year on year, with record first half shipments of 1,900,000 tonnes and an underlying EBITDA of $23 million [2][9] - The results included several one-off items, indicating a change in the risk profile of the company, with a reversal of impairment and recognition of tax losses [3][4][6] Business Line Data and Key Metrics Changes - The company has focused on improving operational consistency and addressing interface issues in its production processes, particularly in the barge loading facility [13][14] - The production levels have shown improvement, with consistent operations reaching around 30,000 tonnes per day, which is necessary for achieving the target capacity of 7,000,000 tonnes [16][17] Market Data and Key Metrics Changes - The company has benefited from a strong pricing environment that has supported its financial performance in the first half of the year [9] - The operational performance has been strong despite external challenges, such as weather impacts that constrained production [15] Company Strategy and Development Direction - The company aims to achieve increased output and operational improvements, targeting a capacity of 8,000,000 tonnes in the medium term [20][21] - There is a focus on both organic growth through operational enhancements and potential inorganic growth by exploring bauxite opportunities and leveraging core competencies in logistics and marketing [22][23][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the future sustainability of strong performance, indicating that the current results reflect a paradigm shift in the company's risk profile [6][10] - The second half of the year is traditionally the most productive period, and the company is optimistic about carrying momentum into this period [10] Other Important Information - The company has set targets for 2026, including achieving specific output and cost reduction goals, while maintaining a cautious approach to any potential acquisitions [22][24] Q&A Session Summary Question: Progress on ramping up to 7,000,000 tonnes annual capacity - Management confirmed satisfaction with operational growth and noted improvements in production consistency despite some external challenges [13][16] Question: Outlook for Metro in 2026 and growth strategy - Management discussed medium-term growth aspirations, emphasizing the importance of achieving current capacity targets and exploring both organic and inorganic growth opportunities [18][20][22]

Financial Data and Key Metrics Changes - The company reported a significant turnaround in underlying performance year on year, with record first half shipments of 1,900,000 tonnes and an underlying EBITDA of $23 million [2][8] - The results included a reversal of impairment and recognition of tax losses, indicating a change in the company's risk profile and confidence in future earnings [4][6][7] Business Line Data and Key Metrics Changes - The company has focused on improving operational consistency and addressing interface issues in its production processes, which has led to increased production levels [14][16] - The operational focus has shifted towards achieving a consistent output of around 30,000 tonnes per day, which is essential for reaching the targeted annual capacity of 7,000,000 tonnes [17] Market Data and Key Metrics Changes - The strong pricing environment has supported the company's financial performance, contributing to positive operating cash flow in the first half of the year [8] Company Strategy and Development Direction - The company aims to achieve increased output in 2026, with a focus on continuous improvement in all areas of the business and leveraging core competencies in logistics and marketing [20][23] - There are plans for potential inorganic growth opportunities, although the company will proceed cautiously and within set limits [22][24] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the second half of the year, traditionally the most productive period, and highlighted the momentum carried into this period [9] - The management emphasized the importance of the recent accounting adjustments as indicators of a paradigm shift in the company's risk profile and future confidence [6][7] Other Important Information - The company has been addressing operational challenges and has made investments to improve production facilities, which are expected to yield positive results moving forward [14][15] Q&A Session Summary Question: Can you discuss the progress that the company has made on its ramp up to 7,000,000 tonnes per annual capacity? - Management confirmed satisfaction with the growth, noting improvements in production consistency and addressing previous operational issues [13][17] Question: What is the outlook for Metro in 2026 and what does the growth strategy mean for investors and shareholders? - Management highlighted the focus on increasing output, continuous improvement, and exploring inorganic growth opportunities while maintaining a cautious approach [18][20][22]

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents unaudited condensed consolidated financial statements, detailing financial position, performance, and cash flows [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Condensed Consolidated Balance Sheet Highlights | Metric | Dec 31, 2024 (in thousands) | Jun 30, 2025 (in thousands) | Change (in thousands) | | :----- | :-------------------------- | :-------------------------- | :-------------------- | | Total Assets | $869,800 | $792,209 | $(77,591) | | Total Liabilities | $238,982 | $184,434 | $(54,548) | | Total Stockholders' Equity | $630,818 | $607,775 | $(23,043) | | Cash, Cash Equivalents, and Restricted Cash | $153,445 | $85,954 | $(67,491) | | Marketable Debt Securities (Current) | $189,667 | $136,461 | $(53,206) | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Condensed Consolidated Statements of Operations (Three Months Ended June 30) | Metric (Three Months Ended June 30) | 2025 (in thousands) | 2024 (in thousands) | YoY Change (%) | | :---------------------------------- | :------------------ | :------------------ | :------------- | | Total Revenue | $172,276 | $158,367 | 8.8% | | Real Estate Brokerage Commissions | $141,417 | $135,423 | 4.4% | | Financing Fees | $26,259 | $18,294 | 43.5% | | Operating Loss | $(9,045) | $(8,046) | 12.4% | | Net Loss | $(11,035) | $(5,538) | 99.3% | | Basic EPS | $(0.28) | $(0.14) | 100.0% | Condensed Consolidated Statements of Operations (Six Months Ended June 30) | Metric (Six Months Ended June 30) | 2025 (in thousands) | 2024 (in thousands) | YoY Change (%) | | :-------------------------------- | :------------------ | :------------------ | :------------- | | Total Revenue | $317,314 | $287,471 | 10.4% | | Real Estate Brokerage Commissions | $265,039 | $244,898 | 8.2% | | Financing Fees | $44,389 | $32,721 | 35.7% | | Operating Loss | $(26,756) | $(28,148) | (4.9)% | | Net Loss | $(15,457) | $(15,525) | (0.4)% | | Basic EPS | $(0.40) | $(0.40) | 0.0% | [Condensed Consolidated Statements of Comprehensive Loss](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Loss) Condensed Consolidated Statements of Comprehensive Loss (Three Months Ended June 30) | Metric (Three Months Ended June 30) | 2025 (in thousands) | 2024 (in thousands) | | :---------------------------------- | :------------------ | :------------------ | | Net Loss | $(11,035) | $(5,538) | | Total Other Comprehensive Income (Loss) | $1,405 | $(85) | | Comprehensive Loss | $(9,630) | $(5,623) | Condensed Consolidated Statements of Comprehensive Loss (Six Months Ended June 30) | Metric (Six Months Ended June 30) | 2025 (in thousands) | 2024 (in thousands) | | :-------------------------------- | :------------------ | :------------------ | | Net Loss | $(15,457) | $(15,525) | | Total Other Comprehensive Income (Loss) | $1,758 | $(593) | | Comprehensive Loss | $(13,699) | $(16,118) | [Condensed Consolidated Statements of Stockholders' Equity](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) Condensed Consolidated Statements of Stockholders' Equity (Six Months Ended June 30, 2025) | Metric (Six Months Ended June 30, 2025) | Amount (in thousands) | | :-------------------------------------- | :-------------------- | | Balance at December 31, 2024 | $630,818 | | Net and Comprehensive (Loss) Income | $(13,699) | | Dividends | $(10,230) | | Stock-Based Compensation | $12,402 | | Repurchases of Common Stock | $(7,398) | | Balance as of June 30, 2025 | $607,775 | [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Condensed Consolidated Statements of Cash Flows (Six Months Ended June 30) | Cash Flow Activity (Six Months Ended June 30) | 2025 (in thousands) | 2024 (in thousands) | YoY Change (in thousands) | | :-------------------------------------------- | :------------------ | :------------------ | :------------------------ | | Net Cash Used in Operating Activities | $(31,821) | $(50,170) | $18,349 | | Net Cash (Used in) Provided by Investing Activities | $(10,076) | $58,777 | $(68,853) | | Net Cash Used in Financing Activities | $(25,858) | $(17,229) | $(8,629) | | Net Decrease in Cash, Cash Equivalents, and Restricted Cash | $(67,491) | $(8,760) | $(58,731) | | Cash, Cash Equivalents, and Restricted Cash at End of Period | $85,954 | $161,993 | $(76,039) | [Notes to Condensed Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) - Marcus & Millichap specializes in commercial real estate investment sales, financing, research, and advisory services, operating over 80 offices in the US and Canada[24](index=24&type=chunk) - The company's Canadian operations represented **3.7%** and **4.1% of total revenue** for the three and six months ended June 30, 2025, respectively, a decrease from 6.5% and 5.6% in the prior year[34](index=34&type=chunk) - Revenue from real estate brokerage commissions and financing fees is recognized at the close of escrow or loan closing, respectively, when performance obligations are complete[37](index=37&type=chunk)[38](index=38&type=chunk) - The company has a strategic alliance with MTRCC, where it may indemnify a portion of MTRCC's loan guarantee obligation to Fannie Mae, with a **maximum aggregate guarantee of $371.1 million** as of June 30, 2025[32](index=32&type=chunk)[42](index=42&type=chunk)[133](index=133&type=chunk) - The company changed its income tax calculation method from the annual effective tax rate (AETR) to the discrete method for the second quarter of 2025 due to significant variability in the AETR from nominal changes to projected pre-tax earnings[120](index=120&type=chunk) Selected Financial Statement Details | Item | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :--- | :--------------------------- | :------------------------------- | | Goodwill and other intangible assets, net | $42,713 | $43,521 | | Allowance for credit losses (advances and loans) | $1,600 | $1,200 | | Current Deferred compensation and commissions | $37,428 | $67,197 | | Non-current Deferred compensation and commissions | $26,318 | $33,257 | | Maximum aggregate loan guarantee obligation | $371,100 | N/A | - The Board of Directors declared a semi-annual regular dividend of **$0.25 per share** on July 31, 2025, payable on October 6, 2025[104](index=104&type=chunk)[135](index=135&type=chunk) - The company repurchased **242,821 shares** of common stock for **$7.4 million** during the six months ended June 30, 2025, with **$63.6 million remaining authorized** under the repurchase program[20](index=20&type=chunk)[108](index=108&type=chunk) - The Credit Facility with Wells Fargo Bank was extended to **June 1, 2026**, providing a **$10 million line of credit**, with **$1.1 million utilized** for standby letters of credit as of June 30, 2025[130](index=130&type=chunk)[131](index=131&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=32&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial condition and operational results, analyzing key factors including economic conditions and capital resources [Forward-Looking Statements](index=32&type=section&id=Forward-Looking%20Statements) - Forward-looking statements are based on current expectations and projections, subject to risks like general capital market uncertainty, economic conditions, interest rate changes, and the ability to attract and retain professionals[137](index=137&type=chunk)[141](index=141&type=chunk) [Overview](index=33&type=section&id=Overview) - The company is a top commercial real estate investment broker in the U.S., with **1,640 investment sales and financing professionals**[142](index=142&type=chunk) Key Operational Metrics (Three Months Ended June 30, 2025) | Metric (Three Months Ended June 30, 2025) | Value | | :---------------------------------------- | :---- | | Total Transactions Closed | 2,070 | | Total Sales Volume | ~$12.3 billion | | Revenue from Real Estate Brokerage Commissions | 82% | | Revenue from Financing Fees | 15% | | Revenue from Other Services | 3% | | Private Client Market Contribution to Brokerage Commissions | 66% | [Factors Affecting Our Business](index=34&type=section&id=Factors%20Affecting%20Our%20Business) - Key economic indicators show positive momentum with **597,000 new jobs added** in the first half of 2025, but unemployment remains stable at **4.1%**[149](index=149&type=chunk) - Commercial real estate fundamentals are robust, with positive space absorption across most property types, and oversupply risks diminishing due to elevated capital costs and rising tariffs[152](index=152&type=chunk)[154](index=154&type=chunk) - Apartment vacancy rates trended lower to **4.4% in Q2 2025**, with **790,000 units absorbed** in the trailing 12 months, the strongest in over 30 years[157](index=157&type=chunk) - Interest rate volatility and policy uncertainty have led to increased lender caution, with the **10-year treasury benchmark remaining near 4.5%**[160](index=160&type=chunk) - Commercial real estate transaction activity increased by **12% year-over-year in Q2 2025**, led by office and retail property sales[164](index=164&type=chunk) - New tax act provisions, including bonus depreciation and increased state and local tax (SALT) allowances, are expected to bolster commercial real estate investment activity[162](index=162&type=chunk)[166](index=166&type=chunk) [Key Financial Measures and Indicators](index=37&type=section&id=Key%20Financial%20Measures%20and%20Indicators) - Revenue is primarily from real estate investment sales, with commissions recognized at escrow close and financing fees at loan closing[167](index=167&type=chunk)[170](index=170&type=chunk)[171](index=171&type=chunk) - Cost of services primarily consists of variable commissions paid to investment sales and financing professionals, which can vary based on individual contracts and experience[175](index=175&type=chunk) - Selling, general and administrative expenses include personnel costs, business development, marketing, and stock-based compensation[176](index=176&type=chunk) - The company changed its interim income tax calculation method from the annual effective tax rate (AETR) to the discrete method in Q2 2025 due to AETR variability[180](index=180&type=chunk)[181](index=181&type=chunk) [Results of Operations](index=39&type=section&id=Results%20of%20Operations) [Comparison of Three Months Ended June 30, 2025 and 2024](index=40&type=section&id=Comparison%20of%20Three%20Months%20Ended%20June%2030,%202025%20and%202024) Results of Operations (Three Months Ended June 30) | Metric | 3 Months Ended Jun 30, 2025 (in thousands) | 3 Months Ended Jun 30, 2024 (in thousands) | Dollar Change (in thousands) | Percentage Change | | :-------------------------------- | :--------------------------------------- | :--------------------------------------- | :--------------------------- | :---------------- | | Real estate brokerage commissions | $141,417 | $135,423 | $5,994 | 4.4% | | Financing fees | $26,259 | $18,294 | $7,965 | 43.5% | | Total revenue | $172,276 | $158,367 | $13,909 | 8.8% | | Cost of services | $106,618 | $98,081 | $8,537 | 8.7% | | Selling, general and administrative | $71,550 | $65,003 | $6,547 | 10.1% | | Operating loss | $(9,045) | $(8,046) | $(999) | 12.4% | | Provision for income taxes | $7,288 | $2,100 | $5,188 | 247.0% | | Net loss | $(11,035) | $(5,538) | $(5,497) | 99.3% | - The average commission rate for real estate brokerage decreased by **13 basis points** due to an increase in average transaction size, as larger transactions typically have smaller commission rates[187](index=187&type=chunk) - Selling, general, and administrative expense increased by **$6.6 million**, or **10.1%**, primarily due to higher compensation-related costs, increased investment in business development and marketing, and changes in deferred contingent consideration valuation[192](index=192&type=chunk) [Comparison of Six Months Ended June 30, 2025 and 2024](index=42&type=section&id=Comparison%20of%20Six%20Months%20Ended%20June%2030,%202025%20and%202024) Results of Operations (Six Months Ended June 30) | Metric | 6 Months Ended Jun 30, 2025 (in thousands) | 6 Months Ended Jun 30, 2024 (in thousands) | Dollar Change (in thousands) | Percentage Change | | :-------------------------------- | :--------------------------------------- | :--------------------------------------- | :--------------------------- | :---------------- | | Real estate brokerage commissions | $265,039 | $244,898 | $20,141 | 8.2% | | Financing fees | $44,389 | $32,721 | $11,668 | 35.7% | | Total revenue | $317,314 | $287,471 | $29,843 | 10.4% | | Cost of services | $194,966 | $174,949 | $20,017 | 11.4% | | Selling, general and administrative | $143,102 | $133,919 | $9,183 | 6.9% | | Operating loss | $(26,756) | $(28,148) | $1,392 | (4.9)% | | Benefit for income taxes | $(2,209) | $(2,646) | $437 | (16.5)% | | Net loss | $(15,457) | $(15,525) | $68 | (0.4)% | - Cost of services as a percentage of total revenue increased by **50 basis points** to **61.4%**, primarily due to senior professionals earning higher additional commissions[203](index=203&type=chunk) - Other revenue decreased by **20.0%** to **$7.9 million**, mainly due to a reduction in leasing fees[201](index=201&type=chunk) [Non-GAAP Financial Measure](index=43&type=section&id=Non-GAAP%20Financial%20Measure) - Adjusted EBITDA is defined as net loss before interest income and other, interest expense, provision (benefit) for income taxes, depreciation and amortization, and stock-based compensation[209](index=209&type=chunk) Adjusted EBITDA Reconciliation (Three Months Ended June 30) | Metric | 3 Months Ended Jun 30, 2025 (in thousands) | 3 Months Ended Jun 30, 2024 (in thousands) | | :----- | :--------------------------------------- | :--------------------------------------- | | Net loss | $(11,035) | $(5,538) | | Adjusted EBITDA | $1,456 | $1,441 | Adjusted EBITDA Reconciliation (Six Months Ended June 30) | Metric | 6 Months Ended Jun 30, 2025 (in thousands) | 6 Months Ended Jun 30, 2024 (in thousands) | | :----- | :--------------------------------------- | :--------------------------------------- | | Net loss | $(15,457) | $(15,525) | | Adjusted EBITDA | $(7,286) | $(8,641) | [Liquidity and Capital Resources](index=44&type=section&id=Liquidity%20and%20Capital%20Resources) - Primary liquidity sources are cash, cash equivalents, restricted cash, operating cash flows, marketable debt securities, and a **$10 million credit facility**[211](index=211&type=chunk) Cash Flow Summary (Six Months Ended June 30) | Cash Flow Activity (Six Months Ended June 30) | 2025 (in thousands) | 2024 (in thousands) | | :-------------------------------------------- | :------------------ | :------------------ | | Net cash flows used in operating activities | $(31,821) | $(50,170) | | Net cash flows (used in) provided by investing activities | $(10,076) | $58,777 | | Net cash flows used in financing activities | $(25,858) | $(17,229) | | Net decrease in cash, cash equivalents, and restricted cash | $(67,491) | $(8,760) | | Cash, cash equivalents, and restricted cash at end of period | $85,954 | $161,993 | - Cash flows used in operating activities decreased by **$18.3 million**, primarily due to a reduction in advances and loans[213](index=213&type=chunk) - Investing activities shifted from providing **$58.8 million** in 2024 to using **$10.1 million** in 2025, mainly due to a **$69.8 million increase** in net purchases of securities[214](index=214&type=chunk) - Financing activities used **$8.6 million more cash**, driven by a **$6.8 million increase** in stock repurchases and **$1.1 million** in principal payments for deferred/contingent consideration[215](index=215&type=chunk) - The company has a maximum aggregate loan guarantee obligation of **$371.1 million** related to its strategic alliance with MTRCC, supported by **$0.8 million** in restricted cash[218](index=218&type=chunk)[219](index=219&type=chunk) - Inflation, which rose to **2.7% as of March 2025**, and the Federal Reserve's restrained interest rate outlook, coupled with potential inflationary trade policies, could impact future economic conditions[222](index=222&type=chunk)[223](index=223&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=46&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section details market risk exposure, primarily interest rate risk on marketable debt securities and minor foreign currency risk - The company holds **$246.7 million** in marketable debt securities, available-for-sale, with a weighted average credit rating of **AA-**[225](index=225&type=chunk) Sensitivity of Marketable Debt Securities to Interest Rate Changes | Change in Interest Rates | Approximate Change in Fair Value of Investments (in thousands) | | :----------------------- | :----------------------------------------------------------- | | 2% Decrease | $6,229 | | 1% Decrease | $3,115 | | 1% Increase | $(3,116) | | 2% Increase | $(6,233) | [Item 4. Controls and Procedures](index=47&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls were effective as of June 30, 2025, with no material changes to internal control - Management concluded that disclosure controls and procedures were effective as of June 30, 2025[228](index=228&type=chunk) - No material changes in internal control over financial reporting occurred during the quarter ended June 30, 2025[229](index=229&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=48&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in ordinary course legal proceedings, with no material adverse effect expected on financial results - The company is involved in ordinary course legal proceedings, but management does not expect a material adverse effect on financial results[231](index=231&type=chunk) [Item 1A. Risk Factors](index=48&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors were reported since the last Annual Report on Form 10-K - No material changes to risk factors were reported since the last Annual Report on Form 10-K[232](index=232&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=48&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased 230,283 shares for $7.4 million, with $63.6 million remaining authorized for repurchases Common Stock Repurchases (Three Months Ended June 30, 2025) | Period (Three Months Ended June 30, 2025) | Total Shares Purchased | Average Price Paid Per Share | Approximate Dollar Value Remaining (in thousands) | | :---------------------------------------- | :--------------------- | :--------------------------- | :------------------------------------------------ | | April 1, 2025 - April 30, 2025 | 161,165 | $31.04 | $65,523 | | May 1, 2025 - May 31, 2025 | 57,288 | $28.45 | $63,894 | | June 1, 2025 - June 30, 2025 | 11,830 | $28.80 | $63,553 | | Total | 230,283 | N/A | $63,553 | - As of June 30, 2025, **$63.6 million remained authorized** for repurchases under the common stock repurchase program[108](index=108&type=chunk)[233](index=233&type=chunk) [Item 3. Defaults Upon Senior Securities](index=48&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) No defaults upon senior securities were reported by the company during the period - No defaults upon senior securities were reported[234](index=234&type=chunk) [Item 4. Mine Safety Disclosures](index=48&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company's operations - Mine Safety Disclosures are not applicable to the company[235](index=235&type=chunk) [Item 5. Other Information](index=49&type=section&id=Item%205.%20Other%20Information) No Rule 10b5-1 trading arrangements were adopted or terminated by directors or officers during the quarter - No Rule 10b5-1 trading plans were adopted or terminated by directors or officers during the quarter[236](index=236&type=chunk) [Item 6. Exhibits](index=50&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of the Form 10-Q, including credit agreement amendments and CEO/CFO certifications - Key exhibits include the Third Amendment to the Second Amended and Restated Credit Agreement and CEO/CFO certifications[237](index=237&type=chunk) [SIGNATURES](index=51&type=section&id=SIGNATURES) The report was signed on August 7, 2025, by President and CEO Hessam Nadji and CFO Steven F. DeGennaro - The report was signed by the President and CEO, Hessam Nadji, and CFO, Steven F. DeGennaro, on **August 7, 2025**[243](index=243&type=chunk)