Marcus & Millichap, Inc.

Greetings and welcome to the Marcus and Millichap first quarter 2026 financial results conference call. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. And as a reminder, this conference call is being recorded. I would now like to turn the conference over to your host, Jacques Cornet. Thank you. You may begin.

Thank you, operator. Good morning and welcome to Marcus and Millichap's first quarter 2026 earnings conference call. With us today are President and Chief Executive Officer, Hossam Nagy, and Chief Financial Officer, Steve DiGennaro. Before I turn the call over to management, please remember that our prepared remarks and the responses to questions may contain forward-looking statements. Words such as may, will, expect, believe, estimate, anticipate, goal, and variations of these words and similar expressions are intended to identify forward-looking statements. Actual results can differ materially from those implied by such forward-looking statements due to a variety of factors, including but not limited to general economic conditions and commercial real estate market conditions, the company's ability to retain and attract transactional professionals, the company's ability to retain its business philosophy and partnership culture amid competitive pressures, the company's ability to integrate new agents and sustain its growth, and other factors discussed in the company's filings, including its annual report on Form 10-K filed with the Securities and Exchange Commission on February 26, 2026. Although the company believes the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can make no assurance that its expectations will be attained. The company undertakes no obligation to update any forward-looking statement, whether as a result of new information, future events, or otherwise. In addition, certain financial information presented on this call represents non-GAAP financial measures. Company's earnings release, which was issued this morning and is available on the company's website, represents a reconciliation to the appropriate GAAP measures and explains why the company believes such non-GAAP measures are useful to investors. This conference call is being webcast The webcast link is available on the investor relations section of the company's website at www.marcusmillichap.com, along with the slide presentation you may reference during the prepared remarks. With that, it is my pleasure to turn the call over to CEO, Hassan Nagy.

Thank you, Jacques. On behalf of the entire Marcus Millichap team, good morning, everybody, and welcome to our first quarter 2026 earnings call. We're pleased to report a strong start to the year with revenue growth of 18% over the first quarter of 2025. This reflects improving market conditions, a more robust recovery in our private client business, and further momentum in our financing division. Building on last year's fourth quarter, our strong start is also driven by two-plus years of persistent client outreach, frequent valuation updates, and seller consultations that are now translating into transactions. Brokerage revenue grew nearly 12% year-over-year, while our financing business delivered a stellar 48% increase, demonstrating both the scaling of our capital markets platform and an improving lending environment. Adjusted EBITDA improved to nearly $3 million from a loss of nearly $9 million a year ago, as we start to benefit from expense leveraging with revenue recovery from the prolonged market disruptions. MMI completed nearly 1,400 brokerage transactions in the first quarter, a 15% increase. Transactions per agent increased 11%, which we see as a key measure of productivity gains, particularly given the growth in our headcount over the past year. Improvements were broad, with seven of the 11 property types we service hosting brokerage revenue growth for the quarter. Office transactions delivered the largest gains in several years thanks to significant price resets and an improving space demand driven by a growing return to office mandates. Activity was also strong in multifamily, manufactured housing, and single-tenant retail. Our private client brokerage revenue improved 13% year-over-year and contributed the largest share of incremental brokerage revenue gains in the quarter. The strength was driven by a narrowing bid-ask spread thanks to more realistic price expectations by sellers and more banks and credit unions returning to the market. We're seeing broader acceptance by sellers that current interest rate levels represent the new normal, which is forcing more realism on valuation. Small and mid-cap multifamily and single-tenant properties, which were most affected by the interest rate shock and lender constraints, are now seeing more transactions following the unusually sharp and prolonged correction we experienced since 2023. Our larger transaction segment delivered a 25% revenue increase in the quarter, reversing last year's decline. As I shared on our last quarter's call, revenue from our 20 million plus sales increased by 28% in 2024, clearly leading the recovery. In 2025, this segment faced a very tough comp, while institutions also became more selective and focused primarily on top-tier assets. During the first quarter, our IPA division, which drives the majority of our larger deals, leveraged a widening buyer pool and increasing appetite across the asset quality spectrum. As a general observation, price adjustments over the last two years point to a compelling entry point for investors, especially relative to replacement costs. MMI's financing revenue reached $27 million in the quarter, a 48 percent increase, while total financing volume grew 60 percent across nearly 400 finance transactions. Average deal size increased 36 percent as we executed larger and more complex transactions. This is a direct result of our successful recruiting and acquisition strategy over the past few years to attract highly experienced originators and finance boutique firms. Given the success in this strategy, we continue to focus on adding origination teams in key regions around the country. It is also critical to note that MMCC benefits from a deep bench of veteran originators who have been with the firm for many years. and continue to thrive as we expand technology, lender relationships, and collaboration with our sales brokers. A notable shift this quarter was toward acquisition financing, which accounted for 61% of originations, up from 50% a year ago. This trend is consistent with a rising transaction market, which enables more trades than refinancings and recapitalizations. As lenders feel the pressure to become more competitive, we're seeing various metrics improve, particularly in higher loan-to-value ratios. At the same time, underwriting and sponsor qualification remain tight, still requiring more time and diligence from originators and investment brokers to execute transactions. Lastly, our finance team used 188 unique lenders in the first quarter to provide our clients with a competitive advantage by leveraging our vast and growing network of qualified capital sources. Our auction services and loan sales business continue to gain traction and cross-generate referrals with our brokerage and financing teams. Auction revenue nearly doubled year-over-year in the first quarter, while revenue from loan sales and IPA capital markets increased 39%. These value-added services are effectively providing alternative marketing and sales channels to investors and lenders with ample growth opportunity ahead. On headcount, we ended the quarter with 1,621 investment brokers, up 87 from the first quarter of 2025. This includes a larger than usual seasonal reduction in sales force during the first quarter due to the proactive termination of two- to three-year agents in development who are falling short of key metrics. We are being more selective in recruiting and exercising tighter monitoring of sales performance for newer agents in their first 18 to 24 months with us. Going forward, more of the company's organic growth strategy will shift toward reliance on our expanded internship program and our fellowship channel, both of which are generating higher-performing agents with more reliable production. This shift would likely cause some noise in the net hiring data from quarter to quarter, but should be a better approach in the long term. Results from the recent expansion of our corporate recruiting team, working hand-in-hand with our local market leaders, have been encouraging as measured by the screening improvement and improved placements we've seen so far. We're scaling this further with the recent hiring of an industry veteran recruiter focused entirely on adding experienced talent. The company's technology investments continue to advance across multiple areas of the business, including our central support services. This critical group is referred to as brokerage transaction services, or BTS, and provides financial analysis, document generation, and marketing tools to support our sales force. The central theme in our technology strategy is the scalable application of AI to drive efficiency gains throughout all aspects of the brokerage service continuum, and various internal functions. While the power of AI applied to a particular brokerage team, a particular geographic market or property type is clearly measurable, our focus is on building scalable AI agents and tools that markedly improve Salesforce productivity across the firm. This is a bigger challenge than simply applying AI to a particular practice. Looking forward, we expect commercial real estate fundamentals to remain healthy, with more catalysts emerging to drive the rising tide of transactions. Pricing has generally adjusted and continues to recalibrate by asset quality, while new construction is slowing dramatically. This is especially critical for industrial and multifamily assets, which have seen record new inventory in the last few years. These factors are making the commercial real estate investment case increasingly compelling on a replacement cost basis. More of our clients are accepting that the pricing paradigm has shifted, and lenders are facilitating the transition to a new cycle with more competitive terms. Notwithstanding some cooling of activity around the time of the conflict in the Middle East, our focused Salesforce granular client-centric business model and local market expertise should drive growth amid ongoing macro-political and economic developments. Our balance sheet remains a competitive advantage with approximately $335 million in cash and no debt. MMI has achieved the flexibility to invest in our platform, continue to pursue its strategic acquisitions, and return capital to shareholders all at the same time. The ability to maintain a strong balance sheet clearly stands out as a catalyst to accelerate growth as the next real estate cycle takes shape. We see substantial growth opportunity ahead with operating leverage from recent investments and the addition of talented individuals we've brought on board over the past several years. With that, I will turn the call over to Steve for more details on our financial results. Steve?