CALABASAS, CALIF. — Marcus & Millichap (NYSE: MMI) reported total revenues of $117.4 million in the second quarter, compared with $209.6 million during the same period a year ago, a 44 percent decrease, according to the company’s latest quarterly results released Thursday.
The precipitous drop in revenue resulted in net income of $106,000 for the second quarter that ended June 30, compared with $21.3 million for the same period in 2019. The decline in total revenues was driven by the decrease in real estate brokerage commissions, financing fees and other revenues due primarily to the COVID-19 pandemic, the earnings release stated.
“The health crisis and economic shutdown resulted in major market disruption during the second quarter with an estimated decline of roughly 60 percent in market transactions,” explained Hessam Nadji, president and CEO of the Calabasas-based firm. “Our team worked extremely hard to take care of our clients’ needs in a difficult environment, which resulted in 1,075 closed brokerage transactions.”
Nadji added that the company’s long-term focus is on the continued hiring of experienced agents, investments in technology and strategic acquisitions. “We are positioning MMI to lead an eventual recovery in real estate transactions facilitated by record-low interest rates and the release of pent-up demand, the timing of which is difficult to project. We expect our platform enhancements will not only create shareholder value in the next cyclical recovery, but for the long term.”
Total operating expenses for the second quarter decreased 34.3 percent to $120 million, compared with $182.6 million for the same period in 2019. The change was primarily driven by a 42.3 percent decrease in cost of services to $73.7 million and a 17.6 percent decrease in selling, general and administrative expenses.
The company’s stock price closed Thursday, Aug. 6, at $26.96 per share, down from its 52-week high of $38.24 per share.