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Marcus & Millichap, Inc. Reports Results for Fourth Quarter and Full Year 2021

All-time Record Quarterly and Annual Revenues and Earnings Per Share

Initiates Semi-Annual Regular Dividend and Declares Special Dividend

Marcus & Millichap, Inc. (the “Company”, “Marcus & Millichap”, “MMI”) (NYSE: MMI), a leading national brokerage firm specializing in commercial real estate investment sales, financing, research and advisory services, today reported record financial results for the fourth quarter and the year ended December 31, 2021.

Fourth Quarter 2021 Highlights Compared to Fourth Quarter 2020

  • Total revenues increased by 97.9% to $495.1 million
  • Net income increased to $62.0 million, or $1.53 per common share, diluted, compared to $23.6 million, or $0.59 per common share, diluted
  • Adjusted EBITDA more than doubled to $88.2 million compared to $36.9 million
  • Brokerage commissions more than doubled to $455.5 million
    • Private Client brokerage revenue increased by 78.2% to $247.4 million
    • Middle Market and Larger Transaction brokerage revenue increased nearly threefold to $198.6 million
  • Financing fees increased by 27.5% to $34.2 million

Full Year 2021 Highlights Compared to Full Year 2020

  • Total revenues increased by 80.8% to $1.3 billion
  • Net income increased to $142.5 million, or $3.55 per common share, diluted, compared to $42.8 million, or $1.08 per common share, diluted
  • Adjusted EBITDA increased nearly threefold to $213.0 million compared to $75.7 million
  • Brokerage commissions increased by 84.9% to $1.2 billion
    • Private Client brokerage revenue increased by 64.5% to $694.0 million
    • Middle Market and Larger Transaction brokerage revenue more than doubled to $446.3 million
  • Financing fees increased by 55.5% to $109.7 million

Hessam Nadji, Marcus & Millichap’s President and CEO commented, “Record fourth quarter and full-year 2021 results were the culmination of key strategies deployed over the past few years to expand and strengthen the MMI platform, our team’s time-tested and unique ability to help investors navigate and execute effectively amid shifting market sentiment, as well as a strong market recovery. The company’s significant investment in proprietary tools and technology, elevated branding and client outreach campaigns, and key acquisitions over the past several years were direct and meaningful contributors to our results. We are pleased to have captured strong growth in our core, private client business while diversifying into larger, institutional transactions and growing our financing business.”

Mr. Nadji continued, “We believe market conditions will remain favorable for our business, notwithstanding the tide of rising interest rates, slower economic growth, and heightened geopolitical tensions. Our pipeline coming into 2022 reflects healthy growth thanks to many of the same drivers that contributed to our results in 2021 and is supported by strong capital demand for commercial real estate. The asset class is seen as an inflation hedge with compelling yields given the prospects for continued rent growth across most sectors and still-low interest rates. Our focus on supporting our sales forces’ productivity, business development, and market share growth is unwavering while we continue to pursue accretive acquisitions. MMI’s balance sheet which was further bolstered by exceptional cash flow and earnings last year, leading brand, and committed management team are key assets toward maximizing shareholder value in the coming years.”

Dividends

On February 16, 2022, the Board of Directors declared an initial semi-annual regular dividend of $0.25 per share, or approximately $10.4 million, payable on April 4, 2022 to shareholders of record as of the close of business on March 8, 2022.

In addition, the Board of Directors declared a special dividend of $1.00 per share, or approximately $41.7 million, payable on April 4, 2022, to shareholders of record at the close of business on March 8, 2022. Any and all future dividends are subject to review and approval by the Board of Directors.

Fourth Quarter 2021 Results Compared to Fourth Quarter 2020

Total revenues for the fourth quarter of 2021 reached $495.1 million, compared to $250.2 million for the same period during the prior year, increasing by 97.9%. The outperformance in total revenues was driven by increases in real estate brokerage commissions and financing fees. Real estate brokerage commissions more than doubled to $455.5 million from the same period in the prior year primarily due to the growth in overall sales volume generated by an increase in the number of investment sales transactions. This growth was partially offset by a reduction in average commission rates due to a larger proportion of closed transactions from the Larger Transaction Market segment. Financing fees increased 27.5% to $34.2 million.

Total operating expenses for the fourth quarter of 2021 were $413.2 million, an increase of 87.7% compared to $220.2 million for the same period in the prior year. The change was primarily driven by a 107.5% increase in cost of services and a 36.5% increase in selling, general and administrative expense. Cost of services as a percent of total revenues increased by 310 basis points to 67.3% compared to the same period during the prior year, primarily due to senior investment sales and financing professionals earning additional commissions as certain annual revenue thresholds were achieved earlier relative to prior years.

Selling, general and administrative expense for the fourth quarter of 2021 increased by $20.6 million to $77.0 million, compared to the same period in the prior year. The change was primarily due to increases in (i) compensation related costs, primarily driven by increases in management performance compensation due to a significant year-over-year growth in operating results; (ii) business development, marketing and other support related to the long-term retention of our sales and financing professionals; (iii) expenses related to our recent acquisitions; (iv) facilities expenses; and (v) net other expense categories, including events, travel and other related expenses.

Net income for the fourth quarter of 2021 was $62.0 million, or $1.53 per common share, diluted, compared to $23.6 million, or $0.59 per common share, diluted, for the same period in the prior year. Adjusted EBITDA for the fourth quarter of 2021 was $88.2 million, compared to $36.9 million for the same period in the prior year.

Full Year 2021 Results Compared to Full Year 2020

Total revenues for 2021 reached $1.3 billion, compared to $716.9 million for the same period in the prior year, which represents an increase of $579.5 million, or 80.8%. Total operating expenses for 2021 were $1.1 billion, compared to $663.3 million for the same period in the prior year, which represents an increase of 66.9%. Cost of services as a percent of total revenues increased to 64.8%, up 230 basis points compared to the same period in the prior year. Net income for 2021 was $142.5 million, or $3.55 per common share, diluted, compared with net income of $42.8 million, or $1.08 per common share, diluted, for the same period in the prior year. Adjusted EBITDA for 2021 increased nearly threefold to $213.0 million, from $75.7 million for the same period in the prior year. As of December 31, 2021, the Company had 1,994 investment sales and financing professionals, a net reduction of 103 over the prior year.

Business Outlook

Notwithstanding the potential continuing impact of the COVID-19 pandemic and anticipated interest rate increases on the current macroeconomic environment, the Company believes it is well positioned to achieve long-term growth.

The Company benefits from its experienced management team, infrastructure investments, industry-leading market research and proprietary technology. The size and fragmentation of the Private Client Market segment continues to offer long-term growth opportunities through consolidation. This highly fragmented market segment consistently accounts for over 80% of all commercial property sales transactions and over 60% of the commission pool. The top 10 brokerage firms led by MMI have an estimated 23% share of this segment by transaction count.

Key factors that may influence the Company’s business during 2022 include:

  • Volatility in market sales and investor sentiment driven by:
    • Slowdown in market sales of asset types impacted by COVID-19, interest rate fluctuations, increasing bid-ask spread between buyers and sellers, and economic trends
    • Changes to investor sentiment and sales activity based on interest rates and economic initiatives which may affect real estate investor demand
    • Possible impact to investor sentiment related to potential tax law changes which may contribute to transaction acceleration and/or future fluctuations in sales and financing activity
  • Potential higher cost of services resulting from more experienced investment sales and financing professionals closing a larger share of revenue and surpassing revenue thresholds earlier in the year
  • Volatility in each of the Company’s market segments
  • Increase in costs related to in-person events, client meetings, and conferences as the economy opens further
  • Global geopolitical uncertainty, which may cause investors to refrain from transacting
  • The potential for acquisition activity and subsequent integration

Webcast and Call Information

Marcus & Millichap will host a live webcast today to discuss the results at 7:30 a.m. Pacific Time/10:30 a.m. Eastern Time. The webcast will be accessible through the Investor Relations section of Marcus & Millichap's website at ir.marcusmillichap.com and will be archived upon completion of the call. The Company encourages use of the webcast due to potential extended wait times to access the conference call via dial-in.

For those unable to access the webcast, callers from the United States and Canada should dial 1-877-407-9208 ten minutes prior to the scheduled call time. International callers should dial 1-201-493-6784.

Replay Information

For those unable to participate during the live broadcast, a telephonic replay of the call will also be available from 1:30 p.m. Eastern Time on Friday, February 18, 2022 through 11:59 p.m. Eastern Time on Friday, March 4, 2022 by dialing 1-844-512-2921 in the United States and Canada or 1-412-317-6671 internationally and entering passcode 13726405.

About Marcus & Millichap, Inc.

Marcus & Millichap, Inc. is a leading national brokerage firm specializing in commercial real estate investment sales, financing, research and advisory services. As of December 31, 2021, the Company had 1,994 investment sales and financing professionals in 82 offices who provide investment brokerage and financing services to sellers and buyers of commercial real estate. The Company also offers market research, consulting and advisory services to our clients. Marcus & Millichap closed 13,255 transactions in 2021, with a sales volume of approximately $84.4 billion. For additional information, please visit www.MarcusMillichap.com.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This release includes forward-looking statements, including the Company’s business outlook for 2022, the potential continuing impact of the COVID-19 pandemic, the execution of our capital return program, including the initial semi-annual dividend, and expectations for market share growth. 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:

  • uncertainties relating to the economic, operational and financial impact of the ongoing COVID-19 pandemic, including uncertainties regarding the potential impact of new variants, vaccination rates and vaccine mandates on our workforce;
  • general uncertainty in the capital markets and 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;
  • our ability to attract and retain qualified senior executives, managers and investment sales and financing professionals;
  • 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 cyber and ransomware attacks, and any related impact on our reputation;
  • changes in interest rates, availability of capital, tax laws, employment laws or other government regulation affecting our business;
  • 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 and Quarterly Report on Form 10-Q.

In addition, in this release, the words “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “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 release 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 release. 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. We have not filed our Form 10-K for the year ended December 31, 2021. As a result, all financial results described in this earnings release should be considered preliminary, and are subject to change to reflect any necessary adjustments or changes in accounting estimates, that are identified prior to the time we file our Form 10-K.

MARCUS & MILLICHAP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF NET AND COMPREHENSIVE INCOME

(in thousands, except per share amounts)

(Unaudited)

 

 

Three Months Ended

December 31,

Year Ended

December 31,

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Revenues:

 

 

 

 

Real estate brokerage commissions

$

455,511

 

$

217,120

 

$

1,170,969

 

$

633,164

 

Financing fees

 

34,242

 

 

26,864

 

 

109,690

 

 

70,538

 

Other revenues

 

5,381

 

 

6,230

 

 

15,781

 

 

13,204

 

Total revenues

 

495,134

 

 

250,214

 

 

1,296,440

 

 

716,906

 

Operating expenses:

 

 

 

 

Cost of services

 

333,327

 

 

160,672

 

 

840,209

 

 

447,879

 

Selling, general and administrative

 

77,007

 

 

56,413

 

 

255,154

 

 

204,514

 

Depreciation and amortization

 

2,915

 

 

3,077

 

 

11,721

 

 

10,899

 

Total operating expenses

 

413,249

 

 

220,162

 

 

1,107,084

 

 

663,292

 

Operating income

 

81,885

 

 

30,052

 

 

189,356

 

 

53,614

 

Other income (expense), net

 

1,790

 

 

2,426

 

 

4,527

 

 

6,650

 

Interest expense

 

(144

)

 

(205

)

 

(580

)

 

(900

)

Income before provision for income taxes

 

83,531

 

 

32,273

 

 

193,303

 

 

59,364

 

Provision for income taxes

 

21,529

 

 

8,651

 

 

50,833

 

 

16,526

 

Net income

 

62,002

 

 

23,622

 

 

142,470

 

 

42,838

 

 

 

 

 

 

Other comprehensive (loss) income:

 

 

 

 

Marketable debt securities, available-for-sale:

 

 

 

 

Change in net unrealized gains/losses

 

(839

)

 

112

 

 

(1,554

)

 

799

 

Less: reclassification adjustment for net losses included in other

income (expense), net

 

46

 

 

2

 

 

72

 

 

34

 

Net change, net of tax of $(266), $40, $(505) and $286 for the three

months ended December 31, 2021 and 2020, and the years ended

December 31, 2021 and 2020, respectively

 

(793

)

 

114

 

 

(1,482

)

 

833

 

Foreign currency translation loss, net of tax of $0 for the three

months ended December 31, 2021 and 2020 and the years ended

December 31, 2021 and 2020, respectively

 

(44

)

 

(491

)

 

(182

)

 

(237

)

Total other comprehensive (loss) income

 

(837

)

 

(377

)

 

(1,664

)

 

596

 

Comprehensive income

$

61,165

 

$

23,245

 

$

140,806

 

$

43,434

 

 

 

 

 

 

Earnings per share:

 

 

 

 

Basic

$

1.55

 

$

0.59

 

$

3.57

 

$

1.08

 

Diluted

$

1.53

 

$

0.59

 

$

3.55

 

$

1.08

 

 

Weighted average common shares outstanding:

 

 

 

 

Basic

 

39,977

 

 

39,715

 

 

39,888

 

 

39,642

 

Diluted

 

40,419

 

 

39,967

 

 

40,187

 

 

39,735

 

 

 

 

 

 

 

MARCUS & MILLICHAP, INC.

KEY OPERATING METRICS SUMMARY

(Unaudited)

Total sales volume was $34.2 billion for the three months ended December 31, 2021, encompassing 4,313 transactions consisting of $28.6 billion for real estate brokerage (3,278 transactions), $3.8 billion for financing (696 transactions) and $1.8 billion in other transactions, including consulting and advisory services (339 transactions). Total sales volume was $84.4 billion for the year ended December 31, 2021, encompassing 13,255 transactions consisting of $67.5 billion for real estate brokerage (9,652 transactions), $11.6 billion for financing (2,474 transactions) and $5.3 billion in other transactions, including consulting and advisory services (1,129 transactions). As of December 31, 2021, the Company had 1,914 investment sales professionals and 80 financing professionals. Key metrics for real estate brokerage and financing activities (excluding other transactions) are as follows:

 

Three Months Ended

December 31,

Year Ended

December 31,

Real Estate Brokerage

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Average Number of Investment Sales Professionals

 

1,899

 

 

1,948

 

 

1,925

 

 

1,920

 

Average Number of Transactions per Investment Sales Professional

 

1.73

 

 

1.06

 

 

5.01

 

 

3.28

 

Average Commission per Transaction

$

138,960

 

$

104,838

 

$

121,319

 

$

100,694

 

Average Commission Rate

 

1.59

%

 

1.94

%

 

1.73

%

 

1.98

%

Average Transaction Size (in thousands)

$

8,718

 

$

5,404

 

$

6,994

 

$

5,097

 

Total Number of Transactions

 

3,278

 

 

2,071

 

 

9,652

 

 

6,288

 

Total Sales Volume (in millions)

$

28,576

 

$

11,191

 

$

67,507

 

$

32,052

 

 

 

 

 

 

 

Three Months Ended

December 31,

Year Ended

December 31,

Financing (1)

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Average Number of Financing Professionals

 

83

 

 

87

 

 

85

 

 

86

 

Average Number of Transactions per Financing Professional

 

8.39

 

 

7.38

 

 

29.11

 

 

22.59

 

Average Fee per Transaction

$

42,639

 

$

38,083

 

$

37,959

 

$

33,747

 

Average Fee Rate

 

0.78

%

 

0.80

%

 

0.81

%

 

0.85

%

Average Transaction Size (in thousands)

$

5,458

 

$

4,789

 

$

4,691

 

$

3,948

 

Total Number of Transactions

 

696

 

 

642

 

 

2,474

 

 

1,943

 

Total Financing Volume (in millions)

$

3,799

 

$

3,075

 

$

11,605

 

$

7,672

 

 

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

The following table sets forth the number of transactions, sales volume and revenues by commercial real estate market segment for real estate brokerage:

 

Three Months Ended December 31,

 

2021

2020

Change

Real Estate Brokerage

Number

Volume

Revenues

Number

Volume

Revenues

Number

Volume

Revenues

 

 

(in millions)

(in thousands)

 

(in millions)

(in thousands)

 

(in millions)

(in thousands)

<$1 million

296

$

200

$

9,506

295

$

190

$

7,906

1

$

10

$

1,600

Private Client Market ($1 - <$10 million)

2,439

 

8,700

 

247,404

1,570

 

4,908

 

138,830

869

 

3,792

 

108,574

Middle Market ($10 - <$20 million)

273

 

3,733

 

72,531

112

 

1,526

 

29,719

161

 

2,207

 

42,812

Larger Transaction Market (≥$20 million)

270

 

15,943

 

126,070

94

 

4,567

 

40,665

176

 

11,376

 

85,405

 

3,278

$

28,576

$

455,511

2,071

$

11,191

$

217,120

1,207

$

17,385

$

238,391

 

 

Year Ended December 31,

 

 

2021

2020

Change

Real Estate Brokerage

Number

Volume

Revenues

Number

Volume

Revenues

Number

Volume

Revenues

 

 

(in millions)

(in thousands)

 

(in millions)

(in thousands)

 

(in millions)

(in thousands)

<$1 million

1,087

$

732

$

30,681

944

$

600

$

24,456

143

$

132

$

6,225

Private Client Market ($1 - <$10 million)

7,300

 

24,339

 

693,996

4,773

 

15,115

 

421,767

2,527

 

9,224

 

272,229

Middle Market ($10 - <$20 million)

643

 

8,874

 

170,230

316

 

4,311

 

81,621

327

 

4,563

 

88,609

Larger Transaction Market (≥$20 million)

622

 

33,562

 

276,062

255

 

12,026

 

105,320

367

 

21,536

 

170,742

 

9,652

$

67,507

$

1,170,969

6,288

$

32,052

$

633,164

3,364

$

35,455

$

537,805

MARCUS & MILLICHAP, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except for shares and par value)

 

 

December 31,

2021

(Unaudited)

December 31,

2020

Assets

 

 

Current assets:

 

 

Cash and cash equivalents

$

382,140

$

243,152

Commissions receivable, net

 

17,230

 

10,391

Prepaid expenses

 

13,220

 

10,153

Marketable debt securities, available-for-sale (includes amortized cost of $183,915 and $158,148 at December

31, 2021 and 2020, respectively, and $0 allowance for credit losses)

 

183,868

 

158,258

Advances and loans, net

 

6,403

 

2,413

Other assets

 

5,270

 

4,711

Total current assets

 

608,131

 

429,078

Property and equipment, net

 

23,192

 

23,436

Operating lease right-of-use assets, net

 

81,528

 

84,024

Marketable debt securities, available-for-sale (includes amortized cost of $111,858 and $45,181 at December 31,

2021 and 2020, respectively, and $0 allowance for credit losses)

 

112,610

 

47,773

Assets held in rabbi trust

 

11,508

 

10,295

Deferred tax assets, net

 

33,736

 

21,374

Goodwill and other intangible assets, net

 

48,105

 

52,053

Advances and loans, net

 

113,242

 

106,913

Other assets

 

13,146

 

4,176

Total assets

$

1,045,198

$

779,122

 

 

 

Liabilities and stockholders’ equity

 

 

Current liabilities:

 

 

Accounts payable and other liabilities

$

24,271

$

18,288

Deferred compensation and commissions

 

114,685

 

58,106

Income tax payable

 

17,853

 

3,726

Operating lease liabilities

 

18,973

 

19,190

Accrued bonuses and other employee related expenses

 

49,848

 

21,007

Total current liabilities

 

225,630

 

120,317

Deferred compensation and commissions

 

53,536

 

38,745

Operating lease liabilities

 

58,334

 

59,408

Other liabilities

 

11,394

 

13,816

Total liabilities

 

348,894

 

232,286

 

 

 

Commitments and contingencies

 

 

 

Stockholders’ equity:

 

Preferred stock, $0.0001 par value:

 

 

Authorized shares – 25,000,000; issued and outstanding shares – none at December 31, 2021 and 2020, respectively

 

 

Common stock, $0.0001 par value:

Authorized shares – 150,000,000; issued and outstanding shares – 39,692,373 and 39,401,976 at

December 31, 2021 and 2020, respectively

 

4

 

4

Additional paid-in capital

 

121,844

 

113,182

Retained earnings

 

573,546

 

431,076

Accumulated other comprehensive income

 

910

 

2,574

Total stockholders’ equity

 

696,304

 

546,836

Total liabilities and stockholders’ equity

$

1,045,198

$

779,122

MARCUS & MILLICHAP, INC.

OTHER INFORMATION

(Unaudited)

Adjusted EBITDA Reconciliation

Adjusted EBITDA, which the Company defines as net income before (i) interest income and other, including net realized gains (losses) on marketable debt securities, available-for-sale and cash and cash equivalents, (ii) interest expense, (iii) provision for income taxes, (iv) depreciation and amortization, (v) stock-based compensation, and (vi) non-cash mortgage servicing rights (“MSRs”) activity. The Company uses Adjusted EBITDA in its business operations to evaluate the performance of its business, develop budgets and measure its performance against those budgets, among other things. The Company also believes that analysts and investors use Adjusted EBITDA as a supplemental measure to evaluate its 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 the Company’s results as reported under U.S. generally accepted accounting principles (“U.S. GAAP”). The Company finds 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, the Company does not rely solely on Adjusted EBITDA as a performance measure and also considers its U.S. GAAP results. Adjusted EBITDA is not a measurement of the Company’s financial performance under U.S. GAAP and should not be considered as an alternative to net income, operating income 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 income, to Adjusted EBITDA is as follows (in thousands):

 

Three Months Ended

December 31,

Year Ended

December 31,

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Net income

$

62,002

 

$

23,622

 

$

142,470

 

$

42,838

 

Adjustments:

 

 

 

Interest income and other (1)

 

(1,026

)

 

(958

)

 

(2,496

)

 

(5,048

)

Interest expense

 

144

 

 

205

 

 

580

 

 

900

 

Provision for income taxes

 

21,529

 

 

8,651

 

 

50,833

 

 

16,526

 

Depreciation and amortization

 

2,915

 

 

3,077

 

 

11,721

 

 

10,899

 

Stock-based compensation

 

2,708

 

 

2,354

 

 

10,361

 

 

9,905

 

Non-cash MSR activity (2)

 

(60

)

 

(9

)

 

(467

)

 

(321

)

Adjusted EBITDA(3)

$

88,212

 

$

36,942

 

$

213,002

 

$

75,699

 

(1)

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

(2)

Non-cash MSR activity includes the assumption of servicing obligations.

(3)

The increase in Adjusted EBITDA for the three months ended December 31, 2021 and the year ended December 31, 2021 compared to the same periods in 2020 is primarily due to an increase in total revenues and a lower proportion of operating expenses compared to total revenues.

Glossary of Terms

  • Private Client Market segment: transactions with values from $1 million to up to but less than $10 million
  • Middle Market segment: transactions with values from $10 million to up to but less than $20 million
  • Larger Transaction Market segment (previously Institutional Market segment): transactions with values of $20 million and above
  • Acquisitions: acquisitions of teams and/or acquisitions as business combinations under accounting standards

Certain Adjusted Metrics

Real Estate Brokerage

During the three months ended and the year ended December 31, 2021, we closed a large portfolio of transactions in our real estate brokerage business in excess of $300 million. Following are actual and as adjusted metrics excluding these transactions:

 

Three Months Ended

December 31, 2021

Year Ended

December 31, 2021

(actual)

(as adjusted)

(actual)

(as adjusted)

Total Sales Volume Increase

155.4%

135.8%

110.6%

101.8%

Average Commission Rate Reduction

(17.8)%

(12.4)%

(12.6)%

(9.1)%

Average Transaction Size Increase

61.3%

49.1%

37.2%

31.6%

 

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