Marcus & Millichap, Inc. (NYSE:MMI) Q2 2020 Earnings Conference Call - Final Transcript
Aug 06, 2020 • 05:00 pm ET
Greetings. Welcome to Marcus & Millichap's Second Quarter 2020 Earnings Conference Call. [Operator Instructions] Please note this conference is being recorded.
I will now turn the conference over to your host, Evelyn Infurna. Thank you. You may begin.
Thank you. Good afternoon, and welcome to Marcus & Millichap's second quarter 2020 earnings conference call. With us today are President and Chief Executive Officer, Hessam Nadji; and Chief Financial Officer, Marty Louie.
Before I turn the call over to management, please remember that our prepared remarks and 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 could differ materially from those implied by such forward-looking statements due to a variety of factors, including but not limited to, the COVID-19 pandemic, 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 public filings, including its annual report on Form 10-K filed with the Securities and Exchange Commission on March 1, 2020. Although the Company believes the expectations reflected in such forward-looking statements are based on reasonable assumptions, it can make no assurance that its expectations will be attained. The Company undertakes no obligation to update any forward-looking statements, 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. The Company's earnings release, which was issued this afternoon and is available on the Company's website, represents reconciliation to the appropriate GAAP measures and explains why the Company believes such non-GAAP measures are useful to investors.
Finally, this conference is being webcast. The webcast link is available on the Investor Relations section of our website, www.marcusmillichap.com, along with the slide presentation you may reference during the prepared remarks.
With that, it's my pleasure to turn the call over to Hessam Nadji. Hessam?
Thank you, Evelyn. On behalf of the entire Marcus & Millichap team, good afternoon, and thank you for joining our second quarter 2020 earnings call. We extend our well wishes for health and safety to everyone on the call. As expected, the health crisis and corresponding economic shock created a major disruption in the commercial real estate transaction market during the second quarter. Uncertainty regarding occupancies and rent collection challenged asset valuations, while physical impediments, such as the inability to inspect or tour properties and meet with investors, made it difficult to bring buyers and sellers together. Conditions were further aggravated by lender caution and tightened underwriting. Based on preliminary estimates from Real Capital Analytics, transactions in the marketplace dropped by 60% year-over-year.
For the quarter, MMI's revenue of $117 million reflected a 44% decline, while a 41% reduction of controllable costs contributed to adjusted