Company: MMI
Filing Date: 2025-02-27
Form Type: 10-K
Source: 0001578732-25-000015
Chunk: 91

Company: Marcus & Millichap, Inc.
Filing Date: 2025-02-27
Form: 10-K
Item: Item 7
Chunk 91
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 $705.3 million in 2023, an increase of $23.7 million, or 3.4%. Cost of services increased by $24.8 million and selling, general, and administrative expenses decreased by $4.1 million, as described below. 

Cost of services. Cost of services are variable commissions paid to our investment sales professionals and compensation-related costs in connection with our financing activities. Cost of services increased to $431.5 million in 2024 from $406.6 million in 2023, an increase of $24.8 million, or 6.1%. The increase was primarily due to increased commission expenses driven by the related increased revenue discussed above. Cost of services as a percentage of total revenue decreased by 100 basis points to 62.0% compared to 2023 primarily due to our senior investment sales and financing professionals earning a lower amount of commissions.

Selling, general, and administrative expense. Selling, general and administrative expense decreased to $280.9 million in 2024 from $285.0 million in 2023, a decrease of $4.1 million or 1.4%. The decrease was primarily due to a reduction in marketing support costs, partially offset by an increase in compensation-related costs. As a percentage of revenue, selling, general and administrative expense decreased due to the fixed nature of certain of these expenses.

Depreciation and amortization expense. Depreciation and amortization expense increased to $16.6 million in 2024 from $13.6 million in 2023, an increase of $3.0 million, or 21.7%. The increase primarily relates to accelerated amortization and impairment of certain intangible assets resulting from changes in estimates.

Other Income, Net

Other income, net increased to $20.7 million in 2024 from $19.9 million in 2023. The $0.8 million increase was primarily driven by an increase in interest income as a result of rebalancing the Company's investments to take advantage of higher yields.

Interest Expense

Interest expense increased by an immaterial amount in 2024 compared to 2023, and primarily relates to interest expense on our SARs liability. 

(Benefit) Provision for Income Taxes

The benefit for income taxes was $0.7 million in 2024, compared to a benefit for income taxes of $6.4 million in 2023. The effective income tax rate for 2024 was 5.1% compared