Company: MMI
Filing Date: 2025-08-07
Form Type: 10-Q
Source: 0001578732-25-000040
Chunk: 98

Company: Marcus & Millichap, Inc.
Filing Date: 2025-08-07
Form: 10-Q
Item: Part I, Item 8
Chunk 98
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, is carried at fair value and determined on a contract-by-contract basis, calculated using unobservable inputs based on a probability of achieving EBITDA and other performance requirements, and is a Level 3 measurement. Deferred consideration in connection with acquisitions is carried at fair value and calculated using a discounted cash flow estimate with the only remaining condition on such payments being the passage of time, and is a Level 2 measurement. 

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Table of ContentsMARCUS & MILLICHAP, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Unaudited) 

We have elected to account for our investments in convertible notes, included in other assets, under the fair value option, with changes in fair value recognized in other income, net in the condensed consolidated statements of operations. We estimate the fair value of each convertible note at each balance sheet date using a scenario-based framework that incorporates various scenarios weighted based on the expected likelihood of occurrence. Within each scenario, a discounted cash flow approach was utilized, taking the expected settlement for the event, and discounting it based on the expected timing and a discount rate. Each of the assumptions in the model were considered significant assumptions. We noted that a change in the expected probability, expected payoff, timing, or discount rate, would result in a change to the fair value ascribed to the convertible notes. As these are significant inputs not observable in the market, the valuation is classified as a Level 3 measurement.Assets and liabilities carried at fair value on a recurring basis consisted of the following (in thousands): June 30, 2025December 31, 2024Fair ValueLevel 1Level 2Level 3Fair ValueLevel 1Level 2Level 3Assets:Assets held in rabbi trust$12,757 $— $12,757 $— $12,191 $— $12,191 $— Convertible notes$6,614 $— $— $6,614 $6,347 $— $— $6,347 Cash equivalents (1):       Money market funds23,868 23,868 — — 90,737 90,737 — — $23,868 $23,868 $— $— $90,737 $90,737 $— $— Marketable debt securities, available-for-sale:        Short-term investments:        U.S.