Marcus & Millichap (MMI) risk factors, FY2025 10-K

Other

1. 01General economic conditions and commercial real estate market conditions have had and may in the future have a negative impact on our business
2. 02The impact of hybrid work and lower office real estate occupancy rates could adversely affect our business62% rewritten
3. 03Increases in prevailing interest rates may place downward pressure on commercial real estate prices and could potentially reduce commercial real estate investment activity, negatively impacting our business90% rewritten
4. 04supply, international disorder and instability in domestic and foreign financial markets. Increased interest rates can apply downward pressure on commercial real estate prices and reduce activity in the commercial real estate industry, which have recently and may continue to have an adverse impact on our businessNew
5. 05Our business has been, and may in the future, be adversely affected by restrictions in the availability of debt or equity capital, the fluctuating cost of capital, as well as a lack of adequate credit and the risk of deterioration of the debt or credit markets and commercial real estate markets
6. 06Inflation can have an adverse impact on our business and on our clients20% rewritten
7. 07Our loss sharing indemnification obligation pursuant to our agreement with M&T Realty Capital Corporation may adversely impact our results of operations, cash flows and/or our financial condition
8. 08We have numerous significant competitors and potential future competitors, some of which may have greater resources than we do, and we may not be able to continue to compete effectively
9. 09Our brokerage operations are subject to geographic and commercial real estate market risks, which could adversely affect our revenue and profitability
10. 10Seasonal fluctuations and other market data in the investment real estate industry could adversely affect our business and make comparisons of our quarterly results difficult
11. 11A change in the tax laws relating to like-kind exchanges could adversely affect our business and the value of our stock
12. 12A change in the tax laws could adversely affect our business and the value of our stock
13. 13New laws or regulations or changes in existing laws or regulations or the application thereof could adversely affect our businesses, financial condition, results of operations, and prospects
14. 14We are subject to complex and evolving licensing and regulatory requirements
15. 15If we are unable to attract and retain qualified and experienced managers, investment sales and financing professionals, our growth may be limited, and our business and operating results could suffer82% rewritten
16. 16If we lose the services of our executive officers or certain other members of our senior management team, we may not be able to execute our business strategy81% rewritten
17. 17Our business could be hurt if we are unable to maintain our business philosophy and culture of information sharing and efforts to maintain our philosophy and culture could adversely affect our ability to maintain and grow our business
18. 18The concentration of sales among our top investment sales and financing professionals could lead to losses if we are unable to retain them or if there is an economic downturn89% rewritten
19. 19Our investment sales professionals are independent contractors, not employees, and if laws, regulations or rulings mandate that they be employees, our business would be adversely impacted86% rewritten
20. 20Fraud, or theft, which is difficult to detect and deter, could harm us by impairing our ability to attract and retain clients and subjecting us to significant legal liability and reputational harm96% rewritten
21. 21We may fail to successfully differentiate our brand from those of our competitors, which could adversely affect our revenue
22. 22Our continued efforts to expand our services and businesses may not be successful, and we may expend significant resources without corresponding returns
23. 23If we experience significant growth in the future, such growth may be difficult to sustain and may place significant demands on our administrative, operational and financial resources
24. 24If we acquire businesses in the future, we may experience high transaction and integration costs, the integration process may be disruptive to our business and the acquired businesses may not perform as we expect
25. 25A majority of our revenue is derived from transaction fees, which are not long-term contracted sources of recurring revenue and are subject to external economic conditions and declines in those engagements could have a material adverse effect on our financial condition and results of operations23% rewritten
26. 26If we are unable to retain existing clients and develop new clients, our financial condition may be adversely affected27% rewritten
27. 27A failure by third parties to comply with service agreements or regulatory or legal requirements could result in economic and reputational harm to us
28. 28Failure to comply with confidentiality obligations could damage our reputation and materially harm our operating results
29. 29We may face significant liabilities and/or damage to our professional reputation as a result of litigation allegations and negative publicity
30. 30Failure to appropriately address actual or perceived conflicts of interest could adversely affect our businesses

Technology and Cybersecurity Risks

1. 31If we do not respond to technological innovations or changes or upgrade our technology systems, our growth prospects and results of operations could be adversely affected100% rewritten
2. 32Interruption, data security breaches, or failure of our information technology, communications systems or data services could hurt our ability to effectively provide our services, which could damage our reputation and harm our operating results100% rewritten
3. 33Failure to maintain the security of our information and technology networks, including personally identifiable and client information could adversely affect us
4. 34Additionally, a portion of our workforce works remotely in some capacity. This arrangement exposes us to additional threat vectors and vulnerabilities82% rewritten
5. 35disrupt our operations and the services we provide to clients, damage our reputation, and cause a loss of confidence in our services, which could adversely affect our business, revenue and competitive positionNew
6. 36Our business is subject to complex and evolving laws and regulations regarding privacy, data protection, and cybersecurity. Many of these laws and regulations are subject to change and uncertain interpretation and could result in claims, increased cost of operations or otherwise harm our business99% rewritten
7. 37Our investments in marketable debt securities, available-for-sale are subject to certain risks which could affect our overall financial condition, results of operations or cash flows
8. 38We may be deemed to be an investment company due to our investments in marketable debt securities, available-for-sale and, if such a determination were made, we would become subject to significant regulation that would adversely affect our business

Risks Related to Our Founder

1. 39Our Chair and founder owns a significant portion of our common stock, which may prevent other stockholders from influencing significant decisions, and the sale of such stock may depress the price of our common stock and impair our ability to raise capital
2. 40Our Chair may have actual or potential conflicts of interest because of his position with MMC

General Risks

1. 41Our existing goodwill and other intangible assets could become impaired, which may require us to take non-cash charges
2. 42Our brand and reputation are important Company assets, and will be affected by how we are perceived in the marketplace
3. 43In preparing our financial statements we make certain assumptions, judgments, and estimates that affect amounts reported in our consolidated financial statements, which, if not accurate, may significantly impact our financial results
4. 44The price of our common stock may fluctuate significantly, and you could lose all or part of your investment
5. 45If securities analysts do not publish research or reports about our business or if they downgrade our Company or our sector, or we do not meet expectations of the analysts the price of our common stock could decline
6. 46Significant fluctuations in our revenue and net income may make it difficult for us to achieve steady earnings growth on a quarterly or an annual basis, which may make the comparison between periods difficult and may cause the price of our common stock to decline
7. 47Future sales or the perception of future sales of a substantial amount of our common stock may depress the price of shares of our common stock