10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2015

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

Commission File Number: 001-36155

MARCUS & MILLICHAP, INC.

(Exact name of registrant as specified in its Charter)

Delaware	35-2478370
(State or Other Jurisdiction of	(I.R.S. Employer
Incorporation or Organization)	Identification No.)
23975 Park Sorrento, Suite 400 Calabasas, California	91302
(Address of Principal Executive Offices)	(Zip Code)

(818) 212-2250

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by checkmark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter time period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	¨	Accelerated filer	x
Non-accelerated filer	¨  (Do not check if a smaller reporting company)	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

Number of shares of common stock, par value $0.0001 per share, of the registrant issued outstanding as of November 3, 2015 was 37,117,674 shares.

MARCUS & MILLICHAP, INC.

TABLE OF CONTENTS

		Page
PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements
	Condensed Consolidated Balance Sheets at September 30, 2015 (Unaudited) and December 31, 2014		3
	Condensed Consolidated Statements of Net and Comprehensive Income for the Three and Nine Months Ended September 30, 2015 and 2014 (Unaudited)		4
	Condensed Consolidated Statements of Stockholders’ Equity for the Nine Months Ended September 30, 2015 (Unaudited)		5
	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2015 and 2014 (Unaudited)		6
	Notes to Condensed Consolidated Financial Statements (Unaudited)		8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		22
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		36
Item 4.	Controls and Procedures		36
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings		38
Item 1A.	Risk Factors		38
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		38
Item 3.	Defaults Upon Senior Securities		38
Item 4.	Mine Safety Disclosures		38
Item 5.	Other Information		38
Item 6.	Exhibits		38
SIGNATURES
EXHIBIT INDEX

2

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

MARCUS & MILLICHAP, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(dollar amounts in thousands, except per share amounts)

	September 30, 2015 (Unaudited)			December 31, 2014
Assets
Current assets:
Cash and cash equivalents	$	67,632		$	149,159
Commissions receivable		3,882			3,412
Employee notes receivable		214			216
Prepaid expenses		6,392			7,536
Income tax receivable		—			1,711
Marketable securities, available for sale		89,764			—
Deferred tax assets, net		14,284			13,600
Other assets, net		3,404			2,839
Total current assets		185,572			178,473
Prepaid rent		8,183			3,645
Property and equipment, net		9,725			7,693
Employee notes receivable		152			162
Marketable securities, available for sale		45,004			14,752
Assets held in rabbi trust		5,334			4,332
Deferred tax assets, net		23,674			21,265
Other assets		6,585			3,282
Total assets	$	284,229		$	233,604
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable and accrued expenses	$	7,572		$	9,488
Accounts payable and accrued expenses – related party, net		92			97
Notes payable to former stockholders		939			894
Commissions payable		23,376			28,932
Income tax payable		7,539			—
Accrued bonuses and other employee related expenses		22,700			27,793
Total current liabilities		62,218			67,204
Deferred compensation and commissions		38,586			36,581
Notes payable to former stockholders		9,671			10,610
Other liabilities		3,402			2,400
Total liabilities		113,877			116,795
Stockholders’ equity:
Preferred stock, $0.0001 par value:
Authorized shares – 25,000,000; issued and outstanding shares – none at September 30, 2015 and December 31, 2014		—			—
Common Stock $0.0001 par value:
Authorized shares – 150,000,000; issued and outstanding shares – 37,117,674 and 36,918,442 at September 30, 2015 and December 31, 2014, respectively		4			4
Additional paid-in capital		82,088			75,058
Stock notes receivable from employees		(4	)		(4	)
Retained earnings		87,993			41,592
Accumulated other comprehensive income		271			159
Total stockholders’ equity		170,352			116,809
Total liabilities and stockholders’ equity	$	284,229		$	233,604

See accompanying notes to condensed consolidated financial statements.

3

MARCUS & MILLICHAP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF NET AND COMPREHENSIVE INCOME

(UNAUDITED)

(dollar and share amounts in thousands, except per share amounts)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2015			2014			2015			2014
Revenues:
Real estate brokerage commissions	$	151,942		$	140,220		$	446,356		$	368,246
Financing fees		10,865			7,864			30,046			22,348
Other revenues		3,069			2,805			9,497			9,150
Total revenues		165,876			150,889			485,899			399,744
Operating expenses:
Cost of services		102,010			92,269			293,725			240,266
Selling, general, and administrative expense		35,646			34,086			109,064			99,570
Depreciation and amortization expense		802			813			2,389			2,399
Total operating expenses		138,458			127,168			405,178			342,235
Operating income		27,418			23,721			80,721			57,509
Other income (expense), net		(464	)		(308	)		23			(39	)
Interest expense		(380	)		(397	)		(1,349	)		(1,202	)
Income before provision for income taxes		26,574			23,016			79,395			56,268
Provision for income taxes		11,398			9,493			32,994			23,167
Net income		15,176			13,523			46,401			33,101
Other comprehensive income:
Unrealized gain (loss) on marketable securities, net of tax of $47, $0, $159 and $0 for the three months ended September 30, 2015 and 2014 and the nine months ended September 30, 2015 and 2014, respectively		56			—			(249	)		—
Foreign currency translation gain, net of tax of $140, $38, $226 and $40 for the three months ended September 30, 2015 and 2014 and the nine months ended September 30, 2015 and 2014, respectively		234			57			361			60
Total other comprehensive income		290			57			112			60
Comprehensive income		15,466		$	13,580			46,513		$	33,161
Earnings per share:
Basic	$	0.39		$	0.35		$	1.19		$	0.85
Diluted	$	0.39		$	0.35		$	1.19		$	0.85
Weighted average common shares outstanding:
Basic		38,890			38,847			38,868			38,847
Diluted		39,160			39,011			39,051			38,949

See accompanying notes to condensed consolidated financial statements.

4

MARCUS & MILLICHAP, INC.

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

(UNAUDITED)

(dollar amounts in thousands)

	Preferred Stock				Common Stock					Additional Paid-In Capital			Stock Notes Receivable From Employees			Retained Earnings				Total
	Shares		Amount		Shares			Amount										Accumulated Other Comprehensive Income
Balance as of December 31, 2014		—	$	—		36,918,442		$	4	$	75,058		$	(4	)	$	41,592	$	159	$	116,809
Net and comprehensive income		—		—		—			—		—			—			46,401		112		46,513
Stock-based award activity
Stock-based compensation		—		—		—			—		6,750			—			—		—		6,750
Shares issued pursuant to employee stock purchase plan		—		—		17,822			—		502			—			—		—		502
Issuance of common stock for unvested restricted stock awards		—		—		10,110			—		—			—			—		—		—
Issuance of common stock for vesting of restricted stock units		—		—		193,598			—		—			—			—		—		—
Shares withheld related to net share settlement of restricted stock units		—		—		(22,298	)		—		(756	)		—			—		—		(756	)
Windfall tax benefit from stock-based award activity		—		—		—			—		534			—			—		—		534
Balance as of September 30, 2015		—	$	—		37,117,674		$	4	$	82,088		$	(4	)	$	87,993	$	271	$	170,352

See accompanying notes to condensed consolidated financial statements.

5

MARCUS & MILLICHAP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(in thousands)

	Nine Months Ended September 30,
	2015			2014
Cash flows from operating activities
Net income	$	46,401		$	33,101
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense		2,389			2,399
Provision for bad debt expense		127			86
Stock-based compensation		6,750			3,275
Deferred taxes, net		(3,160	)		1,481
Net realized gains on marketable securities, available for sale		(130	)		—
Tax benefit from stock-based award activity		4,844			—
Excess tax benefit from stock-based award activity		(4,844	)		—
Other non-cash items		295			155
Changes in operating assets and liabilities:
Commissions receivable		(470	)		(386	)
Prepaid expenses		1,144			(267	)
Prepaid rent		(4,538	)		932
Assets held in rabbi trust		(1,448	)		(36	)
Other assets		(3,993	)		(1,095	)
Accounts payable and accrued expenses		(2,645	)		2,908
Accounts payable and accrued expenses – related party, net		(5	)		(334	)
Income tax receivable (payable)		4,939			(1,543	)
Commissions payable		(5,556	)		(9,068	)
Accrued bonuses and other employee related expenses		(4,885	)		4,509
Deferred compensation and commissions		2,365			673
Other liabilities		1,002			(1,882	)
Net cash provided by operating activities		38,582			34,908
Cash flows from investing activities
Purchases of marketable securities, available for sale		(130,500	)		—
Proceeds from sales and maturities of marketable securities, available for sale		10,608			—
Payments received on employee notes receivable		15			68
Issuances of employee notes receivable		(175	)		(68	)
Purchase of property and equipment		(3,753	)		(1,830	)
Proceeds from sale of property and equipment		—			1
Net cash used in investing activities		(123,805	)		(1,829	)
Cash flows from financing activities
Proceeds from issuance of shares pursuant to employee stock purchase plan		502			—
Taxes paid related to net share settlement of stock-based awards		(756	)		—
Excess tax benefit from stock-based award activity		4,844			—
Realized tax benefit of deductible IPO transaction costs		—			840
Principal payments on notes payable to former stockholders		(894	)		(851	)
Payments on obligations under capital leases		—			(16	)
Payments received on stock notes receivable from employees		—			6
Net cash provided by (used in) financing activities		3,696			(21	)
Net (decrease) increase in cash and cash equivalents		(81,527	)		33,058
Cash and cash equivalents at beginning of period		149,159			100,952
Cash and cash equivalents at end of period	$	67,632		$	134,010

6

MARCUS & MILLICHAP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)

(UNAUDITED)

(in thousands)

	Nine Months Ended September 30,
	2015		2014
Supplemental disclosures of cash flow information
Interest paid during the period	$	853	$	619
Income taxes paid, net	$	26,370	$	22,429
Supplemental disclosures of noncash investing and financing activities
Reduction of accrued bonuses and other employee related expenses in settlement of employee notes receivable	$	208	$	—
Net change in accounts payable and accrued expenses related to property and equipment additions	$	729	$	(86	)
Settlements of deferred compensation obligation with trust assets	$	28	$	—
Distribution related to stock appreciation rights liability for taxes payable included in accrued bonuses and other employee related expenses	$	—	$	412

See accompanying notes to condensed consolidated financial statements.

7

MARCUS & MILLICHAP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. Description of business, basis of presentation and recent accounting pronouncements

Description of Business

Marcus & Millichap, Inc., (the “Company”, “Marcus & Millichap”, or “MMI”), a Delaware corporation, is a brokerage firm specializing in commercial real estate investment sales, financing, research and advisory services. As of September 30, 2015, MMI operates 80 offices in the United States and Canada through its wholly-owned subsidiary, Marcus & Millichap Real Estate Investment Services, Inc. (“MMREIS”), which includes the operations of Marcus & Millichap Capital Corporation (“MMCC”).

Reorganization and Initial Public Offering

MMI was formed in June 2013 in preparation for Marcus & Millichap Company (“MMC”) to spin-off its majority owned subsidiary, MMREIS (“Spin-Off”). Prior to the initial public offering (“IPO”) of MMI stock on October 30, 2013, all of the preferred and common stockholders of MMREIS (including MMC and employees of MMREIS) contributed all of their outstanding shares to MMI, in exchange for new MMI common stock. As a result, MMREIS became a wholly-owned subsidiary of MMI. Thereafter, MMC distributed 80.0% of the shares of MMI common stock to MMC’s shareholders and exchanged the remaining portion of its shares of MMI common stock for cancellation of indebtedness of MMC.

Basis of Presentation

The financial information presented in the accompanying unaudited condensed consolidated financial statements, has been prepared in accordance with rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) for quarterly reports on Form 10–Q and Article 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles (“U.S. GAAP”) for complete financial statements. In the opinion of management, the accompanying unaudited condensed consolidated financial statements and notes include all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation of the consolidated financial position, results of operations and cash flows for the periods presented. These unaudited condensed consolidated financial statements should be read in conjunction with the annual audited consolidated financial statements and notes thereto for the year ended December 31, 2014 included in the Company’s Annual Report on Form 10-K filed on March 9, 2015 with the SEC. The results of the three and nine months ended September 30, 2015 are not necessarily indicative of the results to be expected for the fiscal year ending December 31, 2015, or for other interim periods or future years.

Consolidation

The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the related disclosures at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Reclassifications

Certain prior-period amounts in the condensed consolidated statements of cash flows have been reclassified to conform to the current period presentation. These changes had no impact on the previously reported consolidated results of operations, financial condition, stockholders’ equity or on cash flows subtotals.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to a concentration of credit risk principally consist of cash and cash equivalents, commissions receivable, investments in marketable securities, available for sale, due from independent contractors (included under other assets, current caption), security deposits (included under other assets, non-current caption) and company owned variable life insurance policies underlying the assets held in rabbi trust. Cash is placed with high-credit quality financial institutions, invested in high-credit quality money market funds and in fixed and variable income available for sale debt securities, in accordance with the Company’s investment policy approved by the Board of Directors.

8

MARCUS & MILLICHAP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

To reduce its credit risk, the Company monitors the credit standing of the financial institutions that hold the Company’s cash and cash equivalents and monitors marketable securities, available for sale for impairment. The Company historically has not experienced any losses related to cash and cash equivalents or marketable securities, available for sale. The Company derives its revenues from a broad range of real estate investors, owners, and users in the United States and Canada, none of which individually represents a significant concentration of credit risk. The Company maintains allowances, as needed, for estimated credit losses based on management’s assessment of the likelihood of collection. For the three and nine months ended September 30, 2015 and 2014, no transaction represented 10% or more of total revenues. Further, while one or more transactions may represent 10% or more of commissions receivable at any reporting date, amounts due are typically collected within 10 days of settlement and therefore do not expose the Company to significant concentration of credit risk.

The Company’s Canadian operations represented less than 1.0% of total revenues in each period presented.

Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”), which supersedes virtually all of the current revenue recognition guidance under U.S. GAAP, and requires entities to recognize revenue for transfer to customer of promised goods or services in an amount that reflects the consideration to which the entity expects to be entitled to receive in exchange for those goods or services. ASU 2014-09 permits two implementation approaches, one requiring retrospective application of the new standard with restatement of prior years and one requiring prospective application of the new standard with disclosure of results under old standards. In July 2015, the FASB decided to delay the effective date one year, and, as a result, ASU 2014-09 is effective for reporting periods beginning after December 15, 2017 and early adoption is permitted as of January 1, 2017. The Company is currently evaluating the impact of this new standard and will select a transition method when the effect is determined; however, the Company does not expect this standard to have a significant effect on the Company’s revenue recognition.

In August 2014, the FASB issued ASU No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (“ASU 2014-15”). Currently, there is no guidance under U.S. GAAP regarding management’s responsibility to assess whether there is substantial doubt about an entity’s ability to continue as a going concern. Under ASU 2014-15, the Company will be required to assess its ability to continue as a going concern each interim and annual reporting period and provide certain disclosures if there is substantial doubt about the entity’s ability to continue as a going concern, including management’s plan to alleviate the substantial doubt. ASU 2014-15 is effective for reporting periods beginning after December 15, 2016 and early adoption is permitted. For the Company, the new standard will be effective January 1, 2017. The Company anticipates that this new standard will not have an impact on the Company’s condensed consolidated financial position or results of operations.

In April 2015, the FASB issued ASU No. 2015-03, Interest – Imputation of Interest: Simplifying the Presentation of Debt Issuance Costs (“ASU 2015-03”), which requires debt issuance costs to be presented in the balance sheet as a direct deduction from the associated debt liability. ASU 2015-03 does not change the amortization of debt issuance costs, which continues to follow the existing accounting guidance. In August 2015, the FASB issued ASU No. 2015-15, Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements (“ASU 2015-15”), which permits debt issuance costs associated with line-of-credit arrangements to be deferred and presented as an asset in the balance sheet and subsequently amortized ratably over the term of the line-of-credit arrangement. For the Company, ASU 2015-03 and ASU 2015-15 will be effective for interim and annual reporting periods beginning after December 15, 2015 and early adoption is permitted. The Company early adopted ASU 2015-03 and ASU 2015-15 during the quarter ended September 30, 2015. The adoption of ASU 2015-03 and ASU 2015-15, did not have any impact on the Company’s condensed consolidated financial position or results of operations.

9

MARCUS & MILLICHAP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

2. Property and Equipment

Property and equipment, net consist of the following (in thousands):

	September 30, 2015			December 31, 2014
Computer software and hardware equipment	$	10,104		$	8,769
Furniture, fixtures, and equipment		15,257			14,684
Less: accumulated depreciation and amortization		(15,636	)		(15,760	)
	$	9,725		$	7,693

During the nine months ended September 30, 2015, the Company wrote off approximately $2.6 million of fully depreciated computer software and hardware and furniture fixtures, and equipment no longer in use.

As of December 31, 2014, the Company did not have any remaining capital lease obligations.

Payments for certain improvements to the Company’s leased office space are recorded as prepaid rent. Amortization of prepaid rent is recorded using the straight-line method over the shorter of the estimated economic life or lease term as a charge to rent expense.

3. Selected Balance Sheet Data

Other Assets

Other assets consisted of the following (in thousands):

	Current				Non-Current
	September 30,		December 31,		September 30,		December 31,
	2015		2014		2015		2014
Due from independent contractors, net (1) (2)	$	1,581	$	1,577	$	5,184	$	1,820
Security deposits		—		—		1,299		1,240
Customer trust accounts and other		1,823		1,262		102		222
	$	3,404	$	2,839	$	6,585	$	3,282

⁽¹⁾  Includes allowance for doubtful accounts related to current of $261,000 as of September 30, 2015 and $193,000 as of December 31, 2014, respectively. The Company recorded a provision for bad debt expense of $48,000 and $44,000 and wrote off $24,000 and $23,000 of these receivables for the three months ended September 30, 2015 and, 2014, respectively. The Company recorded a provision for bad debt expense of $127,000 and $86,000 and wrote off $59,000 and $110,000 of these receivables for the nine months ended September 30, 2015 and, 2014, respectively.

⁽²⁾  Represents amounts advanced, notes receivable and other receivables due from the Company’s sales and financing professionals. The notes receivable along with interest, are typically collected from future commissions and are generally due in one to five years. Any cash receipts on notes are applied first to unpaid principal balance prior to any income being recognized.

Deferred Compensation and Commissions

Deferred compensation and commissions consisted of the following (in thousands):

	September 30, 2015		December 31, 2014
SARs liability	$	21,184	$	20,542
Commissions payable to sales and financing professionals		12,451		12,176
Deferred compensation liability		4,951		3,863
	$	38,586	$	36,581

10

MARCUS & MILLICHAP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SARs Liability

Prior to the IPO, certain employees of the Company were granted stock appreciation rights (“SARs”) under a stock-based compensation program assumed by MMC. In connection with the IPO, the SARs agreements were revised, and the MMC liability of $20.0 million for the SARs was frozen at March 31, 2013, and was transferred to MMI through a capital distribution. The SARs liability will be settled with each participant in installments upon retirement or departure. Under the revised agreements, MMI is required to accrue interest on the outstanding balance beginning on January 1, 2014 at a rate based on the 10-year treasury note plus 2%. The rate resets annually. The rate at January 1, 2015 and 2014 was 4.173% and 5.03%, respectively. MMI recorded interest expense related to this liability of $214,000 and $236,000, for the three months ended September 30, 2015 and 2014, respectively and $642,000 and $738,000 for the nine months ended September 30, 2015 and 2014, respectively. During 2014, the Company reduced the SARs liability balance in the amount of $412,000 related to a distribution for the settlement of FICA taxes payable on behalf of certain participants.

Commissions Payable

Certain investment sales professionals have the ability to earn additional commissions after meeting certain annual revenue thresholds. These commissions are recognized as cost of services in the period in which they are earned. The Company has the ability to defer payment of certain commissions, at its election, for up to three years. Commissions payable that are not expected to be paid within twelve months are classified as non-current liabilities.

Deferred Compensation Liability

A select group of management is eligible to participate in a Deferred Compensation Plan. The plan is a 409A plan and permits the participant to defer compensation up to limits as determined by the plan. The Company elected to fund the Deferred Compensation Plan through company owned variable life insurance policies. The Deferred Compensation Plan is managed by a third-party institutional fund manager, and the deferred compensation and investment earnings are held as a Company asset in a rabbi trust, which is recorded in assets held in rabbi trust in the accompanying condensed consolidated balance sheets. The assets in the trust are restricted unless the Company becomes insolvent, as defined in the Deferred Compensation Plan, in which case the trust assets are subject to the claims of MMI’s creditors. The Company may also, in its sole and absolute discretion, elect to withdraw at any time all or a portion of the trust assets by an amount by which the fair market value of the trust assets exceeds 110% of the aggregate amount in the Deferred Compensation Plan’s participants’ accounts.

The net change in the carrying value of the assets held in the rabbi trust and the net change in the carrying value of the deferred compensation obligation, each exclusive of additional contributions and distributions consisted of the following (in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2015			2014			2015			2014
Increase (decrease) in the carrying value of the assets held in the rabbi trust (1)	$	(351	)	$	(51	)	$	(340	)	$	177
Increase (decrease) in the carrying value of the deferred compensation obligation (2)	$	(307	)	$	(32	)	$	(248	)	$	201

⁽¹⁾  Recorded in other income (expense), net in the condensed consolidated statements of net and comprehensive income.

⁽²⁾  Recorded in selling, general and administrative expense in the condensed consolidated statements of net and comprehensive income.

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MARCUS & MILLICHAP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

4. Investments in Marketable Securities

Amortized cost and fair value of marketable securities, available-for-sale, by type of security consisted of the following (in thousands):

	September 30, 2015									December 31, 2014
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Short-term investments:
U.S. Treasuries	$	70,497	$	31	$	—		$	70,528	$	—	$	—	$	—		$	—
U.S. Government Sponsored Entities		19,110		3		(1	)		19,112		—		—		—			—
Asset-backed securities and other		124		—		—			124		—		—		—			—
	$	89,731	$	34	$	(1	)	$	89,764	$	—	$	—	$	—		$	—
Long-term investments:
U.S. Treasuries	$	6,110	$	23	$	(26	)	$	6,107	$	2,974	$	7	$	—		$	2,981
U.S. Government Sponsored Entities		11,750		5		(13	)		11,742		2,019		—		(3	)		2,016
Corporate debt securities		17,217		18		(408	)		16,827		7,442		48		(12	)		7,478
Asset-backed securities and other		10,328		33		(33	)		10,328		2,277		4		(4	)		2,277
	$	45,405	$	79	$	(480	)	$	45,004	$	14,712	$	59	$	(19	)	$	14,752

As of September 30, 2015, the amortized cost and fair value of the Company’s investment in available-for-sale securities that have been in a continuous unrealized loss position for less than 12 months were $28.7 million and $28.2 million, respectively. As of December 31, 2014, the amortized cost and fair value of the Company’s investment in available-for-sale securities that have been in a continuous unrealized loss position for less than 12 months were $5.4 million. Unrealized losses related to these investments are due to interest rate fluctuations as opposed to changes in credit quality. In addition, the Company does not intend to sell and it is not more-likely-than-not that the Company would be required to sell these investments before recovery of their amortized cost basis, which may be at maturity. As of September 30, 2015 and December 31, 2014, the Company did not have any investments in a continuous unrealized loss position for 12 months or longer.

For the three months ended September 30, 2015, there were no gross realized gains and gross realized losses from the sales of the Company’s available-for-sale securities. For the nine months ended September 30, 2015, gross realized gains and gross realized losses from the sales of the Company’s available-for-sale securities were $133,000 and $3,000, respectively and were recorded in other income (expense), net in the condensed consolidated statements of net and comprehensive income. The cost basis of securities sold were determined on the specific identification method.

The Company regularly reviews its investment portfolio to determine if any security is other-than-temporarily impaired, which would require the Company to record an impairment charge in the period any such determination is made. In making this judgment, the Company evaluates, among other items, the duration and extent to which the fair market value of a security is less than its amortized cost and the Company’s intent and ability to sell, or whether the Company will more likely than not be required to sell, the security before recovery of its amortized cost basis. The Company has evaluated its investments in marketable securities as of September 30, 2015 and has determined that no investments with unrealized losses are other-than-temporarily impaired.

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MARCUS & MILLICHAP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Amortized cost and fair value of marketable securities, available-for-sale, by contractual maturity consisted of the following (dollars in thousands):

	September 30, 2015				December 31, 2014
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due in one year or less	$	89,731	$	89,764	$	—	$	—
Due after one year through five years		18,948		18,955		4,679		4,679
Due after five years through ten years		17,835		17,474		5,652		5,662
Due after ten years		8,622		8,575		4,381		4,411
	$	135,136	$	134,768	$	14,712	$	14,752
Weighted average maturity		3.4 years				9.6 years

Actual maturities may differ from contractual maturities because certain borrowers may have the right to call or prepay certain obligations with or without call or prepayment penalties.

5. Notes Payable to Former Stockholders

In conjunction with the Spin-Off and IPO, notes payable to certain former stockholders of MMREIS that were issued in settlement of restricted stock and SARs awards that were redeemed by MMREIS upon the termination of employment by these former stockholders (“the Notes”), which had been previously assumed by MMC, were transferred to the Company. The Notes are unsecured and bear interest at 5% with annual principal and interest installments and a final principal payment due during the second quarter of 2020. During each of the nine months ended September 30, 2015 and 2014, the Company made payments on the Notes of $1.5 million (includes principal and interest).

Accrued interest pertaining to the Notes consisted of the following (dollars in thousands):

	September 30, 2015		December 31, 2014
Accrued interest (1)	$	234	$	396

⁽¹⁾  Recorded in accounts payable and accrued expenses in the accompanying condensed consolidated balance sheets.

Interest expense pertaining to the Notes consisted of the following (dollars in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2015		2014		2015		2014
Interest expense	$	133	$	144	$	414	$	447

6. Related-Party Transactions

Shared and Transition Services

Prior to October 2013, the Company operated under a shared services arrangement with MMC where by the Company was charged for actual costs specifically incurred on behalf of the Company or allocated to the Company on a pro rata basis. These costs included reimbursement for health insurance premiums, shared services and other general and administrative costs. Beginning in October 2013, certain services are provided to the Company under a Transition Services Agreement (“TSA”) between MMC and the Company, which replaced the pre-IPO shared services arrangement. The TSA is intended to provide certain services until the Company can acquire the services separately. In April 2014, the Company established its own health insurance plan significantly reducing the reliance on the TSA. During the three months ended September 30, 2015 and 2014, the Company incurred $56,000 and $42,000 under the TSA. During the nine months ended September 30, 2015 and 2014, the Company incurred $165,000 and $1.2 million under the TSA of which $0 and $1.0 million was incurred for reimbursement of health insurance premiums. These amounts are included in selling, general and administrative expense in the accompanying condensed consolidated statements of net and comprehensive income. As of September 30, 2015 and December 31, 2014, $92,000 and $97,000, respectively, remains unpaid and included in accounts payable and other accrued expenses – related party, net in the accompanying condensed consolidated balance sheets.

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MARCUS & MILLICHAP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Brokerage and Financing Services with the Subsidiaries of MMC

MMC has wholly or majority owned subsidiaries that buy and sell commercial real estate properties. The Company performs certain brokerage and financing services related to transactions of the subsidiaries of MMC. For the three months ended September 30, 2015 and 2014, the Company recorded real estate brokerage commissions and financing fees of $305,000 and $872,000, respectively, from subsidiaries of MMC related to these services. The Company incurred cost of services of $173,000 and $540,000, respectively, related to these revenues. For the nine months ended September 30, 2015 and 2014, the Company recorded real estate brokerage commissions and financing fees of $1.6 million and $932,000, respectively, from subsidiaries of MMC related to these services. The Company incurred cost of services of $943,000 and $576,000, respectively, related to these revenues.

Operating Lease with MMC

The Company has an operating lease with MMC for a single story office building located in Palo Alto, California, which was amended with a new expiration date of May 31, 2022. Rent expense for this lease totaled $219,000 and $109,000 for the three month periods ended September 30, 2015 and 2014, respectively. Rent expense for this lease totaled $474,500 and $328,000 for the nine month periods ended September 30, 2015 and 2014, respectively. Rent expense is included in selling, general and administrative expense in the accompanying condensed consolidated statements of net and comprehensive income.

Other

The Company makes advances to non-executive employees from time-to-time. At September 30, 2015 and December 31, 2014, the aggregate principal amount for employee loans outstanding was $366,000 and $378,000, respectively, and is included in employee notes receivable in the accompanying condensed consolidated balance sheets.

As of September 30, 2015, George M. Marcus, the Company’s founder and Co-Chairman, beneficially owned indirectly approximately 53.2% (includes shares owned by Phoenix Investments Holdings, LLC (“Phoenix”) and the George and Judy Marcus Family Foundation) of the Company’s issued and outstanding common stock, including shares to be issued upon settlement of vested deferred stock units, or DSUs.

On February 6, 2015, the Company filed a shelf Registration Statement on Form S-3, registering for future sale 4,600,000 shares of common stock beneficially owned by Mr. Marcus. No new shares were offered, and the Company did not receive any proceeds from the sale of common stock by the selling stockholders. On March 13, 2015, the Company filed a Prospectus Supplement offering for sale by certain selling stockholders 4,000,000 shares of common stock including an option to sell up to an additional 600,000 shares pursuant to an option granted to the underwriters. On March 18, 2015, 4,000,000 shares were sold at a price per share of $31.9925 and the underwriters exercised their option to purchase an additional 600,000 shares at a price per share of $31.9925. In connection with the Registration Statement and Prospectus Supplement, for the three months ended March 31, 2015, the Company incurred approximately $113,000 of costs, which were reimbursed by the selling stockholders during the second quarter of 2015.

7. Fair Value Measurements

U.S. GAAP defines the fair value of a financial instrument as the amount that would be received from the sale of an asset in an orderly transaction between market participants at the measurement date. The Company is responsible for the determination of the value of the investment carried and fair value and the supporting methodologies and assumptions. The Company uses various pricing sources to validate the values utilized.

The degree of judgment used in measuring the fair value of financial instruments generally inversely correlates with the level of observable valuation inputs. Financial instruments with quoted prices in active markets generally have more pricing observability and less judgment is used in measuring fair value. Financial instruments for which no quoted prices are available have less observability and are measured at fair value using valuation models or other pricing techniques that require more judgment.

Assets recorded at fair value are measured and classified in accordance with a fair value hierarchy consisting of the three “levels” based on the observability of inputs available in the market place used to measure the fair values as discussed below:

Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

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MARCUS & MILLICHAP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Level 2: Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability; or

Level 3: Inputs reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model.

Recurring Fair Value Measurements

The Company values its investments including assets held in rabbi trust, money market funds and investments in marketable securities, available for sale at fair value on a recurring basis.

Investments carried at fair value are categorized into one of the three categories described above and consisted of the following (in thousands):

	September 30, 2015								December 31, 2014
	Fair Value		Level 1		Level 2		Level 3		Fair Value		Level 1		Level 2		Level 3
Assets held in rabbi trust	$	5,334	$	—	$	5,334	$	—	$	4,332	$	—	$	4,332	$	—
Money market funds (1)	$	5,708	$	5,708	$	—	$	—	$	25,310	$	25,310	$	—	$	—
Marketable securities, available for sale:
Short-term investments:
U.S. Treasuries	$	70,528	$	70,528	$	—	$	—	$	—	$	—	$	—	$	—
U.S. Government Sponsored Entities		19,112		—		19,112		—		—		—		—		—
Asset-backed securities and other		124		—		124		—		—		—		—		—
	$	89,764	$	70,528	$	19,236	$	—	$	—	$	—	$	—	$	—
Long-term investments:
U.S. Treasuries	$	6,107	$	6,107	$	—	$	—	$	2,981	$	2,981	$	—	$	—
U.S. Government Sponsored Entities		11,742		—		11,742		—		2,016		—		2,016		—
Corporate debt securities		16,827		—		16,827		—		7,478		—		7,478		—
Asset-backed securities and other		10,328		—		10,328		—		2,277		—		2,277		—
	$	45,004	$	6,107	$	38,897	$	—	$	14,752	$	2,981	$	11,771	$	—

⁽¹⁾  Included in cash and cash equivalents.

There were no transfers in or out of Level 1 and Level 2 during the three months and nine months ended September 30, 2015.

Assets and Liabilities not Measured at Fair Value

The Company’s cash and cash equivalents, commissions receivable, amounts due from employees (included in employee notes receivable caption) and sales and financing professionals (included in other assets caption), accounts payable and accrued expenses and commissions payable are carried at cost, which approximates fair value based on their immediate or short-term maturities and terms, which approximate current market rates, and are considered to be in the Level 1 classification.

As the Company’s obligations under notes payable to former stockholders bear fixed interest rates that approximate current interest rates for debt instruments with similar terms and maturities, the Company has determined that the carrying value on these instruments approximates fair value. As the Company’s obligations under SARs liability (included in deferred compensation and commission’s caption) bear interest at a variable rate based on U.S. Treasuries, the Company has determined that the carrying value approximates the fair value. These are considered to be in the Level 2 classification.

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MARCUS & MILLICHAP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

8. Stockholders’ Equity

Common Stock

As of September 30, 2015 and December 31, 2014, there were 37,117,674 and 36,918,442 shares of common stock, $0.0001 par value, issued and outstanding, which includes unvested restricted stock awards issued to non-employee directors, respectively. See Note 11 – “Earnings Per Share” for additional information.

The Company currently does not intend to pay a regular dividend. The Company will evaluate its dividend policy in the future. Any declaration and payment of future dividends to holders of the Company’s common stock will be at the discretion of the board of directors and will depend on many factors, including the Company’s financial condition, earnings, cash flows, capital requirements, level of indebtedness, statutory and contractual restrictions applicable to the payment of dividends and other considerations that the board of directors deems relevant.

Preferred Stock

The Company has 25,000,000 authorized shares of preferred stock with a par value $0.0001 per share. At September 30, 2015 and December 31, 2014, there were no preferred shares issued or outstanding.

Accumulated Other Comprehensive (Loss) Income

The changes in accumulated other comprehensive (loss) income as of September 30, 2015, by component, net of income taxes consisted of the following (in thousands):

	Unrealized gains and (losses) of available-for- sale securities			Foreign currency translation		Total
Beginning balance, December 31, 2014	$	24		$	135	$	159
Other comprehensive (loss) income before reclassifications		(265	)		361		96
Amounts reclassified from accumulated other comprehensive (loss) income (1)		16			—		16
Net current-period other comprehensive (loss) income		(249	)		361		112
Ending balance, September 30, 2015	$	(225	)	$	496	$	271

⁽¹⁾  Included as a component of other income (expense), net in the condensed consolidated statements of net and comprehensive income. The reclassifications were determined on a specific identification basis.

9. Stock-Based Compensation Plans

2013 Omnibus Equity Incentive Plan

In October 2013, the board of directors adopted the 2013 Omnibus Equity Incentive Plan (“2013 Plan”), which became effective upon the Company’s IPO. The 2013 Plan, in general, authorizes the granting of incentive stock options, nonstatutory stock options, stock appreciation rights, restricted stock awards (RSAs), restricted stock units (RSUs), performance units and performance shares to the Company and subsidiary corporations’ employees, independent contractors, directors and consultants. Grants are made from time to time at the discretion of the Company’s board of directors.

The following limits apply to any awards granted under the 2013 Plan:

• Options and stock appreciation rights—no employee or independent contractor can be granted, within any fiscal year, one or more options or stock appreciation rights, which in the aggregate cover more than 500,000 shares; provided, however, that in connection with an employee or independent contractor’s initial service as an employee or independent contractor, an employee or independent contractor’s aggregate limit may be increased by 1,000,000 shares;

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MARCUS & MILLICHAP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

• Restricted stock and restricted stock units—no employee or independent contractor can be granted, within any fiscal year one or more awards of restricted stock or restricted stock units, which in the aggregate cover more than 500,000 shares; provided, however, that in connection with an employee or independent contractor’s initial service as an employee or independent contractor, an employee or independent contractor’s aggregate limit may be increased by 1,000,000 shares; and

• Performance units and performance shares—no employee or independent contractor can receive performance units or performance shares having a grant date value (assuming maximum payout) greater than $2 million dollars or covering more than 500,000 shares, whichever is greater; provided, however, that in connection with an employee or independent contractor’s initial service as an employee or independent contractor, an employee or independent contractor may receive performance units or performance shares having a grant date value (assuming maximum payout) of up to an additional amount equal to $5 million dollars or covering up to 1,000,000 shares, whichever is greater. An individual may only have one award of performance units or performance shares for a performance period.

Upon adoption of the 2013 Plan, 5,500,000 shares of common stock were reserved for the issuance of awards under the 2013 Plan. The number of shares available for issuance under the 2013 Plan increases annually on the first day of each year beginning with the 2015 fiscal year, by an amount equal to the lesser of: (i) 5,500,000 shares of the Company’s common stock; (ii) 3% of the outstanding shares of the Company’s common stock as of the last day of the immediately preceding fiscal year; and (iii) such other amount as the Company’s board of directors may determine. Pursuant to the automatic increase provided for in the 2013 Plan, the board of directors approved a share reserve increase of 1,100,000 shares in 2015. At September 30, 2015, there were 3,265,526 shares available for future grants under the Plan.

Awards Granted and Vested

Under the 2013 Plan, the Company has issued RSA’s to non-employee directors and RSU’s to employees and non-employee sales and financing professionals. All RSAs vest in equal annual installments over a three year period from the date of grant. All RSUs vest in equal annual installments over a five year period from the date of grant. Any unvested awards are canceled upon termination of service. Awards accelerate upon death subject to approval by the compensation committee. As of September 30, 2015, there were no issued or outstanding options, stock appreciation rights, performance units or performance shares awards.

During the nine months ended September 30, 2015, 201,224 shares of RSAs and RSUs vested and 22,298 shares of common stock were withheld to pay applicable required employee statutory withholding taxes based on the market value of the shares on the vesting date. The amount remitted to the tax authorities for the employees’ tax obligation was reflected in the taxes paid related to net share settlement of stock-based awards caption in the financing section of the condensed consolidated statements of cash flows. The shares withheld for taxes were returned to the share reserve and are available for future issuance in accordance with provisions of the 2013 Plan.

During the nine months ended September 30, 2015 and the year ended December 31, 2014, the Company recorded windfall tax benefits resulting from the settlement of stock-based award activity, in the amounts of $534,000 and $4.3 million, respectfully. Such windfall tax benefits are excluded from the provision for income taxes and included as a component of additional paid-in capital when the awards are settled. During the nine months ended September 30, 2015, the Company realized an aggregate of $4.8 million of windfall tax benefits from stock-based award activity, which is included in cash flows from financing activities in the accompanying condensed consolidated statement of cash flows.

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MARCUS & MILLICHAP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Outstanding Awards

The following table summarizes the Company’s activity under the 2013 Plan for the nine months ended September 30, 2015 (dollars in thousands, except per share data):

	RSA Grants to Non-employee Directors			RSU Grants to Employees			RSU Grants to Independent Contractors			Total			Weighted- Average Grant Date Fair Value Per Share
Nonvested shares at December 31, 2014		42,882			516,437			647,690			1,207,009		$	18.23
Granted
February 2015		—			15,847			9,720			25,567
May 2015		10,110			8,142			4,212			22,464
August 2015		—			5,607			25,148			30,755
Total Granted		10,110			29,596			39,080			78,786			42.84
Vested		(7,626	)		(56,719	)		(136,879	)		(201,224	)		14.85
Transferred		—			(8,423	)		8,423			—			17.81
Forfeited/canceled		—			(13,047	)		(15,904	)		(28,951	)		17.78
Nonvested shares at September 30, 2015 (1)		45,366			467,844			542,410			1,055,620		$	20.73
Unrecognized stock-based compensation expense as of September 30, 2015 (2)	$	634		$	9,185		$	19,695		$	29,514
Weighted average remaining vesting period (years) as of September 30, 2015		1.98			4.04			3.41			3.58

⁽¹⁾  Nonvested RSU’s will be settled through the issuance of new shares of common stock.

⁽²⁾  The total unrecognized compensation expense is expected to be recognized over a weighted-average period of approximately 3.58 years.

In November 2013, MMI issued the following deferred stock units (“DSUs”) under the 2013 Plan: (i) DSUs for an aggregate of 2,192,413 shares granted as replacement awards related to the prior SARs program to the MMREIS managing directors and (ii) DSUs for 83,334 shares granted to the Company’s Co-chairman of the board of directors (Mr. Millichap). The DSU’s are fully vested and shares will be issued 20% per year. As of September 30, 2015, fully vested DSUs for 1,820,596 shares remained outstanding. See “Amendments to Restricted Stock and SARs” section below and Note 11 – “Earnings Per Share” for additional information.

Employee Stock Purchase Plan

In 2013, the Company adopted the 2013 Employee Stock Purchase Plan (“ESPP Plan”). The ESPP Plan qualifies under Section 423 of the IRS Code and provides for consecutive, non-overlapping 6-month offering periods. The offering periods generally start on the first trading day on or after May 15 and November 15 of each year. The first offering period began on May 15, 2014. Qualifying employees may purchase shares of the Company stock at a 10% discount based on the lower of the market price at the beginning or end of the offering period, subject to IRS limitations.

The Company determined that the ESPP Plan was a compensatory plan and is required to expense the fair value of the awards over each 6-month offering period. The Company determines the fair value of ESPP shares to be acquired during each offering period using the Black Scholes option pricing model. The Company calculates the expected volatility based on the historical volatility of the Company’s common stock and the risk-free interest rate based on the U.S. Treasury yield curve in effect at the time of grant both consistent with the term of the offering period. The Company incorporates 0% forfeiture rate and 0% expected dividend yield as the Company expects all awards to be delivered and does not intend to pay regular dividends.

The ESPP Plan had 366,667 shares of common stock reserved and 323,514 shares of common stock available for issuance at September 30, 2015. The ESPP Plan provides for annual increases in the number of shares available for issuance under the ESPP on the first day of each fiscal year beginning with the 2015 fiscal year, equal to the least of (i) 366,667 shares, (ii) 1% of the outstanding shares on such date, or (iii) an amount determined by the Board. Pursuant to the provisions of the ESPP Plan, the board of directors determined a share reserve increase was not needed in 2015. At September 30, 2015, total unrecognized compensation cost related to the ESPP Plan was $28,000 and is expected to be recognized over a weighted average period of 0.12 years.

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MARCUS & MILLICHAP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Amendments to Restricted Stock and SARs

Prior to the IPO, certain employees were granted SARs. As of March 31, 2013, the outstanding SARs were frozen at the liability amount, which will be paid out to each participant in installments upon retirement or departure under the terms of the revised SARs agreements. See Note 3 – “Selected Balance Sheet Data” for additional information. To replace beneficial ownership in the SARs, the difference between the book value liability and the fair value of the awards was granted to plan participants in the form of DSUs, which were fully vested upon receipt and will be settled in stock of MMI at a rate of 20% per year if the participant remains employed by the Company during that period (otherwise all unsettled shares of stock upon termination of employment will be settled five years from the termination date). For restricted stock held by the plan participants, the formula settlement value of all outstanding shares was removed, and all such shares of stock are subject to sales restrictions that lapse at a rate of 20% per year for five years if the participant remains employed by the Company. Additionally, in the event of death or termination of employment after reaching the age of 67, 100% of the DSUs will be settled and 100% of the shares of stock will be released from the resale restriction. Further, 100% of the shares of stock will be released from the resale restriction upon the consummation of a change of control of the Company.

Summary of Stock-Based Compensation

The Company grants RSUs to independent contractors (i.e. sales and financing professionals), who are considered non-employees under ASC 718. Accordingly, such awards are required to be measured at fair value at the end of each reporting period until settlement. Stock-based compensation expense is therefore impacted by the changes in the Company’s common stock price during each reporting period. The following table summarizes the components of stock-based compensation included in selling, general and administrative expense in the condensed consolidated statements of net and comprehensive income (in thousands, except common stock price):

	Three Months Ended September 30,					Nine Months Ended September 30,
	2015			2014		2015		2014
Employee stock purchase plan	$	56		$	45	$	184	$	68
RSAs – non-employee directors		91			61		228		137
RSUs – employees		547			175		1,626		521
RSUs – independent contractors		1,474			1,136		4,712		2,549
	$	2,168		$	1,417	$	6,750	$	3,275
Common stock price at beginning of period	$	46.14		$	25.51	$	33.25	$	14.90
Common stock price at end of period	$	45.99		$	30.26	$	45.99	$	30.26
(Decrease) increase in stock price	$	(0.15	)	$	4.75	$	12.74	$	15.36

10. Income Taxes

The Company’s effective tax rate for the three and nine months ended September 30, 2015 was 42.9% and 41.6%, compared to 41.2% for each of the three and nine months ended September 30, 2014. The Company’s estimated annual effective tax rate for 2015 is 41.1%. The Company provides for the effects of income taxes in interim financial statements based on the Company’s estimate of its estimated annual effective tax rate for the full year, which is based on forecasted income by jurisdiction where the Company operates, adjusted for the tax effects of items that relate discretely to the period, if any. The difference between the statutory tax rate and the Company’s effective tax rate is largely attributable to state income taxes and a full valuation allowance with respect to the deferred tax assets of the Company’s Canadian operations.

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MARCUS & MILLICHAP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

11. Earnings Per Share

The following table sets forth the computation of basic and diluted earnings per share for the three and nine months ended September 30, 2015 and 2014, respectively (in thousands, except per share data):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2015			2014			2015			2014
Numerator (Basic and Diluted):
Net income	$	15,176		$	13,523		$	46,401		$	33,101
Denominator:
Basic
Weighted average common shares issued and outstanding		37,114			36,624			37,091			36,613
Deduct: Unvested RSAs (1)		(45	)		(53	)		(44	)		(42	)
Add: Fully vested DSUs (2)		1,821			2,276			1,821			2,276
Weighted Average Common Shares Outstanding		38,890			38,847			38,868			38,847
Basic earnings per common share	$	0.39		$	0.35		$	1.19		$	0.85
Diluted
Weighted Average Common Shares Outstanding from above		38,890			38,847			38,868			38,847
Add: Dilutive effect of RSUs, RSAs & ESPP		270			164			183			102
Weighted Average Common Shares Outstanding		39,160			39,011			39,051			38,949
Diluted earnings per common share	$	0.39		$	0.35		$	1.19		$	0.85
Antidilutive shares excluded from diluted earnings per common share (3)		31			67			77			618

⁽¹⁾  RSAs were issued and outstanding to the non-employee directors and have a three year vesting term subject to service requirements. See Note 9 – “Stock-Based Compensation Plans” for additional information.

⁽²⁾  Shares are included in weighted average common shares outstanding as the shares are fully vested but have not yet been delivered. See Note 9 – “Stock-Based Compensation Plans” for additional information.

⁽³⁾  Primarily pertaining to RSU grants to the Company’s independent contractors.

12. Commitments and Contingencies

Credit Agreement

On June 18, 2014, the Company entered into a Credit Agreement with Wells Fargo Bank, National Association (“Bank”), dated as of June 1, 2014 (the “Credit Agreement”). The Credit Agreement provides for a $60.0 million principal amount senior secured revolving credit facility that is guaranteed by all of the Company’s domestic subsidiaries (the “Credit Facility”), which originally matured on June 1, 2017. The Company may borrow, repay and reborrow amounts under the Credit Facility until its maturity date, at which time all amounts outstanding under the Credit Facility must be repaid in full. In connection with executing the Credit Agreement, the Company paid bank fees and other expenses in the aggregate amount of $224,000, which are being amortized over the term of the Credit Agreement. The Company must pay a commitment fee of up to 0.1% per annum, payable quarterly commencing on July 1, 2014, based on the amount of unutilized commitments under the Credit Facility. The amortization and commitment fee is included in interest expense in the accompanying condensed consolidated statements of net and comprehensive income and was $32,000 and $35,000 during the three months ended September 30, 2015 and 2014, respectively and $100,000 and $41,000 during the nine months ended September 30, 2015 and 2014, respectively. As of September 30, 2015, there were no amounts outstanding under the Credit Agreement.

Borrowings under the Credit Agreement are available for general corporate purposes and working capital. The Credit Facility includes a $10.0 million sublimit for the issuance of standby letters of credit of which $533,000 was utilized at September 30, 2015. Borrowings under the Credit Facility will bear interest, at the Company’s option, at either the (i) Base Rate (defined as the highest of (a) the Bank’s prime rate, (b) the Federal Funds Rate plus 1.5% and (c) one-month LIBOR plus 1.5%), or (ii) at a variable rate between 0.875% and 1.125% above LIBOR, based upon the total funded debt to EBITDA ratio.

The Credit Facility contains customary covenants, including financial and other covenants reporting requirements and events of default. Financial covenants require the Company, on a combined basis with its guarantors, to maintain (i) an EBITDAR Coverage

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MARCUS & MILLICHAP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Ratio (as defined in the Credit Agreement) of not less than 1.25:1.0 as of each quarter end on a rolling 4-quarter basis and (ii) total funded debt to EBITDA not greater than 2.0:1.0 as of each quarter end on a rolling 4-quarter basis. The Credit Facility is secured by substantially all assets of the Company, including pledges of 100% of the stock or other equity interest of each subsidiary except for the capital stock of a controlled foreign corporation (as defined in the Internal Revenue Code). As of September 30, 2015, the Company was in compliance with all financial and non-financial covenants.

On August 21, 2015, the Company extended the Credit Agreement, which now matures on June 1, 2018. No other changes to the original terms. In connection with the Credit Agreement extension, the Company paid bank fees and other expenses in the aggregate amount of $35,000, which are being amortized over the extended term of the Credit Agreement. The amortization and commitment fee is included in interest expense in the accompanying condensed consolidated statements of net and comprehensive income.

Litigation

The Company is subject to various legal proceeding and claims that arise in the ordinary course of business, some of which involve claims for damages that are substantial in amount. Most of these litigation matters are covered by insurance which contain deductibles, exclusions, claim limits and aggregate policy limits. While the ultimate liability for these legal proceedings cannot be determined, the Company reviews the need for its accrual for loss contingencies quarterly and records an accrual for litigation related losses where the likelihood of loss is both probable and estimable. The Company believes that the ultimate resolution of the legal proceedings will not have a material adverse effect on its financial condition or results of operations. The Company accrues legal fees for litigation as the legal services are provided.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Unless the context requires otherwise, the words “Marcus & Millichap,” “Marcus & Millichap Real Estate Investment Services,” “MMREIS,” “we,” the “Company,” “us” and “our” refer to Marcus & Millichap, Inc., Marcus & Millichap Real Estate Investment Services, Inc. and its other consolidated subsidiaries.

Forward-Looking Statements

The following discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of many factors. The results of operations for the three and nine months ended September 30, 2015 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2015, or for any other future period. The following discussion should be read in conjunction with the unaudited condensed consolidated financial statements and the notes thereto included in Item 1 of this Form 10-Q and in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2014 filed with SEC on March 9, 2015, including the “Risk Factors” section and the consolidated financial statements and notes included therein.

Overview

We are a leading national brokerage firm specializing in commercial real estate investment sales, financing, research and advisory services. We have been the top commercial real estate investment broker in the United States based on the number of investment transactions over the last 10 years, based on data from CoStar and Real Capital Analytics. As of September 30, 2015, we had over 1,500 investment sales and financing professionals in 80 offices who provide investment brokerage and financing services to sellers and buyers of commercial real estate. We also offer market research, consulting and advisory services to our clients. For the three and nine months ended September 30, 2015, we closed more than 2,200 and 6,200 sales, financing and other transactions with total volume of approximately $9.4 billion and $26.9 billion, respectively. During the year ended December 31, 2014, we closed more than 7,600 sales, financing and other transactions with total volume of approximately $33.1 billion.

We generate revenues by collecting real estate brokerage commissions upon the sale and fees upon the financing of commercial properties and, in addition, by providing consulting and advisory services. Real estate brokerage commissions are typically based upon the value of the property, and financing fees are typically based upon the size of the loan. For each of the three and nine months ended September 30, 2015, approximately 92% of our revenues were generated from real estate brokerage commissions, 6% from financing fees and 2% from other revenues, including consulting and advisory services. During the year ended December 31, 2014, approximately 92% of our revenues were generated from real estate brokerage commissions, 6% from financing fees and 2% from other revenues, including consulting and advisory services.

Real Estate Brokerage Transactions by Property Type

Real estate brokerage commissions represent the largest source of our revenues. While we earn real estate brokerage commissions by representing owners of a broad range of commercial property types, our core concentration is in the multifamily, retail and office property types. The following tables set forth the number of transactions and sales volume (dollars in billions) by property type of our real estate brokerage activity as well as the source of those number of transactions by region.

	Three Months Ended September 30,								Change
	2015				2014				Increase (Decrease)
Property Type	Number		Volume		Number		Volume		Number		Volume
Multifamily		588	$	3.0		567	$	3.0		21	$	—
Retail		683		2.0		576		3.3		107		(1.3	)
Office		79		0.3		79		0.3		—		—
Other (1)		246		1.1		222		1.3		24		(0.2	)
		1,596	$	6.4		1,444	$	7.9		152	$	(1.5	)

⁽¹⁾  Includes the following specialty groups: Industrial, self-storage, land, hospitality, senior housing, manufactured housing and mixed – use/other.

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	Nine Months Ended September 30,								Change
	2015				2014				Increase (Decrease)
Property Type	Number		Volume		Number		Volume		Number		Volume
Multifamily		1,679	$	9.3		1,533	$	7.7		146	$	1.6
Retail		1,872		5.9		1,677		6.6		195		(0.7	)
Office		254		1.2		228		0.8		26		0.4
Other (1)		717		3.5		579		2.8		138		0.7
		4,522	$	19.9		4,017	$	17.9		505	$	2.0

⁽¹⁾  Includes the following specialty groups: Industrial, self-storage, land, hospitality, senior housing, manufactured housing and mixed – use/other.

Real Estate Brokerage Transactions by Region

⁽¹⁾  Includes our Canadian operations, which represented less than 1.0% of our total revenues in each period presented.

Factors Affecting Our Business

Our business and our operating results, financial condition and liquidity are significantly affected by the number and size of commercial real estate sales and financing transactions. The number and size of these transactions is affected by our ability to recruit and retain sales and financing professionals and by the general trends in the economy and real estate industry, including:

• Economic and commercial real estate market conditions. Our business is dependent on economic conditions and the demand for commercial real estate and related services in the markets in which we operate. Changes in the economy on a national, regional or local basis can have a positive or negative impact on our business. Fluctuations in acquisition and disposition activity, as well as general commercial real estate investment activity, can impact commissions for arranging such transactions, as well as impacting fees for arranging financing for acquirers and property owners that are seeking to recapitalize their existing properties.

• Credit and liquidity in the financial markets. Since real estate purchases are often financed with debt, credit and liquidity issues in the financial markets have a direct impact on flow of capital to the commercial real estate markets as well as transaction activity and prices.

• Fluctuations in interest rates. Changes in interest rates as well as steady and protracted movements of interest rates in one direction (increases or decreases) could adversely or positively affect the operation and income of commercial real estate properties, as well as the demand from investors for commercial real estate investments. In particular, increased interest rates may cause prices to decrease due to the increased costs of obtaining financing and could lead to decreases in purchase and sale activities, thereby reducing the amounts of investment sales and loan originations. In contrast, decreased interest rates will generally decrease the costs of obtaining financing which could lead to increases in purchase and sales activities.

• Demand for investment in commercial real estate. The willingness of private investors to invest in commercial real estate is affected by factors beyond our control, including the performance of real estate assets when compared with the performance of other investments.

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Seasonality

Our real estate brokerage commissions and financing fees are seasonal, which can affect an investor’s ability to compare our financial condition and results of operation on a quarter-by-quarter basis. Historically, this seasonality has caused our revenue, operating income, net income and cash flows from operating activities to be lower in the first six months of the year and higher in the second half of the year, particularly in the fourth quarter. The concentration of earnings and cash flows in the last six months of the year, particularly in the fourth quarter, is due to an industry-wide focus of clients to complete transactions towards the end of the calendar year. In addition, our operating margins are typically lower during the second half of each year due to our commission structure for some of our senior sales and financing professionals. These senior sales and financing professionals are on a graduated commission schedule that resets annually in which higher commissions are paid for higher sales volumes.

Operating Segments

Management has determined that each of the Company’s offices represent individual operating segments with similar economic characteristics that meet the criteria for aggregation into a single reportable segment for financial statement purposes. The Company’s financing operations also represent an individual operating segment, which does not meet the thresholds to be presented as a separate reportable segment.

Key Financial Measures and Indicators

Revenues

Our revenues are primarily generated from our real estate investment sales business. In addition to real estate brokerage commissions, we generate revenues from financing fees and from other revenues, which are primarily comprised of consulting and advisory fees.

• Real estate brokerage commissions. We earn real estate brokerage commissions by acting as a broker for commercial real estate owners seeking to sell or investors seeking to buy properties. Revenues from real estate brokerage commissions are typically recognized at the close of escrow.

• Financing fees. We earn financing fees by securing financing on purchase transactions or by securing refinancing of our clients’ existing mortgage debt. We recognize financing fee revenues at the time the loan closes and we have no remaining significant obligations for performance in connection with the transaction. To a lesser extent, we also earn ancillary fees associated with financing activities.

• Other revenues. Other revenues include fees generated from consulting and advisory services performed by our investment sales professionals, as well as referral fees from other real estate brokers. Revenues from these services are recognized as they are performed and completed.

Substantially all of our transactions are success based. A small percentage of our transactions include retainer fees and/or breakage fees. Retainer fees are credited against a success-based fee upon the closing of a transaction or a breakage fee. Transactions that are terminated before completion will sometimes generate breakage fees, which are usually calculated as a set amount or a percentage of the fee we would have received had the transaction closed. The amount and timing of all of the fees paid vary by the type of transaction and are generally negotiated on a transaction-by-transaction basis.

Operating Expenses

Our operating expenses consist of cost of services, selling, general and administrative expenses and depreciation and amortization. The significant components of our expenses are further described below.

• Cost of services. The majority of our cost of services expense is commission expense. Commission expenses are directly attributable to providing services to our clients for investment sales and financing services. Most of our transaction professionals are independent contractors and are paid commissions; however, there are some who are initially paid a salary and certain of our financing professionals are employees and as such, these expenses also include employee-related compensation, employer taxes and benefits for those employees. In addition, some of our most senior investment sales and

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financing professionals have the ability to earn additional commissions after meeting certain annual revenue thresholds. These additional commissions are recognized as cost of services in the period in which they are earned. Payment of a portion of these additional commissions are generally deferred for a period of three years, at the Company’s election and paid at the beginning of the fourth calendar year. Cost of services also includes referral fees paid to other real estate brokers where the Company is the principal service provider.

• Selling, general & administrative expenses. The largest expense component within selling, general and administrative expenses is personnel expenses for our management team and sales and support staff. In addition, these costs include facilities costs (excluding depreciation and amortization), staff related expenses, sales, marketing, legal, telecommunication, network, data sources and other administrative expenses. Also included in selling, general and administrative are expenses for stock-based compensation to non-employee directors, employees and independent contractors (i.e. sales and financing professionals) under the 2013 Omnibus Equity Incentive Plan.

• Depreciation and amortization expense. Depreciation and amortization expense consists of depreciation and amortization recorded on our computer software and hardware equipment and furniture, fixture, and equipment. Depreciation and amortization are provided over estimated useful lives ranging from three to seven years for owned assets or over the lesser of the asset estimated useful lives or the related lease term for leased assets.

Other Income (Expense), Net

Other income (expense), net primarily consists of net gains or losses on our deferred compensation plan assets, interest income and realized gains and losses on our investments in marketable securities, foreign currency gains and losses and other non-operating gains and losses.

Interest Expense

Interest expense consists of interest expense associated with SARs liability, notes payable to former stockholders, the credit agreement and other. See Notes to Condensed Consolidated Financial Statements for additional information.

Provision for Income Taxes

We are subject to U.S. and Canadian federal taxes. We are also subject to individual state and local taxes based on the income generated in the jurisdictions in which we operate. Our effective tax rate fluctuates as a result of the change in the mix of our activities in the jurisdictions we operate due to differing tax rates in those jurisdictions. Our provision for income taxes excludes the windfall benefit from stock-based award activity.

Results of Operations

Following is a discussion of our results of operations for the three and nine months ended September 30, 2015 and 2014. The tables included in the period comparisons below provide summaries of our results of operations. The period-to-period comparisons of financial results are not necessarily indicative of future results.

Key Operating Metrics

We regularly review a number of key metrics to evaluate our business, measure our performance, identify trends affecting our business, formulate financial projections and make strategic decisions. During the three months ended September 30, 2015 and 2014, we closed more than 2,200 and 1,900 sales, financing and other transactions with total volume of approximately $9.4 billion and $9.9 billion, respectively. During the nine months ended September 30, 2015 and 2014, we closed more than 6,200 and 5,500 sales, financing and other transactions with total volume of approximately $26.9 billion and $23.2 billion, respectively. Key metrics for Real Estate Brokerage and Financing activities are as follows:

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	Three Months Ended September 30,				Nine Months Ended September 30,
Real Estate Brokerage	2015		2014		2015		2014
Average Number of Sales Professionals		1,415		1,312		1,416		1,271
Average Number of Transactions per Sales Professional		1.1		1.1		3.2		3.2
Average Commission per Transaction	$	95,202	$	97,105	$	98,708	$	91,672
Average Transaction Size	$	4,008,530	$	5,500,284	$	4,395,217	$	4,463,755
Total Number of Transactions		1,596		1,444		4,522		4,017
Total Sales Volume (in millions)	$	6,398	$	7,942	$	19,875	$	17,931
	Three Months Ended September 30,				Nine Months Ended September 30,
Financing	2015		2014		2015		2014
Average Number of Financing Professionals		84		79		83		77
Average Number of Transactions per Financing Professional		4.9		4.1		13.7		12.5
Average Fee per Transaction	$	26,565	$	24,197	$	26,472	$	23,231
Average Transaction Size	$	3,029,062	$	2,950,386	$	2,966,008	$	2,576,650
Total Number of Transactions		409		325		1,135		962
Total Dollar Volume (in millions)	$	1,239	$	959	$	3,366	$	2,479

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Comparison of Three Months Ended September 30, 2015 and 2014

(dollars and share amounts in thousands, except per share amounts)

	Three Months Ended September 30, 2015			Percentage of Revenue			Three Months Ended September 30, 2014			Percentage of Revenue			Total Dollar Change			Total Percentage Change
Revenues:
Real estate brokerage commissions	$	151,942			91.6	%	$	140,220			92.9	%	$	11,722			8.4	%
Financing fees		10,865			6.6			7,864			5.2			3,001			38.2
Other revenues		3,069			1.8			2,805			1.9			264			9.4
Total revenues		165,876			100.0			150,889			100.0			14,987			9.9
Operating expenses:
Cost of services		102,010			61.5			92,269			61.2			9,741			10.6
Selling, general, and administrative expense		35,646			21.5			34,086			22.6			1,560			4.6
Depreciation and amortization expense		802			0.5			813			0.5			(11	)		(1.4	)
Total operating expenses		138,458			83.5			127,168			84.3			11,290			8.9
Operating income		27,418			16.5			23,721			15.7			3,697			15.6
Other income (expense), net		(464	)		(0.3	)		(308	)		(0.2	)		(156	)		50.6
Interest expense		(380	)		(0.2	)		(397	)		(0.2	)		17			(4.3	)
Income before provision for income taxes		26,574			16.0			23,016			15.3			3,558			15.5
Provision for income taxes		11,398			6.9			9,493			6.3			1,905			20.1
Net income	$	15,176			9.1	%	$	13,523			9.0	%	$	1,653			12.2	%
Adjusted EBITDA (1)	$	29,601			17.8	%	$	25,641			17.0	%	$	3,960			15.4	%
Earnings per share:
Basic	$	0.39					$	0.35
Diluted	$	0.39					$	0.35
Weighted average common shares outstanding:
Basic		38,890						38,847
Diluted		39,160						39,011

⁽¹⁾  Adjusted EBITDA is not a measurement of our financial performance under U.S. GAAP and should not be considered as an alternative to net income, operating income or any other measures derived in accordance with U.S. GAAP. For a definition of Adjusted EBITDA and a reconciliation of Adjusted EBITDA to net income, see “Non-GAAP Financial Measure.”

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Revenues.

Our total revenues were $165.9 million for the three months ended September 30, 2015 compared to $150.9 million for the same period in 2014, an increase of $15.0 million, or 9.9%. Total revenues increased primarily as a result of increases in real estate brokerage commissions, which contributed 78.2% of the total increase. An increase in financing fees and to a lesser extent, increase in other revenues, contributed the remaining increase in total revenues.

• Real estate brokerage commissions. Revenues from real estate brokerage commissions increased to $151.9 million for the three months ended September 30, 2015 from $140.2 million for the same period in 2014, an increase of $11.7 million or 8.4%. The increase was primarily driven by an increase in the number of investment sales transactions (10.5%) and an increase in average commission rates. The rise in average commission rate is due to an increase in the proportion of our $1 to $10 million private client transactions as compared to our larger transactions in the institutional segment. These transactions generally earn a higher commission rate.

• Financing fees. Revenues from financing fees increased to $10.9 million for the three months ended September 30, 2015 from $7.9 million for the same period in 2014, an increase of $3.0 million or 38.2%. The increase was driven by a combination of an increase in the number of loan transactions (25.8%) due to an increase in the number of financing professionals combined with an increase in their productivity levels and an increase in average commission per transaction (9.8%).

• Other revenues. Other revenues increased to $3.1 million for the three months ended September 30, 2015 from $2.8 million for the same period in 2014, an increase of $0.3 million or 9.4%.

Total operating expenses.

Our total operating expenses were $138.5 million for the three months ended September 30, 2015 compared to $127.2 million for the same period in 2014, an increase of $11.3 million, or 8.9%. Expenses increased primarily due to an increase in cost of services, which is predominantly variable commissions paid to our investment sales and financing professionals and compensation-related costs related to our financing activities. Selling, general and administrative costs increased as well, as described below. 

• Cost of services. Cost of services for the three months ended September 30, 2015 increased $9.7 million, or 10.6% to $102.0 million from $92.3 million for the same period in 2014. The increase was primarily due to increased commission expenses driven by the related increased revenues noted above. Cost of services as a percent of total revenues increased to 61.5% for the three months ended September 30, 2015 compared to 61.2% for the same period in 2014 primarily due to an increase in the proportion of transactions closed by our more senior investment sales professionals whose commission rates generally increase as they meet certain production thresholds.

• Selling, general and administrative expense. Selling, general and administrative expense for the three months ended September 30, 2015 increased $1.6 million, or 4.6%, to $35.7 million from $34.1 million for the same period in 2014. The increase was primarily due to (i) a $1.1 million increase in salaries and related benefits driven by an increase in headcount in corporate support in connection with our growth; (ii) a $1.0 million increase in sales and promotional expenses driven by marketing expenses to support increased sales activity; (iii) a $0.8 million increase in stock-based compensation expense resulting from an increase in the Company’s stock price, which impacted stock-based compensation expense of RSU grants to the Company’s independent contractors, which are required to be measured at fair value and incremental stock-based awards granted since the third quarter of 2014; and (iv) a $0.3 million net increase in other expense categories primarily driven by our expansion and business growth. The increases were partially offset by a $1.6 million decrease in legal costs due to settlement of outstanding litigation.

• Depreciation and amortization expense. There were no significant changes in depreciation and amortization expenses for the three months ended September 30, 2015 as compared to the same period in 2014.

Other income (expense), net

Other income (expense), net increased to $(0.5) million for the three months ended September 30, 2015 from $(0.3) million for the same period in 2014. The increase in loss was primarily due to a decrease in value of our deferred compensation plan assets held in the rabbi trust and foreign currency losses related to our Canadian operations. The increase in loss was partially offset by an increase in interest income due to our investments in marketable securities, available for sale during the three months ended September 30, 2015 with no such investments in the same period in 2014.

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Interest expense

There were no significant changes in interest expense for the three months ended September 30, 2015 as compared to the same period in 2014.

Provision for income taxes

The provision for income taxes was $11.4 million for the three months ended September 30, 2015 as compared to $9.5 million in the same period in 2014, an increase of $1.9 million or 20.1%. The effective income tax rate for the three months ended September 30, 2015 was 42.9%, compared with 41.2% for the same period in 2014.

We calculate our provision for income taxes using an annual effective tax rate based on projected taxable income for the year adjusted for the effects of permanent and discrete items. We anticipate our estimated annual effective tax rate to be approximately 41.1% in 2015. Deferred taxes are adjusted for significant changes in temporary items in the period in which they occur. The future effective tax rate may vary from this estimated annual effective rate due to several factors, including but not limited to, the level of state and foreign jurisdiction activity, future changes in tax laws, the amount of future book versus income tax items that are permanent in nature and changes, if any, in a valuation allowance as it relates to deferred tax assets.

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Comparison of Nine Months Ended September 30, 2015 and 2014

(dollars and share amounts in thousands, except per share amounts)

	Nine Months Ended September 30, 2015			Percentage of Revenue			Nine Months Ended September 30, 2014			Percentage of Revenue			Total Dollar Change			Total Percentage Change
Revenues:
Real estate brokerage commissions	$	446,356			91.9	%	$	368,246			92.1	%	$	78,110			21.2	%
Financing fees		30,046			6.2			22,348			5.6			7,698			34.4
Other revenues		9,497			1.9			9,150			2.3			347			3.8
Total revenues		485,899			100.0			399,744			100.0			86,155			21.6
Operating expenses:
Cost of services		293,725			60.4			240,266			60.1			53,459			22.2
Selling, general, and administrative expense		109,064			22.5			99,570			24.9			9,494			9.5
Depreciation and amortization expense		2,389			0.5			2,399			0.6			(10	)		(0.4	)
Total operating expenses		405,178			83.4			342,235			85.6			62,943			18.4
Operating income		80,721			16.6			57,509			14.4			23,212			40.4
Other income (expense), net		23			—			(39	)		—			62			nm
Interest expense		(1,349	)		(0.3	)		(1,202	)		(0.3	)		(147	)		12.2
Income before provision for income taxes		79,395			16.3			56,268			14.1			23,127			41.1
Provision for income taxes		32,994			6.8			23,167			5.8			9,827			42.4
Net income	$	46,401			9.5	%	$	33,101			8.3	%	$	13,300			40.2	%
Adjusted EBITDA (1)	$	88,886			18.3	%	$	63,138			15.8	%	$	25,748			40.8	%
Earnings per share:
Basic	$	1.19					$	0.85
Diluted	$	1.19					$	0.85
Weighted average common shares outstanding:
Basic		38,868						38,847
Diluted		39,051						38,949

⁽¹⁾  Adjusted EBITDA is not a measurement of our financial performance under U.S. GAAP and should not be considered as an alternative to net income, operating income or any other measures derived in accordance with U.S. GAAP. For a definition of Adjusted EBITDA and a reconciliation of Adjusted EBITDA to net income, see “Non-GAAP Financial Measure.”

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Revenues.

Our total revenues were $485.9 million for the nine months ended September 30, 2015 compared to $399.7 million for the same period in 2014, an increase of $86.2 million, or 21.6%. Total revenues increased primarily as a result of increases in real estate brokerage commissions, which contributed 90.7% of the total increase. An increase in financing fees and to a lesser extent, increase in other revenues, contributed the remaining increase in total revenues.

• Real estate brokerage commissions. Revenues from real estate brokerage commissions increased to $446.4 million for the nine months ended September 30, 2015 from $368.2 million for the same period in 2014, an increase of $78.1 million or 21.2%. The increase was primarily driven by an increase in the number of investment sales transactions (12.6%) and an increase in the average commission per transaction (7.7%). The increase in average commission per transaction is a reflection of the maturing of our agents, focus on hiring experienced sales professionals and the rise in real estate values.

• Financing fees. Revenues from financing fees increased to $30.0 million for the nine months ended September 30, 2015 from $22.3 million for the same period in 2014, an increase of $7.7 million or 34.4%. The increase was driven by an increase in the number of loan transactions (18.0%) due to an increase in the number of financing professionals combined with an increase in their productivity levels and an increase in average transaction size (15.1%).

• Other revenues. Other revenues increased to $9.5 million for the nine months ended September 30, 2015 from $9.1 million for the same period in 2014, an increase of $0.3 million or 3.8%.

Total operating expenses.

Our total operating expenses were $405.2 million for the nine months ended September 30, 2015 compared to $342.2 million for the same period in 2014, an increase of $62.9 million, or 18.4%. Expenses increased primarily due to an increase in cost of services, which is predominantly variable commissions paid to our investment sales and financing professionals and compensation-related costs related to our financing activities. Selling, general and administrative costs increased as well, as described below. 

• Cost of services. Cost of services for the nine months ended September 30, 2015 increased approximately $53.5 million, or 22.2% to $293.7 million from $240.3 million for the same period in 2014. The increase was primarily due to increased commission expenses driven by the related increased revenues noted above. Cost of services as a percent of total revenues increased to 60.4% for the nine months ended September 30, 2015 compared to 60.1% for the same period in 2014 due to an increase in the proportion of transactions closed by our more senior investment sales professionals whose commission rates generally increase as they meet certain production thresholds.

• Selling, general and administrative expense. Selling, general and administrative expense for the nine months ended September 30, 2015 increased $9.5 million, or 9.5%, to $109.1 million from $99.6 million for the same period in 2014. The increase was primarily due to (i) a $4.4 million increase in sales and promotional expenses driven by an increase in our annual sales recognition event and marketing expenses to support increased sales activity; (ii) a $3.5 million increase in stock-based compensation expense driven by an increase in the Company’s stock price as RSU grants to the Company’s independent contractors are required to be measured at fair value, stock-based compensation expense for incremental share-based awards granted since the third quarter of 2014 and immediate vesting of certain RSU awards under the provisions of the RSU agreement; (iii) a $2.6 million increase in management performance compensation driven by the increase in operating results during the nine months ended September 30, 2015 as compared to the same period in 2014; (iv) a $2.2 million increase in salaries and related benefits driven by an increase in headcount in corporate support in connection with our growth; and (v) a $1.3 million net increase in other expense categories primarily driven by our expansion and business growth. The increases were partially offset by a $4.5 million decrease in legal costs due to settlement of outstanding litigation and recoveries from a settlement with an insurance carrier.

• Depreciation and amortization expense. There were no significant changes in depreciation and amortization expenses for the nine months ended September 30, 2015 as compared to the same period in 2014.

Other income (expense), net

Other income (expense), net increased to $23,000 for the nine months ended September 30, 2015 from $(39,000) for the same period in 2014. The increase was primarily from interest income and realized gains on our investments in marketable securities, available for sale. The increase was partially offset by foreign currency losses related to our Canadian operations and a decrease in value of our deferred compensation plan assets held in the rabbi trust.

31

Interest expense.

There were no significant changes in interest expense for the nine months ended September 30, 2015 as compared to the same period in 2014.

Provision for income taxes.

The provision for income taxes was $33.0 million for the nine months ended September 30, 2015 as compared to $23.2 million in the same period in 2014, an increase of $9.8 million or 42.4%. The effective income tax rate for the nine months ended September 30, 2015 was 41.6%, compared with 41.2% for the same period in 2014.

We calculate our provision for income taxes using an annual effective tax rate based on projected taxable income for the year adjusted for the effects of permanent and discrete items. We anticipate our estimated annual effective tax rate to be approximately 41.1% in 2015. Deferred taxes are adjusted for significant changes in temporary items in the period in which they occur. The future effective tax rate may vary from this estimated annual effective rate due to several factors, including but not limited to, the level of state and foreign jurisdiction activity, future changes in tax laws, the amount of future book versus income tax items that are permanent in nature and changes, if any, in a valuation allowance as it relates to deferred tax assets.

32

Non-GAAP Financial Measure

In this Form 10-Q, we include a non-GAAP financial measure, adjusted earnings before interest income/expense, taxes, depreciation and amortization and stock-based compensation, or Adjusted EBITDA. We define Adjusted EBITDA as net income before (i) interest income/expense, (ii) net realized gains on marketable securities, available for sale, (iii) income tax expense, (iv) depreciation and amortization and (v) stock-based compensation expense. We use Adjusted EBITDA in our business operations to, among other things, evaluate the performance of our business, develop budgets and measure our performance against those budgets. We also believe that analysts and investors use Adjusted EBITDA as supplemental measures to evaluate our overall operating performance. However, Adjusted EBITDA has material limitations as an analytical tool and should not be considered in isolation, or as a substitute for analysis of our results as reported under U.S. generally accepted accounting principles (“U.S. GAAP”). We find Adjusted EBITDA as a useful tool to assist in evaluating performance because it eliminates items related to capital structure and taxes and non-cash stock-based compensation charges. In light of the foregoing limitations, we do not rely solely on Adjusted EBITDA as a performance measure and also consider our U.S. GAAP results. Adjusted EBITDA is not a measurement of our 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 GAAP financial measure, net income, to Adjusted EBITDA is as follows (in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2015			2014			2015			2014
Net income	$	15,176		$	13,523		$	46,401		$	33,101
Adjustments:
Interest income and other (1)		(323	)		(2	)		(997	)		(6	)
Interest expense		380			397			1,349			1,202
Provision for income taxes		11,398			9,493			32,994			23,167
Depreciation and amortization		802			813			2,389			2,399
Stock-based compensation		2,168			1,417			6,750			3,275
Adjusted EBITDA	$	29,601		$	25,641		$	88,886		$	63,138

⁽¹⁾  Other for the three and nine months ended September 30, 2015 consists of $0 and $130,000 of net realized gains on marketable securities, available for sale.

Liquidity and Capital Resources

Our primary sources of liquidity are cash and cash equivalents, marketable securities, available for sale, cash flows from operations and, if necessary, borrowings under our credit agreement. In order to enhance yield to us, we have invested a portion of our cash in money market funds and in fixed and variable income debt securities, in accordance with our investment policy approved by the Board of Directors. Although we have historically funded our operations through operating cash flows, there can be no assurance that we can continue to meet our cash requirements entirely through our operations, cash and cash equivalents, marketable securities, available for sale or availability under the credit agreement.

Cash held in our Canadian operations aggregated $538,000 and $318,000 at September 30, 2015 and December 31, 2014, respectively.

33

Our total cash and cash equivalents balance decreased by $81.5 million to $67.6 million at September 30, 2015, compared to $149.2 million at December 31, 2014 as we invested cash into marketable securities to generate higher yields. The following table sets forth our summary cash flows for the nine months ended September 30, 2015 and 2014 (in thousands):

Cash Flows

	Nine Months Ended September 30,
	2015			2014
Net cash provided by operating activities	$	38,582		$	34,908
Net cash used in investing activities		(123,805	)		(1,829	)
Net cash provided by (used in) financing activities		3,696			(21	)
Net (decrease) increase in cash and cash equivalents		(81,527	)		33,058
Cash and cash equivalents at beginning of period		149,159			100,952
Cash and cash equivalents at end of period	$	67,632		$	134,010

Operating Activities

Cash flows provided by operating activities were $38.6 million for the nine months ended September 30, 2015, as compared to $34.9 million for the same period in 2014. Net cash provided by operating activities is driven by our net income adjusted for non-cash items and changes in operating assets and liabilities. The $3.7 million increase in cash flows provided by operating activities for the nine months ended September 30, 2015 compared to the same period in 2014 was primarily due to the growth in our business along with differences in timing of payments and receipts and bonus accruals related to our increased operating results.

Investing Activities

Cash flows used for investing activities were $123.8 million for the nine months ended September 30, 2015, as compared to $1.8 million for the same period in 2014. The increase in cash flows used for investing activities for the nine months ended September 30, 2015, as compared to the same period in 2014 was primarily due to $119.9 million in net purchases of marketable securities, available for sale for the nine months ended September 30, 2015 with no such purchases or sales in the same period in 2014.

Financing Activities

Cash flows provided by financing activities were $3.7 million for the nine months ended September 30, 2015, as compared to cash flows used in financing activities of $21,000 for the same period in 2014. The change in cash flows provided by financing activities for the nine months ended September 30, 2015, as compared to the same period in 2014, was primarily the result of net changes in stock-based award activity with no such comparable cash flows for the same period in 2014 (See Note 9 – “Stock-Based Compensation Plans” our Notes to Condensed Consolidated Financial Statements for additional information).

We believe that our existing balances of cash and cash equivalents, marketable securities, available for sale, cash flows expected to be generated from our operations and borrowings available under the credit agreement will be sufficient to satisfy our operating requirements for at least the next twelve months. If we need to raise additional capital through public or private debt or equity financings, strategic relationships or other arrangements, this capital might not be available to us in a timely manner, on acceptable terms, or at all. Our failure to raise sufficient capital when needed could prevent us from, among other factors, to fund acquisitions or to otherwise finance our growth or operations. In addition, our notes payable to former stockholders and SARs liability have provisions, which could accelerate repayment of outstanding principal and accrued interest and adversely impact our liquidity.

Contractual Obligations and Commitments

There have been no material changes in our commitments under contractual obligations, as disclosed in our Annual Report on Form 10-K for the year ended December 31, 2014 other than an increase of approximately $28.2 million due to new or amended operating lease obligations.

Off Balance Sheet Arrangements

We do not have any off balance sheet arrangements.

34

Inflation

Our commissions and other variable costs related to revenue are primarily affected by real estate market supply and demand, which may be affected by general economic conditions including inflation. However, to date, we do not believe that general inflation has had a material impact upon our operations.

Critical Accounting Policies; Use of Estimates

We prepare our financial statements in accordance with U.S. GAAP. In applying many of these accounting principles, we make assumptions, estimates and/or judgments that affect the reported amounts of assets, liabilities, revenues and expenses in our consolidated financial statements. We base our estimates and judgments on historical experience and other assumptions that we believe are reasonable under the circumstances. These assumptions, estimates and/or judgments, however, are often subjective and our actual results may change based on changing circumstances or changes in our analyses. If actual amounts are ultimately different from our estimates, the revisions are included in our results of operations for the period in which the actual amounts become known. There were no material changes in our critical accounting policies, as disclosed in in our Annual Report on Form 10-K for the year ended December 31, 2014.

Recent Accounting Pronouncements

See Note 1 – “Description of business, basis of presentation and recent accounting pronouncements” of our Notes to Condensed Consolidated Financial Statements.

35

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We maintain a portfolio of investments in a variety of fixed and variable rate securities, including U.S. government and federal agency securities, corporate debt securities and asset backed securities. As of September 30, 2015, the amount of investments in marketable securities, available for sale was $134.8 million. The primary objective of our investment activity is to maintain the safety of principal, provide for future liquidity requirements while maximizing yields without significantly increasing risk. While some investments may be securities of companies in foreign countries, all investments are denominated and payable in U.S. Dollars. We do not enter into investments for trading or speculative purposes. While our intent is not to sell these investment securities prior to maturity, we may choose to sell any of the securities based on liquidity requirements or market opportunities to enhance our overall yield. We do not use derivatives or similar instruments to manage our interest rate risk. We seek to invest in high quality investments, with a weighted average rating (exclusive of cash and cash equivalents) of AA+ as of September 30, 2015. Maturities are maintained consistent with our short, medium and long-term liquidity objectives.

Currently our portfolio of investments predominantly consists of fixed interest rate debt securities; however, a portion of our investment portfolio may consist of variable interest rate debt securities. Our investments in fixed interest rate debt securities are subject to market risk. Changes in prevailing interest rates may adversely impact their fair market value should interest rates rise or fall. Accordingly, we also may have interest rate risk with the variable rate debt securities as the income produced may decrease if interest rates fall. The following table sets forth the impact on the fair value of our investments from changes in interest rates based on the duration of the securities (dollars in thousands):

Change in Interest Rates	Approximate Change In Fair Value of Investments Increase (Decrease)
2% Decrease	$	4,054
1% Decrease		2,156
1% Increase		(2,628	)
2% Increase		(5,255	)

Due to the nature of our business and the manner in which we conduct our operations, we believe we do not face any material interest rate risk with respect to other assets and liabilities, equity price risk or other market risks. The functional currency of our Canadian operations is the Canadian dollar. We are exposed to foreign currency exchange rate risk for the settlement of transactions of the Canadian operations as well as unrealized translation adjustments. To date realized foreign currency exchange rate gains and losses have not been material.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

As of September 30, 2015, our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of September 30, 2015, our disclosure controls and procedures were effective in ensuring that material information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, including ensuring that such material information is accumulated by and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

The design of any system of control is based upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated objectives under all future events, no matter how remote, or that the degree of compliance with the policies or procedures may not deteriorate. Because of its inherent limitations, disclosure controls and procedures may not prevent or detect all misstatements. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives.

36

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during the quarter ended September 30, 2015 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

37

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We are involved in claims and legal actions arising in the ordinary course of our business some of which involve claims for damages that are substantial in amount. Most of these litigation matters are covered by insurance which contain deductibles, exclusions, claim limits and aggregate policy limits. Such litigation and other proceedings may include, but are not limited to, actions relating to commercial relationships, standard brokerage disputes like the alleged failure to disclose physical or environmental defects or property expenses or contracts, the alleged inadequate disclosure of matters relating to the transaction like the relationships among the parties to the transaction, potential claims or losses pertaining to the asset, vicarious liability based upon conduct of individuals or entities outside of our control, general fraud claims, conflicts of interest claims, employment law claims, including claims challenging the classification of our sales professionals as independent contractors, claims alleging violations of state consumer fraud statutes and intellectual property. While the ultimate liability for these legal proceeding cannot be determined, the Company reviews the need for its accrual for loss contingencies quarterly and records an accrual for litigation related losses where the likelihood of loss is both probable and estimable. We do not believe, based on information currently available to us, that the final outcome of these proceedings will have a material adverse effect on our consolidated financial position, results of operations or cash flows.

For information on our legal proceedings, see Note 12 – “Commitments and Contingencies” of our Notes to Condensed Consolidated Financial Statements.

ITEM 1A. RISK FACTORS

There have been no material changes from the risk factors described in our Annual Report on Form 10-K for the year ended December 31, 2014.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not Applicable.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

The documents listed in the Exhibit Index of this quarterly report on Form 10-Q are incorporated by reference or are filed with this quarterly report on Form 10-Q, in each case as indicated therein (numbered in accordance with Item 601 of Regulation S-K).

38

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		Marcus & Millichap, Inc.
Date:	November 9, 2015	By:	/s/ John J. Kerin
			John J. Kerin
			President and Chief Executive Officer
			(Principal Executive Officer)
Date:	November 9, 2015	By:	/s/ Martin E. Louie
			Martin E. Louie
			Chief Financial Officer
			(Principal Financial Officer)

EXHIBIT INDEX

Exhibit No.	Description
10.1*	First Amendment to Credit Agreement, between the Company and Wells Fargo Bank, National Association dated as of August 21, 2015.
31.1*	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) under the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) under the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1*	Certifications of Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a-14(b) under the Exchange Act and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS*	XBRL Instance Document
101.SCH*	XBRL Taxonomy Extension Schema Document
101.CAL*	XBRL Taxonomy Calculation Linkbase Document
101.DEF*	XBRL Taxonomy Extension Definition Document
101.LAB*	XBRL Taxonomy Label Linkbase Document
101.PRE*	XBRL Taxonomy Presentation Linkbase Document

* Filed herewith.

EX-10.1

Exhibit 10.1

FIRST AMENDMENT TO CREDIT AGREEMENT

THIS AMENDMENT TO CREDIT AGREEMENT (this “Amendment”) is entered into as of August 21, 2015, by and between MARCUS & MILLICHAP, INC., a Delaware corporation (“Borrower”), and WELLS FARGO BANK, NATIONAL ASSOCIATION (“Bank”).

RECITALS

WHEREAS, Borrower is currently indebted to Bank pursuant to the terms and conditions of that certain Credit Agreement between Borrower and Bank dated as of June 1, 2014, as amended from time to time (“Credit Agreement”).

WHEREAS, Bank and Borrower have agreed to certain changes in the terms and conditions set forth in the Credit Agreement and have agreed to amend the Credit Agreement to reflect said changes.

NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree that the Credit Agreement shall be amended as follows:

1. Section 1.1 (a) is hereby amended by deleting “June 1, 2017” as the last day on which Bank will make advances under the Line of Credit, and by substituting for said date “June 1, 2018.”

2. In consideration of the changes set forth herein and as a condition to the effectiveness hereof, immediately upon signing this Amendment Borrower shall pay to Bank a non-refundable fee of $35,000.00.

3. Except as specifically provided herein, all terms and conditions of the Credit Agreement remain in full force and effect, without waiver or modification. All terms defined in the Credit Agreement shall have the same meaning when used in this Amendment. This Amendment and the Credit Agreement shall be read together, as one document.

4. Borrower hereby remakes all representations and warranties contained in the Credit Agreement and reaffirms all covenants set forth therein. Borrower further certifies that as of the date of this Amendment there exists no Event of Default as defined in the Credit Agreement, nor any condition, act or event which with the giving of notice or the passage of time or both would constitute any such Event of Default.

-1-

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed as of the day and year first written above.

MARCUS & MILLICHAP, INC.		WELLS FARGO BANK, NATIONAL ASSOCIATION
By:		By:
	JOHN J. KERIN, PRESIDENT		JAMIE CHEN,
	AND CHIEF EXECUTIVE OFFICER		SENIOR VICE PRESIDENT
By:
	MARTIN E. LOUIE,
	SENIOR VICE PRESIDENT AND
	CHIEF FINANCIAL OFFICER

-2-

EX-31.1

Exhibit 31.1

Certification of Chief Executive Officer of Marcus & Millichap, Inc. pursuant to

Rule 13a-14(a) under the Exchange Act,

as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, John J. Kerin, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Marcus & Millichap, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 9, 2015	/s/    JOHN J. KERIN
	John J. Kerin
	President and Chief Executive Officer

EX-31.2

Exhibit 31.2

Certification of Chief Financial Officer of Marcus & Millichap, Inc. pursuant to

Rule 13a-14(a) under the Exchange Act,

as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Martin E. Louie, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Marcus & Millichap, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 9, 2015	/s/    Martin E. Louie
	Martin E. Louie
	Chief Financial Officer

EX-32.1

Exhibit 32.1

Certifications of Chief Executive Officer and Chief Financial Officer of Marcus & Millichap, Inc. Pursuant to

Rule 13a-14(b) under the Exchange Act and 18 U.S.C. Section 1350, as Adopted Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of Marcus & Millichap, Inc. on Form 10-Q for the period ended September 30, 2015 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), we, John J. Kerin, President and Chief Executive Officer of the Company, and Martin E. Louie, Chief Financial Officer of the Company, certify, to the best of our knowledge, pursuant to Rule 13a-14(b) under the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	November 9, 2015	/s/    John J. Kerin
		John J. Kerin
		President and Chief Executive Officer
		(Principal Executive Officer)
Date:	November 9, 2015	/s/    Martin E. Louie
		Martin E. Louie
		Chief Financial Officer
		(Principal Financial Officer)

XML

Investments in Marketable Securities - Schedule of Amortized Cost and Fair Value of Marketable Securities, Available-for-Sale, by Contractual Maturity (Detail) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2015	Dec. 31, 2014
Investments, Debt and Equity Securities [Abstract]
Due in one year or less, Amortized Cost	$ 89,731
Due after one year through five years, Amortized Cost	18,948	$ 4,679
Due after five years through ten years, Amortized Cost	17,835	5,652
Due after ten years, Amortized Cost	8,622	4,381
Amortized Cost	135,136	14,712
Due in one year or less, Fair Value	89,764
Due after one year through five years, Fair Value	18,955	4,679
Due after five years through ten years, Fair Value	17,474	5,662
Due after ten years, Fair Value	8,575	4,411
Total Fair Value	$ 134,768	$ 14,752
Weighted average maturity	3 years 4 months 24 days	9 years 7 months 6 days

XML

Stock-Based Compensation Plans - Components of Stock-Based Compensation Included in Selling, General and Administrative Expense in Condensed Consolidated Statements of Net and Comprehensive Income (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense - Independent contractors	$ 1,474	$ 1,136	$ 4,712	$ 2,549
Allocated share-based compensation expense	2,168	1,417	6,750	3,275
Employee Stock Purchase Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Allocated share-based compensation expense	56	45	184	68
Restricted Stock [Member] | Non-employee directors [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Allocated share-based compensation expense	91	61	228	137
Restricted Stock Units (RSUs) [Member] | Employees [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Allocated share-based compensation expense	$ 547	$ 175	$ 1,626	$ 521

XML

Stock-Based Compensation Plans - 2013 Omnibus Equity Incentive Plan - Award Limitations - Additional Information (Detail) $ in Millions	9 Months Ended
	Sep. 30, 2015 USD ($) Incentive_Plan award shares
2013 Omnibus Equity Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of active equity plans | Incentive_Plan	1
Common stock shares reserved for issuance of awards	5,500,000
Common stock shares available for grant	3,265,526
Common stock available for future issuance authorized annual percentage increase	3.00%
Increase of common stock share reserve approved	1,100,000
Options & SARs [Member] | Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share limitations to awards granted under the 2013 Plan	500,000
Options & SARs [Member] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share limitations to awards granted under the 2013 Plan	1,000,000
Restricted Stock and RSUs [Member] | Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share limitations to awards granted under the 2013 Plan	500,000
Restricted Stock and RSUs [Member] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share limitations to awards granted under the 2013 Plan	1,000,000
Performance Shares [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of award limitation, performance units or performance shares | award	1
Performance Shares [Member] | Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share limitations to awards granted under the 2013 Plan	500,000
Grant date fair value limitations to awards granted under the 2013 Plan | $	$ 2
Performance Shares [Member] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share limitations to awards granted under the 2013 Plan	1,000,000
Grant date fair value limitations to awards granted under the 2013 Plan | $	$ 5

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Stock-Based Compensation Plans - Changes in Company's Common Stock Price During Reporting Period (Detail) - Stock Based Compensation Expense [Member] - $ / shares	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock price at beginning of period	$ 46.14	$ 25.51	$ 33.25	$ 14.90
Common stock price at end of period	45.99	30.26	45.99	30.26
(Decrease) increase in stock price	$ (0.15)	$ 4.75	$ 12.74	$ 15.36

XML

Stockholders' Equity - Additional Information (Detail) - $ / shares	Sep. 30, 2015	Dec. 31, 2014
Equity [Abstract]
Common stock, shares issued	37,117,674	36,918,442
Common stock, shares outstanding	37,117,674	36,918,442
Common stock, par value	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	25,000,000	25,000,000
Preferred stock, par value	$ 0.0001	$ 0.0001
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0

XML

Selected Balance Sheet Data - Schedule of Other Assets (Parenthetical) (Detail) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014
Other Assets [Line Items]
Allowance of doubtful accounts	$ 261,000		$ 261,000		$ 193,000
Provision for bad debt expense	48,000	$ 44,000	127,000	$ 86,000
Write-off receivables	$ 24,000	$ 23,000	$ 59,000	$ 110,000
Minimum [Member]
Other Assets [Line Items]
Notes receivable due period			1 year
Maximum [Member]
Other Assets [Line Items]
Notes receivable due period			5 years

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Earnings Per Share - Computation of Basic and Diluted Earnings Per Share, Including Antidilutive Securities Excluded from Computation of Earnings Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Numerator (Basic and Diluted):
Net income	$ 15,176	$ 13,523	$ 46,401	$ 33,101
Denominator:
Weighted average common shares issued and outstanding	37,114	36,624	37,091	36,613
Deduct: Unvested RSAs	(45)	(53)	(44)	(42)
Add: Fully vested DSUs	1,821	2,276	1,821	2,276
Weighted Average Common Shares Outstanding	38,890	38,847	38,868	38,847
Basic earnings per common share	$ 0.39	$ 0.35	$ 1.19	$ 0.85
Weighted Average Common Shares Outstanding from above	38,890	38,847	38,868	38,847
Add: Dilutive effect of RSUs, RSAs & ESPP	270	164	183	102
Weighted Average Common Shares Outstanding	39,160	39,011	39,051	38,949
Diluted earnings per common share	$ 0.39	$ 0.35	$ 1.19	$ 0.85
Antidilutive shares excluded from diluted earnings per common share	31	67	77	618

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Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2015

Fair Value Disclosures [Abstract]

Schedule of Investments at Fair Value on Recurring Basis

Investments carried at fair value are categorized into one of the three categories described above and consisted of the following (in thousands):

	September 30, 2015								December 31, 2014
	Fair Value		Level 1		Level 2		Level 3		Fair Value		Level 1		Level 2		Level 3
Assets held in rabbi trust	$	5,334	$	—	$	5,334	$	—	$	4,332	$	—	$	4,332	$	—
Money market funds (1)	$	5,708	$	5,708	$	—	$	—	$	25,310	$	25,310	$	—	$	—
Marketable securities, available for sale:
Short-term investments:
U.S. Treasuries	$	70,528	$	70,528	$	—	$	—	$	—	$	—	$	—	$	—
U.S. Government Sponsored Entities		19,112		—		19,112		—		—		—		—		—
Asset-backed securities and other		124		—		124		—		—		—		—		—
	$	89,764	$	70,528	$	19,236	$	—	$	—	$	—	$	—	$	—
Long-term investments:
U.S. Treasuries	$	6,107	$	6,107	$	—	$	—	$	2,981	$	2,981	$	—	$	—
U.S. Government Sponsored Entities		11,742		—		11,742		—		2,016		—		2,016		—
Corporate debt securities		16,827		—		16,827		—		7,478		—		7,478		—
Asset-backed securities and other		10,328		—		10,328		—		2,277		—		2,277		—
	$	45,004	$	6,107	$	38,897	$	—	$	14,752	$	2,981	$	11,771	$	—

⁽¹⁾  Included in cash and cash equivalents.

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Stock-Based Compensation Plans - Outstanding Awards Under 2013 Omnibus Equity Incentive Plan (Detail) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended			9 Months Ended
	Aug. 31, 2015	May. 31, 2015	Feb. 28, 2015	Sep. 30, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Nonvested shares, beginning balance				1,207,009
Granted	30,755	22,464	25,567	78,786
Vested				(201,224)
Forfeited/canceled				(28,951)
Nonvested shares, ending balance				1,055,620
Unrecognized stock-based compensation expense as of September 30, 2015				$ 29,514
Weighted average remaining vesting period (years) as of September 30, 2015				3 years 6 months 29 days
Nonvested weighted average grant date fair value per share, beginning balance				$ 18.23
Weighted average grant date fair value per share, Granted				42.84
Weighted average grant date fair value, Vested				14.85
Weighted average grant date fair value, Transferred				17.81
Weighted average grant date fair value, Forfeited/canceled				17.78
Nonvested weighted average grant date fair value per share, ending balance				$ 20.73
Restricted Stock [Member] | Non-employee directors [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Nonvested shares, beginning balance				42,882
Granted		10,110		10,110
Vested				(7,626)
Nonvested shares, ending balance				45,366
Unrecognized stock-based compensation expense as of September 30, 2015				$ 634
Weighted average remaining vesting period (years) as of September 30, 2015				1 year 11 months 23 days
Restricted Stock Units (RSUs) [Member] | Employees [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Nonvested shares, beginning balance				516,437
Granted	5,607	8,142	15,847	29,596
Vested				(56,719)
Transferred				(8,423)
Forfeited/canceled				(13,047)
Nonvested shares, ending balance				467,844
Unrecognized stock-based compensation expense as of September 30, 2015				$ 9,185
Weighted average remaining vesting period (years) as of September 30, 2015				4 years 15 days
Restricted Stock Units (RSUs) [Member] | Independent Contractors [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Nonvested shares, beginning balance				647,690
Granted	25,148	4,212	9,720	39,080
Vested				(136,879)
Transferred				8,423
Forfeited/canceled				(15,904)
Nonvested shares, ending balance				542,410
Unrecognized stock-based compensation expense as of September 30, 2015				$ 19,695
Weighted average remaining vesting period (years) as of September 30, 2015				3 years 4 months 28 days

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Notes Payable to Former Stockholders - Schedule of Interest Expense Pertaining to Notes (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Interest Expense [Line Items]
Interest expense	$ 380	$ 397	$ 1,349	$ 1,202
Notes Payable to Former Stockholders [Member]
Interest Expense [Line Items]
Interest expense	$ 133	$ 144	$ 414	$ 447

XML

Investments in Marketable Securities - Schedule of Amortized Cost and Fair Value of Marketable Securities, Available-for-Sale, by Type of Security (Detail) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	$ 135,136	$ 14,712
Fair Value	134,768	14,752
Short-term investments [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	89,731
Gross Unrealized Gains	34
Gross Unrealized Losses	(1)
Fair Value	89,764
Short-term investments [Member] | U.S. Treasuries [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	70,497
Gross Unrealized Gains	31
Fair Value	70,528
Short-term investments [Member] | U.S. Government Sponsored Entities [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	19,110
Gross Unrealized Gains	3
Gross Unrealized Losses	(1)
Fair Value	19,112
Short-term investments [Member] | Asset-backed securities and other [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	124
Fair Value	124
Long-term marketable securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	45,405	14,712
Gross Unrealized Gains	79	59
Gross Unrealized Losses	(480)	(19)
Fair Value	45,004	14,752
Long-term marketable securities [Member] | U.S. Treasuries [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	6,110	2,974
Gross Unrealized Gains	23	7
Gross Unrealized Losses	(26)
Fair Value	6,107	2,981
Long-term marketable securities [Member] | U.S. Government Sponsored Entities [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	11,750	2,019
Gross Unrealized Gains	5
Gross Unrealized Losses	(13)	(3)
Fair Value	11,742	2,016
Long-term marketable securities [Member] | Corporate debt securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	17,217	7,442
Gross Unrealized Gains	18	48
Gross Unrealized Losses	(408)	(12)
Fair Value	16,827	7,478
Long-term marketable securities [Member] | Asset-backed securities and other [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	10,328	2,277
Gross Unrealized Gains	33	4
Gross Unrealized Losses	(33)	(4)
Fair Value	$ 10,328	$ 2,277

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Stock-Based Compensation Plans - Employee Stock Purchase Plan - Additional Information (Detail)	9 Months Ended
	Sep. 30, 2015 USD ($) shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized stock-based compensation expense | $	$ 29,514,000
Unrecognized stock-based compensation expenses recognition period	3 years 6 months 29 days
Employee Stock Purchase Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
ESPP offering period description	The offering periods generally start on the first trading day on or after May 15 and November 15 of each year. The first offering period began on May 15, 2014.
Length of purchase intervals	6 months
ESPP discount rate	10.00%
Expected dividend yield	0.00%
Forfeiture rate	0.00%
Common stock reserved and available for issuance	366,667
Common stock shares available for issuance	323,514
Common stock available for future issuance authorized annual share increase	366,667
Common stock available for future issuance authorized annual percentage increase	1.00%
Unrecognized stock-based compensation expense | $	$ 28,000
Unrecognized stock-based compensation expenses recognition period	1 month 13 days

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Stockholders' Equity - Changes in Accumulated Other Comprehensive (Loss) Income, Net of Income Taxes (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance			$ 159
Other comprehensive (loss) income before reclassifications			96
Amounts reclassified from accumulated other comprehensive (loss) income			16
Total other comprehensive (loss) income	$ 290	$ 57	112	$ 60
Ending balance	271		271
Unrealized gains and (losses) of available-for-sale securities [ Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance			24
Other comprehensive (loss) income before reclassifications			(265)
Amounts reclassified from accumulated other comprehensive (loss) income			16
Total other comprehensive (loss) income			(249)
Ending balance	(225)		(225)
Foreign currency translation [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance			135
Other comprehensive (loss) income before reclassifications			361
Total other comprehensive (loss) income			361
Ending balance	$ 496		$ 496

XML

Property and Equipment

9 Months Ended

Sep. 30, 2015

Property, Plant and Equipment [Abstract]

Property and Equipment

2. Property and Equipment

Property and equipment, net consist of the following (in thousands):

	September 30, 2015			December 31, 2014
Computer software and hardware equipment	$	10,104		$	8,769
Furniture, fixtures, and equipment		15,257			14,684
Less: accumulated depreciation and amortization		(15,636	)		(15,760	)
	$	9,725		$	7,693

During the nine months ended September 30, 2015, the Company wrote off approximately $2.6 million of fully depreciated computer software and hardware and furniture fixtures, and equipment no longer in use.

As of December 31, 2014, the Company did not have any remaining capital lease obligations.

Payments for certain improvements to the Company’s leased office space are recorded as prepaid rent. Amortization of prepaid rent is recorded using the straight-line method over the shorter of the estimated economic life or lease term as a charge to rent expense.

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Related-Party Transactions - Additional Information (Detail) - USD ($)			3 Months Ended		9 Months Ended
	Mar. 18, 2015	Mar. 13, 2015	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Mar. 31, 2015	Dec. 31, 2014
Related Party Transaction [Line Items]
Accounts payable and other accrued expenses - related party			$ 92,000		$ 92,000			$ 97,000
Transition services agreement date					Oct. 01, 2013
Real estate brokerage commissions and financing fees from transactions with former parent, Marcus & Millichap Company			305,000	$ 872,000	$ 1,600,000	$ 932,000
Commission expenses for transactions with former parent, Marcus & Millichap Company			173,000	540,000	943,000	576,000
Aggregate principal amount outstanding for employee notes receivable			366,000		366,000			378,000
MMC [Member]
Related Party Transaction [Line Items]
Rent expense for lease			219,000	109,000	$ 474,500	328,000
Lease expiration date					May 31, 2022
MMC [Member] | Transition Services Agreement [Member]
Related Party Transaction [Line Items]
Selling, general and administrative expense			56,000	$ 42,000	$ 165,000	1,200,000
Accounts payable and other accrued expenses - related party			$ 92,000		92,000			$ 97,000
MMC [Member] | Transition Services Agreement [Member] | Health Insurance Premium [Member]
Related Party Transaction [Line Items]
Selling, general and administrative expense					$ 0	$ 1,000,000
Health insurance plan establishment date					2014-04
George M. Marcus [Member]
Related Party Transaction [Line Items]
Beneficial indirect ownership percentage					53.20%
Shares registered for future sale			4,600,000		4,600,000
Registration Statement date					Feb. 06, 2015
Proceeds from issuance of common stock					$ 0
New shares offered					0
Costs incurred in connection with registration statement, reimbursed by selling stockholders							$ 113,000
Sale date of shares filed under registration statement					Mar. 18, 2015
Prospectus Supplement filing date					Mar. 13, 2015
George M. Marcus [Member] | Underwriters [Member]
Related Party Transaction [Line Items]
Common stock sold by certain selling stockholders	600,000	600,000
Common stock selling price	$ 31.9925
George M. Marcus [Member] | Selling Stockholders [Member]
Related Party Transaction [Line Items]
Common stock sold by certain selling stockholders	4,000,000	4,000,000
Common stock selling price	$ 31.9925

XML

Description of Business, Basis of Presentation and Recent Accounting Pronouncements - Additional Information (Detail) - Office	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Class of Stock [Line Items]
Number of offices in the United States and Canada			80
Formation date			2013-06
Contribution date			Oct. 30, 2013
Percentage of common stock distributed			80.00%
Commission's receivable settled period			10 days
Customer Concentration Risk [Member] | Total revenues [Member]
Class of Stock [Line Items]
Concentration of credit risk percentage	10.00%	10.00%	10.00%	10.00%
Customer Concentration Risk [Member] | Commissions receivable [Member]
Class of Stock [Line Items]
Concentration of credit risk percentage	10.00%	10.00%	10.00%	10.00%
Geographic Concentration Risk [Member] | Total revenues [Member] | Maximum [Member] | CANADA
Class of Stock [Line Items]
Concentration of credit risk percentage			1.00%

XML

Earnings Per Share (Tables)

9 Months Ended

Sep. 30, 2015

Earnings Per Share [Abstract]

Computation of Basic and Diluted Earnings Per Share, Including Antidilutive Securities Excluded from Computation of Earnings Per Share

The following table sets forth the computation of basic and diluted earnings per share for the three and nine months ended September 30, 2015 and 2014, respectively (in thousands, except per share data):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2015			2014			2015			2014
Numerator (Basic and Diluted):
Net income	$	15,176		$	13,523		$	46,401		$	33,101
Denominator:
Basic
Weighted average common shares issued and outstanding		37,114			36,624			37,091			36,613
Deduct: Unvested RSAs (1)		(45	)		(53	)		(44	)		(42	)
Add: Fully vested DSUs (2)		1,821			2,276			1,821			2,276
Weighted Average Common Shares Outstanding		38,890			38,847			38,868			38,847
Basic earnings per common share	$	0.39		$	0.35		$	1.19		$	0.85
Diluted
Weighted Average Common Shares Outstanding from above		38,890			38,847			38,868			38,847
Add: Dilutive effect of RSUs, RSAs & ESPP		270			164			183			102
Weighted Average Common Shares Outstanding		39,160			39,011			39,051			38,949
Diluted earnings per common share	$	0.39		$	0.35		$	1.19		$	0.85
Antidilutive shares excluded from diluted earnings per common share (3)		31			67			77			618

⁽¹⁾  RSAs were issued and outstanding to the non-employee directors and have a three year vesting term subject to service requirements. See Note 9 – “Stock-Based Compensation Plans” for additional information.

⁽²⁾  Shares are included in weighted average common shares outstanding as the shares are fully vested but have not yet been delivered. See Note 9 – “Stock-Based Compensation Plans” for additional information.

⁽³⁾  Primarily pertaining to RSU grants to the Company’s independent contractors.

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Income Taxes - Additional Information (Detail)	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Income Taxes [Line Items]
Effective income tax rate	42.90%	41.20%	41.60%	41.20%
Estimated 2015 annual effective tax rate [Member]
Income Taxes [Line Items]
Effective income tax rate			41.10%

XML

Fair Value Measurements - Schedule of Investments at Fair Value on Recurring Basis (Detail) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets held in rabbi trust	$ 5,334	$ 4,332
Marketable securities, available for sale	134,768	14,752
Short-term investments [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities, available for sale	89,764
Short-term investments [Member] | U.S. Treasuries [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities, available for sale	70,528
Short-term investments [Member] | U.S. Government Sponsored Entities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities, available for sale	19,112
Short-term investments [Member] | Asset-backed securities and other [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities, available for sale	124
Long-term marketable securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities, available for sale	45,004	14,752
Long-term marketable securities [Member] | U.S. Treasuries [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities, available for sale	6,107	2,981
Long-term marketable securities [Member] | U.S. Government Sponsored Entities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities, available for sale	11,742	2,016
Long-term marketable securities [Member] | Corporate debt securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities, available for sale	16,827	7,478
Long-term marketable securities [Member] | Asset-backed securities and other [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities, available for sale	10,328	2,277
Recurring [Member] | Money market funds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	5,708	25,310
Recurring [Member] | Assets held in rabbi trust [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets held in rabbi trust	5,334	4,332
Recurring [Member] | Short-term investments [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities, available for sale	89,764
Recurring [Member] | Short-term investments [Member] | U.S. Treasuries [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities, available for sale	70,528
Recurring [Member] | Short-term investments [Member] | U.S. Government Sponsored Entities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities, available for sale	19,112
Recurring [Member] | Short-term investments [Member] | Asset-backed securities and other [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities, available for sale	124
Recurring [Member] | Long-term marketable securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities, available for sale	45,004	14,752
Recurring [Member] | Long-term marketable securities [Member] | U.S. Treasuries [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities, available for sale	6,107	2,981
Recurring [Member] | Long-term marketable securities [Member] | U.S. Government Sponsored Entities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities, available for sale	11,742	2,016
Recurring [Member] | Long-term marketable securities [Member] | Corporate debt securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities, available for sale	16,827	7,478
Recurring [Member] | Long-term marketable securities [Member] | Asset-backed securities and other [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities, available for sale	10,328	2,277
Level 1 [Member] | Recurring [Member] | Money market funds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	5,708	25,310
Level 1 [Member] | Recurring [Member] | Short-term investments [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities, available for sale	70,528
Level 1 [Member] | Recurring [Member] | Short-term investments [Member] | U.S. Treasuries [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities, available for sale	70,528
Level 1 [Member] | Recurring [Member] | Long-term marketable securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities, available for sale	6,107	2,981
Level 1 [Member] | Recurring [Member] | Long-term marketable securities [Member] | U.S. Treasuries [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities, available for sale	6,107	2,981
Level 2 [Member] | Recurring [Member] | Assets held in rabbi trust [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets held in rabbi trust	5,334	4,332
Level 2 [Member] | Recurring [Member] | Short-term investments [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities, available for sale	19,236
Level 2 [Member] | Recurring [Member] | Short-term investments [Member] | U.S. Government Sponsored Entities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities, available for sale	19,112
Level 2 [Member] | Recurring [Member] | Short-term investments [Member] | Asset-backed securities and other [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities, available for sale	124
Level 2 [Member] | Recurring [Member] | Long-term marketable securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities, available for sale	38,897	11,771
Level 2 [Member] | Recurring [Member] | Long-term marketable securities [Member] | U.S. Government Sponsored Entities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities, available for sale	11,742	2,016
Level 2 [Member] | Recurring [Member] | Long-term marketable securities [Member] | Corporate debt securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities, available for sale	16,827	7,478
Level 2 [Member] | Recurring [Member] | Long-term marketable securities [Member] | Asset-backed securities and other [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities, available for sale	$ 10,328	$ 2,277

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Property and Equipment - Schedule of Property and Equipment, Net (Detail) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Property, Plant and Equipment [Line Items]
Less: accumulated depreciation and amortization	$ (15,636)	$ (15,760)
Property and equipment, net	9,725	7,693
Computer software and hardware equipment [Member]
Property, Plant and Equipment [Line Items]
Property and equipment	10,104	8,769
Furniture, fixtures, and equipment [Member]
Property, Plant and Equipment [Line Items]
Property and equipment	$ 15,257	$ 14,684

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Property and Equipment - Additional Information (Detail) - USD ($)	9 Months Ended
	Sep. 30, 2015	Dec. 31, 2014
Property, Plant and Equipment [Abstract]
Fully depreciated no longer in use computer software and hardware and furniture, fixtures and equipment write-off	$ 2,600,000
Capital lease obligations		$ 0

XML

Description of business, basis of presentation and recent accounting pronouncements

9 Months Ended

Sep. 30, 2015

Accounting Policies [Abstract]

Description of business, basis of presentation and recent accounting pronouncements

1. Description of business, basis of presentation and recent accounting pronouncements

Description of Business

Marcus & Millichap, Inc., (the “Company”, “Marcus & Millichap”, or “MMI”), a Delaware corporation, is a brokerage firm specializing in commercial real estate investment sales, financing, research and advisory services. As of September 30, 2015, MMI operates 80 offices in the United States and Canada through its wholly-owned subsidiary, Marcus & Millichap Real Estate Investment Services, Inc. (“MMREIS”), which includes the operations of Marcus & Millichap Capital Corporation (“MMCC”).

Reorganization and Initial Public Offering

MMI was formed in June 2013 in preparation for Marcus & Millichap Company (“MMC”) to spin-off its majority owned subsidiary, MMREIS (“Spin-Off”). Prior to the initial public offering (“IPO”) of MMI stock on October 30, 2013, all of the preferred and common stockholders of MMREIS (including MMC and employees of MMREIS) contributed all of their outstanding shares to MMI, in exchange for new MMI common stock. As a result, MMREIS became a wholly-owned subsidiary of MMI. Thereafter, MMC distributed 80.0% of the shares of MMI common stock to MMC’s shareholders and exchanged the remaining portion of its shares of MMI common stock for cancellation of indebtedness of MMC.

Basis of Presentation

The financial information presented in the accompanying unaudited condensed consolidated financial statements, has been prepared in accordance with rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) for quarterly reports on Form 10–Q and Article 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles (“U.S. GAAP”) for complete financial statements. In the opinion of management, the accompanying unaudited condensed consolidated financial statements and notes include all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation of the consolidated financial position, results of operations and cash flows for the periods presented. These unaudited condensed consolidated financial statements should be read in conjunction with the annual audited consolidated financial statements and notes thereto for the year ended December 31, 2014 included in the Company’s Annual Report on Form 10-K filed on March 9, 2015 with the SEC. The results of the three and nine months ended September 30, 2015 are not necessarily indicative of the results to be expected for the fiscal year ending December 31, 2015, or for other interim periods or future years.

Consolidation

The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the related disclosures at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Reclassifications

Certain prior-period amounts in the condensed consolidated statements of cash flows have been reclassified to conform to the current period presentation. These changes had no impact on the previously reported consolidated results of operations, financial condition, stockholders’ equity or on cash flows subtotals.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to a concentration of credit risk principally consist of cash and cash equivalents, commissions receivable, investments in marketable securities, available for sale, due from independent contractors (included under other assets, current caption), security deposits (included under other assets, non-current caption) and company owned variable life insurance policies underlying the assets held in rabbi trust. Cash is placed with high-credit quality financial institutions, invested in high-credit quality money market funds and in fixed and variable income available for sale debt securities, in accordance with the Company’s investment policy approved by the Board of Directors.

To reduce its credit risk, the Company monitors the credit standing of the financial institutions that hold the Company’s cash and cash equivalents and monitors marketable securities, available for sale for impairment. The Company historically has not experienced any losses related to cash and cash equivalents or marketable securities, available for sale. The Company derives its revenues from a broad range of real estate investors, owners, and users in the United States and Canada, none of which individually represents a significant concentration of credit risk. The Company maintains allowances, as needed, for estimated credit losses based on management’s assessment of the likelihood of collection. For the three and nine months ended September 30, 2015 and 2014, no transaction represented 10% or more of total revenues. Further, while one or more transactions may represent 10% or more of commissions receivable at any reporting date, amounts due are typically collected within 10 days of settlement and therefore do not expose the Company to significant concentration of credit risk.

The Company’s Canadian operations represented less than 1.0% of total revenues in each period presented.

Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”), which supersedes virtually all of the current revenue recognition guidance under U.S. GAAP, and requires entities to recognize revenue for transfer to customer of promised goods or services in an amount that reflects the consideration to which the entity expects to be entitled to receive in exchange for those goods or services. ASU 2014-09 permits two implementation approaches, one requiring retrospective application of the new standard with restatement of prior years and one requiring prospective application of the new standard with disclosure of results under old standards. In July 2015, the FASB decided to delay the effective date one year, and, as a result, ASU 2014-09 is effective for reporting periods beginning after December 15, 2017 and early adoption is permitted as of January 1, 2017. The Company is currently evaluating the impact of this new standard and will select a transition method when the effect is determined; however, the Company does not expect this standard to have a significant effect on the Company’s revenue recognition.

In August 2014, the FASB issued ASU No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (“ASU 2014-15”). Currently, there is no guidance under U.S. GAAP regarding management’s responsibility to assess whether there is substantial doubt about an entity’s ability to continue as a going concern. Under ASU 2014-15, the Company will be required to assess its ability to continue as a going concern each interim and annual reporting period and provide certain disclosures if there is substantial doubt about the entity’s ability to continue as a going concern, including management’s plan to alleviate the substantial doubt. ASU 2014-15 is effective for reporting periods beginning after December 15, 2016 and early adoption is permitted. For the Company, the new standard will be effective January 1, 2017. The Company anticipates that this new standard will not have an impact on the Company’s condensed consolidated financial position or results of operations.

In April 2015, the FASB issued ASU No. 2015-03, Interest – Imputation of Interest: Simplifying the Presentation of Debt Issuance Costs (“ASU 2015-03”), which requires debt issuance costs to be presented in the balance sheet as a direct deduction from the associated debt liability. ASU 2015-03 does not change the amortization of debt issuance costs, which continues to follow the existing accounting guidance. In August 2015, the FASB issued ASU No. 2015-15, Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements (“ASU 2015-15”), which permits debt issuance costs associated with line-of-credit arrangements to be deferred and presented as an asset in the balance sheet and subsequently amortized ratably over the term of the line-of-credit arrangement. For the Company, ASU 2015-03 and ASU 2015-15 will be effective for interim and annual reporting periods beginning after December 15, 2015 and early adoption is permitted. The Company early adopted ASU 2015-03 and ASU 2015-15 during the quarter ended September 30, 2015. The adoption of ASU 2015-03 and ASU 2015-15, did not have any impact on the Company’s condensed consolidated financial position or results of operations.

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Selected Balance Sheet Data - Schedule of Other Assets (Detail) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Other Assets [Line Items]
Other assets Current	$ 3,404	$ 2,839
Other assets Non-Current	6,585	3,282
Due from independent contractors [Member]
Other Assets [Line Items]
Other assets Current	1,581	1,577
Other assets Non-Current	5,184	1,820
Security deposits [Member]
Other Assets [Line Items]
Other assets Non-Current	1,299	1,240
Customer trust accounts and other [Member]
Other Assets [Line Items]
Other assets Current	1,823	1,262
Other assets Non-Current	$ 102	$ 222

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Notes Payable to Former Stockholders - Additional Information (Detail) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Notes Payable to Former Stockholders [Member]
Debt Instrument [Line Items]
Principal and interest payments on notes payable to former stockholders	$ 1.5	$ 1.5
Restricted Stock - Notes Payable [Member]
Debt Instrument [Line Items]
Unsecured notes interest rate	5.00%
Unsecured notes maturity date	Jun. 30, 2020
SARs - Notes Payable [Member]
Debt Instrument [Line Items]
Unsecured notes interest rate	5.00%
Unsecured notes maturity date	Jun. 30, 2020

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Stock-Based Compensation Plans - Amendments to Restricted Stock and SARs - Additional Information (Detail)	9 Months Ended
	Sep. 30, 2015
Deferred stock units [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
DSU settlement to common stock percentage	20.00%
DSU settlement into actual stock issued term	5 years
Employee termination age	67 years
Percentage of deferred stock units settled	100.00%
Percentage of shares of deferred stock units released from resale restriction in the event of death or termination after reaching age 67	100.00%
Restricted Stock [Member] | Sales Restricted [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Sales restriction lapse percentage for restricted stock	20.00%
Sales restriction period for restricted stock	5 years
Employee termination age	67 years
Percentage of shares of stock released from resale restriction upon consummation of change of control	100.00%
Percentage of shares of restricted released from resale restriction in the event of death or termination after reaching age 67	100.00%

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Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Current assets:
Cash and cash equivalents	$ 67,632	$ 149,159
Commissions receivable	3,882	3,412
Employee notes receivable	214	216
Prepaid expenses	6,392	7,536
Income tax receivable		1,711
Marketable securities, available for sale	89,764
Deferred tax assets, net	14,284	13,600
Other assets, net	3,404	2,839
Total current assets	185,572	178,473
Prepaid rent	8,183	3,645
Property and equipment, net	9,725	7,693
Employee notes receivable	152	162
Marketable securities, available for sale	45,004	14,752
Assets held in rabbi trust	5,334	4,332
Deferred tax assets, net	23,674	21,265
Other assets	6,585	3,282
Total assets	284,229	233,604
Current liabilities:
Accounts payable and accrued expenses	7,572	9,488
Accounts payable and accrued expenses - related party, net	92	97
Notes payable to former stockholders	939	894
Commissions payable	23,376	28,932
Income tax payable	7,539
Accrued bonuses and other employee related expenses	22,700	27,793
Total current liabilities	62,218	67,204
Deferred compensation and commissions	38,586	36,581
Notes payable to former stockholders	9,671	10,610
Other liabilities	3,402	2,400
Total liabilities	$ 113,877	$ 116,795
Stockholders' equity:
Preferred stock, $0.0001 par value: Authorized shares - 25,000,000; issued and outstanding shares - none at September 30, 2015 and December 31, 2014
Common Stock $0.0001 par value: Authorized shares - 150,000,000; issued and outstanding shares - 37,117,674 and 36,918,442 at September 30, 2015 and December 31, 2014, respectively	$ 4	$ 4
Additional paid-in capital	82,088	75,058
Stock notes receivable from employees	(4)	(4)
Retained earnings	87,993	41,592
Accumulated other comprehensive income	271	159
Total stockholders' equity	170,352	116,809
Total liabilities and stockholders' equity	$ 284,229	$ 233,604

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Fair Value Measurements - Additional Information (Detail)	Sep. 30, 2015 USD ($)
Fair Value Disclosures [Abstract]
Fair value, assets, level 1 to level 2 transfers, amount	$ 0
Fair value, assets, level 2 to level 1 transfers, amount	$ 0

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Condensed Consolidated Statement of Stockholders' Equity (Unaudited) - 9 months ended Sep. 30, 2015 - USD ($) $ in Thousands	Total	Preferred Stock [Member]	Common Stock [Member]	Additional Paid-In Capital [Member]	Stock Notes Receivable From Employees [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Income [Member]
Beginning Balance at Dec. 31, 2014	$ 116,809		$ 4	$ 75,058	$ (4)	$ 41,592	$ 159
Beginning Balance, Shares at Dec. 31, 2014			36,918,442
Net and comprehensive income	46,513					$ 46,401	$ 112
Stock-based award activity
Stock-based compensation	$ 6,750			$ 6,750
Stock-based compensation, Shares	0	0	0	0	0	0	0
Shares issued pursuant to employee stock purchase plan	$ 502			$ 502
Shares issued pursuant to employee stock purchase plan, Shares			17,822
Issuance of common stock for unvested restricted stock awards	0	$ 0	$ 0	0	$ 0	$ 0	$ 0
Issuance of common stock for unvested restricted stock awards, Shares			10,110
Issuance of common stock for vesting of restricted stock units	0	$ 0	$ 0	0	0	0	0
Issuance of common stock for vesting of restricted stock units, Shares			193,598
Shares withheld related to net share settlement of restricted stock units	(756)			(756)
Shares withheld related to net share settlement of restricted stock units, Shares			(22,298)
Windfall tax benefit from stock-based award activity	534			534
Ending Balance at Sep. 30, 2015	$ 170,352		$ 4	$ 82,088	$ (4)	$ 87,993	$ 271
Ending Balance, Shares at Sep. 30, 2015			37,117,674

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Commitments and Contingencies - Additional Information Credit Agreement (Detail) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Line of Credit Facility [Line Items]
Senior secured revolving credit facility maximum borrowing capacity	$ 60,000,000		$ 60,000,000
Revolving credit facility maturity date			Jun. 01, 2017
Bank fees and other expenses	224,000		$ 224,000
Credit agreement, unused capacity, commitment fee percentage			0.10%
Commitment fee commencement date			Jul. 01, 2014
Date the Company entered into a Credit Agreement			Jun. 18, 2014
Credit agreement date			Jun. 01, 2014
Interest expense	380,000	$ 397,000	$ 1,349,000	$ 1,202,000
Credit agreement, amount outstanding	0		0
Standby letters of credit borrowing capacity	10,000,000		10,000,000
Standby letters of credit, utilized amount	533,000		$ 533,000
Credit facility interest rate description			Credit Facility will bear interest, at the Company's option, at either the (i) Base Rate (defined as the highest of (a) the Bank's prime rate, (b) the Federal Funds Rate plus 1.5% and (c) one-month LIBOR plus 1.5%), or (ii) at a variable rate between 0.875% and 1.125% above LIBOR, based upon the total funded debt to EBITDA ratio.
LIBOR rate duration period			1 month
Credit facility covenants			(i) an EBITDAR Coverage Ratio (as defined in the Credit Agreement) of not less than 1.251.0 as of each quarter end on a rolling 4-quarter basis and (ii) total funded debt to EBITDA not greater than 2.01.0
Minimum EBITDAR coverage ratio			1.25%
Maximum Total Funded Debt to EBITDA ratio			2.00%
Credit agreement, pledge percentage			100.00%
Compliance description			As of September 30, 2015, the Company was in compliance with all financial and non-financial covenants.
London Interbank Offered Rate (LIBOR) [Member]
Line of Credit Facility [Line Items]
Base spread on variable rate			1.50%
Federal Funds Rate [Member]
Line of Credit Facility [Line Items]
Base spread on variable rate			1.50%
Credit Agreement [Member]
Line of Credit Facility [Line Items]
Interest expense	32,000	$ 35,000	$ 100,000	$ 41,000
Extended Credit Agreement [Member]
Line of Credit Facility [Line Items]
Revolving credit facility maturity date			Jun. 01, 2018
Bank fees and other expenses	$ 35,000		$ 35,000
Date the Company entered into a Credit Agreement			Aug. 21, 2015
Minimum [Member] | London Interbank Offered Rate (LIBOR) [Member]
Line of Credit Facility [Line Items]
Base spread on variable rate			0.875%
Maximum [Member] | London Interbank Offered Rate (LIBOR) [Member]
Line of Credit Facility [Line Items]
Base spread on variable rate			1.125%

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Selected Balance Sheet Data - Additional Information (Detail) - USD ($)			3 Months Ended		9 Months Ended		12 Months Ended
	Jan. 01, 2015	Jan. 01, 2014	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014	Mar. 31, 2013
Schedule Of Accrued Expenses [Line Items]
SARs frozen liability amount			$ 21,184,000		$ 21,184,000		$ 20,542,000
Interest expense			380,000	$ 397,000	$ 1,349,000	$ 1,202,000
Stock appreciation rights liability distribution						412,000
Maximum payment deferral period for certain commissions payable					3 years
Fair value of deferred compensation plan assets					110.00%
SARs [Member]
Schedule Of Accrued Expenses [Line Items]
SARs frozen liability amount								$ 20,000,000
SARs liability frozen value date					Mar. 31, 2013
SARs liability interest accrual commencement date					Jan. 01, 2014
Interest expense			$ 214,000	$ 236,000	$ 642,000	$ 738,000
Treasury note term		10 years
Base spread on SARs liability variable rate		2.00%
SARs liability interest accrual rate	4.173%	5.03%
Stock appreciation rights liability distribution							$ 412,000

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Selected Balance Sheet Data (Tables)

9 Months Ended

Sep. 30, 2015

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of Other Assets

Other assets consisted of the following (in thousands):

	Current				Non-Current
	September 30,		December 31,		September 30,		December 31,
	2015		2014		2015		2014
Due from independent contractors, net (1) (2)	$	1,581	$	1,577	$	5,184	$	1,820
Security deposits		—		—		1,299		1,240
Customer trust accounts and other		1,823		1,262		102		222
	$	3,404	$	2,839	$	6,585	$	3,282

⁽¹⁾  Includes allowance for doubtful accounts related to current of $261,000 as of September 30, 2015 and $193,000 as of December 31, 2014, respectively. The Company recorded a provision for bad debt expense of $48,000 and $44,000 and wrote off $24,000 and $23,000 of these receivables for the three months ended September 30, 2015 and, 2014, respectively. The Company recorded a provision for bad debt expense of $127,000 and $86,000 and wrote off $59,000 and $110,000 of these receivables for the nine months ended September 30, 2015 and, 2014, respectively.

⁽²⁾  Represents amounts advanced, notes receivable and other receivables due from the Company’s sales and financing professionals. The notes receivable along with interest, are typically collected from future commissions and are generally due in one to five years. Any cash receipts on notes are applied first to unpaid principal balance prior to any income being recognized.

Components of Deferred Compensation and Commissions

Deferred compensation and commissions consisted of the following (in thousands):

	September 30, 2015		December 31, 2014
SARs liability	$	21,184	$	20,542
Commissions payable to sales and financing professionals		12,451		12,176
Deferred compensation liability		4,951		3,863
	$	38,586	$	36,581

Summary of Net Change in Carrying Value of Assets Held in Rabbi Trust and Deferred Compensation Obligation

The net change in the carrying value of the assets held in the rabbi trust and the net change in the carrying value of the deferred compensation obligation, each exclusive of additional contributions and distributions consisted of the following (in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2015			2014			2015			2014
Increase (decrease) in the carrying value of the assets held in the rabbi trust (1)	$	(351	)	$	(51	)	$	(340	)	$	177
Increase (decrease) in the carrying value of the deferred compensation obligation (2)	$	(307	)	$	(32	)	$	(248	)	$	201

⁽¹⁾  Recorded in other income (expense), net in the condensed consolidated statements of net and comprehensive income.

⁽²⁾  Recorded in selling, general and administrative expense in the condensed consolidated statements of net and comprehensive income.

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Selected Balance Sheet Data - Summary of Net Change in Carrying Value of Assets Held in Rabbi Trust and Deferred Compensation Obligation (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Balance Sheet Related Disclosures [Abstract]
Increase (decrease) in the carrying value of the assets held in the rabbi trust	$ (351)	$ (51)	$ (340)	$ 177
Increase (decrease) in the carrying value of the deferred compensation obligation	$ (307)	$ (32)	$ (248)	$ 201

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Notes Payable to Former Stockholders (Tables)

9 Months Ended

Sep. 30, 2015

Payables and Accruals [Abstract]

Schedule of Accrued Interest Pertaining to Notes

Accrued interest pertaining to the Notes consisted of the following (dollars in thousands):

	September 30, 2015		December 31, 2014
Accrued interest (1)	$	234	$	396

⁽¹⁾  Recorded in accounts payable and accrued expenses in the accompanying condensed consolidated balance sheets.

Schedule of Interest Expense Pertaining to Notes

Interest expense pertaining to the Notes consisted of the following (dollars in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2015		2014		2015		2014
Interest expense	$	133	$	144	$	414	$	447

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Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Cash flows from operating activities
Net income	$ 46,401,000	$ 33,101,000
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense	2,389,000	2,399,000
Provision for bad debt expense	127,000	86,000
Stock-based compensation	6,750,000	3,275,000
Deferred taxes, net	(3,160,000)	1,481,000
Net realized gains on marketable securities, available for sale	(130,000)
Tax benefit from stock-based award activity	4,844,000
Excess tax benefit from stock-based award activity	(4,844,000)
Other non-cash items	295,000	155,000
Changes in operating assets and liabilities:
Commissions receivable	(470,000)	(386,000)
Prepaid expenses	1,144,000	(267,000)
Prepaid rent	(4,538,000)	932,000
Assets held in rabbi trust	(1,448,000)	(36,000)
Other assets	(3,993,000)	(1,095,000)
Accounts payable and accrued expenses	(2,645,000)	2,908,000
Accounts payable and accrued expenses - related party, net	(5,000)	(334,000)
Income tax receivable (payable)	4,939,000	(1,543,000)
Commissions payable	(5,556,000)	(9,068,000)
Accrued bonuses and other employee related expenses	(4,885,000)	4,509,000
Deferred compensation and commissions	2,365,000	673,000
Other liabilities	1,002,000	(1,882,000)
Net cash provided by operating activities	38,582,000	34,908,000
Cash flows from investing activities
Purchases of marketable securities, available for sale	(130,500,000)
Proceeds from sales and maturities of marketable securities, available for sale	10,608,000
Payments received on employee notes receivable	15,000	68,000
Issuances of employee notes receivable	(175,000)	(68,000)
Purchase of property and equipment	(3,753,000)	(1,830,000)
Proceeds from sale of property and equipment		1,000
Net cash used in investing activities	(123,805,000)	(1,829,000)
Cash flows from financing activities
Proceeds from issuance of shares pursuant to employee stock purchase plan	502,000
Taxes paid related to net share settlement of stock-based awards	(756,000)
Excess tax benefit from stock-based award activity	4,844,000
Realized tax benefit of deductible IPO transaction costs		840,000
Principal payments on notes payable to former stockholders	(894,000)	(851,000)
Payments on obligations under capital leases		(16,000)
Payments received on stock notes receivable from employees		6,000
Net cash provided by (used in) financing activities	3,696,000	(21,000)
Net (decrease) increase in cash and cash equivalents	(81,527,000)	33,058,000
Cash and cash equivalents at beginning of period	149,159,000	100,952,000
Cash and cash equivalents at end of period	67,632,000	134,010,000
Supplemental disclosures of cash flow information
Interest paid during the period	853,000	619,000
Income taxes paid, net	26,370,000	22,429,000
Supplemental disclosures of noncash investing and financing activities
Reduction of accrued bonuses and other employee related expenses in settlement of employee notes receivable	208,000
Net change in accounts payable and accrued expenses related to property and equipment additions	729,000	(86,000)
Settlements of deferred compensation obligation with trust assets	$ 28,000
Distribution related to stock appreciation rights liability for taxes payable included in accrued bonuses and other employee related expenses		$ 412,000

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Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2015	Dec. 31, 2014
Statement of Financial Position [Abstract]
Preferred stock, par value	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	25,000,000	25,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	150,000,000	150,000,000
Common stock, shares issued	37,117,674	36,918,442
Common stock, shares outstanding	37,117,674	36,918,442

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Income Taxes

9 Months Ended

Sep. 30, 2015

Income Tax Disclosure [Abstract]

Income Taxes

10. Income Taxes

The Company’s effective tax rate for the three and nine months ended September 30, 2015 was 42.9% and 41.6%, compared to 41.2% for each of the three and nine months ended September 30, 2014. The Company’s estimated annual effective tax rate for 2015 is 41.1%. The Company provides for the effects of income taxes in interim financial statements based on the Company’s estimate of its estimated annual effective tax rate for the full year, which is based on forecasted income by jurisdiction where the Company operates, adjusted for the tax effects of items that relate discretely to the period, if any. The difference between the statutory tax rate and the Company’s effective tax rate is largely attributable to state income taxes and a full valuation allowance with respect to the deferred tax assets of the Company’s Canadian operations.

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Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2015	Nov. 03, 2015
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2015
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q3
Trading Symbol	MMI
Entity Registrant Name	Marcus & Millichap, Inc.
Entity Central Index Key	0001578732
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		37,117,674

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Earnings Per Share

9 Months Ended

Sep. 30, 2015

Earnings Per Share [Abstract]

Earnings Per Share

11. Earnings Per Share

The following table sets forth the computation of basic and diluted earnings per share for the three and nine months ended September 30, 2015 and 2014, respectively (in thousands, except per share data):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2015			2014			2015			2014
Numerator (Basic and Diluted):
Net income	$	15,176		$	13,523		$	46,401		$	33,101
Denominator:
Basic
Weighted average common shares issued and outstanding		37,114			36,624			37,091			36,613
Deduct: Unvested RSAs (1)		(45	)		(53	)		(44	)		(42	)
Add: Fully vested DSUs (2)		1,821			2,276			1,821			2,276
Weighted Average Common Shares Outstanding		38,890			38,847			38,868			38,847
Basic earnings per common share	$	0.39		$	0.35		$	1.19		$	0.85
Diluted
Weighted Average Common Shares Outstanding from above		38,890			38,847			38,868			38,847
Add: Dilutive effect of RSUs, RSAs & ESPP		270			164			183			102
Weighted Average Common Shares Outstanding		39,160			39,011			39,051			38,949
Diluted earnings per common share	$	0.39		$	0.35		$	1.19		$	0.85
Antidilutive shares excluded from diluted earnings per common share (3)		31			67			77			618

⁽¹⁾  RSAs were issued and outstanding to the non-employee directors and have a three year vesting term subject to service requirements. See Note 9 – “Stock-Based Compensation Plans” for additional information.

⁽²⁾  Shares are included in weighted average common shares outstanding as the shares are fully vested but have not yet been delivered. See Note 9 – “Stock-Based Compensation Plans” for additional information.

⁽³⁾  Primarily pertaining to RSU grants to the Company’s independent contractors.

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Condensed Consolidated Statements of Net and Comprehensive Income (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Revenues:
Real estate brokerage commissions	$ 151,942	$ 140,220	$ 446,356	$ 368,246
Financing fees	10,865	7,864	30,046	22,348
Other revenues	3,069	2,805	9,497	9,150
Total revenues	165,876	150,889	485,899	399,744
Operating expenses:
Cost of services	102,010	92,269	293,725	240,266
Selling, general, and administrative expense	35,646	34,086	109,064	99,570
Depreciation and amortization expense	802	813	2,389	2,399
Total operating expenses	138,458	127,168	405,178	342,235
Operating income	27,418	23,721	80,721	57,509
Other income (expense), net	(464)	(308)	23	(39)
Interest expense	(380)	(397)	(1,349)	(1,202)
Income before provision for income taxes	26,574	23,016	79,395	56,268
Provision for income taxes	11,398	9,493	32,994	23,167
Net income	15,176	13,523	46,401	33,101
Other comprehensive income:
Unrealized gain (loss) on marketable securities, net of tax of $47, $0, $159 and $0 for the three months ended September 30, 2015 and 2014 and the nine months ended September 30, 2015 and 2014, respectively	56		(249)
Foreign currency translation gain, net of tax of $140, $38, $226 and $40 for the three months ended September 30, 2015 and 2014 and the nine months ended September 30, 2015 and 2014, respectively	234	57	361	60
Total other comprehensive (loss) income	290	57	112	60
Comprehensive income	$ 15,466	$ 13,580	$ 46,513	$ 33,161
Earnings per share:
Basic	$ 0.39	$ 0.35	$ 1.19	$ 0.85
Diluted	$ 0.39	$ 0.35	$ 1.19	$ 0.85
Weighted average common shares outstanding:
Basic	38,890	38,847	38,868	38,847
Diluted	39,160	39,011	39,051	38,949

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Notes Payable to Former Stockholders

9 Months Ended

Sep. 30, 2015

Payables and Accruals [Abstract]

Notes Payable to Former Stockholders

5. Notes Payable to Former Stockholders

In conjunction with the Spin-Off and IPO, notes payable to certain former stockholders of MMREIS that were issued in settlement of restricted stock and SARs awards that were redeemed by MMREIS upon the termination of employment by these former stockholders (“the Notes”), which had been previously assumed by MMC, were transferred to the Company. The Notes are unsecured and bear interest at 5% with annual principal and interest installments and a final principal payment due during the second quarter of 2020. During each of the nine months ended September 30, 2015 and 2014, the Company made payments on the Notes of $1.5 million (includes principal and interest).

Accrued interest pertaining to the Notes consisted of the following (dollars in thousands):

	September 30, 2015		December 31, 2014
Accrued interest (1)	$	234	$	396

⁽¹⁾  Recorded in accounts payable and accrued expenses in the accompanying condensed consolidated balance sheets.

Interest expense pertaining to the Notes consisted of the following (dollars in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2015		2014		2015		2014
Interest expense	$	133	$	144	$	414	$	447

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Investments in Marketable Securities

9 Months Ended

Sep. 30, 2015

Investments, Debt and Equity Securities [Abstract]

Investments in Marketable Securities

4. Investments in Marketable Securities

Amortized cost and fair value of marketable securities, available-for-sale, by type of security consisted of the following (in thousands):

	September 30, 2015									December 31, 2014
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Short-term investments:
U.S. Treasuries	$	70,497	$	31	$	—		$	70,528	$	—	$	—	$	—		$	—
U.S. Government Sponsored Entities		19,110		3		(1	)		19,112		—		—		—			—
Asset-backed securities and other		124		—		—			124		—		—		—			—
	$	89,731	$	34	$	(1	)	$	89,764	$	—	$	—	$	—		$	—
Long-term investments:
U.S. Treasuries	$	6,110	$	23	$	(26	)	$	6,107	$	2,974	$	7	$	—		$	2,981
U.S. Government Sponsored Entities		11,750		5		(13	)		11,742		2,019		—		(3	)		2,016
Corporate debt securities		17,217		18		(408	)		16,827		7,442		48		(12	)		7,478
Asset-backed securities and other		10,328		33		(33	)		10,328		2,277		4		(4	)		2,277
	$	45,405	$	79	$	(480	)	$	45,004	$	14,712	$	59	$	(19	)	$	14,752

As of September 30, 2015, the amortized cost and fair value of the Company’s investment in available-for-sale securities that have been in a continuous unrealized loss position for less than 12 months were $28.7 million and $28.2 million, respectively. As of December 31, 2014, the amortized cost and fair value of the Company’s investment in available-for-sale securities that have been in a continuous unrealized loss position for less than 12 months were $5.4 million. Unrealized losses related to these investments are due to interest rate fluctuations as opposed to changes in credit quality. In addition, the Company does not intend to sell and it is not more-likely-than-not that the Company would be required to sell these investments before recovery of their amortized cost basis, which may be at maturity. As of September 30, 2015 and December 31, 2014, the Company did not have any investments in a continuous unrealized loss position for 12 months or longer.

For the three months ended September 30, 2015, there were no gross realized gains and gross realized losses from the sales of the Company’s available-for-sale securities. For the nine months ended September 30, 2015, gross realized gains and gross realized losses from the sales of the Company’s available-for-sale securities were $133,000 and $3,000, respectively and were recorded in other income (expense), net in the condensed consolidated statements of net and comprehensive income. The cost basis of securities sold were determined on the specific identification method.

The Company regularly reviews its investment portfolio to determine if any security is other-than-temporarily impaired, which would require the Company to record an impairment charge in the period any such determination is made. In making this judgment, the Company evaluates, among other items, the duration and extent to which the fair market value of a security is less than its amortized cost and the Company’s intent and ability to sell, or whether the Company will more likely than not be required to sell, the security before recovery of its amortized cost basis. The Company has evaluated its investments in marketable securities as of September 30, 2015 and has determined that no investments with unrealized losses are other-than-temporarily impaired.

Amortized cost and fair value of marketable securities, available-for-sale, by contractual maturity consisted of the following (dollars in thousands):

	September 30, 2015				December 31, 2014
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due in one year or less	$	89,731	$	89,764	$	—	$	—
Due after one year through five years		18,948		18,955		4,679		4,679
Due after five years through ten years		17,835		17,474		5,652		5,662
Due after ten years		8,622		8,575		4,381		4,411
	$	135,136	$	134,768	$	14,712	$	14,752
Weighted average maturity		3.4 years				9.6 years

Actual maturities may differ from contractual maturities because certain borrowers may have the right to call or prepay certain obligations with or without call or prepayment penalties.

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Investments in Marketable Securities (Tables)

9 Months Ended

Sep. 30, 2015

Investments, Debt and Equity Securities [Abstract]

Schedule of Amortized Cost and Fair Value of Marketable Securities, Available-for-Sale, by Type of Security

Amortized cost and fair value of marketable securities, available-for-sale, by type of security consisted of the following (in thousands):

	September 30, 2015									December 31, 2014
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Short-term investments:
U.S. Treasuries	$	70,497	$	31	$	—		$	70,528	$	—	$	—	$	—		$	—
U.S. Government Sponsored Entities		19,110		3		(1	)		19,112		—		—		—			—
Asset-backed securities and other		124		—		—			124		—		—		—			—
	$	89,731	$	34	$	(1	)	$	89,764	$	—	$	—	$	—		$	—
Long-term investments:
U.S. Treasuries	$	6,110	$	23	$	(26	)	$	6,107	$	2,974	$	7	$	—		$	2,981
U.S. Government Sponsored Entities		11,750		5		(13	)		11,742		2,019		—		(3	)		2,016
Corporate debt securities		17,217		18		(408	)		16,827		7,442		48		(12	)		7,478
Asset-backed securities and other		10,328		33		(33	)		10,328		2,277		4		(4	)		2,277
	$	45,405	$	79	$	(480	)	$	45,004	$	14,712	$	59	$	(19	)	$	14,752

Schedule of Amortized Cost and Fair Value of Marketable Securities, Available-for-Sale, by Contractual Maturity

Amortized cost and fair value of marketable securities, available-for-sale, by contractual maturity consisted of the following (dollars in thousands):

	September 30, 2015				December 31, 2014
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due in one year or less	$	89,731	$	89,764	$	—	$	—
Due after one year through five years		18,948		18,955		4,679		4,679
Due after five years through ten years		17,835		17,474		5,652		5,662
Due after ten years		8,622		8,575		4,381		4,411
	$	135,136	$	134,768	$	14,712	$	14,752
Weighted average maturity		3.4 years				9.6 years

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2015

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

12. Commitments and Contingencies

Credit Agreement

On June 18, 2014, the Company entered into a Credit Agreement with Wells Fargo Bank, National Association (“Bank”), dated as of June 1, 2014 (the “Credit Agreement”). The Credit Agreement provides for a $60.0 million principal amount senior secured revolving credit facility that is guaranteed by all of the Company’s domestic subsidiaries (the “Credit Facility”), which originally matured on June 1, 2017. The Company may borrow, repay and reborrow amounts under the Credit Facility until its maturity date, at which time all amounts outstanding under the Credit Facility must be repaid in full. In connection with executing the Credit Agreement, the Company paid bank fees and other expenses in the aggregate amount of $224,000, which are being amortized over the term of the Credit Agreement. The Company must pay a commitment fee of up to 0.1% per annum, payable quarterly commencing on July 1, 2014, based on the amount of unutilized commitments under the Credit Facility. The amortization and commitment fee is included in interest expense in the accompanying condensed consolidated statements of net and comprehensive income and was $32,000 and $35,000 during the three months ended September 30, 2015 and 2014, respectively and $100,000 and $41,000 during the nine months ended September 30, 2015 and 2014, respectively. As of September 30, 2015, there were no amounts outstanding under the Credit Agreement.

Borrowings under the Credit Agreement are available for general corporate purposes and working capital. The Credit Facility includes a $10.0 million sublimit for the issuance of standby letters of credit of which $533,000 was utilized at September 30, 2015. Borrowings under the Credit Facility will bear interest, at the Company’s option, at either the (i) Base Rate (defined as the highest of (a) the Bank’s prime rate, (b) the Federal Funds Rate plus 1.5% and (c) one-month LIBOR plus 1.5%), or (ii) at a variable rate between 0.875% and 1.125% above LIBOR, based upon the total funded debt to EBITDA ratio.

The Credit Facility contains customary covenants, including financial and other covenants reporting requirements and events of default. Financial covenants require the Company, on a combined basis with its guarantors, to maintain (i) an EBITDAR Coverage Ratio (as defined in the Credit Agreement) of not less than 1.25:1.0 as of each quarter end on a rolling 4-quarter basis and (ii) total funded debt to EBITDA not greater than 2.0:1.0 as of each quarter end on a rolling 4-quarter basis. The Credit Facility is secured by substantially all assets of the Company, including pledges of 100% of the stock or other equity interest of each subsidiary except for the capital stock of a controlled foreign corporation (as defined in the Internal Revenue Code). As of September 30, 2015, the Company was in compliance with all financial and non-financial covenants.

On August 21, 2015, the Company extended the Credit Agreement, which now matures on June 1, 2018. No other changes to the original terms. In connection with the Credit Agreement extension, the Company paid bank fees and other expenses in the aggregate amount of $35,000, which are being amortized over the extended term of the Credit Agreement. The amortization and commitment fee is included in interest expense in the accompanying condensed consolidated statements of net and comprehensive income.

Litigation

The Company is subject to various legal proceeding and claims that arise in the ordinary course of business, some of which involve claims for damages that are substantial in amount. Most of these litigation matters are covered by insurance which contain deductibles, exclusions, claim limits and aggregate policy limits. While the ultimate liability for these legal proceedings cannot be determined, the Company reviews the need for its accrual for loss contingencies quarterly and records an accrual for litigation related losses where the likelihood of loss is both probable and estimable. The Company believes that the ultimate resolution of the legal proceedings will not have a material adverse effect on its financial condition or results of operations. The Company accrues legal fees for litigation as the legal services are provided.

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Stockholders' Equity

9 Months Ended

Sep. 30, 2015

Equity [Abstract]

Stockholders' Equity

8. Stockholders’ Equity

Common Stock

As of September 30, 2015 and December 31, 2014, there were 37,117,674 and 36,918,442 shares of common stock, $0.0001 par value, issued and outstanding, which includes unvested restricted stock awards issued to non-employee directors, respectively. See Note 11 – “Earnings Per Share” for additional information.

The Company currently does not intend to pay a regular dividend. The Company will evaluate its dividend policy in the future. Any declaration and payment of future dividends to holders of the Company’s common stock will be at the discretion of the board of directors and will depend on many factors, including the Company’s financial condition, earnings, cash flows, capital requirements, level of indebtedness, statutory and contractual restrictions applicable to the payment of dividends and other considerations that the board of directors deems relevant.

Preferred Stock

The Company has 25,000,000 authorized shares of preferred stock with a par value $0.0001 per share. At September 30, 2015 and December 31, 2014, there were no preferred shares issued or outstanding.

Accumulated Other Comprehensive (Loss) Income

The changes in accumulated other comprehensive (loss) income as of September 30, 2015, by component, net of income taxes consisted of the following (in thousands):

	Unrealized gains and (losses) of available-for- sale securities			Foreign currency translation		Total
Beginning balance, December 31, 2014	$	24		$	135	$	159
Other comprehensive (loss) income before reclassifications		(265	)		361		96
Amounts reclassified from accumulated other comprehensive (loss) income (1)		16			—		16
Net current-period other comprehensive (loss) income		(249	)		361		112
Ending balance, September 30, 2015	$	(225	)	$	496	$	271

⁽¹⁾  Included as a component of other income (expense), net in the condensed consolidated statements of net and comprehensive income. The reclassifications were determined on a specific identification basis.

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Related-Party Transactions

9 Months Ended

Sep. 30, 2015

Related Party Transactions [Abstract]

Related-Party Transactions

6. Related-Party Transactions

Shared and Transition Services

Prior to October 2013, the Company operated under a shared services arrangement with MMC where by the Company was charged for actual costs specifically incurred on behalf of the Company or allocated to the Company on a pro rata basis. These costs included reimbursement for health insurance premiums, shared services and other general and administrative costs. Beginning in October 2013, certain services are provided to the Company under a Transition Services Agreement (“TSA”) between MMC and the Company, which replaced the pre-IPO shared services arrangement. The TSA is intended to provide certain services until the Company can acquire the services separately. In April 2014, the Company established its own health insurance plan significantly reducing the reliance on the TSA. During the three months ended September 30, 2015 and 2014, the Company incurred $56,000 and $42,000 under the TSA. During the nine months ended September 30, 2015 and 2014, the Company incurred $165,000 and $1.2 million under the TSA of which $0 and $1.0 million was incurred for reimbursement of health insurance premiums. These amounts are included in selling, general and administrative expense in the accompanying condensed consolidated statements of net and comprehensive income. As of September 30, 2015 and December 31, 2014, $92,000 and $97,000, respectively, remains unpaid and included in accounts payable and other accrued expenses – related party, net in the accompanying condensed consolidated balance sheets.

Brokerage and Financing Services with the Subsidiaries of MMC

MMC has wholly or majority owned subsidiaries that buy and sell commercial real estate properties. The Company performs certain brokerage and financing services related to transactions of the subsidiaries of MMC. For the three months ended September 30, 2015 and 2014, the Company recorded real estate brokerage commissions and financing fees of $305,000 and $872,000, respectively, from subsidiaries of MMC related to these services. The Company incurred cost of services of $173,000 and $540,000, respectively, related to these revenues. For the nine months ended September 30, 2015 and 2014, the Company recorded real estate brokerage commissions and financing fees of $1.6 million and $932,000, respectively, from subsidiaries of MMC related to these services. The Company incurred cost of services of $943,000 and $576,000, respectively, related to these revenues.

Operating Lease with MMC

The Company has an operating lease with MMC for a single story office building located in Palo Alto, California, which was amended with a new expiration date of May 31, 2022. Rent expense for this lease totaled $219,000 and $109,000 for the three month periods ended September 30, 2015 and 2014, respectively. Rent expense for this lease totaled $474,500 and $328,000 for the nine month periods ended September 30, 2015 and 2014, respectively. Rent expense is included in selling, general and administrative expense in the accompanying condensed consolidated statements of net and comprehensive income.

Other

The Company makes advances to non-executive employees from time-to-time. At September 30, 2015 and December 31, 2014, the aggregate principal amount for employee loans outstanding was $366,000 and $378,000, respectively, and is included in employee notes receivable in the accompanying condensed consolidated balance sheets.

As of September 30, 2015, George M. Marcus, the Company’s founder and Co-Chairman, beneficially owned indirectly approximately 53.2% (includes shares owned by Phoenix Investments Holdings, LLC (“Phoenix”) and the George and Judy Marcus Family Foundation) of the Company’s issued and outstanding common stock, including shares to be issued upon settlement of vested deferred stock units, or DSUs.

On February 6, 2015, the Company filed a shelf Registration Statement on Form S-3, registering for future sale 4,600,000 shares of common stock beneficially owned by Mr. Marcus. No new shares were offered, and the Company did not receive any proceeds from the sale of common stock by the selling stockholders. On March 13, 2015, the Company filed a Prospectus Supplement offering for sale by certain selling stockholders 4,000,000 shares of common stock including an option to sell up to an additional 600,000 shares pursuant to an option granted to the underwriters. On March 18, 2015, 4,000,000 shares were sold at a price per share of $31.9925 and the underwriters exercised their option to purchase an additional 600,000 shares at a price per share of $31.9925. In connection with the Registration Statement and Prospectus Supplement, for the three months ended March 31, 2015, the Company incurred approximately $113,000 of costs, which were reimbursed by the selling stockholders during the second quarter of 2015.

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Fair Value Measurements

9 Months Ended

Sep. 30, 2015

Fair Value Disclosures [Abstract]

Fair Value Measurements

7. Fair Value Measurements

U.S. GAAP defines the fair value of a financial instrument as the amount that would be received from the sale of an asset in an orderly transaction between market participants at the measurement date. The Company is responsible for the determination of the value of the investment carried and fair value and the supporting methodologies and assumptions. The Company uses various pricing sources to validate the values utilized.

The degree of judgment used in measuring the fair value of financial instruments generally inversely correlates with the level of observable valuation inputs. Financial instruments with quoted prices in active markets generally have more pricing observability and less judgment is used in measuring fair value. Financial instruments for which no quoted prices are available have less observability and are measured at fair value using valuation models or other pricing techniques that require more judgment.

Assets recorded at fair value are measured and classified in accordance with a fair value hierarchy consisting of the three “levels” based on the observability of inputs available in the market place used to measure the fair values as discussed below:

Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

Level 2: Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability; or

Level 3: Inputs reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model.

Recurring Fair Value Measurements

The Company values its investments including assets held in rabbi trust, money market funds and investments in marketable securities, available for sale at fair value on a recurring basis.

Investments carried at fair value are categorized into one of the three categories described above and consisted of the following (in thousands):

	September 30, 2015								December 31, 2014
	Fair Value		Level 1		Level 2		Level 3		Fair Value		Level 1		Level 2		Level 3
Assets held in rabbi trust	$	5,334	$	—	$	5,334	$	—	$	4,332	$	—	$	4,332	$	—
Money market funds (1)	$	5,708	$	5,708	$	—	$	—	$	25,310	$	25,310	$	—	$	—
Marketable securities, available for sale:
Short-term investments:
U.S. Treasuries	$	70,528	$	70,528	$	—	$	—	$	—	$	—	$	—	$	—
U.S. Government Sponsored Entities		19,112		—		19,112		—		—		—		—		—
Asset-backed securities and other		124		—		124		—		—		—		—		—
	$	89,764	$	70,528	$	19,236	$	—	$	—	$	—	$	—	$	—
Long-term investments:
U.S. Treasuries	$	6,107	$	6,107	$	—	$	—	$	2,981	$	2,981	$	—	$	—
U.S. Government Sponsored Entities		11,742		—		11,742		—		2,016		—		2,016		—
Corporate debt securities		16,827		—		16,827		—		7,478		—		7,478		—
Asset-backed securities and other		10,328		—		10,328		—		2,277		—		2,277		—
	$	45,004	$	6,107	$	38,897	$	—	$	14,752	$	2,981	$	11,771	$	—

⁽¹⁾  Included in cash and cash equivalents.

There were no transfers in or out of Level 1 and Level 2 during the three months and nine months ended September 30, 2015.

Assets and Liabilities not Measured at Fair Value

The Company’s cash and cash equivalents, commissions receivable, amounts due from employees (included in employee notes receivable caption) and sales and financing professionals (included in other assets caption), accounts payable and accrued expenses and commissions payable are carried at cost, which approximates fair value based on their immediate or short-term maturities and terms, which approximate current market rates, and are considered to be in the Level 1 classification.

As the Company’s obligations under notes payable to former stockholders bear fixed interest rates that approximate current interest rates for debt instruments with similar terms and maturities, the Company has determined that the carrying value on these instruments approximates fair value. As the Company’s obligations under SARs liability (included in deferred compensation and commission’s caption) bear interest at a variable rate based on U.S. Treasuries, the Company has determined that the carrying value approximates the fair value. These are considered to be in the Level 2 classification.

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Stock-Based Compensation Plans

9 Months Ended

Sep. 30, 2015

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-Based Compensation Plans

9. Stock-Based Compensation Plans

2013 Omnibus Equity Incentive Plan

In October 2013, the board of directors adopted the 2013 Omnibus Equity Incentive Plan (“2013 Plan”), which became effective upon the Company’s IPO. The 2013 Plan, in general, authorizes the granting of incentive stock options, nonstatutory stock options, stock appreciation rights, restricted stock awards (RSAs), restricted stock units (RSUs), performance units and performance shares to the Company and subsidiary corporations’ employees, independent contractors, directors and consultants. Grants are made from time to time at the discretion of the Company’s board of directors.

The following limits apply to any awards granted under the 2013 Plan:

• Options and stock appreciation rights—no employee or independent contractor can be granted, within any fiscal year, one or more options or stock appreciation rights, which in the aggregate cover more than 500,000 shares; provided, however, that in connection with an employee or independent contractor’s initial service as an employee or independent contractor, an employee or independent contractor’s aggregate limit may be increased by 1,000,000 shares;

• Restricted stock and restricted stock units—no employee or independent contractor can be granted, within any fiscal year one or more awards of restricted stock or restricted stock units, which in the aggregate cover more than 500,000 shares; provided, however, that in connection with an employee or independent contractor’s initial service as an employee or independent contractor, an employee or independent contractor’s aggregate limit may be increased by 1,000,000 shares; and

• Performance units and performance shares—no employee or independent contractor can receive performance units or performance shares having a grant date value (assuming maximum payout) greater than $2 million dollars or covering more than 500,000 shares, whichever is greater; provided, however, that in connection with an employee or independent contractor’s initial service as an employee or independent contractor, an employee or independent contractor may receive performance units or performance shares having a grant date value (assuming maximum payout) of up to an additional amount equal to $5 million dollars or covering up to 1,000,000 shares, whichever is greater. An individual may only have one award of performance units or performance shares for a performance period.

Upon adoption of the 2013 Plan, 5,500,000 shares of common stock were reserved for the issuance of awards under the 2013 Plan. The number of shares available for issuance under the 2013 Plan increases annually on the first day of each year beginning with the 2015 fiscal year, by an amount equal to the lesser of: (i) 5,500,000 shares of the Company’s common stock; (ii) 3% of the outstanding shares of the Company’s common stock as of the last day of the immediately preceding fiscal year; and (iii) such other amount as the Company’s board of directors may determine. Pursuant to the automatic increase provided for in the 2013 Plan, the board of directors approved a share reserve increase of 1,100,000 shares in 2015. At September 30, 2015, there were 3,265,526 shares available for future grants under the Plan.

Awards Granted and Vested

Under the 2013 Plan, the Company has issued RSA’s to non-employee directors and RSU’s to employees and non-employee sales and financing professionals. All RSAs vest in equal annual installments over a three year period from the date of grant. All RSUs vest in equal annual installments over a five year period from the date of grant. Any unvested awards are canceled upon termination of service. Awards accelerate upon death subject to approval by the compensation committee. As of September 30, 2015, there were no issued or outstanding options, stock appreciation rights, performance units or performance shares awards.

During the nine months ended September 30, 2015, 201,224 shares of RSAs and RSUs vested and 22,298 shares of common stock were withheld to pay applicable required employee statutory withholding taxes based on the market value of the shares on the vesting date. The amount remitted to the tax authorities for the employees’ tax obligation was reflected in the taxes paid related to net share settlement of stock-based awards caption in the financing section of the condensed consolidated statements of cash flows. The shares withheld for taxes were returned to the share reserve and are available for future issuance in accordance with provisions of the 2013 Plan.

During the nine months ended September 30, 2015 and the year ended December 31, 2014, the Company recorded windfall tax benefits resulting from the settlement of stock-based award activity, in the amounts of $534,000 and $4.3 million, respectfully. Such windfall tax benefits are excluded from the provision for income taxes and included as a component of additional paid-in capital when the awards are settled. During the nine months ended September 30, 2015, the Company realized an aggregate of $4.8 million of windfall tax benefits from stock-based award activity, which is included in cash flows from financing activities in the accompanying condensed consolidated statement of cash flows.

Outstanding Awards

The following table summarizes the Company’s activity under the 2013 Plan for the nine months ended September 30, 2015 (dollars in thousands, except per share data):

	RSA Grants to Non-employee Directors			RSU Grants to Employees			RSU Grants to Independent Contractors			Total			Weighted- Average Grant Date Fair Value Per Share
Nonvested shares at December 31, 2014		42,882			516,437			647,690			1,207,009		$	18.23
Granted
February 2015		—			15,847			9,720			25,567
May 2015		10,110			8,142			4,212			22,464
August 2015		—			5,607			25,148			30,755
Total Granted		10,110			29,596			39,080			78,786			42.84
Vested		(7,626	)		(56,719	)		(136,879	)		(201,224	)		14.85
Transferred		—			(8,423	)		8,423			—			17.81
Forfeited/canceled		—			(13,047	)		(15,904	)		(28,951	)		17.78
Nonvested shares at September 30, 2015 (1)		45,366			467,844			542,410			1,055,620		$	20.73
Unrecognized stock-based compensation expense as of September 30, 2015 (2)	$	634		$	9,185		$	19,695		$	29,514
Weighted average remaining vesting period (years) as of September 30, 2015		1.98			4.04			3.41			3.58

⁽¹⁾  Nonvested RSU’s will be settled through the issuance of new shares of common stock.

⁽²⁾  The total unrecognized compensation expense is expected to be recognized over a weighted-average period of approximately 3.58 years.

In November 2013, MMI issued the following deferred stock units (“DSUs”) under the 2013 Plan: (i) DSUs for an aggregate of 2,192,413 shares granted as replacement awards related to the prior SARs program to the MMREIS managing directors and (ii) DSUs for 83,334 shares granted to the Company’s Co-chairman of the board of directors (Mr. Millichap). The DSU’s are fully vested and shares will be issued 20% per year. As of September 30, 2015, fully vested DSUs for 1,820,596 shares remained outstanding. See “Amendments to Restricted Stock and SARs” section below and Note 11 – “Earnings Per Share” for additional information.

Employee Stock Purchase Plan

In 2013, the Company adopted the 2013 Employee Stock Purchase Plan (“ESPP Plan”). The ESPP Plan qualifies under Section 423 of the IRS Code and provides for consecutive, non-overlapping 6-month offering periods. The offering periods generally start on the first trading day on or after May 15 and November 15 of each year. The first offering period began on May 15, 2014. Qualifying employees may purchase shares of the Company stock at a 10% discount based on the lower of the market price at the beginning or end of the offering period, subject to IRS limitations.

The Company determined that the ESPP Plan was a compensatory plan and is required to expense the fair value of the awards over each 6-month offering period. The Company determines the fair value of ESPP shares to be acquired during each offering period using the Black Scholes option pricing model. The Company calculates the expected volatility based on the historical volatility of the Company’s common stock and the risk-free interest rate based on the U.S. Treasury yield curve in effect at the time of grant both consistent with the term of the offering period. The Company incorporates 0% forfeiture rate and 0% expected dividend yield as the Company expects all awards to be delivered and does not intend to pay regular dividends.

The ESPP Plan had 366,667 shares of common stock reserved and 323,514 shares of common stock available for issuance at September 30, 2015. The ESPP Plan provides for annual increases in the number of shares available for issuance under the ESPP on the first day of each fiscal year beginning with the 2015 fiscal year, equal to the least of (i) 366,667 shares, (ii) 1% of the outstanding shares on such date, or (iii) an amount determined by the Board. Pursuant to the provisions of the ESPP Plan, the board of directors determined a share reserve increase was not needed in 2015. At September 30, 2015, total unrecognized compensation cost related to the ESPP Plan was $28,000 and is expected to be recognized over a weighted average period of 0.12 years.

Amendments to Restricted Stock and SARs

Prior to the IPO, certain employees were granted SARs. As of March 31, 2013, the outstanding SARs were frozen at the liability amount, which will be paid out to each participant in installments upon retirement or departure under the terms of the revised SARs agreements. See Note 3 – “Selected Balance Sheet Data” for additional information. To replace beneficial ownership in the SARs, the difference between the book value liability and the fair value of the awards was granted to plan participants in the form of DSUs, which were fully vested upon receipt and will be settled in stock of MMI at a rate of 20% per year if the participant remains employed by the Company during that period (otherwise all unsettled shares of stock upon termination of employment will be settled five years from the termination date). For restricted stock held by the plan participants, the formula settlement value of all outstanding shares was removed, and all such shares of stock are subject to sales restrictions that lapse at a rate of 20% per year for five years if the participant remains employed by the Company. Additionally, in the event of death or termination of employment after reaching the age of 67, 100% of the DSUs will be settled and 100% of the shares of stock will be released from the resale restriction. Further, 100% of the shares of stock will be released from the resale restriction upon the consummation of a change of control of the Company.

Summary of Stock-Based Compensation

The Company grants RSUs to independent contractors (i.e. sales and financing professionals), who are considered non-employees under ASC 718. Accordingly, such awards are required to be measured at fair value at the end of each reporting period until settlement. Stock-based compensation expense is therefore impacted by the changes in the Company’s common stock price during each reporting period. The following table summarizes the components of stock-based compensation included in selling, general and administrative expense in the condensed consolidated statements of net and comprehensive income (in thousands, except common stock price):

	Three Months Ended September 30,					Nine Months Ended September 30,
	2015			2014		2015		2014
Employee stock purchase plan	$	56		$	45	$	184	$	68
RSAs – non-employee directors		91			61		228		137
RSUs – employees		547			175		1,626		521
RSUs – independent contractors		1,474			1,136		4,712		2,549
	$	2,168		$	1,417	$	6,750	$	3,275
Common stock price at beginning of period	$	46.14		$	25.51	$	33.25	$	14.90
Common stock price at end of period	$	45.99		$	30.26	$	45.99	$	30.26
(Decrease) increase in stock price	$	(0.15	)	$	4.75	$	12.74	$	15.36

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Selected Balance Sheet Data - Components of Deferred Compensation and Commissions (Detail) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Balance Sheet Related Disclosures [Abstract]
SARs liability	$ 21,184	$ 20,542
Commissions payable to sales and financing professionals	12,451	12,176
Deferred compensation liability	4,951	3,863
Total	$ 38,586	$ 36,581

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Stock-Based Compensation Plans - Outstanding Awards Under 2013 Omnibus Equity Incentive Plan (Parenthetical) (Detail)	9 Months Ended
	Sep. 30, 2015
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Unrecognized stock-based compensation expenses recognition period	3 years 6 months 29 days

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Property and Equipment (Tables)

9 Months Ended

Sep. 30, 2015

Property, Plant and Equipment [Abstract]

Schedule of Property and Equipment, Net

Property and equipment, net consist of the following (in thousands):

	September 30, 2015			December 31, 2014
Computer software and hardware equipment	$	10,104		$	8,769
Furniture, fixtures, and equipment		15,257			14,684
Less: accumulated depreciation and amortization		(15,636	)		(15,760	)
	$	9,725		$	7,693

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Stockholders' Equity (Tables)

9 Months Ended

Sep. 30, 2015

Equity [Abstract]

Changes in Accumulated Other Comprehensive (Loss) Income, Net of Income Taxes

The changes in accumulated other comprehensive (loss) income as of September 30, 2015, by component, net of income taxes consisted of the following (in thousands):

	Unrealized gains and (losses) of available-for- sale securities			Foreign currency translation		Total
Beginning balance, December 31, 2014	$	24		$	135	$	159
Other comprehensive (loss) income before reclassifications		(265	)		361		96
Amounts reclassified from accumulated other comprehensive (loss) income (1)		16			—		16
Net current-period other comprehensive (loss) income		(249	)		361		112
Ending balance, September 30, 2015	$	(225	)	$	496	$	271

⁽¹⁾  Included as a component of other income (expense), net in the condensed consolidated statements of net and comprehensive income. The reclassifications were determined on a specific identification basis.

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Stock-Based Compensation Plans - 2013 Omnibus Equity Incentive Plan - Additional Information (Detail) - USD ($) $ in Thousands	1 Months Ended	9 Months Ended	12 Months Ended
	Nov. 30, 2013	Sep. 30, 2015	Dec. 31, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted stock awards and restricted stock units, vested shares		201,224
Tax benefits from stock-based award activity included in cash flows from financing activities		$ 4,844
Tax benefit from stock-based award activity included in additional paid-in capital		$ 534	$ 4,300
2013 Omnibus Equity Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of common stock shares withheld to pay employee statutory withholding taxes		22,298
Description of awards granted under the 2013 Plan		In November 2013, MMI issued the following deferred stock units ("DSUs") under the 2013 Plan (i) DSUs for an aggregate of 2,192,413 shares granted as replacement awards related to the prior SARs program to the MMREIS managing directors and (ii) DSUs for 83,334 shares granted to the Company's Co-chairman of the board of directors (Mr. Millichap). The DSU's are fully vested and shares will be issued 20% per year.
2013 Omnibus Equity Incentive Plan [Member] | Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares issued under compensation plan		0
Number of shares outstanding under compensation plan		0
2013 Omnibus Equity Incentive Plan [Member] | Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period for restricted stock awards and restricted stock units		3 years
Restricted stock awards and restricted stock units, vested shares		201,224
2013 Omnibus Equity Incentive Plan [Member] | Restricted Stock Units (RSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period for restricted stock awards and restricted stock units		5 years
Restricted stock awards and restricted stock units, vested shares		201,224
2013 Omnibus Equity Incentive Plan [Member] | SARs [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares issued under compensation plan		0
Number of shares outstanding under compensation plan		0
2013 Omnibus Equity Incentive Plan [Member] | Performance Shares [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares issued under compensation plan		0
Number of shares outstanding under compensation plan		0
2013 Omnibus Equity Incentive Plan [Member] | Performance Units [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares issued under compensation plan		0
Number of shares outstanding under compensation plan		0
2013 Omnibus Equity Incentive Plan [Member] | Deferred stock units [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
DSU's, percentage settled into actual stock	20.00%
Fully vested deferred stock units remaining outstanding		1,820,596
2013 Omnibus Equity Incentive Plan [Member] | Deferred stock units [Member] | MMREIS Managing Directors [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Fully vested deferred stock units	2,192,413
2013 Omnibus Equity Incentive Plan [Member] | Deferred stock units [Member] | Millichap [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Fully vested deferred stock units	83,334

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Notes Payable to Former Stockholders - Schedule of Accrued Interest Pertaining to Notes (Detail) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Accounts Payable and Accrued Expenses [Member]
Accounts Payable And Accrued Expenses [Line Items]
Accrued interest	$ 234	$ 396

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Condensed Consolidated Statements of Net and Comprehensive Income (Unaudited) (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Income Statement [Abstract]
Unrealized gain (loss) on marketable securities, tax	$ 47	$ 0	$ (159)	$ 0
Foreign currency translation gain, tax	$ 140	$ 38	$ 226	$ 40

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Selected Balance Sheet Data

9 Months Ended

Sep. 30, 2015

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Selected Balance Sheet Data

3. Selected Balance Sheet Data

Other Assets

Other assets consisted of the following (in thousands):

	Current				Non-Current
	September 30,		December 31,		September 30,		December 31,
	2015		2014		2015		2014
Due from independent contractors, net (1) (2)	$	1,581	$	1,577	$	5,184	$	1,820
Security deposits		—		—		1,299		1,240
Customer trust accounts and other		1,823		1,262		102		222
	$	3,404	$	2,839	$	6,585	$	3,282

⁽¹⁾  Includes allowance for doubtful accounts related to current of $261,000 as of September 30, 2015 and $193,000 as of December 31, 2014, respectively. The Company recorded a provision for bad debt expense of $48,000 and $44,000 and wrote off $24,000 and $23,000 of these receivables for the three months ended September 30, 2015 and, 2014, respectively. The Company recorded a provision for bad debt expense of $127,000 and $86,000 and wrote off $59,000 and $110,000 of these receivables for the nine months ended September 30, 2015 and, 2014, respectively.

⁽²⁾  Represents amounts advanced, notes receivable and other receivables due from the Company’s sales and financing professionals. The notes receivable along with interest, are typically collected from future commissions and are generally due in one to five years. Any cash receipts on notes are applied first to unpaid principal balance prior to any income being recognized.

Deferred Compensation and Commissions

Deferred compensation and commissions consisted of the following (in thousands):

	September 30, 2015		December 31, 2014
SARs liability	$	21,184	$	20,542
Commissions payable to sales and financing professionals		12,451		12,176
Deferred compensation liability		4,951		3,863
	$	38,586	$	36,581

SARs Liability

Prior to the IPO, certain employees of the Company were granted stock appreciation rights (“SARs”) under a stock-based compensation program assumed by MMC. In connection with the IPO, the SARs agreements were revised, and the MMC liability of $20.0 million for the SARs was frozen at March 31, 2013, and was transferred to MMI through a capital distribution. The SARs liability will be settled with each participant in installments upon retirement or departure. Under the revised agreements, MMI is required to accrue interest on the outstanding balance beginning on January 1, 2014 at a rate based on the 10-year treasury note plus 2%. The rate resets annually. The rate at January 1, 2015 and 2014 was 4.173% and 5.03%, respectively. MMI recorded interest expense related to this liability of $214,000 and $236,000, for the three months ended September 30, 2015 and 2014, respectively and $642,000 and $738,000 for the nine months ended September 30, 2015 and 2014, respectively. During 2014, the Company reduced the SARs liability balance in the amount of $412,000 related to a distribution for the settlement of FICA taxes payable on behalf of certain participants.

Commissions Payable

Certain investment sales professionals have the ability to earn additional commissions after meeting certain annual revenue thresholds. These commissions are recognized as cost of services in the period in which they are earned. The Company has the ability to defer payment of certain commissions, at its election, for up to three years. Commissions payable that are not expected to be paid within twelve months are classified as non-current liabilities.

Deferred Compensation Liability

A select group of management is eligible to participate in a Deferred Compensation Plan. The plan is a 409A plan and permits the participant to defer compensation up to limits as determined by the plan. The Company elected to fund the Deferred Compensation Plan through company owned variable life insurance policies. The Deferred Compensation Plan is managed by a third-party institutional fund manager, and the deferred compensation and investment earnings are held as a Company asset in a rabbi trust, which is recorded in assets held in rabbi trust in the accompanying condensed consolidated balance sheets. The assets in the trust are restricted unless the Company becomes insolvent, as defined in the Deferred Compensation Plan, in which case the trust assets are subject to the claims of MMI’s creditors. The Company may also, in its sole and absolute discretion, elect to withdraw at any time all or a portion of the trust assets by an amount by which the fair market value of the trust assets exceeds 110% of the aggregate amount in the Deferred Compensation Plan’s participants’ accounts.

The net change in the carrying value of the assets held in the rabbi trust and the net change in the carrying value of the deferred compensation obligation, each exclusive of additional contributions and distributions consisted of the following (in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2015			2014			2015			2014
Increase (decrease) in the carrying value of the assets held in the rabbi trust (1)	$	(351	)	$	(51	)	$	(340	)	$	177
Increase (decrease) in the carrying value of the deferred compensation obligation (2)	$	(307	)	$	(32	)	$	(248	)	$	201

⁽¹⁾  Recorded in other income (expense), net in the condensed consolidated statements of net and comprehensive income.

⁽²⁾  Recorded in selling, general and administrative expense in the condensed consolidated statements of net and comprehensive income.

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Earnings Per Share - Computation of Basic and Diluted Earnings Per Share, Including Antidilutive Securities Excluded from Computation of Earnings Per Share (Parenthetical) (Detail)	9 Months Ended
	Sep. 30, 2015
Non-employee directors [Member] | Restricted Stock [Member]
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
Restricted common stock issued, vesting period	3 years

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Stock-Based Compensation Plans (Tables)

9 Months Ended

Sep. 30, 2015

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Outstanding Awards Under 2013 Omnibus Equity Incentive Plan

The following table summarizes the Company’s activity under the 2013 Plan for the nine months ended September 30, 2015 (dollars in thousands, except per share data):

	RSA Grants to Non-employee Directors			RSU Grants to Employees			RSU Grants to Independent Contractors			Total			Weighted- Average Grant Date Fair Value Per Share
Nonvested shares at December 31, 2014		42,882			516,437			647,690			1,207,009		$	18.23
Granted
February 2015		—			15,847			9,720			25,567
May 2015		10,110			8,142			4,212			22,464
August 2015		—			5,607			25,148			30,755
Total Granted		10,110			29,596			39,080			78,786			42.84
Vested		(7,626	)		(56,719	)		(136,879	)		(201,224	)		14.85
Transferred		—			(8,423	)		8,423			—			17.81
Forfeited/canceled		—			(13,047	)		(15,904	)		(28,951	)		17.78
Nonvested shares at September 30, 2015 (1)		45,366			467,844			542,410			1,055,620		$	20.73
Unrecognized stock-based compensation expense as of September 30, 2015 (2)	$	634		$	9,185		$	19,695		$	29,514
Weighted average remaining vesting period (years) as of September 30, 2015		1.98			4.04			3.41			3.58

⁽¹⁾  Nonvested RSU’s will be settled through the issuance of new shares of common stock.

⁽²⁾  The total unrecognized compensation expense is expected to be recognized over a weighted-average period of approximately 3.58 years.

Components of Stock-Based Compensation Included in Selling, General and Administrative Expense in Condensed Consolidated Statements of Net and Comprehensive Income

The following table summarizes the components of stock-based compensation included in selling, general and administrative expense in the condensed consolidated statements of net and comprehensive income (in thousands, except common stock price):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2015		2014		2015		2014
Employee stock purchase plan	$	56	$	45	$	184	$	68
RSAs – non-employee directors		91		61		228		137
RSUs – employees		547		175		1,626		521
RSUs – independent contractors		1,474		1,136		4,712		2,549
	$	2,168	$	1,417	$	6,750	$	3,275

Changes in Company's Common Stock Price During Reporting Period

Common stock price at beginning of period	$	46.14		$	25.51	$	33.25	$	14.90
Common stock price at end of period	$	45.99		$	30.26	$	45.99	$	30.26
(Decrease) increase in stock price	$	(0.15	)	$	4.75	$	12.74	$	15.36

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Investments in Marketable Securities - Additional Information (Detail) - USD ($)	3 Months Ended	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2015	Dec. 31, 2014
Investments, Debt and Equity Securities [Abstract]
Available for sale securities continuous unrealized loss position for less than 12 months, amortized cost	$ 28,700,000	$ 28,700,000	$ 5,400,000
Available for sale securities continuous unrealized loss position for less than 12 months, fair value	28,200,000	28,200,000	5,400,000
Available-for-sale-securities, Continuous unrealized loss position for 12 months or longer	0	0	$ 0
Available for sale securities gross realized gains	0	133,000
Available for sale securities gross realized loss	$ 0	3,000
Other-than-temporary impairment		$ 0

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Description of business, basis of presentation and recent accounting pronouncements (Policies)

9 Months Ended

Sep. 30, 2015

Accounting Policies [Abstract]

Description of Business

Description of Business

Marcus & Millichap, Inc., (the “Company”, “Marcus & Millichap”, or “MMI”), a Delaware corporation, is a brokerage firm specializing in commercial real estate investment sales, financing, research and advisory services. As of September 30, 2015, MMI operates 80 offices in the United States and Canada through its wholly-owned subsidiary, Marcus & Millichap Real Estate Investment Services, Inc. (“MMREIS”), which includes the operations of Marcus & Millichap Capital Corporation (“MMCC”).

Reorganization and Initial Public Offering

Reorganization and Initial Public Offering

MMI was formed in June 2013 in preparation for Marcus & Millichap Company (“MMC”) to spin-off its majority owned subsidiary, MMREIS (“Spin-Off”). Prior to the initial public offering (“IPO”) of MMI stock on October 30, 2013, all of the preferred and common stockholders of MMREIS (including MMC and employees of MMREIS) contributed all of their outstanding shares to MMI, in exchange for new MMI common stock. As a result, MMREIS became a wholly-owned subsidiary of MMI. Thereafter, MMC distributed 80.0% of the shares of MMI common stock to MMC’s shareholders and exchanged the remaining portion of its shares of MMI common stock for cancellation of indebtedness of MMC.

Basis of Presentation

Basis of Presentation

The financial information presented in the accompanying unaudited condensed consolidated financial statements, has been prepared in accordance with rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) for quarterly reports on Form 10–Q and Article 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles (“U.S. GAAP”) for complete financial statements. In the opinion of management, the accompanying unaudited condensed consolidated financial statements and notes include all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation of the consolidated financial position, results of operations and cash flows for the periods presented. These unaudited condensed consolidated financial statements should be read in conjunction with the annual audited consolidated financial statements and notes thereto for the year ended December 31, 2014 included in the Company’s Annual Report on Form 10-K filed on March 9, 2015 with the SEC. The results of the three and nine months ended September 30, 2015 are not necessarily indicative of the results to be expected for the fiscal year ending December 31, 2015, or for other interim periods or future years.

Consolidation

Consolidation

The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the related disclosures at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Reclassifications

Reclassifications

Certain prior-period amounts in the condensed consolidated statements of cash flows have been reclassified to conform to the current period presentation. These changes had no impact on the previously reported consolidated results of operations, financial condition, stockholders’ equity or on cash flows subtotals.

Concentration of Credit Risk

Concentration of Credit Risk

Financial instruments that potentially subject the Company to a concentration of credit risk principally consist of cash and cash equivalents, commissions receivable, investments in marketable securities, available for sale, due from independent contractors (included under other assets, current caption), security deposits (included under other assets, non-current caption) and company owned variable life insurance policies underlying the assets held in rabbi trust. Cash is placed with high-credit quality financial institutions, invested in high-credit quality money market funds and in fixed and variable income available for sale debt securities, in accordance with the Company’s investment policy approved by the Board of Directors.

To reduce its credit risk, the Company monitors the credit standing of the financial institutions that hold the Company’s cash and cash equivalents and monitors marketable securities, available for sale for impairment. The Company historically has not experienced any losses related to cash and cash equivalents or marketable securities, available for sale. The Company derives its revenues from a broad range of real estate investors, owners, and users in the United States and Canada, none of which individually represents a significant concentration of credit risk. The Company maintains allowances, as needed, for estimated credit losses based on management’s assessment of the likelihood of collection. For the three and nine months ended September 30, 2015 and 2014, no transaction represented 10% or more of total revenues. Further, while one or more transactions may represent 10% or more of commissions receivable at any reporting date, amounts due are typically collected within 10 days of settlement and therefore do not expose the Company to significant concentration of credit risk.

The Company’s Canadian operations represented less than 1.0% of total revenues in each period presented.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”), which supersedes virtually all of the current revenue recognition guidance under U.S. GAAP, and requires entities to recognize revenue for transfer to customer of promised goods or services in an amount that reflects the consideration to which the entity expects to be entitled to receive in exchange for those goods or services. ASU 2014-09 permits two implementation approaches, one requiring retrospective application of the new standard with restatement of prior years and one requiring prospective application of the new standard with disclosure of results under old standards. In July 2015, the FASB decided to delay the effective date one year, and, as a result, ASU 2014-09 is effective for reporting periods beginning after December 15, 2017 and early adoption is permitted as of January 1, 2017. The Company is currently evaluating the impact of this new standard and will select a transition method when the effect is determined; however, the Company does not expect this standard to have a significant effect on the Company’s revenue recognition.

In August 2014, the FASB issued ASU No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (“ASU 2014-15”). Currently, there is no guidance under U.S. GAAP regarding management’s responsibility to assess whether there is substantial doubt about an entity’s ability to continue as a going concern. Under ASU 2014-15, the Company will be required to assess its ability to continue as a going concern each interim and annual reporting period and provide certain disclosures if there is substantial doubt about the entity’s ability to continue as a going concern, including management’s plan to alleviate the substantial doubt. ASU 2014-15 is effective for reporting periods beginning after December 15, 2016 and early adoption is permitted. For the Company, the new standard will be effective January 1, 2017. The Company anticipates that this new standard will not have an impact on the Company’s condensed consolidated financial position or results of operations.

In April 2015, the FASB issued ASU No. 2015-03, Interest – Imputation of Interest: Simplifying the Presentation of Debt Issuance Costs (“ASU 2015-03”), which requires debt issuance costs to be presented in the balance sheet as a direct deduction from the associated debt liability. ASU 2015-03 does not change the amortization of debt issuance costs, which continues to follow the existing accounting guidance. In August 2015, the FASB issued ASU No. 2015-15, Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements (“ASU 2015-15”), which permits debt issuance costs associated with line-of-credit arrangements to be deferred and presented as an asset in the balance sheet and subsequently amortized ratably over the term of the line-of-credit arrangement. For the Company, ASU 2015-03 and ASU 2015-15 will be effective for interim and annual reporting periods beginning after December 15, 2015 and early adoption is permitted. The Company early adopted ASU 2015-03 and ASU 2015-15 during the quarter ended September 30, 2015. The adoption of ASU 2015-03 and ASU 2015-15, did not have any impact on the Company’s condensed consolidated financial position or results of operations.

Investments in Marketable Securities

The Company regularly reviews its investment portfolio to determine if any security is other-than-temporarily impaired, which would require the Company to record an impairment charge in the period any such determination is made. In making this judgment, the Company evaluates, among other items, the duration and extent to which the fair market value of a security is less than its amortized cost and the Company’s intent and ability to sell, or whether the Company will more likely than not be required to sell, the security before recovery of its amortized cost basis. The Company has evaluated its investments in marketable securities as of September 30, 2015 and has determined that no investments with unrealized losses are other-than-temporarily impaired.

Fair Value Measurements

U.S. GAAP defines the fair value of a financial instrument as the amount that would be received from the sale of an asset in an orderly transaction between market participants at the measurement date. The Company is responsible for the determination of the value of the investment carried and fair value and the supporting methodologies and assumptions. The Company uses various pricing sources to validate the values utilized.

The degree of judgment used in measuring the fair value of financial instruments generally inversely correlates with the level of observable valuation inputs. Financial instruments with quoted prices in active markets generally have more pricing observability and less judgment is used in measuring fair value. Financial instruments for which no quoted prices are available have less observability and are measured at fair value using valuation models or other pricing techniques that require more judgment.

Assets recorded at fair value are measured and classified in accordance with a fair value hierarchy consisting of the three “levels” based on the observability of inputs available in the market place used to measure the fair values as discussed below:

Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

Level 2: Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability; or

Level 3: Inputs reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model.

Stock-Based Compensation Plans

The Company grants RSUs to independent contractors (i.e. sales and financing professionals), who are considered non-employees under ASC 718. Accordingly, such awards are required to be measured at fair value at the end of each reporting period until settlement.

Income Taxes

The Company provides for the effects of income taxes in interim financial statements based on the Company’s estimate of its estimated annual effective tax rate for the full year, which is based on forecasted income by jurisdiction where the Company operates, adjusted for the tax effects of items that relate discretely to the period, if any. The difference between the statutory tax rate and the Company’s effective tax rate is largely attributable to state income taxes and a full valuation allowance with respect to the deferred tax assets of the Company’s Canadian operations.