☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 35-2478370 | |||||
(State or Other Jurisdiction of | ||||||
Incorporation or Organization) | (I.R.S. Employer Identification No.) | |||||
23975 Park Sorrento, Suite 400 Calabasas, California | 91302 | |||||
(Address of Principal Executive Offices) | (Zip Code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Common Stock, par value $0.0001 per share | MMI | New York Stock Exchange |
Large accelerated filer | ☒ | Accelerated filer | ☐ | |||||||||||
Non-accelerated filer | ☐ | Smaller reporting company | ☐ | |||||||||||
Emerging growth company | ☐ |
Page | ||||||||
5 | ||||||||
September 30, 2022 (unaudited) | December 31, 2021 | ||||||||||
Assets | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | 270,864 | $ | 382,140 | |||||||
Commissions receivable | 11,768 | 17,230 | |||||||||
Prepaid expenses | 8,665 | 13,220 | |||||||||
Income tax receivable | 3,253 | — | |||||||||
Marketable debt securities, available-for-sale (includes amortized cost of $213,042 and $183,915 at September 30, 2022 and December 31, 2021, respectively, and $0 allowance for credit losses) | 211,759 | 183,868 | |||||||||
Advances and loans, net | 3,484 | 6,403 | |||||||||
Other assets, current | 5,964 | 5,270 | |||||||||
Total current assets | 515,757 | 608,131 | |||||||||
Property and equipment, net | 26,823 | 23,192 | |||||||||
Operating lease right-of-use assets, net | 83,972 | 81,528 | |||||||||
Marketable debt securities, available-for-sale (includes amortized cost of $94,727 and $111,858 at September 30, 2022 and December 31, 2021, respectively, and $0 allowance for credit losses) | 89,329 | 112,610 | |||||||||
Assets held in rabbi trust | 9,222 | 11,508 | |||||||||
Deferred tax assets, net | 37,883 | 33,736 | |||||||||
Goodwill and other intangible assets, net | 57,092 | 48,105 | |||||||||
Advances and loans, net | 164,640 | 113,242 | |||||||||
Other assets, non-current | 15,170 | 13,146 | |||||||||
Total assets | $ | 999,888 | $ | 1,045,198 | |||||||
Liabilities and stockholders’ equity | |||||||||||
Current liabilities: | |||||||||||
Accounts payable and accrued expenses | $ | 10,237 | $ | 15,487 | |||||||
Deferred compensation and commissions | 62,547 | 114,685 | |||||||||
Income tax payable | — | 17,853 | |||||||||
Operating lease liabilities | 18,683 | 18,973 | |||||||||
Accrued bonuses and other employee related expenses | 34,572 | 49,848 | |||||||||
Other liabilities, current | 20,603 | 8,784 | |||||||||
Total current liabilities | 146,642 | 225,630 | |||||||||
Deferred compensation and commissions | 55,825 | 53,536 | |||||||||
Operating lease liabilities | 62,837 | 58,334 | |||||||||
Other liabilities, non-current | 10,623 | 11,394 | |||||||||
Total liabilities | 275,927 | 348,894 | |||||||||
Commitments and contingencies | — | — | |||||||||
Stockholders’ equity: | |||||||||||
Preferred stock, $0.0001 par value: | |||||||||||
Authorized shares – 25,000,000; issued and outstanding shares – none at September 30, 2022 and December 31, 2021, respectively | — | — | |||||||||
Common stock, $0.0001 par value: | |||||||||||
Authorized shares – 150,000,000; issued and outstanding shares – 39,797,423 and 39,692,373 at September 30, 2022 and December 31, 2021, respectively | 4 | 4 | |||||||||
Additional paid-in capital | 128,174 | 121,844 | |||||||||
Retained earnings | 599,710 | 573,546 | |||||||||
Accumulated other comprehensive (loss) income | (3,927) | 910 | |||||||||
Total stockholders’ equity | 723,961 | 696,304 | |||||||||
Total liabilities and stockholders’ equity | $ | 999,888 | $ | 1,045,198 |
September 30, 2021 (Unaudited) | December 31, 2020 | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 281,007 | $ | 243,152 | ||||
Commissions receivable, net | 15,377 | 10,391 | ||||||
Prepaid expenses | 9,232 | 10,153 | ||||||
Marketable debt securities, available-for-sale | 116,902 | 158,258 | ||||||
Advances and loans, net | 3,017 | 2,413 | ||||||
Other assets | 4,436 | 4,711 | ||||||
Total current assets | 429,971 | 429,078 | ||||||
Property and equipment, net | 22,890 | 23,436 | ||||||
Operating lease right-of-use | 85,250 | 84,024 | ||||||
Marketable debt securities, available-for-sale | 130,502 | 47,773 | ||||||
Assets held in rabbi trust | 11,056 | 10,295 | ||||||
Deferred tax assets, net | 24,410 | 21,374 | ||||||
Goodwill and other intangible assets, net | 48,974 | 52,053 | ||||||
Advances and loans, net | 108,709 | 106,913 | ||||||
Other assets | 13,318 | 4,176 | ||||||
Total assets | $ | 875,080 | $ | 779,122 | ||||
Liabilities and stockholders’ equity | ||||||||
Current liabilities: | ||||||||
Accounts payable and other liabilities | $ | 20,025 | $ | 18,288 | ||||
Deferred compensation and commissions | 53,068 | 58,106 | ||||||
Income tax payable | 5,658 | 3,726 | ||||||
Operating lease liabilities | 19,745 | 19,190 | ||||||
Accrued bonuses and other employee related expenses | 32,066 | 21,007 | ||||||
Total current liabilities | 130,562 | 120,317 | ||||||
Deferred compensation and commissions | 38,638 | 38,745 | ||||||
Operating lease liabilities | 60,970 | 59,408 | ||||||
Other liabilities | 12,641 | 13,816 | ||||||
Total liabilities | 242,811 | 232,286 | ||||||
Commitments and contingencies | 0 | 0 | ||||||
Stockholders’ equity: | ||||||||
Preferred stock, $0.0001 par value: | ||||||||
Authorized shares – 25,000,000; issued and outstanding shares – NaN at September 30, 2021 and December 31, 2020, respectively | 0 | 0 | ||||||
Common stock, $0.0001 par value: | ||||||||
Authorized shares – 150,000,000; issued and outstanding shares – 39,666,785 and 39,401,976 at September 30, 2021 and December 31, 2020, respectively | 4 | 4 | ||||||
Additional paid-in capital | 118,974 | 113,182 | ||||||
Retained earnings | 511,544 | 431,076 | ||||||
Accumulated other comprehensive income | 1,747 | 2,574 | ||||||
Total stockholders’ equity | 632,269 | 546,836 | ||||||
Total liabilities and stockholders’ equity | $ | 875,080 | $ | 779,122 | ||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Revenues: | |||||||||||||||||||||||
Real estate brokerage commissions | $ | 292,889 | $ | 299,759 | $ | 934,483 | $ | 715,458 | |||||||||||||||
Financing fees | 28,099 | 29,391 | 91,363 | 75,448 | |||||||||||||||||||
Other revenues | 2,852 | 3,233 | 13,415 | 10,400 | |||||||||||||||||||
Total revenues | 323,840 | 332,383 | 1,039,261 | 801,306 | |||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||
Cost of services | 217,360 | 219,194 | 670,170 | 506,882 | |||||||||||||||||||
Selling, general and administrative | 73,004 | 64,673 | 227,380 | 178,147 | |||||||||||||||||||
Depreciation and amortization | 2,924 | 2,850 | 10,167 | 8,806 | |||||||||||||||||||
Total operating expenses | 293,288 | 286,717 | 907,717 | 693,835 | |||||||||||||||||||
Operating income | 30,552 | 45,666 | 131,544 | 107,471 | |||||||||||||||||||
Other income, net | 978 | 323 | 967 | 2,737 | |||||||||||||||||||
Interest expense | (229) | (144) | (547) | (436) | |||||||||||||||||||
Income before provision for income taxes | 31,301 | 45,845 | 131,964 | 109,772 | |||||||||||||||||||
Provision for income taxes | 9,939 | 11,921 | 35,651 | 29,304 | |||||||||||||||||||
Net income | $ | 21,362 | $ | 33,924 | $ | 96,313 | $ | 80,468 | |||||||||||||||
Earnings per share: | |||||||||||||||||||||||
Basic | $ | 0.53 | $ | 0.85 | $ | 2.40 | $ | 2.02 | |||||||||||||||
Diluted | $ | 0.53 | $ | 0.84 | $ | 2.39 | $ | 2.00 | |||||||||||||||
Weighted average common shares outstanding: | |||||||||||||||||||||||
Basic | 40,086 | 39,940 | 40,038 | 39,859 | |||||||||||||||||||
Diluted | 40,302 | 40,241 | 40,358 | 40,148 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
Revenues: | ||||||||||||||||
Real estate brokerage commissions | $ | 299,759 | $ | 140,844 | $ | 715,458 | $ | 416,044 | ||||||||
Financing fees | 29,391 | 15,620 | 75,448 | 43,674 | ||||||||||||
Other revenues | 3,233 | 2,111 | 10,400 | 6,974 | ||||||||||||
Total revenues | 332,383 | 158,575 | 801,306 | 466,692 | ||||||||||||
Operating expenses: | ||||||||||||||||
Cost of services | 219,194 | 99,707 | 506,882 | 287,207 | ||||||||||||
Selling, general and administrative | 64,673 | 49,722 | 178,147 | 148,101 | ||||||||||||
Depreciation and amortization | 2,850 | 2,606 | 8,806 | 7,822 | ||||||||||||
Total operating expenses | 286,717 | 152,035 | 693,835 | 443,130 | ||||||||||||
Operating income | 45,666 | 6,540 | 107,471 | 23,562 | ||||||||||||
Other income (expense), net | 323 | 1,615 | 2,737 | 4,224 | ||||||||||||
Interest expense | (144 | ) | (199 | ) | (436 | ) | (695 | ) | ||||||||
Income before provision for income taxes | 45,845 | 7,956 | 109,772 | 27,091 | ||||||||||||
Provision for income taxes | 11,921 | 1,916 | 29,304 | 7,875 | ||||||||||||
Net income | 33,924 | 6,040 | 80,468 | 19,216 | ||||||||||||
Other comprehensive (loss) income: | ||||||||||||||||
Marketable debt securities, available-for-sale: | ||||||||||||||||
Change in net unrealized gains | (240 | ) | (30 | ) | (715 | ) | 687 | |||||||||
Less: reclassification adjustment for net losses included in other income (expense), net | 23 | 8 | 26 | 32 | ||||||||||||
Net change, net of tax of $(75), $(7), $(239) and $246 for the three and nine months ended September 30, 2021 and 2020, respectively | (217 | ) | (22 | ) | (689 | ) | 719 | |||||||||
Foreign currency translation gain (loss), net of tax of $0 for each of the three and nine months ended September 30, 2021 and 2020, respectively | 192 | (214 | ) | (138 | ) | 254 | ||||||||||
Total other comprehensive (loss) income | (25 | ) | (236 | ) | (827 | ) | 973 | |||||||||
Comprehensive income | $ | 33,899 | $ | 5,804 | $ | 79,641 | $ | 20,189 | ||||||||
Earnings per share: | ||||||||||||||||
Basic | $ | 0.85 | $ | 0.15 | $ | 2.02 | $ | 0.49 | ||||||||
Diluted | $ | 0.84 | $ | 0.15 | $ | 2.00 | $ | 0.48 | ||||||||
Weighted average common shares outstanding: | ||||||||||||||||
Basic | 39,940 | 39,681 | 39,859 | 39,617 | ||||||||||||
Diluted | 40,241 | 39,727 | 40,148 | 39,676 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Net income | $ | 21,362 | $ | 33,924 | $ | 96,313 | $ | 80,468 | |||||||||||||||
Other comprehensive loss: | |||||||||||||||||||||||
Marketable debt securities, available-for-sale: | |||||||||||||||||||||||
Change in net unrealized (losses) gains | (1,541) | (240) | (5,456) | (715) | |||||||||||||||||||
Less: reclassification adjustment for net losses (gains) included in other income, net | 7 | 23 | (70) | 26 | |||||||||||||||||||
Net change, net of tax of $(522) and $(1,888) for the three and nine months ended September 30, 2022, and $(75) and $(239) for the three and nine months ended September 30, 2021, respectively | (1,534) | (217) | (5,526) | (689) | |||||||||||||||||||
Foreign currency translation gain (loss), net of tax of $0 for each of the three and nine months ended September 30, 2022 and 2021, respectively | 569 | 192 | 689 | (138) | |||||||||||||||||||
Total other comprehensive loss | (965) | (25) | (4,837) | (827) | |||||||||||||||||||
Comprehensive income | $ | 20,397 | $ | 33,899 | $ | 91,476 | $ | 79,641 |
Three Months Ended September 30, 2021 | ||||||||||||||||||||||||||||||||||||
Preferred Stock | Common Stock | Additional Paid-In Capital | Stock Notes Receivable From Employees | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Total | ||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||||||||
Balance at June 30, 2021 | 0 | $ | 0 | 39,578,360 | $ | 4 | $ | 117,457 | $ | 0 | $ | 477,620 | $ | 1,772 | $ | 596,853 | ||||||||||||||||||||
Net and comprehensive income (loss) | — | 0 | — | 0 | 0 | 0 | 33,924 | (25 | ) | 33,899 | ||||||||||||||||||||||||||
Stock-based award activity | ||||||||||||||||||||||||||||||||||||
Stock-based compensation | 0 | 0 | 0 | 0 | 2,703 | 0 | 0 | 0 | 2,703 | |||||||||||||||||||||||||||
Issuance of common stock for settlement of deferred stock units | 0 | 0 | 60,373 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||||||
Issuance of common stock for vesting of restricted stock units | 0 | 0 | 58,411 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||||||
Shares withheld related to net share settlement of stock-based awards | 0 | 0 | (30,359 | ) | 0 | (1,186 | ) | 0 | 0 | 0 | (1,186 | ) | ||||||||||||||||||||||||
Balance as of September 30, 2021 | 0 | $ | 0 | 39,666,785 | $ | 4 | $ | 118,974 | $ | 0 | $ | 511,544 | $ | 1,747 | $ | 632,269 | ||||||||||||||||||||
Three Months Ended September 30, 2020 | ||||||||||||||||||||||||||||||||||||
Preferred Stock | Common Stock | Additional Paid-In Capital | Stock Notes Receivable From Employees | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Total | ||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||||||||
Balance at June 30, 2020 | 0 | $ | 0 | 39,328,017 | $ | 4 | $ | 108,308 | $ | 0 | $ | 401,414 | $ | 3,187 | $ | 512,913 | ||||||||||||||||||||
Net and comprehensive income (loss) | — | 0 | — | 0 | 0 | 0 | 6,040 | (236 | ) | 5,804 | ||||||||||||||||||||||||||
Stock-based award activity | ||||||||||||||||||||||||||||||||||||
Stock-based compensation | 0 | 0 | 0 | 0 | 2,383 | 0 | 0 | 0 | 2,383 | |||||||||||||||||||||||||||
Issuance of common stock for vesting of restricted stock units | 0 | 0 | 50,912 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||||||
Shares withheld related to net share settlement of stock-based awards | 0 | 0 | (2,452 | ) | 0 | (66 | ) | 0 | 0 | 0 | (66 | ) | ||||||||||||||||||||||||
Balance as of September 30, 2020 | 0 | $ | 0 | 39,376,477 | $ | 4 | $ | 110,625 | $ | 0 | $ | 407,454 | $ | 2,951 | $ | 521,034 | ||||||||||||||||||||
Three Months Ended September 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||
Preferred Stock | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Total | ||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||
Balance at June 30, 2022 | — | $ | — | 39,964,292 | $ | 4 | $ | 123,767 | $ | 596,361 | $ | (2,962) | $ | 717,170 | |||||||||||||||||||||||||||||||||
Net and comprehensive income (loss) | — | — | — | — | — | 21,362 | (965) | 20,397 | |||||||||||||||||||||||||||||||||||||||
Dividend | — | — | — | — | — | (10,436) | — | (10,436) | |||||||||||||||||||||||||||||||||||||||
Stock-based award activity | |||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | 4,544 | — | — | 4,544 | |||||||||||||||||||||||||||||||||||||||
Issuance of common stock for vesting of restricted stock units | — | — | 63,397 | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Shares withheld related to net share settlement of stock-based awards | — | — | (3,471) | — | (137) | — | — | (137) | |||||||||||||||||||||||||||||||||||||||
Repurchases of common stock | — | — | (226,795) | — | — | (7,577) | — | (7,577) | |||||||||||||||||||||||||||||||||||||||
Balance as of September 30, 2022 | — | $ | — | 39,797,423 | $ | 4 | $ | 128,174 | $ | 599,710 | $ | (3,927) | $ | 723,961 |
Three Months Ended September 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||
Preferred Stock | Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Total | ||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||
Balance at June 30, 2021 | — | $ | — | 39,578,360 | $ | 4 | $ | 117,457 | $ | 477,620 | $ | 1,772 | $ | 596,853 | |||||||||||||||||||||||||||||||||
Net and comprehensive income (loss) | — | — | — | — | — | 33,924 | (25) | 33,899 | |||||||||||||||||||||||||||||||||||||||
Stock-based award activity | |||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | 2,703 | — | — | 2,703 | |||||||||||||||||||||||||||||||||||||||
Issuance of common stock for settlement of deferred stock units | — | — | 60,373 | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Issuance of common stock for vesting of restricted stock units | — | — | 58,411 | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Shares withheld related to net share settlement of stock-based awards | — | — | (30,359) | — | (1,186) | — | — | (1,186) | |||||||||||||||||||||||||||||||||||||||
Balance as of September 30, 2021 | — | $ | — | 39,666,785 | $ | 4 | $ | 118,974 | $ | 511,544 | $ | 1,747 | $ | 632,269 |
Nine Months Ended September 30, 2021 | ||||||||||||||||||||||||||||||||||||
Preferred Stock | Common Stock | Additional Paid-In Capital | Stock Notes Receivable From Employees | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Total | ||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||||||||
Balance at December 31, 2020 | 0 | $ | 0 | 39,401,976 | $ | 4 | $ | 113,182 | $ | 0 | $ | 431,076 | $ | 2,574 | $ | 546,836 | ||||||||||||||||||||
Net and comprehensive income (loss) | — | 0 | — | 0 | 0 | 0 | 80,468 | (827 | ) | 79,641 | ||||||||||||||||||||||||||
Stock-based award activity | ||||||||||||||||||||||||||||||||||||
Stock-based compensation | 0 | 0 | 0 | 0 | 7,653 | 0 | 0 | 0 | 7,653 | |||||||||||||||||||||||||||
Shares issued pursuant to employee stock purchase plan | 0 | 0 | 11,635 | 0 | 369 | 0 | 0 | 0 | 369 | |||||||||||||||||||||||||||
Issuance of common stock for settlement of deferred stock units | 0 | 0 | 60,373 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||||||
Issuance of common stock for vesting of restricted stock units | 0 | 0 | 241,726 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||||||
Issuance of common stock for unvested restricted stock awards | 0 | 0 | 12,492 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||||||
Issuance of common stock for stock settled deferred consideration | 0 | 0 | 27,481 | 0 | 1,000 | 0 | 0 | 0 | 1,000 | |||||||||||||||||||||||||||
Shares withheld related to net share settlement of stock-based awards | 0 | 0 | (88,898 | ) | 0 | (3,230 | ) | 0 | 0 | 0 | (3,230 | ) | ||||||||||||||||||||||||
Balance as of September 30, 2021 | 0 | $ | 0 | 39,666,785 | $ | 4 | $ | 118,974 | $ | 0 | $ | 511,544 | $ | 1,747 | $ | 632,269 | ||||||||||||||||||||
Nine Months Ended September 30, 2020 | ||||||||||||||||||||||||||||||||||||
Preferred Stock | Common Stock | Additional Paid-In Capital | Stock Notes Receivable From Employees | Retained Earnings | Accumulated Other Comprehensive Income | Total | ||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||||||||
Balance at December 31, 2019 | 0 | $ | 0 | 39,153,195 | $ | 4 | $ | 104,658 | $ | (4 | ) | $ | 388,271 | $ | 1,978 | $ | 494,907 | |||||||||||||||||||
Cumulative effect of a change in accounting principle, net of tax | 0 | 0 | 0 | 0 | 0 | 0 | (33 | ) | 0 | (33 | ) | |||||||||||||||||||||||||
Balance at January 1, 2020, as adjusted | 0 | 0 | 39,153,195 | 4 | 104,658 | (4 | ) | 388,238 | 1,978 | 494,874 | ||||||||||||||||||||||||||
Net and comprehensive income | — | 0 | — | 0 | 0 | 0 | 19,216 | 973 | 20,189 | |||||||||||||||||||||||||||
Stock-based award activity | ||||||||||||||||||||||||||||||||||||
Stock-based compensation | 0 | 0 | 0 | 0 | 7,551 | 0 | 0 | 0 | 7,551 | |||||||||||||||||||||||||||
Shares issued pursuant to employee stock purchase plan | 0 | 0 | 15,923 | 0 | 371 | 0 | 0 | 0 | 371 | |||||||||||||||||||||||||||
Issuance of common stock for vesting of restricted stock units | 0 | 0 | 248,391 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||||||
Issuance of common stock for unvested restricted stock awards | 0 | 0 | 19,516 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||||||
Shares withheld related to net share settlement of stock-based awards | 0 | 0 | (60,548 | ) | 0 | (1,955 | ) | 0 | 0 | 0 | (1,955 | ) | ||||||||||||||||||||||||
Reduction of stock notes receivable from employees | — | 0 | — | 0 | 0 | 4 | 0 | 0 | 4 | |||||||||||||||||||||||||||
Balance as of September 30, 2020 | 0 | $ | 0 | 39,376,477 | $ | 4 | $ | 110,625 | $ | 0 | $ | 407,454 | $ | 2,951 | $ | 521,034 | ||||||||||||||||||||
Nine Months Ended September 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||
Preferred Stock | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Total | ||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2021 | — | $ | — | 39,692,373 | $ | 4 | $ | 121,844 | $ | 573,546 | $ | 910 | $ | 696,304 | |||||||||||||||||||||||||||||||||
Net and comprehensive income (loss) | — | — | — | — | — | 96,313 | (4,837) | 91,476 | |||||||||||||||||||||||||||||||||||||||
Dividends | — | — | — | — | (62,572) | — | (62,572) | ||||||||||||||||||||||||||||||||||||||||
Stock-based award activity | |||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | 12,675 | — | — | 12,675 | |||||||||||||||||||||||||||||||||||||||
Shares issued pursuant to employee stock purchase plan | — | — | 11,089 | — | 414 | — | — | 414 | |||||||||||||||||||||||||||||||||||||||
Issuance of common stock for settlement of deferred stock units | — | — | 166,449 | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Issuance of common stock for vesting of restricted stock units | — | — | 275,631 | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Issuance of common stock for unvested restricted stock awards | — | — | 11,494 | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Shares withheld related to net share settlement of stock-based awards | — | — | (161,491) | — | (8,176) | — | — | (8,176) | |||||||||||||||||||||||||||||||||||||||
Issuance of common stock for stock settled deferred consideration | — | — | 28,673 | — | 1,417 | — | — | 1,417 | |||||||||||||||||||||||||||||||||||||||
Repurchases of common stock | — | — | (226,795) | — | — | (7,577) | — | (7,577) | |||||||||||||||||||||||||||||||||||||||
Balance as of September 30, 2022 | — | $ | — | 39,797,423 | $ | 4 | $ | 128,174 | $ | 599,710 | $ | (3,927) | $ | 723,961 |
Nine Months Ended September 30, | ||||||||
2021 | 2020 | |||||||
Cash flows from operating activities | ||||||||
Net income | $ | 80,468 | $ | 19,216 | ||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||||||||
Depreciation and amortization | 8,806 | 7,822 | ||||||
Amortization of right-of-use | 17,773 | 16,883 | ||||||
Credit loss recovery | 25 | 55 | ||||||
Stock-based compensation | 7,653 | 7,551 | ||||||
Deferred taxes, net | (2,847 | ) | 6,050 | |||||
Unrealized foreign exchange (gains) losses | (298 | ) | 276 | |||||
Net realized gains on marketable debt securities, available-for-sale | (78 | ) | (180 | ) | ||||
Other non-cash items | 361 | 930 | ||||||
Changes in operating assets and liabilities: | ||||||||
Commissions receivable | (5,297 | ) | (1,928 | ) | ||||
Prepaid expenses | 925 | 1,988 | ||||||
Advances and loans | (2,434 | ) | (36,905 | ) | ||||
Other assets | (1,076 | ) | (1,087 | ) | ||||
Accounts payable and other liabilities | 4,020 | (1,373 | ) | |||||
Income tax receivable/payable | 1,932 | (5,024 | ) | |||||
Accrued bonuses and other employee related expenses | 11,223 | (12,145 | ) | |||||
Deferred compensation and commissions | (4,499 | ) | (17,593 | ) | ||||
Operating lease liabilities | (15,889 | ) | (13,504 | ) | ||||
Other liabilities | (1,175 | ) | 702 | |||||
Net cash provided by (used in) operating activities | 99,593 | (28,266 | ) | |||||
Cash flows from investing activities | ||||||||
Acquisition of businesses, net of cash received | 229 | (11,821 | ) | |||||
Purchases of marketable debt securities, available-for-sale | (291,063 | ) | (179,221 | ) | ||||
Proceeds from sales and maturities of marketable debt securities, available-for-sale | 248,540 | 175,226 | ||||||
Purchases of securities, held-to-maturity | (9,500 | ) | 0 | |||||
Issuances of employee notes receivable | (40 | ) | (243 | ) | ||||
Payments received on employee notes receivable | 290 | 90 | ||||||
Purchase of property and equipment | (4,238 | ) | (5,412 | ) | ||||
Net cash used in investing activities | (55,782 | ) | (21,381 | ) | ||||
Cash flows from financing activities | ||||||||
Taxes paid related to net share settlement of stock-based awards | (3,230 | ) | (1,955 | ) | ||||
Proceeds from issuance of shares pursuant to employee stock purchase plan | 369 | 371 | ||||||
Principal payments on notes payable to former stockholders | 0 | (6,564 | ) | |||||
Principal payments on stock appreciation rights liability | (1,481 | ) | (1,251 | ) | ||||
Principal payments on contingent and deferred consideration | (1,739 | ) | (420 | ) | ||||
Net cash used in financing activities | (6,081 | ) | (9,819 | ) | ||||
Effect of currency exchange rate changes on cash and cash equivalents | 125 | (92 | ) | |||||
Net increase (decrease) in cash and cash equivalents | 37,855 | (59,558 | ) | |||||
Cash and cash equivalents at beginning of period | 243,152 | 232,670 | ||||||
Cash and cash equivalents at end of period | $ | 281,007 | $ | 173,112 | ||||
Supplemental disclosures of cash flow information | ||||||||
Interest paid during the period | $ | 734 | $ | 1,208 | ||||
Income taxes paid, net | $ | 30,168 | $ | 6,849 | ||||
Nine Months Ended September 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||
Preferred Stock | Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Total | ||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2020 | — | $ | — | 39,401,976 | $ | 4 | $ | 113,182 | $ | 431,076 | $ | 2,574 | $ | 546,836 | |||||||||||||||||||||||||||||||||
Net and comprehensive income (loss) | — | — | — | — | — | 80,468 | (827) | 79,641 | |||||||||||||||||||||||||||||||||||||||
Stock-based award activity | |||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | 7,653 | — | — | 7,653 | |||||||||||||||||||||||||||||||||||||||
Shares issued pursuant to employee stock purchase plan | — | — | 11,635 | — | 369 | — | — | 369 | |||||||||||||||||||||||||||||||||||||||
Issuance of common stock for settlement of deferred stock units | — | — | 60,373 | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Issuance of common stock for vesting of restricted stock units | — | — | 241,726 | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Issuance of common stock for unvested restricted stock awards | — | — | 12,492 | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Shares withheld related to net share settlement of stock-based awards | — | — | (88,898) | — | (3,230) | — | — | (3,230) | |||||||||||||||||||||||||||||||||||||||
Issuance of common stock for stock settled deferred consideration | — | — | 27,481 | — | 1,000 | — | — | 1,000 | |||||||||||||||||||||||||||||||||||||||
Balance as of September 30, 2021 | — | $ | — | 39,666,785 | $ | 4 | $ | 118,974 | $ | 511,544 | $ | 1,747 | $ | 632,269 |
Nine Months Ended September 30, | |||||||||||
2022 | 2021 | ||||||||||
Cash flows from operating activities | |||||||||||
Net income | $ | 96,313 | $ | 80,468 | |||||||
Adjustments to reconcile net income to net cash (used in) provided by operating activities: | |||||||||||
Depreciation and amortization | 10,167 | 8,806 | |||||||||
Noncash lease expense | 17,840 | 17,773 | |||||||||
Credit loss recovery | — | 25 | |||||||||
Stock-based compensation | 12,675 | 7,653 | |||||||||
Deferred taxes, net | (2,256) | (2,847) | |||||||||
Unrealized foreign exchange losses (gains) | 1,600 | (298) | |||||||||
Net realized gains on marketable debt securities, available-for-sale | (87) | (78) | |||||||||
Other non-cash items | (1,459) | 361 | |||||||||
Changes in operating assets and liabilities: | |||||||||||
Commissions receivable | 4,891 | (5,297) | |||||||||
Prepaid expenses | 4,544 | 925 | |||||||||
Advances and loans | (49,171) | (2,434) | |||||||||
Other assets | (4,472) | (1,076) | |||||||||
Accounts payable and accrued expenses | (4,942) | 4,020 | |||||||||
Income tax receivable/payable | (21,106) | 1,932 | |||||||||
Accrued bonuses and other employee related expenses | (15,239) | 11,223 | |||||||||
Deferred compensation and commissions | (45,481) | (4,499) | |||||||||
Operating lease liabilities | (14,598) | (15,889) | |||||||||
Other liabilities | (994) | (1,175) | |||||||||
Net cash (used in) provided by operating activities | (11,775) | 99,593 | |||||||||
Cash flows from investing activities | |||||||||||
Acquisition of businesses, net of cash received | (12,500) | 229 | |||||||||
Purchases of marketable debt securities, available-for-sale | (276,708) | (291,063) | |||||||||
Proceeds from sales and maturities of marketable debt securities, available-for-sale | 266,481 | 248,540 | |||||||||
Purchases of securities, held-to-maturity | — | (9,500) | |||||||||
Issuances of employee notes receivable | (71) | (40) | |||||||||
Payments received on employee notes receivable | 71 | 290 | |||||||||
Purchase of property and equipment | (8,564) | (4,238) | |||||||||
Net cash used in investing activities | (31,291) | (55,782) | |||||||||
Cash flows from financing activities | |||||||||||
Taxes paid related to net share settlement of stock-based awards | (8,176) | (3,230) | |||||||||
Proceeds from issuance of shares pursuant to employee stock purchase plan | 414 | 369 | |||||||||
Dividends paid | (50,161) | — | |||||||||
Principal payments on stock appreciation rights liability | (1,761) | (1,481) | |||||||||
Principal payments on deferred and contingent consideration | (2,431) | (1,739) | |||||||||
Cash paid for stock repurchases | (5,659) | — | |||||||||
Net cash used in financing activities | (67,774) | (6,081) | |||||||||
Effect of currency exchange rate changes on cash and cash equivalents | (436) | 125 | |||||||||
Net (decrease) increase in cash and cash equivalents | (111,276) | 37,855 | |||||||||
Cash and cash equivalents at beginning of period | 382,140 | 243,152 | |||||||||
Cash and cash equivalents at end of period | $ | 270,864 | $ | 281,007 | |||||||
Supplemental cash flow disclosures: | |||||||||||
Interest paid during the period | $ | 599 | $ | 734 | |||||||
Income taxes paid, net | $ | 58,572 | $ | 30,168 | |||||||
Supplemental disclosures of noncash investing and financing activities: | |||||||||||
Unpaid purchases of property and equipment | $ | 892 | $ | 786 | |||||||
Right-of-use assets obtained in exchange for operating lease liabilities | $ | 20,799 | $ | 19,008 | |||||||
Issuance of stock for the settlement of deferred consideration | $ | 1,417 | $ | 1,000 | |||||||
Measurement period adjustment of acquisition related contingent consideration | $ | — | $ | (100) |
1. Description of Business, Basis of Presentation and Recent Accounting Pronouncements |
2. Property and Equipment, Net |
September 30, 2022 | December 31, 2021 | ||||||||||
Computer software and hardware equipment | $ | 40,725 | $ | 33,819 | |||||||
Furniture, fixtures and equipment | 26,130 | 24,511 | |||||||||
Less: accumulated depreciation and amortization | (40,032) | (35,138) | |||||||||
$ | 26,823 | $ | 23,192 |
September 30, 2021 | December 31, 2020 | |||||||
Computer software and hardware equipment | $ | 32,766 | $ | 30,955 | ||||
Furniture, fixtures and equipment | 23,946 | 23,418 | ||||||
Less: accumulated depreciation and amortization | (33,822 | ) | (30,937 | ) | ||||
$ | 22,890 | $ | 23,436 | |||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
Operating lease cost: | ||||||||||||||||
Lease cost (1) | $ | 6,549 | $ | 6,355 | $ | 19,650 | $ | 18,959 | ||||||||
Variable lease cost (2) | 1,355 | 1,485 | 3,996 | 4,096 | ||||||||||||
Sublease income | (206 | ) | (50 | ) | (258 | ) | (216 | ) | ||||||||
$ | 7,698 | $ | 7,790 | $ | 23,388 | $ | 22,839 | |||||||||
September 30, 2021 | ||||
Remainder of 2021 | $ | 5,958 | ||
2022 | 20,560 | |||
2023 | 17,256 | |||
2024 | 14,769 | |||
2025 | 12,462 | |||
Thereafter | 15,603 | |||
Total future minimum lease payments | 86,608 | |||
Less imputed interest | (5,893 | ) | ||
Present value of operating lease liabilities | $ | 80,715 | ||
Nine Months Ended September 30, | ||||||||
2021 | 2020 | |||||||
Operating cash flow information: | ||||||||
Cash paid for amounts included in the measurement of operating lease liabilities | $ | 17,697 | $ | 15,566 | ||||
Noncash activity: | ||||||||
ROU assets obtained in exchange for operating lease liabilities | $ | 18,003 | $ | 7,771 | ||||
Tenant improvements owned by lessor related to ROU assets (1) | $ | 1,005 | $ | 949 |
September 30, 2021 | December 31, 2020 | |||||||
Weighted average remaining operating lease term | 4.71 years | 4.70 years | ||||||
Weighted average discount rate | 2.9 | % | 3.1 | % |
3. Investments in Marketable Debt Securities, Available for Sale |
September 30, 2022 | |||||||||||||||||||||||||||||
Amortized Cost | Allowance for Credit Losses | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | |||||||||||||||||||||||||
Short-term investments: | |||||||||||||||||||||||||||||
U.S. treasuries | $ | 122,550 | $ | — | $ | — | $ | (1,140) | $ | 121,410 | |||||||||||||||||||
Corporate debt | 89,638 | — | 1 | (132) | 89,507 | ||||||||||||||||||||||||
Asset-backed securities (“ABS”) and other | 854 | — | — | (12) | 842 | ||||||||||||||||||||||||
$ | 213,042 | $ | — | $ | 1 | $ | (1,284) | $ | 211,759 | ||||||||||||||||||||
Long-term investments: | |||||||||||||||||||||||||||||
U.S. treasuries | $ | 44,315 | $ | — | $ | — | $ | (1,434) | $ | 42,881 | |||||||||||||||||||
U.S. government sponsored entities | 619 | — | — | (76) | 543 | ||||||||||||||||||||||||
Corporate debt | 42,885 | — | 3 | (3,326) | 39,562 | ||||||||||||||||||||||||
ABS and other | 6,908 | — | — | (565) | 6,343 | ||||||||||||||||||||||||
$ | 94,727 | $ | — | $ | 3 | $ | (5,401) | $ | 89,329 |
December 31, 2021 | |||||||||||||||||||||||||||||
Amortized Cost | Allowance for Credit Losses | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | |||||||||||||||||||||||||
Short-term investments: | |||||||||||||||||||||||||||||
U.S. treasuries | $ | 35,767 | $ | — | $ | — | $ | (34) | $ | 35,733 | |||||||||||||||||||
Corporate debt | 148,148 | — | 22 | (35) | 148,135 | ||||||||||||||||||||||||
$ | 183,915 | $ | — | $ | 22 | $ | (69) | $ | 183,868 | ||||||||||||||||||||
Long-term investments: | |||||||||||||||||||||||||||||
U.S. treasuries | $ | 70,902 | $ | — | $ | 128 | $ | (263) | $ | 70,767 | |||||||||||||||||||
U.S. government sponsored entities | 726 | — | 22 | (3) | 745 | ||||||||||||||||||||||||
Corporate debt | 33,197 | — | 962 | (146) | 34,013 | ||||||||||||||||||||||||
ABS and other | 7,033 | — | 82 | (30) | 7,085 | ||||||||||||||||||||||||
$ | 111,858 | $ | — | $ | 1,194 | $ | (442) | $ | 112,610 |
September 30, 2021 | ||||||||||||||||||||
Amortized Cost | Allowance for Credit Losses | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | ||||||||||||||||
Short-term investments: | ||||||||||||||||||||
U.S. treasuries | $ | 19,984 | $ | 0 | $ | 7 | $ | 0 | $ | 19,991 | ||||||||||
Corporate debt | 96,868 | 0 | 43 | 0 | 96,911 | |||||||||||||||
$ | 116,852 | $ | 0 | $ | 50 | $ | 0 | $ | 116,902 | |||||||||||
Long-term investments: | ||||||||||||||||||||
U.S. treasuries | $ | 86,893 | $ | 0 | $ | 190 | $ | (26 | ) | $ | 87,057 | |||||||||
U.S. government sponsored entities | 797 | 0 | 27 | (2 | ) | 822 | ||||||||||||||
Corporate debt | 33,845 | 0 | 1,422 | (33 | ) | 35,234 | ||||||||||||||
Asset-backed securities (“ABS”) and other | 7,253 | 0 | 141 | (5 | ) | 7,389 | ||||||||||||||
$ | 128,788 | $ | 0 | $ | 1,780 | $ | (66 | ) | $ | 130,502 | ||||||||||
December 31, 2020 | ||||||||||||||||||||
Amortized Cost | Allowance for Credit Losses | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | ||||||||||||||||
Short-term investments: | ||||||||||||||||||||
U.S. treasuries | $ | 75,887 | $ | 0 | $ | 88 | $ | (5 | ) | $ | 75,970 | |||||||||
U.S. government sponsored entities | 32,439 | 0 | 8 | 0 | 32,447 | |||||||||||||||
Corporate debt | 49,822 | 0 | 20 | (1 | ) | 49,841 | ||||||||||||||
$ | 158,148 | $ | 0 | $ | 116 | $ | (6 | ) | $ | 158,258 | ||||||||||
Long-term investments: | ||||||||||||||||||||
U.S. treasuries | $ | 3,375 | $ | 0 | $ | 266 | $ | 0 | $ | 3,641 | ||||||||||
U.S. government sponsored entities | 1,114 | 0 | 38 | 0 | 1,152 | |||||||||||||||
Corporate debt | 34,183 | 0 | 2,137 | (33 | ) | 36,287 | ||||||||||||||
ABS and other | 6,509 | 0 | 195 | (11 | ) | 6,693 | ||||||||||||||
$ | 45,181 | $ | 0 | $ | 2,636 | $ | (44 | ) | $ | 47,773 | ||||||||||
September 30, 2021 | ||||||||||||||||||||||||
Less than 12 months | 12 months or greater | Total | ||||||||||||||||||||||
Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | |||||||||||||||||||
U.S. treasuries | $ | 44,428 | $ | (26 | ) | $ | 0 | $ | 0 | $ | 44,428 | $ | (26 | ) | ||||||||||
U.S. government sponsored entities | 123 | (2 | ) | 0 | 0 | 123 | (2 | ) | ||||||||||||||||
Corporate debt | 12,501 | (33 | ) | 0 | 0 | 12,501 | (33 | ) | ||||||||||||||||
ABS and other | 1,129 | (4 | ) | 221 | (1 | ) | 1,350 | (5 | ) | |||||||||||||||
$ | 58,181 | $ | (65 | ) | $ | 221 | $ | (1 | ) | $ | 58,402 | $ | (66 | ) | ||||||||||
September 30, 2022 | |||||||||||||||||||||||||||||||||||
Less than 12 months | 12 months or greater | Total | |||||||||||||||||||||||||||||||||
Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | ||||||||||||||||||||||||||||||
U.S. treasuries | $ | 143,148 | $ | (2,042) | $ | 20,766 | $ | (532) | $ | 163,914 | $ | (2,574) | |||||||||||||||||||||||
U.S. government sponsored entities | 453 | (55) | 88 | (21) | 541 | (76) | |||||||||||||||||||||||||||||
Corporate debt | 110,806 | (2,793) | 4,454 | (665) | 115,260 | (3,458) | |||||||||||||||||||||||||||||
ABS and other | 6,950 | (534) | 212 | (43) | 7,162 | (577) | |||||||||||||||||||||||||||||
$ | 261,357 | $ | (5,424) | $ | 25,520 | $ | (1,261) | $ | 286,877 | $ | (6,685) |
December 31, 2021 | |||||||||||||||||||||||||||||||||||
Less than 12 months | 12 months or greater | Total | |||||||||||||||||||||||||||||||||
Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | ||||||||||||||||||||||||||||||
U.S. treasuries | $ | 103,019 | $ | (297) | $ | — | $ | — | $ | 103,019 | $ | (297) | |||||||||||||||||||||||
U.S. government sponsored entities | 115 | (3) | — | — | 115 | (3) | |||||||||||||||||||||||||||||
Corporate debt | 115,908 | (173) | 146 | (8) | 116,054 | (181) | |||||||||||||||||||||||||||||
ABS and other | 2,915 | (30) | — | — | 2,915 | (30) | |||||||||||||||||||||||||||||
$ | 221,957 | $ | (503) | $ | 146 | $ | (8) | $ | 222,103 | $ | (511) |
December 31, 2020 | ||||||||||||||||||||||||
Less than 12 months | 12 months or greater | Total | ||||||||||||||||||||||
Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | |||||||||||||||||||
U.S. treasuries | $ | 41,702 | $ | (5 | ) | $ | 0 | $ | 0 | $ | 41,702 | $ | (5 | ) | ||||||||||
Corporate debt | 29,810 | (34 | ) | 0 | 0 | 29,810 | (34 | ) | ||||||||||||||||
ABS and other | 546 | (6 | ) | 157 | (5 | ) | 703 | (11 | ) | |||||||||||||||
$ | 72,058 | $ | (45 | ) | $ | 157 | $ | (5 | ) | $ | 72,215 | $ | (50 | ) | ||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Gross realized gains (1) | $ | — | $ | 68 | $ | 114 | $ | 78 | |||||||||||||||
Gross realized losses (1) | $ | (10) | $ | — | $ | (27) | $ | — |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
Gross realized gains (1) | $ | 68 | $ | 97 | $ | 78 | $ | 229 | ||||||||
Gross realized losses (1) | $ | 0 | $ | (34 | ) | $ | 0 | $ | (49 | ) | ||||||
(1) | Recorded in other income, |
September 30, 2022 | December 31, 2021 | ||||||||||||||||||||||
Amortized Cost | Fair Value | Amortized Cost | Fair Value | ||||||||||||||||||||
Due in one year or less | $ | 213,042 | $ | 211,759 | $ | 183,915 | $ | 183,868 | |||||||||||||||
Due after one year through five years | 78,268 | 74,918 | 96,035 | 96,257 | |||||||||||||||||||
Due after five years through ten years | 13,554 | 11,808 | 11,129 | 11,601 | |||||||||||||||||||
Due after ten years | 2,905 | 2,603 | 4,694 | 4,752 | |||||||||||||||||||
$ | 307,769 | $ | 301,088 | $ | 295,773 | $ | 296,478 | ||||||||||||||||
Weighted average contractual maturity | 1.3 years | 1.5 years |
September 30, 2021 | December 31, 2020 | |||||||||||||||
Amortized Cost | Fair Value | Amortized Cost | Fair Value | |||||||||||||
Due in one year or less | $ | 116,852 | $ | 116,902 | $ | 158,148 | $ | 158,258 | ||||||||
Due after one year through five years | 112,288 | 113,167 | 30,604 | 32,041 | ||||||||||||
Due after five years through ten years | 11,618 | 12,334 | 10,022 | 11,044 | ||||||||||||
Due after ten years | 4,882 | 5,001 | 4,555 | 4,688 | ||||||||||||
$ | 245,640 | $ | 247,404 | $ | 203,329 | $ | 206,031 | |||||||||
Weighted average contractual maturity | 1.9 years | 1.6 years |
4. Acquisitions, Goodwill and Other Intangible Assets |
September 30, 2022 | December 31, 2021 | ||||||||||||||||||||||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Net Book Value | Gross Carrying Amount | Accumulated Amortization | Net Book Value | ||||||||||||||||||||||||||||||
Goodwill and intangible assets: | |||||||||||||||||||||||||||||||||||
Goodwill | $ | 38,101 | $ | — | $ | 38,101 | $ | 34,071 | $ | — | $ | 34,071 | |||||||||||||||||||||||
Intangible assets (1) | 32,444 | (13,453) | 18,991 | 23,974 | (9,940) | 14,034 | |||||||||||||||||||||||||||||
$ | 70,545 | $ | (13,453) | $ | 57,092 | $ | 58,045 | $ | (9,940) | $ | 48,105 |
September 30, 2021 | December 31, 2020 | |||||||||||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Net Book Value | Gross Carrying Amount | Accumulated Amortization | Net Book Value | |||||||||||||||||||
Goodwill and intangible assets: | ||||||||||||||||||||||||
Goodwill | $ | 34,071 | $ | — | $ | 34,071 | $ | 33,375 | $ | — | $ | 33,375 | ||||||||||||
Intangible assets (1) | 23,974 | (9,071 | ) | 14,903 | 24,745 | (6,067 | ) | 18,678 | ||||||||||||||||
$ | 58,045 | $ | (9,071 | ) | $ | 48,974 | $ | 58,120 | $ | (6,067 | ) | $ | 52,053 | |||||||||||
(1) | Total weighted average amortization period was |
Nine Months Ended September 30, | |||||||||||
2022 | 2021 | ||||||||||
Beginning balance | $ | 34,071 | $ | 33,375 | |||||||
Additions from acquisitions (1) | 4,030 | 696 | |||||||||
Impairment losses | — | — | |||||||||
Ending balance | $ | 38,101 | $ | 34,071 |
Nine Months Ended September 30, | ||||||||
2021 | 2020 | |||||||
Beginning balance | $ | 33,375 | $ | 15,072 | ||||
Additions from acquisitions (1) | 696 | 9,247 | ||||||
Impairment losses | 0 | 0 | ||||||
Ending balance | $ | 34,071 | $ | 24,319 | ||||
(1) | The 2021 addition represents a measurement period |
September 30, 2022 | |||||
Remainder of 2022 | $ | 1,171 | |||
2023 | 4,617 | ||||
2024 | 4,101 | ||||
2025 | 3,881 | ||||
2026 | 2,156 | ||||
Thereafter | 3,065 | ||||
$ | 18,991 |
September 30, 2021 | ||||
Remainder of 2021 | $ | 869 | ||
2022 | 3,474 | |||
2023 | 3,407 | |||
2024 | 2,891 | |||
2025 | 2,671 | |||
Thereafter | 1,591 | |||
$ | 14,903 | |||
Advances and Loans | Commissions Receivable | Total | ||||||||||
Beginning balance as of January 1, 2021 | $ | 563 | $ | 94 | $ | 657 | ||||||
Credit loss (recovery) | 116 | (91 | ) | 25 | ||||||||
Write-offs | (60 | ) | 0 | (60 | ) | |||||||
Ending balance as of September 30, 2021 | $ | 619 | $ | 3 | $ | 622 | ||||||
Advances and Loans | Commissions Receivable | Total | ||||||||||
Beginning balance as of January 1, 2020 | $ | 512 | $ | 32 | (1) | $ | 544 | |||||
Credit loss expense | 13 | 42 | 55 | |||||||||
Write-offs | (50 | ) | 0 | (50 | ) | |||||||
Ending balance as of September 30, 2020 | $ | 475 | $ | 74 | $ | 549 | ||||||
Current | Non-Current | ||||||||||||||||||||||
September 30, 2022 | December 31, 2021 | September 30, 2022 | December 31, 2021 | ||||||||||||||||||||
Mortgage servicing rights (“MSRs”), net of amortization | $ | — | $ | — | $ | — | $ | 1,855 | |||||||||||||||
Security deposits | — | — | 1,680 | 1,395 | |||||||||||||||||||
Employee notes receivable | 1 | 40 | — | — | |||||||||||||||||||
Securities, held-to-maturity(1) | — | — | 9,500 | 9,500 | |||||||||||||||||||
Loan performance fee receivable | 564 | — | 3,990 | — | |||||||||||||||||||
Prepaid lease costs and other | 5,399 | 5,230 | — | 396 | |||||||||||||||||||
$ | 5,964 | $ | 5,270 | $ | 15,170 | $ | 13,146 |
Current | Non-Current | |||||||||||||||
September 30, 2021 | December 31, 2020 | September 30, 2021 | December 31, 2020 | |||||||||||||
Mortgage servicing rights (“MSRs”), net of amortization | $ | 0 | $ | 0 | $ | 1,919 | $ | 1,897 | ||||||||
Security deposits | 0 | 0 | 1,445 | 1,461 | ||||||||||||
Employee notes receivable (1) | 66 | 185 | 0 | 246 | ||||||||||||
Securities, held-to-maturity | 0 | 0 | 9,500 | 0 | ||||||||||||
Customer trust accounts and other | 4,370 | 4,526 | 454 | 572 | ||||||||||||
$ | 4,436 | $ | 4,711 | $ | 13,318 | $ | 4,176 | |||||||||
Nine Months Ended September 30, | |||||||||||
2022 | 2021 | ||||||||||
Beginning balance | $ | 1,855 | $ | 1,897 | |||||||
Additions | — | 421 | |||||||||
Amortization | (1,275) | (399) | |||||||||
Reclassification to assets held for sale | (280) | — | |||||||||
Loss on sale | (300) | — | |||||||||
Ending balance | $ | — | $ | 1,919 |
Nine Months Ended September 30, | ||||||||
2021 | 2020 | |||||||
Beginning balance | $ | 1,897 | $ | 2,002 | ||||
Additions | 421 | 425 | ||||||
Amortization | (399 | ) | (404 | ) | ||||
Ending balance | $ | 1,919 | $ | 2,023 | ||||
Current | Non-Current | ||||||||||||||||||||||
September 30, 2022 | December 31, 2021 | September 30, 2022 | December 31, 2021 | ||||||||||||||||||||
Stock appreciation rights (“SARs”) liability (1) | $ | 2,323 | $ | 2,241 | $ | 13,002 | $ | 14,918 | |||||||||||||||
Commissions payable to investment sales and financing professionals | 59,507 | 110,769 | 36,789 | 31,697 | |||||||||||||||||||
Deferred compensation liability (1) | 524 | 1,080 | 6,034 | 6,921 | |||||||||||||||||||
Other | 193 | 595 | — | — | |||||||||||||||||||
$ | 62,547 | $ | 114,685 | $ | 55,825 | $ | 53,536 |
Current | Non-Current | |||||||||||||||
September 30, 2021 | December 31, 2020 | September 30, 2021 | December 31, 2020 | |||||||||||||
Stock appreciation rights (“SARs”) liability (1) | $ | 2,241 | $ | 2,162 | $ | 14,796 | $ | 16,671 | ||||||||
Commissions payable to investment sales and financing professionals | 49,175 | 54,082 | 17,012 | 15,306 | ||||||||||||
Deferred compensation liability (1) | 1,132 | 1,519 | 6,830 | 6,768 | ||||||||||||
Other | 520 | 343 | 0 | 0 | ||||||||||||
$ | 53,068 | $ | 58,106 | $ | 38,638 | $ | 38,745 | |||||||||
(1) | The SARs and deferred compensation |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
(Decrease) increase in the carrying value of the assets held in the rabbi trust (1) | $ | (59 | ) | $ | 434 | $ | 932 | $ | 170 | |||||||
(Decrease) increase in the net carrying value of the deferred compensation obligation (2) | $ | (43 | ) | $ | 388 | $ | 720 | $ | 88 | |||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
(Decrease) increase in the carrying value of the assets held in the rabbi trust (1) | $ | (347) | $ | (59) | $ | (2,131) | $ | 932 | |||||||||||||||
Decrease (increase) in the net carrying value of the deferred compensation obligation (2) | $ | 317 | $ | 43 | $ | 2,108 | $ | (720) |
Non-Current | ||||||||
September 30, 2021 | December 31, 2020 | |||||||
Deferred consideration (1) (2) | $ | 5,809 | $ | 8,582 | ||||
Contingent consideration (1) (2) | 5,812 | 4,219 | ||||||
Other | 1,020 | 1,015 | ||||||
$ | 12,641 | $ | 13,816 | |||||
Current | Non-Current | ||||||||||||||||||||||
September 30, 2022 | December 31, 2021 | September 30, 2022 | December 31, 2021 | ||||||||||||||||||||
Deferred consideration | $ | 4,692 | $ | 5,112 | $ | 1,467 | $ | 4,689 | |||||||||||||||
Contingent consideration | 2,414 | 2,681 | 5,610 | 6,631 | |||||||||||||||||||
Dividends payable | 10,784 | — | 1,627 | — | |||||||||||||||||||
Stock repurchase payable | 1,918 | — | — | — | |||||||||||||||||||
Other | 795 | 991 | 1,919 | 74 | |||||||||||||||||||
$ | 20,603 | $ | 8,784 | $ | 10,623 | $ | 11,394 |
6. Related-Party Transactions |
7. Fair Value Measurements |
September 30, 2022 | December 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||
Fair Value | Level 1 | Level 2 | Level 3 | Fair Value | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||||||||||||||||||
Assets held in rabbi trust | $ | 9,222 | $ | — | $ | 9,222 | $ | — | $ | 11,508 | $ | — | $ | 11,508 | $ | — | |||||||||||||||||||||||||||||||
Cash equivalents (1): | |||||||||||||||||||||||||||||||||||||||||||||||
Commercial paper | $ | 80,095 | $ | — | $ | 80,095 | $ | — | $ | 8,948 | $ | — | $ | 8,948 | $ | — | |||||||||||||||||||||||||||||||
Money market funds | 120,011 | 120,011 | — | — | 210,985 | 210,985 | — | — | |||||||||||||||||||||||||||||||||||||||
$ | 200,106 | $ | 120,011 | $ | 80,095 | $ | — | $ | 219,933 | $ | 210,985 | $ | 8,948 | $ | — | ||||||||||||||||||||||||||||||||
Marketable debt securities, available-for-sale: | |||||||||||||||||||||||||||||||||||||||||||||||
Short-term investments: | |||||||||||||||||||||||||||||||||||||||||||||||
U.S. treasuries | $ | 121,410 | $ | 121,410 | $ | — | $ | — | $ | 35,733 | $ | 35,733 | $ | — | $ | — | |||||||||||||||||||||||||||||||
Corporate debt | 89,507 | — | 89,507 | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
ABS and other | 842 | — | 842 | — | 148,135 | — | 148,135 | — | |||||||||||||||||||||||||||||||||||||||
$ | 211,759 | $ | 121,410 | $ | 90,349 | $ | — | $ | 183,868 | $ | 35,733 | $ | 148,135 | $ | — | ||||||||||||||||||||||||||||||||
Long-term investments: | |||||||||||||||||||||||||||||||||||||||||||||||
U.S. treasuries | $ | 42,881 | $ | 42,881 | $ | — | $ | — | $ | 70,767 | $ | 70,767 | $ | — | $ | — | |||||||||||||||||||||||||||||||
U.S. government sponsored entities | 543 | — | 543 | — | 745 | — | 745 | — | |||||||||||||||||||||||||||||||||||||||
Corporate debt | 39,562 | — | 39,562 | — | 34,013 | — | 34,013 | — | |||||||||||||||||||||||||||||||||||||||
ABS and other | 6,343 | — | 6,343 | — | 7,085 | — | 7,085 | — | |||||||||||||||||||||||||||||||||||||||
$ | 89,329 | $ | 42,881 | $ | 46,448 | $ | — | $ | 112,610 | $ | 70,767 | $ | 41,843 | $ | — | ||||||||||||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||||||||||||||||
Contingent consideration | $ | 8,024 | $ | — | $ | — | $ | 8,024 | $ | 9,312 | $ | — | $ | — | $ | 9,312 | |||||||||||||||||||||||||||||||
Deferred consideration | $ | 6,159 | $ | — | $ | 6,159 | $ | — | $ | 9,801 | $ | — | $ | 9,801 | $ | — | |||||||||||||||||||||||||||||||
Deferred compensation liability | $ | 6,558 | $ | 6,558 | $ | — | $ | — | $ | 8,001 | $ | 8,001 | $ | — | $ | — |
September 30, 2021 | December 31, 2020 | |||||||||||||||||||||||||||||||
Fair Value | Level 1 | Level 2 | Level 3 | Fair Value | Level 1 | Level 2 | Level 3 | |||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||||||||
Assets held in rabbi trust | $ | 11,056 | $ | 0 | $ | 11,056 | $ | 0 | $ | 10,295 | $ | 0 | $ | 10,295 | $ | 0 | ||||||||||||||||
Cash equivalents (1) : | ||||||||||||||||||||||||||||||||
Commercial paper | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 9,399 | $ | 0 | $ | 9,399 | $ | 0 | ||||||||||||||||
Money market funds | 223,678 | 223,678 | 0 | 0 | 158,271 | 158,271 | 0 | 0 | ||||||||||||||||||||||||
$ | 223,678 | $ | 223,678 | $ | 0 | $ | 0 | $ | 167,670 | $ | 158,271 | $ | 9,399 | $ | 0 | |||||||||||||||||
Marketable debt securities, available-for-sale: | ||||||||||||||||||||||||||||||||
Short-term investments: | ||||||||||||||||||||||||||||||||
U.S. treasuries | $ | 19,991 | $ | 19,991 | $ | 0 | $ | 0 | $ | 75,970 | $ | 75,970 | $ | 0 | $ | 0 | ||||||||||||||||
U.S. government sponsored entities | 0 | 0 | 0 | 0 | 32,447 | 0 | 32,447 | 0 | ||||||||||||||||||||||||
Corporate debt | 96,911 | 0 | 96,911 | 0 | 49,841 | 0 | 49,841 | 0 | ||||||||||||||||||||||||
$ | 116,902 | $ | 19,991 | $ | 96,911 | $ | 0 | $ | 158,258 | $ | 75,970 | $ | 82,288 | $ | 0 | |||||||||||||||||
Long-term investments: | ||||||||||||||||||||||||||||||||
U.S. treasuries | $ | 87,057 | $ | 87,057 | $ | 0 | $ | 0 | $ | 3,641 | $ | 3,641 | $ | 0 | $ | 0 | ||||||||||||||||
U.S. government sponsored entities | 822 | 0 | 822 | 0 | 1,152 | 0 | 1,152 | 0 | ||||||||||||||||||||||||
Corporate debt | 35,234 | 0 | 35,234 | 0 | 36,287 | 0 | 36,287 | 0 | ||||||||||||||||||||||||
ABS and other | 7,389 | 0 | 7,389 | 0 | 6,693 | 0 | 6,693 | 0 | ||||||||||||||||||||||||
$ | 130,502 | $ | 87,057 | $ | 43,445 | $ | 0 | $ | 47,773 | $ | 3,641 | $ | 44,132 | $ | 0 | |||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||||||||
Contingent consideration | $ | 8,098 | $ | 0 | $ | 0 | $ | 8,098 | $ | 5,572 | $ | 0 | $ | 0 | $ | 5,572 | ||||||||||||||||
Deferred consideration | $ | 11,227 | $ | 0 | $ | 11,227 | $ | 0 | $ | 15,248 | $ | 0 | $ | 15,248 | $ | 0 | ||||||||||||||||
Deferred compensation liability | $ | 7,962 | $ | 7,962 | $ | 0 | $ | 0 | $ | 8,287 | $ | 8,287 | $ | 0 | $ | 0 | ||||||||||||||||
(1) | Included in cash and cash equivalents on the accompanying condensed consolidated balance sheets. |
Nine Months Ended September 30, | |||||||||||
2022 | 2021 | ||||||||||
Beginning balance | $ | 9,312 | $ | 5,572 | |||||||
Contingent consideration in connection with acquisitions | — | (100) | |||||||||
Change in fair value of contingent consideration | (248) | 3,246 | |||||||||
Payments of contingent consideration | (1,040) | (620) | |||||||||
Ending balance | $ | 8,024 | $ | 8,098 |
Nine Months Ended September 30, | ||||||||
2021 | 2020 | |||||||
Beginning balance | $ | 5,572 | $ | 3,387 | ||||
Contingent consideration in connection with acquisitions (1) | (100 | ) | 1,800 | |||||
Change in fair value of contingent consideration | 3,246 | 134 | ||||||
Payments of contingent consideration | (620 | ) | (638 | ) | ||||
Ending balance | $ | 8,098 | $ | 4,683 | ||||
Fair Value at September 30, 2022 | Valuation Technique | Unobservable inputs | Range (Weighted Average)(1) | ||||||||||||||||||||
Contingent consideration | $ | 8,024 | Discounted cash flow | Expected life of cash flows | 0.7-5.1 years (2.8 years) | ||||||||||||||||||
Discount rate | 6.3%-6.9% (6.7%) | ||||||||||||||||||||||
Probability of achievement | 0.0%-100.0% (96.3%) | ||||||||||||||||||||||
Fair Value at December 31, 2021 | Valuation Technique | Unobservable inputs | Range (Weighted Average)(1) | ||||||||||||||||||||
Contingent consideration | $ | 9,312 | Discounted cash flow | Expected life of cash flows | 1.4-5.8 years (3.4 years) | ||||||||||||||||||
Discount rate | 2.2%-3.5% (2.9%) | ||||||||||||||||||||||
Probability of achievement | 29.0%-100.0% (95.2%) |
Fair Value at September 30, 2021 | Valuation Technique | Unobservable inputs | Range (Weighted Average) (1) | |||||||||||||
Contingent consideration | $ | 8,098 | Discounted cash flow | Expected life of cash flows | 1.7-6.1 years (3.7 years) | |||||||||||
Discount rate | 1.8%-3.6% (2.8%) | |||||||||||||||
Probability of achievement | 26.9%-100.0% (94.9%) | |||||||||||||||
Fair Value at December 31, 2020 | Valuation Technique | Unobservable inputs | Range (Weighted Average) (1) | |||||||||||||
Contingent consideration | $ | 5,572 | Discounted cash flow | Expected life of cash flows | 2.4-6.8 years (4.4 years) | |||||||||||
Discount rate | 2.6%-4.3% (3.4%) | |||||||||||||||
Probability of achievement | 50.0%-100.0% (86.1%) |
(1) | Unobservable inputs were weighted by the relative fair value of the instruments. |
Fair Value at September 30, 2021 | Valuation Technique | Unobservable inputs | Range (Weighted Average) (1) | |||||||||||||
MSRs | $ | 2,351 | Discounted cash flow | Constant prepayment rates | 0.0%-20.0% (10.0%) | |||||||||||
Constant default rate | 0.3%-4.7 1.2%)% ( | |||||||||||||||
Loss severity | 26.2%-31.4% (28.0%) | |||||||||||||||
Discount rate | 10.0%-10.0% (10.0%) | |||||||||||||||
Fair Value at December 31, 2020 | Valuation Technique | Unobservable inputs | Range (Weighted Average) (1) | |||||||||||||
MSRs | $ | 2,135 | Discounted cash flow | Constant prepayment rates | 0.0%-20.0% (10.0%) | |||||||||||
Constant default rate | 0.3%-4.1 1.1%)% ( | |||||||||||||||
Loss severity | 26.2%-31.4% (28.0%) | |||||||||||||||
Discount rate | 10.0%-10.0% (10.0%) |
8. Stockholders’ Equity |
Shares | Weighted- Average Grant Date Fair Value Per Share | ||||||||||
Nonvested shares at December 31, 2021⁽¹⁾ | 980,936 | $ | 36.58 | ||||||||
Granted | 1,051,178 | 45.75 | |||||||||
Vested | (288,954) | 36.24 | |||||||||
Forfeited/canceled | (24,137) | 39.00 | |||||||||
Nonvested shares at September 30, 2022⁽¹⁾ | 1,719,023 | $ | 42.21 | ||||||||
Unrecognized stock-based compensation expense as of September 30, 2022 | $ | 63,294 | |||||||||
Unrecognized compensation expense is expected to be recognized over a weighted-average period (years) of approximately | 3.95 | ||||||||||
Weighted average remaining vesting period (years) as of September 30, 2022 | 3.95 |
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, 2020 (1) | 16,728 | 637,650 | 264,001 | 918,379 | $ | 33.73 | ||||||||||||||
Granted | 12,492 | 269,474 | 81,566 | 363,532 | $ | 38.74 | ||||||||||||||
Vested | (16,728 | ) | (163,758 | ) | (77,968 | ) | (258,454 | ) | $ | 31.93 | ||||||||||
Transferred | 0 | (9,057 | ) | 9,057 | 0 | $ | 34.49 | |||||||||||||
Forfeited/canceled | 0 | (25,470 | ) | (6,345 | ) | (31,815 | ) | $ | 33.06 | |||||||||||
Nonvested shares at September 30, 2021 (1) | 12,492 | 708,839 | 270,311 | 991,642 | $ | 35.52 | ||||||||||||||
Unrecognized stock-based compensation expense as of September 30, 2021 (2) | $ | 265 | $ | 22,090 | $ | 8,499 | $ | 30,854 | ||||||||||||
Weighted average remaining vesting period (years) as of September 30, 2021 | 0.59 | 3.60 | 3.44 | 3.53 | ||||||||||||||||
(1) | Nonvested RSUs will be settled through the issuance of new shares of common stock. |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
ESPP | $ | 66 | $ | 33 | $ | 151 | $ | 107 | |||||||||||||||
RSUs and RSAs | 4,478 | 2,670 | 12,524 | 7,546 | |||||||||||||||||||
$ | 4,544 | $ | 2,703 | $ | 12,675 | $ | 7,653 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
ESPP | $ | 33 | $ | 62 | $ | 107 | $ | 145 | ||||||||
RSAs – non-employee directors | 114 | 120 | 338 | 493 | ||||||||||||
RSUs – employees | 1,731 | 1,413 | 4,932 | 4,583 | ||||||||||||
RSUs – independent contractors | 825 | 788 | 2,276 | 2,330 | ||||||||||||
$ | 2,703 | $ | 2,383 | $ | 7,653 | $ | 7,551 | |||||||||
10. Income Taxes |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||||||||||||||||||||||||||
Amount | Rate | Amount | Rate | Amount | Rate | Amount | Rate | ||||||||||||||||||||||||||||||||||||||||
Income tax expense at the federal statutory rate | $ | 6,573 | 21.0 | % | $ | 9,627 | 21.0 | % | $ | 27,712 | 21.0 | % | $ | 23,052 | 21.0 | % | |||||||||||||||||||||||||||||||
State income tax expense, net of federal benefit | 1,707 | 5.5 | % | 2,111 | 4.6 | % | 6,129 | 4.6 | % | 5,157 | 4.7 | % | |||||||||||||||||||||||||||||||||||
(Windfall) shortfall tax benefits, net related to stock-based compensation | (54) | (0.2) | % | (443) | (1.0) | % | (2,118) | (1.6) | % | (522) | (0.5) | % | |||||||||||||||||||||||||||||||||||
Change in valuation allowance | 1,073 | 3.4 | % | 55 | 0.1 | % | 992 | 0.8 | % | 243 | 0.2 | % | |||||||||||||||||||||||||||||||||||
Permanent and other items (1) | 640 | 2.0 | % | 571 | 1.3 | % | 2,936 | 2.2 | % | 1,374 | 1.3 | % | |||||||||||||||||||||||||||||||||||
$ | 9,939 | 31.7 | % | $ | 11,921 | 26.0 | % | $ | 35,651 | 27.0 | % | $ | 29,304 | 26.7 | % |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||||||||||||||||||
Amount | Rate | Amount | Rate | Amount | Rate | Amount | Rate | |||||||||||||||||||||||||
Income tax expense at the federal statutory rate | $ | 9,627 | 21.0 | % | $ | 1,671 | 21.0 | % | $ | 23,052 | 21.0 | % | $ | 5,689 | 21.0 | % | ||||||||||||||||
State income tax expense, net of federal benefit | 2,111 | 4.6 | % | 453 | 5.7 | % | 5,157 | 4.7 | % | 1,403 | 5.2 | % | ||||||||||||||||||||
(Windfall) shortfall tax benefits, net related to stock-based compensation | (443 | ) | (1.0 | )% | 130 | 1.6 | % | (522 | ) | (0.5 | )% | 203 | 0.7 | % | ||||||||||||||||||
Change in valuation allowance | 55 | 0.1 | % | 134 | 1.7 | % | 243 | 0.2 | % | 594 | 2.2 | % | ||||||||||||||||||||
Permanent and other items (1) | 571 | 1.3 | % | (472 | ) | (5.9 | )% | 1,374 | 1.3 | % | (14 | ) | 0 | |||||||||||||||||||
$ | 11,921 | 26.0 | % | $ | 1,916 | 24.1 | % | $ | 29,304 | 26.7 | % | $ | 7,875 | 29.1 | % | |||||||||||||||||
(1) | Permanent items relate principally to compensation charges, qualified transportation fringe benefits and meals and entertainment. |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Numerator (Basic and Diluted): | |||||||||||||||||||||||
Net income | $ | 21,362 | $ | 33,924 | $ | 96,313 | $ | 80,468 | |||||||||||||||
Change in value for stock settled consideration | (12) | (2) | (50) | 8 | |||||||||||||||||||
Adjusted net income | $ | 21,350 | $ | 33,922 | $ | 96,263 | $ | 80,476 | |||||||||||||||
Denominator: | |||||||||||||||||||||||
Basic | |||||||||||||||||||||||
Weighted average common shares issued and outstanding | 39,983 | 39,634 | 39,881 | 39,539 | |||||||||||||||||||
Deduct: Unvested RSAs (1) | (12) | (13) | (12) | (14) | |||||||||||||||||||
Add: Fully vested DSUs (2) | 115 | 319 | 169 | 334 | |||||||||||||||||||
Weighted average common shares outstanding | 40,086 | 39,940 | 40,038 | 39,859 | |||||||||||||||||||
Basic earnings per common share | $ | 0.53 | $ | 0.85 | $ | 2.40 | $ | 2.02 | |||||||||||||||
Diluted | |||||||||||||||||||||||
Weighted average common shares outstanding from above | 40,086 | 39,940 | 40,038 | 39,859 | |||||||||||||||||||
Add: Dilutive effect of RSUs, RSAs & ESPP | 131 | 188 | 235 | 176 | |||||||||||||||||||
Add: Contingently issuable shares(3) | 85 | 113 | 85 | 113 | |||||||||||||||||||
Weighted average common shares outstanding | 40,302 | 40,241 | 40,358 | 40,148 | |||||||||||||||||||
Diluted earnings per common share | $ | 0.53 | $ | 0.84 | $ | 2.39 | $ | 2.00 | |||||||||||||||
Antidilutive shares excluded from diluted earnings per common share(4) | 1,046 | 112 | 1,041 | 363 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
Numerator (Basic and Diluted): | ||||||||||||||||
Net income | $ | 33,924 | $ | 6,040 | $ | 80,468 | $ | 19,216 | ||||||||
Change in value for stock settled consideration | (2 | ) | 0 | 8 | 0 | |||||||||||
Adjusted net income | $ | 33,922 | $ | 6,040 | $ | 80,476 | $ | 19,216 | ||||||||
Denominator: | ||||||||||||||||
Basic | ||||||||||||||||
Weighted average common shares issued and outstanding | 39,634 | 39,357 | 39,539 | 39,293 | ||||||||||||
Deduct: Unvested RSAs (1) | (13 | ) | (18 | ) | (14 | ) | (18 | ) | ||||||||
Add: Fully vested DSUs (2) | 319 | 342 | 334 | 342 | ||||||||||||
Weighted average common shares outstanding | 39,940 | 39,681 | 39,859 | 39,617 | ||||||||||||
Basic earnings per common share | $ | 0.85 | $ | 0.15 | $ | 2.02 | $ | 0.49 | ||||||||
Diluted | ||||||||||||||||
Weighted average common shares outstanding from above | 39,940 | 39,681 | 39,859 | 39,617 | ||||||||||||
Add: Dilutive effect of RSUs, RSAs & ESPP | 188 | 46 | 176 | 59 | ||||||||||||
Add: Contingently issuable shares (3) | 113 | 0 | 113 | 0 | ||||||||||||
Weighted average common shares outstanding | 40,241 | 39,727 | 40,148 | 39,676 | ||||||||||||
Diluted earnings per common share | $ | 0.84 | $ | 0.15 | $ | 2.00 | $ | 0.48 | ||||||||
Antidilutive shares excluded from diluted earnings per common share (4) | 112 | 696 | 363 | 719 | ||||||||||||
12. Commitments and Contingencies |
Three Months Ended September 30, | ||||||||||||||||||||||||||||||||||||
2021 | 2020 | Change | ||||||||||||||||||||||||||||||||||
Real Estate Brokerage | Number | Volume | Revenues | Number | Volume | Revenues | Number | Volume | Revenues | |||||||||||||||||||||||||||
(in millions) | (in thousands) | (in millions) | (in thousands) | (in millions) | (in thousands) | |||||||||||||||||||||||||||||||
<$1 million | 267 | $ | 183 | $ | 7,419 | 241 | $ | 156 | $ | 6,290 | 26 | $ | 27 | $ | 1,129 | |||||||||||||||||||||
Private client market ($1 - <$10 million) | 1,894 | 6,296 | 183,033 | 1,168 | 3,592 | 97,856 | 726 | 2,704 | 85,177 | |||||||||||||||||||||||||||
Middle market ($10 - <$20 million) | 136 | 1,940 | 35,353 | 70 | 945 | 17,643 | 66 | 995 | 17,710 | |||||||||||||||||||||||||||
Larger transaction market ( ³ $20 million) | 159 | 8,088 | 73,954 | 48 | 2,302 | 19,055 | 111 | 5,786 | 54,899 | |||||||||||||||||||||||||||
2,456 | $ | 16,507 | $ | 299,759 | 1,527 | $ | 6,995 | $ | 140,844 | 929 | $ | 9,512 | $ | 158,915 | ||||||||||||||||||||||
Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||
2021 | 2020 | Change | ||||||||||||||||||||||||||||||||||
Real Estate Brokerage | Number | Volume | Revenues | Number | Volume | Revenues | Number | Volume | Revenues | |||||||||||||||||||||||||||
(in millions) | (in thousands) | (in millions) | (in thousands) | (in millions) | (in thousands) | |||||||||||||||||||||||||||||||
<$1 million | 791 | $ | 532 | $ | 21,175 | 649 | $ | 410 | $ | 16,550 | 142 | $ | 122 | $ | 4,625 | |||||||||||||||||||||
Private client market ($1 - <$10 million) | 4,861 | 15,639 | 446,592 | 3,203 | 10,207 | 282,937 | 1,658 | 5,432 | 163,655 | |||||||||||||||||||||||||||
Middle market ($10 - <$20 million) | 370 | 5,141 | 97,699 | 204 | 2,785 | 51,902 | 166 | 2,356 | 45,797 | |||||||||||||||||||||||||||
Larger transaction market ( ³ $20 million) | 352 | 17,619 | 149,992 | 161 | 7,459 | 64,655 | 191 | 10,160 | 85,337 | |||||||||||||||||||||||||||
6,374 | $ | 38,931 | $ | 715,458 | 4,217 | $ | 20,861 | $ | 416,044 | 2,157 | $ | 18,070 | $ | 299,414 | ||||||||||||||||||||||
Three Months Ended September 30, | |||||||||||||||||||||||||||||||||||||||||||||||||||||
2022 | 2021 | Change | |||||||||||||||||||||||||||||||||||||||||||||||||||
Real Estate Brokerage | Number | Volume | Revenues | Number | Volume | Revenues | Number | Volume | Revenues | ||||||||||||||||||||||||||||||||||||||||||||
(in millions) | (in thousands) | (in millions) | (in thousands) | (in millions) | (in thousands) | ||||||||||||||||||||||||||||||||||||||||||||||||
<$1 million | 243 | $ | 154 | $ | 7,252 | 267 | $ | 183 | $ | 7,419 | (24) | $ | (29) | $ | (167) | ||||||||||||||||||||||||||||||||||||||
Private Client Market ($1 – <$10 million) | 1,658 | 5,885 | 165,534 | 1,894 | 6,296 | 183,033 | (236) | (411) | (17,499) | ||||||||||||||||||||||||||||||||||||||||||||
Middle Market ($10 – <$20 million) | 188 | 2,527 | 46,901 | 136 | 1,940 | 35,353 | 52 | 587 | 11,548 | ||||||||||||||||||||||||||||||||||||||||||||
Larger Transaction Market (≥$20 million) | 157 | 9,360 | 73,202 | 159 | 8,088 | 73,954 | (2) | 1,272 | (752) | ||||||||||||||||||||||||||||||||||||||||||||
2,246 | $ | 17,926 | $ | 292,889 | 2,456 | $ | 16,507 | $ | 299,759 | (210) | $ | 1,419 | $ | (6,870) |
Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||||||||||||||||||||||
2022 | 2021 | Change | |||||||||||||||||||||||||||||||||||||||||||||||||||
Real Estate Brokerage | Number | Volume | Revenues | Number | Volume | Revenues | Number | Volume | Revenues | ||||||||||||||||||||||||||||||||||||||||||||
(in millions) | (in thousands) | (in millions) | (in thousands) | (in millions) | (in thousands) | ||||||||||||||||||||||||||||||||||||||||||||||||
<$1 million | 728 | $ | 450 | $ | 19,711 | 791 | $ | 532 | $ | 21,175 | (63) | $ | (82) | $ | (1,464) | ||||||||||||||||||||||||||||||||||||||
Private Client Market ($1 – <$10 million) | 5,285 | 18,929 | 536,433 | 4,861 | 15,639 | 446,592 | 424 | 3,290 | 89,841 | ||||||||||||||||||||||||||||||||||||||||||||
Middle Market ($10 – <$20 million) | 581 | 7,849 | 150,117 | 370 | 5,141 | 97,699 | 211 | 2,708 | 52,418 | ||||||||||||||||||||||||||||||||||||||||||||
Larger Transaction Market (≥$20 million) | 474 | 27,771 | 228,222 | 352 | 17,619 | 149,992 | 122 | 10,152 | 78,230 | ||||||||||||||||||||||||||||||||||||||||||||
7,068 | $ | 54,999 | $ | 934,483 | 6,374 | $ | 38,931 | $ | 715,458 | 694 | $ | 16,068 | $ | 219,025 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
Real Estate Brokerage | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
Average Number of Investment Sales Professionals | 1,792 | 1,909 | 1,823 | 1,934 | |||||||||||||||||||
Average Number of Transactions per Investment Sales Professional | 1.25 | 1.29 | 3.88 | 3.30 | |||||||||||||||||||
Average Commission per Transaction | $ | 130,405 | $ | 122,052 | $ | 132,213 | $ | 112,246 | |||||||||||||||
Average Commission Rate | 1.63 | % | 1.82 | % | 1.70 | % | 1.84 | % | |||||||||||||||
Average Transaction Size (in thousands) | $ | 7,981 | $ | 6,721 | $ | 7,781 | $ | 6,108 | |||||||||||||||
Total Number of Transactions | 2,246 | 2,456 | 7,068 | 6,374 | |||||||||||||||||||
Total Sales Volume (in millions) | $ | 17,926 | $ | 16,507 | $ | 54,999 | $ | 38,931 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
Financing (1) | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
Average Number of Financing Professionals | 87 | 86 | 86 | 86 | |||||||||||||||||||
Average Number of Transactions per Financing Professional | 5.95 | 6.98 | 20.17 | 20.67 | |||||||||||||||||||
Average Fee per Transaction | $ | 44,751 | $ | 42,319 | $ | 44,363 | $ | 36,126 | |||||||||||||||
Average Fee Rate | 0.70 | % | 0.77 | % | 0.74 | % | 0.82 | % | |||||||||||||||
Average Transaction Size (in thousands) | $ | 6,350 | $ | 5,503 | $ | 6,021 | $ | 4,390 | |||||||||||||||
Total Number of Transactions | 518 | 600 | 1,735 | 1,778 | |||||||||||||||||||
Total Financing Volume (in millions) | $ | 3,289 | $ | 3,302 | $ | 10,447 | $ | 7,806 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
Real Estate Brokerage | 2021 | 2020 | 2021 | 2020 | ||||||||||||
Average Number of Investment Sales Professionals | 1,909 | 1,917 | 1,934 | 1,911 | ||||||||||||
Average Number of Transactions per Investment Sales Professional | 1.29 | 0.80 | 3.30 | 2.21 | ||||||||||||
Average Commission per Transaction | $ | 122,052 | $ | 92,236 | $ | 112,246 | $ | 98,659 | ||||||||
Average Commission Rate | 1.82 | % | 2.01 | % | 1.84 | % | 1.99 | % | ||||||||
Average Transaction Size (in thousands) | $ | 6,721 | $ | 4,581 | $ | 6,108 | $ | 4,947 | ||||||||
Total Number of Transactions | 2,456 | 1,527 | 6,374 | 4,217 | ||||||||||||
Total Sales Volume (in millions) | $ | 16,507 | $ | 6,995 | $ | 38,931 | $ | 20,861 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
Financing (1) | 2021 | 2020 | 2021 | 2020 | ||||||||||||
Average Number of Financing Professionals | 86 | 82 | 86 | 86 | ||||||||||||
Average Number of Transactions per Financing Professional | 6.98 | 5.39 | 20.67 | 15.13 | ||||||||||||
Average Fee per Transaction | $ | 42,319 | $ | 33,531 | $ | 36,126 | $ | 31,607 | ||||||||
Average Fee Rate | 0.77 | % | 0.88 | % | 0.82 | % | 0.89 | % | ||||||||
Average Transaction Size (in thousands) | $ | 5,503 | $ | 3,828 | $ | 4,390 | $ | 3,533 | ||||||||
Total Number of Transactions | 600 | 442 | 1,778 | 1,301 | ||||||||||||
Total Financing Volume (in millions) | $ | 3,302 | $ | 1,692 | $ | 7,806 | $ | 4,597 |
Three Months Ended September 30, 2022 | Percentage of Revenue | Three Months Ended September 30, 2021 | Percentage of Revenue | Change | |||||||||||||||||||||||||||||||
Dollar | Percentage | ||||||||||||||||||||||||||||||||||
Revenues: | |||||||||||||||||||||||||||||||||||
Real estate brokerage commissions | $ | 292,889 | 90.4 | % | $ | 299,759 | 90.2 | % | $ | (6,870) | -2.3 | % | (2.3) | % | |||||||||||||||||||||
Financing fees | 28,099 | 8.7 | 29,391 | 8.8 | (1,292) | -4.4 | % | (4.4) | % | ||||||||||||||||||||||||||
Other revenues | 2,852 | 0.9 | 3,233 | 1.0 | (381) | -11.8 | % | (11.8) | % | ||||||||||||||||||||||||||
Total revenues | 323,840 | 100 | 332,383 | 100 | (8,543) | -2.6 | % | (2.6) | % | ||||||||||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||||||||||||||
Cost of services | 217,360 | 67.1 | 219,194 | 65.9 | (1,834) | -0.8 | % | (0.8) | % | ||||||||||||||||||||||||||
Selling, general and administrative | 73,004 | 22.6 | 64,673 | 19.5 | 8,331 | 12.9 | % | 12.9 | % | ||||||||||||||||||||||||||
Depreciation and amortization | 2,924 | 0.9 | 2,850 | 0.9 | 74 | 2.6 | % | 2.6 | % | ||||||||||||||||||||||||||
Total operating expenses | 293,288 | 90.6 | 286,717 | 86.3 | 6,571 | 2.3 | % | 2.3 | % | ||||||||||||||||||||||||||
Operating income | 30,552 | 9.4 | 45,666 | 13.7 | (15,114) | -33.1 | % | (33.1) | % | ||||||||||||||||||||||||||
Other income, net | 978 | 0.3 | 323 | 0.1 | 655 | 202.8 | % | 202.8 | % | ||||||||||||||||||||||||||
Interest expense | (229) | 0.0 | (144) | 0.0 | (85) | 59.0 | % | 59.0 | % | ||||||||||||||||||||||||||
Income before provision for income taxes | 31,301 | 9.7 | 45,845 | 13.8 | (14,544) | -31.7 | % | (31.7) | % | ||||||||||||||||||||||||||
Provision for income taxes | 9,939 | 3.1 | 11,921 | 3.6 | (1,982) | -16.6 | % | (16.6) | % | ||||||||||||||||||||||||||
Net income | $ | 21,362 | 6.6 | % | $ | 33,924 | 10.2 | % | $ | (12,562) | -37.0 | % | (37.0) | % | |||||||||||||||||||||
Adjusted EBITDA (1) | $ | 36,633 | 11.3 | % | $ | 50,985 | 15.3 | % | $ | (14,352) | -28.1 | % | (28.1) | % |
Three Months Ended September 30, 2021 | Percentage of Revenue | Three Months Ended September 30, 2020 | Percentage of Revenue | Change | ||||||||||||||||||||
Dollar | Percentage | |||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||
Real estate brokerage commissions | $ | 299,759 | 90.2 | % | $ | 140,844 | 88.8 | % | $ | 158,915 | 112.8 | % | ||||||||||||
Financing fees | 29,391 | 8.8 | 15,620 | 9.9 | 13,771 | 88.2 | % | |||||||||||||||||
Other revenues | 3,233 | 1.0 | 2,111 | 1.3 | 1,122 | 53.2 | % | |||||||||||||||||
Total revenues | 332,383 | 100.0 | 158,575 | 100.0 | 173,808 | 109.6 | % | |||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||
Cost of services | 219,194 | 65.9 | 99,707 | 62.9 | 119,487 | 119.8 | % | |||||||||||||||||
Selling, general and administrative | 64,673 | 19.5 | 49,722 | 31.4 | 14,951 | 30.1 | % | |||||||||||||||||
Depreciation and amortization | 2,850 | 0.9 | 2,606 | 1.6 | 244 | 9.4 | % | |||||||||||||||||
Total operating expenses | 286,717 | 86.3 | 152,035 | 95.9 | 134,682 | 88.6 | % | |||||||||||||||||
Operating income | 45,666 | 13.7 | 6,540 | 4.1 | 39,126 | nm | (2) | |||||||||||||||||
Other income (expense), net | 323 | 0.1 | 1,615 | 1.0 | (1,292 | ) | (80.0 | )% | ||||||||||||||||
Interest expense | (144 | ) | 0.0 | (199 | ) | (0.1 | ) | 55 | (27.6 | )% | ||||||||||||||
Income before provision for income taxes | 45,845 | 13.8 | 7,956 | 5.0 | 37,889 | nm | (2) | |||||||||||||||||
Provision for income taxes | 11,921 | 3.6 | 1,916 | 1.2 | 10,005 | nm | (2) | |||||||||||||||||
Net income | $ | 33,924 | 10.2 | % | $ | 6,040 | 3.8 | % | $ | 27,884 | nm | (2) | ||||||||||||
Adjusted EBITDA (1) | $ | 50,985 | 15.3 | % | $ | 12,229 | 7.7 | % | $ | 38,756 | nm | (2) | ||||||||||||
Nine Months Ended September 30, 2022 | Percentage of Revenue | Nine Months Ended September 30, 2021 | Percentage of Revenue | Change | |||||||||||||||||||||||||||||||
Dollar | Percentage | ||||||||||||||||||||||||||||||||||
Revenues: | |||||||||||||||||||||||||||||||||||
Real estate brokerage commissions | $ | 934,483 | 89.9 | % | $ | 715,458 | 89.3 | % | $ | 219,025 | 30.6 | % | |||||||||||||||||||||||
Financing fees | 91,363 | 8.8 | 75,448 | 9.4 | 15,915 | 21.1 | % | ||||||||||||||||||||||||||||
Other revenues | 13,415 | 1.3 | 10,400 | 1.3 | 3,015 | 29.0 | % | ||||||||||||||||||||||||||||
Total revenues | 1,039,261 | 100.0 | 801,306 | 100.0 | 237,955 | 29.7 | % | ||||||||||||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||||||||||||||
Cost of services | 670,170 | 64.5 | 506,882 | 63.3 | 163,288 | 32.2 | % | ||||||||||||||||||||||||||||
Selling, general and administrative | 227,380 | 21.9 | 178,147 | 22.2 | 49,233 | 27.6 | % | ||||||||||||||||||||||||||||
Depreciation and amortization | 10,167 | 0.9 | 8,806 | 1.1 | 1,361 | 15.5 | % | ||||||||||||||||||||||||||||
Total operating expenses | 907,717 | 87.3 | 693,835 | 86.6 | 213,882 | 30.8 | % | ||||||||||||||||||||||||||||
Operating income | 131,544 | 12.7 | 107,471 | 13.4 | 24,073 | 22.4 | % | ||||||||||||||||||||||||||||
Other income, net | 967 | 0.1 | 2,737 | 0.3 | (1,770) | (64.7) | % | ||||||||||||||||||||||||||||
Interest expense | (547) | (0.1) | (436) | (0.1) | (111) | 25.5 | % | ||||||||||||||||||||||||||||
Income before provision for income taxes | 131,964 | 12.7 | 109,772 | 13.6 | 22,192 | 20.2 | % | ||||||||||||||||||||||||||||
Provision for income taxes | 35,651 | 3.4 | 29,304 | 3.7 | 6,347 | 21.7 | % | ||||||||||||||||||||||||||||
Net income | $ | 96,313 | 9.3 | % | $ | 80,468 | 9.9 | % | $ | 15,845 | 19.7 | % | |||||||||||||||||||||||
Adjusted EBITDA | $ | 151,394 | 14.6 | % | $ | 124,790 | 15.6 | % | $ | 26,604 | 21.3 | % |
Nine Months Ended September 30, 2021 | Percentage of | Nine Months Ended | Percentage of | Change | ||||||||||||||||||||
Revenue | September 30, 2020 | Revenue | Dollar | Percentage | ||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||
Real estate brokerage commissions | $ | 715,458 | 89.3 | % | $ | 416,044 | 89.1 | % | $ | 299,414 | 72.0 | % | ||||||||||||
Financing fees | 75,448 | 9.4 | 43,674 | 9.4 | 31,774 | 72.8 | % | |||||||||||||||||
Other revenues | 10,400 | 1.3 | 6,974 | 1.5 | 3,426 | 49.1 | % | |||||||||||||||||
Total revenues | 801,306 | 100.0 | 466,692 | 100.0 | 334,614 | 71.7 | % | |||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||
Cost of services | 506,882 | 63.3 | 287,207 | 61.5 | 219,675 | 76.5 | % | |||||||||||||||||
Selling, general and administrative | 178,147 | 22.2 | 148,101 | 31.7 | 30,046 | 20.3 | % | |||||||||||||||||
Depreciation and amortization | 8,806 | 1.1 | 7,822 | 1.8 | 984 | 12.6 | % | |||||||||||||||||
Total operating expenses | 693,835 | 86.6 | 443,130 | 95.0 | 250,705 | 56.6 | % | |||||||||||||||||
Operating income | 107,471 | 13.4 | 23,562 | 5.0 | 83,909 | nm | (2) | |||||||||||||||||
Other income (expense), net | 2,737 | 0.3 | 4,224 | 0.9 | (1,487 | ) | (35.2 | )% | ||||||||||||||||
Interest expense | (436 | ) | (0.1 | ) | (695 | ) | (0.1 | ) | 259 | (37.3 | )% | |||||||||||||
Income before provision for income taxes | 109,772 | 13.6 | 27,091 | 5.8 | 82,681 | nm | (2) | |||||||||||||||||
Provision for income taxes | 29,304 | 3.7 | 7,875 | 1.7 | 21,429 | nm | (2) | |||||||||||||||||
Net income | $ | 80,468 | 9.9 | % | $ | 19,216 | 4.1 | % | $ | 61,252 | nm | (2) | ||||||||||||
Adjusted EBITDA (1) | $ | 124,790 | 15.6 | % | $ | 38,757 | 8.3 | % | $ | 86,033 | nm | (2) | ||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Net income | $ | 21,362 | $ | 33,924 | $ | 96,313 | $ | 80,468 | |||||||||||||||
Adjustments: | |||||||||||||||||||||||
Interest income and other (1) | (2,365) | (503) | (3,959) | (1,470) | |||||||||||||||||||
Interest expense | 229 | 144 | 547 | 436 | |||||||||||||||||||
Provision for income taxes | 9,939 | 11,921 | 35,651 | 29,304 | |||||||||||||||||||
Depreciation and amortization | 2,924 | 2,850 | 10,167 | 8,806 | |||||||||||||||||||
Stock-based compensation | 4,544 | 2,703 | 12,675 | 7,653 | |||||||||||||||||||
Non-cash MSR activity (2) | — | (54) | — | (407) | |||||||||||||||||||
Adjusted EBITDA | $ | 36,633 | $ | 50,985 | $ | 151,394 | $ | 124,790 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
Net income | $ | 33,924 | $ | 6,040 | $ | 80,468 | $ | 19,216 | ||||||||
Adjustments: | ||||||||||||||||
Interest income and other (1) | (503 | ) | (889 | ) | (1,470 | ) | (4,090 | ) | ||||||||
Interest expense | 144 | 199 | 436 | 695 | ||||||||||||
Provision for income taxes | 11,921 | 1,916 | 29,304 | 7,875 | ||||||||||||
Depreciation and amortization | 2,850 | 2,606 | 8,806 | 7,822 | ||||||||||||
Stock-based compensation | 2,703 | 2,383 | 7,653 | 7,551 | ||||||||||||
Non-cash MSR activity(2) | (54 | ) | (26 | ) | (407 | ) | (312 | ) | ||||||||
Adjusted EBITDA (3) | $ | 50,985 | $ | 12,229 | $ | 124,790 | $ | 38,757 | ||||||||
Nine Months Ended September 30, | ||||||||
2021 | 2020 | |||||||
Net cash provided by (used in) operating activities | $ | 99,593 | $ | (28,266 | ) | |||
Net cash used in investing activities | (55,782 | ) | (21,381 | ) | ||||
Net cash used in financing activities | (6,081 | ) | (9,819 | ) | ||||
Effect of currency exchange rate changes on cash and cash equivalents | 125 | (92 | ) | |||||
Net increase (decrease) in cash and cash equivalents | 37,855 | (59,558 | ) | |||||
Cash and cash equivalents at beginning of period | 243,152 | 232,670 | ||||||
Cash and cash equivalents at end of period | $ | 281,007 | $ | 173,112 | ||||
Nine Months Ended September 30, | |||||||||||
2022 | 2021 | ||||||||||
Net cash flows (used in) provided by operating activities | $ | (11,775) | $ | 99,593 | |||||||
Net cash flows used in investing activities | (31,291) | (55,782) | |||||||||
Net cash flows used in financing activities | (67,774) | (6,081) | |||||||||
Effect of currency exchange rate changes on cash and cash equivalents | (436) | 125 | |||||||||
Net (decrease) increase in cash and cash equivalents | (111,276) | 37,855 | |||||||||
Cash and cash equivalents at beginning of period | 382,140 | 243,152 | |||||||||
Cash and cash equivalents at end of period | $ | 270,864 | $ | 281,007 |
Change in Interest Rates | Approximate Change in Fair Value of Investments Increase (Decrease) | |||||||
2% Decrease ….................. | $ | 5,576 | ||||||
1% Decrease ….................. | $ | 2,788 | ||||||
1% Increase ….................. | $ | (2,787) | ||||||
2% Increase ….................. | $ | (5,572) |
Change in Interest Rates | Approximate Change in Fair Value of Investments Increase (Decrease) | |||
2% Decrease | $ | 2,604 | ||
1% Decrease | $ | 1,788 | ||
1% Increase | $ | (3,299 | ) | |
2% Increase | $ | (6,597 | ) |
Periods | Total Number of Shares Purchased(1) | Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs | ||||||||||||||||||||||
July 1, 2022 - July 31, 2022 | — | $ | — | — | $ | — | ||||||||||||||||||||
August 1, 2022 - August 31, 2022 | — | $ | — | — | $ | — | ||||||||||||||||||||
September 1, 2022 - September 30, 2022 | 226,795 | $ | 33.41 | 226,795 | $ | 62,422,637 | ||||||||||||||||||||
Total | 226,795 | 226,795 | $ | 62,422,637 | ||||||||||||||||||||||
Exhibit No. | Description | |||||||
10.1+ | ||||||||
10.3+ | ||||||||
31.1* | ||||||||
31.2* | ||||||||
32.1** | ||||||||
101* | The following financial statements from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, | |||||||
104* | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
Marcus & Millichap, Inc | ||||||||||||||||||
Date: | November | 4, 2022 | By: | |||||||||||||||
Hessam Nadji President and Chief Executive Officer (Principal Executive Officer) | ||||||||||||||||||
Date: | November 4, 2022 | By: | /s/ Steven F. DeGennaro | |||||||||||||||
Steven F. DeGennaro Chief Financial Officer (Principal Financial Officer) |