Financial Data and Key Metrics Changes - The company ended the quarter with $71 million in cash, significantly reducing cash burn compared to the first quarter, and anticipates ending the year with between $60 million and $65 million of cash [8][21] - The origination segment experienced a year-over-year revenue decline in line with a market-wide decline in origination volume, with a forecasted 41% decline in origination volume for 2022 [11][12] Business Line Data and Key Metrics Changes - The servicer and real estate segment saw revenue and adjusted EBITDA growth, benefiting from the restart of the default business, with adjusted EBITDA margins improving [9][10] - The average weighted sales pipeline in the origination business increased by 54% to $32 million, indicating a strong sales performance despite market challenges [7][13] Market Data and Key Metrics Changes - Foreclosure initiations in the second quarter were still 47% below pre-COVID 2019 levels, indicating a slow recovery in the default market [10][26] - Mortgage delinquency rates are at near historical lows, but rising interest rates and inflation may lead to increased delinquency rates, potentially expanding the addressable market for default services by $700 million for every 1% increase in 30-day delinquency rates [11] Company Strategy and Development Direction - The company is focused on growing its sales pipeline and has made progress in onboarding new business, with an estimated $8.4 million of annualized revenue on a stabilized basis [10] - The company anticipates that its countercyclical default business could benefit from a deteriorating economic environment, positioning itself for long-term growth [11][14] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about generating positive EBITDA and cash flow in 2023, depending on the recovery of the default market [21][22] - The company is learning how long it takes to convert its sales pipeline into revenue, with expectations of modest improvements in the origination business in the third quarter and more significant improvements in the fourth quarter [32][33] Other Important Information - The company has undertaken cost-saving initiatives, resulting in a 28% reduction in corporate costs compared to the second quarter of 2021 [7] - The company is experiencing increased interest in its cost-saving solutions from Lenders One members as origination volumes decline [12][18] Q&A Session Summary Question: Are there geographical differences in foreclosure timing? - Management noted no significant geographical differences in foreclosure timing, with new foreclosure initiations still down 47% from last year [16] Question: Is there an opportunity to gain market share in a softer origination environment? - Management indicated that members are now focused on cost savings, which presents an opportunity for the company to gain market share [17] Question: Can you elaborate on cash flow trajectory and breakeven expectations? - Management expects to end the year with $60 million to $65 million in cash and anticipates generating positive EBITDA and cash flow in 2023 [21][22] Question: What is the company's share of foreclosure initiations compared to pre-COVID levels? - Management stated that their inventory is currently one-third of a competitor's, indicating a potential market share position [25] Question: What is the expected cadence of REO flow and foreclosure starts? - Management expects stabilization of new foreclosures initiated this year by mid-2023, with significant revenue opportunities as the market recovers [29][30] Question: How are new product launches performing in the origination business? - Management reported that new products in the verification and credit reporting space are gaining traction, with expectations for modest improvements in the third quarter and more significant improvements in the fourth quarter [32][33]

Financial Performance - Altisource's Q2 2022 service revenue was $376 million, a 14% decrease compared to Q2 2021's $440 million[21] - The company's loss from operations in Q2 2022 was $105 million, a 28% improvement from the $146 million loss in Q2 2021[21] - Adjusted EBITDA for Q2 2022 was a loss of $66 million, a 2% improvement compared to the $67 million loss in Q2 2021[21] - Altisource ended Q2 2022 with $71 million in cash and cash equivalents[6] Segment Performance - Servicer and Real Estate segment revenue grew by 8% in Q2 2022 compared to Q1 2022[8] - Servicer and Real Estate segment Adjusted EBITDA grew by 10% in Q2 2022 compared to Q1 2022[10] - The average weighted sales pipeline in the Origination business grew to $32 million, a 54% increase since last quarter[6, 16] Market Trends and Outlook - Industry-wide origination volume is projected to decline 41% in 2022 compared to 2021[16] - U S foreclosure initiations increased 451% in the first half of 2022 compared to the first half of 2021, but were still 42% below the same pre-pandemic period in 2019[15] - Altisource anticipates REO inventory to reach stabilized levels in mid-2023[15] - The company estimates that for every 1% increase in the 30+ day delinquency rate, the addressable market for its default-related services increases by approximately $700 million[15]

Financial Performance - Total revenue for Q2 2022 was $40,421, a decrease of 12% compared to $46,041 in Q2 2021[12] - Gross profit for Q2 2022 was $4,066, significantly improved from $2,004 in Q2 2021[12] - Net loss for Q2 2022 was $15,321, compared to a net loss of $18,654 in Q2 2021, indicating a reduction in losses[12] - Basic loss per share for Q2 2022 was $(0.96), an improvement from $(1.17) in Q2 2021[12] - Net loss for June 2022 was $27.35 million, a decrease from $40.57 million in June 2021, indicating an improvement in financial performance[20] - Total revenue for the six months ended June 30, 2022, was $79,937 thousand, down 17% from $96,506 thousand in the prior year[111] - Service revenue for the six months ended June 30, 2022, was $75,401 thousand, a decrease of 18% from $92,046 thousand for the same period in 2021[107] - Gross profit for the six months ended June 30, 2022, was $9.7 million, a 320% increase compared to $2.3 million for the same period in 2021[183] - Net loss attributable to Altisource for the six months ended June 30, 2022, was $(27.7) million, a 32% improvement compared to $(40.5) million for the same period in 2021[183] Assets and Liabilities - Total current assets decreased to $110,703 as of June 30, 2022, down from $138,004 as of December 31, 2021[10] - Total liabilities decreased to $224,839 as of June 30, 2022, compared to $257,808 as of December 31, 2021[10] - Total assets decreased to $224,839 as of June 30, 2022, from $257,808 as of December 31, 2021[10] - Retained earnings decreased to $145,879 as of June 30, 2022, down from $186,592 as of December 31, 2021[10] - Long-term debt increased slightly to $244,458 as of June 30, 2022, from $243,637 as of December 31, 2021[10] - Total non-current liabilities amounted to $18.764 million, a decrease from $19.266 million as of December 31, 2021[79] Cash Flow and Investments - Cash used in operating activities for June 2022 was $25.78 million, compared to $22.78 million in June 2021, reflecting increased operational costs[20] - Total cash, cash equivalents, and restricted cash at the end of June 2022 was $74.30 million, up from $40.15 million at the end of June 2021, showing improved liquidity[20] - The company had a net cash outflow from investing activities of $0.29 million in June 2022, down from a net inflow of $2.31 million in June 2021, indicating reduced investment activity[20] - Proceeds from the sale of business in June 2022 were $0.35 million, significantly lower than $3.00 million in June 2021, reflecting a decline in divestiture activities[20] Expenses - Selling, general and administrative expenses for Q2 2022 were $14,525, down from $16,556 in Q2 2021[12] - Total selling, general and administrative expenses for the three months ended June 30, 2022, were $14.525 million, a decrease of 12.3% from $16.556 million in the same period of 2021[118] - Compensation and benefits accounted for $6.296 million in the three months ended June 30, 2022, unchanged from the same period in 2021[118] - Selling, General and Administrative (SG&A) expenses for the six months ended June 30, 2022, were $28.5 million, a decrease of 20% compared to $35.4 million for the same period in 2021[194] Revenue Sources - For the six months ended June 30, 2022, revenue from Ocwen was $29.9 million, a decrease from $31.2 million for the same period in 2021, with second quarter revenue of $16.2 million compared to $14.2 million in 2021[31] - Ocwen accounted for 37% of total revenue for the six months ended June 30, 2022, and 40% for the second quarter of 2022[30] - For the six months ended June 30, 2022, revenue from NRZ was $1.8 million, slightly up from $1.7 million in 2021, with second quarter revenue of $1.0 million compared to $0.9 million in 2021[37] - The company recognized additional revenue of $5.1 million from Ocwen for the six months ended June 30, 2022, compared to $5.5 million in 2021[31] Share Repurchase and Compensation - As of June 30, 2022, approximately 2.4 million shares remain available for repurchase under the share repurchase program, with a limit of $72 million under Luxembourg law[86] - The company has a maximum limit of approximately $420 million for share repurchases under the Credit Agreement, which may restrict repurchases under certain conditions[86] - Share-based compensation expense for June 2022 was $2.58 million, an increase from $2.08 million in June 2021, indicating higher employee compensation costs[20] - Estimated unrecognized compensation costs related to share-based awards amounted to $5.4 million, expected to be recognized over a remaining service period of approximately 1.51 years[89] Segment Performance - The company has restructured its reportable segments into Servicer and Real Estate, and Origination, effective January 1, 2022, to better align with its operational management[141] - Total revenue for the Servicer and Real Estate segment was $31,947 thousand for the three months ended June 30, 2022, compared to $30,150 thousand for the same period in 2021, representing a growth of 5.95%[145] - The Origination segment experienced a 40% decrease in service revenue for the six months ended June 30, 2022, compared to the same period in 2021[183] - The Servicer and Real Estate segment saw a 4% decrease in service revenue for the six months ended June 30, 2022, compared to the same period in 2021[183] Market Conditions and Future Outlook - The company anticipates an increase in default-related referrals following the expiration of foreclosure and eviction moratoriums, which may impact future performance[154] - The company is positioned to gain market share as customers consolidate services or outsource historically in-house functions[166] - Altisource aims to grow its Lenders One membership and increase customer adoption of solutions to enhance its origination business[172] - Altisource's strategy includes diversifying its customer base and revenue streams to mitigate risks associated with reliance on key customers like Ocwen[177]

Financial Data and Key Metrics Changes - The company generated service revenue of $37.8 million in Q1 2022, marking the first quarter of sequential revenue growth in 11 quarters [6] - The adjusted EBITDA loss for Q1 2022 was $4.1 million, representing a $4.7 million improvement over Q4 2021 [6] - The company ended the quarter with $80 million in cash and anticipates ending the year with between $65 million and $70 million [7][8] Business Line Data and Key Metrics Changes - In the Servicer and Real Estate segment, service revenue grew by 18% compared to Q4 2021, and adjusted EBITDA grew by 54% [9] - The origination business experienced a decline in service revenue compared to Q4 2021, but at a lower rate than the overall market decline [15][17] Market Data and Key Metrics Changes - The origination market is forecasted to decline by 36% in 2022, but the company expects to outperform the market due to new product launches and higher product adoption [14][15] - The unweighted annualized sales pipeline for the Servicer and Real Estate segment is currently $90 million, translating to an estimated $31 million to $39 million in annual revenue [13] Company Strategy and Development Direction - The company is focused on executing its strategic plan, with expectations of returning to growth and creating substantial value for customers and shareholders [18] - The Servicer and Real Estate segment is expected to benefit from market tailwinds and a strong sales pipeline, while the origination business is positioned for long-term growth [18] Management's Comments on Operating Environment and Future Outlook - Management noted that the default market is beginning to recover, which is expected to positively impact revenue growth [6][9] - The company anticipates year-over-year revenue growth in the second half of 2022, with expectations of revenue growth beginning in Q3 and Q4 [30][44] Other Important Information - The company is now reporting its two core businesses, Servicer and Real Estate and Origination, as separate segments for better visibility [8] - The company has a $155 million unweighted annualized sales pipeline, which could translate into $50 million to $62 million in revenue on a stabilized basis [6] Q&A Session Summary Question: How long will the increase in REO referrals last? - Management indicated that significant increases in REO referrals are expected to stabilize around mid-2023, as the foreclosure process can take 6 months to several years [19][20] Question: What is the average revenue per unit for foreclosure versus REO sales? - Management stated that they generally keep 2% to 5% of proceeds from foreclosure auctions and earn a buyer's premium or act as a real estate agent for REO sales, which can vary [23] Question: Will the company see year-over-year revenue growth in the second half? - Management confirmed expectations for year-over-year revenue growth in Q3 and Q4, anticipating overall revenue for the year to exceed last year's figures [30] Question: What is the expected cash usage for the year? - Management indicated that they expect cash usage to be around $15 million to $20 million, with an anticipated year-end cash balance of $65 million to $70 million [31][32]

Altisource Portfolio Solutions S.A. Q4 2021 Earnings Conference Call March 3, 2022 8:30 AM ET Company Participants William Shepro - Chairman and Chief Executive Officer, Board of Directors Michelle Esterman - Chief Financial Officer Conference Call Participants Mike Grondahl - Northland Securities Raj Sharma - B. Riley Operator Ladies and gentlemen, thank you for standing by. And welcome to the Altisource Fourth Quarter 2021 Earnings Conference Call. [Operator Instructions] Please be advised that today’s c ...

Financial Highlights - Altisource ended 2021 with $98.1 million in cash and cash equivalents, a 68% increase from December 31, 2020[5] - Net debt decreased by 21% to $149.1 million as of December 31, 2021, compared to December 31, 2020[5] - Q4 2021 net income attributable to Altisource was $70.6 million, benefiting from the sale of Pointillist[7] - Altisource received $102.2 million at the closing of the Pointillist sale and recognized a post-tax gain of $88.9 million[7] - The company anticipates receiving an additional $3.8 million in 2022 related to the Pointillist sale[7] Business Performance & Outlook - Altisource anticipates positive Adjusted EBITDA for the second half of 2022, driven by expected revenue growth and cost reduction initiatives[5] - The company expects quarterly year-over-year revenue growth beginning in the third quarter of 2022[5] - Lenders One membership grew by 11 members in Q4 2021, reaching a total of 251 members[9] - Despite an anticipated 34% decline in origination volume in 2022, the Origination business expects double-digit revenue growth[9] - For the first two months of 2022, trustee referrals grew 57%, pre-foreclosure title referrals grew 22%, and Hubzu referrals grew 217% compared to the same period in 2021[10] Default Business & Pandemic Recovery - The company believes the default market is entering the early stages of recovery following the expiration of foreclosure moratoriums and loss mitigation measures[10] - Fourth quarter Hubzu referrals were 158% higher than the same quarter in 2020, and 30% higher in 2021 compared to 2020[10]

Financial Data and Key Metrics Changes - The company anticipates generating positive cash flow in the second half of 2022 as it returns to revenue growth on a significantly reduced cost structure [5][12] - Cash costs, excluding outside fees and services for the nine months ended September 30, were $40.7 million, which is 26% lower than the same period in 2020 [13] Business Line Data and Key Metrics Changes - The default business revenue could grow on a stabilized basis to between $227 million and $296 million, depending on delinquency levels [9] - Third quarter Hubzu referrals were 107% higher than the same quarter in 2020, indicating a positive trend in the default business [8] - The origination business is expected to see 40% to 50% revenue growth despite a forecasted 33% decline in origination volume in 2022 [11] Market Data and Key Metrics Changes - Foreclosure initiations in the third quarter were 28% higher than the second quarter, but still more than 85% lower than pre-pandemic levels [7] - The single-family investor market is more than 7 times larger than the REO sales market, with an estimated 1 million investment homes sold per year compared to 140,000 foreclosures in 2019 [9] Company Strategy and Development Direction - The company is executing on its strategic plan in the originations business, which is expected to be a significant driver for growth [5] - The anticipated sale of the equity interest in Pointillist is expected to strengthen the balance sheet by adding an estimated $100 million in cash at closing [6][14] Management's Comments on Operating Environment and Future Outlook - Management believes the default offerings are poised for significant revenue and earnings growth as the operating environment normalizes post-pandemic [5] - The company is optimistic about growth opportunities in both the origination and default businesses in 2022 [15] Other Important Information - The sale of Pointillist is expected to close before the end of the year, generating a pre- and post-tax gain of $107 million [14] - The company is focused on reducing costs further, with expectations to lower facilities costs by approximately $1.5 million to $2 million on a run rate basis by the end of next year [30] Q&A Session Summary Question: What are the big drivers behind the expected 40% to 50% growth in origination revenue? - The company expects growth from the launch of the tri-merge credit product, a suite of employment verification solutions, and the preferred investor program [17] Question: What level of revenues is needed to generate cash flow? - The company anticipates meaningful revenue growth next year, with expectations for improvement in revenue and EBITDA as the year progresses [18] Question: Has the outlook for the default services business changed? - The change in outlook is primarily due to current delinquency rates being lower than previously anticipated, affecting potential service revenues [24] Question: Are there opportunities for new sales in the default services business? - The company expects to grow not only with existing clients but also to add new clients as the market opens up [28] Question: When is the Pointillist sale expected to close? - The sale is expected to close by the end of the fourth quarter, with no feedback received on the filed HSR applications so far [34]