Financial Performance - Third quarter Service revenue was $39.7 million, an increase of $1.5 million or 4% compared to the same quarter of 2024[7] - Loss before income taxes and non-controlling interests improved by $6.8 million to $(1.7) million compared to the same quarter of 2024[7] - Net loss attributable to Altisource was $(2.4) million, a $7.0 million improvement compared to the same quarter of 2024[7] - Adjusted EBITDA for the third quarter was $3.6 million, roughly flat compared to the same quarter of 2024[7] - Adjusted EBITDA margin decreased to 9.1% from 9.5% in the same quarter of 2024, primarily due to product mix[7] - Adjusted diluted earnings per share improved to $0.10 from $(1.83) in the same quarter of 2024, a 105% increase[8] - Service revenue for Q3 2025 was $39.666 million, up from $38.150 million in Q3 2024, representing a growth of 3.96%[14] - Total revenue for the nine months ended September 30, 2025, reached $128.635 million, compared to $119.121 million for the same period in 2024, an increase of 8.57%[14] - Gross profit for Q3 2025 was $11.347 million, a decrease from $12.070 million in Q3 2024, reflecting a decline of 6.00%[14] - Basic loss per share improved to $(0.22) in Q3 2025 from $(2.61) in Q3 2024[14] - The company reported net cash used in operating activities of $(4.560) million for the nine months ended September 30, 2025, compared to $(3.624) million for the same period in 2024[18] - Adjusted net income attributable to Altisource for the nine months ended September 30, 2025, was not explicitly stated but is a key measure for evaluating ongoing performance[22] - For the three months ended September 30, 2025, adjusted operating income was $2,663,000, compared to $3,419,000 for the same period in 2024, representing a decrease of 22.2%[29] - The net loss attributable to Altisource for the nine months ended September 30, 2025, was $8,842,000, an improvement from a net loss of $26,867,000 in the same period of 2024[29] - Adjusted EBITDA for the three months ended September 30, 2025, was $3,621,000, slightly down from $3,624,000 in 2024, while for the nine months it increased to $14,265,000 from $12,640,000[29] - The diluted loss per share for the three months ended September 30, 2025, was $(0.22), compared to $(2.61) in 2024, indicating a significant improvement[31] - The company reported a pretax loss attributable to Altisource of $(1,736,000) for the three months ended September 30, 2025, compared to $(8,553,000) in 2024, showing a reduction of 79.7%[29] - Total income from operations for the three months ended September 30, 2025, was $521,000, down from $1,105,000 in 2024, reflecting a decline of 52.8%[29] - The adjusted pretax income attributable to Altisource for the nine months ended September 30, 2025, was $4,431,000, compared to a loss of $(16,683,000) in 2024, marking a significant turnaround[29] Cash and Debt Management - The company ended the quarter with $28.6 million in cash and cash equivalents[7] - Cash and cash equivalents at the end of Q3 2025 were $28.598 million, slightly down from $29.811 million at the end of 2024[16] - Total current liabilities decreased significantly to $39.657 million in Q3 2025 from $271.273 million at the end of 2024, indicating improved financial stability[16] - The company issued equity in exchange for debt reduction amounting to $45.370 million, reflecting strategic financial management[20] - Net debt as of September 30, 2025, stood at $143,290 million after accounting for cash and cash equivalents of $28,598 million[35] Business Development - New business won during the quarter is estimated to represent $14.4 million of annual Service revenue on a stabilized basis[5] - The weighted average sales pipeline was estimated between $33.6 million and $42.0 million for potential service revenue on a stabilized basis[7] - Industrywide mortgage origination volume increased by 17% for the nine months ended September 30, 2025, compared to the same period in 2024[9] Expenses and Compensation - Share-based compensation expense for Q3 2025 was $1,308 million, compared to $859 million in Q3 2024, reflecting a 52% increase[33] - Cost of cost savings initiatives for Q3 2025 was $276 million, up from $185 million in Q3 2024, indicating a 49% increase[33] - The per diluted share impact of share-based compensation expense, net of tax, was $0.11 for Q3 2025, down from $0.20 in Q3 2024[33] - Debt exchange transaction expenses for Q3 2025 amounted to $194 million, with a per diluted share impact of $0.02[33] - The company incurred debt exchange transaction expenses of $194,000 for the three months ended September 30, 2025, and $3,646,000 for the nine months, impacting overall financial performance[29] Taxation - The company recognized a full valuation allowance on its net deferred tax assets in Luxembourg, resulting in an effective tax rate of close to 0% for 2024 and 2025[23] - The company reported a significant tax benefit from certain income tax-related items of $536 million for Q3 2025, compared to $616 million in Q3 2024[33]

Financial Performance - Revenue for Q3 2025 was $41.9 million, a 3.4% increase from $40.5 million in Q3 2024[10] - Gross profit for Q3 2025 was $11.3 million, compared to $12.1 million in Q3 2024, reflecting a decrease of 6%[10] - Net loss attributable to Altisource for Q3 2025 was $2.4 million, an improvement from a net loss of $9.4 million in Q3 2024[10] - For the nine months ended September 30, 2025, Altisource reported a net income of $9,062 thousand, compared to a net loss of $26,731 thousand for the same period in 2024[17] - The company reported a comprehensive loss of $2.4 million for Q3 2025, compared to a comprehensive loss of $9.4 million in Q3 2024[10] - Basic loss per share for Q3 2025 was $0.22, an improvement from a loss of $2.61 per share in Q3 2024[10] - Total revenue for the nine months ended September 30, 2025, reached $128.635 million, up 7.73% from $119.121 million in the same period of 2024[133] - Service revenue for Q3 2025 was $39.666 million, a 3.96% increase from $38.150 million in Q3 2024[131] Assets and Liabilities - Total current assets increased to $54.4 million as of September 30, 2025, up from $51.1 million at the end of 2024[8] - Total liabilities decreased significantly to $230.5 million as of December 31, 2024, from $39.7 million as of September 30, 2025[8] - Long-term debt stood at $191.3 million as of September 30, 2025, indicating a substantial financial obligation[8] - The accumulated deficit increased to $355.9 million as of September 30, 2025, compared to $260.0 million at the end of 2024[8] - Total assets decreased to $139.9 million as of September 30, 2025, down from $143.6 million at the end of 2024[8] - Total current liabilities decreased significantly to $39.7 million from $271.3 million at the end of 2024[8] Cash Flow and Financing - The company experienced a net cash used in operating activities of $4,560 thousand for the nine months ended September 30, 2025, compared to $3,624 thousand for the same period in 2024[17] - Cash, cash equivalents, and restricted cash at the end of the period were $32,478 thousand, a decrease from $31,226 thousand at the end of the same period in 2024[20] - Altisource's total cash flow from financing activities for the nine months ended September 30, 2025, was a net inflow of $4,637 thousand, compared to a net outflow of $566 thousand in 2024[17] - The company issued equity worth $45,370 thousand in exchange for debt reduction during the reporting period[19] Revenue Sources - Onity accounted for 42% and 43% of the company's total revenue for the three and nine months ended September 30, 2025, respectively, with revenue from Onity recognized at $55.5 million for the nine months ended September 30, 2025, compared to $52.6 million in 2024[36] - The company recognized revenue from Rithm of $3.3 million for the nine months ended September 30, 2025, up from $1.8 million in 2024[44] - Total revenue from servicer and real estate for Q3 2025 was $33.242 million, compared to $32.549 million in Q3 2024, indicating a growth of 2.13%[133] Expenses - Cost of revenue for Q3 2025 totaled $30.561 million, an increase of 7.74% from $28.461 million in Q3 2024[138] - Selling, general and administrative expenses for Q3 2025 were $10.826 million, slightly down from $10.965 million in Q3 2024[141] - Share-based compensation expense for the nine months ended September 30, 2025, was $3,066 thousand, down from $3,916 thousand in 2024[17] Tax and Compliance - The company recognized an income tax benefit of $15.1 million for the nine months ended September 30, 2025, compared to a provision of $(2.2) million for the same period in 2024[143] - The total amount of unrecognized tax benefits, including interest and penalties, was $3.5 million as of September 30, 2025, down from $19.2 million as of December 31, 2024[150] - The company has open tax years in the United States (2017 through 2023), India (2011 through 2024), and Luxembourg (2017 through 2023)[146] Shareholder Information - The company distributed 70.5 million Stakeholder Warrants to purchase approximately 14.3 million shares of common stock at $9.5998 per share on April 3, 2025[100] - As of September 30, 2025, there were 35,222,298 outstanding Stakeholder Warrants, with 7,156,372 shares issuable upon exercise[105] - The company has a share repurchase program authorized to purchase up to 0.4 million shares until May 16, 2028[116]

Core Viewpoint - Altisource Portfolio Solutions S.A. is set to report its third quarter 2025 earnings on October 23, 2025, with a press release and presentation available on its Investor Relations website [1][2]. Group 1: Earnings Report - The earnings report for the third quarter 2025 will be released on October 23, 2025 [1]. - A conference call to discuss the results will take place at 8:30 a.m. EDT on the same day [2]. - A replay of the conference call will be accessible approximately two hours after the call and will remain available for about 30 days [2]. Group 2: Company Overview - Altisource Portfolio Solutions S.A. operates as an integrated service provider and marketplace for the real estate and mortgage industries [3]. - The company combines operational excellence with innovative services and technologies to address the demands of changing markets [3].

Core Viewpoint - Altisource Portfolio Solutions S.A. (NASDAQ: ASPS) is currently rated as a "Strong Buy" due to its recovery and growth trajectory after past misdeeds [1] Company Performance - The company has successfully navigated a decade since its share price collapse, leading to improved profitability and growth under current management [1]

Core Insights - Altisource Portfolio Solutions S.A. (NASDAQ: ASPS) has seen its stock price more than double this year due to improved business performance [1] - Despite the recent rally, the stock remains 90% lower than its value five years ago, indicating a significant long-term decline [1] Company Performance - The stock has experienced a substantial increase in value this year, reflecting positive changes in business operations [1] - The current stock price is still significantly depressed compared to historical levels, suggesting potential concerns among investors regarding its long-term viability [1]

Core Insights - Equator, a SaaS platform for real estate transaction management, has added four prominent organizations, including Renovo Financial and HGF Management, to its customer base, indicating strong demand for its services [1][2] - The platform aims to enhance scalability and control across the property lifecycle, showcasing its evolution from default lifecycle management to broader asset management [3] - Equator is investing in AI-driven capabilities to improve property management efficiency and provide predictive insights, adapting to the rapidly changing real estate market [3] Company Overview - Equator is part of Altisource, which provides integrated services and technologies for the real estate and mortgage industries, focusing on operational excellence and innovative solutions [4][5] - The platform connects servicers, investors, agents, and vendors in a secure ecosystem, offering tools for property marketing, transaction management, and compliance [5]

Core Viewpoint - Altisource Portfolio Solutions reported a significant turnaround in Q2 2025, achieving positive net income primarily due to a tax benefit from reversing reserves related to Indian tax uncertainties, despite ongoing cash flow challenges [1][6]. Financial Performance - Revenue increased by 11% year-over-year to $43.3 million from $39.1 million in Q2 2024 [2]. - Net income (GAAP) rose to $16.6 million, a $24.9 million improvement from a loss of $8.3 million in the previous year [2]. - Adjusted EBITDA (non-GAAP) grew by 23% to $5.4 million compared to $4.4 million in Q2 2024 [2]. - Diluted EPS (GAAP) improved to $1.48 from a loss of $2.33 [2]. Business Overview and Strategy - Altisource specializes in services and technology for the mortgage, real estate, and loan origination markets, offering platforms like Equator and RentRange [3]. - The growth strategy focuses on strong client relationships, technology-enabled solutions, and effective debt management [4]. Revenue and Profitability Insights - Service revenue increased by $3.9 million year-over-year, with slight improvements in segment-level margins [5]. - Gross margin on service revenue decreased from 34% in Q2 2024 to 32% in Q2 2025 [5]. - The significant profit driver was an $18.5 million tax reserve reversal, which heavily influenced net income [6]. Debt Management - Long-term debt was reduced to $172.5 million from $232.8 million at the end of 2024, aided by debt restructuring efforts [7]. - Net debt at the end of the quarter was $142.2 million, expected to lower annual GAAP interest expense to approximately $9.5 million [7]. Cash Flow and Operational Challenges - Operating cash flow remained negative at ($0.3) million for the quarter and ($5.3) million for the first half of 2025 [8]. - Corporate segment losses offset improvements in core business lines, indicating ongoing cost discipline challenges [9]. Industry Context - The mortgage industry saw a 22% increase in foreclosure initiations compared to the same period in 2024, although volumes remain below pre-pandemic levels [10]. - Mortgage origination volumes rose by 14%, driven by a 58% increase in refinancing activity [10]. - Industry delinquencies remain low, constraining organic growth for foreclosure-related services [11]. Technology and Innovation - Technology remains a focus area, but no quantitative progress was reported on platforms like Equator or SaaS adoption metrics [12]. Regulatory Impact - The tax reversal in India removed significant uncertainty, positively impacting results, although regulatory factors continue to influence operations [13]. Future Outlook - Management did not provide explicit financial guidance but expects higher industry defaults and foreclosure volumes to benefit profitable business lines [14]. - A sales pipeline of potential annualized service revenue between $36 million and $44 million was noted, with most opportunities expected to materialize in 2026 and beyond [14]. - The company aims to monitor operating cash flow, sales pipeline conversion, and client concentration dynamics [15].

Financial Data and Key Metrics Changes - Total company service revenue increased by 11% to $40.8 million compared to the second quarter of last year [7] - Adjusted EBITDA grew by 23% to $5.4 million, driven by service revenue growth and cost discipline [7] - Net income attributable to Altisource improved to $16.6 million from a net loss of $8.3 million in the same quarter of 2024 [8] - Income before tax improved to $200,000 from a loss of $7.6 million in the second quarter of 2024 [8] - The corporate segment's adjusted EBITDA loss was $7.5 million, slightly higher than the previous year [14] Business Line Data and Key Metrics Changes - The servicer and real estate segment reported service revenue of $32 million, a 10% increase year-over-year [9] - Adjusted EBITDA for the servicer and real estate segment was $12 million, up 8% from the previous year, with a slight decline in margins due to revenue mix [10] - The origination segment's service revenue increased by 13% to $8.8 million, with adjusted EBITDA improving by 81% to $900,000 [11][12] Market Data and Key Metrics Changes - The residential mortgage delinquency rate remained low at 1.2% in May, with foreclosure starts increasing by 15% in April 2025 compared to the same period in 2024 [15] - Industry-wide origination unit volume increased by 27% in the second quarter compared to the same quarter last year [15] Company Strategy and Development Direction - The company is focusing on businesses with growth potential, including renovation, Granite Construction Risk Management, Lenders One, Hubzu Marketplace, and Foreclosure Trustee [13] - The success of these initiatives is not dependent on an increase in foreclosure starts or a growing residential loan origination market [14] - The company aims to maintain cost discipline while leveraging a strong sales pipeline to drive future growth [17] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's performance in a low delinquency environment and highlighted the potential for accelerated growth if loan delinquencies and foreclosure activities increase [17] - The company is well-positioned to benefit from stronger revenue and adjusted EBITDA growth in its countercyclical businesses [17] Other Important Information - The company ended the quarter with $30 million in unrestricted cash [8] - The estimated total weighted average sales pipeline for the real estate segment was $25.3 million [11] Q&A Session Summary Question: Inquiry about working capital build - Management indicated that the working capital activities were normal and there was nothing unusual in the quarter [20][21]

Financial Performance Highlights - Total Company Service revenue grew by 11% to $40.8 million compared to Q2 2024[19] - Total Company Adjusted EBITDA increased by 23% to $5.4 million compared to Q2 2024[19] - Servicer and Real Estate segment service revenue increased by 10% to $32.0 million[24] - Origination segment service revenue increased by 13% to $8.8 million[32] - Q2 2025 net income attributable to Altisource reflects an income tax benefit from the reversal of certain tax reserves related to India operations[19] Segment Performance - Servicer and Real Estate segment Adjusted EBITDA increased by 8% to $12.0 million, with margins declining slightly to 37.4% due to revenue mix[24] - Origination segment Adjusted EBITDA increased by 81% to $0.9 million, driven by stronger margins and service revenue growth[32] - Corporate Adjusted EBITDA loss was $7.5 million, $0.3 million higher than Q2 2024[40] Market Environment - Despite low delinquency rates, foreclosure starts increased by 15% in April and May 2025 compared to the same period in 2024, but were 29% lower than the same period in 2019[44] - Foreclosure sales in April and May 2025 were 10% higher than the same period in 2024 but were 47% lower than the same period in 2019[44] - Q2 2025 mortgage origination unit volume increased 27% compared to Q2 2024, with refinance activity increasing 89%[44]

Company Overview - Altisource Portfolio Solutions S.A. reported financial results for the second quarter of 2025, highlighting growth in service revenue, adjusted EBITDA, and net income compared to the same quarter in 2024 [1][2][5] - The company experienced a significant increase in net income attributable to Altisource, reaching $16.6 million, which is $24.9 million higher than the same quarter of 2024 [5][8] Financial Performance - Service revenue for the second quarter of 2025 was $40.8 million, an increase of $3.9 million or 11% compared to the second quarter of 2024 [5][7] - Adjusted EBITDA for the second quarter was $5.4 million, representing a 19% increase from the same quarter in 2024 [5][8] - Diluted earnings per share rose to $1.48, a significant increase of $3.81 compared to the same quarter of 2024 [5][8] Operational Highlights - The company ended the quarter with $30.0 million in cash and cash equivalents [5] - A share consolidation was executed at a ratio of 1-for-8, reducing the total number of issued and outstanding shares from 88,129,766 to 11,016,220 [5] - The adjusted EBITDA margin improved to 13.2%, up from 11.9% in the same quarter of 2024 [5] Industry Context - Industrywide foreclosure initiations increased by 22% for the five months ended May 31, 2025, compared to the same period in 2024 [5][8] - Mortgage origination volume across the industry rose by 14% for the six months ended June 30, 2025, driven by a 58% increase in refinancing origination [8] - The company is well-positioned to benefit from potential increases in loan delinquencies and foreclosure activities, which could enhance revenue and adjusted EBITDA growth in its countercyclical businesses [3][5]