Altisource Portfolio Solutions S.A.(ASPS) - 2022 Q1 - Earnings Call Transcript

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]