• Service Revenue: $40.9 million, an 11% increase over Q1 2024.
• Adjusted EBITDA: $5.3 million, a 14% increase over Q1 2024.
• Unrestricted Cash: $30.8 million at the end of the quarter.
• Long-term Debt: Reduced by over $60 million to $172.5 million.
• GAAP Interest Expense: $4.9 million, down from $9.5 million in Q1 2024.
• Servicer and Real Estate Segment Revenue: $32.9 million, a 13% increase over Q1 2024.
• Servicer and Real Estate Segment Adjusted EBITDA: $12 million, a 15% increase over Q1 2024.
• Origination Segment Revenue: $8 million, a 3% increase over Q1 2024.
• Corporate Segment Adjusted EBITDA Loss: $7.2 million, a $900,000 increase over Q1 2024.
• Foreclosure Starts: Increased by 25% in Q1 2025 compared to Q1 2024.

• Warning! GuruFocus has detected 5 Warning Signs with ASPS.

Release Date: May 01, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Altisource Portfolio Solutions SA reported a 11% year-over-year increase in total company service revenue, reaching $40.9 million.
• Adjusted EBITDA grew by 14% to $5.3 million, outpacing service revenue growth due to scale benefits and a favorable revenue mix.
• The company significantly strengthened its balance sheet by reducing long-term debt by over $60 million and lowering interest expenses.
• The Servicer and Real Estate segment saw a 13% increase in service revenue, driven by the launch and growth of the renovation business and stronger foreclosure starts.
• Altisource Portfolio Solutions SA won new business estimated to generate $4.7 million in annual service revenue, indicating strong sales performance and future growth potential.

Negative Points

• The Corporate segment's adjusted EBITDA loss increased by $900,000 or 15% to $7.2 million, primarily due to non-recurring benefits in the previous year.
• Despite growth in certain areas, the origination segment's adjusted EBITDA remained flat, reflecting challenges in the origination market.
• Foreclosure sales for the first quarter of 2025 declined by 2% compared to last year and are 53% lower than the same period in 2019.
• The origination market continues to face challenges, with first quarter 2025 mortgage origination volume relatively flat compared to the previous year.
• The company faces potential risks from a weakening U.S. economy, which could impact loan delinquencies and foreclosure activities.

Q & A Highlights

Q: Can you provide an overview of Altisource's financial performance for the first quarter of 2025? A: William Shepro, Chairman and CEO, highlighted that Altisource achieved an 11% increase in service revenue to $40.9 million and a 14% rise in adjusted EBITDA to $5.3 million compared to the first quarter of 2024. This growth was driven by the ramp-up of the renovation business, stronger foreclosure starts, and sales wins.

Q: How has the recent exchange and maturity extension transaction impacted Altisource's financial position? A: William Shepro explained that the transaction significantly strengthened the balance sheet by reducing long-term debt by over $60 million and lowering annual cash interest costs by approximately $18 million. This positions the company on a stronger financial footing.

Q: What are the key drivers behind the growth in the Servicer and Real Estate segment? A: The segment saw a 13% increase in service revenue to $32.9 million, primarily due to the launch and growth of the renovation business, stronger foreclosure starts, and sales wins. Adjusted EBITDA for the segment increased by 15% to $12 million.

Q: How is Altisource addressing challenges in the origination market? A: Despite a challenging origination market, Altisource focused on helping Lenders One members save money and compete better, resulting in an estimated $4.7 million in new business for the first quarter. The weighted average sales pipeline was $11.9 million.

Q: What are the potential factors that could influence foreclosure starts and sales in the future? A: William Shepro noted several factors, including rising delinquency rates for FHA mortgages, updates to FHA servicer guidelines, and potential economic pressures such as tariff changes and the resumption of federal student loan collections, which could drive higher foreclosure starts and sales.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.