Altisource: Altisource Announces First Quarter 2025 Financial Results

LUXEMBOURG, May 01, 2025 (GLOBE NEWSWIRE) -- Altisource Portfolio Solutions S.A. ("Altisource" or the "Company") ASPS , a leading provider and marketplace for the real estate and mortgage industries, today reported financial results for the first quarter 2025. "We are pleased with our first quarter performance as we continue to drive year-over-year and sequential Service revenue and Adjusted EBITDA (1) growth primarily from the ramp of our Renovation Business, stronger foreclosure starts and sales wins. Compared to the first quarter of last year, we grew total Company service revenue by 11% to $40.9 million and Adjusted EBITDA (1) by 14% to $5.3 million. Adjusted EBITDA (1) growth outpaced Service revenue growth from scale benefits and favorable revenue mix. In February 2025, we closed on an exchange and maturity extension transaction with our lenders, significantly strengthening our balance sheet and reducing interest expense," said Chairman and Chief Executive Officer William B. Shepro. Mr. Shepro further commented, "To support longer term growth, we are focusing on accelerating the growth of certain of our businesses that we believe have tailwinds. Should loan delinquencies, foreclosure starts and foreclosure sales increase, we believe we are well positioned to benefit from stronger revenue and Adjusted EBITDA (1) growth in our largest and most profitable countercyclical businesses." First Quarter 2025 Highlights (2) Company, Corporate and Financial : First quarter Service revenue of $40.9 million was $4.0 million, or 10.8%, higher than the same quarter of 2024, marking the highest quarterly Service revenue since the third quarter of 2021, primarily from stronger foreclosure starts, sales wins and the ramp of our Renovation business First quarter Adjusted earnings before interest, tax, depreciation and amortization ("Adjusted EBITDA") (1) of $5.3 million was $0.6 million, or 13.6%, higher than the same quarter of 2024, marking the highest quarterly Adjusted EBITDA (1) since the third quarter of 2020 First quarter Adjusted EBITDA (1) margin of 12.9% was stronger than the 12.6% Adjusted EBITDA (1) margin in the same quarter of 2024 First quarter Adjusted EBITDA (1) loss in Corporate and Others of $(7.2) million was $0.9 million higher than the same quarter of 2024 primarily due to certain non-recurring benefits in the first quarter of 2024. Ended the quarter with $30.8 million of cash and cash equivalents On February 19, 2025, the Company executed and closed an exchange transaction with 100% of lenders under the Company's senior secured term loans whereby the lenders exchanged the Company's senior secured term loans with an outstanding balance of $232.8 million for a $160.0 million new first lien loan and the issuance of approximately 58.2 million common shares of Altisource (the "Debt Exchange Transaction"); the new first lien loan is comprised of a $110.0 million term loan and a $50.0 million non-interest bearing exit fee which is reduced on a pro-rata basis with the repayment of the term loan. In connection with the Debt Exchange Transaction, the Company expensed $3.0 million relating to fees paid to advisors and others In connection with the Debt Exchange Transaction, the Company issued transferable warrants to holders as of February 14, 2025 of the Company's (i) common stock, (ii) restricted share units and (iii) outstanding penny warrants, to purchase approximately 114.5 million shares of Altisource common stock for $1.20 per share (the "Stakeholder Warrants"); the Stakeholder Warrants provide the Stakeholders with the ability to purchase approximately 3.25 shares of Altisource common stock for each share of or right to common stock held (5) On February 19, 2025, Altisource also executed and closed on a $12.5 million super senior credit facility to fund transaction costs related to the Debt Exchange Transaction and for general corporate purposes (the "Super Senior Facility Transaction") On a pro forma basis, the Debt Exchange Transaction and the Super Senior Facility Transaction (a) reduce annual cash and payment-in-kind interest by approximately $18 million to $13 million, (b) reduce annual GAAP interest expense by $23 million to approximately $9.5 million and (c) extend the maturity dates of the Company's senior secured debt Business and Industry : Improved Adjusted EBITDA (1) in the Servicer and Real Estate and Origination segments (together "Business Segments") to $12.5 million, or 30.5% of Service revenue, from $10.9 million, or 29.5% of Service revenue, in the same quarter of 2024 primarily from Service revenue growth Generated sales wins which we estimate represent potential annualized Service revenue on a stabilized basis of $4.7 million for the Servicer and Real Estate segment and $4.7 million for the Origination segment Ended the quarter with a weighted average sales pipeline between $34 million and $42 million of estimated potential Service revenue on a stabilized basis based upon forecasted probability of closing (comprising of between $23 million and $29 million in the Servicer and Real Estate segment and between $11 million and $13 million in the Origination segment) Industrywide foreclosure initiations were 25% higher for the three months ended March 31, 2025 compared to the same period in 2024 (and 18% lower than the same pre-COVID-19 period in 2019) (3) Industrywide foreclosure sales were 2% lower for the three months ended March 31, 2025 compared to the same period in 2024 (and 53% lower than the same pre-COVID-19 period in 2019) (3) Industrywide mortgage origination volume decreased by 1% for the three months ended March 31, 2025 compared to the same period in 2024, comprised of an 11% decline in purchase origination and a 25% increase in refinancing origination (4) First Quarter 2025 Financial Results Service revenue of $40.9 million Income from operations of $3.2 million Loss before income taxes and non-controlling interests of $(4.5) million Net loss attributable to Altisource of $(5.3) million Adjusted EBITDA (1) of $5.3 million First Quarter 2025 Results Compared to the First Quarter 2024 (unaudited): (in thousands, except per share data) First Quarter 2025 First Quarter 2024 % Change Service revenue $ 40,895 $ 36,891 11 Revenue 43,439 39,469 10 Gross profit 13,325 12,304 8 Income (loss) from operations 3,245 (548 ) N/M Adjusted operating income (1) 5,199 2,958 76 Loss before income taxes and non-controlling interests (4,529 ) (8,435 ) 46 Pretax loss attributable to Altisource (1) (4,602 ) (8,476 ) 46 Adjusted pretax income (loss) attributable to Altisource (1) 332 (4,970 ) 107 Adjusted EBITDA (1) 5,262 4,632 14 Net loss attributable to Altisource (5,344 ) (9,198 ) 42 Adjusted net loss attributable to Altisource (1) (144 ) (5,598 ) 97 Diluted loss per share (0.09 ) (0.33 ) 73 Adjusted diluted loss per share (1) 0.00 (0.20 ) 100 Net cash used in operating activities (4,972 ) (2,237 ) (122 ) Net cash used in operating activities less additions to premises and equipment (1) (4,997 ) (2,237 ) (123 ) Margins: Gross profit / service revenue 33 % 33 % Adjusted EBITDA (1) / service revenue 13 % 13 % N/M - not meaningful. First quarter 2025 loss before income taxes and non-controlling interests includes $3.0 million of Debt Exchange Transaction expenses (no comparative amount for the first quarter 2024). ________________________ (1) This is a non-GAAP measure that is defined and reconciled to the corresponding GAAP measure herein (2) Applies to the first quarter 2025 unless otherwise indicated (3) Based on data from ICE's Mortgage Monitor and First Look reports with data through March 2025 (4) Based on estimated number of loans originated as reported by the Mortgage Bankers Association's Mortgage Finance Forecast dated April 11, 2025 (5) Stakeholder Warrants are subject to the previously disclosed vesting requirements Forward-Looking Statements This press release contains forward-looking statements that involve a number of risks and uncertainties. These forward-looking statements include all statements that are not historical fact, including statements that relate to, among other things, future events or our future performance or financial condition. These statements may be identified by words such as "anticipate," "intend," "expect," "may," "could," "should," "would," "plan," "estimate," "seek," "believe," "potential" or "continue" or the negative of these terms and comparable terminology. Such statements are based on expectations as to the future and are not statements of historical fact. Furthermore, forward-looking statements are not guarantees of future performance and involve a number of assumptions, risks and uncertainties that could cause actual results to differ materially. Important factors that could cause actual results to differ materially from those suggested by the forward-looking statements include, but are not limited to, the risks discussed in Item 1A of Part I "Risk Factors" in our Form 10-K filed with the Securities and Exchange Commission ("SEC") on March 31, 2025 and our Form 10-Q filed with the SEC on May 1, 2025. We caution you not to place undue reliance on these forward-looking statements which reflect our view only as of the date of this report. We are under no obligation (and expressly disclaim any obligation) to update or alter any forward-looking statements contained herein to reflect any change in our expectations with regard thereto or change in events, conditions or circumstances on which any such statement is based. The risks and uncertainties to which forward-looking statements are subject include, but are not limited to, risks related to customer concentration, the timing of the anticipated increase in default related referrals following the expiration of foreclosure and eviction moratoriums and forbearance programs and any other delays occasioned by government, investor or servicer actions, the use and success of our products and services, our ability