ALTISOURCE PORTFOLIO SOLUTIONS
I NV E S T O R P R E S E NT A T I O N
N A S D A Q : A S P S
M A Y 2 0 2 4
DIS C LAI M ER
CAUTIONARY STATEMENT REGARDING FORWARD LOOKING STATEMENTS
This corporate presentation includes certain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, statements regarding the intent, belief or current expectations of Altisource Portfolio Solutions S.A. ("we," "us," "our," the "Company" or "Altisource") and our management team. These forward-looking statements involve known and unknown risks, uncertainties and other important factors that may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.
This presentation 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. 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 the COVID-19 pandemic, 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 to retain existing customers and attract new customers and the potential for expansion or changes in our customer relationships, technology disruptions, our compliance with applicable data requirements, our use of third party vendors and contractors, our ability to effectively manage potential conflicts of interest, macro-economic and industry specific conditions, our ability to effectively manage our regulatory and contractual obligations, the adequacy of our financial resources, including our sources of liquidity and ability to repay borrowings and comply with our Credit Agreement, including the financial and other covenants contained therein, as well as our ability to retain key executives or employees, behavior of customers, suppliers and/or competitors, technological developments, governmental regulations, taxes and policies.
The financial projections and scenarios contained in this presentation are expressly qualified as forward-looking statements and, as with other forward-looking statements, should not be unduly relied upon. Nothing in this presentation and our other SEC filings should be regarded as a representation by any person that these statements will be achieved, and the Company undertakes no obligation to update these statements as a result of a change in circumstances, new information or future events.
For additional information about factors that could cause actual results to differ materially from those described in the forward-looking statements, please refer to the Company's filings with the Securities and Exchange Commission, including the risk factors contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2023.
This corporate presentation shall not constitute an offer to sell, or a solicitation of an offer to buy, nor will there be any sale of these securities in any state or other jurisdiction in which such an offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or other jurisdiction.
NON-GAAP MEASURES
Adjusted earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA") and Adjusted EBITDA margin, which are presented elsewhere in this Presentation, are non-GAAP measures used by management, existing shareholders, potential shareholders and other users of our financial information to measure Altisource's performance and do not purport to be alternatives to net (loss) income attributable to Altisource, net (loss) income attributable to Altisource as a percentage of service revenue, income (loss) before income taxes and non-controlling interests, and income (loss) before income taxes and non-controlling interests as a percentage of service revenue as measures of Altisource's performance. We believe these measures are useful to management, existing shareholders, potential shareholders and other users of our financial information in evaluating operating profitability and cash flow generation more on a basis of continuing cost and cash flows as they exclude amortization expense related to acquisitions that occurred in prior periods and non-cashshare-based compensation, as well as the effect of more significant non-operational items from earnings and cash flows from operating activities. We believe these measures are useful in evaluating the effectiveness of our operations and underlying business trends in a manner that is consistent with management's evaluation of business performance. Furthermore, we believe the exclusion of more significant non-operational items enables comparability to prior period performance and trend analysis. It is management's intent to provide non-GAAP financial information to enhance the understanding of Altisource's GAAP financial information, and it should be considered by the reader in addition to, but not instead of, the financial statements prepared in accordance with GAAP. Each non-GAAP financial measure is presented along with the corresponding GAAP measure so as not to imply that more emphasis should be placed on the non-GAAP measure.
The non-GAAP financial information presented may be determined or calculated differently by other companies. The non-GAAP financial information presented should not be unduly relied upon.
These non-GAAP measures are presented as supplemental information and reconciled to the appropriate GAAP measures in the Appendix.
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© 2024 Altisource All Rights Reserved.
COMPANY HIGHLIGHTS
Altisource provides a comprehensive suite of solutions that support the residential default servicing,
real estate and origination lifecycles
- Attractive suite of solutions for loan servicers and originators
- Compelling Service revenue and Adjusted EBITDA1 growth catalysts include:
- Ramping sales wins
- A return to a normal default mortgage market
- Strong sales pipeline
- Increasing demand for Lenders One solutions
- A rise in delinquency rates
- Improving financial performance
- Adjusted EBITDA1 growth of over $30 million from 2021 to 2023
- Q1 2024 Adjusted EBITDA1 of $4.6 million represents best quarterly performance since Q3 2020
- If the mid-point of our 2024 guidance2 is achieved, Adjusted EBITDA1 will improve approximately $52 million, to $20 million, over a three-year period
- This is a non-GAAP measure reconciled and calculated in the Appendix. For a definition of Adjusted EBITDA, see page 23
- 2024 financial guidance includes an estimated Service revenue range of $155 million to $180 million and an estimated Adjusted EBITDA1 range of $17.5 million to $22.5 million.
Additional details are included on page 21 | 3 |
© 2024 Altisource All Rights Reserved. |
OVERVIEW OF ALTISOURCE
K E Y B U S I N E S S H I G H L I G H T S
S U I T E O F S O L U T I O N S
- Attractive suite of solutions
- Compelling growth catalysts
- Improving financial performance
Comprehensive suite of solutions that support the residential default servicing, real estate and origination lifecycles
LEND
Suite of solutions for small and mid-sized residential loan originators
K E Y F A C T S | BUY | |||
LUXEMBOURG | UNITED STATES | |||
~1,100 | buy | |||
Headquarters | ||||
INDIA | URUGUAY | Employees1 | ||
$148MM | $54MM | $251MM | ||
Market Cap3 | Enterprise Value4 | |||
Q1 2024 Annualized Service | NASDAQ | ASPS | ||
Revenue2 | Exchange | Ticker Symbol | ||
- Full time employees, excluding contractors, as of April 30, 2024
-
Annualized Service Revenue based on Q1 2024 Service revenue of $36.9 million. Service Revenue presented herein non-controlling interests
3 Market Capitalization ("Market Cap") equal to 27.0 million shares outstanding plus 1.5 million penny warrants multiplied 14, 2024. Note share count excludes out-of-the money options and RSUs
4 Enterprise Value ("EV") reflects Market Cap as of May 14, 2024 plus debt outstanding of $226.2 million less cash of $29.6 million as of March 31, 2024
SELL
Marketplace to sell homes
SERVICE / MANAGE
Suite of solutions for residential loan servicers and real estate investors
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© 2024 Altisource All Rights Reserved.
OVERVIEW OF ALTISOURCE
Business Segments | Investment Thesis | ||
Servicer and Real Estate | Countercyclical business that provides solutions to loan servicers and real estate investors that support | Background: | |
• | COVID-19-induced borrower relief measures led to a | ||
("SRE") | the servicing of defaulted residential mortgage loans and the management and disposition of homes | ||
significant reduction in industrywide foreclosure starts and | |||
• Represents 79% of Q1 2024 consolidated Service revenue | foreclosure sales, which are the main revenue drivers in the | ||
SRE segment | |||
• Main Driver: Foreclosure starts and sales and new business wins | |||
• | Additionally, in recent years, residential loan originators have | ||
• Industry Factors: Volume significantly impacted by COVID-19 related foreclosure moratoriums and borrower relief measures; these measures largely | |||
faced a challenging operating environment due to high | |||
expired at the end of 2021. Even though relief measures have largely expired, we believe the default market may also be impacted by the economic | |||
interest rates, declining origination volumes and margin | |||
environment (i.e., homeowner equity, interest rates, low unemployment, wage growth) | |||
compression | |||
Origination ("ORG") | Provides originators, including mortgage bankers, banks and credit unions, solutions that support | • During these challenging times, Altisource focused on | |
improving its Business Segments Adjusted EBITDA4 margins, | |||
residential mortgage loan originations | |||
reducing corporate operating costs and winning new | |||
• Represents 21% of Q1 2024 consolidated Service revenue | business |
- Main Driver: Market origination volume, customer product penetration and new product launches and adoption
• Industry Factors: Significant decline in market origination volumes beginning in 2022 driving demand for solutions that help originators reduce costs | Thesis: | ||||||||||||||||
Key Metrics ($ in MM) | Ramping sales wins and a reversion to a normalized, pre- | ||||||||||||||||
pandemic foreclosure environment, on a lower cost base should | |||||||||||||||||
$622 | drive strong Service revenue and Adjusted EBITDA4 growth | ||||||||||||||||
$106 | |||||||||||||||||
$183 | $347 | $3 | Upside Drivers: | ||||||||||||||
$88 | $171 | $5 | $144 | $137 | $148 | • Strong sales pipeline and pipeline conversion to wins | |||||||||||
$333 | |||||||||||||||||
$71 | $256 | $10 | $162 | $3 | $37 | $5 | $19 | • Increasing demand for Lenders One solutions | |||||||||
• | Rising delinquency rates | ||||||||||||||||
2019 | 2020 | 2021 | ($32) | 2022 ($17) | 2023 ($1) | Q1 2024 | Q1 2024 | ||||||||||
RITM1Service Revenue2 | Annualized | Risks/Sensitivities: | |||||||||||||||
Service Revenue | Divested Service Revenue3 | Adjusted EBITDA4 | • | Default market recovery | |||||||||||||
Pre-pandemic operations | • | Customer concentration and churn | |||||||||||||||
Pandemic impacted operations | • | Cost-savings realization | |||||||||||||||
Post-pandemic - beginning of operational recovery | |||||||||||||||||
Note: Numbers may not sum due to rounding. | |||||||||||||||||
1 Rithm Capital Corp. ("RITM" formerly known as New Residential Investment Corp.) | |||||||||||||||||
2 Represents the amount of field services, valuation and title Service revenue from RITM's portfolios that has been transitioned to RITM's vendor subsidiaries | |||||||||||||||||
3 Represents revenue from businesses that have been sold or discontinued including Pointillist, Owners.com, Buy-Renovate-Lease-Sell, Financial Services, Mortgage Builders and Corporate Technology | 5 | ||||||||||||||||
© 2024 Altisource All Rights Reserved. | 4 This is a non-GAAP measure reconciled in the Appendix. For a definition of Adjusted EBITDA, see page 23 | ||||||||||||||||
ATTRACTIVE SUITE OF SOLUTIONS
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SOLUTIONS THAT SUPPORT LOAN SERVICERS AND REAL ESTATE INVESTORS
Loan Servicers: Providing a suite of solutions that support the servicing of defaulted loans and management and disposition of homes
Customers include six of the top 20 loan servicers1 and both GSEs
Pre-Foreclosure | Foreclosure | REO Management and Disposition | ||||||||||
Property Inspection and Preservation | Online Real Estate Marketing Platform | Online Real Estate Marketing Platform | ||||||||||
(Field Services) | ||||||||||||
Property Inspection and Preservation | ||||||||||||
Valuation Products | Real Estate Brokerage | |||||||||||
(Field Services) | ||||||||||||
Property Inspection and Preservation | ||||||||||||
Pre-foreclosure Title | Foreclosure Trustee | |||||||||||
(Field Services) | ||||||||||||
Title and Escrow | ||||||||||||
Renovations | ||||||||||||
Real Estate Investors: White space opportunity to deploy established solutions to the single-family rental and investor market | ||||||||||||
Real Estate Due Diligence and Acquisition | Real Estate Management | Real Estate Disposition | ||||||||||
.com | Real Estate | Real Estate Brokerage | Construction Risk Management | Online Real Estate Marketing | ||||||||
Marketplace | Platform | |||||||||||
Automated Home | Property Inspection and | |||||||||||
.com | Real Estate Marketplace | |||||||||||
Valuation Model and | Title and Escrow | Preservation | ||||||||||
Analytics | (Field Services) | |||||||||||
Real Estate Brokerage | ||||||||||||
Automated Rental | Construction Risk | Valuation Products | ||||||||||
Valuation Model and | Management | Valuation Products | ||||||||||
Analytics | Renovations | |||||||||||
Title and Escrow | ||||||||||||
Technology solutions that support loan servicers and real estate investors | ||||||||||||
Asset Management Workflow and Invoicing Solutions | ||||||||||||
1 Source: Inside Mortgage Finance, Top 100 Firms in Owned Mortgage Servicing 4Q23 | 7 |
© 2024 Altisource All Rights Reserved.
SERVICER AND REAL ESTATE SERVICE OFFERINGS
The summary below reflects the business units included within the three publicly reported SRE Businesses
SRE Businesses | Description |
M A R K E T P L A C E | Hubzu® Online Real Estate Marketing Platform, Real Estate Brokerage and Asset Management |
• 19.5% of Service Revenue | |
Real Estate Marketplace | |
S O L U T I O N S | Property Inspection and Preservation (Field Services) |
• 52.2% of Service Revenue | |
Title and Escrow | |
Valuation Products | |
Construction Inspection and Risk Mitigation | |
Foreclosure Trustee | |
Renovations |
T E C H N O L O G Y A N D S A A S P R O D U C T S
- 7.2% of Service Revenue
REO, Short Sales and Foreclosure, Bankruptcy and Eviction Workflow Management SaaS
Vendor Management SaaS
Commercial Loan Servicing Technology
Automated Rental Valuation Model and Analytics
Automated Home Valuation Model and Analytics
Note: Based on Q1 2024 Service Revenue | 8 |
© 2024 Altisource All Rights Reserved. |
SOLUTIONS THAT SUPPORT LOAN ORIGINATORS
Mortgage Originators: Providing a suite of solutions to help loan originators (primarily Lenders One members) better compete
Customers include members of the Lenders One Cooperative that represents ~16% of U.S. residential originations1
Loan Manufacturing | Capital Markets and Business Operations | Engagement and Data | |||||||
VERIFICATIONS | Borrower Verifications | Loan QC SaaS | Vendor Management SaaS | EVENTS | Membership Events | ||||
CREDIT | Tri-merge Credit and | Document Solutions | Insurance | DATA | Market Intelligence | ||||
Related Products | SaaS | and Benchmarking | |||||||
FLOOD | Flood Certifications | Mortgage Loan | PREFERRED INVESTORS Capital Markets Solutions | ||||||
Fulfillment | |||||||||
PREFERRED PROVIDERS | Suite of Third-Party | Automated Home | PREFERRED PROVIDERS Suite of Third-Party Solutions | ||||||
Valuation Model | |||||||||
Solutions | |||||||||
and Analytics | |||||||||
INSURANCE | Homeowners and Auto | Valuation Products | |||||||
Insurance2 | |||||||||
Title and Escrow
Technology solutions that support components of the origination lifecycle
Vendor Marketplace and Automation Platform
- Member market share based on 2023 HMDA data
2 Lenders One provides this service as an agent | 9 |
© 2024 Altisource All Rights Reserved. |
ORIGINATION SERVICE OFFERINGS
The summary below reflects the business units included within the three publicly reported ORG Businesses
ORG Businesses | Description | ||
L E N D E R S O N E ® | Management Services to the Lenders One Cooperative | ||
• 17.5% of Service Revenue | Loan Manufacturing, Capital Markets and Business Operations, and Engagement and Data | ||
S O L U T I O N S | Mortgage Loan Fulfillment | ||
• 3.2% of Service Revenue | |||
Title and Escrow | |||
Valuation Products | |||
Insurance | |||
O R I G I N AT I O N T E C H | Vendor Management SaaS | ||
• 0.4% of Service Revenue | |||
Loan QC SaaS | |||
Document Solutions SaaS | |||
Automated Home Valuation Model and Analytics | |||
Vendor Marketplace and Automation | |||
Note: Based on Q1 2024 Service Revenue | 10 | ||
© 2024 Altisource All Rights Reserved. |
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Altisource Portfolio Solutions SA published this content on 21 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 21 May 2024 20:28:12 UTC.