Altisource Portfolio Solutions S.a. · NASDAQ:ASPS
Altisource Portfolio Solutions — Q2 2024 Earnings Presentation
33 slides from Altisource Portfolio Solutions's earnings presentation, Jul 25, 2024
Slide 1: Second Quarter 2024 Supplementary Information
ALTISOURCE SECOND QUARTER 2024 SUPPLEMENTARY INFORMATION JULY 25, 2024
Slide 2: Disclaimer
DIS CLAIMER This presentation contains forward-looking statements that involve a number of risks pandemic, customer concentration, the timing of the anticipated increase in default and uncertainties. These forward-looking statements include all statements that are related referrals following the exp
Slide 3: Non-GAAP Measures
NON-G AAP MEA SURES Adjusted operating income (loss), pretax loss attributable to Altisource, adjusted pretax Furthermore, we believe the exclusion of more significant non-operational items loss attributable to Altisource, adjusted net loss attributable to Altisource, adjusted enables comparability
Slide 4: Second Quarter 2024 Overview
SECOND QUARTER 20 24 OV ERV IEW • Generated $36.9 million of Service revenue and $4.4 million of Adjusted EBITDA1 in what continues to be an incredibly difficult environment of historically low mortgage delinquency rates and low origination volume − Q2 2024 Service revenue was $3.7 million, or 11%,
Slide 5: Total Company Financial Performance
TOTAL COMPANY FINANCIA L PERFORMANCE Service Revenue Financial Performance $37.1 $36.9 $36.9 • Q2 2024 Service revenue was 11% higher than Q2 $34.1 2023 $33.2 $32.2 • Q2 2024 Adjusted EBITDA1 was $7.9 million better than Q2 2023 • Q2 2024 Adjusted EBITDA1 margins improved to 11.9% compared to negati
Slide 6: Servicer and Real Estate Segment
SE RVICER AND REAL ESTATE S EGME NT Segment Service Revenue Segment Financial Performance $29.8 • Q2 2024 Service revenue was 16% higher than Q2 $29.1 $29.0 2023 and flat compared to Q1 2024 $26.9 $26.2 • Q2 2024 Adjusted EBITDA1 was 50% higher than Q2 $24.9 2023 and 6% higher than Q1 2024 − Q1 2024
Slide 7: SRE Sales Pipeline and Wins
SRE SALES PIPELINE AND WINS ($ millions) $41.7 Attractive Sales $38.6 $30.1 $25.6 $26.7 Pipeline1 $20.3 Weighted Average Pipeline Estimated Revenue – End of Quarter 2 Q1'23 Q2'23 Q3'23 Q4'23 Q1'24 Q2'24 FY 2023 H1 2024 Wins Wins Strong Sales $25.9 $58.4 $21.6 $15.3 $15.3 Wins3 $14.4 $6.3 $2.9 Estima
Slide 8: Macroeconomic Environment
MACROECONOMIC EN VIRONMENT Early signs of consumer financial stress could be precursors to a rise in mortgage delinquency rates • Consumer savings have declined1 • 3.6% of workers made a hardship withdrawal from employer-sponsored • Credit card debt near record high 401(k) plans in 2023, up from 2.8
Slide 9: Origination Segment
ORIGINATION SEG MENT Segment Service Revenue Segment Financial Performance $8.3 • Q2 2024 Adjusted EBITDA2 was $1.8 million higher $7.8 $7.8 $7.3 $7.2 than Q2 2023 despite a 5% decline in Service revenue $6.0 and a 13% decline in industrywide residential origination volume1 for the same period • Q2
Slide 10: Origination Sales Pipeline and Wins
ORIGINATION SALES P IPE LINE AND W INS ($ millions) $24.6 $20.8 $20.4 Attractive Sales $18.0 $14.7 $13.9 Pipeline1 Weighted Average Pipeline Estimated Revenue – End of Quarter 2 Q1'23 Q2'23 Q3'23 Q4'23 Q1'24 Q2'24 FY 2023 H1 2024 Wins Wins Strong Sales $10.3 $4.2 $5.8 $3.4 Wins3 $2.9 $1.7 $2.4 $1.5
Slide 11: Corporate and Others
CORP ORATE A ND OTHERS Corporate and Others Adjusted EBITDA1 Loss Corporate Financial Performance • Corporate and Others includes costs related to corporate functions including executive, $ (9.5) infrastructure and certain technology groups, finance, $ (8.9) $ (8.7) law, compliance, human resources,
Slide 12: Conclusion
CONCLUS ION • Strong second quarter and first half 2024 financial performance in a historically difficult market • Continue to win new business and are making good progress ramping sales wins on a much lower cost base • Service revenue for the first six months of 2024 is $3.5 million, or 5%, higher
Slide 13: Appendix
APPENDIX SECOND C O N S O L I D AT E D QUARTER 2024 SALES INVESTOR O P E R AT I N G NON-GAAP FINANCIAL FINANCIAL PIPELINE AND R E L AT I O N S METRICS MEASURES MODELS R E S U LT S WINS I N F O R M AT I O N 14 16 17 20 29 32 © 2024 Altisource All Rights Reserved. 13
Slide 14: Second Quarter Financial Results
SECOND QUARTER 20 24 FINANCIAL RESULTS $ millions (except per share data) Q2 Q2 Vs. H1 H1 Vs. 2024 2023 Q2 2023 2024 2023 H1 2023 Service revenue $ 36.9 $ 33.2 11% $ 73.8 $ 70.2 5% Revenue 39.1 35.2 11% 78.6 74.7 5% Gross profit 12.7 5.5 130% 25.0 14.0 78% Income (loss) from operations 2.1 (6.8) 131
Slide 15: Progress with Select Customer Wins
PROGRESS W ITH SELECT 1 CUSTOMER WINS Agreements Anticipated Began Est. Stabilized Notified of Agreements in "Go Live" receiving revenue Win Customer description Service executed negotiation Date referrals in opportunity1 Q1'23 Originator (Multiple) Lenders One √ Q2'23 Medium Q3'23 Servicer Multiple
Slide 16: Consolidated Sales Pipeline and Wins
CONSOLIDATE D SA LES P IP ELINE A ND WINS ($ millions) $62.4 $63.2 Attractive Sales $45.9 $48.2 $40.7 $35.1 Pipeline1 Weighted Average Pipeline Estimated Revenue – End of Quarter 2 Q1'23 Q2'23 Q3'23 Q4'23 Q1'24 Q2'24 FY 2023 H1 2024 $28.3 Wins Wins Strong Sales $68.8 $27.4 $17.8 $16.9 $16.9 Wins3 $1
Slide 17: Operating Metrics
OPERATING ME TRICS Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Q1'24 Q2'24 Default Related Services Onity1 Serviced Forward Loan Portfolio2: Service revenue3 per delinquent loan4 per quarter Non-GSE $ 158 $ 156 $ 158 $ 210 $ 244 $ 260 $ 241 $ 288 $ 246 $ 275 $ 262 $ 316 $ 331 G
Slide 18: Operating Metrics
OPERATING ME TRICS Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Q1'24 Q2'24 1 Hubzu : 2 Service revenue (in millions) $ 8.6 $ 6.1 $ 5.8 $ 8.0 $ 8.1 $ 6.7 $ 5.9 $ 7.7 $ 7.1 $ 7.1 $ 5.8 $ 7.1 $ 7.3 Number of homes sold on Hubzu: 3 Onity serviced portfolios 620 514 510 653 772 645
Slide 19: Hubzu Inventory
HUBZU IN VENTORY Ending Inventory (in 000’s) 6.9 6.2 6.3 6.2 6.3 5.9 6.0 6.0 5.8 5.9 5.8 5.7 5.6 4.4 3.6 4.1 3.5 3.4 3.6 4.2 3.5 3.4 3.6 3.9 3.5 3.3 2.4 2.5 2.6 2.7 2.7 2.4 2.4 2.0 2.0 2.2 2.2 2.3 2.3 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Q1'24 Q2'24 All Other Customers O
Slide 20: Non-GAAP Measures
NON-GAAP MEA SURES Adjusted operating income (loss), pretax loss attributable to Altisource, adjusted pretax loss attributable to Altisource, adjusted net loss attributable to Altisource, adjusted diluted loss per share, EBITDA, Adjusted EBITDA and Segment Adjusted EBITDA are non-GAAP measures used
Slide 21: Non-GAAP Measures
NON-GAAP MEA SURES • Adjusted diluted loss per share is calculated by dividing net loss attributable to Altisource after removing intangible asset amortization expense (net of tax), share-based compensation expense (net of tax), cost of cost savings initiatives and other (net of tax), debt amendment
Slide 22: Non-GAAP Measures Reconciliation
NON-GAAP MEA SURES Reconciliation Q2 2024 Q2 2023 H1 2024 H1 2023 ($ in millions except per share data) Income (loss) from operations $ 2.1 $ (6.8) $ 1.5 $ (10.4) Intangible asset amortization expense 1.3 1.3 2.5 2.6 Share-based compensation expense 0.8 1.2 3.1 2.7 Cost of cost savings initiatives a
Slide 23: Non-GAAP Measures Reconciliation
NON-GAAP MEA SURES Reconciliation Q2 2024 Q2 2023 H1 2024 H1 2023 ($ in millions except per share data) Net loss attributable to Altisource $ (8.3) $ (18.9) $ (17.5) $ (31.8) Intangible asset amortization expense, net of tax 1.3 1.3 2.5 2.6 Share-based compensation expense, net of tax 0.7 1.1 2.7 2.
Slide 24: Non-GAAP Measures Reconciliation
NON-GAAP MEA SURES Reconciliation Q2 2024 Q2 2023 H1 2024 H1 2023 ($ in millions except per share data) Calculation of the impact of intangible asset amortization expense, net of tax Intangible asset amortization expense $ 1.3 $ 1.3 $ 2.5 $ 2.6 Tax benefit from intangible asset amortization - (0.0)
Slide 25: Non-GAAP Measures Reconciliation
NON-GAAP MEA SURES Reconciliation Q2 2024 Q2 2023 H1 2024 H1 2023 ($ in millions except per share data) Calculation of the impact of debt amendment costs, net of tax Debt amendment costs $ - $ 0.1 $ - $ 3.3 Tax benefit from debt amendment costs - - - - Debt amendment costs, net of tax - 0.1 - 3.3 Di
Slide 26: Non-GAAP Measures Reconciliation
NON-GAAP MEA SURES Q1 2024 Reconciliation Run-Rate 2019 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Normalized and Scenario ($ in millions except per share data) Case Annualized Net (loss) income attributable to Altisource $ (308.0) $ (12.9) $ (18.9) $ (11.3) $ (13.2) $ (9.2) $ (8.3) $ (39.3) $
Slide 27: Non-GAAP Measures Reconciliation
NON-GAAP MEA SURES Q1 2024 Reconciliation Run-Rate 2019 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Normalized and Scenario ($ in millions except per share data) Case Annualized Servicer and Real Estate: Income before income taxes and non-controlling $ 138.5 $ 9.9 $ 6.2 $ 8.4 $ 7.6 $ 9.3 $ 10.0
Slide 28: Non-GAAP Measures Reconciliation
NON-GAAP MEA SURES Q1 2024 Reconciliation Run-Rate 2019 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Normalized and Scenario ($ in millions except per share data) Case Annualized Corporate and Others: Loss before income taxes and non-controlling interests $ (127.4) $ (19.6) (22.4) $ (17.8) $ (18.
Slide 29: Financial Models
FINANCIAL MODELS Service Revenue Financial Models Slides 30 and 31 summarize the assumptions used in arriving at the Scenario and Run-Rate Case models. Actual results could differ materially Ramping Sales Wins (Scenario): • Scenario annualizes and adjusts Q1 2024 performance to exclude estimated non
Slide 30: Scenario and Run-Rate Case Assumptions
SCENA RIO AND RUN-RATE CA SE AS SUMPTIONS ($ in millions, except for Service revenue per delinquent loan / active Q1 2024 • Scenario annualizes and adjusts Q1 2024 performance to Q1 2024 Run-Rate foreclosure) 2019 Normalized and Scenario Actual Annualized Case exclude estimated non-recurring items a
Slide 31: Scenario and Run-Rate Case Assumptions
SCENA RIO AND RUN-RATE CA SE AS SUMPTIONS Scenario Run-Rate Case • Q1 2024 Actual Service revenue of $36.9 million is normalized for $0.2 million of estimated non- • Default Service revenue from Onity-serviced loans: recurring Service revenue in the Origination Segment − Service revenue per delinque
Slide 32: Investor Relations Information
INVESTOR RELATION S INFORMATION Altisource Portfolio Solutions S.A. is an integrated service provider and marketplace for the real estate and mortgage industries. Combining operational excellence with a suite of ABOUT ALTISOURCE innovative services and technologies, Altisource helps solve the demand
Slide 33: Altisource
a x Altisource YOUR ONE SOURCE™
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