Altisource Portfolio Solutions S.a. · NASDAQ:ASPS
Altisource Portfolio Solutions — Investor Presentation (May 2023)
20 slides from Altisource Portfolio Solutions's investor presentation, May 24, 2023
Slide 1: Investor Presentation May 2023
I N VE S T O R P R E S E N T AT I ON ALTISOURCE M A Y 2 0 2 3
Slide 2: Cautionary Statement Regarding Forward Looking Statements
© 2023 Altisource All Rights Reserved. DISCLAIMER 2 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 Litig
Slide 3: Overview of Altisource
© 2023 Altisource All Rights Reserved. OVERVIEW OF ALT ISOURCE 3 1 Comprehensive suite of solutions 1 Full time employees, excluding contractors, as of May 15, 2023 2 Service revenue presented herein excludes reimbursable expenses and non-controlling interests 3 Market Capitalization (“Market Cap”)
Slide 4: Setup and thesis: foreclosure moratoriums and recovery opportunity
© 2023 Altisource All Rights Reserved. Setup: COVID-19-induced foreclosure moratoriums and borrower relief measures led to a ~86% peak-to-trough reduction in foreclosure starts, which is the Servicer and Real Estate business’ main revenue driver. Foreclosure starts remain 28% below pre-pandemic leve
Slide 5: Solutions Along the Foreclosure Process
© 2023 Altisource All Rights Reserved. 5 SOLUTIONS ALONG THE FORECLOSURE PROCESS Asset Management Workflow and Invoicing Solutions Technology solutions that support loan servicers and real estate investors Online Real Estate Marketing Platform Real Estate Marketplace Real Estate Brokerage Valuation
Slide 6: Segment Financial Performance: Servicer and Real Estate
© 2023 Altisource All Rights Reserved. SEGMENT F INANCIAL PERFORMANCE 6 • The countercyclical default business was significantly impacted by two factors beginning in 2020: 1. Covid-19-induced foreclosure moratoriums and borrower relief measures; these measures largely expired at the end of 2021 2. T
Slide 7: Market Factors That Drive Revenue Growth: Foreclosure Starts and Timing
© 2023 Altisource All Rights Reserved. MARKET FACTORS THAT DRIVE REVENUE GROWTH 7 Foreclosure Starts and Timing Foreclosure Starts Days • 2022 foreclosure starts were 325% higher than 2021 • The 2022 increase in foreclosure starts drove higher referrals for our pre-foreclosure solutions including ti
Slide 8: Market Factors: Foreclosures that Convert to Foreclosure Sales
© 2023 Altisource All Rights Reserved. MARKET FACTORS THAT DRIVE REVENUE GROWTH 8 Foreclosures that Convert to Foreclosure Sales Foreclosure Sales % • 2022 foreclosure sales were 49% higher than 2021, but significantly lower than the 325% growth in foreclosure starts; we believe this disparity is dr
Slide 9: Sales Pipeline and Wins
© 2023 Altisource All Rights Reserved. SALES P IPEL INE AND WINS 9 $35.4 $33.4 $35.6 $46.3 $41.7 Q1'22 Q2 Q3 Q4 Q1'23 $1.2 $1.7 $4.2 $2.2 $14.4 Q1'22 Q2 Q3 Q4 Q1'23 $0.0 $0.1 $0.1 $0.2 $0.2 Q1'22 Q2 Q3 Q4 Q1'23 Attractive Sales Pipeline1 Weighted Average Pipeline Estimated Revenue – End of Quarter (
Slide 10: Macroeconomic Environment
© 2023 Altisource All Rights Reserved. • Indicators that consumers are becoming increasingly financially stressed which could be precursors to a rise in mortgage delinquency rates: • High inflation eroding consumer purchasing power • Rapid rise in Fed Funds Rate driving mortgage interest rates to al
Slide 11: Normal Default Market Run-Rate Scenario
© 2023 Altisource All Rights Reserved. NORMAL DEFAULT MARKET RUN-RATE SCENARIO 11 • Slides 18 and 19 in the Appendix summarize the assumptions used in arriving at this Run-Rate scenario • The Run-Rate scenario assumes the default market will return to a normal, pre- pandemic foreclosure environment;
Slide 12: Solutions Along the Loan Origination Process
© 2023 Altisource All Rights Reserved. SOLUTIONS ALONG THE LOAN ORIGINATION PROCESS Membership Events Market Intelligence and Benchmarking Vendor Management SaaS Loan Manufacturing Insurance Capital Markets Solutions Suite of Third-Party Solutions Borrower Verifications Tri-merge Credit and Related
Slide 13: Segment Financial Performance: Origination
© 2023 Altisource All Rights Reserved. SEGMENT F INANCIAL PERFORMANCE 13 • 2022 industry-wide origination volume declined 49% compared to 2021; refinance origination volume declined by 74% over the same period1 • Altisource’s 44% revenue decline was modestly better than the market from Lenders One n
Slide 14: Sales Pipeline and Wins (Origination)
© 2023 Altisource All Rights Reserved. $20.8 $31.9 $23.4 $22.6 $20.8 Q1'22 Q2 Q3 Q4 Q1'23 $1.7 $7.9 $10.2 $1.8 $3.4 Q1'22 Q2 Q3 Q4 Q1'23 $0.2 $0.4 $0.8 $1.0 $2.3 Q1'22 Q2 Q3 Q4 Q1'23 SALES P IPEL INE AND WINS 14 Strong Sales Wins3 Growth in Revenue4 Estimated Annualized Revenue on a Stabilized Basis
Slide 15: First Quarter 2023 Highlights
© 2023 Altisource All Rights Reserved. • Generated $1.5 million in Adjusted EBITDA, representing a $5.6 million improvement over the first quarter of 20221 • Improved company-wide gross profit margins to 23% compared to 15% in the first quarter of 20221 • In the Servicer and Real Estate segment, gre
Slide 16: Appendix
Altisource APPENDIX
Slide 17: Historical Financials
© 2023 Altisource All Rights Reserved. HISTORICAL FINANCIALS 17 Altisource was significantly impacted by COVID-19 related borrower relief measures beginning in 2020. Following the expiration of these measures in late 2021, along with efficiency measures implemented, the Company’s performance began t
Slide 18: Normal Default Market Run-Rate: Servicer and Real Estate
© 2023 Altisource All Rights Reserved. ($ in millions, except for Service revenue per delinquent loan / active foreclosure) 2019 LTM Q1’23 Run-Rate Scenario Servicer and Real Estate Segment: Default Service revenue - Ocwen-serviced loans (Non GSE): Average number of loans serviced by Ocwen (in 000s)
Slide 19: Normal Default Market Run-Rate and Assumptions
© 2023 Altisource All Rights Reserved. ($ in millions, except for Service revenue per delinquent loan / active foreclosure) 2019 LTM Q1’23 Run-Rate Scenario Origination Segment: Total Origination segment Service revenue $ 36.8 $ 29.1 $ 29.1 Corporate and Others Segment: Total Corporate and Others Se
Slide 20: Reconciliation of Non-GAAP Measures
© 2023 Altisource All Rights Reserved. RECONCILIATIO N OF NON-GAAP MEASURES 20 Reconciliation of Net (Loss) Income Attributable to Altisource to Adjusted EBITDA ($ in MM) 2019 2020 2021 2022 LTM Q1'23 Q1'22 Q1'23 Net (Loss) Income Attributable to Altisource (308.0)$ (67.2)$ 11.8$ (53.4)$ (54.2)$ (12
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