Altisource Portfolio Solutions S.a. · NASDAQ:ASPS
Altisource Portfolio Solutions — Q4 2023 Earnings Presentation
34 slides from Altisource Portfolio Solutions's earnings presentation, Mar 7, 2024
Slide 1: Fourth Quarter 2023 Supplementary Information
ALTISOURCE FOURTH QUARTER 2023 SUPPLEMENTARY INFORMATION MARCH 7, 2024 1
Slide 2: Disclaimer
DIS CLAIMER This presentation contains forward-looking statements that involve a number of risks statements are subject include, but are not limited to, risks related to the COVID-19 and uncertainties. These forward-looking statements include all statements that are pandemic, customer concentration,
Slide 3: Non-GAAP Measures
NON-G AAP MEA SURES Adjusted operating loss, pretax loss attributable to Altisource, adjusted pretax loss Furthermore, we believe the exclusion of more significant non-operational items attributable to Altisource, earnings before interest, taxes, depreciation and enables comparability to prior perio
Slide 4: 2023 Performance Overview
20 23 P ERFORMA NCE OVE RVIEW We continue to strengthen our financial position and win new business which has not fully ramped • In the face of serious market headwinds for both Business Segments1, Service revenue in the Servicer and Real Estate segment was only 4% lower than 2022 and Service revenu
Slide 5: Historical Performance
HISTORICAL PERFORMANCE We continue to strengthen our financial position and win new business which has not fully ramped Service Revenue Background: • COVID-19-induced borrower relief measures led to a $170.6 significant reduction in industrywide foreclosure $144.5 starts and foreclosure sales, which
Slide 6: 2024 Financial Guidance
20 24 F INA NCIAL GUIDANCE 1 We believe our sales wins, enhanced margins and lower corporate operating costs position us for strong Service revenue and Adjusted EBITDA2 growth in 2024 Service Revenue Adjusted EBITDA2 Service revenue improvement driven by: • Continue ramping 2023 sales wins, 2024 sal
Slide 7: 2024 Strategic Initiatives
20 24 STRATEG IC INIT IATIV ES Accelerate business development efforts on solutions where we believe Altisource is a strong performer, generates high margins and where we forecast market tailwinds Deliver strong operational efficiency and manage costs to drive higher Gross Profit and Adjusted EBITDA
Slide 8: Servicer and Real Estate Segment
SE RVICER AND REAL ESTATE S EGME NT Segment Service Revenue Financial Performance • 2023 Service revenue of $107.8 million was $4.4 million, or 4%, $112.1 $107.8 $107.8 lower than 2022 • 2023 Service revenue modest decline reflects growth in certain higher margin businesses that support the earlier
Slide 9: SRE Sales Pipeline and Wins
SRE SALES PIPELINE AND WINS ($ millions) $46.3 $41.7 Attractive Sales $35.4 $33.4 $35.6 $38.6 $30.1 $25.6 Pipeline1 Weighted Average Pipeline Estimated Revenue – End of Quarter 2 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 FY 2022 FY 2023 Strong Sales Wins $25.9 Wins $9.4 $14.4 $15.3 $58.4 Wins3
Slide 10: Macroeconomic Environment
MACROECONOMIC EN VIRONMENT Early signs of consumer financial stress could be precursors to a rise in 90+ day mortgage delinquency rates • Consumer savings have declined1 • Hardship withdrawals on 401(k) accounts increased 13% in Q3 2023 • Credit card debt at record high compared to Q2 20234 • Balanc
Slide 11: Origination Segment
ORIGINATION SEG MENT Segment Service Revenue Financial Performance $58.0 • 2023 Service revenue of $28.8 million declined by 11% compared to 2022, outperforming the 36% decline in industrywide origination volume2 $32.4 $28.8 • 2023 Service revenue decline reflects revenue growth in Lenders One from
Slide 12: Origination Sales Pipeline and Wins
ORIGINATION SALES P IPE LINE AND W INS ($ millions) $31.9 Attractive Sales $20.8 $23.4 $22.6 $20.8 $24.6 $20.4 $18.0 Pipeline1 Weighted Average Pipeline Estimated Revenue – End of Quarter 2 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 FY 2022 FY 2023 Strong Sales $10.2 Wins Wins $7.9 $21.6 $10.3
Slide 13: Corporate and Others Segment
CORP ORATE A ND OTHERS SEG MENT Corporate and Others Adjusted EBITDA1 Loss Financial Performance • Corporate and Others includes costs related to corporate $(60.4) functions including executive, infrastructure and certain technology groups, finance, law, compliance, human resources, $(43.0) vendor m
Slide 14: Conclusion
CONCLUS ION The Company is positioned for attractive Service revenue and Adjusted EBITDA1 growth in 2024 and beyond • Despite a difficult default and origination environment, improved Adjusted EBITDA1 by more than $30 million over the last two years • Won meaningful new business that should continue
Slide 15: Appendix
APPENDIX FOURTH C O N S O L I D AT E D QUARTER 2023 SALES INVESTOR O P E R AT I N G NON-GAAP FINANCIAL PIPELINE AND R E L AT I O N S METRICS MEASURES R E S U LT S WINS I N F O R M AT I O N 16 18 19 22 33 © 2024 Altisource All Rights Reserved. 15
Slide 16: Fourth Quarter 2023 Financial Results
FOURTH QUA RTE R 2 02 3 FINANCIA L RESULTS $ millions (except per share data) Q4 Q4 Vs. FY FY Vs. 2023 2022 Q4 2022 2023 2022 FY 2022 Revenue $34.2 $34.8 -2% $145.1 $153.1 -5% Service revenue 32.2 32.8 -2% 136.6 144.5 -5% Gross profit 8.4 8.1 4% 29.7 21.8 36% Loss from operations (2.8) (3.8) 26% (16
Slide 17: Progress with Select Customer Wins
PROGRESS W ITH SELECT 1 CUSTOMER WINS Agreements Began Est. Stabilized Notified of Agreements in Anticipated receiving revenue win Customer description Service executed negotiation "Go Live" Date referrals in opportunity1 Q2'22 Originator Granite √ Q1'23 Medium Q3'22 Servicer Field Services √ Q4'22
Slide 18: Consolidated Sales Pipeline and Wins
CONSOLIDATE D SA LES P IP ELINE A ND WINS ($ millions) $65.3 $68.9 $62.4 $63.2 $56.2 $59.0 Attractive Sales $45.9 $48.2 Pipeline1 Weighted Average Pipeline Estimated Revenue – End of Quarter 2 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 FY 2022 FY 2023 $28.3 Strong Sales Wins Wins $31.0 $17.8 $1
Slide 19: Operating Metrics
OPERATING ME TRICS Q4'20 Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 1 2 Ocwen Serviced Portfolio : Default Related Services: Service revenue3 per delinquent loan 4 per quarter Non-GSE $ 235 $ 157 $ 158 $ 156 $ 158 $ 210 $ 244 $ 260 $ 243 $ 295 $ 257 $ 291 $ 279 GSE and F
Slide 20: Operating Metrics
OPERATING ME TRICS Q4'20 Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 1 Hubzu : 2 Service revenue (in millions) $ 12.2 $ 7.4 $ 8.6 $ 6.1 $ 5.8 $ 8.0 $ 8.1 $ 6.7 $ 5.9 $ 7.7 $ 7.1 $ 7.1 $ 5.8 Number of homes sold on Hubzu: 3 Ocwen serviced portfolios 860 570 620 514 510 653
Slide 21: 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 6.0 5.8 5.7 5.0 4.5 4.4 3.4 3.6 3.6 4.1 3.5 3.5 3.9 4.2 3.4 3.5 2.6 2.4 2.4 2.4 2.5 2.6 2.7 2.7 2.4 2.4 2.1 2.0 2.0 2.2 2.2 Q4'20 Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 All Other Customers O
Slide 22: Non-GAAP Measures
NON-GAAP MEA SURES Adjusted operating loss, pretax loss attributable to Altisource, adjusted pretax loss attributable to Altisource, EBITDA, Adjusted EBITDA, adjusted net loss attributable to Altisource and adjusted diluted loss per share are non-GAAP measures used by management, existing shareholde
Slide 23: Non-GAAP Measures
NON-GAAP MEA SURES • Adjusted EBITDA is calculated by removing the income tax provision, interest expense (net of interest income)1, depreciation and amortization, intangible asset amortization expense, share-based compensation expense, cost of cost savings initiatives and other, debt amendment cost
Slide 24: Non-GAAP Measures Reconciliation
NON-GAAP MEA SURES Reconciliation Q4'23 Q4'22 FY'23 FY'22 ($ in millions except per share data) Loss from operations $ (2.8) $ (3.8) $ (16.8) $ (33.2) Intangible asset amortization expense 1.3 1.3 5.2 5.1 Share-based compensation expense 1.2 1.2 5.1 5.1 Cost of cost savings initiatives and other 0.1
Slide 25: Non-GAAP Measures Reconciliation
NON-GAAP MEA SURES Reconciliation Q4'23 Q4'22 FY'23 FY'22 FY'21 ($ in millions except per share data) Net loss attributable to Altisource $ (13.2) $ (11.3) $ (56.3) $ (53.4) $ 11.8 Income tax provision 1.1 3.1 3.7 5.3 3.2 1 Interest expense, net of interest income 9.2 4.9 34.8 16.0 14.6 Depreciation
Slide 26: Non-GAAP Measures Reconciliation
NON-GAAP MEA SURES Reconciliation Q4'23 Q4'22 FY'23 FY'22 ($ in millions except per share data) Net loss attributable to Altisource $ (13.2) $ (11.3) $ (56.3) $ (53.4) Intangible asset amortization expense, net of tax 1.3 1.3 5.2 5.1 Share-based compensation expense, net of tax 1.0 1.0 4.4 4.4 Cost
Slide 27: Non-GAAP Measures Reconciliation
NON-GAAP MEA SURES Reconciliation Q4'23 Q4'22 FY'23 FY'22 ($ 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 $ 5.2 $ 5.1 Tax benefit from intangible asset amortization - (0.0) (0.0) (0
Slide 28: Non-GAAP Measures Reconciliation
NON-GAAP MEA SURES Reconciliation Q4'23 Q4'22 FY'23 FY'22 ($ in millions except per share data) Calculation of the impact of cost of cost savings initiatives and other, net of tax Cost of cost savings initiatives and other $ 0.1 $ 0.6 $ 2.0 $ 1.7 Tax benefit from cost of cost savings initiatives and
Slide 29: Non-GAAP Measures Reconciliation
NON-GAAP MEA SURES Reconciliation Q4'23 Q4'22 FY'23 FY'22 ($ in millions except per share data) Calculation of the impact of unrealized gain on warrant liability, net of tax Unrealized gain on warrant liability $ - $ - $ (1.1) $ - Tax benefit from unrealized gain on warrant liability - - - - Unreali
Slide 30: Non-GAAP Measures Reconciliation
NON-GAAP MEA SURES Reconciliation FY'23 FY'22 FY'21 ($ in millions except per share data) Servicer and Real Estate: Income before income taxes and non-controlling interests $ 32.1 $ 26.5 $ 13.7 Depreciation and amortization 0.7 1.0 1.1 Intangible asset amortization expense 3.0 3.0 7.3 EBITDA $ 35.8
Slide 31: Non-GAAP Measures Reconciliation
NON-GAAP MEA SURES Reconciliation FY'23 FY'22 FY'21 ($ in millions except per share data) Corporate and Others: Loss before income taxes and non-controlling interests $ (78.4) $ (66.6) $ (3.7) Non-controlling interests - - 1.0 Interest expense, net of interest income 1 34.8 16.0 14.6 Depreciation an
Slide 32: Non-GAAP Measures: 2024 Guidance Reconciliation
NON-GAAP MEA SURES 2024 Guidance Reconciliation Low High ($ in millions except per share data) Net loss attributable to Altisource $ (36.5) $ (32.5) Income tax provision 3.0 4.0 1 Interest expense, net of interest income 38.5 38.5 Depreciation and amortization 1.0 1.0 Intangible asset amortization e
Slide 33: 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 34: Altisource
a x Altisource YOUR ONE SOURCE™
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