ASPS - Earnings call transcript Q1 2022 | Altisource Portfolio Solutions S.A.

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Operator

Welcome to the Altisource First Quarter 2022 Earnings Call. My name is Cheryl, and I will be your operator for today's call. [Operator Instructions] As a reminder, the conference is being recorded. I will now turn the call over to Michelle Esterman, Chief Financial Officer.

You may begin.

Michelle Esterman

operator. you, Thank to XX-Q want website that earnings the www.altisource.com. We quarterly remind slides Form and our are release, first you available at on These find investors provide useful. additional information may

a include statements, that today cause to results actual risks remarks Our could which involve and number forward-looking uncertainties differ. of

review statements, on the economy projections difficult as lead Form forward-looking or to addition XXXX the to provided, as herein previously and the risk forward-looking statements, of obligation XX-K, associated may future to Altisource. We and pandemic results. factors the these undertake or COVID-XX state release uncertainty usual continuing no In the its change information provided that in well predict new factors impact potential result in different circumstances, makes Please contained the of in earnings section a future to with and the it statements which as extremely the company's scenarios, slides our events. update describe quarterly financial

During and appendix measures slides. our non-GAAP GAAP additional A non-GAAP this of regarding slides, in quarterly included the financial both quarterly will disclosures you reconciliation GAAP present release and In non-GAAP earnings to measures. to measures. we the is the will call, find

Joining I and is will me for over William Officer. Bill. today's Chairman Chief now call Executive call Shepro, our to turn the

William Shepro

joining Beginning the financial Slide sequential with marking for call. growth of X, with today's $XX.X you generated We XX results. quarter revenue thank service our quarter quarters. pleased and first morning revenue Good first in million, I'm of

it revenue could million approximately and closing as pipeline revenue annualized sales a over the forecasted into $XXX $XX on million pipeline excludes to begins based to Keep unweighted existing $X.X cash revenue items. $XX existing base with a in probability represents to products. cost than million of the of upon in our the We improvement annualized about default adjusted million of favorable our that translate each first fourth business million our cash. only benefited quarter use represents million $XX XX% currently that million ended What's sales nonrecurring quarter pipeline have is from market We XXXX. first typically that of revenue. new lower Our loss a includes We $X.X $X.X EBITDA the basis. quarter revenue mix, stabilized XX% and We our growth customers of from recover, a quarter a exciting in year. mind probability-adjusted sales in quarters the remaining of on growth more quarter of the first

This of we quarters expect used from related entire estimate fluctuate to year. the XXXX. capital. We for $X.X subsidiaries, as in taxes burn certain that anticipated and in our items distribution year During million in escrow anticipated first with from could down decline year expenses approximately point includes quarter, $XX a that repatriation and relate the of our to approximately of the for pay the ending the but of $X.X million anticipate believe funds significantly of remaining will previously million include this accrued don't items on based or bonuses, sale. and of the certain million $XX up progresses the and $XX.X of cash, annual between onetime These refund working U.S. cash prepaid million cash taxes large to we the

businesses; and and We Real have Origination. Servicer core X Estate

of I performance are greater businesses businesses other. This believe see core As now corporate into in these in of our this separately will visibility segments provide additional businesses. segment these We and you reporting reporting and are morning, new as we will detail. structure XX-Q, the our each X discuss will

This Real environmental segment Estate to couple measures in first issues X revenue. the of reduced largest years for Servicer and relief pandemic-related business. has as significantly Slide which borrower faced our our Turning segment, last is

in strength of pre-pandemic the XXst this these the XXXX, The primarily service Hubzu measures and grew segment and fourth grew default temporary the revenue mitigation EBITDA in quarter expiration of revenue relief the the at of the first revenue higher our business of for September end restart by businesses foreclosures reflects tailwinds. now from With 'XX from other from this higher quarter XX% measures. XXXX, loss of Compared by adjusted December has delinquencies to the XX%. strong expiration

to of For to decline quarter the expect anticipate revenue impacting to continue modest relief our into the borrower recover. referrals will Estate the we in stabilizes. would in the Hubzu in years. on to larger and our second quarter we and explain to that grow will impact business XXXX as sales. believe market default resume market how quarter, its We sequentially. the a Hubzu coming we Servicer revenue the understand given will revenue continue and segment the between the total and measures helpful much rest flat business our be We the second growth lag expect Real default this, pandemic-related we the it segment think third grow and had year, be In think To margins,

all our nearly Slide than XX%. to during to reduced businesses Turning came X, more This default-related the to foreclosures referrals halt. by pandemic, a

depleting sell During this our continued existing REO, time, inventory. to we

other with With for stage the our pre-pandemic XXst, delinquencies. expiration temporary the that rebuild on fall, the and earlier grow our mitigation loss Then default delinquencies foreclosure measures, inventory. to of auction continuing in inventory foreclosure businesses early we began the are of to auction foreclosures December REO support referrals we our rebuild restart and

time that entering For takes work just through to foreclosure, are it the loans process. those

our on business this through several some fully to process, default re-perform one a foreclosure. loans sold. foreclosure will higher-margin pay the from off. the Others the Based ultimately that benefit through of Of to this go at some will will Some or other market. become default party of and delinquent third auction REO years. recovery likely approximately factors, sell these months take state will Depending X foreclosure, and our the process those could Hubzu, of last go be and will to on businesses

As Hubzu earnings auction illustrate Analytics, X, REO To and please Moody and growth. experience REO market to acquisitions we fully which the this, shows foreclosure forecasted anticipate will Hubzu's revenue. historical Slide recovers, and refer tremendous auction historical and revenue

acquisitions correlation to to million forecasted million revenue. grow in XXXX, see, forecast which Hubzu Hubzu's fourth that revenue XX% this quarter can Hubzu's over REO from maintains you per revenue its to quarter than revenue fourth the $XX is sales. REO. the of XXXX acquisitions quarter National acquisitions of generated declining of growth REO Hubzu's reaching closely If of million quarter when REO in acquisition the of and both market and a XXXX. with $X first grow, XXXX Analytics fourth typically As REO XXXX REO $XX quarter higher of to Moody's would year from growth first of a quarter through quarters, quarter correlated become average in periods reflecting XXXX, begin that more quarter revenue strong the Moody's acquisitions, growth, by quarter Beginning the will first sell of time the high in the a of are than In first couple lags

and estate in the focused from are In good also addition we're progress. real servicer new benefiting making on and to tailwinds customers business, adding

this translate in million $XX $XX $XX to revenue upon sales is annualized on could currently our We pipeline stabilized stabilized a unweighted into basis. on closing. million basis annual forecasted probability Our a of based estimate million

and years origination than we performance the strong our of over believe from to high faces higher with Turning by business adoption. in to impact we can business the the product last declines new and because newer volume decline origination origination the this We Slide challenges product couple customer interest MBA forecasting The anticipate experienced X growth, XXXX and market product growth our market stronger a launches. of low origination market for environment, business, origination volume now launches with market XX%. offset rate

and increasing million In and a annual adoption expected, origination will Lenders new market our and the One decline are solutions us $XX progress in lower fourth to flat very our our One basis. much title, of probability but rate believe origination MBA demonstrated a Lenders declines over a anticipated business are market, businesses. them Based reflects sequential the compared believe As adoption, resiliency revenue product upon revenue achieve revenue compared and revenue their service to objectives. at our that a we XX%. business fulfillment flat quarter, members our improve as origination than closing. in volumes their The be valuation, to reducing declined launching are This decline. roughly We to in to as on businesses million in-house focusing a by help revenue million overall One were in our our to in our in is well Lenders other in position. member a on origination market and represents certain difficult market pipeline customers annualized as retain newer in This $XX lower employees. forecast origination perspective, our revenue origination our reflect forecasted profitability origination product our will sales currently market the declines declines $XX launches. their market XXXX costs looking that stabilized difficult competitive to well-suited based offset services by very on products From of XXXX bringing unweighted

our customer in-house customer revenue move of expectations as some to solutions changing the experience stabilization work to our staff. their behavior well for businesses, our onboarding newer longer-than-anticipated lines moderated have We recent to time for our reflect retain with and as origination

servicer are believe membership our estate to growth exciting and and conclude, revenue benefit anticipate from well-positioned strong with our In and sales contributor we and We we the a earnings. in origination product benefit strategic from believe strong we our well to Altisource's the pipeline. will plan. we growth, executing innovative market sales origination and results pipeline. real long-term quarter we for first In new our business, and will launches, our is should tailwinds pleased an business business, be are building a are continue significant business and To that

anticipate substantial execute we return shareholders. to for value to now plan up our I'll and business, win we a As customers open questions. more our continue will create call on Operator? company and for growth and the we

Operator

Mike We Securities. have Northland Instructions] from question Grondahl a [Operator

Mike Grondahl

Yes.

couple got Sorry, I minutes little had a of late. trouble bit of connecting. a on I

saw referrals. about How you of a have do should bit may a in sort think of significant do we a little you but foreclosures. think you long about So really in leg? similar this, or increase we that increase How see covered REO

William Shepro

allowed those first see to able some to saw now take we when foreclosures middle stabilizes started the increase going REO from the Mike, have back some and or referrals starting some were sell in we now, of not to in when start the government early that inventory homes. XXXX, receive real the of So new servicers loans delinquent those foreclosures what we foreclosures of a anywhere until in REO those X could and months all foreclosure to the on pre-pandemic recommence fall, of our think But completed to we to years. couple we're in are it because quarter,

at as long XX, as that Some homes will and selling REO. of and status of depending REO, take could later, months those start sell X, the XX, become those months foreclosure to homes X XX we on auction the that then later

Today, take, So inventory Mike at or the ago, I looking you and our couple were a REO years roughly we little just XXXX, think if it REO first of X,XXX. quarter at was roughly of about REO, bit. inventory a where stands in X,XXX give our back was

opportunity, I'm where the years. think of in year correct of million first couple Michelle, But compare when XXXX, that recovers but market the a have it's inventory $XX to we around during million to quarter significantly it if quarter, we to -- We of [indiscernible]. me million wrong, back, our grow in million, And $X generated did we comes $XX Hubzu. that us Hubzu take alone to I like $X.X first something you revenue as revenue of of believe, an this going back

recovers, revenue highest perspective. business to the a amount when and our recover it last going for a we of margin mean But tremendous think business to it can So earnings is be revenue from Altisource.

those as that's interesting that growing is but foreclosures now generate that's ultimately thing is our in up inventory auction other growing quite The all our we are auctions significantly not revenue, inventory and the restart, dramatically. foreclosure are foreclosure that quite portfolio will

to able And foreclosures sort that become as another get that's of grow be they Hubzu then indicator sold. And leading don't at the so sell if should the reach those as auction REO business sale. and they

Mike Grondahl

sale foreclosure you REO sale? do a on what per unit average, versus On make an

William Shepro

a go it to X% foreclosure we're anywhere depends. a X%. the generally from agent, couple probably getting to going REO the auction, we all look, from specifics, acting percent probably you XX couple premium. cases, a of in basis X% And in Yes. we're an anywhere not into some In buyer's earn some speak to a could we're of also be the cases, proceeds. and And That And real we can but as keep in we estate really points percent. of auction, to earn

Mike Grondahl

That's And it. helpful. you thumb a sale. waterfall? think say, many is to there REO rule Got there us, way can you at that Roughly, would got let's Is remind of foreclosures. -- end XXX a up how about

William Shepro

really at in I every in what mean cycle give point their give they foreclosures. I is terms can you the Yes. different customer of sort us

But say, customer can generally a auction foreclosure probably very talk that it's really generates in this. let's result ultimately impact to going revenue. I'm and So XX% around mix

Some us percentages the later in much customers the could foreclosure higher. give process, the be who

Mike Grondahl

inventory a housing market? quarters And then in in Are that grown it. Got your a or X,XXX this What's X? row, average you has seeing duration, units. faster sell anything the Hubzu quarter X in does

William Shepro

last -- REO. real Mike, X,XXX have look the home roughly been perfect these or increasing I couple conversion lot have of inventory lines when of robust our But been good. X,XXX you very we inventory over It's so, sale today, yes, estate aren't at a from and a has Average years. supply. think, a X,XXX of today, numbers, perspective, time sales been not rates market, So our price assets and our very again, about

Mike Grondahl

Got it.

William Shepro

take foreclosure time starts a normal XX,XXX takes the does over we work it that where market, process. starts for industry-wide to with back as And month, get to there's through foreclosure it those a

will the a out loan. get modify sale sell and to Some percentage They'll ultimately or re-perform or REO. will their those and the some borrowers of those home either work become the loan of will

Mike Grondahl

you're Do Maybe towards up half? second you the the on Got how growth still half. financials. the kind of year-over-year year seeing the more sort in shape two in it. still Is of that revenue back roughly working

William Shepro

expect the quarter. Yes. also in the revenue quarter fourth beginning We growth and third do the of year-over-year

more anticipate our than we year. this year, full for So be last revenue year will

Mike Grondahl

With I million still spell about at is it. the cash year kind Got know XQ in $XX still that was fair high $XX half and still roughly but roughly XX%, XX% of XX.X%, close? growth the usage. or to second of you about to million why

William Shepro

Yes.

year think, cash. I of that I prepared million with the million said remarks $XX on $XX we anticipate ending the to

the million So it’s bit than we’re a little more to million use. to $XX $XX going

Operator

The from Riley. Raj from Sharma B. Instructions] question next comes [Operator

Raj Sharma

to national I in acquisitions you're by the go the and track of about million I What expect $XX they that fourth So With about quarter end this acquisitions about actually projection if it to X XXXX. said the REO wanted you REO you seems Hubzu million million? talking your line; the in to a to there quarter just, in about a Bill, in and that, that of over shows slide, to REO year on the ramping the know of the $XX million $X start end by year still nice would year, talk or... from this $X could revenues be the

William Shepro

Yes.

sort sale. of reverses it is quarters your or prepared lag from inventory a remarks, the to outperforms declining, referral revenue growth a an a takes And sort your then I As itself. the decline. revenue in time Raj, to by of inventory the when of actually about that is that your talked because couple going grows, inventory When acquisition

quarters there's be probably a as could so grow couple you a of inventory. lag that to your be going And

happens declined. place the the took what as from So reverse inventory

and Hubzu, the begin But I So that some as a REO we REO as as on ultimately, auctions second we the degree. think, degree the lesser quarters slide to to down newer in place a sold on foreclosure some which little do remarks from homes to get third the grow expect the you And anticipate I revenue is of that impact of will some to in fourth the or second quarter. of quarter, those faster sort the be of roughly our the for some going Hubzu start said prepared take mix in states referrals. to become to again foreclosure benefit and bit

Raj Sharma

it. Got of know then pipeline pipeline, sort metric your the I And you of a introduced closing. of new probability the sales and

that you sign that you revenues accounts new the to additional are on hoping give and of $XX million these So looking $XX to would million? are

William Shepro

right. That's

we also range segment you it segment. right. What Servicer existing gave our think weighted new broke on then Estate and did out and So the customers be. the win basis And either with customers we with or that that's between total rate then the origination pipeline, a we average new is we and provided represents will products products. new a we And what Real

pipeline would side. tailwinds, result customers anticipate any default So on we for existing as our products exclude revenue with the our example, existing on of a growth that the

Raj Sharma

is Okay. And there a line that would year? of close when within time

William Shepro

Yes.

a sharing put like together predict. to it's then, of average. bit what you timing little of course, we And weighted with So stabilize would once is the close The for is harder revenue sort client. look that we what when a we're going to

getting this been give our you year. clearly, not I'll But unbelievable. for the an newer our has So to mean mean it's business. I all we're -- in we example I origination products going close feel just reception

these the a And time. at contract at then on just takes origination negotiate branch our we're get it APIs we then to have contract. turning you're originators customer, what negotiate to on one onboard longer side. massive basically, the pipeline we in all for newer learning place. the But is the We a solutions the once that launched And

takes to it in origination demonstrating originators a the while, revenue, market, customers are the amount but money. of in And many save we're save can a reception our today's So stabilize money. to we cases, meaningful looking

the reception more really we're help hiring demand really, turn strong. people is products so We're really proposals really we're focusing it's And pricing And for frankly, is on able now to getting faster with onboarding. the those just, strong. because to around being

Raj Sharma

comes Hubzu in Got margins for know the break business? lastly, the you Could year. it's I And talk flat it... it's just out know touch you be higher I a that then origination bit I that going then Is for know to little gross it. end. it margin profitability. what it; basis? to means you a business, upon said or gross money? example, the don't on And divisional the that Is it losing last you Hubzu, Can is about

William Shepro

of it I EBITDA in quarter. a little first think lost bit the

You cost we be and the revenue, a Q. could as as as And over of revenue. lost can couple is that lot more have scale I we it margin a anticipate take can My years. normalized basis do at grow believe, of it bring power. to a look again, ultimately, some also the generate and business of But we that a XX% of we're buying bit. on XX% But goods think mix we our your depends down optimistic business on recollection we business next a we just little more

Raj Sharma

And that's XX%. the EBITDA

William Shepro

Yes, margin. EBITDA

Operator

We Grondahl follow-up from Northland question Securities. have Mr. a from Mike

Mike Grondahl

but if sort or I about business is and the think Is XQ prepared saying XQ, repeat, slower a rates, were origination the of to that Bill, rising remarks XQ little XQ? your because is said the even just a flattish half I anything with understand maybe you what bit? Hubzu of year, little you in in can you down back

William Shepro

a first of got think little of to onetime because we going and bit benefits We revenue. Yes. some the the quarter of mix in down the it’s be

the turn even in quarter, benefits. and got though will going believe in around grow sequentially that then to the So revenue we onetime And think mix business going quarters. we of some we’re is margins the impact and the then fourth second to third we

Operator

this at Do show have moment, questions. And remarks? you. you Thank further other I no any

William Shepro

call, and Thank operator. joining Take everyone's for we you support. you, the appreciate care. Thank

Operator

concludes This Thank you, today's ladies and Thank for you participating. conference. gentlemen.

now disconnect. may You

Altisource Portfolio Solutions (ASPS) 28 Apr 222022 Q1 Earnings call transcript