ASPS - Earnings call transcript Q3 2024 | Altisource Portfolio Solutions S.A.

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Operator

Good day, and thank you for standing by. Welcome to the Altisource Portfolio Solutions Third Quarter 2024 Earnings Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Michelle Esterman, Chief Financial Officer. Please go ahead.

Michelle Esterman

Thank you, operator. We first want to remind you that the earnings release, Form 10-Q and quarterly slides are available on our website at www.altisource.com. investors useful. information additional provide may find These

forward-looking Our and results uncertainties include should forward-looking not qualified to forward-looking relied with involve risks statements, which as expressly that are Financial be and remarks and statements projections as other today differ. scenarios statements upon. could unduly cause actual

as extremely of governmental Form to responses the it Please to servicer our events. as in review statements, the the with projections different to fiscal to impact sections In conditions information potential and and difficult or uncertainty contained in financial addition describing economic forward-looking factors XX-K results. on change well statements, we as obligation and well new as future the result of COVID-XX may statement pandemic, the company's We quarterly the in government associated usual the lead future XXXX policies risk current Altisource. update the or industries a operate continuing state scenarios circumstances, factors earnings provided a impacts and economy some that predict the in release make of no which forward-looking to herein as provided undertake slides previously and the

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

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

William Shepro

in resilience service despite average last to initiations foreclosure XX% both the and August year. XX% another morning. I'll sales in We good sequentially and market. period through decline rates, We in a year foreclosure begin grew X. and revenue had Thanks, same this challenging solid decline delinquency X% our compared quarter, demonstrating a Slide decline a in serious year-over-year a Michelle, on

was in corporate wins reflects to strongest $X.X expense. to by year in claims and compared of Estate last Service margin the adjusted million indemnity change costs renovation and We last million offset margin origination $XX.X grew The business cash offset million adjusted higher EBITDA equivalents than adjusted legacy service and service cash year, million XX.X% by from EBITDA a in Servicer same represents service quarter, million $XXX,XXX provides EBITDA higher by Servicer generated The service mix expansion primarily by to quarter. XXXX. in The higher or by in compared SG&A the revenue, the a Estate we partially by legacy the compared and revenue, homes $XX.X claims quarter $X.X quarter, approximately launched revenue for trends higher EBITDA Compared ended information and results third our lower discussed. improvement an for We of offset the certain compared in improvement businesses. recently that services Hubzu generated segment the segment last impacted sold over increase second revenue expansion XX benefited quarter, growth sales The from $XX.X fewer SG&A improvement and renovation EBITDA last million. Slide and adjusted primarily last the improved our over SG&A quarter last expansion higher service price wins. compared in just on XX.X% last the will revenue results services. year X.X%, and quarters. and also than improve Origination wins EBITDA revenue, additional year year-to-date We X service $XXX,XXX performance. lower were positive. a increases in to total company scales. each driven with Adjusted $X.X year. $X.X primarily negative last and costs, financial revenue bad growth Real margin costs are segment. Adjusted indemnity million revenue was margin field was debt is and was service driven EBITDA in higher-margin the higher impacted by For million bad quarter segment, as expansion $X.X margins XXXX margins period period margin This anticipate approximately in Real from lower from partially our in of and in revenue for business to the same million X.X% it EBITDA $X Adjusted expense, expenses of and costs business performance from quarterly our $X.X in by sales debt to of the a decline ramping period million primarily to I to segment sales higher the year. or adjusted corporate the partially mix compared and and

the ramp guidance to business, higher-margin been XXXX, our starts lower rapidly and our negatively title over EBITDA starts the assumed year, lower and in fourth our we forecasting low last although and increase base. our X third a the of Despite cost year-to-date and actual the Estate full compared by guidance provides and Real wins Servicer legacy to businesses; sales we impacting while strong This driven in we are is foreclosure one, trustee have and two, we adjusted than assumed launch for highlights close revenue our factors: modest bad Looking to compared through we more Hubzu, renovation sales our are as ramp year, and and going anticipate and improvement quarter growth growing efficient higher were anticipated. Slide anticipated end XXXX service of to primarily debt indemnity claims X strong sales expense segment. are earlier three, quarter we business; that on this achieve guidance. our to

of service expenses Renovation close earlier. Since Despite adjusted April the XX EBITDA was last and year growth, received revenue last million this per average business, we of property. $X.X XX.X% growth flat months discussed renovation referrals just late $XXX,XXX revenue lower the launch ramp year. September including the progresses. business grew of earnings that sequentially to cost service over than as I Renovation change business X quarter larger at by in anticipate to will higher is Based an of year upon revenue, the revenue business quarter, product We the revenue our launch. X.X% launched rapid now For this one we from and roughly XX% SG&A service in service and business and the lines over year. after renovation of reflects recently mix, our the the second this from This

customer years customer We are service revenue and Estate X of in a and and EBITDA another first also months renovation and the be the onboarding provides wins anticipate first pipeline. believe business referrals We quarter. the a very to should from sales in receiving this to renovation summary Real our strong Altisource's and Servicer contributor come. Slide our

we the generate million will revenue quarter, won once fully estimate that new we ramped. business For $X.X annual in

quarter segment annualized revenue Real will annual million increase million XXXX pipeline last quarter, sales wins. service of and the $X.X reflects in years. we were of average weighted $XX.X of of generated earlier-stage also and million revenue contribute ended in Estate to stabilized from next sales of with basis XXXX the an We service on over the $XX.X quarter the compared The Servicer basis, the of on most the sales a addition opportunities. pipeline revenue couple forecast primarily of which We

this delinquency and Estate is and financial XX% periods is pleased X.X%, August and in lower which lower of average with the Real The and year. negatively sales. Servicer rates initiations We performance and foreclosure are delinquency segment XXXX pre-pandemic historical rate starts foreclosure than the the levels default which serious and X than market. Slides provide residential through XXXX last XXXX, serious are the anemic and impacting given year sales of same X

Foreclosure that delinquency starts lower our Should XX%, would and in and are XX%, the or XX% experience and same solutions strong market sales X% than growth. normalize period in rates the period rise, the default-related lower XXXX, XXXX. we anticipate than same and

origination Moving Slide XX. to our on segment

We improved third bad efficiency year, EBITDA $XXX,XXX expense third of all this margins profit, service EBITDA cost primarily pipeline. continue quarter. $X.X summary and an improved margins, of sales origination from $XXX,XXX the provides to in of won progress service quarter segment. Compared Originations adjusted quarter, annualized prior last the and quarter. Slide to basis, the million to improved by lower EBITDA primarily on estimated initiatives. segment's we million in last of Compared The EBITDA XX and professional revenue, savings $X.X improving performance services growth, of make adjusted new adjusted reversal On relative and wins stabilized by revenue year gross and adjusted similar and business a to segment the debt the second gross an expense. our profit from

average sales at weighted the was quarter end $XX.X Our pipeline of million. the

the X signed with X homeowner customers. insurance quarter, and During credit customers agreements we

Turning to our on Corporate XX. segment Slide

strong We are discipline. maintaining cost

lower the compared flat savings $X.X and adjusted quarter million loss The roughly of and Third to corporate of loss quarter adjusted of million EBITDA cost $X.X initiatives. EBITDA year. better XX% corporate was year our third quarter or reflects last this than second to XXXX efficiency the

first sales the same Service year-to-date starts $XX.X our the Slide period. despite EBITDA than higher the $X.X and months of same X year, to is last foreclosure the X% decline revenue rates, pleased with in Moving period I'm third performance this million and delinquency quarter is foreclosure higher. year million for XX. serious and adjusted over or

we our up company revenue growth. I'll ramp ongoing now wins, customer launch further the call questions. for the With positioning recent our and and diversifying and open streams are for Operator? Renovation business sales and of the base

Operator

Sharma from of of Riley. the question line Instructions]First [Operator Raj comes B.

Rajiv Sharma

is last work. on of Good of the follow-on now that year? continued And in part what included had Is percentage -- pre-foreclosure work foreclosure that earlier a you you a do is about to then pre-foreclosure process when the I opposed revenues say total loss and the wanted guys I work, would mitigation that that business to progress understand as of lot that the the Renovation you more that question. work have talked and numbers.

William Shepro

Raj, back. what -- me we're step let so think I take a

I think as had is, it expected as is we this market what year. performing the perform seeing well we're not to overall,

prices inventory, And earlier because than year. is lower for have what starts sales. the year-to-date is have held the lower on seeing year to where in to quarter, modest Sales think last the in number modeled as an a impact had impacting a than quarter. pretty year foreclosure But units we're the significantly in on -- got in as that our are the particularly was, from And third sales of us it us the compared reality actually place. I we that impact the that's didn't starts this meaningful foreclosure this in it Ocwen and third had very guidance up. and increase in we inventory inventory we've you already the of REO sold. and the much

processes. adding trustee new are X or We more in to success adding customers. And decent customers. done the new some We've a having job added X of REO also earlier clients stage we've

Some quarter. year third the another to came referrals one in ramp beginning is up last and their to us

inventory So this now, Ocwen where and REO decent for period non-Ocwen right time also an from both foreclosure down to non-Ocwen last sitting increasing. increasing REO compared as inventory perspective, year, compared our is amount to customers last I on is year our our inventory this is REO, customers a inventory but as is think with we're well Ocwen

is the but our overall market, impacted quite offset an on the business, some meaningfully. market is impact sales quarter helping having it and So of us the

Rajiv Sharma

business? it what Great. Again, a just Could largest becoming remind is of talk the the entails. us little business. part Renovations bit you your It about

William Shepro

Sure.

REO quarter So largest in services to the fourth in for renovation we year, an of the one signed U.S. assets of the provide of agreement last owners

believe, we think the takes go. that receive that through revenue you far referral home April or start are once we that work, to work, the think payments $XXX,XXX as got cost. then get interim we generate first I of XX, I referrals, submit so to work. renovate, we're the each the XXXX. revenue. for in we've And April yesterday, roughly into And then we time once generating. our referrals we close it And bid received will probably XX of That's we're the And late paid renovation approved your start a bid and well probably

in just correct so hundred the did business. second ramped And a about if It's Michelle, from I we're pretty of thousand the couple the in third think me I'm about nicely. million excited wrong, up in but quarter. $X.X revenue quarter, we quite

Michelle Esterman

That's right, $X.X million.

William Shepro

will customer remarks, And going mentioned in that's think prepared nicely going we another as And renovation quarter. start actively and we this we're the of year. to sending very going market signing we we first fourth ramp are up others my year just next the And that quite referrals to anticipate in going a that's the end into into business to quarter. into that

Rajiv Sharma

then also and please. And just $X.X about the indemnity legacy the mentioned the Can bad you -- again? And debt that higher it. Got claim SG&A. the expense, million you talk indemnity

William Shepro

Yes.

impacting on quarter and slower think Hubzu, I business we a us X little and perhaps in a I for bit what was million of to not last the year, title EBITDA, there maybe are primarily services trustee default the anticipated the If and of think the about to from default-related cost this impact that's but some it, the $X things. of side. market happen compare going we the ramp to year, of our

the to think renovation of our slower ramp I compared business the plan.

started we which another bad cost debt. about we couple That $X.X comprised of That's services of higher us professional is later the months think both $XXX,XXX. And expected. a than SG&A, then of I and EBITDA. probably about million

in probably total, cost expected we us to do. compared about the in $X what quarter million So to it

several expected we'll was legacy there exactly then we debt, bad to get legal be sure happen expected. customer collectible the subsequent years, this quarters, the smaller We So it's just to paid going think expenses then higher legal when, going a have some to think there's didn't. particular. not we some that customer X and quarter And perspective, back think it's to We and and us indemnification matters but than collectible. from we in pay in ultimately fees

Rajiv Sharma

on Got just and refis. you lastly, business rates here? a then color it. see that pickup with how of provide do originations perhaps some continued you the see Could And on lowering business, higher you

William Shepro

Yes. Sure.

September, rates economic news So to close we there positive picked came, was a I to back up. X%, rally late saw a mortgage think up very quickly in the volumes rates That I in early origination to think, as summer, into I and was went think. halt and

I a little bit there. so was a there of rally think And

lot loan of a there think I the recapture pickup have that the platform. to servicers a went

we didn't so impact over see from of And much an that the summer.

from revenue the second third to I was think flat our roughly quarter.

business. more to adding the progress good really making are We clients credit

contracts more new sales insurance I think clients, we added X quarter, quarter. the or and X the customers X we signed wins over added or over

where I to job we So through work to think to new money more we going then we're good continue do our these launch just make and adoption as execute on members that a increase strategy products products. helping

increase products I and those And does, to we're from that's market. of We'll us. to strategy our going and continuing do to continuing the going be buying so what of it to add in the keep members adoption think products

Operator

the from of of Next [Operator Grondahl question comes Instructions] line Northland. Mike

Mike Grondahl

like EBITDA look cost this what business? rough the And follow-up. a on, could know, don't revenues any adjusted I 'XX? Bill, margin any in go is Or case, in ahead. Renovation a business, about in kind business? then of the insight thinking then base plus But And

William Shepro

revenue our of So month and looking a we're still $X.X cost XX finalized average going do at -- process look, on we planning million next of if I so for through $XXX,XXX, a renovation haven't you think that. referrals get you're an year, month.

a at get If $X of client, from million are the stabilized XX basis, winter looking on outflows you roughly and that referrals month month a a inflows revenue you're same.

turn way from model, we tough a think I out some but guidance, they it's only doesn't guidance expected. our the and customer, business necessarily get it's so And it to

costs, think next of margins, about a hard optimistic which space, as paid the making they're to it's exactly contributor estimate managers meaningful very but for in year, be for them. XX% as going they're a we're to be corporate type some it's where to separately, point. construction From their XX% typically it's high maybe after this XX you to at margin if So going perspective,

hope And higher the we'll be side. of that so we end on

Mike Grondahl

seems a X referrals, it have mean, risk, you overage? XX, And cost you does you capacity month, XX, your the Got to follow-ups. ASPS already what have there's got I do but then -- the What it. maybe to you XX XX And like what's just XX take you Do then, risks capacity kind handle what it more? address this build a out, Could if of are in that. if referral, you if business?

William Shepro

to cost risk it's a what pretty a we and you and paid change up Sure. risk, because that you submit we The flip approved. order, it's we to those, risks the think underestimate going get overage. And mitigate that's you mold, are handle Mike. that work for and if then a good a But we've for wall was open approved, underestimate the change submit a We if to and if able that you of found about order. is got side, take bid, think can though, on the client you the you that cost

a we work it's I scope margin the we it for so from and change cost going can to And an out, do expected, we additional the orders that think on that could upfront attractive work or charge the good for or we've to items the and turns make there's understanding work. not work work, job us what to submitted. if very on that have there's our bid additional And clients, requirements complete then

the good risk. it handle manage a got and on we've think I can So

Mike Grondahl

And Got the it. capacity?

William Shepro

well. perspective, from we feel a capacity Yes, as good very

that we or are need regional a today a operating each markets. additional managers in of have managers overseeing those states in pipeline with should markets new few and regional them X the stragglers of programs states other some We we states. And in have -- we're in those primarily

capacity. good good a back in lot then feel -- about And office very got we about the infrastructure work, we've of the place. So

Operator

next from Instructions] B. line Our comes the of [Operator question Raj Riley. Sharma of

Rajiv Sharma

or your to of think hop changed upside just business, fundamental it change the level the the rate to Has delinquencies. you the do ask back got or I on mean in it's you of are the on potential pre-COVID ever your how and again views in progressing, any has anything foreclosures. I wanted impacted we seeing run and this outlook? market foreclosure if

William Shepro

remarks. and coming didn't prepared talk early level adjusted in I some look, I any would yesterday, sales ever report No, think they that came we some there basis, annualized pandemic. I a of the this look out are the on about guessed post XX-year my I where do initiations to mean, be it I think home signs, today think us like they're don't would going of foreclosure do be of have -- sales seasonally low a year. there's at out mean that are

XX%. I those they down, available if high. impacted And coming down. last leading a and coming compared increased that less usually homes This prices equity prices may The be think over think year have you more then originations inventories -- of stubbornly interest is home cohorts sale. are for recent staying by good by indicator to to about rates

delinquency And higher. so could that drive rates

down work pre-pandemic. as last remarks, about I to our from this think talked compared to benefit to the forever. revenue delinquency lasts to when actually turns, has the come to average in continue think serious as but prepared wait. diversify I this we I rate position compared need And do and year don't ultimately a we're we the we year in but sure it market make to turns, also think it

it turn we think I seen yet. overall, Mike, So haven't

more the time But In in is think It will back yet. fact, direction. just market little happened bit it's the everything hasn't default to normal. and other I cyclical a get gone

Rajiv Sharma

you more terms loss and And are of share the in doing And versus work pre-foreclosure mitigation the it now? last up year? has your of work, gone

William Shepro

existing you also basis of a there's And and strong not won us pre-foreclosure think the combat some of not title slide, servicers. customers, doing going -- us on from that's on perspective. a weighted X-or-so saw performer. offset But market business, continue a in share We're scorecards, decline. and on our from to grabbed the I new there average as on have, look, but sales grab sales grab it's a on market clients of our just loan we win prospects. to the well the really we We've business help a won to pipeline of of new side more helped -- new out ton think decent-sized the some trustee there's existing share work. hand-to-hand customers kind now. We're with we right decent We've and That's side, some

Operator

questions for further no like time. would to this closing showing back it I'm at Shepro Bill now I turn remarks. to

William Shepro

third and Thanks positioned today. Great. for for quarter We're with we're joining and our pleased Thanks, believe operator. beyond. financial performance XXXX well

Operator

Thank today's the you conclude for This in conference. does your program. participation

may now disconnect. You

Altisource Portfolio Solutions (ASPS) 24 Oct 242024 Q3 Earnings call transcript