Q4 2023 Altisource Portfolio Solutions SA Earnings Call

March 7, 2024

Operator: Thank you for watching. For more information, visit www.salesforce.com. Hello, and thank you for standing by. Welcome to Altisource's Fourth Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode.

Okay.

Hello, and thank you for standing by.

Welcome to our resorts fourth quarter 2023 earnings conference call.

At this time all participants are in a listen only mode.

Operator: After the speaker's presentation, there will be a question and answer session. To ask a question during this session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again.

After the speaker's presentation, there will be a question and answer session.

To ask a question. During this session you will need to press star one on your telephone.

You would then here are automated message advising your hand is raised.

To withdraw your question. Please press star one again.

Operator: I would now like to hand the conference over to Michelle Esterman, Chief Financial Officer. You may begin. Thank you, Operator.

I would now like to hand, the conference over to Michele estimate Chief Financial Officer, you may begin.

Thank you operator, we first want to remind you that the earnings release Form 10-K, and quarterly slides are available on our website at www Dot L P, Georgia Dot com.

Michelle D. Esterman: We first want to remind you that the earnings release, Form 10-K, and quarterly slides are available on our website at www.altisource.com. These provide additional information investors may find useful. Our remarks today include forward-looking statements, which involve a number of risks and uncertainties that could cause actual results to differ. In addition to the usual uncertainty associated with forward-looking statements, the continuing impacts of government and servicer responses to the COVID-19 pandemic, governmental fiscal policies, and current economic conditions make it extremely difficult to predict the future state of the economy and the industries in which we operate, as well as the potential impact on Altisource. Please review the forward-looking statements sections in the company's earnings release and quarterly slides, as well as the risk factors contained in our 2023 Form 10-K, describing some factors that may lead to different results. We undertake no obligation to update statements, financial scenarios, and projections previously provided or provided herein as a result of a change in circumstances, new information, or future events.

To provide additional information investors may find useful.

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

In addition to the usual uncertainty associated with forward looking statements the continuing impacts of government and service your responses to the COVID-19 pandemic governmental fiscal policies and current economic conditions make it extremely difficult to predict the future state of the economy and the industries in which we operate as well as the potential impact.

The source.

Please review the forward looking statements sections in the company's earnings release, and quarterly slides as well as the risk factors contained in our 2023 Form 10-K, describing some factors that may lead to different results. We undertake no obligation to update statements financial scenarios and projections previously provided or provider.

And as a result of a change in circumstances, new information or future events.

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

During this call we will present, both GAAP and non-GAAP financial measures.

In our earnings release and quarterly slides.

You will find additional disclosures regarding the non-GAAP measures a reconciliation of GAAP to non-GAAP measures is included in the appendix to the quarterly slides.

Michelle D. Esterman: Joining me for today's call is Bill Shepro, our Chairman and Chief Executive Officer. I will now turn the call over to Bill. Thanks, Michelle, and good morning.

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

Thanks, Michelle and good morning, I'll begin on slides four and five we are pleased with our performance in 2023, as we continue to strengthen our financial position and win new business, which is not fully ramped.

William B. Shepro: I'll begin on slides four and five. We're pleased with our performance in 2023 as we continue to strengthen our financial position and win new business, which has not fully run, in the face of serious market headwinds for both business segments. Service revenue in the servicer and real estate segment was only 4% lower than 2022, and service revenue in the origination segment outperformed the overall market with a decline of 11% compared to a 36% decline in industry-wide residential origination volume. We improved total company-adjusted EBITDA by $15.7 million compared to 2022 and by $30.8 million compared to 2021. Our 2023 total company adjusted EBITDA improvement is largely from product mix, higher margins in our businesses, and lower corporate operating costs. The 2023 adjusted EBITDA margins in the business segments improved by 680 basis points to 25.1%, and the corporate segments adjusted EBITDA loss declined by 18.4% to $35.1 million.

In the face of serious market headwinds for both business segments service revenue in the servicer in real estate segment was only 4% lower than 2022 in service revenue in the origination segment outperformed the overall market with a decline of 11% compared to a 36% decline in industry wide.

Residential origination volume.

We improved total company adjusted EBITDA by $15 $7 million compared to 2022 and by $38 million compared to 2021.

2023 total company adjusted EBITDA improvement.

As largely from product mix higher margins in our businesses and lower corporate operating costs.

For 2023, adjusted EBITDA margins in the business segments improved by 680 basis points to 25, 1% and the corporate segment's adjusted EBITDA loss declined by 18, 4% to $35 1 million.

William B. Shepro: Company-wide, we generated positive adjusted EBITDA for five of the last six months of 2023, including $520,000 in December. We're off to a good start in 2024, generating $900,000 of adjusted EBITDA in January. During 2023, we won new business, strengthened our sales pipeline, and took steps to improve our balance. I'll discuss our wins and sales pipeline in greater detail in a few minutes. With respect to the balance sheet, we reduced the principal balance of our term loan by $23.1 million, or 9.4%, and extended the maturity date of our term loan and revolver to April 2025, with the option to extend both by another year, subject to meeting certain conditions.

Companywide, we generated positive adjusted EBITDA for five of the last six months of 2023, including $520000 in December.

We're off to a good start in 2024 generating $900000 of adjusted EBITDA in January.

During 2023, we won new business strengthen our sales pipeline and took strength steps to improve our balance sheet.

I'll discuss our wins and sales pipeline in greater detail in a few minutes.

With respect to the balance sheet, we reduced the principal balance of our term loan by $23 1 million or nine 4%.

And extended the maturity date of our term loan and revolver to April 2025, with the option to extend both by another year subject to meeting certain conditions.

William B. Shepro: Turning to slide six in our 2024 forecast, we believe our sales wins, enhanced margins, and lower corporate costs position us for strong revenue and adjusted EBITDA growth. Based upon our current expectations for the market in which we operate, which assumes only a modest benefit from the post-COVID increase in foreclosure starts and 17% growth in industry-wide origination volume, we are forecasting $155 to $180 million in service revenue and $17.5 million to $22.5 million in adjusted EBIT.

Turning to slide six and our 2024 forecast.

We believe our sales wins enhanced margins and lower corporate costs position us for strong revenue and adjusted EBITDA growth.

Based upon our current expectations for the market in which we operate which assumes only a modest benefit from a post COVID-19, increasing foreclosure starts and 17% growth in industry wide origination volume.

We're forecasting $155 million to $180 million in service revenue and $17 5 million to $22 5 million in adjusted EBITDA.

This represents 13% to 32% service revenue growth.

And an $18 4 million to $23 $4 million improvement in adjusted EBITDA over 2023.

William B. Shepro: This represents 13% to 32% service revenue growth and an $18.4 million to $23.4 million improvement in adjusted EBITDA over 2023. We are forecasting that the service revenue growth will be driven by the continued ramping of our 2023 sales wins. 2024 Sales Wings and Price Increases for Certain Services. We anticipate that the 2024 adjusted EBITDA improvement will be driven by one revenue growth, higher business unit margins, primarily from the full year benefit of 2023 cost savings and efficiency initiatives, price increases, and scale, and three, lower corporate operating costs from the full year benefit of 2023 cost savings and efficiency. While it is still early in the year, we're off to a good start in January with adjusted EBIT of $900,000. As we look beyond 2024, we anticipate that our businesses will also benefit from the sales windfall. Continued recovery of the default market and normalized origination volume.

We are forecasting that the service revenue growth will be driven by the continued ramping of our 2023 sales wins.

2024 sales wins and price increases for certain services.

We anticipate that the 2024 adjusted EBITDA improvement will be driven by one revenue growth.

Two higher business unit margins, primarily from a full year benefit of 2023 cost savings and efficiency initiatives.

Price increases and scale and three lower corporate operating costs from the full year benefit of 2023 cost savings and efficiency initiatives.

While it's still early in the year, we're off to a good start in January with adjusted EBITDA of $900000.

As we look beyond 2024, we anticipate that our businesses will also benefit from the ramp up sales wins continued recovery of the default market and normalized origination volumes.

Slide seven provides a summary of our 2024 strategic initiatives.

As you can see we established four initiatives to support long term growth.

First accelerated business development efforts on solutions, where we believe alto source as a strong performer generates high margins and where we forecast market tailwind.

Several of our businesses generate strong margins and we believe are in high demand as servicers prepare for a rise in delinquencies and originators look to improve their profitability.

William B. Shepro: Slide seven provides a summary of our 2024 strategic initiative. As you can see, we established four initiatives to support long-term growth. First, accelerate business development efforts on solutions where we believe Altisource is a strong performer, generates high margins, and where we forecast market tailwind. Several of our businesses generate strong margins, and we believe they are in high demand as servicers prepare for a rise in delinquencies, and originators look to improve their profitability. We plan to focus our business development efforts on these offices.

Plan to focus our business development efforts on these offerings.

Second deliver strong operational efficiency and manage costs to drive higher gross profit and adjusted EBITDA margins, we plan to continue to evaluate and implement processes to streamline operations and reduce costs in those businesses and corporate departments that we believe will generate the greatest.

The impact on profitability and performance.

Third strengthen customer relationships and cross sell other solutions to existing customers to gain wallet share we.

We have hundreds of revenue generating customers. We believe that there is a significant opportunity to grow business with our existing customer base through strong performance in cross selling other solutions.

William B. Shepro: Second, deliver strong operational efficiency and manage costs to drive higher gross profit and adjusted EBITDA margins. We plan to continue to evaluate and implement processes to streamline operations and reduce costs in those businesses and corporate departments that we believe will generate the greatest impact on profitability and performance. Third, strengthen customer relationships and cross-sell other solutions to existing customers to gain wallet share. We have hundreds of revenue-generating companies; we believe that there's a significant opportunity to grow business with our existing customer base through strong performance and cross-selling other solutions. Sports launched new offerings intended to help Lenders1 members improve their profitability.

Fourth launch new offerings intended to help lenders one members improve their profitability.

We believe that there is a significant opportunity to improve lenders one members profitability and grow our revenue and earnings by launching new solutions that leverage the lenders one members collective buying power.

Moving to slide eight and our countercyclical service or our real estate segment for.

For 2023 service revenue declined by 4%, which reflects growth in certain higher margin businesses that support the earlier stage of the default process.

Offset by modestly lower service revenue from the fourth quarter 2022 exit of low margin employee outsource business and fewer referrals that are lower margin field services business.

We improved the servicer and real estate segments, adjusted EBITDA and adjusted EBITDA margins 2023, adjusted EBITDA of $37 1 million was $5 9 million or 18, 8% higher than 2022 and.

William B. Shepro: We believe that there is a significant opportunity to improve Lenders1Members profitability and grow our revenue and earnings by launching new solutions that leverage the Lenders1Members Collective Fund. Moving to slide 8 in our counter-cyclical servicer and real estate segment. For 2023, service revenue declined by 4%, which reflects growth in certain higher-margin businesses that support the earlier stage of the default process, offset by modestly lower service revenue from the fourth quarter 2022 exit of a low-margin employee outsource business, and fewer referrals in our lower-margin field services.

And adjusted EBITDA margins improved to 34, 4% from 27, 9%.

Adjusted EBIT growth and margin improvement reflect product mix and benefits from cost reduction and efficiency initiatives, partially offset by modestly lower service revenue.

Slide nine provides a summary of our servicer real estate sales wins and pipeline.

For the year, we won new business that we estimate will generate $58 $4 million in annual revenue on a stabilized basis over the next couple of years.

William B. Shepro: We improved the servicer and real estate segments' adjusted EBITDA and adjusted EBITDA margin. 2023 adjusted EBITDA of $37.1 million was $5.9 million, or 18.8% higher than 2022, and adjusted EBITDA margins improved to 34.4% from 27.9%. Adjusted EBITDA growth and margin improvement reflect product mix and benefits from cost reduction and efficiency initiatives partially offset by modestly lower service revenue. Slide nine provides a summary of our servicer and real estate sales wins and pipeline. For the year, we won new business that we estimate will generate $58.4 million in annual revenue on a stabilized basis over the next couple of years. We had a couple of significant sales wins in the fourth quarter. The first was signing agreements to provide renovation services for one of the larger owners of REO.

Had a couple of significant sales wins in the FERC fourth quarter.

The first was signing agreements to provide renovation services for one of the larger owners of Oreo assets.

We anticipate that we will start to receive the first renovation referrals toward the end of the first quarter and ramp as the year progresses.

The second one was an expansion of wallet share with an existing customer and our higher margin trustee business. We.

We started to receive an increase in referrals in January.

And anticipate referral volumes to grow steadily through the summer.

We ended the year with a total weighted average sales pipeline of $31 million of annual revenue on a stabilized basis.

First of which will impact 2025 and beyond.

There are a few larger late stage opportunities in the pipeline worth noting we.

We are currently negotiating an agreement to provide REO auction services for a loan servicer and their real estate agents.

Also discussing market share expansion with one of our Oreo asset management customers and.

And finally, we are negotiating agreements to provide trust services for a couple of non bank loan Servicers.

William B. Shepro: We anticipate that we will start to receive the first renovation referrals toward the end of the first quarter and ramp up as the year progresses. The second win was an expansion of WalletShare with an existing customer in our higher-margin trustee business. We started to receive an increase in referrals in January, and we anticipate referral volumes to grow steadily through the summer. We ended the year with a total weighted average sales pipeline of $30.1 million in annual revenue on a stabilized basis, most of which will impact 2025 and beyond. There are a few larger late-stage opportunities in the pipeline worth noting. For example, we are currently negotiating an agreement to provide REO option services for a loan servicer and their real estate agent.

We hope to have more to report on these exciting opportunities with our first quarter earnings call.

For 2024, we anticipate that our servicer in real estate segment service revenue and adjusted EBITDA will improve considerably compared to 2023 from the continued ramp of 2023 sales wings conversion of sales wins to revenue.

Nice increases for certain services and the full year benefit of 2023 cost savings and efficiency initiatives.

Our hubs you in later stage Oreo offerings forecast assumes only a modest benefit from the post COVID-19 increase in foreclosure starts.

Turning to the macroeconomic environment and slide 10.

There are early signs of consumer financial stress, which could be precursors to arrive and 90 plus day mortgage delinquency rates.

Consumer savings have declined that is growing early stage delinquency rates are rising and home affordability entered 2023 at a near 10 year low.

William B. Shepro: We're also discussing market share expansion with one of our REO Asset Management divisions. And finally, we are negotiating agreements to provide trustee services for a couple of non-bank loan services. We hope to have more to report on these exciting opportunities with our first quarter earnings. For 2024, we anticipate that our servicer and real estate segment service revenue and adjusted EBITDA will improve considerably compared to 2023 from the continued ramp of 2023 sales when Conversion of Sales Wins to Revenue, price increases for certain services, and the full year benefit of 2023 cost savings and efficiency. Our HUBZoo and later stage REO offerings forecast assumes only a modest benefit from the post-COVID increase in foreclosures. Turning There are early signs of consumer financial stress, which could be precursors to a rise in 90-plus day mortgage delinquency rates.

Credit card debt is at record high balances on home equity lines of credit have grown for 17 consecutive quarters 401, K hardship withdrawals continue to grow and early stage auto and credit card delinquencies continue to rise.

According to the Federal Reserve Bank of New York Credit card and auto loans that are becoming delinquent are rising above pre pandemic levels Cigna.

Signaling increased financial stress.

Early stage mortgage delinquency rates are also rising comparing December 23 to December 'twenty, 215% more in mortgages are delinquent by one payment and 16% more mortgages are behind by two payments.

Moving to our origination segment in slide 11.

Our origination segment performed well in a difficult origination environment.

Despite the 36% decline in industry wide residential origination volumes in 2023 compared to 2020 to the origination segment outperformed the market with a revenue decline of only 11%.

And in the adjusted EBITDA improvement of $1 9 million.

This reflects revenue growth from the lenders one business from customer wins from our newer solutions pars.

Partially offset by revenue declines in our other origination businesses.

Were impacted to a greater degree by lower origination volumes.

William B. Shepro: Consumer savings have declined, debt is growing, early stage delinquency rates are rising, and home affordability ended 2023 at a near 10-year low. Credit card debt is at a record high, balances on home equity lines of credit have grown for seven consecutive quarters, 401k hardship withdrawals continue to rise, and early stage auto and credit card delinquencies continue to rise. According to the Federal Reserve Bank of New York, credit card and auto loans that are becoming delinquent are rising above pre-pandemic levels, signaling increased financial strength. Early-stage mortgage delinquency rates are also rising.

Adjusted EBITDA improved from cost savings and efficiency initiatives.

For 2023 of the origination segments gross profit gross profit margins adjusted EBITDA and adjusted EBITDA margins, all improved relative to 2022.

Slide 12 provides a summary of our origination segment sales wins and pipeline.

During a very difficult origination market, our focus on helping our lenders one members save money and better compete drove substantial interest in our solutions.

On an annualized stabilized basis, we wanted an estimated $10 $3 million in new business for the year.

Our weighted average sales pipeline at the end of 2023 was $18 million with $4 million of the $18 million in the contracting stage.

For 2024, we anticipate our origination segment service revenue to outperform the forecasted 17% increase in industry wide origination volume and adjusted EBITDA to improve considerably compared to 2023.

William B. Shepro: Comparing December 23 to December 22, 15% more mortgages are delinquent by one payment, and 16% more mortgages are behind by two payments. Moving to our origination segment, slide 11. Our origination segment performed well in a difficult origination environment. Despite the 36% decline in industry-wide residential origination volumes in 2023 compared to 2022, our origination segment outperformed the market with a revenue decline of only 11% and an adjusted EBITDA improvement of $1.9 million. This reflects revenue growth in the LendersOne business from customer wins from our newer solutions, partially offset by revenue declines in our other origination businesses that were impacted to a greater degree by lower origination volume. However, adjusted EBITDA improved from cost savings and efficiency.

This is from sales momentum and our lenders one business.

The full year benefit of 2023 cost savings and efficiency initiatives January 24 price increases for certain of our services.

And the launch of new solutions that help lenders one members improve their profitability.

On the new solution front, we are planning a soft launch of lenders one homeowners insurance in the first quarter.

Through this program, we will work with an insurance technology partner and over 40 insurance carriers across 50 states to provide lenders one members borrowers with access to competitively priced homeowners insurance.

We believe the regular launch of new solutions to lenders one members.

Combined with greater adoption of our existing solutions will strengthen our value proposition for lenders one members and support further revenue and earnings growth in our origination segment.

William B. Shepro: For 2023, the origination segments gross profit, gross profit margins, adjusted EBITDA, and adjusted EBITDA margins all improved relative to 2022. Slide 12 provides a summary of our Origination Segment Sales Wins and Pipes. During a very difficult origination market, our focus on helping our Lenders1 member save money and better compete drove substantial interest in our solution. On an annualized, stabilized basis, we won an estimated $10.3 million in new business for the year. Our weighted average sales pipeline at the end of 2023 was $18 million, with $4 million of that $18 million in the contracting state.

Turning to our corporate segment on slide 13.

We continue to bring down our operating costs.

2023, adjusted EBITDA loss of $35 1 million or $7 9 million or 18% better than 2022.

The lower adjusted EBIT loss reflects our cost savings and efficiency initiatives.

For 2024, we anticipate adjusted EBITDA loss to improve compared to 2023 from a full year benefit of.

2023 cost savings and efficiency initiatives.

Moving to slide 14.

The environment over the last few years created a perfect storm for Alta source.

William B. Shepro: For 2024, we anticipate our origination segment service revenue to outperform the forecasted 17% increase in industry-wide origination volume and adjusted EBITDA to improve considerably compared to 2023. This is due to Sales Momentum and our Lenders1Business. The Full Year Benefit of 2023 Cost Savings and Efficiency Initiatives, January 24, Price Increases for Certain of Our Services, and the launch of new solutions that help Lenders1 members improve their profitability. On the new solution front, we are planning a soft launch of LendersOne Homeowners Insurance in the first quarter. Through this program, we will work with an insurance technology partner and over 40 insurance carriers across 50 states to provide Lenders1 members borrowers with access to competitively priced homeowners insurance.

The default market was virtually shut down in 2020, and it's still not fully recovered.

More recently, there has been a dramatic increase in interest rates significantly reducing mortgage origination volumes and increasing our corporate interest expense.

While these events negatively impacted service revenue in both our business segments, the servicer and real estate segments businesses that primarily support earlier stage foreclosure activities grew in the origination segment outperformed the 36% decline in origination volume.

Even still we improved adjusted EBITDA by more than $30 million over the last two years.

Additionally, we've won meaningful new business that should continue to ramp in 2024 and have a strong sales pipeline to support growth in 2025 and beyond.

As a result, we believe we are positioned to achieve 13% to 32% service revenue growth.

William B. Shepro: We believe the regular launch of new solutions for Lenders1 members, combined with greater adoption of our existing solutions, will strengthen our value proposition for LendersOne members and support further revenue and earnings growth in our origination segment. Turning to our corporate segment in slide 13, We continue to bring down our operating costs. In 2023, we had an adjusted EBITDA loss of $35.1 million, with $7.9 million, or 18% better than 2022. The lower adjusted EBITDA loss reflects our cost savings and efficiency initiatives in the short term. For 2024, we anticipate adjusted EBITDA loss to improve compared to 2023 from the full year benefit of our 2023 Cost Savings and Efficiency Initiative. Moving to slide 14.

And adjusted EBITDA of between $17 5 million and $22 5 million in 2024.

When the default market returns to normal and interest rates decline, we should benefit from stronger revenue and adjusted EBITDA growth.

And lower corporate interest expense.

I will now open up the call for questions.

Greater.

Thank you.

Ladies and gentlemen, as a reminder to ask a question. Please press star one on your telephone and then wait to hear your name announced.

To withdraw your question. Please press star one again.

Please stand by while we compile the Q&A roster.

Our first question comes from the line of Raj Sharma with B Riley Your line is open.

Yes. Thank you for taking my question.

Great.

Providing guidance for the first time in several years.

Bill or could you talk about some of the new products that were launched on the lenders one.

Origination side.

William B. Shepro: The environment over the last few years created a perfect storm for Altisource. The default market was virtually shut down in 2020, and it's still not fully recovered. More recently, there has been a dramatic increase in interest rates, significantly reducing mortgage origination volumes and increasing our corporate interest expense. While these events negatively impacted service revenue in both our business segments, the service and real estate segments, which primarily support earlier stage foreclosure activities, grew, and the origination segment outperformed the 36% decline in origination volume. Even so, we improved adjusted EBITDA by more than $30 million over the last two years. Additionally, we've won meaningful new business that should continue to ramp up in 2024 and have a strong sales pipeline to support growth in 2025 and beyond. As a result, we believe we are positioned to achieve 13% to 32% service revenue growth and adjusted EBITDA between $17.5 million and $22.5 million in 2024. Additionally, when the default market returns to normal and interest rates decline, we should benefit from stronger revenue and adjusted EBITDA growth, as well as lower corporate interest rates. I'll now open up the call for questions. Operator?

The the credit reporting.

And give more color on that and how thats kind of doing in the in the first half of the year.

In the beginning of the year.

Great. Thanks.

Roger and good morning, it's interesting on the credit reporting business, we became a credit reporting agency in 2021 and went live with our first customer in January of 2022.

And since then we've grown the business to 30 customers and I think last month, we did roughly $900000 of revenue in that.

The credit reporting business and the related White label services and I think we're on track.

Probably by March if not March and April to be over a $1 million.

A month run rate.

Right. Thanks, excuse me that's a very good example of how we can take a new product launch it roll it out to our members and generate $1 billion a month in revenue were $12 million a year.

Annual revenue and so the whole strategy around lenders warranted our origination business is to continue to work with our members to understand what their needs are what their pain points are and then we leverage their buying power to launch new programs to help them make more money and better compete and so an example, which I talked about in my prepared remarks is a homeowners insurance.

So we're working with a insure tech company and launching this quarter a program to help our members and our loan officers and our borrowers.

And then what.

Less friction get quotes for homeowners insurance. So we're pretty excited about that program. It's still early but what we like about that business as we earn a commission on every policy Thats originated and then that creates an annuity.

To the extent those borrowers renew the policy we are in ongoing commission revenue in subsequent years.

Other products were in the process of launching as a flood insurance program or call add lenders, one flood insurance and here again, we're working with a partner to offer our members cost effective flood insurance policy and again the whole strategy is launch it brought gainer gain adoption that gives us a stronger buying power that.

Operator: Thank you. Ladies and gentlemen, as a reminder to ask questions, please press star 1-1 on your telephone and then wait to hear your name announced. To withdraw your question, please press star 11 again.

<unk> helps reduce our costs and provide a stronger pricing to our members, which increases the adoption and increases the profitability of the members and our profitability. So we're pretty excited.

Operator: Please stand by while we compile the Q&A roster. Our first question comes from the line of Raj Sharma with B Rally. Your line is open. Yeah, thank you for taking my question and for great providing guidance for the first time in several years. Bill, could you talk about some of the new products that were launched on the Lenders1 Origination side, especially the credit reporting, and give more color on that and how that's kind of doing in the first half of the year, at the beginning of the year? Great. Hey, thanks, Rajiv. Good morning.

The launch of these new programs and we are optimistic that these.

A couple of new programs, we launch each year can contribute to future revenue and earnings growth.

Great. Thank you.

And then moving onto the default services segment.

Of the business.

With the slower conversion into oreos.

The indications.

Or that you started or you have been focusing more on the earlier part of the foreclosure.

Pre foreclosure process is that.

Is that accurate.

Yes, so what we're seeing is the ending of the early stage delinquencies as I pointed out on our call look like they are starting to pick up and clearly a foreclosure initiations have picked up substantially from the from the time of the pandemic, although not quite back at the levels.

Rajiv Sharma: Yeah, it's interesting. In the credit reporting business, we became a credit reporting agency in 2021 and went live with our first customer in January of 2022. And since then, we've grown the business to 30 customers, and I think last month we made roughly $900,000 in revenue from that between the credit reporting business and the related white label services. And I think we're on track probably by March, if not March and April, to be over a million dollars a month. So I think, excuse me, that's a very good example of how we can take a new product, launch it, roll it out to our members, and generate, you know, a million dollars a month in revenue or 12 million dollars a year in annual revenue.

They were at prior to the pandemic.

What we haven't seen yet is that those early 2022 foreclosures make it all the way to the end and so what we're doing now and what we're working on with our customers existing and new customers is focusing on those early stage activities, where we are seeing a pretty good lift in referral volumes. So just to give you. An example in the fourth quarter.

And our trustee business and our.

Foreclosure title search business, we saw about a 30% increase in referral volumes compared to the fourth quarter of the prior year and that trend is continuing in the first quarter of this year. So what we're doing from a from a sales perspective is focusing a lot on those earlier stage activities.

Where there is an increase in referral volumes and the guidance. We gave doesn't it assumes we're going to get a lift in some of those earlier stage activities, but we're only assuming a very modest lift at the end so as the market continues to get back to normal.

Rajiv Sharma: And so the whole strategy around LendersOne and our origination business is to continue to work with our members to understand what their needs are, what their pain points are, and then we leverage their buying power to launch new programs to help them make more money and better compete. And so an example which I talked about in my prepared remarks is homeowner's insurance.

And your inflows and outflows stabilize.

There is some upside we think to two what were.

What were forecasting, but because we are not seeing that increase or that conversion rate increase at the end yet we're trying to be more conservative in terms of how we're approaching our guidance.

William B. Shepro: So we're working with an insurance tech company and launching this quarter a program to help our members and their loan officers and their borrowers efficiently and with less friction get quotes for homeowner's insurance. So we're pretty excited about that program. It's still early, but what we like about that business is we earn a commission on every policy that's originated, and then that creates an annuity where, to the extent those borrowers renew the policy, we earn ongoing commission revenue and subsequent. Another product we're in the process of launching is a flood insurance program. We're calling it Lenders1 Flood Insurance, and here again, we're working with a partner to offer our members a cost-effective flood insurance policy. And again, the whole strategy is to launch it and gain adoption.

Got it Thanks, and then just last question for me on the fiscal 'twenty for guidance.

Can you talk about.

Perhaps a guide to the cadence of.

Is it a slight rise in foreclosure activity.

Is the guidance largely back half.

Loaded.

Yes, so I think youre going to see that.

But from a revenue perspective, I think in the first quarter March as it was for a variety of reasons is a tough comp for us, but January and February I think our revenue Michelle correct me if I'm wrong was roughly 89% higher service revenue then at the same time last year and better than every months last year.

Other than March our revenue in both January and February. So I think we're off to a good start from a revenue perspective, I talked about our EBITDA being $900000 in the month of January we think February is going to continue to be strong. So raj to answer your question I think youre going to see the revenue as we ramp.

William B. Shepro: That gives us stronger buying power that ultimately helps reduce our costs and provide stronger pricing to our members, which increases adoption and increases the profitability of the members and our profitability. So we're pretty excited about the launch of these new programs. And we're optimistic that these couple of new programs we launch each year can contribute to future revenue and earnings.

The good news is we've largely one and the customers that support our revenue growth for the year and it's all about the timing for how we ramp those customers.

How they onboard and ramp throughout the year. So we feel in that and that's why there's a range in our revenue forecast.

Because it's all about it's either wins that we already have signed to contract or we've got a verbal commitment that are in those numbers largely that are in those numbers and as we ramp throughout the year, we would expect that revenue to grow in our EBIT to grow. So I think I would look to and Michelle correct me if I'm wrong.

Rajiv Sharma: And then moving on to the default service segment of the business. You know, with the slower conversion into REOs, the indications are that you've started, or you have been focusing more on the earlier part of the foreclosure process, the pre-foreclosure process. Is that accurate?

First quarter I think because of March will be a tough comp from a revenue side, but we'll be pretty pretty close to revenue service revenue last year EBIT will be better in the first quarter than last year, and we would expect our EBITDA and revenue to grow as the year progresses.

William B. Shepro: Yeah, so Raj, what we're seeing is early stage delinquencies, as I pointed out on our call, look like they're starting to pick up, and clearly, foreclosure initiations have picked up substantially from the time of the pandemic, although not quite back at the levels they were at prior to the pandemic. What we haven't seen yet is that those early 2022 foreclosures make it all the way to the end. And so what we're doing now and what we're working on with our customers, existing and new customers, is focusing on those early stage activities where we are seeing a pretty good lift in referral volumes. So just to give you an example, in the fourth quarter, in our trustee business and our foreclosure title search business, we saw about a 30 percent increase in referral volumes compared to the fourth quarter of the prior year. And that trend is continuing in the first quarter of this year.

As we ramp these customers that we've already won and where we've gotten a verbal commitment.

Great. Thank you for answering my questions I'll take it offline. Thanks.

Thanks Raj.

As a reminder, ladies and gentlemen, Thats star one to ask a question.

Please standby for our next question.

Yeah.

Our next question comes from the line of Mike Grondahl with Northland. Your line is open.

Hey, Bill good morning.

How would you describe your outlook for hub inventory over the course of 'twenty four.

And Michele you can jump in as well so I think Mike we're being very we're trying to be conservative on <unk> inventory. So I think we're focusing a lot on what we can control and what we can control around a lot of these <unk> in the earlier stage foreclosure starts we're making really really.

William B. Shepro: So what we're doing from a sales perspective is focusing a lot on those earlier stage activities where there is an increase in referral volumes, and the guidance we gave assumes we're going to get a lift in some of those earlier stage activities, but we're only assuming a very modest lift at the end. So as the market continues to get back to normal, and your inflows and outflows stabilize, there is some upside, we think, to what we're forecasting. But because we're not seeing that increase or that conversion rate increase at the end yet, we're trying to be more conservative in terms of how we're approaching our guidance. I got it.

Good progress and we think thats going to drive pretty significant revenue and EBITDA growth.

We're being more cautious on absolute because until we actually see that conversion rate from a foreclosure start all the way to the and getting back to sort of a pre pandemic levels.

We want to be more modest in our projections.

So I don't have the inventory in front of me.

Rajiv Sharma: And then just last question for me, you know, on the fiscal 24 guidance, can you talk about, perhaps a guide to the cadence of, um, is there a slight rise in foreclosure activity? Is it, is the guidance largely for the back half? Yeah, so I think you're going to see that.

The projection, but I think it's.

It's a very modest growth in inventory like is my recollection.

Got it.

And.

Slide nine lays out a bunch of.

When.

<unk> amount.

But.

As its been for a while revenue from those wins really lag.

William B. Shepro: Look, from a revenue perspective, I think the first quarter, March, was, for a variety of reasons, it was a tough comp for us, but January and February, I think our revenue, Michelle, correct me if I'm wrong, was roughly 8. 9% higher service revenue than the same time last year and better than every month last year, other than March, our revenue in both January and February. So, I think we're off to a good start from a revenue perspective. I talked about our EBITDA being $900,000 in the month of January. We think February is going to continue to be strong.

<unk> 24, and 25 kind of the years that that the growth in revenue catches up to those strong sales wins, how do we just think about conversion so.

The bottom line is it just takes time from when you win to when you ramp of course things can happen.

Customers could go out of business they could increase market share decreased market share. So a lot can happen with these wins and we start to leave it as a static but there is in the $58 4 million Mike. There's a couple of larger wins this new Oreo renovation our business. We won that's got massive potential for us and we haven't launched it yet.

William B. Shepro: So, Raj, to answer your question, I think you're going to see revenue, as we ramp. The good news is we've largely won the customers that support our revenue growth for the year, and it's all about the timing for how we ramp those customers, you know, how they onboard and ramp throughout the year. So, we feel, and that's why there's a range in our revenue forecast, because it's all about, it's either wins that we already have signed a contract for, or we've gotten a verbal commitment that are in those numbers, largely, that are in those numbers, and as we ramp throughout the year, we would expect that revenue to grow and our EBITDA to grow. So, I think I would look to, and Michelle, correct me if I'm wrong, you know, first quarter, I think, because of March, will be a tough comp from a revenue side, but we'll be pretty close to service revenue last year. EBITDA will be better in the first quarter than last year, and we would expect our EBITDA and revenue to grow as the year progresses, as we ramp up these customers that we've already worked with and where we've gotten over. Great Thank you for answering my questions. I'll take it off.

So thats going to launch we think we're going to get our first referrals hopefully in the next week or two and that's got the potential to become very very significant from a revenue perspective, we launched a new our construction lending program and are granted a business that's been ramping as the year progressed last year, but we're nowhere near stabilized.

From a revenue perspective, Michel help me out here.

Our Oreo win that we got our first referral I think in September we issued a press release around that win I mean it takes.

We're getting an attractive number of referrals that it takes time for those referrals ultimately to get to an REO sale and generate revenue, but its ramping quite nicely and as we planned we would we are expecting.

Year progresses to get more market share from that customer as well. So the bottom line. Mike is it just takes time from these wins to actually generating revenue and earnings, but they're very they're household names, they're very attractive wins and.

We believe the margins are strong in those.

Associated with that revenue and we're going to continue to ramp this year and next.

Got it got it and then lastly.

Rajiv Sharma: Thanks, Raj. As a reminder, ladies and gentlemen, that's star 11 to ask the question. Please stand by for our next question. Our next question comes from the line of Mike Grondahl with Northland. Your line is open.

Any milestones related to the debt this year to remind us about her.

Not that any amounts due or anything but just like any milestones you need to reach during 'twenty four for the debt.

Yeah, No look I think we've made really strong progress and a very very tough environment, which I talked about in the prepared remarks, you had both.

Michael John Grondahl: Hey, Bill, good morning. How would you describe your outlook for HUBZoom in the future? over the course of the next week?

The pandemic impact to the default market and the higher interest rates impacting the origination market a bit of a perfect storm and even during this difficult time, we've improved our EBIT over the last couple of years by over $30 million and we're forecasting a $21 $22 million improvement. This year. So I think we're going in.

Operator: Thank you. Thank you. And Michelle, you can jump in as well.

William B. Shepro: So I think, Mike, we're being very, we're trying to be conservative on HUBZoo inventory. So I think we're focusing a lot on what we can control and what we can control around a lot of these sale wins and the earlier stage foreclosure starts. We're making really, really good progress, and we think that's going to drive pretty significant revenue and EBITDA growth. We're being more cautious on HUBZoom because until we actually see that conversion rate from a foreclosure start all the way to the end, you know, getting back to sort of the pre-pandemic levels, we want to be more modest in our projections. Michelle, I don't have the inventory in front of me, the projection, but I think it's a very modest growth in inventory, Mike, is my recommendation. Got it. And, um, you know, Slide nine lays out a bunch. Win. But, but, you know.

The right direction in terms of getting back to a strong strong margin strong EBITDA.

The costs are in line and as we continue to make progress in our growth where our plans are to ultimately refinance refinance the debt.

So right now we've got time of a debt matures in April.

25, but we have an automatic rate is subject to some conditions around.

An extension fee in complying with reps and warrants another year and so.

We feel good about our position and we got to continue to grow our adjusted EBITDA and put the company in a position to refi that debt and hopefully reduce our interest expense.

Got it got it hey, thank you.

Yeah. Thanks, Mike.

Thank you.

As a reminder, ladies and gentlemen at Star one to ask a question.

Yeah.

William B. Shepro: As it's been for a while, revenue from those wins really lies. It is only in the 24 and 25 kind of years that growth and revenue catches up to those strong sales winds. How do we just think about that?

I'm showing no further questions in the queue.

I would now like to turn the call back over to Bill for closing remarks, great.

Thank you operator, we're pleased with our financial performance and sales wins in 2023 and believe this sets us up really well for this year. Thanks for joining us.

William B. Shepro: So, the bottom line is it just takes time from when you win to when you ramp up. Of course, things can happen, and, you know, customers could go out of business, they could increase market share, or decrease market share. So, a lot could happen with these wins, and we sort of leave it as static. But there's a couple of larger wins in the 58.4 million, Mike. You know, this new REO renovation business we won, that's got massive potential for us, and we haven't launched it yet. So, that's going to launch, and we think we're going to get our first referrals hopefully in the next week or two. And that's got the potential to become very, very significant from a revenue perspective. We launched a new construction lending program in our Granite business. That's been ramping up as the year progressed last year, but we're nowhere near destabilized from a revenue perspective. Michelle, help me out here.

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation you may now disconnect.

Yeah.

[music].

Okay.

[music].

Okay.

[music].

William B. Shepro: Our REO win where we got our first referral, I think in September, we issued a press release around that win. I mean, it takes, you know, we're getting an attractive number of referrals. It takes time for those referrals ultimately to get to an REO sale and generate revenue, but it's ramping quite nicely.

Okay.

[music].

William B. Shepro: And as we planned, we would, and we are expecting, as the year progresses, to get more market share from that customer as well. So, the bottom line, Mike, is it just takes time from these wins to actually generate revenue and earnings. But they're very, you know, they're household names. They're very attractive wins.

William B. Shepro: And we believe the margins are strong in those, in that associated with that revenue. And we're going to continue to ramp it up this year and next. Got it, got it.

William B. Shepro: And then lastly, any milestone related to the debt this year to remind us about or, Not that any amounts matter or anything, but just like any milestone, during 24 months. Yeah, no, look, I think we've made really strong progress in a very, very tough environment. As I talked about in the prepared remarks, you had both the pandemic impact on the default market and the higher interest rates impacting the origination market, a bit of a perfect storm. And even during this difficult time, we've improved our EBIT over the last couple of years by over $30 million. And, you know, we're forecasting, you know, $21, $22 million of improvement this year. So I think we're going in the right direction in terms of getting back to a strong, you know, strong margin, strong EBIT. The costs are in line. And as we continue to make progress in our growth, you know, our plans are to ultimately refinance the debt. So right now, we've got time. The debt matures on April 25, but we have an automatic right, subject to some conditions around an extension fee and complying with reps and warrants for another year.

Yes.

[music].

William B. Shepro: Thanks, Mike. Thank you. As a reminder, ladies and gentlemen, that's star 11 to ask the question. I am showing no further questions in the queue.

Operator: I would now like to turn the call back over to Bill for closing remarks. Great. Thank you, operator. We're pleased with our financial performance and sales wins in 2023 and believe this sets us up really well for this year. Thanks for joining us.

Operator: Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect, www.ottobock.com Phone Ringing Phone Ringing Phone Ringing, www.altisource.com www.salesforce.com www.salesforce.com www.salesforce.com www.salesforce.com www.salesforce.com www.salesforce.com www.salesforce.com www.salesforce.com www.salesforce.com www.salesforce.com www.salesforce.com www.salesforce.com www.salesforce.com www.salesforce.com www.salesforce.com ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? www.ottobock.com, Researchers at the University of Michigan are working to improve the quality of life for our students and faculty. For more information, visit www.michigan.edu. For more information, visit www.michigan.edu. For more information, visit www.michigan.edu. For more information, visit www.michigan.edu. For more information, visit www.michigan.edu. For more information, visit www.michigan.edu. For more information, visit www.michigan.edu, www.ottobock.com www.ottobock.com www.ottobock.com www.ottobock.com www.ottobock.com www.ottobock.com www.ottobock.com www.ottobock.com www.ottobock.com www.ottobock.com www.ottobock.com www.ottobock.com www.ottobock.com www.ottobock.com www.ottobock.com Hello and thank you for standing by.

Okay.

[music].

Yes.

[music].

Sure.

[music].

Okay.

[music].

Thanks.

Okay.

[music].

Okay.

[music].

Operator: Welcome to Altisource's Fourth Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. During the speaker's presentation, there will be a question and answer session. To ask a question during this session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again.

Michelle D. Esterman: I would now like to hand the conference over to Michelle Esterman, Chief Financial Officer. You may begin. Thank you, Operator.

Okay.

[music].

Okay.

[music].

Michelle D. Esterman: We undertake no obligation to update statements, financial scenarios, and projections previously provided or provided herein as a result of a change in circumstances, new information, or future events. During this call, we will present both GAAP and non-GAAP financial measures. In our earnings release and quarterly slides, you will find additional disclosures regarding the non-GAAP measures. A reconciliation of GAAP to non-GAAP measures is included in the appendix to the quarterly

Thanks.

Okay.

Yes.

Okay.

Yes.

Okay.

<unk>.

Michelle D. Esterman: Joining me for today's call is Bill Shepro, our Chairman and Chief Executive Officer. I will now turn the call over to Bill. Thanks, Michelle, and good morning.

Thanks.

Okay.

Sure.

Okay.

Thanks.

Yes.

[music].

Okay.

Thank you.

Okay.

[music].

Okay.

Yes.

Thanks.

Okay.

Thanks.

[music].

Thanks.

Okay.

Thanks.

Okay.

Sure.

Okay.

Yes.

Thank you.

Okay.

Yes.

Thank you.

Okay.

[music].

Okay.

Yes.

Okay.

Yes.

[music].

Yes.

Okay.

Thank you.

Thanks.

No.

Okay.

Sure.

Yes.

Okay.

[music].

Sure.

Yes.

Okay.

William B. Shepro: I'll begin on slides 4 and 5. We're pleased with our performance in 2023 as we continue to strengthen our financial position and win new business, which has not fully run, in the face of serious market headwinds for both business segments. Service revenue in the servicer and real estate segment was only 4% lower than 2022, and service revenue in the origination segment outperformed the overall market with a decline of 11% compared to a 36% decline in industry-wide residential origination volume. We improved total company-adjusted EBITDA by $15.7 million compared to 2022 and by $30.8 million compared to 2021. Our 2023 Total Company Adjusted EBITDA improvement is largely from product mix, higher margins in our businesses, and lower corporate operating costs. The 2023 adjusted EBITDA margins in the business segments improved by 680 basis points to 25.1%, and the corporate segment adjusted EBITDA loss declined by 18.4% to $35.1 million.

Okay.

Yes.

Okay.

[music].

Thanks.

Okay.

Yes.

[music].

Okay.

Sure.

Okay.

Sure.

Okay.

Yes.

Okay.

Sure.

Okay.

Yes.

Okay.

[music].

Okay.

Thanks.

Okay.

Sure.

[music].

Sure.

Okay.

[music].

Thanks.

[music].

Okay.

[music].

Yes.

Okay.

Yes.

Okay.

Hello, and thank you for standing by.

Welcome to our fourth quarter 2023 earnings conference call.

William B. Shepro: Company-wide, we generated positive adjusted EBITDA for five of the last six months of 2023, including $520,000 in December. We're off to a good start in 2024, generating $900,000 of adjusted EBITDA in January. During 2023, we won new business, strengthened our sales pipeline, and took strong steps to improve our balance. I'll discuss our wins and sales pipeline in greater detail in a few minutes. With respect to the balance sheet, we reduced the principal balance of our term loan by $23.1 million, or 9.4%, and extended the maturity date of our term loan and revolver to April 2025, with the option to extend both by another year, subject to meeting certain conditions.

At this time all participants are in a listen only mode.

After the speaker's presentation, there will be a question and answer session.

Ask a question during this session you will need to press star one on your telephone you.

You will then hear our automated message advising your hand is raised.

To withdraw your question. Please press star one again.

I would now like to hand, the conference over to Michel estimate Chief Financial Officer, you may begin.

Thank you operator, we first want to remind you that the earnings release Form 10-K, and quarterly slides are available on our web site at Www Dot <unk> Dot com. These provide additional information investors may find useful.

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

This is the usual uncertainty associated with forward looking statements the continuing impacts of government and service your responses to the COVID-19 pandemic.

William B. Shepro: Turning to slide six in our 2024-14, we believe our sales wins, enhanced margins, and lower corporate costs position us for strong revenue and adjusted EBITDA growth. Based upon our current expectations for the market in which we operate, which assumes only a modest benefit from the post-COVID increase in foreclosure starts and 17% growth in industry-wide origination volume, we are forecasting $155 to $180 million in service revenue and $17.5 million to $22.5 million in adjusted EBIT.

We met our fiscal policies and current economic conditions make it extremely difficult to predict the future state of the economy and the industry in which we operate as well as the potential impact on LTE.

Please review the forward looking statements sections in the company's earnings release enquiries slides as well as the risk factors contained in our 2023 Form 10-K disguising. Some factors that may lead to different results. We undertake no obligation to update statements financial scenarios and projections previously provided will provide.

Herein as a result of a change in circumstances, new information or future events.

This call, we will present, both GAAP and non-GAAP financial measures.

In our earnings release and currently side.

You will find additional disclosures regarding the non-GAAP measures a reconciliation of GAAP to non-GAAP measures is included in the appendix to the quarterly slag join.

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

Thanks, Michelle and good morning, I'll begin on slides four and five were pleased with our performance in 2023, as we continue to strengthen our financial position and win new business, which is not fully ramped.

In the face of serious market headwinds for both business segments service revenue in the servicer in real estate segment was only 4% lower than 2022 and service revenue in the origination segment outperformed the overall market with a decline of 11% compared to a 36% decline in industry wide.

William B. Shepro: Lower Corporate Operating Costs from the Full Year Benefit of 2023 Cost Savings and Efficiency Index. While it is still early in the year, we are off to a good start in January with an adjusted EBIT of $900,000. As we look beyond 2024, we anticipate that our businesses will also benefit from the ramp of saleswinds, including continued recovery of the default market and normalized origination volume. Slide seven provides a summary of our 2024 strategic initiative. As you can see, we established four initiatives to support long-term growth.

Residential origination volume.

We improved total company adjusted EBITDA by $15 $7 million compared to 2022 and by $38 million compared to 2021.

Our 2023 total company adjusted EBITDA improvement.

It's largely from product mix higher margins in our businesses and lower corporate operating costs with.

For 2023, adjusted EBITDA margins in the business segments improved by 680 basis points to 25, 1% and the corporate segment's adjusted EBITDA loss declined by 18, 4% to $35 1 million.

William B. Shepro: First, accelerate business development efforts on solutions where we believe Altisource is a strong performer, generates high margins, and where we forecast market talent. Several of our businesses generate strong margins, and we believe they are in high demand as servicers prepare for a rise in delinquencies, and originators look to improve their profitability. We plan to focus our business development efforts on these offices. Second, deliver strong operational efficiency and manage costs to drive higher gross profit and adjusted EBITDA margins. We plan to continue to evaluate and implement processes to streamline operations and reduce costs in those businesses and corporate departments that we believe will generate the greatest impact on profitability and performance.

Companywide, we generated positive adjusted EBITDA for five of the last six months of 2023, including $520000 in December.

We're off to a good start in 2024 generating $900000 of adjusted EBITDA in January.

During 2023, we won new business strengthen our sales pipeline and took strength steps to improve our balance sheet.

I will discuss our wins and sales pipeline in greater detail in a few minutes.

With respect to the balance sheet, we reduced the principal balance of our term loan by $23 1 million or nine 4%.

And extended the maturity date of our term loan and revolver to April 2025, with the option to extend both by another year subject to meeting certain conditions.

William B. Shepro: Third, strengthen customer relationships and cross-sell other solutions to existing customers to gain wallet share. We have hundreds of revenue-generating companies. We believe that there is a significant opportunity to grow business with our existing customer base through strong performance and cross-selling other solutions. Sports launched new offerings intended to help Lenders1 members improve their profitability.

Turning to slide six and our 2024 forecast.

We believe our sales wins enhanced margins and lower corporate costs position us for strong revenue and adjusted EBITDA growth.

Based upon our current expectations for the market in which we operate which assumes only a modest benefit from the post COVID-19 increase in foreclosure starts and 17% growth in industry wide origination volume.

William B. Shepro: We believe that there is a significant opportunity to improve LendersOne members' profitability and grow our revenue and earnings by launching new solutions that leverage the LendersOne members' collective buying power. Moving to slide 8 in our counter-cyclical service and real estate segment. For 2023, service revenue declined by 4%, which reflects growth in certain higher margin businesses that support the earlier stage of the default process, offset by modestly lower service revenue from the fourth quarter 2022 exit of a low-margin employee outsource business and fewer referrals in our lower margin field services. We improved the servicer and real estate segments' adjusted EBITDA and adjusted EBITDA margin. 2023 adjusted EBITDA of $37.1 million was $5.9 million, or 18.8% higher than 2022, and adjusted EBITDA margins improved to 34.4% from 27.9%.

We're forecasting $155 million to $180 million in service revenue and $17 5 million to $22 5 million in adjusted EBITDA.

This represents 13% to 32% service revenue growth.

And an $18 4 million to $23 $4 million improvement in adjusted EBITDA over 2023.

We are forecasting that the service revenue growth will be driven by the continued ramping of our 2023 sales wins.

2024 sales wings and price increases for certain services.

We anticipate that the 2024 adjusted EBITDA improvement will be driven by one revenue growth.

Higher business unit margins, primarily from the full year benefit of 2023 cost savings and efficiency initiatives.

Price increases and scale and three lower corporate operating costs from the full year benefit of 2023 cost savings and efficiency initiatives.

While it's still early in the year, we're off to a good start in January with adjusted EBITDA of $900000.

William B. Shepro: Adjusted EBITDA growth and margin improvement reflect product mix and benefits from cost reduction and efficiency initiatives partially offset by modestly lower service revenue. Slide 9 provides a summary of our servicer and real estate sales wins and pipelines. For the year, we won new business that we estimate will generate $58.4 million in annual revenue on a stabilized basis over the next couple of years. We had a couple of significant sales wins in the fourth quarter. The first was signing agreements to provide renovation services for one of the larger owners of the REO Act.

As we look beyond 2024, we anticipate that our businesses will also benefit from the ramp up sales wins continued recovery of the default market and normalized origination volumes.

Slide seven provides a summary of our 2024 strategic initiatives.

As you can see we established four initiatives to support long term growth.

First accelerated business development efforts on solutions, where we believe alto source as a strong performer generates high margins and where we forecast market tailwind.

Several of our businesses generate strong margins and we believe are in high demand as servicers prepare for a rise in delinquencies and originators look to improve their profitability.

William B. Shepro: We anticipate that we will start to receive the first renovation referrals toward the end of the first quarter and ramp up as the year progresses. The second win was an expansion of WalletShare with an existing customer in our higher-margin trustee business. We started to receive an increase in referrals in January, and we anticipate referral volumes to grow steadily through the summer. We ended the year with a total weighted average sales pipeline of $30.1 million in annual revenue on a stabilized basis, most of which will impact 2025 and beyond. There are a few larger late-stage opportunities in the pipeline worth noting. For example, we are currently negotiating an agreement to provide REO auction services for a loan servicer and their real estate agents.

Plan to focus our business development efforts on these offerings.

The impact on profitability and performance.

Third strengthen customer relationships and cross sell other solutions to existing customers to gain wallet share.

William B. Shepro: We're also discussing market share expansion with one of our REO Asset Management divisions. And finally, we are negotiating agreements to provide trustee services for a couple of non-bank loan services. We hope to have more to report on these exciting opportunities with our first quarter earnings. For 2024, we anticipate that our servicer and real estate segment service revenue and adjusted EBITDA will improve considerably compared to 2023 from the continued ramp of 2023 sales when Conversion of Sales Wins to Revenue, price increases for certain services, and the full year benefit of 2023 cost savings and efficiency initiatives. Our HBZU and later stage REO offerings forecast assumes only a modest benefit from the post-COVID increase in foreclosures. Turning to the macroeconomic environment, in slide

Fourth launch new offerings intended to help lenders one members improve their profitability.

Moving to slide eight and our countercyclical servicer real estate segment.

For 2023 service revenue declined by 4%, which reflects growth in certain higher margin businesses that support the earlier stage of the default process.

The offset by modestly lower service revenue from the fourth quarter 2020 to exit of low margin employee outsource business and fewer referrals in our lower margin field services business.

We improved the servicer and real estate segments, adjusted EBITDA and adjusted EBITDA margins 2023, adjusted EBITDA of $37 1 million.

Was $5 9 million or 18, 8% higher than 2022.

William B. Shepro: There are early signs of consumer financial stress which could be precursors to a rise in 90 plus day mortgage delinquency rates. Consumer savings have declined, debt is growing, early stage delinquency rates are rising, and home affordability ended in 2023 at a near 10-year low. Credit card debt is at a record high, balances on home equity lines of credit have grown for seven consecutive quarters, 401k hardship withdrawals continue to grow, and early stage auto and credit card delinquencies continue to rise, according to the Federal Reserve Bank of New York.

And adjusted EBITDA margins improved to 34, 4% from 27, 9%.

Adjusted EBIT growth and margin improvement reflect product mix and benefits from cost reduction and efficiency initiatives, partially offset by modestly lower service revenue.

Slide nine provides a summary of our servicer and real estate sales wins and pipeline for.

For the year, we won new business that we estimate will generate $58 $4 million in annual revenue on a stabilized basis over the next couple of years.

Had a couple of significant sales wins in the FERC fourth quarter.

First with signing agreements to provide renovation services for one of the larger owners of Oreo assets.

We anticipate that we will start to receive the first renovation referrals toward the end of the first quarter and ramp as the year progresses.

William B. Shepro: Credit card and auto loans that are becoming delinquent are rising above pre-pandemic levels, signaling increased financial strength. Early-stage mortgage delinquency rates are also rising. Comparing December 23 to December 22, 15% more mortgages are delinquent by one payment, and 16% more mortgages are behind by two payments.

The second one was an expansion of wallet share with an existing customer and our higher margin trustee business.

We started to receive an increase in referrals in January.

And anticipate referral volumes to grow steadily through the summer.

We ended the year with a total weighted average sales pipeline of $30 $1 million of annual revenue on a stabilized basis.

Of which will impact 2025 and beyond.

William B. Shepro: Moving to our origination segment, our origination segment performed well in a difficult origination environment. Despite the 36% decline in industry-wide residential origination volumes in 2023 compared to 2022, the origination segment outperformed the market with a revenue decline of only 11% and an adjusted EBITDA improvement of $1.9 million. This reflects revenue growth in the LendersOne business from customer wins from our newer solutions, partially offset by revenue declines in our other origination businesses that were impacted to a greater degree by lower origination volumes Adjusted EBITDA improved from cost savings and efficiency.

There are a few larger late stage opportunities in the pipeline worth noting.

We are currently negotiating an agreement to provide REO auction services for a loan servicer and there are real estate agents.

Also discussing market share expansion with one of our Oreo asset management customers.

And finally, we are negotiating agreements to provide trustee services for a couple of non bank loan Servicers.

We hope to have more to report on these exciting opportunities with our first quarter earnings call.

For 2024, we anticipate that our service or in real estate segment service revenue and adjusted EBITDA will improve considerably compared to 2023 from the continued ramp of 2023 sales wings conversion of sales wins to revenue.

Price increases for certain services and the full year benefit of 2023 cost savings and efficiency initiatives.

William B. Shepro: For 2023, the origination segments gross profit, gross profit margins, adjusted EBITDA, and adjusted EBITDA margins all improved relative to 2022. Slide 12 provides a summary of our Origination Segment Sales Wins and Pipes. During a very difficult origination market, our focus on helping our Lenders1 members save money and better compete drove substantial interest in our solution. On an annualized, stabilized basis, we won an estimated $10.3 million in new business for the year. Our weighted average sales pipeline at the end of 2023 was $18 million, with $4 million of that $18 million in the contracting state.

Our hubs you in later stage Oreo offerings forecast assumes only a modest benefit from the post COVID-19 increase in foreclosure starts.

Turning to the macroeconomic environment and slide 10.

There are early signs of consumer financial stress, which could be precursors to arrive and 90 plus day mortgage delinquency rates consumer.

Consumer savings have declined that is growing early stage delinquency rates are rising and home affordability ended 2023 at a near 10 year low.

According to the Federal Reserve Bank of New York.

Credit card and auto loans that are becoming delinquent are rising above pre pandemic levels Cigna.

William B. Shepro: For 2024, we anticipate our origination segment service revenue to outperform the forecasted 17% increase in industry-wide origination volume and adjusted EBITDA to improve considerably compared to 2023. This is due to Sales Momentum and our Lenders1Business. The Full Year Benefit of 2023 Cost Savings and Efficiency Initiatives, January 24 Price Increases for Certain of Our Services, and the launch of new solutions that help Lenders1 members improve their profitability. On the new solution front, we are planning a soft launch of LendersOne Homeowners Insurance in the first quarter. Through this program, we will work with an insurance technology partner and over 40 insurance carriers across 50 states to provide Lenders1 members borrowers with access to competitively priced homeowners insurance.

Signaling increased financial stress.

Moving to our origination segment on slide 11.

Our origination segment performed well in a difficult origination environment.

Despite the 36% decline in industry wide residential origination volumes in 2023 compared to 2020 to the origination segment outperformed the market with a revenue decline of only 11%.

And in the adjusted EBITDA improvement of $1 9 million.

This reflects revenue growth in the lenders one business from customer wins from our newer solutions.

Partially offset by revenue declines in our other origination businesses.

Were impacted to a greater degree by lower origination volumes.

Adjusted EBITDA improved from cost savings and efficiency initiatives for.

For 2023 of the origination segments gross profit gross profit margins adjusted EBITDA and adjusted EBITDA margins, all improved relative to 2022.

William B. Shepro: We believe the regular launch of new solutions to Lenders1 members, combined with greater adoption of our existing solutions, will strengthen our value proposition for Lenders1 members and support further revenue and earnings growth in our origination segment. Turning to our corporate segment on slide 13, we continue to bring down our operating costs. 2023 adjusted EBITDA loss of $35.1 million, with $7.9 million, or 18% better than 2022. The lower adjusted EBITDA loss reflects our cost savings and efficiency gains.

Okay.

Slide 12 provides a summary of our origination segment sales wins and pipeline.

During a very difficult origination market, our focus on helping our lenders one members save money and better compete drove substantial interest in our solutions.

On an annualized stabilized basis, we want an estimated $10 $3 million in new business for the year.

Our weighted average sales pipeline at the end of 2023 was $18 million with $4 million of the $18 million in the contracting stage.

William B. Shepro: For 2024, we anticipate adjusted EBITDA losses to improve compared to 2023 from the full year benefit of the 2023 Cost Savings and Efficiency Initiative. Moving to slide 14. The environment over the last few years created a perfect storm for Altisource. The default market was virtually shut down in 2020, and it's still not fully recovered. More recently, there has been a dramatic increase in interest rates, significantly reducing mortgage origination volumes and increasing our corporate interest expense.

This is from sales momentum and our lenders one business.

Full year benefit of 2023 cost savings and efficiency initiatives January 24 price increases for certain of our services.

And the launch of new solutions that help lenders one members improve their profitability.

On the new solution front, we are planning a soft launch of lenders one homeowners insurance in the first quarter.

William B. Shepro: While these events negatively impacted service revenue in both our business segments, the service and real estate segments, which primarily support earlier stage foreclosure activities, grew, and the origination segment outperformed the 36% decline in origination volume. Even so, we improved adjusted EBITDA by more than $30 million over the last two years. Additionally, we've won meaningful new business that should continue to ramp up in 2024 and have a strong sales pipeline to support growth in 2025 and beyond. As a result, we believe we are positioned to achieve 13% to 32% service revenue growth and adjusted EBITDA between $17.5 million and $22.5 million in 2024. When the default market returns to normal and interest rates decline, we should benefit from stronger revenue and adjusted EBITDA growth and a lower Corporate Interest Rate. I'll now open up the call to questions. Operator.

We believe the regular launch of new solutions to lenders one members.

Bind with greater adoption of our existing solutions will strengthen our value proposition for lenders one members and support further revenue and earnings growth in our origination segment.

Turning to our corporate segment on slide 13.

We continue to bring down our operating costs.

123, adjusted EBITDA loss of $35 1 million was $7 9 million or 18% better than 2022.

The lower adjusted EBITDA loss reflects our cost savings and efficiency initiatives.

For 2024, we anticipate adjusted EBITDA loss to improve compared to 2023 from a full year benefit of.

2023 cost savings and efficiency initiatives.

Moving to slide 14.

The environment over the last few years created a perfect storm for Alta source.

The default market was virtually shut down in 2020 and is still not fully recovered.

More recently, there has been a dramatic increase in interest rates significantly reducing mortgage origination volumes and increasing our corporate interest expense.

Operator: Thank you. Ladies and gentlemen, as a reminder to ask the questions, please first press 1-1 on your telephone and then wait to hear your name announced. To withdraw your question, please press star 11 again.

Operator: Please stand by while we compile the Q&A roster. Our first question comes from the line of Raj Sharma with B Rally. Your line is open. Yeah, thank you for taking my question and for great providing guidance for the first time in several years. Bill, could you talk about some of the new products that were launched on the LendersOne Origination side, especially the credit reporting, and give more color on that and how that's kind of doing in the first half of the year, at the beginning of the year? Hey, thanks, Rajiv. Good morning.

Even still we improved adjusted EBITDA by more than $30 million over the last two years. Additionally.

Additionally, we've won meaningful new business that should continue to ramp in 2024 and have a strong sales pipeline to support growth in 2025 and beyond.

As a result, we believe we are positioned to achieve 13% to 32% service revenue growth.

And adjusted EBITDA of between $17 5 million and $22 5 million in 2024.

When the default market returns to normal and interest rates decline, we should benefit from stronger revenue and adjusted EBITDA growth.

And lower corporate interest expense.

I will now open up the call for questions.

Operator.

Thank you.

Ladies and gentlemen, as a reminder to ask a question. Please press star one on your telephone and then wait to hear your name announced.

To withdraw your question. Please press star one again.

Please standby, while we compile the Q&A roster.

Our first question comes from the line of Raj Sharma with B Riley Your line is open.

Yes. Thank you for taking my question.

Great.

Providing guidance for the first time in several years.

Rajiv Sharma: And so the whole strategy around LendersOne and our origination business is to continue to work with our members to understand what their needs are, what their pain points are, and then we leverage their buying power to launch new programs to help them make more money and better compete. And so an example, which I talked about in my prepared remarks, is homeowner's insurance.

Bill.

Could you talk about some of the new products that were launched on the lenders one.

The origination side.

The the credit reporting.

And give more color on that and how thats kind of doing in the in the first half of the year.

At the beginning of the year.

Great. Thanks.

Roger and good morning, Yeah, it's interesting on the credit reporting business, we became a credit reporting agency in 2021 and went live with our first customer in January of 2022.

William B. Shepro: So we're working with an insured tech company and launching this quarter a program to help our members and their loan officers and their borrowers efficiently and with less friction get quotes for homeowner's insurance. So we're pretty excited about that program. It's still early, but what we like about that business is we earn a commission on every policy that's originated, and then that creates an annuity where, to the extent those borrowers renew the policy, we earn ongoing commission revenue and subsequent. Another product we're in the process of launching is a flood insurance program. We're calling it Lenders1 Flood Insurance.

And since then we've grown the business to 30 customers and I think last month, we did roughly $900000 of revenue and that between the credit reporting business and the related White label services and I think we're on track.

Probably by March if not March and April to be over a $1 million.

A month run rate.

Thanks, excuse me that's a very good example of how we can take a new product launch it roll it out to our members and generate $1 billion a month in revenue were $12 million a year.

William B. Shepro: And here again, we're working with a partner to offer our members cost-effective flood insurance policies. And again, the whole strategy is to launch it, gain adoption. That gives us stronger buying power that ultimately helps reduce our costs and provide stronger pricing to our members, which increases adoption and increases the profitability of the members and our profitability. So we're pretty excited about the launch of these new programs. And we're optimistic that these couple of new programs we launch each year can contribute to future revenue and earnings. Great, thank you.

So we're working with a insure tech company and launching this quarter.

Program to help our members and our loan officers and their borrowers efficiently.

And with less friction get quotes for homeowners insurance. So we're pretty excited about that program. It's still early but what we like about that business as we earn a commission on every policy Thats originated and then that creates an annuity.

To the extent those borrowers renew the policy we are in ongoing our commission revenue in subsequent years. Another product. We are in the process of launching as a flood insurance program or call add lenders, one flood insurance and here again, we're working with a partner to offer our members cost effective flood insurance policy and again the <unk>.

Strategy is launch it brought gainer gain adoption that gives us a stronger buying power that ultimately helps reduce our costs and provide a stronger pricing to our members, which increases the adoption and increases the profitability of the members and our profitability. So we're pretty excited around the launch of these new programs.

Grams, and we're optimistic that these.

A couple of new programs, we launch each year can contribute to future revenue and earnings growth.

Great. Thank you.

And then moving onto the default services segment part of the business.

With the slower conversion into oreos.

The indications.

Are you started or you have been focusing more on the earlier part of the foreclosure. The pre foreclosure process is that is that accurate.

Yes, so raj what we're seeing is the any of the early stage delinquencies as I pointed out on our call look like they are starting to pick up and clearly a foreclosure initiations have picked up substantially from the from the time of the pandemic, although not quite back at the levels.

They were at prior to the pandemic.

But we haven't seen yet is that those early 2022 foreclosures make it all the way to the end and so what we're doing now and what we're working on with our customers existing and new customers is focusing on those early stage activities, where we are seeing a pretty good lift in referral volumes. So just to give you. An example in the fourth quarter.

And our trustee business and our.

And your inflows and outflows stabilize.

There is some upside.

Thank to two what were.

What were forecasting, but because we are not seeing that increase or that conversion rate increase at the end yet we're trying to be more conservative in terms of how we're approaching our guidance.

William B. Shepro: Yeah, so I think you're going to see that. Look, from a revenue perspective, I think the first quarter, March, was, for a variety of reasons, it was a tough comp for us, but January and February, I think our revenue, Michelle, correct me if I'm wrong, was roughly 8. 9% higher service revenue than the same time last year and better than every month last year, other than March, our revenue in both January and February. So, I think we're off to a good start from a revenue perspective. I talked about our EBITDA being $900,000 in the month of January. We think February is going to continue to be strong.

Got it Thanks, and then just last question for me on the fiscal 'twenty for guidance.

Can you talk about.

Perhaps a guide to the cadence of.

Is it a slight rise in foreclosure activity.

Is the guidance largely back half.

Loaded.

Yes, so I think youre going to see that.

Eight 9% higher service revenue than the same time last year and better than every months last year other than March our revenue in both January and February. So I think we're off to a good start from a revenue perspective, I talked about our EBITDA being $900000 in the month of January we think February is going to continue to be strong so raj.

To answer your question I think youre going to see the revenue as we ramp.

The good news is we've largely one and the customers that support our revenue growth for the year and it's all about the timing for how we ramp those customers.

How they onboard and ramp throughout the year. So we feel in that and that's why there's a range in our revenue forecast.

Quarter, I think because of March will be a tough comp from a revenue side, but we'll be pretty pretty close to revenue service revenue last year EBIT will be better in the first quarter than last year, and we would expect our EBITDA and revenue to grow as the year progresses.

As we ramp these customers that we've already won and where we've gotten a verbal commitment.

Great. Thank you for answering my questions I'll take it offline. Thanks.

Rajiv Sharma: Thanks Raj. As a reminder, ladies and gentlemen, that's star 11 to ask the question. Please stand by for our next question. Our next question comes from the line of Mike Grondahl with Northland. Your line is open.

Thanks Raj.

As a reminder, ladies and gentlemen, Thats star one to ask a question.

Please standby for our next question.

Our next question comes from the line of Mike Grondahl with Northland. Your line is open.

Michael John Grondahl: Hey, Bill, good morning, um, how would you describe your outlook for HUBZoom in the future during the course of this presentation? And Michelle, you can jump in as well.

Hey, Bill good morning.

How would you describe your outlook for hub inventory over the course of 'twenty four.

Okay.

And Michele you can jump in as well so I think Mike we're being very we're trying to be conservative on hubs inventory. So I think we're focusing a lot on what we can control and what we can control around a lot of these <unk> wins in the earlier stage foreclosure starts we're making really really good progress and we think that is.

William B. Shepro: So I think, Mike, we're being very, we're trying to be conservative on HUBZoo inventory. So I think we're focusing a lot on what we can control and what we can control around a lot of these sale wins and the earlier stage foreclosure starts. We're making really, really good progress. And we think that's going to drive pretty significant revenue and EBITDA growth. But we're being more cautious on HUBZoom because until we actually see that conversion rate from a foreclosure start all the way to the end, you know, getting back to sort of the pre-pandemic levels, we want to be more modest in our projections. Michelle, I don't have the inventory in front of me, or the projection, but I think it's a very modest growth in inventory. Mike, my recommendation, got it. And, um, you know, Slide nine lays out a lot.

Going to drive pretty significant revenue and EBITDA growth.

We're being more cautious on absolute because until we actually see that conversion rate from a foreclosure start all the way to the and getting back to sort of a pre pandemic levels, we want to be more modest in our projections.

I don't have the inventory in front of me.

The projection, but I think it's a very modest growth in inventory like is my recollection.

Got it.

And.

Yes.

Slide nine lays out a bunch of.

William B. Shepro: Win, dollar a month. But, but, you know. As it's been for a while, revenue from those wins really lies. It is only in the 24 and 25 kind of years that growth and revenue catches up to those strong sales winds. How do we just think about that? So the bottom line is it just takes time from when you win to when you lose. Of course, things can happen, and, you know, customers could go out of business, they could increase market share, decrease market share. So a lot could happen with these wins, and we sort of leave it as static.

When.

Lower amount.

But.

As its been for a while revenue from those wins really lag.

<unk> 24, and 25 kind of the years.

The growth in revenue catches up to those strong sales wins.

How do we just think about conversion so.

The bottom line. It just takes time from when you win to when you ramp of course things can happen.

Customers could go out of business they could increase market share decreased market share. So a lot can happen with these wins and we start to leave it as a static but there is in the $58 4 million, Mike. There's a couple of larger wins this new Oreo renovation.

William B. Shepro: But there's a couple of larger wins in the 58.4 million, Mike. You know, this new Ario renovation business we won has got massive potential for us, and we haven't launched it yet. So that's gonna launch, we think. We're gonna get our first referrals, hopefully, in the next week or two. And that's got the potential to become very, very significant from a revenue perspective. We launched a new construction lending program in our Granite business.

Business, we won that's got massive potential for us and we haven't launched it yet so that's going to launch we think we're going to get our first referrals hopefully in the next week or two and that's got the potential to become very very significant from a revenue perspective.

We launched our new our construction our lending program and are granted.

William B. Shepro: That's been ramping as the year progressed last year, but we're nowhere near stabilizing from a revenue perspective. Michelle, help me out here. There was, oh, our Ario win that we got our first referral. I think in September, we issued a press release around that win. It takes time for those referrals, ultimately, to get to an Ario sale and generate revenue.

That's been ramping as the year progressed last year, but we're nowhere near stabilized from a revenue perspective, Michel help me out here.

Our Oreo win that we got our first referral I think in September we issued a press release.

Round that win I mean, it takes we're getting an attractive number of referrals that it takes time for those referrals ultimately to get to an REO sale and generate revenue, but its ramping quite nicely and as we planned we are expecting as the year progresses to get more market share from that customer as well so.

William B. Shepro: But it's ramping quite nicely, and as we planned, we are expecting, as the year progresses, to get more market share from that customer as well. So the bottom line, Mike, is it just takes time from these wins to actually generate revenue and earnings. But they're very, you know, they're household names; they're very attractive wins.

The bottom line Mike is it just takes time from these wins to actually generating revenue and earnings, but they're very they're household names, they're very attractive wins and.

William B. Shepro: And we believe the margins are strong in those, in that associated with that revenue. And we're gonna continue to ramp it up this year and next. Got it, got it.

We believe the margins are strong in those.

As stated with that revenue and we're going to continue to ramp this year and next.

Got it got it and then lastly.

William B. Shepro: And then lastly, related to the debt this year to remind us about or, Not that any amounts matter or anything, but just like any milestone, during 24 for the, Yeah, no, look, I think we've made really strong progress in a very, very tough environment. As I talked about in the prepared remarks, you have both the pandemic impact on the default market and higher interest rates impacting the origination market. A bit of a perfect storm, really.

Milestones.

Related to the debt this year to remind us about her.

Not that any amounts due or anything but just like any milestones you need to reach during 'twenty four for the debt.

Yeah, No look I think we've made really strong progress and a very very tough environment as I talked about in the prepared remarks, you had both.

The pandemic impact of it to the default market in the higher interest rates impacting the origination market a bit of a perfect storm and even during this difficult time, we've improved our EBIT over the last couple of years by over $30 million and we're forecasting <unk>.

William B. Shepro: And even during this difficult time, we've improved our EBIT over the last couple of years by over $30 million. And, you know, we're forecasting, you know, a $21, $22 million improvement this year. So I think we're going in the right direction in terms of getting back to a strong, you know, strong margin, strong EBIT. The costs are in line.

$122 million improvement this year. So I think we're going in the right direction in terms of getting back to a strong strong margin and strong EBITDA.

The costs are in line and as we continue to make progress in our growth where our plans are to ultimately refinance refinance.

William B. Shepro: And as we continue to make progress in our growth, you know, our plans are to ultimately refinance the debt. So right now, we've got time. The debt matures on April 25, but we have an automatic right, subject to some conditions around an extension fee and complying with reps and warrants for another year.

So right now we've got time at the debt matures in April.

25, but we have an automatic rate is subject to some conditions around.

An extension fee in complying with reps and warrants another year and so we feel good about our position we've got to continue to grow our adjusted EBITDA and put the company in a position to refi that debt and hopefully reduce our interest expense.

William B. Shepro: And so we feel good about our position. We have to continue to grow our adjusted EBIT and put the company in a position to refinance the debt and, hopefully, reduce our interest. Hey, thanks. Yep. Thanks, Mike. Thank you. As a reminder, ladies and gentlemen, that's star 11 to ask the question.

Got it got it hey, thank you.

Yeah. Thanks, Mike.

Thank you.

As a reminder, ladies and gentlemen.

<unk> won one to ask a question.

Operator: I am showing no further questions in the queue. I would now like to turn the call back over to Bill for closing remarks. Great. Thank you, operator. We're pleased with our financial performance and sales wins in 2023 and believe this sets us up really well for this year. Thanks for joining us. Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.

I'm showing no further questions in the queue.

I'd now like to turn the call back over to Bill for closing remarks.

Great. Thank you operator, we're pleased with our financial performance and sales wins in 2023 and believe this sets us up really well for this year. Thanks for joining us.

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation you may now disconnect.

Q4 2023 Altisource Portfolio Solutions SA Earnings Call

Request a DemoDemo

ASPS

Altisource Portfolio Solutions SA

Earnings