ALTISOURCE PORTFOLIO SOLUTIONS THIRD QUARTER 2025 SUPPLEMENTARY INFORMATION © 2025 Altisource All Rights Reserved. AUGUST 2022 Furthermore, we believe the exclusion of more significant non-operational items enables comparability to prior period performance and trend analysis. DISCLAIMER This presentation contains forward-looking statements that involve a number of risks and uncertainties. These forward-looking statements include all statements that are not historical fact, including statements that relate t ...

Core Viewpoint - Altisource Portfolio Solutions S.A. reported solid financial performance for the third quarter of 2025, with growth in service revenue and improvements in earnings metrics compared to the same period in 2024 [2][5]. Company Financial Performance - Service revenue for Q3 2025 was $39.7 million, an increase of $1.5 million or 4% from Q3 2024 [5][6]. - The net loss attributable to Altisource was $2.4 million, representing a $7.0 million improvement compared to the same quarter of 2024 [5][6]. - Diluted loss per share improved to $(0.22), a $2.39 improvement from the same quarter in 2024 [5][6]. - Adjusted EBITDA for Q3 2025 was $3.6 million, roughly flat compared to Q3 2024, with an adjusted EBITDA margin of 9.1%, down from 9.5% in the same quarter of 2024 [5][6]. - The company ended the quarter with $28.6 million in cash and cash equivalents [5]. Business Segments Performance - Adjusted EBITDA in the Servicer and Real Estate and Origination segments improved to $10.9 million, or 27.5% of service revenue, compared to $10.8 million, or 28.3% of service revenue in Q3 2024 [5]. - The company generated sales wins estimated to represent potential annualized service revenue of $3.2 million for the Servicer and Real Estate segment and $11.2 million for the Origination segment [5][6]. Industry Context - Industrywide foreclosure initiations were 19% higher for the eight months ended August 31, 2025, compared to the same period in 2024 [5]. - Industrywide mortgage origination volume increased by 17% for the nine months ended September 30, 2025, driven by a 4% decline in purchase origination and a 103% increase in refinancing origination [5].

Financial Performance - Third quarter Service revenue was $39.7 million, an increase of $1.5 million or 4% compared to the same quarter of 2024[7] - Loss before income taxes and non-controlling interests improved by $6.8 million to $(1.7) million compared to the same quarter of 2024[7] - Net loss attributable to Altisource was $(2.4) million, a $7.0 million improvement compared to the same quarter of 2024[7] - Adjusted EBITDA for the third quarter was $3.6 million, roughly flat compared to the same quarter of 2024[7] - Adjusted EBITDA margin decreased to 9.1% from 9.5% in the same quarter of 2024, primarily due to product mix[7] - Adjusted diluted earnings per share improved to $0.10 from $(1.83) in the same quarter of 2024, a 105% increase[8] - Service revenue for Q3 2025 was $39.666 million, up from $38.150 million in Q3 2024, representing a growth of 3.96%[14] - Total revenue for the nine months ended September 30, 2025, reached $128.635 million, compared to $119.121 million for the same period in 2024, an increase of 8.57%[14] - Gross profit for Q3 2025 was $11.347 million, a decrease from $12.070 million in Q3 2024, reflecting a decline of 6.00%[14] - Basic loss per share improved to $(0.22) in Q3 2025 from $(2.61) in Q3 2024[14] - The company reported net cash used in operating activities of $(4.560) million for the nine months ended September 30, 2025, compared to $(3.624) million for the same period in 2024[18] - Adjusted net income attributable to Altisource for the nine months ended September 30, 2025, was not explicitly stated but is a key measure for evaluating ongoing performance[22] - For the three months ended September 30, 2025, adjusted operating income was $2,663,000, compared to $3,419,000 for the same period in 2024, representing a decrease of 22.2%[29] - The net loss attributable to Altisource for the nine months ended September 30, 2025, was $8,842,000, an improvement from a net loss of $26,867,000 in the same period of 2024[29] - Adjusted EBITDA for the three months ended September 30, 2025, was $3,621,000, slightly down from $3,624,000 in 2024, while for the nine months it increased to $14,265,000 from $12,640,000[29] - The diluted loss per share for the three months ended September 30, 2025, was $(0.22), compared to $(2.61) in 2024, indicating a significant improvement[31] - The company reported a pretax loss attributable to Altisource of $(1,736,000) for the three months ended September 30, 2025, compared to $(8,553,000) in 2024, showing a reduction of 79.7%[29] - Total income from operations for the three months ended September 30, 2025, was $521,000, down from $1,105,000 in 2024, reflecting a decline of 52.8%[29] - The adjusted pretax income attributable to Altisource for the nine months ended September 30, 2025, was $4,431,000, compared to a loss of $(16,683,000) in 2024, marking a significant turnaround[29] Cash and Debt Management - The company ended the quarter with $28.6 million in cash and cash equivalents[7] - Cash and cash equivalents at the end of Q3 2025 were $28.598 million, slightly down from $29.811 million at the end of 2024[16] - Total current liabilities decreased significantly to $39.657 million in Q3 2025 from $271.273 million at the end of 2024, indicating improved financial stability[16] - The company issued equity in exchange for debt reduction amounting to $45.370 million, reflecting strategic financial management[20] - Net debt as of September 30, 2025, stood at $143,290 million after accounting for cash and cash equivalents of $28,598 million[35] Business Development - New business won during the quarter is estimated to represent $14.4 million of annual Service revenue on a stabilized basis[5] - The weighted average sales pipeline was estimated between $33.6 million and $42.0 million for potential service revenue on a stabilized basis[7] - Industrywide mortgage origination volume increased by 17% for the nine months ended September 30, 2025, compared to the same period in 2024[9] Expenses and Compensation - Share-based compensation expense for Q3 2025 was $1,308 million, compared to $859 million in Q3 2024, reflecting a 52% increase[33] - Cost of cost savings initiatives for Q3 2025 was $276 million, up from $185 million in Q3 2024, indicating a 49% increase[33] - The per diluted share impact of share-based compensation expense, net of tax, was $0.11 for Q3 2025, down from $0.20 in Q3 2024[33] - Debt exchange transaction expenses for Q3 2025 amounted to $194 million, with a per diluted share impact of $0.02[33] - The company incurred debt exchange transaction expenses of $194,000 for the three months ended September 30, 2025, and $3,646,000 for the nine months, impacting overall financial performance[29] Taxation - The company recognized a full valuation allowance on its net deferred tax assets in Luxembourg, resulting in an effective tax rate of close to 0% for 2024 and 2025[23] - The company reported a significant tax benefit from certain income tax-related items of $536 million for Q3 2025, compared to $616 million in Q3 2024[33]

Financial Performance - Revenue for Q3 2025 was $41.9 million, a 3.4% increase from $40.5 million in Q3 2024[10] - Gross profit for Q3 2025 was $11.3 million, compared to $12.1 million in Q3 2024, reflecting a decrease of 6%[10] - Net loss attributable to Altisource for Q3 2025 was $2.4 million, an improvement from a net loss of $9.4 million in Q3 2024[10] - For the nine months ended September 30, 2025, Altisource reported a net income of $9,062 thousand, compared to a net loss of $26,731 thousand for the same period in 2024[17] - The company reported a comprehensive loss of $2.4 million for Q3 2025, compared to a comprehensive loss of $9.4 million in Q3 2024[10] - Basic loss per share for Q3 2025 was $0.22, an improvement from a loss of $2.61 per share in Q3 2024[10] - Total revenue for the nine months ended September 30, 2025, reached $128.635 million, up 7.73% from $119.121 million in the same period of 2024[133] - Service revenue for Q3 2025 was $39.666 million, a 3.96% increase from $38.150 million in Q3 2024[131] Assets and Liabilities - Total current assets increased to $54.4 million as of September 30, 2025, up from $51.1 million at the end of 2024[8] - Total liabilities decreased significantly to $230.5 million as of December 31, 2024, from $39.7 million as of September 30, 2025[8] - Long-term debt stood at $191.3 million as of September 30, 2025, indicating a substantial financial obligation[8] - The accumulated deficit increased to $355.9 million as of September 30, 2025, compared to $260.0 million at the end of 2024[8] - Total assets decreased to $139.9 million as of September 30, 2025, down from $143.6 million at the end of 2024[8] - Total current liabilities decreased significantly to $39.7 million from $271.3 million at the end of 2024[8] Cash Flow and Financing - The company experienced a net cash used in operating activities of $4,560 thousand for the nine months ended September 30, 2025, compared to $3,624 thousand for the same period in 2024[17] - Cash, cash equivalents, and restricted cash at the end of the period were $32,478 thousand, a decrease from $31,226 thousand at the end of the same period in 2024[20] - Altisource's total cash flow from financing activities for the nine months ended September 30, 2025, was a net inflow of $4,637 thousand, compared to a net outflow of $566 thousand in 2024[17] - The company issued equity worth $45,370 thousand in exchange for debt reduction during the reporting period[19] Revenue Sources - Onity accounted for 42% and 43% of the company's total revenue for the three and nine months ended September 30, 2025, respectively, with revenue from Onity recognized at $55.5 million for the nine months ended September 30, 2025, compared to $52.6 million in 2024[36] - The company recognized revenue from Rithm of $3.3 million for the nine months ended September 30, 2025, up from $1.8 million in 2024[44] - Total revenue from servicer and real estate for Q3 2025 was $33.242 million, compared to $32.549 million in Q3 2024, indicating a growth of 2.13%[133] Expenses - Cost of revenue for Q3 2025 totaled $30.561 million, an increase of 7.74% from $28.461 million in Q3 2024[138] - Selling, general and administrative expenses for Q3 2025 were $10.826 million, slightly down from $10.965 million in Q3 2024[141] - Share-based compensation expense for the nine months ended September 30, 2025, was $3,066 thousand, down from $3,916 thousand in 2024[17] Tax and Compliance - The company recognized an income tax benefit of $15.1 million for the nine months ended September 30, 2025, compared to a provision of $(2.2) million for the same period in 2024[143] - The total amount of unrecognized tax benefits, including interest and penalties, was $3.5 million as of September 30, 2025, down from $19.2 million as of December 31, 2024[150] - The company has open tax years in the United States (2017 through 2023), India (2011 through 2024), and Luxembourg (2017 through 2023)[146] Shareholder Information - The company distributed 70.5 million Stakeholder Warrants to purchase approximately 14.3 million shares of common stock at $9.5998 per share on April 3, 2025[100] - As of September 30, 2025, there were 35,222,298 outstanding Stakeholder Warrants, with 7,156,372 shares issuable upon exercise[105] - The company has a share repurchase program authorized to purchase up to 0.4 million shares until May 16, 2028[116]

Core Viewpoint - Altisource Portfolio Solutions S.A. is set to report its third quarter 2025 earnings on October 23, 2025, with a press release and presentation available on its Investor Relations website [1][2]. Group 1: Earnings Report - The earnings report for the third quarter 2025 will be released on October 23, 2025 [1]. - A conference call to discuss the results will take place at 8:30 a.m. EDT on the same day [2]. - A replay of the conference call will be accessible approximately two hours after the call and will remain available for about 30 days [2]. Group 2: Company Overview - Altisource Portfolio Solutions S.A. operates as an integrated service provider and marketplace for the real estate and mortgage industries [3]. - The company combines operational excellence with innovative services and technologies to address the demands of changing markets [3].

Core Viewpoint - Altisource Portfolio Solutions S.A. (NASDAQ: ASPS) is currently rated as a "Strong Buy" due to its recovery and growth trajectory after past misdeeds [1] Company Performance - The company has successfully navigated a decade since its share price collapse, leading to improved profitability and growth under current management [1]

Core Insights - Altisource Portfolio Solutions S.A. (NASDAQ: ASPS) has seen its stock price more than double this year due to improved business performance [1] - Despite the recent rally, the stock remains 90% lower than its value five years ago, indicating a significant long-term decline [1] Company Performance - The stock has experienced a substantial increase in value this year, reflecting positive changes in business operations [1] - The current stock price is still significantly depressed compared to historical levels, suggesting potential concerns among investors regarding its long-term viability [1]

Core Insights - Equator, a SaaS platform for real estate transaction management, has added four prominent organizations, including Renovo Financial and HGF Management, to its customer base, indicating strong demand for its services [1][2] - The platform aims to enhance scalability and control across the property lifecycle, showcasing its evolution from default lifecycle management to broader asset management [3] - Equator is investing in AI-driven capabilities to improve property management efficiency and provide predictive insights, adapting to the rapidly changing real estate market [3] Company Overview - Equator is part of Altisource, which provides integrated services and technologies for the real estate and mortgage industries, focusing on operational excellence and innovative solutions [4][5] - The platform connects servicers, investors, agents, and vendors in a secure ecosystem, offering tools for property marketing, transaction management, and compliance [5]

Core Viewpoint - Altisource Portfolio Solutions reported a significant turnaround in Q2 2025, achieving positive net income primarily due to a tax benefit from reversing reserves related to Indian tax uncertainties, despite ongoing cash flow challenges [1][6]. Financial Performance - Revenue increased by 11% year-over-year to $43.3 million from $39.1 million in Q2 2024 [2]. - Net income (GAAP) rose to $16.6 million, a $24.9 million improvement from a loss of $8.3 million in the previous year [2]. - Adjusted EBITDA (non-GAAP) grew by 23% to $5.4 million compared to $4.4 million in Q2 2024 [2]. - Diluted EPS (GAAP) improved to $1.48 from a loss of $2.33 [2]. Business Overview and Strategy - Altisource specializes in services and technology for the mortgage, real estate, and loan origination markets, offering platforms like Equator and RentRange [3]. - The growth strategy focuses on strong client relationships, technology-enabled solutions, and effective debt management [4]. Revenue and Profitability Insights - Service revenue increased by $3.9 million year-over-year, with slight improvements in segment-level margins [5]. - Gross margin on service revenue decreased from 34% in Q2 2024 to 32% in Q2 2025 [5]. - The significant profit driver was an $18.5 million tax reserve reversal, which heavily influenced net income [6]. Debt Management - Long-term debt was reduced to $172.5 million from $232.8 million at the end of 2024, aided by debt restructuring efforts [7]. - Net debt at the end of the quarter was $142.2 million, expected to lower annual GAAP interest expense to approximately $9.5 million [7]. Cash Flow and Operational Challenges - Operating cash flow remained negative at ($0.3) million for the quarter and ($5.3) million for the first half of 2025 [8]. - Corporate segment losses offset improvements in core business lines, indicating ongoing cost discipline challenges [9]. Industry Context - The mortgage industry saw a 22% increase in foreclosure initiations compared to the same period in 2024, although volumes remain below pre-pandemic levels [10]. - Mortgage origination volumes rose by 14%, driven by a 58% increase in refinancing activity [10]. - Industry delinquencies remain low, constraining organic growth for foreclosure-related services [11]. Technology and Innovation - Technology remains a focus area, but no quantitative progress was reported on platforms like Equator or SaaS adoption metrics [12]. Regulatory Impact - The tax reversal in India removed significant uncertainty, positively impacting results, although regulatory factors continue to influence operations [13]. Future Outlook - Management did not provide explicit financial guidance but expects higher industry defaults and foreclosure volumes to benefit profitable business lines [14]. - A sales pipeline of potential annualized service revenue between $36 million and $44 million was noted, with most opportunities expected to materialize in 2026 and beyond [14]. - The company aims to monitor operating cash flow, sales pipeline conversion, and client concentration dynamics [15].

Financial Data and Key Metrics Changes - Total company service revenue increased by 11% to $40.8 million compared to the second quarter of last year [7] - Adjusted EBITDA grew by 23% to $5.4 million, driven by service revenue growth and cost discipline [7] - Net income attributable to Altisource improved to $16.6 million from a net loss of $8.3 million in the same quarter of 2024 [8] - Income before tax improved to $200,000 from a loss of $7.6 million in the second quarter of 2024 [8] - The corporate segment's adjusted EBITDA loss was $7.5 million, slightly higher than the previous year [14] Business Line Data and Key Metrics Changes - The servicer and real estate segment reported service revenue of $32 million, a 10% increase year-over-year [9] - Adjusted EBITDA for the servicer and real estate segment was $12 million, up 8% from the previous year, with a slight decline in margins due to revenue mix [10] - The origination segment's service revenue increased by 13% to $8.8 million, with adjusted EBITDA improving by 81% to $900,000 [11][12] Market Data and Key Metrics Changes - The residential mortgage delinquency rate remained low at 1.2% in May, with foreclosure starts increasing by 15% in April 2025 compared to the same period in 2024 [15] - Industry-wide origination unit volume increased by 27% in the second quarter compared to the same quarter last year [15] Company Strategy and Development Direction - The company is focusing on businesses with growth potential, including renovation, Granite Construction Risk Management, Lenders One, Hubzu Marketplace, and Foreclosure Trustee [13] - The success of these initiatives is not dependent on an increase in foreclosure starts or a growing residential loan origination market [14] - The company aims to maintain cost discipline while leveraging a strong sales pipeline to drive future growth [17] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's performance in a low delinquency environment and highlighted the potential for accelerated growth if loan delinquencies and foreclosure activities increase [17] - The company is well-positioned to benefit from stronger revenue and adjusted EBITDA growth in its countercyclical businesses [17] Other Important Information - The company ended the quarter with $30 million in unrestricted cash [8] - The estimated total weighted average sales pipeline for the real estate segment was $25.3 million [11] Q&A Session Summary Question: Inquiry about working capital build - Management indicated that the working capital activities were normal and there was nothing unusual in the quarter [20][21]