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What changed in ALTISOURCE PORTFOLIO SOLUTIONS S.A.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of ALTISOURCE PORTFOLIO SOLUTIONS S.A.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+436 added−458 removedSource: 10-K (2025-03-31) vs 10-K (2024-03-07)

Top changes in ALTISOURCE PORTFOLIO SOLUTIONS S.A.'s 2024 10-K

436 paragraphs added · 458 removed · 307 edited across 9 sections

Item 1. Business

Business — how the company describes what it does

32 edited+19 added−14 removed29 unchanged
Biggest changeThe Lenders One members’ earnings are included in revenue and reduced from net income to arrive at net income attributable to Altisource. 2023 Highlights Company, Corporate and Financial : • Improved total Company loss from operations by $16.4 million in 2023 compared to 2022 by (1) improving operating income as a percentage of service revenue in the Servicer and Real Estate and Origination segments (together, “Business Segments”) to 19.1% in 2023 from 13.2% in 2022, and (2) reducing Corporate and Others operating loss as a percentage of total Company service revenue to (31.4)% in 2023 from (36.1)% in 2022, primarily through efficiency initiatives and cost savings measures • Amended the senior secured term loans (“SSTL”) and revolving credit facility to, among other things, extend the maturity dates to April 2025, with options to extend both to April 2026, subject to certain terms and conditions • Generated $38.8 million in net proceeds from the sale of common stock and used $30 million to partially repay the SSTL • Ended the year with $32.5 million of cash and cash equivalents, $15.0 million available under a revolving credit facility and $191.6 million of net debt Business Segments : • In the face of serious market headwinds for both Business Segments, service revenue in the Servicer and Real Estate segment was only down 4% and service revenue in the Origination segment outperformed the overall market with a decline of 11% compared to a 36% decline in industrywide residential origination volume • Improved income from operations in the Business Segments by $7.0 million to $26.1 million, representing 19.1% of service revenue, in 2023 compared to $19.0 million, representing 13.2% of service revenue, in 2022, primarily through efficiency and cost cutting initiatives • Ended 2023 with a weighted average sales pipeline between $43 million and $53 million of potential estimated revenue on a stabilized basis based upon forecasted probability of closing (comprised of between $27 million and $33 million in the Servicer and Real Estate segment and between $16 million and $20 million in the Origination segment) 4 Table of Contents • Generated 2023 sales wins which we estimate represent potential annualized revenue on a stabilized basis of $58.4 million for the Servicer and Real Estate segment and $10.3 million for the Origination segment Industry : • Industrywide foreclosure initiations were 4% lower in 2023 compared to 2022 (and 31% lower than the same pre-COVID-19 period in 2019) • Industrywide foreclosure sales were 8% higher in 2023 compared to 2022 (and 46% lower than the same pre-COVID-19 period in 2019) • Industrywide early-stage mortgage delinquencies (30-days late) increased by 15% and borrowers who have missed two payments (60-days past due) increased by 16% in December 2023 compared to December 2022 • Industrywide mortgage origination volume decreased by 36% in 2023 compared to 2022 • Industrywide seriously delinquent mortgage rate (90+ day past due and loans in foreclosure) decreased to 1.3% in December 2023 compared to 1.6% in December 2022 Customers Overview Our customers include large financial institutions, government-sponsored enterprises (“GSEs”), banks, asset managers, servicers, investors, property management firms, real estate brokerages, insurance companies, mortgage bankers, originators, correspondent and private money lenders.
Biggest changeThe Lenders One members’ earnings are included in revenue and reduced from net loss to arrive at net loss attributable to Altisource. 2024 Highlights and Certain Subsequent Events Company, Corporate and Financial : • Grew service revenue by $13.8 million, or 10%, to $150.4 million in 2024 compared to 2023 • Full year 2024 total Company income (loss) from operations of $3.2 million was $20.0 million higher than 2023 due to (1) improving operating income as a percentage of service revenue in the Servicer and Real Estate and Origination segments (together “Business Segments”) to 25.3% in 2024 from 19.1% in 2023, and (2) reducing Corporate and Others operating loss as a percentage of total Company service revenue to (23.1)% in 2024 from (31.4)% in 2023, primarily through efficiency initiatives and cost savings measures and service revenue growth • Ended the year with $29.8 million of cash and cash equivalents • On February 19, 2025, the Company executed and closed an exchange transaction with 100% of lenders under the Company’s senior secured term loans whereby the lenders exchanged the Company’s senior secured term loans with an outstanding balance of $232.8 million for a $160.0 million new first lien loan and the issuance of approximately 58.2 million common shares of Altisource (the “Term Loan Exchange Transaction”); the new first lien loan is comprised of a $110 million term loan and a $50 million non-interest bearing exit fee which is reduced on a pro-rata basis with the repayment of the term loan • In connection with the Term Loan Exchange Transaction, Altisource will be issuing transferable warrants to holders as of February 14, 2025 of the Company’s (i) common stock, (ii) restricted share units and (iii) outstanding penny warrants, to purchase approximately 114.5 million shares of Altisource common stock for $1.20 per share (the “Stakeholder Warrants”); once issued, the Stakeholder Warrants will provide Stakeholders with the ability to purchase approximately 3.25 shares of Altisource common stock for each share of or right to common stock held • On February 19, 2025, Altisource also executed and closed on a $12.5 million super senior credit facility to fund transaction costs related to the Term Loan Exchange Transaction and for general corporate purposes 4 Table of Contents Business and Industry : • In the face of serious market headwinds for both Business Segments, service revenue in the Servicer and Real Estate segment increased by 11% to $120 million and service revenue in the Origination segment increased by 6% to $30 million • Improved income from operations in the Business Segments by $12.0 million to $38.0 million in 2024 compared to $26.1 million in 2023; improved income from operations as a percentage of service revenue in the Business Segments to 25.3% in 2024 from 19.1% in 2023; improvements were primarily through scale benefits and efficiency and cost cutting initiatives • Ended 2024 with a weighted average sales pipeline between $38 million and $47 million of potential estimated revenue on a stabilized basis based upon forecasted probability of closing (comprised of between $26 million and $33 million in the Servicer and Real Estate segment and between $12 million and $15 million in the Origination segment) • Generated 2024 sales wins which we estimate represent potential annualized service revenue on a stabilized basis of $25.8 million for the servicer and Real Estate segment and $13.6 million for the Origination segment • Industrywide foreclosure initiations were 6% lower in 2024 compared to 2023 (and 35% lower than the same pre-COVID-19 period in 2019) • Industrywide foreclosure sales were 14% lower in 2024 compared to 2023 (and 53% lower than the same pre-COVID-19 period in 2019) • Industrywide mortgage origination volume increased by 20% in 2024 compared to 2023, comprised of a 2% decline in purchase origination and a 112% increase in refinance origination • Industrywide seriously delinquent mortgage rate (90+ day past due and loans in foreclosure) increased to 1.4% in December 2024 compared to 1.3% in December 2023 Customers Overview Our customers include large financial institutions, government-sponsored enterprises (“GSEs”), banks, asset managers, servicers, real estate and mortgage investors, property management firms, real estate brokerages, insurance companies, mortgage bankers, originators, correspondent and private money lenders.
Marketplace Our Marketplace business includes the Hubzu ® online real estate auction platform and real estate auction, real estate brokerage and asset management services.
Marketplace Our Marketplace business includes the Hubzu ® online real estate auction platform, real estate brokerage and asset management services.
We gather this data from a variety of third party sources, including from governmental entities and, subject to licensed usage rights, we use this data in connection with the delivery of 6 Table of Contents certain of our services, including combining it with proprietary data we generate to further enhance data and metrics in connection with our services.
We gather this data from a variety of third party sources, 6 Table of Contents including from governmental entities and, subject to licensed usage rights, we use this data in connection with the delivery of certain of our services, including combining it with proprietary data we generate to further enhance data and metrics in connection with our services.
We also must comply with a number of federal, state and local laws, which may include, among others: • the Americans with Disabilities Act (“ADA”); • the Bank Secrecy Act; • the California Homeowner Bill of Rights (“CHBR”); • the Controlling the Assault of Non-Solicited Pornography And Marketing Act (“CAN-SPAM”); • the Equal Credit Opportunity Act (“ECOA”); • the Fair and Accurate Credit Transactions Act (“FACTA”); • the Fair Credit Reporting Act (“FCRA”); • the Fair Housing Act; • the Federal Trade Commission Act (“FTC Act”); • the Gramm-Leach-Bliley Act (“GLBA”); • the Home Affordable Refinance Program (“HARP”); • the Home Mortgage Disclosure Act (“HMDA”); • the Home Ownership and Equity Protection Act (“HOEPA”); • the National Housing Act; • the New York Real Property Actions and Proceedings Law (“RPAPL”); • the Real Estate Settlement Procedures Act (“RESPA”); • the Secure and Fair Enforcement for Mortgage Licensing (“SAFE”) Act; • the Servicemembers Civil Relief Act (“SCRA”); • the Telephone Consumer Protection Act (“TCPA”); • the Truth in Lending Act (“TILA”); and • Unfair, Deceptive or Abusive Acts and Practices statutes (“UDAAP”); and • Applicable state laws addressing consumer data privacy, use or disclosure.
We also must comply with a number of federal, state and local laws, which may include, among others: • the Americans with Disabilities Act (“ADA”); • the Bank Secrecy Act; • the California Homeowner Bill of Rights (“CHBR”); • the Controlling the Assault of Non-Solicited Pornography And Marketing Act (“CAN-SPAM”); • the Equal Credit Opportunity Act (“ECOA”); • the Fair and Accurate Credit Transactions Act (“FACTA”); • the Fair Credit Reporting Act (“FCRA”); • the Fair Housing Act; • the Federal Trade Commission Act (“FTC Act”); • the Gramm-Leach-Bliley Act (“GLBA”); • the Home Affordable Refinance Program (“HARP”); • the Home Mortgage Disclosure Act (“HMDA”); • the Home Ownership and Equity Protection Act (“HOEPA”); • the National Housing Act; • the New York Real Property Actions and Proceedings Law (“RPAPL”); • the Real Estate Settlement Procedures Act (“RESPA”); • the Secure and Fair Enforcement for Mortgage Licensing (“SAFE”) Act; • the Servicemembers Civil Relief Act (“SCRA”); • the Telephone Consumer Protection Act (“TCPA”); • the Truth in Lending Act (“TILA”); • Unfair, Deceptive or Abusive Acts and Practices statutes (“UDAAP”); and • Applicable state laws addressing consumer data privacy, use or disclosure.
Intellectual Property and Data We rely on a combination of contractual restrictions, internal security practices, patents, trademarks and copyrights to establish and protect our trade secrets, intellectual property, software, technology and expertise. We also own or, as we deem necessary and appropriate, have obtained licenses from third parties to intellectual property relating to our services, processes and businesses.
Intellectual Property and Data We rely on a combination of contractual restrictions, internal security practices, trademarks and copyrights to establish and protect our trade secrets, intellectual property, software, technology and expertise. We also own or, as we deem necessary and appropriate, have obtained licenses from third parties to intellectual property relating to our services, processes and businesses.
We typically compete based upon product and service awareness and offerings, product performance and service delivery, national coverage, ease of transacting, price, quality and control environment, technology integration and support, customer service and personal service. Our competitors may have greater financial resources, brand recognition, alternative or disruptive products and technology and other competitive advantages.
We typically compete based upon product and service awareness and offerings, product performance and service delivery, national coverage, ease of transacting, price, quality and control environment, technology integration and support, reputation, customer service and personal service. Our competitors may have greater financial resources, brand recognition, alternative or disruptive products and technology and other competitive advantages.
Within the Servicer and Real Estate segment we provide: Solutions Our Solutions business includes property preservation and inspection services, title insurance (as an agent) and settlement services, real estate valuation services, foreclosure trustee services, and residential and commercial construction inspection and risk mitigation services.
Within the Servicer and Real Estate segment we provide: Solutions Our Solutions business includes property preservation and inspection services, title insurance (as an agent) and settlement services, real estate valuation services, foreclosure trustee services, residential and commercial construction inspection and risk mitigation services, and residential real estate renovation services.
Within the Origination segment we provide: Solutions Our Solutions business includes title insurance (as an agent) and settlement services, real estate valuation services, and loan fulfillment, certification and certification insurance services.
Within the Origination segment we provide: Solutions Our Solutions business includes title insurance (as an agent) and settlement services, real estate valuation services, loan fulfillment and insurance services.
Rithm purchases brokerage services for REO exclusively from us, irrespective of the subservicer, subject to certain limitations, for certain MSRs set forth in and pursuant to the terms of a Cooperative Brokerage Agreement, as amended, and related letter agreement (collectively, the “Brokerage Agreement”) with terms extending through August 2025.
Rithm purchases brokerage services for REO exclusively from us, irrespective of the subservicer, subject to certain limitations, for certain MSRs set forth in and pursuant to the terms of a Cooperative Brokerage Agreement, as amended, and related letter agreement (collectively, the “Rithm Brokerage Agreement”) with terms extending through August 2025.
We actively protect our rights and intend to continue our policy of taking the measures we deem reasonable and necessary to develop and protect our patents, trademarks, copyrights, trade secrets and other intellectual property rights. In addition, we may make use of data in connection with certain of our services.
We strive to actively protect our rights and intend to continue our policy of taking the measures we deem reasonable and necessary to develop and protect our trademarks, copyrights, trade secrets and other intellectual property rights. In addition, we may make use of data in connection with certain of our services.
Government Regulation Our business and the business of our customers are or may be subject to extensive scrutiny and regulation by federal, state and local governmental authorities including the Federal Trade Commission (“FTC”), the CFPB, the Securities and Exchange Commission (“SEC”), the Department of Housing and Urban Development (“HUD”), the Treasury Department, various federal and state banking, financial and consumer regulators and the state and local agencies that license or oversee certain of our auction, real estate brokerage, title insurance agency, appraisal management, valuation, property preservation and inspection, mortgage and debt collection, trustee, mortgage origination underwriter and broker, property and asset management, insurance and credit report reselling services.
Government Regulation Our business and the business of our customers are or may be subject to extensive scrutiny and regulation by federal, state and local governmental authorities including the Federal Trade Commission (“FTC”), the Consumer Financial Protection Bureau (“CFPB”), the Securities and Exchange Commission (“SEC”), the Department of Housing and Urban Development (“HUD”), the Treasury Department, various federal and state banking, financial and consumer regulators and the state and local agencies that license or oversee certain of our auction, real estate brokerage, title insurance agency, appraisal management, valuation, property preservation and inspection, mortgage and debt collection, trustee, mortgage origination underwriter and broker, property and asset management, insurance and credit report reselling services.
Technology and software-as-a-service (“SaaS”) Products Our Technology and SaaS Products business includes Equator ® (a SaaS-based technology to manage real estate owned (“REO”), short sales, foreclosure, bankruptcy and eviction processes), Vendorly Invoice (a vendor invoicing and payment system), RentRange ® (a single and multi-family rental data, analytics and rent-based valuation solution), REALSynergy ® (a commercial loan servicing platform), and NestRange TM (an automated residential valuation model and analytics solution). 3 Table of Contents Origination segment provides originators with solutions and technologies that span the mortgage origination lifecycle.
Technology and software-as-a-service (“SaaS”) Products Our Technology and SaaS Products business includes Equator ® (a SaaS-based technology to manage real estate owned (“REO”) and investor homes, short sales, foreclosure, bankruptcy and eviction processes), Vendorly Invoice (a vendor invoicing and payment system), RentRange ® (a single and multi-family rental data, analytics and rent-based valuation solution), REALSynergy ® (a commercial loan servicing platform), and NestRange TM (a single family automated valuation model and analytics solution). 3 Table of Contents Origination segment provides originators with solutions and technologies that span the mortgage origination lifecycle.
Technology and SaaS Products Our Technology and SaaS Products business includes Vendorly Monitor (a vendor management platform), Lenders One Loan Automation (“LOLA”) (a marketplace to order services and a tool to automate components of the loan manufacturing process), TrelixAI TM (technology to manage the workflow and automate components of the loan fulfillment, pre and post-close quality control and service transfer processes), and ADMS (a document management and data analytics delivery platform).
Technology and SaaS Products Our Technology and SaaS Products business includes Vendorly Monitor (a vendor management platform), Lenders One Loan Automation (“LOLA”) (a marketplace to order services and a tool to automate components of the loan manufacturing process), TrelixAI TM (technology to manage the workflow and automate components of the loan fulfillment and pre and post-close quality control), and ADMS (a document management and data analytics delivery platform).
The markets for services provided to buyers and sellers of home for investment are highly competitive and generally consist of several national companies, a large number of regional and local providers and start-up companies.
The markets for services provided to buyers and sellers of homes for investment are highly competitive and generally consist of several national companies, a large number of regional and local providers and start-up companies.
The Dodd-Frank Act is extensive and includes reform of the regulation and supervision of financial institutions, as well as the regulation of derivatives, capital market activities and consumer financial services. The Dodd-Frank Act, among other things, created the CFPB, a 9 Table of Contents federal entity responsible for regulating consumer financial services and products.
The Dodd-Frank Act is extensive and includes reform of the regulation and supervision of financial institutions, as well as the regulation of derivatives, capital market activities and consumer financial services. The Dodd-Frank Act, among other things, created the CFPB, a federal entity responsible for regulating consumer financial services and products.
Certain of the Ocwen Services Agreements contain a “most favored nation” provision and also grant the parties the right to renegotiate pricing, among other things.
Certain of the Onity Services Agreements contain a “most favored nation” provision and also grant the parties the right to renegotiate pricing, among other things.
For the years ended December 31, 2023 and 2022, we recognized revenue from Rithm of $2.8 million and $3.2 million, respectively, under the Brokerage Agreement.
For the years ended December 31, 2024 and 2023, we recognized revenue from Rithm of $2.3 million and $2.8 million, respectively, under the Rithm Brokerage Agreement.
We are also subject to the requirements of the Foreign Corrupt Practices Act (“FCPA”) and comparable foreign laws due to our activities in foreign jurisdictions. In addition to federal and state laws regarding privacy and data security, we are also subject to data protection laws in the countries in which we operate.
We are also subject to the requirements of the Foreign Corrupt Practices Act (“FCPA”) and comparable foreign laws due to our activities in foreign jurisdictions. 9 Table of Contents In addition to federal and state laws regarding privacy and data security, we are also subject to data protection laws in the countries in which we operate.
For the years ended December 31, 2023 and 2022, we recognized additional revenue of $12.6 million and $13.0 million, respectively, relating to the Subject MSRs when a party other than Rithm selects Altisource as the service provider. Other Our services are provided to customers predominantly located in the United States.
For the years ended December 31, 2024 and 2023, we recognized additional revenue of $10.8 million and $12.6 million, respectively, relating to the Subject MSRs when a party other than Rithm selects Altisource as the service provider. Other Our services are provided to customers predominantly located in the United States.
Customer Concentration Ocwen Ocwen Financial Corporation (together with its subsidiaries, “Ocwen”) is a residential mortgage loan servicer of mortgage servicing rights (“MSRs”) it owns, including those MSRs in which others have an economic interest, and a subservicer of loans owned by others.
Customer Concentration Onity Onity Group Inc. (together with its subsidiaries, “Onity”) (formerly Ocwen Financial Corporation, or “Ocwen”) is a residential mortgage loan servicer of mortgage servicing rights (“MSRs”) it owns, including those MSRs in which others have an economic interest, and a subservicer of loans owned by others.
During the year ended December 31, 2023, Ocwen was our largest customer, accounting for 44% of our total revenue. Ocwen purchases certain mortgage services from us under the terms of services agreements and amendments thereto (collectively, the “Ocwen Services Agreements”) with terms extending through August 2030.
During the year ended December 31, 2024, Onity was our largest customer, accounting for 44% of our total revenue. Onity purchases certain mortgage services from us under the terms of services agreements and amendments thereto (collectively, the “Onity Services Agreements”) with terms extending through August 2030.
Revenue from Ocwen primarily consists of revenue earned from the loan portfolios serviced and subserviced by Ocwen when Ocwen engages us as the service provider, and revenue earned directly from Ocwen, pursuant to the Ocwen Services Agreements. For the years ended December 31, 2023 and 2022, we recognized revenue from Ocwen of $63.2 million and $63.5 million, respectively.
Revenue from Onity primarily consists of revenue earned from the loan portfolios serviced and subserviced by Onity when Onity engages us as the service provider, and revenue earned directly from Onity, pursuant to the Onity Services Agreements. For the years ended December 31, 2024 and 2023, we recognized revenue from Onity of $70.4 million and $63.2 million, respectively.
Revenue from Ocwen as a percentage of segment and consolidated revenue was as follows: 2023 2022 Servicer and Real Estate 55 % 53 % Origination — % — % Corporate and Others — % — % Consolidated revenue 44 % 41 % We earn additional revenue related to the portfolios serviced and subserviced by Ocwen when a party other than Ocwen or the MSRs owner selects Altisource as the service provider.
Revenue from Onity as a percentage of segment and consolidated revenue was as follows: 2024 2023 Servicer and Real Estate 55 % 55 % Origination 0 % 0 % Corporate and Others — % — % Consolidated revenue 44 % 44 % We earn additional revenue related to the portfolios serviced and subserviced by Onity when a party other than Onity or the MSR owner selects Altisource as the service provider.
More specifically, revenues from property sales, loan originations and certain property preservation services in Field Services typically tend to be at their lowest level during the fall and winter months and at their highest level during the spring and summer months.
More specifically, revenues from property sales, loan originations and certain property preservation services in field services typically tend to be at their lowest level during the fall and winter months and at their highest level during the spring and summer months. Current economic conditions, residential mortgage default rates and interest rates may impact historical revenue patterns.
As of December 31, 2023, Ocwen reported that approximately 16% of loans serviced and subserviced by Ocwen (measured in unpaid principal balance (“UPB”)) and approximately 67% of all delinquent loans that Ocwen services were related to Rithm MSRs or rights to MSRs (the “Subject MSRs”).
Onity has disclosed that Rithm is one of its largest servicing clients. As of December 31, 2024, Onity reported that approximately 14% of loans serviced and subserviced by Onity (measured in unpaid principal balance (“UPB”)) and approximately 63% of all delinquent loans that Onity services were related to Rithm MSRs or rights to MSRs (the “Subject MSRs”).
We cannot determine our market share with certainty, but believe for mortgage servicers we have a modest share of the market, and for the others we have a relatively small market share.
We cannot determine our market share with certainty, but believe for mortgage servicers we have a modest share of the market, and for the others we have a relatively small market share. Debt and Equity Transactions In April 2018, Altisource Portfolio Solutions S.A. and its wholly-owned subsidiary, Altisource S.à r.l.
As of December 31, 2023, there are no outstanding amounts under the First Revolver Amendment and the First Amendment Revolver has never been drawn. 8 Table of Contents Employees As of December 31, 2023, we had the following number of employees: United States India Uruguay Luxembourg Consolidated Altisource Total employees 187 810 66 8 1,071 Seasonality Certain of our revenues can be impacted by seasonality.
Employees As of December 31, 2024, we had the following number of employees: United States India Uruguay Luxembourg Consolidated Altisource Total employees 192 892 68 8 1,160 Seasonality Certain of our revenues can be impacted by seasonality.
For the years ended December 31, 2023 and 2022, we recognized $9.2 million and $9.5 million, respectively, of such revenue. These amounts are not included in deriving revenue from Ocwen and revenue from Ocwen as a percentage of revenue discussed above.
For the years ended December 31, 2024 and 2023, we recognized $9.6 million and $9.2 million, respectively, of such revenue.
As of December 31, 2023, accounts receivable from Ocwen totaled $3.4 million, $2.2 million of which was billed and $1.2 million of which was unbilled. As of December 31, 2022, accounts receivable from Ocwen totaled $4.0 million, $3.2 million of which was billed and $0.8 million of which was unbilled. 5 Table of Contents Rithm Rithm Capital Corp.
These amounts are not included in deriving revenue from Onity and revenue from Onity as a percentage of revenue discussed above. 5 Table of Contents As of December 31, 2024, accounts receivable from Onity totaled $4.4 million, $3.1 million of which was billed and $1.3 million of which was unbilled.
Term Loan Amendment On February 9, 2023, we executed Amendment No. 2 (the “Second Amendment”) to the Credit Agreement effective February 14, 2023 (as amended by the Second Amendment, the “Amended Credit Agreement”).
Effective February 14, 2023, Altisource Portfolio Solutions S.A. and Altisource S.à r.l. entered into Amendment No. 2 to the Credit Agreement (as amended by Amendment No. 2, the “Amended Credit Agreement”).
(individually, together with one or more of its subsidiaries or one or more of its subsidiaries individually, “Rithm”) (formerly New Residential Investment Corp.) is an asset manager focused on the real estate and financial services industries. Ocwen has disclosed that Rithm is a significant client of Ocwen’s.
As of December 31, 2023, accounts receivable from Onity totaled $3.4 million, $2.2 million of which was billed and $1.2 million of which was unbilled. Rithm Rithm Capital Corp. (individually, together with one or more of its subsidiaries or one or more of its subsidiaries individually, “Rithm”) is an asset manager focused on the real estate and financial services industries.
In addition, we have registered trademarks in a number of jurisdictions including the United States, the European Union (“EU”), India and five other jurisdictions. These trademarks generally can be renewed indefinitely, provided they are being used in commerce.
These intellectual property rights are important factors in the success of our businesses. As of December 31, 2024, we hold registered trademarks in a number of jurisdictions including the United States, the European Union (“EU”), India and four other jurisdictions. These trademarks are generally renewable indefinitely, subject to continued use in commerce.
Removed
These intellectual property rights are important factors in the success of our businesses. As of December 31, 2023, we have been awarded five patents that expire in 2025, one patent that expires in 2026, one patent that expires in 2027, one patent that expires in 2029, one patent that expires in 2030.
Added
(the “Borrower”), entered into a credit agreement with Morgan Stanley Senior Funding, Inc., as administrative agent and collateral agent, and certain lenders (the “Credit Agreement”). Under the Credit Agreement, Altisource borrowed $412 million in the form of senior secured term loans (the “SSTL”).
Removed
Public offerings of Common Stock On February 14, 2023, Altisource closed on an underwritten public offering to sell 4,550,000 shares of its common stock, at a price of $5.00 per share, generating net proceeds of $20.5 million, after deducting the underwriting discounts and commissions and other offering expenses.
Added
On December 16, 2024, Altisource Portfolio Solutions S.A. and the Borrower entered into that certain Transaction Support Agreement, dated as of December 16, 2024 (the “Transaction Support Agreement”), with certain holders of the Company’s SSTL under the Amended Credit Agreement. The transactions described below (the “Transactions”) were conducted pursuant to the Transaction Support Agreement.
Removed
On September 7, 2023, Altisource closed on an underwritten public offering to sell 5,590,277 shares of its common stock, at a price of $3.60 per share, generating net proceeds of $18.4 million, after deducting the underwriting discounts and commissions and other offering expenses.
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On February 13, 2025, the Company granted approximately 4.6 million restricted share units (“RSUs”) (at a weighted average grant date fair value of $1.06 per share) under the Company’s 2009 Equity Incentive Plan (the “Equity Plan”) to senior management in connection with the Transactions.
Removed
The following is a summary of certain key terms of the Second Amendment and the Amended Credit Agreement. • The maturity date of the term loans under the Amended Credit Agreement is April 30, 2025 • If the amount of par paydown that we make on the term loans (excluding amortization and other required payments) in the aggregate using proceeds from issuances of equity interest or from junior indebtedness prior to February 14, 2024 ("Aggregate Paydowns”) is equal to or greater than $30 million, then (subject to the representations and warranties being true and correct as of such date and there being no default or event of default being in existence as of such date) the maturity date of the term loans may be extended to April 30, 2026, at our option subject to Company's payment of a 2% payment-in-kind extension fee. • The principal amortization of the term loans under the Amended Credit Agreement is 1.00% per year through April 30, 2025 and, if the maturity date is extended, 1% per month during the 12 month extension period. • The interest rate on the term loans will initially be Secured Overnight Financing Rate (“SOFR”) plus 5.00% per annum payable in cash plus 5.00% per annum payable in kind (“PIK”).
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On February 18, 2025, the Company’s shareholders approved an increase in the number of authorized shares of Altisource Portfolio Solutions S.A. common stock (“common stock”) from 100.0 million to 250.0 million, a decrease in the par value of the Company’s common stock from $1.00 to $0.01 and an increase the number of shares of common stock reserved for issuance under the Equity Plan from approximately 11.7 million to approximately 16.3 million.
Removed
The PIK component of the interest rate is subject to adjustment based on the amount of Aggregate Paydowns as set forth in the table below: 7 Table of Contents Aggregate Paydowns PIK Component of Interest Rate Less than $20 million 5.00% $20 million+ but less than below 4.50% $30 million+ but less than below 3.75% $40 million+ but less than below 3.50% $45 million+ but less than below 3.00% $50 million+ but less than below 2.50% $55 million+ but less than below 2.00% $60 million+ but less than below 1.00% $65 million+ but less than below 0.50% $70 million+ 0.00% • If, as of the end of any calendar quarter, (i) our amount of unencumbered cash and cash equivalents on a consolidated basis plus (ii) the undrawn commitment amount under our revolving credit facility is, or is forecast as of the end of the immediately subsequent calendar quarter to be, less than $35 million, then up to 2.00% in interest otherwise payable in cash in the following quarter may be paid in kind at our election • The lenders under the Amended Credit Agreement received warrants (the “Warrants”) to purchase 3,223,851 shares of Altisource common stock (the “Warrant Shares”).
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On February 18, 2025, the Company’s shareholders also approved proposals to enable, among other things, an issuance of warrants (the “Warrant Distribution”) to purchase approximately 114.5 million shares of common stock for $1.20 per share, subject to adjustment (the “Stakeholder Warrants”) to record and beneficial holders of the following securities of Altisource Portfolio Solutions S.A.
Removed
The number of Warrant Shares is subject to reduction based on the amount of Aggregate Paydowns as set forth in the table below. Aggregate Paydowns Warrant Shares Less than $20 million 3,223,851 $20 million+ but less than below 2,578,743 $30 million+ 1,612,705 • The exercise price per share of common stock under each Warrant is equal to $0.01.
Added
(collectively, “Stakeholders”): (i) shares of common stock, (ii) RSUs, and (iii) warrants to purchase shares of common stock at an exercise price of $0.01 per share granted on February 14, 2023 (the “Penny Warrants”), in each case, as of 5:00 p.m., New York City time, on February 14, 2025 (such date and time, the “Distribution Record Date”).
Removed
The Warrants may be exercised at any time on and after February 14, 2024 and prior to their expiration date. The Warrants are exercisable on a cashless basis and are subject to customary anti-dilution provisions. The Warrants, if not previously exercised or terminated, will be automatically exercised on May 22, 2027.
Added
Subject to the right of the Board of Directors to change the Distribution Record Date, the issuance of Stakeholder Warrants shall occur on a date to be subsequently determined by the Board of Directors that will be within 60 days after the Distribution Record Date (i.e., by April 15, 2025).
Removed
The Warrants are subject to a lock-up agreement, subject to customary exceptions, ending on February 16, 2024 • The lenders under the Amended Credit Agreement were paid an amendment fee equal to 1.0%, substantially all of which was paid in cash at closing • Various of the affirmative and negative covenants, mandatory prepayments, events of default and other terms to which we are subject under the Amended Credit Agreement have been modified including in many cases to be more restrictive or to reduce certain permissions previously available to us • Based on the $30 million of Aggregate Paydowns made by Company during the year ended December 31, 2023, the maturity date may be extended to April 30, 2026 at the Company's option (subject to conditions described above), the PIK component of the interest rate decreased to 3.75%, the number of Warrant Shares decreased to 1,612,705 and there is no contractual amortization due until the April 30, 2025 maturity date.
Added
Fifty percent of the Stakeholder Warrants will expire on April 2, 2029 and require settlement through the cash payment to the Company of the exercise price of such Stakeholder Warrant (“Cash Exercise Stakeholder Warrants”).
Removed
If the maturity date is extended to April 30, 2026, the Company is required to make mandatory repayments of $5.2 million in the first quarter of 2026 with the remaining balance due at the April 2026 maturity • As of December 31, 2023 the outstanding amount of our SSTL was $224.1 million.
Added
Fifty percent of the Stakeholder Warrants will expire on April 30, 2032 and require settlement through the forfeiture of shares of common stock to the Company equal to the exercise price of such Stakeholder Warrants.
Removed
Revolver Amendment On February 9, 2023, we entered into Amendment No. 1 (the “First Revolver Amendment”) to our revolving credit facility (the “Revolver”) effective February 14, 2023.
Added
Pursuant to the Warrant 7 Table of Contents Distribution, each Stakeholder is expected to receive: one Cash Exercise Stakeholder Warrant to purchase 1.625 shares of our common stock and one Net Settle Stakeholder Warrant to purchase 1.625 shares of our common stock for each (a) share of common stock held as of the Distribution Record Date, (b) RSU held as of the Distribution Record Date and (c) share of common stock that could be acquired upon exercise of Penny Warrants held as of the Distribution Record Date.
Removed
The First Revolver Amendment establishes the credit available under our revolving credit facility at $15 million, extends the facility termination and maturity date to coincide with the maturity date of the term loans under the Amended Credit Agreement, and increases the interest rate under our revolving credit facility to 10% per annum payable in cash and 3% per annum PIK.
Added
The Stakeholder Warrants are expected to be exercisable on the later of (i) 90 days after their issuance and (ii) first date on which the VWAP (as defined in the Warrant Agent Agreement for the Stakeholder Warrants (the “Warrant Agent Agreement”)) of the common stock equals or exceeds the Implied Per Share Exercise Price (as such term is defined in the Warrant Agent Agreement) of the Stakeholder Warrants, which is expected to initially be $1.20, for a period of fifteen consecutive trading days (the “VWAP Condition”).
Removed
A usage fee of $0.75 million will be payable upon the initial drawing under our revolving credit facility following the effectiveness of the First Revolver Amendment.
Added
The exercise price of the Stakeholder Warrants is $1.95 per Stakeholder Warrant. On February 18, 2025, the Lenders exercised Penny Warrants for approximately 1.5 million shares of common stock. On February 19, 2025, Altisource Portfolio Solutions S.A. and the Borrower entered into agreements with 100% of the lenders under the SSTL (the “Lenders”) under the Amended Credit Agreement.
Removed
Our revolving credit facility is secured by a first-priority lien on substantially all of our assets, which lien will be pari passu with liens securing the term loans under the Amended Credit Agreement, and our revolving credit facility will continue to be guaranteed by Altisource and substantially all of our material subsidiaries.
Added
Under these agreements, the Lenders exchanged the SSTL with an outstanding balance of $232.8 million for a $160.0 million new first lien loan facility (the “New Facility”) and 58.2 million shares of common stock (the “Debt Exchange Shares”).
Removed
However, as a result of the COVID-19 pandemic and related measures and the rapid rise in mortgage interest rates, the seasonal impact to revenue may not follow historical patterns.
Added
The New Facility is comprised of a $110.0 million interest-bearing loan (the “New Debt”) and a $50.0 million non-interest-bearing exit fee (the “Exit Fee”).
Added
The following is a summary of certain terms of the New Facility: • $158.6 million of the New Facility matures on April 30, 2030 and $1.4 million of the New Facility matures on January 15, 2029 • The interest rate on the New Debt is the Secured Overnight Financing Rate (“SOFR”) plus 6.50% per annum with a 3.50% SOFR floor • The interest rate on the Exit Fee is 0% • All mandatory and voluntary prepayments under the New Facility are allocated between the New Debt and the Exit Fee on a pro rata basis • The principal amortization of the New Facility is 1.0% of the New Debt per year • A minimum of 95% of the net proceeds the Company receives from the exercise of Cash Exercise Stakeholder Warrants (defined below) are to be used to prepay the New Facility • Beginning with the fiscal year ending December 31, 2025, the lesser of (a) 75% of the aggregate Excess Cash Flow (as defined in the credit agreement) for the most recently ended fiscal year of the Company for which financial statements have been delivered and (b) such amount which, immediately after giving effect to such repayment, would result in the Company having no less than $30 million of total cash on its balance sheet, shall be applied first to the prepayment of the Super Senior Facility (defined below) and, second, to the prepayment of the New Facility The payment of all amounts owing by the Borrower under the New Facility is guaranteed by Altisource Portfolio Solutions S.A. and certain of its wholly-owned subsidiaries (the “Guarantors”) and is secured by a lien on substantially all of the assets of the Borrower, Altisource and the other Guarantors, subject to certain exceptions.
Added
The liens securing the New Facility are junior to the liens securing the Super Senior Facility (defined below) pursuant to, and as set forth in, an intercreditor agreement.
Added
Pursuant to the terms of the Exchange Agreement, dated February 19, 2025, by and among the Borrower and Altisource Portfolio Solutions S.A., on the one hand, and the Lenders, on the other hand, with limited exceptions, the Lenders may not, among other things, sell, offer to sell, grant any option to purchase or otherwise dispose of any Debt Exchange Shares, without the prior written consent of Altisource Portfolio Solutions S.A., until the date that is the earlier of (i) September 17, 2025 or (ii) the date on which Altisource Portfolio Solutions S.A. completes a liquidation, merger, stock exchange or other similar transaction that results in all of Altisource’s shareholders having the right to exchange their shares of common stock for cash, securities or other property (“Lock-Up”).
Added
On February 19, 2025, Altisource Portfolio Solutions S.A. and the Borrower also entered into a $12.5 million super senior credit facility (the “Super Senior Facility”) to fund transaction costs related to the Transactions (defined below) and for general corporate purposes.
Added
The following is a summary of certain terms of the Super Senior Facility: • The maturity date of the Super Senior Facility is February 19, 2029 • The original issue discount on the Super Senior Facility is 10.0% • The interest rate on the Super Senior Facility is SOFR plus 6.50% with a 3.50% SOFR floor • Beginning with the fiscal year ending December 31, 2025, the lesser of (a) 75% of the aggregate Excess Cash Flow (as defined in the credit agreement) for the most recently ended fiscal year of the Company for which financial statements 8 Table of Contents have been delivered and (b) such amount which, immediately after giving effect to such repayment, would result in the Company having no less than $30 million of total cash on its balance sheet, shall be applied first to the prepayment of the Super Senior Facility and, second, to the prepayment of the New Facility On February 19, 2025, Altisource entered into an agreement to terminate the $15.0 million revolving credit facility with STS Master Fund, Ltd, an investment fund managed by Deer Park Road Management Company, L.P.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

139 edited+82 added−70 removed87 unchanged
Biggest changeIn this ITEM 1A, unless the context otherwise clearly indicates, references to our “services” include any services, products or solutions provided, or made available, by us. 10 Table of Contents Summary • We may experience a significant and extended reduction in the demand for our default-related services due to the continued low number of residential mortgage foreclosures, extended time periods from foreclosure starts to sales, the reduction in rates of foreclosures starts converting to foreclosure sales and reduced supply of Real Estates Owned inventory resulting from loss mitigation and borrower relief measures, fiscal policies, and other relevant economic conditions. • We earn a significant portion of our revenue in connection with providing services to two customers. • Changes that reduce or limit the use of online default real estate auctions or otherwise reduce the volume or rate of success of such auctions can negatively impact us. • If our agreement with Rithm is terminated, expires, is breached, or suffers a significant reduction in volume we could be adversely affected. • Technology disruptions, failures, defects or inadequacies, delays or difficulties in implementing software or hardware changes, acts of vandalism or the introduction of harmful code could negatively impact us. • We depend on our ability to use services, products, data and infrastructure provided by third parties to maintain and grow our businesses. • We may not successfully detect fraudulent activity, which could impact our services, our clients or third parties and could adversely affect our reputation and our results of operations. • The Company’s databases contain our proprietary information, the proprietary information of third parties and personal information of our customers, consumers, vendors and employees.
Biggest changeSummary • A significant portion of our revenue is generated from providing services to two customers, the loss of some or all of these customer(s)’ business would negatively impact us. • If the Rithm Brokerage Agreement is terminated, expires, is breached, or if there is a significant reduction in the volume of services that we provide pursuant to such agreement, our business and results of operations would be adversely affected. • Technology disruptions, failures, defects, inadequacies, delays, difficulties in implementing software or hardware modifications, acts of vandalism, or the introduction of harmful code could negatively affect our operations and relationships with clients and stakeholders. • We depend on third-party services, products, data, infrastructure and solutions to maintain and grow our businesses, the loss or disruption of which could negatively impact us. • We may not successfully prevent or detect fraudulent activity, which could harm our services, clients, third parties, reputation, and our results of operations. • Our databases contain our proprietary information, the proprietary information of third parties, and personal information about our customers, consumers, vendors, and employees.
Termination events include, but are not limited to, a breach of the terms of the Brokerage Agreement (including, without limitation, the failure to meet performance standards and non-compliance with law in a material respect), the failure to maintain licenses which failure materially prevents performance of the contract, regulatory allegations of non-compliance resulting in an adversarial proceeding against Rithm, voluntary or involuntary bankruptcy, appointment of a receiver, disclosure in a Form 10-K or Form 10-Q that there is significant uncertainty about Altisource’s ability to continue as a going concern, failure to maintain a specified level of cash and an unapproved change of control.
Termination events include, but are not limited to, a breach of the terms of the Rithm Brokerage Agreement (including, without limitation, the failure to meet performance standards and non-compliance with law in a material respect), a failure to maintain licenses which materially prevents performance of the contract, regulatory allegations of non-compliance resulting in an adversarial proceeding against Rithm, voluntary or involuntary bankruptcy, appointment of a receiver, disclosure in a Form 10-K or Form 10-Q that there is significant uncertainty about Altisource’s ability to continue as a going concern, failure to maintain a specified level of cash and an unapproved change of control.
Rithm could decide to not renew or extend the term of the Brokerage Agreement upon its termination in August 2025, in which case Rithm may elect to use a brokerage service provider other than the Altisource subsidiaries for some or all of its REO.
Rithm could decide to not renew or extend the term of the Rithm Brokerage Agreement upon its termination in August 2025, in which case Rithm may elect to use a brokerage service provider other than the Altisource subsidiaries for some or all of its REO.
If our vendor sourcing efforts are not effective or if we are otherwise not able to secure an appropriate supply and quality of vendors, services or supplies, if vendors are unable to hire or retain employees or acquire supplies or are prohibited or prevented from performing the services or providing the products for which we contract, including as the result of restrictions imposed by state or local governments or health departments, we may be unable to provide services or compliant services or services may become more expensive.
If our vendor sourcing efforts are not effective or if we are otherwise not able to secure an appropriate supply and quality of vendors, services or supplies, if vendors are unable to hire or retain employees or acquire supplies, or are prohibited or prevented from performing the services or providing the products for which we contract, including as the result of restrictions imposed by state or local governments or health departments, we may be unable to provide services or compliant services, or our services may become more expensive.
If our vendor oversight activities are ineffective, if a vendor fails to provide the services or products that we require or expect or fails to meet contractual requirements, such as service levels or compliance with applicable laws, or a vendor engages in misconduct, the failure or misconduct could negatively impact our business by adversely affecting our ability to serve our customers or subjecting us to litigation and regulatory risk for ineffective vendor oversight.
If our vendor oversight activities are ineffective, if a vendor fails to provide the services or products that we require or expect, or fails to meet contractual requirements, such as service levels or compliance with applicable laws, or if a vendor engages in misconduct, the failure or misconduct could negatively impact our business by adversely affecting our ability to serve our customers or by subjecting us to litigation and regulatory risk for ineffective vendor oversight.
Developments that impact residential foreclosures or the supply, sale price or sale of REO could negatively affect demand for certain of our default-related services and negatively impact our ability to meet certain contractual performance metrics.
Developments that impact residential foreclosures or the supply, sale price or sale of REO could negatively affect demand for certain of our default-related services and impact our ability to meet certain contractual performance metrics.
If we do not meet the standards established by or imposed upon our customers, regulators allege that products or services provided by Altisource fail to meet applicable legal requirements, or if any other oversight procedures result in a negative outcome for Altisource, we may lose customers, may no longer be granted referrals for certain services, or may have to conform our business to address these standards.
If we do not meet the standards established by or imposed upon our customers, regulators allege that services provided by Altisource fail to meet applicable legal requirements, or if any other oversight procedures result in a negative outcome for Altisource, we may lose customers, may no longer be granted referrals for certain services, or may have to conform our business to address these standards.
Changes in laws concerning sales tax, gross recipient tax, dividends, retained earnings, application of operating or other losses, and intercompany transactions and loans, among others, could impact us. We may not be able to raise our prices to customers or pass-through such taxes to our customers or vendors in response to changes, which could adversely affect our results of operations.
Changes in laws concerning sales tax, gross recipient tax, dividends, retained earnings, application of operating or other losses, and intercompany transactions and loans, among others, could impact us. We may not be able to raise our prices to customers or pass-through such taxes to our customers or vendors in response to changes, which would adversely affect our results of operations.
If the characteristics of the portfolios of properties on which we provide services for either of these customers were to significantly change, for example to become less delinquent, more rural or lower value, this could impact the type and volume of services that we provide, increase our costs of doing business, or reduce the value of commissions or fees we earn.
If the characteristics of the portfolios of properties on which we provide services for either of these customers were to change, for example to become less delinquent, more rural or lower value, this could impact the type and volume of services that we provide, increase our costs of doing business, or reduce the value of commissions or fees we earn.
We are required to have and maintain licenses as a provider of certain product and services including, among others, services as a residential mortgage origination underwriter, valuation provider, appraisal management company, asset manager, property manager, title insurance agent, insurance broker and underwriter, real estate broker, auctioneer, foreclosure trustee and credit report provider in a number of jurisdictions.
We are required to have and maintain licenses as a provider of certain services including, among others, services as a residential mortgage origination underwriter, valuation provider, appraisal management company, asset manager, property manager, title insurance agent, insurance broker and underwriter, real estate broker, auctioneer, foreclosure trustee and credit report provider in a number of jurisdictions.
Under this agreement and related amendments, Altisource is the exclusive provider (with certain exceptions) of brokerage services for REO associated with the certain MSR through August 2025, irrespective of the subservicer, as long as Rithm owns such MSRs. The Brokerage Agreement may be terminated by Rithm upon the occurrence of certain specified events.
Under this agreement and related amendments, Altisource is the exclusive provider (with certain exceptions) of brokerage services for REO associated with certain MSRs through August 2025, irrespective of the subservicer, as long as Rithm owns such MSRs. The Rithm Brokerage Agreement may be terminated by Rithm upon the occurrence of certain specified events.
Our dependence on these vendors makes our operations vulnerable to the unavailability of such vendors, the pricing and quality of services and products offered by such vendors, solvency of those vendors, security failures of those vendors, deficiencies and failures of business continuity and disaster recovery plans and efforts of such vendors, and such vendors’ failure to perform adequately under our agreements with them.
Our dependence on these vendors makes our operations vulnerable to the unavailability of such vendors, the pricing and quality of services and products offered by such vendors, solvency of those vendors, deficiencies and failures of technology, security and business continuity and disaster recovery plans and efforts of such vendors, and such vendors’ failure to perform adequately under our agreements with them.
We are subject to this limitation until such time as our public float exceeds $75 million. If we are required to file a new registration statement on another form, we may incur additional costs and be subject to delays due to review by the SEC.
We are subject to this limitation until such time as our public float exceeds $75.0 million. If we are required to file a new registration statement on another form, we may incur additional costs and be subject to delays due to review by the SEC.
Such proceedings and settlement could increase our costs and expose us to sanctions, including limitations on our ability to provide services, or otherwise reduce demand for our services. Failure to comply with US sanctions, including blocking certain activities in Sanctioned Countries, could expose us to penalties and other adverse consequences.
Such proceedings and settlement could increase our costs and expose us to sanctions, including limitations on our ability to provide services, or otherwise reduce demand for our services. Failure to comply with applicable sanctions, including blocking certain activities in sanctioned countries, could expose us to penalties and other adverse consequences.
Such conditions could negatively impact demand for our default services. Reductions in the rates of residential mortgage delinquencies, defaults, foreclosures and REO would likely reduce demand for our services related to non-judicial foreclosures, inspecting, maintaining, valuing, marketing and selling such assets.
Such conditions could negatively impact demand for our default services. Reductions in the rates of residential mortgage delinquencies, defaults, foreclosures and REO volume would likely reduce demand for our services related to non-judicial foreclosures, inspecting, maintaining, valuing, marketing and selling such assets.
We and our vendors rely on processes that are intended to provide necessary notices, processes and controls regarding the collection, storage, processing and destruction of PI, and to permit subjects to exercise their legal rights concerning their PI in our possession.
We and our vendors rely on processes that are intended to provide necessary notices, processes and controls regarding the collection, access, storage, processing and destruction of PI, and to permit subjects to exercise their legal rights concerning their PI in our possession.
Our employees and subsidiaries may be required to be licensed by various state or regulatory commissions or bodies for the particular type of product or service provided and to participate in regular continuing education programs.
Our employees and subsidiaries may be required to be licensed by various state or regulatory commissions or bodies for the particular type of service provided and to participate in regular continuing education programs.
Foreign Exchange We have operations in India, Luxembourg and Uruguay which may result in us being party to transactions denominated, or incurring obligations, in currencies other than the United States dollar, including, for example, payroll, taxes, facilities-related expenses. Weakness of the United States dollar in relation to these applicable currencies (e.g., Euro, Indian rupee, Uruguayan peso) may increase our costs.
We have operations in India, Luxembourg and Uruguay which may result in us being party to transactions denominated, or incurring obligations, in currencies other than the United States dollar, including, for example, payroll, taxes, facilities-related expenses. Weakness of the United States dollar in relation to these applicable currencies (e.g., Euro, Indian rupee, Uruguayan peso) may increase our costs.
For example, we could experience a reduction in scope or volume of business as a direct or indirect result of the existence or outcome of regulatory matters impacting one or more of these clients, a change in the servicing relationship between these clients, a reduction in the MSRs for which Ocwen or Rithm acts as a servicer or subservicer or controls the rights to designate service providers, or a change in the contractual relationship between Altisource and Ocwen or Rithm.
For example, we could experience a reduction in scope or volume of business as a direct or indirect result of the existence or outcome of regulatory matters impacting one or more of these clients, a change in the servicing relationship between these clients, a reduction in the MSRs for which Onity or Rithm acts as a servicer or subservicer or controls the rights to designate service providers, or a change in the contractual relationship between Altisource and Onity or Rithm.
We also may face increased data privacy and security risks resulting from the use of non-Altisource networks to access information and to provide services.
We also may face increased data privacy and security risks resulting from the use of non-Altisource networks to access and process information and to provide services.
If faced with an extended period of decline in demand for and revenue from certain of our services as a result of economic conditions, borrower loss mitigation or relief measures, or due to government, GSE, servicer or investor restrictions related to loan delinquencies and foreclosures, including moratoriums on foreclosures and mortgage payment forbearance plans, we may 20 Table of Contents be unable to sufficiently adjust our cost structure, in our operations that provide such impacted services or at the corporate level, to avoid negative impacts to net revenue or profits.
If faced with an extended period of decline in demand for and revenue from certain of our services as a result of economic conditions, borrower loss mitigation or relief measures, or due to government, GSE, servicer or investor restrictions related to loan delinquencies and foreclosures, including moratoriums on foreclosures and mortgage payment forbearance plans, we may be unable to sufficiently adjust our cost structure, in our operations that provide such impacted services or at the corporate level, to avoid negative impacts to net revenue or profits.
ITEM 1A. RISK FACTORS The following risk factors and other information included in this Annual Report on Form 10-K should be carefully considered. The risks and uncertainties described below address the most materials risks, of which we are currently aware but are not the only ones we face.
ITEM 1A. RISK FACTORS The following risk factors and other information included in this Annual Report on Form 10-K should be carefully considered. The risks and uncertainties described below address the most material risks of which we are currently aware but are not the only ones we face.
Persistent and pervasive fraudulent activity may harm our client relationships and our reputation and could result in financial loss, thereby adversely affecting our business and results of operations . The Company’s databases contain our proprietary information, the proprietary information of third parties and personal information of our customers, consumers, vendors and employees.
Persistent and pervasive fraudulent activity may harm our client relationships and our reputation and could result in financial loss, thereby adversely affecting our business and results of operations . Our databases contain our proprietary information, the proprietary information of third parties, and personal information about our customers, consumers, vendors and employees.
National servicing standards, federal and state government scrutiny and regulation, requirements specifying loan loss mitigation, modification and foreclosure procedures, rules instituted by governmental authorities, GSEs, servicers or investors preventing actions related to loan delinquencies and foreclosures, including moratoriums on foreclosures and mortgage payment forbearance plans, may also reduce the number of mortgage loans entering the foreclosure process or suspend pending foreclosure and eviction actions.
National servicing standards, federal and state government scrutiny and regulation, requirements specifying loan loss mitigation, modification and foreclosure procedures, rules instituted by governmental authorities, GSEs, servicers or investors preventing actions related to loan delinquencies and foreclosures, including moratoriums on foreclosures and mortgage payment forbearance plans, may also reduce the number of mortgage loans entering the foreclosure process or 16 Table of Contents suspend pending foreclosure and eviction actions.
A reduction in the volume of real estate transactions or the sales price of real estate could negatively impact our residential real estate brokerage and auction businesses which earn commission fees that are generally set as a percentage based on the property sale price.
A reduction in the volume of real estate transactions or the sales price of real estate could negatively impact our residential real estate brokerage and auction businesses which earn commission fees generally set as a percentage based on the property sale price.
Demand for services from other businesses, such as mortgage origination, valuation, title and closing, may also decline as a result of a reduction in real estate transaction volumes including from increasing residential mortgage interest rates.
Demand for services from other businesses, such as mortgage origination, valuation, title and closing, may also decline as a result of a reduction in real estate transaction volumes including from increasing residential real estate values or mortgage interest rates.
Risks Related to Financing, Our Indebtedness and Capital Structure If we are unable to generate sufficient cash flow or access the capital markets or our borrowing capacity is reduced, our liquidity and competitive position will be negatively affected.
Risks Related to Financing, Our Indebtedness and Capital Structure If we are unable to generate sufficient cash flow or access the capital markets or our borrowing capacity is reduced, our liquidity and competitive position would be negatively affected.
If Altisource S.à r.l. is unable to generate sufficient pretax income by 2034, the Company may not be able to fully utilize this deferred tax asset. In 24 Table of Contents addition, changes in our structure or operations could prevent us from fully realizing some or all of the benefit of such deferred tax asset.
If Altisource S.à r.l. is unable to generate sufficient pretax income by 2034, the Company may not be able to fully utilize this deferred tax asset. In addition, changes in our structure or operations could prevent us from fully realizing some or all of the benefit of such deferred tax asset.
In addition, our liquidity would be adversely affected by any inability to access the capital markets, volatility in the capital markets, unforeseen outflows of cash, funding for contingencies and increased regulatory liquidity requirements.
In addition, our liquidity could be adversely affected by any inability to access the capital markets, volatility in the capital markets, unforeseen outflows of cash, funding for contingencies and increased regulatory liquidity requirements.
Economic or market fluctuations such as a decrease in sales or sales prices of residential properties or an increase in sales transaction timelines could reduce the demand for certain of our services related to marketing and real estate sale transactions, including services ancillary to such transactions, such as closing services and title insurance services.
Economic or market fluctuations such as a decrease in sales, sales prices or values of residential properties or origination volumes or an increase in sales transaction timelines could reduce the demand for certain of our services related to marketing and real estate sale transactions, including services ancillary to such transactions, such as closing services and title insurance services.
In addition, Rithm operational changes, breach of the Brokerage Agreement or other actions that reduce the number of properties converting to REO status could: (i) reduce the volume of services that we provide on the applicable MSRs pursuant to our agreements with Ocwen, and (ii) reduce the volume of services that we provide pursuant to the Brokerage Agreement.
In addition, Rithm operational changes, a breach of the Rithm Brokerage Agreement, or other actions that reduce the number of properties converting to REO status could: (i) reduce the volume of services that we provide on the applicable MSRs pursuant to our agreements with Onity, and (ii) reduce the volume of services that we provide pursuant to the Rithm Brokerage Agreement.
We provide certain services to residential mortgage servicers and subservicers, as well as government sponsored entities, federal agencies and others, to protect, preserve, manage and potentially dispose of properties securing residential mortgage loans, when such loans become delinquent, default, undergo foreclosure or become a REO asset.
We provide certain services to residential mortgage servicers and subservicers, as well as government sponsored entities, federal agencies and others, to protect, preserve, manage and potentially dispose of properties securing residential mortgage loans, when such loans become delinquent, default, undergo foreclosure or become REO assets.
Furthermore, even if we believe we comply with applicable laws and regulations, we may choose to settle such allegations in order to avoid the potentially significant costs of defending such allegations and to further avoid the risk of increased damages if we ultimately were to receive an unfavorable outcome, but such settlements may also result in further claims or create issues for existing and potential customers.
Furthermore, even if we believe we comply with applicable laws and regulations, we may choose to settle such allegations to avoid the potentially significant costs of defending such allegations and to further avoid the risk of increased damages if we ultimately were to receive an unfavorable outcome, but such settlements may also result in further claims or create issues for 27 Table of Contents existing and potential customers.
In addition, contractors, or contractors or employees of our vendors, may assert claims that they are our employees and seek to recover compensation, benefits, damages and penalties from us.
In addition, our contractor, and contractors and employees of our vendors may assert claims that they are our employees and seek to recover compensation, benefits, damages and penalties from us.
The insurance underwriting loss limitation methods we use may not be effective or sufficient. Altisource, through its subsidiary Association of Certified Mortgage Originators Risk Retention Group, Inc., provides certified loan insurance to its customers. Altisource reduces a portion of its risk of insurance loss through third-party reinsurance. The incidence and severity of claims against insurance policies are inherently unpredictable.
The insurance underwriting loss limitation methods we used may not be effective or sufficient. Altisource, through its subsidiary Association of Certified Mortgage Originators Risk Retention Group, Inc., provided certified loan insurance to its customers. Altisource reduces a portion of its risk of insurance loss through third-party reinsurance. The incidence and severity of claims against insurance policies are inherently unpredictable.
We may fail to adapt our services to changes in technology or in the marketplace related to mortgage servicing or origination, changing requirements of governmental authorities, GSEs and customers. Customers may seek to reduce reliance upon the number of service providers.
We may fail to adapt our services to changes in technology or in the marketplace related to mortgage servicing or origination, changing requirements of governmental authorities, GSEs and customers. Customers may seek to reduce the number of their service providers.
Economic or market fluctuations that reduce the volume or value of residential mortgage origination or re-financings could decrease the demand for our mortgage origination and mortgage insurance related services, including those provided to members of the Lenders One mortgage cooperative.
Economic or market fluctuations that reduce the volume or value of residential mortgage origination or refinancings could decrease the demand for our mortgage origination and mortgage insurance related services, including those provided to members of the Lenders One mortgage cooperative.
We have significant investments in goodwill and intangible assets recorded as a result of prior acquisitions and an impairment of these assets would require a write-down that would reduce our net income. As a result of prior investments, we have significant goodwill and intangible assets recorded in our financial statements.
We have significant investments in goodwill and intangible assets recorded as a result of prior acquisitions and an impairment of these assets would require a write-down that would reduce our net income. 25 Table of Contents As a result of prior investments, we have significant goodwill and intangible assets recorded in our financial statements.
Under certain of our material agreements a change of control would be deemed to occur if, among other things, a “group” (as that term is used in Sections 13(d) and 14(d) of the Exchange Act) is formed by shareholders holding beneficial ownership of a defined percentage of the combined voting power or economic interest of our capital stock.
Under certain of our material agreements a change of control would be deemed to occur if, among other things, a “group” (as that term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) is formed by shareholders holding beneficial ownership of a defined percentage of the combined voting power or economic interest of our capital stock.
Reduction in residential foreclosures or the supply or sales of REO in the United States could reduce the demand for and volume of certain of our services, including foreclosure trustee, foreclosure auction, REO asset management, REO property inspection and preservation, real estate brokerage, real estate auction and marketing services, as well as sales of REO, especially in cases where more loans are resolved prior to foreclosure or sold at foreclosure auctions and therefore do not convert to REO.
A reduction in residential foreclosures or the supply or sale of REO in the United States could reduce the demand for services, including foreclosure trustee, foreclosure auction, REO asset management, REO property inspection and preservation, real estate brokerage, real estate auction and marketing services, as well as sales of REO, especially in cases where more loans are resolved prior to foreclosure or sold at foreclosure auctions, and therefore do not convert to REO.
Certain of our services are provided at the direction and pursuant to the identified requirements of our customers, including property preservation, inspection, title, valuations, brokerage, auction, foreclosure and eviction services that are triggered by information provided by our customers.
Certain of our services are provided at the direction and pursuant to the identified requirements of our customers, including property preservation, inspection, title, valuations, brokerage, auction, foreclosure and eviction services that are triggered by 28 Table of Contents information provided by our customers.
Further, our customers may require changes and improvements to the systems we provide to them to manage the volume and complexity, laws or regulations of their businesses, or to interoperate with other systems, which changes and improvements may be unfeasible, unsuccessful, costly or time-consuming to implement or may create disruptions in our provision of services to customers.
Further, our customers may require modifications to the services we provide to them to manage the volume and complexity of or laws or regulations applicable to their businesses, or to interoperate with other systems, which modifications may be unfeasible, unsuccessful, costly or time-consuming to implement, or may create disruptions in our provision of systems to customers.
Additional risks to our systems and data as well as customer, vendor and borrower data include increased phishing activities targeting our workforce, vendors and counterparties in transactions and the possibility of attacks on our systems or systems of our remote workforce.
Additional risks to our systems and data, as well as customer, vendor and borrower data, include increased phishing activities targeting our workforce, vendors and counterparties in transactions, and potential attacks on our systems or systems of our remote workforce.
We may face an increase in wages or other costs of attracting, training or retaining skilled employees. In addition, attrition of current employees may negatively impact our ability to provide services of a quality or volume that satisfy applicable contractual obligations or that support our planned growth or expansion of services.
We may face an increase in wages or other costs of attracting, training or retaining skilled employees. In addition, attrition of current employees may negatively impact our ability to provide services of a quality or volume that satisfies applicable contractual obligations or supports our planned growth or expansion of services.
The relevant taxing authorities may disagree with our determinations as to the income and expenses attributable to specific jurisdictions.
The relevant taxing authorities may disagree with our determinations as to the transfer pricing, income and expenses attributable to specific jurisdictions.
Although we attempt to manage our exposure to insurance underwriting risk through the use of disciplined underwriting controls and the purchase of third-party reinsurance, we maintain first loss exposure and the frequency and severity of claims could be greater than contemplated in our pricing and risk management methods and our controls and mitigation efforts may not be effective or sufficient.
Although we attempted to manage our exposure to insurance underwriting risk through the use of disciplined underwriting controls and the purchase of third-party 15 Table of Contents reinsurance, we maintain first loss exposure and the frequency and severity of claims could be greater than contemplated in our pricing and risk management methods and our controls and mitigation efforts may not be effective or sufficient.
The Brokerage Agreement with Rithm’s licensed brokerage subsidiary contains a similar provision, and we may enter into material agreements in the future that contain similar provisions. The formation of a “group” could occur without the involvement of or input by us, and we are not in a position to prevent such an event from occurring.
The Rithm Brokerage Agreement contains such a provision, and we may enter into material agreements in the future that contain similar provisions. The formation of a “group” could occur without the involvement of or input by us, and we are not in a position to prevent such an event from occurring.
The markets for our services are characterized by constant technological and other changes, our customers’ and competitors’ frequent introduction of new services, and evolving industry standards and government regulations. We are currently in the process of, and from time to time will be, developing and introducing new services and technologies and improvements to existing services and technologies.
The markets for our services are characterized by constant technological and other changes, frequent introduction of new services by competitors, and evolving industry standards and government regulations. We are currently in the process of, and from time to time will be, developing and introducing new services and technologies and improving existing services and technologies.
A reduction in residential mortgage delinquencies, defaults or foreclosures in the United States can negatively affect demand for certain of our services.
A reduction in residential mortgage delinquencies, defaults or foreclosures, and REO volume in the United States can negatively affect demand for certain of our services.
Additionally, the improper implementation or use of Altisource technology, such as Equator, by customers could adversely impact the operation of that technology, and potentially cause harm to our reputation, loss of customers, negative publicity or exposure to liability claims or government investigations or actions.
Additionally, the improper implementation or use of Altisource services, such as Equator and others, by customers could adversely impact the operation of our services. The forgoing could potentially cause harm to our reputation, loss of customers, negative publicity, or exposure to liability claims or government investigations or actions.
An extended period of reduced demand for all or certain of our default-related services could negatively impact our cash flow such that we may need to use unrestricted cash on hand to satisfy our obligations, which would reduce our cash balance negatively impacting our liquidity.
An extended period of reduced demand for all or certain of our services would negatively impact our cash flow such that we may need to use unrestricted cash to satisfy our obligations, which would reduce our cash balance negatively impacting our liquidity.
If the agreement is terminated, expires, is breached or if there is a significant reduction in the volume of services that we provide pursuant to such agreement, our business and results of operations could be adversely affected. On August 28, 2017, Altisource, through its licensed subsidiaries, entered into the Brokerage Agreement with Rithm which extends through August 2025 (“Brokerage Agreement”).
If the Rithm Brokerage Agreement is terminated, expires, breached, or if there is a significant reduction in the volume of services that we provide pursuant to such agreement, our business and results of operations would be adversely affected. On August 28, 2017, Altisource, through its licensed subsidiaries, entered into the Rithm Brokerage Agreement.
If we do not generate sufficient cash flows and do not have sufficient cash on hand to meet our debt service and working capital requirements, we may need to seek additional financing, raise equity or sell assets, and our ability to take these actions may be limited by the terms of the Amended Credit Agreement, Revolver or the market.
If we do not generate sufficient cash flows and do not have sufficient cash on hand to meet our debt service and working capital requirements, we may need to seek additional financing, raise equity, or sell assets, and our ability to take these actions may be limited by the terms of the New Facility and the Super Senior Facility or the market.
Our customers may refuse to agree to modifications to technology or infrastructure that we provide to them or that interoperate with the technology or infrastructure we provide to them that we may believe are desirable to improve the reliability, performance, efficiency or cost in delivering.
Our customers may refuse to agree to modifications to technology or infrastructure services which we provide or which interoperate with the technology or infrastructure services which we provide and we believe are desirable to improve the reliability, performance, efficiency or cost in delivering services.
Employees and third parties have in the past conducted, and may attempt in the future to conduct, fraudulent activity, which may result in, among others, transferring funds to fraudulent actors, paying for services which were not performed or failed to meet applicable requirements, disbursing construction funds when applicable conditions have not been satisfied, selling real estate for below market values, issuing title insurance based on fraudulent ownership documentation, underwriting mortgage applications based on fraudulent information and insuring fraudulent mortgages.
This activity may result in, among others, transferring funds to fraudulent actors, paying for services which were not performed or failed to meet applicable requirements, disbursing construction funds when applicable conditions have not been satisfied, selling real estate for below market values, issuing title insurance based on fraudulent ownership documentation, underwriting mortgage applications based on fraudulent information, and insuring fraudulent mortgages.
Complying with these covenants may impair our ability to finance our future operations or capital needs or to engage in other favorable business activities. Our failure to comply with the covenants or terms contained in our Amended Credit Agreement or Revolver, including as a result of events beyond our control, could result in an event of default.
Complying with these covenants may impair our ability to finance our future operations or capital needs or to engage in other favorable business activities. Our failure to comply with the covenants or terms contained in the New Facility or the Super Senior Facility, including as a result of events beyond our control, could result in an event of default.
We may continue to encounter significant challenges in attracting and retaining employees as needed to satisfy demand or growth expectations for our services, or to be able to limit compensation related costs to make operations economically viable. We may not be able to attract and retain skilled employees.
We face inflationary wage pressures which may continue for an extended period. We may continue to encounter significant challenges in attracting and retaining employees as needed to satisfy demand or growth expectations for our services, or to be able to limit compensation related costs to make operations economically viable. We may not be able to attract or retain skilled employees.
Home price appreciation typically increases equity in the borrowers’ homes providing borrowers with more options to avoid foreclosure and, therefore, reducing foreclosure auction and REO referrals and ancillary services such as closing and title insurance services.
Residential real estate value appreciation typically increases equity in borrowers’ homes providing borrowers with more options to avoid foreclosure and, therefore, reducing foreclosure auction and REO referrals and ancillary services such as closing and title insurance services.
If we fail to satisfy applicable performance metrics or perform in a manner satisfactory to our customers, such customers may reduce the services they acquire from us or otherwise terminate us as a service provider. Changes to real estate brokerage commission structures or rates paid for residential property transactions could negatively impact us.
If we fail to satisfy applicable performance metrics or perform in a manner satisfactory to our customers, such customers may reduce the services they acquire from us or otherwise terminate us as a service provider. Changes to compensation paid in connection with residential property transactions could negatively impact us.
The tax regulations, and the interpretation thereof, in the countries, states and local jurisdictions in which we operate periodically change, which may adversely affect our results due to higher taxes, interest and penalties, or our inability to utilize tax credits available to us. Certain of our subsidiaries provide services in the United States and several other countries.
The tax regulations, and the interpretation thereof, in the countries, states and local jurisdictions in which we operate periodically change, which may adversely affect our results due to higher taxes, interest and penalties, or our inability to utilize operating losses or other tax credits available to us.
If we are required to pay employer taxes, pay backup withholding compensation, benefits, damages or penalties with respect to or on behalf of our contractors or contractors or employees of our vendors, our operating costs will increase.
If we are required to pay employer taxes, pay backup withholding compensation, benefits, damages or penalties with respect to or on behalf of our contractors or contractors or employees of our vendors, our costs would increase and we would be financially harmed.
Rates of residential mortgage delinquencies, defaults and foreclosures can be negatively impacted by numerous factors, including strengthening economic conditions, increasing housing equity from rising home values, decreasing residential mortgage interest rates, a reduction in the number of residential mortgages outstanding or a reduction in home ownership levels or governmental or servicer action.
Rates of residential mortgage delinquencies, defaults and foreclosures, and REO volume can be negatively impacted by numerous factors, such as strengthening economic conditions, increasing housing equity from rising home values, decreasing residential mortgage interest rates, reductions in the number of residential mortgages outstanding, reductions in homeownership levels or governmental or servicer action.
We currently anticipate that we will retain future earnings for the development, operation and expansion of our business and do not anticipate we will declare or pay any cash dividends for the foreseeable future. In addition, the terms of applicable debt agreements may preclude us from paying dividends.
We currently anticipate that we will retain future earnings for the development, operation and expansion of our business and do not anticipate we will declare or pay any cash dividends for the foreseeable future. In addition, the terms of applicable debt agreements may preclude us from paying dividends. Any return to stockholders could therefore, be limited to potential stock appreciation.
If any one of these termination events occurs and the Brokerage Agreement is terminated or if the Brokerage Agreement is not renewed or extended, Altisource’s business and results of operations could be adversely affected.
If any one of these termination events occurs and the Rithm Brokerage Agreement is terminated or if the Rithm Brokerage Agreement is not renewed or extended or the volume of referrals under the Rithm Brokerage Agreement is reduced, Altisource’s business and results of operations would be adversely affected.
There can be no assurance that we are in compliance, or that legislative, judicial or regulatory (including tax) authorities will not introduce proposals or assert interpretations of existing rules and regulations that would change, or at least challenge, the classification of our contractors.
There can be no assurance that we are or will be in compliance the various tests used in determining whether an individual is an employee or a contractor, or that legislative, judicial or regulatory (including tax) authorities will not introduce proposals or assert interpretations of existing rules and regulations that would change, or at least challenge, the classification of our contractors.
If such Inputs become unavailable or too expensive and we are unable to obtain suitable alternatives and efficiently and effectively integrate these alternatives into our service offerings or infrastructure, we could experience service disruptions, increased costs and reduced quality of our services.
If such Inputs become unavailable or too expensive, and we are unable to obtain suitable alternatives and efficiently and effectively integrate these alternatives into our services or infrastructure, we could experience service disruptions, increased costs and reduced quality of our services. We also provide certain third-party services for resale or distribution to our clients.
A significant portion of our workforce works from locations other than our facilities (“Remote Work Environment”). We may incur significant costs associated with the Remote Work Environment and we may not be able to increase our fees to cover the additional costs.
A majority of our workforce works from a Remote Work Environment. We may incur significant costs associated with the Remote Work Environment and we may not be able to increase our fees to cover the additional costs.
Governmental, GSE, servicer or investor actions or action by others that restrict online real estate auctions (foreclosure and REO), reduce the permissible fees or direct the use of auction providers other than us, could negatively impact demand for our auction marketplace, real estate brokerage and related services, and negatively impact our ability to meet certain contractual performance metrics, including those related to aging of assets, time on market and sale price compared to valuation.
Governmental, GSE, servicer or investor actions or action by others that restrict online real estate auctions (foreclosure and REO), reduce the permissible fees or direct the use of auction providers other than us, could negatively impact demand for our auction marketplace, real estate brokerage and related services, revenues we receive related to such real estate auctions and impact our ability to meet certain contractual performance metrics.
We may be unable to repay or refinance the balance of our loans under the Amended Credit Agreement or Revolver upon maturity, particularly if cash from operations fails to significantly improve, assets are not readily available for sale and sold or we are unable to timely refinance on favorable terms or at all.
We may be unable to repay or refinance the balance of our loans under the New Facility or the Super Senior Facility upon maturity, particularly if cash from operations fails to improve, assets are not readily available for sale, or we are unable to refinance on favorable terms or at all.
As of January 23, 2024, our public float (i.e., the aggregate market value of our outstanding equity securities held by non-affiliates) was approximately $48.8 million, based on 15.3 million shares of outstanding common stock held by non-affiliates and on the closing price of $3.20 per share of our common stock as reported on Nasdaq on January 23, 2024 (a date within 60 days of the date hereof), as calculated in accordance with General Instruction I.B.6 of Form S-3.
As of March 25, 2025, our public float (i.e., the aggregate market value of our outstanding equity securities held by non-affiliates) was approximately $62.5 million, based on 54.3 million shares of outstanding common stock held by non-affiliates and on the closing price of $1.15 per share of our common stock on February 13, 2025 (a date within 60 days of the date hereof), as calculated in accordance with General Instruction I.B.6 of Form S-3.
The United States Internal Revenue Service or other United States federal or state authorities or similar authorities of a foreign government may determine that we or our vendors have misclassified our contractors for employment tax or other purposes and, as a result, seek additional taxes from us, require us to pay certain compensation or benefits to wrongly classified employees, or attempt to impose fines or penalties.
Authorities may determine that we or our vendors have misclassified contractors for employment tax or other purposes and, as a result, seek additional taxes from us, require us to pay certain compensation or benefits to wrongly classified 19 Table of Contents employees, or attempt to impose fines or penalties.
If either party substantially reduces the scope or volume of services acquired from us, or otherwise ceases using us as a vendor, it would negatively impact our business.
A significant portion of our revenue is earned from providing services to Onity and Rithm. If either party substantially reduces the scope or volume of services acquired from us, or otherwise ceases using us as a vendor, it would negatively impact our business.
In addition, our Amended Credit Agreement contains covenants that limit our flexibility in planning for, or reacting to changes in, our business and our industry, including limitations on incurring additional indebtedness, making investments, adding new product lines, disposing or selling of assets, granting liens and merging or consolidating with other companies.
In addition, the New Facility and the Super Senior Facility contain covenants that limit our flexibility in planning for, or reacting to, changes in our business and our industry, including limitations on incurring additional indebtedness, making investments, adding new lines of service, disposing or selling of assets or equity, granting liens, and merging or consolidating 24 Table of Contents with other companies.
The inadequacy, disruption or failure of our business continuity or disaster recovery plans and procedures in response to significant business or system disruption could adversely affect our business. 15 Table of Contents Our business continuity and disaster recovery plans and other adjustments to business may not be sufficient to anticipate impacts of, or address or adequately recover from, business interruptions or a pandemic, or may not be implemented on a timely or error free basis in response to business interruptions or a pandemic, resulting in negative operational impacts and errors.
Our business continuity and disaster recovery plans and other adjustments to business may not be sufficient to anticipate impacts of, or address or adequately recover from, business interruptions or a pandemic, or may not be maintained, updated and implemented on a timely or error free basis in response to business interruptions or a pandemic, resulting in negative operational impacts and errors.
A determination that we have failed to comply with US sanctions, 26 Table of Contents whether knowingly or inadvertently, could result in the imposition of substantial penalties, including enforcement actions, fines, and civil and/or criminal penalties, and may adversely affect our business. If we fail to timely make required disclosure filings with the U.S.
A determination that we have failed to comply with applicable sanctions, whether knowingly or inadvertently, could result in the imposition of substantial penalties, including enforcement actions, fines, and civil and/or criminal penalties, and may adversely affect our business.
If we fail to satisfy applicable performance metrics or perform in a manner satisfactory to our customers, such customers may reduce the services they acquire from us or otherwise terminate us as a provider. 13 Table of Contents We entered into a brokerage agreement with Rithm’s licensed brokerage subsidiary.
If we fail to satisfy applicable performance metrics or perform in a manner satisfactory to our customers, such customers may reduce the services they acquire from us or otherwise terminate us as a provider.
Risks Relating to Luxembourg Organization and Ownership of Our Shares We are a Luxembourg company. The rights of shareholders under Luxembourg law may differ in certain respects from the rights afforded to shareholders of companies organized under laws in other jurisdictions. It may also be difficult to obtain and enforce judgments against us or our directors and executive officers.
Risks Relating to Luxembourg Organization and Ownership of Our Shares We are a Luxembourg company. The rights of shareholders under Luxembourg law may differ in certain respects from the rights afforded to shareholders of companies organized under laws in other jurisdictions.
Our level of debt and the variable interest rate on our term loan makes us sensitive to the effects of our current financial performance and interest rate increases; our level of debt and provisions in our Amended Credit Agreement and revolving credit facility could limit our ability to react to changes in the economy or our industry.
Our level of debt and the variable interest rate on our New Facility and the Super Senior Facility make us sensitive to the effects of our financial performance and interest rate increases; our level of debt and provisions of the New Facility and the Super Senior Facility could limit our ability to react to changes in the economy or our industry.
Those jurisdictions are subject to changing tax environments, which may result in higher operating expenses or taxes and which may introduce uncertainty as to 27 Table of Contents the application of tax laws and regulations to our operations.
Certain of our subsidiaries provide services in the United States and several other countries. Those jurisdictions are subject to changing tax environments, which may result in higher operating expenses or taxes and which may introduce uncertainty as to the application of tax laws and regulations to our operations.
The rights of shareholders under Luxembourg law may differ from the rights of shareholders of companies incorporated in other jurisdictions. A significant portion of our assets are owned outside of the United States.
As a result, Luxembourg law and our amended and restated articles of incorporation, as amended from time to time (“Articles”) govern the rights of shareholders. The rights of shareholders under Luxembourg law may differ from the rights of shareholders of companies incorporated in other jurisdictions. A significant portion of our assets are owned outside of the United States.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe Company conducts periodic drills and tabletop exercises to test these. • Third-Party Risk Management: The Company conducts initial, and on a periodic basis, subsequent risk evaluations of vendors that satisfy certain preestablished criteria classifying such vendors as presenting higher potential cybersecurity risks based upon vendor access to or provision of information systems or data to the Company that present significant potential risks.
Biggest changeThe Company strives to conduct periodic drills and tabletop exercises to test these. • Third-Party Risk Management: The Company strives to conduct initial and periodic risk evaluations of vendors meeting predefined criteria for heightened cybersecurity risk, based on their access to or provision of critical information systems or data. 30 Table of Contents The Company strives to conduct periodic assessments of the Company’s policies, standards, processes and practices.
The Company seeks to comply with the cybersecurity framework guidelines issued by the NIST and ISO. • Education and Awareness: The Company provides periodic, mandatory training for all levels of employees regarding information security, cybersecurity threats, business continuity planning and disaster recovery to equip Company employees with tools to address cybersecurity threats, and to communicate the Company’s evolving information security policies, standards, processes and practices. • Incident Response and Recovery Planning: The Company’s Security Operations Center (“SOC”), reporting to the CISO, provides 24x7 incident monitoring.
The Company seeks to comply with the cybersecurity framework guidelines issued by the NIST and ISO. • Education and Awareness: The Company provides periodic, mandatory training for all levels of employees regarding information security, cybersecurity threats, business continuity planning and disaster recovery in an effort to equip Company employees with tools to address cybersecurity threats, and to communicate the Company’s evolving information security policies, standards, processes and practices. • Incident Response and Recovery Planning: The Company’s Security Operations Center (“SOC”), reporting to the CISO, strives to provide 24x7 incident monitoring.
Cybersecurity Risk Management and Strategy The Company’s cybersecurity risk management strategy focuses on several areas: • Identification and Reporting: The Company has controls and procedures designed to identify, assess, manage and respond to cybersecurity threats and incidents, including fulfilling potential public disclosure or reporting requirements as may be applicable. 28 Table of Contents • Technical Safeguards: The Company implements and maintains technical safeguards designed to protect the Company’s information systems and data from cybersecurity threats, including perimeter and web application firewalls, proxy, intrusion prevention and detection systems, anti-malware, endpoint detection response functionality, data loss prevention systems, security incident event management, geo-blocking and access controls.
Cybersecurity Risk Management and Strategy The Company’s cybersecurity risk management strategy focuses on several areas: • Identification and Reporting: The Company strives to have controls and procedures designed to identify, assess, manage and respond to cybersecurity threats and incidents, including fulfilling potential public disclosure or reporting requirements as may be applicable. • Technical Safeguards: The Company strives to implement and maintain technical safeguards designed to protect the Company’s information systems and data from cybersecurity threats, including perimeter and web application firewalls, proxy, intrusion prevention and detection systems, anti-malware, endpoint detection response functionality, data loss prevention systems, security incident event management, geo-blocking and access controls.
The Company conducts periodic assessments of the Company’s policies, standards, processes and practices. Summary results of such assessments are evaluated by the CISO to assist the Company in adjusting its cybersecurity policies, standards, processes and practices; the CISO reviews critical results with the TIS Committee.
Summary results of such assessments are evaluated by the CISO to assist the Company in adjusting its cybersecurity policies, standards, processes and practices; the CISO reviews critical results with the TIS Committee. Governance The Board of Directors oversees the Company’s risk management program, including the management of cybersecurity threats.
In general, the Company seeks to identify, assess and manage material cybersecurity risks through a company-wide approach addressing the confidentiality, integrity, and availability of the Company’s information systems and the information that the Company collects and processes.
Annual technology and cybersecurity risk assessments are conducted to identify and evaluate applicable risks and controls designed to address such risks. In general, the Company seeks to identify, assess and manage material cybersecurity risks through a company-wide approach addressing the confidentiality, integrity, and availability of the Company’s information systems and the information that the Company collects and processes.
The Company’s cybersecurity policies, standards, processes, and practices are based on recognized frameworks established by the National Institute of Standards and Technology (“NIST”), the International Organization for Standardization (“ISO”), applicable industry standards, and applicable data privacy and cybersecurity regulations. Annual technology and cybersecurity risk assessments are conducted to identify and evaluate applicable risks and controls designed to address such risks.
The Company’s cybersecurity policies, standards, processes, and practices are generally based on recognized frameworks established by the National Institute of Standards and Technology (“NIST”), the International Organization for Standardization (“ISO”), applicable industry standards, and applicable data privacy and cybersecurity regulations.
If an incident occurs which SOC determines qualifies as a “critical risk” according to predetermined criteria, the SOC engages an incident management team to assist with evaluating, responding to and managing the response of the incident. The Company has established and maintains comprehensive incident identification, containment, response and business continuity plans designed to respond to potential cybersecurity incidents.
If an incident occurs which SOC determines qualifies as a “critical risk” according to predetermined criteria, Company policy requires the SOC to engage an incident management team to assist with evaluating, responding to and managing the response of the incident.
The TIS Committee provides Management oversight of the Company’s cybersecurity risk management, business continuity planning and disaster recovery strategy and performance. To facilitate the success of the Company’s cybersecurity program, cross-functional teams work with the CISO and SOC to address cybersecurity threats and respond to cybersecurity incidents.
To facilitate the success of the Company’s cybersecurity program, cross-functional teams work with the CISO and SOC seek to address cybersecurity threats and respond to cybersecurity incidents.
The CISO holds undergraduate and graduate degrees in Information Systems Management and has attained the professional certification of Certified Information Security Manager from the Information Systems Audit and Control Association.
The CISO holds undergraduate and graduate degrees in Information Systems Management and has attained the professional certification of Certified Information Security Manager from the Information Systems Audit and Control Association. Material Effects of Cybersecurity Incidents Past cybersecurity incidents have not had, and are not reasonably expected to have, a material impact on the Company’s business strategy, operations, or financial condition.
Governance The Board of Directors oversees the Company’s risk management program, including the management of cybersecurity threats. The Board of Directors receives regular reports from the CTSO on cybersecurity threats and the Company’s strategy to manage the risks associated with such threats.
The Board of Directors receives regular reports from the CTSO on cybersecurity threats and the Company’s mitigation strategies. The TIS Committee provides Management oversight of the Company’s cybersecurity risk management, business continuity planning and disaster recovery strategy and performance.
Removed
Material Effects of Cybersecurity Incidents Previous cybersecurity incidents did not have, and are not reasonably likely to have, a material effect on the Company, including its business strategy, results of operations, or financial condition.
Added
The Company has established and seeks to maintain comprehensive incident identification, containment, response and business continuity plans designed to respond to potential cybersecurity incidents.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe consider these facilities to be suitable and currently adequate for the management and operations of our businesses. 29 Table of Contents
Biggest changeWe consider these facilities to be suitable and currently adequate for the management and operations of our businesses.
ITEM 2. PROPERTIES Our principal executive offices are located in leased office space in Luxembourg, Grand Duchy of Luxembourg. Our principal leased offices in other countries as of December 31, 2023 include two offices in the United States and one office each in India and Uruguay. We do not own any office facilities.
ITEM 2. PROPERTIES Our principal executive offices are located in leased office space in Luxembourg, Grand Duchy of Luxembourg. Our principal leased offices in other countries as of December 31, 2024 include two offices in the United States and one office each in India and Uruguay. We do not own any office facilities.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeFor further information, see Item 1A of Part I, “ Risk Factors ” above and Note 22 to the consolidated financial statements. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 30 Table of Contents PART II
Biggest changeFor further information, see Item 1A of Part I, “ Risk Factors ” above and Note 22 to the consolidated financial statements. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 31 Table of Contents PART II

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeITEM 4. MINE SAFETY DISCLOSURES 30 PART II ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES 31 ITEM 6 [RESERVED] 31 ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 32 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 51 ITEM 8.
Biggest changeITEM 4. MINE SAFETY DISCLOSURES 31 PART II ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES 32 ITEM 6 [RESERVED] 32 ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 33 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 50 ITEM 8.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeAs of December 31, 2023, approximately 3.1 million shares of common stock remain available for repurchase under the program. There were no purchases of shares of common stock during the years ended December 31, 2023 and 2022. Luxembourg law limits share repurchases to the balance of Altisource Portfolio Solutions S.A.
Biggest changeAs of December 31, 2024, approximately 3.1 million shares of common stock remain available for repurchase under the program. There were no purchases of shares of common stock during the years ended December 31, 2024 and 2023. Under the New Facility and the Super Senior Facility, we are not permitted to repurchase shares except for limited circumstances.
Securities Authorized for Issuance under Equity Compensation Plans The information required by this item is incorporated herein by reference to our definitive proxy statement in connection with our 2024 annual meeting of shareholders to be filed pursuant to Regulation 14A under the Exchange Act.
Securities Authorized for Issuance under Equity Compensation Plans The information required by this item is incorporated herein by reference to our definitive proxy statement in connection with our 2025 annual meeting of shareholders to be filed pursuant to Regulation 14A under the Exchange Act.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock is listed on the NASDAQ Global Select Market under the symbol “ASPS.” The number of holders of record of our common stock as of March 1, 2024 was 304.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock is listed on the NASDAQ Global Select Market under the symbol “ASPS.” The number of holders of record of our common stock as of March 25, 2025 was 387.
Such approval typically occurs during a company’s annual meeting of shareholders. Luxembourg law imposes limits on our ability to pay dividends based on annual net income and net income carried forward, less any amounts placed in reserve. The provisions of our senior secured term loan agreement, as amended, also limit our ability to pay dividends.
Such approval typically occurs during a company’s annual meeting of shareholders. Luxembourg law imposes limits on our ability to pay dividends based on annual net income and net income carried forward, less any amounts placed in reserve. The provisions of the New Facility and the Super Senior Facility also limit our ability to pay dividends.
Removed
(unconsolidated parent company) retained earnings, less the value of shares repurchased. As of December 31, 2023, we can repurchase up to approximately $116 million of our common stock under Luxembourg law. Under the Amended Credit Agreement, we are not permitted to repurchase shares except for limited circumstances.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

114 edited+27 added−64 removed29 unchanged
Biggest changeFinancial information for our segments was as follows: For the year ended December 31, 2023 (in thousands) Servicer and Real Estate Origination Corporate and Others Consolidated Altisource Revenue Service revenue $ 107,779 $ 28,786 $ — $ 136,565 Reimbursable expenses 7,688 585 — 8,273 Non-controlling interests — 228 — 228 115,467 29,599 — 145,066 Cost of revenue 73,746 27,946 13,722 115,414 Gross profit (loss) 41,721 1,653 (13,722) 29,652 Selling, general and administrative expenses 9,622 7,693 29,105 46,420 Income (loss) from operations 32,099 (6,040) (42,827) (16,768) Total other income (expense), net — — (35,580) (35,580) Income (loss) before income taxes and non-controlling interests $ 32,099 $ (6,040) $ (78,407) $ (52,348) Margins: Gross profit (loss) / service revenue 39 % 6 % N/M 22 % Income (loss) from operations / service revenue 30 % (21) % N/M (12) % _____________________________________ N/M — not meaningful.
Biggest changeFor the year ended December 31, 2023 (in thousands) Servicer and Real Estate Origination Corporate and Others Consolidated Altisource Revenue Service revenue $ 107,779 $ 28,786 $ — $ 136,565 Reimbursable expenses 7,688 585 — 8,273 Non-controlling interests — 228 — 228 115,467 29,599 — 145,066 Cost of revenue 73,746 27,946 13,722 115,414 Gross profit (loss) 41,721 1,653 (13,722) 29,652 Selling, general and administrative expenses 9,622 7,693 29,105 46,420 Income (loss) from operations 32,099 (6,040) (42,827) (16,768) Total other income (expense), net — — (35,580) (35,580) Income (loss) before income taxes and non-controlling interests $ 32,099 $ (6,040) $ (78,407) $ (52,348) Margins: Gross profit (loss) / service revenue 39 % 6 % N/M 22 % Income (loss) from operations / service revenue 30 % (21) % N/M (12) % _____________________________________ N/M — not meaningful. 41 Table of Contents Servicer and Real Estate Revenue Revenue by line of business was as follows for the years ended December 31: (in thousands) 2024 2023 % Increase (decrease) Service revenue: Solutions $ 82,438 $ 67,946 21 Marketplace 26,894 27,878 (4) Technology and SaaS Products 10,607 11,955 (11) Total service revenue 119,939 107,779 11 Reimbursable expenses: Solutions 4,409 3,551 24 Marketplace 4,602 4,137 11 Total reimbursable expenses 9,011 7,688 17 Total revenue $ 128,950 $ 115,467 12 We recognized service revenue of $119.9 million for the year ended December 31, 2024, an 11% increase compared to the year ended December 31, 2023.
Marketplace Our Marketplace business includes the Hubzu online real estate auction platform and real estate auction, real estate brokerage and asset management services.
Marketplace Our Marketplace business includes the Hubzu online real estate auction platform, real estate brokerage and asset management services.
Within the Servicer and Real Estate segment we provide: Solutions Our Solutions business includes property preservation and inspection services, title insurance (as an agent) and settlement services, real estate valuation services, foreclosure trustee services, and residential and commercial construction inspection and risk mitigation services.
Within the Servicer and Real Estate segment we provide: Solutions Our Solutions business includes property preservation and inspection services, title insurance (as an agent) and settlement services, real estate valuation services, foreclosure trustee services, residential and commercial construction inspection and risk mitigation services, and residential real estate renovation services.
If any of the following events occurred, Altisource’s revenue could be significantly reduced and our results of operations could be materially adversely affected, including from the possible impairment or write-off of goodwill, intangible assets, property and equipment, other assets and accounts receivable: • Altisource loses Ocwen as a customer or there is a significant reduction in the volume of services it purchases from us • Ocwen loses, sells or transfers a significant portion of its GSE or Federal Housing Administration servicing rights or subservicing arrangements or remaining other servicing rights or subservicing arrangements and Altisource fails to be retained as a service provider • The contractual relationship between Ocwen and Rithm changes significantly, including Ocwen’s sub-servicing arrangement with Rithm expiring without renewal, and this change results in a change in our status as a provider of services related to the Subject MSRs • Ocwen loses state servicing licenses in states with a significant number of loans in Ocwen’s servicing portfolio • Ocwen is subject to stays, moratoriums, suspensions or other restrictions that limit or delay default-related actions on the loans it services • The contractual relationship between Ocwen and Altisource changes significantly or there are significant changes to our pricing to Ocwen for services from which we generate material revenue • Altisource otherwise fails to be retained as a service provider and/or there is a reduction in referral volumes The foregoing list is not intended to be exhaustive.
If any of the following events occurred, Altisource’s revenue could be significantly reduced and our results of operations could be materially adversely affected, including from the possible impairment or write-off of goodwill, intangible assets, property and equipment, other assets and accounts receivable: • Altisource loses Onity as a customer or there is a significant reduction in the volume of services it purchases from us • Onity loses, sells or transfers a significant portion of its GSE or Federal Housing Administration servicing rights or subservicing arrangements or remaining other servicing rights or subservicing arrangements and Altisource fails to be retained as a service provider • The contractual relationship between Onity and Rithm changes significantly, including Onity’s sub-servicing arrangement with Rithm expiring without renewal, and this change results in a change in our status as a provider of services related to the Subject MSRs • Onity loses state servicing licenses in states with a significant number of loans in Onity’s servicing portfolio • Onity is subject to stays, moratoriums, suspensions or other restrictions that limit or delay default-related actions on the loans it services • The contractual relationship between Onity and Altisource changes significantly or there are significant changes to our pricing to Onity for services from which we generate material revenue • Altisource otherwise fails to be retained as a service provider and/or there is a reduction in referral volumes The foregoing list is not intended to be exhaustive.
In addition, from time to time we consider and evaluate business acquisitions, dispositions, closures, sales of equity securities or other similar actions that are aligned with our strategy.
In addition, from time to time we may consider and evaluate business acquisitions, dispositions, closures, sales of equity securities or other similar actions that are aligned with our strategy.
Within the Origination segment we provide: Solutions Our Solutions business includes title insurance (as an agent) and settlement services, real estate valuation services, and loan fulfillment, certification and certification insurance services.
Within the Origination segment we provide: Solutions Our Solutions business includes title insurance (as an agent) and settlement services, real estate valuation services, loan fulfillment and insurance services.
We are focused on growing referrals from our existing customer base and attracting new customers to our offerings. We have a customer base that includes GSEs, asset managers, and several large bank and non-bank servicers including Ocwen and Rithm. We believe we are one of only a few providers with a broad suite of solutions, nationwide coverage and scalability.
We are focused on growing referrals from our existing customer base and attracting new customers to our offerings. We have a customer base that includes GSEs, asset managers, and several large bank and non-bank servicers including Onity and Rithm. We believe we are one of only a few providers with a broad suite of solutions, nationwide coverage and scalability.
We provide all of our significant accounting policies in Note 2 to the accompanying consolidated financial statements. Other Matters. This section, beginning on page 50 , provides a discussion of customer concentration. OVERVIEW Our Business We are an integrated service provider and marketplace for the real estate and mortgage industries.
We provide all of our significant accounting policies in Note 2 to the accompanying consolidated financial statements. Other Matters. This section, beginning on page 49 , provides a discussion of customer concentration. OVERVIEW Our Business We are an integrated service provider and marketplace for the real estate and mortgage industries.
Technology and SaaS Products Our Technology and SaaS Products business includes Equator (a SaaS-based technology to manage REO, short sales, foreclosure, bankruptcy and eviction processes), Vendorly Invoice (a vendor invoicing and payment system), RentRange (a single and multi-family rental data, analytics and rent-based valuation solution), REALSynergy (a commercial loan servicing platform), and NestRange (an automated valuation model and analytics solution). 32 Table of Contents The Origination segment provides originators with solutions and technologies that span the mortgage origination lifecycle.
Technology and SaaS Products Our Technology and SaaS Products business includes Equator (a SaaS-based technology to manage REO, short sales, foreclosure, bankruptcy and eviction processes), Vendorly Invoice (a vendor invoicing and payment system), RentRange (a single and multi-family rental data, analytics and rent-based valuation solution), REALSynergy (a commercial loan servicing platform), and NestRange (a single-family automated valuation model and analytics solution). 33 Table of Contents The Origination segment provides originators with solutions and technologies that span the mortgage origination lifecycle.
Ocwen has disclosed that it is subject to a number of ongoing regulatory examinations, consent orders, inquiries, subpoenas, civil investigative demands, requests for information and other actions and is subject to pending and threatened legal proceedings, some of which include claims against Ocwen for substantial monetary damages.
Onity has disclosed that it is subject to a number of ongoing regulatory examinations, consent orders, inquiries, subpoenas, civil investigative demands, requests for information and other actions and is subject to pending and threatened legal proceedings, some of which include claims against Onity for substantial monetary damages.
For example, Ocwen may be required to alter the way it conducts business, including the parties it contracts with for services, it may be required to seek changes to its existing pricing structure with us, it may lose its non-GSE servicing rights or subservicing arrangements or may lose one or more of its state servicing or origination licenses.
For example, Onity may be required to alter the way it conducts business, including the parties it contracts with for services, it may be required to seek changes to its existing pricing structure with us, it may lose its non-GSE servicing rights or subservicing arrangements or may lose one or more of its state servicing or origination licenses.
Any or all of these effects and others could result in our eventual loss of Ocwen as a customer or a reduction in the number and/or volume of services it purchases from us or the loss of other customers.
Any or all of these effects and others could result in our eventual loss of Onity as a customer or a reduction in the number and/or volume of services it purchases from us or the loss of other customers.
OTHER MATTERS Customer Concentration Ocwen Revenue from Ocwen primarily consists of revenue earned from the loan portfolios serviced and subserviced by Ocwen when Ocwen engages us as the service provider, and revenue earned directly from Ocwen, pursuant to the Ocwen Services Agreements.
OTHER MATTERS Customer Concentration Onity Revenue from Onity primarily consists of revenue earned from the loan portfolios serviced and subserviced by Onity when Onity engages us as the service provider, and revenue earned directly from Onity, pursuant to the Onity Services Agreements.
Lenders One is a mortgage cooperative managed, but not owned, by Altisource. The Lenders One members’ earnings are included in revenue and reduced from net income to arrive at net income attributable to Altisource.
Lenders One is a mortgage cooperative managed, but not owned, by Altisource. The Lenders One members’ earnings are included in revenue and reduced from net loss to arrive at net loss attributable to Altisource.
Technology and SaaS Products Our Technology and SaaS Products business includes Vendorly Monitor (a vendor management platform), LOLA (a marketplace to order services and a tool to automate components of the loan manufacturing process), TrelixAI (technology to manage the workflow and automate components of the loan fulfillment, pre and post-close quality control and service transfer processes), and ADMS (a document management and data analytics delivery platform).
Technology and SaaS Products Our Technology and SaaS Products business includes Vendorly Monitor (a vendor management platform), LOLA (a marketplace to order services and a tool to automate components of the loan manufacturing process), TrelixAI (technology to manage the workflow and automate components of the loan fulfillment and pre and post-close quality control), and ADMS (a document management and data analytics delivery platform).
Additional regulatory actions or adverse financial developments may impose additional restrictions on or require changes in Ocwen’s business that could require it to sell assets or change its business operations.
Additional regulatory actions or adverse financial developments may impose additional restrictions on or require changes in Onity’s business that could require it to sell assets or change its business operations.
We first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value as a basis for determining whether we need to perform the quantitative goodwill impairment test.
We first assess qualitative factors 48 Table of Contents to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value as a basis for determining whether we need to perform the quantitative goodwill impairment test.
For the years ended December 31, 2023 and 2022, we recognized revenue from Rithm of $2.8 million and $3.2 million, respectively, under the Brokerage Agreement.
For the years ended December 31, 2024 and 2023, we recognized revenue from Rithm of $2.3 million and $2.8 million, respectively, under the Rithm Brokerage Agreement.
It also provides a brief description of significant transactions and events that affect the comparability of financial results and a discussion of the progress being made on our strategic initiatives. Consolidated Results of Operations. This section, beginning on page 37 , provides an analysis of our consolidated results of operations for the two years ended December 31, 2023 and 2022.
It also provides a brief description of significant transactions and events that affect the comparability of financial results and a discussion of the progress being made on our strategic initiatives. Consolidated Results of Operations. This section, beginning on page 38 , provides an analysis of our consolidated results of operations for the two years ended December 31, 2024 and 2023.
We are focused on growing business from our existing customer base, attracting new customers to our offerings and developing new 33 Table of Contents offerings. We have a customer base that includes the Lenders One cooperative members, which includes independent mortgage bankers, credit unions, and banks, as well as bank and non-bank loan originators.
We are focused on growing business from our existing customer base, attracting new customers to our offerings and developing new offerings. We have a customer base that includes the Lenders One cooperative members, which includes independent mortgage bankers, credit unions, and banks, as well as bank and non-bank loan originators.
Ocwen Related Matters During the year ended December 31, 2023, Ocwen was our largest customer, accounting for 44% of our total revenue. Additionally, 6% of our revenue for the year ended December 31, 2023 was earned on the loan portfolios serviced by Ocwen, when a party other than Ocwen or the MSR owner selected Altisource as the service provider.
Onity Related Matters During the year ended December 31, 2024, Onity was our largest customer, accounting for 44% of our total revenue. Additionally, 6% of our revenue for the year ended December 31, 2024 was earned on the loan portfolios serviced by Onity, when a party other than Onity or the MSR owner selected Altisource as the service provider.
Previous regulatory actions against Ocwen have subjected Ocwen to independent oversight of its operations and placed certain restrictions on its ability to acquire servicing rights or proceed with default-related actions on the loans it services. Existing or future similar matters could result in adverse regulatory or other actions against Ocwen.
Previous regulatory actions against Onity have 35 Table of Contents subjected Onity to independent oversight of its operations and placed certain restrictions on its ability to acquire servicing rights or proceed with default-related actions on the loans it services. Existing or future similar matters could result in adverse regulatory or other actions against Onity.
During the years ended December 31, 2023 and 2022, we made payments of $0.5 million and $1.1 million, respectively, to satisfy employee tax withholding obligations on the issuance of restricted share units and restricted shares.
During the years ended December 31, 2024 and 2023, we made payments of $0.7 million and $0.5 million, respectively, to satisfy employee tax withholding obligations on the issuance of restricted share units and restricted shares.
Gross profit as a percentage of service revenue for the year ended December 31, 2023 increased compared to the year ended December 31, 2022 primarily due to margin expansion in both the Servicer and Real Estate segment and the Origination segment from efficiency initiatives and cost savings measures and lower corporate costs as a percentage of revenue.
Gross profit as a percentage of service revenue for the year ended December 31, 2024 increased compared to the year ended December 31, 2023 primarily due to margin expansion in both the Servicer and Real Estate segment and the Origination segment from efficiency initiatives and lower corporate costs as a percentage of service revenue growth, and service revenue growth.
The existence or outcome of Ocwen regulatory matters or the termination of Ocwen’s sub-servicing agreements with Rithm or other significant Ocwen clients may have significant adverse effects on Ocwen’s business.
The existence or outcome of Onity regulatory matters or the termination of Onity’s sub-servicing agreements with Rithm or other significant Onity clients may have significant adverse effects on Onity’s business.
For the years ended December 31, 2023 and 2022, we recognized additional revenue of $12.6 million and $13.0 million, respectively, relating to the Subject MSRs when a party other than Rithm selects Altisource as the service provider.
For the years ended December 31, 2024 and 2023, we recognized additional revenue of $10.8 million and $12.6 million, respectively, relating to the Subject MSRs when a party other than Rithm selects Altisource as the service provider.
Certain of our revenues can be impacted by seasonality. More specifically, revenues from property sales, loan originations and certain property preservation services in Field Services typically tend to be at their lowest level during the fall and winter months and at their highest level during the spring and summer months.
More specifically, revenues from property sales, loan originations and certain property preservation services in field services typically tend to be at their lowest level during the fall and winter months and at their highest level during the spring and summer months.
For the years ended December 31, 2023 and 2022, we recognized $9.2 million and $9.5 million, respectively, of such revenue. These amounts are not included in deriving revenue from Ocwen and revenue from Ocwen as a percentage of revenue discussed above.
For the years ended December 31, 2024 and 2023, we recognized $9.6 million and $9.2 million, respectively, of such revenue. These amounts are not included in deriving revenue from Onity and revenue from Onity as a percentage of revenue discussed above.
Segment Results of Operations. This section, beginning on page 40 , provides analysis of our business segments’ results of operations for the years ended December 31, 2023 and 2022. Liquidity and Capital Resources . This section, beginning on page 45 , provides an analysis of our cash flows for the two years ended December 31, 2023 and 2022.
Segment Results of Operations. This section, beginning on page 41 , provides analysis of our business segments’ results of operations for the years ended December 31, 2024 and 2023. Liquidity and Capital Resources . This section, beginning on page 46 , provides an analysis of our cash flows for the two years ended December 31, 2024 and 2023.
The foreclosure timelines could vary significantly based upon, for example, upon the state where the property is located and whether the foreclosure is contested. The REO sale timelines could also vary significantly based upon, for example, the local real estate market, whether the home is located in a redemption state and whether the home is occupied post foreclosure.
The REO sale timelines could also vary significantly based upon, for example, mortgage interest rates, the local real estate market, whether the home is located in a redemption state and whether the home is occupied post foreclosure.
The change for the year ended December 31, 2023 was primarily driven by higher interest expense and debt amendment costs, partially offset by a gain on the change in fair value of the warrant liability and higher interest and other income.
The change for the year ended December 31, 2024 was primarily driven by higher interest expense and a gain on the change in fair value of the warrant liability for the year ended December 31, 2023 (no comparable amount for the year ended December 31, 2024), partially offset by lower debt amendment costs.
The change for the year ended December 31, 2023 was primarily driven by higher interest expense and debt amendment costs, partially offset by a gain on the change in fair value of the warrant liability and higher interest and other income.
The change for the year ended December 31, 2024 was primarily driven by higher interest expense and a gain on the change in fair value of the warrant liability for the year ended December 31, 2023 (no comparable amount for the year ended December 31, 2024), partially offset by lower debt amendment costs.
Recently Adopted and Future Adoption of New Accounting Pronouncements See Note 2 to the consolidated financial statements for a discussion of the recent adoption of a new accounting pronouncements and the future adoption of new accounting pronouncements.
See Note 20 to the consolidated financial statements for a discussion on the uncertain tax positions. Recently Adopted and Future Adoption of New Accounting Pronouncements See Note 2 to the consolidated financial statements for a discussion of the recent adoption of new accounting pronouncements and the future adoption of new accounting pronouncements.
Other income (expense), net Other income (expense), net, principally includes interest expense and other non-operating gains and losses. Other income (expense), net was $(35.6) million for the year ended December 31, 2023 compared to $(14.4) million for the year ended December 31, 2022.
Other income (expense), net Other income (expense), net, principally includes interest expense and other non-operating gains and losses. Other income (expense), net was $(36.1) million for the year ended December 31, 2024 compared to $(35.6) million for the year ended December 31, 2023.
Other Income (Expense), net Other Income (Expense), net principally includes interest expense and other non-operating gains and losses. Other Income (Expense), net was $(35.6) million for the year ended December 31, 2023 compared to $(14.4) million for the year ended December 31, 2022.
Other Income (Expense), net Other income (expense), net principally includes interest expense and other non-operating gains and losses. Other income (expense), net was $(36.2) million for the year ended December 31, 2024 compared to $(35.6) million for the year ended December 31, 2023.
In connection with Amendment No. 2, the Company paid $3.4 million to advisors and recorded these payments as other expense in the consolidated statements of operations and comprehensive loss • The Company recognized an income tax provision of $3.7 million for the year ended December 31, 2023.
In connection with Amendment No. 2, the Company paid $3.4 million to advisors and recorded these payments as other expense in the consolidated statements of operations and comprehensive loss (no comparative amount for the year ended December 31, 2024) 36 Table of Contents • The Company recognized an income tax provision of $2.6 million for the year ended December 31, 2024.
The increase in operating income as a percentage of service revenue for the year ended December 31, 2023 is primarily the result of higher gross profit margins and a percentage reduction in SG&A in excess of the percentage reduction in revenue.
The increase in operating income as a percentage of service revenue for the year ended December 31, 2024 is primarily the result of higher gross profit margins.
Revenue from Ocwen as a percentage of segment and consolidated revenue was as follows: 2023 2022 Servicer and Real Estate 55 % 53 % Origination — % — % Corporate and Others — % — % Consolidated revenue 44 % 41 % 50 Table of Contents We earn additional revenue related to the portfolios serviced and subserviced by Ocwen when a party other than Ocwen or the MSRs owner selects Altisource as the service provider.
Revenue from Onity as a percentage of segment and consolidated revenue was as follows: 49 Table of Contents 2024 2023 Servicer and Real Estate 55 % 55 % Origination 0 % 0 % Corporate and Others — % — % Consolidated revenue 44 % 44 % We earn additional revenue related to the portfolios serviced and subserviced by Onity when a party other than Onity or the MSR owner selects Altisource as the service provider.
The higher interest expense was driven by higher interest rates, higher interest rates on our amended SSTL and higher amortization of debt discount and debt issuance and amendment costs. 44 Table of Contents LIQUIDITY AND CAPITAL RESOURCES Liquidity Our primary source of liquidity has historically been cash flow from operations, cash proceeds from sales of businesses, cash proceeds from the sale of equity securities and cash on hand.
The higher interest expense was driven by higher interest rates on the SSTL. 45 Table of Contents LIQUIDITY AND CAPITAL RESOURCES Liquidity Our primary source of liquidity has historically been cash flow from operations, cash proceeds from sales of businesses, cash proceeds from the sale of equity securities and cash on hand.
Compensation and benefits for the year ended December 31, 2023 decreased primarily due to efficiency initiatives and cost savings measures taken in 2022 and 2023. Technology and telecommunications for the year ended December 31, 2023 decreased primarily due to the renegotiation of certain contracts and lower overall headcount.
Compensation and benefits for the year ended December 31, 2024 decreased primarily due to efficiency initiatives and cost savings measures taken in 2023. Technology and telecommunications costs for the year ended December 31, 2024 decreased primarily due to lower overall headcount.
The income tax provision for the year ended December 31, 2023 was driven primarily by income tax expense on transfer pricing income from India and the United States, reduction in deferred tax assets related to intangible assets, no tax benefit on the pretax loss from our Luxembourg operating company and uncertain tax positions.
The income tax provision for the year ended December 31, 2024 was driven primarily by income tax expense on transfer pricing income from India and the United States, no tax benefit on the pretax loss from our Luxembourg operating company and uncertain tax positions.
Loss from operations as a percentage of service revenue improved for the year ended December 31, 2023 compared to the year ended December 31, 2022, primarily as a result of higher gross profit margins and the percentage reduction in SG&A expenses in excess of the percentage change in revenue.
Income (loss) from operations as a percentage of service revenue improved for the year ended December 31, 2024 compared to the year ended December 31, 2023, primarily as a result of higher gross profit margins and lower SG&A expenses as a percentage of service revenue.
The decrease in cost of revenue for the year ended December 31, 2023 is primarily driven by lower technology and telecommunications and compensation and benefits due to efficiency initiatives and cost savings initiatives.
Cost of revenue for the year ended December 31, 2024 of $6.5 million decreased by 53% compared to the year ended December 31, 2023. The decrease in cost of revenue for the year ended December 31, 2024 is primarily driven by lower compensation and benefits and technology and telecommunications costs due to efficiency initiatives and cost savings initiatives.
We also recognized reimbursable expense revenue of $0.6 million for the year ended December 31, 2023, a 15% increase compared to the year ended December 31, 2022.
We also recognized reimbursable expense revenue of $9.0 million for the year ended December 31, 2024, a 17% increase compared to the year ended December 31, 2023.
For the year ended December 31, 2023, net cash used in operating activities was $(21.8) million compared to net cash used in operating activities of $(44.9) million for the year ended December 31, 2022.
For the year ended December 31, 2024, net cash used in operating activities was $(5.0) million compared to net cash used in operating activities of $(21.8) million for the year ended December 31, 2023.
Rithm purchases brokerage services for REO exclusively from us, irrespective of the subservicer, subject to certain limitations, for certain MSRs set forth in and pursuant to the terms of a Cooperative Brokerage Agreement, as amended, and related letter agreement (collectively, the “Brokerage Agreement”) with terms extending through August 2025.
Rithm purchases brokerage services for REO exclusively from us, irrespective of the subservicer, subject to certain limitations, for certain MSRs set forth in and pursuant to the terms of the Rithm Brokerage Agreement with terms extending through August 2025.
As of December 31, 2023, accounts receivable from Ocwen totaled $3.4 million, $2.2 million of which was billed and $1.2 million of which was unbilled. As of December 31, 2022, accounts receivable from Ocwen totaled $4.0 million, $3.2 million of which was billed and $0.8 million of which was unbilled.
As of December 31, 2024, accounts receivable from Onity totaled $4.4 million, $3.1 million of which was billed and $1.3 million of which was unbilled. As of December 31, 2023, accounts receivable from Onity totaled $3.4 million, $2.2 million of which was billed and $1.2 million of which was unbilled.
As of December 31, 2023, Ocwen reported that approximately 16% of loans serviced and subserviced by Ocwen (measured in UPB) and approximately 67% of all delinquent loans that Ocwen services were related to Rithm MSRs or rights to MSRs.
As of December 31, 2024, Onity reported that approximately 14% of loans serviced and subserviced by Onity (measured in UPB) and approximately 63% of all delinquent loans that Onity services were related to Rithm MSRs or rights to MSRs.
Only if we determine, based on qualitative assessment, that it is more likely than not that a reporting unit’s fair value is less than its carrying value will we calculate the fair value of the reporting unit. We estimate the fair value of the reporting units using discounted cash flows and market comparisons.
Only if we determine, based on qualitative assessment, that it is more likely than not that a reporting unit’s fair value is less than its carrying value, will we calculate the fair value of the reporting unit.
Income from operations Income from operations increased to $32.1 million, representing 30% of service revenue, for the year ended December 31, 2023 compared to $26.5 million, representing 24% of service revenue, for the year ended December 31, 2022.
Income from operations Income from operations increased to $37.9 million, representing 32% of service revenue, for the year ended December 31, 2024 compared to $32.1 million, representing 30% of service revenue, for the year ended December 31, 2023.
Gross profit increased to $1.7 million, representing 6% of service revenue, for the year ended December 31, 2023 compared to $1.4 million, representing 4% of service revenue, for the year ended December 31, 2022. Gross profit as a percentage of service revenue increased from margin expansion from efficiency initiatives and cost savings measures.
Gross profit increased to $6.7 million, representing 22% of service revenue, for the year ended December 31, 2024 compared to $1.7 million, representing 6% of service revenue, for the year ended December 31, 2023. Gross profit as a percentage of service revenue increased from efficiency initiatives, cost savings measures and price increase for certain services.
Gross profit increased to $41.7 million, representing 39% of service revenue, for the year ended December 31, 2023 compared to $38.5 million, representing 34% of service revenue, for the year ended December 31, 2022.
Gross profit increased to $49.3 million, representing 41% of service revenue, for the year ended December 31, 2024 compared to $41.7 million, representing 39% of service revenue, for the year ended December 31, 2023.
Income from Operations Loss from operations was $(6.0) million, representing (21)% of service revenue, for the year ended December 31, 2023 compared to loss from operations of $(7.4) million, representing (23)% of service revenue, for the year ended December 31, 2022.
Income (loss) from Operations Income (loss) from operations was $0.1 million, representing less than 1% of service revenue, for the year ended December 31, 2024 compared to income (loss) from operations of $(6.0) million, representing (21)% of service revenue, for the year ended December 31, 2023.
The income tax provision for the year ended December 31, 2023 was driven primarily by income tax expense on transfer pricing income from India and the United States, reduction in deferred tax assets related to intangible assets, no tax benefit on the pretax loss from our Luxembourg operating company and uncertain tax positions 35 Table of Contents • The Company recognized an income tax provision of $5.3 million for the year ended December 31, 2022.
The income tax provision for the year ended December 31, 2024 was driven primarily by income tax expense on transfer pricing income from India and the United States, no tax benefit on the pretax loss from our Luxembourg operating company and uncertain tax positions • The Company recognized an income tax provision of $3.7 million for the year ended December 31, 2023.
The income tax provision for the year ended December 31, 2022 was driven by income tax expense on transfer pricing income from India, no tax benefit on the pretax loss from our Luxembourg operating company, uncertain tax positions and anticipated withholdings tax on current year earnings in India. 39 Table of Contents SEGMENT RESULTS OF OPERATIONS The following section provides a discussion of pretax results of operations of our business segments.
The income tax provision for the year ended December 31, 2023 was driven primarily by income tax expense on transfer pricing income from India and the United States, reduction in deferred tax assets related to intangible assets, no tax benefit on the pretax loss from our Luxembourg operating company and uncertain tax positions. 40 Table of Contents SEGMENT RESULTS OF OPERATIONS The following section provides a discussion of pretax results of operations of our business segments.
The income tax provision for the year ended December 31, 2022 was driven by income tax expense on transfer pricing income from India, no tax benefit on the pretax loss from our Luxembourg operating company, uncertain tax positions and anticipated withholding tax on current year earnings in India 36 Table of Contents CONSOLIDATED RESULTS OF OPERATIONS The following is a discussion of our consolidated results of operations for the years ended December 31, 2023 and 2022.
The income tax provision for the year ended December 31, 2023 was driven primarily by income tax expense on transfer pricing income from India and the United States, reduction in deferred tax assets related to intangible assets, no tax benefit on the pretax loss from our Luxembourg operating company and uncertain tax positions. 37 Table of Contents CONSOLIDATED RESULTS OF OPERATIONS The following is a discussion of our consolidated results of operations for the years ended December 31, 2024 and 2023.
For the years ended December 31, 2023 and 2022, we recognized revenue from Ocwen of $63.2 million and $63.5 million, respectively.
For the years ended December 31, 2024 and 2023, we recognized revenue from Onity of $70.4 million and $63.2 million, respectively.
We recognize tax benefits from uncertain tax positions only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position.
Significant judgment is required in determining tax expense and in evaluating tax positions including evaluating uncertainties under ASC Topic 740. We recognize tax benefits from uncertain tax positions only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position.
The improvement in cash provided by (used for) changes in working capital was primarily driven by the $3.8 million net collection of taxes receivable for the year ended December 31, 2023 compared to a net payment of taxes of $3.3 million for the year ended December 31, 2022, a $2.0 million return of surety bonds, and no cash bonuses paid in the year ended December 31, 2023.
This improvement was partially offset by a $4.7 million decrease in cash provided by working capital primarily from the $2.1 million net payment of taxes for the year ended December 31, 2024 compared to $3.8 million net collection of taxes receivable for the year ended December 31, 2023 and a $2.0 million return of surety bonds in the year ended December 31, 2023.
The decrease for the year ended December 31, 2023 was primarily driven by lower compensation and benefits, professional services and marketing costs. Compensation and benefits and marketing costs for the year ended December 31, 2023 decreased from efficiency initiatives and cost savings measures.
The decrease for the year ended December 31, 2024 was primarily driven by lower compensation and benefits and occupancy related costs, partially offset by higher professional services. Compensation and benefits and occupancy related costs for the year ended December 31, 2024 decreased from efficiency and cost reductions measures.
Consequently, our cash flows from operations may not be comparable from one period to another. Cash Flows from Investing Activities Cash flows from investing activities generally include additions to premises and equipment and proceeds from the sale of businesses.
Furthermore, lower margin services generate lower income and cash flows from operations. Consequently, our cash flows from operations may be negatively impacted when comparing one period to another. Cash Flows from Investing Activities Cash flows from investing activities generally include additions to premises and equipment and proceeds from the sale of businesses.
However, due to governmental and market responses to the COVID-19 pandemic, revenue has declined significantly. The lower revenue, partially offset by efficiency initiatives and cost savings measures, resulted in negative operating cash flow from operations for the years ended December 31, 2023 and 2022.
However, primarily due to governmental and market responses to the COVID-19 pandemic, lower delinquency rates, and higher home equity, revenue has declined significantly compared to pre pandemic levels. The lower revenue, partially offset by efficiency initiatives and cost savings measures, has resulted in negative operating cash flow from operations.
Net cash used in investing activities was $(0.8) million for the year ended 2022 (no comparable amount for the year ended December 31, 2023). We used $0.9 million for the year ended December 31, 2022 (no comparable amount for the year ended December 31, 2023), for additions to premises and equipment primarily related to the purchase of technology hardware.
In addition, we used less than $0.1 million for the year ended December 31, 2024 (no comparable amount for the year ended December 31, 2023), for additions to premises and equipment primarily related to the purchase of technology hardware.
The following table sets forth information on our consolidated results of operations for the years ended December 31: (in thousands, except per share data) 2023 % Increase (decrease) 2022 Service revenue Servicer and Real Estate $ 107,779 (4) $ 112,132 Origination 28,786 (11) 32,364 Total service revenue 136,565 (5) 144,496 Reimbursable expenses 8,273 3 8,039 Non-controlling interests 228 (61) 585 Total revenue 145,066 (5) 153,120 Cost of revenue 115,414 (12) 131,305 Gross profit 29,652 36 21,815 Operating expense (income): Selling, general and administrative expenses 46,420 (15) 54,755 Loss on sale of business — (100) 242 Loss from operations (16,768) 49 (33,182) Other income (expense), net: Interest expense (36,103) 117 (16,639) Change in fair value of warrant liability 1,145 N/M — Debt amendment costs (3,410) N/M — Other income (expense), net 2,788 24 2,254 Total other income (expense), net (35,580) (147) (14,385) Loss before income taxes and non-controlling interests (52,348) (10) (47,567) Income tax provision (3,714) (29) (5,266) Net loss (56,062) (6) (52,833) Net income attributable to non-controlling interests (228) (61) (585) Net loss attributable to Altisource $ (56,290) (5) $ (53,418) Margins: Gross profit / service revenue 22 % 15 % Loss from operations / service revenue (12) % (23) % Loss per share: Basic $ (2.51) 24 $ (3.32) Diluted $ (2.51) 24 $ (3.32) Weighted average shares outstanding: Basic 22,418 40 16,070 Diluted 22,418 40 16,070 _____________________________________ N/M — not meaningful. 37 Table of Contents Revenue We recognized service revenue of $136.6 million for the year ended December 31, 2023, a 5% decrease compared to the year ended December 31, 2022.
The following table sets forth information on our consolidated results of operations for the years ended December 31: (in thousands, except per share data) 2024 2023 % Increase (decrease) Service revenue Servicer and Real Estate $ 119,939 $ 107,779 11 Origination 30,415 28,786 6 Total service revenue 150,354 136,565 10 Reimbursable expenses 9,592 8,273 16 Non-controlling interests 188 228 (18) Total revenue 160,134 145,066 10 Cost of revenue 110,605 115,414 (4) Gross profit 49,529 29,652 67 Operating expense: Selling, general and administrative expenses 45,620 46,420 (2) Loss on sale of business 685 — N/M Income (loss) from operations 3,224 (16,768) 119 Other income (expense), net: Interest expense (38,877) (36,103) 8 Change in fair value of warrant liability — 1,145 (100) Debt amendment costs — (3,410) 100 Other income (expense), net 2,786 2,788 — Total other income (expense), net (36,091) (35,580) (1) Loss before income taxes and non-controlling interests (32,867) (52,348) 37 Income tax provision (2,581) (3,714) (31) Net loss (35,448) (56,062) 37 Net income attributable to non-controlling interests (188) (228) (18) Net loss attributable to Altisource $ (35,636) $ (56,290) 37 Margins: Gross profit / service revenue 33 % 22 % Income (loss) from operations / service revenue 2 % (12) % Loss per share: Basic $ (1.25) $ (2.51) 50 Diluted $ (1.25) $ (2.51) 50 Weighted average shares outstanding: Basic 28,534 22,418 27 Diluted 28,534 22,418 27 _____________________________________ N/M — not meaningful. 38 Table of Contents Revenue We recognized service revenue of $150.4 million for the year ended December 31, 2024, a 10% increase compared to the year ended December 31, 2023.
Certain services are performed immediately following or shortly after the referral, but the collection of the receivable does not occur until a specific event occurs (e.g., the foreclosure is complete, the REO asset is sold, etc.). Furthermore, lower margin services generate lower income and cash flows from operations.
Operating cash flows can be negatively impacted because of the nature of some of our services and the mix of services provided. Certain services are performed immediately following or shortly after the referral, but the collection of the receivable does not occur until a specific event occurs (e.g., the foreclosure is complete, the REO asset is sold, etc.).
Corporate and Others includes interest expense and costs related to corporate functions including executive, infrastructure and certain technology groups, finance, law, compliance, human resources, vendor management, facilities, risk management and eliminations between reportable segments.
Corporate and Others includes interest expense and costs related to corporate functions including executive, infrastructure and certain technology groups, finance, law, compliance, human resources, vendor management, facilities, risk management and eliminations between reportable segments. Default Related Mortgage Market Serious delinquency rates, foreclosure initiations and foreclosure sales are very low relative to historical levels.
Cost of Revenue and Gross Profit Cost of revenue consisted of the following for the years ended December 31: (in thousands) 2023 2022 % Increase (decrease) Outside fees and services $ 35,962 $ 40,235 (11) Compensation and benefits 22,214 25,786 (14) Reimbursable expenses 7,688 7,529 2 Technology and telecommunications 7,138 6,627 8 Depreciation and amortization 744 971 (23) Cost of revenue $ 73,746 $ 81,148 (9) Cost of revenue for the year ended December 31, 2023 of $73.7 million decreased by 9% compared to the year ended December 31, 2022.
Cost of Revenue and Gross Profit Cost of revenue consisted of the following for the years ended December 31: (in thousands) 2024 2023 % Increase (decrease) Outside fees and services $ 41,011 $ 35,962 14 Compensation and benefits 22,104 22,214 — Reimbursable expenses 9,011 7,688 17 Technology and telecommunications 7,182 7,138 1 Depreciation and amortization 323 744 (57) Cost of revenue $ 79,631 $ 73,746 8 Cost of revenue for the year ended December 31, 2024 of $79.6 million increased by 8% compared to the year ended December 31, 2023.
Goodwill and Identifiable Intangible Assets Goodwill We evaluate goodwill for impairment annually during the fourth quarter or more frequently when an event occurs or circumstances change in a manner that indicates the carrying value may not be recoverable.
Actual results may differ significantly from these estimates under different assumptions, judgments or conditions. Goodwill We evaluate goodwill for impairment annually during the fourth quarter or more frequently when an event occurs or circumstances change in a manner that indicates the carrying value may not be recoverable.
SG&A expenses consisted of the following for the years ended December 31: (in thousands) 2023 2022 % Increase (decrease) Compensation and benefits $ 16,374 $ 17,492 (6) Professional services 5,257 8,069 (35) Occupancy related costs 3,984 3,526 13 Depreciation and amortization 698 1,142 (39) Marketing costs (9) 14 (164) Other 2,801 3,630 (23) Selling, general and administrative expenses $ 29,105 $ 33,873 (14) SG&A for the year ended December 31, 2023 of $29.1 million decreased by 14% compared to the year ended December 31, 2022.
SG&A expenses consisted of the following for the years ended December 31: (in thousands) 2024 2023 % Increase (decrease) Compensation and benefits $ 15,280 $ 16,374 (7) Professional services 6,120 5,257 16 Occupancy related costs 2,686 3,984 (33) Depreciation and amortization 392 698 (44) Marketing costs 6 (9) 167 Other 3,131 2,801 12 Selling, general and administrative expenses $ 27,615 $ 29,105 (5) SG&A for the year ended December 31, 2024 of $27.6 million decreased by 5% compared to the year ended December 31, 2023.
The decrease for the year ended December 31, 2023 is primarily driven by lower professional services, compensation and benefits and other expenses. Professional services for the year ended December 31, 2023 decreased due to lower insurance, legal and audit related expenses. The decrease in compensation and benefits was driven by efficiency initiatives and cost savings measures.
The decrease for the year ended December 31, 2024 is primarily driven by lower occupancy related costs and compensation and benefits driven by efficiency initiatives and cost savings measures partially offset by higher professional services expenses due to higher legal-related costs and costs associated with the Transactions.
Cost of revenue consists of the following for the years ended December 31: (in thousands) 2023 % Increase (decrease) 2022 Outside fees and services $ 55,858 — $ 55,979 Compensation and benefits 35,396 (26) 48,064 Technology and telecommunications 14,196 (16) 16,937 Reimbursable expenses 8,273 3 8,039 Depreciation and amortization 1,691 (26) 2,286 Total $ 115,414 (12) $ 131,305 We recognized cost of revenue of $115.4 million for the year ended December 31, 2023, a 12% decrease compared to the year ended December 31, 2022.
Cost of revenue consists of the following for the years ended December 31: (in thousands) 2024 2023 % Increase (decrease) Outside fees and services $ 59,808 $ 55,858 7 Compensation and benefits 29,321 35,396 (17) Technology and telecommunications 11,282 14,196 (21) Reimbursable expenses 9,592 8,273 16 Depreciation and amortization 602 1,691 (64) Total $ 110,605 $ 115,414 (4) We recognized cost of revenue of $110.6 million for the year ended December 31, 2024, a 4% decrease compared to the year ended December 31, 2023.
Rithm Ocwen has disclosed that Rithm is a significant client of Ocwen’s. As of December 31, 2023, Ocwen reported that approximately 16% of loans serviced and subserviced by Ocwen (measured in UPB) and approximately 67% of all delinquent loans that Ocwen services were related to Rithm MSRs or rights to MSRs.
Rithm Onity has disclosed that Rithm is one of its largest servicing clients. As of December 31, 2024, Onity reported that approximately 14% of loans serviced and subserviced by Onity (measured in UPB) and approximately 63% of all delinquent loans that Onity services were related to Rithm MSRs or rights to MSRs.
Cost of Revenue and Gross Profit Cost of revenue consisted of the following for the years ended December 31: (in thousands) 2023 2022 % Increase (decrease) Outside fees and services $ 19,896 $ 15,744 26 Compensation and benefits 6,320 13,955 (55) Technology and telecommunications 1,108 1,806 (39) Reimbursable expenses 585 510 15 Depreciation and amortization 37 37 — Cost of revenue $ 27,946 $ 32,052 (13) Cost of revenue for the year ended December 31, 2023 of $27.9 million decreased by 13% compared to the year ended December 31, 2022.
Cost of Revenue and Gross Profit Cost of revenue consisted of the following for the years ended December 31: (in thousands) 2024 2023 % Increase (decrease) Outside fees and services $ 18,800 $ 19,896 (6) Compensation and benefits 4,413 6,320 (30) Technology and telecommunications 659 1,108 (41) Reimbursable expenses 581 585 (1) Depreciation and amortization 20 37 (46) Cost of revenue $ 24,473 $ 27,946 (12) Cost of revenue for the year ended December 31, 2024 of $24.5 million decreased by 12% compared to the year ended December 31, 2023.
The decrease in service revenue for the year ended December 31, 2023 is driven by lower revenue in both segments.
The increase in service revenue for the year ended December 31, 2024 was driven by higher revenue in both segments.
Selling, General and Administrative Expenses SG&A expenses consisted of the following for the years ended December 31: (in thousands) 2023 2022 % Increase (decrease) Amortization of intangible assets $ 2,960 $ 2,970 — Compensation and benefits 2,311 2,594 (11) Professional services 1,734 2,711 (36) Marketing costs 1,258 1,524 (17) Occupancy related costs 631 931 (32) Depreciation and amortization 2 12 (83) Other 726 1,315 (45) Selling, general and administrative expenses $ 9,622 $ 12,057 (20) SG&A for the year ended December 31, 2023 of $9.6 million decreased by 20% compared to the year ended December 31, 2022.
Selling, General and Administrative Expenses SG&A expenses consisted of the following for the years ended December 31: (in thousands) 2024 2023 % Increase (decrease) Amortization of intangible assets $ 2,960 $ 2,960 — Compensation and benefits 1,991 2,311 (14) Professional services 3,563 1,734 105 Marketing costs 1,249 1,258 (1) Occupancy related costs 545 631 (14) Depreciation and amortization 2 2 — Other 1,111 726 53 Selling, general and administrative expenses $ 11,421 $ 9,622 19 SG&A for the year ended December 31, 2024 of $11.4 million increased by 19% compared to the year ended December 31, 2023.
Net cash provided by (used in) financing activities were $3.0 million and $(2.2) million for the years ended December 31, 2023 and 2022, respectively. During the year ended December 31, 2023, we received $38.8 million in proceeds from the issuance of common stock, net of issuance costs and used $30.0 million of the proceeds for repayment of debt.
During the year ended December 31, 2023, we received $20.5 million in proceeds from the issuance of common stock, net of issuance costs, received $18.3 million in proceeds from the sale of treasury stock, net of issuance costs and used $30.0 million of the proceeds for repayment of debt.
Selling, General and Administrative Expenses Selling, general and administrative (“SG&A”) expenses includes payroll for personnel employed in executive, sales and marketing, finance, technology, law, compliance, audit, human resources, vendor management, facilities and risk management roles.
Selling, General and Administrative Expenses Selling, general and administrative (“SG&A”) expenses includes payroll for personnel employed in executive, sales and marketing, finance, technology, law, compliance, audit, human resources, vendor management, facilities and risk management 39 Table of Contents roles. This category also includes professional services fees, occupancy costs, marketing costs, depreciation and amortization of non-operating assets and other expenses.
The decrease in SG&A for the year ended December 31, 2023 is primarily due to lower professional services, marketing costs, compensation and benefits, occupancy related costs and other expenses. Professional services for the year ended December 31, 2023 decreased primarily due to lower legal fees.
The decrease in SG&A for the year ended December 31, 2024 was primarily due to lower professional services from lower legal-related costs, lower compensation and benefits from efficiency and cost reduction measures and lower other expenses from lower bad debt expense.
Origination Revenue Revenue by business unit was as follows for the years ended December 31: (in thousands) 2023 2022 % Increase (decrease) Service revenue: Lenders One $ 22,644 $ 20,027 13 Solutions 5,507 11,610 (53) Technology and SaaS Products 635 727 (13) Total service revenue 28,786 32,364 (11) Reimbursable expenses: Solutions 585 510 15 Total reimbursable expenses 585 510 15 Non-controlling interests 228 585 (61) Total revenue $ 29,599 $ 33,459 (12) We recognized service revenue of $28.8 million for the year ended December 31, 2023, an 11% decrease compared to the year 42 Table of Contents ended December 31, 2022.
Origination Revenue Revenue by business unit was as follows for the years ended December 31: (in thousands) 2024 2023 % Increase (decrease) Service revenue: Lenders One $ 23,837 $ 22,644 5 Solutions 5,915 5,507 7 Technology and SaaS Products 663 635 4 Total service revenue 30,415 28,786 6 Reimbursable expenses: Solutions 581 585 (1) Total reimbursable expenses 581 585 (1) Non-controlling interests 188 228 (18) Total revenue $ 31,184 $ 29,599 5 We recognized service revenue of $30.4 million for the year ended December 31, 2024, a 6% increase compared to the year 43 Table of Contents ended December 31, 2023.
While we cannot predict whether the default market will return to a pre-pandemic operating environment, we believe the demand for our Default business will grow. We estimate that in today’s environment it typically takes on average two years to convert foreclosure initiations to foreclosure sales and six months to market and sell the REO.
We estimate that in today’s environment it typically takes on average two years to convert foreclosure initiations to foreclosure sales and six months to market and sell the REO.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeInterest Rate Risk Under the terms of the Amended Credit Agreement, the initial interest rate charged on the SSTL is SOFR (as defined in the Amended Credit Agreement), with a minimum floor of 1.00%, plus 5.00% paid in cash plus 5.00% PIK.
Biggest changeThe interest rate charged on the Super Senior Facility is SOFR, with a minimum floor of 3.50%, plus 6.50%.
Based on expenses incurred in Indian rupees for the year ended December 31, 2023, a one percentage point increase or decrease in value of the Indian rupee in relation to the United States dollar would increase or decrease our annual expenses by approximately $0.1 million. 51 Table of Contents
Based on expenses incurred in Indian rupees for the year ended December 31, 2024, a one percentage point increase or decrease in value of the Indian rupee in relation to the United States dollar would increase or decrease our annual expenses by approximately $0.04 million. 50 Table of Contents
Based on the principal amount outstanding and SOFR as of December 31, 2023, a one percentage point increase in SOFR above the minimum floor would increase our annual interest expense by approximately $2.2 million. There would be a $2.2 million decrease in our annual interest expense if there was a one percentage point decrease in SOFR.
Based on the terms of the New Facility and the Super Senior Facility, a one percentage point increase in SOFR would increase our annual interest expense by approximately $1.2 million, and there would be a $1.2 million decrease in our annual interest expense if there was a one percentage point decrease in SOFR.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Market Risk Our financial market risk consists primarily of interest rate and foreign currency exchange rate risk.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Market Risk Our financial market risk consists primarily of interest rate and foreign currency exchange rate risk. Interest Rate Risk Under the terms of the New Facility, the interest rate charged on the New Debt is SOFR, with a minimum floor of 3.50%, plus 6.50%.
Removed
Based on par paydowns of $30 million during the year ended December 31, 2023, the PIK component was reduced to 3.75% and may be further reduced on a prospective basis based on the Aggregate Paydowns made prior to February 14, 2024.

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