Executive Summary

Q1 2023 delivered modest revenue with improved profitability trajectory: revenue $2.13M, net loss $(2.99)M, and $(1.68) basic/diluted EPS; sequential loss improved by ~$1.13M vs. Q4 2022 despite slightly lower revenue, aided by a $0.85M favorable change in fair value of loans and lower operating costs .
Origination pipeline accelerated: through May 12, 2023, AAMC received $107M in total net loan submissions (direct-to-borrower and wholesale) and expanded forward-sale counterparties to five institutions, including one with >$500B AUM—building distribution for a capital-light private credit model .
Liquidity and funding: quarter-end cash was $11.84M; credit facilities outstanding were $43.23M; AAMC repurchased 27,441 shares for $1.5M in Q1, signaling balance sheet flexibility alongside platform buildout .
Estimates: S&P Global/Capital IQ consensus was not available for AAMC this quarter; no formal revenue or EPS guidance was issued (management shared operating “expected metrics” and channel rollout details) .

What Went Well and What Went Wrong

What Went Well

Loss narrowed by ~$1.13M q/q to $(2.99)M on $2.13M of revenue, reflecting early ramp of lending activities and a $0.85M positive fair value change on loans .
Distribution and demand signals strengthened: $107M net submissions through May 12, 2023; forward contracts expanded to five institutional counterparties, including a >$500B AUM manager, supporting scalable flow-through for originations .
Strategic positioning: management reiterated the capital-light private credit strategy and expected unit economics (e.g., RTLs 300–450 bps revenue per loan; DSCR 200–350 bps; ~$160 processing cost per file), helping frame operating leverage as volumes grow .
- “Now with the team, process and distribution partners in place, we look forward to ramping up our originations, to meet growing demand in the multi-trillion-dollar private credit market.” — CEO Jason Kopcak (Q4 2022 release, framing the setup into 2023) .

What Went Wrong

Sequential revenue declined to $2.13M from $2.53M in Q4 2022; interest expense also increased year-over-year to $1.08M (vs. immaterial in 1H22), reflecting funding costs as the platform scales .
Balance sheet remains constrained by redeemable preferred stock ($144.21M redemption value) and a stockholders’ deficit of $(94.22)M, limiting financial flexibility until sustained profitability and capital solutions materialize .
Operating expenses remain meaningful for a small revenue base (Salaries/benefits $1.86M; Professional $0.48M; Legal $0.44M in Q1), though trending down from Q4 legal costs; execution must outpace expense burn to achieve breakeven .

Financial Results

Headline P&L vs. Prior Quarters and Estimates

Metric	Q3 2022	Q4 2022	Q1 2023	Consensus (Q1 2023)
Revenue ($USD Millions)	$1.906	$2.526	$2.131	N/A (S&P Global consensus unavailable)
Net Income (Loss) ($USD Millions)	$(3.986)	$(4.119)	$(2.988)	N/A (S&P Global consensus unavailable)
EPS (Basic) ($)	$(2.24)	$(2.31)	$(1.68)	N/A (S&P Global consensus unavailable)

Notes: No S&P Global/Capital IQ consensus estimates available for AAMC this quarter.

Operating Detail (Selected KPIs)

KPI	Q3 2022	Q4 2022	Q1 2023
Loan Interest Income ($M)	$1.739	$2.316	$2.036
Loan Fee Income ($M)	$0.166	$0.178	$0.085
Change in Fair Value of Loans ($M)	$(1.563)	$(0.075)	$0.849
Interest Expense ($M)	$0.435	$0.893	$1.082
Share Repurchases (Shares / $M)	—	—	27,441 / $1.5
Net Loan Submissions (thru May 12) ($M)	—	—	$107

Balance Sheet Snapshot

Metric	Q3 2022	Q4 2022	Q1 2023
Cash & Cash Equivalents ($M)	$10.195	$10.727	$11.836
Loans Held for Investment (FV) ($M)	$90.514	$83.143	$65.316
Loans Held for Sale (FV) ($M)	$7.158	$11.593	$13.475
Credit Facilities / Credit Facility ($M)	$52.467	$51.653	$43.234
Redeemable Preferred Stock (Redemption Value) ($M)	$144.212	$144.212	$144.212
Stockholders’ Deficit ($M)	$(85.864)	$(89.890)	$(94.222)

Guidance Changes

AAMC did not issue formal financial guidance (revenue, EPS) in Q1; management provided operating “expected metrics” and channel rollout details.

Metric	Period	Previous Guidance	Current Guidance/Commentary	Change
RTL (Residential Transitional Loan) Gross Revenue/Loan (bps)	2023 framework	—	300–450 bps expected range per loan	New framework
DSCR Loan Gross Revenue/Loan (bps)	2023 framework	—	200–350 bps expected range per loan	New framework
Cost to Process Loan	2023 framework	—	~$160 per file (Bangalore-centered production)	New framework
Customer Acquisition Cost (Direct-to-Borrower)	2023 framework	—	~$1,500 per client; potential to improve to ~$800 over time	New framework
Channel Rollout	2023	—	Direct, Wholesale, Broker Direct rolling out; wholesale broker base building	New framework
Formal Financial Guidance (Revenue/EPS)	Q1 2023	—	None issued	Maintained (none)

Earnings Call Themes & Trends

Topic	Q3 2022 (Prior-2)	Q4 2022 (Prior-1)	Q1 2023 (Current)	Trend
Alternative lending buildout	>$79.1M loan commitments; strong demand; forward-flow delayed by market volatility	Loss $(4.1)M on $2.5M revenue; originations ramp setup; COO hire; added forward-sale counterparties	$107M net submissions (thru 5/12); five forward-sale counterparties including >$500B AUM; continued channel rollout	Improving pipeline and distribution
Funding/liquidity	Flagstar $50M line; $52.5M drawn	Added $50M NexBank facility; cash $10.73M; facility $51.65M	Cash $11.84M; credit facilities $43.23M; share repurchase $1.5M	Adequate liquidity for ramp; cost of funds rising
Business model/strategy	Data-driven origination; not an aggregator; build take-out investor base	Capital-light private credit focus reiterated	Framework economics (bps/loan; CAC; processing cost); wholesale/broker rollout underway	Clearer unit economics
Regulatory/legal	Prevail vs former CEO litigation	Arbitration judgment $1.6M + interest vs former CEO	No new updates disclosed in Q1 8-K	Legacy issues resolving
Macro	Rate volatility; adjust pricing/LTV/LTC; housing demand persists	—	Continued focus on short-duration RTLs and DSCR in private credit	Strategy aligned with macro

Management Commentary

“Now with the team, process and distribution partners in place, we look forward to ramping up our originations, to meet growing demand in the multi-trillion-dollar private credit market.” — Jason Kopcak, CEO (Q4 2022 press release, framing ramp into 2023) .
2023 expected metrics emphasize capital-light economics and scalable channels: RTL and DSCR bps economics, $160 processing cost/loan, and CAC targets; three-channel strategy (Direct, Wholesale, Broker Direct) underpins growth roadmap .
Through May 12, $107M in net submissions and five forward-sale counterparties (including >$500B AUM institution) signal traction with institutional take-out capital critical to scaling originations .

Q&A Highlights

AAMC hosted its Q1 2023 conference call on May 15, 2023 at 8:30 a.m. EDT; materials and webcast details were provided in the Company’s May 9 notice. Management participants included CEO Jason Kopcak and COO of Lending Operations Danya Sawyer; detailed transcript content was not included in the SEC exhibit, and third-party transcript access is required for verbatim Q&A excerpts .

Based on Company filings and presentation materials, Q&A likely focused on:

Originations ramp cadence and conversion of submissions to funded volumes;
Forward-flow counterparties and funding flexibility;
Unit economics and breakeven path given operating expense base;
No formal financial guidance beyond operating metrics .

Estimates Context

Wall Street consensus for Q1 2023 (revenue, EPS) via S&P Global/Capital IQ was unavailable for AAMC; therefore, no direct beat/miss assessment vs. consensus can be made this quarter .

Key Takeaways for Investors

AAMC is executing a capital-light private credit model with expanding institutional distribution (five forward-sale counterparties, including a >$500B AUM manager), which should enable scaling without heavy balance sheet risk .
Sequential loss improvement (to $(2.99)M) despite slightly lower revenue reflects a more favorable loan fair value environment and early operating leverage; sustained improvement hinges on converting submissions into higher volumes and monetizing forward flows .
Liquidity appears adequate for near-term growth (cash $11.84M; credit facilities $43.23M), but interest expense has risen with leverage; continued focus on unit economics (bps/loan, $160 processing cost) is critical to reaching breakeven .
Structural considerations remain: large redeemable preferred stock ($144.21M) and stockholders’ deficit $(94.22)M—any strategic capital actions, profitability inflection, or preferred stock resolution would be stock catalysts .
Near-term trading setup likely hinges on tangible origination growth metrics (funded loan volume, gain-on-sale execution), additional institutional flows, and expense discipline; absence of formal guidance may increase volatility around monthly/quarterly operating updates .
Monitor operating KPIs disclosed by management (submissions, channel rollout, counterparties) and quarterly loan valuation impacts; execution vs. stated unit-economics will shape estimate formation once coverage/consensus emerges .

Citations:

Q1 2023 8-K and press release, including condensed financials and highlights .
Q4 2022 8-K and press release/financials .
Q3 2022 8-K and press release/financials .
Q1 2023 earnings call scheduling release .
Third-party transcript references (for call access) .

Altisource Asset Management Corp (AAMC)·Q1 2023 Earnings Summary