Executive Summary

Service revenue rose 10.8% year-over-year to $40.9M, marking the highest since Q3 2021; Adjusted EBITDA increased 13.6% to $5.3M, with margin at 12.9% as scale and mix improved .
GAAP net loss improved to -$5.3M and GAAP interest expense fell to $4.9M vs $9.5M a year ago; management expects ~$9.5M annual GAAP interest expense post-debt exchange starting Q2, a structural tailwind .
Segment performance: Servicer & Real Estate service revenue grew 13% to $32.9M with Adjusted EBITDA $12.0M (36.5% margin); Origination service revenue increased 3% to $8.0M with ~$0.5M Adjusted EBITDA .
Corporate Adjusted EBITDA loss widened by $0.9M to -$7.2M due to nonrecurring prior-year benefits; operating cash outflow was -$5.0M, reflecting transaction costs and working capital .
Stock catalysts: debt exchange reducing interest burden, pipeline of $34–$42M potential service revenue, warrant listing (ASPSZ/ASPSW) and subsequent share consolidation to regain Nasdaq minimum bid compliance .

What Went Well and What Went Wrong

What Went Well

“We are pleased with our first quarter performance as we continue to drive year-over-year and sequential Service revenue and Adjusted EBITDA(1) growth primarily from the ramp of our Renovation Business, stronger foreclosure starts and sales wins.” — CEO William Shepro .
Business segments Adjusted EBITDA improved to $12.5M (30.5% of service revenue) from $10.9M (29.5%) YoY, reflecting revenue growth and margin expansion .
Debt exchange reduced long-term debt and is expected to cut annual GAAP interest to ~$9.5M; Q1 GAAP interest expense already declined to $4.9M from $9.5M YoY .

What Went Wrong

Corporate and Others Adjusted EBITDA loss increased by $0.9M to -$7.2M due to the absence of nonrecurring benefits from Q1 2024 .
Operating cash flow was -$5.0M (net cash used), pressured by transaction-related costs and working capital movements .
Industry foreclosure sales fell 2% YoY and remain 53% below pre-COVID 2019 levels, tempering volume conversion despite higher foreclosure starts (+25% YoY) .

Financial Results

Metric	Q3 2024	Q4 2024	Q1 2025
Service revenue ($USD Millions)	$38.150	$38.450	$40.895
Total revenue ($USD Millions)	$40.531	$41.013	$43.439
Gross profit ($USD Millions)	$12.070	$12.438	$13.325
Income from operations ($USD Millions)	$1.105	$0.584	$3.245
Adjusted EBITDA ($USD Millions)	$3.624	$4.747	$5.262
Adjusted EBITDA Margin (%)	9%	12.4% (calc: $4.747/$38.450)	13%
Net loss attributable to Altisource ($USD Millions)	$(9.362)	$(8.769)	$(5.344)
Diluted EPS ($USD)	$(0.33)	$(0.31)	$(0.09)

Segment breakdown (Q1 2025):

Segment	Service Revenue ($USD Millions)	Adjusted EBITDA ($USD Millions)	EBITDA Margin (%)
Servicer & Real Estate	$32.9	$12.0	36.5%
Origination	$8.0	$0.5	n/a

KPIs (Q1 2025):

KPI	Q1 2025
Weighted average sales pipeline (stabilized annual service revenue)	$34–$42M
Sales wins (stabilized annual service revenue)	Servicer & Real Estate: $4.7M; Origination: $4.7M
Cash & cash equivalents	$30.817M
Net debt	$141.683M
Industry foreclosure starts YoY	+25%
Industry foreclosure sales YoY	-2%

Non-GAAP reconciliation notes (Q1 2025): Adjusted pretax income $0.332M vs GAAP pretax loss $(4.529)M; adjustments include intangible amortization ($1.270M), share-based comp ($1.094M), cost savings initiatives (-$0.410M), and debt exchange expenses ($2.980M) .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Service revenue	FY 2025	$165M–$185M	Not updated/explicitly reiterated in Q1 materials	Maintained (no update provided)
Adjusted EBITDA	FY 2025	$18M–$23M	Not updated/explicitly reiterated in Q1 materials	Maintained (no update provided)
GAAP interest expense (run-rate)	Annual	n/a	~$9.5M expected post exchange from Q2 onward	New detail (structural reduction)

Note: Q1 2025 press release and call did not introduce new revenue/EBITDA guidance ranges; prior FY 2025 guidance provided on March 13, 2025 remains the latest published .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3 2024)	Previous Mentions (Q4 2024)	Current Period (Q1 2025)	Trend
Renovation business ramp/diversification	Launch and ramp supported sequential service revenue growth	Continued improvement and new business wins across segments	Key driver of YoY growth; favored mix aided margins	Strengthening
Macro default cycle (delinquencies/foreclosures)	Delinquencies 1.2% in Aug-24; starts/sales down YoY	Serious delinquency 1.4% in Dec-24	Foreclosure starts +25% YoY; FHA 30+ day delinquency ~11%; VA moratorium end cited	Potential tailwind developing
Regulatory/servicer guidelines (HUD/FHA)	n/a	n/a	HUD updates: permanent loss mitigation options Oct 1, 2025; 24-month cadence may reduce repeat mods and lift starts/sales	Watch for impact in H2/H1 next year
Interest burden/Capital structure	High interest expense; net debt ~$202.3M	Debt exchange planned/closed in Feb; interest reduction outlined	GAAP interest down to $4.9M; annual GAAP interest expected ~$9.5M going forward	Material improvement
Sales pipeline & wins	Pipeline $32–$40M; wins in Servicer & Real Estate, Origination	Pipeline $38–$47M; strong wins	Pipeline $34–$42M; $4.7M wins in each segment	Robust; conversion key
Origination market	Q3 origination +6% YoY	FY 2024 origination +20% YoY; mix shift	Q1 originations -1% YoY; purchases -11%, refi +25%	Mixed/challenged

Management Commentary

“Adjusted EBITDA(1) growth outpaced Service revenue growth from scale benefits and favorable revenue mix. In February 2025, we closed on an exchange and maturity extension transaction with our lenders, significantly strengthening our balance sheet and reducing interest expense.” — William Shepro .
“For the first quarter of this year, our GAAP interest expense was $4.9 million compared to $9.5 million in the first quarter of 2024… we estimate annual GAAP interest expense on the new debt to be approximately $9.5 million.” — William Shepro .
“Should loan delinquencies, foreclosure starts and foreclosure sales increase, we believe we are well positioned to benefit from stronger revenue and Adjusted EBITDA(1) growth in our largest and most profitable countercyclical businesses.” — William Shepro .

Q&A Highlights

The call had no analyst Q&A; operator noted no questions in the queue .
Management reiterated focus on ramping tailwind businesses and highlighted macro/regulatory factors potentially increasing default activity .

Estimates Context

Q1 2025: Wall Street consensus EPS and revenue were not available via S&P Global; comparison to estimates cannot be made for Q1. Values retrieved from S&P Global.*
Historical context:
- Q3 2024 Revenue: Consensus $45.7765M vs actual $40.531M — miss; EBITDA: Consensus $5.051M vs actual $2.597M — miss; EPS: Consensus -$1.92 vs actual -$1.84 — small beat. Values retrieved from S&P Global.* (actuals)
- Q4 2024: Actual revenue $41.013M; actual Adjusted EBITDA $2.742M (S&P figure) vs company-reported Adjusted EBITDA $4.747M; note methodology differences. Values retrieved from S&P Global.* (company actuals)

Where estimates may need to adjust: With interest expense structurally lower from Q2 onward (~$9.5M run-rate), forward EPS and EBITDA trajectories should improve if revenue growth and segment margins persist .

Key Takeaways for Investors

Countercyclical exposure: Rising foreclosure starts (+25% YoY) and FHA delinquency trends could strengthen Servicer & Real Estate growth and margins; monitor HUD guideline implementation and VA moratorium impact through 2H25 .
Structural interest tailwind: Debt exchange and super senior facility reposition capital structure; expect ~$9.5M annual GAAP interest from Q2 onward, boosting EPS and cash flow vs prior periods .
Revenue mix quality: Renovation business ramp contributed to margin expansion; continued diversification reduces dependence on macro origination volumes .
Pipeline conversion: $34–$42M stabilized annual service revenue pipeline and $4.7M wins in each segment support 2025–2026 growth; focus on timing of onboarding .
Corporate cost discipline vs loss: Corporate Adjusted EBITDA loss widened YoY due to lapping nonrecurring items; ongoing cost control is key to translating segment gains to consolidated profitability .
Cash/liquidity: $30.8M cash at quarter-end and improved interest profile provide runway for execution; watch operating cash flow trajectory as transaction costs subside .
Corporate actions: Warrant listings (ASPSZ/ASPSW) and 1-for-8 share consolidation support Nasdaq compliance and may affect float/dilution dynamics; track investor participation and any capital inflows from warrant exercises .

References:

Q1 2025 press release and financials
8-K Item 2.02 with Exhibit 99.1
Q1 2025 earnings call transcript
Q4 2024 press release (guidance and actuals)
Q3 2024 press release (trend context)
Warrant listing and consolidation press releases
Debt exchange closing press release

Estimates disclaimer: Values retrieved from S&P Global.*

ALTISOURCE PORTFOLIO SOLUTIONS S.A. (ASPS)·Q1 2025 Earnings Summary