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    ASPS
    Earnings call· Jun 2026(Q2 FY26)

    ALTISOURCE PORTFOLIO SOLUTIONS S.A. ASPS

    Jul 23, 2026 Source

    Executive summary

    Altisource Portfolio Solutions Q2 FY26 — Strong Service Revenue Growth and Diversification

    Altisource delivered strong Q2 FY26 service revenue growth and significantly advanced its customer diversification strategy, with non-Onity/Rithm revenue reaching a new high. The company is actively deploying AI and efficiency initiatives to improve margins and scalability, positioning itself for future profitability despite a challenging market characterized by low delinquency rates and origination volumes. Management anticipates roughly flat Q3 and higher Q4 adjusted EBITDA, working towards its Project 45 objective.

    Highlights

    5

    • Total service revenue grew 19% year-over-year to $48.7 million, and 8% quarter-over-quarter.

    • Originations segment service revenue increased 62% year-over-year.

    • Hubzu inventory grew 30% quarter-over-quarter to 22,300 assets.

    • Revenue from non-Onity/Rithm customers increased to 65% of total service revenue, up from 46% year-over-year.

    • Reduced outstanding debt by $2 million through opportunistic repurchase of term loan.

    Concerns

    3

    • Business segment and total company adjusted EBITDA and adjusted EBITDA margins declined quarter-over-quarter.

    • Corporate adjusted EBITDA loss increased by $400,000 quarter-over-quarter to $7.9 million.

    • Net cash used in operating activities was $6.6 million, primarily driven by an increase in receivables from revenue growth.

    Guidance & targets

    4
    CategoryTargetConfidence
    Adjusted EBITDA
    roughly flat
    medium materiality
    Medium
    Adjusted EBITDA
    higher
    medium materiality
    Medium
    Run rate adjusted EBITDA
    $45 million
    high materiality
    Medium
    Mortgage origination unit volume
    5.7 million loans
    low materiality
    Medium

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    Servicer and Real Estate
    Growth driven by customer wins in Hubzu, title, and trustee businesses, partially offset by Rithm-related reductions. Adjusted EBITDA declined 2% YoY due to a non-recurring benefit in Q2 2025 and Rithm-related EBITDA losses, largely offset by new customer wins.
    Annualized stabilized service revenue wins: $5.2 millionQ2 revenue from sales wins since 2024: $9.1 million ($36.5 million annualized)Estimated total weighted average sales pipeline: $8.2 millionHubzu inventory: 22,300 assets (up 30% QoQ)
    		$34.4 million8%—$11.7 million Adjusted EBITDA
    Originations
    Revenue growth driven by sales wins. Adjusted EBITDA declined due to investments in leadership, staff, and higher outside fees to support growth. Anticipate service revenue and adjusted EBITDA to grow as sales wins onboard and market conditions improve.
    Estimated wins in Q2: $7.1 million (primarily in Lenders One)Estimated weighted average sales pipeline: $20 million
    		—62%—Declined Adjusted EBITDA
    Corporate
    Adjusted EBITDA loss increased $400,000 compared to Q2 2025, largely due to the net impact of non-recurring items. Expect corporate costs to align with Q1 2026 and remain stable as revenue grows.
    		———$7.9 million Adjusted EBITDA loss

    Operational metrics

    15
    Total Service Revenue
    $48.7 millionUp 19% YoY, 8% QoQ
    Q2 FY26

    Total company service revenue.

    Adjusted EBITDA
    declinedQoQ
    Q2 FY26

    Business segment and total company adjusted EBITDA and adjusted EBITDA margins declined quarter-over-quarter.

    Revenue from non-Onity/Rithm customers
    65%Up from 46% YoY
    Q2 FY26

    Percentage of total service revenue from customers other than Onity and Rithm.

    Debt Repurchase
    $2 million
    Q2 FY26

    Repurchase of term loan at a discount.

    GAAP Pretax Earnings
    nearly breakevenCompared to $200,000 in Q2 2025
    Q2 FY26

    Overall GAAP pretax earnings.

    Net Cash Used in Operating Activities
    $6.6 million
    Q2 FY26

    Primarily driven by an increase in receivables from revenue growth.

    Unrestricted Cash
    $23.2 million
    Q2 FY26

    Cash balance at the end of the quarter.

    90-plus day mortgage delinquency rates
    1.55%Up from 1.45% in Dec 2025
    May 2026

    Industry-wide mortgage delinquency rates.

    90-plus day delinquent mortgages plus loans in foreclosure
    857,000Up 28% YoY, 7% from Dec 2025
    May 31, 2026

    Total count of distressed mortgages.

    Foreclosure Starts
    14%Higher than same period in 2025
    First 5 months 2026

    Foreclosure activity trend.

    Foreclosure Sales
    19%Higher than same period in 2025
    First 5 months 2026

    Foreclosure activity trend.

    Mortgage Origination Unit Volume
    9%Increased compared to Q2 2025
    Q2 FY26

    Industry-wide mortgage origination volume, with breakdown by type.

    Servicer and Real Estate Sales Pipeline
    $8.2 million
    Q2 FY26

    Pipeline for new service revenue wins in the Servicer and Real Estate segment.

    Origination Sales Pipeline
    $20 million
    Q2 FY26

    Pipeline for new service revenue wins in the Originations segment.

    Hubzu Inventory
    22,300Up 30% QoQ from 17,200 assets
    Q2 FY26

    Number of assets in the Hubzu platform, an important service revenue barometer.

    Industry KPIs

    3
    MetricValueDetails
    Leasing revenue growth19%%
    Segment operating profit growth-2%%
    Mortgage origination loan servicing62%%

    Risks & headwinds

    4
    Loss of Rithm-related businessOngoing, expected to stabilize Q4 FY26

    Reduction of Rithm-related referrals and EBITDA losses

    Mitigation: Growth from customer wins and diversification efforts.

    Higher costs to support revenue growthQ2 FY26

    Impacted adjusted EBITDA and margins QoQ

    Mitigation: Deployment of AI and efficiency initiatives to improve margins.

    Low delinquency rates and origination volumesOngoing

    Market conditions remain tough, significantly below pre-pandemic levels

    Mitigation: Strategic focus on efficiency, scalability, and positioning to benefit from future market increases.

    Working capital use from increased receivablesQ2 FY26

    $6.6 million net cash used in operating activities

    Mitigation: Normal fluctuation with revenue growth; cash already building back up in Q3.

    What to watch in Q3 FY26

    5

    Adjusted EBITDA trajectory

    Q3 FY26 / Q4 FY26
    CurrentDeclined QoQ
    TargetRoughly flat Q3, higher Q4

    Why it matters

    Indicates the effectiveness of efficiency initiatives and sales ramp in improving profitability.

    We believe the continued ramp of sales wins and ongoing efficiency initiatives should drive roughly flat third quarter and higher fourth quarter adjusted EBITDA.

    Q&A highlights

    4

    How long does it typically take for Hubzu REO and foreclosure inventory to convert into realized revenue, and do Q1 wins still have runway?

    REO files typically take 9-12 months to sell, while foreclosure referrals take around 12 months to reach sale, with significant variability by state. Management confirmed that inventory wins from Q1 2026 still have substantial runway to be realized as revenue.

    “Typically, when you receive an REO file, it could take anywhere from, let's say, 9 to 12 months to sell... with respect to foreclosure starts... it takes around 12 months before it gets to the foreclosure sale.”

    asked by Timothy D'Agostino · answered by William Shepro

    2 min read5 chapters

    Detailed Narrative

    01

    Q2 Performance and Strategic Progress

    Altisource reported a strong second quarter with total service revenue reaching $48.7 million, marking a 19% year-over-year and 8% sequential increase. This growth was attributed to successful customer wins, which have more than compensated for the reduction in Rithm-related business. The company also focused on debt reduction, repurchasing $2 million of its term loan, and continued deploying AI initiatives to enhance efficiency and product development speed.

    02

    Segmental Revenue Dynamics

    The Servicer and Real Estate segment saw an 8% year-over-year increase in service revenue to $34.4 million, driven by growth in Hubzu, title, and trustee businesses, despite Rithm-related reductions. The Originations segment demonstrated significant momentum with a 62% year-over-year service revenue increase, primarily from sales wins. While revenue grew, both segments experienced a decline in adjusted EBITDA margins due to a non-recurring📎 benefit in Q2 2025 and higher costs associated with supporting growth.

    03

    Customer Diversification and Hubzu Growth

    A key strategic achievement was the substantial increase in customer diversification, with revenue from non-Onity/Rithm customers rising to 65% of total service revenue, up from 46% in the prior year. This represents the highest percentage since the company went public in 2009. Hubzu inventory, a critical revenue barometer, grew 30% quarter-over-quarter to 22,300 assets, indicating potential for future revenue generation as these assets move through the sales cycle.

    04

    AI and Automation Strategy

    Altisource is actively implementing an AI and automation strategy across its operations. The focus is on enhancing customer-facing capabilities, improving operating efficiency, supporting revenue generation, and accelerating software development. These initiatives are already contributing to faster software development and productivity, and are expected to drive more efficient scaling, reduce software costs, strengthen platforms like Equator and Hubzu, and support the Project 45 growth objectives.

    05

    Market Environment and Outlook

    The company is performing well despite a challenging market with relatively low delinquency rates and origination volumes. While 90-plus day mortgage delinquency rates and foreclosure activity have seen slight increases (e.g., 90-day delinquencies up to 1.55% in May from 1.45% in December 2025), they remain significantly below pre-pandemic levels. Mortgage origination unit volume increased 9% year-over-year in Q2, driven by refinance activity. Management anticipates continued sales wins and efficiency initiatives to lead to roughly flat Q3 and higher Q4 adjusted EBITDA.

    AI-generated summary of the company’s earnings call. Not investment advice.