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Combining operational excellence with a suite of innovative services and technologies, Altisource helps solve the demands of the ever-changing markets we serve.
−Removed: Effective January 1, 2022, our reportable segments changed as a result of a change in the way our Chief Executive Officer (our chief operating decision maker) manages our businesses, allocates resources and evaluates performance, and the related changes in our internal organization.
−Removed: We now report our operations through two reportable segments:
+Added: We conduct our operations through two reportable segments:
Servicer and Real Estate and Origination .
In addition, we report Corporate and Others separately.
−Removed: Prior to the January 1, 2022 change in reportable segments, the Company operated with one reportable segment (total Company).
−Removed: Prior year comparable period segment disclosures have been restated to conform to the current year presentation.
The Servicer and Real Estate segment provides loan servicers and real estate investors with solutions and technologies that span the mortgage and real estate lifecycle.
3 unchanged sentences
Technology and SaaS Products
−Removed: 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),
−Removed: RentRange (a single family rental data, analytics and rent-based valuation solution), REALSynergy (a commercial loan servicing platform), and NestRange (an automated valuation model and analytics solution).
+Added: 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).
The Origination segment provides originators with solutions and technologies that span the mortgage origination lifecycle.
3 unchanged sentences
Technology and SaaS Products
−Removed: 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), ADMS (a document management and data analytics delivery platform), and automated valuation technology.
−Removed: Corporate and Others includes Pointillist (sold on December 1, 2021), interest expense and costs related to corporate functions including executive, infrastructure and certain technology groups, finance, law, compliance, human resources, vendor management, facilities and risk management.
+Added: 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).
+Added: 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.
We classify revenue in three categories:
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The real estate and mortgage marketplaces represent very large markets, and we believe our scale and suite of offerings provide us with competitive advantages that could support our growth.
−Removed: As we navigate the COVID-19 pandemic and its impacts on our business, we continue to evaluate our strategy and core businesses and seek to position our businesses to provide long term value to our customers and stakeholders.
+Added: As we navigate the continuing unsettled nature of the housing and mortgage servicing markets in the wake of governmental mandates taken in connection with the COVID-19 pandemic and other macro-economic trends, we continue to evaluate our strategy and core businesses and seek to position our businesses to provide long term value to our customers and shareholders.
Each of our business segments provides Altisource the potential to grow and diversify our customer and revenue base.
2 unchanged sentences
Servicer and Real Estate:
−Removed: Through our offerings that support residential real estate and loan investors and servicers, we provide a suite of solutions and technologies intended to meet their growing and evolving needs.
+Added: Through our offerings that support residential real estate and loan investors and forward and reverse servicers, we provide a suite of solutions and technologies intended to meet their growing and evolving needs.
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.
−Removed: We believe we are one of only a few providers with a broad suite of servicer solutions, nationwide coverage and scalability.
−Removed: Further, we believe we are well positioned to gain market share from existing and new customers as they consolidate to larger, full-service providers or outsource services that have historically been performed in-house.
+Added: We believe we are one of only a few providers with a broad suite of solutions, nationwide coverage and scalability.
+Added: Further, we believe we are well positioned to gain market share from existing and new customers if they consolidate to larger, full-service providers or outsource services that have historically been performed in-house.
Through our offerings that support mortgage loan originators (or other similar mortgage market participants), we provide a suite of solutions and technologies to meet the evolving and growing needs of lenders, mortgage purchasers and securitizers.
−Removed: We are focused on growing business from our existing customer base, attracting new customers to our offerings and developing new offerings.
+Added: We are focused on growing business from our existing customer base, attracting new customers to our offerings and developing new
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.
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Further, we believe we are well positioned to gain market share from existing and new customers as customers and prospects look to Lenders One to help them improve their profitability and better compete.
−Removed: Corporate and Others includes Pointillist (sold on December 1, 2021), 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.
−Removed: We developed the Pointillist business through our consumer analytics capabilities.
−Removed: During 2019, we created Pointillist as a separate legal entity to position it for accelerated growth and outside investment and contributed the Pointillist business and $8.5 million to it.
−Removed: On May 27, 2021, Pointillist issued $1.3 million in principal of convertible notes to related parties with a maturity date of January 1, 2023.
−Removed: The notes bore interest at a rate of 7% per annum.
−Removed: The principal and unpaid accrued interest then outstanding under the notes (1) would automatically convert to Pointillist equity at the earlier of the time Pointillist receives proceeds of $5.0 million or more from the sale of its equity or January 1, 2023, or (2) are repaid in cash or converted into Pointillist common stock equity based on a $13.1 million Pointillist valuation (at the Lenders’ option) in the event of a corporate transaction or initial public offering of Pointillist.
−Removed: On October 6, 2021, the shareholders of Pointillist, entered into a definitive Stock Purchase Agreement to sell all of the equity interests in Pointillist to Genesys Cloud Services, Inc.
−Removed: (“Genesys”) for $150.0 million.
−Removed: The Purchase Price consisted of (1) an up-front payment of $144.5 million, subject to certain adjustments, (2) $0.5 million deposited into the Working Capital Escrow, with excess amounts remaining after satisfying such deficits (if any) being paid to the sellers, and (3) $5.0 million deposited into an escrow account to satisfy certain Genesys indemnification claims that may arise on or prior to the first anniversary of the sale closing and, at Genesys’ election, any working capital deficits that exceed the Working Capital Escrow, with the balance to be paid to the sellers thereafter.
−Removed: The transaction closed on December 1, 2021 and the notes were converted to Pointillist equity in connection with the transaction.
−Removed: On a fully diluted basis, we owned approximately 69% of the equity of Pointillist.
−Removed: After working capital and other applicable adjustments, we received approximately $106.0 million from the sale of our Pointillist equity and the collection of outstanding receivables, with $102.2 million received at closing, approximately $0.3 million deposited into the Working Capital Escrow and approximately $3.5 million deposited into the Indemnification Escrow.
−Removed: Altisource received the Working Capital Escrow in May 2022.
−Removed: The Indemnification Escrow funds have not yet been received.
−Removed: During the year ended December 31, 2022, the Company recognized a loss of $(0.2) million based on estimated losses from claims expected to be made against the Indemnification Escrow account.
−Removed: During the year ended December 31, 2021, the Company recognized a pre-tax and after-tax gain of $88.9 million from the sale of Pointillist.
+Added: 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.
COVID-19 Pandemic Impacts
−Removed: In response to the COVID-19 pandemic, beginning in March 2020, various governmental entities and servicers implemented unprecedented foreclosure and eviction moratoriums, forbearance programs and loss mitigation measures to help mitigate the impact to borrowers and renters.
−Removed: As a result of these measures and other related actions, industrywide foreclosure initiations were 88% lower in 2021, compared to 2019, and foreclosure sales were 76% lower.
−Removed: The Federal government’s foreclosure moratorium expired on July 1, 2021 and the CFPB’s temporary loss mitigation measures expired on December 31, 2021.
−Removed: Despite the expiration of such governmental measures, we believe servicers are proceeding slowly with foreclosure initiations for borrowers in default.
−Removed: Industrywide foreclosure initiations were 368% higher in 2022 compared to 2021, although still 45% lower than the pre-COVID-19 period in 2019.
−Removed: Industrywide foreclosure sales were 39% higher in 2022 compared to 2021, although still 67% lower than the pre-COVID-19 period in 2019.
+Added: Actions taken by federal, state and local governments, GSEs and mortgage servicers in connection with the COVID-19 pandemic continue to have a profound impact on our business, our customers, and the industries in which we operate.
+Added: Despite the expiration of certain such measures, we believe servicers are proceeding slowly with foreclosure initiations for borrowers in default and foreclosure initiations may not convert to foreclosure sales and REO at the same pace as prior to the pandemic due to improved home equity and borrower relief options.
The decline in foreclosure initiations and foreclosure sales throughout the pandemic, partially offset by the restart of the default market, significantly decreased default related referrals to Altisource and continues to negatively impact virtually all of Altisource’s default related services revenue.
−Removed: We cannot predict the duration of the pandemic and future governmental and industry measures.
−Removed: Based on the expirations of the Federal government’s foreclosure and eviction moratoriums and the CFPB’s rules on temporary loss mitigation measures, we believe the demand for our Default business will grow.
+Added: 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.
−Removed: Due to this timing, we anticipate that our later stage foreclosure auction and REO asset management services will not fully benefit from the early 2022 higher foreclosure initiations until late 2023 or early 2024.
−Removed: During 2021 and 2022, to address lower revenue, we worked to (1) reduce our cost structure, (2) maintain the infrastructure to deliver default related services for our customer base and support the anticipated increase in demand following the expiration of the moratoriums and forbearance plans and CFPB’s rules on temporary loss mitigation measures, (3) grow Lenders One membership, launch new solutions and increase customer adoption of our solutions to accelerate the growth of our origination business, and (4) generate cash from the 2021 sale of Pointillist.
+Added: The foreclosure timelines could vary significantly based upon, for example, upon the state where the property is located and whether the foreclosure is contested.
+Added: 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.
+Added: During 2022 and 2023, to address lower revenue, we worked to (1) reduce our cost structure, (2) maintain the infrastructure to deliver default related services for our customer base and support the anticipated increase in demand following the expiration of the moratoriums and forbearance plans and CFPB’s rules on temporary loss mitigation measures, and (3) add new Lenders One members, launch new solutions and increase customer adoption of our solutions to accelerate the growth of our origination business.
Share Repurchase Program
−Removed: On May 15, 2018, our shareholders approved the renewal and replacement of the share repurchase program previously approved by the shareholders on May 17, 2017.
+Added: On May 16, 2023, our shareholders approved the renewal and amendment of the share repurchase program previously approved by the shareholders on May 15, 2018.
Under the program, we are authorized to purchase up to 3.1 million shares of our common stock, based on a limit of 15% of the outstanding shares of common stock on the date of approval, at a minimum price of $1.00 per share and a maximum price of $25.00 per share, for a period of five years from the date of approval.
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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.
−Removed: Ocwen has disclosed that it is subject to a number of ongoing federal and state 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.
−Removed: 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.
+Added: 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.
+Added: 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.
In addition to the above, Ocwen may become subject to future adverse regulatory or other actions.
−Removed: Ocwen has disclosed that Rithm is its largest client.
−Removed: As of December 31, 2022, approximately 17% of loans serviced and subserviced by Ocwen (measured in UPB) were related to Rithm MSRs or rights to MSRs.
−Removed: The existence or outcome of Ocwen regulatory matters or the termination of the Rithm sub-servicing agreement with Ocwen may have significant adverse effects on Ocwen’s business.
+Added: Ocwen has disclosed that Rithm is a significant client of Ocwen’s.
+Added: 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.
+Added: 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.
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.
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.
−Removed: 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 they purchase from us or the loss of other customers.
+Added: 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.
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:
−Removed: • Altisource loses Ocwen as a customer or there is a significant reduction in the volume of services they purchase from us
+Added: • 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
1 unchanged sentence
• Ocwen loses state servicing licenses in states with a significant number of loans in Ocwen’s servicing portfolio
+Added: • 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
−Removed: • Altisource otherwise fails to be retained as a service provider.
−Removed: Management cannot predict whether any of these events will occur or the amount of any impact they may have on Altisource.
+Added: • Altisource otherwise fails to be retained as a service provider and/or there is a reduction in referral volumes
+Added: The foregoing list is not intended to be exhaustive.
+Added: Management cannot predict whether any of these events or other events will occur or the amount of any impact they may have on Altisource.
We are seeking to diversify and grow our revenue and customer base and we have a sales and marketing strategy to support these efforts.
3 unchanged sentences
The following items impact the comparability of our results:
−Removed: • Industrywide foreclosure initiations were 368% higher in 2022, compared to 2021 (although still 45% lower than the pre-COVID-19 period in 2019), as the foreclosure market is beginning to recover following expiration of the Federal government’s foreclosure moratorium on July 31, 2021 and the CFPB’s temporary loss mitigation measures on December 31, 2021
−Removed: • Industrywide foreclosure sales were 39% higher in 2022, compared to 2021 (although still 67% lower than the same pre-COVID-19 period in 2019)
−Removed: • On December 1, 2021, the equity interests of Pointillist, a majority owned subsidiary of Altisource, were sold for $150.0 million.
−Removed: On a fully diluted basis, Altisource owned approximately 69% of the equity of Pointillist.
−Removed: After working capital and other applicable adjustments, Altisource received approximately $106.0 million from the sale of its Pointillist equity and the collection of outstanding receivables, with $102.2 million received at closing, approximately $0.3 million deposited into the Working Capital Escrow and approximately $3.5 million deposited into the Indemnification Escrow.
−Removed: We recognized a pre-tax and after-tax (loss) gain of $(0.2) million and $88.9 million from the sale for the years ended December 31, 2022 and 2021, respectively.
−Removed: For the year ended December 31 2021, service revenue from Pointillist was $4.8 million (no comparative amount for the year ended December 31, 2022)
−Removed: • During the year ended December 31, 2021, Altisource used approximately $20.0 million of the proceeds from the sale of its equity interest in Pointillist to repay the outstanding balance on its revolving line of credit.
−Removed: This revolving line of credit remains available to Altisource according to its terms
+Added: • Industrywide foreclosure initiations were 4% lower in 2023, compared to 2022, and 31% lower than the same pre-COVID-19 period in 2019
+Added: • Industrywide foreclosure sales were 8% higher in 2023, compared to 2022, and 46% lower than the same pre-COVID-19 period in 2019
+Added: • The interest rate on the Company’s senior secured term loans was 14.24% for the year ended December 31, 2023, compared to 7.67% for the same period in 2022
+Added: • On February 14, 2023, Altisource Portfolio Solutions S.A.
+Added: and its wholly-owned subsidiary, Altisource S.à r.l., entered into Amendment No.
+Added: 2 to the Credit Agreement.
+Added: In connection with Amendment No.
+Added: 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.
−Removed: 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.
+Added: 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 Company recognized an income tax provision of $5.3 million for the year ended December 31, 2022.
−Removed: The income tax provision for the year ended December 31, 2021 was driven by no income tax provision on the gain on sale of Pointillist, income tax on transfer pricing income from India, no tax benefit on the pretax loss from our Luxembourg operating company and Pointillist, uncertain tax position and tax on unrepatriated earnings in India.
+Added: 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
CONSOLIDATED RESULTS OF OPERATIONS
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Servicer and Real Estate $ 107,779 (4) $ 112,132
−Removed: Originations 32,364 (44) 58,002
−Removed: Corporate and Others — (100) 4,821
−Removed: Service revenue 144,496 (15) 170,613
+Added: 28,786 (11) 32,364
+Added: Total service revenue 136,565 (5) 144,496
Reimbursable expenses 8,273 3 8,039
5 unchanged sentences
Selling, general and administrative expenses 46,420 (15) 54,755
−Removed: Loss (gain) on sale of business 242 100 (88,930)
−Removed: (Loss) income from operations (33,182) (215) 28,968
+Added: Loss on sale of business — (100) 242
+Added: Loss from operations (16,768) 49 (33,182)
Other income (expense), net:
Interest expense (36,103) 117 (16,639)
−Removed: Other income, net 2,254 161 864
+Added: Change in fair value of warrant liability
+Added: Debt amendment costs
+Added: (3,410) N/M —
+Added: Other income (expense), net 2,788 24 2,254
Total other income (expense), net (35,580) (147) (14,385)
−Removed: (Loss) income before income taxes and non-controlling interests (47,567) (411) 15,285
+Added: Loss before income taxes and non-controlling interests (52,348) (10) (47,567)
Income tax provision (3,714) (29) (5,266)
−Removed: Net (loss) income (52,833) N/M 12,053
+Added: Net loss (56,062) (6) (52,833)
Net income attributable to non-controlling interests
−Removed: Net (loss) income attributable to Altisource $ (53,418) N/M $ 11,812
+Added: (228) (61) (585)
+Added: Net loss attributable to Altisource $ (56,290) (5) $ (53,418)
Gross profit / service revenue 22 % 15 %
−Removed: Income (loss) from operations/service revenue (23) % 17 %
−Removed: (Loss) earnings per share:
−Removed: Basic $ (3.32) N/M $ 0.75
−Removed: Diluted $ (3.32) N/M $ 0.74
+Added: Loss from operations / service revenue (12) % (23) %
+Added: Loss per share:
+Added: Basic $ (2.51) 24 $ (3.32)
+Added: Diluted $ (2.51) 24 $ (3.32)
Weighted average shares outstanding:
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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.
−Removed: The increase in service revenue in the Servicer and Real Estate segment for the year ended December 31, 2022 was primarily driven by increases across all our Solutions, Marketplace and Technology and SaaS Products businesses as the default market continues to recover.
−Removed: The increase in the Solutions business was driven by revenue growth in all of the businesses except for Field Services.
−Removed: Revenue in the Solutions businesses grew as the default market continues to recover.
−Removed: Revenue in the Field Services declined due to fewer preservation referrals per property.
−Removed: Revenue in the other Solutions businesses grew as the default market began to recover following the expiration of the pandemic related borrower relief measures.
−Removed: The increase in the Marketplace business was driven by a higher number of homes sold, partially offset by lower average sales prices and lower average commission rate from a higher percentage of foreclosure auctions.
−Removed: The increase in the Technology and SaaS Products business was from higher professional services revenue in the Equator business.
−Removed: The decrease in service revenue in the Origination segment for the year ended December 31, 2022 was primarily driven by the overall market decline in mortgage origination.
−Removed: The decline in Lenders One revenue was lower than the overall market decline as we gained traction with our solutions that are designed to help our members save money.
−Removed: The decline in the Solutions business revenue was greater than the overall market decline as customers transitioned services in-house to retain their employees in some of our Solutions businesses and a greater percentage of revenue in some of these businesses was derived from refinance transactions which declined faster than the market.
−Removed: The decrease in service revenue in Corporate and Other was from the December 2021 Pointillist sale.
+Added: The decrease in service revenue for the year ended December 31, 2023 is driven by lower revenue in both segments.
+Added: Revenue was lower in the Servicer and Real Estate segment from the exit of a low margin customer care business in the fourth quarter 2022 and the apparent decline in a customer’s propensity to order services in two of our lower margin Solutions businesses within the Servicer and Real Estate segment, partially offset by growth in our foreclosure trustee business in the Solutions business within the Servicer and Real Estate segment.
+Added: Revenue was lower in the Origination segment from the overall market decline in mortgage originations partially offset by Lenders One growth driven by our new reseller products.
We recognized reimbursable expense revenue of $8.3 million for the year ended December 31, 2023, a 3% increase compared to the year ended December 31, 2022.
−Removed: The increase in reimbursable expense revenue for the year ended December 31, 2022 was largely due to a higher volume of asset resolution and asset management activities.
+Added: The increase in reimbursable expenses for the year ended December 31, 2023 is primarily driven by an increase in property preservation services in the Solutions business within the Servicer and Real Estate segment partially offset by lower asset resolution and asset management activities in the Marketplace business within the Servicer and Real Estate segment.
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.
−Removed: However, as a result of the pandemic and related measures, the seasonal impact to revenue may not follow historical patterns.
+Added: 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.
Cost of Revenue and Gross Profit
2 unchanged sentences
(in thousands) 2023 % Increase (decrease) 2022
−Removed: Compensation and benefits $ 48,064 (31) $ 69,990
Outside fees and services $ 55,858 — $ 55,979
+Added: Compensation and benefits 35,396 (26) 48,064
Technology and telecommunications 14,196 (16) 16,937
3 unchanged sentences
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.
−Removed: Compensation and benefits for the year ended December 31, 2022 decreased primarily due to cash cost savings measures taken in 2021, the December 2021 sale of Pointillist and from lower service revenue in the Origination segment.
−Removed: Outside fees and services for the year ended December 31, 2022 decreased primarily from lower service revenue in the Origination segment, as discussed in the revenue section above, and from lower Field Services revenue in the Solutions business of the Servicer and Real Estate segment.
−Removed: In addition, the increases in reimbursable expenses were consistent with the changes in reimbursable expense revenue discussed in the revenue section above.
+Added: 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.
+Added: Technology and telecommunications for the year ended December 31, 2023 decreased primarily due to the renegotiation of certain contracts and lower overall headcount.
+Added: Depreciation and amortization was lower from the completion of the depreciation periods of certain premises and equipment and the reduction in capital expenditures.
Gross profit increased to $29.7 million, representing 22% of service revenue, for the year ended December 31, 2023 compared to $21.8 million, representing 15% of service revenue, for the year ended December 31, 2022.
−Removed: Gross profit as a percentage of service revenue for the year ended December 31, 2022 increased compared to the year ended December 31, 2021 primarily due
−Removed: to revenue mix with higher revenue from the higher margin businesses in Servicer and Real Estate, the December 1, 2021 Pointillist sale, our COVID-19 cash cost savings measures and lower incentive payments as well as the payment of incentive payments in stock as opposed to cash, partially offset by lower gross profit margin in the Origination business from lower revenue.
+Added: 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.
Selling, General and Administrative Expenses
−Removed: Selling, general and administrative (“SG&A”) expenses includes payroll for personnel employed in executive, sales and marketing, finance, technology, law, compliance, human resources, vendor management, facilities and risk management roles.
+Added: 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.
This category also includes professional services fees, occupancy costs, marketing costs, depreciation and amortization of non-operating assets and other expenses.
2 unchanged sentences
Compensation and benefits $ 20,879 (9) $ 22,973
−Removed: Occupancy related costs 5,000 (46) 9,332
−Removed: Amortization of intangible assets 5,129 (46) 9,467
Professional services 7,885 (32) 11,595
+Added: Amortization of intangible assets 5,182 1 5,129
+Added: Occupancy related costs 4,917 (2) 5,000
Marketing costs 1,977 (36) 3,107
2 unchanged sentences
Selling, general and administrative expenses $ 46,420 (15) $ 54,755
−Removed: SG&A for the year ended December 31, 2022 of $54.8 million decreased by 18% compared to the year ended December 31, 2021.
−Removed: The decrease was primarily driven by lower compensation and benefits, occupancy related costs and amortization of intangible assets.
−Removed: Compensation and benefits for the year ended December 31, 2022 decreased primarily due to cash cost savings initiatives and lower incentive payments as well as the payment of incentive payments in stock as opposed to cash.
−Removed: Occupancy related costs for the year ended December 31, 2022 decreased primarily from facility consolidation initiatives.
−Removed: Amortization of intangible assets for the year ended December 31, 2022 decreased from the completion of the amortization period of certain intangible assets during 2021.
−Removed: The decreases for year ended December 31, 2022 were partially offset by increases in marketing costs from Lenders One convention activities that were cancelled in the first quarter of 2021 due to the pandemic.
−Removed: Other Operating Income
−Removed: On December 1, 2021, Altisource sold its equity interest in Pointillist (see subsection Strategy and Core Businesses in MD&A Overview for more details).
−Removed: After working capital and other applicable adjustments, Altisource received approximately $106.0 million from the sale of its Pointillist equity and the collection of outstanding receivables, with $102.2 million received at closing, approximately $0.3 million deposited into the Working Capital Escrow and approximately $3.5 million deposited into the Indemnification Escrow.
−Removed: Altisource received the Working Capital Escrow in May 2022.
−Removed: The Indemnification Escrow funds have not yet been received.
−Removed: During the year ended December 31, 2022, the Company recognized a loss of $(0.2) million based on estimated losses from claims expected to be made against the Indemnification Escrow account.
−Removed: During the year ended December 31, 2021, the Company recognized a pre-tax and after-tax gain of $88.9 million from the sale of Pointillist.
−Removed: (Loss) income from operations
−Removed: Loss from operations was $(33.2) million, representing (23)% of service revenue, for the year ended December 31, 2022 compared to income from operations of $29.0 million, representing 17% of service revenue, for the year ended December 31, 2021.
−Removed: (Loss) income from operations as a percentage of service revenue decreased for the year ended December 31, 2022 compared to the year ended December 31, 2021, primarily as a result of the gain on sale of business recognized during the year ended December 31, 2021, partially offset by higher 2022 gross profit margins and a greater percentage reduction in 2022 SG&A expenses than the percentage change in revenue, discussed above.
+Added: SG&A expenses for the year ended December 31, 2023 of $46.4 million decreased by 15% compared to the year ended December 31, 2022.
+Added: The decrease for the year ended December 31, 2023 was primarily driven by lower compensation and benefits, professional services and marketing costs.
+Added: Compensation and benefits and marketing costs for the year ended December 31, 2023 decreased from efficiency initiatives and cost savings measures.
+Added: Professional services for the year ended December 31, 2023 decreased primarily due to lower legal and litigation fees.
+Added: Loss from Operations
+Added: Loss from operations was $(16.8) million, representing (12)% of service revenue, for the year ended December 31, 2023 compared to loss from operations of $(33.2) million, representing (23)% of service revenue, for the year ended December 31, 2022.
+Added: 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.
Other income (expense), net
1 unchanged sentence
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.
−Removed: The change for the year ended December 31, 2022 is primarily driven by an increase of $(2.1) million in interest expense driven by higher interest rate on our senior secured term loan partially offset by lower average outstanding balance on the Revolver and higher interest income and foreign currency exchange gains.
+Added: 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.
+Added: The higher interest expense was driven by higher interest rates due to the increase in SOFR and the increase in the SOFR spread on our amended SSTL and higher amortization of debt discount and debt issuance and amendment costs.
Income Tax Provision
We recognized an income tax provision of $3.7 million and $5.3 million for the years ended December 31, 2023 and 2022, respectively.
+Added: 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, 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.
−Removed: The income tax provision for the year ended December 31, 2021 was driven by no income tax provision on the gain on sale of Pointillist, income tax on transfer pricing income from India, no tax benefit on the pretax loss from our Luxembourg operating company and Pointillist, uncertain tax position and tax on unrepatriated earnings in India.
SEGMENT RESULTS OF OPERATIONS
6 unchanged sentences
Reimbursable expenses 7,688 585 — 8,273
−Removed: Non-controlling interest — 585 — 585
+Added: Non-controlling interests
115,467 29,599 — 145,066
2 unchanged sentences
Selling, general and administrative expenses 9,622 7,693 29,105 46,420
−Removed: Loss on sale of businesses — — 242 242
Income (loss) from operations 32,099 (6,040) (42,827) (16,768)
Total other income (expense), net — — (35,580) (35,580)
−Removed: Income (loss) before income taxes and
−Removed: non-controlling interests $ 26,460 $ (7,418) $ (66,609) $ (47,567)
+Added: Income (loss) before income taxes and non-controlling interests $ 32,099 $ (6,040) $ (78,407) $ (52,348)
Gross profit (loss) / service revenue 39 % 6 % N/M 22 %
6 unchanged sentences
Reimbursable expenses 7,529 510 — 8,039
−Removed: Non-controlling interest — 1,285 — 1,285
+Added: Non-controlling interests
119,661 33,459 — 153,120
2 unchanged sentences
Selling, general and administrative expenses 12,057 8,825 33,873 54,755
−Removed: Gain on sale of businesses — — (88,930) (88,930)
−Removed: Income from operations 13,652 5,282 10,034 28,968
+Added: Gain on sale of business
+Added: Income (loss) from operations 26,456 (7,418) (52,220) (33,182)
Total other income (expense), net 4 — (14,389) (14,385)
−Removed: Income (loss) before income taxes and
−Removed: non-controlling interests $ 13,660 $ 5,282 $ (3,657) $ 15,285
+Added: Income (loss) before income taxes and non-controlling interests $ 26,460 $ (7,418) $ (66,609) $ (47,567)
Gross profit (loss) / service revenue 34 % 4 % N/M 15 %
−Removed: Income from operations/service revenue 13 % 9 % 208 % 17 %
+Added: Income (loss) from operations / service revenue 24 % (23) % N/M (23) %
_____________________________________
13 unchanged sentences
Total revenue $ 115,467 $ 119,661 (4)
−Removed: We recognized service revenue of $112.1 million for the year ended December 31, 2022, a 4% increase compared to the year ended December 31, 2021.
+Added: We recognized service revenue of $107.8 million for the year ended December 31, 2023, a 4% decrease compared to the year ended December 31, 2022.
We also recognized reimbursable expense revenue of $7.7 million for the year ended December 31, 2023, a 2% increase compared to the year ended December 31, 2022.
−Removed: The increase in service revenue in the Servicer and Real Estate segment for the year ended December 31, 2022 was primarily driven by increases across all our Solutions, Marketplace and Technology and SaaS Products businesses as the default market continues to recover.
−Removed: The increase in the Solutions business was primarily driven by higher revenues from our other Solutions businesses, partially offset by fewer preservation referrals per property in the Field Services business.
−Removed: Revenue in the other Solutions businesses grew as the default market began to recover following the expiration of the pandemic related borrower relief measures.
−Removed: The increase in the Marketplace business was driven by a higher number of homes sold, partially offset by lower average sales prices and lower average commission rate from a higher percentage of foreclosure auctions.
−Removed: The increase in the Technology and SaaS Products business was from higher professional services revenue in the Equator business.
+Added: The decrease in service revenue for the year ended December 31, 2023 was driven by the exit of a low margin customer care business within the Solutions business in the fourth quarter 2022 and the apparent decline in a customer’s propensity to order services in two of our lower margin businesses within the Solutions business, partially offset by growth in our foreclosure trustee business in the Solutions business.
Certain of our Servicer and Real Estate businesses are impacted by seasonality.
Revenues from property sales and certain property preservation services are generally lowest during the fall and winter months and highest during the spring and summer months.
−Removed: However, as a result of the pandemic and related measures, the seasonal impact to revenue may not follow historical patterns.
+Added: 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.
Cost of Revenue and Gross Profit
1 unchanged sentence
(in thousands) 2023 2022 % Increase (decrease)
−Removed: Compensation and benefits $ 25,786 $ 29,573 (13)
Outside fees and services $ 35,962 $ 40,235 (11)
−Removed: Technology and telecommunications 6,627 9,066 (27)
+Added: Compensation and benefits 22,214 25,786 (14)
Reimbursable expenses 7,688 7,529 2
+Added: Technology and telecommunications 7,138 6,627 8
Depreciation and amortization 744 971 (23)
1 unchanged sentence
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.
−Removed: The decrease in cost of revenue for the year ended December 31, 2022 is primarily driven by lower compensation and benefits primarily due to cash cost savings initiatives and lower incentive payments as well as the payment of incentive payments in stock as opposed to cash and lower technology and telecommunications.
−Removed: The decrease in technology and telecommunications was driven by a change in the terms of the vendor agreement for property management technologies executed in December 2021 and other cost savings initiatives.
−Removed: In addition, outside fees and services decreased from lower Field
−Removed: Services revenue in the Solutions business, as discussed above.
−Removed: These decreases are partially offset by an increase in reimbursable expenses from a higher volume of asset resolution and asset management activities.
+Added: The decrease in cost of revenue for the year ended December 31, 2023 is primarily driven by lower compensation and benefits primarily due to efficiency initiatives and cost savings measures and outside fees and services from lower revenue, partially offset by higher technology and telecommunications in the Solutions business from a prior year credit received related to the renegotiation of a vendor agreement for property management technologies.
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.
−Removed: Gross profit as a percentage of service revenue in 2022 increased compared to 2021 due to our COVID-19 cash cost savings and efficiency measures as well as from revenue mix with higher revenue from the other higher margin default solution businesses.
+Added: Gross profit as a percentage of
+Added: service revenue for the year ended December 31, 2023 increased primarily due to efficiency initiatives and cost savings measures.
+Added: Our margins can vary substantially depending upon the service revenue mix.
Selling, General and Administrative Expenses
1 unchanged sentence
(in thousands) 2023 2022 % Increase (decrease)
−Removed: Compensation and benefits $ 2,594 $ 14 N/M
−Removed: Occupancy related costs 931 828 12
Amortization of intangible assets $ 2,960 $ 2,970 —
+Added: Compensation and benefits 2,311 2,594 (11)
Professional services 1,734 2,711 (36)
Marketing costs 1,258 1,524 (17)
+Added: Occupancy related costs 631 931 (32)
Depreciation and amortization 2 12 (83)
1 unchanged sentence
Selling, general and administrative expenses $ 9,622 $ 12,057 (20)
−Removed: _____________________________________
−Removed: N/M — not meaningful.
SG&A for the year ended December 31, 2023 of $9.6 million decreased by 20% compared to the year ended December 31, 2022.
−Removed: The decrease in SG&A for the year ended December 31, 2021 was primarily due to lower amortization of intangible assets driven by the completion of the amortization period of certain intangible assets during 2021.
−Removed: These decreases were partially offset by higher compensation and benefits for the year ended December 31, 2021 from the assignment of sales and marketing employees to the business segments beginning in January 1, 2022 and higher marketing costs from higher participation in convention activities for the Solutions businesses and related Technology and SaaS Products business.
+Added: 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.
+Added: Professional services for the year ended December 31, 2023 decreased primarily due to lower legal fees.
+Added: Compensation and benefits, occupancy related costs, marketing costs and other expenses for the year ended December 31, 2023 decreased from efficiency initiatives and cost savings measures.
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.
−Removed: The increase in operating income as a percentage of service revenue for the year ended December 31, 2022 was primarily the result of higher gross profit margins and the percentage reduction in SG&A expenses in excess of the percentage change in revenue, discussed above.
+Added: 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.
Revenue by business unit was as follows for the years ended December 31:
1 unchanged sentence
Service revenue:
−Removed: Solutions $ 11,025 $ 32,745 (66)
Lenders One $ 22,644 $ 20,027 13
+Added: Solutions 5,507 11,610 (53)
Technology and SaaS Products 635 727 (13)
3 unchanged sentences
Total reimbursable expenses 585 510 15
−Removed: Non-controlling interest 585 1,285 (54)
+Added: Non-controlling interests
Total revenue $ 29,599 $ 33,459 (12)
−Removed: We recognized service revenue of $32.4 million for the year ended December 31, 2022, a 44% decrease compared to the year ended December 31, 2021.
−Removed: We also recognized reimbursable expense revenue of $0.5 million for the year ended December 31, 2022, a 28% decrease compared to the year ended December 31, 2021.
−Removed: The decrease in service revenue in the Origination segment for the year ended December 31, 2022 was primarily driven by the overall market decline in mortgage origination.
−Removed: The decline in Lenders One revenue was lower than the overall market decline as we gained traction with selling our solutions that are designed to help our members save money.
−Removed: The decline in the Solutions business revenue was greater than the overall market decline as customers transitioned services in-house to retain their employees in some of our Solutions businesses and a greater percentage of revenue in some of these businesses was derived from refinance transactions which declined faster than the market.
+Added: We recognized service revenue of $28.8 million for the year ended December 31, 2023, an 11% decrease compared to the year
+Added: ended December 31, 2022.
+Added: 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.
+Added: The decrease in service revenue in the Origination segment for the year ended December 31, 2023 is primarily driven by the overall market decline in mortgage originations partially offset by Lenders One growth with our new reseller products.
+Added: The decline in the Solutions business revenue was greater than the overall market decline as a greater percentage of revenue in some of our Solutions businesses was derived from refinance transactions which declined at a greater rate than the overall market.
Cost of Revenue and Gross Profit
1 unchanged sentence
(in thousands) 2023 2022 % Increase (decrease)
−Removed: Compensation and benefits $ 13,955 $ 21,868 (36)
Outside fees and services $ 19,896 $ 15,744 26
+Added: Compensation and benefits 6,320 13,955 (55)
Technology and telecommunications 1,108 1,806 (39)
3 unchanged sentences
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.
−Removed: The decrease in cost of revenue for the year ended December 31, 2022 was primarily driven by lower compensation and benefits and outside fees and services driven by the decrease in service revenue discussed above.
−Removed: In addition, the decrease in reimbursable expenses for the year ended December 31, 2022 is consistent with the changes in reimbursable expense revenue discussed in the revenue section above.
−Removed: Gross profit decreased to $1.4 million, representing 4% of service revenue, for the year ended December 31, 2022 compared to $11.0 million, representing 19% of service revenue, for the year ended December 31, 2021.
−Removed: Gross profit as a percentage of service revenue decreased primarily as costs did not decline at the same rate that revenue declined.
+Added: The decrease in cost of revenue for the year ended December 31, 2023 was primarily driven by the alignment of compensation and benefits and technology and telecommunications with lower service revenue discussed above, partially offset by the increase in outside fees and services from Lenders One revenue growth.
+Added: 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.
+Added: Gross profit as a percentage of service revenue increased from margin expansion from efficiency initiatives and cost savings measures.
Selling, General and Administrative Expenses
2 unchanged sentences
Compensation and benefits $ 2,194 $ 2,887 (24)
−Removed: Occupancy related costs 543 303 79
Amortization of intangible assets 2,222 2,159 3
1 unchanged sentence
Marketing costs 728 1,569 (54)
+Added: Occupancy related costs 302 543 (44)
+Added: Depreciation and amortization 1 — N/M
Other 1,352 852 59
Selling, general and administrative expenses $ 7,693 $ 8,825 (13)
−Removed: SG&A for the year ended December 31, 2022 of $8.8 million increased by 55% compared to the year ended December 31, 2021.
−Removed: The increase in SG&A for the year ended December 31, 2022 was primarily due to higher compensation and benefits from the assignment of sales and marketing employees to the business segments beginning in January 1, 2022.
−Removed: In addition, the increase in marketing costs and other for the year ended December 31, 2022 was primarily from Lenders One convention activities that were cancelled in first quarter of 2021 due to the pandemic.
−Removed: (Loss) income from Operations
−Removed: Loss from operations was $(7.4) million, representing (23)% of service revenue, for the year ended December 31, 2022 compared to income from operations of $5.3 million, representing 9% of service revenue, for the year ended December 31, 2021.
−Removed: The decrease in operating (loss) income as a percentage of service revenue for the year ended December 31, 2022 was primarily the result of lower gross profit margins and higher SG&A costs, as discussed above.
+Added: _____________________________________
+Added: N/M — not meaningful.
+Added: SG&A for the year ended December 31, 2023 of $7.7 million decreased by 13% compared to the year ended December 31, 2022.
+Added: The decrease in SG&A for the year ended December 31, 2023 was primarily due to lower marketing costs and compensation and benefits from efficiency initiatives and cost savings measures and lower occupancy related costs.
+Added: Income from Operations
+Added: 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.
+Added: The improvement in operating loss as a percentage of service revenue for the year ended December 31, 2023 is primarily
+Added: from higher gross profit margins and from a greater percentage reduction in SG&A expenses than the percentage change in revenue.
Corporate and Others
−Removed: Revenue by business unit was as follows for the years ended December 31:
−Removed: (in thousands) 2022 2021 % Increase (decrease)
−Removed: Service revenue:
−Removed: Pointillist $ — $ 4,821 (100)
−Removed: Total service revenue — 4,821 (100)
−Removed: Total revenue $ — $ 4,821 (100)
−Removed: We recognized service revenue of $4.8 million for the year ended December 31, 2021 (no comparative amount for the year ended December 31, 2022).
−Removed: The decrease in service revenue for the year ended December 31, 2022 was driven by the December 1, 2021 Pointillist sale.
Cost of Revenue
2 unchanged sentences
Compensation and benefits $ 6,862 $ 8,323 (18)
−Removed: Outside fees and services — 50 (100)
Technology and telecommunications 5,950 8,504 (30)
2 unchanged sentences
Cost of revenue for the year ended December 31, 2023 of $13.7 million decreased by 24% compared to the year ended December 31, 2022.
−Removed: The decrease in cost of revenue for the year ended December 31, 2022 is primarily driven by lower compensation and benefits due to cash cost savings initiatives and the December 1, 2021 Pointillist sale.
−Removed: In addition, technology and telecommunications decreased due to lower service contract costs as a result of the December 1, 2021, Pointillist sale and cost savings initiatives.
+Added: 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.
Selling, General and Administrative Expenses
3 unchanged sentences
Compensation and benefits $ 16,374 $ 17,492 (6)
−Removed: Occupancy related costs 3,526 8,201 (57)
Professional services 5,257 8,069 (35)
−Removed: Marketing costs 14 843 (98)
+Added: Occupancy related costs 3,984 3,526 13
Depreciation and amortization 698 1,142 (39)
+Added: Marketing costs (9) 14 (164)
Other 2,801 3,630 (23)
1 unchanged sentence
SG&A for the year ended December 31, 2023 of $29.1 million decreased by 14% compared to the year ended December 31, 2022.
−Removed: Compensation and benefits for the year ended December 31, 2022 decreased primarily due to cash cost savings initiatives, and from the assignment of sales and marketing employees to the business segments beginning in January 1, 2022.
−Removed: In addition, the decrease in occupancy related costs for the year ended December 31, 2022 is primarily from facility consolidation initiatives.
−Removed: Other Operating Income
−Removed: On December 1, 2021, Altisource sold its equity interest in Pointillist (see subsection Strategy and Core Businesses in MD&A Overview for more details).
−Removed: After working capital and other applicable adjustments, Altisource received approximately $106.0 million from the sale of its Pointillist equity and the collection of outstanding receivables, with $102.2 million received at closing, approximately $0.3 million deposited into the Working Capital Escrow and approximately $3.5 million deposited into the Indemnification Escrow.
−Removed: Altisource received the Working Capital Escrow in May 2022.
−Removed: The Indemnification Escrow funds have not yet been received.
−Removed: During the year ended December 31, 2022, the Company recognized a loss of $(0.2) million based on estimated losses from claims expected to be made against the Indemnification Escrow account.
−Removed: During the year ended December 31, 2021, the Company recognized a pre-tax and after-tax gain of $88.9 million from the sale of Pointillist.
+Added: The decrease for the year ended December 31, 2023 is primarily driven by lower professional services, compensation and benefits and other expenses.
+Added: Professional services for the year ended December 31, 2023 decreased due to lower insurance, legal and audit related expenses.
+Added: The decrease in compensation and benefits was driven by efficiency initiatives and cost savings measures.
Other Income (Expense), net
1 unchanged sentence
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.
−Removed: The change for the year ended December 31, 2022 was primarily driven by an increase of $2.1 million in interest expense driven by higher interest rate on our senior secured term loan partially offset by higher interest income and foreign currency exchange gains.
+Added: 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.
+Added: 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.
LIQUIDITY AND CAPITAL RESOURCES
−Removed: Our primary source of liquidity has historically been cash flow from operations, cash proceeds from sales of businesses and cash on hand.
+Added: 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.
However, due to governmental and market responses to the COVID-19 pandemic, revenue has declined significantly.
−Removed: The lower revenue, partially offset by cost savings initiatives, resulted in negative operating cash flow from operations for the years ended December 31, 2022 and 2021.
−Removed: To increase our liquidity we entered into a $20.0 million revolving credit facility during the second quarter of 2021 ($15.0 million available as of December 31, 2022).
−Removed: In addition, Altisource’s December 1, 2021 sale of its equity interest in Pointillist increased our liquidity.
−Removed: The Pointillist sale generated approximately $106.0 million in cash, with $102.2 million received at closing, approximately $0.3 million deposited into the Working Capital Escrow and received in May 2022, and approximately $3.5 million deposited into the Indemnification Escrow.
−Removed: Finally, we believe our anticipated revenue growth from the return of the default market, on-boarding sales wins, and revenue mix together with our reduced cost structure, should help reduce negative operating cash flow.
+Added: 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.
+Added: We believe our anticipated revenue growth from the return of the default market, on-boarding sales wins, and revenue mix together with our reduced cost structure, should help reduce negative operating cash flow.
We seek to deploy cash generated in a disciplined manner.
1 unchanged sentence
We also use cash for repayments of our long-term debt and capital investments.
−Removed: In addition, from time to time we consider and evaluate business acquisitions, dispositions, closures or other similar actions that are aligned with our strategy.
−Removed: Credit Agreement
−Removed: On April 3, 2018, Altisource Portfolio Solutions S.A.
−Removed: and its wholly-owned subsidiary, Altisource S.à r.l.
−Removed: entered into a credit agreement (the “Credit Agreement”) pursuant to which Altisource borrowed $412.0 million in the form of Term B Loans and obtained a $15.0 million revolving credit facility.
−Removed: We terminated the revolving credit facility on December 1, 2021.
−Removed: As of December 31, 2022, the principal balance of the Term B Loans was $247.2 million.
−Removed: The Credit Agreement was amended effective February 14, 2023 (the “Amended Credit Agreement”).
−Removed: The Term B Loans under the Amended Credit Agreement mature in April 2025.
−Removed: The maturity date can be extended by one year, to April 2026, at Altisource’s option if certain par paydowns in the aggregate using proceeds from issuances of equity interest or from junior indebtedness made prior to February 14, 2024 (“Aggregate Paydowns”) total $30 million or more and certain other conditions are satisfied.
−Removed: In February 2023, the Company made payments toward the determination of Aggregate Paydowns of $20 million.
−Removed: The principal amortization of the Term B Loans under the Amended Credit Agreement is 1% per year through April 2025 and, if applicable, 12% per year paid monthly for the year ended April 2026.
−Removed: All amounts outstanding under the Term B Loans will become due on the earlier of (i) the maturity date described above, and (ii) the date on which the loans are declared to be due and owing by the administrative agent at the request (or with the consent) of the Required Lenders (as defined in the Credit Agreement;
−Removed: other capitalized terms, unless defined herein, are defined in the Credit Agreement) or as otherwise provided in the Credit Agreement upon the occurrence of any event of default.
−Removed: In addition to the scheduled principal payments, subject to certain exceptions, the Term B Loans are subject to mandatory prepayment upon issuances of debt, certain casualty and condemnation events and sales of assets, as well as 50% of Consolidated Excess Cash Flow, as calculated in accordance with the provisions of the Amended Credit Agreement.
−Removed: The interest rate on the Term B Loans as of December 31, 2022 was 7.67%, representing the sum of (i) the greater of (x) the Adjusted Eurodollar Rate for a three month interest period and (y) 1.00% plus (ii) 4.00%.
−Removed: Under the Amended Credit Agreement, the Term B Loans bear interest at rates based upon, at our option, the Secured Overnight Financing Rate (“SOFR”) or the Base Rate.
−Removed: SOFR term loans initially bear interest at a rate per annum equal to SOFR plus 5.00% payable in cash plus 5.00% payable in kind (“PIK”).
−Removed: Base Rate loans initially bear interest at a rate per annum equal to the Base Rate plus 4.00% payable in cash plus 5.00% PIK.
−Removed: Base Rate term loans bear interest at a rate per annum equal to the sum of (i) the greater of (x) the Base Rate and (y) 2.00% plus (ii) 4.00%.
+Added: 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.
+Added: Senior Secured Term Loans
+Added: In April 2018, Altisource Portfolio Solutions S.A.
+Added: and its wholly-owned subsidiary, Altisource S.à r.l., entered into a credit agreement with Morgan Stanley Senior Funding, Inc., as administrative agent and collateral agent, and certain lenders (the “Credit Agreement”).
+Added: Under the Credit Agreement, Altisource borrowed $412 million in the form of the SSTL.
+Added: Effective February 14, 2023, Altisource Portfolio Solutions S.A.
+Added: and Altisource S.à r.l.
+Added: entered into Amendment No.
+Added: 2 to the Credit Agreement (as amended by Amendment No.
+Added: 2, the “Amended Credit Agreement”).
+Added: Altisource Portfolio Solutions S.A.
+Added: and its subsidiaries, subject to the applicable exclusions in the Amended Credit Agreement, are guarantors on the SSTL (collectively, the “Guarantors”).
+Added: Effective June 1, 2023, the administrative agent and collateral agent of the Amended Credit Agreement changed to Wilmington Trust, N.A.
+Added: The maturity date of the Amended Credit Agreement is April 30, 2025.
+Added: If Aggregate Paydowns under the Amended Credit Agreement are equal to or greater than $30 million by February 13, 2024, 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 SSTL may be extended at the Company’s option to April 30, 2026.
+Added: Such extension is conditioned upon the Company’s payment of a 2% payment-in-kind extension fee on or before April 30, 2025.
+Added: During the year ended December 31, 2023, Company made $30 million of Aggregate Paydowns.
+Added: All amounts outstanding under the SSTL become due on the earlier of (i) the maturity date, and (ii) the date on which the loans are declared to be due and owing by the administrative agent at the request (or with the consent) of the Required Lenders (as defined in the Amended Credit Agreement;
+Added: other capitalized terms, unless defined herein, are defined in the Amended Credit Agreement) or as otherwise provided in the Amended Credit Agreement upon the occurrence of any event of default.
+Added: There are no mandatory repayments of the SSTL, except as set forth herein, until the April 30, 2025 maturity when the balance is due.
+Added: 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.
+Added: In addition to the scheduled principal payments, subject to certain exceptions, the SSTL is subject to mandatory prepayment upon issuances of debt, certain casualty and condemnation events and sales of assets, as well as 50% of Consolidated Excess Cash Flow, as calculated in accordance with the provisions of the Amended Credit Agreement.
Altisource may incur incremental indebtedness under the Amended Credit Agreement from one or more incremental lenders, which may include existing lenders, in an aggregate incremental principal amount not to exceed $50 million, subject to certain conditions set forth in the Amended Credit Agreement.
The lenders have no obligation to provide any incremental indebtedness.
−Removed: The Credit Agreement includes covenants that restrict or limit, among other things, our ability, subject to certain exceptions and baskets, to incur additional debt, pay dividends and repurchase shares of our common stock.
+Added: Through March 29, 2023, the SSTL’s interest rate was the Adjusted Eurodollar Rate plus 4.00%.
+Added: Beginning March 30, 2023, the SSTL bears interest at rates based upon, at our option, the Secured Overnight Financing Rate (“SOFR”) or the Base Rate, as defined in the Amended Credit Agreement.
+Added: If the Company selects SOFR, the term loans initially bear interest at a rate per annum equal to SOFR plus 5.00% payable in cash plus 5.00% payable in kind (“PIK”).
+Added: If the Company selects Base Rate, the loans initially bear interest at a rate per annum equal to the Base Rate plus 4.00% payable in cash plus 5.00% PIK.
+Added: Base Rate term loans bear interest at a rate per annum equal to the sum of (i) the greater of (x) the Base Rate and (y) 2.00% plus (ii) 4.00%.
+Added: 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.
+Added: The PIK component of the interest rate was 3.75% for the six months ended December 31, 2023 and
+Added: 4.50% for the three months ended June 30, 2023.
+Added: The interest rate as of December 31, 2023, including the PIK component, was 14.24%.
+Added: Aggregate Paydowns PIK Component of Interest Rate
+Added: Less than $20 million 5.00%
+Added: $20 million+ but less than below 4.50%
+Added: $30 million+ but less than below 3.75%
+Added: $40 million+ but less than below 3.50%
+Added: $45 million+ but less than below 3.00%
+Added: $50 million+ but less than below 2.50%
+Added: $55 million+ but less than below 2.00%
+Added: $60 million+ but less than below 1.00%
+Added: $65 million+ but less than below 0.50%
+Added: $70 million+ 0.00%
+Added: If, as of the end of any calendar quarter, (i) the amount of unencumbered cash and cash equivalents of Altisource S.à r.l.
+Added: and its direct and indirect subsidiaries on a consolidated basis plus (ii) the undrawn commitment amount under the Revolver 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 the Company’s election.
+Added: The payment of all amounts owing by Altisource under the Amended Credit Agreement is guaranteed by the Guarantors and is secured by a pledge of all equity interests of certain subsidiaries of Altisource, as well as a lien on substantially all of the assets of Altisource S.à r.l.
+Added: and the Guarantors, subject to certain exceptions.
+Added: The Amended Credit Agreement includes covenants that restrict or limit, among other things, our ability, subject to certain exceptions and baskets, to incur additional debt, pay dividends and repurchase shares of our common stock.
Under the Amended Credit Agreement, we are not permitted to repurchase shares except for limited circumstances.
−Removed: In the event we require additional liquidity, our ability to obtain it may be limited by the Credit Agreement.
+Added: In the event we require additional liquidity, our ability to obtain it may be limited by the Amended Credit Agreement.
+Added: As of December 31, 2023, the outstanding principal balance of the SSTL was $224 million.
On June 22, 2021 Altisource S.à r.l, a subsidiary of Altisource Portfolio Solutions S.A., entered into a revolving credit facility with a related party, STS Master Fund, Ltd.
1 unchanged sentence
STS is an investment fund managed by Deer Park.
−Removed: Deer Park owns approximately 24% of Altisource’s common stock as of December 31, 2022 and owns Altisource debt as a lender pursuant to our senior secured term loan agreement, as amended and restated with an effective date of February 14, 2023.
+Added: Deer Park owns approximately 16% of Altisource’s common stock as of December 31, 2023 and owns Altisource debt as a lender under the Amended Credit Agreement.
Deer Park’s Chief Investment Officer and managing partner was a member of Altisource’s Board of Directors until his resignation on March 1, 2022.
−Removed: The replacement director appointed by the Board of Directors is a current employee of Deer Park.
+Added: The replacement director appointed by the Board of Directors and subsequently elected by shareholders is a current employee of Deer Park.
The Revolver was amended effective February 14, 2023 (the “Amended Revolver”).
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Amounts that are repaid may be re-borrowed in accordance with the limitations set forth below.
−Removed: The maturity date of the Amended Revolver coincides with the maturity date of the Term B Loans under the Amended Credit Agreement, as it may be extended.
+Added: The maturity date of the Amended Revolver coincides with the maturity date of the SSTL under the Amended Credit Agreement, as it may be extended.
The outstanding balance on the Amended Revolver is due and payable on such maturity date.
1 unchanged sentence
In connection with the Amended Revolver, Altisource is required to pay a usage fee equal to $0.75 million at the initial extension of credit pursuant to the Amended Revolver.
−Removed: Altisource’s obligations under the Amended Revolver are secured by first-priority lien on substantially all of the assets of the Company, which lien will be pari passu with liens securing the Term B Loans under the Amended Credit Agreement.
+Added: Altisource’s obligations under the Amended Revolver are secured by a first-priority lien on substantially all of the assets of the Company, which lien will be pari passu with liens securing the SSTL under the Amended Credit Agreement.
The Amended Revolver contains additional representations, warranties, covenants, terms and conditions customary for transactions of this type, that restrict or limit, among other things, our ability to use the proceeds of credit only for general corporate purposes.
−Removed: As of December 31, 2022, there was no outstanding debt under the Revolver.
+Added: As of December 31, 2023, there was no outstanding debt under the Amended Revolver and since obtaining the Amended Revolver, the Company has not borrowed any amount under the Amended Revolver.
The following table presents our cash flows for the years ended December 31:
1 unchanged sentence
Net cash used in operating activities $ (21,833) (51) $ (44,888)
−Removed: Net Cash (used in) provided by investing activities (767) (101) 102,762
−Removed: Net Cash used in financing activities (2,221) 4 (2,304)
−Removed: Net (decrease) increase in cash, cash equivalents and restricted cash (47,876) (220) 40,053
+Added: Net cash used in investing activities — (100) (767)
+Added: Net cash provided by (used in) financing activities 2,976 234 (2,221)
+Added: Net decrease in cash, cash equivalents and restricted cash (18,857) (61) (47,876)
Cash, cash equivalents and restricted cash at the beginning of the period 54,273 (47) 102,149
1 unchanged sentence
Cash Flows from Operating Activities
−Removed: Cash flows from operating activities generally consist of the cash effects of transactions and events that enter into the determination of net (loss) income.
+Added: Cash flows from operating activities generally consist of the cash effects of transactions and events that enter into the determination of net loss.
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.
−Removed: During the year ended December 31, 2022, the increase in cash used in operating activities was driven by a $24.3 million decrease in net loss excluding the gain (loss) on sale of business partially offset by a $1.5 million decrease in non-cash depreciation, amortization of intangibles, stock based compensation expenses and deferred income tax expenses, and a $7.4 million increase in cash used for working capital.
−Removed: The decrease in net loss excluding the gain on sale of business was primarily due to higher gross profit during the year ended December 31, 2022 from revenue mix with higher revenue from the higher margin businesses in Servicer and Real Estate, our cash cost savings measures, the sale of Pointillist and lower SG&A expenses, partially offset by lower gross profit in the Origination business from lower revenue.
−Removed: The increase in cash used for changes in working capital was primarily driven by higher cash payments for annual incentive compensation bonuses in the first quarter of 2022 by $3.7
−Removed: million ($0 accrued as of December 31, 2022) and a fourth quarter of 2022 prepayment of insurance premiums of $2.4 million (prior year was paid in the first quarter of 2022).
+Added: During the year ended December 31, 2023, the decrease in cash used in operating activities was driven by a $17.9 million improvement in cash provided by (used for) working capital and a $11.5 million increase in non-cash interest expense (amortization of debt discount and amortization of debt issuance and amendment costs), partially offset by a $3.2 million increase in net loss and a $2.1 million decrease in non-cash depreciation and deferred income tax expenses.
+Added: The increase in net loss was primarily due to higher interest expense driven by higher interest rates on our Amended Credit Agreement and debt amendment costs, partially offset by lower corporate costs and higher operating income in the Servicer and Real Estate segment from our cash cost savings measures.
+Added: 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.
+Added: Non-cash interest expense increased as a result of the February 2023 Amended Credit Agreement.
Operating cash flows can be negatively impacted because of the nature of some of our services and the mix of services provided.
1 unchanged sentence
Furthermore, lower margin services generate lower income and cash flows from operations.
−Removed: Consequently, our cash flows from operations may be negatively impacted when comparing one period to another.
+Added: Consequently, our cash flows from operations may not be comparable from one period to another.
Cash Flows from Investing Activities
−Removed: Cash flows from investing activities generally include additions to premises and equipment, acquisitions and sales of businesses, and sales of equity securities.
−Removed: Net cash (used in) provided by investing activities was $(0.8) million and $102.8 million for the years ended December 31, 2022 and 2021, respectively.
−Removed: The change in cash provided by investing activities was primarily driven by $104.1 million in proceeds from the sale of businesses for the year ended December 31, 2021, including $101.1 million from the sale of equity in Pointillist and $3.0 million in connection with the second installment from the August 2018 sale of the rental property management business to RESI.
−Removed: In addition, we used $0.9 million for the year ended December 31, 2022 compared to $1.4 million in 2021, for additions to premises and equipment primarily related to investments in the development of certain software applications and facility improvements.
+Added: Cash flows from investing activities generally include additions to premises and equipment and proceeds from the sale of businesses.
+Added: 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).
+Added: 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.
Cash Flows from Financing Activities
−Removed: Cash flows from financing activities primarily included payments of tax withholdings on issuance of restricted share units and restricted shares, distributions to non-controlling interests, debt repayments and, for the year ended December 31, 2021, included proceeds from issuance of debt and debt issuance costs and the repayment of debt.
−Removed: Net cash used in financing activities were $(2.2) million and $(2.3) million for the years ended December 31, 2022 and 2021, respectively.
+Added: Cash flows from financing activities primarily included payments of tax withholding on issuance of restricted share units and restricted shares, distributions to non-controlling interests, proceeds from the sale of equity securities, debt repayments and debt amendment costs.
+Added: 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.
+Added: 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.
+Added: Also during the year ended December 31, 2023, we paid $4.9 million to lenders or others on behalf of the lenders related to the debt amendment.
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.
1 unchanged sentence
In addition, during the years ended December 31, 2023 and 2022, we distributed $0.4 million and $1.1 million, respectively, to non-controlling interests.
−Removed: During the year ended December 31, 2021, we used $(20.0) million for repayments of debt from proceeds from the sale of equity in Pointillist and from proceeds from the sale of RESI common shares as discussed in the cash flows from investing activities section above.
−Removed: During the year ended December 31, 2021, we received proceeds from the issuance of long-term debt of $20.0 million and paid $0.5 million in debt issuance costs in connection with borrowings under the Credit Facility (no comparable amount for the year ended December 31, 2022).
−Removed: During the year ended December 31, 2021, we also received proceeds from the Pointillist convertible notes payable to related parties of $1.2 million (no comparable amount for the year ended December 31, 2022).
Future Uses of Cash
−Removed: Our significant future liquidity obligations primarily pertain to the maturity of the Amended Credit Agreement, interest expense under the Amended Credit Agreement (see Liquidity section above), distributions to Lenders One members and operating lease payments on certain of our premises and equipment.
+Added: Our significant future liquidity obligations primarily pertain to the maturity of the SSTL under the Amended Credit Agreement, interest expense under the Amended Credit Agreement (see Liquidity section above), and operating lease payments on certain of our premises and equipment.
Significant future uses of cash include the following:
1 unchanged sentence
(in thousands) Total 2024 2025-2026 2027-2028
−Removed: Credit Agreement outstanding balance (1) (2)
+Added: Senior secured term loans (1)
$ 235,741 $ — $ 235,741 $ —
4 unchanged sentences
______________________________________
−Removed: (1) The outstanding balance of our Amended Credit Agreement of $247.2 million is due on April 30, 2025 and can be extended to April 30, 2026 if Aggregate Paydowns made prior to February 14, 2024 total $30 million or more.
−Removed: The table herein reflects a maturity of April 2025 as the Company has not made Aggregate Paydowns of $30 million or more at the time of this filing.
−Removed: The increase in outstanding balance is from the PIK component of our interest expense and is assumed to be paid in kind.
−Removed: (2) In the first quarter of 2023, the Company made $20 million of payments toward the determination of Aggregate Paydowns.
−Removed: Such amount is reflected in the 2023 column herein.
−Removed: (3) Estimated future interest payments based on the SOFR interest rate as of February 14, 2023, the effective date of the Amended Credit Agreement, and the April 30, 2025 maturity date.
+Added: (1) The outstanding balance of our SSTL as of December 31, 2023 is $224 million and is due on April 30, 2025.
+Added: If Aggregate Paydowns are equal to or greater than $30 million, then (subject to a payment of a 2% payment-in-kind extension fee on or before April 30, 2025 and 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 SSTL may be extended at the Company’s option to April 30, 2026.
+Added: During the year ended December 31, 2023, Company made $30 million of Aggregate Paydowns.
+Added: The table herein reflects a maturity of April 2025.
+Added: The increase in outstanding balance is from the PIK component of our interest expense and is assumed to be paid in kind through the April 2025 maturity date.
+Added: (2) Estimated future interest payments based on the SOFR interest rate as of December 31, 2023 and the April 30, 2025 maturity date.
Based on the April 30, 2025 maturity date, no interest expense has been included beyond April 30, 2025.
−Removed: We anticipate to fund future liquidity requirements with a combination of existing cash balances, cash anticipated to be generated by operating activities and, if needed, proceeds from the Amended Revolver.
−Removed: For further information, see Note 12, Note 22 and Note 24 to the consolidated financial statements.
+Added: We anticipate funding future liquidity requirements with a combination of existing cash balances, cash anticipated to be generated by operating activities and, as needed, proceeds from the Amended Revolver.
+Added: For further information, see Note 11 and Note 22 to the consolidated financial statements.
Off-Balance Sheet Arrangements
1 unchanged sentence
We hold customers’ assets in escrow accounts at various financial institutions pending completion of certain real estate activities.
−Removed: These amounts are held in escrow accounts for limited periods of time and are not included in the consolidated balance sheets.
+Added: These amounts are held in escrow accounts for limited periods of time and are not included in the accompanying consolidated balance sheets.
Amounts held in escrow accounts were $21.6 million and $13.2 million as of December 31, 2023 and 2022, respectively.
20 unchanged sentences
• For vendor management transactions, we recognize revenue over the period during which we perform the services.
+Added: We use judgment to determine the period over which we recognize revenue for certain of these services
• For loan disbursement review services, we recognize revenue over the period during which we perform the processing services with full recognition upon completion of the disbursements
1 unchanged sentence
We use judgment to determine the period over which we recognize revenue for certain of these services
−Removed: • For the real estate auction platform, real estate auction and real estate brokerage services, we recognize revenue on a net basis (i.e., the commission on the sale) as we perform services as an agent without assuming the risks and rewards of ownership of the asset and the commission earned on the sale is a fixed percentage or amount.
+Added: • For the real estate auction platform, real estate auction and real estate brokerage services, we recognize revenue on a net basis (i.e., commission and/or auction fee, as applicable, on the sale) at the closing of the sale of the REO as we perform services as an agent without assuming the risks and rewards of ownership of the asset and the commission earned on the sale is a fixed percentage or amount
• For SaaS based technology to manage REO, we recognize revenue over the estimated average number of months the REO are on the platform or ratably over the contract period.
We generally recognize revenue for professional services as services are provided.
−Removed: • For loan servicing technologies, we recognize revenue based on the number of loans on the system.
−Removed: We generally recognized revenue from professional services over the contract period.
+Added: We use judgment to determine the period over which we recognize revenue for certain of these services
+Added: • For loan servicing technologies, we generally recognize revenue based on the number of loans on the system.
+Added: We generally recognized revenue from professional services as services are provided.
+Added: We use judgment to determine the period over which we recognize revenue for certain of these services
• Reimbursable expenses revenue related to property preservation and inspection services, real estate sales, title services and foreclosure trustee services is included in revenue with an equal amount recognized in cost of revenue.
3 unchanged sentences
• For vendor management oversight SaaS, we recognize revenue over the period during which we perform the services.
−Removed: Corporate and Others
−Removed: • For our customer journey analytics platform (sold on December 1, 2021), we recognized revenue primarily based on subscription fees.
−Removed: We recognized revenue associated with implementation services and maintenance services ratably over the contract term.
+Added: We use judgment to determine the period over which we recognize revenue for certain of these services.
Goodwill and Identifiable Intangible Assets
5 unchanged sentences
Forecasts of future cash flows are based on our estimate of future sales and operating expenses, based primarily on estimated pricing, sales volumes, market segment share, cost trends and general economic conditions.
−Removed: The estimated cash flows are discounted using a rate that represents our estimated weighted average cost of capital.
+Added: The estimated cash flows are discounted using a rate that
+Added: represents our estimated weighted average cost of capital.
The market comparisons include an analysis of revenue and earnings multiples of guideline public companies compared to the Company.
10 unchanged sentences
We recognize deferred income tax assets and liabilities for these differences between the financial reporting basis and the tax basis of our assets and liabilities as well as expected benefits of utilizing net operating loss and credit carryforwards.
−Removed: The most significant temporary differences relate to accrued compensation, amortization, loss
−Removed: carryforwards and valuation allowances.
+Added: The most significant temporary differences relate to accrued compensation, amortization, loss carryforwards and valuation allowances.
We measure deferred income tax assets and liabilities using enacted tax rates expected to apply to taxable income in the years in which we anticipate recovery or settlement of those temporary differences.
18 unchanged sentences
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.
−Removed: For both the years ended December 31, 2022 and 2021, we recognized $9.5 million, of such revenue.
+Added: 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.
1 unchanged sentence
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.
−Removed: Ocwen has disclosed that Rithm is its largest client.
−Removed: As of December 31, 2022, approximately 17% of loans serviced and subserviced by Ocwen (measured in UPB) were related to Rithm MSRs or rights to MSRs.
+Added: Ocwen has disclosed that Rithm is a significant client of Ocwen’s.
+Added: 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 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.
2 unchanged sentences
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.