What changed in this filing

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Item 7. Management’s Discussion and Analysis

2025-03-31 compared with 2024-03-07 · 179 added, 260 removed, 347 unchanged (56% of the section changed)

23 unchanged sentences

Within the Servicer and Real Estate segment we provide:

Our Solutions business includes property preservation and inspection services, title insurance (as an agent) and settlement services, real estate valuation services, foreclosure trustee services, and residential and commercial construction inspection and risk mitigation services.

Our Marketplace business includes the Hubzu online real estate auction platform and real estate auction, real estate brokerage and asset management services.

Our Solutions business includes property preservation and inspection services, title insurance (as an agent) and settlement services, real estate valuation services, foreclosure trustee services, residential and commercial construction inspection and risk mitigation services, and residential real estate renovation services.

Our Marketplace business includes the Hubzu online real estate auction platform, real estate brokerage and asset management services.

Technology and SaaS Products

Our Technology and SaaS Products business includes Equator (a SaaS-based technology to manage REO, short sales, foreclosure, bankruptcy and eviction processes), Vendorly Invoice (a vendor invoicing and payment system), RentRange (a single and multi-family rental data, analytics and rent-based valuation solution), REALSynergy (a commercial loan servicing platform), and NestRange (an automated valuation model and analytics solution).

Our Technology and SaaS Products business includes Equator (a SaaS-based technology to manage REO, short sales, foreclosure, bankruptcy and eviction processes), Vendorly Invoice (a vendor invoicing and payment system), RentRange (a single and multi-family rental data, analytics and rent-based valuation solution), REALSynergy (a commercial loan servicing platform), and NestRange (a single-family automated valuation model and analytics solution).

The Origination segment provides originators with solutions and technologies that span the mortgage origination lifecycle.

Within the Origination segment we provide:

Our Solutions business includes title insurance (as an agent) and settlement services, real estate valuation services, and loan fulfillment, certification and certification insurance services.

Our Solutions business includes title insurance (as an agent) and settlement services, real estate valuation services, loan fulfillment and insurance services.

Our Lenders One business includes management services provided to the Best Partners Mortgage Cooperative, Inc., doing business as Lenders One, and certain loan manufacturing and capital markets services provided to the members of the Lenders One cooperative.

Technology and SaaS Products

Our Technology and SaaS Products business includes Vendorly Monitor (a vendor management platform), LOLA (a marketplace to order services and a tool to automate components of the loan manufacturing process), TrelixAI (technology to manage the workflow and automate components of the loan fulfillment, pre and post-close quality control and service transfer processes), and ADMS (a document management and data analytics delivery platform).

Our Technology and SaaS Products business includes Vendorly Monitor (a vendor management platform), LOLA (a marketplace to order services and a tool to automate components of the loan manufacturing process), TrelixAI (technology to manage the workflow and automate components of the loan fulfillment and pre and post-close quality control), and ADMS (a document management and data analytics delivery platform).

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.

7 unchanged sentences

Lenders One is a mortgage cooperative managed, but not owned, by Altisource.

The Lenders One members’ earnings are included in revenue and reduced from net income to arrive at net income attributable to Altisource.

The Lenders One members’ earnings are included in revenue and reduced from net loss to arrive at net loss attributable to Altisource.

Strategy and Core Businesses

1 unchanged sentence

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.

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.

As we navigate the current state of the economy, interest rate environment, housing supply, 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.

4 unchanged sentences

We are focused on growing referrals from our existing customer base and attracting new customers to our offerings.

We have a customer base that includes GSEs, asset managers, and several large bank and non-bank servicers including Ocwen and Rithm.

We have a customer base that includes GSEs, asset managers, and several large bank and non-bank servicers including Onity and Rithm.

We believe we are one of only a few providers with a broad suite of solutions, nationwide coverage and scalability.

1 unchanged sentence

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.

We are focused on growing business from our existing customer base, attracting new customers to our offerings and developing new

We are focused on growing business from our existing customer base, attracting new customers to our offerings and developing new offerings.

We have a customer base that includes the Lenders One cooperative members, which includes independent mortgage bankers, credit unions, and banks, as well as bank and non-bank loan originators.

2 unchanged sentences

COVID-19 Pandemic Impacts

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.

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.

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.

Default Related Mortgage Market

Serious delinquency rates, foreclosure initiations and foreclosure sales are very low relative to historical levels.

Additionally, foreclosure initiations and sales as a percentage of seriously delinquent loans for 2020 through 2024 are significantly lower than prior years.

During 2020 and 2021, these percentages were significantly impacted by COVID-19 borrower relief measures, including foreclosure moratoriums and forbearance programs.

These measures largely expired at the end of 2021.

Beginning in 2022, these percentages were impacted by servicer practices, home price appreciation, the general state of the economy, the interest rate environment, housing supply, and other factors.

In 2021 and 2022, a very low interest environment drove a high volume of refinance transactions and home prices appreciated significantly.

Although interest rates began to increase in 2022, home prices remained high.

With greater home equity from home price appreciation, troubled borrowers have more options to avoid foreclosure.

While we cannot predict whether the default market will return to a pre-pandemic operating environment, we believe the demand for our Default business is likely to 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.

The foreclosure timelines could vary significantly based upon, for example, upon the state where the property is located and whether the foreclosure is contested.

The REO sale timelines could also vary significantly based upon, for example, the local real estate market, whether the home is located in a redemption state and whether the home is occupied post foreclosure.

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.

The foreclosure timelines could vary significantly based upon, for example, the state where the property is located, whether the foreclosure is contested, amount of borrower equity in the home and available borrower relief programs.

The REO sale timelines could also vary significantly based upon, for example, mortgage interest rates, the local real estate market, whether the home is located in a redemption state and whether the home is occupied post foreclosure.

During 2023 and 2024, to address the close to historically low delinquency rates, 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 should delinquency rates rise, (3) launch a residential renovation business to renovate single family homes, and (4) in Lenders One members, launch new solutions and increase customer adoption of our solutions to accelerate the growth of our origination business.

Share Repurchase Program

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There were no purchases of shares of common stock during the years ended December 31, 2024 and 2023.

Luxembourg law limits share repurchases to the balance of Altisource Portfolio Solutions S.A.

(unconsolidated parent company) retained earnings, less the value of shares repurchased.

As of December 31, 2023, we can repurchase up to approximately $116 million of our common stock under Luxembourg law.

Under the Amended Credit Agreement, we are not permitted to repurchase shares except for limited circumstances.

Ocwen Related Matters

During the year ended December 31, 2023, Ocwen was our largest customer, accounting for 44% of our total revenue.

Additionally, 6% of our revenue for the year ended December 31, 2023 was earned on the loan portfolios serviced by Ocwen, when a party other than Ocwen or the MSR owner selected Altisource as the service provider.

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.

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.

Ocwen has disclosed that Rithm is a significant client of Ocwen’s.

As of December 31, 2023, Ocwen reported that approximately 16% of loans serviced and subserviced by Ocwen (measured in UPB) and approximately 67% of all delinquent loans that Ocwen services were related to Rithm MSRs or rights to MSRs.

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.

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.

Under the New Facility and the Super Senior Facility, we are not permitted to repurchase shares except for limited circumstances.

Onity Related Matters

During the year ended December 31, 2024, Onity was our largest customer, accounting for 44% of our total revenue.

Additionally, 6% of our revenue for the year ended December 31, 2024 was earned on the loan portfolios serviced by Onity, when a party other than Onity or the MSR owner selected Altisource as the service provider.

Onity has disclosed that it is subject to a number of ongoing regulatory examinations, consent orders, inquiries, subpoenas, civil investigative demands, requests for information and other actions and is subject to pending and threatened legal proceedings, some of which include claims against Onity for substantial monetary damages.

Previous regulatory actions against Onity have

subjected Onity to independent oversight of its operations and placed certain restrictions on its ability to acquire servicing rights or proceed with default-related actions on the loans it services.

Existing or future similar matters could result in adverse regulatory or other actions against Onity.

In addition to the above, Onity may become subject to future adverse regulatory or other actions.

Onity has disclosed that Rithm is one of its largest servicing clients.

As of December 31, 2024, Onity reported that approximately 14% of loans serviced and subserviced by Onity (measured in UPB) and approximately 63% of all delinquent loans that Onity services were related to Rithm MSRs or rights to MSRs.

The existence or outcome of Onity regulatory matters or the termination of Onity’s sub-servicing agreements with Rithm or other significant Onity clients may have significant adverse effects on Onity’s business.

For example, Onity may be required to alter the way it conducts business, including the parties it contracts with for services, it may be required to seek changes to its existing pricing structure with us, it may lose its non-GSE servicing rights or subservicing arrangements or may lose one or more of its state servicing or origination licenses.

Additional regulatory actions or adverse financial developments may impose additional restrictions on or require changes in Onity’s business that could require it to sell assets or change its business operations.

Any or all of these effects and others could result in our eventual loss of Onity as a customer or a reduction in the number and/or volume of services it purchases from us or the loss of other customers.

If any of the following events occurred, Altisource’s revenue could be significantly reduced and our results of operations could be materially adversely affected, including from the possible impairment or write-off of goodwill, intangible assets, property and equipment, other assets and accounts receivable:

• Altisource loses Ocwen as a customer or there is a significant reduction in the volume of services it purchases from us

• Ocwen loses, sells or transfers a significant portion of its GSE or Federal Housing Administration servicing rights or subservicing arrangements or remaining other servicing rights or subservicing arrangements and Altisource fails to be retained as a service provider

• The contractual relationship between Ocwen and Rithm changes significantly, including Ocwen’s sub-servicing arrangement with Rithm expiring without renewal, and this change results in a change in our status as a provider of services related to the Subject MSRs

• Ocwen loses state servicing licenses in states with a significant number of loans in Ocwen’s servicing portfolio

• Ocwen is subject to stays, moratoriums, suspensions or other restrictions that limit or delay default-related actions on the loans it services

• The contractual relationship between Ocwen and Altisource changes significantly or there are significant changes to our pricing to Ocwen for services from which we generate material revenue

• Altisource loses Onity as a customer or there is a significant reduction in the volume of services it purchases from us

• Onity loses, sells or transfers a significant portion of its GSE or Federal Housing Administration servicing rights or subservicing arrangements or remaining other servicing rights or subservicing arrangements and Altisource fails to be retained as a service provider

• The contractual relationship between Onity and Rithm changes significantly, including Onity’s sub-servicing arrangement with Rithm expiring without renewal, and this change results in a change in our status as a provider of services related to the Subject MSRs

• Onity loses state servicing licenses in states with a significant number of loans in Onity’s servicing portfolio

• Onity is subject to stays, moratoriums, suspensions or other restrictions that limit or delay default-related actions on the loans it services

• The contractual relationship between Onity and Altisource changes significantly or there are significant changes to our pricing to Onity for services from which we generate material revenue

• Altisource otherwise fails to be retained as a service provider and/or there is a reduction in referral volumes

1 unchanged sentence

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.

Moreover, in the event one or more of these events materially negatively impact Altisource, we believe the variable nature of our cost structure would allow us to realign our cost structure to address some of the impact to revenue and that current liquidity would be sufficient to meet our working capital, capital expenditures, debt service and other cash needs.

There can be no assurance that our plans will be successful or our operations will be profitable.

Factors Affecting Comparability

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• Industrywide foreclosure initiations were 6% lower in 2024 compared to 2023 (and 35% lower than the same pre-COVID-19 period in 2019)

• Industrywide foreclosure sales were 8% higher in 2023, compared to 2022, and 46% lower than the same pre-COVID-19 period in 2019

• 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

• Industrywide foreclosure sales were 14% lower in 2024 compared to 2023 (and 53% lower than the same pre-COVID-19 period in 2019)

• Industrywide mortgage origination volume increased by 20% in 2024 compared to 2023, comprised of a 2% decline in purchase origination and a 112% increase in refinancing origination

• Temporary delay in certain California foreclosures during the three months ended June 30, 2023 negatively impacted revenue in the Servicer and Real Estate segment in 2023

• The average interest rate on the Company’s SSTL was 14.00% for the year ended December 31, 2024, compared to 12.89% for the same period in 2023

• On February 14, 2023, Altisource Portfolio Solutions S.A.

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In connection with Amendment No.

2, the Company paid $3.4 million to advisors and recorded these payments as other expense in the consolidated statements of operations and comprehensive loss

2, the Company paid $3.4 million to advisors and recorded these payments as other expense in the consolidated statements of operations and comprehensive loss (no comparative amount for the year ended December 31, 2024)

• The Company recognized an income tax provision of $2.6 million for the year ended December 31, 2024.

The income tax provision for the year ended December 31, 2023 was driven primarily by income tax expense on transfer pricing income from India and the United States, reduction in deferred tax assets related to intangible assets, no tax benefit on the pretax loss from our Luxembourg operating company and uncertain tax positions

The income tax provision for the year ended December 31, 2024 was driven primarily by income tax expense on transfer pricing income from India and the United States, no tax benefit on the pretax loss from our Luxembourg operating company and uncertain tax positions

• The Company recognized an income tax provision of $3.7 million for the year ended December 31, 2023.

The income tax provision for the year ended December 31, 2022 was driven by income tax expense on transfer pricing income from India, no tax benefit on the pretax loss from our Luxembourg operating company, uncertain tax positions and anticipated withholding tax on current year earnings in India

CONSOLIDATED RESULTS OF OPERATIONS

12 unchanged sentences

Gross profit 49,529 29,652 67

Operating expense (income):

Operating expense:

Selling, general and administrative expenses 45,620 46,420 (2)

Loss on sale of business — (100) 242

Loss from operations (16,768) 49 (33,182)

Loss on sale of business 685 — N/M

Income (loss) from operations 3,224 (16,768) 119

Other income (expense), net:

1 unchanged sentence

Change in fair value of warrant liability

— 1,145 (100)

Debt amendment costs

(3,410) N/M —

— (3,410) 100

Other income (expense), net 2,786 2,788 —

7 unchanged sentences

Gross profit / service revenue 33 % 22 %

Loss from operations / service revenue (12) % (23) %

Income (loss) from operations / service revenue 2 % (12) %

Loss per share:

6 unchanged sentences

N/M — not meaningful.

We recognized service revenue of $136.6 million for the year ended December 31, 2023, a 5% decrease compared to the year ended December 31, 2022.

The decrease in service revenue for the year ended December 31, 2023 is driven by lower revenue in both segments.

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.

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 service revenue of $150.4 million for the year ended December 31, 2024, a 10% increase compared to the year ended December 31, 2023.

The increase in service revenue for the year ended December 31, 2024 was driven by higher revenue in both segments.

Revenue was higher in the Servicer and Real Estate segment from growth in our Field Services, Foreclosure Trustee and Property Renovation Services businesses in the Solutions business, partially offset by $0.8 million of first quarter 2023 non-recurring professional services revenue in the Equator business within the Technology and SaaS Products business and fewer home sales in the Marketplace business.

Revenue was higher in the Origination segment from growth of reseller products in the Lenders One business.

We recognized reimbursable expense revenue of $9.6 million for the year ended December 31, 2024, a 16% increase compared to the year ended December 31, 2023.

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.

The increase in reimbursable expenses for the year ended December 31, 2024 was primarily driven by higher asset resolution and asset management activities in the Marketplace business, higher-value REO title related expenses and growth in the foreclosure trustee business in the Solutions 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.

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.

However, as a result of the current default market, home price appreciation and higher mortgage interest rates, the seasonal impact to revenue may not follow historical patterns.

Cost of Revenue and Gross Profit

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We recognized cost of revenue of $110.6 million for the year ended December 31, 2024, a 4% decrease compared to the year ended December 31, 2023.

Compensation and benefits for the year ended December 31, 2023 decreased primarily due to efficiency initiatives and cost savings measures taken in 2022 and 2023.

Technology and telecommunications for the year ended December 31, 2023 decreased primarily due to the renegotiation of certain contracts and lower overall headcount.

Depreciation and amortization was lower from the completion of the depreciation periods of certain premises and equipment and the reduction in capital expenditures.

Compensation and benefits for the year ended December 31, 2024 decreased primarily due to efficiency initiatives and cost savings measures taken in 2023.

Technology and telecommunications costs for the year ended December 31, 2024 decreased primarily due to lower overall headcount.

Depreciation and amortization was lower from the completion of the depreciation periods of certain premises and equipment with only modest additions.

Outside fees and services increased primarily from higher revenue in the Solutions business within the Servicer and Real Estate segment partially offset by lower outside fees and services in the Origination segment from a change in revenue mix.

In addition, changes in reimbursable expenses for the year ended December 31, 2024 are consistent with the changes in reimbursable expenses revenue discussed in the revenue section above.

Gross profit increased to $49.5 million, representing 33% of service revenue, for the year ended December 31, 2024 compared to $29.7 million, representing 22% of service revenue, for the year ended December 31, 2023.

Gross profit as a percentage of service revenue for the year ended December 31, 2023 increased compared to the year ended December 31, 2022 primarily due to margin expansion in both the Servicer and Real Estate segment and the Origination segment from efficiency initiatives and cost savings measures and lower corporate costs as a percentage of revenue.

Gross profit as a percentage of service revenue for the year ended December 31, 2024 increased compared to the year ended December 31, 2023 primarily due to margin expansion in both the Servicer and Real Estate segment and the Origination segment from efficiency initiatives and lower corporate costs as a percentage of service revenue growth, and service revenue growth.

Selling, General and Administrative Expenses

Selling, general and administrative (“SG&A”) expenses includes payroll for personnel employed in executive, sales and marketing, finance, technology, law, compliance, audit, human resources, vendor management, facilities and risk management roles.

This category also includes professional services fees, occupancy costs, marketing costs, depreciation and amortization of non-operating assets and other expenses.

10 unchanged sentences

SG&A expenses for the year ended December 31, 2024 of $45.6 million decreased by 2% compared to the year ended December 31, 2023.

The decrease for the year ended December 31, 2023 was primarily driven by lower compensation and benefits, professional services and marketing costs.

Compensation and benefits and marketing costs for the year ended December 31, 2023 decreased from efficiency initiatives and cost savings measures.

Professional services for the year ended December 31, 2023 decreased primarily due to lower legal and litigation fees.

Loss from Operations

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.

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.

The decrease for the year ended December 31, 2024 was primarily driven by lower compensation and benefits and occupancy related costs, partially offset by higher professional services.

Compensation and benefits and occupancy related costs for the year ended December 31, 2024 decreased from efficiency and cost reductions measures.

Professional services for the year ended December 31, 2024 increased primarily due to accruals for potential settlements of certain legacy indemnity claims, estimated legal matters and costs associated with the Transactions.

Income (loss) from Operations

Income from operations was $3.2 million, representing 2% of service revenue, for the year ended December 31, 2024 compared to loss from operations of $(16.8) million, representing (12)% of service revenue, for the year ended December 31, 2023.

Income (loss) from operations as a percentage of service revenue improved for the year ended December 31, 2024 compared to the year ended December 31, 2023, primarily as a result of higher gross profit margins and lower SG&A expenses as a percentage of service revenue.

Other income (expense), net

1 unchanged sentence

Other income (expense), net was $(36.1) million for the year ended December 31, 2024 compared to $(35.6) million for the year ended December 31, 2023.

The change for the year ended December 31, 2023 was primarily driven by higher interest expense and debt amendment costs, partially offset by a gain on the change in fair value of the warrant liability and higher interest and other income.

The 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.

The change for the year ended December 31, 2024 was primarily driven by higher interest expense and a gain on the change in fair value of the warrant liability for the year ended December 31, 2023 (no comparable amount for the year ended December 31, 2024), partially offset by lower debt amendment costs.

The higher interest expense was driven by higher interest rates on the SSTL.

Income Tax Provision

We recognized an income tax provision of $2.6 million and $3.7 million for the years ended December 31, 2024 and 2023, respectively.

SEGMENT RESULTS OF OPERATIONS

11 unchanged sentences

Selling, general and administrative expenses 11,421 6,584 27,615 45,620

Loss on sale of business

Income (loss) from operations 37,898 127 (34,801) 3,224

14 unchanged sentences

Selling, general and administrative expenses 9,622 7,693 29,105 46,420

Gain on sale of business

Income (loss) from operations 32,099 (6,040) (42,827) (16,768)

18 unchanged sentences

Total revenue $ 128,950 $ 115,467 12

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 recognized service revenue of $119.9 million for the year ended December 31, 2024, an 11% increase compared to the year ended December 31, 2023.

We also recognized reimbursable expense revenue of $9.0 million for the year ended December 31, 2024, a 17% increase compared to the year ended December 31, 2023.

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.

The increase in service revenue for the year ended December 31, 2024 was driven by growth in our Field Services, Foreclosure Trustee and Property Renovation Services businesses in the Solutions business, partially offset by $0.8 million of first quarter 2023 non-recurring professional services revenue in the Equator business within the Technology and SaaS Products business and fewer home sales in the Marketplace 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.

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.

However, as a result of the current default market, home price appreciation and higher mortgage interest rates, the seasonal impact to revenue may not follow historical patterns.

Cost of Revenue and Gross Profit

7 unchanged sentences

Cost of revenue $ 79,631 $ 73,746 8

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.

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.

Cost of revenue for the year ended December 31, 2024 of $79.6 million increased by 8% compared to the year ended December 31, 2023.

The increase in cost of revenue for the year ended December 31, 2024 is primarily driven by higher outside fees and services from higher revenue in the Field Services, Property Renovation Services and Foreclosure Trustee businesses in the Solutions business and higher reimbursable expenses, partially offset by lower depreciation and amortization from the completion of the depreciation periods of certain premises and equipment.

Gross profit increased to $49.3 million, representing 41% of service revenue, for the year ended December 31, 2024 compared to $41.7 million, representing 39% of service revenue, for the year ended December 31, 2023.

Gross profit as a percentage of

service revenue for the year ended December 31, 2023 increased primarily due to efficiency initiatives and cost savings measures.

Gross profit as a percentage of service revenue for the year ended December 31, 2024 increased primarily due to price increases for certain services and

efficiency initiatives and cost savings measures partially offset by a change in revenue mix from fewer homes sold in our higher margin Hubzu business and growth in the lower margin Field Services and recently launched Property Renovation Services businesses.

Our margins can vary substantially depending upon the service revenue mix.

10 unchanged sentences

Selling, general and administrative expenses $ 11,421 $ 9,622 19

SG&A for the year ended December 31, 2023 of $9.6 million decreased by 20% compared to the year ended December 31, 2022.

The decrease in SG&A for the year ended December 31, 2023 is primarily due to lower professional services, marketing costs, compensation and benefits, occupancy related costs and other expenses.

Professional services for the year ended December 31, 2023 decreased primarily due to lower legal fees.

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.

SG&A for the year ended December 31, 2024 of $11.4 million increased by 19% compared to the year ended December 31, 2023.

The increase in SG&A for the year ended December 31, 2024 is primarily due to higher professional services and other expenses, partially offset by lower compensation and benefits.

Professional services for the year ended December 31, 2024 increased primarily due to accruals for potential settlements of certain legacy indemnity claims.

Other expenses for the year ended December 31, 2024 increased from higher bad debt expense.

Compensation and benefits for the year ended December 31, 2024 decreased from efficiency and cost reduction measures.

Income from operations

Income from operations increased to $37.9 million, representing 32% of service revenue, for the year ended December 31, 2024 compared to $32.1 million, representing 30% of service revenue, for the year ended December 31, 2023.

The increase in operating income as a percentage of service revenue for the year ended December 31, 2023 is primarily the result of higher gross profit margins and a percentage reduction in SG&A in excess of the percentage reduction in revenue.

The increase in operating income as a percentage of service revenue for the year ended December 31, 2024 is primarily the result of higher gross profit margins.

Revenue by business unit was as follows for the years ended December 31:

10 unchanged sentences

Total revenue $ 31,184 $ 29,599 5

We recognized service revenue of $28.8 million for the year ended December 31, 2023, an 11% decrease compared to the year

We recognized service revenue of $30.4 million for the year ended December 31, 2024, a 6% increase compared to the year

ended December 31, 2023.

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.

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.

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.

We also recognized reimbursable expense revenue of $0.6 million for the year ended December 31, 2024, a 1% decrease compared to the year ended December 31, 2023.

The increase in service revenue in the Origination segment for the year ended December 31, 2024 was primarily driven by an increase in product adoption in the Lenders One business.

Cost of Revenue and Gross Profit

8 unchanged sentences

Cost of revenue for the year ended December 31, 2024 of $24.5 million decreased by 12% compared to the year ended December 31, 2023.

The decrease in 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.

The decrease in cost of revenue for the year ended December 31, 2024 was primarily driven by the prior year alignment of compensation and benefits with lower origination volume and lower outside fees and services from a change in revenue mix.

Gross profit increased to $6.7 million, representing 22% of service revenue, for the year ended December 31, 2024 compared to $1.7 million, representing 6% of service revenue, for the year ended December 31, 2023.

Gross profit as a percentage of service revenue increased from margin expansion from efficiency initiatives and cost savings measures.

Gross profit as a percentage of service revenue increased from efficiency initiatives, cost savings measures and price increase for certain services.

Selling, General and Administrative Expenses

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Occupancy related costs 325 302 8

Depreciation and amortization 1 — N/M

Depreciation and amortization 1 1 —

Other 966 1,352 (29)

Selling, general and administrative expenses $ 6,584 $ 7,693 (14)

_____________________________________

N/M — not meaningful.

SG&A for the year ended December 31, 2024 of $6.6 million decreased by 14% compared to the year ended December 31, 2023.

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.

Income from Operations

Loss from operations was $(6.0) million, representing (21)% of service revenue, for the year ended December 31, 2023 compared to loss from operations of $(7.4) million, representing (23)% of service revenue, for the year ended December 31, 2022.

The improvement in operating loss as a percentage of service revenue for the year ended December 31, 2023 is primarily

from higher gross profit margins and from a greater percentage reduction in SG&A expenses than the percentage change in revenue.

The decrease in SG&A for the year ended December 31, 2024 was primarily due to lower professional services from lower legal-related costs, lower compensation and benefits from efficiency and cost reduction measures and lower other expenses from lower bad debt expense.

Income (loss) from Operations

Income (loss) from operations was $0.1 million, representing less than 1% of service revenue, for the year ended December 31, 2024 compared to income (loss) from operations of $(6.0) million, representing (21)% of service revenue, for the year ended December 31, 2023.

The improvement in operating income as a percentage of service revenue for the year ended December 31, 2024 is primarily from higher gross profit margins and lower SG&A expenses and to a lesser degree, service revenue growth.

Corporate and Others

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Compensation and benefits $ 2,804 $ 6,862 (59)

Outside fees and services (3) — N/M

Technology and telecommunications 3,441 5,950 (42)

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Cost of revenue $ 6,501 $ 13,722 (53)

_____________________________________

N/M — not meaningful.

Cost of revenue for the year ended December 31, 2024 of $6.5 million decreased by 53% compared to the year ended December 31, 2023.

The decrease in cost of revenue for the year ended December 31, 2023 is primarily driven by lower technology and telecommunications and compensation and benefits due to efficiency initiatives and cost savings initiatives.

The decrease in cost of revenue for the year ended December 31, 2024 is primarily driven by lower compensation and benefits and technology and telecommunications costs due to efficiency initiatives and cost savings initiatives.

Selling, General and Administrative Expenses

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SG&A for the year ended December 31, 2024 of $27.6 million decreased by 5% compared to the year ended December 31, 2023.

The decrease for the year ended December 31, 2023 is primarily driven by lower professional services, compensation and benefits and other expenses.

Professional services for the year ended December 31, 2023 decreased due to lower insurance, legal and audit related expenses.

The decrease in compensation and benefits was driven by efficiency initiatives and cost savings measures.

The decrease for the year ended December 31, 2024 is primarily driven by lower occupancy related costs and compensation and benefits driven by efficiency initiatives and cost savings measures partially offset by higher professional services expenses due to higher legal-related costs and costs associated with the Transactions.

Other Income (Expense), net

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Other income (expense), net was $(36.2) million for the year ended December 31, 2024 compared to $(35.6) million for the year ended December 31, 2023.

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.

The higher interest expense was driven by higher interest rates on the SSTL.

LIQUIDITY AND CAPITAL RESOURCES

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.

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.

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.

However, primarily due to governmental and market responses to the COVID-19 pandemic, lower delinquency rates, and higher home equity, revenue has declined significantly compared to pre pandemic levels.

The lower revenue, partially offset by efficiency initiatives and cost savings measures, has resulted in negative operating cash flow from operations.

We believe lower interest expense as a result of the February 2025 Transactions, our anticipated revenue growth from the renovation business launched in 2024, the anticipated improvement in the default market, on-boarding sales wins, and revenue mix together with our reduced cost structure, should help improve operating cash flow.

For a description of the Transactions undertaken in February 2025, see the disclosure under the heading, “Debt and Equity Transactions” in Item 1 (“Business”) of this Annual Report on Form 10-K, which disclosure is incorporated herein by reference.

We seek to deploy cash generated in a disciplined manner.

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We also use cash for repayments of our long-term debt and capital investments.

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.

Senior Secured Term Loans

In April 2018, Altisource Portfolio Solutions S.A.

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”).

Under the Credit Agreement, Altisource borrowed $412 million in the form of the SSTL.

Effective February 14, 2023, Altisource Portfolio Solutions S.A.

and Altisource S.à r.l.

entered into Amendment No.

2 to the Credit Agreement (as amended by Amendment No.

2, the “Amended Credit Agreement”).

Altisource Portfolio Solutions S.A.

and its subsidiaries, subject to the applicable exclusions in the Amended Credit Agreement, are guarantors on the SSTL (collectively, the “Guarantors”).

Effective June 1, 2023, the administrative agent and collateral agent of the Amended Credit Agreement changed to Wilmington Trust, N.A.

The maturity date of the Amended Credit Agreement is April 30, 2025.

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.

Such extension is conditioned upon the Company’s payment of a 2% payment-in-kind extension fee on or before April 30, 2025.

During the year ended December 31, 2023, Company made $30 million of Aggregate Paydowns.

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;

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.

There are no mandatory repayments of the SSTL, except as set forth herein, until the April 30, 2025 maturity when the balance is due.

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.

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.

Through March 29, 2023, the SSTL’s interest rate was the Adjusted Eurodollar Rate plus 4.00%.

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.

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”).

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.

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%.

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.

The PIK component of the interest rate was 3.75% for the six months ended December 31, 2023 and

4.50% for the three months ended June 30, 2023.

The interest rate as of December 31, 2023, including the PIK component, was 14.24%.

Aggregate Paydowns PIK Component of Interest Rate

Less than $20 million 5.00%

$20 million+ but less than below 4.50%

$30 million+ but less than below 3.75%

$40 million+ but less than below 3.50%

$45 million+ but less than below 3.00%

$50 million+ but less than below 2.50%

$55 million+ but less than below 2.00%

$60 million+ but less than below 1.00%

$65 million+ but less than below 0.50%

$70 million+ 0.00%

If, as of the end of any calendar quarter, (i) the amount of unencumbered cash and cash equivalents of Altisource S.à r.l.

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.

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.

and the Guarantors, subject to certain exceptions.

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.

In the event we require additional liquidity, our ability to obtain it may be limited by the Amended Credit Agreement.

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.

(“STS”) (the “Revolver”).

STS is an investment fund managed by Deer Park.

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.

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”).

Under the terms of the Amended Revolver, STS will make loans to Altisource from time to time, in amounts requested by Altisource and Altisource may voluntarily prepay all or any portion of the outstanding loans at any time.

The Amended Revolver provides Altisource the ability to borrow a maximum amount of $15.0 million.

In addition, from time to time we may consider and evaluate business acquisitions, dispositions, closures, sales of equity securities or other similar actions that are aligned with our strategy.

Revolving Loan Agreement

In connection with the Company’s residential real estate renovation services business, on June 3, 2024 Altisource Solutions, Inc., an indirect subsidiary of Altisource Portfolio Solutions S.A, entered into a revolving loan agreement with a related party, Altisource Asset Management Corporation (“AAMC”) (the “Revolving Loan Agreement”).

Under the terms of the Revolving Loan Agreement, AAMC will make loans to Altisource from time to time, as may be requested by Altisource.

The Revolving Loan Agreement provides Altisource the ability to borrow an initial aggregate amount of up to $1.0 million, with the potential for this to be increased up to $3.0 million at the option of AAMC.

Amounts that are repaid may be re-borrowed in accordance with the limitations set forth below.

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.

Borrowings under the Amended Revolver bear interest of 10.00% per annum in cash and 3.00% per annum PIK and are payable quarterly on the last business day of each March, June, September and December.

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.

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.

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 maturity date of the Revolving Loan Agreement is June 3, 2025 and may be automatically extended for one year on each anniversary of the maturity date.

During any extension period, AAMC may terminate the Revolving Loan Agreement upon 150 days prior written notice and the loan will mature upon such termination.

The outstanding balance on the Revolving Loan Agreement is due and payable on such maturity date.

Borrowings under the Revolving Loan Agreement bear interest of 12.00% per annum in cash and are payable monthly in arrears on the first business day of each calendar month.

Altisource will pay AAMC a monthly unused commitment fee in an amount equal to 0.25% per annum of the average amount of the unused available credit under the Revolving Loan Agreement.

Altisource’s obligation under the Revolving Loan Agreement is secured by certain receivables related to the Company’s residential real estate renovation services business.

As of December 31, 2024, there was $1.0 million outstanding debt under the Revolving Loan Agreement.

The following table presents our cash flows for the years ended December 31:

1 unchanged sentence

Net cash used in operating activities $ (5,025) $ (21,833) (77)

Net cash used in investing activities — (100) (767)

Net cash provided by (used in) financing activities 2,976 234 (2,221)

Net cash provided by investing activities 2,254 — N/M

Net cash provided by financing activities 55 2,976 (98)

Net decrease in cash, cash equivalents and restricted cash (2,716) (18,857) (86)

1 unchanged sentence

Cash, cash equivalents and restricted cash at the end of the period $ 32,700 $ 35,416 (8)

_____________________________________

N/M — not meaningful.

Cash Flows from Operating Activities

1 unchanged sentence

For the year ended December 31, 2024, net cash used in operating activities was $(5.0) million compared to net cash used in operating activities of $(21.8) million for the year ended December 31, 2023.

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.

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.

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.

Non-cash interest expense increased as a result of the February 2023 Amended Credit Agreement.

During the year ended December 31, 2024, the decrease in cash used in operating activities was driven by a $20.9 million improvement in net loss adjusted for non-cash items included in the determination of net loss (PIK interest, stock based compensation, change in the fair value of warrant liability, bad debt expense, depreciation and amortization, deferred income taxes, amortization of debt discount, amortization of debt issuance and amendment costs, loss on disposal of fixed assets and amortization of intangible assets).

This improvement was partially offset by a $4.7 million decrease in cash provided by working capital primarily from the $2.1 million net payment of taxes for the year ended December 31, 2024 compared to $3.8 million net collection of taxes receivable for the year ended December 31, 2023 and a $2.0 million return of surety bonds in the year ended December 31, 2023.

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.

Consequently, our cash flows from operations may not be comparable from one period to another.

Consequently, our cash flows from operations may be negatively impacted when comparing one period to another.

Cash Flows from Investing Activities

Cash flows from investing activities generally include additions to premises and equipment and proceeds from the sale of businesses.

Net cash used in investing activities was $(0.8) million for the year ended 2022 (no comparable amount for the year ended December 31, 2023).

We used $0.9 million for the year ended December 31, 2022 (no comparable amount for the year ended December 31, 2023), for additions to premises and equipment primarily related to the purchase of technology hardware.

Net cash provided by investing activities was $2.3 million for the year ended December 31, 2024 (no comparable amount for the year ended 2023).

The change in cash provided by investing activities was primarily driven by $2.3 million in proceeds received in the year ended December 31, 2024 in connection with the indemnity escrow from the Pointillist sale (no comparable amount for the year ended December 31, 2023).

In addition, we used less than $0.1 million for the year ended December 31, 2024 (no comparable amount for the year ended December 31, 2023), for additions to premises and equipment primarily related to the purchase of technology hardware.

Cash Flows from Financing Activities

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.

Net cash provided by (used in) financing activities were $3.0 million and $(2.2) million for the years ended December 31, 2023 and 2022, respectively.

During the year ended December 31, 2023, we received $38.8 million in proceeds from the issuance of common stock, net of issuance costs and used $30.0 million of the proceeds for repayment of debt.

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.

Net cash provided by financing activities was $0.1 million and $3.0 million for the years ended December 31, 2024 and 2023, respectively.

During the years ended December 31, 2024 and 2023, we made payments of $0.7 million and $0.5 million, respectively, to satisfy employee tax withholding obligations on the issuance of restricted share units and restricted shares.

1 unchanged sentence

In addition, during the years ended December 31, 2024 and 2023, we distributed $0.1 million and $0.4 million, respectively, to non-controlling interests.

During the year ended December 31, 2024, we received proceeds from the issuance of short-term debt of $1.0 million in connection with borrowings under the Revolving Loan Agreement.

During the year ended December 31, 2023, we received $20.5 million in proceeds from the issuance of common stock, net of issuance costs, received $18.3 million in proceeds from the sale of treasury stock, net of issuance costs and used $30.0 million of the proceeds for repayment of debt.

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.

Future Uses of Cash

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.

Our significant future liquidity obligations primarily pertain to amortization of the New Facility, amortization and maturity of the Super Senior Facility, interest expense under the New Facility and the Super Senior Facility (see Liquidity section above), and operating lease payments on certain of our premises and equipment.

Significant future uses of cash include the following:

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(in thousands) Total 2025 2026-2027 2028-2029

Senior secured term loans (1)

New Facility (1)

$ 6,568 $ 825 $ 2,200 $ 3,543

Super Senior Facility (2)

12,500 94 250 12,156

Revolving Loan Agreement (3)

1,000 1,000 — —

Interest expense payments (4)

3 unchanged sentences

______________________________________

(1) The outstanding balance of our SSTL as of December 31, 2023 is $224 million and is due on April 30, 2025.

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.

During the year ended December 31, 2023, Company made $30 million of Aggregate Paydowns.

The table herein reflects a maturity of April 2025.

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.

(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.

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.

For further information, see Note 11 and Note 22 to the consolidated financial statements.

(1) $158.6 million of the New Facility matures on April 30, 2030 and $1.4 million of the New Facility matures on January 15, 2029

(2) The Super Senior Facility matures on February 19, 2029

(3) The outstanding balance of our Revolving Loan Agreement as of December 31, 2024 is $1.0 million and is due on June 3, 2025, and may be automatically extended for one year on each anniversary of the maturity date.

The table herein reflects a maturity date of June 3, 2025.

(4) Estimated future interest payments based on the three-month SOFR interest rate as of March 25, 2025

We anticipate funding future liquidity requirements with a combination of existing cash balances and cash anticipated to be generated by operating activities.

For further information, see Note 11, Note 22, and Note 24 to the consolidated financial statements.

Off-Balance Sheet Arrangements

Our off-balance sheet arrangements consist of escrow arrangements.

We hold customers’ assets in escrow accounts at various financial institutions pending completion of certain real estate activities.

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.

Our off-balance sheet arrangements consist of escrow and certain other account arrangements.

We hold customers’ assets in escrow and other accounts at various financial institutions pending completion of certain real estate and construction review activities.

These amounts are held in escrow and other accounts for limited periods of time and are not included in the accompanying consolidated balance sheets.

Amounts held in escrow and other accounts were $20.4 million and $21.6 million as of December 31, 2024 and 2023, respectively.

CRITICAL ACCOUNTING POLICIES, ESTIMATES AND RECENT ACCOUNTING PRONOUNCEMENTS

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Actual results may differ significantly from these estimates under different assumptions, judgments or conditions.

Revenue Recognition

We recognize revenue when we satisfy a performance obligation by transferring control of a product or service to a customer in an amount that reflects the consideration that we expect to receive.

This revenue can be recognized at a point in time or over time.

We invoice customers based on our contractual arrangements with each customer, which may not be consistent with the period that revenues are recognized.

When there is a timing difference between when we invoice customers and when revenues are recognized, we record either a contract asset (unbilled accounts receivable) or a contract liability (deferred revenue or other current liabilities), as appropriate.

Descriptions of our principal revenue generating activities are as follows:

Servicer and Real Estate

• For property preservation and inspection services and payment management technologies, we recognize transactional revenue when the service is provided

• For vendor management transactions, we recognize revenue over the period during which we perform the services.

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

• For foreclosure trustee services, we recognize revenue over the period during which we perform the related services, with full recognition upon completion and/or recording the related foreclosure deed.

We use judgment to determine the period over which we recognize revenue for certain of these services

• 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.

We use judgment to determine the period over which we recognize revenue for certain of these services

• For loan servicing technologies, we generally recognize revenue based on the number of loans on the system.

We generally recognized revenue from professional services as services are provided.

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.

These amounts are recognized on a gross basis, principally because generally we have control over selection of vendors and the vendor relationships are with us, rather than with our customers

• For the majority of the services we provide, we recognize transactional revenue when the service is provided.

We recognize membership fees from Lender One members ratably over the term of membership

• For vendor management oversight SaaS, we recognize revenue over the period during which we perform the services.

We use judgment to determine the period over which we recognize revenue for certain of these services.

Goodwill and Identifiable Intangible Assets

We evaluate goodwill for impairment annually during the fourth quarter or more frequently when an event occurs or circumstances change in a manner that indicates the carrying value may not be recoverable.

We first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value as a basis for determining whether we need to perform the quantitative goodwill impairment test.

We first assess qualitative factors

to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value as a basis for determining whether we need to perform the quantitative goodwill impairment test.

Only if we determine, based on qualitative assessment, that it is more likely than not that a reporting unit’s fair value is less than its carrying value, will we calculate the fair value of the reporting unit.

We estimate the fair value of the reporting units using discounted cash flows and market comparisons.

The discounted cash flow method is based on the present value of projected cash flows.

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.

The estimated cash flows are discounted using a rate that

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.

Identifiable Intangible Assets

Identified intangible assets consist primarily of customer related intangible assets, operating agreements, trademarks and trade names and other intangible assets.

We determine the useful lives of our identifiable intangible assets after considering the specific facts and circumstances related to each intangible asset.

Factors we consider when determining useful lives include the contractual term of any arrangements, the history of the asset, our long-term strategy for use of the asset and other economic factors.

We amortize intangible assets that we deem to have definite lives in proportion to actual and expected customer revenues or on a straight-line basis over their useful lives, generally ranging from 4 to 20 years.

We perform tests for impairment if conditions exist that indicate the carrying value may not be recoverable.

When facts and circumstances indicate that the carrying value of intangible assets determined to have definite lives may not be recoverable, management assesses the recoverability of the carrying value by preparing estimates of cash flows of discrete intangible assets generally consistent with models utilized for internal planning purposes.

If the sum of the undiscounted expected future cash flows is less than the carrying value, we recognize an impairment to the extent the carrying amount exceeds fair value.

When performing the quantitative assessment, we make use of estimates and assumptions to evaluate the fair value of each reporting unit, using a weighting of the income and market valuation approaches as described below.

The income approach applies a fair value methodology to each reporting unit using discounted cash flows, including an estimation of future cash flows, which is based on our internally-developed revenue and profitability forecasts, including estimations of the long-term rate of growth of our business;

estimations of the useful life over which cash flows will occur and the determination of our weighted average cost of capital, which is risk-adjusted to reflect the specific risk profile of the reporting unit being tested.

The market approach includes an analysis of revenue and earnings multiples of guideline public companies compared to the Company.

We base fair value estimates on assumptions we believe to be reasonable but that are unpredictable and inherently uncertain.

Our forecasts may change compared to prior period projections due to a variety of factors, including reductions in the rates of residential mortgage delinquencies, defaults, foreclosures and REO volume and economic or market fluctuations that reduce the volume or value of residential mortgage origination or refinancings.

We also perform sensitivity analyses of certain significant assumptions in our forecasts and assess the historical accuracy of our estimates.

Actual future results may differ from those estimates.

We record income taxes in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 740, Income Taxes (“ASC Topic 740”).

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The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period when the change is enacted.

Deferred tax assets are reduced by a valuation allowance when it is more likely than not that some portion or all of the deferred tax assets will not be realized.

Tax laws are complex and subject to different interpretations by the taxpayer and respective governmental taxing authorities.

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Resolution of these uncertainties in a manner inconsistent with management’s expectations could have a material impact on our results of operations.

See Note 20 to the consolidated financial statements for a discussion on the uncertain tax positions.

Recently Adopted and Future Adoption of New Accounting Pronouncements

See Note 2 to the consolidated financial statements for a discussion of the recent adoption of a new accounting pronouncements and the future adoption of new accounting pronouncements.

See Note 2 to the consolidated financial statements for a discussion of the recent adoption of new accounting pronouncements and the future adoption of new accounting pronouncements.

OTHER MATTERS

Customer Concentration

Revenue from Ocwen primarily consists of revenue earned from the loan portfolios serviced and subserviced by Ocwen when Ocwen engages us as the service provider, and revenue earned directly from Ocwen, pursuant to the Ocwen Services Agreements.

For the years ended December 31, 2023 and 2022, we recognized revenue from Ocwen of $63.2 million and $63.5 million, respectively.

Revenue from Ocwen as a percentage of segment and consolidated revenue was as follows:

Revenue from Onity primarily consists of revenue earned from the loan portfolios serviced and subserviced by Onity when Onity engages us as the service provider, and revenue earned directly from Onity, pursuant to the Onity Services Agreements.

For the years ended December 31, 2024 and 2023, we recognized revenue from Onity of $70.4 million and $63.2 million, respectively.

Revenue from Onity as a percentage of segment and consolidated revenue was as follows:

Servicer and Real Estate 55 % 55 %

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Consolidated revenue 44 % 44 %

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.

We earn additional revenue related to the portfolios serviced and subserviced by Onity when a party other than Onity or the MSR owner selects Altisource as the service provider.

For the years ended December 31, 2024 and 2023, we recognized $9.6 million and $9.2 million, respectively, of such revenue.

These amounts are not included in deriving revenue from Ocwen and revenue from Ocwen as a percentage of revenue discussed above.

As of December 31, 2023, accounts receivable from Ocwen totaled $3.4 million, $2.2 million of which was billed and $1.2 million of which was unbilled.

As of December 31, 2022, accounts receivable from Ocwen totaled $4.0 million, $3.2 million of which was billed and $0.8 million of which was unbilled.

Ocwen has disclosed that Rithm is a significant client of Ocwen’s.

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.

For the years ended December 31, 2023 and 2022, we recognized revenue from Rithm of $2.8 million and $3.2 million, respectively, under the Brokerage Agreement.

These amounts are not included in deriving revenue from Onity and revenue from Onity as a percentage of revenue discussed above.

As of December 31, 2024, accounts receivable from Onity totaled $4.4 million, $3.1 million of which was billed and $1.3 million of which was unbilled.

As of December 31, 2023, accounts receivable from Onity totaled $3.4 million, $2.2 million of which was billed and $1.2 million of which was unbilled.

Onity has disclosed that Rithm is one of its largest servicing clients.

Rithm purchases brokerage services for REO exclusively from us, irrespective of the subservicer, subject to certain limitations, for certain MSRs set forth in and pursuant to the terms of the Rithm Brokerage Agreement with terms extending through August 2025.

For the years ended December 31, 2024 and 2023, we recognized revenue from Rithm of $2.3 million and $2.8 million, respectively, under the Rithm Brokerage Agreement.

For the years ended December 31, 2024 and 2023, we recognized additional revenue of $10.8 million and $12.6 million, respectively, relating to the Subject MSRs when a party other than Rithm selects Altisource as the service provider.

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.

What changed 10-K

Item 7. Management’s Discussion and Analysis