Altisource Portfolio Solutions (ASPS) Q2 2024 earnings summary

Executive summary

• Q2 2024 service revenue rose 11% year-over-year to $36.9 million, with adjusted EBITDA of $4.4 million, reflecting strong sales wins, price increases, and efficiency gains in a challenging market.

• Service revenue for the first six months of 2024 increased 5% to $73.8 million, with gross profit margin improving to 34% and net loss narrowing to $17.5 million from $31.8 million year-over-year.

• Cash and cash equivalents ended at $29.7 million, with $15 million available under a revolving credit facility.

• Growth was driven by new business wins, price increases, referral volume growth, and a lower cost base.

• Onity remained the largest customer, accounting for 44% of total revenue, with ongoing regulatory and legal risks potentially impacting future business.

Financial highlights

• Q2 2024 gross profit was $12.7 million, up 130% from Q2 2023, with gross margin improving to 34% from 17% year-over-year.

• Adjusted EBITDA margin reached 12% in Q2 2024, compared to -11% in Q2 2023.

• Net loss attributable to Altisource narrowed to $8.3 million from $18.9 million in Q2 2023; diluted loss per share improved to $(0.29) from $(0.90).

• Net cash provided by operating activities was $0.2 million in Q2 2024, up from a use of $7.9 million in Q2 2023.

• Net debt stood at $198.7 million as of June 30, 2024, with $228.4 million in senior secured term loans due April 2025 (extendable to April 2026).

Outlook and guidance

• Management reaffirmed 2024 guidance for 13%–32% service revenue growth and Adjusted EBITDA of $17.5–$22.5 million.

• Targeting a $30 million+ Adjusted EBITDA run-rate by year-end as new business ramps up.

• No formal 2025 guidance, but scenarios suggest further growth as new business ramps.

• Liquidity is expected to be sufficient to meet working capital, capital expenditures, and debt service needs, assuming anticipated revenue growth.