ASPS 10-K & 10-Q changes, risk factors and insider trading
Altisource Portfolio Solutions S.a. (also ASPSW, ASPSZ) · Nasdaq · Services-Miscellaneous Business Services · CIK 1462418 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “Cyberattacks, ransomware, data breaches, malicious activity or other security incidents targeting our systems, data or platforms could disrupt our operations, expose us to liability, and materially harm our financial condition and reputation.”
New heading “Government shutdowns, funding lapses or other disruptions affecting federal, state or local governmental operations could adversely affect our business, results of operations and cash flows.”
New heading “The individual and collective interests and objectives of the lenders under our New Facility which are also our shareholders (collectively, the “Lender Shareholders”) may conflict with those of our other shareholders.”
New heading “Our services, regulatory obligations and tax compliance requirements expose us to significant penalties, litigation, customer loss and increased costs.”
Removed heading “If the Rithm Brokerage Agreement is terminated, expires, breached, or if there is a significant reduction in the volume of services that we provide pursuant to such agreement, our business and results of operations would be adversely affected.”
Removed heading “We depend on our ability to use services, products, data, infrastructure and solutions provided by third parties to maintain and grow our businesses.”
Removed heading “The insurance underwriting loss limitation methods we used may not be effective or sufficient.”
Removed heading “Business expansion involves potential risks and uncertainties.”
Removed heading “Acquisitions to accelerate growth initiatives involve potential risks.”
Removed heading “We may be delisted from Nasdaq, which could negatively impact the value of our common stock and our business.”
Removed heading “We could have conflicts of interest with certain shareholders, lenders, members of management and our Board of Directors. These conflicts may be resolved in a manner adverse to us.”
Removed heading “Certain of our customers are subject to governmental oversight, regulations, orders, judgments or settlements which may impose certain obligations and limitations on their use of our services.”
Largest changes
“•Cyberattacks, ransomware, data breaches, AI exploitation or other security incidents could disrupt operations, expose us to liability, penalties or litigation and materially harm our financial condition and reputation. Insurance may be unavailable or insufficient.”see in full comparison
“On August 28, 2017, Altisource, through its licensed subsidiaries, entered into the Rithm Brokerage Agreement. Under this agreement and related amendments, Altisource is the exclusive provider (with certain exceptions) of brokerage services for REO associated with certain MSRs through August 2025, irrespective of the subservicer, as long as Rithm owns such MSRs. The Rithm Brokerage Agreement may be terminated by Rithm upon the occurrence of certain specified events. …”see in full comparison
“Cyberattacks, ransomware, data breaches, malicious activity or other security incidents targeting our systems, data or platforms could disrupt our operations, expose us to liability, and materially harm our financial condition and reputation.”see in full comparison
Our ability to borrow money could be limited, or our cost of borrowing could increase, due to volatility in the capital markets, worsening terms on which credit is available or limitations in our loan agreements. In addition, our financial results, reduced revenue or cash flow, or volatility in the markets which we support, could negatively impact our customer and prospective customer relationships, as well as our ability to borrow or our ability to continue to satisfy the covenants and terms of our loan agreements. If we were to have a default under our loan agreements, we would not be able borrow additional funds under our existing agreements and our lenders could seek to enforce the remedies available to them under our loan agreements. A reduction in our ability to borrow funds to support our operations or a reduction in cash flow would also reduce our ability to pursue our business strategy to diversify and grow our customer base. Significant litigation, regulatory penalties, indemnification obligations, or settlements could require substantial cash outflows, impair liquidity, reduce capital available for operations, or cause us to breach covenants under our loan agreements.see in full comparison
•Failure to comply withsee in full comparisonanti-moneyloanlaundering and financial crime reporting requirementscovenants could result inpenalties,default,contractual breaches,acceleration andpotentialenforcementterminationagainstof agreements with title insurance underwriters.collateral.
“•Our databases contain our proprietary information, the proprietary information of third parties, and personal information about our customers, consumers, vendors, and employees. …”see in full comparison
Full comparison: every changed paragraph (177)
•We derive a significant portion of revenue from Onity and Rithm. The Rithm Brokerage Agreement expired on August 31, 2025 and was not renewed. Separately, Rithm notified Onity of termination of its subservicing agreement effective January 31, 2026. Any material reduction in referrals, MSR volumes or scope of services, or termination by either customer, would adversely affect our revenue, liquidity and financial condition.
•Technology failures or intellectual property disputes could disrupt operations, impair service delivery and increase costs or regulatory exposure.
•Cyberattacks, ransomware, data breaches, AI exploitation or other security incidents could disrupt operations, expose us to liability, penalties or litigation and materially harm our financial condition and reputation. Insurance may be unavailable or insufficient.
•A significant portion of our revenue is generated from providing services to two customers, the loss of some or all of these customer(s)’ business would negatively impact us.
•If the Rithm Brokerage Agreement is terminated, expires, is breached, or if there is a significant reduction in the volume of services that we provide pursuant to such agreement, our business and results of operations would be adversely affected.
•Technology disruptions, failures, defects, inadequacies, delays, difficulties in implementing software or hardware modifications, acts of vandalism, or the introduction of harmful code could negatively affect our operations and relationships with clients and stakeholders.
•We depend on third-party services, products, data, infrastructure and solutions to maintain and grow our businesses, the loss or disruption of which could negatively impact us.
•WeFailure may not successfullyto prevent or detect fraudulent activity, whichactivity could harmresult ourin services,financial clients,loss, third parties, reputation,liability and ourreputational results of operations.harm.
•Unauthorized access, disclosure or processing of proprietary or personal information, or non-compliance with privacy, data protection, AI or notification laws, could result in investigations, fines, litigation and significant costs.
•Business interruptions, pandemics, governmental shutdowns or system failures may not be adequately addressed by our continuity and recovery plans, resulting in operational or compliance disruptions.
•Formation of a stockholder “group,” change-of-control events or certain business sales may trigger termination or default rights under material agreements, limiting strategic flexibility.
•Our databases contain our proprietary information, the proprietary information of third parties, and personal information about our customers, consumers, vendors, and employees. Unauthorized disclosure, access or processing of such information, whether due to a cybersecurity incident, human error or other vulnerabilities, or our failure to comply with applicable information management requirements, privacy laws, or notification obligations, could result in adverse publicity, loss of trust, investigations, regulatory fines, loss of customers, government enforcement actions, private litigation, claims from third parties, and significant financial and operational costs.
•Our business continuity and disaster recovery plans may not adequately address potential impacts from business interruptions or pandemics, which could result in operational disruptions, financial losses, or regulatory compliance issues.
•The insurance underwriting loss limitation methods we used may not be effective or sufficient.
•Certain shareholder arrangements could trigger termination or events of defaults under some of our material agreements.
•Changes inCertain economic or housing market conditions thatadverse reduceto residentialour real estate sales, values, or mortgage origination volumesbusinesses could negatively impactreduce demand for certain of our services.
•Government shutdowns or funding lapses affecting courts or agencies could delay foreclosures and REO activity, reduce volumes and impair performance metrics.
•Failure to adapt to technological change, regulatory developments or customer consolidation may reduce demand or competitiveness.
•Changes in residential mortgage delinquencies, defaults, or foreclosures could negatively affect demand for some of our services.
•Adapting to changes in technology or marketplace dynamics related to mortgage servicing or origination and changing requirements of governmental authorities, GSEs and customers, could pose risks to us.
•Changes to compensation paid in connection with residential property transactions could negatively impact us.
•Changes that reduce the frequency or alter or eliminate requirements to use default or origination services of the type we provide may reduce the volume of sales of our services.
•DevelopmentsRestrictions impactingon residentialonline foreclosures,foreclosure or REO supply, or salesauctions could negatively affectimpact us.our auction and brokerage revenues.
•Changes reducing the frequency or requirement for default or origination services may decrease demand for certain of our services.
•Reduced foreclosures, constrained REO supply, buyer participation limits or inability to meet contractual performance metrics could adversely affect our default and related services.
•Changes to real estate brokerage commissioncommissions, auction fees or other transaction compensation structures or transaction rates could adverselyreduce affect us by reducing revenue from brokerage activities and impacting profitability.revenues.
•Anticipated sales from awarded contracts or pipeline opportunities may not materialize or may be delayed.
•Our remote work environment may reduce productivity, impair controls and increase cybersecurity, tax and regulatory risks.
•Reliance on vendors exposes us to service failures, pricing increases, compliance deficiencies and potential liability for vendor misconduct.
•Reclassification of contractors as employees could result in taxes, penalties and increased compensation costs.
•Loss of key directors, executives or personnel, or difficulty attracting leadership in Luxembourg, could adversely affect operations.
•Sales from our awarded business or pipeline may not occur or may take longer than anticipated to develop which could result in lower-than-expected revenue and impact our financial performance.
•Business expansion carries potential risks and uncertainties, which could lead to operational inefficiencies, increased costs, or failure to achieve anticipated growth.
•Acquisitions to support growth initiatives involve inherent risks.
•A majority of our employees and contractors work remotely, potentially impacting control environments, productivity, and cybersecurity.
•Dependence on vendors for many aspects of our business exposes us to risks related to vendor availability, performance, and oversight.
•Extensive use of contractors could result in reclassification risks, incurring additional costs or penalties.
•Our performance could be negatively impacted by the loss of the experience and relationships of certain directors, executives, and key personnel.
•Attracting,Failure motivating,to attract and retainingretain skilled and licensed employees could proveimpair difficult.service delivery and growth.
•International operations expose us to political, economic, corruption, sanctions, trade and labor risks.
•The presence of operations in multiple countries subjects us to unique risks endemic to those countries and regions.
•We maydo not expect to pay cash dividends,dividends; limitingstockholder returns todepend on stock appreciation.
•Our smallerrelatively small market capitalization couldmay increase thestock volatility, and limit investors inliquidity and restrict access to capital or analyst coverage, of our stock.coverage.
•Issuance of additional shares, exercise of warrants or vesting of equity awards could dilute stockholders and affect trading prices.
•The market price and trading volume of our common stock and Stakeholder Warrants have been and may beremain volatile.volatile, and significant resales could increase volatility or lead to litigation.
•Public float limitations restrict our use of Form S-3 and may impair our ability to raise capital efficiently.
•Significant ownership by lender stockholders may create conflicts.
•As a "smaller reporting company," reduced disclosure requirements may affect the information we provide to stockholders.
•Loss of Form S-3 eligibility or offering limitations under SEC regulations could restrict our ability to raise capital efficiently and on favorable terms.
•The large number of authorized shares and outstanding warrants may make the market price and trading volume of our stock volatile.
•Future issuances of common stock, warrants, or equity grants could dilute existing shareholders' economic and voting interests, potentially negatively impacting the trading price of our stock and leading to litigation.
•We may be delisted from the Nasdaq Global Select Market, which could negatively impact the market for our common stock and our business.
•We could have conflicts of interest with certain shareholders, lenders, members of management and our Board of Directors. These conflicts may be resolved in a manner adverse to us.
•Insufficient cash flowflow, limited capital access or accessreduced toborrowing capital marketscapacity could negatively affectimpair liquidity and competitivestrategic positioning.flexibility.
•DebtOur levels andindebtedness, variable interest ratesrates, maymandatory constrainprepayments ourand covenant restrictions limit financial flexibility and responsesincrease sensitivity to customer, industry or economic changes.performance.
•The New Facility and the Super Senior Facility terms could limit cash and reduce liquidity available for operations and strategic investments.
•Failure to comply with loan covenants in the New Facility or the Super Senior Facility would result in a loan default and could result in termination of either or both facilities and acceleration of amounts owing which, in turn, could have a negative impact on liquidity and our business.
•The maturity extension risk under the New Facility or the Super Senior Facility and restrictions on refinancing could lead to challenges if market conditions worsen or alternative financing is unavailable.
•Utilizing a significant deferred tax asset depends on future profitability; if profitability does not materialize, we may not be able to realize some or all of the tax benefit.
•Cash, cash equivalents, and escrow funds held at financial institutions could be at risk.
Management's Discussion & Analysis (MD&A)
Largest changes
“(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.”see in full comparison
Through our offerings that support residential real estate and loan investors and forward and reverse servicers, we provide a suite of loan default and real estate investor solutions and technologies intended to meet their growing and evolving needs. We are focused onsee in full comparisongrowinggainingreferralsmarketfromshare on existing solutions and launching new solutions with 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 Onity and Rithm. We believe we are one of only a few providers with a broad suite of solutions, nationwide coverage and scalability. Further, we believe we are well positioned to gain market share from existing and new customers if loan delinquency rates and foreclosure initiations and sales rise, or if they consolidate to larger, full-service providers or outsource services that have historically been performed in-house.
Serious delinquency rates, foreclosure initiations and foreclosure sales aresee in full comparisonverylow relative to historicallevels.levels but increased during the year ended December 31, 2025 relative to the year ended December 31, 2024. Additionally, foreclosure initiations and sales as a percentage of seriously delinquent loans for 2020 through20242025 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, we believe these percentages were impacted by servicer practices, home price appreciation, the interest rate environment, housing supply, the general state of the economy,the interest rate environment, housing supply,and other factors. In 2021 and 2022, averylow interest rate 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, we believe troubled borrowers have more options to avoid foreclosure. Foreclosure initiations and sales increased during the year ended December 31, 2025 compared to the same period in 2024. However, both measures remain below pre-pandemic levels.
“We believe we have sufficient sources of liquidity to fund our business requirements for the next 12 months and in the longer term. Our primary sources of liquidity are existing cash balances and cash generated from operating activities. We expect that debt related obligations will be satisfied through a combination of repayments prior to maturity, including from potential proceeds received from the exercise of Cash Exercise Stakeholder Warrants, and the issuance of new debt. …”see in full comparison
Income from operations was $0.4 million, representing less than 1% of service revenue, for the year ended December 31, 2025 compared to income from operations of $3.2 million, representing 2% of service revenue, for the year ended December 31,see in full comparison2024 compared to loss from operations of $(16.8) million, representing (12)% of service revenue, for the year ended December 31, 2023.2024. Income(loss)from operations as a percentage of service revenueimproveddeclined for the year ended December 31,20242025 compared to the year ended December 31,2023,2024, primarilyasfrom aresult$7.5ofmillionhigherloss from litigation settlement with NFHA and associated defense costs and lower gross profitmarginsmargins,andpartially offset by lower SG&A expenses as a percentage of service revenue. For further information on the settlement, see Item 3 “Legal Proceedings” above and Note 22 to the consolidated financial statements.
Income from operationssee in full comparisonincreaseddecreased to $33.1 million, representing 26% of service revenue, for the year ended December 31, 2025 compared to $37.9 million, representing 32% of service revenue, for the year ended December 31,20242024.compared to $32.1 million, representing 30% of service revenue, for the year ended December 31, 2023. The increase in operatingOperating income as a percentage of service revenue for the year ended December 31, 2025 declined compared to the year ended December 31, 2024isprimarilythefromresultaof$7.5highermillion loss from litigation settlement with NFHA and lower gross profitmargins.margins, partially offset by lower SG&A expenses.
Full comparison: every changed paragraph (72)
Our Solutions business includes property preservation and inspection services, foreclosure trustee services, residential real estate renovation services, residential and commercial construction inspection and risk mitigation services, title insurance (as an agent) and settlement services, and real estate valuation services, foreclosure trustee services, residential and commercial construction inspection and risk mitigation services, and residential real estate renovation services.
Our Technology and SaaS Products business includes Equator (a SaaS-based technology to manage REO,REO and investor homes, 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), and REALSynergy (a commercial loan servicing platform), and NestRange (a single-family automated valuation model and analytics solution).
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 servicessolutions provided to the members of the Lenders One cooperative.
Our Solutions business includes loan fulfillment services, real estate valuation services, title insurance (as an agent) and settlement services, and insurance services.
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), and 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).
We classify revenue in three categories: service revenue, revenue from reimbursable expenses and non-controlling interests. In evaluating our performance, we focus on service revenue. Service revenue consists of amounts attributable to our fee-based services. Reimbursable expenses and non-controlling interests are pass-through items for which we earn no margin. Reimbursable expenses consist of amounts we incur on behalf of our customers in performing our fee-based services that we pass directly on to our customers without a markup. Non-controlling interests represent the earnings of Lenders One. Lenders One is a mortgage cooperative managed, but not owned, by Altisource. The Lenders One members’One’s earnings are included in revenue and reduced from net income (loss) to arrive at net income (loss) attributable to Altisource.
Through our offerings that support residential real estate and loan investors and forward and reverse servicers, we provide a suite of loan default and real estate investor solutions and technologies intended to meet their growing and evolving needs. We are focused on growinggaining referralsmarket fromshare on existing solutions and launching new solutions with 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 Onity and Rithm. We believe we are one of only a few providers with a broad suite of solutions, nationwide coverage and scalability. Further, we believe we are well positioned to gain market share from existing and new customers if loan delinquency rates and foreclosure initiations and sales rise, or 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. 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,members (Lenders One is a residential mortgage cooperative managed by Altisource), which includes independent mortgage bankers, credit unions, and banks, as well as bank and non-bank loan originators.banks. We believe our suite of services, technologies and unique access to the members of the Lenders One mortgage cooperative position us to grow our relationships with our existing customer base by growing membership of Lenders One, increasing member adoption of existing solutions and developing and cross-selling new offerings. 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.
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.
Serious delinquency rates, foreclosure initiations and foreclosure sales are very low relative to historical levels.levels but increased during the year ended December 31, 2025 relative to the year ended December 31, 2024. Additionally, foreclosure initiations and sales as a percentage of seriously delinquent loans for 2020 through 20242025 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, we believe these percentages were impacted by servicer practices, home price appreciation, the interest rate environment, housing supply, the general state of the economy, the interest rate environment, housing supply, and other factors. In 2021 and 2022, a very low interest rate 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, we believe troubled borrowers have more options to avoid foreclosure. Foreclosure initiations and sales increased during the year ended December 31, 2025 compared to the same period in 2024. However, both measures remain below pre-pandemic levels.
While we cannot predict whether the default market will return to a pre-pandemic operating environment, we believe the demand for our Defaultdefault-related 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, 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 20232024 and 2024,2025, 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 ratesrates, foreclosure initiations and/or foreclosure sales rise, (3) launch a residential renovation business to renovate single family homes,homes and launch a commercial real estate auction business on Hubzu, our online auction platform, and (4) in Lenders One members, launch new solutions and increase customer adoption of our existing solutions to accelerate the growth of our originationOrigination business.segment.
On May 16, 2023, our shareholders approved the renewal and amendment of the share repurchase program previously approved by theour shareholders on May 15, 2018. Under the program, we are authorized to purchase up to 3.10.4 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$8.00 per share and a maximum price of $25.00$200.00 per share, foruntil aMay period16, of five years from the date of approval.2028. As of December 31, 2024,2025, approximately 3.10.4 million shares of common stock remain available for repurchase under the program. In connection with the elimination of fractional shares resulting from the Share Consolidation, the Company purchased 204 shares of common stock during the year ended December 31, 2025 (no comparative amount for the year ended December 31, 2024). There were no other purchases of shares of common stock during the years ended December 31, 20242025 and 2023.2024. Under the New Facility and the Super Senior Facility, we are not permitted to repurchase shares except for limited circumstances.
Onity has disclosed that Rithm is one of its largest servicing clients. As of December 31, 2024,2025, Onity reported that approximately 14%10% of loans serviced and subserviced by Onity (measured in UPB) and approximately 63%50% of all delinquent loans that Onity services were related to Rithm MSRs or rights to MSRs. In November 2025, Onity disclosed that it had received notification from Rithm that Rithm does not intend to renew its subservicing agreements with Onity effective January 31, 2026.
The termination of Onity’s subservicing agreements with Rithm may have significant adverse effects on Onity’s business. Additionally, Altisource’s revenue from Onity and Rithm (and revenue associated with the Rithm MSRs) will be reduced and our results of operations will be adversely affected by this termination.
The existence or outcome of Onity regulatory matters or theOnity’s terminationloss 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.
•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
•Industrywide foreclosure initiations were 6%25% lowerhigher in 20242025 compared to 20232024 (andalthough 35%still 19% lower than the same pre-COVID-19 period in 2019)
•Industrywide foreclosure sales were 14%17% lowerhigher in 20242025 compared to 20232024 (andalthough 53%still 45% lower than the same pre-COVID-19 period in 2019)
•Industrywide mortgage origination unit volume increased by 20%19% in 20242025 compared to 2023,2024, comprised of a 2% decline in purchase origination and a 112%92% 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 weighted average interest rate on the Company’s SSTLlong-term debt was 14.00%8.11% for the year ended December 31, 2024,2025, compared to 12.89%14.00% for the same period in 20232024
•The Company recognized a $7.5 million litigation settlement loss for the year ended December 31, 2025 related to a settlement agreement with NFHA and associated defense costs. For further information, see Item 3. of Part I, “Legal Proceedings” and Note 22 to the consolidated financial statements
•The Company recognized $3.6 million of expenses related to the Debt Exchange Transaction for the year ended December 31, 2025
•On February 14, 2023, Altisource Portfolio Solutions S.A. and its wholly-owned subsidiary, Altisource S.à r.l., entered into Amendment No. 2 to the Credit Agreement. 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 (no comparative amount for the year ended December 31, 2024)
•The Company recognized an income tax provisionbenefit of $2.6$16.1 million for the year ended December 31, 2024.2025, The income tax provision for the year ended December 31, 2024which was driven primarily by the reversal of liabilities for uncertain tax positions, partially offset by income tax expense on transfer pricing income from India and the United States,States and 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$2.6 million for the year ended December 31, 2023.2024, The income tax provision for the year ended December 31, 2023which 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.
We recognized service revenue of $150.4$161.3 million for the year ended December 31, 2024,2025, a 10%7% increase compared to the year ended December 31, 2023.2024. The increase in service revenue for the year ended December 31, 20242025 was driven by higher revenue in both segments. Revenue was higher in the Servicer and Real Estate segment from growth in our FieldProperty Renovation Services, Foreclosure TrusteeTrustee, Granite and Property RenovationField Services businesses in the Solutions business, partially offset by $0.8fewer millionhome ofsales firstin quarterthe 2023Marketplace non-recurringbusiness and lower professional services revenue in the Equator business within the Technology and SaaS Products business and fewer home sales in the Marketplaceproducts business. Revenue was higher in the Origination segment from growth ofin reseller products in the Lenders One business.
We recognized reimbursable expense revenue of $9.6$9.4 million for the year ended December 31, 2024,2025, a 16%2% increasedecrease compared to the year ended December 31, 2023.2024. The increasedecrease in reimbursable expenses for the year ended December 31, 20242025 was primarily driven by higherfewer asset resolution and asset management activities in the Marketplace business, higher-valuelower REO title related expenses and growtha decrease in theproperty foreclosurepreservation trustee businessservices in the Solutions business within the Servicer and Real Estate segment.Solutions business, partially offset by growth in the Foreclosure Trustee business in the Servicer and Real Estate Solutions business.
We recognized cost of revenue of $110.6$122.1 million for the year ended December 31, 2024,2025, a 4%10% decreaseincrease compared to the year ended December 31, 2023.2024. Outside fees and services for the year ended December 31, 2025 increased primarily from service revenue growth in the Property Renovations Services, Foreclosure Trustee and Field Services businesses within the Servicer and Real Estate segment and service revenue growth in the Lenders One business in the Origination segment. Compensation and benefits for the year ended December 31, 20242025 decreasedincreased primarily due to efficiencygrowth initiativesin the Property Renovation Services business and costhigher savingsannual measuresincentive takencompensation in 2023.accruals. Technology and telecommunications costs for the year ended December 31, 20242025 decreasedincreased primarily duefrom toa lowerbenefit overallrecognized headcount.in 2024. Depreciation and amortization was lower for the year ended December 31, 2025 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, 20242025 are consistent with the changes in reimbursable expenses revenue discussed in the revenue section above.
Gross profit increaseddecreased to $48.9 million, representing 30% of service revenue, for the year ended December 31, 2025 compared 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, 2023.2024. Gross profit as a percentage of service revenue for the year ended December 31, 20242025 increaseddecreased compared to the year ended December 31, 20232024 primarily due to margina expansionchange in bothrevenue mix from greater growth in the Servicerlower margin Property Renovations Services and RealLenders EstateOne segmentbusinesses andthan in the Originationhigher segmentmargin fromHubzu efficiencybusiness. initiativesOur andmargins lowercan corporatevary costssubstantially asdepending aupon percentage ofthe service revenue growth, and service revenue growth.mix.
SG&A expenses for the year ended December 31, 20242025 of $45.6$41.0 million decreased by 2%10% compared to the year ended December 31, 2023.2024. The decrease in SG&A for the year ended December 31, 20242025 was primarily driven by lower compensationprofessional services and benefitsother andSG&A occupancy related costs,expenses, partially offset by higher professional services. Compensationcompensation and benefits and occupancy related costs for the year ended December 31, 2024 decreased from efficiency and cost reductions measures.benefits. Professional services for the year ended December 31, 20242025 increaseddecreased primarily due to lower costs related to legacy indemnification accruals and a settlement payment received related to a legacy matter. Other SG&A expenses for potentialthe settlementsyear ended December 31, 2025 decreased primarily due to lower bad debt expense, as well as a loss on sale of certainbusiness legacyrecognized indemnityduring claims,the estimatedyear legalended mattersDecember and31, costs2024 associatedin connection with the Transactions.indemnity escrow related to the Pointillist sale. Compensation and benefits for the year ended December 31, 2025 increased primarily from higher annual incentive compensation accruals.
Income (loss) from Operationsoperations
Income from operations was $0.4 million, representing less than 1% of service revenue, for the year ended December 31, 2025 compared to income from operations of $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, 2023.2024. Income (loss) from operations as a percentage of service revenue improveddeclined for the year ended December 31, 20242025 compared to the year ended December 31, 2023,2024, primarily asfrom a result$7.5 ofmillion higherloss from litigation settlement with NFHA and associated defense costs and lower gross profit marginsmargins, andpartially offset by lower SG&A expenses as a percentage of service revenue. For further information on the settlement, see Item 3 “Legal Proceedings” above and Note 22 to the consolidated financial statements.
Other income (expense), net was $(14.6) million for the year ended December 31, 2025 compared to $(36.1) million for the year ended December 31, 2024 compared to $(35.6) million for the year ended December 31, 2023.2024. The change for the year ended December 31, 20242025 was primarily driven by higherlower 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),expense, partially offset by lowerhigher debt amendmentexchange costs.transaction expenses. The higherlower interest expense was driven by higherthe decrease in outstanding debt and a lower interest ratesrate onfrom the SSTL.February 19, 2025 Debt Exchange Transaction.
We recognized an income tax benefit (provision) of $2.6$16.1 million and $3.7$(2.6) million for the years ended December 31, 20242025 and 2023,2024, respectively.
Income tax benefit for the year ended December 31, 2025 was driven primarily by the reversal of liabilities for uncertain tax positions partially offset by income tax expense on transfer pricing income from India and the United States and no tax benefit on the pretax loss from our Luxembourg operating company. For further information, see Note 20.
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.
We recognized service revenue of $119.9$126.1 million for the year ended December 31, 2024,2025, ana 11%5% 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, 2023.2024. The increase in service revenue for the year ended December 31, 20242025 was driven by growth in our FieldProperty Renovation Services, Foreclosure Trustee businesses, Granite and Property RenovationField Services businesses in the Solutions business, partially offset by $0.8fewer millionhome ofsales firstin quarterthe 2023Marketplace non-recurringbusiness and lower professional services revenue in the Equator business within the Technology and SaaS Productsproducts businessbusiness. The decrease in reimbursable expenses for the year ended December 31, 2025 was primarily driven by fewer asset resolution and fewerasset homemanagement salesactivities in the Marketplace business, lower REO title related expenses and a decrease in property preservation services in the Servicer and Real Estate Solutions business, partially offset by growth in the Foreclosure Trustee business in the Solutions business.
Cost of revenue for the year ended December 31, 20242025 of $79.6$86.8 million increased by 8%9% compared to the year ended December 31, 2023.2024. The increase in cost of revenue for the year ended December 31, 20242025 iswas primarily driven by higher outside fees and services, compensation and benefits and higher technology and telecommunications. Outside fees and services for the year ended December 31, 2025 increased from higherservice revenue growth in the Field Services, Property Renovation Services andServices, Foreclosure Trustee and Field Services businesses in the Solutions business. Compensation and benefits for the year ended December 31, 2025 increased primarily due to growth in the Property Renovation Services business and higher reimbursableannual expenses,incentive partiallycompensation offsetaccruals. by lower depreciationTechnology and amortizationtelecommunications for the year ended December 31, 2025 increased from thehigher completioncloud ofservices thecosts depreciationfrom periodshigher of certain premisesvolumes and equipment.from a benefit recognized in 2024.
Gross profit increaseddecreased to $48.1 million, representing 38% of service revenue, for the year ended December 31, 2025 compared 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, 2023.2024. Gross profit as a percentage of service revenue for the year ended December 31, 20242025 increaseddecreased 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 andgreater growth in the lower margin FieldProperty Renovations Services business than in the higher margin Foreclosure Trustee business in the Solutions business and recentlyfewer launchedhomes Propertysales Renovationin Servicesthe businesses.higher margin Marketplace business. Our margins can vary substantially depending upon the service revenue mix.
SG&A for the year ended December 31, 20242025 of $11.4$7.5 million increaseddecreased by 19%34% compared to the year ended December 31, 2023.2024. The increasedecrease in SG&A for the year ended December 31, 20242025 iswas primarily due to higherlower professional services and other expenses, partially offset by lower compensation and benefits.services. Professional services for the year ended December 31, 20242025 increaseddecreased primarily due to accrualsa forsettlement potentialpayment settlementsreceived ofrelated certainto a legacy indemnity claims. Other expenses for the year ended December 31, 2024 increased from higher bad debt expense. Compensationmatter and benefitslower forcosts therelated yearto endedlegacy Decemberindemnification 31, 2024 decreased from efficiency and cost reduction measures.accruals.
Income from operations increaseddecreased to $33.1 million, representing 26% of service revenue, for the year ended December 31, 2025 compared to $37.9 million, representing 32% of service revenue, for the year ended December 31, 20242024. compared to $32.1 million, representing 30% of service revenue, for the year ended December 31, 2023. The increase in operatingOperating income as a percentage of service revenue for the year ended December 31, 2025 declined compared to the year ended December 31, 2024 is primarily thefrom resulta of$7.5 highermillion loss from litigation settlement with NFHA and lower gross profit margins.margins, partially offset by lower SG&A expenses.
We recognized service revenue of $30.4$35.2 million for the year ended December 31, 2024,2025, a 6%16% increase compared to the year ended December 31, 2023.2024. We also recognized reimbursable expense revenue of $0.6 million for the year ended December 31, 2024,2025, aan 1%8% decreaseincrease compared to the year ended December 31, 2023.2024. The increase in service revenue in the Origination segment for the year ended December 31, 20242025 was primarily driven by an increasegrowth in productreseller adoptionproducts in the Lenders One business. The increase in reimbursable expenses for the year ended December 31, 2025 was primarily driven by certain Title orders partially offset by lower volumes in the loan fulfillment services business within the Solutions business.
Cost of revenue for the year ended December 31, 20242025 of $24.5$28.9 million decreasedincreased by 12%18% compared to the year ended December 31, 2023.2024. The decreaseincrease in cost of revenue for the year ended December 31, 20242025 was primarily driven by the prior year alignment of compensation and benefits with lower origination volume and lowerhigher outside fees and services from a changegrowth in revenuethe mix.reseller products in the Lenders One business.
Gross profit increased to $7.3 million, representing 21% of service revenue, for the year ended December 31, 2025 compared to $6.7 million, representing 22% of service revenue, for the year ended December 31, 2024. Gross profit as a percentage of service revenue for the year ended December 31, 2025 decreased slightly compared to the year ended December 31, 2024 from 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 efficiency initiatives, cost savings measures and price increase for certain services.
SG&A for the year ended December 31, 20242025 of $6.6$7.2 million decreasedincreased by 14%9% compared to the year ended December 31, 2023.2024. The decreaseincrease in SG&A for the year ended December 31, 20242025 was primarily due to lowerhigher professional services from lower legal-related costs, lowerand compensation and benefitsbenefits, partially offset by lower occupancy related costs. Professional services for the year ended December 31, 2025 increased primarily from efficiencya legacy litigation matter. Compensation and costbenefits reductionfor measuresthe andyear lowerended otherDecember expenses31, 2025 increased primarily from lowerrevenue badgrowth debtin expense.the Lenders One business.
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, 20242025 compared to income (loss) from operations of $(6.0)$0.1 million, representing (21)%less than 1% of service revenue, for the year ended December 31, 2023.2024. TheIncome improvementfrom in operating income as a percentage of service revenueoperations for the year ended December 31, 20242025 iswas primarilyrelatively fromflat higher gross profit margins and lower SG&A expenses andcompared to athe lesseryear degree,ended serviceDecember revenue31, growth.2024.
Cost of revenue for the year ended December 31, 20242025 of $6.5 million decreased by 53%1% compared to the year ended December 31, 2023.2024. The decrease in cost of revenue for the year ended December 31, 20242025 iswas primarily driven by lower compensationdepreciation and benefitsamortization from the completion of the depreciation periods for certain premises and technology and telecommunications costs due to efficiency initiatives and cost savings initiatives.equipment.
SG&A for the year ended December 31, 20242025 of $27.6$26.3 million decreased by 5% compared to the year ended December 31, 2023.2024. The decrease for the year ended December 31, 20242025 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 expensesfrom duelower toaccruals higherfor legal-relatedestimated costslegal and costs associated with the Transactions.matters.
Other income (expense), net was $(14.8) million for the year ended December 31, 2025 compared to $(36.2) million for the year ended December 31, 2024 compared to $(35.6) million for the year ended December 31, 2023.2024. The change for the year ended December 31, 20242025 was primarily driven by higherlower 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),expense, partially offset by lowerhigher debt amendmentexchange costs.transaction expenses. The higherlower interest expense was driven by higherthe decrease in outstanding debt and a lower interest ratesrate onfrom the SSTL.February 19, 2025 Debt Exchange Transaction.
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, primarily due to governmentallower delinquency and market responses to the COVID-19 pandemic, lower delinquencyforeclosure rates, and higher home equity, revenue has declined significantly compared to pre pandemic levels.levels (although revenue grew in 2025 compared to 2024 and in 2024 compared to 2023). The lower revenue, partially offset by efficiency initiatives and cost savings measures,initiatives, has resulted in negative operating cash flow from operations. We believe lower interest expense as a result of the February 2025 Debt Exchange Transactions, ourmore anticipatedrecent revenue growth from the renovation business launched in 2024, the anticipated improvement in the default market, on-boarding sales wins, converting sales prospects to 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. Principally, we intend to use cash to develop and grow complementary services and businesses that we believe will generate attractive margins in line with our core capabilities and strategy and fund negative operating cash flow.flow, if necessary. We also use cash for repayments of our long-term debt and capital investments. 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.
In connection with the Company’s residential real estate renovation servicesRenovation 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 then related party, Altisource Asset Management Corporation (“AAMC”) (the “Revolving Loan Agreement”).
The maturity date of the Revolving Loan Agreement iswas June 3, 2025 and maycan 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. During the second quarter of 2025 the Revolving Loan Agreement was renewed, extending the maturity date to June 3, 2026. The outstanding balance on the Revolving Loan Agreement is due and payable on such maturity date.
As of December 31, 2024,2025, there was $1.0 millionno outstanding debt under the Revolving Loan Agreement.
Cash flows from operating activities generally consist of the cash effects of transactions and events that enter into the determination of net loss.income (loss). For the year ended December 31, 2024,2025, net cash used in operating activities was $(5.05.1) million compared to net cash used in operating activities of $(21.85.0) million for the year ended December 31, 2023.2024. DuringThe the year ended December 31, 2024, the decreaseincrease in cash used in operating activities was driven by a$17.6 $20.9million lower non-cash interest expense and $2.2 million lower adjustments to net income for depreciation and amortization, bad debt expense, share based compensation and loss on sale of business, partially offset by an $18.7 million improvement in net loss adjustedbefore forincome non-cashtaxes itemsand includednon-controlling ininterests theand determinationa $1.1 million lower use 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 byfor working capital primarily(accounts fromreceivable, theprepaid $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, 2023expenses and aother $2.0current millionassets, returnother ofassets, suretyand bondsaccounts inpayable theand yearaccrued ended December 31, 2023.expenses). Operating cash flows can be negatively impacted because of the nature of some of our services and the mix of services provided. Certain services are performed immediately following or shortly after the referral, but the collection of the receivable does not occur until a specific event occurs (e.g., the foreclosure is complete, the REO asset is sold, etc.). Furthermore, lower margin services generate lower income and cash flows from operations. Consequently, our cash flows from operations may be negatively impacted when comparing one period to another.
What changed in the latest 10-Q
Risk Factors
New heading “We may lose the ability to market, distribute or resell certain third-party verification, data, technology and other products, or such products may become less competitive, which could adversely affect our revenues, customer relationships and operating results.”
New heading “Developments affecting REO volumes, REO pricing or REO sales could negatively affect demand for certain of our default-related services and impair our ability to satisfy contractual performance metrics.”
Largest changes
“In addition, changes in policies, regulations, or program requirements imposed by federal housing agencies or government-sponsored enterprises, including the FHA, HUD, Fannie Mae and Freddie Mac, could adversely affect foreclosure and post-foreclosure processes, auction participation, reimbursement programs and related economics. …”see in full comparison
“Developments affecting REO volumes, REO pricing or REO sales could negatively affect demand for certain of our default-related services and impair our ability to satisfy contractual performance metrics.”see in full comparison
“We may lose the ability to market, distribute or resell certain third-party verification, data, technology and other products, or such products may become less competitive, which could adversely affect our revenues, customer relationships and operating results.”see in full comparison
see in full comparisonAsExceptofasthesetdateforthof this filing,below, there have been no material changesintoourthe risk factorsfrom thosedisclosed in Part I, Item 1A, of ourformForm 10-K for the year ended December 31, 2025 filed with the SEC on March 4,2026.2026 (our “2025 Form 10-K”). Capitalized terms used but not defined in this section have the meanings given to them in our 2025 Form 10-K.
“If one or more of these third-party providers were to terminate or materially modify our rights to resell their products, increase pricing, impose more restrictive contractual terms, experience financial, operational, security, regulatory or compliance issues, discontinue products, be acquired by a competitor or become controlled by a party whose interests do not align with ours, or otherwise limit our access to their products, technologies, platforms, services or underlying data, we may be unable to continue offering those products to our customers or may only be able to do so at reduced …”see in full comparison
“In addition, even if we retain the right to resell such products and use applicable platforms or technologies, our business could be adversely affected if the products, services, platforms or technologies provided by our third-party suppliers fail to remain competitive with alternative solutions available in the marketplace. …”see in full comparison
Full comparison: every changed paragraph (11)
AsExcept ofas theset dateforth of this filing,below, there have been no material changes into ourthe risk factors from those disclosed in Part I, Item 1A, of our formForm 10-K for the year ended December 31, 2025 filed with the SEC on March 4, 2026.2026 (our “2025 Form 10-K”). Capitalized terms used but not defined in this section have the meanings given to them in our 2025 Form 10-K.
We may lose the ability to market, distribute or resell certain third-party verification, data, technology and other products, or such products may become less competitive, which could adversely affect our revenues, customer relationships and operating results.
A portion of our revenue is derived from the marketing, distribution, integration and resale of credit, verification, data, technology and other products and services provided by third parties. In some cases, a significant percentage of the revenue generated from these offerings is derived from products and technologies provided by a limited number of third-party suppliers, licensors and data providers or platform operators. As a result, our business may be particularly vulnerable to the loss, disruption or deterioration of any such relationship. Our ability to offer these products depends on maintaining contractual relationships with these third parties, and such arrangements may be terminated, may not be renewed, may be renewed on less favorable terms, or may become subject to restrictions on our ability to market, distribute, bundle, integrate or resell the applicable products and services.
If one or more of these third-party providers were to terminate or materially modify our rights to resell their products, increase pricing, impose more restrictive contractual terms, experience financial, operational, security, regulatory or compliance issues, discontinue products, be acquired by a competitor or become controlled by a party whose interests do not align with ours, or otherwise limit our access to their products, technologies, platforms, services or underlying data, we may be unable to continue offering those products to our customers or may only be able to do so at reduced margins. In some cases, a competitor that acquires or controls a product, technology or platform that we market, use, distribute or resell may have incentives to favor its own competing offerings, increase pricing, limit investment in products, platforms or technologies made available to us, restrict our access, reduce functionality or support, or make the products, platforms or technologies available to us on less favorable terms, any of which could adversely affect our business, financial condition and results of operations. Third-party providers may also seek to market or distribute their products, platforms or technologies directly to our customers, reduce the role of resellers, intermediaries, cooperatives or distribution partners, or otherwise compete with us for customer relationships. If we are unable to maintain access to competitive products, platforms, technologies, services or pricing, or customers increasingly obtain such products directly from providers, demand for certain of our offerings could decline.
In addition, even if we retain the right to resell such products and use applicable platforms or technologies, our business could be adversely affected if the products, services, platforms or technologies provided by our third-party suppliers fail to remain competitive with alternative solutions available in the marketplace. Competitors may develop or obtain access to products, platforms and technologies that are less expensive, more accurate, more technologically advanced, more automated, faster, provide broader data coverage, or may be more comprehensive, more compliant with evolving regulatory requirements, or otherwise more attractive to customers than the products we offer. If our third-party providers fail to innovate, invest in their products, platforms, or technologies, or maintain competitive service levels, or prioritize competing products or channels, customers may reduce their use of our offerings, switch to competing providers, or exert pressure on pricing and contract terms.
Further, identifying, negotiating and implementing alternative suppliers or replacement products, platforms or technologies may be costly, time-consuming and disruptive and may require significant operational, technological and customer-transition efforts. Alternative products, platforms or technologies may not be available on commercially reasonable terms, may not offer comparable functionality, performance, data coverage, or customer acceptance, or may not be capable of being integrated into our offerings on a timely basis.
The loss of the ability to resell one or more significant verification, credit reporting, or other third-party products, the deterioration of those products, platforms or technologies' competitive position, or our inability to replace such products, platforms or technologies on a timely and cost-effective basis could result in reduced revenues, lower profitability, customer attrition, damage to our reputation, disruption to customer workflows, increased operating costs and reduced competitiveness. Because some of these products, platforms or technologies are integrated into broader service offerings provided by Altisource, any such event could also adversely affect demand for related services and solutions. Any of these events could have a material adverse effect on our business, financial condition and results of operations.
Developments affecting REO volumes, REO pricing or REO sales could negatively affect demand for certain of our default-related services and impair our ability to satisfy contractual performance metrics.
A reduction in residential foreclosures or the supply or sale of REO in the United States could reduce the demand for services, including foreclosure trustee, foreclosure auction, REO asset management, REO property inspection and preservation, real estate brokerage, real estate auction and marketing services, as well as sales of REO, especially in cases where more loans are resolved prior to foreclosure or sold at foreclosure auctions, and therefore do not convert to REO. A reduction in REO properties, or lower sales volumes, could impair our ability to meet certain contractually required service metrics, including conversion percentage requirements, as the size of the applicable REO inventory declines and the remaining properties are often the most difficult to sell. Reduced volumes may also diminish operating efficiencies, increase per unit costs, and make it more challenging to secure and retain vendors at economically viable scale.
Proposals or actions which seek to limit or restrict participation by institutional investors or other buyer classes in single-family housing or REO markets could depress demand for REO, change the composition of the pool of potential REO buyers, lengthen REO sales cycles, or negatively impact pricing for REO assets. Any such developments could adversely affect demand for our REO disposition, auction, brokerage, marketplace and related services, increase execution complexity, reduce the value of REO and associated sales commission and auction fees, or impair our ability to satisfy contractual performance metrics.
In addition, changes in policies, regulations, or program requirements imposed by federal housing agencies or government-sponsored enterprises, including the FHA, HUD, Fannie Mae and Freddie Mac, could adversely affect foreclosure and post-foreclosure processes, auction participation, reimbursement programs and related economics. For example, changes to foreclosure bidding requirements, credit bidding thresholds, eligibility for claims without conveyance of title or similar programs, reimbursement of foreclosure or auction-related costs, conveyance requirements, or other loss mitigation and post-foreclosure programs could reduce the volume of assets eligible for third-party sale, alter servicer behavior at foreclosure auctions, reduce referral volumes, lengthen timelines, negatively impact pricing or fees associated with foreclosure auctions and REO disposition services, or impair our ability to meet contractual performance metrics. Governmental actions that influence mortgage interest rates, mortgage-backed securities markets, or participation by certain buyer classes in residential real estate markets could further reduce demand for our services or increase volatility in volumes and execution complexity. Fannie Mae and Freddie Mac have been under federal conservatorship since 2008. Recapitalization, privatization, exit from conservatorship or other restructuring could result in changes to GSE programs, servicing requirements, foreclosure and REO processes, reimbursement structures, vendor requirements or other aspects of the residential mortgage market. Such changes could affect the volume, timing, economics or profitability of services we provide to GSEs and customers whose portfolios include GSE-backed loans, and could adversely affect our revenues, cash flows, results of operations and financial condition. We may not be able to effectively manage rapid or unanticipated changes in foreclosures or the supply, sale price or sale of REO which could negatively impact our ability to satisfy service level metrics that are tied to conversion rates or other percentage requirements. For example, if a service metric specifies that a certain percentage of the total REO inventory is to be sold within a defined period of time, a rapid change in the total REO inventory may increase the risk of failing to meet the defined percentage metric during the period required to prepare the newly added REO to be marketed. Some of the service metrics which may be impacted include those related to REO conversion rates, aging of REO, time on market and sale price compared to valuation. If we fail to satisfy applicable performance metrics or perform in a manner satisfactory to our customers, such customers may reduce the services they acquire from us or otherwise terminate us as a service provider.
Management's Discussion & Analysis (MD&A)
Largest changes
“SG&A expenses for the six months ended June 30, 2026 of $23.1 million increased by 16% compared to the six months ended June 30, 2025 ($11.7 million for the second quarter of 2026, a 19% increase compared to the second quarter of 2025). The increase in SG&A for the three and six months ended June 30, 2026 was primarily driven by higher compensation and benefits, other SG&A and professional services. Compensation and benefits increased from severance costs related to cost reductions in the Corporate and Other segment and to support revenue growth in certain of our businesses. …”see in full comparison
SG&A for thesee in full comparisonthreesix months endedMarchJune31,30, 2026 of$2.5$4.0 million increased by9%20% compared to thethreesix months endedMarchJune31,30,2025.2025 ($1.5 million for the second quarter of 2026, a 47% increase compared to the second quarter of 2025). The increase in SG&A for the three and six months endedMarchJune31,30, 2026 was primarily due to lower professional services net benefit and higher bad debt expensepartiallyandoffsettravelbycostslowertoprofessionalsupportservices.revenue growth. Professional servicesfornetthe three months ended March 31, 2026benefit decreased primarily due toloweralegal-relatedsecondcosts.quarter 2025 settlement benefit received related to a legacy matter, partially offset by a second quarter 2026 favorable adjustment to a previously recorded litigation settlement loss.
On May 16, 2023, our shareholders approved the renewal and amendment of the share repurchase program previously approved by our shareholders on May 15, 2018. Under the program, we are authorized to purchase up to 0.4 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 $8.00 per share and a maximum price of $200.00 per share, until May 16, 2028. As ofsee in full comparisonMarchJune31,30, 2026, approximately 0.4 million shares of common stock remain available for repurchase under the program. In connection with the elimination of fractional shares resulting from the Share Consolidation, the Company purchased 204 shares of common stock during the year ended December 31, 2025 (no comparative amount for thethreesix months endedMarchJune31,30, 2026). There were no other purchases of shares of common stock during thethreesix months endedMarchJune31,30, 2026 and 2025. Under thenew first lien loan facility (the “New Facility”(as defined below) and the super senior credit facility (the “Super Senior Facility”), we are not permitted to repurchase shares except for limited circumstances.
“We recognized service revenue of $65.8 million for the six months ended June 30, 2026, a 1% increase compared to the six months ended June 30, 2025 ($34.4 million for the second quarter of 2026, an 8% increase compared to the second quarter of 2025). We also recognized reimbursable expenses revenue of $4.1 million for the six months ended June 30, 2026, an 11% decrease compared to the six months ended June 30, 2025 ($1.8 million for the second quarter of 2026, a 22% decrease compared to the second quarter of 2025). …”see in full comparison
“Gross profit decreased to $25.0 million, representing 38% of service revenue, for the six months ended June 30, 2026 compared to $25.6 million, representing 40% of service revenue, for the six months ended June 30, 2025 (increased to $12.9 million, representing 37% of service revenue, for the second quarter of 2026, compared to $12.3 million, representing 39% of service revenue, for the second quarter of 2025). …”see in full comparison
Net cash (used in) provided by financing activities was $(see in full comparison1.13.4) million and$6.0$5.5 million for thethreesix months endedMarchJune31,30, 2026 and 2025, respectively. During thethreesix months endedMarchJune31,30, 2026, we used$0.3$0.6 million to make scheduled repayments ofourtheseniorNewsecured term loanFacility and Super Senior Facility ($0.3 million for the six months ended June 30, 2025), and $1.5 million to repurchase $2.0 million of our debt under the New Facility in June 2026 (no comparative amount for thethreesix months endedMarchJune31,30, 2025). During thethreesix months endedMarchJune31,30, 2025, in connectiontowith the Debt Exchange Transaction, we received $11.3 million in proceeds from the Super Senior Credit Facility, net of original issuance discount and used $1.7 million for debt issuance costsand(no$3.2comparative amounts for the six months ended June 30, 2026). During the six months ended June 30, 2026, we used $0.3 million related to the issuance of equity (no$3.4comparative amountsmillion for thethreesix months endedMarchJune31,30,20262025). During thethreesix months endedMarchJune31,30, 2026 and 2025, we made payments of$0.8$0.9 million and $0.3 million, respectively, to satisfy employee tax withholding obligations on the vesting of restricted share units (“RSUs”) and restricted shares. These payments were made to tax authorities, at the employees’ direction, to satisfy the employees’ tax obligations rather than issuing a portion of vested restricted share units and restricted shares to employees. In addition, we distributed $0.1 million and less than $0.1 million duringboththe three and six months endedMarchJune31,30, 2026 and 2025, respectively, to non-controlling interests.
Full comparison: every changed paragraph (57)
Important factors that could cause actual results to differ materially from those suggested by the forward-looking statements include, but are not limited to, the risks discussed in the Risk Factors section of our Form 10-K for the year ended December 31, 2025, and in Part II, Item 1A of this Form 10-Q, such as:
We classify revenue in three categories: service revenue, revenue from reimbursable expenses and non-controlling interests. In evaluating our performance, we focus on service revenue. Service revenue consists of amounts attributable to our fee-based services. Reimbursable expenses and non-controlling interests are pass-through items for which we earn no margin. Reimbursable expenses consist of amounts we incur on behalf of our customers in performing our fee-based services that we pass directly on to our customers without a markup. Non-controlling interests represent the earnings of Lenders One. Lenders One is a mortgage cooperative managed, but not owned, by Altisource. Lenders One’s earnings are included in revenue and reduced from net (loss) income to arrive at net (loss) income attributable to Altisource.
Serious delinquency rates, foreclosure initiations and foreclosure sales are low relative to historical levels but increased during the threefive months ended MarchMay 31, 2026 relative to the same period in 2025. Additionally, foreclosure initiations and sales as a percentage of seriously delinquent loans for 2020 through 2025 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, we believe these percentages were impacted by servicer practices, home price appreciation, the interest rate environment, housing supply, the general state of the economy, and other factors. In 2021 and 2022, a low interest rate 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, we believe troubled borrowers have more options to avoid foreclosure. Foreclosure initiations and sales increased during the threesix months ended MarchJune 31,30, 2026 compared to the same period in 2025. However, both measures remain below pre-pandemic levels.
During 2025 and the threesix months ended MarchJune 31,30, 2026, 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, foreclosure initiations and/or foreclosure sales rise, and (3) launch new solutions and increase customer adoption of our existing solutions to accelerate the growth of our Origination segment.
On May 16, 2023, our shareholders approved the renewal and amendment of the share repurchase program previously approved by our shareholders on May 15, 2018. Under the program, we are authorized to purchase up to 0.4 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 $8.00 per share and a maximum price of $200.00 per share, until May 16, 2028. As of MarchJune 31,30, 2026, approximately 0.4 million shares of common stock remain available for repurchase under the program. In connection with the elimination of fractional shares resulting from the Share Consolidation, the Company purchased 204 shares of common stock during the year ended December 31, 2025 (no comparative amount for the threesix months ended MarchJune 31,30, 2026). There were no other purchases of shares of common stock during the threesix months ended MarchJune 31,30, 2026 and 2025. Under the new first lien loan facility (the “New Facility” (as defined below) and the super senior credit facility (the “Super Senior Facility”), we are not permitted to repurchase shares except for limited circumstances.
During the threesix months ended MarchJune 31,30, 2026, Onity was our largest customer, accounting for 37%33% of our total revenue.revenue (29% of our revenue for the second quarter of 2026). Additionally, 4% of our revenue for the three and six months ended MarchJune 31,30, 20262026, was earned on the loan portfolios serviced by Onity, when a party other than Onity or the mortgage servicing rights (“MSRs”) 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 DecemberMarch 31, 2025,2026, Onity reported that Rithm MSRs and rights to MSRs (the “Subject MSRs”) represented $29.7 billion of Onity’s servicing and subservicing portfolio. Onity disclosed that the Subject MSRs represent approximately 10%9% of loans serviced and subserviced by Onity (measured in unpaid principal balance (“UPB”)) and approximately 50%47% of all delinquent loans that Onity services were(measured relatedin to Rithm MSRs or rights to MSRs.UPB). In November 2025, Onity disclosed that it had received notification from Rithm that Rithm does not intend to renew its subservicing agreementagreements with Onity effective January 31, 2026. Onity also disclosed that the servicing transfer to Rithm’s own servicing platform began in the first quarter of 2026 and that the transfer of $6.9 billion UPB of the Subject MSRs is subject to the receipt of necessary consents from trustees and others, the timing and success of which are uncertain.
The termination of Onity’s subservicing agreements with Rithm may have a significant adverse effectseffect on Onity’s business. Additionally, this termination will reduce Altisource’s revenue from Onity and Rithm (and revenue associated with the Rithm MSRs) and our results of operations will be adversely affected.
In April 2018, Altisource Portfolio Solutions S.A. and its wholly-owned subsidiary, Altisource S.à r.l. (the “Borrower”), 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 senior secured term loans (the “SSTL”). Effective February 14, 2023, Altisource Portfolio Solutions S.A. and Altisourcethe S.à r.l.Borrower entered into Amendment No. 2 to the Credit Agreement.
During the second quarter of 2026, we repurchased $2.0 million of debt under the New Facility at a discount of 23.7%, recognizing a net gain of $0.7 million on the early extinguishment of debt. This net gain is included in Other income (expense), net, in the Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income. For further information, see Note 10 and Note 21 to the condensed consolidated financial statements.
•Industrywide foreclosure initiations were 5%14% higher for the twofive months ended FebruaryMay 28,31, 2026 compared to the same period in 2025 (although still 14%11% lower than the same pre-COVID-19 period in 2019)
•Industrywide foreclosure sales were 27%19% higher for the twofive months ended FebruaryMay 28,31, 2026 compared to the same period in 2025 (although still 42% lower than the same pre-COVID-19 period in 2019)
•Industrywide mortgage origination unit volume increased by 42%23% for the threesix months ended MarchJune 31,30, 2026 compared to the same period in 2025, comprised of a 19%6% increase in purchase origination and a 91%60% increase in refinancing origination
•The weighted average interest rate on the Company’s long-term debt was 7.31%7.36% for the threesix months ended MarchJune 31,30, 2026 compared to 8.75%8.24% for the same period in 2025
•The Company recognized $3.0$3.5 million of expenses related to the Debt Exchange Transaction for the threesix months ended MarchJune 31,30, 2025 (no comparable amount for the threesix months ended MarchJune 31,30, 2026).
•The Company recognized a $0.7 million gain on early extinguishment of debt from a second quarter 2026 repurchase of $2.0 million of debt under the New Facility at a discount of 23.7% (no comparable amount for the second quarter 2025)
•The Company recognized an income tax (provision) benefit of $0.9$(1.4) million and $0.7$15.7 million for the threesix months ended MarchJune 31,30, 2026 and 2025, respectively. The income tax provision for the three and six months ended MarchJune 31,30, 2026 and 2025 was driven 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 income tax benefit for the three and six months ended June 30, 2025 was driven primarily by the reversal of liabilities for uncertain tax positions, partially offset by income tax expense on transfer pricing income from India and the United States and no tax benefit on the pretax loss from our Luxembourg operating company.
We recognized service revenue of $45.1$93.8 million for the threesix months ended MarchJune 31,30, 2026, a 10%15% increase compared to the threesix months ended MarchJune 31,30, 2025.2025 ($48.7 million for the second quarter of 2026, a 19% increase compared to the second quarter of 2025). The increase in service revenue for the three and six months ended MarchJune 31,30, 2026 was primarily driven by 71% service revenue growth in the Origination segment from sales wins and a stronger origination market. ThisThe increase in service revenue for the three months ended June 30, 2026 was partiallyalso offsetsupported by a8% 5% declinegrowth in the Servicer and Real Estate segment primarily from asales one-time 2025 pricing adjustment benefit in the Foreclosure Trustee business and lower volume in the Renovation business.wins.
We recognized reimbursable expenses revenue of $2.4$4.3 million for the threesix months ended MarchJune 31,30, 2026, a 3%13% decrease compared to the threesix months ended MarchJune 31,30, 2025.2025 ($1.9 million for the second quarter of 2026, a 22% decrease compared to the second quarter of 2025). The decrease in reimbursable expenses for the three and six months ended MarchJune 31,30, 2026 was primarily driven by fewer asset resolution and asset management activities in the Marketplace business and a decrease in the Solutions business within the Origination segment, partially offset by growth in the Foreclosure Trustee business in the Solutions business within the Servicer and Real Estate segment.segment, reflecting the transfer of certain Hubzu REO to Rithm.
We recognized cost of revenue of $34.5$72.3 million for the threesix months ended MarchJune 31,30, 2026, a 14%20% increase compared to the threesix months ended MarchJune 31,30, 2025.2025 Outside($37.8 feesmillion andfor servicesthe second quarter of 2026, a 25% increase compared to the second quarter of 2025). The increase in cost of revenue for the three and six months ended MarchJune 31,30, 2026 increasedwas primarilydriven by higher outside fees and services from service revenue growth in the Lenders One business inwithin the Origination segment.
Gross profit decreased to $13.1$25.9 million, representing 29%28% of service revenue, for the threesix months ended MarchJune 31,30, 2026 compared to $13.3$26.4 million, representing 33%32% of service revenue, for the threesix months ended MarchJune 31,30, 2025.2025 (decreased to $12.8 million, representing 26% of service revenue, for the second quarter of 2026, compared to $13.0 million, representing 32% of service revenue, for the second quarter of 2025). Gross profit as a percentage of service revenue for the three and six months ended MarchJune 31,30, 2026 decreased compared to the three and six months ended MarchJune 31,30, 2025 primarily due to a change in revenue mix fromin growthLenders One within the Origination segment and higher costs associated with the newer Hubzu and Foreclosure Trustee business in the lower margin Origination Segment and lower revenue in the higher margin Servicer and Real Estate segment. Our margins can vary substantially depending upon the service revenue mix.
SG&A expenses for the six months ended June 30, 2026 of $23.1 million increased by 16% compared to the six months ended June 30, 2025 ($11.7 million for the second quarter of 2026, a 19% increase compared to the second quarter of 2025). The increase in SG&A for the three and six months ended June 30, 2026 was primarily driven by higher compensation and benefits, other SG&A and professional services. Compensation and benefits increased from severance costs related to cost reductions in the Corporate and Other segment and to support revenue growth in certain of our businesses. Other SG&A increased from travel costs to support revenue growth. Other SG&A for the three months ended June 30, 2026 also increased from higher bad debt expense. Professional services increased primarily due to a lower net benefit driven by a second quarter 2025 settlement benefit received related to a legacy matter, partially offset by a second quarter 2026 favorable adjustment to a previously recorded litigation settlement loss.
SG&A expenses for the three months ended March 31, 2026 of $11.4 million increased by 13% compared to the three months ended March 31, 2025. The increase in SG&A for the three months ended March 31, 2026 was primarily driven by higher other SG&A expenses and compensation and benefits, and professional services. Other SG&A expenses for the three months ended March 31, 2026 increased primarily due to higher bad debt expense. Compensation and benefits for the three months ended March 31, 2026 increased primarily from higher share based compensation.
Income from operations for the threesix months ended MarchJune 31,30, 2026 was $1.7$2.9 million, representing 4%3% of service revenue, compared to $3.2$6.5 million, representing 8% of service revenue, for the threesix months ended MarchJune 31,30, 2025.2025 (decreased to $1.1 million, representing 2% of service revenue, for the second quarter of 2026, compared to $3.2 million representing 8% of service revenue for the second quarter of 2025). Income from operations as a percentage of service revenue declined for the three and six months ended MarchJune 31,30, 2026 compared to the three and six months ended MarchJune 31,30, 2025 primarily as a result offrom lower gross profit as a percentage of service revenue.
Other income (expense), net was $(1.42.5) million for the threesix months ended MarchJune 31,30, 2026 compared to $(7.810.8) million for the threesix months ended MarchJune 31,30, 2025.2025 ($(1.2) million and $(3.0) million for the second quarters of 2026 and 2025, respectively). The change for the three and six months ended MarchJune 31,30, 2026 was primarily driven by lower interest expense andexpense, no debtDebt exchangeExchange transactionTransaction expenses in 2026.2026, and a gain on early extinguishment of debt in 2026 (no comparable amount in 2025). The lower interest expense was driven by the decrease in outstanding debt and a lower interest rate from the Debt Exchange Transaction. The $0.7 million gain on early extinguishment of debt was from a second quarter 2026 repurchase of $2.0 million of debt under the New Facility at a discount of 23.7%.
We recognized an income tax (provision) benefit of $0.9$(1.4) million and $0.7$15.7 million for the threesix months ended MarchJune 31,30, 2026 and 2025, respectively.respectively ($(0.5) million and $16.5 million for the second quarters of 2026 and 2025, respectively). The income tax (provision) benefit for the three and six months ended MarchJune 31,30, 2026 and 2025 was driven 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 income tax benefit for the three and six months ended June 30, 2025 was driven primarily by the reversal of liabilities for uncertain tax positions, partially offset by income tax expense on transfer pricing income from India and the United States and no tax benefit on the pretax loss from our Luxembourg operating company.
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N/M — not meaningful.
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N/M — not meaningful.
We recognized service revenue of $65.8 million for the six months ended June 30, 2026, a 1% increase compared to the six months ended June 30, 2025 ($34.4 million for the second quarter of 2026, an 8% increase compared to the second quarter of 2025). We also recognized reimbursable expenses revenue of $4.1 million for the six months ended June 30, 2026, an 11% decrease compared to the six months ended June 30, 2025 ($1.8 million for the second quarter of 2026, a 22% decrease compared to the second quarter of 2025). The increase in service revenue for the six months ended June 30, 2026 was driven by sales wins in the Hubzu business within Marketplace and Title business within Solutions, partially offset by lower service revenue in the Property Renovation business within Solutions. The increase in service revenue for the three months ended June 30, 2026 was driven by sales wins the Foreclosure Trustee and Title businesses within Solutions and the Hubzu business within Marketplace. The decrease in reimbursable expenses revenue for the three and six months ended June 30, 2026 was driven by fewer asset resolution and asset management activities in the Hubzu business within Marketplace, reflecting the transfer of certain Hubzu REO to Rithm.
We recognized service revenue of $31.4 million for the three months ended March 31, 2026, a 5% decrease compared to the three months ended March 31, 2025. We also recognized reimbursable expenses revenue of $2.3 million for the three months ended March 31, 2026, a less than 1% decrease compared to the three months ended March 31, 2025. The decrease in service revenue for the three months ended March 31, 2026 was driven by a one-time 2025 pricing adjustment benefit in the Foreclosure Trustee business and lower volume in the Renovation business in the Solutions business, partially offset by revenue growth in the Title business.
Cost of revenue for the threesix months ended MarchJune 31,30, 2026 of $21.5$44.8 million decreasedincreased by 2% compared to the three and six months ended MarchJune 31,30, 2025.2025 ($23.3 million for the second quarter of 2026, a 6% increase compared to the second quarter of 2025). The decreaseincrease in cost of revenue for the three and six months ended MarchJune 31,30, 2026 was primarily driven by lowerhigher compensation and benefits to support revenue growth in certain businesses and higher outside fees and servicesservices. This was partially offset by higherlower compensationreimbursable andexpenses benefits.driven by the transfer of certain Hubzu REO to Rithm. Outside fees and services forincreased the three months ended March 31, 2026 decreasedprimarily from revenue mix changes in the Field Services Business, partially offset by service revenue growth in the Foreclosure Trustee and Title business.businesses within Solutions.
Gross profit decreased to $25.0 million, representing 38% of service revenue, for the six months ended June 30, 2026 compared to $25.6 million, representing 40% of service revenue, for the six months ended June 30, 2025 (increased to $12.9 million, representing 37% of service revenue, for the second quarter of 2026, compared to $12.3 million, representing 39% of service revenue, for the second quarter of 2025). Gross profit as a percentage of service revenue for the three and six months ended June 30, 2026 decreased primarily from higher costs associated with newer Hubzu and Foreclosure Trustee business within Marketplace and Solutions, respectively, partially offset by a change in revenue mix with a higher percentage of revenue from the higher margin Hubzu, Foreclosure Trustee and Title businesses. Our margins can vary substantially depending upon the service revenue mix.
Gross profit decreased to $12.1 million, representing 39% of service revenue, for the three months ended March 31, 2026 compared to $13.3 million, representing 40% of service revenue, for the three months ended March 31, 2025. Gross profit as a percentage of service revenue for the three months ended March 31, 2026 decreased primarily due to a change in revenue mix from greater decline in the higher margin Foreclosure Trustee business and the Field services business in the Solutions business. Our margins can vary substantially depending upon the service revenue mix.
SG&A for the threesix months ended MarchJune 31,30, 2026 of $2.5$4.0 million increased by 9%20% compared to the threesix months ended MarchJune 31,30, 2025.2025 ($1.5 million for the second quarter of 2026, a 47% increase compared to the second quarter of 2025). The increase in SG&A for the three and six months ended MarchJune 31,30, 2026 was primarily due to lower professional services net benefit and higher bad debt expense partiallyand offsettravel bycosts lowerto professionalsupport services.revenue growth. Professional services fornet the three months ended March 31, 2026benefit decreased primarily due to lowera legal-relatedsecond costs.quarter 2025 settlement benefit received related to a legacy matter, partially offset by a second quarter 2026 favorable adjustment to a previously recorded litigation settlement loss.
Income from operations decreased to $9.6$20.9 million, representing 31%32% of service revenue, for the threesix months ended MarchJune 31,30, 2026 compared to $11.0$22.2 million, representing 34% of service revenue, for the six months ended June 30, 2025 (increased to $11.4 million, representing 33% of service revenue, for the threesecond monthsquarter endedof March2026, 31,compared 2025.to $11.3 million, representing 35% of service revenue, for the second quarter of 2025). Operating income as a percentage of service revenue for the three and six months ended MarchJune 31,30, 2026 decreased compared to March 31, 2025 as a result of lower gross profit margins and higher SG&A expenses.margins.
We recognized service revenue of $13.7$28.1 million for the threesix months ended MarchJune 31,30, 2026, a 71%66% increase compared to the threesix months ended MarchJune 31,30, 2025.2025 ($14.3 million for the second quarter of 2026, a 62% increase compared to the second quarter of 2025). We also recognized reimbursable expenses revenue of $0.1$0.2 million for the threesix months ended MarchJune 31,30, 2026, a 42%37% decrease compared to the threesix months ended MarchJune 31,30, 2025.2025 ($0.1 million for the second quarter of 2026, a 31% decrease compared to the second quarter of 2025). The increase in service revenue for the three and six months ended MarchJune 31,30, 2026 was primarily driven by sales wins in Lenders One and a stronger origination market.market, partially offset by lower volumes for loan fulfillment services within Solutions. The decrease in reimbursable expenses for the three and six months ended MarchJune 31,30, 2026 was primarily driven by a decreasedecline in Title services and lower volumes in the loan fulfillment services business within the Solutions business.Solutions.
Cost of revenue for the threesix months ended MarchJune 31,30, 2026 of $11.3$24.2 million increased by 70%80% compared to the threesix months ended MarchJune 31,30, 2025.2025 ($12.9 million for the second quarter of 2026, a 90% increase compared to the second quarter of 2025). The increase in cost of revenue for the three and six months ended MarchJune 31,30, 2026 was primarily driven by higher outside fees and services from growth in the reseller products in Lenders One and higher compensation and benefits to support revenue growth.
Gross profit increased to $2.6$4.2 million, representing 19%15% of service revenue, for the threesix months ended MarchJune 31,30, 2026 compared to $1.6$3.9 million, representing 20%23% of service revenue, for the threesix months ended MarchJune 31,30, 2025.2025 (decreased to $1.6 million, representing 11% of service revenue, for the second quarter of 2026, compared to $2.3 million, representing 26% of service revenue for the second quarter of 2025). Gross profit as a percentage of service revenue for the three and six months ended MarchJune 31,30, 2026 was relatively flatdecreased compared to the three and six months ended MarchJune 31,30, 2025.2025 from revenue mix in Lenders One.
SG&A for the threesix months ended MarchJune 31,30, 2026 of $1.9$3.8 million increased by 14%10% compared to the threesix months ended MarchJune 31,30, 2025.2025 ($1.9 million for the second quarter of 2026, a 5% increase compared to the second quarter of 2025). The increase in SG&A for the three and six months ended MarchJune 31,30, 2026 was primarily due to higher compensation and benefits and amortization of intangible assets,assets and compensation and benefits, partially offset by lower professional services costs. Compensation and benefits for the three months ended March 31, 2026 increased primarily to support revenue growth in the Lenders One business. Amortization of intangible assets for the three months ended March 31, 2026 increased due to the addition of Lenders One intangible assets in the fourth quarter of 2025. Compensation and benefits increased primarily to support revenue growth in the Origination segment. Professional services for the three months ended March 31, 2025 decreased primarily due to lower legal-related costs.
Income (loss) from operations was $0.7relatively flat at $0.5 million, representing 5%2% of service revenue for the six months ended June 30, 2026 compared to $0.5 million, representing 3% of service revenue, for the threesix months ended MarchJune 31,30, 20262025 compared(decreased to $(0.10.2) million, representing less than (11%)% of service revenue,revenue for the threesecond monthsquarter endedof March2026, 31,compared 2025.to $0.6 million, representing 6% of service revenue for the second quarter of 2025). Income from operations as a percentage of service revenue for the three and six months ended MarchJune 31,30, 2026 increaseddecreased compared to the three and six months ended MarchJune 31,30, 2025,2025 primarily fromdue higherto servicethe revenuedecline andin gross profit margins, partially offset by lower SG&A expenses as a percentage of service revenue, partially offset by lower gross margin.revenue.
Cost of revenue for the threesix months ended MarchJune 31,30, 2026 of $1.6$3.3 million increased by 2%4% compared to the threesix months ended MarchJune 31,30, 2025.2025 ($1.7 million for the second quarter of 2026, a 6% increase compared to the second quarter of 2025). The increase in cost of revenue for the three and six months ended MarchJune 31,30, 2026 was primarily driven by investments in technology initiatives and higher compensation and benefitsbenefits, partially offset by lower depreciation and amortization from the completion of the depreciation periods for certain premises and equipment.
SG&A for the threesix months ended MarchJune 31,30, 2026 of $6.9$15.3 million increased by 14%17% compared to the threesix months ended MarchJune 31,30, 2025.2025 ($8.3 million for the second quarter of 2026, a 19% increase compared to the second quarter of 2025). The increase in SG&A for the three and six months ended MarchJune 31,30, 2026 was primarily driven by higher compensation and benefits from severance costs related to cost reductions. The increase in SG&A for the six months ended June 30, 2026 was also driven by higher professional services from higher accruals for estimated legal matters and higher compensation and benefits from higher share based compensation.matters.
Other income (expense), net was $(1.62.9) million for the threesix months ended MarchJune 31,30, 2026 compared to $(7.810.8) million for the threesix months ended MarchJune 31,30, 2025.2025 ($(1.3) million and $(3.0) million for the second quarters of 2026 and 2025, respectively). The change for the three and six months ended MarchJune 31,30, 2026 was primarily driven by lower interest expense andexpense, no debtDebt exchangeExchange transactionTransaction expenses in 2026.2026, and a gain on early extinguishment of debt in 2026 (no comparable amount in 2025). The lower interest expense was driven by the decrease in outstanding debt and a lower interest rate from the Debt Exchange Transaction. The $0.7 million gain on early extinguishment of debt was from a second quarter 2026 repurchase of $2.0 million of debt under the New Facility at a discount of 23.7%
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, primarily due to lower delinquency and foreclosure rates, and higher home equity, revenue has declined significantly compared to pre-pandemic levels (although revenue grew in 2025 compared to 2024 and for the firstthree threeand six months ofended June 30, 2026 compared to the firstthree threeand six months ofended 2025June 30, 2025, respectively).
As of MarchJune 31,30, 2026, there was no outstanding debt under the Revolving Loan Agreement.
The following table presents our cash flows for the threesix months ended MarchJune 3130:
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N/M — not meaningful.
Cash flows from operating activities generally consist of the cash effects of transactions and events that enter into the determination of net loss.(loss) income. For the threesix months ended MarchJune 31,30, 2026, net cash providedused byin operating activities was $4.5$(2.2) million compared to net cash (used in) operating activities of $(5.05.3) million for the threesix months ended MarchJune 31,30, 2025. The increasedecrease in cash provided by (used in) operating activities was driven by a $4.7 million improvement in net loss and a $5.7 million lower use of cash for working capitalincome (accountsloss) receivable,before prepaidincome expenses and other current assets, other assets, accounts payable and accrued expenses, and other current and non-current liabilities),tax, partially offset by $1.3a $1.6 million higherincrease in net reductions to net income for gain on the early extinguishment of debt, amortization of debt premium, net of amortization of debt discount and debt issuance costs.costs, and share based compensation. Operating cash flows can be negatively impacted because of the nature of some of our services and the mix of services provided. Certain services are performed immediately following or shortly after the referral, but the collection of the receivable does not occur until a specific event occurs (e.g., the foreclosure is complete, the REO asset is sold, etc.). Furthermore, lower margin services generate lower income and cash flows from operations. Consequently, our cash flows from operations may be negatively impacted when comparing one period to another.
Net cash (used in) provided by financing activities was $(1.13.4) million and $6.0$5.5 million for the threesix months ended MarchJune 31,30, 2026 and 2025, respectively. During the threesix months ended MarchJune 31,30, 2026, we used $0.3$0.6 million to make scheduled repayments of ourthe seniorNew secured term loanFacility and Super Senior Facility ($0.3 million for the six months ended June 30, 2025), and $1.5 million to repurchase $2.0 million of our debt under the New Facility in June 2026 (no comparative amount for the threesix months ended MarchJune 31,30, 2025). During the threesix months ended MarchJune 31,30, 2025, in connection towith the Debt Exchange Transaction, we received $11.3 million in proceeds from the Super Senior Credit Facility, net of original issuance discount and used $1.7 million for debt issuance costs and(no $3.2comparative amounts for the six months ended June 30, 2026). During the six months ended June 30, 2026, we used $0.3 million related to the issuance of equity (no$3.4 comparative amountsmillion for the threesix months ended MarchJune 31,30, 20262025). During the threesix months ended MarchJune 31,30, 2026 and 2025, we made payments of $0.8$0.9 million and $0.3 million, respectively, to satisfy employee tax withholding obligations on the vesting of restricted share units (“RSUs”) and restricted shares. These payments were made to tax authorities, at the employees’ direction, to satisfy the employees’ tax obligations rather than issuing a portion of vested restricted share units and restricted shares to employees. In addition, we distributed $0.1 million and less than $0.1 million during both the three and six months ended MarchJune 31,30, 2026 and 2025, respectively, to non-controlling interests.
(3) Estimated future interest payments for the New Facility and the Super Senior Facility based on the three-month Secured Overnight Financing Rate (“SOFR”) interest rate as of MarchJune 31,30, 2026.
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 condensed consolidated balance sheets. Amounts held in escrow and other accounts were $53.0$38.1 million and $50.5 million as of MarchJune 31,30, 2026 and December 31, 2025, respectively.
For the threesix months ended MarchJune 31,30, 2026, there were no significant changes to our contractual obligations from those identified in our Form 10-K for the fiscal year ended December 31, 2025 and this Form 10-Q, other than those that occur in the normal course of business. See Note 21 to the condensed consolidated financial statements.
Our critical accounting policies are described in the MD&A section of our Form 10-K for the year ended December 31, 2025 filed with the SEC on March 4, 2026. There have been no material changes to our critical accounting policies during the threesix months ended MarchJune 31,30, 2026.
ASPS insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 5 Form 4 filings (3 insiders, 7 trade dates, 61,212 shares, about $350.3K) and open-market sales in 0 filings. Net open-market shares: 61,212 (purchases minus sales); net value about $350.3K.Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-08-20 | Winkler Matthew T. |
Open-market purchase | 2,000 | $5.60 | $11.2K |
| 2026-08-03 | Benefit Street Partners Llc |
Open-market purchase | 48,991 | $5.78 | $283.2K |
| 2026-07-31 | Benefit Street Partners Llc |
Open-market purchase | 1,009 | $5.43 | $5.5K |
| 2026-07-30 | Winkler Matthew T. |
Open-market purchase | 1,000 | $5.05 | $5.0K |
| 2026-07-29 | Winkler Matthew T. |
Open-market purchase | 701 | $5.10 | $3.6K |
| 2026-07-28 | Shepro William B |
Open-market purchase | 4,000 | $5.18 | $20.7K |
| 2026-06-09 | Benefit Street Partners Llc |
Other | 19,073 | — | — |
| 2026-06-09 | Winkler Matthew T. |
Other | 19,073 | — | — |
| 2026-05-22 | Shepro William B |
Open-market purchase | 3,511 | $6.02 | $21.1K |
| 2026-05-21 | Burg Scott Edward |
Grant/award | 19,070 | — | — |
| 2026-05-21 | Burg Scott Edward |
Grant/award | 145 | — | — |
| 2026-05-21 | Agatecreek Llc |
Grant/award | 19,215 | — | — |
| 2026-05-21 | Iseley Wesley G |
Grant/award | 19,215 | — | — |
| 2026-05-21 | Aldridge John G Jr |
Grant/award | 19,215 | — | — |
| 2026-05-21 | Winkler Matthew T. |
Grant/award | 19,215 | — | — |
| 2026-05-21 | Morettini Joseph L |
Grant/award | 19,215 | — | — |
| 2026-05-21 | Shepro William B |
Grant/award | 112,951 | — | — |
| 2026-05-21 | Ritts Gregory J. |
Grant/award | 19,779 | — | — |
| 2026-05-21 | Esterman Michelle D. |
Grant/award | 23,717 | — | — |
Well-known investors holding ASPS (13F)
None of the 59 investors we track reported a position in their latest 13F.