Altisource Portfolio Solutions Q1 Earnings Call Highlights
by Jessica Moore · The Cerbat GemAltisource Portfolio Solutions (NASDAQ:ASPS) reported first-quarter 2026 results that showed higher service revenue and improved profitability versus the prior-year period, driven by sales wins, a stronger origination market, and lower debt-related costs, according to management on the company’s earnings call.
First-quarter revenue rose 10% as origination accelerated
Chairman and CEO Bill Shepro said the company was “off to a strong start” in 2026, citing growth in service revenue and pre-tax GAAP earnings compared with the first quarter of 2025. Total service revenue was $45.1 million, up 10% year-over-year.
Shepro attributed the increase primarily to the Origination segment, where service revenue rose 71% to $13.7 million, “primarily from sales wins in our Lenders One business,” as well as what he described as a stronger origination market. That growth was partially offset by a 5% decline in Servicer and Real Estate segment service revenue to $31.4 million, which Shepro said was mainly due to “a one-time 2025 pricing adjustment benefit in our foreclosure trustee business,” along with lower renovation volume.
Adjusted EBITDA declined on revenue mix; GAAP results improved
Despite higher revenue, Shepro said total company adjusted EBITDA declined by $800,000, citing a shift in mix toward “higher revenue in the lower margin Origination segment,” lower revenue in Servicer and Real Estate, and “modestly higher corporate costs.”
On a GAAP basis, the company posted first-quarter pre-tax income of $400,000, compared with a $4.5 million pre-tax loss in the first quarter of 2025. Shepro said the improvement was “primarily attributable to lower interest expense and debt exchange transaction expenses incurred last year.”
Altisource generated net cash provided by operating activities of $4.5 million, which Shepro said was a $9.4 million improvement year-over-year. The company ended the quarter with $30.3 million in unrestricted cash.
Servicer and Real Estate: sales wins and growing Hubzu inventory
In the Servicer and Real Estate segment, adjusted EBITDA was $10.8 million, down 10% year-over-year, which Shepro again tied primarily to the year-ago one-time pricing adjustment benefit in the foreclosure trustee business.
Shepro highlighted segment sales wins and a growing Hubzu inventory base as key drivers for the outlook. He said the company won an estimated $12.4 million in annualized stabilized service revenue during the quarter, with “two of the larger first quarter wins” coming in “our higher margin foreclosure trustee and title businesses.” He added that the company began receiving referrals from new business late in the quarter and expects “referral growth and earnings from these wins to accelerate as the year progresses.”
Hubzu inventory growth was a major focus of management’s comments. Shepro said Altisource recently onboarded two larger Hubzu wins and that, driven by those and other customer wins, total Hubzu inventory “has more than tripled since September 30th.” Hubzu inventory stood at 17,200 assets as of March 31 and “over 18,800 assets as of earlier this week,” he said.
Shepro said the company expects revenue from these wins to increase during the year “as REO and foreclosure referrals proceed to sale,” and that management is forecasting full-year Servicer and Real Estate segment service revenue growth from the larger Hubzu inventory and recent sales wins.
However, Shepro noted the forecast assumes some offsets, including “lower Onity and Rithm revenue” based on management’s estimated timing for “the service transfer of Onity servicing to Rithm” and the transition of cooperative brokerage agreement REO assets from Altisource to Rithm.
Origination segment: Lenders One wins lift revenue and EBITDA
The Origination segment delivered both revenue and profitability growth in the quarter. Shepro said adjusted EBITDA in the segment more than doubled to $1.2 million from $500,000 a year earlier, reflecting sales wins and improved market conditions.
During the quarter, the company secured an estimated $4.7 million in wins, “primarily in Lenders One,” and ended the quarter with an estimated $17.2 million weighted average sales pipeline. Based on those wins, the pipeline, and forecasted market conditions, Shepro said Altisource is “anticipating strong full-year service revenue growth in our origination segment.”
Pipeline questions and cash flow expectations
During the Q&A, B. Riley Securities analyst Timothy D’Agostino asked about the quarter-over-quarter decline in the Servicer and Real Estate sales pipeline, which ended the quarter at a total weighted average pipeline of $11.7 million on a stabilized basis.
Management responded that the decline primarily reflected the conversion of pipeline into wins. “The difference in the pipeline reflects the $10 or $11 million in sales wins I discussed in the call,” Shepro said, adding that the change was “simply partially offset by some increases in the sales pipeline” and that the company would be working “very diligently to rebuild that pipeline.”
D’Agostino also asked whether operating cash flow would remain positive through the year. CFO Michelle Esterman said the company expects positive operating cash flow for 2026, while noting quarter-to-quarter variability. “Yes, I think we guided earlier in the year to positive cash flow, operating cash flow for the year,” Esterman said. “You do see fluctuations from quarter to quarter depending on revenue growth, et cetera. Yes, we do anticipate positive cash flow for the year.”
Asked which segment was supporting operating cash flow, Esterman said both segments generated positive EBITDA, though the larger contribution came from Servicer and Real Estate. “You do have larger EBITDA in Servicer and Real Estate, so more of the cash flow does come from that segment,” she said, while reiterating Shepro’s earlier point that management expects results to become more balanced over time.
In closing remarks, Shepro said the company was “very pleased” with the quarter and again pointed to Hubzu inventory, which he said stood at roughly 18,800 assets earlier in the week. “We think we’re set up very well for continued growth during the year,” he said.
About Altisource Portfolio Solutions (NASDAQ:ASPS)
Altisource Portfolio Solutions SA (NASDAQ: ASPS) is a provider of proprietary technology and specialized services to the mortgage and real estate industries. Founded in 2009, the company helps financial institutions, investors and loan servicers streamline processes across the full loan lifecycle, from origination and valuation through default management, asset disposition and investor reporting.
Core offerings include loan servicing and asset management solutions, property preservation and inspection services, valuation and due diligence, title and settlement services, as well as vendor management platforms.