Altisource Portfolio Solutions SA
03/04/2026 | Press release | Distributed by Public on 03/04/2026 06:09
Annual Report for Fiscal Year Ending December 31, 2025 (Form 10-K)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Management's discussion and analysis of financial condition and results of operations ("MD&A") is a supplement to the accompanying consolidated financial statements and is intended to provide a reader of our financial statements with a narrative from the perspective of management on our businesses, current developments, financial condition, results of operations and liquidity. Significant sections of the MD&A are as follows:
Overview.This section, beginning below, provides a description of recent developments we believe are important in understanding our results of operations and financial condition as well as understanding anticipated future trends. It also provides a brief description of significant transactions and events that affect the comparability of financial results and a discussion of the progress being made on our strategic initiatives.
Consolidated Results of Operations. This section, beginning on page 38, provides an analysis of our consolidated results of operations for the two years ended December 31, 2025 and 2024.
Segment Results of Operations. This section, beginning on page 42, provides analysis of our business segments' results of operations for the years ended December 31, 2025 and 2024.
Liquidity and Capital Resources. This section, beginning on page 48, provides an analysis of our cash flows for the two years ended December 31, 2025 and 2024. We also discuss restrictions on cash movements, future commitments and capital resources.
Critical Accounting Policies, Estimates and Recent Accounting Pronouncements. This section, beginning on page 50, identifies those accounting principles we believe are most important to our financial results and that require significant judgment and estimates on the part of management in application. We provide all of our significant accounting policies in Note 2 to the accompanying consolidated financial statements.
Other Matters.This section, beginning on page 51, provides a discussion of customer concentration.
OVERVIEW
Our Business
We are an integrated service provider and marketplace for the real estate and mortgage industries. Combining operational excellence with a suite of innovative services and technologies, Altisource helps solve the demands of the ever-changing markets we serve.
We conduct our operations through two reportable segments: Servicer and Real Estateand Origination. In addition, we report Corporate and Othersseparately.
The Servicer and Real Estate segment provides loan servicers and real estate investors with solutions and technologies that span the mortgage and real estate lifecycle. Within the Servicer and Real Estate segment we provide:
Solutions
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.
Marketplace
Our Marketplace business includes the Hubzu online real estate auction platform, real estate brokerage and asset management services.
Technology and SaaS Products
Our Technology and SaaS Products business includes Equator (a SaaS-based technology to manage REO 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).
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The Origination segment provides originators with solutions and technologies that span the mortgage origination lifecycle. Within the Origination segment we provide:
Lenders One
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 solutions provided to the members of the Lenders One cooperative.
Solutions
Our Solutions business includes loan fulfillment services, real estate valuation services, title insurance (as an agent) and settlement services, and insurance services.
Technology and SaaS Products
Our Technology and SaaS Products business includes Vendorly Monitor (a vendor management platform), LOLA (a marketplace to order services and a tool to automate components of the loan manufacturing process) and TrelixAI (technology to manage the workflow and automate components of the loan fulfillment and pre and post-close quality control).
Corporate and Othersincludes interest expense and costs related to corporate functions including executive, infrastructure and certain technology groups, finance, law, compliance, human resources, vendor management, facilities, risk management and eliminations between reportable segments.
We classify revenue in three categories: 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 income (loss) to arrive at net income (loss) attributable to Altisource.
Strategy and Core Businesses
We are focused on becoming the premier provider of mortgage and real estate marketplaces and related technology enabled solutions to a broad and diversified customer base of residential real estate and loan investors, servicers, and originators. The real estate and mortgage marketplaces represent very large markets, and we believe our scale and suite of offerings provide us with competitive advantages that could support our growth. As we navigate the current state of the economy, interest rate environment, housing supply, and other macro-economic trends, we continue to evaluate our strategy and core businesses and seek to position our businesses to provide long term value to our customers and shareholders.
Each of our business segments provides Altisource the potential to grow and diversify our customer and revenue base. We believe these business segments address very large markets and directly leverage our core competencies and distinct competitive advantages. Our business segments and strategic initiatives follow:
Servicer and Real Estate:
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 gaining market share 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.
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Origination:
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 (Lenders One is a residential mortgage cooperative managed by Altisource), which includes independent mortgage bankers, credit unions, and 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.
Default Related Mortgage Market
Serious delinquency rates, foreclosure initiations and foreclosure sales are low relative to historical 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 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 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 default-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 2024 and 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 rates, foreclosure initiations and/or foreclosure sales rise, (3) launch a residential renovation business to renovate single family homes and launch a commercial real estate auction business on Hubzu, our online auction platform, and (4) launch new solutions and increase customer adoption of our existing solutions to accelerate the growth of our Origination segment.
Share Repurchase Program
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 December 31, 2025, 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 year ended December 31, 2024). There were no other purchases of shares of common stock during the years ended December 31, 2025 and 2024. Under the New Facility and the Super Senior Facility, we are not permitted to repurchase shares except for limited circumstances.
Onity Related Matters
During the year ended December 31, 2025, Onity was our largest customer, accounting for 42% of our total revenue. Additionally, 5% of our revenue for the year ended December 31, 2025 was earned on the loan portfolios serviced by Onity, when a party other than Onity or the MSR owner selected Altisource as the service provider.
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Onity has disclosed that it is subject to a number of ongoing regulatory examinations, consent orders, inquiries, subpoenas, civil investigative demands, requests for information and other actions and is subject to pending and threatened legal proceedings, some of which include claims against Onity for substantial monetary damages. Previous regulatory actions against Onity have subjected Onity to independent oversight of its operations and placed certain restrictions on its ability to acquire servicing rights or proceed with default-related actions on the loans it services. Existing or future similar matters could result in adverse regulatory or other actions against Onity. In addition to the above, Onity may become subject to future adverse regulatory or other actions.
Onity has disclosed that Rithm is one of its largest servicing clients. As of December 31, 2025, Onity reported that approximately 10% of loans serviced and subserviced by Onity (measured in UPB) and approximately 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 Onity's loss of significant clients may have significant adverse effects on Onity's business. For example, Onity may be required to alter the way it conducts business, including the parties it contracts with for services, it may be required to seek changes to its existing pricing structure with us, it may lose its non-GSE servicing rights or subservicing arrangements or may lose one or more of its state servicing or origination licenses. Additional regulatory actions or adverse financial developments may impose additional restrictions on or require changes in Onity's business that could require it to sell assets or change its business operations. Any or all of these effects and others could result in our eventual loss of Onity as a customer or a reduction in the number and/or volume of services it purchases from us or the loss of other customers.
If any of the following events occurred, Altisource's revenue could be significantly reduced and our results of operations could be materially adversely affected, including from the possible impairment or write-off of goodwill, intangible assets, property and equipment, other assets and accounts receivable:
•Altisource loses Onity as a customer or there is a significant reduction in the volume of services it purchases from us
•Onity loses, sells or transfers a significant portion of its GSE or Federal Housing Administration servicing rights or subservicing arrangements or remaining other servicing rights or subservicing arrangements and Altisource fails to be retained as a service provider
•Onity loses state servicing licenses in states with a significant number of loans in Onity's servicing portfolio
•Onity is subject to stays, moratoriums, suspensions or other restrictions that limit or delay default-related actions on the loans it services
•The contractual relationship between Onity and Altisource changes significantly or there are significant changes to our pricing to Onity for services from which we generate material revenue
•Altisource otherwise fails to be retained as a service provider and/or there is a reduction in referral volumes
The foregoing list is not intended to be exhaustive. Management cannot predict whether any of these events or other events will occur or the amount of any impact they may have on Altisource.
Factors Affecting Comparability
The following items impact the comparability of our results:
•Industrywide foreclosure initiations were 25% higher in 2025 compared to 2024 (although still 19% lower than the same pre-COVID-19 period in 2019)
•Industrywide foreclosure sales were 17% higher in 2025 compared to 2024 (although still 45% lower than the same pre-COVID-19 period in 2019)
•Industrywide mortgage origination unit volume increased by 19% in 2025 compared to 2024, comprised of a 2% decline in purchase origination and a 92% increase in refinancing origination
•The weighted average interest rate on the Company's long-term debt was 8.11% for the year ended December 31, 2025, compared to 14.00% for the same period in 2024
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•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
•The Company recognized an income tax benefit of $16.1 million for the year ended December 31, 2025, which 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 and uncertain tax positions
•The Company recognized an income tax provision of $2.6 million for the year ended December 31, 2024, which was driven primarily by income tax expense on transfer pricing income from India and the United States, no tax benefit on the pretax loss from our Luxembourg operating company and uncertain tax positions.
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CONSOLIDATED RESULTS OF OPERATIONS
The following is a discussion of our consolidated results of operations for the years ended December 31, 2025 and 2024. For a more detailed discussion of the factors that affected the results of our business segments in these periods, see "Segment Results of Operations"below.
The following table sets forth information on our consolidated results of operations for the years ended December 31:
| (in thousands, except per share data) | 2025 | 2024 | % Increase (decrease) | |||||||||||||||||
| Service revenue | ||||||||||||||||||||
| Servicer and Real Estate | $ | 126,057 | $ | 119,939 | 5 | |||||||||||||||
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Origination
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35,200 | 30,415 | 16 | |||||||||||||||||
| Total service revenue | 161,257 | 150,354 | 7 | |||||||||||||||||
| Reimbursable expenses | 9,405 | 9,592 | (2) | |||||||||||||||||
| Non-controlling interests | 313 | 188 | 66 | |||||||||||||||||
| Total revenue | 170,975 | 160,134 | 7 | |||||||||||||||||
| Cost of revenue | 122,065 | 110,605 | 10 | |||||||||||||||||
| Gross profit | 48,910 | 49,529 | (1) | |||||||||||||||||
| Selling, general and administrative expenses | 40,976 | 45,620 | (10) | |||||||||||||||||
| Litigation settlement loss | 7,517 | - | N/M | |||||||||||||||||
| Loss on sale of business | - | 685 | (100) | |||||||||||||||||
| Income from operations | 417 | 3,224 | (87) | |||||||||||||||||
| Other income (expense), net: | ||||||||||||||||||||
| Interest expense | (12,173) | (38,877) | (69) | |||||||||||||||||
| Debt exchange transaction expenses | (3,646) | - | N/M | |||||||||||||||||
| Other income (expense), net | 1,256 | 2,786 | (55) | |||||||||||||||||
| Total other income (expense), net | (14,563) | (36,091) | 60 | |||||||||||||||||
| Loss before income taxes and non-controlling interests | (14,146) | (32,867) | 57 | |||||||||||||||||
| Income tax benefit (provision) | 16,074 | (2,581) | N/M | |||||||||||||||||
| Net income (loss) | 1,928 | (35,448) | 105 | |||||||||||||||||
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Net income attributable to non-controlling interests
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(313) | (188) | 66 | |||||||||||||||||
| Net income (loss) attributable to Altisource | $ | 1,615 | $ | (35,636) | 105 | |||||||||||||||
| Margins: | ||||||||||||||||||||
| Gross profit / service revenue | 30 | % | 33 | % | ||||||||||||||||
| Income from operations / service revenue | - | % | 2 | % | ||||||||||||||||
| Earnings (loss) per share: | ||||||||||||||||||||
| Basic | $ | 0.16 | $ | (9.99) | 102 | |||||||||||||||
| Diluted | $ | 0.15 | $ | (9.99) | 102 | |||||||||||||||
| Weighted average shares outstanding: | ||||||||||||||||||||
| Basic | 10,066 | 3,567 | 182 | |||||||||||||||||
| Diluted | 11,067 | 3,567 | 210 | |||||||||||||||||
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| N/M - not meaningful. | ||||||||||||||||||||
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Revenue
We recognized service revenue of $161.3 million for the year ended December 31, 2025, a 7% increase compared to the year ended December 31, 2024. The increase in service revenue for the year ended December 31, 2025 was driven by higher revenue in both segments. Revenue was higher in the Servicer and Real Estate segment from growth in our Property Renovation Services, Foreclosure Trustee, Granite and Field Services businesses in the Solutions business, partially offset by fewer home sales in the Marketplace business and lower professional services revenue in the Equator business within the Technology and SaaS products business. Revenue was higher in the Origination segment from growth in reseller products in the Lenders One business.
We recognized reimbursable expense revenue of $9.4 million for the year ended December 31, 2025, a 2% decrease compared to the year ended December 31, 2024. The decrease in reimbursable expenses for the year ended December 31, 2025 was primarily driven by fewer asset resolution and asset management activities 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 Servicer and Real Estate Solutions business.
Certain of our revenues can be impacted by seasonality. More specifically, revenues from property sales, loan originations and certain property preservation services in field services typically tend to be at their lowest level during the fall and winter months and at their highest level during the spring and summer months. However, as a result of the current default market, home price appreciation and higher mortgage interest rates, the seasonal impact to revenue may not follow historical patterns.
Cost of Revenue and Gross Profit
Cost of revenue principally includes payroll and employee benefits associated with personnel employed in customer service, operations and technology roles, fees paid to external providers related to the provision of services, reimbursable expenses, technology and telecommunications costs as well as depreciation and amortization of operating assets.
Cost of revenue consists of the following for the years ended December 31:
| (in thousands) | 2025 | 2024 | % Increase (decrease) | |||||||||||||||||
| Outside fees and services | $ | 69,317 | $ | 59,808 | 16 | |||||||||||||||
| Compensation and benefits | 31,115 | 29,321 | 6 | |||||||||||||||||
| Technology and telecommunications | 11,848 | 11,282 | 5 | |||||||||||||||||
| Reimbursable expenses | 9,405 | 9,592 | (2) | |||||||||||||||||
| Depreciation and amortization | 380 | 602 | (37) | |||||||||||||||||
| Total | $ | 122,065 | $ | 110,605 | 10 | |||||||||||||||
We recognized cost of revenue of $122.1 million for the year ended December 31, 2025, a 10% increase compared to the year ended December 31, 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, 2025 increased primarily due to growth in the Property Renovation Services business and higher annual incentive compensation accruals. Technology and telecommunications for the year ended December 31, 2025 increased primarily from a benefit recognized 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. In addition, changes in reimbursable expenses for the year ended December 31, 2025 are consistent with the changes in reimbursable expenses revenue discussed in the revenue section above.
Gross profit decreased 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. Gross profit as a percentage of service revenue for the year ended December 31, 2025 decreased compared to the year ended December 31, 2024 primarily due to a change in revenue mix from greater growth in the lower margin Property Renovations Services and Lenders One businesses than in the higher margin Hubzu business. Our margins can vary substantially depending upon the service revenue mix.
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Selling, General and Administrative Expenses
Selling, general and administrative ("SG&A") expenses includes payroll for personnel employed in executive, sales and marketing, finance, technology, law, compliance, audit, human resources, vendor management, facilities and risk management roles. This category also includes professional services fees, occupancy costs, marketing costs, depreciation and amortization of non-operating assets and other expenses.
SG&A expenses consist of the following for the years ended December 31:
| (in thousands) | 2025 | 2024 | % Increase (decrease) | |||||||||||||||||
| Compensation and benefits | $ | 20,008 | $ | 19,212 | 4 | |||||||||||||||
| Professional services | 5,157 | 10,118 | (49) | |||||||||||||||||
| Amortization of intangible assets | 5,183 | 5,080 | 2 | |||||||||||||||||
| Occupancy related costs | 3,388 | 3,556 | (5) | |||||||||||||||||
| Marketing costs | 2,375 | 2,051 | 16 | |||||||||||||||||
| Depreciation and amortization | 137 | 395 | (65) | |||||||||||||||||
| Other | 4,728 | 5,208 | (9) | |||||||||||||||||
| Selling, general and administrative expenses | $ | 40,976 | $ | 45,620 | (10) | |||||||||||||||
SG&A expenses for the year ended December 31, 2025 of $41.0 million decreased by 10% compared to the year ended December 31, 2024. The decrease in SG&A for the year ended December 31, 2025 was primarily driven by lower professional services and other SG&A expenses, partially offset by higher compensation and benefits. Professional services for the year ended December 31, 2025 decreased 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 the year ended December 31, 2025 decreased primarily due to lower bad debt expense, as well as a loss on sale of business recognized during the year ended December 31, 2024 in connection with the 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 from operations
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. Income from operations as a percentage of service revenue declined for the year ended December 31, 2025 compared to the year ended December 31, 2024, primarily from a $7.5 million loss from litigation settlement with NFHA and associated defense costs and lower gross profit margins, partially 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
Other income (expense), net, principally includes interest expense and other non-operating gains and losses.
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. The change for the year ended December 31, 2025 was primarily driven by lower interest expense, partially offset by higher debt exchange transaction expenses. The lower interest expense was driven by the decrease in outstanding debt and a lower interest rate from the February 19, 2025 Debt Exchange Transaction.
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Income Tax Provision
We recognized an income tax benefit (provision) of $16.1 million and $(2.6) million for the years ended December 31, 2025 and 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, 2024 was driven primarily by income tax expense on transfer
pricing income from India and the United States, no tax benefit on the pretax loss from our Luxembourg operating company
and uncertain tax positions.
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SEGMENT RESULTS OF OPERATIONS
The following section provides a discussion of pretax results of operations of our business segments. Transactions between segments are accounted for as third party arrangements for purposes of presenting segment results of operations.
Financial information for our segments was as follows:
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For the year ended December 31, 2025
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| (in thousands) | Servicer and Real Estate | Origination | Corporate and Others | Consolidated Altisource | ||||||||||||||||||||||
| Revenue | ||||||||||||||||||||||||||
| Service revenue | $ | 126,057 | $ | 35,200 | $ | - | $ | 161,257 | ||||||||||||||||||
| Reimbursable expenses | 8,780 | 625 | - | 9,405 | ||||||||||||||||||||||
|
Non-controlling interests
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- | 313 | - | 313 | ||||||||||||||||||||||
| 134,837 | 36,138 | - | 170,975 | |||||||||||||||||||||||
| Cost of revenue | 86,752 | 28,861 | 6,452 | 122,065 | ||||||||||||||||||||||
| Gross profit (loss) | 48,085 | 7,277 | (6,452) | 48,910 | ||||||||||||||||||||||
| Selling, general and administrative expenses | 7,503 | 7,162 | 26,311 | 40,976 | ||||||||||||||||||||||
| Litigation settlement loss | 7,517 | - | - | 7,517 | ||||||||||||||||||||||
| Income (loss) from operations | 33,065 | 115 | (32,763) | 417 | ||||||||||||||||||||||
| Total other income (expense), net | 228 | (5) | (14,786) | (14,563) | ||||||||||||||||||||||
| Income (loss) before income taxes and non-controlling interests | $ | 33,293 | $ | 110 | $ | (47,549) | $ | (14,146) | ||||||||||||||||||
| Margins: | ||||||||||||||||||||||||||
| Gross profit (loss) / service revenue | 38 | % | 21 | % | N/M | 30 | % | |||||||||||||||||||
| Income (loss) from operations / service revenue | 26 | % | - | % | N/M | 0 | % | |||||||||||||||||||
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| N/M - not meaningful. | ||||||||||||||||||||||||||
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For the year ended December 31, 2024
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| (in thousands) | Servicer and Real Estate | Origination | Corporate and Others | Consolidated Altisource | ||||||||||||||||||||||
| Revenue | ||||||||||||||||||||||||||
| Service revenue | $ | 119,939 | $ | 30,415 | $ | - | $ | 150,354 | ||||||||||||||||||
| Reimbursable expenses | 9,011 | 581 | - | 9,592 | ||||||||||||||||||||||
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Non-controlling interests
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- | 188 | - | 188 | ||||||||||||||||||||||
| 128,950 | 31,184 | - | 160,134 | |||||||||||||||||||||||
| Cost of revenue | 79,631 | 24,473 | 6,501 | 110,605 | ||||||||||||||||||||||
| Gross profit (loss) | 49,319 | 6,711 | (6,501) | 49,529 | ||||||||||||||||||||||
| Selling, general and administrative expenses | 11,421 | 6,584 | 27,615 | 45,620 | ||||||||||||||||||||||
| Loss on sale of business | - | - | 685 | 685 | ||||||||||||||||||||||
| Income (loss) from operations | 37,898 | 127 | (34,801) | 3,224 | ||||||||||||||||||||||
| Total other income (expense), net | 120 | - | (36,211) | (36,091) | ||||||||||||||||||||||
| Income (loss) before income taxes and non-controlling interests | $ | 38,018 | $ | 127 | $ | (71,012) | $ | (32,867) | ||||||||||||||||||
| Margins: | ||||||||||||||||||||||||||
| Gross profit (loss) / service revenue | 41 | % | 22 | % | N/M | 33 | % | |||||||||||||||||||
| Income (loss) from operations / service revenue | 32 | % | 0 | % | N/M | 2 | % | |||||||||||||||||||
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| N/M - not meaningful. | ||||||||||||||||||||||||||
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Servicer and Real Estate
Revenue
Revenue by line of business was as follows for the years ended December 31:
| (in thousands) | 2025 | 2024 | % Increase (decrease) | |||||||||||||||||
| Service revenue: | ||||||||||||||||||||
| Solutions | $ | 92,338 | $ | 82,438 | 12 | |||||||||||||||
| Marketplace | 24,293 | 26,894 | (10) | |||||||||||||||||
| Technology and SaaS Products | 9,426 | 10,607 | (11) | |||||||||||||||||
| Total service revenue | 126,057 | 119,939 | 5 | |||||||||||||||||
| Reimbursable expenses: | ||||||||||||||||||||
| Solutions | 4,528 | 4,409 | 3 | |||||||||||||||||
| Marketplace | 4,252 | 4,602 | (8) | |||||||||||||||||
| Total reimbursable expenses | 8,780 | 9,011 | (3) | |||||||||||||||||
| Total revenue | $ | 134,837 | $ | 128,950 | 5 | |||||||||||||||
We recognized service revenue of $126.1 million for the year ended December 31, 2025, a 5% increase compared to the year ended December 31, 2024. The increase in service revenue for the year ended December 31, 2025 was driven by growth in our Property Renovation Services, Foreclosure Trustee businesses, Granite and Field Services businesses in the Solutions business, partially offset by fewer home sales in the Marketplace business and lower professional services revenue in the Equator business within the Technology and SaaS products business. The decrease in reimbursable expenses for the year ended December 31, 2025 was primarily driven by fewer asset resolution and asset management activities 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.
Certain of our Servicer and Real Estate businesses are impacted by seasonality. Revenues from property sales and certain property preservation services are generally lowest during the fall and winter months and highest during the spring and summer months. However, as a result of the current default market, home price appreciation and higher mortgage interest rates, the seasonal impact to revenue may not follow historical patterns.
Cost of Revenue and Gross Profit
Cost of revenue consisted of the following for the years ended December 31:
| (in thousands) | 2025 | 2024 | % Increase (decrease) | |||||||||||||||||
| Outside fees and services | $ | 46,435 | $ | 41,011 | 13 | |||||||||||||||
| Compensation and benefits | 23,611 | 22,104 | 7 | |||||||||||||||||
| Reimbursable expenses | 8,780 | 9,011 | (3) | |||||||||||||||||
| Technology and telecommunications | 7,678 | 7,182 | 7 | |||||||||||||||||
| Depreciation and amortization | 248 | 323 | (23) | |||||||||||||||||
| Cost of revenue | $ | 86,752 | $ | 79,631 | 9 | |||||||||||||||
Cost of revenue for the year ended December 31, 2025 of $86.8 million increased by 9% compared to the year ended December 31, 2024. The increase in cost of revenue for the year ended December 31, 2025 was 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 service revenue growth in the Property Renovation Services, 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 annual incentive compensation accruals. Technology and telecommunications for the year ended December 31, 2025 increased from higher cloud services costs from higher volumes and from a benefit recognized in 2024.
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Gross profit decreased 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. Gross profit as a percentage of service revenue for the year ended December 31, 2025 decreased primarily due to a change in revenue mix from greater growth in the lower margin Property Renovations Services business than in the higher margin Foreclosure Trustee business in the Solutions business and fewer homes sales in the higher margin Marketplace business. Our margins can vary substantially depending upon the service revenue mix.
Selling, General and Administrative Expenses
SG&A expenses consisted of the following for the years ended December 31:
| (in thousands) | 2025 | 2024 | % Increase (decrease) | |||||||||||||||||
| Amortization of intangible assets | $ | 2,960 | $ | 2,960 | - | |||||||||||||||
| Compensation and benefits | 1,932 | 1,991 | (3) | |||||||||||||||||
| Professional services | 33 | 3,563 | (99) | |||||||||||||||||
| Marketing costs | 1,352 | 1,249 | 8 | |||||||||||||||||
| Occupancy related costs | 420 | 545 | (23) | |||||||||||||||||
| Depreciation and amortization | 1 | 2 | (50) | |||||||||||||||||
| Other | 805 | 1,111 | (28) | |||||||||||||||||
| Selling, general and administrative expenses | $ | 7,503 | $ | 11,421 | (34) | |||||||||||||||
SG&A for the year ended December 31, 2025 of $7.5 million decreased by 34% compared to the year ended December 31, 2024. The decrease in SG&A for the year ended December 31, 2025 was primarily due to lower professional services. Professional services for the year ended December 31, 2025 decreased primarily due to a settlement payment received related to a legacy matter and lower costs related to legacy indemnification accruals.
Income from operations
Income from operations decreased 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, 2024. Operating income as a percentage of service revenue for the year ended December 31, 2025 declined compared to the year ended December 31, 2024 primarily from a $7.5 million loss from litigation settlement with NFHA and lower gross profit margins, partially offset by lower SG&A expenses.
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Origination
Revenue
Revenue by business unit was as follows for the years ended December 31:
| (in thousands) | 2025 | 2024 | % Increase (decrease) | |||||||||||||||||
| Service revenue: | ||||||||||||||||||||
| Lenders One | $ | 28,158 | $ | 23,837 | 18 | |||||||||||||||
| Solutions | 6,306 | 5,915 | 7 | |||||||||||||||||
| Technology and SaaS Products | 736 | 663 | 11 | |||||||||||||||||
| Total service revenue | 35,200 | 30,415 | 16 | |||||||||||||||||
| Reimbursable expenses: | ||||||||||||||||||||
| Solutions | 625 | 581 | 8 | |||||||||||||||||
| Total reimbursable expenses | 625 | 581 | 8 | |||||||||||||||||
|
Non-controlling interests
|
313 | 188 | 66 | |||||||||||||||||
| Total revenue | $ | 36,138 | $ | 31,184 | 16 | |||||||||||||||
We recognized service revenue of $35.2 million for the year ended December 31, 2025, a 16% increase compared to the year ended December 31, 2024. We also recognized reimbursable expense revenue of $0.6 million for the year ended December 31, 2025, an 8% increase compared to the year ended December 31, 2024. The increase in service revenue in the Origination segment for the year ended December 31, 2025 was primarily driven by growth in reseller products 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 and Gross Profit
Cost of revenue consisted of the following for the years ended December 31:
| (in thousands) | 2025 | 2024 | % Increase (decrease) | |||||||||||||||||
| Outside fees and services | $ | 22,882 | $ | 18,800 | 22 | |||||||||||||||
| Compensation and benefits | 4,566 | 4,413 | 3 | |||||||||||||||||
| Technology and telecommunications | 777 | 659 | 18 | |||||||||||||||||
| Reimbursable expenses | 625 | 581 | 8 | |||||||||||||||||
| Depreciation and amortization | 11 | 20 | (45) | |||||||||||||||||
| Cost of revenue | $ | 28,861 | $ | 24,473 | 18 | |||||||||||||||
Cost of revenue for the year ended December 31, 2025 of $28.9 million increased by 18% compared to the year ended December 31, 2024. The increase in cost of revenue for the year ended December 31, 2025 was primarily driven by higher outside fees and services from growth in the 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.
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Selling, General and Administrative Expenses
SG&A expenses consisted of the following for the years ended December 31:
| (in thousands) | 2025 | 2024 | % Increase (decrease) | |||||||||||||||||
| Compensation and benefits | $ | 2,097 | $ | 1,941 | 8 | |||||||||||||||
| Amortization of intangible assets | 2,223 | 2,120 | 5 | |||||||||||||||||
| Professional services | 865 | 435 | 99 | |||||||||||||||||
| Marketing costs | 1,022 | 796 | 28 | |||||||||||||||||
| Occupancy related costs | 188 | 325 | (42) | |||||||||||||||||
| Depreciation and amortization | - | 1 | (100) | |||||||||||||||||
| Other | 767 | 966 | (21) | |||||||||||||||||
| Selling, general and administrative expenses | $ | 7,162 | $ | 6,584 | 9 | |||||||||||||||
SG&A for the year ended December 31, 2025 of $7.2 million increased by 9% compared to the year ended December 31, 2024. The increase in SG&A for the year ended December 31, 2025 was primarily due to higher professional services and compensation and benefits, partially offset by lower occupancy related costs. Professional services for the year ended December 31, 2025 increased primarily from a legacy litigation matter. Compensation and benefits for the year ended December 31, 2025 increased primarily from revenue growth in the Lenders One business.
Income from Operations
Income from operations was $0.1 million, representing less than 1% of service revenue, for the year ended December 31, 2025 compared to income from operations of $0.1 million, representing less than 1% of service revenue, for the year ended December 31, 2024. Income from operations for the year ended December 31, 2025 was relatively flat compared to the year ended December 31, 2024.
Corporate and Others
Cost of Revenue
Cost of revenue consisted of the following for the years ended December 31:
| (in thousands) | 2025 | 2024 | % Increase (decrease) | |||||||||||||||||
| Compensation and benefits | $ | 2,938 | $ | 2,804 | 5 | |||||||||||||||
| Outside fees and services | - | (3) | 100 | |||||||||||||||||
| Technology and telecommunications | 3,393 | 3,441 | (1) | |||||||||||||||||
| Depreciation and amortization | 121 | 259 | (53) | |||||||||||||||||
| Cost of revenue | $ | 6,452 | $ | 6,501 | (1) | |||||||||||||||
|
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| N/M - not meaningful. | ||||||||||||||||||||
Cost of revenue for the year ended December 31, 2025 of $6.5 million decreased by 1% compared to the year ended December 31, 2024. The decrease in cost of revenue for the year ended December 31, 2025 was primarily driven by lower depreciation and amortization from the completion of the depreciation periods for certain premises and equipment.
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Selling, General and Administrative Expenses
SG&A in Corporate and Others include costs related to the corporate functions including executive, finance, technology, law, compliance, human resources, vendor management, facilities, risk management and eliminations between reportable segments.
SG&A expenses consisted of the following for the years ended December 31:
| (in thousands) | 2025 | 2024 | % Increase (decrease) | |||||||||||||||||
| Compensation and benefits | $ | 15,979 | $ | 15,280 | 5 | |||||||||||||||
| Professional services | 4,259 | 6,120 | (30) | |||||||||||||||||
| Occupancy related costs | 2,780 | 2,686 | 3 | |||||||||||||||||
| Depreciation and amortization | 136 | 392 | (65) | |||||||||||||||||
| Marketing costs | 1 | 6 | (83) | |||||||||||||||||
| Other | 3,156 | 3,131 | 1 | |||||||||||||||||
| Selling, general and administrative expenses | $ | 26,311 | $ | 27,615 | (5) | |||||||||||||||
SG&A for the year ended December 31, 2025 of $26.3 million decreased by 5% compared to the year ended December 31, 2024. The decrease for the year ended December 31, 2025 is primarily driven by lower professional services from lower accruals for estimated legal matters.
Other Income (Expense), net
Other income (expense), net principally includes interest expense and other non-operating gains and losses.
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. The change for the year ended December 31, 2025 was primarily driven by lower interest expense, partially offset by higher debt exchange transaction expenses. The lower interest expense was driven by the decrease in outstanding debt and a lower interest rate from the February 19, 2025 Debt Exchange Transaction.
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LIQUIDITY AND CAPITAL RESOURCES
Liquidity
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 in 2024 compared to 2023). The lower revenue, partially offset by efficiency initiatives and cost savings 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, more recent 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.
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, 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.
Revolving Loan Agreement
In connection with the Company's Renovation 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").
Under the terms of the Revolving Loan Agreement, AAMC will make loans to Altisource from time to time, as may be requested by Altisource. The Revolving Loan Agreement provides Altisource the ability to borrow an initial aggregate amount of up to $1.0 million, with the potential for this to be increased up to $3.0 million at the option of AAMC. Amounts that are repaid may be re-borrowed in accordance with the limitations set forth below.
The maturity date of the Revolving Loan Agreement was June 3, 2025 and can 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.
Borrowings under the Revolving Loan Agreement bear interest of 12.00% per annum in cash and are payable monthly in arrears on the first business day of each calendar month. Altisource will pay AAMC a monthly unused commitment fee in an amount equal to 0.25% per annum of the average amount of the unused available credit under the Revolving Loan Agreement.
Altisource's obligation under the Revolving Loan Agreement is secured by certain receivables related to the Company's residential real estate renovation services business.
As of December 31, 2025, there was no outstanding debt under the Revolving Loan Agreement.
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Cash Flows
The following table presents our cash flows for the years ended December 31:
| (in thousands) | 2025 | 2024 | % Increase (decrease) | |||||||||||||||||
| Net cash used in operating activities | $ | (5,065) | $ | (5,025) | 1 | |||||||||||||||
| Net cash (used in) provided by investing activities | (319) | 2,254 | (114) | |||||||||||||||||
| Net cash provided by financing activities | 3,177 | 55 | N/M | |||||||||||||||||
| Net decrease in cash, cash equivalents and restricted cash | (2,207) | (2,716) | (19) | |||||||||||||||||
| Cash, cash equivalents and restricted cash at the beginning of the period | 32,700 | 35,416 | (8) | |||||||||||||||||
| Cash, cash equivalents and restricted cash at the end of the period | $ | 30,493 | $ | 32,700 | (7) | |||||||||||||||
|
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| N/M - not meaningful. | ||||||||||||||||||||
Cash Flows from Operating Activities
Cash flows from operating activities generally consist of the cash effects of transactions and events that enter into the determination of net income (loss). For the year ended December 31, 2025, net cash used in operating activities was $(5.1) million compared to net cash used in operating activities of $(5.0) million for the year ended December 31, 2024. The increase in cash used in operating activities was driven by $17.6 million 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 loss before income taxes and non-controlling interests and a $1.1 million lower use of cash for working capital (accounts receivable, prepaid expenses and other current assets, other assets, and accounts payable and accrued 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.
Cash Flows from Investing Activities
Cash flows from investing activities generally include additions to premises and equipment and proceeds from the sale of businesses. Net cash (used in) provided by investing activities was $(0.3) million and $2.3 million for the years ended December 31, 2025 and 2024, respectively. The change in cash provided by investing activities was primarily driven by $2.3 million in proceeds received in the year ended December 31, 2024 in connection with the indemnity escrow from the Pointillist sale (no comparable amount for the year ended December 31, 2025). In addition, we used less than $0.1 million for each of the years ended December 31, 2025 and 2024 for additions to premises and equipment primarily related to the purchase of technology hardware.
Cash Flows from Financing Activities
Net cash provided by financing activities was $3.2 million and $0.1 million for the years ended December 31, 2025 and 2024, respectively. During the year ended December 31, 2025, we received $11.3 million in proceeds from the Super Senior Facility, net of the original issuance discount. We used $(1.7) million for debt issuance costs and $(3.8) million related to the issuance of equity, in connection to the Debt Exchange Transaction. During the year ended December 31, 2025, we used $0.9 million to make scheduled repayments of our senior secured term loan (no comparative amount for the year ended December 31, 2024). During the year ended December 31, 2025, we repaid $1.0 million under the Revolving Loan Agreement. During the year ended December 31, 2024 we received proceeds from the issuance of short-term debt of $1.0 million in connection with borrowings under the Revolving Loan Agreement. During the years ended December 31, 2025 and 2024, we made payments of $0.4 million and $0.7 million, respectively, to satisfy employee tax withholding obligations on the issuance 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, during the years ended December 31, 2025 and 2024, we distributed $0.2 million and $0.1 million, respectively, to non-controlling interests.
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Future Uses of Cash
Our significant future liquidity obligations primarily pertain to amortization of the New Facility, amortization and maturity of the Super Senior Facility, interest expense under the New Facility and the Super Senior Facility, and operating lease payments on certain of our premises and equipment.
Significant future uses of cash include the following:
| Payments Due by Period | ||||||||||||||||||||||||||
| (in thousands) | Total | 2026 | 2027-2028 | 2029-2030 | ||||||||||||||||||||||
|
New Facility (1)
|
$ | 159,175 | $ | 1,100 | $ | 2,200 | $ | 155,875 | ||||||||||||||||||
|
Super Senior Facility (2)
|
12,391 | 125 | 250 | 12,016 | ||||||||||||||||||||||
|
Interest payments (3)
|
52,371 | 12,653 | 23,802 | 15,916 | ||||||||||||||||||||||
| Lease payments | 1,256 | 922 | 282 | 52 | ||||||||||||||||||||||
| Total | $ | 225,193 | $ | 14,800 | $ | 26,534 | $ | 183,859 | ||||||||||||||||||
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(1) $157.8 million of the New Facility matures on April 30, 2030 and $1.4 million of the New Facility matures on January 15, 2029
(2) The Super Senior Facility matures on February 19, 2029
(3) 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 December 31, 2025.
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. We will continue to routinely monitor our funding requirements to ensure we maintain adequate liquidity to meet our business needs. For further information, see Note 11 and Note 22 to the consolidated financial statements and Item 1A. Risk Factors - Risks Related to Financing, Our Indebtedness and Capital Structure.
Off-Balance Sheet Arrangements
Our off-balance sheet arrangements consist of escrow and certain other account arrangements.
We hold customers' assets in escrow and other accounts at various financial institutions pending completion of certain real estate and construction review activities. These amounts are held in escrow and other accounts for limited periods of time and are not included in the accompanying consolidated balance sheets. Amounts held in escrow and other accounts were $50.5 million and $20.4 million as of December 31, 2025 and 2024, respectively.
CRITICAL ACCOUNTING POLICIES, ESTIMATES AND RECENT ACCOUNTING PRONOUNCEMENTS
We prepare our consolidated financial statements in accordance with GAAP. In applying many of these accounting principles, we need to make assumptions, estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses in our consolidated financial statements. We base our estimates and judgments on historical experience and other assumptions that we believe are reasonable under the circumstances. These assumptions, estimates and judgments, however, are often subjective. Actual results may be negatively affected based on changing circumstances. If actual amounts are ultimately different from our estimates, the revisions are included in our results of operations for the period in which the actual amounts become known.
We have identified the critical accounting policies and estimates addressed below. We also have other key accounting policies, which involve the use of assumptions, estimates and judgments that are significant to understanding our results. For additional information, see Note 2 to the consolidated financial statements. Although we believe that our assumptions, estimates and judgments are reasonable, they are based upon information presently available. Actual results may differ significantly from these estimates under different assumptions, judgments or conditions.
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Goodwill
We evaluate goodwill for impairment annually during the fourth quarter or more frequently when an event occurs or circumstances change in a manner that indicates the carrying value may not be recoverable. We first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value as a basis for determining whether we need to perform the quantitative goodwill impairment test. Only if we determine, based on qualitative assessment, that it is more likely than not that a reporting unit's fair value is less than its carrying value, will we calculate the fair value of the reporting unit. When performing the quantitative assessment, we make use of estimates and assumptions to evaluate the fair value of each reporting unit, using a weighting of the income and market valuation approaches as described below.
The income approach applies a fair value methodology to each reporting unit using discounted cash flows, including an estimation of future cash flows, which is based on our internally-developed revenue and profitability forecasts, including estimations of the long-term rate of growth of our business; estimations of the useful life over which cash flows will occur and the determination of our weighted average cost of capital, which is risk-adjusted to reflect the specific risk profile of the reporting unit being tested. The market approach includes an analysis of revenue and earnings multiples of guideline public companies compared to the Company. We base fair value estimates on assumptions we believe to be reasonable but that are unpredictable and inherently uncertain. Our forecasts may change compared to prior period projections due to a variety of factors, including reductions in the rates of residential mortgage delinquencies, defaults, foreclosures and REO volume and economic or market fluctuations that reduce the volume or value of residential mortgage origination or refinancings. We also perform sensitivity analyses of certain significant assumptions in our forecasts and assess the historical accuracy of our estimates. Actual future results may differ from those estimates.
Income Taxes
We record income taxes in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 740, Income Taxes("ASC Topic 740"). We account for certain income and expense items differently for financial reporting purposes and income tax purposes. We recognize deferred income tax assets and liabilities for these differences between the financial reporting basis and the tax basis of our assets and liabilities as well as expected benefits of utilizing net operating loss and credit carryforwards. The most significant temporary differences relate to accrued compensation, amortization, loss carryforwards and valuation allowances. We measure deferred income tax assets and liabilities using enacted tax rates expected to apply to taxable income in the years in which we anticipate recovery or settlement of those temporary differences. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period when the change is enacted.
Tax laws are complex and subject to different interpretations by the taxpayer and respective governmental taxing authorities. Significant judgment is required in determining tax expense and in evaluating tax positions including evaluating uncertainties under ASC Topic 740. We recognize tax benefits from uncertain tax positions only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. The tax benefits recognized in the financial statements from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. Resolution of these uncertainties in a manner inconsistent with management's expectations could have a material impact on our results of operations. See Note 20 to the consolidated financial statements for a discussion on the uncertain tax positions.
Recently Adopted and Future Adoption of New Accounting Pronouncements
See Note 2 to the consolidated financial statements for a discussion of the recent adoption of new accounting pronouncements and the future adoption of new accounting pronouncements.
OTHER MATTERS
Customer Concentration
Onity
Revenue from Onity primarily consists of revenue earned from the loan portfolios serviced and subserviced by Onity when Onity engages us as the service provider, and revenue earned directly from Onity, pursuant to the Onity Services Agreements. For the years ended December 31, 2025 and 2024, we recognized revenue from Onity of $72.3 million and $70.4 million, respectively. Revenue from Onity as a percentage of segment and consolidated revenue was as follows:
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| 2025 | 2024 | |||||||||||||
| Servicer and Real Estate | 54 | % | 55 | % | ||||||||||
| Origination | 0 | % | 0 | % | ||||||||||
| Corporate and Others | - | % | - | % | ||||||||||
| Consolidated revenue | 42 | % | 44 | % | ||||||||||
We earn additional revenue related to the portfolios serviced and subserviced by Onity when a party other than Onity or the MSR owner selects Altisource as the service provider. For the years ended December 31, 2025 and 2024, we recognized $7.7 million and $9.6 million, respectively, of such revenue. These amounts are not included in deriving revenue from Onity and revenue from Onity as a percentage of revenue discussed above.
As of December 31, 2025, accounts receivable from Onity totaled $5.1 million, $2.6 million of which was billed and $2.5 million of which was unbilled. As of December 31, 2024, accounts receivable from Onity totaled $4.4 million, $3.1 million of which was billed and $1.3 million of which was unbilled.
Rithm
Onity has disclosed that Rithm is one of its largest servicing clients. As of December 31, 2025, Onity reported that approximately 10% of loans serviced and subserviced by Onity (measured in UPB) and approximately 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.
Rithm purchased brokerage services for REO exclusively from us, irrespective of the subservicer, subject to certain limitations, for certain MSRs set forth in and pursuant to the terms of a Cooperative Brokerage Agreement, as amended, and related letter agreement (collectively, the 'Rithm Brokerage Agreement") through August 2025. The Rithm Brokerage Agreement expired on August 31, 2025. At Rithm's discretion, Altisource has continued to manage REO and receive referrals from portfolios subject to the Rithm Brokerage Agreement despite the expiration of the Rithm Brokerage Agreement. In addition, Rithm also purchases property inspection, preservation and other services from us.
For the years ended December 31, 2025 and 2024, we recognized revenue from Rithm of $4.2 million and $2.3 million, respectively, under the Rithm Brokerage Agreement and other agreements. For the years ended December 31, 2025 and 2024, we recognized additional revenue of $9.6 million and $10.8 million, respectively, relating to the Subject MSRs when a party other than Rithm selected us as the service provider.
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