10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)
☑	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2023

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 1-34354

ALTISOURCE PORTFOLIO SOLUTIONS S.A.

(Exact name of registrant as specified in its Charter)

Luxembourg	98-0554932
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

33, Boulevard Prince Henri

L-1724 Luxembourg

Grand Duchy of Luxembourg

(Address of principal executive offices)

(352) 2060 2055

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, $1.00 par value	ASPS	NASDAQ Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑  No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☑  No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer		☐	Accelerated filer	☐
Non-accelerated filer	☑		Smaller reporting company		☑
			Emerging growth company		☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐  No ☑

As of October 20, 2023, there were 26,492,632 outstanding shares of the registrant’s common stock (excluding 3,470,116 shares held as treasury stock).

Table of Contents

ALTISOURCE PORTFOLIO SOLUTIONS S.A.

FORM 10-Q

			Page
PART I — Financial Information
	Item 1	Interim Condensed Consolidated Financial Statements (Unaudited)
		Condensed Consolidated Balance Sheets	3
		Condensed Consolidated Statements of Operations and Comprehensive Loss	4
		Condensed Consolidated Statements of Equity (Deficit)	5
		Condensed Consolidated Statements of Cash Flows	7
		Notes to Condensed Consolidated Financial Statements	8
	Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	29
	Item 3	Quantitative and Qualitative Disclosures about Market Risk	50
	Item 4	Controls and Procedures	50
PART II — Other Information
	Item 1	Legal Proceedings	51
	Item 1A	Risk Factors	51
	Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	51
	Item 6	Exhibits	53
SIGNATURES			54

2

PART I — FINANCIAL INFORMATION

Item 1. Interim Condensed Consolidated Financial Statements (Unaudited)

ALTISOURCE PORTFOLIO SOLUTIONS S.A.

Condensed Consolidated Balance Sheets

(in thousands, except per share data)

	September 30, 2023		December 31, 2022
ASSETS
Current assets:
Cash and cash equivalents	$	36,640	$	51,025
Accounts receivable, net of allowance for doubtful accounts of $3,379 and $4,363, respectively	12,981		12,989
Prepaid expenses and other current assets	11,217		23,544
Total current assets	60,838		87,558
Premises and equipment, net	2,168		4,222
Right-of-use assets under operating leases	3,628		5,321
Goodwill	55,960		55,960
Intangible assets, net	27,818		31,730
Deferred tax assets, net	4,982		5,048
Other assets	7,242		5,429
Total assets	$	162,636	$	195,268
LIABILITIES AND DEFICIT
Current liabilities:
Accounts payable and accrued expenses	$	31,032	$	33,507
Deferred revenue	3,303		3,711
Other current liabilities	2,299		2,867
Total current liabilities	36,634		40,085
Long-term debt	211,980		245,493
Deferred tax liabilities, net	8,724		9,028
Other non-current liabilities	18,232		19,536
Commitments, contingencies and regulatory matters (Note 21)
Equity (deficit):
Common stock ($1.00 par value; 100,000 shares authorized, 29,963 issued and 26,482 outstanding as of September 30, 2023; 16,129 outstanding as of December 31, 2022)	29,963		25,413
Additional paid-in capital	176,128		149,348
Retained earnings	(166,125)		118,948
Treasury stock, at cost (3,481 shares as of September 30, 2023 and 9,284 shares as of December 31, 2022)	(153,561)		(413,358)
Altisource deficit	(113,595)		(119,649)
Non-controlling interests	661		775
Total deficit	(112,934)		(118,874)
Total liabilities and deficit	$	162,636	$	195,268

See accompanying notes to condensed consolidated financial statements.

3

ALTISOURCE PORTFOLIO SOLUTIONS S.A.

Condensed Statements of Operations and Comprehensive Loss

(in thousands, except per share data)

	Three months ended September 30,				Nine months ended September 30,
	2023		2022		2023		2022
Revenue	$	36,213	$	38,380	$	110,909	$	118,317
Cost of revenue	29,024		34,387		89,684		104,611
Gross profit	7,189		3,993		21,225		13,706
Selling, general and administrative expenses	10,734		14,556		35,169		43,055
Loss from operations	(3,545)		(10,563)		(13,944)		(29,349)
Other income (expense), net:
Interest expense	(9,890)		(4,349)		(26,554)		(11,439)
Change in fair value of warrant liability	2,225		—		1,145		—
Debt amendment costs	(59)		—		(3,402)		—
Other income (expense), net	407		459		2,357		1,392
Total other income (expense), net	(7,317)		(3,890)		(26,454)		(10,047)
Loss before income taxes and non-controlling interests	(10,862)		(14,453)		(40,398)		(39,396)
Income tax (provision) benefit	(418)		197		(2,586)		(2,210)
Net loss	(11,280)		(14,256)		(42,984)		(41,606)
Net income attributable to non-controlling interests	(62)		(133)		(155)		(468)
Net loss attributable to Altisource	$	(11,342)	$	(14,389)	$	(43,139)	$	(42,074)
Loss per share:
Basic	$	(0.51)	$	(0.89)	$	(2.10)	$	(2.62)
Diluted	$	(0.51)	$	(0.89)	$	(2.10)	$	(2.62)
Weighted average shares outstanding:
Basic	22,181		16,087		20,538		16,051
Diluted	22,181		16,087		20,538		16,051
Comprehensive loss:
Comprehensive loss, net of tax	$	(11,280)	$	(14,256)	$	(42,984)	$	(41,606)
Comprehensive income attributable to non-controlling interests	(62)		(133)		(155)		(468)
Comprehensive loss attributable to Altisource	$	(11,342)	$	(14,389)	$	(43,139)	$	(42,074)

See accompanying notes to condensed consolidated financial statements.

4

ALTISOURCE PORTFOLIO SOLUTIONS S.A.

Condensed Consolidated Statements of Equity (Deficit)

(in thousands)

	Altisource Equity (Deficit)
	Common stock			Additional paid-in capital		Retained earnings		Treasury stock, at cost		Non-controlling interests		Total
	Shares
Balance, December 31, 2021	25,413	$	25,413	$	144,298	$	186,592	$	(426,445)	$	1,272	$	(68,870)
Net loss	—	—		—		(12,190)		—		161		(12,029)
Distributions to non-controlling interest holders	—	—		—		—		—		(264)		(264)
Share-based compensation expense	—	—		1,290		—		—		—		1,290
Issuance of restricted share units and restricted shares	—	—		—		(6,560)		6,560		—		—
Treasury shares withheld for the payment of tax on restricted share unit and restricted share issuances	—	—		—		(4,046)		3,032		—		(1,014)
Balance, March 31, 2022	25,413	$	25,413	$	145,588	$	163,796	$	(416,853)	$	1,169	$	(80,887)
Net loss	—	—		—		(15,495)		—		174		(15,321)
Distributions to non-controlling interest holders	—	—		—		—		—		(486)		(486)
Share-based compensation expense	—	—		1,289		—		—		—		1,289
Issuance of restricted share units and restricted shares	—	—		—		(2,384)		2,384		—		—
Treasury shares withheld for the payment of tax on restricted share unit and restricted share issuances	—	—		—		(38)		29		—		(9)
Balance, June 30, 2022	25,413	$	25,413	$	146,877	$	145,879	$	(414,440)	$	857	$	(95,414)
Net loss	—	—		—		(14,389)		—		133		(14,256)
Distribution to non-controlling interest holders	—	—		—		—		—		(142)		(142)
Share-based compensation expense	—	—		1,320		—		—		—		1,320
Issuance of restricted share units and restricted shares	—	—		—		(260)		260		—		—
Treasury shares withheld for the payment of tax on restricted share unit and restricted share issuances	—	—		—		(106)		78		—		(28)
Balance, September 30, 2022	25,413	$	25,413	$	148,197	$	131,124	$	(414,102)	$	848	$	(108,520)

5

ALTISOURCE PORTFOLIO SOLUTIONS S.A.

Condensed Consolidated Statements of Equity (Deficit)

(in thousands)

	Altisource Equity (Deficit)
	Common stock			Additional paid-in capital		Retained earnings		Treasury stock, at cost		Non-controlling interests		Total
	Shares
Balance, December 31, 2022	25,413	$	25,413	$	149,348	$	118,948	$	(413,358)	$	775	$	(118,874)
Net loss	—	—		—		(12,947)		—		80		(12,867)
Distributions to non-controlling interest holders	—	—		—		—		—		(102)		(102)
Share-based compensation expense	—	—		1,445		—		—		—		1,445
Issuance of restricted share units and restricted shares	—	—		—		(6,058)		6,058		—		—
Issuance of common stock, net of issuance costs	4,550	4,550		15,911		—		—		—		20,461
Treasury shares withheld for the payment of tax on restricted share unit and restricted share issuances	—	—		—		(3,700)		3,240		—		(460)
Balance, March 31, 2023	29,963	$	29,963	$	166,704	$	96,243	$	(404,060)	$	753	$	(110,397)
Net loss	—	—		—		(18,850)		—		13		(18,837)
Distributions to non-controlling interest holders	—	—		—		—		—		(100)		(100)
Share-based compensation expense	—	—		1,242		—		—		—		1,242
Issuance of restricted share units and restricted shares	—	—		—		(2,259)		2,259		—		—
Treasury shares withheld for the payment of tax on restricted share unit and restricted share issuances	—	—		—		(30)		27		—		(3)
Balance, June 30, 2023	29,963	$	29,963	$	167,946	$	75,104	$	(401,774)	$	666	$	(128,095)
Net loss	—	—		—		(11,342)		—		62		(11,280)
Distributions to non-controlling interest holders	—	—		—		—		—		(67)		(67)
Reclassification of warrant liability to equity	—	—		6,951		—		—		—		6,951
Share-based compensation expense	—	—		1,231		—		—		—		1,231
Sale of treasury stock, net of transaction costs	—	—		—		(228,269)		246,643		—		18,374
Issuance of restricted share units and restricted shares	—	—		—		(1,153)		1,153		—		—
Treasury shares withheld for the payment of tax on restricted share unit and restricted share issuances	—	—		—		(465)		417		—		(48)
Balance, September 30, 2023	29,963	$	29,963	$	176,128	$	(166,125)	$	(153,561)	$	661	$	(112,934)

See accompanying notes to condensed consolidated financial statements.

6

ALTISOURCE PORTFOLIO SOLUTIONS S.A.

Condensed Consolidated Statements of Cash Flows

(in thousands)

	Nine months ended September 30,
	2023		2022
Cash flows from operating activities:
Net loss	$	(42,984)	$	(41,606)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	1,933		2,700
Amortization of right-of-use assets under operating leases	1,351		2,254
Amortization of intangible assets	3,912		3,849
PIK accrual	4,777		—
Share-based compensation expense	3,918		3,899
Bad debt expense	319		578
Amortization of debt discount	2,846		495
Amortization of debt issuance costs	1,846		712
Deferred income taxes	(224)		(329)
Loss on disposal of fixed assets	121		1
Change in fair value of warrant liability	(1,145)		—
Changes in operating assets and liabilities:
Accounts receivable	(311)		3,095
Prepaid expenses and other current assets	12,350		160
Other assets	(1,891)		363
Accounts payable and accrued expenses	(2,475)		(5,014)
Current and non-current operating lease liabilities	(1,351)		(2,444)
Other current and non-current liabilities	(587)		(1,006)
Net cash used in operating activities	(17,595)		(32,293)
Cash flows from investing activities:
Additions to premises and equipment	—		(863)
Proceeds from the sale of business	—		346
Net cash used in investing activities	—		(517)
Cash flows from financing activities:
Proceeds from issuance of common stock, net of issuance costs	20,461		—
Proceeds from sale of treasury stock, net of transaction costs	18,374		—
Debt issuance and amendment costs	(4,886)		—
Repayments of long-term debt	(30,000)		—
Distributions to non-controlling interests	(269)		(892)
Payments of tax withholding on issuance of restricted share units and restricted shares	(511)		(1,051)
Net cash provided by (used in) financing activities	3,169		(1,943)
Net decrease in cash, cash equivalents and restricted cash	(14,426)		(34,753)
Cash, cash equivalents and restricted cash at the beginning of the period	54,273		102,149
Cash, cash equivalents and restricted cash at the end of the period	$	39,847	$	67,396
Supplemental cash flow information:
Interest paid	$	16,989	$	10,167
Income taxes (refunded) paid, net	(4,034)		2,556
Acquisition of right-of-use assets with operating lease liabilities	329		797
Reduction of right-of-use assets from operating lease modifications or reassessments	(671)		(172)
Non-cash investing and financing activities:
Net decrease in payables for purchases of premises and equipment	$	—	$	(65)
Warrants issued in connection with Amended Credit Agreement	8,096		—
The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the unaudited condensed consolidated balance sheets and the unaudited condensed consolidated statements of cash flows:
	September 30, 2023		September 30, 2022
Cash and cash equivalents	$	36,640	$	63,812
Restricted cash	3,207		3,584
Total cash, cash equivalents and restricted cash reported in the statements of cash flows	$	39,847	$	67,396

See accompanying notes to condensed consolidated financial statements.

7

ALTISOURCE PORTFOLIO SOLUTIONS S.A.

Notes to Condensed Consolidated Financial Statements

NOTE 1 — ORGANIZATION AND BASIS OF PRESENTATION

Description of Business

Altisource Portfolio Solutions S.A., together with its subsidiaries (which may be referred to as “Altisource,” the “Company,” “we,” “us” or “our”), is 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 are publicly traded on the NASDAQ Global Select Market under the symbol “ASPS.” We are organized under the laws of the Grand Duchy of Luxembourg.

We conduct our operations through two reportable segments: Servicer and Real Estate and Origination. In addition, we report Corporate and Others separately (see Note 22 for a description of our business segments).

Basis of Accounting and Presentation

The unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Securities and Exchange Commission (“SEC”) Regulation S-X. Accordingly, these financial statements do not include all of the information and footnotes required by GAAP for complete consolidated financial statements. In the opinion of management, the interim data includes all normal recurring adjustments considered necessary to fairly state the results for the interim periods presented. The preparation of interim condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of our interim condensed consolidated financial statements, as well as the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Intercompany transactions and accounts have been eliminated in consolidation. Certain prior year balance sheet amounts have been reclassified for consistency with the current year presentation.

Altisource consolidates Best Partners Mortgage Cooperative, Inc., which is managed by The Mortgage Partnership of America, L.L.C. (“MPA”), a wholly-owned subsidiary of Altisource. Best Partners Mortgage Cooperative, Inc. is a mortgage cooperative doing business as Lenders One® (“Lenders One”). MPA provides services to Lenders One under a management agreement that ends on December 31, 2025 (with renewals for three successive five-year periods at MPA’s option).

The management agreement between MPA and Lenders One, pursuant to which MPA is the management company, represents a variable interest in a variable interest entity. MPA is the primary beneficiary of Lenders One as it has the power to direct the activities that most significantly impact the cooperative’s economic performance and the right to receive benefits from the cooperative. As a result, Lenders One is presented in the accompanying condensed consolidated financial statements on a consolidated basis and the interests of the members are reflected as non-controlling interests. As of September 30, 2023, Lenders One had total assets of $0.2 million and total liabilities of $0.4 million. As of December 31, 2022, Lenders One had total assets of $1.2 million and total liabilities of $1.1 million.

These interim condensed consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, as filed with the SEC on March 30, 2023.

8

ALTISOURCE PORTFOLIO SOLUTIONS S.A.

Notes to Condensed Consolidated Financial Statements (Continued)

Fair Value Measurements

Fair value is defined as an exit price, representing the amount that would be received for an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The three-tier hierarchy for inputs used in measuring fair value, which prioritizes the inputs used in the methodologies of measuring fair value for assets and liabilities, is as follows:

Level 1 — Quoted prices in active markets for identical assets and liabilities

Level 2 — Observable inputs other than quoted prices included in Level 1

Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of assets or liabilities

Financial assets and financial liabilities are classified based on the lowest level of input that is significant to the fair value measurements. Our assessment of the significance of a particular input to the fair value measurements requires judgment and may affect the valuation of the assets and liabilities being measured and their placement within the fair value hierarchy.

NOTE 2 — CUSTOMER CONCENTRATION

Ocwen

Ocwen Financial Corporation (together with its subsidiaries, “Ocwen”) is a residential mortgage loan servicer of mortgage servicing rights (“MSRs”) it owns, including those MSRs in which others have an economic interest, and a subservicer of loans owned by others.

During the three and nine months ended September 30, 2023, Ocwen was our largest customer, accounting for 43% of our total revenue. Ocwen purchases certain mortgage services from us under the terms of services agreements and amendments thereto (collectively, the “Ocwen Services Agreements”) with terms extending through August 2030. Certain of the Ocwen Services Agreements contain a “most favored nation” provision and also grant the parties the right to renegotiate pricing, among other things.

Revenue from Ocwen primarily consists of revenue earned from the loan portfolios serviced and subserviced by Ocwen when Ocwen engages us as the service provider, and revenue earned directly from Ocwen, pursuant to the Ocwen Services Agreements. For the nine months ended September 30, 2023 and 2022, we recognized revenue from Ocwen of $47.3 million and $47.2 million, respectively ($15.7 million and $17.2 million for the third quarter of 2023 and 2022, respectively). Revenue from Ocwen as a percentage of segment and consolidated revenue was as follows:

	Three months ended September 30,				Nine months ended September 30,
	2023		2022		2023		2022
Servicer and Real Estate	55	%	56	%	54	%	52	%
Origination	—	%	—	%	—	%	—	%
Corporate and Others	—	%	—	%	—	%	—	%
Consolidated revenue	43	%	45	%	43	%	40	%

We earn additional revenue related to the portfolios serviced and subserviced by Ocwen when a party other than Ocwen or the MSRs owner selects Altisource as the service provider. For the nine months ended September 30, 2023 and 2022, we recognized revenue of $7.3 million ($2.3 million and $2.2 million for the third quarter of 2023 and 2022, respectively), of such revenue. These amounts are not included in deriving revenue from Ocwen and revenue from Ocwen as a percentage of revenue discussed above.

As of September 30, 2023, accounts receivable from Ocwen totaled $4.0 million, $2.8 million of which was billed and $1.2 million of which was unbilled. As of December 31, 2022, accounts receivable from Ocwen totaled $4.0 million, $3.2 million of which was billed and $0.8 million of which was unbilled.

9

ALTISOURCE PORTFOLIO SOLUTIONS S.A.

Notes to Condensed Consolidated Financial Statements (Continued)

Rithm

Rithm Capital Corp. (individually, together with one or more of its subsidiaries or one or more of its subsidiaries individually, “Rithm”) (formerly New Residential Investment Corp.) is a real estate investment trust that invests in and manages investments primarily related to residential real estate, including MSRs and excess MSRs.

Ocwen has disclosed that Rithm is a significant client of Ocwen’s. As of June 30, 2023, approximately 16% of loans serviced and subserviced by Ocwen (measured in unpaid principal balance (“UPB”)) and approximately 68% of all delinquent loans that Ocwen services were related to Rithm MSRs or rights to MSRs (the “Subject MSRs”).

Rithm purchases brokerage services for real estate owned (“REO”) exclusively from us, irrespective of the subservicer, subject to certain limitations, for certain MSRs set forth in and pursuant to the terms of a Cooperative Brokerage Agreement, as amended, and related letter agreement (collectively, the “Brokerage Agreement”) with terms extending through August 2025.

For the nine months ended September 30, 2023 and 2022, we recognized revenue from Rithm of $2.3 million and $2.6 million, respectively ($0.7 million and $0.8 million for the third quarter of 2023 and 2022, respectively), under the Brokerage Agreement. For the nine months ended September 30, 2023 and 2022, we recognized additional revenue of $10.1 million and $10.4 million, respectively ($3.2 million and $3.0 million for the third quarter of 2023 and 2022, respectively), relating to the Subject MSRs when a party other than Rithm selects Altisource as the service provider.

NOTE 3 — ACCOUNTS RECEIVABLE, NET

Accounts receivable, net consists of the following:

(in thousands)	September 30, 2023		December 31, 2022
Billed	$	10,386	$	11,993
Unbilled	5,974		5,359
	16,360		17,352
Less: Allowance for credit losses	(3,379)		(4,363)
Total	$	12,981	$	12,989

Unbilled accounts receivable consist primarily of certain real estate asset management, REO sales, title and closing services for which we generally recognize revenue when the service is provided but collect upon closing of the sale, and foreclosure trustee services, for which we generally recognize revenues over the service delivery period but bill following completion of the service. We also include amounts in unbilled accounts receivable that are earned during a month and billed in the following month.

We are exposed to credit losses through our sales of products and services to our customers which are recorded as accounts receivable, net on the Company’s condensed consolidated financial statements. We monitor and estimate the allowance for credit losses based on our historical write-offs, historical collections, our analysis of past due accounts based on the contractual terms of the receivables, relevant market and industry reports and our assessment of the economic status of our customers, if known. Estimated credit losses are written off in the period in which the financial asset is determined to be no longer collectible. There can be no assurance that actual results will not differ from estimates or that consideration of these factors in the future will not result in an increase or decrease to our allowance for credit losses.

10

ALTISOURCE PORTFOLIO SOLUTIONS S.A.

Notes to Condensed Consolidated Financial Statements (Continued)

Changes in the allowance for expected credit losses consist of the following:

			Additions
(in thousands)	Balance at Beginning of Period		Charged to Expenses		Deductions Note(1)		Balance at End of Period
Allowance for expected credit losses:
Three months ended September 30, 2023	$	4,314	$	(203)	$	732	$	3,379
Three months ended September 30, 2022	4,792		(22)		289		4,481
Nine months ended September 30, 2023	$	4,363	$	319	$	1,303	$	3,379
Nine months ended September 30, 2022	5,297		578		1,394		4,481

______________________________________

(1)    Amounts written off as uncollectible or transferred to other accounts or utilized.

NOTE 4 — PREPAID EXPENSES AND OTHER CURRENT ASSETS

Prepaid expenses and other current assets consist of the following:

(in thousands)	September 30, 2023		December 31, 2022
Prepaid expenses	$	2,746	$	5,165
Income taxes receivable	510		7,031
Maintenance agreements, current portion	1,868		1,498
Indemnity escrow receivable from Pointillist sale	3,201		3,223
Restricted cash	23		—
Surety bond collateral	—		4,000
Other current assets	2,869		2,627
Total	$	11,217	$	23,544

NOTE 5 — PREMISES AND EQUIPMENT, NET

Premises and equipment, net consists of the following:

(in thousands)	September 30, 2023		December 31, 2022
Computer hardware and software	$	46,568	$	49,339
Leasehold improvements	1,011		5,794
Furniture and fixtures	102		3,832
Office equipment and other	24		346
	47,705		59,311
Less: Accumulated depreciation and amortization	(45,537)		(55,089)
Total	$	2,168	$	4,222

Depreciation and amortization expense amounted to $1.9 million and $2.7 million for the nine months ended September 30, 2023 and 2022, respectively ($0.6 million and $0.9 million for the third quarter of 2023 and 2022, respectively), and is included in cost of revenue for operating assets and in selling, general and administrative expenses for non-operating assets in the accompanying condensed consolidated statements of operations and comprehensive loss.

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ALTISOURCE PORTFOLIO SOLUTIONS S.A.

Notes to Condensed Consolidated Financial Statements (Continued)

Premises and equipment, net consist of the following, by country:

(in thousands)	September 30, 2023		December 31, 2022
Luxembourg	$	1,459	$	2,455
India	602		1,129
United States	80		586
Uruguay	27		52
Total	$	2,168	$	4,222

NOTE 6 — RIGHT-OF-USE ASSETS UNDER OPERATING LEASES, NET

Right-of-use assets under operating leases, net consists of the following:

(in thousands)	September 30, 2023		December 31, 2022
Right-of-use assets under operating leases	$	7,334	$	11,808
Less: Accumulated amortization	(3,706)		(6,487)
Total	$	3,628	$	5,321

Amortization of operating leases was $1.4 million and $2.3 million for the nine months ended September 30, 2023 and 2022, respectively ($0.4 million and $0.5 million for the third quarter of 2023 and 2022, respectively), and is included in cost of revenue for operating assets and in selling, general and administrative expenses for non-operating assets in the accompanying condensed consolidated statements of operations and comprehensive loss.

NOTE 7 — GOODWILL AND INTANGIBLE ASSETS, NET

Goodwill

The following is a summary of goodwill by segment:

(in thousands)	Servicer and Real Estate		Origination		Corporate and Others		Total
Balance as of September 30, 2023 and December 31, 2022	$	30,681	$	25,279	$	—	$	55,960

Intangible Assets, net

Intangible assets, net consist of the following:

	Weighted average estimated useful life (in years)	Gross carrying amount				Accumulated amortization				Net book value
(in thousands)		September 30, 2023		December 31, 2022		September 30, 2023		December 31, 2022		September 30, 2023		December 31, 2022
Definite lived intangible assets:
Customer related intangible assets	9	$	214,307	$	214,307	$	(199,915)	$	(197,594)	$	14,392	$	16,713
Operating agreement	20	35,000		35,000		(23,917)		(22,604)		11,083		12,396
Trademarks and trade names	16	9,709		9,709		(7,366)		(7,088)		2,343		2,621
Total		$	259,016	$	259,016	$	(231,198)	$	(227,286)	$	27,818	$	31,730

Amortization expense for definite lived intangible assets was $3.9 million and $3.8 million for the nine months ended September 30, 2023 and 2022, respectively ($1.4 million and $1.3 million for the third quarter of 2023 and 2022, respectively).

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ALTISOURCE PORTFOLIO SOLUTIONS S.A.

Notes to Condensed Consolidated Financial Statements (Continued)

Forecasted annual definite lived intangible asset amortization expense for 2023 through 2027 is $5.2 million, $5.1 million, $5.1 million, $4.9 million and $4.7 million, respectively.

NOTE 8 — OTHER ASSETS

Other assets consist of the following:

(in thousands)	September 30, 2023		December 31, 2022
Restricted cash	$	3,184	$	3,248
Security deposits	597		596
Other	3,461		1,585
Total	$	7,242	$	5,429

NOTE 9 — ACCOUNTS PAYABLE, ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

Accounts payable and accrued expenses consist of the following:

(in thousands)	September 30, 2023		December 31, 2022
Accounts payable	$	16,404	$	14,981
Accrued expenses - general	8,425		11,858
Accrued salaries and benefits	4,937		5,501
Income taxes payable	1,266		1,167
Total	$	31,032	$	33,507

Other current liabilities consist of the following:

(in thousands)	September 30, 2023		December 31, 2022
Operating lease liabilities	$	1,596	$	2,097
Other	703		770
Total	$	2,299	$	2,867

NOTE 10 — WARRANTS

On February 14, 2023, the lenders under the Amended Credit Agreement (see Note 11 for additional information) received warrants (the “Warrants”) to purchase 3,223,851 shares of Altisource common stock (the “Warrant Shares”). The number of Warrant Shares is subject to reduction based on the amount of par paydowns on the senior secured term loans (“SSTL”) in the aggregate using proceeds from issuances of equity interests or from junior indebtedness made prior to February 14, 2024 (“Aggregate Paydowns”) as set forth in the table below.

Aggregate Paydowns	Warrant Shares
Less than $20 million	3,223,851
$20 million+ but less than below	2,578,743
$30 million+	1,612,705

During the first quarter of 2023, Company made $20 million of Aggregate Paydowns. In the third quarter of 2023, the Company made an additional $10 million of Aggregate Paydowns. As a result, the number of Warrant Shares as of September 30, 2023 is 1,612,705.

The exercise price per share of common stock under each Warrant is equal to $0.01. The Warrants may be exercised at any time on and after February 14, 2024 and prior to their expiration date. The Warrants are exercisable on a cashless basis and are subject to customary anti-dilution provisions. The Warrants, if not previously exercised or terminated, will be automatically

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ALTISOURCE PORTFOLIO SOLUTIONS S.A.

Notes to Condensed Consolidated Financial Statements (Continued)

exercised on May 22, 2027. The Warrants are subject to a lock-up agreement, subject to customary exceptions, ending on February 16, 2024.

The Company determined that the Warrants are free standing financial instruments that are legally detachable and separately exercisable from the term loans under the Amended Credit Agreement. At inception, the Company also determined that the Warrants were not considered to be indexed to the Company’s stock because the number of Warrant Shares varies based on Aggregate Paydowns and as such were required to be classified as a liability pursuant to ASC 815-40, Derivatives and Hedging–Contracts in Entity’s Own Equity. The outstanding Warrants were recognized as a warrant liability on the balance sheet and were measured at their inception date fair value and subsequently re-measured at each reporting period with changes being recorded as a component of other income (expense) in the statement of operations. On September 18, 2023, the Company reached the $30 million in Aggregate Paydowns threshold and the number of Warrant Shares is no longer variable. As a result, the Warrants are considered to be indexed to the Company’s stock and the Warrant Liability was reclassified to equity.

The fair value of the warrant liability was based on the number of Warrant Shares that were expected to be exercisable on and after February 14, 2024 and the Altisource share price less $0.01 at the measurement date.

The fair value of the warrant liability at each of the respective valuation dates is summarized below:

Warrant Liability	Warrant Shares based on Aggregate Paydowns	Expected Warrant Shares that will be exercisable on February 14, 2024	Fair Value per Warrant Share	Fair Value (in thousands)
Fair value at initial measurement date of February 14, 2023	3,223,851	1,612,705	$5.02	$	8,096
Gain on change in fair value of warrant liability				(694)
Fair value at March 31, 2023	2,578,743	1,612,705	$4.59	7,402
Loss on change in fair value of warrant liability				1,774
Fair value at June 30, 2023	2,578,743	1,612,705	$5.69	$	9,176
Gain on change in fair value of warrant liability				(2,225)
Fair value at September 18, 2023	1,612,705	1,612,705	$4.31	$	6,951

During the nine months ended September 30, 2023, the Company recorded a gain on changes in fair value of warrant liability of $1.1 million ($2.2 million for the third quarter of 2023). During the three and nine months ended September 30, 2022, there were no warrant liabilities outstanding.

NOTE 11 — LONG-TERM DEBT

Long-term debt consists of the following:

(in thousands)	September 30, 2023		December 31, 2022
Senior Secured Term Loans	$	221,981	$	247,204
Less: Debt issuance and amendment costs, net	(3,918)		(878)
Less: Unamortized discount, net	(6,083)		(833)
Net Senior secured term loans	211,980		245,493
Total Long-term debt	$	211,980	$	245,493

Senior Secured Term Loans

In April 2018, Altisource Portfolio Solutions S.A. and its wholly-owned subsidiary, Altisource S.à r.l., entered into a credit agreement with Morgan Stanley Senior Funding, Inc., as administrative agent and collateral agent, and certain lenders (the “Credit Agreement”). Under the Credit Agreement, Altisource borrowed $412 million in the form of SSTL. Effective February 14, 2023, Altisource Portfolio Solutions S.A. and Altisource S.à r.l. entered into Amendment No. 2 to the Credit Agreement (as amended by Amendment No. 2, the “Amended Credit Agreement”). Altisource Portfolio Solutions S.A. and its subsidiaries, subject to the applicable exclusions in the Amended Credit Agreement, are guarantors on the SSTL (collectively,

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ALTISOURCE PORTFOLIO SOLUTIONS S.A.

Notes to Condensed Consolidated Financial Statements (Continued)

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

The maturity date of the SSTL under the Amended Credit Agreement is April 30, 2025. If Aggregate Paydowns are equal to or greater than $30 million, then the maturity date of the SSTL may be extended at the Company’s option to April 30, 2026. Such extension is conditioned upon the Company’s payment of a 2% payment-in-kind extension fee on or before April 30, 2025 and subject to the representations and warranties being true and correct as of such date and there being no default or event of default being in existence as of such date. During the nine months ended September 30, 2023, Company made $30 million of Aggregate Paydowns.

All amounts outstanding under the SSTL will become due on the earlier of (i) the maturity date, and (ii) the date on which the loans are declared to be due and owing by the administrative agent at the request (or with the consent) of the Required Lenders (as defined in the Amended Credit Agreement; other capitalized terms, unless defined herein, are defined in the Amended Credit Agreement) or as otherwise provided in the Amended Credit Agreement upon the occurrence of any event of default. There are no mandatory repayments of the SSTL except as set forth herein until the April 30, 2025 maturity when the balance is due.

In addition to the scheduled principal payments, subject to certain exceptions, the SSTL is subject to mandatory prepayment upon issuances of debt, certain casualty and condemnation events and sales of assets, as well as 50% of Consolidated Excess Cash Flow, as calculated in accordance with the provisions of the Amended Credit Agreement.

Altisource may incur incremental indebtedness under the Amended Credit Agreement from one or more incremental lenders, which may include existing lenders, in an aggregate incremental principal amount not to exceed $50 million, subject to certain conditions set forth in the Amended Credit Agreement. The lenders have no obligation to provide any incremental indebtedness.

Through March 29, 2023, the SSTL’s interest rate was the Adjusted Eurodollar Rate plus 4.00%. Beginning March 30, 2023, the SSTL bears interest at rates based upon, at our option, the Secured Overnight Financing Rate (“SOFR”) or the Base Rate, as defined in the Amended Credit Agreement. If the Company selects SOFR, the term loans initially bear interest at a rate per annum equal to SOFR plus 5.00% payable in cash plus 5.00% payable in kind (“PIK”). If the Company selects Base Rate, the loans initially bear interest at a rate per annum equal to the Base Rate plus 4.00% payable in cash plus 5.00% PIK. Base Rate term loans bear interest at a rate per annum equal to the sum of (i) the greater of (x) the Base Rate and (y) 2.00% plus (ii) 4.00%. The PIK component of the interest rate is subject to adjustment based on the amount of Aggregate Paydowns as set forth in the table below. The PIK component of the interest rate was 3.75% for the three months ended September 30, 2023 and 4.50% for the three months ended June 30, 2023. The interest rate as of September 30, 2023 was 14.09%.

Aggregate Paydowns	PIK Component of Interest Rate
Less than $20 million	5.00%
$20 million+ but less than below	4.50%
$30 million+ but less than below	3.75%
$40 million+ but less than below	3.50%
$45 million+ but less than below	3.00%
$50 million+ but less than below	2.50%
$55 million+ but less than below	2.00%
$60 million+ but less than below	1.00%
$65 million+ but less than below	0.50%
$70 million+	0.00%

If, as of the end of any calendar quarter, (i) the amount of unencumbered cash and cash equivalents of Altisource S.à r.l. and its direct and indirect subsidiaries on a consolidated basis plus (ii) the undrawn commitment amount under the Revolver is, or is forecast as of the end of the immediately subsequent calendar quarter to be, less than $35 million, then up to 2.00% in interest otherwise payable in cash in the following quarter may be paid in kind at the Company’s election.

The payment of all amounts owing by Altisource under the Amended Credit Agreement is guaranteed by the Guarantors and is secured by a pledge of all equity interests of certain subsidiaries of Altisource, as well as a lien on substantially all of the assets of Altisource S.à r.l. and the Guarantors, subject to certain exceptions.

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ALTISOURCE PORTFOLIO SOLUTIONS S.A.

Notes to Condensed Consolidated Financial Statements (Continued)

The Amended Credit Agreement includes covenants that restrict or limit, among other things, our ability, subject to certain exceptions and baskets, to incur indebtedness; incur liens on our assets; sell, transfer or dispose of assets; make Restricted Junior Payments including share repurchases, dividends and repayment of junior indebtedness; make investments; dispose of equity interests of any Material Subsidiaries; engage in a line of business substantially different than existing businesses and businesses reasonably related, complimentary or ancillary thereto; amend material debt agreements or other material contracts; engage in certain transactions with affiliates; enter into sale/leaseback transactions; grant negative pledges or agree to such other restrictions relating to subsidiary dividends and distributions; make changes to our fiscal year; and engage in mergers and consolidations.

The Amended Credit Agreement contains certain events of default including (i) failure to pay principal when due or interest or any other amount owing on any other obligation under the Amended Credit Agreement within five days of becoming due, (ii) material incorrectness of representations and warranties when made, (iii) breach of certain other covenants, subject to cure periods described in the Amended Credit Agreement, (iv) failure to pay principal or interest on any other debt that equals or exceeds $5.0 million when due, (v) default on any other debt that equals or exceeds $5.0 million that causes, or gives the holder or holders of such debt the ability to cause, an acceleration of such debt, (vi) occurrence of a Change of Control, (vii) bankruptcy and insolvency events, (viii) entry by a court of one or more judgments against us in an aggregate amount in excess of $10.0 million that remain unbonded, undischarged or unstayed for a certain number of days after the entry thereof, (ix) the occurrence of certain ERISA events, (x) the failure of certain Loan Documents to be in full force and effect and (xi) failure to comply in any material respects with the terms of the Warrants or the Warrant Purchase Agreement. If any event of default occurs and is not cured within applicable grace periods set forth in the Credit Agreement or waived, all loans and other obligations could become due and immediately payable and the facility could be terminated.

The lenders under the Amended Credit Agreement received Warrants to purchase shares of Altisource common stock. The number of Warrant Shares is subject to reduction based on the amount of Aggregate Paydowns (see Note 10 for additional information).

The fair value of the Warrants on February 14, 2023 was $8.1 million and was recorded as an increase in debt discount. In connection with Amendment No. 2, the Company paid $4.9 million to the lenders and to third parties on behalf of the lenders. The $4.9 million payment was recorded as an increase in debt issuance and amendment costs. In connection with Amendment No. 2, the Company paid $3.4 million to advisors and recorded these payments as other expense in the condensed consolidated statements of operations and comprehensive loss.

Deer Park Road Management Company, LP (“Deer Park”), a related party, owns approximately 15% of Altisource’s common stock and $40.2 million of Altisource debt under the Amended Credit Agreement as of September 30, 2023. Deer Park’s Chief Investment Officer and managing partner was a member of Altisource’s Board of Directors until his resignation on March 1, 2022. The replacement director appointed by the Board of Directors is a current employee of Deer Park. In connection with the Amended Credit Agreement, Deer Park received 583 thousand Warrants. During the nine months ended September 30, 2023, Deer Park received interest of $2.0 million from the Altisource SSTL.

As of September 30, 2023, debt issuance and amendment costs were $3.9 million, net of $5.5 million of accumulated amortization. As of December 31, 2022, debt issuance costs were $0.9 million, net of $3.6 million of accumulated amortization.

Revolver

On June 22, 2021 Altisource S.à r.l, a subsidiary of Altisource Portfolio Solutions S.A., entered into a revolving credit facility with STS Master Fund, Ltd. (“STS”) (the “Revolver”). STS is an investment fund managed by Deer Park.

The Revolver was amended effective February 14, 2023 (the “Amended Revolver”). Under the terms of the Amended Revolver, STS will make loans to Altisource from time to time, in amounts requested by Altisource and Altisource may voluntarily prepay all or any portion of the outstanding loans at any time. The Amended Revolver provides Altisource the ability to borrow a maximum amount of $15.0 million. Amounts that are repaid may be re-borrowed in accordance with the limitations set forth below.

The maturity date of the Amended Revolver coincides with the maturity date of the SSTL under the Amended Credit Agreement, as it may be extended. The outstanding balance on the Amended Revolver is due and payable on such maturity date.

16

ALTISOURCE PORTFOLIO SOLUTIONS S.A.

Notes to Condensed Consolidated Financial Statements (Continued)

Borrowings under the Amended Revolver bear interest of 10.00% per annum in cash and 3.00% per annum PIK and are payable quarterly on the last business day of each March, June, September and December. In connection with the Amended Revolver, Altisource is required to pay a usage fee equal to $0.75 million at the initial extension of credit pursuant to the Amended Revolver.

Altisource’s obligations under the Amended Revolver are secured by a first-priority lien on substantially all of the assets of the Company, which lien will be pari passu with liens securing the SSTL under the Amended Credit Agreement.

The Amended Revolver contains additional representations, warranties, covenants, terms and conditions customary for transactions of this type, that restrict or limit, among other things, our ability to use the proceeds of credit only for general corporate purposes.

The Amended Revolver contains certain events of default including (i) failure to pay principal when due or interest or any other amount owing on any other obligation under the Amended Revolver within three business days of becoming due, (ii) failure to perform or observe any material provisions of the Amended Revolver Documents to be performed or complied with and such failure continues for a period of 30 days after written notice is given by the Lender to the Borrower, (iii) material incorrectness of representations and warranties when made, (iv) default on any other debt that equals or exceeds $40.0 million that causes, or gives the holder or holders of such debt the ability to cause, an acceleration of such debt, (v) entry by a court of one or more judgments against us in an aggregate amount in excess of $40.0 million that remain unbonded, undischarged or unstayed for a certain number of days after the entry thereof, (vi) occurrence of a Change of Control, (vii) bankruptcy and insolvency events. If any event of default occurs and is not cured within applicable grace periods set forth in the Amended Revolver or waived, all loans and other obligations could become due and immediately payable and the facility could be terminated.

As of September 30, 2023 and December 31, 2022, there was no outstanding debt under the Amended Revolver and Revolver, respectively. As of September 30, 2023 and December 31, 2022, debt issuance costs were $0.2 million, net of $0.4 million of accumulated amortization, and $0.3 million, net of $0.3 million of accumulated amortization, respectively. Debt issuance costs for the Amended Revolver and Revolver are included in other assets in the accompanying consolidated balance sheet.

NOTE 12 — OTHER NON-CURRENT LIABILITIES

Other non-current liabilities consist of the following:

(in thousands)	September 30, 2023		December 31, 2022
Income tax liabilities	$	16,036	$	16,079
Operating lease liabilities	2,179		3,371
Deferred revenue	13		82
Other non-current liabilities	4		4
Total	$	18,232	$	19,536

17

ALTISOURCE PORTFOLIO SOLUTIONS S.A.

Notes to Condensed Consolidated Financial Statements (Continued)

NOTE 13 — FAIR VALUE MEASUREMENTS AND FINANCIAL INSTRUMENTS

The following table presents the carrying amount and estimated fair value of financial instruments and certain liabilities measured at fair value as of September 30, 2023 and December 31, 2022. The following fair values are estimated using market information and what the Company believes to be appropriate valuation methodologies under GAAP:

	September 30, 2023								December 31, 2022
(in thousands)	Carrying amount		Fair value						Carrying amount		Fair value
			Level 1		Level 2		Level 3				Level 1		Level 2		Level 3
Assets:
Cash and cash equivalents	$	36,640	$	36,640	$	—	$	—	$	51,025	$	51,025	$	—	$	—
Restricted cash	3,207		3,207		—		—		3,248		3,248		—		—
Short-term receivable	3,201		—		—		3,201		3,223		—		—		3,223
Liabilities:
Senior secured term loans	221,981		—		177,585		—		247,204		—		200,235		—

Fair Value Measurements on a Recurring Basis

Cash and cash equivalents and restricted cash are carried at amounts that approximate their fair values due to the highly liquid nature of these instruments and were measured using Level 1 inputs.

The fair value of our SSTL is based on quoted market prices. Based on the frequency of trading, we do not believe that there is an active market for our debt. Therefore, the quoted prices are considered Level 2 inputs.

In connection with the sale of Pointillist on December 1, 2021, $3.5 million was deposited into an escrow account to satisfy certain indemnification claims that may arise on or prior to the first anniversary of the sale closing. The deposit was recorded as a short-term receivable. We measure short-term receivables without a stated interest rate based on the present value of the future payments.

There were no transfers between different levels during the periods presented.

Concentrations of Credit Risk

Financial instruments that subject us to concentrations of credit risk primarily consist of cash and cash equivalents and accounts receivable. Our policy is to deposit our cash and cash equivalents with larger, highly rated financial institutions. The Company derived 43% of its revenue from Ocwen for the three and nine months ended September 30, 2023 (see Note 2 for additional information on Ocwen revenues and accounts receivable balance). The Company strives to mitigate its concentrations of credit risk with respect to accounts receivable by actively monitoring past due accounts and the economic status of larger customers, if known.

NOTE 14 — SHAREHOLDERS’ EQUITY AND SHARE-BASED COMPENSATION

Share Repurchase Program

On May 16, 2023, our shareholders approved the renewal and amendment of the share repurchase program previously approved by the shareholders on May 15, 2018. Under the program, we are authorized to purchase up to 3.1 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 per share and a maximum price of $25.00 per share, for a period of five years from the date of approval. As of September 30, 2023, approximately 3.1 million shares of common stock remain available for repurchase under the program. There were no purchases of shares of common stock during the nine months ended September 30, 2023 and 2022. Luxembourg law limits share repurchases to the balance of Altisource Portfolio Solutions S.A. (unconsolidated parent company) retained earnings, less the value of shares repurchased. As of September 30, 2023, we can repurchase up to approximately $60 million of our common stock under Luxembourg law. Under the Amended Credit Agreement, we are not permitted to repurchase shares except for limited circumstances.

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ALTISOURCE PORTFOLIO SOLUTIONS S.A.

Notes to Condensed Consolidated Financial Statements (Continued)

Public offerings of Common Stock

On February 14, 2023, Altisource closed on an underwritten public offering to sell 4,550,000 shares of its common stock, at a price of $5.00 per share, generating net proceeds of $20.5 million, after deducting the underwriting discounts and commissions and other offering expenses.

On September 7, 2023, Altisource closed on an underwritten public offering to sell 5,590,277 shares of its common stock, at a price of $3.60 per share, generating net proceeds of $18.4 million, after deducting the underwriting discounts and commissions and other offering expenses.

Share-Based Compensation

We issue share-based awards in the form of stock options, restricted shares and restricted share units for certain employees, officers and directors. We recognized share-based compensation expense of $3.9 million and $3.9 million for the nine months ended September 30, 2023 and 2022, respectively ($1.2 million and $1.3 million for the third quarter of 2023 and 2022, respectively). As of September 30, 2023, estimated unrecognized compensation costs related to share-based awards amounted to $3.2 million, which we expect to recognize over a weighted average remaining requisite service period of approximately 1.16 years.

Stock Options

Stock option grants are composed of a combination of service-based, market-based and performance-based options.

Service-Based Options. These options generally vest over three or four years with equal annual vesting and generally expire on the earlier of ten years after the date of grant or following termination of service. A total of 182 thousand service-based options were outstanding as of September 30, 2023.

Market-Based Options. These option grants generally have two components, each of which vests only upon the achievement of certain criteria. The first component, which we refer to as “ordinary performance” grants, generally consists of two-thirds of the market-based grant and begins to vest if the stock price is at least double the exercise price, as long as the stock price realizes a compounded annual gain of at least 20% over the exercise price. The remaining third of the market-based options, which we refer to as “extraordinary performance” grants, generally begins to vest if the stock price is at least triple the exercise price, as long as the stock price realizes a compounded annual gain of at least 25% over the exercise price. Market-based options vest in three or four year installments with the first installment vesting upon the achievement of the criteria and the remaining installments vesting thereafter in equal annual installments. Market-based options generally expire on the earlier of ten years after the date of grant or following termination of service, unless the performance criteria is met prior to termination of service or in the final three years of the option term, in which case vesting will generally continue in accordance with the provisions of the award agreement. A total of 96 thousand market-based options were outstanding as of September 30, 2023.

Performance-Based Options. These option grants generally will vest if certain specific financial measures are achieved; typically with one-fourth vesting on each anniversary of the grant date. The award of performance-based options is adjusted based on the level of achievement specified in the award agreements. If the performance criteria achieved is above threshold performance levels, participants generally have the opportunity to vest in 50% to 200% of the option grants, depending upon performance achieved. If the performance criteria achieved is below a certain threshold, the options are canceled. The options generally expire on the earlier of ten years after the date of grant or following termination of service, unless the performance criteria is met prior to termination of service in which case vesting will generally continue in accordance with the provisions of the award agreement. There were 461 thousand performance-based options outstanding as of September 30, 2023.

There were no stock option grants during the nine months ended September 30, 2023. The Company granted 105 thousand stock options (at a weighted average exercise price of $11.86 per share) for the nine months ended September 30, 2022.

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ALTISOURCE PORTFOLIO SOLUTIONS S.A.

Notes to Condensed Consolidated Financial Statements (Continued)

The fair values of the performance-based options are determined using the Black-Scholes option pricing model. The following assumptions were used to determine the fair values as of the grant date:

	Nine months ended September 30, 2022
	Black-Scholes
Risk-free interest rate (%)	1.62
Expected stock price volatility (%)	67.75
Expected dividend yield	—
Expected option life (in years)	6
Fair value	$	7.27

We determined the expected option life of all service-based stock option grants using the simplified method, determined based on the graded vesting term plus the contractual term of the options, divided by two. We use the simplified method because we believe that our historical data does not provide a reasonable basis upon which to estimate expected option life.

The following table summarizes the grant date fair value of stock options that vested during the periods presented:

	Nine months ended September 30,
(in thousands, except per share data)	2023		2022
Weighted average grant date fair value of stock options granted per share	$	—	$	8.19
Intrinsic value of options exercised	—		—
Grant date fair value of stock options that vested	83		1,031

The following table summarizes the activity related to our stock options:

	Number of options	Weighted average exercise price		Weighted average contractual term (in years)	Aggregate intrinsic value (in thousands)
Outstanding as of December 31, 2022	745,277	$	27.03	4.83	$	—
Granted	—	—
Forfeited	(6,088)	25.26
Outstanding as of September 30, 2023	739,189	27.04		4.09	—
Exercisable as of September 30, 2023	543,701	25.27		3.50	—

Other Share-Based Awards

The Company’s other share-based and similar types of awards are comprised of restricted shares and restricted share units. The restricted shares and restricted share units are comprised of a combination of service-based awards, performance-based awards, market-based awards and performance and market-based awards.

Service-Based Awards. These awards generally vest over one-to-four-year periods. A total of 907 thousand service-based awards were outstanding as of September 30, 2023.

Performance-Based Awards. These awards generally vest if certain specific financial measures are achieved; generally one-third vests on each anniversary of the grant date or cliff-vest on the third anniversary of the grant date. The number of performance-based restricted shares and restricted share units that may vest is based on the level of achievement as specified in the award agreements. If the performance criteria achieved is above certain financial performance levels and Altisource’s share performance is above certain established criteria, participants have the opportunity to vest in up to 150% of the restricted share unit award for certain awards. If the performance criteria achieved is below certain thresholds, the award is canceled. A total of 141 thousand performance-based awards were outstanding as of September 30, 2023.

Market-Based Awards. 50% of these awards generally vest if certain specific market conditions are achieved over a 30-day period and the remaining 50% of these awards generally vest on the one year anniversary of the initial vesting. The

20

ALTISOURCE PORTFOLIO SOLUTIONS S.A.

Notes to Condensed Consolidated Financial Statements (Continued)

Company estimates the grant date fair value of these awards using a lattice (binomial) model. A total of 112 thousand market-based awards were outstanding as of September 30, 2023.

Performance-Based and Market-Based Awards. These awards generally vest if certain specific financial measures are achieved and if certain specific market conditions are achieved. If the performance criteria achieved is above certain financial performance levels and Altisource’s share performance is above certain established criteria, participants have the opportunity to vest in up to 300% of the restricted share unit award for certain awards. If the performance criteria or the market criteria is below certain thresholds, the award is canceled. The Company estimates the grant date fair value of these awards using a Monte Carlo simulation model. A total of 125 thousand performance-based and market-based awards were outstanding as of September 30, 2023.

The Company granted 891 thousand restricted share units (at a weighted average grant date fair value of $4.82 per share) during the nine months ended September 30, 2023. These grants include 57 thousand awards that include both a performance condition and a market condition and 57 thousand performance-based awards, for the nine months ended September 30, 2023. The Company granted 46 thousand awards that include both a performance condition and a market condition and 46 thousand performance-based awards, for the nine months ended September 30, 2022.

The following table summarizes the activity related to our restricted shares and restricted share units:

	Number of restricted shares and restricted share units
Outstanding as of December 31, 2022	755,006
Granted	890,810
Issued	(213,576)
Forfeited/canceled	(147,241)
Outstanding as of September 30, 2023	1,284,999

NOTE 15 — REVENUE

We classify revenue in three categories: service revenue, revenue from reimbursable expenses and non-controlling interests. 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, a consolidated entity that is a mortgage cooperative managed, but not owned, by Altisource. The Lenders One members’ earnings are included in revenue and reduced from net income to arrive at net income attributable to Altisource (see Note 1). Our services are provided to customers located in the United States. The components of revenue were as follows:

	Three months ended September 30,				Nine months ended September 30,
(in thousands)	2023		2022		2023		2022
Service revenue	$	34,112	$	36,290	$	104,356	$	111,691
Reimbursable expenses	2,039		1,957		6,398		6,158
Non-controlling interests	62		133		155		468
Total	$	36,213	$	38,380	$	110,909	$	118,317

21

ALTISOURCE PORTFOLIO SOLUTIONS S.A.

Notes to Condensed Consolidated Financial Statements (Continued)

Disaggregation of Revenue

Disaggregation of total revenues by segment and major source was as follows:

	Three months ended September 30, 2023
(in thousands)	Revenue recognized when services are performed or assets are sold		Revenue related to technology platforms and professional services		Reimbursable expenses revenue		Total revenue
Servicer and Real Estate	$	24,223	$	2,677	$	1,802	$	28,702
Origination	7,264		10		237		7,511
Total revenue	$	31,487	$	2,687	$	2,039	$	36,213

	Three months ended September 30, 2022
(in thousands)	Revenue recognized when services are performed or assets are sold		Revenue related to technology platforms and professional services		Reimbursable expenses revenue		Total revenue
Servicer and Real Estate	$	26,387	$	2,633	$	1,846	$	30,866
Origination	7,392		11		111		7,514
Total revenue	$	33,779	$	2,644	$	1,957	$	38,380

	Nine months ended September 30, 2023
(in thousands)	Revenue recognized when services are performed or assets are sold		Revenue related to technology platforms and professional services		Reimbursable expenses revenue		Total revenue
Servicer and Real Estate	$	73,314	$	8,265	$	5,916	$	87,495
Origination	22,908		24		482		23,414
Total revenue	$	96,222	$	8,289	$	6,398	$	110,909

	Nine months ended September 30, 2022
(in thousands)	Revenue recognized when services are performed or assets are sold		Revenue related to technology platforms and professional services		Reimbursable expenses revenue		Total revenue
Servicer and Real Estate	$	77,947	$	7,654	$	5,748	$	91,349
Origination	26,533		25		410		26,968
Total revenue	$	104,480	$	7,679	$	6,158	$	118,317

Transactions with Related Parties

In May 2022, John G. Aldridge, Jr., the Managing Partner of Aldridge Pite LLP (“Aldridge Pite”), joined the Board of Directors of Altisource. Aldridge Pite provides eviction and other real estate related services to the Company. The Company recognized $0.1 million and $0.1 million for the nine months ended September 30, 2023 and 2022, respectively (less than $0.1 million and less than $0.1 million for the third quarter of 2023 and 2022, respectively) of service revenue relating to services provided to Aldridge Pite.

Contract Balances

Our contract assets consist of unbilled accounts receivable (see Note 3). Our contract liabilities consist of current deferred revenue and other non-current liabilities as reported on the accompanying condensed consolidated balance sheets. Revenue recognized that was included in the contract liability at the beginning of the period was $3.3 million and $3.7 million for the nine months ended September 30, 2023 and 2022, respectively ($0.5 million and $0.8 million for the third quarter of 2023 and 2022, respectively).

22

ALTISOURCE PORTFOLIO SOLUTIONS S.A.

Notes to Condensed Consolidated Financial Statements (Continued)

NOTE 16 — COST OF REVENUE

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. The components of cost of revenue were as follows:

	Three months ended September 30,				Nine months ended September 30,
(in thousands)	2023		2022		2023		2022
Outside fees and services	$	13,659	$	15,319	$	42,810	$	42,573
Compensation and benefits	9,090		11,885		28,072		39,231
Technology and telecommunications	3,786		4,656		11,048		14,844
Reimbursable expenses	2,039		1,957		6,398		6,158
Depreciation and amortization	450		570		1,356		1,805
Total	$	29,024	$	34,387	$	89,684	$	104,611

Transactions with Related Parties

The Company recognized $0.6 million and $0.3 million for the nine months ended September 30, 2023 and 2022, respectively ($0.2 million and $0.1 million for the third quarter of 2023 and 2022, respectively) of reimbursable expenses relating to services provided to Aldridge Pite. As of September 30, 2023, the Company had no payable to Aldridge Pite.

NOTE 17 — SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

Selling, general and administrative expenses include payroll and employee benefits associated with personnel employed in executive, sales and marketing, finance, technology, law, compliance, 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. The components of selling, general and administrative expenses were as follows:

	Three months ended September 30,				Nine months ended September 30,
(in thousands)	2023		2022		2023		2022
Compensation and benefits	$	4,906	$	7,388	$	16,312	$	19,093
Professional services	1,897		2,584		5,743		8,432
Occupancy related costs	1,266		1,008		3,924		4,049
Amortization of intangible assets	1,352		1,281		3,912		3,849
Marketing costs	440		774		1,381		2,446
Depreciation and amortization	129		284		577		895
Other	744		1,237		3,320		4,291
Total	$	10,734	$	14,556	$	35,169	$	43,055

NOTE 18 — OTHER INCOME (EXPENSE), NET

Other income (expense), net consists of the following:

	Three months ended September 30,				Nine months ended September 30,
(in thousands)	2023		2022		2023		2022
Interest income (expense)	$	262	$	212	$	1,011	$	318
Other, net	145		247		1,346		1,074
Total	$	407	$	459	$	2,357	$	1,392

23

ALTISOURCE PORTFOLIO SOLUTIONS S.A.

Notes to Condensed Consolidated Financial Statements (Continued)

NOTE 19 — INCOME TAXES

We recognized an income tax (provision) benefit of $(2.6) million and $(2.2) million for the nine months ended September 30, 2023 and 2022, respectively ($(0.4) million and $0.2 million for the third quarter of 2023 and 2022, respectively). Income tax (provision) benefit for the three and nine months ended September 30, 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.

NOTE 20 — LOSS PER SHARE

Basic loss per share is computed by dividing loss available to common shareholders by the weighted average number of common shares outstanding for the period. In accordance with ASC 260, penny warrants are included in the calculation of weighted average basic and diluted earnings (loss) per share for the period of time that they are classified as equity. For the three and nine months ended, September 30, 2023, 0.2 million and 0.1 million penny warrants have been included in the calculation of weighted average basic and diluted loss per share. Diluted net loss per share excludes all dilutive securities because their impact would be anti-dilutive, as described below.

Basic and diluted loss per share are calculated as follows:

	Three months ended September 30,				Nine months ended September 30,
(in thousands, except per share data)	2023		2022		2023		2022
Net loss attributable to Altisource	$	(11,342)	$	(14,389)	$	(43,139)	$	(42,074)
Weighted average common shares outstanding, basic	22,181		16,087		20,538		16,051
Weighted average common shares outstanding, diluted	22,181		16,087		20,538		16,051
Loss per share:
Basic	$	(0.51)	$	(0.89)	$	(2.10)	$	(2.62)
Diluted	$	(0.51)	$	(0.89)	$	(2.10)	$	(2.62)

For the nine months ended September 30, 2023 and 2022, 1.5 million and 1.3 million, respectively (1.5 million and 1.3 million for the third quarter of 2023 and 2022, respectively), stock options, restricted shares and restricted share units, were excluded from the computation of loss per share, as a result of the following:

•For the nine months ended September 30, 2023 and 2022, 0.3 million and 0.2 million, respectively (0.4 million and 0.2 million for the third quarter of 2023 and 2022, respectively), stock options, restricted shares and restricted share units were anti-dilutive and have been excluded from the computation of diluted loss per share because the Company incurred a net loss

•For the nine months ended September 30, 2023 and 2022, 0.3 million and 0.2 million, respectively (0.2 million and 0.2 million for the third quarter of 2023 and 2022, respectively), stock options were anti-dilutive and have been excluded from the computation of diluted loss per share because their exercise price was greater than the average market price of our common stock

•For the nine months ended September 30, 2023 and 2022, 0.9 million and 0.9 million, respectively (0.9 million and 0.9 million for the third quarter of 2023 and 2022, respectively) , stock options, restricted shares and restricted share units, which begin to vest upon the achievement of certain market criteria related to our common stock price, performance criteria and a total shareholder return compared to the market benchmark, that have not yet been met in each period have been excluded from the computation of diluted loss per share

NOTE 21 — COMMITMENTS, CONTINGENCIES AND REGULATORY MATTERS

We record a liability for contingencies if an unfavorable outcome is probable and the amount of loss can be reasonably estimated, including expected insurance coverage. For proceedings where the reasonable estimate of loss is a range, we record a best estimate of loss within the range.

24

ALTISOURCE PORTFOLIO SOLUTIONS S.A.

Notes to Condensed Consolidated Financial Statements (Continued)

Litigation

We are currently involved in legal actions in the course of our business, some of which seek monetary damages. We do not believe that the outcome of these proceedings, both individually and in the aggregate, will have a material impact on our financial condition, results of operations or cash flows.

Regulatory Matters

Periodically, we are subject to audits, examinations and investigations by federal, state and local governmental authorities and receive subpoenas, civil investigative demands or other requests for information from such governmental authorities in connection with their regulatory or investigative authority. We are currently responding to such inquiries from governmental authorities relating to certain aspects of our business. We believe it is premature to predict the potential outcome or to estimate any potential financial impact in connection with these inquiries.

Ocwen Related Matters

As discussed in Note 2, during the three and nine months ended September 30, 2023, Ocwen was our largest customer, accounting for 43% of our total revenue. Additionally, 7% of our revenue for the nine months ended September 30, 2023 (6% of our revenue for the third quarter of 2023) was earned on the loan portfolios serviced by Ocwen, when a party other than Ocwen or the MSRs owner selected Altisource as the service provider.

Ocwen has disclosed that it is subject to a number of ongoing regulatory examinations, consent orders, inquiries, subpoenas, civil investigative demands, requests for information and other actions and is subject to pending and threatened legal proceedings, some of which include claims against Ocwen for substantial monetary damages. Previous regulatory actions against Ocwen have subjected Ocwen to independent oversight of its operations and placed certain restrictions on its ability to acquire servicing rights or proceed with default-related actions on the loans it services. Existing or future similar matters could result in adverse regulatory or other actions against Ocwen. In addition to the above, Ocwen may become subject to future adverse regulatory or other actions.

Ocwen has disclosed that Rithm is a significant client of Ocwen’s. As of June 30, 2023, approximately 16% of loans serviced and subserviced by Ocwen (measured in UPB) and approximately 68% of all delinquent loans that Ocwen services were related to Rithm MSRs or rights to MSRs.

The existence or outcome of Ocwen regulatory matters or the termination of Ocwen’s sub-servicing agreements with Rithm or other significant Ocwen clients may have significant adverse effects on Ocwen’s business. For example, Ocwen may be required to alter the way it conducts business, including the parties it contracts with for services, it may be required to seek changes to its existing pricing structure with us, it may lose its non-government-sponsored enterprise (“GSE”) servicing rights or subservicing arrangements or may lose one or more of its state servicing or origination licenses. Additional regulatory actions or adverse financial developments may impose additional restrictions on or require changes in Ocwen’s business that could require it to sell assets or change its business operations. Any or all of these effects and others could result in our eventual loss of Ocwen as a customer or a reduction in the number and/or volume of services they purchase from us or the loss of other customers.

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

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

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

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

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

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

•Altisource otherwise fails to be retained as a service provider

25

ALTISOURCE PORTFOLIO SOLUTIONS S.A.

Notes to Condensed Consolidated Financial Statements (Continued)

Management cannot predict whether any of these events will occur or the amount of any impact they may have on Altisource.

Leases

We lease certain premises and equipment, primarily consisting of office space and information technology equipment. Certain of our leases include options to renew at our discretion or terminate leases early, and these options are considered in our determination of the expected lease term. Certain of our lease agreements include rental payments adjusted periodically for inflation. Our lease agreements generally do not contain any material residual value guarantees or material restrictive covenants. We sublease certain office space to third parties. Sublease income was $0.1 million and $0.4 million for the nine months ended September 30, 2023 and 2022, respectively (less than $0.1 million and less than $0.1 million for the third quarter of 2023 and 2022, respectively). The amortization periods of right-of-use assets are generally limited by the expected lease term. Our leases generally have expected lease terms at adoption of one to six years.

Information about our lease terms and our discount rate assumption were as follows for the nine months ended September 30:

	2023		2022
Weighted average remaining lease term (in years)	2.51		3.15
Weighted average discount rate	5.93	%	5.66	%

Our lease activity during the period was as follows:

	Three months ended September 30,				Nine months ended September 30,
(in thousands)	2023		2022		2023		2022
Operating lease costs:
Selling, general and administrative expense	$	553	$	586	$	1,638	$	2,217
Cost of revenue	—		—		—		265
Cash used in operating activities for amounts included in the measurement of lease liabilities	$	507	$	515	$	1,638	$	2,022
Short-term (twelve months or less) lease costs	789		402		1,638		827

Maturities of our lease liabilities as of September 30, 2023 are as follows:

(in thousands)	Operating lease obligations
2023	$	559
2024	1,796
2025	1,322
2026	638
2027	—
Total lease payments	4,315
Less: interest	(540)
Present value of lease liabilities	$	3,775

Escrow Balances

We hold customers’ assets in escrow accounts at various financial institutions pending completion of certain real estate activities. These amounts are held in escrow accounts for limited periods of time and are not included in the accompanying condensed consolidated balance sheets. Amounts held in escrow accounts were $39.0 million and $13.2 million as of September 30, 2023 and December 31, 2022, respectively.

NOTE 22 — SEGMENT REPORTING

Our business segments are based upon our organizational structure, which focuses primarily on the services offered, and are consistent with the internal reporting used by our Chief Executive Officer (our chief operating decision maker) to evaluate operating performance and to assess the allocation of our resources.

26

ALTISOURCE PORTFOLIO SOLUTIONS S.A.

Notes to Condensed Consolidated Financial Statements (Continued)

We conduct our operations through two reportable segments: Servicer and Real Estate and Origination. In addition, we report Corporate and Others separately.

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. The Origination segment provides originators with solutions and technologies that span the mortgage origination lifecycle. 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, as well as eliminations between reportable segments.

Financial information for our segments is as follows:

	Three months ended September 30, 2023
(in thousands)	Servicer and Real Estate		Origination		Corporate and Others		Consolidated Altisource
Revenue	$	28,702	$	7,511	$	—	$	36,213
Cost of revenue	18,312		7,151		3,561		29,024
Gross profit (loss)	10,390		360		(3,561)		7,189
Selling, general and administrative expenses	1,966		1,797		6,971		10,734
Income (loss) from operations	8,424		(1,437)		(10,532)		(3,545)
Total other income (expense), net	—		—		(7,317)		(7,317)
Income (loss) before income taxes and non-controlling interests	$	8,424	$	(1,437)	$	(17,849)	$	(10,862)

	Three months ended September 30, 2022
(in thousands)	Servicer and Real Estate		Origination		Corporate and Others		Consolidated Altisource
Revenue	$	30,866	$	7,514	$	—	$	38,380
Cost of revenue	22,082		7,654		4,651		34,387
Gross profit (loss)	8,784		(140)		(4,651)		3,993
Selling, general and administrative expenses	2,931		2,399		9,226		14,556
Income (loss) from operations	5,853		(2,539)		(13,877)		(10,563)
Total other income (expense), net	4		—		(3,894)		(3,890)
Income (loss) before income taxes and non-controlling interests	$	5,857	$	(2,539)	$	(17,771)	$	(14,453)

	Nine months ended September 30, 2023
(in thousands)	Servicer and Real Estate		Origination		Corporate and Others		Consolidated Altisource
Revenue	$	87,495	$	23,414	$	—	$	110,909
Cost of revenue	56,075		22,623		10,986		89,684
Gross profit (loss)	31,420		791		(10,986)		21,225
Selling, general and administrative expenses	6,905		5,873		22,391		35,169
Income (loss) from operations	24,515		(5,082)		(33,377)		(13,944)
Total other income (expense), net	—		—		(26,454)		(26,454)
Income (loss) before income taxes and non-controlling interests	$	24,515	$	(5,082)	$	(59,831)	$	(40,398)

27

ALTISOURCE PORTFOLIO SOLUTIONS S.A.

Notes to Condensed Consolidated Financial Statements (Continued)

	Nine months ended September 30, 2022
(in thousands)	Servicer and Real Estate		Origination		Corporate and Others		Consolidated Altisource
Revenue	$	91,349	$	26,968	$	—	$	118,317
Cost of revenue	64,235		26,206		14,170		104,611
Gross profit (loss)	27,114		762		(14,170)		13,706
Selling, general and administrative expenses	9,227		6,739		27,089		43,055
Income (loss) from operations	17,887		(5,977)		(41,259)		(29,349)
Total other income (expense), net	4		—		(10,051)		(10,047)
Income (loss) before income taxes and non-controlling interests	$	17,891	$	(5,977)	$	(51,310)	$	(39,396)

(in thousands)	Servicer and Real Estate		Origination		Corporate and Others		Consolidated Altisource
Total assets:
September 30, 2023	$	57,143	$	51,191	$	54,302	$	162,636
December 31, 2022	63,696		53,984		77,588		195,268

28

Item 2. 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 interim condensed 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. Our MD&A should be read in conjunction with our Form 10-K for the year ended December 31, 2022 filed with the Securities and Exchange Commission (“SEC”) on March 30, 2023.

FORWARD-LOOKING STATEMENTS

This Form 10-Q contains forward-looking statements within the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements may relate to, among other things, future events or our future performance or financial condition. Words such as “anticipate,” “intend,” “expect,” “may,” “could,” “should,” “would,” “plan,” “estimate,” “believe,” “predict,” “potential” or “continue” or the negative of these terms and comparable terminology are intended to identify such forward-looking statements. Such statements are based on expectations as to the future and are not statements of historical fact. Furthermore, forward-looking statements are not guarantees of future performance and involve a number of assumptions, risks and uncertainties that could cause actual results to differ materially. The following are examples of such items and are not intended to be all inclusive:

•assumptions related to sources of liquidity and the adequacy of financial resources;

•assumptions about our ability to grow our business, including executing on our strategic initiatives;

•assumptions about our ability to improve margins and affect anticipated expense reductions in response to lower revenue due to COVID-19 or other factors;

•assumptions about the variable nature of our cost structure that would allow us to realign our cost structure in line with revenue;

•assumptions regarding the impact of seasonality;

•assumptions regarding the impacts of the COVID-19 pandemic and the timeliness and effectiveness of actions taken in response thereto;

•estimates regarding our effective tax rate; and

•estimates regarding our reserves and valuations.

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, 2022 as updated by this Form 10-Q including:

•the timing of the anticipated increase in default related referrals following the expiration of foreclosure and eviction moratoriums, forbearance programs and temporary governmental or servicer loss mitigation requirements, the timing of the expiration of such moratoriums, programs and requirements, and any other delays occasioned by government, investor or servicer actions;

•our ability to retain Ocwen Financial Corporation (together with its subsidiaries, “Ocwen”) as a customer or our ability to receive the anticipated volume of referrals from Ocwen;

•our ability to retain Rithm Capital Corp. (individually, together with one or more of its subsidiaries, or one or more of its subsidiaries individually, “Rithm”) (formerly New Residential Investment Corp.) as a customer or our ability to receive the anticipated volume of referrals from Rithm;

•our ability to comply with material agreements if a change of control is deemed to have occurred including, among other things, through the formation of a shareholder group, which may cause a termination event or event of default under certain of our agreements;

•our ability to execute on our strategic plan;

•our ability to retain our existing customers, expand relationships and attract new customers;

•our ability to comply with governmental regulations and policies and any changes in such regulations and policies;

•our ability to develop, launch and gain market acceptance of new solutions or recoup our investments in developing such new solutions;

•the level of loan delinquencies and charge-offs;

•the level of origination volume;

•technology incidents, data breaches and cybersecurity risks;

29

•significant changes in tax regulations and interpretations in the countries, states and local jurisdictions in which we operate; and

•the risks and uncertainties related to pandemics, epidemics or other force majeure events, including the COVID-19 pandemic, and associated impacts and the duration of such impacts on the economy, supply chain, transportation, movement of people, availability of vendors and demand for our products or services as well as increased costs, recommendations or restrictions imposed by governmental entities, changes in relevant business practices undertaken or imposed by our clients, vendors or regulators, impacts on contracts and client relationships and potential litigation exposure.

We caution you not to place undue reliance on these forward-looking statements which reflect our view only as of the date of this report. We are under no obligation (and expressly disclaim any obligation) to update or alter any forward-looking statements contained herein to reflect any change in our expectations with regard thereto or change in events, conditions or circumstances on which any such statement is based.

OVERVIEW

Our Business

When we refer to “Altisource,” the “Company,” “we,” “us” or “our” we mean Altisource Portfolio Solutions S.A., a Luxembourg société anonyme, or public limited liability company, and its subsidiaries.

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 Estate and Origination. In addition, we report Corporate and Others separately.

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, title insurance (as an agent) and settlement services, real estate valuation services, foreclosure trustee services, and residential and commercial construction inspection and risk mitigation services.

Marketplace

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

Technology and software-as-a-service (“SaaS”) Products

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

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

Solutions

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

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Lenders One

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

Technology and SaaS Products

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

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.

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’ earnings are included in revenue and reduced from net income to arrive at net income 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 COVID-19 pandemic and its impacts on our business, 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 servicers, we provide a suite of solutions and technologies intended to meet their growing and evolving needs. We are focused on growing referrals from our existing customer base and attracting new customers to our offerings. We have a customer base that includes government-sponsored enterprises (“GSEs”), asset managers, and several large bank and non-bank servicers including Ocwen and Rithm. We believe we are one of only a few providers with a broad suite of servicer solutions, nationwide coverage and scalability. Further, we believe we are well positioned to gain market share from existing and new customers as they consolidate to larger, full-service providers or outsource services that have historically been performed in-house.

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, which includes independent mortgage bankers, credit unions, and banks, as well as bank and non-bank loan originators. 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.

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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.

COVID-19 Pandemic Impacts

In response to the COVID-19 pandemic, beginning in March 2020, various governmental entities and servicers implemented unprecedented foreclosure and eviction moratoriums, forbearance programs and loss mitigation measures to help mitigate the impact to borrowers and renters. The Federal government’s foreclosure moratorium expired on July 31, 2021 and the Consumer Financial Protection Bureau’s (“CFPB’s”) temporary loss mitigation measures expired on December 31, 2021. Despite the expiration of such governmental measures, we believe servicers are proceeding slowly with foreclosure initiations for borrowers in default. Industrywide foreclosure initiations were 7% lower for the nine months ended September 30, 2023 compared to the same period in 2022, and 30% lower than the same period in 2019. Industrywide foreclosure sales were 11% higher for the nine months ended September 30, 2023 compared to the same period in 2022, although still 46% lower than the same pre-COVID-19 period in 2019. The decline in foreclosure initiations and foreclosure sales throughout the pandemic, partially offset by the restart of the default market, significantly decreased default related referrals to Altisource and continues to negatively impact virtually all of Altisource’s default related services revenue.

We cannot predict whether the default market will return to a pre-pandemic operating environment or the timing of such return or future government and industry actions. Based on the expirations of the Federal government’s foreclosure and eviction moratoriums and the CFPB’s rules on temporary loss mitigation measures, we believe the demand for our Default business will 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. Due to this timing, we anticipate that our later stage foreclosure auction and REO asset management services will not fully benefit from the early 2022 higher foreclosure initiations until late 2023 or early 2024.

During 2022 and the nine months ended September 2023, to address lower revenue, we worked to (1) reduce our cost structure, (2) maintain the infrastructure to deliver default related services for our customer base and support the anticipated increase in demand following the expiration of the moratoriums and forbearance plans and CFPB’s rules on temporary loss mitigation measures, and (3) add new Lenders One members, launch new solutions and increase customer adoption of our solutions to accelerate the growth of our origination business.

Share Repurchase Program

On May 16, 2023, our shareholders approved the renewal and amendment of the share repurchase program previously approved by the shareholders on May 15, 2018. Under the program, we are authorized to purchase up to 3.1 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 per share and a maximum price of $25.00 per share, for a period of five years from the date of approval. As of September 30, 2023, approximately 3.1 million shares of common stock remain available for repurchase under the program. There were no purchases of shares of common stock during the nine months ended September 30, 2023 and 2022. Luxembourg law limits share repurchases to the balance of Altisource Portfolio Solutions S.A. (unconsolidated parent company) retained earnings, less the value of shares repurchased. As of September 30, 2023, we can repurchase up to approximately $60 million of our common stock under Luxembourg law. Under the Amended Credit Agreement, we are not permitted to repurchase shares except for limited circumstances.

Ocwen Related Matters

During the three and nine months ended September 30, 2023, Ocwen was our largest customer, accounting for 43% of our total revenue. Additionally, 7% of our revenue for the nine months ended September 30, 2023 (6% of our revenue for the third quarter of 2023) was earned on the loan portfolios serviced by Ocwen, when a party other than Ocwen or the mortgage servicing rights (“MSRs”) owner selected Altisource as the service provider.

Ocwen has disclosed that it is subject to a number of ongoing regulatory examinations, consent orders, inquiries, subpoenas, civil investigative demands, requests for information and other actions and is subject to pending and threatened legal proceedings, some of which include claims against Ocwen for substantial monetary damages. Previous regulatory actions against Ocwen have subjected Ocwen to independent oversight of its operations and placed certain restrictions on its ability to acquire servicing rights or proceed with default-related actions on the loans it services. Existing or future similar matters could result in adverse regulatory or other actions against Ocwen. In addition to the above, Ocwen may become subject to future adverse regulatory or other actions.

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Ocwen has disclosed that Rithm is a significant client of Ocwen’s. As of June 30, 2023, approximately 16% of loans serviced and subserviced by Ocwen (measured in unpaid principal balance) and approximately 68% of all delinquent loans that Ocwen services were related to Rithm MSRs or rights to MSRs.

The existence or outcome of Ocwen regulatory matters or the termination of Ocwen’s sub-servicing agreements with Rithm or other significant Ocwen clients may have significant adverse effects on Ocwen’s business. For example, Ocwen may be required to alter the way it conducts business, including the parties it contracts with for services, it may be required to seek changes to its existing pricing structure with us, it may lose its non-GSE servicing rights or subservicing arrangements or may lose one or more of its state servicing or origination licenses. Additional regulatory actions or adverse financial developments may impose additional restrictions on or require changes in Ocwen’s business that could require it to sell assets or change its business operations. Any or all of these effects and others could result in our eventual loss of Ocwen as a customer or a reduction in the number and/or volume of services they purchase from us or the loss of other customers.

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

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

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

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

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

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

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

•Altisource otherwise fails to be retained as a service provider

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. We are seeking to diversify and grow our revenue and customer base and we have a sales and marketing strategy to support these efforts. Moreover, in the event one or more of these events materially negatively impact Altisource, we believe the variable nature of our cost structure would allow us to realign our cost structure to address some of the impact to revenue and that current liquidity would be sufficient to meet our working capital, capital expenditures, debt service and other cash needs. There can be no assurance that our plans will be successful or our operations will be profitable.

Factors Affecting Comparability

The following items impact the comparability of our results:

•Industrywide foreclosure initiations were 7% lower for the nine months ended September 30, 2023 compared to the same period in 2022, and 30% lower than the same pre-COVID-19 period in 2019.

•Industrywide foreclosure sales were 11% higher for the nine months ended September 30, 2023 compared to the same period in 2022, although still 46% lower than the same pre-COVID-19 period in 2019.

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

•The interest rate on the Company’s senior secured term loans was 14.09% for the nine months ended September 30, 2023 compared to 5.01% for the same period in 2022

•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 condensed consolidated statements of operations and comprehensive loss

•The Company recognized an income tax (provision) benefit of $(2.6) million and $(2.2) million for the nine months

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ended September 30, 2023 and 2022, respectively ($(0.4) million and $0.2 million for the third quarter of 2023 and 2022, respectively). The income tax (provision) benefit for the nine months ended September 30, 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

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CONSOLIDATED RESULTS OF OPERATIONS

Summary Results

The following is a discussion of our consolidated results of operations for the periods indicated. 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:

	Three months ended September 30,							Nine months ended September 30,
(in thousands, except per share data)	2023			2022			% Increase (decrease)	2023			2022			% Increase (decrease)
Service revenue
Servicer and Real Estate	$	26,900		$	29,020		(7)	$	81,579		$	85,601		(5)
Origination	7,212			7,270			(1)	22,777			26,090			(13)
Total service revenue	34,112			36,290			(6)	104,356			111,691			(7)
Reimbursable expenses	2,039			1,957			4	6,398			6,158			4
Non-controlling interests	62			133			(53)	155			468			(67)
Total revenue	36,213			38,380			(6)	110,909			118,317			(6)
Cost of revenue	29,024			34,387			(16)	89,684			104,611			(14)
Gross profit	7,189			3,993			80	21,225			13,706			55
Selling, general and administrative expenses	10,734			14,556			(26)	35,169			43,055			(18)
Loss from operations	(3,545)			(10,563)			66	(13,944)			(29,349)			52
Other income (expense), net:
Interest expense	(9,890)			(4,349)			127	(26,554)			(11,439)			132
Change in fair value of warrant liability	2,225			—			N/M	1,145			—			N/M
Debt amendment costs	(59)			—			N/M	(3,402)			—			N/M
Other income (expense), net	407			459			(11)	2,357			1,392			69
Total other income (expense), net	(7,317)			(3,890)			88	(26,454)			(10,047)			163
Loss before income taxes and non-controlling interests	(10,862)			(14,453)			25	(40,398)			(39,396)			(3)
Income tax (provision) benefit	(418)			197			N/M	(2,586)			(2,210)			17
Net loss	(11,280)			(14,256)			21	(42,984)			(41,606)			(3)
Net income attributable to non-controlling interests	(62)			(133)			53	(155)			(468)			67
Net loss attributable to Altisource	$	(11,342)		$	(14,389)		21	$	(43,139)		$	(42,074)		(3)
Margins:
Gross profit/service revenue	21		%	11		%		20		%	12		%
Loss from operations/service revenue	(10)		%	(29)		%		(13)		%	(26)		%
Loss per share:
Basic	$	(0.51)		$	(0.89)		43	$	(2.10)		$	(2.62)		20
Diluted	$	(0.51)		$	(0.89)		43	$	(2.10)		$	(2.62)		20
Weighted average shares outstanding:
Basic	22,181			16,087			38	20,538			16,051			28
Diluted	22,181			16,087			38	20,538			16,051			28

_____________________________________

N/M — not meaningful.

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Revenue

We recognized service revenue of $104.4 million for the nine months ended September 30, 2023, a 7% decrease compared to the nine months ended September 30, 2022 ($34.1 million for the third quarter of 2023, a 6% decrease compared to the third quarter of 2022). The decline in service revenue for the nine months ended September 30, 2023 is driven by lower revenue in both segments. Revenue was lower in the Servicer and Real Estate segment from the exit of a low margin customer care business in the fourth quarter 2022 and the apparent decline in a customer’s propensity to order services in two of our lower margin default related businesses. Revenue was lower in the Origination segment from the overall market decline in mortgage originations. The decline in service revenue for the three months ended September 30, 2023 is primarily driven by the apparent decline in a customer’s propensity to order services in two of our lower margin default related businesses, partially offset by growth in our foreclosure trustee business within the Servicer and Real Estate segment.

We recognized reimbursable expense revenue of $6.4 million for the nine months ended September 30, 2023, a 4% increase compared to the nine months ended September 30, 2022 ($2.0 million for the third quarter of 2023, a 4% increase compared to the third quarter of 2022). The increase in reimbursable expenses for the nine months ended September 30, 2023 is primarily driven by an increase in property preservation services in the Solutions business within the Servicer and Real Estate segment partially offset by lower asset resolution and asset management activities in the Marketplace business within the Servicer and Real Estate segment. The increase in reimbursable expenses for the three months ended September 30, 2023 is primarily driven by an increase in asset resolution and asset management activities in the Marketplace business within the Servicer and Real Estate segment.

Certain of our revenues can be impacted by seasonality. More specifically, revenues from property sales, loan originations and certain property preservation services in Field Services typically tend to be at their lowest level during the fall and winter months and at their highest level during the spring and summer months. However, as a result of the pandemic and related measures and the rapid rise in 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:

	Three months ended September 30,					Nine months ended September 30,
(in thousands)	2023		2022		% Increase (decrease)	2023		2022		% Increase (decrease)
Outside fees and services	$	13,659	$	15,319	(11)	$	42,810	$	42,573	1
Compensation and benefits	9,090		11,885		(24)	28,072		39,231		(28)
Technology and telecommunications	3,786		4,656		(19)	11,048		14,844		(26)
Reimbursable expenses	2,039		1,957		4	6,398		6,158		4
Depreciation and amortization	450		570		(21)	1,356		1,805		(25)
Cost of revenue	$	29,024	$	34,387	(16)	$	89,684	$	104,611	(14)

We recognized cost of revenue of $89.7 million for the nine months ended September 30, 2023, a 14% decrease compared to the nine months ended September 30, 2022 ($29.0 million for the third quarter of 2023, a 16% decrease compared to the third quarter of 2022). Compensation and benefits for the three and nine months ended September 30, 2023 decreased primarily due to efficiency initiatives and cost savings measures taken in 2022 and 2023. Technology and telecommunications for the three and nine months ended September 30, 2023 decreased primarily due to the renegotiation of certain contracts and lower overall headcount. Outside fees and services for the nine months ended September 30, 2023 increased primarily from growth of reseller products in the Origination segment, partially offset by lower costs in certain default related businesses from fewer orders in the Servicer and Real Estate segment. Outside fees and services for the three months ended September 30, 2023 decreased primarily from fewer orders in certain default related businesses in the Servicer and Real Estate segment. In addition, changes in reimbursable expenses for the three and nine months ended September 30, 2023 are consistent with the changes in reimbursable expense revenue discussed in the revenue section above.

Gross profit increased to $21.2 million, representing 20% of service revenue, for the nine months ended September 30, 2023 compared to $13.7 million, representing 12% of service revenue, for the nine months ended September 30, 2022 (increased to

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$7.2 million, representing 21% of service revenue, for the third quarter of 2023, compared to $4.0 million, representing 11% of service revenue, for the third quarter of 2022). Gross profit as a percentage of service revenue for the three and nine months ended September 30, 2023 increased compared to the three and nine months ended September 30, 2022 primarily due to margin expansion in both the Servicer and Real Estate segment and the Origination segment from efficiency initiatives and lower corporate costs as a percentage of revenue.

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, 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:

	Three months ended September 30,					Nine months ended September 30,
(in thousands)	2023		2022		% Increase (decrease)	2023		2022		% Increase (decrease)
Compensation and benefits	$	4,906	$	7,388	(34)	$	16,312	$	19,093	(15)
Professional services	1,897		2,584		(27)	5,743		8,432		(32)
Occupancy related costs	1,266		1,008		26	3,924		4,049		(3)
Amortization of intangible assets	1,352		1,281		6	3,912		3,849		2
Marketing costs	440		774		(43)	1,381		2,446		(44)
Depreciation and amortization	129		284		(55)	577		895		(36)
Other	744		1,237		(40)	3,320		4,291		(23)
Selling, general and administrative expenses	$	10,734	$	14,556	(26)	$	35,169	$	43,055	(18)

SG&A expenses for the nine months ended September 30, 2023 of $35.2 million decreased by 18% compared to the nine months ended September 30, 2022 ($10.7 million for the third quarter of 2023, a 26% decrease compared to the third quarter of 2022). The decrease for the three and nine months ended September 30, 2022 was primarily driven by lower compensation and benefits, professional services and marketing costs. Compensation and benefits and marketing costs for the three and nine months ended September 30, 2023 decreased from efficiency initiatives and cost savings measures. Professional services for the three and nine months ended September 30, 2023 decreased primarily due to lower legal and litigation fees.

Loss from Operations

Loss from operations for the nine months ended September 30, 2023 was $(13.9) million, representing (13)% of service revenue, compared to $(29.3) million, representing (26)% of service revenue, for the nine months ended September 30, 2022 (decreased to $(3.5) million, representing (10)% of service revenue, for the third quarter of 2023, compared to $(10.6) million representing (29)% of service revenue for the third quarter of 2022). Loss from operations as a percentage of service revenue improved for the three and nine months ended September 30, 2023 compared to the three and nine months ended September 30, 2022, primarily as a result of higher gross profit margins and the percentage reduction in SG&A expenses in excess of the percentage change in revenue.

Other Income (Expense), net

Other income (expense), net principally includes interest expense and other non-operating gains and losses.

Other income (expense), net was $(26.5) million for the nine months ended September 30, 2023 compared to $(10.0) million for the nine months ended September 30, 2022 ($(7.3) million for the third quarter of 2023 and $(3.9) million for the third quarter of 2022). The change for the three and nine months ended September 30, 2023 was primarily driven by higher interest expense and debt amendment costs, partially offset by a gain on the change in fair value of the warrant liability and higher interest and other income. The higher interest expense was driven by higher interest rates, higher interest rates on our amended SSTL and higher amortization of debt discount and debt issuance and amendment costs.

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Income Tax Provision

We recognized an income tax (provision) benefit of $(2.6) million and $(2.2) million for the nine months ended September 30, 2023 and 2022, respectively ($(0.4) million and $0.2 million for the third quarter of 2023 and 2022, respectively). The income tax (provision) benefit 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.

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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:

	Three months ended September 30, 2023
(in thousands)	Servicer and Real Estate			Origination			Corporate and Others		Consolidated Altisource
Revenue
Service revenue	$	26,900		$	7,212		$	—	$	34,112
Reimbursable expenses	1,802			237			—		2,039
Non-controlling interests	—			62			—		62
	28,702			7,511			—		36,213
Cost of revenue	18,312			7,151			3,561		29,024
Gross profit (loss)	10,390			360			(3,561)		7,189
Selling, general and administrative expenses	1,966			1,797			6,971		10,734
Income (loss) from operations	8,424			(1,437)			(10,532)		(3,545)
Total other income (expense), net	—			—			(7,317)		(7,317)
Income (loss) before income taxes and non-controlling interests	$	8,424		$	(1,437)		$	(17,849)	$	(10,862)
Margins:
Gross profit (loss) / service revenue	39		%	5		%	N/M		21		%
Income (loss) from operations / service revenue	31		%	(20)		%	N/M		(10)		%

_____________________________________

N/M — not meaningful.

	Three months ended September 30, 2022
(in thousands)	Servicer and Real Estate			Origination			Corporate and Others		Consolidated Altisource
Revenue
Service revenue	$	29,020		$	7,270		$	—	$	36,290
Reimbursable expenses	1,846			111			—		1,957
Non-controlling interests	—			133			—		133
	30,866			7,514			—		38,380
Cost of revenue	22,082			7,654			4,651		34,387
Gross profit (loss)	8,784			(140)			(4,651)		3,993
Selling, general and administrative expenses	2,931			2,399			9,226		14,556
Income (loss) from operations	5,853			(2,539)			(13,877)		(10,563)
Total other income (expense), net	4			—			(3,894)		(3,890)
Income (loss) before income taxes and non-controlling interests	$	5,857		$	(2,539)		$	(17,771)	$	(14,453)
Margins:
Gross profit (loss) / service revenue	30		%	(2)		%	N/M		11		%
Income (loss) from operations / service revenue	20		%	(35)		%	N/M		(29)		%

_____________________________________

N/M — not meaningful.

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	Nine months ended September 30, 2023
(in thousands)	Servicer and Real Estate			Origination			Corporate and Others		Consolidated Altisource
Revenue
Service revenue	$	81,579		$	22,777		$	—	$	104,356
Reimbursable expenses	5,916			482			—		6,398
Non-controlling interests	—			155			—		155
	87,495			23,414			—		110,909
Cost of revenue	56,075			22,623			10,986		89,684
Gross profit (loss)	31,420			791			(10,986)		21,225
Selling, general and administrative expenses	6,905			5,873			22,391		35,169
Income (loss) from operations	24,515			(5,082)			(33,377)		(13,944)
Total other income (expense), net	—			—			(26,454)		(26,454)
Income (loss) before income taxes and non-controlling interests	$	24,515		$	(5,082)		$	(59,831)	$	(40,398)
Margins:
Gross profit (loss) / service revenue	39		%	3		%	N/M		20		%
Income (loss) from operations / service revenue	30		%	(22)		%	N/M		(13)		%

_____________________________________

N/M — not meaningful.

	Nine months ended September 30, 2022
(in thousands)	Servicer and Real Estate			Origination			Corporate and Others		Consolidated Altisource
Revenue
Service revenue	$	85,601		$	26,090		$	—	$	111,691
Reimbursable expenses	5,748			410			—		6,158
Non-controlling interests	—			468			—		468
	91,349			26,968			—		118,317
Cost of revenue	64,235			26,206			14,170		104,611
Gross profit (loss)	27,114			762			(14,170)		13,706
Selling, general and administrative expenses	9,227			6,739			27,089		43,055
Income (loss) from operations	17,887			(5,977)			(41,259)		(29,349)
Total other income (expense), net	4			—			(10,051)		(10,047)
Income (loss) before income taxes and non-controlling interests	$	17,891		$	(5,977)		$	(51,310)	$	(39,396)
Margins:
Gross profit (loss) / service revenue	32		%	3		%	N/M		12		%
Income (loss) from operations / service revenue	21		%	(23)		%	N/M		(26)		%

_____________________________________

N/M — not meaningful.

40

Servicer and Real Estate

Revenue

Revenue by line of business was as follows:

	Three months ended September 30,					Nine months ended September 30,
(in thousands)	2023		2022		% Increase (decrease)	2023		2022		% Increase (decrease)
Service revenue:
Solutions	$	16,744	$	19,418	(14)	$	50,420	$	54,178	(7)
Marketplace	7,174		6,727		7	22,028		23,014		(4)
Technology and SaaS Products	2,982		2,875		4	9,131		8,409		9
Total service revenue	26,900		29,020		(7)	81,579		85,601		(5)
Reimbursable expenses:
Solutions	830		915		(9)	2,657		2,416		10
Marketplace	972		931		4	3,259		3,332		(2)
Total reimbursable expenses	1,802		1,846		(2)	5,916		5,748		3
Total revenue	$	28,702	$	30,866	(7)	$	87,495	$	91,349	(4)

We recognized service revenue of $81.6 million for the nine months ended September 30, 2023, a 5% decrease compared to the nine months ended September 30, 2022 ($26.9 million for the third quarter of 2023, a 7% decrease compared to the third quarter of 2022). We also recognized reimbursable expense revenue of $5.9 million for the nine months ended September 30, 2023, a 3% increase compared to the nine months ended September 30, 2022 ($1.8 million for the third quarter of 2023, a 2% decrease compared to the third quarter of 2022). The decrease in service revenue for the nine months ended September 30, 2023 was driven by the exit of a low margin customer care business in the fourth quarter 2022 and the apparent decline in a customer’s propensity to order services in two of our lower margin businesses within our Solutions business. The decline in service revenue for the three months ended September 30, 2023 is primarily driven by the apparent decline in a customer’s propensity to order services in two of our lower margin businesses within our Solutions business, partially offset by growth in our foreclosure trustee business in the Solutions business within the Servicer and Real Estate segment.

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 pandemic and related measures and the rapid rise in 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:

	Three months ended September 30,					Nine months ended September 30,
(in thousands)	2023		2022		% Increase (decrease)	2023		2022		% Increase (decrease)
Outside fees and services	$	8,469	$	11,382	(26)	$	26,816	$	30,216	(11)
Compensation and benefits	5,757		6,554		(12)	17,236		20,819		(17)
Reimbursable expenses	1,802		1,846		(2)	5,916		5,748		3
Technology and telecommunications	2,069		2,059		—	5,462		6,723		(19)
Depreciation and amortization	215		241		(11)	645		729		(12)
Cost of revenue	$	18,312	$	22,082	(17)	$	56,075	$	64,235	(13)

Cost of revenue for the nine months ended September 30, 2023 of $56.1 million decreased by 13% compared to the nine months ended September 30, 2022 ($18.3 million for the third quarter of 2023, a 17% decrease compared to the third quarter of 2022). The decrease in cost of revenue for the nine months ended September 30, 2023 is primarily driven by lower compensation and benefits primarily due to cost savings initiatives, outside fees and services from lower revenue and lower technology and telecommunications due to a change in the terms of a vendor agreement for property management technologies

41

in the Solutions business within the Servicer and Real Estate segment and other cost savings initiatives. The decrease in cost of revenue for the three months ended September 30, 2023 is driven by a decrease in outside fees and services from lower revenue and lower compensation and benefits primarily due to cost savings initiatives.

Gross profit increased to $31.4 million, representing 39% of service revenue, for the nine months ended September 30, 2023 compared to $27.1 million, representing 32% of service revenue, for the nine months ended September 30, 2022 (increased to $10.4 million, representing 39% of service revenue, for the third quarter of 2023, compared to $8.8 million, representing 30% of service revenue, for the third quarter of 2022). Gross profit as a percentage of service revenue for the three and nine months ended September 30, 2023 increased primarily due to efficiency initiatives and cost savings measures. Our margins can vary substantially depending upon the service revenue mix.

Selling, General and Administrative Expenses

SG&A expenses consisted of the following:

	Three months ended September 30,					Nine months ended September 30,
(in thousands)	2023		2022		% Increase (decrease)	2023		2022		% Increase (decrease)
Amortization of intangible assets	$	740	$	742	—	$	2,220	$	2,230	—
Compensation and benefits	563		733		(23)	1,885		2,130		(12)
Professional services	439		558		(21)	1,085		2,040		(47)
Marketing costs	187		336		(44)	861		1,148		(25)
Occupancy related costs	170		228		(25)	527		756		(30)
Depreciation and amortization	1		4		(75)	2		10		(80)
Other	(134)		330		(141)	325		913		(64)
Selling, general and administrative expenses	$	1,966	$	2,931	(33)	$	6,905	$	9,227	(25)

SG&A for the nine months ended September 30, 2023 of $6.9 million decreased by 25% compared to the nine months ended September 30, 2022 ($2.0 million for the third quarter of 2023, a 33% decrease compared to the third quarter of 2022). The decrease in SG&A for the three and nine months ended September 30, 2023 is primarily due to lower professional services, marketing costs, compensation and benefits, occupancy related costs and Other expenses. Professional services for the nine months ended September 30, 2023 decreased primarily due to certain non-recurring expenses incurred in the first quarter of 2022. Compensation and benefits, occupancy related costs, marketing costs and Other expenses for the three and nine months ended September 30, 2023 decreased from efficiency and cost reduction measures.

Income from operations

Income from operations increased to $24.5 million, representing 30% of service revenue, for the nine months ended September 30, 2023 compared to $17.9 million, representing 21% of service revenue, for the nine months ended September 30, 2022 (decreased to $8.4 million, representing 31% of service revenue, for the third quarter of 2023, compared to $5.9 million, representing 20% of service revenue for the third quarter of 2022). The increase in operating income as a percentage of service revenue for the three and nine months ended September 30, 2023 is primarily the result of higher gross profit margins and a percentage reduction in SG&A in excess of the percentage reduction in revenue.

42

Origination

Revenue

Revenue by business unit was as follows:

	Three months ended September 30,					Nine months ended September 30,
(in thousands)	2023		2022		% Increase (decrease)	2023		2022		% Increase (decrease)
Service revenue:
Lenders One	$	5,784	$	4,962	17	$	18,028	$	15,703	15
Solutions	1,294		2,126		(39)	4,270		9,839		(57)
Technology and SaaS Products	134		182		(26)	479		548		(13)
Total service revenue	7,212		7,270		(1)	22,777		26,090		(13)
Reimbursable expenses:
Solutions	237		111		114	482		410		18
Total reimbursable expenses	237		111		114	482		410		18
Non-controlling interests	62		133		(53)	155		468		(67)
Total revenue	$	7,511	$	7,514	—	$	23,414	$	26,968	(13)

We recognized service revenue of $22.8 million for the nine months ended September 30, 2023, a 13% decrease compared to the nine months ended September 30, 2022 ($7.2 million for the third quarter of 2023, a 1% decrease compared to the third quarter of 2022). We also recognized reimbursable expense revenue of $0.5 million for the nine months ended September 30, 2023, a 18% increase compared to the nine months ended September 30, 2022 ($0.2 million for the third quarter of 2023, a 114% increase compared to the third quarter of 2022). The decrease in service revenue in the Origination segment for the three and nine months ended September 30, 2023 is primarily driven by the overall market decline in mortgage originations partially offset by Lenders One growth with our new reseller products. The decline in the Solutions business revenue was greater than the overall market decline as a greater percentage of revenue in some of our Solutions businesses was derived from refinance transactions which declined at a greater rate than the overall market.

Cost of Revenue and Gross Profit

Cost of revenue consisted of the following:

	Three months ended September 30,					Nine months ended September 30,
(in thousands)	2023		2022		% Increase (decrease)	2023		2022		% Increase (decrease)
Outside fees and services	$	5,190	$	3,937	32	$	15,994	$	12,357	29
Compensation and benefits	1,468		3,121		(53)	5,282		11,947		(56)
Technology and telecommunications	248		476		(48)	838		1,464		(43)
Reimbursable expenses	237		111		114	482		410		18
Depreciation and amortization	8		9		(11)	27		28		(4)
Cost of revenue	$	7,151	$	7,654	(7)	$	22,623	$	26,206	(14)

Cost of revenue for the nine months ended September 30, 2023 of $22.6 million decreased by 14% compared to the nine months ended September 30, 2022 ($7.2 million for the third quarter of 2023, a 7% decrease compared to the third quarter of 2022). The decrease in cost of revenue for the three and nine months ended September 30, 2023 was primarily driven by the alignment of compensation and benefits with lower service revenue discussed above, partially offset by an increase in outside fees and services from growth in sales of certain Lenders One reseller solutions.

Gross profit decreased to $0.8 million, representing 3% of service revenue, for the nine months ended September 30, 2023 compared to $0.8 million, representing 3% of service revenue, for the nine months ended September 30, 2022 (increased to $0.4 million, representing 5% of service revenue, for the third quarter of 2023, compared to $(0.1) million, representing (2)% of

43

service revenue for the third quarter of 2022). Gross profit as a percentage of service revenue for the three months ended September 30, 2022 increased from margin expansion from efficiency initiatives and cost savings measures.

Selling, General and Administrative Expenses

SG&A expenses consisted of the following:

	Three months ended September 30,					Nine months ended September 30,
(in thousands)	2023		2022		% Increase (decrease)	2023		2022		% Increase (decrease)
Compensation and benefits	$	511	$	1,172	(56)	$	1,755	$	2,119	(17)
Amortization of intangible assets	612		539		14	1,692		1,619		5
Professional services	125		149		(16)	806		625		29
Marketing costs	252		436		(42)	530		1,286		(59)
Occupancy related costs	79		133		(41)	221		483		(54)
Other	218		(30)		N/M	869		607		43
Selling, general and administrative expenses	$	1,797	$	2,399	(25)	$	5,873	$	6,739	(13)

_____________________________________

N/M — not meaningful.

SG&A for the nine months ended September 30, 2023 of $5.9 million decreased by 13% compared to the nine months ended September 30, 2022 ($1.8 million for the third quarter of 2023, decreased by 25% compared to the third quarter of 2022). The decrease in SG&A for the nine months ended September 30, 2023 is primarily due to lower marketing costs and compensation and benefits from efficiency and cost reduction measures and lower occupancy related costs partially offset by non-recurring professional services expenses for the first nine months of 2023 of $0.4 million.

Loss from operations

Loss from operations decreased to $(5.1) million, representing (22)% of service revenue, for the nine months ended September 30, 2023 compared to $(6.0) million, representing (23)% of service revenue, for the nine months ended September 30, 2022 (decreased to $(1.4) million, representing (20)% of service revenue for the third quarter of 2023, compared to $(2.5) million, representing (35)% of service revenue for the third quarter of 2022). The improvement in operating loss as a percentage of service revenue for the nine months ended September 30, 2023 is primarily from a greater percentage reduction in SG&A expenses than the percentage change in revenue. The improvement in operating loss as a percentage of service revenue for the three months ended September 30, 2023 is primarily from higher gross profit margins and from a greater percentage reduction in SG&A expenses than the percentage change in revenue.

Corporate and Others

Cost of Revenue

Cost of revenue consisted of the following:

	Three months ended September 30,					Nine months ended September 30,
(in thousands)	2023		2022		% Increase (decrease)	2023		2022		% Increase (decrease)
Compensation and benefits	$	1,865	$	2,210	(16)	$	5,554	$	6,465	(14)
Technology and telecommunications	1,469		2,121		(31)	4,748		6,657		(29)
Depreciation and amortization	227		320		(29)	684		1,048		(35)
Cost of revenue	$	3,561	$	4,651	(23)	$	10,986	$	14,170	(22)

Cost of revenue for the nine months ended September 30, 2023 of $11.0 million decreased by 22% compared to the nine months ended September 30, 2022 ($3.6 million for the third quarter of 2023, a 23% decrease compared to the third quarter of

44

2022). The decrease in cost of revenue for the three and nine months ended September 30, 2023 is primarily driven by lower technology and telecommunications and compensation and benefits due to efficiency initiatives and cost savings initiatives.

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:

	Three months ended September 30,					Nine months ended September 30,
(in thousands)	2023		2022		% Increase (decrease)	2023		2022		% Increase (decrease)
Compensation and benefits	$	3,832	$	5,483	(30)	$	12,672	$	14,844	(15)
Professional services	1,333		1,877		(29)	3,852		5,767		(33)
Occupancy related costs	1,017		647		57	3,176		2,810		13
Depreciation and amortization	128		280		(54)	575		885		(35)
Marketing costs	1		2		(50)	(10)		12		(183)
Other	660		937		(30)	2,126		2,771		(23)
Selling, general and administrative expenses	$	6,971	$	9,226	(24)	$	22,391	$	27,089	(17)

SG&A for the nine months ended September 30, 2023 of $22.4 million decreased by 17% compared to the nine months ended September 30, 2022 ($7.0 million for the third quarter of 2023, a 24% decrease compared to third quarter of 2022). The decrease for the three and nine months ended September 30, 2023 is primarily driven by lower compensation and benefits, professional services and Other expenses. The decrease for the three and nine months ended September 30, 2023 in compensation and benefits was driven by lower cash incentive compensation accruals, efficiency initiatives and cost savings measures. Professional services for the three and nine months ended September 30, 2023 decreased due to lower insurance, legal and audit related expenses.

Other Income (Expense), net

Other income (expense), net principally includes interest expense and other non-operating gains and losses.

Other income (expense), net was $(26.5) million for the nine months ended September 30, 2023 compared to $(10.0) million for the nine months ended September 30, 2022 ($(7.3) million for the third quarter of 2023 and $(3.9) million for the third quarter of 2022). The change for the three and nine months ended September 30, 2023 was primarily driven by higher interest expense and debt amendment costs, partially offset by a gain on the change in fair value of the warrant liability and higher interest and other income. The higher interest expense was driven by higher interest rates, higher interest rates on our amended SSTL and higher amortization of debt discount and debt issuance and amendment costs.

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, due to governmental and market responses to the COVID-19 pandemic, revenue has declined significantly. The lower revenue, partially offset by cost savings initiatives, resulted in negative operating cash flow from operations for the nine months ended September 30, 2023 and 2022. We believe our anticipated revenue growth from the return of the default market, on-boarding sales wins, and revenue mix together with our reduced cost structure, should help reduce negative operating cash flow. 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. We also use cash for repayments of our long-term debt and capital investments. In addition, from time to time we consider and evaluate business acquisitions, dispositions, closures, sale of equity securities or other similar actions that are aligned with our strategy.

45

Senior Secured Term Loans

In April 2018, Altisource Portfolio Solutions S.A. and its wholly-owned subsidiary, Altisource S.à r.l., entered into a credit agreement with Morgan Stanley Senior Funding, Inc., as administrative agent and collateral agent, and certain lenders (the “Credit Agreement”). Under the Credit Agreement, Altisource borrowed $412 million in the form of senior secured term loans (“SSTL”). Effective February 14, 2023, Altisource Portfolio Solutions S.A. and Altisource S.à r.l. entered into Amendment No. 2 to the Credit Agreement (as amended by Amendment No. 2, the “Amended Credit Agreement”). Altisource Portfolio Solutions S.A. and its subsidiaries, subject to the applicable exclusions in the Amended Credit Agreement, are guarantors on the SSTL (collectively, the “Guarantors”). Effective June 1, 2023, the administrative agent and collateral agent of the Amended Credit Agreement changed to Wilmington Trust, N.A.

The maturity date of the SSTL under the Amended Credit Agreement is April 30, 2025. If Aggregate Paydowns are equal to or greater than $30 million, then (subject to the representations and warranties being true and correct as of such date and there being no default or event of default being in existence as of such date) the maturity date of the SSTL may be extended at the Company’s option to April 30, 2026. Such extension is conditioned upon the Company’s payment of a 2% payment-in-kind extension fee on or before April 30, 2025.

During the nine months ended September 30, 2023, Company made $30 million of Aggregate Paydowns.

All amounts outstanding under the SSTL will become due on the earlier of (i) the maturity date, and (ii) the date on which the loans are declared to be due and owing by the administrative agent at the request (or with the consent) of the Required Lenders (as defined in the Amended Credit Agreement; other capitalized terms, unless defined herein, are defined in the Amended Credit Agreement) or as otherwise provided in the Amended Credit Agreement upon the occurrence of any event of default. There are no mandatory repayments of the SSTL except as set forth herein until the April 30, 2025 maturity when the balance is due.

In addition to the scheduled principal payments, subject to certain exceptions, the SSTL is subject to mandatory prepayment upon issuances of debt, certain casualty and condemnation events and sales of assets, as well as 50% of Consolidated Excess Cash Flow, as calculated in accordance with the provisions of the Amended Credit Agreement.

Altisource may incur incremental indebtedness under the Amended Credit Agreement from one or more incremental lenders, which may include existing lenders, in an aggregate incremental principal amount not to exceed $50 million, subject to certain conditions set forth in the Amended Credit Agreement. The lenders have no obligation to provide any incremental indebtedness.

Through March 29, 2023, the SSTL’s interest rate was the Adjusted Eurodollar Rate plus 4.00%. Beginning March 30, 2023, the SSTL bears interest at rates based upon, at our option, the Secured Overnight Financing Rate (“SOFR”) or the Base Rate. If the Company selects SOFR, the term loans initially bear interest at a rate per annum equal to SOFR plus 5.00% payable in cash plus 5.00% payable in kind (“PIK”). If the Company selects Base Rate, the loans initially bear interest at a rate per annum equal to the Base Rate plus 4.00% payable in cash plus 5.00% PIK. Base Rate term loans bear interest at a rate per annum equal to the sum of (i) the greater of (x) the Base Rate and (y) 2.00% plus (ii) 4.00%. The PIK component of the interest rate is subject to adjustment based on the amount of Aggregate Paydowns as set forth in the table below. The PIK component of the interest rate was 3.75% for the three months ended September 30, 2023 and 4.50% for the three months ended June 30, 2023. The interest rate as of September 30, 2023 was 14.09%.

Aggregate Paydowns	PIK Component of Interest Rate
Less than $20 million	5.00%
$20 million+ but less than below	4.50%
$30 million+ but less than below	3.75%
$40 million+ but less than below	3.50%
$45 million+ but less than below	3.00%
$50 million+ but less than below	2.50%
$55 million+ but less than below	2.00%
$60 million+ but less than below	1.00%
$65 million+ but less than below	0.50%
$70 million+	0.00%

46

If, as of the end of any calendar quarter, (i) the amount of unencumbered cash and cash equivalents of Altisource S.à r.l. and its direct and indirect subsidiaries on a consolidated basis plus (ii) the undrawn commitment amount under the Revolver is, or is forecast as of the end of the immediately subsequent calendar quarter to be, less than $35 million, then up to 2.00% in interest otherwise payable in cash in the following quarter may be paid in kind at the Company’s election.

The payment of all amounts owing by Altisource under the Amended Credit Agreement is guaranteed by the Guarantors and is secured by a pledge of all equity interests of certain subsidiaries of Altisource, as well as a lien on substantially all of the assets of Altisource S.à r.l. and the Guarantors, subject to certain exceptions.

The Amended Credit Agreement includes covenants that restrict or limit, among other things, our ability, subject to certain exceptions and baskets, to incur additional debt, pay dividends and repurchase shares of our common stock. Under the Amended Credit Agreement, we are not permitted to repurchase shares except for limited circumstances. In the event we require additional liquidity, our ability to obtain it may be limited by the Credit Agreement.

As of September 30, 2023, the outstanding principal balance of the SSTL was $222.0 million.

Revolver

On June 22, 2021 Altisource S.à r.l, a subsidiary of Altisource Portfolio Solutions S.A., entered into a revolving credit facility with a related party, STS Master Fund, Ltd. (“STS”) (the “Revolver”). STS is an investment fund managed by Deer Park. Deer Park owns approximately 15% of Altisource’s common stock as of September 30, 2023 and owns Altisource debt as a lender under the Amended Credit Agreement. Deer Park’s Chief Investment Officer and managing partner was a member of Altisource’s Board of Directors until his resignation on March 1, 2022. The replacement director appointed by the Board of Directors is a current employee of Deer Park.

The Revolver was amended effective February 14, 2023 (the “Amended Revolver”). Under the terms of the Amended Revolver, STS will make loans to Altisource from time to time, in amounts requested by Altisource and Altisource may voluntarily prepay all or any portion of the outstanding loans at any time. The Amended Revolver provides Altisource the ability to borrow a maximum amount of $15.0 million. Amounts that are repaid may be re-borrowed in accordance with the limitations set forth below.

The maturity date of the Amended Revolver coincides with the maturity date of the SSTL under the Amended Credit Agreement, as it may be extended. The outstanding balance on the Amended Revolver is due and payable on such maturity date.

Borrowings under the Amended Revolver bear interest of 10.00% per annum in cash and 3.00% per annum PIK and are payable quarterly on the last business day of each March, June, September and December. In connection with the Amended Revolver, Altisource is required to pay a usage fee equal to $0.75 million at the initial extension of credit pursuant to the Amended Revolver.

Altisource’s obligations under the Amended Revolver are secured by a first-priority lien on substantially all of the assets of the Company, which lien will be pari passu with liens securing the SSTL under the Amended Credit Agreement.

The Amended Revolver contains additional representations, warranties, covenants, terms and conditions customary for transactions of this type, that restrict or limit, among other things, our ability to use the proceeds of credit only for general corporate purposes.

As of September 30, 2023, there was no outstanding debt under the Amended Revolver.

47

Cash Flows

The following table presents our cash flows for the nine months ended September 30:

(in thousands)	2023		2022		% Increase (decrease)
Net cash used in operating activities	$	(17,595)	$	(32,293)	(46)
Net cash used in investing activities	—		(517)		100
Net cash provided by (used in) financing activities	3,169		(1,943)		263
Net decrease in cash, cash equivalents and restricted cash	(14,426)		(34,753)		(58)
Cash, cash equivalents and restricted cash at the beginning of the period	54,273		102,149		(47)
Cash, cash equivalents and restricted cash at the end of the period	$	39,847	$	67,396	(41)

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 loss. For the nine months ended September 30, 2023, net cash used in operating activities was $(17.6) million compared to net cash used in operating activities of $(32.3) million for the nine months ended September 30, 2022. During the nine months ended September 30, 2023, the decrease in cash used in operating activities was driven by a $9.5 million improvement in cash provided by (used for) working capital and a $8.3 million increase in non-cash interest expense (amortization of debt discount and amortization of debt issuance and amendment costs), partially offset by a $1.4 million increase in net loss and a $0.6 million decrease in non-cash depreciation, amortization of intangibles, stock based compensation expenses and deferred income tax expenses. The increase in net loss was primarily due to higher interest expense driven by higher interest rates on our SSTL and debt amendment costs, partially offset by lower corporate costs and higher gross profit in the Servicer and Real Estate segment from our cash cost savings measures and lower SG&A expenses. The improvement in cash provided by (used for) changes in working capital was primarily driven by the $4.0 million net collection of taxes receivable for the nine months ended September 30, 2023 compared to a net payment of taxes of $2.6 million for the nine months ended September 30, 2022, a $2.0 million return of surety bonds, and no cash bonuses paid in the nine months ended September 30, 2023. Non-cash interest expense increased as a result of the February 2023 Amended Credit Agreement. 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 for the nine months ended September 30, 2022 consisted of additions to premises and equipment and proceeds from the sale of a business. Net cash used in investing activities was $(0.5) million for the nine months ended September 30, 2022 (no comparable amount for the nine months ended September 30, 2023). We used $0.9 million for the nine months ended September 30, 2022 (no comparable amount for the nine months ended September 30, 2023), for additions to premises and equipment primarily related to the purchase of technology hardware.

Cash Flows from Financing Activities

Net cash provided by (used in) financing activities were $3.2 million and $(1.9) million for the nine months ended September 30, 2023 and 2022, respectively. During the nine months ended September 30, 2023, we received $20.5 million in proceeds from the issuance of common stock, net of issuance costs, received $18.4 million in proceeds from the issuance of treasury stock, net of issuance costs and used $30.0 million of the proceeds for repayment of debt. Also during the nine months ended September 30, 2023, we paid $4.9 million to lenders or others on behalf of the lenders related to the debt amendment. During the nine months ended September 30, 2023 and 2022, we made payments of $0.5 million and $1.1 million, respectively, to satisfy employee tax withholding obligations on the issuance of restricted share units 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 nine months ended September 30, 2023 and 2022, we distributed $0.3 million and $0.9 million, respectively, to non-controlling interests.

48

Future Uses of Cash

Our significant future liquidity obligations primarily pertain to the maturity of the Amended Credit Agreement, interest expense under the Amended Credit Agreement (see Liquidity section above), and operating lease payments on certain of our premises and equipment.

Significant future uses of cash include the following:

			Payments Due by Period
(in thousands)	Total		2023		2024-2025		2026-2027
Senior secured term loans (1)	$	235,741	$	—	$	235,741	$	—
Interest expense payments (2)	37,832		5,822		32,010		—
Lease payments	4,315		559		3,118		638
Total	$	277,888	$	6,381	$	270,869	$	638

______________________________________

(1)    The outstanding balance of our SSTL as of September 30, 2023 is $222.0 million and is due on April 30, 2025. If Aggregate Paydowns are equal to or greater than $30 million, then (subject to a payment of a 2% payment-in-kind extension fee on or before April 30, 2025 and subject to the representations and warranties being true and correct as of such date and there being no default or event of default being in existence as of such date) the maturity date of the SSTL may be extended at the Company’s option to April 30, 2026. During the nine month ended September 30, 2023, Company made $30 million of Aggregate Paydowns. The table herein reflects a maturity of April 2025. The increase in outstanding balance is from the PIK component of our interest expense and is assumed to be paid in kind.

(2)    Estimated future interest payments based on the SOFR interest rate as of September 30, 2023 and the April 30, 2025 maturity date. Based on the April 30, 2025 maturity date, no interest expense has been included beyond April 30, 2025.

We anticipate funding future liquidity requirements with a combination of existing cash balances, cash anticipated to be generated by operating activities and, as needed, proceeds from the Amended Revolver. For further information, see Note 11 and Note 21 to the condensed consolidated financial statements.

Off-Balance Sheet Arrangements

Our off-balance sheet arrangements consist of escrow arrangements.

We hold customers’ assets in escrow accounts at various financial institutions pending completion of certain real estate activities. These amounts are held in escrow accounts for limited periods of time and are not included in the condensed consolidated balance sheets. Amounts held in escrow accounts were $39.0 million and $13.2 million as of September 30, 2023 and December 31, 2022, respectively.

Contractual Obligations, Commitments and Contingencies

For the nine months ended September 30, 2023, there were no significant changes to our contractual obligations from those identified in our Form 10-K for the fiscal year ended December 31, 2022 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.

CRITICAL ACCOUNTING POLICIES, ESTIMATES AND RECENT ACCOUNTING PRONOUNCEMENTS

We prepare our interim condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States of America. 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 condensed 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.

Our critical accounting policies are described in the MD&A section of our Form 10-K for the year ended December 31, 2022 filed with the SEC on March 30, 2023. There have been no material changes to our critical accounting policies during the nine months ended September 30, 2023.

49

Recently Adopted and Future Adoption of New Accounting Pronouncements

Management does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on our condensed financial statements.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Market Risk

Our financial market risk consists primarily of interest rate and foreign currency exchange rate risk.

Interest Rate Risk

Under the terms of the Amended Credit Agreement, the initial interest rate charged on the SSTL is SOFR (as defined in the Amended Credit Agreement) with a minimum floor of 1.00% plus 5.00% paid in cash plus 5.00% PIK. Based on par paydowns of $30 million during the nine months ended September 30, 2023, the PIK component was reduced to 3.75% and may be further reduced on a prospective basis based on the Aggregate Paydowns made prior to February 14, 2024.

Based on the principal amount outstanding and SOFR as of September 30, 2023, a one percentage point increase in SOFR above the minimum floor would increase our annual interest expense by approximately $2.2 million. There would be a $2.2 million decrease in our annual interest expense if there was a one percentage point decrease in SOFR.

Currency Exchange Risk

We are exposed to currency risk from potential changes in currency values of our non-United States dollar denominated expenses, assets, liabilities and cash flows. Our most significant currency exposure relates to the Indian rupee. Based on expenses incurred in Indian rupees for the third quarter of 2023, a one percentage point increase or decrease in value of the Indian rupee in relation to the United States dollar would increase or decrease our annual expenses by approximately $0.2 million.

Item 4. Controls and Procedures

a)    Evaluation of Disclosure Controls and Procedures

Our disclosure controls and procedures are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in reports we file or submit under the Exchange Act is accumulated and communicated to our management, including the Chairman and Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

As of September 30, 2023, an evaluation was conducted under the supervision and with the participation of our management, including our Chairman and Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Exchange Act). Based on this evaluation, such officers have concluded that our disclosure controls and procedures were effective as of September 30, 2023.

b)    Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in the Exchange Act Rules 13a-15(f) and 15d-15(f)) that occurred during the quarter ended September 30, 2023, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

50

PART II — OTHER INFORMATION

Item 1. Legal Proceedings

We record a liability for contingencies if an unfavorable outcome is probable and the amount of loss can be reasonably estimated, including expected insurance coverage. For proceedings where the reasonable estimate of loss is a range, we record a best estimate of loss within the range.

Litigation

We are currently involved in legal actions in the course of our business, some of which seek monetary damages. We do not believe that the outcome of these proceedings, both individually and in the aggregate, will have a material impact on our financial condition, results of operations or cash flows.

Regulatory Matters

Periodically, we are subject to audits, examinations and investigations by governmental authorities and receive subpoenas, civil investigative demands or other requests for information from such governmental authorities in connection with their regulatory or investigative authority. We are currently responding to such inquiries from governmental authorities relating to certain aspects of our business. We believe it is premature to predict the potential outcome or to estimate any potential financial impact in connection with these inquiries.

Item 1A. Risk Factors

The disclosure below relating to potential risks around the extension of the maturity of our Amended Credit Agreement and Revolver contains material changes and/or additions to the risk factors disclosed in Part I, Item 1A, of our Form 10-K for the year ended December 31, 2022 filed with the SEC on March 30, 2023.

We may be unable to exercise the option to extend the maturity of our Amended Credit Agreement and Revolver from April 2025 to April 2026. We may be unable to repay or refinance the balance of our loans under the Amended Credit Agreement or Revolver upon maturity, particularly if cash from operations fails to significantly improve, assets are not readily available for sale and sold or we are unable to timely refinance on favorable terms or at all.

Our loan agreements require us to repay the outstanding balance due in April 2025, with an option to extend to April 2026 if we make par paydowns from the proceeds of issuances of equity interests or from junior indebtedness totaling at least $30 million on or before February 13, 2024, and there is no continuing default of the loan agreements. We satisfied the $30 million paydown requirement through a par paydown in the amount of $20 million in February 2023 and an additional par paydown of $10 million in September 2023 each from the proceeds of equity issuances, providing us with the option to be able to extend the maturity date of our debt to April 2026. However, there can be no assurance that we will be permitted under our Amended Credit Agreement and Revolver to exercise the option to extend the maturity of our Amended Credit Agreement and Revolver to April 2026.

If our cash from operations fails to significantly improve, there can be no assurance that our cash balances and other assets readily available for sale and sold would be sufficient to fully repay borrowings under our outstanding Amended Credit Agreement and Revolver upon maturity, or that we will be able to refinance the remaining portion of the debt sufficiently prior to the due date or on terms acceptable to us. If we were to default on our debt, our lenders could take action adverse to our interests under the terms of the loan agreements, including seeking to take possession of the applicable collateral. In addition, a default under the loan agreements could constitute a termination event under certain of our client or vendor agreements, which could adversely impact our revenue or cash flow or our ability to provide products and services. Under such circumstances, if we are not able to agree upon a resolution with our lenders, we might seek applicable legal protections including under bankruptcy law, which further could provide certain of our customers or vendors the ability to terminate our agreements. If we refinance the loans under less favorable terms, we may be required to accept a higher interest rate and debt-related costs, as well as additional restrictions and covenants which constrain our ability to finance and operate our business.

As of the date of this filing, there have been no other material changes in our risk factors from those previously disclosed.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

There were no purchases of shares of common stock during the three months ended September 30, 2023. On May 16, 2023, our shareholders approved the renewal and amendment of the share repurchase program previously approved by the shareholders on May 15, 2018. Under the program, we are authorized to purchase up to 3.1 million shares of our common stock in the open market, subject to certain parameters, for a period of five years from the date of approval. As of September 30, 2023, the

51

maximum number of shares that may be purchased under the repurchase program is 3.1 million shares of the Company’s common stock. In addition to the share repurchase program, during the three months ended September 30, 2023, 94,442 common shares were withheld from employees to satisfy tax withholding obligations that arose from the vesting of restricted shares.

On February 14, 2023, the lenders under the Amended Credit Agreement received warrants to purchase 3,223,851 shares of Altisource common stock (the “Warrant Shares”). The Warrants may be exercised at any time on and after February 14, 2024 and prior to their expiration date. The exercise price per share of common stock under each Warrant is equal to $0.01. The number of Warrant Shares was subject to reduction based on the amount of par paydowns on the SSTL in the aggregate using proceeds from issuances of equity interests or from junior indebtedness made prior to February 14, 2024 (“Aggregate Paydowns”) as set forth in the table below.

Aggregate Paydowns	Warrant Shares
Less than $20 million	3,223,851
$20 million+ but less than below	2,578,743
$30 million+	1,612,705

During the nine months ended September 30, 2023, the Company made payments toward the determination of Aggregate Paydowns of $30.0 million. As a result, the number of Warrant Shares as of September 30, 2023 is 1,612,705.

52

Item 6. Exhibits

Exhibit Number	Exhibit Description
31.1 *	Section 302 Certification of the Chief Executive Officer pursuant to Exchange Act Rule 13a-14(a)
31.2 *	Section 302 Certification of the Chief Financial Officer pursuant to Exchange Act Rule 13a-14(a)
32.1 *	Certification by the Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101 *	Pursuant to Rule 405 of Regulation S-T, the following financial information from the Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2023 is formatted in Inline XBRL interactive data files: (i) Condensed Consolidated Balance Sheets as of September 30, 2023 and December 31, 2022; (ii) Condensed Consolidated Statements of Operations and Comprehensive Loss for the three and nine months ended September 30, 2023 and 2022; (iii) Condensed Consolidated Statements of Equity for the nine months ended September 30, 2023 and 2022; (iv) Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2023 and 2022; and (v) Notes to Condensed Consolidated Financial Statements.
104 *	Cover Page Interactive Data File formatted as Inline XBRL and contained in Exhibit 101
______________________________________
*	Filed herewith.

53

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		ALTISOURCE PORTFOLIO SOLUTIONS S.A.
		(Registrant)
Date:	October 26, 2023	By:	/s/ Michelle D. Esterman
			Michelle D. Esterman
			Chief Financial Officer
			(On behalf of the Registrant and as its Principal Financial Officer and Principal Accounting Officer)

54

EX-31.1

Exhibit 31.1

CERTIFICATION BY THE CHIEF EXECUTIVE OFFICER PURSUANT TO SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

I, William B. Shepro, hereby certify that:

1.    I have reviewed this quarterly report on Form 10-Q for the period ended September 30, 2023 of Altisource Portfolio Solutions S.A.;

2.    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.    The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)    designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)    designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)    evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)    disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.    The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)    all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)    any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	October 26, 2023	By:	/s/ William B. Shepro
			William B. Shepro
			Chairman and Chief Executive Officer
			(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION BY THE CHIEF FINANCIAL OFFICER PURSUANT TO SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

I, Michelle D. Esterman, hereby certify that:

1.    I have reviewed this quarterly report on Form 10-Q for the period ended September 30, 2023 of Altisource Portfolio Solutions S.A.;

2.    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.    The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)    designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)    designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)    evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)    disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.    The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)    all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)    any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	October 26, 2023	By:	/s/ Michelle D. Esterman
			Michelle D. Esterman
			Chief Financial Officer
			(Principal Financial Officer and Principal Accounting Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION UNDER SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

(UNITED STATES CODE, TITLE 18, CHAPTER 63, SECTION 1350)

ACCOMPANYING QUARTERLY REPORT ON FORM 10-Q OF

ALTISOURCE PORTFOLIO SOLUTIONS S.A. FOR THE QUARTER ENDED

SEPTEMBER 30, 2023

In connection with the Quarterly Report on Form 10-Q of Altisource Portfolio Solutions S.A. (the “Company”) for the quarterly period ended September 30, 2023, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), William B. Shepro, as Chairman and Chief Executive Officer of the Company, and Michelle D. Esterman, as Chief Financial Officer of the Company, each hereby certifies, pursuant to 18 U.S.C. Section 1350, that:

(1)    The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and

(2)    The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

By:	/s/ William B. Shepro	By:	/s/ Michelle D. Esterman
	William B. Shepro		Michelle D. Esterman
	Chairman and Chief Executive Officer		Chief Financial Officer
	(Principal Executive Officer)		(Principal Financial Officer and
			Principal Accounting Officer)
	October 26, 2023		October 26, 2023

XML

Cover Page - shares	9 Months Ended
	Sep. 30, 2023	Oct. 20, 2023
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2023
Document Transition Report	false
Entity File Number	1-34354
Entity Registrant Name	ALTISOURCE PORTFOLIO SOLUTIONS S.A.
Entity Incorporation, State or Country Code	N4
Entity Tax Identification Number	98-0554932
Entity Address, Address Line One	33, Boulevard Prince Henri
Entity Address, Postal Zip Code	L-1724
Entity Address, City or Town	Luxembourg
Entity Address, Country	LU
City Area Code	352
Local Phone Number	2060 2055
Title of 12(b) Security	Common Stock, $1.00 par value
Trading Symbol	ASPS
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Smaller Reporting Company	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		26,492,632
Entity Central Index Key	0001462418
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q3

XML

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Current assets:
Cash and cash equivalents	$ 36,640	$ 51,025
Accounts receivable, net	12,981	12,989
Prepaid expenses and other current assets	11,217	23,544
Total current assets	60,838	87,558
Premises and equipment, net	2,168	4,222
Right-of-use assets under operating leases	3,628	5,321
Goodwill	55,960	55,960
Intangible assets, net	27,818	31,730
Deferred tax assets, net	4,982	5,048
Other assets	7,242	5,429
Total assets	162,636	195,268
Current liabilities:
Accounts payable and accrued expenses	31,032	33,507
Deferred revenue	$ 3,303	$ 3,711
Other current liabilities	Other current liabilities	Other current liabilities
Other current liabilities	$ 2,299	$ 2,867
Total current liabilities	36,634	40,085
Long-term debt	211,980	245,493
Deferred tax liabilities, net	$ 8,724	$ 9,028
Other non-current liabilities	Other non-current liabilities	Other non-current liabilities
Other non-current liabilities	$ 18,232	$ 19,536
Commitments, contingencies and regulatory matters (Note 21)
Equity (deficit):
Common stock ($1.00 par value; 100,000 shares authorized, 29,963 issued and 26,482 outstanding as of September 30, 2023; 16,129 outstanding as of December 31, 2022)	29,963	25,413
Additional paid-in capital	176,128	149,348
Retained earnings	(166,125)	118,948
Treasury stock, at cost (3,481 shares as of September 30, 2023 and 9,284 shares as of December 31, 2022)	(153,561)	(413,358)
Altisource deficit	(113,595)	(119,649)
Non-controlling interests	661	775
Total deficit	(112,934)	(118,874)
Total liabilities and deficit	$ 162,636	$ 195,268

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) shares in Thousands, $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Statement of Financial Position [Abstract]
Allowance for doubtful accounts	$ 3,379	$ 4,363
Common stock, par value (in usd per share)	$ 1.00	$ 1.00
Common stock, shares authorized (in shares)	100,000	100,000
Common stock, shares issued (in shares)	29,963	29,963
Common stock, shares outstanding (in shares)	26,482	16,129
Treasury shares (in shares)	3,481	9,284

XML

CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Income Statement [Abstract]
Revenue	$ 36,213	$ 38,380	$ 110,909	$ 118,317
Cost of revenue	29,024	34,387	89,684	104,611
Gross profit	7,189	3,993	21,225	13,706
Selling, general and administrative expenses	10,734	14,556	35,169	43,055
Loss from operations	(3,545)	(10,563)	(13,944)	(29,349)
Other income (expense), net:
Interest expense	(9,890)	(4,349)	(26,554)	(11,439)
Change in fair value of warrant liability	2,225	0	1,145	0
Debt amendment costs	(59)	0	(3,402)	0
Other income (expense), net	407	459	2,357	1,392
Total other income (expense), net	(7,317)	(3,890)	(26,454)	(10,047)
Loss before income taxes and non-controlling interests	(10,862)	(14,453)	(40,398)	(39,396)
Income tax (provision) benefit	(418)	197	(2,586)	(2,210)
Net loss	(11,280)	(14,256)	(42,984)	(41,606)
Net income attributable to non-controlling interests	(62)	(133)	(155)	(468)
Net loss attributable to Altisource	$ (11,342)	$ (14,389)	$ (43,139)	$ (42,074)
Loss per share:
Basic (in usd per share)	$ (0.51)	$ (0.89)	$ (2.10)	$ (2.62)
Diluted (in usd per share)	$ (0.51)	$ (0.89)	$ (2.10)	$ (2.62)
Weighted average shares outstanding:
Basic (in shares)	22,181	16,087	20,538	16,051
Diluted (in shares)	22,181	16,087	20,538	16,051
Comprehensive loss:
Comprehensive loss, net of tax	$ (11,280)	$ (14,256)	$ (42,984)	$ (41,606)
Comprehensive income attributable to non-controlling interests	(62)	(133)	(155)	(468)
Comprehensive loss attributable to Altisource	$ (11,342)	$ (14,389)	$ (43,139)	$ (42,074)

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CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (DEFECIT) - USD ($) shares in Thousands, $ in Thousands	Total	Common stock	Additional paid-in capital	Retained earnings	Treasury stock, at cost	Non-controlling interests
Balance (in shares) at Dec. 31, 2021		25,413
Balance at Dec. 31, 2021	$ (68,870)	$ 25,413	$ 144,298	$ 186,592	$ (426,445)	$ 1,272
Increase (Decrease) in Equity
Net loss	(12,029)			(12,190)		161
Distributions to non-controlling interest holders	(264)					(264)
Share-based compensation expense	1,290		1,290
Issuance of restricted share units and restricted shares	0			(6,560)	6,560
Treasury shares withheld for the payment of tax on restricted share unit and restricted share issuances	(1,014)			(4,046)	3,032
Balance (in shares) at Mar. 31, 2022		25,413
Balance at Mar. 31, 2022	(80,887)	$ 25,413	145,588	163,796	(416,853)	1,169
Balance (in shares) at Dec. 31, 2021		25,413
Balance at Dec. 31, 2021	(68,870)	$ 25,413	144,298	186,592	(426,445)	1,272
Increase (Decrease) in Equity
Net loss	(41,606)
Balance (in shares) at Sep. 30, 2022		25,413
Balance at Sep. 30, 2022	(108,520)	$ 25,413	148,197	131,124	(414,102)	848
Balance (in shares) at Mar. 31, 2022		25,413
Balance at Mar. 31, 2022	(80,887)	$ 25,413	145,588	163,796	(416,853)	1,169
Increase (Decrease) in Equity
Net loss	(15,321)			(15,495)		174
Distributions to non-controlling interest holders	(486)					(486)
Share-based compensation expense	1,289		1,289
Issuance of restricted share units and restricted shares	0			(2,384)	2,384
Treasury shares withheld for the payment of tax on restricted share unit and restricted share issuances	(9)			(38)	29
Balance (in shares) at Jun. 30, 2022		25,413
Balance at Jun. 30, 2022	(95,414)	$ 25,413	146,877	145,879	(414,440)	857
Increase (Decrease) in Equity
Net loss	(14,256)			(14,389)		133
Share-based compensation expense	1,320		1,320
Distributions to non-controlling interest holders	(142)					(142)
Issuance of restricted share units and restricted shares	0			(260)	260
Treasury shares withheld for the payment of tax on restricted share unit and restricted share issuances	(28)			(106)	78
Balance (in shares) at Sep. 30, 2022		25,413
Balance at Sep. 30, 2022	(108,520)	$ 25,413	148,197	131,124	(414,102)	848
Balance (in shares) at Dec. 31, 2022		25,413
Balance at Dec. 31, 2022	(118,874)	$ 25,413	149,348	118,948	(413,358)	775
Increase (Decrease) in Equity
Net loss	(12,867)			(12,947)		80
Distributions to non-controlling interest holders	(102)					(102)
Share-based compensation expense	1,445		1,445
Issuance of restricted share units and restricted shares	0			(6,058)	6,058
Issuance of common stock, net of issuance costs (in shares)		4,550
Issuance of common stock, net of issuance costs	20,461	$ 4,550	15,911
Treasury shares withheld for the payment of tax on restricted share unit and restricted share issuances	(460)			(3,700)	3,240
Balance (in shares) at Mar. 31, 2023		29,963
Balance at Mar. 31, 2023	(110,397)	$ 29,963	166,704	96,243	(404,060)	753
Balance (in shares) at Dec. 31, 2022		25,413
Balance at Dec. 31, 2022	(118,874)	$ 25,413	149,348	118,948	(413,358)	775
Increase (Decrease) in Equity
Net loss	(42,984)
Balance (in shares) at Sep. 30, 2023		29,963
Balance at Sep. 30, 2023	(112,934)	$ 29,963	176,128	(166,125)	(153,561)	661
Balance (in shares) at Mar. 31, 2023		29,963
Balance at Mar. 31, 2023	(110,397)	$ 29,963	166,704	96,243	(404,060)	753
Increase (Decrease) in Equity
Net loss	(18,837)			(18,850)		13
Distributions to non-controlling interest holders	(100)					(100)
Share-based compensation expense	1,242		1,242
Issuance of restricted share units and restricted shares	0			(2,259)	2,259
Treasury shares withheld for the payment of tax on restricted share unit and restricted share issuances	(3)			(30)	27
Balance (in shares) at Jun. 30, 2023		29,963
Balance at Jun. 30, 2023	(128,095)	$ 29,963	167,946	75,104	(401,774)	666
Increase (Decrease) in Equity
Net loss	(11,280)			(11,342)		62
Distributions to non-controlling interest holders	(67)					(67)
Reclassification of warrant liability to equity	6,951		6,951
Share-based compensation expense	1,231		1,231
Sale of treasury stock, net of transaction costs	18,374			(228,269)	246,643
Issuance of restricted share units and restricted shares	0			(1,153)	1,153
Treasury shares withheld for the payment of tax on restricted share unit and restricted share issuances	(48)			(465)	417
Balance (in shares) at Sep. 30, 2023		29,963
Balance at Sep. 30, 2023	$ (112,934)	$ 29,963	$ 176,128	$ (166,125)	$ (153,561)	$ 661

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Cash flows from operating activities:
Net loss	$ (11,280)	$ (14,256)	$ (42,984)	$ (41,606)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	600	900	1,933	2,700
Amortization of right-of-use assets under operating leases	400	500	1,351	2,254
Amortization of intangible assets	1,352	1,281	3,912	3,849
PIK accrual			4,777	0
Share-based compensation expense			3,918	3,899
Bad debt expense	(203)	(22)	319	578
Amortization of debt discount			2,846	495
Amortization of debt issuance costs			1,846	712
Deferred income taxes			(224)	(329)
Loss on disposal of fixed assets			121	1
Change in fair value of warrant liability	(2,225)	0	(1,145)	0
Changes in operating assets and liabilities:
Accounts receivable			(311)	3,095
Prepaid expenses and other current assets			12,350	160
Other assets			(1,891)	363
Accounts payable and accrued expenses			(2,475)	(5,014)
Current and non-current operating lease liabilities			(1,351)	(2,444)
Other current and non-current liabilities			(587)	(1,006)
Net cash used in operating activities			(17,595)	(32,293)
Cash flows from investing activities:
Additions to premises and equipment			0	(863)
Proceeds from the sale of business			0	346
Net cash used in investing activities			0	(517)
Cash flows from financing activities:
Proceeds from issuance of common stock, net of issuance costs			20,461	0
Proceeds from sale of treasury stock, net of transaction costs			18,374	0
Debt issuance and amendment costs			(4,886)	0
Repayments of long-term debt			(30,000)	0
Distributions to non-controlling interests			(269)	(892)
Payments of tax withholding on issuance of restricted share units and restricted shares			(511)	(1,051)
Net cash provided by (used in) financing activities			3,169	(1,943)
Net decrease in cash, cash equivalents and restricted cash			(14,426)	(34,753)
Cash, cash equivalents and restricted cash at the beginning of the period			54,273	102,149
Cash, cash equivalents and restricted cash at the end of the period	39,847	67,396	39,847	67,396
Supplemental cash flow information:
Interest paid			16,989	10,167
Income taxes (refunded) paid, net			(4,034)	2,556
Acquisition of right-of-use assets with operating lease liabilities			329	797
Reduction of right-of-use assets from operating lease modifications or reassessments			(671)	(172)
Non-cash investing and financing activities:
Net decrease in payables for purchases of premises and equipment			0	(65)
Warrants issued in connection with Amended Credit Agreement			8,096	0
Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents [Abstract]
Cash and cash equivalents	36,640	63,812	36,640	63,812
Restricted cash	3,207	3,584	3,207	3,584
Total cash, cash equivalents and restricted cash reported in the statements of cash flows	$ 39,847	$ 67,396	$ 39,847	$ 67,396

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ORGANIZATION AND BASIS OF PRESENTATION

9 Months Ended

Sep. 30, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

ORGANIZATION AND BASIS OF PRESENTATION

ORGANIZATION AND BASIS OF PRESENTATION

Description of Business

Altisource Portfolio Solutions S.A., together with its subsidiaries (which may be referred to as “Altisource,” the “Company,” “we,” “us” or “our”), is 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 are publicly traded on the NASDAQ Global Select Market under the symbol “ASPS.” We are organized under the laws of the Grand Duchy of Luxembourg.

We conduct our operations through two reportable segments: Servicer and Real Estate and Origination. In addition, we report Corporate and Others separately (see Note 22 for a description of our business segments).

Basis of Accounting and Presentation

The unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Securities and Exchange Commission (“SEC”) Regulation S-X. Accordingly, these financial statements do not include all of the information and footnotes required by GAAP for complete consolidated financial statements. In the opinion of management, the interim data includes all normal recurring adjustments considered necessary to fairly state the results for the interim periods presented. The preparation of interim condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of our interim condensed consolidated financial statements, as well as the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Intercompany transactions and accounts have been eliminated in consolidation. Certain prior year balance sheet amounts have been reclassified for consistency with the current year presentation.

Altisource consolidates Best Partners Mortgage Cooperative, Inc., which is managed by The Mortgage Partnership of America, L.L.C. (“MPA”), a wholly-owned subsidiary of Altisource. Best Partners Mortgage Cooperative, Inc. is a mortgage cooperative doing business as Lenders One® (“Lenders One”). MPA provides services to Lenders One under a management agreement that ends on December 31, 2025 (with renewals for three successive five-year periods at MPA’s option).

The management agreement between MPA and Lenders One, pursuant to which MPA is the management company, represents a variable interest in a variable interest entity. MPA is the primary beneficiary of Lenders One as it has the power to direct the activities that most significantly impact the cooperative’s economic performance and the right to receive benefits from the cooperative. As a result, Lenders One is presented in the accompanying condensed consolidated financial statements on a consolidated basis and the interests of the members are reflected as non-controlling interests. As of September 30, 2023, Lenders One had total assets of $0.2 million and total liabilities of $0.4 million. As of December 31, 2022, Lenders One had total assets of $1.2 million and total liabilities of $1.1 million.

These interim condensed consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, as filed with the SEC on March 30, 2023.

Fair Value Measurements

Fair value is defined as an exit price, representing the amount that would be received for an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The three-tier hierarchy for inputs used in measuring fair value, which prioritizes the inputs used in the methodologies of measuring fair value for assets and liabilities, is as follows:

Level 1 — Quoted prices in active markets for identical assets and liabilities

Level 2 — Observable inputs other than quoted prices included in Level 1

Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of assets or liabilities

Financial assets and financial liabilities are classified based on the lowest level of input that is significant to the fair value measurements. Our assessment of the significance of a particular input to the fair value measurements requires judgment and may affect the valuation of the assets and liabilities being measured and their placement within the fair value hierarchy.

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CUSTOMER CONCENTRATION

9 Months Ended

Sep. 30, 2023

Risks and Uncertainties [Abstract]

CUSTOMER CONCENTRATION

CUSTOMER CONCENTRATION

Ocwen

Ocwen Financial Corporation (together with its subsidiaries, “Ocwen”) is a residential mortgage loan servicer of mortgage servicing rights (“MSRs”) it owns, including those MSRs in which others have an economic interest, and a subservicer of loans owned by others.

During the three and nine months ended September 30, 2023, Ocwen was our largest customer, accounting for 43% of our total revenue. Ocwen purchases certain mortgage services from us under the terms of services agreements and amendments thereto (collectively, the “Ocwen Services Agreements”) with terms extending through August 2030. Certain of the Ocwen Services Agreements contain a “most favored nation” provision and also grant the parties the right to renegotiate pricing, among other things.

Revenue from Ocwen primarily consists of revenue earned from the loan portfolios serviced and subserviced by Ocwen when Ocwen engages us as the service provider, and revenue earned directly from Ocwen, pursuant to the Ocwen Services Agreements. For the nine months ended September 30, 2023 and 2022, we recognized revenue from Ocwen of $47.3 million and $47.2 million, respectively ($15.7 million and $17.2 million for the third quarter of 2023 and 2022, respectively). Revenue from Ocwen as a percentage of segment and consolidated revenue was as follows:

	Three months ended September 30,				Nine months ended September 30,
	2023		2022		2023		2022
Servicer and Real Estate	55	%	56	%	54	%	52	%
Origination	—	%	—	%	—	%	—	%
Corporate and Others	—	%	—	%	—	%	—	%
Consolidated revenue	43	%	45	%	43	%	40	%

We earn additional revenue related to the portfolios serviced and subserviced by Ocwen when a party other than Ocwen or the MSRs owner selects Altisource as the service provider. For the nine months ended September 30, 2023 and 2022, we recognized revenue of $7.3 million ($2.3 million and $2.2 million for the third quarter of 2023 and 2022, respectively), of such revenue. These amounts are not included in deriving revenue from Ocwen and revenue from Ocwen as a percentage of revenue discussed above.

As of September 30, 2023, accounts receivable from Ocwen totaled $4.0 million, $2.8 million of which was billed and $1.2 million of which was unbilled. As of December 31, 2022, accounts receivable from Ocwen totaled $4.0 million, $3.2 million of which was billed and $0.8 million of which was unbilled.

Rithm

Rithm Capital Corp. (individually, together with one or more of its subsidiaries or one or more of its subsidiaries individually, “Rithm”) (formerly New Residential Investment Corp.) is a real estate investment trust that invests in and manages investments primarily related to residential real estate, including MSRs and excess MSRs.

Ocwen has disclosed that Rithm is a significant client of Ocwen’s. As of June 30, 2023, approximately 16% of loans serviced and subserviced by Ocwen (measured in unpaid principal balance (“UPB”)) and approximately 68% of all delinquent loans that Ocwen services were related to Rithm MSRs or rights to MSRs (the “Subject MSRs”).

Rithm purchases brokerage services for real estate owned (“REO”) exclusively from us, irrespective of the subservicer, subject to certain limitations, for certain MSRs set forth in and pursuant to the terms of a Cooperative Brokerage Agreement, as amended, and related letter agreement (collectively, the “Brokerage Agreement”) with terms extending through August 2025.

For the nine months ended September 30, 2023 and 2022, we recognized revenue from Rithm of $2.3 million and $2.6 million, respectively ($0.7 million and $0.8 million for the third quarter of 2023 and 2022, respectively), under the Brokerage Agreement. For the nine months ended September 30, 2023 and 2022, we recognized additional revenue of $10.1 million and $10.4 million, respectively ($3.2 million and $3.0 million for the third quarter of 2023 and 2022, respectively), relating to the Subject MSRs when a party other than Rithm selects Altisource as the service provider.

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ACCOUNTS RECEIVABLE, NET

9 Months Ended

Sep. 30, 2023

Receivables [Abstract]

ACCOUNTS RECEIVABLE, NET

ACCOUNTS RECEIVABLE, NET

Accounts receivable, net consists of the following:

(in thousands)	September 30, 2023		December 31, 2022
Billed	$	10,386	$	11,993
Unbilled	5,974		5,359
	16,360		17,352
Less: Allowance for credit losses	(3,379)		(4,363)
Total	$	12,981	$	12,989

Unbilled accounts receivable consist primarily of certain real estate asset management, REO sales, title and closing services for which we generally recognize revenue when the service is provided but collect upon closing of the sale, and foreclosure trustee services, for which we generally recognize revenues over the service delivery period but bill following completion of the service. We also include amounts in unbilled accounts receivable that are earned during a month and billed in the following month.

We are exposed to credit losses through our sales of products and services to our customers which are recorded as accounts receivable, net on the Company’s condensed consolidated financial statements. We monitor and estimate the allowance for credit losses based on our historical write-offs, historical collections, our analysis of past due accounts based on the contractual terms of the receivables, relevant market and industry reports and our assessment of the economic status of our customers, if known. Estimated credit losses are written off in the period in which the financial asset is determined to be no longer collectible. There can be no assurance that actual results will not differ from estimates or that consideration of these factors in the future will not result in an increase or decrease to our allowance for credit losses.

Changes in the allowance for expected credit losses consist of the following:

			Additions
(in thousands)	Balance at Beginning of Period		Charged to Expenses		Deductions Note(1)		Balance at End of Period
Allowance for expected credit losses:
Three months ended September 30, 2023	$	4,314	$	(203)	$	732	$	3,379
Three months ended September 30, 2022	4,792		(22)		289		4,481
Nine months ended September 30, 2023	$	4,363	$	319	$	1,303	$	3,379
Nine months ended September 30, 2022	5,297		578		1,394		4,481

______________________________________

(1)    Amounts written off as uncollectible or transferred to other accounts or utilized.

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PREPAID EXPENSES AND OTHER CURRENT ASSETS

9 Months Ended

Sep. 30, 2023

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

PREPAID EXPENSES AND OTHER CURRENT ASSETS

PREPAID EXPENSES AND OTHER CURRENT ASSETS

Prepaid expenses and other current assets consist of the following:

(in thousands)	September 30, 2023		December 31, 2022
Prepaid expenses	$	2,746	$	5,165
Income taxes receivable	510		7,031
Maintenance agreements, current portion	1,868		1,498
Indemnity escrow receivable from Pointillist sale	3,201		3,223
Restricted cash	23		—
Surety bond collateral	—		4,000
Other current assets	2,869		2,627
Total	$	11,217	$	23,544

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PREMISES AND EQUIPMENT, NET

9 Months Ended

Sep. 30, 2023

Property, Plant and Equipment [Abstract]

PREMISES AND EQUIPMENT, NET

PREMISES AND EQUIPMENT, NET

Premises and equipment, net consists of the following:

(in thousands)	September 30, 2023		December 31, 2022
Computer hardware and software	$	46,568	$	49,339
Leasehold improvements	1,011		5,794
Furniture and fixtures	102		3,832
Office equipment and other	24		346
	47,705		59,311
Less: Accumulated depreciation and amortization	(45,537)		(55,089)
Total	$	2,168	$	4,222

Depreciation and amortization expense amounted to $1.9 million and $2.7 million for the nine months ended September 30, 2023 and 2022, respectively ($0.6 million and $0.9 million for the third quarter of 2023 and 2022, respectively), and is included in cost of revenue for operating assets and in selling, general and administrative expenses for non-operating assets in the accompanying condensed consolidated statements of operations and comprehensive loss.

Premises and equipment, net consist of the following, by country:

(in thousands)	September 30, 2023		December 31, 2022
Luxembourg	$	1,459	$	2,455
India	602		1,129
United States	80		586
Uruguay	27		52
Total	$	2,168	$	4,222

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RIGHT-OF-USE ASSETS UNDER OPERATING LEASES, NET

9 Months Ended

Sep. 30, 2023

Leases [Abstract]

RIGHT-OF-USE ASSETS UNDER OPERATING LEASES, NET

RIGHT-OF-USE ASSETS UNDER OPERATING LEASES, NET

Right-of-use assets under operating leases, net consists of the following:

(in thousands)	September 30, 2023		December 31, 2022
Right-of-use assets under operating leases	$	7,334	$	11,808
Less: Accumulated amortization	(3,706)		(6,487)
Total	$	3,628	$	5,321

Amortization of operating leases was $1.4 million and $2.3 million for the nine months ended September 30, 2023 and 2022, respectively ($0.4 million and $0.5 million for the third quarter of 2023 and 2022, respectively), and is included in cost of revenue for operating assets and in selling, general and administrative expenses for non-operating assets in the accompanying condensed consolidated statements of operations and comprehensive loss.

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GOODWILL AND INTANGIBLE ASSETS, NET

9 Months Ended

Sep. 30, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND INTANGIBLE ASSETS, NET

GOODWILL AND INTANGIBLE ASSETS, NET

Goodwill

The following is a summary of goodwill by segment:

(in thousands)	Servicer and Real Estate		Origination		Corporate and Others		Total
Balance as of September 30, 2023 and December 31, 2022	$	30,681	$	25,279	$	—	$	55,960

Intangible Assets, net

Intangible assets, net consist of the following:

	Weighted average estimated useful life (in years)	Gross carrying amount				Accumulated amortization				Net book value
(in thousands)		September 30, 2023		December 31, 2022		September 30, 2023		December 31, 2022		September 30, 2023		December 31, 2022
Definite lived intangible assets:
Customer related intangible assets	9	$	214,307	$	214,307	$	(199,915)	$	(197,594)	$	14,392	$	16,713
Operating agreement	20	35,000		35,000		(23,917)		(22,604)		11,083		12,396
Trademarks and trade names	16	9,709		9,709		(7,366)		(7,088)		2,343		2,621
Total		$	259,016	$	259,016	$	(231,198)	$	(227,286)	$	27,818	$	31,730

Amortization expense for definite lived intangible assets was $3.9 million and $3.8 million for the nine months ended September 30, 2023 and 2022, respectively ($1.4 million and $1.3 million for the third quarter of 2023 and 2022, respectively).

Forecasted annual definite lived intangible asset amortization expense for 2023 through 2027 is $5.2 million, $5.1 million, $5.1 million, $4.9 million and $4.7 million, respectively.

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OTHER ASSETS

9 Months Ended

Sep. 30, 2023

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

OTHER ASSETS

OTHER ASSETS

Other assets consist of the following:

(in thousands)	September 30, 2023		December 31, 2022
Restricted cash	$	3,184	$	3,248
Security deposits	597		596
Other	3,461		1,585
Total	$	7,242	$	5,429

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ACCOUNTS PAYABLE, ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

9 Months Ended

Sep. 30, 2023

Payables and Accruals [Abstract]

ACCOUNTS PAYABLE, ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

ACCOUNTS PAYABLE, ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

Accounts payable and accrued expenses consist of the following:

(in thousands)	September 30, 2023		December 31, 2022
Accounts payable	$	16,404	$	14,981
Accrued expenses - general	8,425		11,858
Accrued salaries and benefits	4,937		5,501
Income taxes payable	1,266		1,167
Total	$	31,032	$	33,507

Other current liabilities consist of the following:

(in thousands)	September 30, 2023		December 31, 2022
Operating lease liabilities	$	1,596	$	2,097
Other	703		770
Total	$	2,299	$	2,867

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WARRANTS

9 Months Ended

Sep. 30, 2023

Other Liabilities Disclosure [Abstract]

WARRANTS

WARRANTS

On February 14, 2023, the lenders under the Amended Credit Agreement (see Note 11 for additional information) received warrants (the “Warrants”) to purchase 3,223,851 shares of Altisource common stock (the “Warrant Shares”). The number of Warrant Shares is subject to reduction based on the amount of par paydowns on the senior secured term loans (“SSTL”) in the aggregate using proceeds from issuances of equity interests or from junior indebtedness made prior to February 14, 2024 (“Aggregate Paydowns”) as set forth in the table below.

Aggregate Paydowns	Warrant Shares
Less than $20 million	3,223,851
$20 million+ but less than below	2,578,743
$30 million+	1,612,705

During the first quarter of 2023, Company made $20 million of Aggregate Paydowns. In the third quarter of 2023, the Company made an additional $10 million of Aggregate Paydowns. As a result, the number of Warrant Shares as of September 30, 2023 is 1,612,705.

The exercise price per share of common stock under each Warrant is equal to $0.01. The Warrants may be exercised at any time on and after February 14, 2024 and prior to their expiration date. The Warrants are exercisable on a cashless basis and are subject to customary anti-dilution provisions. The Warrants, if not previously exercised or terminated, will be automatically

exercised on May 22, 2027. The Warrants are subject to a lock-up agreement, subject to customary exceptions, ending on February 16, 2024.

The Company determined that the Warrants are free standing financial instruments that are legally detachable and separately exercisable from the term loans under the Amended Credit Agreement. At inception, the Company also determined that the Warrants were not considered to be indexed to the Company’s stock because the number of Warrant Shares varies based on Aggregate Paydowns and as such were required to be classified as a liability pursuant to ASC 815-40, Derivatives and Hedging–Contracts in Entity’s Own Equity. The outstanding Warrants were recognized as a warrant liability on the balance sheet and were measured at their inception date fair value and subsequently re-measured at each reporting period with changes being recorded as a component of other income (expense) in the statement of operations. On September 18, 2023, the Company reached the $30 million in Aggregate Paydowns threshold and the number of Warrant Shares is no longer variable. As a result, the Warrants are considered to be indexed to the Company’s stock and the Warrant Liability was reclassified to equity.

The fair value of the warrant liability was based on the number of Warrant Shares that were expected to be exercisable on and after February 14, 2024 and the Altisource share price less $0.01 at the measurement date.

The fair value of the warrant liability at each of the respective valuation dates is summarized below:

Warrant Liability	Warrant Shares based on Aggregate Paydowns	Expected Warrant Shares that will be exercisable on February 14, 2024	Fair Value per Warrant Share	Fair Value (in thousands)
Fair value at initial measurement date of February 14, 2023	3,223,851	1,612,705	$5.02	$	8,096
Gain on change in fair value of warrant liability				(694)
Fair value at March 31, 2023	2,578,743	1,612,705	$4.59	7,402
Loss on change in fair value of warrant liability				1,774
Fair value at June 30, 2023	2,578,743	1,612,705	$5.69	$	9,176
Gain on change in fair value of warrant liability				(2,225)
Fair value at September 18, 2023	1,612,705	1,612,705	$4.31	$	6,951

During the nine months ended September 30, 2023, the Company recorded a gain on changes in fair value of warrant liability of $1.1 million ($2.2 million for the third quarter of 2023). During the three and nine months ended September 30, 2022, there were no warrant liabilities outstanding.

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LONG-TERM DEBT

9 Months Ended

Sep. 30, 2023

Debt Disclosure [Abstract]

LONG-TERM DEBT

LONG-TERM DEBT

Long-term debt consists of the following:

(in thousands)	September 30, 2023		December 31, 2022
Senior Secured Term Loans	$	221,981	$	247,204
Less: Debt issuance and amendment costs, net	(3,918)		(878)
Less: Unamortized discount, net	(6,083)		(833)
Net Senior secured term loans	211,980		245,493
Total Long-term debt	$	211,980	$	245,493

Senior Secured Term Loans

In April 2018, Altisource Portfolio Solutions S.A. and its wholly-owned subsidiary, Altisource S.à r.l., entered into a credit agreement with Morgan Stanley Senior Funding, Inc., as administrative agent and collateral agent, and certain lenders (the “Credit Agreement”). Under the Credit Agreement, Altisource borrowed $412 million in the form of SSTL. Effective February 14, 2023, Altisource Portfolio Solutions S.A. and Altisource S.à r.l. entered into Amendment No. 2 to the Credit Agreement (as amended by Amendment No. 2, the “Amended Credit Agreement”). Altisource Portfolio Solutions S.A. and its subsidiaries, subject to the applicable exclusions in the Amended Credit Agreement, are guarantors on the SSTL (collectively,

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

The maturity date of the SSTL under the Amended Credit Agreement is April 30, 2025. If Aggregate Paydowns are equal to or greater than $30 million, then the maturity date of the SSTL may be extended at the Company’s option to April 30, 2026. Such extension is conditioned upon the Company’s payment of a 2% payment-in-kind extension fee on or before April 30, 2025 and subject to the representations and warranties being true and correct as of such date and there being no default or event of default being in existence as of such date. During the nine months ended September 30, 2023, Company made $30 million of Aggregate Paydowns.

All amounts outstanding under the SSTL will become due on the earlier of (i) the maturity date, and (ii) the date on which the loans are declared to be due and owing by the administrative agent at the request (or with the consent) of the Required Lenders (as defined in the Amended Credit Agreement; other capitalized terms, unless defined herein, are defined in the Amended Credit Agreement) or as otherwise provided in the Amended Credit Agreement upon the occurrence of any event of default. There are no mandatory repayments of the SSTL except as set forth herein until the April 30, 2025 maturity when the balance is due.

In addition to the scheduled principal payments, subject to certain exceptions, the SSTL is subject to mandatory prepayment upon issuances of debt, certain casualty and condemnation events and sales of assets, as well as 50% of Consolidated Excess Cash Flow, as calculated in accordance with the provisions of the Amended Credit Agreement.

Altisource may incur incremental indebtedness under the Amended Credit Agreement from one or more incremental lenders, which may include existing lenders, in an aggregate incremental principal amount not to exceed $50 million, subject to certain conditions set forth in the Amended Credit Agreement. The lenders have no obligation to provide any incremental indebtedness.

Through March 29, 2023, the SSTL’s interest rate was the Adjusted Eurodollar Rate plus 4.00%. Beginning March 30, 2023, the SSTL bears interest at rates based upon, at our option, the Secured Overnight Financing Rate (“SOFR”) or the Base Rate, as defined in the Amended Credit Agreement. If the Company selects SOFR, the term loans initially bear interest at a rate per annum equal to SOFR plus 5.00% payable in cash plus 5.00% payable in kind (“PIK”). If the Company selects Base Rate, the loans initially bear interest at a rate per annum equal to the Base Rate plus 4.00% payable in cash plus 5.00% PIK. Base Rate term loans bear interest at a rate per annum equal to the sum of (i) the greater of (x) the Base Rate and (y) 2.00% plus (ii) 4.00%. The PIK component of the interest rate is subject to adjustment based on the amount of Aggregate Paydowns as set forth in the table below. The PIK component of the interest rate was 3.75% for the three months ended September 30, 2023 and 4.50% for the three months ended June 30, 2023. The interest rate as of September 30, 2023 was 14.09%.

Aggregate Paydowns	PIK Component of Interest Rate
Less than $20 million	5.00%
$20 million+ but less than below	4.50%
$30 million+ but less than below	3.75%
$40 million+ but less than below	3.50%
$45 million+ but less than below	3.00%
$50 million+ but less than below	2.50%
$55 million+ but less than below	2.00%
$60 million+ but less than below	1.00%
$65 million+ but less than below	0.50%
$70 million+	0.00%

If, as of the end of any calendar quarter, (i) the amount of unencumbered cash and cash equivalents of Altisource S.à r.l. and its direct and indirect subsidiaries on a consolidated basis plus (ii) the undrawn commitment amount under the Revolver is, or is forecast as of the end of the immediately subsequent calendar quarter to be, less than $35 million, then up to 2.00% in interest otherwise payable in cash in the following quarter may be paid in kind at the Company’s election.

The payment of all amounts owing by Altisource under the Amended Credit Agreement is guaranteed by the Guarantors and is secured by a pledge of all equity interests of certain subsidiaries of Altisource, as well as a lien on substantially all of the assets of Altisource S.à r.l. and the Guarantors, subject to certain exceptions.

The Amended Credit Agreement includes covenants that restrict or limit, among other things, our ability, subject to certain exceptions and baskets, to incur indebtedness; incur liens on our assets; sell, transfer or dispose of assets; make Restricted Junior Payments including share repurchases, dividends and repayment of junior indebtedness; make investments; dispose of equity interests of any Material Subsidiaries; engage in a line of business substantially different than existing businesses and businesses reasonably related, complimentary or ancillary thereto; amend material debt agreements or other material contracts; engage in certain transactions with affiliates; enter into sale/leaseback transactions; grant negative pledges or agree to such other restrictions relating to subsidiary dividends and distributions; make changes to our fiscal year; and engage in mergers and consolidations.

The Amended Credit Agreement contains certain events of default including (i) failure to pay principal when due or interest or any other amount owing on any other obligation under the Amended Credit Agreement within five days of becoming due, (ii) material incorrectness of representations and warranties when made, (iii) breach of certain other covenants, subject to cure periods described in the Amended Credit Agreement, (iv) failure to pay principal or interest on any other debt that equals or exceeds $5.0 million when due, (v) default on any other debt that equals or exceeds $5.0 million that causes, or gives the holder or holders of such debt the ability to cause, an acceleration of such debt, (vi) occurrence of a Change of Control, (vii) bankruptcy and insolvency events, (viii) entry by a court of one or more judgments against us in an aggregate amount in excess of $10.0 million that remain unbonded, undischarged or unstayed for a certain number of days after the entry thereof, (ix) the occurrence of certain ERISA events, (x) the failure of certain Loan Documents to be in full force and effect and (xi) failure to comply in any material respects with the terms of the Warrants or the Warrant Purchase Agreement. If any event of default occurs and is not cured within applicable grace periods set forth in the Credit Agreement or waived, all loans and other obligations could become due and immediately payable and the facility could be terminated.

The lenders under the Amended Credit Agreement received Warrants to purchase shares of Altisource common stock. The number of Warrant Shares is subject to reduction based on the amount of Aggregate Paydowns (see Note 10 for additional information).

The fair value of the Warrants on February 14, 2023 was $8.1 million and was recorded as an increase in debt discount. In connection with Amendment No. 2, the Company paid $4.9 million to the lenders and to third parties on behalf of the lenders. The $4.9 million payment was recorded as an increase in debt issuance and amendment costs. In connection with Amendment No. 2, the Company paid $3.4 million to advisors and recorded these payments as other expense in the condensed consolidated statements of operations and comprehensive loss.

Deer Park Road Management Company, LP (“Deer Park”), a related party, owns approximately 15% of Altisource’s common stock and $40.2 million of Altisource debt under the Amended Credit Agreement as of September 30, 2023. Deer Park’s Chief Investment Officer and managing partner was a member of Altisource’s Board of Directors until his resignation on March 1, 2022. The replacement director appointed by the Board of Directors is a current employee of Deer Park. In connection with the Amended Credit Agreement, Deer Park received 583 thousand Warrants. During the nine months ended September 30, 2023, Deer Park received interest of $2.0 million from the Altisource SSTL.

As of September 30, 2023, debt issuance and amendment costs were $3.9 million, net of $5.5 million of accumulated amortization. As of December 31, 2022, debt issuance costs were $0.9 million, net of $3.6 million of accumulated amortization.

Revolver

On June 22, 2021 Altisource S.à r.l, a subsidiary of Altisource Portfolio Solutions S.A., entered into a revolving credit facility with STS Master Fund, Ltd. (“STS”) (the “Revolver”). STS is an investment fund managed by Deer Park.

The Revolver was amended effective February 14, 2023 (the “Amended Revolver”). Under the terms of the Amended Revolver, STS will make loans to Altisource from time to time, in amounts requested by Altisource and Altisource may voluntarily prepay all or any portion of the outstanding loans at any time. The Amended Revolver provides Altisource the ability to borrow a maximum amount of $15.0 million. Amounts that are repaid may be re-borrowed in accordance with the limitations set forth below.

The maturity date of the Amended Revolver coincides with the maturity date of the SSTL under the Amended Credit Agreement, as it may be extended. The outstanding balance on the Amended Revolver is due and payable on such maturity date.

Borrowings under the Amended Revolver bear interest of 10.00% per annum in cash and 3.00% per annum PIK and are payable quarterly on the last business day of each March, June, September and December. In connection with the Amended Revolver, Altisource is required to pay a usage fee equal to $0.75 million at the initial extension of credit pursuant to the Amended Revolver.

Altisource’s obligations under the Amended Revolver are secured by a first-priority lien on substantially all of the assets of the Company, which lien will be pari passu with liens securing the SSTL under the Amended Credit Agreement.

The Amended Revolver contains additional representations, warranties, covenants, terms and conditions customary for transactions of this type, that restrict or limit, among other things, our ability to use the proceeds of credit only for general corporate purposes.

The Amended Revolver contains certain events of default including (i) failure to pay principal when due or interest or any other amount owing on any other obligation under the Amended Revolver within three business days of becoming due, (ii) failure to perform or observe any material provisions of the Amended Revolver Documents to be performed or complied with and such failure continues for a period of 30 days after written notice is given by the Lender to the Borrower, (iii) material incorrectness of representations and warranties when made, (iv) default on any other debt that equals or exceeds $40.0 million that causes, or gives the holder or holders of such debt the ability to cause, an acceleration of such debt, (v) entry by a court of one or more judgments against us in an aggregate amount in excess of $40.0 million that remain unbonded, undischarged or unstayed for a certain number of days after the entry thereof, (vi) occurrence of a Change of Control, (vii) bankruptcy and insolvency events. If any event of default occurs and is not cured within applicable grace periods set forth in the Amended Revolver or waived, all loans and other obligations could become due and immediately payable and the facility could be terminated.

As of September 30, 2023 and December 31, 2022, there was no outstanding debt under the Amended Revolver and Revolver, respectively. As of September 30, 2023 and December 31, 2022, debt issuance costs were $0.2 million, net of $0.4 million of accumulated amortization, and $0.3 million, net of $0.3 million of accumulated amortization, respectively. Debt issuance costs for the Amended Revolver and Revolver are included in other assets in the accompanying consolidated balance sheet.

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OTHER NON-CURRENT LIABILITIES

9 Months Ended

Sep. 30, 2023

Other Liabilities Disclosure [Abstract]

OTHER NON-CURRENT LIABILITIES

OTHER NON-CURRENT LIABILITIES

Other non-current liabilities consist of the following:

(in thousands)	September 30, 2023		December 31, 2022
Income tax liabilities	$	16,036	$	16,079
Operating lease liabilities	2,179		3,371
Deferred revenue	13		82
Other non-current liabilities	4		4
Total	$	18,232	$	19,536

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FAIR VALUE MEASUREMENTS AND FINANCIAL INSTRUMENTS

9 Months Ended

Sep. 30, 2023

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENTS AND FINANCIAL INSTRUMENTS

FAIR VALUE MEASUREMENTS AND FINANCIAL INSTRUMENTS

The following table presents the carrying amount and estimated fair value of financial instruments and certain liabilities measured at fair value as of September 30, 2023 and December 31, 2022. The following fair values are estimated using market information and what the Company believes to be appropriate valuation methodologies under GAAP:

	September 30, 2023								December 31, 2022
(in thousands)	Carrying amount		Fair value						Carrying amount		Fair value
			Level 1		Level 2		Level 3				Level 1		Level 2		Level 3
Assets:
Cash and cash equivalents	$	36,640	$	36,640	$	—	$	—	$	51,025	$	51,025	$	—	$	—
Restricted cash	3,207		3,207		—		—		3,248		3,248		—		—
Short-term receivable	3,201		—		—		3,201		3,223		—		—		3,223
Liabilities:
Senior secured term loans	221,981		—		177,585		—		247,204		—		200,235		—

Fair Value Measurements on a Recurring Basis

Cash and cash equivalents and restricted cash are carried at amounts that approximate their fair values due to the highly liquid nature of these instruments and were measured using Level 1 inputs.

The fair value of our SSTL is based on quoted market prices. Based on the frequency of trading, we do not believe that there is an active market for our debt. Therefore, the quoted prices are considered Level 2 inputs.

In connection with the sale of Pointillist on December 1, 2021, $3.5 million was deposited into an escrow account to satisfy certain indemnification claims that may arise on or prior to the first anniversary of the sale closing. The deposit was recorded as a short-term receivable. We measure short-term receivables without a stated interest rate based on the present value of the future payments.

There were no transfers between different levels during the periods presented.

Concentrations of Credit Risk

Financial instruments that subject us to concentrations of credit risk primarily consist of cash and cash equivalents and accounts receivable. Our policy is to deposit our cash and cash equivalents with larger, highly rated financial institutions. The Company derived 43% of its revenue from Ocwen for the three and nine months ended September 30, 2023 (see Note 2 for additional information on Ocwen revenues and accounts receivable balance). The Company strives to mitigate its concentrations of credit risk with respect to accounts receivable by actively monitoring past due accounts and the economic status of larger customers, if known.

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SHAREHOLDERS’ EQUITY AND SHARE-BASED COMPENSATION

9 Months Ended

Sep. 30, 2023

Share-Based Payment Arrangement [Abstract]

SHAREHOLDERS’ EQUITY AND SHARE-BASED COMPENSATION

SHAREHOLDERS’ EQUITY AND SHARE-BASED COMPENSATION

Share Repurchase Program

On May 16, 2023, our shareholders approved the renewal and amendment of the share repurchase program previously approved by the shareholders on May 15, 2018. Under the program, we are authorized to purchase up to 3.1 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 per share and a maximum price of $25.00 per share, for a period of five years from the date of approval. As of September 30, 2023, approximately 3.1 million shares of common stock remain available for repurchase under the program. There were no purchases of shares of common stock during the nine months ended September 30, 2023 and 2022. Luxembourg law limits share repurchases to the balance of Altisource Portfolio Solutions S.A. (unconsolidated parent company) retained earnings, less the value of shares repurchased. As of September 30, 2023, we can repurchase up to approximately $60 million of our common stock under Luxembourg law. Under the Amended Credit Agreement, we are not permitted to repurchase shares except for limited circumstances.

Public offerings of Common Stock

On February 14, 2023, Altisource closed on an underwritten public offering to sell 4,550,000 shares of its common stock, at a price of $5.00 per share, generating net proceeds of $20.5 million, after deducting the underwriting discounts and commissions and other offering expenses.

On September 7, 2023, Altisource closed on an underwritten public offering to sell 5,590,277 shares of its common stock, at a price of $3.60 per share, generating net proceeds of $18.4 million, after deducting the underwriting discounts and commissions and other offering expenses.

Share-Based Compensation

We issue share-based awards in the form of stock options, restricted shares and restricted share units for certain employees, officers and directors. We recognized share-based compensation expense of $3.9 million and $3.9 million for the nine months ended September 30, 2023 and 2022, respectively ($1.2 million and $1.3 million for the third quarter of 2023 and 2022, respectively). As of September 30, 2023, estimated unrecognized compensation costs related to share-based awards amounted to $3.2 million, which we expect to recognize over a weighted average remaining requisite service period of approximately 1.16 years.

Stock Options

Stock option grants are composed of a combination of service-based, market-based and performance-based options.

Service-Based Options. These options generally vest over three or four years with equal annual vesting and generally expire on the earlier of ten years after the date of grant or following termination of service. A total of 182 thousand service-based options were outstanding as of September 30, 2023.

Market-Based Options. These option grants generally have two components, each of which vests only upon the achievement of certain criteria. The first component, which we refer to as “ordinary performance” grants, generally consists of two-thirds of the market-based grant and begins to vest if the stock price is at least double the exercise price, as long as the stock price realizes a compounded annual gain of at least 20% over the exercise price. The remaining third of the market-based options, which we refer to as “extraordinary performance” grants, generally begins to vest if the stock price is at least triple the exercise price, as long as the stock price realizes a compounded annual gain of at least 25% over the exercise price. Market-based options vest in three or four year installments with the first installment vesting upon the achievement of the criteria and the remaining installments vesting thereafter in equal annual installments. Market-based options generally expire on the earlier of ten years after the date of grant or following termination of service, unless the performance criteria is met prior to termination of service or in the final three years of the option term, in which case vesting will generally continue in accordance with the provisions of the award agreement. A total of 96 thousand market-based options were outstanding as of September 30, 2023.

Performance-Based Options. These option grants generally will vest if certain specific financial measures are achieved; typically with one-fourth vesting on each anniversary of the grant date. The award of performance-based options is adjusted based on the level of achievement specified in the award agreements. If the performance criteria achieved is above threshold performance levels, participants generally have the opportunity to vest in 50% to 200% of the option grants, depending upon performance achieved. If the performance criteria achieved is below a certain threshold, the options are canceled. The options generally expire on the earlier of ten years after the date of grant or following termination of service, unless the performance criteria is met prior to termination of service in which case vesting will generally continue in accordance with the provisions of the award agreement. There were 461 thousand performance-based options outstanding as of September 30, 2023.

There were no stock option grants during the nine months ended September 30, 2023. The Company granted 105 thousand stock options (at a weighted average exercise price of $11.86 per share) for the nine months ended September 30, 2022.

The fair values of the performance-based options are determined using the Black-Scholes option pricing model. The following assumptions were used to determine the fair values as of the grant date:

	Nine months ended September 30, 2022
	Black-Scholes
Risk-free interest rate (%)	1.62
Expected stock price volatility (%)	67.75
Expected dividend yield	—
Expected option life (in years)	6
Fair value	$	7.27

We determined the expected option life of all service-based stock option grants using the simplified method, determined based on the graded vesting term plus the contractual term of the options, divided by two. We use the simplified method because we believe that our historical data does not provide a reasonable basis upon which to estimate expected option life.

The following table summarizes the grant date fair value of stock options that vested during the periods presented:

	Nine months ended September 30,
(in thousands, except per share data)	2023		2022
Weighted average grant date fair value of stock options granted per share	$	—	$	8.19
Intrinsic value of options exercised	—		—
Grant date fair value of stock options that vested	83		1,031

The following table summarizes the activity related to our stock options:

	Number of options	Weighted average exercise price		Weighted average contractual term (in years)	Aggregate intrinsic value (in thousands)
Outstanding as of December 31, 2022	745,277	$	27.03	4.83	$	—
Granted	—	—
Forfeited	(6,088)	25.26
Outstanding as of September 30, 2023	739,189	27.04		4.09	—
Exercisable as of September 30, 2023	543,701	25.27		3.50	—

Other Share-Based Awards

The Company’s other share-based and similar types of awards are comprised of restricted shares and restricted share units. The restricted shares and restricted share units are comprised of a combination of service-based awards, performance-based awards, market-based awards and performance and market-based awards.

Service-Based Awards. These awards generally vest over one-to-four-year periods. A total of 907 thousand service-based awards were outstanding as of September 30, 2023.

Performance-Based Awards. These awards generally vest if certain specific financial measures are achieved; generally one-third vests on each anniversary of the grant date or cliff-vest on the third anniversary of the grant date. The number of performance-based restricted shares and restricted share units that may vest is based on the level of achievement as specified in the award agreements. If the performance criteria achieved is above certain financial performance levels and Altisource’s share performance is above certain established criteria, participants have the opportunity to vest in up to 150% of the restricted share unit award for certain awards. If the performance criteria achieved is below certain thresholds, the award is canceled. A total of 141 thousand performance-based awards were outstanding as of September 30, 2023.

Market-Based Awards. 50% of these awards generally vest if certain specific market conditions are achieved over a 30-day period and the remaining 50% of these awards generally vest on the one year anniversary of the initial vesting. The

Company estimates the grant date fair value of these awards using a lattice (binomial) model. A total of 112 thousand market-based awards were outstanding as of September 30, 2023.

Performance-Based and Market-Based Awards. These awards generally vest if certain specific financial measures are achieved and if certain specific market conditions are achieved. If the performance criteria achieved is above certain financial performance levels and Altisource’s share performance is above certain established criteria, participants have the opportunity to vest in up to 300% of the restricted share unit award for certain awards. If the performance criteria or the market criteria is below certain thresholds, the award is canceled. The Company estimates the grant date fair value of these awards using a Monte Carlo simulation model. A total of 125 thousand performance-based and market-based awards were outstanding as of September 30, 2023.

The Company granted 891 thousand restricted share units (at a weighted average grant date fair value of $4.82 per share) during the nine months ended September 30, 2023. These grants include 57 thousand awards that include both a performance condition and a market condition and 57 thousand performance-based awards, for the nine months ended September 30, 2023. The Company granted 46 thousand awards that include both a performance condition and a market condition and 46 thousand performance-based awards, for the nine months ended September 30, 2022.

The following table summarizes the activity related to our restricted shares and restricted share units:

	Number of restricted shares and restricted share units
Outstanding as of December 31, 2022	755,006
Granted	890,810
Issued	(213,576)
Forfeited/canceled	(147,241)
Outstanding as of September 30, 2023	1,284,999

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REVENUE

9 Months Ended

Sep. 30, 2023

Revenue from Contract with Customer [Abstract]

REVENUE

REVENUE

We classify revenue in three categories: service revenue, revenue from reimbursable expenses and non-controlling interests. 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, a consolidated entity that is a mortgage cooperative managed, but not owned, by Altisource. The Lenders One members’ earnings are included in revenue and reduced from net income to arrive at net income attributable to Altisource (see Note 1). Our services are provided to customers located in the United States. The components of revenue were as follows:

	Three months ended September 30,				Nine months ended September 30,
(in thousands)	2023		2022		2023		2022
Service revenue	$	34,112	$	36,290	$	104,356	$	111,691
Reimbursable expenses	2,039		1,957		6,398		6,158
Non-controlling interests	62		133		155		468
Total	$	36,213	$	38,380	$	110,909	$	118,317

Disaggregation of Revenue

Disaggregation of total revenues by segment and major source was as follows:

	Three months ended September 30, 2023
(in thousands)	Revenue recognized when services are performed or assets are sold		Revenue related to technology platforms and professional services		Reimbursable expenses revenue		Total revenue
Servicer and Real Estate	$	24,223	$	2,677	$	1,802	$	28,702
Origination	7,264		10		237		7,511
Total revenue	$	31,487	$	2,687	$	2,039	$	36,213

	Three months ended September 30, 2022
(in thousands)	Revenue recognized when services are performed or assets are sold		Revenue related to technology platforms and professional services		Reimbursable expenses revenue		Total revenue
Servicer and Real Estate	$	26,387	$	2,633	$	1,846	$	30,866
Origination	7,392		11		111		7,514
Total revenue	$	33,779	$	2,644	$	1,957	$	38,380

	Nine months ended September 30, 2023
(in thousands)	Revenue recognized when services are performed or assets are sold		Revenue related to technology platforms and professional services		Reimbursable expenses revenue		Total revenue
Servicer and Real Estate	$	73,314	$	8,265	$	5,916	$	87,495
Origination	22,908		24		482		23,414
Total revenue	$	96,222	$	8,289	$	6,398	$	110,909

	Nine months ended September 30, 2022
(in thousands)	Revenue recognized when services are performed or assets are sold		Revenue related to technology platforms and professional services		Reimbursable expenses revenue		Total revenue
Servicer and Real Estate	$	77,947	$	7,654	$	5,748	$	91,349
Origination	26,533		25		410		26,968
Total revenue	$	104,480	$	7,679	$	6,158	$	118,317

Transactions with Related Parties

In May 2022, John G. Aldridge, Jr., the Managing Partner of Aldridge Pite LLP (“Aldridge Pite”), joined the Board of Directors of Altisource. Aldridge Pite provides eviction and other real estate related services to the Company. The Company recognized $0.1 million and $0.1 million for the nine months ended September 30, 2023 and 2022, respectively (less than $0.1 million and less than $0.1 million for the third quarter of 2023 and 2022, respectively) of service revenue relating to services provided to Aldridge Pite.

Contract Balances

Our contract assets consist of unbilled accounts receivable (see Note 3). Our contract liabilities consist of current deferred revenue and other non-current liabilities as reported on the accompanying condensed consolidated balance sheets. Revenue recognized that was included in the contract liability at the beginning of the period was $3.3 million and $3.7 million for the nine months ended September 30, 2023 and 2022, respectively ($0.5 million and $0.8 million for the third quarter of 2023 and 2022, respectively).

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COST OF REVENUE

9 Months Ended

Sep. 30, 2023

Cost of Revenue [Abstract]

COST OF REVENUE

COST OF REVENUE

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. The components of cost of revenue were as follows:

	Three months ended September 30,				Nine months ended September 30,
(in thousands)	2023		2022		2023		2022
Outside fees and services	$	13,659	$	15,319	$	42,810	$	42,573
Compensation and benefits	9,090		11,885		28,072		39,231
Technology and telecommunications	3,786		4,656		11,048		14,844
Reimbursable expenses	2,039		1,957		6,398		6,158
Depreciation and amortization	450		570		1,356		1,805
Total	$	29,024	$	34,387	$	89,684	$	104,611

Transactions with Related Parties

The Company recognized $0.6 million and $0.3 million for the nine months ended September 30, 2023 and 2022, respectively ($0.2 million and $0.1 million for the third quarter of 2023 and 2022, respectively) of reimbursable expenses relating to services provided to Aldridge Pite. As of September 30, 2023, the Company had no payable to Aldridge Pite.

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SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

9 Months Ended

Sep. 30, 2023

Selling, General and Administrative Expense [Abstract]

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

Selling, general and administrative expenses include payroll and employee benefits associated with personnel employed in executive, sales and marketing, finance, technology, law, compliance, 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. The components of selling, general and administrative expenses were as follows:

	Three months ended September 30,				Nine months ended September 30,
(in thousands)	2023		2022		2023		2022
Compensation and benefits	$	4,906	$	7,388	$	16,312	$	19,093
Professional services	1,897		2,584		5,743		8,432
Occupancy related costs	1,266		1,008		3,924		4,049
Amortization of intangible assets	1,352		1,281		3,912		3,849
Marketing costs	440		774		1,381		2,446
Depreciation and amortization	129		284		577		895
Other	744		1,237		3,320		4,291
Total	$	10,734	$	14,556	$	35,169	$	43,055

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OTHER INCOME (EXPENSE), NET

9 Months Ended

Sep. 30, 2023

Other Income and Expenses [Abstract]

OTHER INCOME (EXPENSE), NET

OTHER INCOME (EXPENSE), NET

Other income (expense), net consists of the following:

	Three months ended September 30,				Nine months ended September 30,
(in thousands)	2023		2022		2023		2022
Interest income (expense)	$	262	$	212	$	1,011	$	318
Other, net	145		247		1,346		1,074
Total	$	407	$	459	$	2,357	$	1,392

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INCOME TAXES	9 Months Ended
	Sep. 30, 2023
Income Tax Disclosure [Abstract]
INCOME TAXES	INCOME TAXESWe recognized an income tax (provision) benefit of $(2.6) million and $(2.2) million for the nine months ended September 30, 2023 and 2022, respectively ($(0.4) million and $0.2 million for the third quarter of 2023 and 2022, respectively). Income tax (provision) benefit for the three and nine months ended September 30, 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

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LOSS PER SHARE

9 Months Ended

Sep. 30, 2023

Earnings Per Share [Abstract]

LOSS PER SHARE

LOSS PER SHARE

Basic loss per share is computed by dividing loss available to common shareholders by the weighted average number of common shares outstanding for the period. In accordance with ASC 260, penny warrants are included in the calculation of weighted average basic and diluted earnings (loss) per share for the period of time that they are classified as equity. For the three and nine months ended, September 30, 2023, 0.2 million and 0.1 million penny warrants have been included in the calculation of weighted average basic and diluted loss per share. Diluted net loss per share excludes all dilutive securities because their impact would be anti-dilutive, as described below.

Basic and diluted loss per share are calculated as follows:

	Three months ended September 30,				Nine months ended September 30,
(in thousands, except per share data)	2023		2022		2023		2022
Net loss attributable to Altisource	$	(11,342)	$	(14,389)	$	(43,139)	$	(42,074)
Weighted average common shares outstanding, basic	22,181		16,087		20,538		16,051
Weighted average common shares outstanding, diluted	22,181		16,087		20,538		16,051
Loss per share:
Basic	$	(0.51)	$	(0.89)	$	(2.10)	$	(2.62)
Diluted	$	(0.51)	$	(0.89)	$	(2.10)	$	(2.62)

For the nine months ended September 30, 2023 and 2022, 1.5 million and 1.3 million, respectively (1.5 million and 1.3 million for the third quarter of 2023 and 2022, respectively), stock options, restricted shares and restricted share units, were excluded from the computation of loss per share, as a result of the following:

•For the nine months ended September 30, 2023 and 2022, 0.3 million and 0.2 million, respectively (0.4 million and 0.2 million for the third quarter of 2023 and 2022, respectively), stock options, restricted shares and restricted share units were anti-dilutive and have been excluded from the computation of diluted loss per share because the Company incurred a net loss

•For the nine months ended September 30, 2023 and 2022, 0.3 million and 0.2 million, respectively (0.2 million and 0.2 million for the third quarter of 2023 and 2022, respectively), stock options were anti-dilutive and have been excluded from the computation of diluted loss per share because their exercise price was greater than the average market price of our common stock

•For the nine months ended September 30, 2023 and 2022, 0.9 million and 0.9 million, respectively (0.9 million and 0.9 million for the third quarter of 2023 and 2022, respectively) , stock options, restricted shares and restricted share units, which begin to vest upon the achievement of certain market criteria related to our common stock price, performance criteria and a total shareholder return compared to the market benchmark, that have not yet been met in each period have been excluded from the computation of diluted loss per share

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COMMITMENTS, CONTINGENCIES AND REGULATORY MATTERS

9 Months Ended

Sep. 30, 2023

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS, CONTINGENCIES AND REGULATORY MATTERS

COMMITMENTS, CONTINGENCIES AND REGULATORY MATTERS We record a liability for contingencies if an unfavorable outcome is probable and the amount of loss can be reasonably estimated, including expected insurance coverage. For proceedings where the reasonable estimate of loss is a range, we record a best estimate of loss within the range.

Litigation

We are currently involved in legal actions in the course of our business, some of which seek monetary damages. We do not believe that the outcome of these proceedings, both individually and in the aggregate, will have a material impact on our financial condition, results of operations or cash flows.

Regulatory Matters

Periodically, we are subject to audits, examinations and investigations by federal, state and local governmental authorities and receive subpoenas, civil investigative demands or other requests for information from such governmental authorities in connection with their regulatory or investigative authority. We are currently responding to such inquiries from governmental authorities relating to certain aspects of our business. We believe it is premature to predict the potential outcome or to estimate any potential financial impact in connection with these inquiries.

Ocwen Related Matters

As discussed in Note 2, during the three and nine months ended September 30, 2023, Ocwen was our largest customer, accounting for 43% of our total revenue. Additionally, 7% of our revenue for the nine months ended September 30, 2023 (6% of our revenue for the third quarter of 2023) was earned on the loan portfolios serviced by Ocwen, when a party other than Ocwen or the MSRs owner selected Altisource as the service provider.

Ocwen has disclosed that it is subject to a number of ongoing regulatory examinations, consent orders, inquiries, subpoenas, civil investigative demands, requests for information and other actions and is subject to pending and threatened legal proceedings, some of which include claims against Ocwen for substantial monetary damages. Previous regulatory actions against Ocwen have subjected Ocwen to independent oversight of its operations and placed certain restrictions on its ability to acquire servicing rights or proceed with default-related actions on the loans it services. Existing or future similar matters could result in adverse regulatory or other actions against Ocwen. In addition to the above, Ocwen may become subject to future adverse regulatory or other actions.

Ocwen has disclosed that Rithm is a significant client of Ocwen’s. As of June 30, 2023, approximately 16% of loans serviced and subserviced by Ocwen (measured in UPB) and approximately 68% of all delinquent loans that Ocwen services were related to Rithm MSRs or rights to MSRs.

The existence or outcome of Ocwen regulatory matters or the termination of Ocwen’s sub-servicing agreements with Rithm or other significant Ocwen clients may have significant adverse effects on Ocwen’s business. For example, Ocwen may be required to alter the way it conducts business, including the parties it contracts with for services, it may be required to seek changes to its existing pricing structure with us, it may lose its non-government-sponsored enterprise (“GSE”) servicing rights or subservicing arrangements or may lose one or more of its state servicing or origination licenses. Additional regulatory actions or adverse financial developments may impose additional restrictions on or require changes in Ocwen’s business that could require it to sell assets or change its business operations. Any or all of these effects and others could result in our eventual loss of Ocwen as a customer or a reduction in the number and/or volume of services they purchase from us or the loss of other customers.

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

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

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

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

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

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

•Altisource otherwise fails to be retained as a service provider

Management cannot predict whether any of these events will occur or the amount of any impact they may have on Altisource.

Leases

We lease certain premises and equipment, primarily consisting of office space and information technology equipment. Certain of our leases include options to renew at our discretion or terminate leases early, and these options are considered in our determination of the expected lease term. Certain of our lease agreements include rental payments adjusted periodically for inflation. Our lease agreements generally do not contain any material residual value guarantees or material restrictive covenants. We sublease certain office space to third parties. Sublease income was $0.1 million and $0.4 million for the nine months ended September 30, 2023 and 2022, respectively (less than $0.1 million and less than $0.1 million for the third quarter of 2023 and 2022, respectively). The amortization periods of right-of-use assets are generally limited by the expected lease term. Our leases generally have expected lease terms at adoption of one to six years.

Information about our lease terms and our discount rate assumption were as follows for the nine months ended September 30:

	2023		2022
Weighted average remaining lease term (in years)	2.51		3.15
Weighted average discount rate	5.93	%	5.66	%

Our lease activity during the period was as follows:

	Three months ended September 30,				Nine months ended September 30,
(in thousands)	2023		2022		2023		2022
Operating lease costs:
Selling, general and administrative expense	$	553	$	586	$	1,638	$	2,217
Cost of revenue	—		—		—		265
Cash used in operating activities for amounts included in the measurement of lease liabilities	$	507	$	515	$	1,638	$	2,022
Short-term (twelve months or less) lease costs	789		402		1,638		827

Maturities of our lease liabilities as of September 30, 2023 are as follows:

(in thousands)	Operating lease obligations
2023	$	559
2024	1,796
2025	1,322
2026	638
2027	—
Total lease payments	4,315
Less: interest	(540)
Present value of lease liabilities	$	3,775

Escrow Balances

We hold customers’ assets in escrow accounts at various financial institutions pending completion of certain real estate activities. These amounts are held in escrow accounts for limited periods of time and are not included in the accompanying condensed consolidated balance sheets. Amounts held in escrow accounts were $39.0 million and $13.2 million as of September 30, 2023 and December 31, 2022, respectively.

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SEGMENT REPORTING

9 Months Ended

Sep. 30, 2023

Segment Reporting [Abstract]

SEGMENT REPORTING

SEGMENT REPORTINGOur business segments are based upon our organizational structure, which focuses primarily on the services offered, and are consistent with the internal reporting used by our Chief Executive Officer (our chief operating decision maker) to evaluate operating performance and to assess the allocation of our resources.

We conduct our operations through two reportable segments: Servicer and Real Estate and Origination. In addition, we report Corporate and Others separately.

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. The Origination segment provides originators with solutions and technologies that span the mortgage origination lifecycle. 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, as well as eliminations between reportable segments.

Financial information for our segments is as follows:

	Three months ended September 30, 2023
(in thousands)	Servicer and Real Estate		Origination		Corporate and Others		Consolidated Altisource
Revenue	$	28,702	$	7,511	$	—	$	36,213
Cost of revenue	18,312		7,151		3,561		29,024
Gross profit (loss)	10,390		360		(3,561)		7,189
Selling, general and administrative expenses	1,966		1,797		6,971		10,734
Income (loss) from operations	8,424		(1,437)		(10,532)		(3,545)
Total other income (expense), net	—		—		(7,317)		(7,317)
Income (loss) before income taxes and non-controlling interests	$	8,424	$	(1,437)	$	(17,849)	$	(10,862)

	Three months ended September 30, 2022
(in thousands)	Servicer and Real Estate		Origination		Corporate and Others		Consolidated Altisource
Revenue	$	30,866	$	7,514	$	—	$	38,380
Cost of revenue	22,082		7,654		4,651		34,387
Gross profit (loss)	8,784		(140)		(4,651)		3,993
Selling, general and administrative expenses	2,931		2,399		9,226		14,556
Income (loss) from operations	5,853		(2,539)		(13,877)		(10,563)
Total other income (expense), net	4		—		(3,894)		(3,890)
Income (loss) before income taxes and non-controlling interests	$	5,857	$	(2,539)	$	(17,771)	$	(14,453)

	Nine months ended September 30, 2023
(in thousands)	Servicer and Real Estate		Origination		Corporate and Others		Consolidated Altisource
Revenue	$	87,495	$	23,414	$	—	$	110,909
Cost of revenue	56,075		22,623		10,986		89,684
Gross profit (loss)	31,420		791		(10,986)		21,225
Selling, general and administrative expenses	6,905		5,873		22,391		35,169
Income (loss) from operations	24,515		(5,082)		(33,377)		(13,944)
Total other income (expense), net	—		—		(26,454)		(26,454)
Income (loss) before income taxes and non-controlling interests	$	24,515	$	(5,082)	$	(59,831)	$	(40,398)

	Nine months ended September 30, 2022
(in thousands)	Servicer and Real Estate		Origination		Corporate and Others		Consolidated Altisource
Revenue	$	91,349	$	26,968	$	—	$	118,317
Cost of revenue	64,235		26,206		14,170		104,611
Gross profit (loss)	27,114		762		(14,170)		13,706
Selling, general and administrative expenses	9,227		6,739		27,089		43,055
Income (loss) from operations	17,887		(5,977)		(41,259)		(29,349)
Total other income (expense), net	4		—		(10,051)		(10,047)
Income (loss) before income taxes and non-controlling interests	$	17,891	$	(5,977)	$	(51,310)	$	(39,396)

(in thousands)	Servicer and Real Estate		Origination		Corporate and Others		Consolidated Altisource
Total assets:
September 30, 2023	$	57,143	$	51,191	$	54,302	$	162,636
December 31, 2022	63,696		53,984		77,588		195,268

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ORGANIZATION AND BASIS OF PRESENTATION (Policies)

9 Months Ended

Sep. 30, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Accounting and Presentation

Basis of Accounting and Presentation

The unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Securities and Exchange Commission (“SEC”) Regulation S-X. Accordingly, these financial statements do not include all of the information and footnotes required by GAAP for complete consolidated financial statements. In the opinion of management, the interim data includes all normal recurring adjustments considered necessary to fairly state the results for the interim periods presented. The preparation of interim condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of our interim condensed consolidated financial statements, as well as the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Intercompany transactions and accounts have been eliminated in consolidation. Certain prior year balance sheet amounts have been reclassified for consistency with the current year presentation.

Altisource consolidates Best Partners Mortgage Cooperative, Inc., which is managed by The Mortgage Partnership of America, L.L.C. (“MPA”), a wholly-owned subsidiary of Altisource. Best Partners Mortgage Cooperative, Inc. is a mortgage cooperative doing business as Lenders One® (“Lenders One”). MPA provides services to Lenders One under a management agreement that ends on December 31, 2025 (with renewals for three successive five-year periods at MPA’s option).

The management agreement between MPA and Lenders One, pursuant to which MPA is the management company, represents a variable interest in a variable interest entity. MPA is the primary beneficiary of Lenders One as it has the power to direct the activities that most significantly impact the cooperative’s economic performance and the right to receive benefits from the cooperative. As a result, Lenders One is presented in the accompanying condensed consolidated financial statements on a consolidated basis and the interests of the members are reflected as non-controlling interests.

Fair Value Measurements

Fair Value Measurements

Fair value is defined as an exit price, representing the amount that would be received for an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The three-tier hierarchy for inputs used in measuring fair value, which prioritizes the inputs used in the methodologies of measuring fair value for assets and liabilities, is as follows:

Level 1 — Quoted prices in active markets for identical assets and liabilities

Level 2 — Observable inputs other than quoted prices included in Level 1

Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of assets or liabilities

Financial assets and financial liabilities are classified based on the lowest level of input that is significant to the fair value measurements. Our assessment of the significance of a particular input to the fair value measurements requires judgment and may affect the valuation of the assets and liabilities being measured and their placement within the fair value hierarchy.

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CUSTOMER CONCENTRATION (Tables)

9 Months Ended

Sep. 30, 2023

Risks and Uncertainties [Abstract]

Schedule of Revenue from Major Customers by Reporting Segments

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

	Three months ended September 30,				Nine months ended September 30,
	2023		2022		2023		2022
Servicer and Real Estate	55	%	56	%	54	%	52	%
Origination	—	%	—	%	—	%	—	%
Corporate and Others	—	%	—	%	—	%	—	%
Consolidated revenue	43	%	45	%	43	%	40	%

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ACCOUNTS RECEIVABLE, NET (Tables)

9 Months Ended

Sep. 30, 2023

Receivables [Abstract]

Schedule of Change in Allowance for Doubtful Accounts and Expected Credit Losses

Accounts receivable, net consists of the following:

(in thousands)	September 30, 2023		December 31, 2022
Billed	$	10,386	$	11,993
Unbilled	5,974		5,359
	16,360		17,352
Less: Allowance for credit losses	(3,379)		(4,363)
Total	$	12,981	$	12,989

Changes in the allowance for expected credit losses consist of the following:

			Additions
(in thousands)	Balance at Beginning of Period		Charged to Expenses		Deductions Note(1)		Balance at End of Period
Allowance for expected credit losses:
Three months ended September 30, 2023	$	4,314	$	(203)	$	732	$	3,379
Three months ended September 30, 2022	4,792		(22)		289		4,481
Nine months ended September 30, 2023	$	4,363	$	319	$	1,303	$	3,379
Nine months ended September 30, 2022	5,297		578		1,394		4,481

______________________________________

(1)    Amounts written off as uncollectible or transferred to other accounts or utilized.

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PREPAID EXPENSES AND OTHER CURRENT ASSETS (Tables)

9 Months Ended

Sep. 30, 2023

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Schedule of Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consist of the following:

(in thousands)	September 30, 2023		December 31, 2022
Prepaid expenses	$	2,746	$	5,165
Income taxes receivable	510		7,031
Maintenance agreements, current portion	1,868		1,498
Indemnity escrow receivable from Pointillist sale	3,201		3,223
Restricted cash	23		—
Surety bond collateral	—		4,000
Other current assets	2,869		2,627
Total	$	11,217	$	23,544

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PREMISES AND EQUIPMENT, NET (Tables)

9 Months Ended

Sep. 30, 2023

Property, Plant and Equipment [Abstract]

Schedule of Premises and Equipment, Net

Premises and equipment, net consists of the following:

(in thousands)	September 30, 2023		December 31, 2022
Computer hardware and software	$	46,568	$	49,339
Leasehold improvements	1,011		5,794
Furniture and fixtures	102		3,832
Office equipment and other	24		346
	47,705		59,311
Less: Accumulated depreciation and amortization	(45,537)		(55,089)
Total	$	2,168	$	4,222

Schedule of Premises and Equipment, Net by Country

Premises and equipment, net consist of the following, by country:

(in thousands)	September 30, 2023		December 31, 2022
Luxembourg	$	1,459	$	2,455
India	602		1,129
United States	80		586
Uruguay	27		52
Total	$	2,168	$	4,222

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RIGHT-OF-USE ASSETS UNDER OPERATING LEASES, NET (Tables)

9 Months Ended

Sep. 30, 2023

Leases [Abstract]

Right-of-Use Assets Under Operating Leases

Right-of-use assets under operating leases, net consists of the following:

(in thousands)	September 30, 2023		December 31, 2022
Right-of-use assets under operating leases	$	7,334	$	11,808
Less: Accumulated amortization	(3,706)		(6,487)
Total	$	3,628	$	5,321

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GOODWILL AND INTANGIBLE ASSETS, NET (Tables)

9 Months Ended

Sep. 30, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Summary of Changes in Goodwill

The following is a summary of goodwill by segment:

(in thousands)	Servicer and Real Estate		Origination		Corporate and Others		Total
Balance as of September 30, 2023 and December 31, 2022	$	30,681	$	25,279	$	—	$	55,960

Schedule of Intangible Assets

Intangible assets, net consist of the following:

	Weighted average estimated useful life (in years)	Gross carrying amount				Accumulated amortization				Net book value
(in thousands)		September 30, 2023		December 31, 2022		September 30, 2023		December 31, 2022		September 30, 2023		December 31, 2022
Definite lived intangible assets:
Customer related intangible assets	9	$	214,307	$	214,307	$	(199,915)	$	(197,594)	$	14,392	$	16,713
Operating agreement	20	35,000		35,000		(23,917)		(22,604)		11,083		12,396
Trademarks and trade names	16	9,709		9,709		(7,366)		(7,088)		2,343		2,621
Total		$	259,016	$	259,016	$	(231,198)	$	(227,286)	$	27,818	$	31,730

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OTHER ASSETS (Tables)

9 Months Ended

Sep. 30, 2023

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Schedule of Other Assets

Other assets consist of the following:

(in thousands)	September 30, 2023		December 31, 2022
Restricted cash	$	3,184	$	3,248
Security deposits	597		596
Other	3,461		1,585
Total	$	7,242	$	5,429

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ACCOUNTS PAYABLE, ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables)

9 Months Ended

Sep. 30, 2023

Payables and Accruals [Abstract]

Schedule of Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses consist of the following:

(in thousands)	September 30, 2023		December 31, 2022
Accounts payable	$	16,404	$	14,981
Accrued expenses - general	8,425		11,858
Accrued salaries and benefits	4,937		5,501
Income taxes payable	1,266		1,167
Total	$	31,032	$	33,507

Schedule of Other Current Liabilities

Other current liabilities consist of the following:

(in thousands)	September 30, 2023		December 31, 2022
Operating lease liabilities	$	1,596	$	2,097
Other	703		770
Total	$	2,299	$	2,867

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WARRANTS (Tables)

9 Months Ended

Sep. 30, 2023

Other Liabilities Disclosure [Abstract]

Schedule of Stockholders' Equity Note, Warrants or Rights

The number of Warrant Shares is subject to reduction based on the amount of par paydowns on the senior secured term loans (“SSTL”) in the aggregate using proceeds from issuances of equity interests or from junior indebtedness made prior to February 14, 2024 (“Aggregate Paydowns”) as set forth in the table below.

Aggregate Paydowns	Warrant Shares
Less than $20 million	3,223,851
$20 million+ but less than below	2,578,743
$30 million+	1,612,705

Fair Value of Warrant Liability

The fair value of the warrant liability at each of the respective valuation dates is summarized below:

Warrant Liability	Warrant Shares based on Aggregate Paydowns	Expected Warrant Shares that will be exercisable on February 14, 2024	Fair Value per Warrant Share	Fair Value (in thousands)
Fair value at initial measurement date of February 14, 2023	3,223,851	1,612,705	$5.02	$	8,096
Gain on change in fair value of warrant liability				(694)
Fair value at March 31, 2023	2,578,743	1,612,705	$4.59	7,402
Loss on change in fair value of warrant liability				1,774
Fair value at June 30, 2023	2,578,743	1,612,705	$5.69	$	9,176
Gain on change in fair value of warrant liability				(2,225)
Fair value at September 18, 2023	1,612,705	1,612,705	$4.31	$	6,951

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LONG-TERM DEBT (Tables)

9 Months Ended

Sep. 30, 2023

Debt Disclosure [Abstract]

Schedule of Long-Term Debt

Long-term debt consists of the following:

(in thousands)	September 30, 2023		December 31, 2022
Senior Secured Term Loans	$	221,981	$	247,204
Less: Debt issuance and amendment costs, net	(3,918)		(878)
Less: Unamortized discount, net	(6,083)		(833)
Net Senior secured term loans	211,980		245,493
Total Long-term debt	$	211,980	$	245,493

Schedule of Debt

The PIK component of the interest rate is subject to adjustment based on the amount of Aggregate Paydowns as set forth in the table below. The PIK component of the interest rate was 3.75% for the three months ended September 30, 2023 and 4.50% for the three months ended June 30, 2023. The interest rate as of September 30, 2023 was 14.09%.

Aggregate Paydowns	PIK Component of Interest Rate
Less than $20 million	5.00%
$20 million+ but less than below	4.50%
$30 million+ but less than below	3.75%
$40 million+ but less than below	3.50%
$45 million+ but less than below	3.00%
$50 million+ but less than below	2.50%
$55 million+ but less than below	2.00%
$60 million+ but less than below	1.00%
$65 million+ but less than below	0.50%
$70 million+	0.00%

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OTHER NON-CURRENT LIABILITIES (Tables)

9 Months Ended

Sep. 30, 2023

Other Liabilities Disclosure [Abstract]

Schedule of Other Non-Current Liabilities

Other non-current liabilities consist of the following:

(in thousands)	September 30, 2023		December 31, 2022
Income tax liabilities	$	16,036	$	16,079
Operating lease liabilities	2,179		3,371
Deferred revenue	13		82
Other non-current liabilities	4		4
Total	$	18,232	$	19,536

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FAIR VALUE MEASUREMENTS AND FINANCIAL INSTRUMENTS (Tables)

9 Months Ended

Sep. 30, 2023

Fair Value Disclosures [Abstract]

Fair Value Measurements, Recurring and Nonrecurring

The following fair values are estimated using market information and what the Company believes to be appropriate valuation methodologies under GAAP:

	September 30, 2023								December 31, 2022
(in thousands)	Carrying amount		Fair value						Carrying amount		Fair value
			Level 1		Level 2		Level 3				Level 1		Level 2		Level 3
Assets:
Cash and cash equivalents	$	36,640	$	36,640	$	—	$	—	$	51,025	$	51,025	$	—	$	—
Restricted cash	3,207		3,207		—		—		3,248		3,248		—		—
Short-term receivable	3,201		—		—		3,201		3,223		—		—		3,223
Liabilities:
Senior secured term loans	221,981		—		177,585		—		247,204		—		200,235		—

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SHAREHOLDERS’ EQUITY AND SHARE-BASED COMPENSATION (Tables)

9 Months Ended

Sep. 30, 2023

Share-Based Payment Arrangement [Abstract]

Schedule of Performance-Based Option Pricing Model

The following assumptions were used to determine the fair values as of the grant date:

	Nine months ended September 30, 2022
	Black-Scholes
Risk-free interest rate (%)	1.62
Expected stock price volatility (%)	67.75
Expected dividend yield	—
Expected option life (in years)	6
Fair value	$	7.27

Summary of the Weighted Average Fair Value of Stock Options Granted, the Total Intrinsic Value of Stock Options Exercised and the Fair Value of Options Vested

The following table summarizes the grant date fair value of stock options that vested during the periods presented:

	Nine months ended September 30,
(in thousands, except per share data)	2023		2022
Weighted average grant date fair value of stock options granted per share	$	—	$	8.19
Intrinsic value of options exercised	—		—
Grant date fair value of stock options that vested	83		1,031

Summary of the Activity of the Entity's Stock Options

The following table summarizes the activity related to our stock options:

	Number of options	Weighted average exercise price		Weighted average contractual term (in years)	Aggregate intrinsic value (in thousands)
Outstanding as of December 31, 2022	745,277	$	27.03	4.83	$	—
Granted	—	—
Forfeited	(6,088)	25.26
Outstanding as of September 30, 2023	739,189	27.04		4.09	—
Exercisable as of September 30, 2023	543,701	25.27		3.50	—

Restricted Stock and Restricted Stock Units Activity

The following table summarizes the activity related to our restricted shares and restricted share units:

	Number of restricted shares and restricted share units
Outstanding as of December 31, 2022	755,006
Granted	890,810
Issued	(213,576)
Forfeited/canceled	(147,241)
Outstanding as of September 30, 2023	1,284,999

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REVENUE (Tables)

9 Months Ended

Sep. 30, 2023

Revenue from Contract with Customer [Abstract]

Schedule of Revenue

The components of revenue were as follows:

	Three months ended September 30,				Nine months ended September 30,
(in thousands)	2023		2022		2023		2022
Service revenue	$	34,112	$	36,290	$	104,356	$	111,691
Reimbursable expenses	2,039		1,957		6,398		6,158
Non-controlling interests	62		133		155		468
Total	$	36,213	$	38,380	$	110,909	$	118,317

Disaggregation of Revenue

Disaggregation of total revenues by segment and major source was as follows:

	Three months ended September 30, 2023
(in thousands)	Revenue recognized when services are performed or assets are sold		Revenue related to technology platforms and professional services		Reimbursable expenses revenue		Total revenue
Servicer and Real Estate	$	24,223	$	2,677	$	1,802	$	28,702
Origination	7,264		10		237		7,511
Total revenue	$	31,487	$	2,687	$	2,039	$	36,213

	Three months ended September 30, 2022
(in thousands)	Revenue recognized when services are performed or assets are sold		Revenue related to technology platforms and professional services		Reimbursable expenses revenue		Total revenue
Servicer and Real Estate	$	26,387	$	2,633	$	1,846	$	30,866
Origination	7,392		11		111		7,514
Total revenue	$	33,779	$	2,644	$	1,957	$	38,380

	Nine months ended September 30, 2023
(in thousands)	Revenue recognized when services are performed or assets are sold		Revenue related to technology platforms and professional services		Reimbursable expenses revenue		Total revenue
Servicer and Real Estate	$	73,314	$	8,265	$	5,916	$	87,495
Origination	22,908		24		482		23,414
Total revenue	$	96,222	$	8,289	$	6,398	$	110,909

	Nine months ended September 30, 2022
(in thousands)	Revenue recognized when services are performed or assets are sold		Revenue related to technology platforms and professional services		Reimbursable expenses revenue		Total revenue
Servicer and Real Estate	$	77,947	$	7,654	$	5,748	$	91,349
Origination	26,533		25		410		26,968
Total revenue	$	104,480	$	7,679	$	6,158	$	118,317

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COST OF REVENUE (Tables)

9 Months Ended

Sep. 30, 2023

Cost of Revenue [Abstract]

Schedule of Components of Cost of Revenue

The components of cost of revenue were as follows:

	Three months ended September 30,				Nine months ended September 30,
(in thousands)	2023		2022		2023		2022
Outside fees and services	$	13,659	$	15,319	$	42,810	$	42,573
Compensation and benefits	9,090		11,885		28,072		39,231
Technology and telecommunications	3,786		4,656		11,048		14,844
Reimbursable expenses	2,039		1,957		6,398		6,158
Depreciation and amortization	450		570		1,356		1,805
Total	$	29,024	$	34,387	$	89,684	$	104,611

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SELLING, GENERAL AND ADMINISTRATIVE EXPENSES (Tables)

9 Months Ended

Sep. 30, 2023

Selling, General and Administrative Expense [Abstract]

Schedule of the Components of Selling, General and Administrative Expenses

The components of selling, general and administrative expenses were as follows:

	Three months ended September 30,				Nine months ended September 30,
(in thousands)	2023		2022		2023		2022
Compensation and benefits	$	4,906	$	7,388	$	16,312	$	19,093
Professional services	1,897		2,584		5,743		8,432
Occupancy related costs	1,266		1,008		3,924		4,049
Amortization of intangible assets	1,352		1,281		3,912		3,849
Marketing costs	440		774		1,381		2,446
Depreciation and amortization	129		284		577		895
Other	744		1,237		3,320		4,291
Total	$	10,734	$	14,556	$	35,169	$	43,055

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OTHER INCOME (EXPENSE), NET (Tables)

9 Months Ended

Sep. 30, 2023

Other Income and Expenses [Abstract]

Schedule of Other (Expense) Income, Net

Other income (expense), net consists of the following:

	Three months ended September 30,				Nine months ended September 30,
(in thousands)	2023		2022		2023		2022
Interest income (expense)	$	262	$	212	$	1,011	$	318
Other, net	145		247		1,346		1,074
Total	$	407	$	459	$	2,357	$	1,392

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LOSS PER SHARE (Tables)

9 Months Ended

Sep. 30, 2023

Earnings Per Share [Abstract]

Schedule of Basic and Diluted EPS Calculation

Basic and diluted loss per share are calculated as follows:

	Three months ended September 30,				Nine months ended September 30,
(in thousands, except per share data)	2023		2022		2023		2022
Net loss attributable to Altisource	$	(11,342)	$	(14,389)	$	(43,139)	$	(42,074)
Weighted average common shares outstanding, basic	22,181		16,087		20,538		16,051
Weighted average common shares outstanding, diluted	22,181		16,087		20,538		16,051
Loss per share:
Basic	$	(0.51)	$	(0.89)	$	(2.10)	$	(2.62)
Diluted	$	(0.51)	$	(0.89)	$	(2.10)	$	(2.62)

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COMMITMENTS, CONTINGENCIES AND REGULATORY MATTERS (Tables)

9 Months Ended

Sep. 30, 2023

Commitments and Contingencies Disclosure [Abstract]

Lease Term and Assumption

Information about our lease terms and our discount rate assumption were as follows for the nine months ended September 30:

	2023		2022
Weighted average remaining lease term (in years)	2.51		3.15
Weighted average discount rate	5.93	%	5.66	%

Lease Activity During Period

Our lease activity during the period was as follows:

	Three months ended September 30,				Nine months ended September 30,
(in thousands)	2023		2022		2023		2022
Operating lease costs:
Selling, general and administrative expense	$	553	$	586	$	1,638	$	2,217
Cost of revenue	—		—		—		265
Cash used in operating activities for amounts included in the measurement of lease liabilities	$	507	$	515	$	1,638	$	2,022
Short-term (twelve months or less) lease costs	789		402		1,638		827

Maturities of Operating Lease Liabilities

Maturities of our lease liabilities as of September 30, 2023 are as follows:

(in thousands)	Operating lease obligations
2023	$	559
2024	1,796
2025	1,322
2026	638
2027	—
Total lease payments	4,315
Less: interest	(540)
Present value of lease liabilities	$	3,775

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SEGMENT REPORTING (Tables)

9 Months Ended

Sep. 30, 2023

Segment Reporting [Abstract]

Schedule of Financial Information of Segments

Financial information for our segments is as follows:

	Three months ended September 30, 2023
(in thousands)	Servicer and Real Estate		Origination		Corporate and Others		Consolidated Altisource
Revenue	$	28,702	$	7,511	$	—	$	36,213
Cost of revenue	18,312		7,151		3,561		29,024
Gross profit (loss)	10,390		360		(3,561)		7,189
Selling, general and administrative expenses	1,966		1,797		6,971		10,734
Income (loss) from operations	8,424		(1,437)		(10,532)		(3,545)
Total other income (expense), net	—		—		(7,317)		(7,317)
Income (loss) before income taxes and non-controlling interests	$	8,424	$	(1,437)	$	(17,849)	$	(10,862)

	Three months ended September 30, 2022
(in thousands)	Servicer and Real Estate		Origination		Corporate and Others		Consolidated Altisource
Revenue	$	30,866	$	7,514	$	—	$	38,380
Cost of revenue	22,082		7,654		4,651		34,387
Gross profit (loss)	8,784		(140)		(4,651)		3,993
Selling, general and administrative expenses	2,931		2,399		9,226		14,556
Income (loss) from operations	5,853		(2,539)		(13,877)		(10,563)
Total other income (expense), net	4		—		(3,894)		(3,890)
Income (loss) before income taxes and non-controlling interests	$	5,857	$	(2,539)	$	(17,771)	$	(14,453)

	Nine months ended September 30, 2023
(in thousands)	Servicer and Real Estate		Origination		Corporate and Others		Consolidated Altisource
Revenue	$	87,495	$	23,414	$	—	$	110,909
Cost of revenue	56,075		22,623		10,986		89,684
Gross profit (loss)	31,420		791		(10,986)		21,225
Selling, general and administrative expenses	6,905		5,873		22,391		35,169
Income (loss) from operations	24,515		(5,082)		(33,377)		(13,944)
Total other income (expense), net	—		—		(26,454)		(26,454)
Income (loss) before income taxes and non-controlling interests	$	24,515	$	(5,082)	$	(59,831)	$	(40,398)

	Nine months ended September 30, 2022
(in thousands)	Servicer and Real Estate		Origination		Corporate and Others		Consolidated Altisource
Revenue	$	91,349	$	26,968	$	—	$	118,317
Cost of revenue	64,235		26,206		14,170		104,611
Gross profit (loss)	27,114		762		(14,170)		13,706
Selling, general and administrative expenses	9,227		6,739		27,089		43,055
Income (loss) from operations	17,887		(5,977)		(41,259)		(29,349)
Total other income (expense), net	4		—		(10,051)		(10,047)
Income (loss) before income taxes and non-controlling interests	$	17,891	$	(5,977)	$	(51,310)	$	(39,396)

(in thousands)	Servicer and Real Estate		Origination		Corporate and Others		Consolidated Altisource
Total assets:
September 30, 2023	$	57,143	$	51,191	$	54,302	$	162,636
December 31, 2022	63,696		53,984		77,588		195,268

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ORGANIZATION AND BASIS OF PRESENTATION (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2023 USD ($) installment segment	Dec. 31, 2022 USD ($)
Summary of significant accounting policies
Number of reporting segments | segment	2
Total assets:	$ 162,636	$ 195,268
Variable Interest Entity, Primary Beneficiary
Summary of significant accounting policies
Number of terms | installment	3
Agreement term	5 years
Total assets:	$ 200	1,200
Total liabilities	$ 400	$ 1,100

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CUSTOMER CONCENTRATION - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Jun. 30, 2023	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Concentration Risk
Revenue	$ 36,213	$ 38,380		$ 110,909	$ 118,317
Customer Concentration Risk | Ocwen
Concentration Risk
Accounts receivable	4,000			4,000		$ 4,000
Customer Concentration Risk | Ocwen | Billed
Concentration Risk
Accounts receivable	2,800			2,800		3,200
Customer Concentration Risk | Ocwen | Unbilled
Concentration Risk
Accounts receivable	$ 1,200			$ 1,200		$ 800
Customer Concentration Risk | Ocwen | Revenue
Concentration Risk
Concentration percentage (in percent)	43.00%	45.00%		43.00%	40.00%
Revenue	$ 15,700	$ 17,200		$ 47,300	$ 47,200
Customer Concentration Risk | Highly Correlated - Ocwen | Revenue
Concentration Risk
Concentration percentage (in percent)	6.00%			7.00%
Revenue	$ 2,300	2,200		$ 7,300	7,300
Customer Concentration Risk | RITM | Revenue
Concentration Risk
Revenue	700	800		2,300	2,600
Percentage of loans serviced and subserviced by largest customer's largest client (in percent)			16.00%
Percentage of delinquent loans Ocwen services (in percent)			0.68
Customer Concentration Risk | Highly Correlated - RITM | Revenue
Concentration Risk
Revenue	$ 3,200	$ 3,000		$ 10,100	$ 10,400
Customer Concentration Risk | Ocwen | RITM | Revenue
Concentration Risk
Percentage of loans serviced and subserviced by largest customer's largest client (in percent)			16.00%
Percentage of delinquent loans Ocwen services (in percent)			0.68

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CUSTOMER CONCENTRATION - Schedule of Revenue from Ocwen (Details) - Ocwen - Revenue - Customer Concentration Risk	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Concentration Risk [Line Items]
Concentration percentage (in percent)	43.00%	45.00%	43.00%	40.00%
Corporate and Others
Concentration Risk [Line Items]
Concentration percentage (in percent)	0.00%	0.00%	0.00%	0.00%
Servicer and Real Estate | Operating Segments
Concentration Risk [Line Items]
Concentration percentage (in percent)	55.00%	56.00%	54.00%	52.00%
Origination | Operating Segments
Concentration Risk [Line Items]
Concentration percentage (in percent)	0.00%	0.00%	0.00%	0.00%

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ACCOUNTS RECEIVABLE, NET - Schedule of Accounts Receivable, Net (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Jun. 30, 2023	Dec. 31, 2022	Jun. 30, 2022	Dec. 31, 2021
Accounts receivable, net
Accounts receivable, gross	$ 16,360		$ 16,360			$ 17,352
Less: Allowance for credit losses	(3,379)	$ (4,481)	(3,379)	$ (4,481)	$ (4,314)	(4,363)	$ (4,792)	$ (5,297)
Total	12,981		12,981			12,989
Bad debt expense	(203)	(22)	319	578
Deductions	732	$ 289	1,303	$ 1,394
Billed
Accounts receivable, net
Accounts receivable, gross	10,386		10,386			11,993
Unbilled
Accounts receivable, net
Accounts receivable, gross	$ 5,974		$ 5,974			$ 5,359

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ACCOUNTS RECEIVABLE, NET - Schedule of Allowance for Doubtful Accounts and Expected Credit Losses (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Allowance for expected credit losses:
Balance at Beginning of Period	$ 4,314	$ 4,792	$ 4,363	$ 5,297
Additions Charged to Expenses	(203)	(22)	319	578
Deductions	732	289	1,303	1,394
Balance at End of Period	$ 3,379	$ 4,481	$ 3,379	$ 4,481

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PREPAID EXPENSES AND OTHER CURRENT ASSETS (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Prepaid expenses	$ 2,746	$ 5,165
Income taxes receivable	510	7,031
Maintenance agreements, current portion	1,868	1,498
Indemnity escrow receivable from Pointillist sale	3,201	3,223
Restricted cash	23	0
Surety bond collateral	0	4,000
Other current assets	2,869	2,627
Total	$ 11,217	$ 23,544

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PREMISES AND EQUIPMENT, NET - Schedule of Premises and Equipment (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Property, Plant and Equipment [Line Items]
Premises and equipment, gross	$ 47,705	$ 59,311
Less: Accumulated depreciation and amortization	(45,537)	(55,089)
Total	2,168	4,222
Computer hardware and software
Property, Plant and Equipment [Line Items]
Premises and equipment, gross	46,568	49,339
Leasehold improvements
Property, Plant and Equipment [Line Items]
Premises and equipment, gross	1,011	5,794
Furniture and fixtures
Property, Plant and Equipment [Line Items]
Premises and equipment, gross	102	3,832
Office equipment and other
Property, Plant and Equipment [Line Items]
Premises and equipment, gross	$ 24	$ 346

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PREMISES AND EQUIPMENT, NET - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Property, Plant and Equipment [Abstract]
Depreciation and amortization	$ 600	$ 900	$ 1,933	$ 2,700

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PREMISES AND EQUIPMENT, NET - Summary by Country (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Property, Plant and Equipment [Line Items]
Total	$ 2,168	$ 4,222
Luxembourg
Property, Plant and Equipment [Line Items]
Total	1,459	2,455
India
Property, Plant and Equipment [Line Items]
Total	602	1,129
United States
Property, Plant and Equipment [Line Items]
Total	80	586
Uruguay
Property, Plant and Equipment [Line Items]
Total	$ 27	$ 52

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RIGHT-OF-USE ASSETS UNDER OPERATING LEASES, NET - Summary of Right-Of-Use Assets (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Leases [Abstract]
Right-of-use assets under operating leases	$ 7,334	$ 11,808
Less: Accumulated amortization	(3,706)	(6,487)
Total	$ 3,628	$ 5,321

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RIGHT-OF-USE ASSETS UNDER OPERATING LEASES, NET - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Leases [Abstract]
Amortization of right-of-use assets under operating leases	$ 400	$ 500	$ 1,351	$ 2,254

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GOODWILL AND INTANGIBLE ASSETS, NET - Goodwill (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Intangible Assets, Net
Goodwill	$ 55,960	$ 55,960
Corporate and Others
Intangible Assets, Net
Goodwill	0	0
Servicer and Real Estate | Operating Segments
Intangible Assets, Net
Goodwill	30,681	30,681
Origination | Operating Segments
Intangible Assets, Net
Goodwill	$ 25,279	$ 25,279

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GOODWILL AND INTANGIBLE ASSETS, NET - Intangible Assets, Net (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Intangible Assets, Net
Gross carrying amount	$ 259,016	$ 259,016
Accumulated amortization	(231,198)	(227,286)
Net book value	27,818	31,730
Customer related intangible assets
Intangible Assets, Net
Gross carrying amount	214,307	214,307
Accumulated amortization	(199,915)	(197,594)
Net book value	14,392	16,713
Operating agreement
Intangible Assets, Net
Gross carrying amount	35,000	35,000
Accumulated amortization	(23,917)	(22,604)
Net book value	11,083	12,396
Trademarks and trade names
Intangible Assets, Net
Gross carrying amount	9,709	9,709
Accumulated amortization	(7,366)	(7,088)
Net book value	$ 2,343	$ 2,621
Weighted Average | Customer related intangible assets
Intangible Assets, Net
Weighted average estimated useful life (in years)	9 years
Weighted Average | Operating agreement
Intangible Assets, Net
Weighted average estimated useful life (in years)	20 years
Weighted Average | Trademarks and trade names
Intangible Assets, Net
Weighted average estimated useful life (in years)	16 years

XML

GOODWILL AND INTANGIBLE ASSETS, NET - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization of intangible assets	$ 1,352	$ 1,281	$ 3,912	$ 3,849
2023	5,200		5,200
2024	5,100		5,100
2025	5,100		5,100
2026	4,900		4,900
2027	$ 4,700		$ 4,700

XML

OTHER ASSETS (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Restricted cash	$ 3,184	$ 3,248
Security deposits	597	596
Other	3,461	1,585
Total	$ 7,242	$ 5,429

XML

ACCOUNTS PAYABLE, ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES - Accounts Payable and Accrued Expenses (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Payables and Accruals [Abstract]
Accounts payable	$ 16,404	$ 14,981
Accrued expenses - general	8,425	11,858
Accrued salaries and benefits	4,937	5,501
Income taxes payable	1,266	1,167
Total	$ 31,032	$ 33,507

XML

ACCOUNTS PAYABLE, ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES - Other Current Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Other current liabilities
Operating lease liabilities	$ 1,596	$ 2,097
Other	703	770
Total	$ 2,299	$ 2,867

XML

WARRANTS - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands		3 Months Ended		9 Months Ended
	Sep. 18, 2023	Sep. 30, 2023	Mar. 31, 2023	Sep. 30, 2023	Sep. 30, 2022	Feb. 14, 2023
Warrant Liability [Line Items]
Repayments of long-term debt				$ 30,000	$ 0
Price of warrant or right (in usd per share)						$ 0.01
Warrant Shares based on Aggregate Paydowns
Warrant Liability [Line Items]
Gain (loss) on changes in fair value of warrant liability		$ 2,200		1,100
Line of Credit | Secured Debt
Warrant Liability [Line Items]
Repayments of long-term debt		$ 10,000	$ 20,000	$ 30,000
Line of Credit | Secured Debt | Maximum
Warrant Liability [Line Items]
Repayments of long-term debt	$ 30,000
Line of Credit | Secured Debt | Common stock
Warrant Liability [Line Items]
Warrant shares (in shares)						3,223,851
Paydown Agreement | Credit Facility
Warrant Liability [Line Items]
Warrant shares (in shares)		1,612,705		1,612,705

XML

WARRANTS - Aggregate Paydown (Details) - Secured Debt - Line of Credit - Common stock	Feb. 14, 2023 shares
Warrant Liability [Line Items]
Warrant shares (in shares)	3,223,851
Less than $20 million
Warrant Liability [Line Items]
Warrant shares (in shares)	3,223,851
$20 million+ but less than below
Warrant Liability [Line Items]
Warrant shares (in shares)	2,578,743
$30 million+
Warrant Liability [Line Items]
Warrant shares (in shares)	1,612,705

XML

WARRANTS - Fair Value of Warrant Liability (Details) - USD ($) $ / shares in Units, $ in Thousands	2 Months Ended	3 Months Ended			9 Months Ended
	Mar. 31, 2023	Sep. 30, 2023	Sep. 18, 2023	Jun. 30, 2023	Sep. 30, 2023	Feb. 14, 2023
Warrant Shares based on Aggregate Paydowns
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning balance (in shares)		2,578,743	2,578,743	2,578,743
Fair value measurement (in shares)	2,578,743		1,612,705	2,578,743		3,223,851
Gain (loss) on changes in fair value of warrant liability		$ (2,200)			$ (1,100)
Ending balance (in shares)	2,578,743		1,612,705	2,578,743
Expected Warrant Shares that will be exercisable on February 14, 2024
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning balance (in shares)		1,612,705	1,612,705	1,612,705
Fair value measurement (in shares)	1,612,705		1,612,705	1,612,705		1,612,705
Gain (loss) on changes in fair value of warrant liability	$ (694)
Ending balance (in shares)	1,612,705		1,612,705	1,612,705
Warranty Liability
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning balance (in usd per share)		$ 5.69	$ 5.69	$ 4.59
Beginning balance Fair Value		$ 9,176	$ 9,176	$ 7,402
Fair value per Warrant Share (in usd per share)	$ 4.59		$ 4.31	$ 5.69		$ 5.02
Fair value of warrants	$ 7,402		$ 6,951	$ 9,176		$ 8,096
Gain (loss) on changes in fair value of warrant liability			$ (2,225)	$ 1,774
Ending balance (in usd per share)	$ 4.59		$ 4.31	$ 5.69
Ending balance Fair Value	$ 7,402		$ 6,951	$ 9,176

XML

LONG-TERM DEBT - Schedule of Long-Term Debt (Details) - USD ($)	Sep. 30, 2023	Dec. 31, 2022
Debt Instrument [Line Items]
Less: Debt issuance and amendment costs, net		$ (900,000)
Long-term debt	$ 211,980,000	245,493,000
Revolver
Debt Instrument [Line Items]
Senior Secured Term Loans	0	0
Less: Debt issuance and amendment costs, net	(200,000)	(300,000)
Senior Secured Term Loans
Debt Instrument [Line Items]
Senior Secured Term Loans	221,981,000	247,204,000
Less: Debt issuance and amendment costs, net	(3,918,000)	(878,000)
Less: Unamortized discount, net	(6,083,000)	(833,000)
Net Senior secured term loans	$ (211,980,000)	$ (245,493,000)

XML

LONG-TERM DEBT - Narrative (Details)					1 Months Ended	3 Months Ended		9 Months Ended
	Sep. 18, 2023 USD ($)	Mar. 29, 2023	Feb. 14, 2023 USD ($) shares	Jun. 22, 2021 USD ($)	Apr. 30, 2018 USD ($) lender	Sep. 30, 2023 USD ($) shares	Mar. 31, 2023 USD ($)	Sep. 30, 2023 USD ($) shares	Sep. 30, 2022 USD ($)	Jun. 30, 2023	Dec. 31, 2022 USD ($)
Debt Instrument [Line Items]
Repayments of long-term debt								$ 30,000,000	$ 0
Cash and cash equivalents (less than)						$ 36,640,000		36,640,000	$ 63,812,000		$ 51,025,000
Debt issuance and amendment costs						3,900,000		3,900,000
Accumulated amortization of debt issuance and amendment costs						$ 5,500,000		$ 5,500,000
Debt issuance costs, net											900,000
Accumulated amortization											3,600,000
Altisource S.A.R.L. | Deer Park Road Management Company, LP
Debt Instrument [Line Items]
Noncontrolling ownership percentage (in percent)						15.00%		15.00%
Warrant
Debt Instrument [Line Items]
Warrants and Rights Outstanding			$ 8,100,000
Term B Loans
Debt Instrument [Line Items]
Percentage of consolidated excess cash flow requiring mandatory prepayments (in percent)						0.50		0.50
April 3, 2018 Credit Agreement
Debt Instrument [Line Items]
Number of incremental lenders | lender					1
Accordion feature, potential increase in additional borrowings					$ 50,000,000
April 3, 2018 Credit Agreement | Term B Loans
Debt Instrument [Line Items]
Debt instrument, face amount					412,000,000
Interest rate at the end of the period (in percent)						14.09%		14.09%
April 3, 2018 Credit Agreement | Term B Loans | Deer Park Road Management Company, LP | Altisource S.A.R.L.
Debt Instrument [Line Items]
Long-term debt						$ 40,200,000		$ 40,200,000
Interest received								$ 2,000,000
April 3, 2018 Credit Agreement | Term B Loans | Altisource S.A.R.L. | Deer Park Road Management Company, LP
Debt Instrument [Line Items]
Warrants (in shares) | shares						583,000		583,000
April 3, 2018 Credit Agreement | Term B Loans | Maximum
Debt Instrument [Line Items]
Amount of principal or interest if failed to pay considered as event of default					5,000,000
Amount of debt which results in acceleration of debt if failed to pay considered as event of default					5,000,000
Amount of unbonded, undischarged or unstayed debt under entry by court of one or more judgments for certain period to determine as event of default					$ 10,000,000
April 3, 2018 Credit Agreement | Term B Loans | Base Rate
Debt Instrument [Line Items]
Debt instrument fixed base rate (in percent)			2.00%
April 3, 2018 Credit Agreement | Term B Loans | Variable Rate Component One, Paid In Cash | Base Rate
Debt Instrument [Line Items]
Interest rate margin (in percent)			4.00%
April 3, 2018 Credit Agreement | Term B Loans | Variable Rate Component Two, Paid In Kind | Base Rate
Debt Instrument [Line Items]
Interest rate margin (in percent)			5.00%
Secured Debt | Line of Credit
Debt Instrument [Line Items]
Repayments of long-term debt						$ 10,000,000	$ 20,000,000	$ 30,000,000
PIK Component of Interest Rate (in percent)						0.0375		0.0375		0.0450
Secured Debt | Line of Credit | Maximum
Debt Instrument [Line Items]
Repayments of long-term debt	$ 30,000,000
Secured Debt | Line of Credit | Common stock
Debt Instrument [Line Items]
Warrant shares (in shares) | shares			3,223,851
Secured Debt | Term B Loans | Adjusted Eurodollar Rate
Debt Instrument [Line Items]
Interest rate margin (in percent)		4.00%
Secured Debt | Second Amended Credit Facility | Line of Credit
Debt Instrument [Line Items]
Repayments of long-term debt			$ 30,000,000
Secured Debt | Second Amended Credit Facility | Line of Credit | Variable Rate Component One, Paid In Cash | Secured Overnight Financing Rate (SOFR)
Debt Instrument [Line Items]
Interest rate margin (in percent)			5.00%
Secured Debt | $30 million+ | Line of Credit
Debt Instrument [Line Items]
PIK Component of Interest Rate (in percent)			0.02
Secured Debt | $30 million+ | Line of Credit | Common stock
Debt Instrument [Line Items]
Warrant shares (in shares) | shares			1,612,705
Credit Facility
Debt Instrument [Line Items]
Payment due date default period (in days)				3 days
Debt issuance costs, net						$ 200,000		$ 200,000			300,000
Accumulated amortization						400,000		400,000			300,000
Interest rate (in percent)			10.00%
Failure to perform period (in days)				30 days
Covenant threshold				$ 40,000,000
Borrowings under revolving credit facility						$ 0		$ 0			$ 0
Credit Facility | Maximum
Debt Instrument [Line Items]
PIK Component of Interest Rate (in percent)			0.0200
Cash and cash equivalents (less than)			$ 35,000,000
Credit Facility | April 3, 2018 Credit Agreement | Line of Credit
Debt Instrument [Line Items]
Payment due date default period (in days)					5 days
Credit Facility | Second Revolver Amendment
Debt Instrument [Line Items]
Repayments of long-term debt			4,900,000
Other expenses			3,400,000
Credit Facility | Credit Facility Borrowings Through June 22, 2023
Debt Instrument [Line Items]
Maximum borrowing capacity			$ 15,000,000
Credit Facility | First Revolver Amendment
Debt Instrument [Line Items]
PIK interest rate (in percent)			0.0300
Upfront fee			$ 750,000

XML

LONG-TERM DEBT - PIK Interest Rate (Details) - Line of Credit - Secured Debt	Sep. 30, 2023	Jun. 30, 2023	Feb. 14, 2023
Interest Rate and Interest Differential Analysis [Line Items]
PIK Component of Interest Rate (in percent)	0.0375	0.0450
Less than $20 million
Interest Rate and Interest Differential Analysis [Line Items]
PIK Component of Interest Rate (in percent)			0.0500
$20 million+ but less than below
Interest Rate and Interest Differential Analysis [Line Items]
PIK Component of Interest Rate (in percent)			0.0450
$30 million+ but less than below
Interest Rate and Interest Differential Analysis [Line Items]
PIK Component of Interest Rate (in percent)			0.0375
$40 million+ but less than below
Interest Rate and Interest Differential Analysis [Line Items]
PIK Component of Interest Rate (in percent)			0.0350
$45 million+ but less than below
Interest Rate and Interest Differential Analysis [Line Items]
PIK Component of Interest Rate (in percent)			0.0300
$50 million+ but less than below
Interest Rate and Interest Differential Analysis [Line Items]
PIK Component of Interest Rate (in percent)			0.0250
$55 million+ but less than below
Interest Rate and Interest Differential Analysis [Line Items]
PIK Component of Interest Rate (in percent)			0.0200
$60 million+ but less than below
Interest Rate and Interest Differential Analysis [Line Items]
PIK Component of Interest Rate (in percent)			0.0100
$65 million+ but less than below
Interest Rate and Interest Differential Analysis [Line Items]
PIK Component of Interest Rate (in percent)			0.0050
$70 million+
Interest Rate and Interest Differential Analysis [Line Items]
PIK Component of Interest Rate (in percent)			0.0000

XML

OTHER NON-CURRENT LIABILITIES (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Other Liabilities Disclosure [Abstract]
Income tax liabilities	$ 16,036	$ 16,079
Operating lease liabilities	2,179	3,371
Deferred revenue	13	82
Other non-current liabilities	4	4
Total	$ 18,232	$ 19,536

XML

FAIR VALUE MEASUREMENTS AND FINANCIAL INSTRUMENTS - Fair Value Measurements, Recurring and Nonrecurring (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022	Sep. 30, 2022
Assets:
Cash and cash equivalents	$ 36,640	$ 51,025	$ 63,812
Restricted cash	3,207	3,248	$ 3,584
Short-term receivable	3,201	3,223
Level 1 | Fair Value, Measurements, Recurring
Assets:
Cash and cash equivalents	36,640	51,025
Restricted cash	3,207	3,248
Short-term receivable	0	0
Level 2 | Fair Value, Measurements, Recurring
Assets:
Cash and cash equivalents	0	0
Restricted cash	0	0
Short-term receivable	0	0
Level 3 | Fair Value, Measurements, Recurring
Assets:
Cash and cash equivalents	0	0
Restricted cash	0	0
Short-term receivable	3,201	3,223
Senior secured term loans
Liabilities:
Senior secured term loans	221,981	247,204
Senior secured term loans | Level 1 | Fair Value, Measurements, Recurring
Liabilities:
Senior secured term loans	0	0
Senior secured term loans | Level 2 | Fair Value, Measurements, Recurring
Liabilities:
Senior secured term loans	177,585	200,235
Senior secured term loans | Level 3 | Fair Value, Measurements, Recurring
Liabilities:
Senior secured term loans	$ 0	$ 0

XML

FAIR VALUE MEASUREMENTS AND FINANCIAL INSTRUMENTS - Narrative (Details) - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
	Dec. 01, 2021	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Proceeds from the sale of business				$ 0	$ 346
Customer Concentration Risk | Ocwen | Revenue
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Percentage of revenue from largest customer (in percent)		43.00%	45.00%	43.00%	40.00%
Pointillist, Inc. | Disposal Group, Held-for-sale, Not Discontinued Operations
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Proceeds from the sale of business	$ 3,500

XML

SHAREHOLDERS’ EQUITY AND SHARE-BASED COMPENSATION - Narrative (Details) $ / shares in Units, $ in Thousands				3 Months Ended		9 Months Ended
	Sep. 07, 2023 USD ($) $ / shares shares	Feb. 14, 2023 USD ($) $ / shares shares	May 15, 2018 $ / shares shares	Sep. 30, 2023 USD ($) shares	Sep. 30, 2022 USD ($)	Sep. 30, 2023 USD ($) component $ / shares shares	Sep. 30, 2022 USD ($) $ / shares shares	Dec. 31, 2022 shares
Share-Based Compensation
Share-based compensation expense | $						$ 3,918	$ 3,899
Estimated unrecognized compensation costs | $				$ 3,200		$ 3,200
Weighted average remaining requisite service period for stock options over which unrecognized compensation costs would be recognized						1 year 1 month 28 days
Outstanding (in shares)				739,189		739,189		745,277
Stock options granted (in shares)						0	105,000
Weighted average exercise price (in usd per share) | $ / shares						$ 0	$ 11.86
Common stock | Public Stock Offering
Share Repurchase Program
Shares issued in transaction (in shares)	5,590,277	4,550,000
Price of stock (in usd per share) | $ / shares	$ 3.60	$ 5.00
Net proceeds of sale of stock | $	$ 18,400	$ 20,500
Share-Based Compensation
Share-based compensation expense | $				$ 1,200	$ 1,300
Stock Options, Service-Based
Share-Based Compensation
Outstanding (in shares)				182,000		182,000
Stock Options, Service-Based | Minimum
Share-Based Compensation
Vesting period						3 years
Expiration term						10 years
Stock Options, Service-Based | Maximum
Share-Based Compensation
Vesting period						4 years
Stock Options, Market-Based
Share-Based Compensation
Outstanding (in shares)				96,000		96,000
Number of components of an award | component						2
Allowable performance period before expiration date						3 years
Stock Options, Market-Based | Minimum
Share-Based Compensation
Vesting period						3 years
Expiration term						10 years
Stock Options, Market-Based | Maximum
Share-Based Compensation
Vesting period						4 years
Stock Options, Market-Based, Ordinary Performance
Share-Based Compensation
Percentage of awards				67.00%		67.00%
Vesting threshold				2		2
Stock Options, Market-Based, Ordinary Performance | Minimum
Share-Based Compensation
Percentage of compounded annual gain of stock price over exercise price required for the award to vest						20.00%
Stock Options, Market-Based, Extraordinary Performance
Share-Based Compensation
Percentage of awards				33.00%		33.00%
Stock Options, Market-Based, Extraordinary Performance | Minimum
Share-Based Compensation
Percentage of compounded annual gain of stock price over exercise price required for the award to vest						25.00%
Stock Options, Performance-Based
Share-Based Compensation
Outstanding (in shares)				461,000		461,000
Stock Options, Performance-Based | Share-based Payment Arrangement, Tranche Two
Share-Based Compensation
Vesting percentage						25.00%
Stock Options, Performance-Based | Share-based Payment Arrangement, Tranche Three
Share-Based Compensation
Vesting percentage						25.00%
Stock Options, Performance-Based | Share-based Payment Arrangement, Tranche One
Share-Based Compensation
Vesting percentage						25.00%
Stock Options, Performance-Based | Share-based Payment Arrangement, Tranche Four
Share-Based Compensation
Vesting percentage						25.00%
Stock Options, Performance-Based | Minimum
Share-Based Compensation
Allowable performance period before expiration date						10 years
Attainment above threshold performance levels, vesting percentage						50.00%
Stock Options, Performance-Based | Maximum
Share-Based Compensation
Attainment above threshold performance levels, vesting percentage						200.00%
Restricted Stock and Restricted Stock Units, Service-Based
Share-Based Compensation
Restricted shares and restricted share units outstanding (in shares)				907,000		907,000
Restricted Stock and Restricted Stock Units, Service-Based | Minimum
Share-Based Compensation
Vesting period						1 year
Restricted Stock and Restricted Stock Units, Service-Based | Maximum
Share-Based Compensation
Vesting period						4 years
Restricted Stock and Restricted Stock Units (RSUs), Performance-Based
Share-Based Compensation
Restricted shares and restricted share units outstanding (in shares)				141,000		141,000
Restricted Stock and Restricted Stock Units (RSUs), Performance-Based | Share-based Payment Arrangement, Tranche Two
Share-Based Compensation
Vesting percentage						33.00%
Restricted Stock and Restricted Stock Units (RSUs), Performance-Based | Share-based Payment Arrangement, Tranche Three
Share-Based Compensation
Vesting percentage						33.00%
Restricted Stock and Restricted Stock Units (RSUs), Performance-Based | Share-based Payment Arrangement, Tranche One
Share-Based Compensation
Vesting percentage						33.00%
Restricted Stock and Restricted Stock Units (RSUs), Performance-Based | Maximum
Share-Based Compensation
Attainment above threshold performance levels, vesting percentage						150.00%
Restricted Stock and Restricted Stock Units (RSUs), Market-Based
Share-Based Compensation
Restricted shares and restricted share units outstanding (in shares)				112,000		112,000
Restricted Stock and Restricted Stock Units (RSUs), Market-Based | Minimum
Share-Based Compensation
Vesting period						30 days
Vesting percentage						50.00%
Restricted Stock and Restricted Stock Units (RSUs), Market-Based | Maximum
Share-Based Compensation
Vesting period						1 year
Vesting percentage						50.00%
Restricted Stock and Restricted Stock Units (RSUs), Performance-Based and Market-Based
Share-Based Compensation
Restricted shares and restricted share units outstanding (in shares)				125,000		125,000
Restricted Stock and Restricted Stock Units (RSUs), Performance-Based and Market-Based | Maximum
Share-Based Compensation
Attainment above threshold performance levels, vesting percentage						300.00%
Restricted Stock Units (RSUs)
Share-Based Compensation
Restricted share units granted (in shares)						891,000
Restricted share units granted, weighted average grant date fair value (in usd per share) | $ / shares						$ 4.82
Restricted Stock Units (RSUs), Performance-Based and Market-Based
Share-Based Compensation
Restricted share units granted (in shares)						57,000	46,000
Restricted Stock Units (RSUs), Market-Based
Share-Based Compensation
Restricted share units granted (in shares)						57,000	46,000
Share Repurchase Program, Current
Share Repurchase Program
Number of shares of common stock authorized to be purchased (in shares)			3,100,000
Percentage of outstanding shares authorized to be repurchased			15.00%
Minimum purchase price authorized (in usd per share) | $ / shares			$ 1.00
Maximum purchase price authorized (in usd per share) | $ / shares			$ 25.00
Period that shares may be repurchased, from the date of approval			5 years
Remaining number of shares available for repurchase under the plan (in shares)				3,100,000		3,100,000
Number of shares of common stock purchased (in shares)						0	0
Authorized amount | $				$ 60,000		$ 60,000

XML

SHAREHOLDERS’ EQUITY AND SHARE-BASED COMPENSATION - Pricing Model (Details) - Stock Options	9 Months Ended
	Sep. 30, 2023 $ / shares
Equity And Share-Based Compensation
Risk-free interest rate (%)	1.62%
Expected stock price volatility (%)	67.75%
Expected dividend yield (%)	0.00%
Expected option life (in years)	6 years
Fair value (in usd per share)	$ 7.27

XML

SHAREHOLDERS’ EQUITY AND SHARE-BASED COMPENSATION - Schedule of Grant Date Fair Value of Stock Options (Details) - USD ($) $ / shares in Units, $ in Thousands	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Share-Based Payment Arrangement [Abstract]
Weighted average grant date fair value of stock options granted per share (in usd per share)	$ 0	$ 8.19
Intrinsic value of options exercised	$ 0	$ 0
Grant date fair value of stock options that vested	$ 83	$ 1,031

XML

SHAREHOLDERS’ EQUITY AND SHARE-BASED COMPENSATION - Summary of Activity Related to Awards (Details) - USD ($) $ / shares in Units, $ in Thousands	9 Months Ended		12 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Number of options
Outstanding at the beginning of the period (in shares)	745,277
Granted (in shares)	0	105,000
Forfeited (in shares)	(6,088)
Outstanding at the end of the period (in shares)	739,189		745,277
Exercisable at the end of the period (in shares)	543,701
Weighted average exercise price
Outstanding at the beginning of the period (in usd per share)	$ 27.03
Granted (in usd per share)	0	$ 11.86
Forfeited (in usd per share)	25.26
Outstanding at the end of the period (in usd per share)	27.04		$ 27.03
Exercisable at the end of the period (in usd per share)	$ 25.27
Weighted average contractual term (in years)
Weighted average contractual term	4 years 1 month 2 days		4 years 9 months 29 days
Exercisable at the end of the period	3 years 6 months
Aggregate intrinsic value (in thousands)
Aggregate intrinsic value, beginning balance (in dollars)	$ 0
Aggregate intrinsic value, ending balance (in dollars)	0		$ 0
Exercisable at the end of the period (in dollars)	$ 0

XML

SHAREHOLDERS’ EQUITY AND SHARE-BASED COMPENSATION - RSU (Details) - Restricted Stock And Restricted Stock Units	9 Months Ended
	Sep. 30, 2023 shares
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding [Roll Forward]
Outstanding at the beginning of period (in shares)	755,006
Granted (in shares)	890,810
Issued (in shares)	(213,576)
Forfeited/canceled (in shares)	(147,241)
Outstanding at the end of period (in shares)	1,284,999

XML

REVENUE - Narrative (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023 USD ($)	Sep. 30, 2022 USD ($)	Sep. 30, 2023 USD ($) category	Sep. 30, 2022 USD ($)
Related Party Transaction [Line Items]
Categories of revenue | category			3
Revenue	$ 36,213	$ 38,380	$ 110,909	$ 118,317
Revenue recognized that was included in the contract liability at the beginning of the period	500	800	3,300	3,700
Service revenue
Related Party Transaction [Line Items]
Revenue	34,112	36,290	104,356	111,691
Related Party | Aldridge Pite | Service revenue
Related Party Transaction [Line Items]
Revenue	$ 100	$ 100	$ 100	$ 100

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REVENUE - Schedule of Components of Revenue (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Disaggregation of Revenue [Line Items]
Revenue	$ 36,213	$ 38,380	$ 110,909	$ 118,317
Service revenue
Disaggregation of Revenue [Line Items]
Revenue	34,112	36,290	104,356	111,691
Reimbursable expenses
Disaggregation of Revenue [Line Items]
Revenue	2,039	1,957	6,398	6,158
Non-controlling interests
Disaggregation of Revenue [Line Items]
Revenue	$ 62	$ 133	$ 155	$ 468

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REVENUE - Disaggregation of Revenue (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Disaggregation of Revenue [Line Items]
Revenue	$ 36,213	$ 38,380	$ 110,909	$ 118,317
Revenue recognized when services are performed or assets are sold
Disaggregation of Revenue [Line Items]
Revenue	31,487	33,779	96,222	104,480
Revenue related to technology platforms and professional services
Disaggregation of Revenue [Line Items]
Revenue	2,687	2,644	8,289	7,679
Reimbursable expenses revenue
Disaggregation of Revenue [Line Items]
Revenue	2,039	1,957	6,398	6,158
Servicer and Real Estate | Operating Segments
Disaggregation of Revenue [Line Items]
Revenue	28,702	30,866	87,495	91,349
Servicer and Real Estate | Revenue recognized when services are performed or assets are sold | Operating Segments
Disaggregation of Revenue [Line Items]
Revenue	24,223	26,387	73,314	77,947
Servicer and Real Estate | Revenue related to technology platforms and professional services | Operating Segments
Disaggregation of Revenue [Line Items]
Revenue	2,677	2,633	8,265	7,654
Servicer and Real Estate | Reimbursable expenses revenue | Operating Segments
Disaggregation of Revenue [Line Items]
Revenue	1,802	1,846	5,916	5,748
Origination | Operating Segments
Disaggregation of Revenue [Line Items]
Revenue	7,511	7,514	23,414	26,968
Origination | Revenue recognized when services are performed or assets are sold | Operating Segments
Disaggregation of Revenue [Line Items]
Revenue	7,264	7,392	22,908	26,533
Origination | Revenue related to technology platforms and professional services | Operating Segments
Disaggregation of Revenue [Line Items]
Revenue	10	11	24	25
Origination | Reimbursable expenses revenue | Operating Segments
Disaggregation of Revenue [Line Items]
Revenue	$ 237	$ 111	$ 482	$ 410

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COST OF REVENUE - Schedule of Components (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Cost of Revenue [Abstract]
Outside fees and services	$ 13,659	$ 15,319	$ 42,810	$ 42,573
Compensation and benefits	9,090	11,885	28,072	39,231
Technology and telecommunications	3,786	4,656	11,048	14,844
Reimbursable expenses	2,039	1,957	6,398	6,158
Depreciation and amortization	450	570	1,356	1,805
Total	$ 29,024	$ 34,387	$ 89,684	$ 104,611

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COST OF REVENUE - Narrative (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Related Party Transaction [Line Items]
Reimbursable expenses	$ 2,039,000	$ 1,957,000	$ 6,398,000	$ 6,158,000
Accounts payable and accrued expenses	31,032,000		31,032,000		$ 33,507,000
Related Party | Aldridge Pite
Related Party Transaction [Line Items]
Reimbursable expenses	200,000	$ 100,000	600,000	$ 300,000
Accounts payable and accrued expenses	$ 0		$ 0

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SELLING, GENERAL AND ADMINISTRATIVE EXPENSES (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Selling, General and Administrative Expense [Abstract]
Compensation and benefits	$ 4,906	$ 7,388	$ 16,312	$ 19,093
Professional services	1,897	2,584	5,743	8,432
Occupancy related costs	1,266	1,008	3,924	4,049
Amortization of intangible assets	1,352	1,281	3,912	3,849
Marketing costs	440	774	1,381	2,446
Depreciation and amortization	129	284	577	895
Other	744	1,237	3,320	4,291
Total	$ 10,734	$ 14,556	$ 35,169	$ 43,055

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OTHER INCOME (EXPENSE), NET (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Other Income and Expenses [Abstract]
Interest income (expense)	$ 262	$ 212	$ 1,011	$ 318
Other, net	145	247	1,346	1,074
Total	$ 407	$ 459	$ 2,357	$ 1,392

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INCOME TAXES (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Income Tax Disclosure [Abstract]
Income tax (provision) benefit	$ (418)	$ 197	$ (2,586)	$ (2,210)

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LOSS PER SHARE - Schedule of Basic and Diluted Calculation (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Earnings Per Share [Abstract]
Net loss attributable to Altisource	$ (11,342)	$ (14,389)	$ (43,139)	$ (42,074)
Weighted average common shares outstanding, basic (in shares)	22,181	16,087	20,538	16,051
Weighted average common shares outstanding, diluted (in shares)	22,181	16,087	20,538	16,051
Loss per share:
Basic (in usd per share)	$ (0.51)	$ (0.89)	$ (2.10)	$ (2.62)
Diluted (in usd per share)	$ (0.51)	$ (0.89)	$ (2.10)	$ (2.62)

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LOSS PER SHARE - Narrative (Details) - shares shares in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Anti-dilutive securities
Options, restricted shares and restricted share units excluded from the computation of diluted EPS (in shares)	1,500	1,300	1,500	1,300
Weighted average common shares outstanding, basic (in shares)	22,181	16,087	20,538	16,051
Weighted average common shares outstanding, diluted (in shares)	22,181	16,087	20,538	16,051
Employee and Nonemployee Stock Options, Restricted Stock and Restricted Stock Units Whose Impacts are Anti-Dilutive
Anti-dilutive securities
Options, restricted shares and restricted share units excluded from the computation of diluted EPS (in shares)	400	200	300	200
Options Whose Exercise Price is Greater than Average Market Price
Anti-dilutive securities
Options, restricted shares and restricted share units excluded from the computation of diluted EPS (in shares)	200	200	300	200
Options and Restricted Shares Issuable upon Achievement of Certain Market and Performance Criteria That Has Not Been Met
Anti-dilutive securities
Options, restricted shares and restricted share units excluded from the computation of diluted EPS (in shares)	900	900	900	900
Penny Warrant
Anti-dilutive securities
Weighted average common shares outstanding, basic (in shares)	200		100
Weighted average common shares outstanding, diluted (in shares)	200		100

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COMMITMENTS, CONTINGENCIES AND REGULATORY MATTERS - Narrative (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Jun. 30, 2023	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Concentration Risk
Sublease income	$ 0.1	$ 0.1		$ 0.1	$ 0.4
Amounts held in escrow and trust accounts	$ 39.0			$ 39.0		$ 13.2
Minimum
Concentration Risk
Lease term	1 year			1 year
Maximum
Concentration Risk
Lease term	6 years			6 years
Ocwen | Revenue | Customer Concentration Risk
Concentration Risk
Percentage of revenue from largest customer (in percent)	43.00%	45.00%		43.00%	40.00%
Highly Correlated - Ocwen | Revenue | Customer Concentration Risk
Concentration Risk
Percentage of revenue from largest customer (in percent)	6.00%			7.00%
RITM | Revenue | Customer Concentration Risk
Concentration Risk
Percentage of loans serviced and subserviced by largest customer's largest client (in percent)			16.00%
Percentage of delinquent loans Ocwen services (in percent)			0.68
RITM | Revenue | Customer Concentration Risk | Ocwen
Concentration Risk
Percentage of loans serviced and subserviced by largest customer's largest client (in percent)			16.00%
Percentage of delinquent loans Ocwen services (in percent)			0.68

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COMMITMENTS, CONTINGENCIES AND REGULATORY MATTERS - Lease Term and Assumption (Details)	Sep. 30, 2023	Sep. 30, 2022
Commitments and Contingencies Disclosure [Abstract]
Weighted average remaining lease term (in years)	2 years 6 months 3 days	3 years 1 month 24 days
Weighted average discount rate	5.93%	5.66%

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COMMITMENTS, CONTINGENCIES AND REGULATORY MATTERS - Lease Activity (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Lessee, Lease, Description [Line Items]
Cash used in operating activities for amounts included in the measurement of lease liabilities	$ 507	$ 515	$ 1,638	$ 2,022
Short-term (twelve months or less) lease costs	789	402	1,638	827
Selling, general and administrative expense
Lessee, Lease, Description [Line Items]
Operating lease costs:	553	586	1,638	2,217
Cost of revenue
Lessee, Lease, Description [Line Items]
Operating lease costs:	$ 0	$ 0	$ 0	$ 265

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COMMITMENTS, CONTINGENCIES AND REGULATORY MATTERS - Maturities of Operating Lease Liabilities (Details) $ in Thousands	Sep. 30, 2023 USD ($)
Commitments and Contingencies Disclosure [Abstract]
2023	$ 559
2024	1,796
2025	1,322
2026	638
2027	0
Total lease payments	4,315
Less: interest	(540)
Present value of lease liabilities	$ 3,775

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SEGMENT REPORTING - Narrative (Details)	9 Months Ended
	Sep. 30, 2023 segment
Segment Reporting [Abstract]
Number of reporting segments	2

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SEGMENT REPORTING - Summary (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
SEGMENT REPORTING
Revenue	$ 36,213	$ 38,380	$ 110,909	$ 118,317
Cost of revenue	29,024	34,387	89,684	104,611
Gross profit (loss)	7,189	3,993	21,225	13,706
Operating expenses:
Selling, general and administrative expenses	10,734	14,556	35,169	43,055
Income (loss) from operations	(3,545)	(10,563)	(13,944)	(29,349)
Total other income (expense), net	(7,317)	(3,890)	(26,454)	(10,047)
Income (loss) before income taxes and non-controlling interests	(10,862)	(14,453)	(40,398)	(39,396)
Total assets:
Total assets:	162,636		162,636		$ 195,268
Corporate and Others
SEGMENT REPORTING
Revenue	0	0	0	0
Cost of revenue	3,561	4,651	10,986	14,170
Gross profit (loss)	(3,561)	(4,651)	(10,986)	(14,170)
Operating expenses:
Selling, general and administrative expenses	6,971	9,226	22,391	27,089
Income (loss) from operations	(10,532)	(13,877)	(33,377)	(41,259)
Total other income (expense), net	(7,317)	(3,894)	(26,454)	(10,051)
Income (loss) before income taxes and non-controlling interests	(17,849)	(17,771)	(59,831)	(51,310)
Total assets:
Total assets:	54,302		54,302		77,588
Servicer and Real Estate | Operating Segments
SEGMENT REPORTING
Revenue	28,702	30,866	87,495	91,349
Cost of revenue	18,312	22,082	56,075	64,235
Gross profit (loss)	10,390	8,784	31,420	27,114
Operating expenses:
Selling, general and administrative expenses	1,966	2,931	6,905	9,227
Income (loss) from operations	8,424	5,853	24,515	17,887
Total other income (expense), net	0	4	0	4
Income (loss) before income taxes and non-controlling interests	8,424	5,857	24,515	17,891
Total assets:
Total assets:	57,143		57,143		63,696
Origination | Operating Segments
SEGMENT REPORTING
Revenue	7,511	7,514	23,414	26,968
Cost of revenue	7,151	7,654	22,623	26,206
Gross profit (loss)	360	(140)	791	762
Operating expenses:
Selling, general and administrative expenses	1,797	2,399	5,873	6,739
Income (loss) from operations	(1,437)	(2,539)	(5,082)	(5,977)
Total other income (expense), net	0	0	0	0
Income (loss) before income taxes and non-controlling interests	(1,437)	$ (2,539)	(5,082)	$ (5,977)
Total assets:
Total assets:	$ 51,191		$ 51,191		$ 53,984