Good day, and thank you for standing by. Welcome to the Altisource first quarter 2023 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising you your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Michelle Esterman, Chief Financial Officer. Michelle, the floor is yours. Thank you, operator. We first want to remind you that the earnings release, Form 10-Q, and quarterly slides are available on our website at www.altisource.com. These provide additional information investors may find useful. Our remarks today include forward-looking statements, which involve a number of risks and uncertainties that could cause actual results to differ. In addition to the usual uncertainty associated with forward-looking statements, the continuing impacts of government and servicer responses to the COVID-19 pandemic, together with the current economic environment, make it extremely difficult to predict the future state of the economy and the industries in which we operate, as well as the potential impact on Altisource. Please review the forward-looking statements section in the company's earnings release and quarterly slides, as well as the risk factors contained in our 2022 Form 10-K, which describe factors that may lead to different results. We undertake no obligation to update statements, financial scenarios, and projections previously provided or provided herein as a result of a change in circumstances, new information, or future events. During this call, we will present both GAAP and non-GAAP financial measures. In our earnings release and quarterly slides, you will find additional disclosures regarding the non-GAAP measures. A reconciliation of GAAP to non-GAAP measures is included in the appendix to the quarterly slides. Joining me for today's call is Will Shepro, our Chairman and Chief Executive Officer. I'll now turn the call over to Will. Thanks, Michelle. Good morning. We will begin with slide four w e are off to a strong start in 2023 as we execute on our plan to recover from the impact of the COVID-19 pandemic. Our first quarter financial performance was better than planned with $1.5 million of adjusted EBITDA and gross profit margins of 23%, representing a $5.6 million improvement in adjusted EBITDA and an 800 basis point improvement in gross profit margins over the first quarter of 2022. These results were primarily driven by revenue growth in our pre-foreclosure solutions in our servicer and real estate segment from the ongoing recovery of the default market, company-wide cost saving measures we took in 2022 and early 2023, and $1.3 million in other income related to an India tax refund. Our counter-cyclical servicer and real estate segment generated both sequential and year-over-year revenue and adjusted EBITDA growth as we continued to benefit from the restart of the default market, product mix, and cost savings initiatives. In both of our segments, we maintained a robust sales pipeline and won and onboarded significant new business. In February 2023, we also strengthened our balance sheet by raising equity, extending the maturity date of our term loan and revolver, and reducing the principal balance of the term loan. We ended the quarter with $43 million in cash. Turning to slide five and our servicer and real estate segment. In the first quarter, we grew service revenue by 10% to $29.8 million and adjusted EBITDA by 63% to $11.1 million compared to the first quarter of last year. We also improved our adjusted EBITDA margins to 37% from 25% over the same period. Our revenue growth reflects the ongoing recovery of the default market, which initially benefits our pre-foreclosure solutions. Adjusted EBITDA and margin improvements reflect scale and cost reduction measures, partially offset by revenue mix with higher revenue growth in our lower margin field services business. Moving to slide six in our servicer and real estate sales pipeline and wins. As you can see from our strong weighted average sales pipeline and wins, we are not waiting for the default market to recover to drive growth, and I continue to be excited about our progress. During the quarter, we won new business that we estimate will generate $14.4 million in annualized revenue on a stabilized basis. We are in the early stage of launching our biggest win from the quarter, which is providing construction risk mitigation services for one of the largest lenders in the U.S. We began generating revenue from this win in February and anticipate monthly revenue and referrals to grow as the year progresses. During the quarter, we also began receiving foreclosure auction referrals from an expanded relationship with a mid-sized bank customer and grew our Equator Asset Management Technologies customer base. For 2023, we anticipate our counter-cyclical servicer and real estate segment to grow revenue and adjusted EBITDA with higher margins compared to 2022. This reflects sales wins, a continuing recovery of the default market, and scale. Turning to the macroeconomic environment on slide seven. There are several indicators that consumers are becoming increasingly financially stressed, which could be precursors to a rise in mortgage delinquency rates. Inflation, which reached a 40-year high in June 2022, has eroded the American consumer's purchasing power. To fight inflation, the Fed rapidly raised the federal funds rate, driving interest rate on mortgages to almost double from the pandemic lows. This has reduced home affordability to historical lows and is beginning to drive down home values. At the same time, average personal savings rates, which were 26% in March 2021, have declined to 4.6% in February 2023. Against this backdrop, Fitch Ratings reports that 60-plus day auto delinquencies were 5.93% in January 2023, near the record high of 5.96% in October 1996. Auto delinquencies are often considered a bellwether to a deteriorating economy. On the student loan front, borrowers are slated to resume federal student loan payments in a few months. Outstanding credit card debt hit a record high in December 2022 and continued to climb at a robust pace in January. Credit card delinquency rates rose sharply throughout 2022, and two large credit card lenders recently reported rising credit card delinquency rates in February compared to January. While it's difficult to predict the future state of the economy, Altisource should benefit if a deteriorating economic environment results in higher mortgage delinquency rates. Turning to slide eight in our origination segment. In a difficult origination environment, we perform well with 17% revenue growth compared to the fourth quarter. This represents our first quarter of sequential revenue growth in our origination segment in eight quarters and reflects the progress we are making in onboarding customer wins from our newer Lenders One products. Adjusted EBITDA was flat to the fourth quarter, reflecting first quarter revenue growth offset by the fourth quarter 2022 benefit from the bonus accrual reversal. Our origination segment's year-over-year revenue decline was better than the market-wide decline in origination volume for the same period. As you can see on the bottom left of this slide, this reflects significantly better than market performance from the Lenders One business as we gain traction with our solutions that are designed to help our members save money. Our performance was partially offset by our other origination businesses, which were largely in line with the market. Slide nine provides a summary of our origination segment sales pipeline and wins. We closed $21.6 million in estimated sales wins in 2022 and an additional $3.4 million during the first quarter. From these wins, we recognized approximately $2.3 million in revenue in the first quarter or $9.4 million of revenue on an annualized basis. Given our momentum, we anticipate sequential revenue growth in the second quarter. For the full year, we anticipate the origination segment to generate year-over-year revenue and adjusted EBITDA growth based upon the progress of our late 2021 and early 2022 product launches, converting sales wins to revenue, and 2022 and early 2023 cost reductions. This is despite the MBA's forecast for 2023 origination volume to decline by 20% compared to 2022. Turning to our corporate segment, we continue to maintain cost discipline with respect to corporate costs. For the year, we expect corporate costs excluding interest expense and one-time debt amendment costs to be largely flat compared to 2022. To conclude, we are encouraged by our first quarter results that demonstrate our operating leverage as we grow revenue. We believe we are well positioned in 2023 to return to year-over-year revenue growth and generate positive adjusted EBITDA. In our countercyclical servicer and real estate segment, we anticipate revenue and adjusted EBITDA growth from market tailwinds, sales pipeline and wins, and scale. In our origination business, we are maintaining a strong sales pipeline and making good progress converting sales wins to revenue. Our sales progress and efficiency initiatives should help return our origination segment to revenue growth and improved adjusted EBITDA for the year in what is forecasted to be a very difficult origination market. The stronger performance of our segments, combined with cost discipline in corporate and the steps we took to strengthen our balance sheet, should help us return to a growth company and create substantial value for our stakeholders. I'll now open up the call for questions. Operator? Thank you. At this time, we will conduct a question-and-answer session. As a reminder, to ask a question, you will need to press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the roster. Our first question comes from Michael Grondahl with Northland Securities. Mike, you have the floor. Hey, Will and Michelle. Good morning. Hey, Will. My first question, you know, in the deck, there's a couple things that are always interesting and we track. You know, my question to you is Hubzu inventory, non-GSE delinquent loans at Ocwen, and maybe service revenue per non-GSE loan, which one do you think is the best leading indicator for your, you know, default business? Yeah. Hey, good morning, Mike. I think, you know, two of those go hand in hand, which is Hubzu inventory and revenue per delinquent loan. I mean, clearly, if you look back, I think, on that slide we have in the back of the deck, Michelle, maybe you can reference the page number. If you look back to the first quarter of 2020, which was really the last quarter pre-pandemic, and really only January and February was pre-pandemic, Hubzu generated, I think, something like $22 million of revenue compared to, I'm going from memory here, around maybe a little over $8 million in the first quarter of this year. Yep. As the market comes back, where all these new foreclosures that started last year and are continuing, as those work through the process and get to the end, and then you manage the REO for a period of time before you sell it, that's when we should start to see revenue per delinquent loan going up from those Hubzu sales and also Hubzu inventory increasing. Got it. Got it. Slide- Sorry. I was just gonna say, Hubzu inventory seems to be maybe slightly better leading indicator than service revenue. Service revenue should tick up as you do more pre-foreclosure work. Ultimately, you need the inventory in Hubzu, I don't know, to kind of push that number a lot higher. Is that fair? Yeah. I mean, Hubzu is a big, you know, it's a higher margin product. As that comes back, you know, if you just think about if we had an extra, you know, $12 million-$14 million of revenue in a very high margin product in the first quarter, you know, we'd be having a very different conversation right now. We're excited for the market to be getting back to normal. Given, you know, the economic conditions I described in my prepared remarks, potentially, the delinquency rates may rise to something above where they were pre-pandemic. Ultimately, we benefit, you know, as those new foreclosures work themselves through the process, become REO, and then ultimately get sold. I think on slide 13, what you can see, Mike, if you look at revenue per delinquent loan for 2022, you know, it was around $950. If you look at the first quarter and annualize it, you'd be just shy of $1200. I think the scenarios that we gave you a few, you know, a quarter or two ago showed it going to $1700. You can see that we're making progress as these initiations work their way through. You know, there's more to come. Yeah. I mean, today we're primarily focused, as I mentioned on the call, on the prepared remarks, on pre-foreclosure services because we haven't seen that uptick yet in REO. We are seeing the uptick in our field services business and our title business and our trustee business. You know, all the services that we provide earlier in the process. Right. Good, good. Okay. Hey, on 2Q, I think you said you expect to see some sequential revenue growth. I don't know, I don't wanna get ahead of ourselves. A little bit of growth in 2Q, but sorta similar to Q1, is that fair? Yeah, I think, We're currently anticipating that Q2, from a revenue perspective, will be somewhat similar to Q1. The mix of those, of the services may change a little bit, which could impact the margins to some degree. We do expect revenue to be similar. Got it. Just lastly, I think in the deck it's got, like, 18.4 million shares. I don't know if that includes all the shares from the recent offering. Maybe what's a good fully diluted share count now to use going forward that includes everything from the offering? Yeah. I think if you look at our Q, on the face of it says that we had 20.8 million shares outstanding at April 21. 20.8. Okay, great. Hey, thanks, guys. Thanks, Mike. Please stand by for our next question. Our next question comes from Raj Sharma of B. Riley & Company. Raj, you have the floor. Hi. Thank you for taking my question. Could you guys comment on any impact the Fannie Mae, Freddie Mac, extension, you know, the 40-year refinancing that's being offered to lenders? Efforts like these, are they expected to kind of delay the process or have an impact? Also, just to follow on, I mean, recently there was a dip in the nationwide mortgage delinquency rate with serious delinquencies, coming down. Do you have any thoughts on that, why that could have happened, and if that's indicative, if that means anything, or is that a blip? Yeah. I'll take the second part of your question first, Raj. Good morning. On delinquency rates, normally what you see in the first quarter, particularly with tax refunds, is that the delinquency rates tick down some. I think given, you know, the economic environment and all the conditions I described, you know, we suspect it's a blip and there continues to be, you know, significant pressure and potentially more pressure on American consumers. With respect to your the first part of your question, I think that was an FHA program where the government's essentially extended some of the COVID loan modification programs that were in place. I think, you know, a lot depends, look, on what happens with unemployment and your ability to pay bills. Basically what the government's doing with interest rates so much higher, you can't do a streamlined refinance. It's very difficult to do a streamlined refinance of an FHA loan because the borrower's rate would go up, not down in today's market. The government's looking for tools to keep the borrower's payments steady, but they have to have the ability to make the payment. If the economic environment continues to put stress on consumers and they're unable to make that payment, you know, maybe it's a slightly lower payment 'cause it's extended out over a longer period of time, it won't have that much of an impact. I think a lot's gonna ultimately depend on what happens with the overall economy, what happens with student loan payments. I think there's something like 26 million or 28 million, 28 million adults that are saving over $200 a month in student loan payments, while there's been a moratorium on collecting on student loans. That is scheduled to restart those payments in a few months. All these things have the potential to continue to put pressure on consumers. Clearly on the margin, Raj, that new FHA program, you know, incrementally will help borrowers. A lot ultimately depends on what happens with the overall economy. Got it. Great. Thank you for that. That makes sense. Just last question on the cost base. Are we to think that the current cost base is to continue, in terms of the corporate overhead and the other costs, continue through the year? Any more cost-cutting that is forthcoming? Yeah. In the, in the first quarter, we made some changes in our origination segment, so we'll get the full quarter benefit of that, beginning in the second quarter. In, in corporate as a whole, you know, I think we talked about in the prepared remarks, largely expecting corporate costs to be flat, maybe down a little bit compared to last year, excluding interest expense and the one-time costs associated with amending our debt. Got it. Thank you. I'll take my questions offline. Thank you. Great. Thank you, Raj. Thank you. I would now like to turn it back over to Will Shepro for closing remarks. Thank you, operator. Thank you for listening to the call. We appreciate your support. Have a good day. Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.