Good day, and thank you for standing by. Welcome to the Altisource Portfolio Solutions third quarter 2024 earnings 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 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 first speaker today, Michelle Esterman, Chief Financial Officer. Please go ahead. 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. Financial projections and scenarios are expressly qualified as forward-looking statements and, as with other forward-looking statements, should not be unduly relied upon. In addition to the usual uncertainty associated with forward-looking statements, the continuing impacts of government and servicer responses to the COVID-19 pandemic, governmental fiscal policies, and current economic conditions 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 sections in the company's earnings release and quarterly slides, as well as the risk factors contained in our 2023 Form 10-K, describing some 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 Bill Shepro, our Chairman and Chief Executive Officer. I'll now turn the call over to Bill. Thanks, Michelle, and good morning. I'll begin on slide four. We had another solid quarter, demonstrating our resilience in a challenging market. We grew service revenue both sequentially and year- over- year, despite a 15% decline in average serious delinquency rates, a 7% decline in foreclosure initiations, and a 14% decline in foreclosure sales through August this year compared to the same period last year. For the quarter, we generated $38.2 million in service revenue, a $4 million, or 11.8% increase over the same period last year. This growth primarily reflects sales wins and represents our strongest quarterly service revenue performance in 12 quarters. Compared to last quarter, service revenue grew by $1.3 million, or 3.5%, primarily from ramping sales wins. We generated $3.6 million of Adjusted EBITDA for the quarter, a $2.8 million improvement over the third quarter 2023, and an $800,000 decline compared to last quarter. The Adjusted EBITDA results compared to last year benefited from higher service revenue, lower corporate costs, and margin expansion in the origination segment, partially offset by approximately $1.2 million of higher SG&A costs in the servicer and real estate segment from legacy indemnity claims and bad debt expense. Adjusted EBITDA results compared to the second quarter were impacted by approximately $800,000 of higher SG&A costs in the servicer and real estate segment from legacy indemnity claims and bad debt expense, partially offset by margin expansion in the origination segment. Adjusted EBITDA in each period was also impacted by a change in revenue mix from fewer homes sold in our higher-margin Hubzu business and growth in our lower-margin field services and recently launched renovation businesses. We anticipate the margins in the renovation business will improve as it scales. We ended the quarter with cash and cash equivalents of $28.3 million. Slide five provides additional information on our total company financial performance. The year-to-date trends are positive. Service revenue is $7.5 million higher than last year, and adjusted EBITDA is $13.8 million higher than last year. Adjusted EBITDA margins improved to 11.3%, compared to negative 1.1% for the same period in 2023. The improvement in service revenue compared to last year was primarily driven by sales wins and price increases for certain services. The adjusted EBITDA improvement and adjusted EBITDA margin expansion compared to last year was primarily driven by higher service revenue, business segment margin expansion, and lower corporate costs, partially offset by $1.8 million of higher SG&A expenses and service revenue mix that I just discussed. Looking to the fourth quarter and full- year, we anticipate strong service revenue and adjusted EBITDA growth over 2023 as we ramp sales wins on our more efficient and lower cost base. Despite the anticipated strong improvement compared to last year, we are forecasting that we are going to achieve close to the low end of our guidance. This is primarily driven by three factors. One, our guidance assumed a modest increase in foreclosure starts and sales compared to 2023, while actual starts and sales have been lower year to date, negatively impacting our higher margin Hubzu, trustee, and title businesses. Two, although we are rapidly growing our renovation business, our guidance assumed an earlier launch and ramp of this business. Three, legacy indemnity claims and bad debt expense were higher through the third quarter than we anticipated. Slide six provides highlights for our servicer and real estate segment. For the quarter, we grew service revenue by 4.7% sequentially and 13% over last year. Despite this service revenue growth, Adjusted EBITDA of $9.9 million was roughly flat to last year and 10.6% lower than the second quarter of this year. This reflects the higher SG&A expenses and change in revenue mix, including from the rapid growth in our recently launched renovation business that I discussed earlier. Since the late April launch of the renovation business, we received over seventy referrals at an average renovation cost of close to $100,000 per property. Based upon September service revenue, the renovation business is now one of our larger business lines just six months after product launch. We anticipate service revenue and earnings from this business will ramp as the year progresses. We are also onboarding another renovation customer and anticipate receiving our first referrals from this customer in the first quarter. We believe the renovation business should be a very strong contributor to Altisource's service revenue and EBITDA in the months and years to come. Slide seven provides a summary of our servicer and real estate sales wins and pipeline. For the quarter, we won new business that we estimate will generate $1.7 million in annual revenue once fully ramped. We also generated $5.2 million of service revenue in the quarter, or $20.8 million of service revenue on an annualized basis from 2023 and 2024 sales wins. We ended the quarter with a servicer and real estate segment weighted average sales pipeline of $23.2 million of annual revenue on a stabilized basis, most of which we forecast will contribute over the next couple of years. The increase in the sales pipeline compared to last quarter primarily reflects the addition of earlier stage opportunities. We are pleased with the financial performance of the servicer and real estate segment, given the anemic default market. Slides eight and nine provide historical serious delinquency rates and residential foreclosure initiations and sales, which are lower than 2019 pre-pandemic levels and last year. The average serious delinquency rate through August of this year is 1.2%, which is 15% lower than the same periods in 2019 and 2023, negatively impacting foreclosure starts and sales. Foreclosure starts and sales are 34% and 54% lower than the same period in 2019, and 7% and 14% lower than the same period in 2023. Should the market normalize or delinquency rates rise, we anticipate that our default related solutions would experience strong growth. Moving to our origination segment on slide 10. We continue to make progress improving the performance of this segment. Compared to the third quarter of last year, Adjusted EBITDA improved by $1.4 million on $500,000 of service revenue growth, primarily from cost savings and efficiency initiatives. Compared to the second quarter, Adjusted EBITDA improved by $400,000 on similar service revenue, primarily from the reversal of bad debt expense and lower professional services expense. The origination segment's gross profit, gross profit margins, Adjusted EBITDA and Adjusted EBITDA margins all improved relative to prior year and last quarter. Slide 11 provides a summary of our origination segment sales, wins and pipeline. On an annualized, stabilized basis, we won an estimated $4.9 million in new business in the third quarter. Our weighted average sales pipeline at the end of the quarter was $12.6 million. During the quarter, we signed agreements with two homeowner insurance customers and nine credit customers. Turning to our corporate segment in slide 12, we are maintaining strong cost discipline. Third quarter corporate Adjusted EBITDA loss of $7.2 million was $1.5 million, or 17% better than the third quarter of 2023 and roughly flat to the second quarter of this year. The lower corporate Adjusted EBITDA loss compared to last year reflects our cost savings and efficiency initiatives. Moving to slide 13. I'm pleased with our third quarter and year-to-date performance, despite the decline in serious delinquency rates, foreclosure starts, and foreclosure sales over the same period. Service revenue for the first nine months of this year is $7.5 million, or 7% higher than the same period last year, and Adjusted EBITDA is $13.8 million higher. With the recent launch and ongoing ramp of our renovation business, and sales wins, we are diversifying our revenue streams and customer base and positioning the company for further growth. I'll now open up the call for questions. Operator? Thank you. At this time, we will conduct the 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 Q&A roster. First question comes from the line of Raj Sharma of B. Riley. Your line is now open. Hi, good morning. Thank you for taking my questions. Good continued progress on the numbers. I wanted to understand, you had talked a lot about the pre-foreclosure work and the loss mitigation work, the earlier part of the foreclosure process, that you guys would do more of that work. Is that when you say that the renovations business is included in that pre-foreclosure work, and what percentage of total revenues is that now as opposed to last year? Then I have a follow-on question. Hey, good morning, Raj. Hi. Let me take a step back. I think what we're seeing is, overall, the market is not performing as well as we had expected it to perform this year. I think we modeled in our guidance a very modest increase in foreclosure starts and sales, and what we're seeing in reality is that foreclosure starts and sales are actually significantly lower than this time, you know, for the year to date this year compared to last year. It didn't have as much of an impact on us earlier in the year because we already had the inventory in place, but as you got to the third quarter, the inventory, particularly the REO inventory from Ocwen, is lower than where it was, and that's impacting the number of units we've sold. Sales prices have held up, and that had a pretty meaningful impact on us in the third quarter. We are having a success in adding new clients to some of the earlier stage processes. We've added two or three new trustee customers, and we've also done a decent job adding more REO customers. Some came last year, and another one is beginning to ramp up their referrals to us in the third quarter. So I think where we're sitting right now from an inventory perspective is our Ocwen REO inventory is down compared to this period last year on REO, but our foreclosure inventory for both Ocwen as well as non-Ocwen customers is increasing, you know, a decent amount compared to this time last year, and our REO inventory with non-Ocwen customers is also increasing. So sales is helping us offset some of the market, but the market is having an impact overall on the business, and it impacted our quarter quite meaningfully. Great. Could you talk a little bit about this renovations business, again, just to remind us what it entails, and is it becoming the largest part of your business? Sure. So in the fourth quarter of last year, we signed an agreement to provide renovation services for one of the largest owners of REO assets in the U.S. I think we got our first referrals in April or late April of 2024, and I think probably through yesterday, we're probably well into 75-80 referrals that we've received so far that are revenue generating. And each home that we renovate, we believe, will generate close to $100,000 of revenue. That's roughly the renovation cost. And it takes time once you receive a referral to submit your bid for the work, get the bid approved, and then start the work. And then once we start the work, we're paid interim payments as we go. And so we're pretty excited about the business. It's ramped quite nicely. Michelle, correct me if I'm wrong, but I think we did about $1.5 million in revenue in the third quarter, up from just $200,000 in the second quarter. Is that right? That's right $1.5 million. And we anticipate that's going to ramp quite nicely going into the fourth quarter. And, as we mentioned in my prepared remarks, we are just signing up another renovation customer that we think will start sending referrals in the first quarter, and that's a business that we're going to very actively market to others going into the end of this year and into next year. Got it. And then just you, you mentioned the $1.8 million higher SG&A. Can you talk about that again and also the legacy indemnity, the indemnity claim, and the bad debt expense, please? Yeah, I think there are three things. If we compare it, maybe not to last year, but to what we anticipated was going to happen for this year, I think the impact from the market and perhaps a little bit of a slower ramp of some of our default-related services in the quarter cost us about $2 million of EBITDA, and that's primarily impacting Hubzu, the trustee, and the title business, you know, on the default side. I think the slower ramp of the renovation business compared to our plan, I think we started a couple of months later than we expected. That probably cost us about $500,000 of EBITDA. And then the higher SG&A, which is comprised of both professional services and bad debt, that's another about $350,000. In total, it probably cost us about $3 million in the quarter compared to what we expected to do. The bad debt, there was one customer in particular. We think it's ultimately going to be collectible. It's a small, smaller customer that expected to pay us and then didn't. We think we'll get paid in the subsequent quarters. Not exactly sure when, but we think it's collectible. From a legal fees perspective, there's some legacy matters going back several years, and we just happened to have some higher legal and indemnification expenses this quarter than we expected. Got it. Thank you. And then just lastly, on the originations business, do you see a continued pickup here? Could you provide some color on how you see that business with the lowering of rates and and perhaps higher refis or? Yeah, sure. So I think we saw in late summer, you know, early into September, there was a rally in rates and origination volumes picked up. That very quickly came, I think, to a halt as some of the economic news was positive and the mortgage rates went back up to close to 7%, I think. And so I think there was a little bit of a rally there. I think a lot of the pickup there went to the loan servicers that have a recapture platform. And so we didn't see much of an impact from that over the summer. I think our revenue was roughly flat from the second to third quarter. We are making really good progress adding more clients to the credit business. I think we added eight or nine new clients, sales wins or signed contracts over the quarter, and we added two more insurance customers over the quarter. So I think we're just gonna continue to execute on that strategy, where we launch new products and then work to increase adoption as we do a good job helping our members make more money through these products. And so I think that's that's gonna be our strategy, and the market will do what it does, and we're gonna keep continuing to add products and continuing to increase the adoption of members buying those products from us. Got it. Thank you. I'll take it offline. Great. Thanks, Raj. Thank you. As a reminder, to ask a question, you will need to press star one one. One moment for our next question. Our next question comes from the line of Mike Grondahl of Northland. Please go ahead. Hey, guys, thanks. Hey, Bill, in thinking about the renovation business, any rough base case, what revenues could look like in 2025? And then any insight on, I don't know, Adjusted EBITDA margin in the business, or is this kind of a cost-plus business? And then a follow-up, but go ahead. Great. Yeah, so you know, we're still going through our planning process for next year, and so we haven't finalized that. I do think, you know, look, if you get 15 referrals a month on an average renovation cost of $100,000, you're looking at $1.5 million of revenue a month. If you get 30 referrals a month from that client, you're looking at $3 million a month of revenue on a stabilized basis, once your inflows and outflows are roughly the same. And so I think it's a tough business to model. You know, we get some guidance from our customer, but it's only guidance, and it doesn't necessarily turn out the way they expected. So we're very optimistic it's gonna be a meaningful contributor next year, but it's hard to estimate exactly where it's gonna be at this point. You know, from a margin perspective, if you think about construction managers, you know, in the space, you know, they're making after their corporate costs, which typically they're paid for separately, you know, 10%-15% type margins, you know, maybe as high as 20% for some of them. And so we hope we'll be on the higher end of that side. Got it, and then just two follow-ups. Do you have the capacity for... I mean, 15 a month seems like you do if you already got 75-80 referrals, but 15-30, you have the capacity to handle that. And then maybe what's your risk if you take a referral, you know, build out? What if it costs more? What if there's overage? You know, could you kind of address what ASPS risk are in this business? Sure. You know, we think we've got a pretty good handle on the risks and are able to mitigate those, Mike, but if you think about the risks, you know, we submit a bid, it's approved, and if we underestimate what it's gonna cost for the work that was approved, you know, we take that risk of overage. The flip side, though, is if you underestimate the cost because you open up a wall and you found mold, that's a change order, and you can submit that to a client, and then you get paid for that change order, so I think we do a very good job on the upfront work, understanding the scope and what it's gonna cost us to complete the work and to make an attractive margin on that work, that for the bid we've submitted. If it turns out there's items that we could not have expected or there's change orders or additional work requirements from our clients, then we can, we can charge for that additional work. I think we've got a good handle on it and can manage the risk. Got it. And the capacity? Yeah, good, thank you. From a capacity perspective, we feel very good as well. We have. We're operating primarily today in six states with a few stragglers in some other states. We have regional managers in each of those states that are overseeing the programs and a pipeline of additional regional managers should we need them in those states or new markets. We feel very good about capacity. Got it. And then a lot of the- Okay ... back office work, we've got the infrastructure in place. Okay. Thank you. Thanks, Mike. Thank you. As a reminder, to ask a question, please press star one one. One moment for our next question. Our next question comes from the line of Raj Sharma of B. Riley. Once more, please go ahead. ... Hi. I just wanted to hop on again and ask your views on the foreclosure market and the delinquencies. I mean, are you seeing any change in the fundamental upside potential of this business or how it's progressing? Or do you think it has impacted the run rate, if we ever got back to the pre-COVID level of foreclosures? Has anything changed in your outlook? Yeah. For the- No, look, I mean, I, I don't think any of us would ever have guessed that the the level of foreclosure initiations and sales would be where they are today, post coming out of the pandemic. I do think there are some. We didn't talk about it in my prepared remarks. I do think there's some early signs. I mean, yesterday, a report came out that on a seasonally adjusted basis, annualized home sales look like they're gonna be at a 29-year low this year. I think homes available for sale, the inventory's increased compared to last year by over 20%. This usually, you know, is a, you know, good leading indicator to prices coming down. And if you think about those more recent cohorts of originations, that have, you know, they may be impacted by home prices coming down, less equity, and then interest rates are staying stubbornly high. And so that could drive delinquency rates higher. I think as we talked about in the prepared remarks, you know, the average serious delinquency rate actually has come down this year, compared to last year and compared to pre-pandemic. I don't think this lasts forever, and I do think the market ultimately turns, but we need to continue to make sure we're in a position to benefit from it turns, when it turns, but also work to diversify our revenue as we wait. So I think overall, Mike, you know, we haven't seen it turn yet. In fact, it's gone a little bit the other direction. But I think, you know, everything is cyclical, and in time, the default market will get more back to normal. It just hasn't happened yet. In terms of the pre-foreclosure work and the loss mitigation work, are you doing more of it now, and has your share gone up versus last year? Yeah, I think, you know, we've won. I think on the trustee side, we and on the title side, we've won, you know, three or so new customers, you know, decent-sized loan servicers. We've also grabbed some more market share from our existing customers on some of the pre-foreclosure work. That's helped us offset some of the market decline. And we continue to have, you know, as you saw in our sales slide, a decent pipeline, you know, on a weighted average basis of prospects. But look, there's not, you know, it's kind of hand-to-hand combat from a sales perspective. We're a really strong performer. We're doing well on the scorecards, and we think that's gonna help us grab share with existing clients and win new business, but there's just not a ton of new business out there to grab right now. Got it. Thank you for taking my questions again. Thank you. Thanks, Raj. Thank you. I'm showing no further questions at this time. I would now like to turn it back to Bill Shepro for closing remarks. Great. Thanks, operator. We're pleased with our third quarter financial performance and believe we're well positioned for twenty twenty-four and beyond. Thanks for joining today.