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ASPS Nasdaq· Altisource Portfolio Solutions S.A.
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ASPS Nasdaq· Altisource Portfolio Solutions S.A.
Earnings report Q3 2023

ASPS reports decrease in service revenue for the third quarter of 2023 compared to the same period in 2022.

Segments of revenue

ASPS recognized service revenue of $26.9 million for the third quarter of 2023, which represents a 7% decrease compared to the third quarter of 2022. For the nine months ended September 30, 2023, service revenue amounted to $81.6 million, reflecting a 5% decrease compared to the same period in 2022. Additionally, reimbursable expense revenue for the nine months ended September 30, 2023, increased by 3% to $5.9 million compared to the same period in 2022.

Strengths

Despite the decrease in service revenue, ASPS demonstrated an increase in gross profit as a percentage of service revenue for both the three and nine months ended September 30, 2023, compared to the same periods in 2022. This increase can be attributed to margin expansion in the Servicer and Real Estate segment and the Origination segment, resulting from efficiency initiatives and lower corporate costs as a percentage of revenue. The company's focus on cost savings measures and efficiency initiatives has positively impacted its gross profit margins.

Challenges

The decline in service revenue for the nine months ended September 30, 2023, was primarily driven by the exit of a low-margin customer care business in the fourth quarter of 2022 and a decline in a customer's propensity to order services in two of ASPS's lower margin businesses within the Solutions business. This decline in revenue from certain segments poses a challenge for the company's overall revenue growth.

Noteworthy

ASPS experienced a decrease in selling, general, and administrative expenses (SG&A) for the three and nine months ended September 30, 2023, compared to the same periods in 2022. This decrease in SG&A expenses can be attributed to lower compensation and benefits, marketing costs, and occupancy-related costs. The company's focus on cost savings initiatives has resulted in improved cost efficiency.

Summary

ASPS reported a decrease in service revenue for the third quarter of 2023 compared to the same period in 2022. However, the company demonstrated an increase in gross profit as a percentage of service revenue, primarily driven by margin expansion and cost savings measures. ASPS faced challenges due to the decline in revenue from certain segments, but its focus on cost savings initiatives has positively impacted its financial performance.

Source documents

Form 10-Q  filed on Oct 26, 2023
45 pages scanned

Reference data

Company financials Q3 revenue 36.2M
Analyst estimates Q3 EPS beat by 29.41%
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