Good day, and thank you for standing by. Welcome to the Altisource Portfolio Solutions first quarter 2026 earnings call. At this time, all participants are in a listen only mode. After the speaker's presentation, there'll be a question and answer session. To ask a question during the session, you'll need to press star and one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one again. Please be advised that this conference is being recorded. I would now like to introduce your speaker for today, Michelle Esterman, Chief Financial Officer. Please go ahead.
Thank you, operator. We first want to remind you that the earnings release 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 include a number of risks and uncertainties that could cause actual results to differ. 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 2025 Form 10-K. These describe 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 will now turn the call over to Bill.
Thanks, Michelle Esterman, and good morning. I'll begin on slide four. We're off to a strong start this year. For the quarter, we grew service revenue and pre-tax GAAP earnings compared to the first quarter of 2025 from sales wins and lower debt-related interest and transaction costs. More importantly, we are seeing strength in both business segments. The origination segment's first quarter service revenue and EBITDA growth compared to last year accelerated from sales wins and a stronger origination market. The servicer and real estate segment is positioned extremely well, with Hubzu inventory at 17,200 homes as of the end of the first quarter and exciting first quarter sales wins in the title and foreclosure trustee businesses. We anticipate this momentum to continue as the year progresses. Turning to slide five.
For the first quarter, we generated service revenue of $45.1 million, a 10% increase over the first quarter of 2025. This was driven by 71% growth in service revenue in our Origination segment, primarily from sales wins in our Lenders One business. Origination segment revenue growth is partially offset by a 5% revenue decline in our Servicer and Real Estate segment, primarily from a one-time 2025 pricing adjustment benefit in our foreclosure trustee business. Total company adjusted EBITDA declined by $800,000 due to revenue mix, including higher revenue in the lower margin Origination segment, lower revenue in the Servicer and Real Estate segment, and modestly higher corporate costs. Moving to slide six. The company generated first quarter pre-tax GAAP income of $400,000 compared to a $4.5 million loss in the first quarter of 2025.
This improvement was primarily attributable to lower interest expense and debt exchange transaction expenses incurred last year. Net cash provided by operating activities was $4.5 million, a $9.4 million improvement compared to the first quarter of 2025. We ended the quarter with $30.3 million in unrestricted cash. Turning to slide seven and our counter-cyclical servicer and real estate segment. First quarter 2026 service revenue of $31.4 million decreased 5% from the same quarter last year. The revenue decline was primarily attributable to a one-time 2025 pricing adjustment benefit in our foreclosure trustee business and lower volume in our renovation business. First quarter servicer and real estate segment adjusted EBITDA of $10.8 million decreased by 10% compared to the same quarter last year, primarily from the lower revenue in the foreclosure trustee business that I just discussed.
Slide eight summarizes our servicer and real estate segment sales wins and pipeline. For the quarter, we won an estimated $12.4 million in annualized stabilized service revenue wins. Two of the larger first quarter wins were in our higher margin foreclosure trustee and title businesses. Toward the end of the first quarter, we began receiving referrals from this new business. We anticipate referral growth and earnings from these wins to accelerate as the year progresses. We ended the quarter with a servicer and real estate segment total weighted average sales pipeline of $11.7 million on a stabilized basis. Turning to slide nine and our growing Hubzu inventory.
As mentioned in our March call, we recently onboarded two larger Hubzu wins. Driven by these and other recent customer wins, total Hubzu inventory has more than tripled since September 30th and stands at 17,200 assets as of March 31st and over 18,800 assets as of earlier this week. We anticipate revenue from these wins to grow during the year as REO and foreclosure referrals proceed to sale. We are forecasting full-year service revenue growth in our servicer and real estate segment from the significant growth in Hubzu inventory and recent sales wins. Our forecast assumes that our revenue growth is partially offset by lower Onity and Rithm revenue based on our estimated timing for both the service transfer of nity servicing to Rithm and the transition of the cooperative brokerage agreement REO assets from Altisource to Rithm. Moving to slide 10 in our origination segment.
We are continuing to demonstrate strong service revenue and adjusted EBITDA growth. First quarter 2026 service revenue of $13.7 million was 71% higher than the first quarter of 2025. Adjusted EBITDA more than doubled to $1.2 million in the first quarter of 2026 from $500,000 in the same period last year. The acceleration of the origination segment's revenue and EBITDA growth in the first quarter of 2026 reflects sales wins and a stronger market. Slide 11 outlines our origination segment sales wins and pipeline. During the quarter, we secured an estimated $4.7 million in wins, primarily in Lenders One, and ended the quarter with an estimated $17.2 million weighted average sales pipeline. Based upon the sales wins, sales pipeline, and forecasted market conditions, we are anticipating strong full-year service revenue growth in our origination segment. Turning to slide 12 and our corporate segment.
First quarter 2026 corporate adjusted EBITDA loss was $7.6 million, reflecting a modest increase compared to the first quarter of 2025. Looking forward, we believe corporate costs should remain relatively stable as revenue grows. Moving to slide 13 and the business environment. We continue to operate in an environment with both low delinquency rates and origination volume, though the market trends appear to be changing. 90+ day mortgage delinquency rates increased from 1.45% in December 2025 to 1.6% in February. As of February 28, 2026, there were 612,000 late-stage delinquent mortgages, a 9% increase since December. This marks the highest level of late-stage delinquent mortgages since July 2022. Foreclosure starts for January and February of 2026 were 5% higher than the same period in 2025, and foreclosure sales were 27% higher, although both remain significantly below pre-pandemic levels.
For the origination market, first quarter 2026 mortgage origination unit volume increased 42% compared to the first quarter 2025, driven by a 91% increase in refinance volume and a 19% increase in purchase volume. The MBA projects 5.7 million loans will be originated in 2026, representing 4% growth over 2025. To conclude, I'm pleased with the first quarter performance and how we are positioned for the year. In addition to 10% service revenue growth and exciting sales wins that should support future growth, we improved pre-tax GAAP earnings by $4.9 million and cash provided by operating activities by $9.4 million compared to the first quarter of 2025. As the year progresses, we believe Onity and Rithm will continue to become a smaller percentage of our revenue base, and total company service revenue and EBITDA will be more balanced between our segments.
I am proud of what the team has accomplished this quarter and am excited about our future. I'll now open up the call for questions. Operator?
Thank you. As a reminder, if you would like to ask a question, please press star one one on your telephone. You'll hear the automated message advising your hand is raised. We also ask that you please wait for your name and company to be announced before proceeding with your question. One moment while we compile the Q&A roster. Our first question today will be coming from the line of Timothy D'Agostino of B. Riley Securities. Your line is open.
Thank you so much. Congrats on the quarter. My first question is on the sales pipeline in the Servicer and Real Estate segment. I guess just understanding the quarter-over-quarter move a little bit more from $19.3 million to $11.7 million. It'd be great to just kind of understand why it decreased. I know earlier in the call you had mentioned it's at this stabilized level. Just understanding that language and what we should expect from the pipeline going forward throughout the year. Thank you.
Yeah. Hey, Tim. Good morning, and we appreciate you covering Altisource. The difference in the pipeline reflects the $10 or $11 million in sales wins I discussed in the call. It's just simply partially offset by some increases in the sales pipeline. We'll be working very diligently to rebuild that pipeline, but the change reflects the fact that we had over $10 million, I think it was $11 million in sales wins.
in the first quarter.
Okay, great. Understood on that. Thank you. Just as a second one, net cash provided by operating activities, as you highlighted earlier in the call, at $4.5 million, significant increase year-over-year. I guess, not really asking for guidance, but as we look to the second quarter, third quarter, fourth quarter, should we expect this to be positive or are there items later in the year that maybe could turn this back negative? Just trying to get an understanding if net cash is going to continue to be positive throughout the year, as that's a pretty important and great milestone you all hit in the first quarter.
Michelle, do you want to take that?
Yeah, I'm happy to. Yes, I think we guided earlier in the year to positive cash flow, operating cash flow for the year. You do see fluctuations from quarter to quarter depending on revenue growth, et cetera. Yes, we do anticipate positive cash flow for the year.
Okay, great. On that positive cash flow, is that more supported by the Servicer and Real Estate segment or Origination segment? I know Hubzu is one of the higher margin businesses, but just getting a better understanding of maybe the driver of the net cash provided. Thank you.
Sure. You can see in our slides what our EBITDA is broken out between Servicer and Real Estate and Origination. They both have positive EBITDA. You do have larger EBITDA in Servicer and Real Estate, so more of the cash flow does come from that segment. As Bill mentioned, we expect that to become more balanced as we move through time.
Okay, great. Thank you so much. I'll jump back in the queue.
Thank you. As a reminder, if you would like to ask a question, please press star one one on your telephone. There are no more questions in the queue. I would like to turn the call back over to Bill for closing remarks. Please go ahead.
Thanks, operator. We're very pleased with the first quarter performance. We're particularly pleased that our Hubzu inventory is standing at roughly 18,800 assets as of earlier this week, and we think we're set up very well for continued growth during the year. Thanks for joining us today.
This does conclude today's conference call. You may all disconnect.