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SEGMENT REPORTING
 12 Months Ended
Dec. 31, 2022
Segment Reporting [Abstract]  
SEGMENT REPORTING SEGMENT REPORTING
Overview
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.
Effective January 1, 2022, our reportable segments changed as a result of a change in the way our Chief Executive Officer (our chief operating decision maker) manages our businesses, allocates resources and evaluates performance, and the related changes in our internal organization. We now report our operations through two reportable segments: Servicer and Real Estate and Origination. In addition, we report Corporate and Others separately. Prior to the January 1, 2022 change in reportable segments, the Company operated with one reportable segment (total Company). Prior year comparable period segment disclosures have been restated to conform to the current year presentation.
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 Pointillist (sold on December 1, 2021), 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.
Revenue
Descriptions of our principal revenue generating activities are as follows:
Servicer and Real Estate
•For property preservation and inspection services and payment management technologies, we recognize transactional revenue when the service is provided.
•For vendor management transactions, we recognize revenue over the period during which we perform the services.
•For loan disbursement review services, we recognize revenue over the period during which we perform the processing services with full recognition upon completion of the disbursements.
•For foreclosure trustee services, we recognize revenue over the period during which we perform the related services, with full recognition upon completion and/or recording the related foreclosure deed. We use judgment to determine the period over which we recognize revenue for certain of these services.
•For the real estate auction platform, real estate auction and real estate brokerage services, we recognize revenue on a net basis (i.e., the commission on the sale) as we perform services as an agent without assuming the risks and rewards of ownership of the asset and the commission earned on the sale is a fixed percentage or amount.
•For SaaS based technology to manage REO, we recognize revenue over the estimated average number of months the REO are on the platform or ratably over the contract period. We generally recognize revenue for professional services as services are provided.
•For loan servicing technologies, we recognized revenue based on the number of loans on the system. We generally recognize revenue from professional services over the contract period.
•Reimbursable expenses revenue related to property preservation and inspection services, real estate sales title services and foreclosure trustee services is included in revenue with an equal amount recognized in cost of revenue. These amounts are recognized on a gross basis, principally because generally we have control over selection of vendors and the vendor relationships are with us, rather than with our customers.
Origination
•For the majority of the services we provide, we recognize transactional revenue when the service is provided. We recognize membership fees from Lender One members ratably over the term of membership.
•For vendor management oversight software-as-a-service (“SaaS”), we recognize revenue over the period during which we perform the services.
Corporate and Others
•For our customer journey analytics platform (sold on December 1, 2021), we recognized revenue primarily based on subscription fees. We recognized revenue associated with implementation services and maintenance services ratably over the contract term.
During the years ended December 31, 2022 and 2021, Ocwen was our largest customer. Revenue from Ocwen as a percentage of segment and consolidated revenue was as follows:
20222021
Servicer and Real Estate53 %49 %
Origination— %— %
Corporate and Others— %— %
Consolidated revenue41 %31 %
Disaggregation of Revenue
Disaggregation of total revenues by segment and major source was as follows for the years ended December 31:
2022
(in thousands)Revenue recognized when services are performed or assets are soldRevenue related to technology platforms and professional servicesReimbursable expenses revenueTotal revenue
Servicer and Real Estate$101,716 $10,416 $7,529 $119,661 
Originations32,915 34 510 33,459 
For the year ended December 31, 2022$134,631 $10,450 $8,039 $153,120 
2021
(in thousands)Revenue recognized when services are performed or assets are soldRevenue related to technology platforms and professional servicesReimbursable expenses revenueTotal revenue
Servicer and Real Estate$98,610 $9,180 $5,846 $113,636 
Originations59,245 42 709 59,996 
Corporate and Others— 4,821 — 4,821 
For the year ended December 31, 2021$157,855 $14,043 $6,555 $178,453 
Financial Information
Financial information for our segments is as follows:
 
For the year ended December 31, 2022
(in thousands)Servicer and Real EstateOriginationCorporate and OthersConsolidated Altisource
Revenue$119,661 $33,459 $— $153,120 
Cost of revenue81,148 32,052 18,105 131,305 
Gross profit (loss) 38,513 1,407 (18,105)21,815 
Selling, general and administrative expenses12,057 8,825 33,873 54,755 
Loss on sale of businesses— — 242 242 
Income (loss) from operations26,456 (7,418)(52,220)(33,182)
Total other income (expense), net4 — (14,389)(14,385)
Income (loss) before income taxes and
non-controlling interests
$26,460 $(7,418)$(66,609)$(47,567)
 
For the year ended December 31, 2021
(in thousands)Servicer and Real EstateOriginationCorporate and OthersConsolidated Altisource
Revenue$113,636 $59,996 $4,821 $178,453 
Cost of revenue87,427 49,012 34,927 171,366 
Gross profit (loss) 26,209 10,984 (30,106)7,087 
Selling, general and administrative expenses12,557 5,702 48,790 67,049 
Gain on sale of businesses— — (88,930)(88,930)
Income from operations13,652 5,282 10,034 28,968 
Total other income (expense), net8 — (13,691)(13,683)
Income (loss) before income taxes and
non-controlling interests
$13,660 $5,282 $(3,657)$15,285 
Total Assets
Total assets for our segments are as follows:
(in thousands)Servicer and Real EstateOriginationCorporate and OthersConsolidated Altisource
Total assets:
December 31, 2022$63,696 $53,984 $77,325 $195,005 
December 31, 202161,832 59,741 136,235 257,808 
Goodwill
Changes in goodwill during the years ended December 31, 2022 and 2021 are summarized below:
(in thousands)Servicer and Real EstateOriginationCorporate and OthersTotal
Balance as of January 1, 2021$30,681 $25,279 $17,889 $73,849 
Write-off (1)
— — (17,889)(17,889)
Balance as of December 31, 2021 and 2022
$30,681 $25,279 $— $55,960 
______________________________________
(1)    During 2021, the Company sold its equity interest in Pointillist (See Note 4 for additional information) which had $17.9 million of goodwill attributed to it. The amount of goodwill attributable to Pointillist was based on the relative fair values of Pointillist and the Company excluding Pointillist. Pointillist was determined to be a business within the Company’s existing reporting unit.
We determined that each reportable segment represents a reporting unit. Goodwill was allocated to each reporting unit based on the relative fair value of each of our reporting units.