Altisource's second quarter answered the question every TickerFile reader should be asking about this company: is the revenue line recovering, and is the recovery durable? The answer on the top line is yes, decisively. Service revenue grew 19% year over year to $48.7 million and 8% sequentially, with the Origination segment up 62% on a stronger origination market and the Servicer and Real Estate segment up 8% on sales wins. Total revenue rose 17% to $50.7 million. That is the second consecutive quarter of double-digit organic growth, and it landed against a base that was itself a recovery quarter a year ago.
The answer underneath is harder. Adjusted EBITDA, the metric Altisource actually values internally, fell 18% to $4.4 million. Adjusted EBITDA margin compressed from 13% to 9% - the company itself attributed the drop to a non-recurring benefit in the second quarter of 2025 (a legacy-matter settlement in the Servicer and Real Estate segment) and to higher costs supporting revenue growth. GAAP diluted loss per share of $(0.05) looks tiny next to the prior-year $1.48, but the prior-year quarter carried an $18.5 million tax benefit from the reversal of reserves on uncertain India tax positions - a one-off windfall that distorted the comparison. On a normalized basis, Altisource earned $0.17 of adjusted diluted EPS, down from $0.19 a year ago, and $0.35 for the first half versus $0.22 in 2025.
The story this quarter is the gap between the operating performance (revenue growth) and the operating leverage (margin compression), plus the company's own Project 45 target: $45 million in run-rate Adjusted EBITDA by the fourth quarter of 2028, or roughly a 2.5-year build from the current annualized run-rate of $17.7 million. That is a 2.5x lift in run-rate earnings the market is being asked to underwrite at a $65.6 million market capitalization. The shares closed at $5.74 on August 13, 2026, down 60% from a 52-week high of $14.36 set on October 7, 2025, with the company sitting on $145.8 million of net debt against stockholders' deficit of $109.3 million. This is a leveraged equity, with all the implications that carries, and a turnaround story the market is currently pricing for partial credit.