Cleaves phosphorylated sphingoid bases (PSBs, such as sphingosine-1-phosphate, into fatty aldehydes and phosphoethanolamine. Elevates stress-induced ceramide production and apoptosis. Required for global lipid homeostasis in liver and cholesterol homeostasis in fibroblasts. Involved in the regulation of pro-inflammatory response and neutrophil trafficking. Modulates neuronal autophagy via phosphoethanolamine production which regulates accumulation of aggregate-prone proteins such as APP (By similarity. Seems to play a role in establishing neuronal contact sites and axonal maintenance (By similarity.