Blend Labs, Inc. · NYSE:BLND
Blend Labs — Q2 2024 Earnings Presentation
22 slides from Blend Labs's earnings presentation, Aug 8, 2024
Slide 1: Blend Labs, Inc. Q2 2024 Earnings Supplemental Slides
Blend Labs, Inc. Q2 2024 Earnings Supplemental Slides AUGUST 8, 2024
Slide 2: Forward-Looking Statements and Non-GAAP Financial Measures
Forward-Looking Statements and Non-GAAP Financial Measures This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which statements involve substantial risks
Slide 3: Second Quarter 2024 Highlights
Second Quarter 2024 Highlights 01 02 03 Consumer Banking Suite Mortgage Suite Outperformed the top revenue grew 37% versus Economic Value Per end of our guidance for Q2 2023 due to the Funded Loan* reached a Non-GAAP Net successful deployment new high of $97 driven Operating Loss, meeting and ramp o
Slide 4: Consumer Banking Suite revenue exceeds 37% year-over-year growth
Consumer Banking Suite revenue exceeds 37% year-over-year growth Consumer Banking Suite* Revenue Mortgage Suite* Revenue Key Key $9.0 $25.0 $7.5 $8.0 $22.3 $20.0 $20.3 $6.7 $18.5 $6.0 $6.2 $6.4 $17.2 $5.8 In millions In millions $15.0 $15.1 $4.5 $10.0 $3.0 $5.0 $1.5 $0.0 $0.0 Q2 2023 Q3 2023 Q4 2023
Slide 5: Mortgage Suite economic value per funded loan
Mortgage Suite economic value per funded loan* Growing usage of add-on products and gains in core mortgage have driven year-over-year expansion in economic value per funded loan $100 $97 $91 $92 $80 $85 $86 $86 $81 $74 $76 $69 $60 $40 $20 $0 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4
Slide 6: Non-GAAP Gross Margin
Improved margins versus last quarter Software Platform Blend Platform Segment Consolidated Blend Non-GAAP Non-GAAP Non-GAAP 80% 81% 79% 79% 79% 76% 74% 71% 71% 71% Non-GAAP Gross Margin 68% 60% 55% 55% 55% 54% 52% 40% 20% 0% Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2
Slide 7: Operating Expense reduction progress by function
Operating Expense reduction progress by function Showing progress to date on cost efficiency initiatives Research & Development Sales & Marketing General & Administrative Non-GAAP Non-GAAP Non-GAAP Non-GAAP Operating Expenses in millions $16.0 $15.0 $13.9 $13.8 $12.6 $11.8 $11.8 $11.6 $10.0 $10.9 $1
Slide 8: Free Cash Flow and Capital Allocation
Free Cash Flow and Capital Allocation $0.0 $(1.3) $(5.0) $(5.8) $(6.9) Blend’s Board of Directors authorized $(10.0) $(8.5) our first share repurchase program of up to $25 million in August 2024 Free Cash Flow in millions $(15.0) $(14.4) $(20.0) $(18.6) $(20.8) $(25.0) $(25.9) $(27.4) $(30.0) $(35.0
Slide 9: Q3 2024 Guidance
Q3 2024 Guidance Blend Platform Segment Revenue $28.0M - $31.0M Blend guidance reflects the following: Title Segment Revenue $11.5M - $12.5M • Blend’s internal forecast of U.S. aggregate industry mortgage originations in 3Q24 • Maintaining our leading market share in Mortgage while driving Blend Lab
Slide 10: Appendix
& blend Appendix ©Blend 2024
Slide 11: Revenue Disaggregation
Revenue Disaggregation (dollars in thousands) Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Blend Platform: YoY change YoY change Mortgage Suite $ 18,454 64 % $ 22,271 73 % (17) % $ 33,532 64 % $ 40,066 73 % (16) % Consumer Banking Suite 8,021 28 % 5,844 19 % 37 % 14,679
Slide 12: GAAP Financial Results
GAAP Financial Results (in thousands) Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Revenue Software $ 26,475 $ 28,115 $ 48,211 $ 51,085 Professional services 2,221 2,216 4,325 3,950 Title 11,784 12,484 22,891 25,116 Total revenue 40,480 42,815 75,427 80,151 Cost of reven
Slide 13: GAAP Financial Results (cont.)
GAAP Financial Results (cont.) (in thousands except per share amounts) Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Net loss per share attributable to Blend Labs, Inc. common stockholders: Basic and diluted $ (0.09) $ (0.18) $ (0.18) $ (0.45) Weighted average shares used
Slide 14: Reconciliation of GAAP to Non-GAAP Measures
Reconciliation of GAAP to Non-GAAP Measures (dollars in thousands) Q2 2024 Q1 2024 Q4 2023 Q3 2023 Q2 2023 Gross Gross Gross Gross Gross Gross Profit Reconciliation Gross Profit Gross Profit Gross Profit Gross Profit Gross Profit Margin Margin Margin Margin Margin Blend Platform Software platform $
Slide 15: Reconciliation of GAAP to Non-GAAP Measures (cont.)
Reconciliation of GAAP to Non-GAAP Measures (cont.) (in thousands) Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 GAAP operating expenses $ 35,017 $ 60,214 $ 74,333 $ 137,503 Non-GAAP adjustments: Stock-based compensation(1) 7,148 14,100 15,065 30,004 (3) Compensation real
Slide 16: Reconciliation of GAAP to Non-GAAP Measures (cont.)
Reconciliation of GAAP to Non-GAAP Measures (cont.) (in thousands) Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 GAAP loss from operations $ (13,339) $ (36,721) $ (34,514) $ (98,157) Non-GAAP adjustments: Stock-based compensation(1) 7,271 14,364 15,342 30,756 Compensation
Slide 17: Reconciliation of GAAP to Non-GAAP Measures (cont.)
Reconciliation of GAAP to Non-GAAP Measures (cont.) (in thousands, except per share amounts) Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 GAAP basic net loss per share $ (0.09) $ (0.18) $ (0.18) $ (0.45) Non-GAAP adjustments: Net loss attributable to noncontrolling inter
Slide 18: Reconciliation of GAAP to Non-GAAP Measures (cont.)
Reconciliation of GAAP to Non-GAAP Measures (cont.) (in thousands) Q2 2024 Q1 2024 Q4 2023 Q3 2023 Q2 2023 GAAP research and development expense $ 12,916 $ 14,183 $ 14,417 $ 18,826 $ 22,091 Non-GAAP adjustments: Stock-based compensation(1) 2,567 3,352 1,996 4,090 4,829 (3) Compensation realignment c
Slide 19: Reconciliation of GAAP to Non-GAAP Measures (cont.)
Reconciliation of GAAP to Non-GAAP Measures (cont.) (dollars in thousands) Q2 2024 Q1 2024 Q4 2023 Q3 2023 Q2 2023 Net cash used in operating activities $ (6,666) $ (3,868) $ (20,691) $ (25,887) $ (34,390) Additions to property, equipment, internal-use software development costs and intangible asset
Slide 20: Reconciliation of GAAP to Non-GAAP Measures (cont.)
Reconciliation of GAAP to Non-GAAP Measures (cont.) Notes: (1) Stock-based compensation represents the non-cash grant date fair value of stock-based instruments utilized to incentivize our employees, for which the expense is recognized over the applicable vesting or performance period. (2) Loss on t
Slide 21: Share Count Outlook
Share Count Outlook (in thousands) Quarter ended June 30, 2024 Weighted average shares used in calculating net loss per share (basic and diluted) 253,069 Dilutive securities(1) 17,459 (1) Dilutive securities represent the number of potential common shares that would have been included in the computa
Slide 22: Footnotes
Footnotes Note 1: Market Share is management’s calculation of Blend’s mortgage market share for the specified period based on funded loan volumes from signed customers. Funded volume is calculated as (i) the number of mortgage banking funded loans processed on the Blend Platform in the period (actua