Slide 1: Blend Labs, Inc. Q3 2023 Earnings Supplemental Slides
Blend Labs, Inc. Q3 2023 Earnings Supplemental Slides NOVEMBER 7, 2023
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: Third Quarter 2023 Highlights
Third Quarter 2023 Highlights Revenue of $40.6 million in-line with revised guidance and outperformed industry volumes 3% expansion in non-GAAP Platform gross margins reflect improved operating leverage despite a challenging market Quarterly cash consumption approximately half of same period prior y
Slide 4: Building and Capturing 30% Mortgage Market Share
Building and Capturing 30% Mortgage Market Share 20.5% 19.8% 20% 17.2% 14.5% 12.4% 10.1% 10% 8.9% 6.5% Market Share 0% 2019 2020 2020 2021 2021 2022 2022 2023 H2 H1 H2 H1 H2 H1 H2 H1 Blend funded loans total market share* * See Note 1 included in Appendix
Slide 5: Blend's Continued Progress in a Challenging Market
Blend’s Continued Progress in a Challenging Market Consumer Banking Suite* Revenue Mortgage Suite* Revenue 18% YoY increase Down 11% YoY despite an estimated 14% decline in industry-wide mortgage loan $6.5M origination volumes $6.2M $30.0M $5.5M $5.8M $5.3M $5.2M $22.9M $22.3M $5.1M $20.0M $4.5M $20
Slide 6: 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 $86 $86 $85 $80 $82 $77 $74 $60 $69 $40 $20 $0 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023** * See Note 4
Slide 7: Executing on the road to profitability
Executing on the road to profitability Software Gross Margins Platform Gross Margins Total Blend Gross Margins Non-GAAP Non-GAAP Non-GAAP 100% 80% 81% 79% 76% 75% 74% 71% 72% 68% 60% 67% 59% 55% 55% 40% 44% 39% 35% 20% 0% Q3 Q4 Q1 Q2 Q3 Q3 Q4 Q1 Q2 Q3 Q3 Q4 Q1 Q2 Q3 2022 2022 2023 2023 2023 2022 202
Slide 8: Reductions in Operating Expenses by function
Reductions in Operating Expenses by function Showing progress to date on cost efficiency initiatives Research & Development Sales & Marketing General & Administrative $30.0 Non-GAAP Non-GAAP Non-GAAP $25.0 Operating Expenses in millions $ $22.1 $20.0 $20.6 $17.6 $21.5 $18.8 $17.1 $16.8 $15.0 $16.0 $
Slide 9: Driving progress towards cash generation
Driving Q3 Q4 Q1 Q2 Q3 progress towards 2022 2022 2023 2023 2023 cash generation $0.0 $(10.0) $(20.0) $(25.9) $(30.0) $(34.6) Free cash flow in millions $ $(40.0) $(47.0) $(47.8) $(50.0) $(50.9) $(60.0) Blend free cash flow* * See Note 5 included in Appendix
Slide 10: Updated Q4 2023 Guidance
Updated Q4 2023 Guidance Blend guidance reflects the Blend Platform Revenue Between $25M and following: $30M ● Revised Mortgage Bankers Association forecast outlook ● Continued expansion in economic value Title Revenue Between $9.5M and per funded loan ● Maintaining focus on our expense base $10.5M
Slide 11: Appendix
Appendix Thank you! ©Blend 2023
Slide 12: Revenue Disaggregation
Revenue Disaggregation (in thousands) 12
Slide 13: Q3 2023 GAAP Financial Results
Q3 2023 GAAP Financial Results (in thousands) 13
Slide 14: Q3 2023 GAAP Financial Results (cont.)
Q3 2023 GAAP Financial Results (cont.) (in thousands) 14
Slide 15: Reconciliation of GAAP to Non-GAAP Measures
Reconciliation of GAAP to Non-GAAP Measures (in thousands) 15
Slide 16: Reconciliation of GAAP to Non-GAAP Measures (cont.)
Reconciliation of GAAP to Non-GAAP Measures (cont.) (in thousands) 16
Slide 17: Reconciliation of GAAP to Non-GAAP Measures (cont.)
Reconciliation of GAAP to Non-GAAP Measures (cont.) (in thousands) 17
Slide 18: Reconciliation of GAAP to Non-GAAP Measures (cont.)
Reconciliation of GAAP to Non-GAAP Measures (cont.) (in thousands) 18
Slide 19: Reconciliation of GAAP to Non-GAAP Measures (cont.)
Reconciliation of GAAP to Non-GAAP Measures (cont.) 19
Slide 20: Reconciliation of GAAP to Non-GAAP Measures (cont.)
Reconciliation of GAAP to Non-GAAP Measures (cont.) (in thousands) 20
Slide 21: Sharecount Outlook
Sharecount Outlook (in thousands) 21
Slide 22: Key Business Metrics - Transaction Volume
Key Business Metrics - Transaction Volume (in thousands) 22
Slide 23: 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 (actual
Slide 24: Footnotes
Footnotes Note 5: We define Free Cash Flow, a non-GAAP financial measure, as net cash provided by (used in) operating activities less purchases of property and equipment. Free cash flow margin is calculated as Free Cash Flow as a percentage of total revenues. Unlevered Free Cash Flow is Free Cash Flow