Slide 1: Blend Labs, Inc. Q4 2023 Earnings Supplemental Slides
Blend Labs, Inc. Q4 2023 Earnings Supplemental Slides MARCH 14, 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: Fourth Quarter 2023 Highlights
Fourth Quarter 2023 Highlights 01 02 03 Revenue of $36.1 Reduced non-GAAP Accelerated million in-line with operating expenses by momentum in our guidance and more than 40% Consumer Banking outperformed mortgage compared to Q4 2022 Suite led by the industry origination as Blend continues on expansion
Slide 4: Continued Progress in a Challenging Market
Continued Progress in a Challenging Market Consumer Banking Suite* Revenue Mortgage Suite* Revenue Key Key 15% YoY increase 3% YoY decrease $7.0 $25.0 $6.0 $6.4 $6.2 $22.3 $5.8 $20.0 $5.6 $20.3 $5.0 $5.2 $17.7 $17.8 $17.2 $15.0 $4.0 In millions $ In millions $ $3.0 $10.0 $2.0 $5.0 $1.0 $0.0 $0.0 Q4
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 $100.0 $91 $80.0 $85 $86 $86 $81 $74 $76 $69 $60.0 $40.0 $20.0 $0.0 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 202
Slide 6: Non-GAAP Gross Margin
Improving our operating performance Software Platform Blend Platform Segment Consolidated Blend Non-GAAP Non-GAAP Non-GAAP 100% Non-GAAP Gross Margin 80% 81% 79% 79% 75% 74% 72% 71% 71% 67% 60% 59% 55% 55% 55% 40% 44% 35% 20% 0% Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q4 2022 Q1 2023 Q2 2023 Q3 2023
Slide 7: Non-GAAP Operating Expenses
Reductions in Operating Expenses by function Showing progress to date on cost efficiency initiatives Research & Development Sales & Marketing General & Administrative Non-GAAP Non-GAAP Non-GAAP $25.0 Non-GAAP Operating Expenses in millions $ $20.0 $20.6 $20.8 $17.1 $16.7 $15.0 $16.0 $15.2 $14.7 $13.
Slide 8: Free Cash Flow
Driving progress $0.0 towards positive cash flows $(10.0) • Q4 2023 marked another $(20.8) Free Cash Flow in millions $ $(20.0) quarter of improvement in cash burn $(25.9) $(30.0) $(34.6) $(40.0) $(47.8) $(47.0) $(50.0) $(60.0) Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Free Cash Flow* * See Note 5 inc
Slide 9: Q1 2024 Guidance
Q1 2024 Guidance Blend Platform Segment Revenue $22M - $24M Blend guidance reflects the following: Title Revenue $10.5M - $11.5M • Blend’s internal forecast of 800,000 - 875,000 total industry mortgage originations in 1Q24 • Maintaining our leading market share in Mortgage while driving Blend Labs i
Slide 10: Appendix
& blend Appendix ©Blend 2024
Slide 11: Revenue Disaggregation
Revenue Disaggregation (in thousands) Three Months Ended December 31, Year Ended December 31, 2023 2022 2023 2022 Blend Platform: YoY change YoY change Mortgage Suite $ 17,203 66 % $ 17,653 70 % (3) % $ 77,574 70 % $ 94,280 78 % (18) % Consumer Banking Suite 6,411 25 % 5,591 22 % 15 % 23,630 22 % 19
Slide 12: GAAP Financial Results
GAAP Financial Results (in thousands) Three Months Ended December 31, Year Ended December 31, 2023 2022 2023 2022 Revenue Software platform $ 23,614 $ 23,244 $ 101,204 $ 113,589 Professional services 2,258 2,034 8,345 7,835 Title 10,232 17,507 47,297 113,777 Total revenue 36,104 42,785 156,846 235,2
Slide 13: GAAP Financial Results (cont.)
GAAP Financial Results (cont.) (in thousands) Three Months Ended December 31, Year Ended December 31, 2023 2022 2023 2022 Net loss per share attributable to Blend Labs, Inc. common stockholders: Basic and diluted $ (0.13) $ (0.35) $ (0.76) $ (3.28) Weighted average shares used in calculating net los
Slide 14: Reconciliation of GAAP to Non-GAAP Measures
Reconciliation of GAAP to Non-GAAP Measures (in thousands) Q4 2023 Q3 2023 Q2 2023 Q1 2023 Q4 2022 Gross Gross Gross Gross Gross Gross Gross Gross Gross Gross Gross Profit Reconciliation Profit Margin Profit Margin Profit Margin Profit Margin Profit Margin Blend Platform Software platform $ 18,553 7
Slide 15: Reconciliation of GAAP to Non-GAAP Measures (cont.)
Reconciliation of GAAP to Non-GAAP Measures (cont.) (in thousands) Three Months Ended December 31, Year Ended December 31, 2023 2022 2023 2022 GAAP operating expenses $ 41,593 $ 89,564 $ 237,357 $ 835,828 Non-GAAP adjustments: Stock-based compensation(1) and amortization of warrant 6,070 27,617 44,8
Slide 16: Reconciliation of GAAP to Non-GAAP Measures (cont.)
Reconciliation of GAAP to Non-GAAP Measures (cont.) (in thousands) Three Months Ended December 31, Year Ended December 31, 2023 2022 2023 2022 GAAP loss from operations $ (21,867) $ (75,157) $ (156,222) $ (746,177) Non-GAAP adjustments: Stock-based compensation(1) and amortization of warrant 6,223 2
Slide 17: Reconciliation of GAAP to Non-GAAP Measures (cont.)
Reconciliation of GAAP to Non-GAAP Measures (cont.) (in thousands) Three Months Ended December 31, Year Ended December 31, 2023 2022 2023 2022 GAAP basic net loss per share $ (0.13) $ (0.35) $ (0.76) $ (3.28) Non-GAAP adjustments: Net loss attributable to noncontrolling interest(11) — — — (0.19) (11
Slide 18: Reconciliation of GAAP to Non-GAAP Measures (cont.)
Reconciliation of GAAP to Non-GAAP Measures (cont.) (in thousands) Q4 2023 Q3 2023 Q2 2023 Q1 2023 Q4 2022 GAAP research and development expense $ 14,417 $ 18,826 $ 22,091 $ 26,257 $ 33,248 Non-GAAP adjustments: Stock-based compensation(1) and amortization of warrant 1,996 4,090 4,829 8,131 12,625 (
Slide 19: Reconciliation of GAAP to Non-GAAP Measures (cont.)
Reconciliation of GAAP to Non-GAAP Measures (cont.) (in thousands) Q4 2023 Q3 2023 Q2 2023 Q1 2023 Q4 2022 Net cash used in operating activities $ (20,691) $ (25,887) $ (34,390) $ (46,653) $ (47,333) Additions to property, equipment, internal-use software and intangible assets (82) (31) (170) (304)
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) Compensat
Slide 21: Share Count Outlook
Share Count Outlook Quarter ended Year ended December 31, 2023 December 31, 2023 Weighted average shares used in calculating net loss per share (basic and diluted) 248,616 245,206 Dilutive securities(1) 10,839 2,501 (1) Dilutive securities represent the number of potential common shares that would h
Slide 22: Key Business Metrics
Key Business Metrics Q1 2022 Q2 2022 Q3 2022 Q4 2022 FY 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023* FY 2023 Mortgage banking transactions 379 350 292 213 1,234 181 241 217 166 805 *Includes estimated transactions from funded loan reports not yet received Q1 2022 Q2 2022 Q3 2022 Q4 2022 FY 2022 Q1 2023 Q2
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 (actua