Slide 1: Blend Labs, Inc. Q3 2024 Earnings Supplemental Slides
Blend Labs, Inc. Q3 2024 Earnings Supplemental Slides NOVEMBER 6, 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: Third Quarter 2024 Highlights
Third Quarter 2024 Highlights 01 02 03 Achieved Non-GAAP Net Revenue of $45.2 million Grew Consumer Banking Operating Income for the exceeded the high end of Suite revenue by more first time our guidance and than 50% year-over-year returned to year-over- and reached a new high year growth of $99 for
Slide 4: Blend Funded Loans as a Percent of HMDA Mortgage Originations
Blend Funded Loans as a percent of HMDA 30.0% Mortgage Originations • Blend grew its share of all HMDA Mortgage Originations in 2023 21.7% 19.7 - 20.2% • Blend will be replacing its presentation of 20.0% 20.5% market share with its percent of HMDA Mortgage Originations moving forward • Percent of HM
Slide 5: Consumer Banking Suite revenue reaches 54% year-over-year growth
Consumer Banking Suite revenue reaches 54% year-over-year growth Consumer Banking Suite* Revenue Mortgage Suite* Revenue Key Key $10.0 $25.0 $9.5 $8.0 $20.0 $21.5 $8.0 $20.3 $18.5 $6.7 $17.2 In millions In millions $6.0 $6.4 $15.0 $6.2 $15.1 $4.0 $10.0 $2.0 $5.0 $0.0 $0.0 Q3 2023 Q4 2023 Q1 2024 Q2
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 $97 $99 $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 202
Slide 7: Non-GAAP Gross Margin
Two consecutive quarters of margin improvement Software Platform Blend Platform Segment Consolidated Blend Non-GAAP Non-GAAP Non-GAAP 80% 80% 79% 79% 79% 76% 75% 71% 71% 71% Non-GAAP Gross Margin 68% 60% 58% 55% 55% 54% 52% 40% 20% 0% Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 Q3 2023 Q4 2023 Q1 2024 Q
Slide 8: Non-GAAP Operating Expenses
Generating leverage through expense rationalization Significantly reduced operating expense year over year Research & Development Sales & Marketing General & Administrative Non-GAAP Non-GAAP Non-GAAP Non-GAAP Operating Expenses in millions $15.0 $13.9 $12.6 $11.8 $11.6 $10.0 $10.9 $10.2 $10.2 $10.3
Slide 9: Free Cash Flow
Free Cash Flow $0.0 $(1.4) $(5.0) • Having achieved non-GAAP $(5.8) operating profitability this quarter, $(10.0) $(8.5) we expect to generate positive Free Cash Flow in millions free cash flow in the near future $(15.0) $(20.0) $(20.8) $(25.0) $(25.9) $(30.0) Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024
Slide 10: Q4 2024 Guidance
Q4 2024 Guidance Blend Platform Segment Revenue $29.0M - $31.0M Blend guidance reflects the following: • Blend’s expectation that U.S. aggregate industry mortgage Title Segment Revenue $10.5M - $11.5M originations will be lower in 4Q24 relative to 3Q24 • Impact of our strategic partnership with Cove
Slide 11: Appendix
& blend Appendix ©Blend 2024
Slide 12: Revenue Disaggregation
Revenue Disaggregation (dollars in thousands) Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023 Blend Platform: YoY change YoY change Mortgage Suite $ 21,546 65 % $ 20,306 71 % 6 % $ 55,078 64 % $ 60,371 72 % (9) % Consumer Banking Suite 9,520 29 % 6,199 22 % 54 %
Slide 13: GAAP Financial Results
GAAP Financial Results (in thousands) Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023 Revenue Software $ 31,066 $ 26,505 $ 79,277 $ 77,590 Professional services 2,038 2,137 6,363 6,087 Title 12,080 11,949 34,971 37,065 Total revenue 45,184 40,591 120,611 120,742
Slide 14: GAAP Financial Results (cont.)
GAAP Financial Results (cont.) (in thousands except per share amounts) Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023 Net loss per share attributable to Blend Labs, Inc. common stockholders: Basic and diluted $ (0.03) $ (0.18) $ (0.21) $ (0.63) Weighted average
Slide 15: Reconciliation of GAAP to Non-GAAP Measures
Reconciliation of GAAP to Non-GAAP Measures (dollars in thousands) Q3 2024 Q2 2024 Q1 2024 Q4 2023 Q3 2023 Gross Gross Gross Gross Gross Gross Profit Reconciliation Gross Profit Margin Gross Profit Margin Gross Profit Margin Gross Profit Margin Gross Profit Margin Blend Platform GAAP Software platfo
Slide 16: Reconciliation of GAAP to Non-GAAP Measures (cont.)
Reconciliation of GAAP to Non-GAAP Measures (cont.) (in thousands) Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023 GAAP operating expenses $ 39,315 $ 58,261 $ 113,648 $ 195,764 Non-GAAP adjustments: Stock-based compensation(1) 6,566 8,815 21,631 38,819 (2) Workfo
Slide 17: Reconciliation of GAAP to Non-GAAP Measures (cont.)
Reconciliation of GAAP to Non-GAAP Measures (cont.) (in thousands) Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023 GAAP loss from operations $ (13,319) $ (36,198) $ (47,833) $ (134,355) Non-GAAP adjustments: Stock-based compensation(1) 6,671 9,042 22,013 39,798 (
Slide 18: 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 September 30, Nine Months Ended September 30, 2024 2023 2024 2023 GAAP net loss per share $ (0.03) $ (0.18) $ (0.21) $ (0.63) Non-GAAP adjustments: Stock-based compensation(1) 0.02 0.03 0.
Slide 19: Reconciliation of GAAP to Non-GAAP Measures (cont.)
Reconciliation of GAAP to Non-GAAP Measures (cont.) (in thousands) Q3 2024 Q2 2024 Q1 2024 Q4 2023 Q3 2023 GAAP research and development expense $ 10,127 $ 12,916 $ 14,183 $ 14,417 $ 18,826 Non-GAAP adjustments: Stock-based compensation(1) 2,169 2,567 3,352 1,996 4,090 (4) Compensation realignment c
Slide 20: Reconciliation of GAAP to Non-GAAP Measures (cont.)
Reconciliation of GAAP to Non-GAAP Measures (cont.) (dollars in thousands) Q3 2024 Q2 2024 Q1 2024 Q4 2023 Q3 2023 Net cash used in operating activities $ 2,076 $ (6,666) $ (3,868) $ (20,691) $ (25,887) Additions to property, equipment and internal-use software development costs (3,432) (1,867) (1,9
Slide 21: 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) Workforce
Slide 22: Share Count Outlook
Share Count Outlook Quarter ended September 30, 2024 Weighted average shares of outstanding common stock 254,910 As of September 30, Outstanding potentially dilutive securities 2024 Outstanding stock options 17,943 Non-plan Co-Founder and Head of Blend options 26,057 Unvested restricted stock units
Slide 23: Footnotes
Footnotes Note 1: Blend Funded Loans as a Percent of HMDA Mortgage Originations is used by management to demonstrate the Company’s coverage of actual and relevant reported transactions in the mortgage origination industry. The Home Mortgage Disclosure Act (HMDA) requires financial institutions to ma