Blend Labs, Inc. · NYSE:BLND
Blend Labs — Q1 2024 Earnings Presentation
23 slides from Blend Labs's earnings presentation, May 8, 2024
Slide 1: Blend Labs, Inc. Q1 2024 Earnings Supplemental Slides
Blend Labs, Inc. Q1 2024 Earnings Supplemental Slides MAY 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: First Quarter 2024 Highlights
First Quarter 2024 Highlights 01 02 03 Received $150 million Outperformed the top Significantly improved investment from Haveli end of our guidance for our cash burn as Investments, marking Non-GAAP Net unlevered free cash the beginning of a new Operating Loss, meeting flow was $(1.3) million chapte
Slide 4: Building and Capturing Market Share
Building and Capturing Market Share 30.0% Based on a survey of estimates of total mortgage originations during 2023, Blend’s market share remained above 20.0% 21.2% 20.4% 20.2% 20% for the year Market Share 16.9% 14.3% 12.5% 10.0% 10.0% 8.5% 0.0% 2020 2020 2021 2021 2022 2022 2023 2023 H1 H2 H1 H2 H
Slide 5: Continued Growth in Consumer Banking Amidst Mortgage Market Headwinds
Continued Growth in Consumer Banking Amidst Mortgage Market Headwinds Consumer Banking Suite* Revenue Mortgage Suite* Revenue Key Key $7.0 $25.0 $6.7 $6.0 $6.4 $6.2 $22.3 $5.8 $20.0 $20.3 $5.0 $5.2 $17.8 $17.2 In millions In millions $15.0 $4.0 $15.1 $3.0 $10.0 $2.0 $5.0 $1.0 $0.0 $0.0 Q1 2023 Q2 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 $91 $92 $80 $85 $86 $86 $81 $76 $74 $69 $60 $40 $20 $0 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 202
Slide 7: Non-GAAP Gross Margin
Improved margins versus last year Software Platform Blend Platform Segment Consolidated Blend Non-GAAP Non-GAAP Non-GAAP 80% 81% 79% 79% 75% 76% 74% Non-GAAP Gross Margin 71% 71% 67% 68% 60% 55% 55% 55% 52% 40% 44% 20% 0% Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 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 Non-GAAP Non-GAAP Non-GAAP $20.0 Non-GAAP Operating Expenses in millions $17.1 $15.0 $16.0 $15.2 $14.7 $13.9 $13.8 $12.6 $11.8 $11.8
Slide 9: Driving progress towards positive cash flows
Driving progress towards positive $0.0 cash flows $(1.3) $(5.8) $(10.0) Q1 2024 marked a significant improvement in quarterly cash burn $(14.4) Free Cash Flow in millions $(20.0) $(18.6) $(20.8) $(25.9) $(27.4) $(30.0) $(34.6) $(40.0) $(40.0) $(47.0) $(50.0) Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 F
Slide 10: Q2 2024 Guidance
Q2 2024 Guidance Blend Platform Segment Revenue $27M - $30M Blend guidance reflects the following: Title Revenue $10.5M - $11.5M • Blend’s internal forecast of 935,000 - 1,025,000 U.S. aggregate industry mortgage originations in 2Q24 • Maintaining our leading market Blend Labs share in Mortgage whil
Slide 11: Appendix
& blend Appendix ©Blend 2024
Slide 12: Revenue Disaggregation
Revenue Disaggregation (dollars in thousands) Three Months Ended March 31, 2024 2023 Blend Platform: YoY change Mortgage Suite $ 15,078 63 % $ 17,795 72 % (15) % Consumer Banking Suite 6,658 28 % 5,175 21 % 29 % Total Software Platform 21,736 91 % 22,970 93 % (5) % Professional Services 2,104 9% 1,7
Slide 13: Q1 2024 GAAP Financial Results
Q1 2024 GAAP Financial Results (in thousands) Three Months Ended March 31, 2024 2023 Revenue Software $ 21,736 $ 22,970 Professional services 2,104 1,734 Title 11,107 12,632 Total revenue 34,947 37,336 Cost of revenue Software 5,175 5,803 Professional services 2,623 2,806 Title 9,008 12,874 Total co
Slide 14: GAAP Financial Results (cont.)
GAAP Financial Results (cont.) (in thousands except per share amounts) Three Months Ended March 31, 2024 2023 Net loss per share attributable to Blend Labs, Inc. common stockholders: Basic and diluted $ (0.09) $ (0.28) Weighted average shares used in calculating net loss per share: Basic and diluted
Slide 15: Reconciliation of GAAP to Non-GAAP Measures
Reconciliation of GAAP to Non-GAAP Measures (dollars in thousands) Q1 2024 Q4 2023 Q3 2023 Q2 2023 Q1 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 16: Reconciliation of GAAP to Non-GAAP Measures (cont.)
Reconciliation of GAAP to Non-GAAP Measures (cont.) (in thousands) Three Months Ended March 31, 2024 2023 GAAP operating expenses $ 39,316 $ 77,289 Non-GAAP adjustments: Stock-based compensation(1) 7,917 15,904 (2) Compensation realignment costs 901 1,096 (3) Restructuring 983 12,783 (4) Transaction
Slide 17: Reconciliation of GAAP to Non-GAAP Measures (cont.)
Reconciliation of GAAP to Non-GAAP Measures (cont.) (in thousands) Three Months Ended March 31, 2024 2023 GAAP loss from operations $ (21,175) $ (61,436) Non-GAAP adjustments: Stock-based compensation(1) 8,071 16,392 Compensation realignment costs(2) 901 1,096 (3) Restructuring 983 12,783 (4) Transa
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 March 31, 2024 2023 GAAP basic net loss per share $ (0.09) $ (0.28) Non-GAAP adjustments: Net loss attributable to noncontrolling interest(7) — — (7) Accretion of redeemable noncontrolling
Slide 19: Reconciliation of GAAP to Non-GAAP Measures (cont.)
Reconciliation of GAAP to Non-GAAP Measures (cont.) (in thousands) Q1 2024 Q4 2023 Q3 2023 Q2 2023 Q1 2023 GAAP research and development expense $ 14,183 $ 14,417 $ 18,826 $ 22,091 $ 26,257 Non-GAAP adjustments: Stock-based compensation(1) 3,352 1,996 4,090 4,829 8,131 (2) Compensation realignment c
Slide 20: Reconciliation of GAAP to Non-GAAP Measures (cont.)
Reconciliation of GAAP to Non-GAAP Measures (cont.) (dollars in thousands) Q1 2024 Q4 2023 Q3 2023 Q2 2023 Q1 2023 Net cash used in operating activities $ (3,868) $ (20,691) $ (25,887) $ (34,390) $ (46,653) Additions to property, equipment, internal-use software development costs and intangible asse
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) Compensat
Slide 22: Share Count Outlook
Share Count Outlook (in thousands) Quarter ended March 31, 2024 Weighted average shares used in calculating net loss per share (basic and diluted) 250,932 Dilutive securities(1) 19,017 (1) Dilutive securities represent the number of potential common shares that would have been included in the comput
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