Blend Labs, Inc. · NYSE:BLND
Blend Labs — Investor Day (September 2023)
138 slides from Blend Labs's investor day presentation, Sep 26, 2023
Slide 1: Welcome to Blend’s 2023 Investor Day
Welcome to Blend’s 2023 Investor Day September 26, 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: Blend’s Investor Day Agenda
Blend’s Investor Day Agenda Blend’s Vision 9:00 am Nima Ghamsari | Head of Blend Product Strategy and Innovation 9:30 am Erik Wrobel | Head of Product Product Demos 10:00 am Erik Wrobel & Nima Ghamsari 10:30 am Break Unlocking Customer Value 11:00 am Sebastian Joll | Head of Revenue Execution and Op
Slide 4: Head of Blend
Investor Day 2023 | §& blend Head of Blend Nima Ghamsari
Slide 5: Blend’s Investor Day Presenters
Blend’s Investor Day Presenters Nima Ghamsari Erik Wrobel Sebastian Joll Amir Jafari Founder & Head of Blend Head of Product Head of Revenue Head of Finance & Administration 5
Slide 6: Execution since IPO
Execution since IPO 2021 Q3 2023 Q3E Mortgage 12% $66 ~20% ~$86 Growth Mortgage Market Mortgage Mortgage Market Mortgage Share1 Economic Value per Loan2 Share1 Economic Value per Loan2 Consumer Banking $4M 90 ~$6M 114 Progress Consumer Banking Consumer Banking Consumer Banking Consumer Banking Reven
Slide 7: Forum Customer Conference: Innovating for Growth
Forum Customer Conference: Innovating for Growth Attended by more than Unveiled latest product Demonstrated solutions to 70 key customers across mortgage roadmap and innovations customer challenges through and consumer lending hands-on product demos 7
Slide 8: Our vision is to bring simplicity and transparency to financial products
Our vision is to bring simplicity and transparency to financial products
Slide 9: Blend is capitalizing on the opportunity for innovation across the banking industry
Blend is capitalizing on the opportunity for innovation across the banking industry 01 02 03 04 Revenue and Consumers are Manual Inflexible legacy benefit left underserved processes systems on the table 80% of bank executives agree 89% of surveyed bank 40% of banks are getting executives cited legac
Slide 10: Simplifying and digitizing origination
Our Solution Simplifying and digitizing origination Increased lifetime value, Delivery at scale Unified platform solution lower unit costs through Builder across originations
Slide 11: Long-Term Success
Long-Term Success Continuing to deepen FIs powered by Blend will relationships with financial continue to grow share institutions across the fueled by improved country economics More originations happen through Blend across all product lines 11
Slide 12: Blend is uniquely positioned to succeed
Blend is uniquely positioned to succeed because of our customers, Customers platform & culture Platform Culture 12
Slide 13: Our Leading Customer Base
Our Leading Customer Base Powering the top financial institutions Drives Blend’s market leading position Banks 39 of the Top 100 banks by AUM in the U.S. are Blend Platform Customers1 >800 bps gain in market share since 1H212 Independent Mortgage Banks 11 of the Top 25 mortgage originators by AUM ar
Slide 14: The Blend Builder Advantage
1 2 Comprehensive Composable The Blend Builder 3 4 Advantage Omnichannel Open 14
Slide 15: Our Culture and Mindset
Our Culture and Mindset Customer Obsession Constant Innovation Powering Greater Increase more financial lender and value product customer creation originations partnerships 15
Slide 16: Near Term Focus
Near Term Focus Expand Help Our Cost Saving Operating Blend Builder Mortgage Customers Products Efficiency Customer-Focused Goals Internal Initiatives 16
Slide 17: Financial Vision
Financial Vision IPO Mindset Today and the Road Ahead Cast a wide net, build as many relationships Focused customer acquisition, maximizing existing Growth as possible, entrench our place in the market partnerships and value-focused product expansion Investing for a larger mortgage market and Renewa
Slide 18: Financial Vision: Long Term Model by 2026
Financial Vision Focus Long Term Model by 2026 Growth Focused customer acquisition, maximizing existing partnerships and value-focused ~35% ~25% product expansion Consumer Banking 1 Mortgage Suite2 Revenue CAGR Revenue CAGR Margin Renewal value capture, focused renegotiation on largest spend areas,
Slide 19: Blend Product Strategy & Innovation
Blend Product Strategy & Innovation Erik Wrobel
Slide 20: Our vision is to bring simplicity and transparency to financial products
Our vision is to bring simplicity and transparency to financial products
Slide 21: Re-architecting banking software around the consumer
Re-architecting banking software around the consumer Integrations Blocks
Slide 22: Key Industry Trends
01 02 03 Key Industry Blend Product New Investment Trends Portfolio Horizons
Slide 23: Key Industry Trends
01 02 03 Key Industry Blend Product New Investment Trends Portfolio Horizons
Slide 24: Consumer Trends are Evolving
Consumer Trends are Evolving Point Solutions End-to-end journeys Generic Personalized Reactive Proactive
Slide 25: Technology is also Changing Rapidly
Technology is also Changing Rapidly Documents Data Code Composable Product Platform
Slide 26: Financial institutions face challenges in addressing modern borrower needs
Financial institutions face challenges in Sources: Capgemini - The Customer Engagement Imperative (2022), The Financial Brand (1, 2) addressing modern borrower needs Lack of Static, Siloed, integrated one-size-fits-all fragmented customer data origination experiences processes 80% of bank executives
Slide 27: Composable Origination
Inflexible Infrastructure Dynamic Market Conditions Composable High Development Costs Origination Increased Competitive Pressures Code → Composable Point Solution → End-to-end Journeys Product → Platform Rising Consumer Demands Complex Processes Key Trends 27
Slide 28: Composable Origination: Innovation, Differentiation, Lower Cost
Composable Origination Innovation Differentiation Lower Cost Key Trends 28
Slide 29: Blend Product Portfolio Strategy
Blend Product Portfolio Strategy 01 02 Deliver the end-to-end Provide best-in-class solutions for digital mortgage experience personalized consumer banking 03 Power exceptional experiences through a composable origination platform
Slide 30: Blend Product Portfolio Strategy
Blend Product Portfolio Strategy 01 02 Deliver the end-to-end Provide best-in-class solutions for digital mortgage experience personalized consumer banking 03 Power exceptional experiences through a composable origination platform
Slide 31: Transformed the homeownership journey from application to close
Transformed the homeownership journey from application to close Get pre-approved Find a home Process loan Close the loan Find lender Pre-approval Real estate agent Home search Title services Homeowners Closing insurance Mortgage 31
Slide 32: Blend Mortgage Suite
Blend Mortgage Suite: an end-to-end solution that enables financial institutions to thrive in any market Pre-App Engagement Application Verifications Title Condition Management Close Mortgage 32
Slide 33: Blend’s Mortgage Suite drives efficient originations, enabling 7.95x ROI
Blend’s Mortgage Suite drives efficient Source: Blend ROI study with MarketWise Advisors originations, enabling 7.95x ROI Pull-through lift Pull- + Speed to + Lower = 15% Through Close Costs Cycle compression vs 30 days Frictionless Onboarding Standardized Loan Files Automation 7 days Personalized E
Slide 34: Blend Product Portfolio Strategy
Blend Product Portfolio Strategy 01 02 Deliver the end-to-end Provide best-in-class solutions for digital mortgage experience personalized consumer banking 03 Power exceptional experiences through a composable origination platform
Slide 35: Redefined the future of banking for all consumer banking experiences
Redefined the future of banking for all consumer banking experiences Deposits Personal Loans Credit cards Home Equity Vehicle Loans Gain primary Automate origination Deliver top-of-class Deliver an instant home Provide customers a financial institutions to drive customer onboarding for equity experi
Slide 36: Blend’s Consumer Banking Suite maximizes application conversion and reduces costs
Blend’s Consumer Banking Suite maximizes Source: Elements application conversion and reduces costs 11% Higher Conversion + Speed to Close + Lower Costs = Increase in approved applications 60% Average reduction in application Frictionless Onboarding Standardized loan files Automation submission times
Slide 37: Uniquely positioned to drive business value across the entire consumer bank
Uniquely positioned to drive business value across the entire consumer bank and increase customer lifetime value Maximize conversion Reduce cost Grow customer by delivering to serve through lifetime value consistent experiences intelligent automation through cross-sell Consumer Banking 37
Slide 38: Blend Product Portfolio Strategy
Blend Product Portfolio Strategy 01 02 Deliver the end-to-end Provide best-in-class solutions for digital mortgage experience personalized consumer banking 03 Power exceptional experiences through a composable origination platform
Slide 39: Blend: powering end-to-end journeys for any banking product
Blend: powering end-to-end journeys for any banking product Blend Builder Platform Closing Settlement Customer Defined Stipulations cons Rapid ume Pre-approval Innovation r Pricing Experiment and Optimize Product Selection Verification Application 39
Slide 40: Blend Builder Platform
Public API Blend Builder Platform Blend Solutions* Bespoke Solutions Builder Orchestration - Low-Code Development Environment Consumer and Banker Experience Design ———— Branding and Theming ———— Workflow Management ———— Business Rules Builder Blocks Consumer Experience Credit Decisioning Identity Cr
Slide 41: Blend Builder Platform
Public API Blend Builder Platform Blend Solutions* Bespoke Solutions Builder Orchestration - Low-Code Development Environment Consumer and Banker Experience Design ———— Branding and Theming ———— Workflow Management ———— Business Rules Builder Blocks Consumer Experience Credit Decisioning Identity Cr
Slide 42: Blend Builder Platform
Public API Blend Builder Platform Blend Solutions* Bespoke Solutions Builder Orchestration - Low-Code Development Environment Consumer and Banker Experience Design ———— Branding and Theming ———— Workflow Management ———— Business Rules Builder Blocks - Reusable Components for Financial Services Consu
Slide 43: A purpose-built platform for cloud banking
A purpose-built platform for cloud banking Comprehensive Composable Purpose-built and opinionated Modular components and consumer finance products, workflows designed specifically all on a single platform for financial services Omnichannel Open Dedicated persona-based Expansive partner ecosystem wor
Slide 44: Key Industry Trends
01 02 03 Key Industry Blend Product New Investment Trends Portfolio Horizons
Slide 45: Our Expanding Market
Our Expanding 1 Market Deepen existing solutions 2 Develop new New origination solutions 3 Consumer Banking Expand into new markets Home Ownership 2025+ Mortgage 45
Slide 46: Deepening Existing Solutions
1 Deepening Existing Solutions Product Spotlight Blend Copilot Digitalization Blend Close (powered by AI) Documents to Blend Income Verification Data End to End Blend Home Insurance Journeys 4.5x increase in revenue contribution from attach products from 2021 to 20231 New Investment Horizons 1 - rev
Slide 47: Develop New Origination Solutions
2 Develop New Origination Solutions Opportunities Launched Business Deposits 01 Small Business Banking 02 Commercial Banking 03 Wealth Management 04 … adjacent opportunities Spotlight: SMB Banking 1.5M SMB 2.2M business 33M small deposit accounts credit cards opened businesses in USA opened in 2022
Slide 48: Expand into New Markets
3 Expand into New Markets Opportunity Existing Investments Blend Builder Internationalization Canada 25+ prospective customers* Spanish Localization for USA Europe 500+ prospective customers* Future Investments Local Country Compliance >500 prospective customers* Multi-language Support Routes to Mar
Slide 49: Comprehensive portfolio of consumer finance solutions on a single platform
01 02 03 Comprehensive portfolio Modern banking platform Well positioned to of consumer finance that unlocks composable capitalize on future solutions, all built on a origination for financial growth opportunities single platform services 3
Slide 50: Blend Builder Demo
Blend Builder Demo
Slide 51: Blend Builder Demo
Investor Day 2023 | & blend Blend Builder Demo
Slide 52: Loan Officer Copilot Demo
Loan Officer Copilot Demo
Slide 53: &§ blend
&§ blend
Slide 54: GTM
GTM Investor Presentation Sebastian Joll
Slide 55: Blend GTM Overview
Blend GTM Overview 01 02 03 The Ecosystem Growing with Market Strategy & Our Buyers Our Customers & Expansion
Slide 56: Blend GTM Overview
Blend GTM Overview 01 02 03 The Ecosystem Growing with Market Strategy & Our Buyers Our Customers & Expansion
Slide 57: Blend & the Originations Ecosystem
Blend & the Originations Ecosystem Borrower Point of Sale Layer Mortgage Home Equity Vehicle Personal Credit Cards Deposit accounts LOS Layer Real Estate Lending Consumer Banking Loan Origination System Core Banking Core
Slide 58: The Originations Ecosystem: Point of Sale
The Originations Ecosystem: Point of Sale Point of sale layer which primarily includes product specific providers who offer 1-2 product types and are often newer technology companies Borrower Technology Layer Point of Sale Mortgage Home Equity Vehicle Personal Credit Cards Deposit accounts Loan Orig
Slide 59: The Originations Ecosystem: Loan Origination Systems
The Originations Ecosystem: Loan Origination Systems LOS layer, which can often be across products (but not across consumer banking and real estate) Borrower Technology Layer Point of Sale Mortgage Home Equity Vehicle Personal Credit Cards Deposit accounts Loan Origination System Real Estate Lending
Slide 60: The Originations Ecosystem: Core
The Originations Ecosystem: Core Core systems are critical to a lender’s operation but older and inflexible, with no ability to “come forward” to the borrower Borrower Technology Layer Point of Sale Mortgage Home Equity Vehicle Personal Credit Cards Deposit accounts Loan Origination System Real Esta
Slide 61: The Originations Ecosystem: What Our Customers Want
The Originations Ecosystem: What Our Customers Want Every lending executive is talking about 3 things: 01 Drive down the cost per loan 02 Beating Fintechs to win customers 03 Maximize potential of existing customers
Slide 62: Blend & the Originations Ecosystem
Blend & the Originations Ecosystem Borrower Technology Layer Point of Sale Mortgage Home Equity Vehicle Personal Credit Cards Deposit accounts Loan Origination System Real Estate Lending Consumer Banking Loan Origination System Core Banking Core
Slide 63: The Originations Ecosystem: Blend
The Originations Ecosystem: Blend Blend is uniquely positioned: able to power originations across products and simplify end to end workflows Technology Layer Mortgage Home Equity Vehicle Personal Credit Cards Deposits Point of Sale Single originations layer Loan Origination Via Partner Integrations
Slide 64: Why Customers Value Us
Why Customers Value Us Best in class origination experiences Lines of business leaders love the pre-built world class Mortgage Close Verifications Home Equity Deposits Personal Vehicle Credit Insurance Title consumer and banker experiences On one platform with integrated capabilities Digital teams b
Slide 65: Why Customers Value Us
Why Customers Value Us Best in class origination experiences Lines of business leaders love the pre-built world class Mortgage Close Verifications Home Equity Deposits Personal Vehicle Credit Insurance Title consumer and banker experiences On one platform with integrated capabilities Digital teams b
Slide 66: Why Customers Value Us
Why Customers Value Us Best in class origination experiences Lines of business leaders love the pre-built world class Mortgage Mortgage CloseCloseVerifications Home Equity Verifications Home Equity Deposits Deposits Personal Vehicle Personal Vehicle InsuranceCreditTitle Credit consumer and banker ex
Slide 67: Why Customers Value Us
Why Customers Value Us Best in class origination experiences Lines of business leaders love the pre-built world class Mortgage Close Verifications Home Equity Deposits Personal Vehicle Credit Insurance Title consumer and banker experiences On one platform with integrated capabilities Digital teams b
Slide 68: But the journey is only just getting started…
But the journey is only just getting started… Expected 2023 global spend on digital lending technology 5% of financial institution executives say they are done or almost done updating their technology¹ $9.9 Billion2 11% expected compounded annual growth rate in spend on modern, third-party software
Slide 69: Blend GTM Overview
Blend GTM Overview 01 02 03 The Ecosystem Growing with Market Strategy & Our Buyers Our Customers & Expansion
Slide 70: Understanding our Revenue
Understanding our Revenue Products Sold Utilization Customer Volumes Blend has a suite of products Blend primarily has a success Blend is also subject to the to support its customers, with based revenue model (each overall volumes our customers each product creating revenue successful transaction cr
Slide 71: Selling Our Products
Selling Our Products Attach Products Blend Builder: is our platform of the future, enabling technology teams and business leaders to innovate faster and Primary Loan Types deploy world class, customized experiences Primary Loan Types: which includes primary lending products, whether Blend in the mor
Slide 72: Our product ecosystem gives Blend multiple ways to serve customers
Our product ecosystem Insurance gives Blend multiple Home Equity ways to serve customers Mortgage and creates layers of revenue on each Close transaction Bespoke Deposits Blend Builder Verifications Credit Personal Cards Vehicle Title 72
Slide 73: Customer Example: $10B+ Credit Union
Customer Example: $10B+ Credit Union Product Revenue Potential 73 $10B refers to Assets Under Management
Slide 74: Customer Example: $10B+ Credit Union
Customer Example: $10B+ Credit Union ● Purchased Mortgage Mortgage Product Revenue Potential 74 $10B refers to Assets Under Management
Slide 75: Customer Example: $10B+ Credit Union
Customer Example: $10B+ Credit Union Home ● Purchased Mortgage Equity ● Added Home Equity and Vehicle Mortgage Vehicle Product Revenue Potential 75 $10B refers to Assets Under Management
Slide 76: Customer Example: $10B+ Credit Union
Customer Example: $10B+ Credit Union ● Purchased Mortgage Home Deposits Equity ● Added Home Equity and Vehicle ● Deposits, Personal, and Credit Cards Mortgage Credit Cards Personal Vehicle Product Revenue Potential 76 $10B refers to Assets Under Management
Slide 77: Customer Example: $10B+ Credit Union
Customer Example: $10B+ Credit Union HOI ● Purchased Mortgage Home Deposits Equity ● Added Home Equity and Vehicle ● Deposits, Personal, and Credit Cards Close ● Launched Close and HOI Mortgage Credit Cards Personal Vehicle Product Revenue Potential 77 $10B refers to Assets Under Management
Slide 78: Customer Example: $10B+ Credit Union
Customer Example: $10B+ Credit Union Insurance HOI ● Purchased Mortgage Home Deposits Equity ● Added Home Equity and Vehicle ● Deposits, Personal, and Credit Cards Close ● Launched Close and HOI ● Additional opportunities to expand into Bespoke Bespoke Products, Verifications, and Title Mortgage Ver
Slide 79: Customer Example: $10B+ Credit Union
Customer Example: $10B+ Credit Union Insurance HOI ● Purchased Mortgage Home Deposits Equity ● Added Home Equity and Vehicle ● Deposits, Personal, and Credit Cards Close ● Launched Close and HOI ● Additional opportunities to expand into Bespoke Bespoke Products, Verifications, and Title Mortgage ● P
Slide 80: Customer Example: $10B+ Credit Union
Customer Example: $10B+ Credit Union Insurance HOI Instant ● Purchased Mortgage Home Deposits Equity ● Added Home Equity and Vehicle ● Deposits, Personal, and Credit Cards Close ● Launched Close and HOI ● Additional opportunities to expand into Bespoke Bespoke Products, Verifications, and Title Mort
Slide 81: Customer Example: $10B+ Credit Union
Customer Example: $10B+ Credit Union Insurance HOI Instant ● Purchased Mortgage Home Deposits Equity ● Added Home Equity and Vehicle ● Deposits, Personal, and Credit Cards Close ● Launched Close and HOI ● Additional opportunities to expand into Bespoke Bespoke Products, Verifications, and Title Mort
Slide 82: Customer Example: $10B+ Credit Union
Customer Example: $10B+ Credit Union Insurance HOI Instant ● Purchased Mortgage Home Home Deposits Equity Equity ● Added Home Equity and Vehicle ● Deposits, Personal, and Credit Cards Close ● Launched Close and HOI ● Additional opportunities to expand into Bespoke Bespoke Products, Verifications, an
Slide 83: Customer Example: $10B+ Credit Union
Customer Example: $10B+ Credit Union Insurance HOI Instant Over time, we will migrate all Home Home Deposits Equity Equity products to Blend Builder and anchor the customer’s originations ecosystem on one innovative platform Close Bespoke Blend Mortgage Builder Verifications Credit Cards Personal Ve
Slide 84: Once Converted to Builder…
Once Converted to Builder… Innovation Quickly adapt their originations process to match their strategy and capture market share Solution can be completely customized to Differentiation a lender to stand out from peers and better fight Fintechs Builder supports more cost effective Lower Cost developm
Slide 85: Capturing Revenue - Utilization by Product
Customer Example: $10B+ Credit Union Capturing Revenue - Utilization by Product 100% So far, only ~30% of available 80% revenue Available growth from the customer has been 60% captured, leaving additional upside for Blend 40% 20% 0% Mortgage (Instant) Close Credit Card Deposits Personal Vehicle Home
Slide 86: Capturing Revenue - Utilization by Product
Customer Example: $10B+ Credit Union Capturing Revenue - Utilization by Product 100% Of the products sold, we 80% have so far only captured ~ 30% of the available Opportunity Available growth revenue 60% There is additional upside in the customer without 40% selling more product 20% 0% Mortgage (Ins
Slide 87: Deposit Accounts - Revenue Capture Example
Customer Example: $10B+ Credit Union Deposit Accounts - Revenue Capture Example 100% As an example, we have room to grow in Deposits. We can capture the full revenue potential by expanding to Branch channels, customizing some products, and enabling functionality 0% Existing Revenue Add channels Add
Slide 88: Capturing Revenue: Income Verification & Assets Derived Income
Capturing Revenue: Double Click on Income Verification & Assets Derived Income Verification of Income - Revenue Capture Example Income Verification is another powerful growth opportunity 100% New revenue can come through customer adoption (by user or channel) or by growing coverage (% of users data
Slide 89: Product Count: ample opportunity to continue expansion
We have ample opportunity to continue this expansion strategy with customers Add Additional Products to Each Customer opportunity 6+ 5 Product Count 4 3 2 1 0% 10% 20% 30% % of Customers 89
Slide 90: Utilization
We have ample opportunity to continue this expansion strategy with customers Add Additional Products to Each Customer Grow Utilization within Sold Products opportunity 6+ 100% 5 88% Product Count 75% Utilization 4 73% 50% 3 42% 2 0% Mortgage Close Mortgage Close 1 Independent Banks & Credit Unions M
Slide 91: Blend GTM Overview
Blend GTM Overview 01 02 03 The Ecosystem Growing with Market Strategy & Our Buyers Our Customers & Expansion
Slide 92: Blend is targeting the top end of lenders, with growth opportunity in all segments
Blend is targeting the top end of lenders, with growth opportunity in all segments Blend Penetration by Segment (minimum 1 Blend Product) Lender Segment Credit Unions Banks Independent Mortgage Banks Strategic N/A 50% 60% 50k+ loans per year Large 50% 83% 25% 25k+ loans per year Medium 50% 33% 27% 1
Slide 93: Driving Growth: Wave 1
Driving Growth: Wave 1 Cross-Sell Monetizing Blend Existing Book Utilization Capture Builder New Use Cases Continue cross–sell efforts Continue to capture Commercialize the Use Builder’s flexibility to with existing customers, revenue potential with underlying Blend Builder sell a broader set of use
Slide 94: Driving Growth: Next Wave
Driving Growth: Next Wave New Logos We have been focused more on in-book sales. Looking ahead, we are expanding our focus on new logos Partnerships Industry partnerships (e.g., other technology vendors), System Integrator relationships, and more general GTM alliances (e.g., AWS) to scale our GTM Int
Slide 95: Execution and Operating Rhythm
Execution and Operating Rhythm Amir Jafari
Slide 96: 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 97: Vision, Clarity, Conviction
Vision Clarity Conviction Looking ahead Surrounding our cash needs, In our foundation for to 2026 and operating margins incremental growth
Slide 98: What we’ve accomplished so far
What we’ve accomplished so far
Slide 99: YTD 2023 Highlights
YTD 2023 Highlights Expanded non-GAAP gross margins by 205 basis points YTD January March May June August Announced $100 million in Marketwise reports a Exceeded first PRMG announces 71% Achieved second quarter 40% increase in ROI on the revenue guidance Decreased Non-GAAP NOL run-rate by annualized
Slide 100: Winning Across All Three Business Lines
Winning Across All Three Business Lines Mortgage Successes Consumer Wins Title Progress Added 14 new client/ Reached record market Signed 16 logos product combinations share of 20.5%1 onto the CB suite3 year-to-date 37 of top 100 Launched Blend Builder Rightsizing operations for U.S. banks by AUM us
Slide 101: Operational Excellence Framework
Operational Excellence Framework Growth in Platform revenue per employee1 Streamlined Organization + Sales Efficiency + Innovation Multiplier = 28% Increase in Software Non-GAAP Gross Profit Margin1 2 Reduced overlap Cross-sale scalability Blend Builder efficiencies 800bps Refreshed strategic priori
Slide 102: Key Levers Driving Margin Improvement
Key Levers Driving Margin Improvement PS / CS targets Efficiency in Aligning our delivery costs and leveraged efficiency Title operations from Builder deployments Matching capacity in our Improved legacy Title organization to current housing market margin mix demand Large vendor Accretive contributi
Slide 103: Gross Margin Profile: Returning to Efficiency
Gross Margin Profile: Returning to Efficiency Non-GAAP Gross Margins1 Blend Labs Gross Margin Platform Gross Margin Title Gross Margin 60% 100% 30% 55% 25% 50% 80% 44% 74% 20% 23% 40% 68% 67% 41% 39% 39% 60% 63% 61% 15% 16% 35% 59% 30% 10% 11% 40% 20% 5% 5% 20% 10% 0% 0% -1% 0% 0% -5% Q1 Q2 Q3 Q4 Q1
Slide 104: Leveraging the Scale of Title Operations
Leveraging the Scale of Title Operations Diverse Product Offering Nationwide Capabilities Scalable Client Relationships Title progress First 12 of the Top 25 Mortgage Mortgage Originators1 Home Default Equity 8 of the Top 10 Owned Mortgage Servicers1 Servicing Portfolio Solutions Licensed States Par
Slide 105: Transitioning to Blend’s Second Phase
Transitioning to Blend’s Second Phase Where we’re headed
Slide 106: Blend’s Priorities Moving Forward
Blend’s Priorities Moving Forward 01 02 03 Continue to deepen Capture Builder-driven Build on momentum mortgage customer growth and financial towards Free Cash relationships through benefits of Platform Flow1 inflection the economic cycle strategy 1 Please refer to note 7 in the appendix of this pre
Slide 107: Blend’s Priorities Moving Forward
Blend’s Priorities Moving Forward 01 02 03 Continue to deepen Capture Builder-driven Build on momentum mortgage customer growth and financial towards Free Cash relationships through benefits of Platform Flow1 inflection the economic cycle strategy 1 Please refer to note 7 in the appendix of this pre
Slide 108: Economic Value per Funded Loan - Mortgage Suite
Economic value Revenue per Economic Value per Funded Loan - Mortgage Suite per funded loan1 transaction2 $100 $87 $80 $85 $82 $77 $74 $69 $60 $40 $20 $0 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 1 Please refer to note 4 in the appendix of this presentation. 2 Please refer to Blend’s quarterly
Slide 109: Increasing Mortgage leverage through expanded economic value per funded loan
Mortgage Attach Core Mortgage Increasing Mortgage leverage through per funded loan1 per funded loan1 expanded economic value per funded loan ~$170 17% increase in core mortgage per funded loan rate 4.5x increase in contribution from mortgage attach per funded loan ~$80 ~$90s $87 High teens to $18 lo
Slide 110: Building and Capturing Mortgage Market Share
Building and Capturing Mortgage Market Share Blend funded loans total market share1 Market Share 25% 20.5% 20% 17.2% 14.5% 15% 12.4% 10.1% 10% 8.9% 6.5% 5% 0% 2019 2020 2020 2021 2021 2022 2022 H2 H1 H2 H1 H2 H1 H2 1 Please refer to note 6 in the appendix of this presentation. 110
Slide 111: Significant upside in current market origination environment
Significant upside in current market origination environment Assumes ~4.5 Million U.S. mortgage originations consistent with 2023 levels1 30% +50% Revenue +130% Revenue Market Share 25% Targeted Range of Outcomes +50% Revenue 20% Blend today3 $85 $100 $130 Economic Value Per Funded Loan2 1 2 An illu
Slide 112: Years of Mortgage Market in Context
30 Years of Mortgage Market in Context Total U.S. Mortgage Origination # Loans (millions)1 00’s Housing Bubble Financial Crisis COVID-19 25 20 Millions of Loans 15 10 Top end of hypothetical scenarios are well below historical 5 cycle peaks E E E E 7 8 9 93 994 995 996 997 998 999 000 001 002 003 00
Slide 113: Sensitizing Mortgage Suite: Potential Year Outcomes
Sensitizing Mortgage Suite: Potential 3 Year Outcomes1 Revenue $mm 200 + ~35% CAGR 150 + ~25% CAGR + ~12% CAGR 100 50 0 Conservative Case Base Case Market Normalization 2023E Key Assumptions (2026 Operating Model)4 Est. # U.S. Market Originations 4.5M ~5.5M ~6.5M ~7.0M Market Share2 ~20% Maintained
Slide 114: Blend’s Priorities Moving Forward
Blend’s Priorities Moving Forward 01 02 03 Continue to deepen Capture Builder-driven Build on momentum mortgage customer growth and financial towards Free Cash relationships through benefits of Platform Flow1 inflection the economic cycle strategy 1 Please refer to note 7 in the appendix of this pre
Slide 115: Key Financial Tenets of our Platform-first Strategy
Key Financial Tenets of our Platform-first Strategy Further diversifying Improving our Expanding our wallet our revenue mix cash flow profile and mindshare Expanding exposure into Committed fees with contract Key partner in modern digital counter-cyclical financial terms including regular transforma
Slide 116: Further diversifying our platform revenue mix
Mortgage Non-mortgage Further diversifying our platform revenue mix transaction linked transaction linked ~15% ~20-30% ~5% 2021 2023E 2026E Targets 116
Slide 117: While improving our overall cash flow profile
While improving our overall cash flow profile Transactions Cash receipts Blend PayGo Model Blend Builder Subscription Model Year 2 volume pre-purchase assuming current contract volume is exhausted Platform Fee 12 months 12 months Billed 30 days in arrears monthly payment terms Pre-purchased consumpt
Slide 118: Sizable growth opportunity for Blend’s consumer banking business
Represents a sizable growth opportunity for Blend’s consumer banking business1 Consumer Banking Revenue2 Revenue $mm Mid twenties +42% +42% YoY YoY YoY Mid 30’s CAGR 2021 2022 2023E 2026+ International markets and new product Platform and Blend Builder focused strategy enables verticals including sm
Slide 119: Expanding on Blend platform Addressable Market
Expanding on Blend platform Addressable Market Total Platform Addressable Market Growth Focus Based on bank technology spend $0.1B Current Platform Revenue $0.9B Platform Cross Sell Opportunity1 ● Increase wallet-share with existing U.S.customer base $5.3B U.S. Consumer Origination Opportunity2 ● Ex
Slide 120: Blend’s Priorities Moving Forward
Blend’s Priorities Moving Forward 01 02 03 Continue to deepen Capture Builder-driven Build on momentum mortgage customer growth and financial towards Free Cash relationships through benefits of Platform Flow1 inflection the economic cycle strategy 1 Please refer to note 7 in the appendix of this pre
Slide 121: Long-Term Operating Model
Long-Term Operating Model FY22 FY23E 2026 Market Scenarios3 In $ millions (unless otherwise indicated) Market Conservative Base Case Unaudited Normalized Scenario Blend Platform Revenue $121 $110 - $114 $200 $245 $290 Title Revenue $114 $47 - $49 $60 $70 $75 Total Blend Labs Revenue $235 $157 - $163
Slide 122: Updated Q3 2023 Guidance
Updated Q3 2023 Guidance In $ millions (unless otherwise indicated) Prior Guidance Updated Guidance Blend Platform Revenue $27 - $30 $28.5 - $30 Title Revenue $11.0 - $12 $11.5 - $12 Total Blend Labs Revenue $38 - $42 $40 - $42 Blend Labs Non-GAAP Net Operating Loss1 2 ($17.5) - ($15.5) ($16.5) - ($
Slide 123: Narrowing the Focus of our Operating Model
Narrowing the Focus of our Operating Model Non-GAAP Operating Expenses1 (in $ millions) $91 $87 $73 ~$60 ~$55 ~$50 ~$50 ~$40 ~$40 2022 2023E 2024E 2022 2023E 2024E 2022 2023E 2024E Research and Development Sales and Marketing General and Administrative 2024 non-GAAP operating expense is expected to
Slide 124: Path To Cash Generation
Unlevered Free2 Cash paid Market Path To Cash Generation1 Cash Flow for interest3 Normalization4 Base4 Conservative4 100 75 50 25 $ millions 0 25 50 75 100 125 150 175 2022 2023E 2024E 2025E 2026E 1 Please refer to note 8 in the appendix of this presentation. 2 Please refer to note 7 in the appendix
Slide 125: Operating and Financial Priorities
Operating and 1 2 Financial Priorities Capture growth, Mortgage success will be achieved through diversification and cash expansion of PFL and flow benefits of market share our platform strategy 3 4 Maintain our financial Inflect to free cash flow discipline and operational generation well ahead of
Slide 126: Thank you for attending Blend’s 2023 Investor Day
Thank you for attending Blend’s 2023 Investor Day September 26, 2023
Slide 127: Appendix
Appendix
Slide 128: Revenue Disaggregation
Revenue Disaggregation (in $ thousands, unaudited) 128
Slide 129: Mortgage Transactions
Mortgage Transactions (in thousands)
Slide 130: Reconciliation of GAAP to Non-GAAP Gross Profit, Quarterly
Reconciliation of GAAP to Non-GAAP Gross Profit, Quarterly (in $ thousands) 130
Slide 131: Reconciliation of GAAP to Non-GAAP Gross Profit, Annual
Reconciliation of GAAP to Non-GAAP Gross Profit, Annual (in $ thousands) 131
Slide 132: Reconciliation of GAAP to Non-GAAP Operating Expenses, Quarterly
Reconciliation of GAAP to Non-GAAP Operating Expenses, Quarterly (in $ thousands)
Slide 133: Reconciliation of GAAP to Non-GAAP Operating Expenses by Category (2022)
Reconciliation of GAAP to Non-GAAP Operating Expenses by Category (2022) (in $ thousands)
Slide 134: Reconciliation of Net Cash Used in Operating Activities to Free Cash Flow
Reconciliation of Net Cash Used in Operating Activities to Free Cash Flow, Unlevered Free Cash Flow, and Free Cash Flow Margin (in $ thousands) 134
Slide 135: Reconciliation of GAAP to Non-GAAP Net Operating Loss and Operating Margin
Reconciliation of GAAP to Non-GAAP Net Operating Loss and Operating Margin (in $ thousands)
Slide 136: Footnotes
Footnotes Note 1: Consumer Banking Suite Revenues consist of home equity, personal lending, credit cards, deposit accounts, auto finance, and other banking product revenue, but exclude software-enabled title revenue. Note 2: Mortgage Suite Revenues consist of Mortgage revenue, Mortgage add-on revenue
Slide 137: Footnotes
Footnotes Note 5: Core Mortgage per Funded Loan reflects the contractual rates for our mortgage product, multiplied by the number of loans funded by a customer in the specified period, divided by the total number of loans funded by all Mortgage customers in that same period. Mortgage Attach per Funded
Slide 138: Footnotes
Footnotes Note 8: 2026 market scenarios are illustrative only and are not intended to represent guidance on actual outcomes. Each scenario is subject to the assumptions outlined below and other risks and uncertainties. In the Conservative Case, we estimate originations in the U.S. mortgage market to