Second Quarter Results Exceed Guidance on
Revenue and Non-GAAP Operating Loss; Accelerates Path to
Profitability
Blend Labs, Inc. (NYSE: BLND), a leader in cloud banking
software, today announced its second quarter 2023 financial
results.
“Blend’s second quarter results once again beat our top and
bottom-line expectations. Revenue is benefiting from faster
adoption of add-on mortgage products and new deployments of our
consumer banking suite. At the same time, we are progressing ahead
of schedule on our cost reduction efforts,” said Nima Ghamsari,
Head of Blend. “Our performance is supported by our strong market
position, with a resilient mortgage customer base that is gaining
share in a challenging origination environment, as well as a
growing base of consumer banking customers.
“Blend enters the second half of the year with improving
software margins, a significantly lower cost base, and an
accelerated path to non-GAAP profitability. We have been investing
for years in products to power the future of banking. We are now
able to deploy more efficiently, supported by our Blend Builder
platform, and as a result, we are doing more for our customers.
Therefore, we believe we are in a strong position to deliver on our
long-term goals.”
Second Quarter 2023 Financial
Highlights
Revenue
- Total company revenue was $42.8 million, composed of Platform
revenue of $30.3 million and Title revenue of $12.5 million.
- Within the Platform segment, Mortgage Banking Suite revenue
declined by 17% year-over-year, to $22.3 million, amidst a 37%
mortgage market volume decline over the same period as reported by
the Mortgage Bankers Association.
- Consumer Banking Suite revenue totaled $5.8 million in 2Q23, an
increase of 27% as compared to the prior-year period.
- Professional services revenue increased 10% year-over-year to
$2.2 million.
Gross Margin & Profitability
- Blend GAAP and non-GAAP gross profit margin was approximately
55%, up from 39% in 2Q22. Both GAAP and Non-GAAP gross profit
margin was higher primarily due to an expansion in Blend Platform
gross profit margin.
- GAAP Platform gross profit was $22.1 million in 2Q23, up from
$20.4 million in 2Q22. Non-GAAP Platform gross profit was $22.4
million in 2Q23, compared to $20.6 million in 2Q22.
- GAAP and Non-GAAP Software gross margins were 80% and 81%,
respectively, in 2Q23, up compared to 73% on a GAAP and non-GAAP
basis in 2Q22.
- GAAP loss from operations was $36.7 million, compared to $471.4
million in 2Q22. Non-GAAP loss from operations was $17.9 million,
compared to $39.5 million in 2Q22.
- GAAP net loss per share attributable to common stockholders was
$0.18, compared to $2.06 in 2Q22. Non-GAAP consolidated net loss
per share was $0.09, compared to $0.19 in 2Q22.
Liquidity & Capital Resources
- As of June 30, 2023, Blend has cash, cash equivalents, and
marketable securities, including restricted cash, totaling $277.9
million with total debt outstanding of $225.0 million in the form
of the Company’s five-year term loan.
- Blend’s $25.0 million revolving line of credit remains undrawn
as of such date.
Recent Business
Highlights
- Blend Builder Increasing Speed of Revenue and
Efficiency: Platform guidance exceeded the high end of prior
guidance by 8%. Blend Builder also enables the company to increase
speed of innovation and deploy more efficiently.
- Growth in Mortgage Suite Revenue per Transaction:
Blend’s mortgage customers continue to realize incremental value,
reflected by increases in adoption of add-on products and increases
in renewals. Mortgage Suite revenue per transaction increased from
$77 to $93 from the same period last year.
- Disciplined Cost Management: Today, Blend announced that
it further streamlined its workforce, thereby positioning Blend for
efficient growth. These actions are expected to reduce operating
expenses by an additional $33 million on an annualized basis,
further accelerating Blend’s path to profitability.
Third Quarter 2023
Outlook
Blend is providing guidance for the third quarter of 2023 as
follows:
$ in millions
Q3 2023 Guidance
Blend Platform Revenue
$27.0 - 30.0
Title Revenue
$11.0 - 12.0
Blend Labs, Inc. Consolidated Revenue
$38.0 - 42.0
Non-GAAP Net Operating Loss
$17.5 - 15.5
Blend’s Q3 2023 guidance reflects an estimated 6% year-over-year
decline in mortgage volumes from Q3 2022 to Q3 2023 as projected by
the Mortgage Bankers Association.
Note that economic conditions, including those affecting the
levels of real estate and mortgage activity, as well as the
financial condition of some of our financial customers, remain
highly uncertain.
We have not provided the forward-looking GAAP equivalent to our
non-GAAP Net Operating Loss outlook or a GAAP reconciliation as a
result of the uncertainty regarding, and the potential variability
of, stock-based compensation, which is affected by our hiring and
retention needs and future prices of our stock, and non-recurring,
infrequent or unusual items.
Webcast Information
On Wednesday, August 9, 2023 at 4:30 pm ET, Blend will host a
live discussion of its second quarter 2023 financial results. A
link to the live discussion will be made available on the Company's
investor relations website at https://investor.blend.com. A replay
will also be made available following the discussion at the same
website.
Forward-Looking
Statements
This press release 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. These statements may relate to, but are not limited to,
quotations of management; the “Third Quarter 2023 Outlook” section
above; Blend’s expectations of future results of operations;
Blend’s financial condition and operating performance, including
market size and position and growth opportunities, capital
expenditures, plans for future operations, competitive positions,
technological capabilities, and strategic relationships; Blend’s
cost reduction efforts and ability to achieve profitability in the
future; Blend’s customers and their position in the market; Blend’s
investment in and deployment of products, particularly those
related to the Blend Builder platform; Blend’s ability to implement
cost reduction measures; Blend’s opportunity to increase market
share and penetration in its existing customers; projections for in
mortgage loan origination volumes, including projections provided
by third parties; other macroeconomic and industry conditions;
Blend’s ability to create long-term value for its customers; and
Blend’s expectations for changes in revenue, as well as assumptions
relating to the foregoing. Forward-looking statements are
inherently subject to risks and uncertainties, some of which cannot
be predicted or quantified. In some cases, you can identify
forward-looking statements by terminology such as “may,” “will,”
“should,” “expect,” “plan,” “anticipate,” “could,” “would,”
“intend,” “target,” “project,” “contemplate,” “believe,”
“estimate,” “predict,” “potential” or “continue” or the negative of
these terms or other comparable terminology that concern Blend’s
expectations, strategy, plans or intentions. You should not put
undue reliance on any forward-looking statements. Forward-looking
statements should not be read as a guarantee of future performance
or results and will not necessarily be accurate indications of the
times at, or by which such performance or results will be achieved,
if at all.
Forward-looking statements are based on information available at
the time those statements are made and/or management’s good faith
beliefs and assumptions as of that time with respect to future
events and are subject to risks and uncertainties that could cause
actual performance or results to differ materially from those
expressed in or suggested by the forward-looking statements. These
risks and uncertainties include the risks that: changes in economic
conditions, such as mortgage interest rates, credit availability,
real estate prices, inflation or consumer confidence, adversely
affect our industry, markets and business, we fail to retain our
existing customers or to acquire new customers in a cost-effective
manner; our customers fail to maintain their utilization of our
products and services; our relationships with any of our key
customers were to be terminated or the level of business with them
significantly reduced over time; we are unable to compete in highly
competitive markets; we are unable to manage our growth; we are
unable to make accurate predictions about our future performance
due to our limited operating history in an evolving industry and
evolving markets; we are unable to successfully integrate or
realize the benefits of our acquisition of Title365; our
restructuring actions do not result in the desired outcomes or
adversely affect our business, or impairment charges on certain
assets have an adverse effect on our financial condition and
results of operations. Further information on these risks and other
factors that could affect our financial results are set forth in
our filings with the Securities and Exchange Commission, including
in our Annual Report on Form 10-K for the year ended December 31,
2022, our Quarterly Report on Form 10-Q for the quarter ended March
31, 2023, and our Quarterly Report on Form 10-Q for the quarter
ended June 30, 2023 that will be filed following this press
release. In light of these risks and uncertainties, the
forward-looking events and circumstances discussed in this press
release may not occur and actual results could differ materially
from those anticipated or implied in the forward-looking
statements. These factors could cause actual results, performance,
or achievement to differ materially and adversely from those
anticipated or implied in the forward-looking statements. Moreover,
we operate in a very competitive and rapidly changing environment.
New risks and uncertainties emerge from time to time, and it is not
possible for us to predict all risks and uncertainties that could
have an impact on the forward-looking statements contained in this
press release. Except as required by law, Blend does not undertake
any obligation to publicly update or revise any forward-looking
statement, whether as a result of new information, future
developments, or otherwise.
About Non-GAAP Financial Measures and
Other Key Metrics
In addition to financial measures prepared in accordance with
GAAP, this press release and the accompanying tables contain, and
the conference call will contain, non-GAAP financial measures,
including non-GAAP gross profit and non-GAAP gross profit margin,
non-GAAP software gross margin, non-GAAP Platform gross profit,
non-GAAP operating expenses, non-GAAP loss from operations,
non-GAAP net operating loss, and non-GAAP consolidated net loss per
share. These non-GAAP financial measures adjust the related GAAP
financial measures to exclude non-cash stock-based compensation and
warrant amortization expense, compensation realignment costs,
amortization of acquired intangible assets, impairment of goodwill
and intangible assets, restructuring costs, non-recurring
acquisition-related costs, non-recurring income tax expenses or
benefits related to acquisitions, and the effect of changes in
foreign currency exchange rates. Our management uses these non-GAAP
financial measures internally in analyzing our financial results
and believes they are useful to investors, as a supplement to the
corresponding GAAP financial measures, in evaluating our ongoing
operational performance and trends, in allowing for greater
transparency with respect to measures used by our management in
their financial and operational decision making, and in comparing
our results of operations with other companies in the same
industry, many of which present similar non-GAAP financial measures
to help investors understand the operational performance of their
businesses. However, it is important to note that the particular
items we exclude from, or include in, our non-GAAP financial
measures may differ from the items excluded from, or included in,
similar non-GAAP financial measures used by other companies in the
same industry. In addition, other companies may utilize metrics
that are not similar to ours.
The non-GAAP financial information is presented for supplemental
informational purposes only and is not intended to be considered in
isolation or as a substitute for, or superior to, financial
information prepared and presented in accordance with GAAP. There
are material limitations associated with the use of non-GAAP
financial measures since they exclude significant expenses and
income that are required by GAAP to be recorded in our financial
statements. Please see the reconciliation tables at the end of this
release for the reconciliation of GAAP and non-GAAP results.
Management encourages investors and others to review Blend’s
financial information in its entirety and not rely on a single
financial measure.
We adjust the following items from our non-GAAP financial
measures:
Stock-based compensation and amortization of warrant. We exclude
stock-based compensation and amortization of warrant, which are
non-cash expenses, from our non-GAAP financial measures because we
believe that excluding these items provides meaningful supplemental
information regarding operational performance. In particular,
companies calculate stock-based compensation expense using a
variety of valuation methodologies and subjective assumptions, and
expense related to stock-based awards can vary significantly based
on the timing, size and nature of awards granted.
Compensation realignment costs. We exclude the compensation
realignment costs incurred in connection with the change in our
compensation strategy from our non-GAAP financial measures. These
costs relate to amortization of one-time two-installment cash bonus
payment made to certain employees in lieu of previously committed
equity-based awards, driven by an organizational initiative to
standardize our equity compensation program. We believe that
excluding these charges for purposes of calculating the non-GAAP
financial measures provides more meaningful period to period
comparisons.
Amortization of acquired intangible assets. We exclude
amortization of acquired intangible assets, which is a non-cash
expense, from our non-GAAP financial measures. We exclude these
amortization expenses because we do not believe these expenses have
a direct correlation to the operation of our business.
Impairment of intangible assets and goodwill. We exclude
impairment of intangible assets and goodwill, which are non-cash
charges, from our non-GAAP financial measures. These charges are
unusual in nature and we do not believe these charges have a direct
correlation to the operation of our business.
Restructuring costs. We exclude restructuring costs as these
costs primarily include employee severance, executive transition
costs and other costs directly associated with resource
realignments incurred in connection with changing strategies or
business conditions. These costs can vary significantly in amount
and frequency based on the nature of the actions as well as the
changing needs of our business and we believe that excluding them
provides easier comparability of pre- and post-restructuring
operating results.
Litigation contingencies. We exclude costs related to litigation
contingencies, which represent reserves for legal settlements.
These costs are non-recurring in nature and we do not believe they
have a direct correlation to the operation of our business.
Foreign currency gains and losses. We exclude unrealized gains
and losses resulting from remeasurement of assets and liabilities
from foreign currency into the functional currency as we do not
believe these gains and losses to be indicative of our business
performance and excluding these gains and losses provides
information consistent with how we evaluate our operating
results.
Transaction-related costs. We exclude costs related to mergers
and acquisitions from our non-GAAP financial measures as we do not
consider these costs to be related to organic continuing operations
of the acquired business or relevant to assessing the long-term
performance of the acquired assets. These adjustments allow for
more accurate comparisons of the financial results to historical
operations and forward looking guidance. These costs include
financial advisory, legal, accounting and other transactional costs
incurred in connection with acquisition activities, and
non-recurring transition and integration costs.
Income taxes. We exclude non-cash non-recurring tax benefits
from our non-GAAP financial measures. These tax benefits consist of
the changes in the valuation allowance resulting from acquisitions
and from changes in U.S. tax law requiring capitalization and
amortization of research and development costs for tax
purposes.
About Blend
Blend is the infrastructure powering the future of banking.
Financial providers — from large banks, fintechs, and credit unions
to community and independent mortgage banks — use Blend’s platform
to transform banking experiences for their customers. Blend powers
billions of dollars in financial transactions every day. To learn
more, visit www.blend.com.
Blend Labs, Inc.
Condensed Consolidated Balance
Sheets
(In thousands, except per share
amounts)
(Unaudited)
June 30, 2023
December 31, 2022
Assets
Current assets:
Cash and cash equivalents
$
34,980
$
124,199
Marketable securities
230,618
229,948
Trade and other receivables, net of
allowance for credit losses of $171 and $436, respectively
21,349
22,718
Prepaid expenses and other current
assets
22,423
19,231
Total current assets
309,370
396,096
Property and equipment, net
4,973
5,742
Operating lease right-of-use assets
10,246
11,668
Intangible assets, net
2,119
2,127
Deferred contract costs
2,467
1,691
Restricted cash, non-current
12,315
5,358
Other non-current assets
9,006
10,082
Total assets
$
350,496
$
432,764
Liabilities, Redeemable Noncontrolling
Interest and Stockholders’ Equity
Current liabilities:
Accounts payable
$
3,149
$
1,260
Deferred revenue
11,970
8,695
Accrued compensation
4,741
10,059
Other current liabilities
15,016
15,459
Total current liabilities
34,876
35,473
Operating lease liabilities,
non-current
9,236
11,091
Other non-current liabilities
3,515
5,478
Debt, non-current, net
218,240
216,801
Total liabilities
265,867
268,843
Commitments and contingencies
Redeemable noncontrolling interest
43,362
40,749
Stockholders’ equity:
Preferred stock, $0.00001 par value:
200,000 shares authorized and no shares issued and outstanding as
of June 30, 2023 and December 31, 2022
—
—
Class A, Class B and Class C Common Stock,
$0.00001 par value: 3,000,000 (Class A 1,800,000, Class B 600,000,
Class C 600,000) shares authorized; 245,775 (Class A 235,606, Class
B 10,169, Class C 0) and 240,931 (Class A 230,210, Class B 10,721,
Class C 0) shares issued and outstanding as of June 30, 2023 and
December 31, 2022, respectively
2
2
Additional paid-in capital
1,311,539
1,286,815
Accumulated other comprehensive loss
(689
)
(708
)
Accumulated deficit
(1,269,585
)
(1,162,937
)
Total stockholders’ equity
41,267
123,172
Total liabilities, redeemable
noncontrolling interest and stockholders’ equity
$
350,496
$
432,764
Blend Labs, Inc.
Condensed Consolidated
Statements of Operations and Comprehensive Income (Loss)
(In thousands, except per share
amounts)
(Unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
2023
2022
2023
2022
Revenue
Software
$
28,115
$
31,580
$
51,085
$
62,184
Professional services
2,216
2,021
3,950
3,993
Title
12,484
31,938
25,116
70,886
Total revenue
42,815
65,539
80,151
137,063
Cost of revenue
Software
5,486
8,676
11,289
17,342
Professional services
2,705
4,552
5,511
8,287
Title
11,131
27,046
24,005
57,300
Total cost of revenue
19,322
40,274
40,805
82,929
Gross profit
23,493
25,265
39,346
54,134
Operating expenses:
Research and development
22,091
35,500
48,348
70,606
Sales and marketing
16,128
22,438
33,696
44,779
General and administrative
19,646
36,472
40,327
73,574
Amortization of acquired intangible
assets
—
4,068
—
8,136
Impairment of intangible assets and
goodwill
—
391,823
—
391,823
Restructuring
2,349
6,380
15,132
6,380
Total operating expenses
60,214
496,681
137,503
595,298
Loss from operations
(36,721
)
(471,416
)
(98,157
)
(541,164
)
Interest expense
(7,947
)
(5,726
)
(15,516
)
(11,284
)
Other income (expense), net
3,232
6
6,114
97
Loss before income taxes
(41,436
)
(477,136
)
(107,559
)
(552,351
)
Income tax (expense) benefit
(53
)
(66
)
(124
)
2,731
Net loss
(41,489
)
(477,202
)
(107,683
)
(549,620
)
Less: Net loss attributable to
noncontrolling interest
258
35,831
1,035
36,145
Net loss attributable to Blend Labs,
Inc.
(41,231
)
(441,371
)
(106,648
)
(513,475
)
Less: Accretion of redeemable
noncontrolling interest to redemption value
(1,592
)
(37,008
)
(3,648
)
(38,450
)
Net loss attributable to Blend Labs, Inc.
common stockholders
$
(42,823
)
$
(478,379
)
$
(110,296
)
$
(551,925
)
Net loss per share attributable to Blend
Labs, Inc. common stockholders:
Basic and diluted
$
(0.18
)
$
(2.06
)
$
(0.45
)
$
(2.38
)
Weighted average shares used in
calculating net loss per share:
Basic and diluted
244,262
232,501
242,861
231,421
Comprehensive loss:
Net loss
$
(41,489
)
$
(477,202
)
$
(107,683
)
$
(549,620
)
Unrealized (loss) gain on marketable
securities
(773
)
(502
)
48
(2,347
)
Foreign currency translation (loss)
gain
(11
)
77
(29
)
105
Comprehensive loss
(42,273
)
(477,627
)
(107,664
)
(551,862
)
Less: Comprehensive loss attributable to
noncontrolling interest
258
35,831
1,035
36,145
Comprehensive loss attributable to Blend
Labs, Inc.
$
(42,015
)
$
(441,796
)
$
(106,629
)
$
(515,717
)
Blend Labs, Inc.
Condensed Consolidated
Statements of Cash Flows
(In thousands)
(Unaudited)
Six Months Ended June
30,
2023
2022
Operating activities
Net loss
$
(107,683
)
$
(549,620
)
Adjustments to reconcile net loss to net
cash used in operating activities:
Stock-based compensation
30,756
53,560
Depreciation and amortization
1,256
9,224
Impairment of intangible assets and
goodwill
—
391,823
Amortization of deferred contract
costs
1,745
2,427
Amortization of debt discount and issuance
costs
1,489
1,440
Amortization of operating lease
right-of-use assets
1,615
1,636
Release of valuation allowance and change
in deferred taxes
—
(2,864
)
Other
(3,372
)
1,459
Changes in operating assets and
liabilities:
Trade and other receivables
1,320
3,739
Prepaid expenses and other assets, current
and non-current
(3,911
)
7,997
Deferred contract costs, non-current
(776
)
1,521
Accounts payable
1,889
(2,858
)
Deferred revenue
3,275
3,978
Accrued compensation
(5,318
)
(8,564
)
Operating lease liabilities
(1,917
)
(1,841
)
Other liabilities, current and
non-current
(1,411
)
(5,657
)
Net cash used in operating activities
(81,043
)
(92,600
)
Investing activities
Purchases of marketable securities
(194,957
)
(49,755
)
Maturities of marketable securities
197,709
61,776
Additions to property, equipment,
internal-use software and intangible assets
(474
)
(1,164
)
Net cash provided by investing
activities
2,278
10,857
Financing activities
Proceeds from exercises of stock options,
including early exercises, net of repurchases
22
1,630
Taxes paid related to net share settlement
of equity awards
(3,532
)
—
Payment of initial public offering
costs
—
(391
)
Net cash (used in) provided by financing
activities
(3,510
)
1,239
Effect of exchange rates on cash, cash
equivalents, and restricted cash
13
105
Net decrease in cash, cash equivalents,
and restricted cash
(82,262
)
(80,399
)
Cash, cash equivalents, and restricted
cash at beginning of period
129,557
218,440
Cash, cash equivalents, and restricted
cash at end of period
$
47,295
$
138,041
Reconciliation of cash, cash
equivalents, and restricted cash within the consolidated balance
sheets:
Cash and cash equivalents
$
34,980
$
132,683
Restricted cash
12,315
5,358
Total cash, cash equivalents, and
restricted cash
$
47,295
$
138,041
Supplemental disclosure of cash flow
information:
Cash paid for income taxes
$
48
$
137
Cash paid for interest
$
14,100
$
9,669
Supplemental disclosure of non-cash
investing and financing activities:
Vesting of early exercised stock
options
$
1,014
$
3,143
Operating lease liabilities arising from
obtaining new or modified right-of-use assets
$
327
$
317
Accretion of redeemable noncontrolling
interest to redemption value
$
3,648
$
38,450
Blend Labs, Inc.
Revenue Disaggregation
(In thousands)
(Unaudited)
Three Months Ended June
30,
2023
2022
Blend Platform revenue:
YoY change
Mortgage Suite
$
22,271
74
%
$
26,976
80
%
(17
)%
Consumer Banking Suite
5,844
19
%
4,604
14
%
27
%
Total Software revenue
28,115
93
%
31,580
94
%
(11
)%
Professional services
2,216
7
%
2,021
6
%
10
%
Total Blend Platform revenue
30,331
100
%
33,601
100
%
(10
)%
Title revenue:
Traditional
9,313
75
%
31,861
100
%
(71
)%
Digitally-enabled
3,171
25
%
77
—
%
4,018
%
Total Title revenue
12,484
100
%
31,938
100
%
(61
)%
Total revenue
$
42,815
$
65,539
(35
)%
Six Months Ended June
30,
2023
2022
Blend Platform revenue:
YoY change
Mortgage Suite
40,066
73
%
$
53,729
81
%
(25
)%
Consumer Banking Suite
11,019
20
%
8,455
13
%
30
%
Total Software revenue
51,085
93
%
62,184
94
%
(18
)%
Professional services
3,950
7
%
3,993
6
%
(1
)%
Total Blend Platform revenue
55,035
100
%
66,177
100
%
(17
)%
Title revenue:
Traditional
18,791
75
%
70,592
100
%
(73
)%
Digitally-enabled
6,325
25
%
294
—
%
2,051
%
Total Title revenue
25,116
100
%
70,886
100
%
(65
)%
Total revenue
$
80,151
137,063
(42
)%
Blend Labs, Inc.
Reconciliation of GAAP to
non-GAAP Measures
(In thousands)
(Unaudited)
Three Months Ended June 30,
2023
GAAP
Non-GAAP
adjustments(1)
Non-GAAP
Gross
Profit
Gross
Margin
Gross
Profit
Gross
Margin
Blend Platform
Software
$
22,629
80
%
9
$
22,638
81
%
Professional services
(489
)
(22
)%
253
(236
)
(11
)%
Total Blend Platform
22,140
73
%
262
22,402
74
%
Title
1,353
11
%
2
1,355
11
%
Total
$
23,493
55
%
$
264
$
23,757
55
%
Three Months Ended June 30,
2022
GAAP
Non-GAAP
adjustments(1)
Non-GAAP
Gross
Profit
Gross
Margin
Gross
Profit
Gross
Margin
Blend Platform
Software
$
22,904
73
%
16
$
22,920
73
%
Professional services
(2,531
)
(125
)%
227
(2,304
)
(114
)%
Total Blend Platform
20,373
61
%
243
20,616
61
%
Title
4,892
15
%
307
5,199
16
%
Total
$
25,265
39
%
$
550
$
25,815
39
%
Six Months Ended June 30,
2023
GAAP
Non-GAAP
adjustments(1)
Non-GAAP
Gross
Profit
Gross
Margin
Gross
Profit
Gross
Margin
Blend Platform
Software
$
39,796
78
%
22
$
39,818
78
%
Professional services
(1,561
)
(40
)%
593
(968
)
(25
)%
Total Blend Platform
38,235
69
%
615
38,850
71
%
Title
1,111
4
%
137
1,248
5
%
Total
$
39,346
49
%
$
752
$
40,098
50
%
Six Months Ended June 30,
2022
GAAP
Non-GAAP
adjustments(1)
Non-GAAP
Gross
Profit
Gross Margin
Gross
Profit
Gross
Margin
Blend Platform
Software
$
44,842
72
%
16
$
44,858
72
%
Professional services
(4,294
)
(108
)%
539
(3,755
)
(94
)%
Total Blend Platform
40,548
61
%
555
41,103
62
%
Title
13,586
19
%
488
14,074
20
%
Total
$
54,134
39
%
$
1,043
$
55,177
40
%
Blend Labs, Inc.
Reconciliation of GAAP to
non-GAAP Measures
(In thousands)
(Unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
2023
2022
2023
2022
GAAP operating expenses
$
60,214
$
496,681
$
137,503
$
595,298
Non-GAAP adjustments:
Stock-based compensation(1) and
amortization of warrant
14,100
28,698
30,004
52,541
Compensation realignment costs(2)
1,778
—
2,874
—
Amortization of acquired intangible
assets(3)
—
4,068
—
8,136
Impairment of intangible assets and
goodwill(4)
—
391,823
—
391,823
Restructuring(5)
2,349
6,380
15,132
6,380
Litigation contingencies(6)
(245
)
—
(245
)
—
Transaction-related costs(7)
596
411
1,034
2,224
Non-GAAP operating expenses
$
41,636
$
65,301
88,704
134,194
GAAP loss from operations
$
(36,721
)
$
(471,416
)
$
(98,157
)
$
(541,164
)
Non-GAAP adjustments:
Stock-based compensation(1) and
amortization of warrant
14,364
29,248
30,756
53,584
Compensation realignment costs(2)
1,778
—
2,874
—
Amortization of acquired intangible
assets(3)
—
4,068
—
8,136
Impairment of intangible assets and
goodwill(4)
—
391,823
—
391,823
Restructuring(5)
2,349
6,380
15,132
6,380
Litigation contingencies(6)
(245
)
—
(245
)
—
Transaction-related costs(7)
596
411
1,034
2,224
Non-GAAP loss from operations
$
(17,879
)
$
(39,486
)
$
(48,606
)
$
(79,017
)
GAAP net loss
$
(41,489
)
$
(477,202
)
$
(107,683
)
$
(549,620
)
Non-GAAP adjustments:
Stock-based compensation(1) and
amortization of warrant
14,364
29,248
30,756
53,584
Compensation realignment costs(2)
1,778
—
2,874
—
Amortization of acquired intangible
assets(3)
—
4,068
—
8,136
Impairment of intangible assets and
goodwill(4)
—
391,823
—
391,823
Restructuring(5)
2,349
6,380
15,132
6,380
Litigation contingencies(6)
(245
)
—
(245
)
—
Transaction-related costs(7)
596
411
1,034
2,224
Foreign currency gains and losses(8)
(23
)
181
(157
)
227
Income tax benefit(9)
—
—
—
(2,864
)
Non-GAAP net loss
$
(22,670
)
$
(45,091
)
$
(58,289
)
$
(90,110
)
GAAP basic net loss per share
$
(0.18
)
$
(2.06
)
$
(0.45
)
$
(2.38
)
Non-GAAP adjustments:
Net loss attributable to noncontrolling
interest(10)
—
(0.15
)
$
—
$
(0.16
)
Accretion of redeemable noncontrolling
interest to redemption value(10)
0.01
0.16
0.01
0.17
Stock-based compensation(1) and
amortization of warrant
0.06
0.12
0.13
0.22
Compensation realignment costs(2)
0.01
—
0.01
—
Amortization of acquired intangible
assets(3)
—
0.02
—
0.04
Impairment of intangible assets and
goodwill(4)
—
1.69
—
1.69
Restructuring(5)
0.01
0.03
0.06
0.03
Litigation contingencies(6)
—
—
—
—
Transaction-related costs(7)
—
—
—
0.01
Foreign currency gains and losses(8)
—
—
—
—
Income tax benefit(9)
—
—
—
(0.01
)
Non-GAAP basic net loss per
share
$
(0.09
)
$
(0.19
)
$
(0.24
)
$
(0.39
)
(1) Stock-based compensation by
function:
Three Months Ended June
30,
Six Months Ended June
30,
2023
2022
2023
2022
Cost of revenue
$
264
$
550
$
752
$
1,043
Research and development
4,829
12,516
12,960
22,382
Sales and marketing
1,931
3,179
4,714
5,702
General and administrative
7,340
13,003
12,330
24,433
Total
$
14,364
$
29,248
$
30,756
$
53,560
(2) Compensation realignment costs relate
to amortization of one-time cash bonus payment (paid in two
installments in March and May 2023) to certain employees in lieu of
previously committed equity-based awards, driven by an
organizational initiative to standardize our equity compensation
program.
(3) Amortization of acquired intangible
assets represents non-cash amortization of customer relationships
acquired in connection with the Title365 acquisition.
(4) Impairment of intangible assets and
goodwill relates to charges recorded based on the results of the
interim quantitative impairment analysis performed in the three
months ended June 30, 2022 and in the three months ended September
30, 2022, in response to certain triggering events, such as a
continued decline in economic and market conditions, decline in our
market capitalization, and current and projected declines in the
operating results of the Title365 reporting unit.
(5) The restructuring charges relate to
our workforce reduction plans executed as part of our broader
efforts to improve cost efficiency and better align our operating
structure with our business activities.
(6) Litigation contingencies represent
reserves for legal settlements that are unusual or infrequent costs
associated with our operating activities.
(7) Transaction-related costs include
non-recurring due diligence, consulting, and integration costs
recorded within general and administrative expense.
(8) Foreign currency gains and losses
include transaction gains and losses incurred in connection with
our operations in India.
(9) Income tax benefit represents the
non-recurring release of historical valuation allowance resulting
from changes in U.S. tax law requiring capitalization and
amortization of research and development costs for tax
purposes.
(10) Net loss attributable to
noncontrolling interest and accretion of redeemable noncontrolling
interest to redemption value relate to the 9.9% non-controlling
interest in our Title365 subsidiary.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230809028413/en/
Investor Relations Bryan Michaleski ir@blend.com
Media press@blend.com
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