Blend Labs (BLND) Q2 2024 earnings summary

Executive summary

• Achieved Q2 2024 revenue of $40.5 million, with Consumer Banking Suite revenue up 37% year-over-year and Mortgage Suite economic value per funded loan reaching a record $97, driven by new customer wins and product adoption.

• Net loss and operating expenses improved significantly year-over-year due to cost management and restructuring, with non-GAAP net operating loss outperforming guidance for the sixth consecutive quarter.

• Board authorized a $25 million share repurchase program in August 2024, reflecting confidence in valuation and balance sheet strength.

• Fully repaid all outstanding debt in April 2024 using proceeds from a $150 million Series A Preferred Stock issuance.

• Continued investment in digital origination, AI-driven automation, and new product flows for refinancing and home equity.

Financial highlights

• Q2 2024 total revenue was $40.5 million, down 5% year-over-year; Blend Platform revenue was $28.7 million, Mortgage Suite $18.5 million (down 17%), Consumer Banking Suite $8.0 million (up 37%), and Title $11.8 million (down 6%).

• GAAP gross margin was 54% (down from 55% prior year); software platform gross margin was 79%; Title segment margin was 11%.

• Non-GAAP operating loss was $5.6 million, better than guidance and improved from $22.7 million in Q2 2023.

• Free cash flow improved to negative $6.9 million from negative $27.4 million in Q2 2023.

• Cash, cash equivalents, and marketable securities totaled $119.9 million as of June 30, 2024, with no outstanding debt.

Outlook and guidance

• Q3 2024 consolidated revenue guidance is $39.5 million to $43.5 million; Blend Platform segment revenue expected at $28.0 million to $31.0 million; Title segment at $11.5 million to $12.5 million.

• Non-GAAP net operating loss for Q3 2024 is expected between $4 million and $7 million, a 65% year-over-year improvement at the midpoint.

• On track for non-GAAP operating profitability in Q4 2024, with plans for sustainable profitability and positive free cash flow thereafter.

• Guidance reflects continued uncertainty in mortgage and real estate markets, with expectations for stable mortgage market share and growth in Consumer Banking.