Blend Labs (BLND) Q3 2024 earnings summary

Executive summary

• Achieved first positive non-GAAP operating income quarter in Q3 2024, ahead of schedule, with significant cost reductions and strong revenue growth in consumer banking and mortgage segments.

• Q3 2024 revenue increased 11% year-over-year to $45.2 million, driven by 16% growth in Blend Platform and 54% in Consumer Banking Suite.

• Net loss narrowed significantly, with GAAP net loss per share at $0.03 versus $0.18 in Q3 2023; non-GAAP net income was $1.5 million.

• Closed significant new deals, including with Pentagon Federal Credit Union and a top 10 bank by assets.

• Entered a strategic partnership and completed the sale of the insurance business to Covered Insurance Solutions, generating a $9.2 million gain.

Financial highlights

• Total Q3 2024 revenue was $45.2 million, up 11% year-over-year; Blend Platform revenue $33.1 million, Title segment $12.1 million.

• Consumer Banking Suite revenue grew 54% year-over-year to $9.5 million; Mortgage Suite revenue increased 6% to $21.5 million.

• GAAP gross margin rose to 58% from 54% in Q3 2023; software platform gross margin was 80%.

• Free cash flow improved to -$1.4 million from -$25.9 million a year ago; cash, cash equivalents, and marketable securities totaled $124.1 million as of September 30, 2024.

• Fully repaid all outstanding debt in April 2024, eliminating interest expense.

Outlook and guidance

• Q4 2024 total revenue guidance: $39.5M–$42.5M; Blend Platform $29.0M–$31.0M; Title $10.5M–$11.5M.

• Non-GAAP net operating income for Q4 2024 expected between $0.0M and $3.0M.

• Guidance reflects expectations of lower U.S. mortgage originations and the impact of the insurance business sale.

• Management expects cost efficiency initiatives and restructuring to yield ongoing improvements in operating expenses.

• Current liquidity is expected to be sufficient to fund operations for at least the next 12 months.