Blend Labs Inc. · Q1 2023 earnings

Briefing

Blend's first quarter results exceeded expectations, driven by strong mortgage customer performance and improvements in gross margins and operating performance.

Blend Labs, Inc. reported first quarter 2023 financial results that exceeded guidance, driven by a strong mortgage customer base and progress on strategic priorities. The company's lower cost structure is driving improvements in operating performance, resulting in market share gains and industry outperformance. Blend is making early strides in proving its Blend Builder platform, highlighted by a new customer win with Navy Federal.

• Blend exceeded guidance on 1Q23 revenue and operating loss metrics.
• Consolidated GAAP gross profit margin of 42% compared to 40% in 1Q22.
• Blend's mortgage banking software processed 23.2% of the total market originations as measured by the Mortgage Bankers Association in the second half of 2022, up from 14.5% in the second half of 2021.
• Blend's Non-GAAP operating loss outperformed the top end of guidance by 17% on execution of efficiency initiatives.

Headline financials

Revenue & EPS history

Blend is providing guidance for the second quarter of 2023 as follows: Blend Platform Revenue $27.0 - 28.0 million, Title Revenue $12.5 - 13.0 million, Blend Labs, Inc. Consolidated Revenue $39.5 - 41.0 million, Non-GAAP Net Operating Loss $26.5 - 25.0 million. Blend’s Q2 2023 guidance reflects an estimated 37% year over year decline in mortgage volumes from Q2 2022 to Q2 2023 as projected by the Mortgage Bankers Association.