Blend Labs (BLND) Q3 2024 earnings summary

Executive summary

• Achieved first positive non-GAAP operating income quarter in Q3 2024, marking a key profitability milestone amid high mortgage rates and challenging macroeconomic conditions, with significant cost reductions and strong revenue growth in consumer banking and mortgage segments.

• Revenue for Q3 2024 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 to $2.6 million from $41.8 million in Q3 2023, reflecting improved operating efficiency and cost reductions.

• Closed significant deals with Pentagon Federal Credit Union, a top 10 bank by assets, and a top 300 financial institution.

• 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, and Consumer Banking Suite $9.5 million (up 54%).

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

• GAAP net loss per share was $0.03 vs. $0.18 in Q3 2023; non-GAAP net income per share was $0.00 vs. a $0.09 loss.

• 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 at quarter end.

• Operating expenses for Q3 2024 decreased 33% year-over-year to $39.3 million, driven by lower R&D, sales, and G&A costs.

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 expected between $0.0M and $3.0M, maintained at Q3 levels.

• Guidance reflects expectations of lower U.S. mortgage originations and the impact of the insurance business sale, with continued expansion in Consumer Banking.

• RPO expected to exceed $110 million by year-end.

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