Company Performance - Blend Labs (BLND) shares have increased by 52.7% over the past month, reaching a new 52-week high of $5.11, and have gained 98.8% since the start of the year [1] - The company has consistently exceeded earnings expectations, reporting an EPS of $0 against a consensus estimate of -$0.02 in its last earnings report [2] Financial Projections - For the current fiscal year, Blend Labs is projected to have an EPS of -$0.07 on revenues of $161.4 million, reflecting an 82.5% change in EPS and a 2.9% change in revenues [3] - In the next fiscal year, the expected EPS is $0.03 on revenues of $190 million, indicating a year-over-year change of 142.86% in EPS and 17.72% in revenues [3] Valuation Metrics - Blend Labs has a Value Score of F, while its Growth and Momentum Scores are A and B, respectively, resulting in a VGM Score of B [6] - The company currently holds a Zacks Rank of 2 (Buy), supported by rising earnings estimates, suggesting potential for further growth [7] Industry Comparison - The Internet - Software industry is performing well, ranking in the top 16% of all industries, which provides favorable conditions for both Blend Labs and its peers [10] - Five9, Inc. (FIVN), a competitor, has a Zacks Rank of 1 (Strong Buy) and has also shown strong earnings performance, indicating a competitive landscape [8][9]

Group 1: Momentum Investing Overview - Momentum investing involves following a stock's recent trend, with the strategy of buying high and selling higher, capitalizing on established price movements [1] - The Zacks Momentum Style Score helps investors identify effective momentum metrics amidst ongoing debates about performance indicators [2] Group 2: Blend Labs (BLND) Performance - Blend Labs currently holds a Momentum Style Score of A and a Zacks Rank of 2 (Buy), indicating strong potential for outperformance [3][4] - Over the past week, BLND shares increased by 30.85%, significantly outperforming the Zacks Internet - Software industry, which rose by 5.16% [6] - In a longer timeframe, BLND shares have gained 25.86% over the past quarter and 250.4% over the last year, compared to the S&P 500's increases of 9.45% and 33.9%, respectively [7] Group 3: Trading Volume and Earnings Outlook - The average 20-day trading volume for BLND is 2,261,540 shares, indicating a bullish sign with rising stock prices [8] - Recent earnings estimate revisions show one upward revision for the full year, improving the consensus estimate from -$0.11 to -$0.07 over the past 60 days [10]

Financial Data and Key Metrics Changes - The company achieved its first positive non-GAAP operating income quarter as a public company, marking a significant milestone in profitability [7] - Total company revenues for Q3 were $45.2 million, representing an 11% year-over-year growth, exceeding guidance [26] - Platform revenue reached $33.1 million, growing 16% year-over-year, while mortgage suite revenue was $21.5 million, reflecting a 6% year-over-year growth [26][28] - Consumer Banking revenue grew 54% year-over-year to $9.5 million, significantly surpassing the previously shared growth target of 35% [26][28] - Non-GAAP gross profit was $26.3 million, with gross margins for the Blend Platform segment at 75% [27] Business Line Data and Key Metrics Changes - The Consumer Banking business outperformed expectations, achieving over 50% growth compared to the same quarter last year [9] - Mortgage suite revenue showed a 17% sequential growth, aligning with expectations of higher industry originations [26] - Professional services revenue slightly decreased to $2 million from $2.1 million year-over-year [26] Market Data and Key Metrics Changes - The mortgage industry is experiencing a positive sentiment shift despite high mortgage rates, with increased willingness to invest in businesses [8] - Blend achieved a 21.7% share of HMDA originations in 2023, a 120 basis point increase from 2022, although a slight decline is expected in 2024 due to industry churn [31][32] Company Strategy and Development Direction - The company is transitioning to a simpler software-focused model, emphasizing operational leverage and partnerships to enhance customer value [11][12] - A strategic partnership with Covered Insurance Solutions aims to enhance the insurance marketplace while reducing operational costs [33][34] - The company plans to continue expanding its platform and partnerships to drive growth and profitability [37] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the mortgage industry's recovery and the potential for increased adoption of technology solutions among customers [17][18] - The outlook for Q4 2024 includes expected platform revenue between $29 million and $31 million, reflecting cautious optimism amid high mortgage rates [39] - Non-GAAP net operating income is projected to be between zero and $3 million for Q4, maintaining profitability from Q3 [40] Other Important Information - The company ended the quarter with approximately $124 million in cash, cash equivalents, and marketable securities, providing a strong balance sheet for strategic initiatives [29] - Remaining performance obligations (RPO) reached a record $107.4 million, marking an 82% year-over-year growth [38] Q&A Session Summary Question: Can you provide more details about the deal with a top 10 bank in consumer banking? - The bank is expanding its relationship with Blend, having previously used Blend for mortgage services and is now adopting consumer banking solutions [43] Question: How is the sentiment shift among customers impacting adoption of new offerings? - The shift is driven by customers finally achieving profitability, allowing them to invest in new solutions like Blend Close [48] Question: What is the current strategy for the title business? - The title business remains critical, with ongoing innovations to enhance the mortgage process [66] Question: How will the sale of the insurance business impact revenue and guidance? - The sale will lead to a decline in revenue but is expected to increase profit per transaction, aligning with the company's strategy for higher operating leverage [75]

Financial Performance - Blend Labs (BLND) reported break-even quarterly earnings per share, surpassing the Zacks Consensus Estimate of a loss of $0.02, compared to a loss of $0.09 per share a year ago, representing an earnings surprise of 100% [1] - The company posted revenues of $45.18 million for the quarter ended September 2024, exceeding the Zacks Consensus Estimate by 9.40%, and up from $40.59 million year-over-year [2] - Over the last four quarters, Blend Labs has surpassed consensus EPS estimates four times and topped consensus revenue estimates three times [2] Stock Performance - Blend Labs shares have increased approximately 49% since the beginning of the year, outperforming the S&P 500's gain of 21.2% [3] - The sustainability of the stock's immediate price movement will depend on management's commentary during the earnings call [3] Earnings Outlook - The current consensus EPS estimate for the coming quarter is -$0.01 on revenues of $40.8 million, and -$0.11 on revenues of $157.5 million for the current fiscal year [7] - The estimate revisions trend for Blend Labs is mixed, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market in the near future [6] Industry Context - The Internet - Software industry, to which Blend Labs belongs, is currently in the top 24% of over 250 Zacks industries, suggesting a favorable outlook compared to the bottom 50% [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Financial Performance - Total revenue for the three months ended September 30, 2024, was $45,184 thousand, an increase of $4,593 thousand or 11% compared to $40,591 thousand for the same period in 2023 [210]. - Gross profit increased by $3,933 thousand or 18% to $25,996 thousand for the three months ended September 30, 2024, compared to $22,063 thousand for the same period in 2023 [211]. - Gross margin improved to 58% for the three months ended September 30, 2024, up from 54% for the same period in 2023 [212]. - Total revenue remained flat at $120.6 million for the nine months ended September 30, 2024, compared to $120.7 million for the same period in 2023 [224]. - Gross profit increased by $4.4 million, or 7%, for the nine months ended September 30, 2024, compared to the same period in 2023 [226]. Cost Management - The company executed a workforce reduction plan in September 2024, eliminating approximately 50 positions, or 9% of its workforce, incurring charges of about $1.7 million [184]. - Research and development expenses decreased by $8,699 thousand or 46% to $10,127 thousand for the three months ended September 30, 2024, compared to $18,826 thousand for the same period in 2023 [214]. - Sales and marketing expenses decreased by $4,611 thousand or 32% to $9,883 thousand for the three months ended September 30, 2024, compared to $14,494 thousand for the same period in 2023 [216]. - Total operating expenses decreased by $18,946 thousand or 33% to $39,315 thousand for the three months ended September 30, 2024, compared to $58,261 thousand for the same period in 2023 [214]. - Total operating expenses decreased by $82.1 million, or 42%, for the nine months ended September 30, 2024, compared to the same period in 2023 [228]. Revenue Streams - The Blend Platform revenue increased by $4,462 thousand or 16% to $33,104 thousand for the three months ended September 30, 2024, compared to $28,642 thousand for the same period in 2023 [210]. - Mortgage Suite revenue increased by $1,240 thousand or 6% to $21,546 thousand for the three months ended September 30, 2024, compared to $20,306 thousand for the same period in 2023 [210]. - Consumer Banking Suite revenue increased by $3,321 thousand or 54% to $9,520 thousand for the three months ended September 30, 2024, compared to $6,199 thousand for the same period in 2023 [210]. Strategic Initiatives - Blend Labs, Inc. reported a strategic partnership agreement on September 30, 2024, which included a cash sale of its insurance business for $10.1 million and a warrant for 177,516 Class B Units [183]. - Blend Labs, Inc. continues to focus on customer acquisition, maximizing partnerships, and product expansion, including potential market expansion outside the United States [180]. - The company has built a market-leading cloud-based software platform designed to support the end-to-end consumer journey for banking products, driving revenue growth opportunities [176]. Financial Position - As of September 30, 2024, the company had cash, cash equivalents, and marketable securities totaling $116.8 million [237]. - The accumulated deficit reached $1,384.1 million as of September 30, 2024, indicating significant operational losses [238]. - The company believes current cash and marketable securities will be sufficient to fund operations for at least the next 12 months, but future capital requirements depend on growth and investments [244]. Other Financial Metrics - Net loss for the three months ended September 30, 2024, was $(2,627) thousand, compared to a net loss of $(41,820) thousand for the same period in 2023 [205]. - Interest expense decreased by $8.2 million, or 100%, for the three months ended September 30, 2024, primarily due to the prepayment of the outstanding Term Loan [220]. - Other income increased by $8.1 million, or 307%, for the three months ended September 30, 2024, primarily due to a $9.2 million gain on the sale of the insurance business [221]. - Net cash used in operating activities for the nine months ended September 30, 2024, was $8.5 million, a significant decrease from $106.9 million in the same period of 2023 [247]. - Net cash provided by investing activities was $47.3 million for the nine months ended September 30, 2024, primarily from sales and maturities of marketable securities [248]. - Net cash used in financing activities was $14.7 million for the nine months ended September 30, 2024, mainly due to long-term debt repayment and issuance costs [250].

Revenue Performance - Total company revenue in Q3 2024 was $45.2 million, with Blend Platform segment revenue of $33.1 million and Title segment revenue of $12.1 million[5]. - Consumer Banking Suite revenue totaled $9.5 million in Q3 2024, representing a 54% year-over-year growth[5]. - Total revenue for the three months ended September 30, 2024, was $45,184,000, a 11.5% increase from $40,591,000 in the same period of 2023[39]. - The total revenue for the Blend Platform in the nine months ended September 30, 2024, was $85,640 thousand, a 2% increase from $83,677 thousand in the same period of 2023[44]. - Revenue for Q3 2024 was $40.591 million, a slight decrease from $40.742 million in Q3 2023[48]. Profitability and Loss - Blend achieved non-GAAP operating profitability, with a GAAP loss from operations reduced to $13.3 million from $36.2 million in Q3 2023[6]. - The net loss attributable to Blend Labs, Inc. for the three months ended September 30, 2024, was $8,253,000, compared to a net loss of $43,212,000 in the same period of 2023, showing a significant improvement[39]. - The GAAP net loss for the three months ended September 30, 2024, was $(2,627) thousand, compared to a net loss of $(41,820) thousand in the same period of 2023[47]. - The comprehensive loss attributable to Blend Labs, Inc. was $(1,984) million for the three months ended September 30, 2023, compared to $(41,473) million for the same period in 2022, reflecting improved financial performance[40]. Cash Flow and Liquidity - Cash provided by operating activities was $2.1 million in Q3 2024, compared to cash used of $25.9 million in Q3 2023[7]. - Cash, cash equivalents, and marketable securities totaled $124.1 million as of September 30, 2024, with no outstanding debt[7]. - Cash paid for interest in Q3 2024 was $0, compared to $7.364 million in Q3 2023, reflecting reduced debt obligations[49]. - Free cash flow for Q3 2024 was $(1.356) million, compared to $(25.918) million in Q3 2023, indicating improved cash management[48]. Operating Expenses - Total operating expenses for the three months ended September 30, 2024, were $39,315,000, down from $58,261,000 in the same period of 2023, indicating a reduction of 32.5%[39]. - Non-GAAP operating expenses for the three months ended September 30, 2024, were $26,281 thousand, down from $38,178 thousand in the same period of 2023[47]. - Research and development expenses for Q3 2024 were $2.169 million, down from $4.090 million in Q3 2023[49]. - Total operating expenses for Q3 2024 were $6.671 million, a decrease from $9.042 million in Q3 2023[49]. Guidance and Future Expectations - The company expects total revenue for Q4 2024 to be between $39.5 million and $42.5 million[8]. - The guidance for Q4 2024 reflects expectations of lower U.S. aggregate industry mortgage originations compared to Q3 2024[8]. - Blend's strategic partnership with Covered Insurance Solutions is anticipated to negatively impact revenue but positively affect operating income going forward[8]. Asset Management - Cash and cash equivalents increased to $55,041,000 as of September 30, 2024, from $30,962,000 as of December 31, 2023[37]. - Total assets decreased to $186,129,000 as of September 30, 2024, from $206,065,000 as of December 31, 2023[38]. - The total current liabilities increased to $45,244,000 as of September 30, 2024, from $31,574,000 as of December 31, 2023[36].

Group 1 - Blend Labs (BLND) is a notable stock in the Computer and Technology sector, showing strong year-to-date performance compared to its peers [1][4] - The Computer and Technology group ranks 8 in the Zacks Sector Rank, which evaluates the strength of 16 sector groups based on individual stock performance [2] - Blend Labs has a Zacks Rank of 2 (Buy), indicating a favorable outlook based on earnings estimate revisions and improving earnings prospects [3] Group 2 - The Zacks Consensus Estimate for Blend Labs' full-year earnings has increased by 29.9% in the past quarter, reflecting stronger analyst sentiment and an improving earnings outlook [4] - Year-to-date, Blend Labs has returned approximately 52.9%, outperforming the average gain of 24% in the Computer and Technology sector [4] - Blend Labs is part of the Internet - Software industry, which ranks 80 in the Zacks Industry Rank, and this industry has seen an average gain of 21.8% this year, further highlighting Blend Labs' strong performance [6]

Group 1 - Blend Labs (BLND) has shown a year-to-date return of 31.8%, outperforming the Computer and Technology sector's average return of 13.4% [4] - The Zacks Consensus Estimate for BLND's full-year earnings has increased by 29.9% over the past 90 days, indicating improving analyst sentiment [4] - Blend Labs is ranked 2 (Buy) in the Zacks Rank system, which highlights stocks expected to outperform the market in the near term [3] Group 2 - Blend Labs is part of the Internet - Software industry, which includes 141 companies, and it currently ranks 95 in the Zacks Industry Rank [6] - The average return for stocks in the Internet - Software industry this year is 10.5%, indicating that BLND is performing better than its peers in this industry [6] - Another stock in the same sector, OneSpan (OSPN), has a year-to-date return of 39.7% and also holds a Zacks Rank of 2 (Buy) [5]

Group 1 - Blend Labs (BLND) is currently outperforming the Computer and Technology sector with a year-to-date return of 60.8%, compared to the sector's average return of 23.8% [4] - The Zacks Rank for Blend Labs is 2 (Buy), indicating a positive outlook based on earnings estimates and revisions, with a 29.9% increase in the consensus estimate for full-year earnings over the past three months [3] - Blend Labs is part of the Internet - Software industry, which has an average year-to-date return of 16.8%, further highlighting BLND's strong performance [6] Group 2 - OneSpan (OSPN), another stock in the Computer and Technology sector, has also shown strong performance with a year-to-date return of 48.8% and a Zacks Rank of 2 (Buy) [4][5] - The consensus EPS estimate for OneSpan has increased by 5.6% over the past three months, indicating positive analyst sentiment [5] - Both Blend Labs and OneSpan are expected to maintain their solid performance in the Computer and Technology sector [7]

Blend Labs, Inc (NYSE:BLND) Q2 2024 Results Conference Call August 8, 2024 4:30 PM ET Company Participants Winnie Ling - Head-Legal and People Nima Ghamsari - Co-Founder and Head-Blend Amir Jafari - Head-Finance and Administration Bryan Michaleski - Investor Relations Lead Conference Call Participants Dylan Becker - William Blair Joseph Vafi - Canaccord Genuity Ryan Tomasello - KBW David Unger - Wells Fargo Winnie Ling Good afternoon, and welcome to Blend's Second Quarter 2024 Earnings Conference Call. My ...