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Cloud banking software provider Blend Labs Inc. continues to inch toward profitability by trimming its workforce, signing new customers, and expanding the services it provides to existing customers.
Blend — which helps mortgage lenders handle about one in five home loans — grew third quarter revenue by 11 percent from a year ago, to $45.2 million. A 32 percent reduction in operating expenses, to $39.3 million, helped the company trim its Q3 net loss to $2.6 million, down from $19.4 million in Q2, Blend reported Wednesday.
Blend said it laid off 50 workers in September, about 9 percent of its workforce, as part of a workforce reduction plan it expects to complete by the end of the year.
It also signed a multi-year mortgage and home equity deal with Pentagon Federal Credit Union, the nation’s second-largest credit union, and inked a deal to power credit cards, auto and personal loans for a top 300 financial institution.
Blend CEO Nima Ghamsari said the company achieved “non-GAAP operating profitability” during the quarter, with income from operations exceeding expenses by $39,000.
“The third quarter resulted in several big wins for Blend, including the signing of multi-year deals with new customers in both mortgage and consumer banking as well as the significant milestone of achieving non-GAAP operating profitability ahead of our fourth quarter target,” Ghamsari said in a statement.
Blend said it expects to generate $39.5 million to $42.5 million in revenue during the final quarter of the year, and up to $3 million in non-GAAP net operating income.
“This achievement reflects the dedication, focus and hard work of our entire team,” Ghamsari said. “Reaching this milestone now positions us to enter the next phase of our growth strategy. Our focus will be on generating profitable growth and ensuring our platform continues to deliver even more value for our customers over time.”
Shares in Blend, which in the last year have changed hands for as little as $1.16 and as much as $4.25, closed at $3.86 Wednesday before earnings were announced and gained 3 percent in after-hours trading.
Having racked up more than $1 billion in cumulative losses in 2021, 2022 and 2023, Blend’s accumulated deficit stood at $1.384 billion as of Sept. 30.
Blend revenue by source
Blend offers a suite of tools that help banks and lenders process applications for mortgages, home equity loans and lines of credit, vehicle loans, personal loans, credit cards, and deposit accounts.
Most of the company’s revenue — 69 percent during Q3 — comes from the services it provides to mortgage lenders.
The addition of new customers and the provision of more services to existing customers helped Blend boost revenue generated by its mortgage suite by 16 percent from Q2 to $21.5 million.
Revenue per mortgage loan up 13% from a year ago
Blend offers a suite of products that lenders can pick and choose from to support the loan origination process, including data collection, verification checks, product selection, pricing, pre-approvals, disclosure delivery and signing closing documents.
Growing lender adoption of add-on products helped Blend boost the “economic value” of each mortgage loan it helps its clients process to $99 in Q3, up from $86 a year ago.
Blend estimated that it has helped process 20 percent of all mortgages originated in 2024, up from 14 percent in 2021.
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