While the mortgage industry has been shrinking, Blend says it has been building its market share, processing 23.2 percent of mortgages originated in H2 2022.
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Lending software and title insurance provider Blend Labs Inc. trimmed its losses during the three months of the year as revenue exceeded guidance the company provided in posting an $81.4 million fourth-quarter loss.
Blend reported a $66.2 million first-quarter net loss Tuesday, down 9 percent from the $72.4 million net loss the same time a year ago.
At $37.3 million, revenue beat the $33 million to $35 million projected in March but represented a 48 percent decline from a year ago. Looking ahead, Blend executives said they expect second-quarter revenue of $39.5 million to $41 million.
“Looking ahead, we are getting stronger every day and believe our top and bottom line performance is poised to improve throughout the year, despite the tough economic backdrop,” Blend co-founder and head Nima Ghamsari said in a statement. “Continued strong execution should keep us at or ahead of plan on our path to profitability.”
At $77.3 million, operating expenses were down 22 percent from a year ago, in large part to jobs the company has shed. Blend cut more than 780 positions in the last year to streamline the company’s title operations, research and development and sales and marketing teams.
As of March 31, Blend had $306.9 million in cash, cash equivalents and marketable securities on hand, down from $354.1 million at the end of the year.
Shares in Blend, which have traded for as little as 53 cents and as much as $3.94 in the last year, closed at 78 cents Tuesday before earnings were released, up 11 percent from Monday’s close of 70 cents.
Having traded below $1 for more than a month, Blend’s share price is trading below the New York Stock Exchange’s minimum requirements, putting the company in danger of being delisted.
Last week, Blend disclosed to investors that it received a notice from the New York Stock Exchange on April 28 that it has six months to regain compliance with the New York Stock Exchange’s minimum price criteria, which it intends to do.
Blend executives said the company “is already undertaking business initiatives and other actions that it believes will increase stockholder value and drive share price increases,” but can also regain compliance through a reverse stock split, if necessary.
Mortgage banking services remain Blend’s primary source of revenue. While the mortgage industry has been shrinking, Blend says it has been building its market share, processing 23.2 percent of mortgages originated in the second half of 2022, up from 14.5 percent during the same period of 2021.
In March, Blend announced a deal with an existing mortgage customer, Navy Federal Credit Union, to expand the use of Blend’s platform to cover membership and deposit account products.
Last month, Blend said another existing customer, Atlantic Coast Mortgage, would continue to rely on Blend to handle its end-to-end mortgage processes from application and disclosures to electronic closings.
Based on its success using Blend’s hybrid remote online notarization (RON) products, Atlantic Coast Mortgage plans to explore a full RON eClosing experience, the companies said.
“Your mortgage platform is your first interaction with the borrower,” Atlantic Coast Mortgage CIO Ed Vint said in a statement. “This is what they’re going to see first. Looking at it from that standpoint really opens up your eyes to what improvements and features we look for in a solution.”
Blend will hold its annual meeting on June 15, and the company is recommending that shareholders elect seven directors to continue serving on the company’s board of directors until the next annual meeting.
In addition to Ghamsari, age 37, Blend’s directors are Ciara Burnham, age 56; Gerald Chen, age 48; Erin James Collard, age 43; Erin Lantz, age 43; Ann Mather, age 62; and Timothy Mayopoulos, age 64.
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