Mix is ​​profitable in Q2 only due to reversal of tax assets

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Blend Labs posted a small profit for the second quarter, but this was entirely the result of a one-off income tax exemption, otherwise the company would have reflected a loss over that period again.

Also, the numbers do not reflect it. acquisition of Title365 as the deal did not close until June 30th. San Francisco company completed its initial public offering July 16.

Blend’s second-quarter net income was $ 5.8 million, including a $ 45.3 million deduction from the historic deferred tax asset valuation discount for the Title365 acquisition. The company reported a non-GAAP net loss figure, which also includes a $ 26.2 million share payment and acquisition-related expense. During the conference call, he reported a net loss as if he owned Title365 for the quarter of $ 31.2 million.

“Over the past few months, we have increased our revenue from the previous quarter, despite a decline in mortgage lending across the country, which indicates that we are expanding our customer base, expanding our customer relationships and diversifying our product offerings,” said Nima Gamsari, co-founder. and Blend’s supervisor during the call.

In the first quarter, Blend reported net loss of $ 27.1 millionand a year ago he lost $ 20.6 million.

Even without Title365, the company’s revenue rose to $ 32.1 million in the second quarter from $ 31.9 million in the first quarter and $ 21.9 million in the second quarter of 2020.

“This growth was characterized by significant transaction volumes, demonstrating increased use and acceptance of our platform, even though the total mortgage lending in the industry was roughly flat in the previous year,” said Mark Greenberg, CFO.

For the remainder of the year, Blend’s revenue will come from two sources, Greenberg said: the platform’s revenue, which consists of mortgage and consumer banking products, homeownership marketplaces, and any new products it launches; and from a business set up through Title365.

“Our recommendations continue to reflect Fannie and MBA forecasts are for last month and we also have a really good start in the third quarter, ”Greenberg said. “If volume is higher than industry forecasts, there is definitely room for growth.”

Thus, Blend expects full-year revenues of $ 226 million to $ 232 million; on a pro forma basis, if the company had owned Title365 for a full year, it would have generated revenues of $ 365 million and $ 371 million.

“Our mortgage business continues to grow, but as we expand into other non-mortgage product lines, such as personal loans, deposit accounts, credit cards, these price categories are changing,” Gamsari said. “As a result, the total volume of transactions will continue to grow, [but] dollars per transaction that we get from banking transactions is going down. “

As Blend’s product portfolio shifts more towards consumer banking, Greenberg said the company will be less exposed to mortgage market volatility.

“The integration of Title365 has not yet come up with any surprises,” added Tim Mayopoulos, President of Blend.

“We are very pleased that we were able to retain a really talented executive team and key staff there,” said Mayopoulos. “We are making significant progress in the integration that needs to be done, and we did it within our company in the first place.”

Additionally, former Title365 owner and largest customer, Mr. Cooper, is moving to the Blend software platform. “We started this rollout early in the third quarter and we expect Mr. Cooper to come out on Blend in the first half of next year,” Mayopoulos said. “We also expect to be able to launch pilot projects by the end of the year with some of the joint clients we have between Blend and Title365.”



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