Blend Labs(US:BLND)2021-11-14 16:00Financial Performance - Blend Labs, Inc. reported a 63% increase in transactions on its software platform for the nine months ended September 30, 2021, compared to the same period in 2020[196]. - The total number of Blend Platform banking transactions reached 1,558,000 for the nine months ended September 30, 2021, up from 957,000 in the same period of 2020[200]. - Revenue increased by $61.7 million, or 221%, for the three months ended September 30, 2021, compared to the same period in 2020, driven by the inclusion of Title365 revenue and a 26% increase in Blend Platform revenue[230]. - Total revenue increased by $88.1 million, or 135%, for the nine months ended September 30, 2021, compared to the same period in 2020, driven by the inclusion of Title365 revenue and a 51% increase in Blend Platform revenue[240]. - The company reported a total gross profit of $40.3 million for the three months ended September 30, 2021, an increase of $21.9 million, or 119%, compared to the same period in 2020[230]. Expenses and Losses - Cost of revenue increased by $39.8 million, or 419%, for the three months ended September 30, 2021, primarily due to costs associated with Title365 operations and a 33% increase in Blend Platform cost of revenue[231]. - General and administrative expenses surged by $51.3 million, or 662%, for the three months ended September 30, 2021, largely due to increased stock-based compensation and personnel-related expenses[236]. - Total operating expenses reached $110.9 million for the three months ended September 30, 2021, an increase of $77.1 million, or 229%, compared to the same period in 2020[233]. - The net loss for the three months ended September 30, 2021, was $76.3 million, compared to a net loss of $15.2 million in the same period in 2020[1]. - Operating expenses rose by $119.3 million, or 120%, with significant increases in general and administrative expenses by $72.8 million, or 336%[242]. Acquisitions and Growth - The company completed its IPO on July 20, 2021, raising net proceeds of $366.7 million after deducting underwriters' discounts and offering expenses[194]. - Following the acquisition of Title365, Blend expects total revenue to increase significantly in dollar amounts and anticipates a growth rate increase in the near term[207]. - The acquisition of Title365, completed on June 30, 2021, allows Blend to streamline the title, settlement, and closing process for mortgages and home equity products[193]. - Blend Platform revenue from Mortgage Banking increased by $24.7 million, or 45%, and Consumer Banking and Marketplace revenue increased by $8.5 million, or 102%[240]. Cash Flow and Financial Position - Cash and cash equivalents, along with marketable securities, totaled $593.6 million as of September 30, 2021[249]. - The company reported an accumulated deficit of $371.1 million as of September 30, 2021, indicating ongoing operating losses[250]. - Net cash used in operating activities was $84.4 million for the nine months ended September 30, 2021, influenced by a net loss of $97.6 million[261]. - Net cash used in investing activities was $614.7 million, primarily due to the acquisition of Title365 and purchases of marketable securities[263]. - Net cash provided by financing activities for the nine months ended September 30, 2021 was $934.5 million, a significant increase from $79.7 million in the same period of 2020[265][266]. Future Expectations and Strategic Initiatives - The company anticipates that its research and development expenses will increase significantly in dollar amounts in future periods[214]. - General and administrative expenses are expected to rise due to the integration of Title365 and the costs associated with operating as a public company[219]. - Blend has seen a shift in consumer behavior towards digital channels for banking services, which is expected to generate additional opportunities in the future[197]. - The company is considering adopting employee compensation programs that may increase cash reserves used for compensation or increase stock-based compensation expenses[268]. Miscellaneous - The company does not believe inflation has had a material effect on its business or financial condition[290]. - Goodwill from business combinations is tested for impairment annually, with no amortization but potential impacts on financial statements if impairment occurs[278]. - Revenue for title insurance services is recognized net of amounts paid to third-party insurance underwriters upon closing of real estate transactions[282].