The cloud banking software developer raises full-year revenue guidance by $13 million as it signs new clients, launches new products and integrates Title365 acquisition.
Shares in cloud banking software developer Blend Labs Inc. fell in after hours trading Wednesday, after the company said third quarter losses grew by 360 percent from a year ago, to $77 million.
Most of those losses were due to vesting of $54 million in stock-based compensation after Blend’s July 16 initial public offering, which raised about $360 million as the company sold 20 million shares at $18 each. But losses from third quarter operations totalled $21.1 million, up 49 percent from a year ago, Blend reported.
Shares in Blend, which closed in the red at $15.45 Wednesday before the company released its latest quarterly earnings report, were briefly trading below $14 after hours. Since the IPO, Blend’s price per share has ranged from a low of $12.63 to a high of $21.04.
Most of Blend’s third quarter revenue of $89.6 million came from its $422 million acquisition of Title365. That deal, which closed on June 30, contributed $54.5 million in revenue during the three months ending Sept. 30.
But at $35.1 million, revenue from Blend’s platform segment was up 26 percent from a year ago, and 9 percent from the second quarter.
“Our Blend platform segment achieved record quarterly revenue in the third quarter, and we built on our business momentum by adding new customers across verticals, innovating to expand our existing customer relationships, and launching and selling new products,” said Blend’s founder and top executive, Nima Ghamsari, in a statement.
Blend launched a new income verification product in October that’s attracted more than 50 customers, Ghamsari said, including American Federal Mortgage, Lennar Mortgage, and IBC Mortgage.
“Overall, we are confident in our progress both on the Blend platform and integration of the Title365 business, and this confidence is reflected in our improved financial outlook for full year 2021,” Ghamsari said.
Blend raised its full year 2021 revenue guidance midpoint by $13 million. In August, Blend said 2021 revenue was expected to be in the range of $226 million to $232 million.
Shedding some light on what next year might look like, Blend said in August that pro forma 2021 revenue — which calculates the contribution of Title365 as if the acquisition had been completed at the beginning of the year, instead of on June 30 — was expected to be in the range of $365 million to $371 million.
Designed to provide an “end-to-end consumer journey for any banking product,” Blend says its cloud banking platform handled 525,000 transactions during the third quarter, up 24 percent from a year ago.
The platform is built on an ecosystem of technology, data and service providers, including real estate agents, insurance carriers and settlement services providers, enabling mortgage lenders to automate title commitments and streamline communication with homebuyers and settlement teams.
The platform can be integrated with offerings from dozens of technology vendors including CRM platforms, loan originations systems and pricing and product engines. Consumers can use integrated marketplaces on Blend’s platform to shop for real estate agents, insurance carriers, and other service providers. It’s up to Blend’s clients to decide whether or not they want to participate in the marketplaces, which are customizable.
During the third quarter, Blend said it increased its total customer base by 17 accounts, including Prosperity Bank, and “drove success” for recently-signed fintech clients including Valon Mortgage, UpEquity, and Accept Inc.
Blend also reported deepening existing customer relationships through deployments and adoption of additional offerings with American Pacific Mortgage, KeyBank, PRMG, Frost Bank and BMO Harris Bank.
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