Mortgage Technology Company hybrid lab The company posted another loss in the second quarter of 2024, even as it signed new customers through its mortgage and consumer banking channels. But executives expect that will change due to lower interest rates, which could help them achieve profitability in the final three months of the year.
“The bond market seems to be sending a signal, FedBlend Chief Executive Nima Ghamsari told analysts on an earnings call Thursday that the target rate for the end of this year could be more than 100 basis points lower than last year.
“Earlier this week, mortgage rates hit their lowest levels since April 2023, and we are already starting to see this show up in our business through application activity levels.”
Gamsari added that “it’s too early for us to tell how this will translate into funding or revenue” because “things seem to be changing on a daily basis.” But he believes that “as we look toward the second half of the year, it’s An encouraging sign.”
Blend reported a non-GAAP net loss of $5.6 million from April to June, down from a $15.1 million loss in the previous quarter and a $22.7 million loss in the same period in 2023. million, according to the filing Securities and Exchange Commission (U.S. Securities and Exchange Commission).
The company reported revenue of $40.5 million in the second quarter of 2024, compared with $34.9 million in the previous quarter and $42.8 million in the same period in 2023.
The majority of revenue comes from the platform segment ($28.7 million), while a smaller portion comes from the gaming segment ($11.8 million).
Blend’s platforms segment includes its mortgage banking suite, which saw revenue fall 17% annually to $18.5 million in the second quarter of 2024. Mainly due to better renewal pricing and product adoption.
Meanwhile, its consumer banking suite revenue grew 37% over the past year to $8 million. Professional services revenue remained unchanged at $2.2 million in the second quarter.
Blend has also recently struck deals with new clients, including horizon bankis an $8 billion financial institution headquartered in the Midwest and headquartered in Arkansas First National Bank of Fort Smith.
Company executives told analysts that Blend has invested in artificial intelligence (AI) to verify customer information. The company also provides loan officers with customized workflows and automated issuance processes.
On the expense side, non-GAAP operating costs totaled $27.4 million in the second quarter of 2024, compared with $41.6 million in the year-ago period, as Blend seeks to improve efficiencies.
As of June 30, 2024, Blend had cash, cash equivalents and marketable securities (including restricted cash) totaling $119.9 million.
The company repaid its term loan in full in April after receiving a $150 million capital injection, and as of the end of June it had no outstanding debt. Haveli Investments.
Looking ahead, the mortgage technology company expects third-quarter non-GAAP net operating loss of $4 million to $7 million.
“Over the next few months, we expect to develop multiple products with our customers, including the latest phase of instant home equity and a next-generation refinance experience,” Ghamsari said.
