Q3 2021 Blend Labs Inc Earnings Call
Good day and welcome to blend third quarter 2021 earnings release Conference call.
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I would now like to turn the conference over to Dan Smith, Treasury and Investor Relations leader. Please go ahead.
Good afternoon, everyone and thank you for joining us and stay to discuss <unk> third quarter 'twenty, one financial results I'm joined on this call today by noon, Mike I'm, sorry, co founder and head of blend Mark Greenberg head of finance and Tim May Atlas precedent.
Before we start I'd like to note that certain statements made during today's conference call regarding blend and its operations may be considered forward looking statements under federal Securities laws.
The company cautions you that forward looking statements involve substantial risks and uncertainties and a number of factors many of which are beyond the company's control and could cause actual results events or circumstances to differ materially from those described in the statements.
Please refer to the risk factors included in our filings with the Securities and Exchange Commission, which are available on the Companys website at blend dot com under the Investor Relations section and on the SEC's website at SEC Gov.
You should not put undue reliance on any forward looking statements.
Also note that any forward looking statements. We make on this call are based on information available to us and assumptions and beliefs as of today's date.
We disclaim any obligation to update any forward looking statements, except as required by law.
During this call we will be discussing certain non-GAAP financial measures information regarding our non-GAAP financial results, including a reconciliation of such non-GAAP results to the most directly comparable GAAP financial measures maybe found on our earnings release, which is available on the company's website under the Investor Relations section.
And included as an exhibit to our form 8-K furnished with the SEC before this call.
These non-GAAP measures should be considered in addition to our GAAP results and are not intended to be a substitute for our GAAP results.
I'd also like to mention there are supplemental slides in the product demo video for your reference are available for viewing at Investor Dot blend dot com.
With that I'd like to now turn the call over to our co founder and head of blend Nemo them sorry.
Welcome everyone. Thank you for joining I want to start with a few highlights for this quarter starting with our growth.
So first we grew our customer base with 17 net new logos.
We expanded our consumer banking and marketplace revenues, which the new disaggregation, we're sharing this quarter by 110% year over year showing growth in our emerging businesses.
Within mortgage our market share increased from 8% a year ago to 14% this year.
And we increased our quarterly revenues on a year on year and sequential basis, despite a softening mortgage market.
On the new product front, we launched a new product called blend income, which is an easy way for lenders to verify the income of their consumers. We have over 50 customers already signed up for that you'll hear more about that a little later.
Third maybe very importantly to you all we are starting to share some clarity on how we view our business the metrics, we use to track our business and so youre going to see that consumer banking in marketplace revenues line item to show our growth in the emerging businesses over time, we're also going to share additional metrics on how we think best in class software businesses should operate.
Things like market share gross revenue retention market adjusted volume adjusted net retention that will help you get a sense of how we think about the growth of our business over time.
And lastly on the title through 65 front, we made meaningful progress on the integration of title through 65 into a blend title solution and we're excited to share more with you on that.
But before I get into it.
I just want to quickly reiterate our vision for financial services.
Banking is quickly moving to the cloud and the way consumers are being served as a consumer first real time proactive experience.
Those things those kinds of experiences are extremely difficult to offer on existing tech stacks and we're seeing lots of our customers scramble to get modern solutions in place to serve those end consumers across our entire bank in a unified way and Thats. What blend comes in we're helping build that proactive personalized data driven future and where the software platform of choice.
For these institutions to do so.
Another metric we track a blend is our mortgage market share and as we sign and rollout customers. We want to continue to grow that over time.
We track it in two components. The first is how much is actually being utilized on the blend platform is being funded through the blend platform. This is important because we have a success based business model and growing that is the way that we make revenue from our customers.
You can see that just over two years, we grew from four 5% market share to 13, 5% market share of signed and used units on the blend platform.
We also track the signed an unused volume on the blend platform. This represents a near term opportunity essentially growth within our current customer base of additional units that could rollout to drive additional value to our customer and revenue to blend in the most recent half year. In addition to the 13, 5% that's actually going through our platform we have in.
Another 10% of unused units that 10% represent significant upside in our current customer base.
And on top of that you have.
<unk> 76, 5% is completely untapped market for us, meaning that there is still a lot of headroom for us to grow within our customer base and outside of our customer base.
I want to talk about our customers I love talking about our customers, that's what matters most to us a blend and.
And let's start with our growth in our customer base and.
In Q3, we had a really strong quarter. Our total customers are up net 73, net new customers year over year and 17 sequentially.
The customer signed in third quarter at a capacity for more than 300000 annual banking transactions and a total capacity grew 40% year over year. So we're excited about continuing to add to our customer base and lay a foundation for the future in this quarter.
Some specific stories, we had a top 25 nonbank lender decided to use us. They were previously on a competitor they wanted to be on the best platform. They sign with us and they got live within a matter of months.
It was just it was a significant offering for us that are very large lender and we're excited to have them on board.
In addition, prosperity bank, a large Texas based bank with 37 billion in assets, they decided to partner with blend across their entire portfolio and for these diversified financial institutions using one platform across their entire customers is exactly what we want because we can offer a unique cross product experience and exactly what they need because they can have a simpler architecture.
And get deeper relationships with our customers and so this is a very important win for us.
We also advanced some existing relationships Keybank, which we just announced last quarter is already live.
Meaning it reflects real revenue to us, which is great to be live that fast for a bank of such scale and in addition, we drove meaningful progress with reading recently won fintech customers, including a Alan mortgage up equity and accept Inc. But continue to work with Fintech to give them the software platform that they need and the flexibility they need to reflect our brand but also.
The power they need to serve their customers.
And lastly, we have customers who have gone from their baseline phase of being live at scale to now growth, which means using new products with us so.
So BMO Harris their.
They are example of a customer has been using us for a few years and now they decided to use us for their wealth management group and that's very exciting for us because it's a new area for us to use our platform and they're a marquee client of ours and partner of ours for years, having them rely on us and come to us for this new solution was a great sign of our partnership.
Another set of metrics that we look at it blend are around our customers in particular, how we retain and grow with our customers.
These are important because we're in an industry specific software company, which means that we have to be able to retain customers and we have to be able to get deeper and deeper with them over time.
And so gross retention shows our ability to retain those customers you can see that we hovered above 99% in the last five quarters, we sometimes make mistakes, but it's very rare and we retain almost every customer because we care about them, we work with them to make them successful we've made our entire organizational model around driving success to them, including how we compensate our people and so retaining.
Customers is very important to us and we'll continue to work on that over time.
But retaining customers is not enough in an industry because you could have a really sticky product, that's very integrated which blend is but not continued grow value with those customers.
And so we also look at how we grow our customers and in particular net retention is how we look at that.
One thing that you all told us in the last few months is that net retention is great, but we have to adjust for market volumes and so we've kind of shared our breakdown of how we look at this which is a market adjusted net retention number didn't even see that every quarter for the last seven quarters. Our net retention has remained above 140% ranging from 140% to 180%.
And that's because we continue to build software products and other services on top of our platform that can grow with our customers as they roll out more volume with us and we look at this to make sure that we're creating more and more value for every single customer every year that goes by Susana <unk>. These are the two things that we really care about as a management team and we make sure we pay a lot of attention too as we continue to.
Grow.
The last thing I want to share is our adoption of new products.
We realized that our core mortgage product, which we launched years ago is very successful, but as we've gotten requests from our customers to expand our new areas. The broader homeownership marketplaces, the broader consumer banking suite, we started build those things out and we want to track the success of those things and for the first time, we're sharing those with you.
And you can see that in consumer banking transactions alone, we more than quadrupled year over year and in consumer banking marketplace revenues, we more than doubled year over year.
We're at the beginning of this industry digitizing not just the industry, but the entire ecosystem around it the entire market places around them.
And for us to be the trusted partner in those things is so important it means the size of our ability to serve and transform this industry. The size of our market. Our total addressable market will continue to grow as new adjacent opportunities come our way by working with our customers very closely and so having a good track record here is exactly what we wanted to be able to show you and show our.
Customers that we can deliver that value to them.
I'm going to shift to the new product front.
It's really important for us is blend to keep adding new products to our suite of services because so much of the industry is still paper today and our ability to add new services new products to our software suite will mean more value for our customers and more revenue to blend in the long run.
That's how we get deeper and deeper and eventually transform this industry like we aim to do.
In this case in this quarter, we launched blend income, which if you've ever gotten a mortgage or a car loan and somebody needed to verify your income it probably involves a paper pay stub or a paper tax return that you handed to somebody who then read it calculated something in our system came back to you in some time after that and gave you a lending decision.
But there's a new way of doing things to use data directly from the source and automatically parse that data provided to the right systems do the right calculation to get you that lending decision in real time, which is what consumers want. So we now offer that it's called blend income it works across different kinds of income whether it's a simple W. Two income standard.
Borrower or overtime, a gig economy worker or self employed borrower, we're going to support the entire suite of types of income and we just launched this product last quarter and we already have 50 customers over 50 customers signed up to work on that this.
This is the benefit of having an integrated platform means that we can as we create more value our customers can take advantage of it much more quickly than we could if these are point solutions that we're offering to them.
So with blending income verification banking teams can now in real time verify customer's income there their customer's income and offer that modern experience with their consumers demand.
A quick update on title through 65 title. Just 65 continues to run modestly ahead of plan for the third quarter and the full year and into next year, and we've been able to retain customers with that team.
We know that the goal long term is a turn this into a software business integrated business as part of the mortgage process and so we're very focused on that we want to transform this thing into a digital data driven process like every modern industry and so we been doing a lot of work on that in the most critical near term objective is the migration of Mr. Cooper, the largest mutual customer of these.
Two platforms blend entitled tissues, five onto the blend platform.
To say that going live in the blend platform next year in the second quarter and in addition, we will we expect to launch some pilots along the way with smaller customers to continue to prove out how this works together.
And now I'll turn it over to Mark to go through the financial results and give you some updates on the company overall.
Thanks Nina.
Before I dive in I have a few housekeeping items.
First with respect to our acquisition of title pre 65, our reported results for the third quarter include the financial results of title III 65 on an actual basis for ease of comparison. We've included the pro forma presentation of <unk> financial results for the third quarter. The first six months of 2020 as well as for the first.
Six months of 2021, and the supplement to todays release.
Second during the third quarter close process, we determined that we will present title III 65 title revenue and related underwriting commissions on a net revenue basis, rather than on a gross revenue basis for those underwriting commissions as title pre 65 had historically reported prior to the closing of our acquisition in June.
This year.
We have provided supplemental information regarding revenue and cost for title pre 60 fives historical periods, we have updated our financial guidance for the full year 2021 to account for the title 365 title revenue being recognized net of those underwriting commissions.
The change in presentation of the effects of portion of title III 65 revenue and cost of revenue only with no effect on gross profit or net income or loss for either title 365 or the total company.
In addition, following the acquisition of title III 65. The company now operates in two reportable segments blend platform and title $3 65.
Having heard from many of the investors and analysts who follow blend we've expanded our revenue and volume disclosures to the blend platform segment to reflect results from mortgage banking separately from consumer banking marketplace and separately from professional services.
This new banking revenue and transaction volume disclosure is included in the appendix of the supplement of today's earnings release.
We have also included specific definitions and historical time series on these metrics, but at a high level blend mortgaging flex revenues and volumes for mortgage transactions processed through our platform.
Sewer banking, a marketplace revenues reflect consumer banking ancillary product and marketplace revenues.
<unk> banking volumes reflect transactions from closed or funded consumer banking transactions and does not include transactions from ancillary products or marketplaces.
<unk> services revenue is also separately stated.
Turning to the third quarter results revenues totaled $89 $6 million on a net revenue basis up 221% year over year.
Blended platform segment revenue was $35 1 million up $7 $2 million or 26% year over year.
And title pre 65 revenues, including underwriting commissions of $4 2 million now presented on a net basis totaled $54 $5 million.
Growth in the blend platform segment was driven by consumer banking of marketplace revenue, which grew by 110% from $3 $1 million to $6 $6 million on a year over year basis.
On a sequential quarter basis consumer banking in marketplace revenues grew at 18% or a CAGR of over 90%.
Blend estimate that the total addressable market in consumer banking and marketplaces is significantly larger than the opportunity in domestic mortgage.
I wasn't even discussed third quarter growth in consumer banking and marketplaces resulted from the deepening of customer relationships as well as the launch and rapid customer adoption of our new products.
Continued focus on driving these two trends should enable blend to demonstrate attractive growth for the foreseeable future.
As the U S economy expands and the banking industry continues to digitize.
Glenda mortgage revenue totaled $27 3 million in the third quarter 'twenty, one up more than 14% year over year. Despite a contraction in industry origination volumes of more than 25% as refi transactions have declined.
This strong relative growth driven by customer logo wins and market share gain demonstrates <unk> ability to grow our mortgage volumes and revenues counter cyclically despite market headwinds.
With the current market share under 15% blend benefits from a significant amount of headroom to grow into the U S mortgage market.
As a result, we believe that blend mortgage revenues can continue to achieve positive growth for the foreseeable future.
Third quarter gross profit totaled $43 million up 119% year over year, driven by the addition of operations from title grew 65 as well as strong growth in the blend platform segment.
Title 365 segment gross profit was $17 8 million.
Blend platform segment gross profit was $22 5 million up $4 1 million or 22% year over year.
Non-GAAP gross profit was largely the same as the GAAP number in the third quarter.
Cost of revenue increased by $39 8 million for the three months ended September 32021, compared to the three months ended September 32020, driven by an increase in blend platform cost of revenue of $3 1 million or 33% and an increase of $36 6 million.
Due to the inclusion of the operation of title grew 65 for the first time this quarter.
And our current stage of development, we are focusing on absolute gross profit dollar growth more than margin expansion.
We expect gross profit to improve in the future as we add more products to the platform and progressed further on the title III 65 integration.
Operating expenses for the third quarter of 2021, or $110 9 million compared to $33 $7 million in the third quarter of 2020.
Third quarter operating expenses included stock based compensation charges totaling $33 $8 million relate.
Related to the stock option award with market based performance targets, including catch up expense recognized at our IPO.
Non-GAAP operating expense for the third quarter of 2021 were $61 7 million compared.
Compared to $32 $6 million in the third quarter of 2020.
The largest driver of the increase in third quarter 'twenty. One non-GAAP operating expenses was an increase in our head count which increased to more than 2200 by the end of the quarter, including approximately 220 employees added from the title 365 acquisition.
We continue to invest in our operations across the company, particularly in R&D, where we are focused on enhancements in future products and sales and marketing to best serve our customers and in G&A to meet operating need support our growth and continue to scale.
These investments deepen the competitive moat, we built over the last nine years by strengthening our ability to innovate at a faster pace than our competitors and fast with an in house capabilities at the largest financial services firms.
Our investment is reflected in our loss from operations for the third quarter of 'twenty, one of $75 million compared with a loss from operations of $15 3 million in the third quarter of 2020.
Our net loss for the third quarter of 'twenty, one was $76 3 million compared with a net loss of $15 $2 million in the third quarter of 2020.
Our net loss for the third quarter of 21 includes increased interest expense of $5 $6 million versus none in the year ago period, reflecting the cost of the term loan we issued to complete the acquisition of title III 65.
Non-GAAP loss from operations for the third quarter of 'twenty, one was $21 $1 million compared with $14 2 million in the third quarter of 2020.
In the third quarter of 'twenty, one, we incurred $1 $6 million in integration costs related to our acquisition of title pre 65.
Now turning to our balance sheet, our cash cash equivalents and marketable securities at September 32021.
$593 $6 million with total debt outstanding up $225 million with the full amount of $25 million available on our revolving line of credit.
Now, let me turn to guidance on.
On the full year 2021 guidance as we disclosed in our press release. This afternoon strong growth in our consumer banking businesses through the first three quarters of the year and continued strength in our blend mortgage entitled 365 revenues lead us to increase our full year pro forma revenue guidance to between 358 and <unk>.
$368 million on a net revenue basis. We have included a summary table to illustrate the boost in guidance from the previous periods.
As you can see we are lifting the midpoint of our full year pro forma revenue outlook by $13 million.
And to our new followers in the investment community I'm looking forward to engaging with you and updating you on our progress in the years to come.
And with that I'll open the lineup to your questions. I'll also note that we opened up a method in this quarter for investors to ask questions in advance. So we will be incorporating these questions into the Q&A as well.
We will now begin the question and answer session to ask a question you May Press Star then one on your Touchtone phone.
You are using speaker phone please pickup your handset before pressing the keys.
To withdraw your question. Please press Star then two.
Glen management, we'll be beginning our question and answer session with two pre submitted questions and then we will move to questions from the phone line.
Thank you and welcome everyone.
Got it off with two questions from the.
Platform that we opened prior to the earnings release first question any future plans to diversify into digital assets.
Thanks Mark.
More and more consumers around the United States invest in digital assets and hold digital assets.
Talk to our customers banks Fintech credit unions and starting to see there is an increased interest in potentially helping consumers hold those assets. So we're looking at it we're not actively doing anything but.
As we started to pay attention to this space. If it continues to grow we will consider building some of the software that helps power that for the institutions that we work with.
Excellent. Thanks, NEMA second question do you have any expansion plans for overseas or international markets.
In terms of international our primary focus is the United States, There's still a lot of paper in the United States or in the beginning of a very large digital transformation of financial services and so our immediate focus and probably even next year focus is on the United States that being said there is a need for similar technology abroad, and we have a lot of customers we've talked to your potential customers. We've talked to you over time.
It might've open us up to those other markets.
Once our platform, we feel our platform is ready and we feel like we have a really good pace in the United States, but for now we're focused in the United States.
Great now.
Now I think we'll open it up to questions.
I think the first question is from Bob I'm, sorry, Bob.
Thanks for taking my question I appreciate it and nice job, it's really good to see the growth I know, we don't have all of it flushed out but in some of the non mortgage segments. I guess, maybe I'll start there I guess I'd love to think through about where our key customers.
Hello.
Okay great.
We can hear you Bob great.
Great Yeah, so when you see customers.
Looking at the business are you seeing them still primarily start mortgage I understand so the largest part of the business, but you had really healthy growth on the consumer banking offerings I guess, if the initial deals are they still mortgage with an expansion into consumer banking or you're starting to see after the adoption of consumer banking as the first initial foray.
Blend customer.
So.
Some interesting statistics as we looked at our customers.
Our product sales.
Two thirds of our customers now have more than one product and what we're seeing is a.
Bundling.
Mortgage plus closed mortgage plus insurance mortgage plus now new the new product the Nemo mentioned blend income verification.
And so we're seeing more and more of our customers buy multiple products and then quickly follow with with additional products.
Got it got it I guess I guess.
Them landing with us.
First I guess, what we will get some clarity on that.
Maybe just one other quick note on that.
The most recent quarter, Bob and was the first quarter, we signed greater capacity of non mortgage consumer banking products than mortgage products. So this quarter was a little bit of flip the script from what it used to be.
Got it got it Super helpful actually.
And then you mentioned something about you've got sort of a 10% unused share kind of a capacity within the existing installed base.
Just how do you access that unused share is it is it simply a matter of more broadly rolling out the platform or are there specific investments you need to make access that sort of using quotes unused capacity.
No those are customers, who have signed with us in volume that signed with us that could use our existing products as it is today. So you can see between <unk> last year and each one of this year, we grew our market share within mortgage by 6%, but then the rollout doesn't happen overnight.
So it's just more of us going through the motions of rolling out our customers getting them to standardize on the product over time and working with us to expand it beyond the initial rollout and pilot stages that they might go through it so.
The Keybank example is a great one where it happened really fast.
A quarter they are already live and doing real volume on our platform.
But there is still not fully rolled out we are still in the process of continuing to roll them out as we get more and more of their business on our platform.
Got it got it was almost like a captive market got it I appreciate it guys. Thanks for taking my questions.
Nice job on the growth rates there.
Thank you.
And the second question is from Michael Michael turned from wealth.
Hey, there. Thanks, thanks for bearing with me, while I got the mute function on my phone.
Yes.
The FERC.
Wanted to stick with the consumer banking for a moment because I think the added disclosure is certainly helpful. I appreciate it.
We see the increase in transactions and what that looks like from a mix perspective trending towards 20% of platform revenue are there expectations you can share for how that could trend going forward over time as they are either in optical mix you see or anything you can add just around your existing customer base that that mix could shift.
<unk>.
Between consumer and mortgage overtime.
Okay.
I think there is.
A massive opportunity in consumer.
About one third of our customers have at least one consumer banking product today.
And what we're seeing is an uptick.
Both marketplace and additional consumer banking products.
Very differently from what happened even in 2020 or 2019. So it's I mean for me. It's I don't know that I could say there is an optical theres an optimal mix mix I, just think that consumer banking is a huge opportunity and.
The component parts that we built over the last nine years are very much applicable to our our forays into consumer banking.
Okay.
Mainly.
Mainly you mentioned, the new income verification product with 50 customers signed.
Anything else you can add on how much of the base that could attached to her address relative to the 300 plus customer logos. You currently have and maybe what that does from a price perspective for the overall model. Thank you.
Sure. So we priced the product it's a similar order of magnitude price to our base mortgage platform and so in terms of the added price per unit that you would expect to see as we get it rolled out.
And it applies to pretty much everyone. I think almost every consumer who gets alone mortgage car loan personal loan some of them don't need proof of our verified income, but almost every mortgage does and so that's a good example of a natural add on where we create more platform value and our customers want that platform value.
Okay over 50 customers and I think that helps explain how our growth in our non mortgage business that are growing expanding so quickly.
And so yes, so I think we'll continue to see that grow.
And expand over time, and probably I would say is probably our fastest growing product.
We launched <unk>.
And Theres only a pattern.
Announcement with only in October.
Actually the third week of October.
Now it seems like a natural extension extension.
I appreciate the color you bet.
The third question is from Terry Tillman of tourists Hey, Gerry.
Hey, guys. This is actually Joe on for Terry Thanks for taking the question sure.
So.
How is the progress with the low code journey builder, just wanted to confirm how thats been trending I'm not sure. If there were any comments on it in the prepared remarks.
We think of that as our base consumer banking platform and so that is the thing that is helping us grow.
We have live customers in production on that.
And we just had our.
Decorative forum, we call blend for them, where we had a bunch of our customers here together with US the last few days and it was the end of the show the idea of being able to have all the power of the blend platform and the flexibility of being able to make it your own journey over time, it's something that can apply across their entire businesses and they love that and it helps US also work with the CIO is who want to have that control and flex it but.
Also have the flexibility as well all of the things that we've been able to industrial in the past eight years. So.
Credibly.
Powerful product and we're getting a lot of uptake from our customers and wanting that.
That's super helpful. And then just a real blend close is that like a material percentage of the mortgage revenue right now is it like 5% or 10% or is it much less than that right now and what do you think that can become over time.
Just for clarity.
The blend closed product is in consumer banking and marketplace. So mortgage is purely in the mortgage times the number of funded mortgage loans and so all of our other ancillary products are included in that second line. So thats part of the reason Youre seeing youre seeing the growth is because the uptake of those ancillary products.
But to answer your question on where we see that growing it's still early days, but it's also a very fast growing product and we expect it to be continue to grow into a material part of our revenue going into next year.
Thank you.
Okay.
Fantastic.
Karl from UBS.
Great. Thanks, very much maybe two for me.
Mark you mentioned.
But you think that the mortgage revenue stream will remain in terms of positive growth territory for the foreseeable future. That's encouraging we for one were in the spirit of our mortgage volumes being down modeling your mortgage revenues down in <unk>. So it's encouraging that you're not envisioning that I'm just.
The press a little bit on why is it because the decline in mortgage volumes is turning out to be a little bit less than you expected or is it that you are having more success on new logos and share gains or maybe it's a little bit of both.
I think it's a little bit of both.
We we have.
I had a lot of success in continuing the rollout.
Captured market share customers are.
On the adoption curve and.
And just having a lot of success with blend high ROI with blend. So they are in there they are motivated to roll it out and we're motivated to help them. The markets are also.
The markets are also.
And the refi volume has not declined as much as many people predicted.
Okay.
Just as a point of reference the markets were down we estimate the market was down over 25% year over year, and our revenues were up and the blend platform segment over 25%.
That's the kind of trend that we want to be able to show is that we can continue our growth rate and that shows a pretty pretty high growth rate normalized for volumes got it. Okay. And then my second question just in terms of.
The core blend platform was there any positive impact from any title 365 migrations or was it was it pretty clean and and when is it <unk> next year I think you mentioned in EMEA that we should see some of the migration boost such that.
Blend platform might start to see a bump from those migrations, maybe you could update us on the timing of that.
Hi. This is this is Tim.
Thanks for the question.
No.
I think it's fair to say that.
Number that you saw for this quarter were not the result of migrations.
Single biggest mutual customer between blend entitled 365, as Mr. Cooper I think of the name I mentioned in his opening remarks.
We expect them to go live on on the blend platform in Q2 of next year, we do have some.
Pilots that were running with other customers over the coming months.
But I think it will be it will be next year, when you start to see real migration.
And this quarter didn't reflect much of that yes for building the integrations that's going fine.
<unk>.
Uh huh.
Technology integrations, the rest of the integration process is coming along just as we had expected so it's all going.
As we as we thought it would but I think youll start to see the migration from title 365, two to the blend software platform.
In 2022 wonderful thanks for the clarity.
Great next we have Josh from Keybanc.
Thank you team for taking the question a lot of good data that you've shared so just wanted to say I appreciate that.
I wanted to talk a little bit about the market share statistics that you provided very helpful. Obviously to see.
Kind of the untapped opportunity there.
Just curious when you think about maybe the pipeline and the conversations that we're having with customers. Obviously, you have some nice wins as well.
How you see that evolving over time.
Just curious if there's some type of limit maybe to the market share or if you just feel like based on the pipeline. You are just going to continue to add customers and there's just going to be a lot more untapped opportunity in that chart.
<unk>.
Well you saw H two two last year to each one of this year, we grew market share by more than 6% almost 7%.
Which was pretty significant gains for a short amount of time, we signed some really big customers. We expect that there is additional that was our best half year ever I think if I look back at history, and we expect that we have still a lot of headroom.
Beyond that so we will have probably some more wins, we announced over time.
And then on top of that the near term opportunity is great I mean at 10 percentage untapped within our current customer base. It's like the most short term pipelines are already signed they want to work with us to roll it out there already working with us roll it out and it's a matter of execution and so continued good execution will get that rolled out onto our platform, but now we don't see any any short term.
Winds in terms of overall market share of possibility.
Okay, that's very helpful.
I wanted to also ask about the the market adjusted net retention. Obviously these are very good metrics in the 140, 280% range I'm just curious as we go into next year, what type of visibility does that provide you.
From effectively growth from existing customers versus the dependence on new bookings. So just kind of curious how that translates into visibility as we start to think about 2022.
Theres so much opportunity in our existing installed base that we continue we believe in really strong net retention numbers there is.
We're not seeing any declines we've tried to extract the market impact from our net retention number so that if we make it as clear as possible to everybody that we're seeing this underlying core growth in our.
And our customers and they're adding products and they are adding value and then we're partnering with them in that way.
Very helpful. Thanks team.
You bet.
Operator.
Any other questions in the queue. We can go ahead and close the call.
This will conclude our question and answer session as well as today's conference call. Thank you for attending today's presentation. You may now disconnect.
Okay.
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Okay.
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