Q1 2022 Blend Labs Inc Earnings Call
Okay.
Good afternoon, and welcome to players first quarter 2022 earnings Conference call. My name is Krystal Sumner had a bit of compliance and the rest of the company.
With me today are Nick I'm, sorry, co founder and head of plan coming uplift President and Mark Greenberg head of finance.
How can you not embark deliver their prepared remarks, the team will take questions you.
You can find the supplemental slides on our Investor relations webpage at Investor that blend dot com.
During the call we will refer to certain non-GAAP measures, which are reconciled to GAAP results in today's earnings release and in the appendix to our supplemental slides.
non-GAAP measures are not intended to be a substitute for GAAP results.
Certain statements made during today's conference call regarding Glenn and its operations may be considered forward looking statements under federal Securities law.
The company cautions you that forward looking statements involve substantial risks and uncertainty and a number of factors many of which are beyond the company's control could cause actual results events or circumstances to differ materially from those described in these statements.
Please see the risk factors we've identified at her most recent 10-K 10-Q and other SEC filings.
We are not undertaking any commitment to update these statements if conditions change except as required by law I will now turn the call over to Nina.
Thank you Crystal and Hello, everyone.
We appreciate you spending time with us today.
Blend delivered a solid first quarter in a tough market with revenue ahead of expectations.
In many ways this quarter validates our view about 2022 and blends long term potential.
For this call I'd like to cover four topics.
First a summary of our Q1 highlights and our general operating environment.
Second an update on current market conditions, and how this impacts our business.
Third how we're executing against our long term growth thesis.
And lastly, an update on how we're thinking about near term management of the business and capital allocation.
After that Mark will review the quarter in more detail and then we'll take questions. Tim is also with us for Q&A.
Yeah.
Starting with Q1 highlights we are encouraged by our top line performance, which reinforces our confidence in our 2022 outlook.
Revenue of $71 5 million was ahead of the range. We gave you at the end of March and Mark will take you through that in more detail.
But the takeaway is that we did better than we expected in both mortgage and consumer banking in fact, we delivered 3% growth in bond platform segment revenues as compared to Q1 2021, Despite Q1 mortgage market volumes being down an estimated 44% year over year.
Additionally declined entitled through 65 were less than anticipated.
This was largely due to the timing of interest rate impacts refinancing activity has begun to meaningfully decline in Q2.
In addition to benefiting from growth in mortgage market share, we continue to cross sell and increase our wallet share of our existing customer base at the end of the quarter about two thirds of our existing customers subscribe to two or more software products.
Consumer banking marketplace revenue, therefore was up 55% year over year, and we are seeing continued adoption of the suite of products.
At the end of Q1, 22% of our blend platform revenue came from consumer bank in marketplace and approximately one third of our total customer base now use one or more of these products.
So we've exceeded our expectations for the first quarter and we're continuing to build momentum in the business. Nonetheless, we are mindful that the broader economic environment is going to continue to be challenging.
Here's what we've observed since we last spoke to you six weeks ago.
Mortgage rates rose quickly in the last few months as you all know and for these and other macro reasons. We are now projecting a 41% year over year drop in mortgage origination volumes in 2022 versus a 35% outlook in place at the time of our call in March.
Given persistently strong housing demand. These declines are disproportionately hitting the refinance market a decrease that started in earnest in April .
While this is a difficult time in our industry blend is well positioned to help our customers navigate this reset it's in moments like this that customers are compelled to focus on efficiency and technology, both to preserve margin and be better positioned to take advantage of the eventual upturn.
I'll touch on this more later.
A blend where increasingly diversifying our revenue base with consumer banking marketplace now starting to grow more quickly.
And with that as the industry backdrop lets shift how blend is operating in this environment and why we think we're in a good position to continue executing on our growth thesis. Despite the current market volatility.
Yeah.
There are two important indicators, one internal and one external that we watch closely to monitor our progress.
An important pillar in the blend growth thesis is our ability to acquire and retain customers.
In Q1, we reported gross revenue retention of 98% roughly in line with our 99% in Q4 and market adjusted net revenue retention of 159% up from 147% in Q4.
Our unique differentiation is our focus on delivering a full platform solution that accelerates the digital transformation process for our customers. This platform solution, coupled with our business model positions blend to build relationships rooted in a shared journey of growth with our customers.
Externally are key leading indicators our customers increased investment in digital transformation automation investing during downturns positions companies to gain market share and come out stronger on the other side for banks and lenders getting stronger is about investing and improving the customer experience and driving efficiency.
Technology is the most effective scalable way to do that at a lower cost with a clear ROI.
Our platform is designed to achieve that goal, allowing customers to significantly improve their profitability and be more competitive this is especially vital in a downturn when margins tightened.
Shifting to how were executing our long term growth thesis, we feel very good about the key indicators for long term growth that blend we are focused on the following three growth areas.
Helping our customers be more efficient through fully integrated software.
Second delivering the best possible experience for our consumer banking product lines and third being the platform that powers the end to end value chain in homeownership.
Can you talk about these three in more detail.
Starting with efficiency on the heels of the market reset we've heard from our customers about the need to standardize their process and become more operationally efficient margins are very tight.
Based on surveys that we've commission customers that run their loans through the blend platform realize an average return of investment of six five times. The dollar they spend saving almost 12 hours per loan.
This means an increased usage of blend software drives additional benefits and is a big reason, we're seeing our platform segment remained strong despite the steep decline in mortgage volumes.
On top of that our investment in products like blends that fast track, which will clear loan conditions automatically using technology before of human touches it will help drive our customers' cost of production down this creates more value for our customers and thus more revenue for blend.
Many customers have told us that they intend to accelerate investment in automation when I talk to mortgage executives. The number one topic I hear on a daily basis is driving efficiency in their operations.
That enables them to stay competitive grow market share and ultimately offer lower cost products to their customers.
Now shifting to consumer banking.
In our last call I mentioned, the importance of home equity to our customers. The urgency is for the market to address this quickly in an instant fully automated technology first way, but this is just one example of things to come having a modern platform powered by blend builder, which enabled us to adjust when there are shifts in the market and launch new products quickly positions blend as the.
Go to platform for financial providers.
Outside of home equity and blend builder, we are partnering with wells Fargo and powering their next generation rental payments reward credit card application through a company called built.
By delivering a seamless digital experience and streamlined application process for their customers, we processed a significant amount of applications within the first 48 hours showing the flexibility and scalability of our consumer banking solutions, we're helping our customers become more efficient through the use of technology.
Lastly, we're continuing to invest in being the end to end platform that brings together all the components of the homeownership lifecycle.
This is a win for everyone consumers get a single platform that seamlessly ties together components, such as income verification approval home insurance title and closing and lenders get more efficiency as the system automatically orchestrates. These events and manages the data flows. This helps keep their cost down which is very important in this time.
When we added value like this to our customers and consumers disk drives them to be more successful and given our success based pricing model. It also drives more revenue to blend.
Providing the end to end journeys not just important for the reasons I mentioned it.
It's also what will be required for lenders remain competitive now and in the future leveraging our software solution gives lenders the ability to have a superior offering while keeping costs down and driving exceptional experience.
This is the promise of technology.
To summarize with an industry, leading platform a growing roster of customers well positioned for the next upturn and increasing revenue diversity as we bring more customers live on consumer banking and marketplace offerings. We are in an excellent position to drive digital transformation at a time when institutions needed the most.
Lastly, I want to talk about our capital management strategy.
As we discussed in our last call we are moving to adjust our cost structure to meet market realities without jeopardizing. Our primary goal of continued investment in the blend platform.
As a first step in this effort, we reduced our head count by approximately 10% in April the reductions.
We're primarily with entitled through 65, where it needs are significantly lower given current market and certain G&A functions.
We expect to begin seeing the cost benefits of this action in the second half of the year.
We believe the decisions like this will allow us to emerge from the current environment stronger and even better positioned to achieve our vision.
Building on the workforce reduction we are doing a comprehensive review to align our cash consumption and market realities near term.
Charting a clear course to a stronger product and operating margins that will lead to blend having long term profitability.
Our plan will include looking at ways to improve our cost structure is improving our product margins, increasing speed of deployment and better managing our spend internally.
We also continue to monitor title volume and adjust our cost structure as market conditions warrant without jeopardizing our customers our consumers experiences.
With all that being said, we are taking a long term view as our role as a preferred technology partner for financial institutions. We are continuing investments in our platform, helping our customers be more efficient delivering the best possible experience for our consumer banking and powering the end to end value chain and homeownership.
We are executing a disciplined approach to our capital allocation strategy, while investing in key growth areas that I highlighted earlier to that end, we plan to provide an update on our plan next quarter.
As our plans are finalized and implemented I'm confident you'll see a company well positioned to deliver on its mission to bluelinx bring simplicity and transparency to financial services and to do so in a way that creates substantial value for shareholders.
I know we have a lot of work to do but we are energized to attack it.
While market conditions are challenging we believe the current period could be accelerant for industry transformation.
Justice Covid drove faster digital adoption in consumer and enterprise markets a significant mortgage reset may also drive accelerated investment in Digitization as operational efficiency becomes a driver for long term success.
Wrapping up I want to thank our customers for their engagement blend through these tough times for them and our investors for supporting us as we position the company for long term growth and value creation.
And I, especially want to thank everyone at blend and the team here for their hard work resilience and dedication to the mission.
I'm grateful for all your efforts and excited for the journey ahead.
And now I'll turn it over to Mark.
Thanks, Nina hopefully everyone on the call is that a chance to review our release.
We'll go through our release in the following three categories first I'll provide color on our Q1 performance, including how we're performing in the early part of the current mortgage cycle second I'll cover our recent and planned cost management activities as part of our broader capital management strategy.
<unk> as a release notes.
In the managed touched on earlier, we reiterated our 2022 revenue outlook today I'll comment on that as well and how we see trends unfolding for the rest of the year and then we'll get to your questions.
Let's start with the highlights from Q1.
Blend reported consolidated revenue of $71 $5 million above our guidance range of $63 million to $66 million provided on our Q4 earnings call. The.
The higher than expected result can be attributed primarily to better than expected blended platform performance.
Mortgage and consumer banking marketplace and lower than expected year on year decline in title III 65 revenue for the period.
<unk> platform segment revenue was approximately $32 $8 million.
Of about 3% year on year against our expectations of a modest decline entitled 365 segment revenue was approximately $38 7 million down almost 13% from the fourth quarter of 2021 against anticipated 20% decline.
It's important to note that at the time of the Q4 earnings call. We had solid funded loan and data for the first two months Q1.
Given both significant predicted declines in mortgage lending by Fannie and the MBA and expectations of fed interest rate actions, we were anticipating a pronounced decline in refinance activity beginning in March.
However that refinancing cliff was pushed out several weeks into Q2 and as such we saw sustained volume of refi closings that benefited our Q1 results more than we had initially expected and.
In addition, our customers purchase mortgage volumes were slightly ahead of our forecast, reflecting the underlying quality of our customer base and the strength and resilience of our market share.
To put some further context around mortgage banking performance. Our Q1 revenues were down 16% in Q4 compared to an estimated 29% decrease in industry mortgage volumes.
Year on year, or Q1 mortgage banking revenue was down 7% against a 44% market decline in origination volume.
This demonstrates that we are continuing to make progress on our goals to.
To increase our market share, including both new customers and wider adoption with existing customers.
Illustrated in our supplemental slides, we estimate our customer share of U S mortgage industry volumes increased to just under 25% in the second half of 2021 up from 23, 5% in the first half of 2021 and from 16, 7% in the second half of 2020. This.
This includes a higher utilized market share north of 15% in the second half of last year with nearly another 10% of committed but not yet utilized capacity. So we're continuing to make good headway and taking share with substantial Tam still available to us.
Q1 included an important new deployment in March and also included ramping of volumes at other select customers.
Yeah.
Shifting to consumer banking and marketplace, we achieved revenue of $7 2 million in Q1 up significantly from $4 6 million in the prior year period.
We highlight the total consumer banking transactions grew by more than 100000 transactions year on year to approximately 155000 in Q1.
We saw a significant increase in deposit account personal loan and home equity transactions in Q1 2022.
Relative to Q1 2021.
It's also worth noting that home equity revenue increased modestly over the prior year and this continues to be an area of opportunity given the current lending environment.
We're rounding out the revenue discussion blend recognized a little over $1 million and professional services revenue up from approximately $800000 in the prior year first quarter.
As a reminder, professional services revenues are tied to product deployments. These revenues are lower margin generally nonrecurring.
Moving to gross profit Q1, non-GAAP gross profit was approximately $29 million up from $21 million in the prior year period.
Current period non-GAAP gross profit includes a little under $19 million attributable to blend platform and a bit north of $10 million to title III 65.
These figures are net of cost of revenue of approximately $43 million.
About two thirds of which relates to the addition of costs associated with title III 65, which we did not own in the prior year period.
Blend platforms segment cost of revenue increased $3 $3 million with early investments in blend title and increases in delivery hosting and connectivity expenses.
non-GAAP operating expenses for the first quarter of 2022 or slightly under $69 million.
Compared with slightly under $40 million in the prior year, reflecting higher personnel costs and sales commissions associated with our expanding team is focused on development marketing and sales of new and existing products as well as the addition of costs from title III 65.
Keep in mind that our opex structure compared with prior year and now also includes expenses associated with operating as a public company.
In April as Nemo highlighted we announced a workforce reduction of approximately 200 positions or 10% of our then current workforce.
Eliminated positions represent annualized compensation expenses of approximately $35 $4 million the reductions were predominantly entitled to receive five where it needs to reduce both due to anticipated lower refi volumes near term and our migration of legacy title III 65 customers to blend title.
We also eliminated the other operating expense positions with a focus on certain corporate G&A functions.
This savings will incrementally reduce our cash needs beginning in Q2, however, before considering additional cost reduction measures that we plan to implement our quarterly Opex run rate is expected to trend in line with Q1 levels.
This run rate includes a ramp in head count related fixed expenses incurred in late Q3, and Q4 2021.
Prior to a reduction in 2022 revenue guidance.
We've made our first meaningful step towards aligning our operating structure with a rapidly evolving market environment.
We look forward to updating you on our comprehensive reprocessed the NEMA highlighted when it is complete.
Now turning to our balance sheet.
Our cash cash equivalents in marketable securities at March 31, 2022 were just under $500 million.
With total debt outstanding of $225 million on our five year term loan.
Our $25 million revolving line of credit remains undrawn.
I'll wrap up now with our outlook our full year 2022 revenue guidance provided in our Q4 earnings call is unchanged that guidance reflects expectations of between 230 and $250 million in consolidated revenue in 2022 with between 140 and $150 million in the blend platform segment.
And between 90 and $100 million entitled 365 segment note that the mortgage markets are volatile and uncertain and industry forecasts moved materially lower we may need to appropriately adjust our guidance at that time.
Blend platform segment guidance reflects expected mortgage banking revenue decline in the high single to low double digits with a more pronounced 41% industry volume decline that we share with you today.
Meanwhile, and as a reminder, our anticipated 2022 consumer banking in marketplace revenue reflects triple digit growth for full year 2021 levels, which includes the transition of revenue from the title III 65 segment as customers transition to the blend platform and the blend title solution as well as contributions from other consumer banking and marketplace products.
Wrapping up 2022 is off to a solid start in a very challenging environment.
Our growing market share in mortgage banking is leading to significant outperformance against pronounced industry declines, while we're seeing solid consumer banking of marketplace revenue growth as more customers adopt our platform and our new products.
We have begun taking meaningful actions to prudently manage our expenses as we navigate the current downturn on not sacrificing the investments that will enable us to drive and create value from the digital transformation of the financial services industry.
Thank you again for joining Crystal we're now ready for questions.
Thanks, Mark and Ian that for your remarks, we'll now turn to Q&A. Our first question comes from Brian <unk> from K B W.
Brian you May meet yourself and ask your question.
Alright.
We can.
Great. Thanks for taking the question.
So nice to see the progress on the cost structure.
I was wondering if based on the progress you've seen to date, if you're able to provide an outlook for earnings for the year, perhaps in terms of non-GAAP operating income.
There's always a possibility.
And beyond that.
Would also be helpful. Whether this fall.
Paul one more defined guardrails on how you view the margin trajectory of the business.
The intermediate term and long term.
Margins, you expect to be able to support.
Thanks.
Thanks, Brian at this point, we're just reaffirming the revenue guidance.
We are anticipating spend in line at this point with what you saw in Q1 and then we'll look to update you later in the year as the plan comes together.
Yeah.
Thanks. Our next question comes from Maddie Schrage Matti, please feel free to yourself and ask your question.
Hey, guys, sorry can you hear me now.
Got you. Thank you.
Just quickly thanks for taking my question I was wondering how you guys are thinking about the pace of share gains as we model out the rest of the year and then the long term trajectory of share gains.
Thanks.
Matt would you mean market share yes.
Yes, yes, yes.
Yes, so the majority of the market share gains come from rolling out within it with you.
Year, so between now and the end of the year will come from existing customer Rollouts.
I'm happy to announce that in the last 60 days, we had a few a couple of large customers in particular rollout.
One large bank and one large non banking, obviously smaller ones and so we will see share gain grow we're not going to share an exact number but we do project chevron to grow as those rollouts come to fruition in terms of volume on the platform. Despite the market coming down I mean, our share is sort of independent of the market volatility right now.
Next question comes from Joseph Harris interest, please feel free to yourself.
Great. Thanks for taking the question.
Last quarter, you noted that the current market environment is leading to thin margins that lenders and the slowdown of adoption of new products. Just wondering if there's been any change positive or negative and this trend over the last six weeks since you last reported thank you.
Yes, what we were finding thanks for the question what we're finding is that for certain product areas and certain areas areas of our product to drive efficiency, we're seeing a lot of.
We're seeing a lot of interest around those specific areas blend income is particularly interesting because it's a cheaper way for them to verify income and they are paying that cost right now.
And then also for other product lines I mentioned home equity a couple of times, but theres a lot of urgency around that product because homeowners hubs.
A huge amount of equity in their home and they want to be able to tap it at the lowest possible cost to them, which in a lot of cases, it will be a home equity line or loan.
So now we're seeing specific areas get a lot of focus from our customers because there's an absolute need to save money to be able to stay competitive in this environment or offer different products to be able to get more revenue.
Thanks. Our next question comes from Matt Stotler from William Blair.
Okay.
Hi, Thank you for taking the question maybe just one on the on the title piece.
Helpful color on kind of the Q on Q2 dynamic.
Release, you mentioned.
I guess beginning the effort in earnest to move tie.
Title pre 65 customers over the core platform or any color you can provide in terms of.
The plan there the strategy to execute on that and the ability to do that in any visit.
Visibility into how you will be able to carry out those migrations into the second half of the year.
This is Tim thanks for the question.
We expect that.
The largest customer of totaled 365 Thats Mr. Cooper will grow we expect that they will go live on R. R.
Glenn title platform.
Before the end of the second quarter, so before the end of June .
And we are working with other customers.
Two two.
To make progress on that in the second half of the year, but.
The single biggest.
Driver of that transition as Mr. Cooper, and and we're pleased with the progress that we've been able to make on that this quarter.
And our next question comes from Arvin from Army from Piper Sandler.
Hi.
Thanks for taking my question I, just wanted to clarify a quick data point.
Thank you.
On the earnings call.
41% reduction in overall mortgage volumes.
And then does it come back to the.
35% that I talked about on the last earnings call.
Yes, that's right yeah. So previously we had thought that volumes would be down in 2022% to 35% in.
In terms of number of units compared to 2021.
Another way to say that a 65% of the same of the number of units in 2022 compared to 2021, and now that number looks more like 59% or 41% decline. So a pretty significant decline in how in our overall volume forecast for the market and we primarily use Fannie Mae and MBA for that but we're still reaffirming our guidance because.
We still feel good about those numbers.
We'll take another question from Ryan Tomasello from K B W.
Hey, Thanks for taking the follow up I guess just.
Certainly that an embedded solution can you talk about how that product will be priced in terms of.
Refi versus purchase purchase is my understanding.
It's really going to be focusing you see more refis, but what we can sit there and I guess the pace of it.
The tax rate.
Are achievable for that product over the next few years and maybe helping to guide some of our modeling.
Yes.
Thanks.
Sure So you're right I think.
We look at refi.
The more immediately available opportunity for us versus purchase in the title space, Although obviously refi volume is coming down this year.
And in terms of pricing.
We expect that we will keep the pricing consistent with what it has been.
Title 365 in the past.
And in terms of.
In terms of attach rates I think it's too early for us to be able to give you any clear estimates around that but we feel good about the amount of volume that we'll be able to capture clearly with the biggest customer Mr. Cooper.
And we'll see where that takes us.
<unk>.
Yeah.
Yes, let me just let me add one quick additional point there another area other product line that is at least a titled property report.
As home equity and so it fits nicely into our instant home equity.
Focus around helping our customers offer that product digitally as well. So that's another area that we're looking at.
Next question comes from David under from Wells Fargo.
You mean.
Okay.
Hi, Tim.
Sure.
Yes, we got you.
Mark.
Given the talent in the industry and cheap valuations broadly.
Question about $500 million on balance sheet cash.
Just thinking about the upswing in the future.
Sophocles, how should we think about.
Thank you.
Let me say upswing do you mean, how we're thinking about how we're thinking about our stock price and the mortgage market.
Sorry, I missed that.
An eventual recovery in the mortgage market.
Yes, no. This is.
In some ways.
This.
This downswing I think.
The fact that we're growing through the downswing, our declines are not as great as what the market is I think goes through our customer selection and we're really happy with that and it also goes to the additional products, we've been able to add on things like income and close.
Already in whats planning in homeowners insurance and elsewhere.
But.
We're focused on driving value, we're focused on doubling down on the investments that we're making that are working for our lenders.
And the stock market will hopefully take care of itself, we're not the only public company I think in this situation.
We have a very sort of mission oriented employee base and.
We're working on.
Just being focused and being connected to our customers.
Next question comes from Joe Murphy from Canaccord.
Hey, guys. Thanks for taking the question I was just wondering in the current environment.
What you see.
Right now in terms of bank behavior it sounds like.
They are kind of still.
Moving forward with new technology initiatives.
Kind of the most updated real time.
I guess update on how banks are thinking about rolling out new technology here. Thanks.
And banks are I guess.
You called out specifically, because banks slash credit unions behave somewhat differently than independent mortgage companies in this regard.
But banks in particular are investing heavily in technology right now.
Mentioned I mentioned home equity a couple of times just because we've spent so much time thinking about it a blend so it's very top of mind for me personally.
And of course top of mind for our customers, but it's not just that.
Personal lending is getting a lot of focus from customers.
New membership our deposit account opening for credit unions and banks is another area that we hear a lot about and so there's quite a bit of energy behind these areas because yes, while the mortgage market is down comps.
Companies offer a wide array of products and especially in times like this when consumers need access to capital when there is high inflation and there is more need for.
Individuals have access to more capital Thats, what the banks and credit unions are therefore, and so we feel good as a preferred provider and it goes back to our underlying thesis of make your customer successful and they'll want to do more with you and we see that in our net are market adjusted net revenue retention number as well.
Thanks, We will take the second question from Matti <unk> from Keybanc.
Yeah.
Hey, guys. Thanks for the follow up.
So you mentioned that two thirds of total customers using two or more software products could you maybe give us a little more information on your more heavily adopted customers. How many products. They are using today and how quickly that might be the rest of the installed base. Thanks.
One thing that we've seen historically is that some of the largest institutions by one or two products at a time and then some of the smaller ones.
Credit unions, and banks will often buy a whole suite of products at once so they'll buy mortgage auto personal loans.
Deposit accounts.
Home equity altogether, and maybe even some of the add ons like clothes and income.
So it sort of depends on the on.
On the <unk>.
Size of customer that being said, we did just announce the credit card products being live with Wells Fargo and so we're even seeing traction at the top of the market with some of these more broader consumer banking offerings as well and so on.
I guess.
So long way of saying.
The top of the market behaves a little differently in the bottom of the market and often we shared a number in the past quarters. We enter this quarter around how much you are buying two or more products in the first sale, which that number has been higher than it was a few years ago. We didn't have multiple products of course, and so both all of those things are positive trends and where we're excited helps reinforce our long term thesis around.
Growing with our customer base.
Okay. Another question from Matt Stotler from William Blair.
Thank you for taking the follow up so maybe just one on.
A couple of things like consumer banking, so obviously, if you will.
Looking at the what we saw in Q1, and what seems to be the updated expectation for 2022, maybe a little bit of an uptick in expectations for consumer banking I know a lot of that was probably from where you guys had talked about last quarter about maybe some delays in rolling out some of those.
Alex you are.
Customers would just love some more some more color on.
What youre seeing in terms of those rollouts.
New additions in terms of customer banking products, and if youre seeing stand alone customer banking.
Wins or if it's still largely an up sell on mortgage.
Thank you.
Sure. Yes. So we're we I didn't understand the very first part of the question, but to answer the second part and maybe you can reiterate this is the first product to answer the second part.
We typically just because we have such a broad mortgage customer base and we've been successful with them.
That's why they trust us with the next product line.
I gave the example of that Wells Fargo, but theres of course, others as well.
It typically ends up being an attached to an existing.
Mortgage customer because that's the first product line went out to market with Internet I shouldn't and attached.
<unk> sale to an existing mortgage customer.
And Thats a trend that we're we're pretty happy with I mean bank, our customers successful and having them do more with US I think it's a good thing it's a good sign and so.
And what was I didn't understand the first part of your question. So could you reiterate that.
Yes. The first part of your question just being it seems like.
The consumer banking segment has performed or performed better than expected in Q1, and it seems like the expectation for full year is that it is also improving relative to the last time, we got it and then I'll look from you guys. So why is that.
Largely just the customers from last year that are rolling out.
And then actually catching up I know some of those have been delayed.
Is there anything new that's being layered in there this year or just how to think about kind of the driving factors behind that kind of uptick in expectations for a part of the business.
Yes.
That part of the business is primarily our home equity.
Personal loans product our deposit account product and then income in close I would say the majority of the.
Uptick is from personal loans.
And Thats a function of a few of our customers who do those those lending products are doing more volume than we had maybe more dollars per unit than we had previously anticipated.
Okay.
Take a follow up question from Joe box from Canaccord.
Hey, guys I know I know this year is a balancing act between managing costs and keeping the roadmap and everything going.
And I know, we're going to get more of an update on the numbers later in the year, but could.
Could you give us a little more color on.
What may be dialing back in the current environment in terms of your investments span across I don't know what maybe customer service.
No.
New product initiatives sales et.
Et cetera. Thanks.
Big part of that Joe is right.
<unk> based on volumes so if.
Title volumes are down then the production of title costs, obviously has to come down alongside it and then just generally right sizing for where we are in the cycle and the size of the company. So we're just we're just being extra prudent and we're looking across the entire company, both revenue and cost but really.
Focused on making sure that our costs are in line with with what the volumes arent in.
Based on Refis.
Okay.
Our last question comes from a retail investor Emily S. Ask what is blends most important goal and focus for this year and even do you want to take this one.
Sure Yes.
I would say I like questions like this because it makes you pick one thing obviously, we do multiple things with our customers and so it's always.
I like questions like this because it helps us focus on on one thing and what's most important to us.
And as well as reflecting on this question a lot of what is going to make us successful in the long run.
Especially if you go back and you look at our history is our existing customers continuing to do more with us.
And so, especially in the mortgage part of the market like I said margins are really tight and I made a couple of comments about it in the prepared remarks margins tight for our lenders.
Making sure that we can drive efficiency for them and make sure that they're winners does really three things for us.
One it makes sure that they not just stay flat in market share, but they grow market share, which leads to more growth for us our market share. It doesn't have to just come from signing new customers as we make customers more successful or they consolidate other mortgage companies. That's a win for us as well and we're seeing some consolidation in the industry as well too.
<unk> that will be the foundation, if theyre, a bank or credit union for them to do more products with us like we've seen this story play out time and time again, where you see in our net revenue retention are market adjusted net revenue retention that number's. So good because our customers want to do more with us because we make them successful.
And then the third thing is they lost with US for decades. These are the kinds of things that we believe the last with us for decades, if we do this and so I have really reaffirmed our team the importance of making sure our existing customers to our successful that's unique for us and as being a vertical software company and something that we have to never lose sight of most of those happening in mortgage but that also means for <unk>.
The ones, who are signed up for consumer banking, we need to make sure. They are just as successful and so that's something that we're we're paying close attention to and we're spending a lot of time and energy on his leadership team, making sure. We're very close to our customers more so now than in times when when times are booming and they have less time to spend time with us. It was not as important to know it is extra important that's where we're focused on.
Yeah.
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