Q1 2025 Blend Labs Inc Earnings Call

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Operator: Thank you for standing by.

Rebecca: Thank you for standing by my name is Rebecca and I will be your conference operator today at this time I would like to welcome everyone to the blend labs incorporated first quarter 'twenty 25 earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's remark.

Rebecca: My name is Rebecca and I will be your conference operator today.

Operator: At this time, I would like to welcome everyone to the Blend Labs Incorporated first quarter 2025 earnings call. All lines have been placed on mute to prevent any background noise.

Operator: After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number on your telephone keypad. If you would like to withdraw your question, press star one again. Thank you.

Rebecca: There will be a question and answer session. If you would like to ask a question. During this time simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question Press Star. One again. Thank you I will now turn the call over to Amir Jafari head of finance and operations. Please.

Rebecca: I will now turn the call over to Amir Jafari, head of finance and operations. Please go ahead.

Amir Jafari: Go ahead.

Amir Jafari: Good afternoon and welcome to Blend's Financial Results conference call for the first quarter of 2025. I'm Amir Jafari, head of finance and operations. Joining me today is Nima Ghamsari, co-founder and CEO of Blend.

Speaker Change: Good afternoon, and welcome to <unk> financial results conference call for the first quarter of 2025.

Study: <unk> head of finance and operations joining me today in New York I'm study co founder and CEO of blend.

Amir Jafari: Before we start today's call, I'd like to note that some of the statements on our call will be forward-looking. We will also 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. Unless otherwise stated, all financial measures we discussed today, including our profitability, refer to non-GAAP.

Study: Before we start today's call I'd like to note that some of the statements on our call will be forward looking we will also 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.

Study: non-GAAP measures are not intended to be a substitute for GAAP results unless otherwise stated all financial measures, we discuss today, including our profitability refer to non-GAAP.

Amir Jafari: Also, certain statements made during today's conference call regarding Blend and its operations, in particular, its guidance for the second quarter in full year 2025 and expectations about our markets, our strategic initiatives, product development plans, and operational targets may be considered forward-looking statements under federal security law. 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, could cause actual results, events, or circumstances to differ materially from those described in these statements. Please see the risk factors we've identified in our most recent 10-K, 10-Q, and other SEC files.

Study: Also certain statements made during today's conference call regarding blend in its operations in particular its guidance for the second quarter and full year 2025, and expectations about our markets our strategic initiatives product development plans and operational targets may be considered forward looking statements under federal Securities laws.

Study: 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 could cause actual results events or circumstances to differ materially from those described in these statements.

Study: Please see the risk factors, we've identified in our 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.

Amir Jafari: We are not undertaking any commitment to update these statements if conditions change, except as required by law.

Amir Jafari: We will provide a transcript of this call and supplemental slides for the quarter on our investor relations website.

Study: We will provide a transcript of this call and supplemental slides for the quarter on our Investor Relations website.

Nima Ghamsari: I'll now turn the call over to Nima. Good afternoon, everyone, and thank you for joining. There are three themes I want to cover. First, our continued shift towards becoming a software first company. Second, the Rocket and Mr. Cooper deal as a catalyst for the industry. And third, how that shift is helping fuel the strong momentum in 2.1.

Speaker Change: I will now turn the call over to NEMA.

NEMA: Good afternoon, everyone and thank you for joining.

NEMA: There are three themes I want to cover today.

NEMA: First our continued shift towards becoming a software first company.

NEMA: Second the rocket Mr. Cooper deal as a catalyst for the industry and third how that shift is helping fuel the strong momentum in Q1 for blend.

Nima Ghamsari: Starting with our Simplified Blend initiative, we began our journey to become a software-focused company, enhancing customer value and improving our unit economics by transitioning to strategic platform partnerships rather than building non-core services ourselves. As a significant step in this evolution, we are pleased to announce that we are in an exclusive process with a leading title and mortgage services provider for the potential sale of our title insurance. This move aligns with our commitment to fully embrace a software-first model and will be the final step in our journey to Simplify. This potential transaction is envisioned to have three key benefits.

NEMA: Starting with our simplified blend initiative, we began our journey to become a software focused company enhancing customer value and improving our unit economics by transitioning to a strategic platform partnerships rather than building noncore services ourselves.

NEMA: And a significant step in this evolution. We are pleased to announce that we are in an exclusive process with a leading title and mortgage services provider for the potential sale of our title insurance business.

NEMA: This move aligns with our commitment to fully embrace our software first model and it will be the final step in our journey to simplify blend.

NEMA: This potential transaction is envisioned at three key benefits.

Nima Ghamsari: First, similar to our successful partnerships in homeowners insurance and income verification, the intended structure includes an ongoing software revenues While this results in lower reported revenue than a typical title transaction, it will drive higher absolute profit dollars, be degraded to our gross margin, and have better capital similar to our other partners. Second, this allows us to strategically exit the capital-intensive title agency business while maintaining some unit economics that will be beneficial in a macro recovery. Most importantly, it accelerates our vision for a more cost-effective, software-driven title insurance experience that's embedded directly into the Blend We'll share more details about this embedded solution in the coming quarter.

First similar to our successful partnerships in homeowners insurance and income verification. The intended structure included ongoing software revenue stream for Blaine.

NEMA: While this resulted in lower reported revenue than a typical tidal tidal transaction. It will drive higher absolute profit dollars be accretive to our gross margin and have better capital efficiency similar to our other partnerships.

NEMA: Second this allowed us to strategically exit the capital intensive title agency business, while maintaining strong unit economics that would be beneficial in a macro recovery.

NEMA: But most importantly, it accelerates our vision for a more cost effective software driven title insurance experience that's embedded directly into the blend platform we'll.

NEMA: We will share more details about this embedded solution in the coming quarters.

Nima Ghamsari: Ultimately, this move reinforces our core objective to leverage the power and reach of our platform and focus on what we do best. delivering innovative software that drives meaningful value. By focusing on our software strengths and forging strategic partnerships, we can provide a seamless workflow and deep integration. This allows us to capture a portion of the value we create without the need for direct operational ownership. We believe that this direction will be instrumental in providing even greater benefits to our entire customer base through innovative software development.

NEMA: Ultimately this move reinforces our core objective to leverage the power and reach of our platform and focus on what we do best delivering innovative software that drives meaningful value to our customers.

NEMA: By focusing on our software strength and forging strategic partnerships, we can provide a seamless workflow and deep integrations.

NEMA: This allows the capture a portion of the value we create without the need for direct operational ownership.

NEMA: We believe that this direction will be instrumental in providing even greater benefits to our entire customer base through innovative software driven solutions.

Nima Ghamsari: In our supplemental presentation, we shared information illustrating the financial benefits we've already derived from our recent partnerships, as well as a preview of the effects these decisions will have on our bottom line over the next 12 months. Contribution profit per funded loan will serve as a key metric to inform our business leaders on how we're performing relative to our profitability goals, and we'll consider the effect of our product and commercial decisions that those will have on our, on the future. This amplifies our focus on profitable. I'm proud of what our team has done to Simplify Blend over the past year, and this sets us up nicely to continue to invest in our software for a very long time.

NEMA: In our supplemental presentation, we shared information illustrating the financial benefits, we've already derived from our recent partnerships as well as a preview of the effects. These decisions will have on our bottom line over the next 12 months.

NEMA: Contribution profit per funded loan will serve as a key metric to inform our business leaders on how we're performing relative to our profitability goals and we'll consider the effect of our product and commercial decisions that those will have on our on this metric.

NEMA: This amplifies our focus on profitable growth.

NEMA: I'm proud of what our team has done to simplify blend over the past year and this sets us up nicely to continue to invest in our software for a very long time.

Nima Ghamsari: Shifting gears, there was another major announcement from Rocket this quarter, announcing the acquisition of Mr. Cooper. While Rocket has never had a commercial relationship with Blend, I have a lot of admiration for Blend. And I actually attribute a lot of our success to their presence in the market. Going back to early on in Blend's history, it was difficult to get mortgage companies and banks to move fast. businesses stabilized and then post financial crisis. There wasn't a strong catalyst to make a big shift towards digital and mobile things that we all take for granted. I've had so many conversations and many interested potential customers, but the pace of those conversations was anemic.

NEMA: Shifting gears there was another major announcement from rocket this quarter announcing the acquisition of Mr. Cooper.

NEMA: Well rocket has never had a commercial relationship with blend.

Speaker Change: I have a lot of admiration for that.

Speaker Change: And actually attribute a lot of our success to their presence in the market.

Speaker Change: Going back to early on in <unk> history.

Speaker Change: It was difficult to get mortgage companies and banks to move fast.

Speaker Change: Business has stabilized and then post financial crisis.

Speaker Change: It wasn't a strong catalyst to make a big shift towards digital and mobile and things that we all take for granted.

Speaker Change: I had so many conversations and many interested potential customers, but the pace of those conversations like anemic.

Nima Ghamsari: and then all of a sudden everything changed. almost 10 years ago. Rocket came out with a simple slogan, push button, get The market was confused. What does that mean? You can't really push a button and get a mortgage, right? Ultimately, that didn't matter. Consumers were now expecting a different type of digital experience and the market started. I remember I fielded hundreds of phone calls from lenders in the following month, and the rest was history. That shift in consumer expectation was the catalyst that Blend needed to move forward.

Speaker Change: And then all of a sudden everything changed.

Speaker Change: 10 years ago.

Speaker Change: Rocket came all the simple slogan push button get mortgage.

Speaker Change: The market was confused what does that mean I can't really push a button and get a mortgage REIT.

Speaker Change: Ultimately that didn't matter consumers, we're now expecting a different type of digital experience and the market started to react.

Speaker Change: I remember I fielded hundreds of phone calls from lenders in the following months and the rest of the history. That's shifting consumer expectation was the catalyst that blend needed to move the market.

Nima Ghamsari: The recently announced Mr. Cooper and Rocket Alliance has a similar tone to it for the market, and it impacts our own trajectory as well as a result. Their creation of an end to end platform underscores the increasing expectation of borrowers to be treated as valued custom. demanding personalized experiences, acknowledging their ongoing relationship with financial This strategic move powerfully validates our longstanding vision of a unified digital mortgage experience, which inherently focuses on creating more personalized and customer-centric interaction. And this validation isn't just theoretical, we're experiencing it tangibly through the acquisition and expansion of our relationship. and it now includes 10 of the nation's top 20 mortgage services.

Speaker Change: The recently announced Mr. Cooper in Rockville lines has a similar tone to it for the market and it impacts our own trajectory as well as a result.

Speaker Change: Their creation of an end to end platform underscores the increasing expectations of borrowers to be treated as valued customers.

Speaker Change: <unk> personalized experiences acknowledging their ongoing relationship with financial institutions.

Speaker Change: This strategic move powerful event validates our long standing vision of a unified digital mortgage experience, which inherently folks and creating more personalized and customer centric interactions.

Speaker Change: And this knowledge is just theoretical we're experiencing it tangibly for the acquisition and expansion of our relationships that now good 10 of the nation's top 20 mortgage servicers.

Nima Ghamsari: You'll see this in our pipeline numbers later, but that week when the acquisition was announced, I fielded more calls than I had in a long time. customers, and prospects, knowing they need to react in the short-term and long-term.

Speaker Change: You'll see this in our pipeline numbers later, but that week when the acquisition was announced I feel that more calls than it had in a long time.

Speaker Change: With customers and prospects knowing they need to react in the short term annual long term.

Nima Ghamsari: And as for Mr. Cooper, we are so grateful to have him as a longtime customer. They are on the latest version of our Blend Builder-powered flows, meaning they have our embedded, modular, API-rich flows embedded right at the right point in the workflow. With them and similar for other large institutions that demand that level of flexibility, it's no longer a question of build versus buy. It's a question of using the right piece of our platform alongside the internally built tools that differentiate their. So all of these things together have laid the groundwork for the momentum we're seeing in Q1.

Speaker Change: And as for Mr. Cooper, we are so grateful to have them as long term customer.

Speaker Change: They are on the latest version of our blend builder powered flows meaning they have are embedded modular API rich flows embedded right at the right points in the workflow with then and similar for other large institutions that demand that level of flexibility.

Speaker Change: Longer a question of build versus buy it's a question of using a piece of our platform alongside the internally built tools that differentiate their institution.

Speaker Change: So all these things together have laid the groundwork for the momentum we're seeing in Q1 and beyond.

Nima Ghamsari: Start on 2.1, we came in right near the high end of our platform revenue range and similar for our platform operating. That's all three consecutive quarters of non-GAAP operating process. We've also achieved positive free cash flow of $15.5 million. which is a record for us and in a very tough. And that's not even counting the 11 new or expanded deals we signed in Q1, nearly three times more than the same period last year. And Q1 is typically a slower quarter.

Speaker Change: Starting in Q1, we came in right near the high end of our platform revenue range and similar for our platform operating income.

Speaker Change: I fell three consecutive quarters of non-GAAP operating profit of.

Speaker Change: We also achieved positive free cash flow of $15 $5 million, which is a record for us and a very tough market.

Speaker Change: That's not even counting the 11, new or extended deals we signed in Q1, nearly three times more than the same period last year.

Speaker Change: And Q1 is typically a slower quarter for us.

Nima Ghamsari: So we're seeing that momentum continuing to Q2, where we've already secured 10 newer expansion deals, and we're only about a month Two things I want to quickly highlight about the Q1 deals are the quality of customers and the breadth We signed a top five mortgage servicer, a top 10 mortgage originator. across our mortgage, home equity, and closed. These customers will typically deploy in two quarters or so. And when these customers, this large rollout, they'll typically start with just the initial rollout being the mortgage solution, which is a little dilutive to our economic value per funded loan.

Speaker Change: So we're seeing that momentum continue into Q2, where we've already secured 10 newer expansion deals and we're only about a month Ed.

Speaker Change: Two things on it quickly highlight about Q1 deal or the quality of customers and the breadth of solutions.

Speaker Change: We signed a top five mortgage servicer and top 10 mortgage originator.

Speaker Change: Our mortgage home and home equity and closed solutions.

Speaker Change: These customers will typically deployed in two quarters yourself and win these customers. This large rollout they'll typically start with just the initial rollout being the mortgage solution, which is a little dilutive to our economic value per funded loan, but they quickly follow on with solutions, they signed up for like blend clothes and become accretive.

Nima Ghamsari: But they quickly follow on with solutions they signed up for like BlendClose and become accretive. So for all the reasons above, the mortgage industry is gaining. catalysts, and companies are now stable. They're ready to invest in the future, which we're seeing in our customer base and in our pipe.

Speaker Change: So for all the reasons above the mortgage industry is gaining steam.

Speaker Change: There are catalysts and companies are now stable they are ready to invest in the future.

Speaker Change: Which we're seeing in our customer base and in our pipeline. So turning to expansion first of all I'd like to announce our largest deal ever.

Nima Ghamsari: So turning to expansions, first of all, I'd like to announce our largest deal ever. $50 million renewal and expansion with a top financial institution that we signed early in This is a multi-product deal that shows our ability to scale with our customers over time and hopefully serves as a blueprint for other customers as they add more product. On top of that, we're excited to report that we've already signed five customers who are recently launched Rapid Home Lending Suite this quarter, which includes both refinance and home equity lending solution.

Speaker Change: Our $50 million renewal and expansion with a top financial institution that we signed early in Q2.

Speaker Change: This is a multi product deal that shows our ability to scale with our customers over time and hopefully serve as a blueprint for other customers as they add more product lines with us.

Speaker Change: On top of that we're excited to report that we've already signed five customers for our recently launched rapid home lending suite this quarter, which includes both refinance and home equity lending solutions.

Nima Ghamsari: These are important to us, so I want to take a moment to highlight why these are so relevant in the current market. Home equity, first of all, has rapidly emerged as a compelling opportunity for lenders, driven by a significant increase in home value. Currently, the average homeowner has approximately $315,000 in equity, presenting substantial potential for lenders as borrowers increasingly seek funds for home improvements, debt consolidation, and other major expenditures. We believe that the home equity market has grown double digits year over year based on the data we're observing from our customers. On top of that, lenders are also preparing for the next refinance.

Speaker Change: These are important so I'm going to take them out to highlight why these are so so relevant in the current market home equity and first of all has rapidly emerged as a compelling opportunity for lenders driven by a significant increase in home values. So currently the average homeowner has approximately $315000 in equity presenting substantial potential for lenders as borrowers.

Speaker Change: Increasingly seek funds for home improvement debt consolidation and other major expenditures.

Speaker Change: We believe that the home equity market has grown double digits year over year based on the data we're observing from our customers.

Speaker Change: On top of that lenders are also going to the next refinance ways.

Nima Ghamsari: They want to make sure that as rates come down through this year and next year and beyond, they can take advantage of that refinance volume when it comes their way. Our rapid refinance and rapid home equity lending solutions are specifically designed to capitalize on these trends by delivering hyper personalized real time approvals, allowing lenders to capture borrower intent precisely when it Our initial pilot last year demonstrated the power of this approach, yielding conversion improvements of over 50%, which is critical. Especially considering the average cost of origination in the mortgage industry is about $11,000 per loan.

Speaker Change: They want to make sure that as rates come down through this year and next year and beyond they can take advantage of that refinance volume when it comes their way.

Speaker Change: Our rapid refinance and rapid home equity lending solutions are specifically designed to capitalize on these trends by delivering hyper personalized real time approvals, allowing lenders to capture borrower intent precisely when it matters the most.

Speaker Change: Our initial pilot last year demonstrate the power of this approach will lead conversion improvements of over 50% which is critical.

Speaker Change: Especially considering the average cost of origination of the mortgage industry is about $11000 per loan.

Nima Ghamsari: I've detailed on slide 20 of our Refresh Corporate Overview, which can be found on the Investor Higher conversion rates are therefore not just beneficial, they are essential, and they form the core rationale between our rapid. The early success of our rapid refinance and home equity offerings is also evidenced by the fact that our customers are paying 1.9x higher in economic value per fund and loan based on our signed deals so far. This grub is fueled by stronger borrower engagement and higher For our customers, this translates to a more streamlined borrower journey and reduced manual effort and higher conversion.

Speaker Change: On slide 20 of our refreshed corporate overview, which can be found on the Investor Relations website.

Speaker Change: Higher conversion rates and therefore, not just an official they're essential and they form the core rationale between our rapid product lines.

Speaker Change: The early success of our rapid refinance and home equity offerings is also evidenced by the fact that our customers are paying $1 Nymex higher and economic value per funded loan based on our signed deals so far.

Speaker Change: This growth is fueled by stronger borrower engagement and higher retention rates for our customers. This translates to a more streamlined barra journey and reduce manual effort and higher conversion and for blended. It means we have a better margin profile and enhanced value per relationship, which gives us a continual path to continue to drive more value to our customers and economics to us.

Nima Ghamsari: And for Blend, it means we have a better margin profile and enhanced value per relationship, which gives us a continual path to continue to drive more value to our customers and economic growth.

Nima Ghamsari: Ultimately, the traction we're seeing with rapid refinance and home equity validates our commitment to providing lenders with powerful solutions to capitalize key market opportunities and build stronger customers.

Speaker Change: Ultimately the traction, we're seeing with rapid refinance and home equity validates our commitment to providing lenders with powerful solutions to capitalized key market opportunities and build stronger customer relationships.

Nima Ghamsari: And we're seeing this kind of momentum on the consumer banking side as well. This quarter, we signed multiple deposit and consumer lenders.

Speaker Change: And we're seeing this kind of go into some of the consumer banking side as well.

Speaker Change: This quarter, we signed multiple deposit and consumer lending deals, notably we partnered with yet another top 25 credit Union by asset size and institution, serving over 400000 numbers to spearhead a comprehensive multi year transformation.

Nima Ghamsari: Notably, we've partnered with yet another top 25 credit union by asset size, an institution serving over 400,000 members to spearhead a comprehensive multi-year Their decision to adopt our full product suite, encompassing deposits, credit cards, personal loans, and home lending, demonstrates a strong vote of confidence in Blend as a strategic ally poised to drive long term growth and foster These three partnerships underscore the inherent value of our end and our robust suite of solutions, areas in which we will continue to invest in and strengthen. One example, yesterday, we announced the launch of our business deposit account opening product, further rounding out our product .

Speaker Change: Their decision to adopt our full product suite encompassing deposits credit cards personal loans and home lending demonstrates a strong vote of confidence in blend as a strategic ally and poised to drive long term growth and foster innovation.

Speaker Change: These partnerships underscore the inherent value of our end to end before and our robust suite of solutions areas in which we will continue to invest in and strengthen overtime.

Speaker Change: One example, yesterday, we announced the launch of our business deposit account opening product further rounding out our product suite.

Nima Ghamsari: Financial institutions can now leverage a single, omnisciental platform to seamlessly serve both consumers and small businesses across a full spectrum of lending products. Personal loans, credit cards, auto loans. Ultimately, these developments solidify our commitment to providing a unified and future-proof platform for the financial service. And we expect these investments to continue attracting leading Our pipeline for Q2 and beyond is nearly double what it was this time. That includes opportunities like the one I mentioned with the Top 25 Credit Union. where we're selling the platform end-to-end across all products as well as mortgage and consumer banking products to institutions of all sizes.

Speaker Change: So institutions can now leverage a single omnichannel platform to seamlessly serve both consumers and small businesses across a full spectrum of lending products, including personal loans credit cards auto loans and home lending.

Speaker Change: Ultimately these developments solidify our commitment to providing a unified and future proof platform for the financial services industry.

Speaker Change: And we expect these investments to continue attracting leading institutions our pipeline for Q2 and beyond is nearly double what it was this time last year.

Speaker Change: That includes opportunities like the one I mentioned with the top 25 credit Union.

Speaker Change: Where we're selling the platform end to end across all products as well as mortgage and consumer banking products to institutions of all sizes.

Nima Ghamsari: Notably, this includes another top 10 bank, another top 10 servicer, another top 10 IND, and another top 10 service provider.

Speaker Change: Notably this includes another top 10 bank another top 10 servicer, another top 10 Indy and another top 10 credit Union.

Nima Ghamsari: In closing, I am so proud of what our team and what they did. We are nearing the successful simplification of our business, allowing us to be laser-focused on our course. The more catalyst created by the rocket, Mr. Cooper deal is energizing our customers and our pipeline and driving significant Prospects for U.S. banking deregulation also have the potential to drive a period of renewed investment in technology and modernization.

Speaker Change: In closing I am so proud of what our team and of our team and what they did in Q1, we are nearing the successful simplification of our business, allowing us to be laser focused on our core software strengths.

Speaker Change: The more catalysts created by the rocket Mr. Cooper deal is energizing, our customers in our pipeline and driving significant opportunity.

Speaker Change: Prospects for U S that can do deregulation also have the potential to drive a period of renewed investment in technology and modernization and industry M&A trends are yielding market share gains for our customers.

Nima Ghamsari: industry M&A trends are yielding market share gains for And to top it off, our Q1 results, marked by strong sales momentum, nearing the high end of our revenue guidance, positive operating income, and record free cash flow, demonstrate the tangible impact of our strategic We believe this confluence of factors positions us for accelerated growth and sustained profitability as we continue to power the future.

Speaker Change: And to cap it off our Q1 results marked by strong sales momentum during the high end of our revenue guidance positive operating income and record free cash flow demonstrate the tangible impact of our strategic direction.

Speaker Change: We believe this confluence of factors positions us for accelerated growth and sustained profitability as we continue to power the future of banking.

Amir Jafari: With that, I want to turn it over to Amir for his Thank you, Nima. We have kicked off 2025 with execution and focus. We have created momentum across our business, and the announcement of the sale process for Title 365 will be the final step in our journey to simplify Blend, which we expect will amplify our operating leverage while allowing us to focus with conviction on our goals for 2025 and the strategic initiatives that will propel us into 2026 and beyond. Every change we have announced is a positive change that will propel profitable growth and deliver value to our customers and shareholders.

Amir Jafari: With that I'm going to turn it over to Amir for his remarks.

Amir Jafari: We have kicked off 2025 with execution and focus we have created momentum across our business and the announcement of the sale process for title 365 will be the final step in our journey to simplify blend, which we expect will amplify our operating leverage while allowing us to focus with conviction on our goals for 2025.

Amir Jafari: And the strategic initiatives that will propel us into 2026 and beyond.

Amir Jafari: Every change we have announced is a positive change that will propel profitable growth and deliver value to our customers and shareholders.

Amir Jafari: Our results in the first quarter of 2025 illustrate this, but before I discuss our results, I'd like to speak to the overall macro, along with the Mr. Cooper acquisition by Rocket Starting with the macro, we recognize that Q1 was volatile. We saw a similar situation in September and October of last year as volumes increased as rates dipped only to see things reverse quickly as the rate volatility remained. Unlike 2024, 2025 also has uncertainty around the potential economic impacts from tariffs offset by potential benefits from banking deregulation. We've always been clear that we cannot predict outcomes related to the macro.

Amir Jafari: Our results in the first quarter of 2025 illustrate this but before I discuss our results I'd like to speak to the overall macro along with the Mr. Cooper acquisition by rocket.

Amir Jafari: Starting with the macro we recognize that Q1 was volatile we saw a similar situation in September and October of last year as volumes increased as rates dipped only to see things reverse quickly because of rate volatility remained.

Amir Jafari: Unlike 2020 for 2025 also has uncertainty around the potential economic impacts from tariffs offset by potential benefits from banking deregulation.

Amir Jafari: We've always been clear that we cannot predict outcomes related to the macro we do not plan to change our approach.

Amir Jafari: We do not plan to change our. With this being said, it's important for us to know that volatility typically leads to spikes and originations. We saw this in the industry before in 2007 and 2008, and today we see a backlog of demand that has been building since 2022. With this, we are focused on being the leading platform for financial institutions and delivering innovation through our suite of solutions. The launch of RapidRefi in February 2025 is a great example of this. As for the acquisition of Mr. Cooper by Rocket, to Nima's point, this may potentially be a catalytic moment for the industry.

Amir Jafari: With this being said it's important for us to know the volatility typically leads the spikes in originations. We saw this in the industry before in 2007, and 2008 and today, we see a backlog of demand that has been building since 2022.

Amir Jafari: We are focused on being the leading platform for financial institution and delivering innovation through our suite of solutions to launch a rapid refund in February 2025 is a great example of this.

Speaker Change: As for the acquisition of Mr. Cooper by rocket.

Speaker Change: <unk> point this may potentially be catalytic moment for the industry. We are focused on providing value to Mr. Cooper until the acquisition closes and through the terms of the renewal, which expire in June 2028.

Amir Jafari: We are focused on providing value to Mr. Cooper until the acquisition closes and through the terms of the renewal, which expire in June 2028. Mr. Cooper represented 60 basis points of market share according to the preliminary 2024 HMDA results and roughly 130 basis points of market share going back to the peak of 2021.

Speaker Change: Mr. Cooper represented 60 basis points of market share. According to the preliminary 2000 2400 results in roughly 130 basis points of market share going back to the peak of 2021.

Amir Jafari: Moving to our Title 365 business. As Nima mentioned, today we announced our intention to exit our Title 365 business in 2025. The sale of Title 365 is the last significant step in this process and will allow us to focus with conviction on our platform to our suite of solutions and partnerships. In connection with this change, with respect to Title 365, Blend now operates in a single, reportable segment, and the results of our previously reported title segment are presented as discontinued operations in our financial filing and supporting material. Any financial results disclosed on this call reflect our platform business and exclude Title 365 unless otherwise Our results for the first quarter of 2025 were encouraging as we continue to exhibit signs of operating leverage and Platform revenue in the first quarter of 2025 was $26.8 million, above the midpoint of our guidance.

Speaker Change: Moving to our title III 65 business as Neal mentioned today, we announced our intention to exit our titles with 65 business in 2025.

Speaker Change: The sale of title III 65 is the last significant step in this process and will allow us to focus with conviction on our platform to our suite of solutions and partnerships in.

Speaker Change: In connection with this change with respect to title 365.

Speaker Change: Now operating a single reportable segment and the results of our previously reported title segment are presented as discontinued operations in our financial filings and supporting materials.

Speaker Change: Any financial results disclosed on this call reflect our platform business and exclude titled <unk> Hundred 65, unless otherwise noted.

Speaker Change: Our results for the first quarter of 2025 were encouraging as we continue to exhibit signs of operating leverage and scale.

Speaker Change: Platform revenue in the first quarter of 2025 was $26 8 million above the midpoint of our guidance.

Amir Jafari: Our platform revenue also grew 12% year-over-year, marking the third consecutive quarter of year-over-year growth. Our mortgage suite revenue was $14.6 million. In our fourth quarter earnings, we shared our projected market size of 800,000 to 900,000 HMDA originations in the first quarter of 2025. We are holding to this estimate for the first quarter origination activity, with the midpoint representing an 8% year-over-year increase. Our consumer banking suite revenue was $9.6 million, growing 45% year-over-year. Nima highlighted several deals this quarter and we continue to have confidence in our growing pipeline. As we announce new deals, it's important to know that revenue will lag as we progress through implementation, go live.

Speaker Change: Our platform revenue also grew 12% year over year, marking the third consecutive quarter of year over year growth or.

Speaker Change: Our mortgage suite revenue was $14 6 million and our fourth quarter earnings we shared our projected market size of 800000 to 900000 Honda originations in the first quarter of 2025, we.

Speaker Change: We are holding to this estimate for the first quarter origination activity with the midpoint, representing an 8% year over year increase.

Speaker Change: Our consumer banking suite revenue was $9 6 million growing 45% year over year Nemo.

Speaker Change: Nemo highlighted several deals this quarter and we continue to have confidence in our growing pipeline.

Speaker Change: We announced new deals it's important to note that revenue will lag as we progress through implementation go lives in a room.

Amir Jafari: Lastly, we reported professional services revenue of $2.5 million.

Speaker Change: Lastly, we reported professional services revenue of $2 5 million.

Amir Jafari: Moving to platform non-gap gross profit and gross margin. Our platform non-gap gross profit for the first quarter of 2025 was $19.5 million, representing platform gross margin of 73%, up from 68% in the first quarter of 2024. Operating expenses for the first quarter of 2025 were $18.5 million, down $9 million year-over-year. Non-GAAP operating income for the first quarter of 2025 was $1 million, representing non-GAAP operating margin of 4%. This came in at the high end of our guidance for the first quarter. We want to highlight that our execution continues to be strong even in the absence of a normalized margin.

Speaker Change: Moving to platform non-GAAP gross profit and gross margins our platform non-GAAP gross profit for the first quarter of 2025 was $19 5 million representing platform gross margin of 73% up from 68% in the first quarter of 2024.

Speaker Change: Operating expenses for the first quarter of 2025 were $18 5 million down $9 million year over year.

Speaker Change: non-GAAP operating income for the first quarter of 2025 was $1 million, representing non-GAAP operating margin of 4%.

Speaker Change: This came in at the high end of our guidance for the first quarter.

Speaker Change: We want to highlight that our execution continues to be strong even in the absence of a normalized market.

Amir Jafari: Market normalization will represent leverage for our mortgage suite as we have minimal operating expenses tied to the return of originations to these more normalized levels. We spent the majority of 2024 strengthening our balance sheet to allow us to focus on playing off We ended the first quarter with approximately $110 million of cash, cash equivalents, and marketable securities, inclusive of restricted capital. During the first quarter, we repurchased and retired approximately 923,000 shares of our Class A common stock for a total of $3.1 million. As of the end of the quarter, we had $21.9 million available to repurchase additional shares of Class A common stock under our current share repurchase program, and we continue to believe that we are undervalued.

Speaker Change: Market normalization will represent leverage for our mortgage suite as we have minimal operating expenses tied to the return of originations to the more normalized levels.

Speaker Change: We spent the majority of 2020 for strengthening our balance sheet to allow us to focus on playing offense.

Speaker Change: We ended the first quarter was approximately $110 million of cash cash equivalents and marketable securities inclusive of restricted cash.

Speaker Change: During the first quarter, we repurchased and retired approximately 923000 shares of our class a common stock for a total of $3 1 million.

Speaker Change: As of the end of the quarter, we had $21 $9 million available to repurchase additional shares of class a common stock under our current share repurchase program.

Speaker Change: And we continue to believe that we are undervalued.

Amir Jafari: We have executed on profitability goals and shown the ability to sustain this. We've also shared that this will allow us to expand our focus to becoming free cash flow. For the first quarter of 2025, we generated $15.5 million of free cash. representing a free cash flow margin of 58%. This was largely attributed to the collection of cash from the deal that we had signed in the latter part of 2020. Tied to this is the drive to increase our remaining performance obligations, or RPO. Our RPO for the first quarter of 2025 set another record for Blend at 158.1 million.

Speaker Change: We have executed on profitability goals and shown the ability to sustain this we've also shared that this will allow us to expand our focus to becoming free cash flow positive for.

Speaker Change: For the first quarter of 2025, we generated $15 5 million of free cash flow.

Representing a free cash flow margin of 58%.

Speaker Change: This was largely attributed to the collection of cash from the deals that we had signed in the latter part of 2024.

Speaker Change: Tied to this is the drive to increase our remaining performance obligations or <unk>.

Speaker Change: <unk> for the first quarter of 2025 set another record for blood at $158 1 million.

Amir Jafari: This represents the financial commitments typically in the form of minimums and platform fees that we are able to achieve as we sign new customers and renew and expand existing customers. We have previously shared a target RPO of $150 million for 2025 and are excited to be well ahead of the target only one quarter into the new year. Our economic value per funded loan for the first quarter of 2025 was $93, just below our guidance of $94. With the conclusion of the sale and transition to a partnership of our homeowner insurance and verification of income businesses, we have shared new analysis in this quarter's supplemental presentation, providing a first look at contribution profit per funded loan to illustrate the immediate contribution profit and margin improvement resulting from the transition to partnership.

Speaker Change: This represents the financial commitments typically in the form of minimums and platform fees that we are able to achieve as we signed new customers in our renew and expand existing customers.

Speaker Change: We have previously shared target <unk> of a $150 million for 2025 and are excited to be well ahead of the target only one quarter into the new year.

Speaker Change: Our economic value per funded loan for the first quarter of 2025 was $93 just below our guidance of 94.

Speaker Change: With the conclusion of the sale and transition to a partnership of our homeowner insurance and verification of income businesses. We have shared new analysis in this quarter's supplemental presentation, providing a first look at contribution profit per funded loan to illustrate the immediate contribution profit and margin improvement, resulting from the transition to partnerships.

Amir Jafari: This solidifies why we transitioned to a partner first model, leveraging the power of our platform to deliver high quality growth. As you can see on slide 6 in our supplemental presentation, in the third quarter of 2024, economic value per funded loan generated from add-on software products and existing partnerships was $17, with contribution profit of $6,000. This resulted in a 35% contribution margin from those add-on products and partners. In the first quarter of 2025 on $15 of economic value per funded loan, we generated $10 of contribution profit per funded loan. This demonstrates how in two quarters and with the execution of a partner first model, contribution profit per funded loan was up by $4 or $67.

Speaker Change: Solidifies why we transitioned to a partner first model leveraging the power of our platform to deliver high quality growth.

Speaker Change: As you can see on slide six in our supplemental presentation in the third quarter of 2024 economic value per funded loan generated from add on software products and existing partnerships was $17 with contribution profit of $6. This resulted in a 35% contribution margin from those add on products and partnerships.

Speaker Change: In the first quarter of 2025 on $15 of economic value per funded loan we generated $10 of contribution profit per funded loan. This demonstrates how in two quarters and with the execution of a partner first model contribution profit per funded loan was up by $4 or 67%.

Amir Jafari: In the near term, we expect the contribution profit margin for our add-on products and partnerships to exceed 90%. Overall, while this may adversely affect economic value per funded loan, our overall contribution profit per funded loan is increasing, which is why we view these transitions as strictly positive to Blend in the short-term and long-term. Also, as we roll out new customers, they will start with mortgage as their core application before expanding to close and other. This will put downward pressure on economic value at the start of our engagements, amplified by the large customer wins before we expand with closed, rapid refi, and other solutions.

Speaker Change: In the near term, we expect the contribution profit margin for our add on products and partnerships to exceed 90%.

Speaker Change: Overall, while this diversity affect economic value per funded loan. Our overall contribution profit per funded loan is increasing which is why we view. These transitions are strictly positive to blend in the short term and long term.

Speaker Change: Also as we rollout new customers they will start with mortgage of their core application before expanding to close and other partnerships.

Speaker Change: This will put downward pressure on economic value for the start of our engagements amplified by the large customer wins before we expand with closed rapid refi and other solutions with it.

Amir Jafari: With this in mind, for the second quarter of 2025, we expect economic value per funded loan to be $8,800. We anticipate this to be the trough in economic value per funded loan as implementations from Rapid Refi and other recreative solutions begin to contribute to our economic value per funded loan.

Speaker Change: This in mind for the second quarter of 2025, we expect economic value per funded loan to be $88. We anticipate this to be the trough and economic value per funded loan as implementations from rapid refi and other accretive solutions begin to contribute to our economic value per funded loan.

Amir Jafari: Before I move to our guidance, we recognize that HMDA has released its preliminary figures for 2024. Our teams are analyzing the data, and we will report on this in our third quarter of 2025 earnings report, as is our current reporting cadence. Our guidance for the second quarter of 2025 is based on our view that the HMDA originations will range from 1.15 to 1.25 million originations. With this context, we're guiding to Q2 platform revenue between $30.5 million and $32.5 million, with the midpoint representing year-over-year growth of 10%. Our Q2 platform non-GAAP operating income is expected to be between $3.5 million and $5 million for the second quarter.

Speaker Change: Before I move to our guidance, we recognized that Honda has released its preliminary figures for 2024. Our teams are analyzing the data and we will report on this in our third quarter of 2025 earnings report.

Speaker Change: As our current reporting cadence.

Speaker Change: Our guidance for the second quarter of 2025 is based on our view that the Honda originations will range from $1.15 million to $125 million originations.

Speaker Change: With this context, we are guiding to Q2 platform revenue between $30 5 million and $32 $5 million with the midpoint representing year over year growth of 10%.

Speaker Change: Our Q2 platform non-GAAP operating income is expected to be between $3 5 million and $5 million for the second quarter.

Amir Jafari: One additional guidance we would like to share as we begin the year is our estimate for platform non-GAAP operating expenses for the full year of 2025. We expect operating expenses to be in the range of $85 million to $90 million. As we have noted in the past, we continue to believe we can create leverage in our operating motions and will utilize the necessary actions to achieve the Rule of 40, which we define as year-over-year platform revenue growth plus our non-GAAP operating margin as we exit 2025.

Speaker Change: One additional guidance, we would like to share as we begin the year is our estimate for platform non-GAAP operating expenses for the full year of 2025.

Speaker Change: We expect operating expenses to be in the range of <unk> $85 million to $90 million as we have noted in the past. We continue to believe we can create leverage in our operating motion and we'll utilize the necessary actions to achieve the rule of 40, which we define as year over year platform revenue growth plus our non-GAAP operating margin as we exit 2025.

Operator: Thank you for joining us, and we will now open the line to questions. Moderator, please proceed with opening the line. At this time, I would like to remind everyone, in order to ask a question, press star, then the number one on your telephone keypad. We'll pause for a moment to compile the Q&A roster.

Speaker Change: Thank you for joining us and we will now open the line to questions.

Speaker Change: Moderator. Please proceed with opening the line.

Speaker Change: At this time I would like to remind everyone in order to ask a question Press Star then the number one on your telephone keypad will pause for a moment to compile the Q&A roster.

Dylan Becker: Your first question comes from the line of Dylan Becker with William Blair. Hey, Nima, Amir, appreciate the question here. Nice job, guys.

Dylan Becker: Your first question comes from the line of Dylan Becker with William Blair.

Dylan Becker: Hey, I appreciate the question here nice job guys, maybe NEMA, starting with you we touched a lot on the call two of kind of the need an emphasis impetus for digital investment in a period of uncertainty I wonder how youre thinking about kind of the dual benefit of some of these higher <unk> products with rapid refi.

Nima Ghamsari: Maybe, Nima, starting with you, we touched a lot on the call, too, of kind of the need and impetus for digital investment in a period of uncertainty. I wonder how you're thinking about kind of the dual benefit of some of these higher ARPU products with rapid refi and the home loan piece, tying into kind of how your customers are thinking about the opportunity for retention in that volume recovery scenario, and really how that kind of sheds light or maybe boasts confidence in their ability to continue investing ahead of potentially what's to come. Great, great question.

Dylan Becker: And the home loan piece tying into kind of how your customers are thinking about the opportunity for retention.

Dylan Becker: And that volume recovery scenario, and really how that kind of shed light or maybe both confidence and their ability to continue investing.

Dylan Becker: Ahead of potentially what's to come here.

Dylan Becker: Yes, great Great question and thank you for the question.

Nima Ghamsari: And thank you for the question. I'd say a couple things. One, the product is designed to be the easiest, most frictionless way to do a refinance. And it's very tailored. So, if you're a veteran and you have a VA loan versus you're a first-time homebuyer and you have an FHA loan or a conventional Fannie Freddie loan, it's designed to be very tailored to a specific situation. And that's what drives the higher pull-through for our customers. And what that means in practice is that they can do more things in that flow that we couldn't do when we didn't have that level of specificity and personalization.

Dylan Becker: A couple of things one that the product is.

Dylan Becker: Designed to make it sound to be the easiest most frictionless way to do a refinance and its very tailored. So if you're a veteran any other VA loan versus your first time homebuyer and do you have an FHA loan where conventional.

Dylan Becker: Fannie Freddie loan.

Dylan Becker: It's designed to be very tailored to a specific situation and that's what drives the higher.

Dylan Becker: The higher pull through for our customers and what that means in practice is that they can do more things in that flow that they couldn't we couldnt do when we didn't have that level of specificity and personalization. So for example, we show the home the home owner, who is now looking to refinance their old monthly payment and our new monthly payments side by side to be able to compare and look.

Nima Ghamsari: So, for example, we show the homeowner who is now looking to refinance their old monthly payment and their new monthly payment side-by-side to be able to compare and look at those and say, oh, wow, I can save $200 a month in this scenario. So, that's one example. We can also take them all the way through things like intent to proceed and rate lock, which are critical moments in a mortgage workflow and drives higher conversion as well, because you're not leaving that to a phone call later, a day later, two days later, having a human have to do that.

Dylan Becker: At those and say Oh, Wow I can save $200 a month in this scenario.

Dylan Becker: That's one one example, we can also take them all the way through things like intend to proceed in rate lock, which are critical moments in our mortgage workflow and drives higher conversion as well because youre not.

Dylan Becker: Leaving that to a phone call later, a day later or two days later, having a human have to do that and then the consumer's gone after something some other place and getting a call from some other lenders while they are waiting to hear from you.

Nima Ghamsari: And then the consumer has gone off to some other place and getting a call from some other lenders while they're waiting to hear from you. And so, with those things in place, that's exactly why lenders are putting this in place now, because they want to be able to take advantage of the recovery and get as much of that. They've done millions of loans in the past few years at high interest rates. They know those consumers want to refinance to save money in tough economic times. And this is precisely... built for that exact purpose.

Dylan Becker: Without for those with those things in place that's exactly why lenders or are putting this in place now because they want to be able to take advantage of the recovery and get as much of that they're they've they've done millions of loans in the past few years that high interest rates. They know those consumers want to refinance to save money in tough economic times.

Dylan Becker: And this is precisely.

Dylan Becker: Built for that exact purpose.

Nima Ghamsari: Very helpful. Thank you.

Dylan Becker: Very helpful. Thank you and then maybe switching over to Amir.

Amir Jafari: And then maybe switching over to Amir, I appreciate the portfolio and platform kind of simplification here, divesting the title business and some of the incremental color on kind of the margin contribution of the additive pieces here.

Speaker Change: Appreciate the portfolio and platform kind of simplification here divesting the title business and some of the incremental color.

Speaker Change: On kind of the margin contribution of the additive pieces here, how should we think about if we take a step back what this means for the evolution of the financial profile of <unk>.

Amir Jafari: How should we think about, if we take a step back, what this kind of means for the evolution of the financial profile of Blend as a higher margin, potentially faster growth business, even if we look at kind of that like-for-like contribution component? Thank you.

Speaker Change: Blend as a higher margin potentially faster growth business.

Speaker Change: Even if we look at kind of that like for like contribution component. Thank you.

Speaker Change: Oh, yes.

Amir Jafari: I'll break it down into the following. I think for us, this notion of simplification has actually always been surrounded by the desire to accelerate and be able to grow. We've made the statements around wanting to become growth-oriented, which we have. It was evident in Nima's comment. We want to do it from a perspective of profitability. So to break that down, with simplification, you can think about the following. The expansion of what we will do across our partnerships and what you're seeing today, that will allow us to not just grow what we have historically talked about with regards to economic value, but really also where we're taking you today in terms of some of the new supplemental information for contribution profit.

Speaker Change: Yes, I'll break it down into the following I think for US. This notion of simplification is actually always been surrounded by a desire to accelerate and be able to grow with.

Speaker Change: We've made the statements around wanting to become.

Speaker Change: <unk> growth oriented, which we have there was evident in his comments, we want to do it from a perspective of profitability.

Speaker Change: Break that down with simplification you can think about to follow the expansion of what we will do of course, our partnerships on what youre seeing today that will allow us to not just grow what we've historically talked about with regard stockpiling value of really also while were taking do today in terms of solid new supplemental information. So contribution profit and then further almost to the point that mainly just made a second ago as you.

Amir Jafari: And then further, almost to the point that Nima just made a second ago, as you see some of our solutions like RapidRefi come to the market, that will, again, be not just an accelerant to the top line, but actually allow us to have not just top-line growth, but also grow profitability. So the portfolio and the approach that we want is to be able to continue to leverage the innovation that we have through our platform, capture as much of that, in essence, the value that we deliver, expand not just, in essence, our revenue base through economic value per funded loan, but by adding new logos and then making it just be as profitable as possible.

Speaker Change: Seeing some of our solutions like profit, where you saw it come to the market that will again be not just an accelerant to the topline, but actually will allow us to have not just top line growth, but also grow profitability of the.

Speaker Change: Our portfolio and the talk of the approach that we want us to be able to continue to deliver leverage the integration that we have through our platform capture as much of that.

Speaker Change: But.

Speaker Change: The value that we deliver expand not just ask since our revenue base through economic value per pound alone, but by adding new logos and then making it just be as profitable as possible.

Amir Jafari: Very helpful. Thank you both. Appreciate it.

Speaker Change: Very helpful. Thank you Bob I appreciate it.

Aaron Kempfing: Your next question comes from the line of Aaron Kempfing with Citizens. Thanks. $50 million expansion is really impressive.

Speaker Change: Your next question comes from the line of Erin Kim King with citizens.

Speaker Change: Thanks.

Speaker Change: $50 million expansion is really impressive can you talk a little bit about the evolution of that relationship if the customers using products beyond mortgage and what the timeline is to realize that incremental $50 million in IPO. It looks like in the 10-Q that the language is the same around realizing our pls.

Nima Ghamsari: Can you talk a little bit about the evolution of that relationship if the customer is using products beyond mortgage and what the timeline is to realize that incremental $50 and RPO. It looks like in the 10-Q that the language is the same around realizing RPO as in prior quarters. Yeah, the relationship started years ago. And, you know, it's been a good one where we started with just mortgage, added home equity, then they added blend close and blend income. And then they added a consumer product to that mix. And, you know, now they've rolled that out to all their channels, or they're rolling that out to all their channels, which is what prompted this, this renewal.

Speaker Change: Prior quarters. Thanks.

Speaker Change: Yeah.

Speaker Change: Yes, the relationship started years ago.

Speaker Change: And it's been a good one where we started with just mortgage.

Speaker Change: Added home equity than they added blend clothes and blend income and then they added a consumer product to that mix and now they've rolled that out to all their channels or they're rolling that out to all their channels, which is what prompted this this renewal and so it's been a really great.

Nima Ghamsari: And so it's been a really great, you know, longtime partnership where we build, we do what vertical software companies have to do to be successful, which is, if that first initial entry point becomes super successful, the customer loves you, and they want to do more business with you. And everything that you do that provides value, they take a really serious look at, because they trust you, they trust us. And I think that's, that's sort of a great, this is a great case study for us, of one that we've built that long standing, successful, trustworthy relationship with this customer.

Speaker Change: Longtime partnership for rebuild we do with vertical software companies have to do to be successful, which is if that first initial entry point becomes super successful the customer loves you and they want to do more business with you and everything that you do that provide value. They take a really serious look at because they trust you.

Speaker Change: Just us and I think that's sort of a great. This is a great case study for us of one that we've built that long standing successful trustworthy relationship with this customer, but I think there is many more to come.

Amir Jafari: But I think there's many more to come, of customers that want to do more things with us, but have had to put the brakes on it during turbulent times in the markets. And so I'm very excited about this. And then as far as RPO, we haven't shared, you know, how much of that contract, but I think typically what we say is about half of our RPO is to be collected in the next 12 months. And so I don't know, Amir, if you want to add anything on the RPO side.

Speaker Change: Customers that want to do more things with us, but if I had to put the brakes on it during turbulent times in the markets.

Speaker Change: So I'm very excited about this and then as far as Rps, we haven't shared right.

Amir Jafari: in the next 12 months. And so I don't know, Amir, if you want to add anything on the RPO side.

Amir Jafari: Well, you shared in the disclosures that we've provided, there's... Got it.

Amir Jafari: Will you share them the disclosures that we've provided? There's a clean system.

Amir Jafari: David, then just to follow up, yesterday you announced.

Nima Ghamsari: And then just to follow up, yesterday you announced business deposit account opening. How does business deposit account opening compare to retail deposit account opening from a product development perspective and then a pricing perspective?

Speaker Change: Business Deposit Account Opening. Time is Business Deposit Account Opening compared to Retail Deposit Account Opening from a product development perspective and then a pricing perspective. Can you talk about this? A little bit about the competitive landscape there as well.

Nima Ghamsari: Can you talk about this, a little bit about the competitive landscape there as well? Yeah, sure. And the impetus for this came from our customers, because they liked us for the consumer account opening. And turns out a lot of consumers are also small business owners. And they had to go and jump through a bunch of hoops to open their business account with the institution that you know, that we were working with. And so they wanted to make it a simple, frictionless experience, focused on individuals or groups with, you know, small business types and be able to make that a consumer like consumer quality experience.

Speaker Change: Yes, sure, and the impetus for this came from our customers.

Speaker Change: Because they liked us for the consumer account opening and turns out a lot of consumers are also small business owners and they had to go and jump through a bunch of hoops to open their business account with the institution that you know that we were working with. [inaudible]

Speaker Change: and so they wanted to make it a simple, frictionless experience, focus on individuals or groups with, you know,

Speaker Change: Small business types and be able to make that a consumer-like, consumer-quality experience. So, the feel of the experience...

Nima Ghamsari: So the feel of the experience is very similar. But there's different components, you have to do different things around under knowing your business, making sure you're doing the right checks with various government and regulatory lists that you have to check before you can open an account for that business. You have to be able to support multiple different account pipes, they're not, you know, there's different kinds of businesses that are registered in different ways. And so, while it's actually all the same DNA, and a lot of the same components, it's, it's so many different things under the hood that are powering that.

is very similar.

Speaker Change: But there are different components. You have to do different things around knowing your business, making sure you're doing the right checks with various government and regulatory lists that you have to check before you can open an account for that business. You have to feel to support multiple different account pipes. There are different kinds of businesses that are registered in different ways and so...

Wallets

Speaker Change: Actually, all the same DNA and a lot of the same components. It's...

Speaker Change: It's so many different things under the hood that are powering that and just having all these things on one platform that's what our customers love is that they don't have to think about those 500 different things that they might have to think about across mortgage and home equity and consumer and deposit accounts. [inaudible]

Nima Ghamsari: And we just, having all these things on one platform, that's what our customers love is that they don't have to think about those 500 different things that they might have to think about across mortgage and home equity, and consumer and deposit accounts. And for the consumer, they certainly don't care what they want is they want their mortgage and their checking account, or they want their personal account and their small business account to be open at the same time. And so we want to make that as easy as possible for both our customer and their customer member.

Speaker Change: and for the consumer, they certainly don't care what they want is they want their mortgage and their checking account, or they want their personal account and their small business account to be open at the same time. And so we want to make that as easy as possible for both our customer and their customer to remember.

Nima Ghamsari: Thank you, guys.

Thank you guys.

Ryan Tomasello: Your next question comes from the line of Ryan Tomasello with KBW. Hi everyone, thanks for taking the questions.

Ryan Tomasello: Your next question comes to the line of Ryan Tomasello with KBW.

Hi everyone, thanks for taking the questions.

Nima Ghamsari: Given the significant milestones you guys have achieved here, obviously cash flow generation, the simplification, curious how you're thinking about maybe leaning a bit more into investing. For growth again, obviously not something that you haven't been doing, but just given the simplification, the efficiency you've stripped out, just how should we be thinking about, you know, reinvesting from here to really capitalize on. Yeah, great. Great question. I you know, it's interesting because this these past few quarters of the first I feel like because we've gone through these simplification steps, because we've reached profitability, because we now have a very high free cash flow quarter behind us, that we've earned the right to go and say, we're going to go invest in growth again.

Speaker Change: Given the significant milestones you guys have achieved here, obviously cash flow generation, the simplification, curious how you're thinking about maybe leaning a bit more into investing

Speaker Change: For growth again, obviously not something that you haven't been doing but just given the simplification, the efficiency you've stripped out. Just how should we be thinking about you know reinvesting from here to really capitalize on the opportunity.

Speaker Change: Yeah, great question. You know, it's interesting because these past few quarters are the first

Thank you.

Speaker Change: Time. I feel like because we've gone through these simplification steps because we've reached profitability because we now have a very high free cash recorder behind us that we've earned the right to go and say we're going to go invest in growth again. And so, you know, for me...

Nima Ghamsari: And so, for me, where I'm looking is things like rapid refi and rapid home equity. Those are such, so complex, but such beautiful solutions. Those are the kinds of things that we have been building the last few quarters and the last few months, and we want to keep investing in.

Speaker Change: Where I'm looking is things like Rapid Refine, Rapid Home Equity, Dozerle.

Speaker Change: Such so complex, such beautiful solutions, those are the kinds of things that we have been building the last few quarters in the last few months and we want to keep investing in. I'd say one area that wasn't covered on this, that will probably cover on future calls is AI, one of the things that.

Nima Ghamsari: I'd say one area that wasn't covered on this that we'll probably cover on future calls is AI. One of the things that our customers do a lot is look through lots of documents and investor guidelines and regulations. And those are things that AI can help them with because it can do that extremely well. And so that's maybe one area you'll see us invest in and do some. We'll share some more details on that in the coming quarters. And then also on go to market on our sales team, making sure that we have enough coverage to make these accounts that are successful with us, make them continue to be successful with us, first and foremost, bright green, loving us, but wanting to also, as we have new solutions in place, want to make sure that they're aware of those.

Our customers do a lot is...

Speaker Change: Look through lots of documents and investor guidelines and regulations and those are things that AI can help them with because it can do that extremely well.

Speaker Change: So that's maybe one area you'll see us invest in, do some, we'll share some more details on that in the coming quarters, and then also go to market on our sales team, making sure that we have enough coverage to make our, these accounts that are successful with us, make

Speaker Change: continue to be successful with us, first and foremost, bright green, loving us, but wanting to also, as we have new solutions in place, wanting to make sure that they're aware of those. And so, we've also given an OPEX guide for the year. And so, all this will fall within that OPEX guide that we gave for the year.

Nima Ghamsari: And so we've also given an OPEX guide for the year. And so all this will fall within that OPEX guide that we gave for the year. Great.

Great, and then...

Nima Ghamsari: And then on the product evolution, you know, as you already highlighted, business account opening helps, you know, round out the products further. But I'm curious how you're thinking about additional expansion of the product set from here. You know, for example, I think you've talked about commercial loan origination being a potential opportunity down the road. So I'm curious if that's something still on the cards today, where it stands on a list of priorities. And then also international, not to kind of get ahead of our skis here, but, you know, just touching on things that you guys have highlighted in the past.

Speaker Change: On the product evolution, you know, as you already highlighted business account opening helps, you know, roundout the products further, but I'm curious.

How you're thinking about additional expansion of the product set from here. For example, I think you've talked about.

Speaker Change: Commercial loan origination, being a potential opportunity down the road, so I'm curious if that's something still in the cards today, where it stands on the list of priorities, and then also international, not to kind of get out ahead of our skis here, but you know, just touching on things that you guys have highlighted in the past. Thanks.

Nima Ghamsari: Yeah, you know, I think both. As a general rule of thumb, I think this sector, banking and lending has been underserved by tech vendors. And you layer that in with the recent I guess, evolution of AI, which is now 10 times or a hundred times as powerful as it was even two years ago. There's so much opportunity in even the U.S. banking space where we will continue to look at opportunities with our customers and our customers are the ones who pull us in these directions as opposed to us pushing into specific areas. And so we'll continue to look at opportunities with them while maintaining focus.

Yeah, you know, I think both [inaudible]

Speaker Change: I guess, Evolution of AI, which is now ten times or a hundred times as powerful as it was even two years ago.

Speaker Change: There's so much opportunity in even the U.S. banking space where we will continue to look at opportunities with our customers and our customers are the ones who pull us in these directions as opposed to us pushing into specific areas.

Speaker Change: and so we'll continue to look at opportunities with them while maintaining focus. I mean, one of the things that is probably underrated in business.

Nima Ghamsari: I mean, one of the things that is probably underrated in business and in product companies like ours is we want to make sure that the products that we're delivering today, like the rapid refi, the rapid home equity, the consumer accounts, the consumer lending, we want to make sure that those are the best in the world, that we have a repeatable and scalable motion about not just selling it, but building new features, rolling those features out. So we want to really perfect those before we go and spend time on other things. So those are, I'd say, expansion areas in the future that we'll do when the time is right.

Speaker Change: and in product companies like ours is we want to make sure that the products that we're delivering today.

Speaker Change: Like the rapid refi, the rapid home equity, the consumer accounts, the consumer lending. We want to make sure that those are the best in the world, that we have a repeatable and scalable motion about not just selling it, but building new features, rolling those features out. So we want to really perfect those before we go and spend time on other things.

Speaker Change: I say expansionaries in the future that will do when the time is right. We'll make sure that we deliver on the things that we say we're going to deliver. We don't want to be another vendor who underserves the industry. [inaudible]

Nima Ghamsari: We'll make sure that we deliver on the things that we say we're going to deliver. We don't want to be another vendor who underserves the industry. We want to be a real partner. And so we'll deliver on things that we say we're going to deliver on, and then we'll go from there. And I think international is another great one where both commercial originations and international, those are things that our blend builder platform are capable of doing when the time is right. And so we've set ourselves up nicely for those things to be able to enter those markets without huge, massive investments.

We want to be a real partner.

Speaker Change: And so we'll do, we'll deliver on things that we say we're going to deliver on and then we'll go from there and I think international is another great one where both commercial commercial.

Todd.

Speaker Change: Originations and international. Those are things that our Blend Builder platform are capable of doing when the time is right. So we've set ourselves up nicely for those things to be able to enter those markets without huge.

You know, massive investments.

Nima Ghamsari: And then I touched on this earlier, but I also believe that banking is in particular because you're moving bits around and not atoms in banking, is a particular area where AI could be very powerful for our customers.

Speaker Change: And then I touched on this earlier, but I also believe that banking is in particular because you're moving bits around and not atoms.

Speaker Change: in banking. Is it a particular area where AI could be very powerful for our customers? And so, you know, I get the pleasure of being able to work on some of those newer areas for our company.

David Unger: And so, you know, I get the pleasure of being able to work on some of those newer areas for our company. Great, thanks for taking the question.

Thank you.

Great. Thanks for taking the questions.

David Unger: Your next question comes from the line of David Unger with Wells Fargo. Great, thank you for taking the questions. I just want to double click on the reinvesting efficiency comment just now.

Speaker Change: Your next question comes from the line of David Unger with Wells Fargo.

David Unger: Great. Thank you for taking the questions. I just want to double-click on the reinvesting efficiency comment just now. I'm wondering how we should think about any change in the capital deployment philosophy, once you get proceeds from title, as are layers on top of positive free cash-love. Thanks.

Amir Jafari: I'm wondering how we should think about any change in the capital deployment philosophy once you get proceeds from title as a layers on top of on top of positive free cash Hey David, thanks for the question. Let me compliment a little bit of what you mentioned. For us, from an investment perspective, everything that Nima mentioned, as you think about it, we're measuring what we do to make sure that we're doing these things with efficiency, whether it's things like the magic number to make sure that our AED deployment. So we're going to continue to reinvest, to your point, around post title and title efficiencies and consideration components.

David Unger: David, thanks for the question. Let me compliment a little bit of what Nima shared.

David Unger: For us from an investment perspective, everything that Nima mentioned is you think about it we're measuring what we do to make sure that we're doing these things with efficiency, whether it seems like the magic number to make sure that our AED deployment, so we're going to continue to reinvest to your point around post title on the bit and title.

Efficiency and Consideration Components.

Amir Jafari: This has been on our radar. It's been on our mission. It's evidence in what we're doing. I think for us, the spectrum and the areas that we want to double click on are the following. One, Nima mentioned AI. In terms of not just what he's seeing, Srini himself and others, what we can do for our customers and prospects with regards to AI and product expansion, that'll always be in our DNA. Second, go to market. It's down the lines of what you heard Nima say. It's not just the AEs. It's about awareness. It's about making it so that our implementation and our approaches, enriching our partner ecosystem to be the strongest, that's going to be the area that we reinvest in.

David Unger: This has been on our radar, it's been on our mission [inaudible]

David Unger: It's evidence in what we're doing. I think for us, the spectrum in the areas that we want to double-click on are the following [inaudible]

One, Nima mentioned AI.

David Unger: in terms of not just what he's seeing, shreni himself and others, what we can do for our customers and prospects with regards to AI and product expansion, that'll always be in our DNA.

Speaker Change: Second, go to market. It's down the lines of what you heard me say. It's not just the AES, it's about awareness, it's about making it so that our implementation and our approaches enriching our partner ecosystem to be the strongest. That's going to be the area that we reinvest in and just continue to deploy capital and we'll always deploy capital in a very ROI centric mindset.

Amir Jafari: just continue to deploy capital. And we'll always deploy capital in a very ROI-centric mindset. I appreciate that. And you read my mind.

Speaker Change: I appreciate that. And you read my mind. I was actually going to ask you about AI and engagement with customers but I guess I'll ask it from a different angle in terms of have you been using it internally to help drive efficiency gains in the business. Thanks.

Nima Ghamsari: I was actually going to ask you about AI and engagement with customers, but I guess I'll ask it from a different angle in terms of, have you been using it internally to help drive efficiency gains in the business? Thanks. Yeah, and you know, AI is evolving so quickly that a year ago, some of these efficiency tools were not that great, and now they're really good. And so we are adopting in areas where we think it's really good. And using that to also help us envision how it can help our customer base, because it's similar. Actually, it's interesting.

Speaker Change: Yeah, and you know, AI is evolving so quickly that a year ago, some of these efficiency tools were...

Not that great, and now they're really good.

Speaker Change: and so we are adopting in areas where we think it's really good.

Speaker Change: Using that to also help us envision how it can help our customer base because it's similar, actually it's interesting, it's so similar.

Nima Ghamsari: It's so similar to how these institutions can be more efficient. And it's our job to be able to productize that, package that up nicely for them so they can use it as part of their current workflow, as part of their back office workflow. We want to make their lives a lot easier with the things that we build for them, whether it's with AI or other modern technologies.

to how these...

Speaker Change: how these institutions can be more efficient. And it's our job to be able to productize that, package that up nicely for them so they can use it as part of their current workflow, as part of their back office workflow. We wanna make their lives a lot easier with the things that we build for them, whether it's with AI or other modern technologies.

Nima Ghamsari: I actually wanted to touch on one thing that Amir mentioned around partnerships, and why we've invested so much in partnerships as opposed to building our own things in every area. Part of it is focus. Like I said, being the best in the world of the two or three things you do really well is materially better than being just really good at those things. And then second of all, maybe this is on me. I underestimated how... Maybe I forgot because I live this every day, how special and how much I appreciate our customers and how special they are.

Amir Jafari: I actually wanted to touch on one thing that Amir mentioned around partnerships and why we've invested so much in partnerships as opposed to our own building our own things in every area. Part of it is focused, like I said being the best in the world of the two or three things you do really well is materially better than being just really good at those things.

Amir Jafari: And then second of all, maybe this is on me, I underestimated how, maybe I forgot because I live this every day, how special and how much I appreciate our customers and how special they are.

Nima Ghamsari: So many institutions ranging all sizes, the biggest ones in the world, smaller ones that are trying to keep up and be innovative and drive their segment of the market or their niche in the right ways. And that's really appealing to our partners. And the reason that that's so important for us, if we can only do two or three things and be the best in the world at those, and the world at those things, and they're motivated to and want to integrate into our platform, that just creates even more value for our customers. And if we always work backwards from the value for our customers, everything will work out in the end.

Amir Jafari: So many institutions ranging all sizes, the biggest ones in the world, smaller ones that are trying to be to keep up and be innovative and drive their segment of the market or their niche in the right ways.

Amir Jafari: and that's really appealing to our partners. And the reason that that's so important for us, if we can only do two or three things and be the best in the world at those.

Amir Jafari: And the partners, they do that one or two things and they're the best in the world at those things and they want they're motivated to and want to integrate into our platform. That just creates even more value for our customers.

Amir Jafari: And if we always work backwards from the value for our customers, everything will work out in the end. Customers are willing to stick with us longer, try new products with us.

Nima Ghamsari: Customers are willing to stick with us longer, try new products with us. The partners are building more things, building more market share and contributing something to us as a partner of theirs. And for us as Blend, it allows us to grow efficiently, as Amir was mentioning. I appreciate all the detail. Thank you very much.

Amir Jafari: The partners are building more things, building more market share and contributing something to us as a partner of theirs and for us as Blend, it allows us to grow efficiently as Amir was mentioning.

I appreciate all the details. Thank you very much.

Joseph Jaffe: Your next question comes from the line of Joseph Jaffe with Canaccord. Hey guys, good afternoon. Nice results, nice progress.

Speaker Change: Your next question comes to the line of Joseph Vafi with Canacord.

Thank you.

Joseph Jaffe: Hey guys, good afternoon. Nice results, nice progress. I thought maybe Nima would circle back to your comments on Rocket, Mr. Cooper a bit and appreciate the analogy.

Nima Ghamsari: I thought maybe Nima, we'd circle back to your comments on Rocket, Mr. Cooper a bit and appreciate the analogy, you know, going back in time when Rocket first launched and just kind of wanted to drill down a little bit on on the kind of similarities today. Number one, do you think that this announcement is more focused on the servicer market or more broad-based? And then could you kind of just remind us kind of how you see your servicer share and Greenfield in the mortgage service market? And then I'll have a quick follow-up. Thanks. Yeah, good questions.

Joseph Jaffe: You know, going back in time when rocket first launched and just kind of wanted to drill down a little bit on the kind of similarities today. Number one, do you think that this announcement is more focused on the service or market?

Joseph Jaffe: Or a more broad base, and then could you kind of just remind us kind of how you see your service or share and greenfield in the mortgage service market, and now I'm a quick follow up. Thanks.

Speaker Change: Yeah, good questions. I'd say one, I definitely see this broader in the market. I mean, I feel that phone calls that week when the announcement was made from our customers really have all sizes and of all types, banks, credit unions, IMBs, other servicers.

Nima Ghamsari: I'd say, one, I definitely see this broader in the market. I mean, I fielded phone calls that week when the announcement was made from our customers, really of all sizes and of all types, banks, credit unions, IMBs, other servicers. And so everyone is, you know, Rocket's, you know, a very admirable company, one of the largest in the space, if not the largest, and doing really big things. And it's the rest of the industry's job to make sure that they keep up and in some ways surpass. Like, there are some things that institutions have that Rocket doesn't.

and so everyone is rockets.

Speaker Change: You know, a very admirable company, one of the largest in the space, if not the largest.

Nima Ghamsari: So the IMBs, they look at their, their retail force is a big strength for them. The credit unions look at their very loyal member base, the banks look at the fact that they touch so many households. And they serve a very specific segment of the market. And so those are things that they all view as strengths. And they're trying to think of how do they use those strengths to be better in their areas and maybe have unfair advantage. And then the second question about our servicer market share, the interesting thing about servicers is a lot of them have been sort of holding steady on the origination side.

Speaker Change: The credit unions look at their very loyal member base. The banks look at the fact that they touch so many households and they serve a very specific segment of the market. And so those are things that they all view as strengths and they're trying to think, how do they use those strengths to be better in their areas and maybe have unfair advantages?

and...

Speaker Change: And then the second question about our servicer and market share. The interesting thing about servicers is a lot of them have been sort of holding steady on the origination side. The originations are typically recapture of their existing book.

Nima Ghamsari: Their originations are typically recapture of their existing book, and generally they're better at refinance transactions or much better at refinance recapture than they are on purchase recapture. And so the reason that that's important and the reason I'm so excited about how well we're doing in the servicer space and some of the new ones we sign, and we have more, like I said, in the pipeline, is that they're the ones best positioned for when there's a refi wave. Now, the refis will spread around to everyone, but the servicers have that regular monthly touchpoint with their customers.

Speaker Change: and generally they're better at refinance transactions or much better at refinance recapture than they are on purchase recapture. And so the reason that that's important and the reason I'm so excited about how well we're doing in the service or space.

Speaker Change: and some of the new ones we signed and we have, you know, more like I said in the pipeline.

is that?

Speaker Change: They are the ones best positioned for when there's a refi way. Now the refi is well sped around to everyone, but the servicers have that regular monthly touchpoint with their customers. So they've sort of been waiting on the sidelines for rates to come down in some ways. Now they have other exposures as well, but for their originations armed to be able to capitalize on lower rates.

Nima Ghamsari: And so they've sort of been waiting on the sidelines for rates to come down in some ways. Now they have other exposures as well, but for their originations arm to be able to capitalize on lower rates. And so I think the servicers in particular will do extremely well in a lower interest rate environment, as will the whole market in agri. I think the market is sort of spring loaded right now, waiting for rates to come down. But the servicers in particular, because they're so refi heavy, will gain a lot of market share during that time.

Speaker Change: So, I think the servicers in particular will do extremely well in a lower interest rate environment as well the whole market in Agri I think the market is sort of spring loaded right now waiting for rates to come down. But the servicers in particular because they're so refi-heavy will gain a lot of market share during that time.

Amir Jafari: That's great. Thanks for that color, Nima. And just, you know, appreciate the color on EV per loan, the moving parts there with the partnership, and, you know, contribution per loan going up. Just also wanted to kind of circle back on contribution per loan on on the core mortgage product. I know that maybe some of these new customers are going to start there. Is, is that, is there variability and in that in that contribution margin on the core product versus some of the add ons to trying to understand some of the moving parts there a little bit better?

That's great. Thanks for that color, Nima, and...

Speaker Change: Just appreciate the color on EV, Perlone in the moving parts there with the partnership and, you know, contribution per loan going up.

I just also wanted to kind of circle back on-

Speaker Change: Contribution, Polone on the core mortgage product. I know that maybe some of these new.

customers are going to...

Speaker Change: Start there. Is there variability in that contribution margin on the core product versus some of the add-ons just trying to understand some of the moving parts there a little bit better? Thanks.

Amir Jafari: Thanks. The variability is only in that our partnership margins are extremely high for the type of offering that we provide. In terms of what you've seen from us now for a few years, the efficiency that we've driven, you've seen it come through on the cost of revenue, our contribution profit in aggregate is going to go up. We haven't disclosed that. It's not an area that we will speak to yet. Contribution profit, I think for us, our goal this quarter was to start to illuminate it, to focus on it with you and the broader community as it pertains to partnerships.

Joseph Vafi, Ryan Tomasello, David Unger

Did you?

Speaker Change: The variability is only in that our partnership margins are extremely high for the type of offering that we provide.

Speaker Change: In terms of what you've seen from us now for a few years, the efficiency that we've driven you've seen it come through on the cost of revenue. Our contribution profit and aggregate is going to go up. We haven't disclosed that it's not an area that we will speak to yet. Contribution profit I think for us our goal this quarter was to start to illuminate it to focus on it with you and the broader community as it pertains to partnerships and then we'll continue to build on this and so more to come from us as it pertains to our contribution profit. It's really going to be the guiding light for how we think about the expansion and the growth of this business.

Amir Jafari: We'll continue to build on this and so more to come from us as it pertains to our contribution profit. It's really going to be the guiding light for how we think about the expansion and the growth of this business.

Amir Jafari: Great. Thanks for those comments, Amir. Thanks, guys.

Great. Thanks for those comments I'm here. Thanks guys.

David Jafari, Ryan Tomasello, David Unger

Seth Gilbert: Again, if you would like to ask a question, press star 1 on your telephone keypad, and your next question comes from the line of Seth Gilbert with UBS. Thanks for the question. I'd love to dig into RPO a little bit more. It was really strong and I was wondering if you could dig into some of the drivers on the consumer banking side, any products you'd call out or change in the competitive position. Just to confirm, I heard this right, the $50 million deal, that would be allocated to 2Q RPO, right? So nothing in 1Q would be the result of that deal?

Speaker Change: Again, if you would like to ask a question, press star 1 on your telephone keypad, and your next question, come from the line of Seth Gilbert with UBS.

Thanks for the questions.

Speaker Change: For the first one, I'd like to dig into RPO a little bit more. It was really strong and I was wondering if you could dig into some of the drivers on the consumer banking side. Any products you'd call out are changing the competitive position and just to confirm I heard this right, the $50 million deal that would be allocated to 2Q RPO rights and nothing in 1Q would be the result of that deal. Thank you. Thank you.

Amir Jafari: Thank you. Hey, Seth. Yeah, we're happy to.

Seth: I said, yeah, we're happy to. Let me just start with the first and foremost on our appeal.

Amir Jafari: Let me just start with first and foremost on RPOs. Going backwards, the $50 million deal that Nima referenced, the massive win for us, yes, that is a Q2. So you're not going to see that in the RPO that we disclosed in Q1. And then tied to Q1, we haven't disclosed any elements of RPOs that pertains to byproduct. I think where we want to double down though is the following. Our ability to gain traction, you heard those numbers that Nima shared, the number of wins that we had, not just in Q1, the momentum that we're seeing in Q2, in the month of April alone, the traction that we saw, our ability to continue to, in essence, delight our customers, win, in essence, as many of the deals as we've been winning, and then to do so as we've historically done, where the RPO that we're really adding is either tied to platform fees or the minimums. That's where you're seeing, in essence, the expansion.

Seth: Going backwards, the $15 million deal, Nima reference the massive win for us. Yes, that is a Q2, so you're not going to see that in the RPO that we...

Seth: that we disclosed in Q1. And then tied to Q1, we haven't disclosed any elements of our POs that pertains to the byproduct. I think where we want to double down is the following. Our ability to gain traction, you heard those numbers Nima shared. The number of wins that we had, not just in Q1, the momentum that we're seeing in Q2, and the month of April alone, the traction that we saw, our ability to continue to, in essence,

Seth: Delight our customers. Win, in essence, as many of the deals as we've been winning and then to do so as we've historically done where there are pure that we're really adding is either tied to platform fees or the minimums. That's where you're seeing in essence the expansion. That's what we were excited about. Obviously a record quarter for us that we were so open. That's what we're going to do today. That's what we're going to do.

Amir Jafari: That's what we were excited about. Obviously, a record quarter for us that we were thrilled with. Understood.

Yep, understood. And maybe for my second question.

Nima Ghamsari: And maybe for my second question, maybe it'd be helpful to just dig in a little bit more on the priorities for the company. I mean, you kind of outlined some of them in the prepared remarks. You know, now we have the sale of title, you know, cleaning up that part of the business, preparing for the refi wave when rates lower, there's a bunch of new products within consumer banking. Maybe you could just help us with the top three priorities as we think about 2025. Yeah, sure.

Seth: Maybe you'd be helpful to just dig in a little bit more on the priorities for the company and then you kind of outline some of them in the prepared remarks.

Seth: You know, now we have the sale of title, you know, cleaning up that art of the business, preparing for the refive weight, weight when rates lower. There's a bunch of new products we've been continuing banking. Maybe you could just help us with the top three priorities as we think about 2025. Thank you.

Speaker Change: Yeah, sure. I would say the number one priority for any vertical software company is to make sure that the existing products at the existing customers are.

Nima Ghamsari: I would say the number one priority for any vertical software company is to make sure that the existing products at the existing customers are really loved. And so that it's got to be the number one priority. And so we're putting a lot of emphasis on that. We're spending a lot of time with our customers. We just had our customer advisory board where we brought, you know, 12 key customers from two different parts of our business and two different days. And we did that at the New York Stock Exchange, it was very well received. We wanna make sure we're always investing in our customer base and making sure they're getting the most from our products and loving what they're getting without having to pay us an additional incremental dollar.

Speaker Change: really loved. And so it's got to be the number one priority. And so putting a lot of emphasis on that, we're spending a lot of time with our customers. We just had our customer advisory board where we brought, you know,

Speaker Change: 12 key customers from two different parts of our business and two different days, and we did that the New York Stock Exchange was very well received. We want to make sure we're always investing.

Speaker Change: in our customer base and making sure they're getting the most from our products and loving what they're getting without having to pay us an additional incremental dollar. That's always priority number one.

Nima Ghamsari: So that's always priority number one. Priority number two is for those existing customers, helping them use the value accretive solutions that are already available from Blend, but they're not using. So Blend Close would be an example. Now the new Rapid Products, Rapid Refi, Rapid Home Equity, that's priority number two because once they're getting a ton of value on their existing products, these are natural add-ons that can drive incremental value to them. And so that's priority number two. And then priority number three is once they have those two things, now we can talk about other product lines with them.

Speaker Change: Priority number two is for those existing customers helping them use the value of creative solutions that are...

Speaker Change: Already available for Blend, but they're not using. So Blend Close would be an example. Now the new Rapid Products, Rapid Refi, Rapid Home Equity. That's part in number two because once they're getting a ton of value on their existing products, these are natural add-ons that can drive incremental value to them.

Speaker Change: and so that's priority number two. And then priority number three is...

Speaker Change: Once they have those two things, now we can talk about other product lines with them.

Nima Ghamsari: And so that could be, you know, for a consumer customer, we have consumer customers who are really happy and want to talk about mortgage. We have mortgage customers who are really happy and want to talk consumer, but we have to earn that right with the first two priorities and in particular, the first priority, which is make sure our existing mortgage and consumer customers are really, really happy with us because when they're happy and they're successful and they're making money as a business, that's when they want to invest more with us in the second two priorities.

Speaker Change: And so that could be, you know, for a consumer customer, we have consumer customers who are really happy and want to talk about mortgage. We have mortgage customers who are really happy and want to talk consumer. But we have to earn that right with the first two priorities. And in particular, the first priority, which is make sure our existing mortgage and consumer customers are really, really happy with us. Because when they're happy and they're successful and they're making money as a business, that's when they want to invest more with us in the second two priorities.

Operator: Again, if you would like to ask a question, press star 1 on your telephone keypad.

Ryan Tosemme: Your next question comes from the line of Ryan Tosemme with KVW. That was close.

Ryan Tosemme: Your next question comes from the line of Ryan Tasemmi with KBW.

Ryan Tosemme: I was close. I just a quick follow up guys. Nima, you mentioned um...

Nima Ghamsari: Just a quick follow-up, guys. Nima, you mentioned... You know, getting the go to market sales motion right and that being a big focus here, especially now that you're more inclined to reinvest. So maybe just help us understand, you know, what the scalability of the sales organization looks like today and, you know, what what do you think is needed there to really start to hit it stride with the new expanded product? Yeah, actually, I would say our, our sales in Q1 and so far in Q2 have been you know, far ahead of my expectations so far this year.

You know, getting the go-to-market [inaudible]

Ryan Tosemme: Sales Motion Right, and that being a big focus here, especially now that you're more in time to reinvest. So maybe to help us understand, you know, what the scalability of the sales organization looks like today.

Ryan Tosemme: and what do you think is needed there to really start to hit it stride with the new expanded product set? Thanks.

Ryan Tosemme: Yeah, and actually I would say our pills in Q1 and so far in Q2 have been...

You know, far ahead of my expectations so far this year.

Nima Ghamsari: Now, there's always room for improvement. There's always things we're looking to do there. I'd say, I think, given the size of our market, there's a question of how we go after the broader market. And some of it is we do really well with the top 200 or 250 financial institutions of the country because we have a relatively small sales force that goes and talks to them and spends time with them on the ground, maybe already has an existing relationship because they're an existing customer of ours. And then I think for the down market beneath those top 250, which are still very large financial institutions.

Ryan Tosemme: Now there's always room for improvement, there's always things we're looking to do there. I'd say I think given the size of our market

Ryan Tosemme: There's a question of how we go after the broader market and some of it as we do really well with the top 200 or 250 financial institutions of the country because we have a relatively small sales force that goes and talks to them and spends time with them on the ground. Maybe already has an existing relationship because they're an existing customer of ours.

Ryan Tosemme: and then I think for the down market beneath those top 250 which are still very large financial institutions.

Nima Ghamsari: So I don't wanna downplay the size of those institutions, but we're looking at different models. There's partnership models that we can do to grow that. There's other internal models of building different kinds of teams. So we're looking at various things. We'll share more with you in the coming quarters, but again, I would say I'm very pleased with the pace and quality of the wins so far this year from the sales team. And it all goes back to what I said with our priorities. And they're also the ones responsible in a lot of cases for making sure the existing customers with the existing products are happy.

Ryan Tosemme: So I don't want to downplay the size of those institutions, but we're looking at different models. There's partnership models that we can do to grow that. There's other internal models with building different kinds of teams. So we're looking at various things. We'll share more with you in the coming quarters, but I would say I'm very pleased with the pace.

Ryan Tosemme: and Quality of the Winds so far this year from the sales team and it all goes back to what I said of their priorities and they're also the ones responsible in a lot of cases for making sure the existing customers with the existing products are happy. So I've been very happy with their focus on that.

Nima Ghamsari: So I've been very happy with their focus on that as well. And I feel it from our customers. The sentiment, it sort of always drifts up to me. I always hear about things. And so the fact that I'm hearing it and feeling it from customers, and again, it's not like every day isn't without challenges or something interesting that happens, but in aggregate, it's really trending in the right direction.

Ryan Tosemme: as well. And, you know, I feel it from our customers. You know, the sentiment, it's sort of...

Ryan Tosemme: Always dressed up to me, always hear about things, and so the fact that I'm hearing it and feeling it from customers and again, it's not like every day and without challenges or something interesting that happens, but you know an aggregate, it's really trending in the right direction. I'm proud of the team and still a lot more work to do.

Amir Jafari: I'm proud of the team and still a lot more work to do.

Amir Jafari: I will now turn the call back over to our host, Amir Jafari, for closing remarks. Thank you everyone for joining. There are no further remarks from our side. Thank you.

Speaker Change: I will now turn the call back over to our host, Amir Jafari for closing remarks.

Amir Jafari: Thank you for joining in. There are no further remarks from our side. Thank you

Operator: Moderator, we can end the call.

Motari, we can end the call.

Operator: Ladies and gentlemen, that concludes today's call. Thank you all.

Ladies and gentlemen, that concludes today's call. Thank you all.