What happened
Shares of Blend Labs (BLND 2.82%) charged sharply higher Tuesday, gaining as much as 38.4%. As of 2:44 p.m. ET, the stock was still up 27.5%.
The catalyst that sent the fintech specialist higher was its quarterly financial report, which detailed robust growth that far outpaced expectations.
NYSE: BLND
Key Data Points
So what
For the second quarter, Blend Labs generated revenue of $65.5 million, up an eye-catching 104% year over year. The company's bottom line cratered, however, with a net loss of $477 million, resulting in a loss per share of $2.06. But that loss requires context.
Blend Labs took a non-cash impairment charge of $391.8 million on its intangible assets and goodwill to adjust the fair value of its Title365 segment. Had it not been for the one-time charge, Blend Labs' loss per share would have been a much more palatable $0.19, an improvement of 63% compared to the prior-year quarter.
Analysts' consensus estimates were calling for revenue of $59.4 million and a loss per share of $0.20, so excluding the write-down, Blend Labs cleared expectations on both counts.
It's also worth noting that the Blend Platform segment -- which focuses on the mortgage market -- grew 5% year over year even as mortgage volumes declined 37% during the same period. This illustrates that the company was able to gain market share even in a challenging environment.
Blend also reported improved client metrics. Its customer base grew to 354, and 71% of the company's total customer base now uses two or more of Blend's products, up from 59% in the year-ago quarter. Additionally, the number of banking transactions grew to 215,000, up 179%.
Now what
For the full fiscal year, Blend Labs reiterated its outlook and is guiding for revenue of $240 million at the midpoint of its guidance. This is particularly impressive considering the company is expecting overall mortgage origination levels to decline by 41% compared to last year. As a result, Blend Labs is expecting low double-digit growth in its mortgage-banking revenue, offset by more than 100% growth in its consumer banking and marketplace revenue.
Blend Labs had its initial public offering (IPO) just over a year ago, and since then, the stock has shed more than 82%. However, if its results are any indication of what's to come for Blend Labs, shareholders could be rolling in the green in years to come.
