The overall cost reductions are expected to save more than $100 million by the end of 2023 compared to Q3 2022 when fully implemented
Enhanced Blend Builder improves revenue generation and margin profile with Platform-as-a-Service components
The executive appointments underscore Blend's transition to a platform company
Blend BLND today announced a number of specific initiatives that support its previously announced plan to accelerate its path to profitability. Blend will host a conference call for the investor community this afternoon at 4:30 p.m. EST to discuss today's announcement.
The initiatives announced today aim to adjust the company's cost structure, focus its investments on the greatest potential growth opportunities, and realign management to lead the company's transition from a product company to a platform company. These include in particular:
- The 28% reduction in Blend's ground staff impacted the Blend name and operations in research and development, sales and marketing, and general and administrative functions. This recent power outage and previous cost savings initiatives are expected to reduce Blend's annual non-GAAP calendar operating expenses and cost of sales by a total of more than $100 million for the 2023 non-GAAP calendar as compared to the third quarter of 2022.
- Execute planned improvements to Blend's investment and go-to-market strategy to improve the Company's product mix, revenue model and gross margin, including:
- Most of the operational costs go to Blend Builder, a customizable business software platform that charges a subscription fee in addition to a fee for successful transactions. This platform already forms the basis for Blend's non-mortgage offerings and, over time, will give mortgage lenders the flexibility and power they need to differentiate themselves from their competitors.
- And for its large base of mortgage customers, Blend is focused on helping lenders become more efficient by combining a number of features that have been developed over the past few years, including the loan officer toolkit, self-service pre-qualification, and more Earnings and Combined Degree.
- Appointment of Amir Jafari as Head of Finance and Administration, a new position that will oversee finance, human resources, legal, compliance, IT and information security. As part of this transition, Blend President Tim Maiopoulos will step down from his leadership role in the first quarter and remain on the Board of Directors; Chief Financial Officer Mark Greenberg will leave Blend after a transition period that includes the company's filing of its Form 10-K with the SEC in March 2023; and Chief Legal, Compliance and Risk Officer Crystal Sumner will leave Blend in early February. Following Sumner's departure, Winnie Ling, who currently heads the firm's securities and corporate law practice, will become chief legal officer and report to Jafara.
"In the past few months, we have embarked on an ambitious financial and strategic plan to align our cost structure, innovation spend and go-to-market with current market realities and how our customers want to best utilize our platform," said Nima Gamsari. , mixing head. . “Today we are announcing a broad range of initiatives that will define and accelerate our previously announced path to profitability, including the opportunity for Blend to achieve better gross margins from our Blend platform offerings, including mortgages, beginning in the second half of 2023.
“An important step in this was a significant reduction in our overall costs. This move required a very difficult decision, but we had to say goodbye to many talented people while we align the organization to market realities and prepare for future growth,” continued .gamsari.
“We are also continuing our planned transition from a multipoint solution model to a platform business. This journey includes refining our go-to-market model around our Blend Builder offering, our platform for compounding initiatives that enables our customers to accelerate their digital processes. .they are". Transforming into product lines in industries such as consumer banking and mortgage lending. This platform will also give our mortgage customers the flexibility they need in a rapidly changing market. We are very pleased with the interest we are seeing in the platform. At the same time, we can help our mortgage customers be more efficient in a challenging market by focusing on the launch of the consistently rich products we have developed, including the Loan Specialist Suite, Self-Service Prequalification, Blend Income and Blend Close, as our With the market recovering rapidly, customers are trying to strengthen their competitiveness,” said Gamsari.
“In line with our platform ambitions, we are also enhancing our governance structure, including the appointment of Amir Jafari as our new Head of Finance and Administration. Amir's strong leadership experience will serve Blend well as he grows. Amir's appointment follows the recent addition of Blend Commercialization Lead Dean Klinger, who was instrumental in the platform's transition to the software industry. I would like to thank Tim, Mark and Crystal for their significant and tireless efforts in building Blend. They have expressed a desire to transfer their roles and are on track for a full transition, including Tim's reinstatement to the board." Gamsari concluded.
Amir Jafari has over 20 years of experience in accounting, finance, investor relations and legal teams. Jafari brings extensive leadership experience in established early stage and public technology companies. Most recently, he was CFO at Plastiq, an enterprise payments platform, and Reputation, a customer management company. Prior to that, Jafari spent five years at ServiceNow, where he helped build the finance and rights business unit, most recently leading it as vice president and general manager. Previously, he was the company's vice president of finance and corporate controller. Jafari has also held various FP&A positions at various distribution, consumer and semiconductor companies. Amir holds an MBA in Finance with honors from San Jose State University and a BA in Economics from San Diego State University.
Also today, Blend announced that Erin Lantz has joined the Board of Directors. Ms. Lantz, CTO and board member, has over 20 years of experience building and scaling operations for leading real estate and financial services companies including Zillow Group, Ethos and Bank of America. Ms. Lantz filled the void left by Roger Ferguson, who left the company's board of directors to spend more time on various boards and other business engagements.
Information on conference calls and webcasts
The Company will host a conference call and webcast today at 1:30 pm PT/4:30 pm ET to discuss today's announcement. The call is presented by Nima Gamsari, co-founder and director of Blend. The conference call will be streamed live from the Company's Investor Relations website at https://investor.blend.com. You can also join the conference call directly over the phone by dialing (888) 300-3045 or (646) 568-1027 for international calls. Replays will be available after the conference call and can be accessed via the Corporate Investor Relations website.
forward-looking statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Act of 1934, as amended. These statements may include, among other things, management's estimates, actual reductions and expected impacts, including expected cost savings, and Blend's announced business initiatives and related objectives, expectations and impacts, including changes in marketing and investment strategies. . ., the planned transition to the platform business, anticipated cost reductions and projected timelines for implementation, benefits of customer initiative and expectations for growth and efficiency, Blend's future operating or financial results, market size and growth opportunities, and associated assumptions about the foregoing. By their nature, forward-looking statements involve risks and uncertainties, some of which cannot be predicted or measured. In some cases, forward-looking statements may be identified by words such as "may", "will", "should", "expects", "plans", "anticipates", "may", "will", "intends". , "target", "project", "consider", "believe", "estimate", "estimate", "potential" or "continue" or the negative of these terms or other comparable terminology relating to expectations, strategy, mix plans or has no intention of placing undue reliance on any forward-looking statements. Forward-looking statements should not be construed as guarantees of future performance or results and are not necessarily accurate statements of when or by what means, if any, such performance or results will be achieved.
Forward-looking statements are based on information available at the time they are made and/or management's good faith estimates and assumptions about future events and are subject to risks and uncertainties that could cause actual performance or results to differ deviate significantly from such statements. expressed or implied by any forward-looking statements. These risks and uncertainties include the risk that our restructuring actions and business initiatives will not produce desired results or adversely affect our business, changes in economic conditions such as mortgage rates, credit availability, home prices, inflation or consumer confidence adversely affecting our industry, our affects the market and our business by failing to retain our existing customers or profitably attracting new customers; our customers cannot support the use of our products and services; our relationship with one of our key customers is disrupted or the level of activity with them is significantly reduced from time to time; we cannot compete in highly competitive markets; we couldn't handle our growth; due to our limited history of operations in changing industries and markets, we are unable to make accurate predictions about our future performance; we have not been able to successfully integrate or realize the benefits of our acquisition of Title365; o Impairment of certain assets adversely affects our financial condition and results of operations. Additional information regarding these risks and other factors that could affect our financial results is included in our filings with the Securities and Exchange Commission, including our quarterly report on Form 10-Q for the quarter ended March 31, 2022, our report on Form 10 - QQ for the quarter ended June 30, 2022 and our quarterly report on Form 10-Q for the quarter ended September 30, 2022. Given these risks and uncertainties, the anticipated events and circumstances discussed in this press release may not occur and actual results may differ materially from those anticipated or implied by the forward-looking statements. These factors could cause actual results, performance or achievements to differ materially and adversely from those anticipated or implied by the forward-looking statements. In addition, we operate in a highly competitive and rapidly changing environment. New risks and uncertainties arise from time to time, and we cannot anticipate all of the risks and uncertainties that may affect the forward-looking statements contained in this press release. Except as required by law, Blend undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
About Mixtures
Blend is the infrastructure powering the future of banking. Financial service providers ranging from large banks, fintech companies and credit unions to independent and municipal mortgage lenders are using the Blend platform to transform the banking experience for their customers. Blend powers billions of dollars in financial transactions every day. Visit blend.com for more information.
