Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2022 | May 06, 2022 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2022 | |
Document Transition Report | false | |
Entity File Number | 001-40599 | |
Entity Registrant Name | BLEND LABS, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 45-5211045 | |
Entity Address, Address Line One | 415 Kearny Street | |
Entity Address, City or Town | San Francisco | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 94108 | |
City Area Code | 650 | |
Local Phone Number | 550-4810 | |
Title of 12(b) Security | Class A common stock, par value $0.00001 per share | |
Trading Symbol | BLND | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Document Fiscal Year Focus | 2022 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Period Focus | Q1 | |
Entity Central Index Key | 0001855747 | |
Amendment Flag | false | |
Class A Common Stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 219,974,986 | |
Class B Common Stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 12,633,331 | |
Class C Common Stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 0 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) shares in Thousands, $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 167,666 | $ 213,082 |
Marketable securities | 331,714 | 334,147 |
Trade and other receivables, net of allowance for credit losses of $1,669 and $1,371, respectively | 33,621 | 34,076 |
Prepaid expenses and other current assets | 27,825 | 31,713 |
Total current assets | 560,826 | 613,018 |
Property and equipment, net | 5,895 | 6,155 |
Operating lease right-of-use assets | 14,245 | 14,713 |
Intangible assets, net | 168,935 | 173,008 |
Goodwill | 287,228 | 287,228 |
Deferred contract costs | 3,326 | 4,178 |
Restricted cash, non-current | 5,358 | 5,358 |
Other non-current assets | 8,617 | 8,828 |
Total assets | 1,054,430 | 1,112,486 |
Current liabilities: | ||
Accounts payable | 2,116 | 6,160 |
Deferred revenue | 14,172 | 8,068 |
Accrued compensation | 13,489 | 18,140 |
Other current liabilities | 24,264 | 27,662 |
Total current liabilities | 54,041 | 60,030 |
Operating lease liabilities, non-current | 13,684 | 14,607 |
Other non-current liabilities | 8,127 | 13,415 |
Debt, non-current, net | 214,527 | 213,843 |
Total liabilities | 290,379 | 301,895 |
Commitments and contingencies (Note 8) | ||
Redeemable noncontrolling interest | 37,077 | 35,949 |
Stockholders’ equity: | ||
Preferred stock | 0 | 0 |
Common stock | 2 | 2 |
Additional paid-in capital | 1,244,466 | 1,218,213 |
Accumulated other comprehensive loss | (2,625) | (808) |
Accumulated deficit | (514,869) | (442,765) |
Total stockholders’ equity | 726,974 | 774,642 |
Total liabilities, redeemable noncontrolling interest and stockholders’ equity | $ 1,054,430 | $ 1,112,486 |
Shares issued (in shares) | 232,400 | 230,324 |
Shares outstanding (in shares) | 232,400 | 230,324 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Accounts receivable, allowance for credit loss, current | $ 1,669 | $ 1,371 |
Preferred stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 |
Preferred stock, shares authorized (in shares) | 200,000,000 | 200,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, shares authorized (in shares) | 3,000,000,000 | 3,000,000,000 |
Common stock, shares issued (in shares) | 232,400,000 | 230,324,000 |
Common stock, shares outstanding (in shares) | 232,400,000 | 230,324,000 |
Class A Common Stock | ||
Common stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 |
Common stock, shares authorized (in shares) | 1,800,000,000 | 1,800,000,000 |
Common stock, shares issued (in shares) | 219,767,000 | 217,691,000 |
Common stock, shares outstanding (in shares) | 219,767,000 | 217,691,000 |
Class B Common Stock | ||
Common stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 |
Common stock, shares authorized (in shares) | 600,000,000 | 600,000,000 |
Common stock, shares issued (in shares) | 12,633,000 | 12,633,000 |
Common stock, shares outstanding (in shares) | 12,633,000 | 12,633,000 |
Class C Common Stock | ||
Common stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 |
Common stock, shares authorized (in shares) | 600,000,000 | 600,000,000 |
Common stock, shares issued (in shares) | 0 | 0 |
Common stock, shares outstanding (in shares) | 0 | 0 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Income Statement [Abstract] | ||
Revenue | $ 71,524 | $ 31,875 |
Cost of revenue | 42,655 | 10,860 |
Gross profit | 28,869 | 21,015 |
Operating expenses: | ||
Research and development | 35,106 | 17,074 |
Sales and marketing | 22,341 | 15,865 |
General and administrative | 37,102 | 15,283 |
Amortization of acquired intangible assets | 4,068 | 0 |
Total operating expenses | 98,617 | 48,222 |
Loss from operations | (69,748) | (27,207) |
Interest expense | (5,558) | 0 |
Other income (expense), net | 91 | 150 |
Loss before income taxes | (75,215) | (27,057) |
Income tax benefit (expense) | 2,797 | (10) |
Net loss | (72,418) | (27,067) |
Less: Net loss attributable to noncontrolling interest | 314 | 0 |
Net loss attributable to Blend Labs, Inc. | (72,104) | (27,067) |
Less: accretion of RNCI to redemption value | (1,442) | 0 |
Net loss attributable to Blend Labs, Inc. common stockholders | (73,546) | (27,067) |
Net loss attributable to Blend Labs, Inc. common stockholders | $ (73,546) | $ (27,067) |
Net loss per share attributable to Blend Labs, Inc. common stockholders: | ||
Basic (in dollars per share) | $ (0.32) | $ (0.60) |
Diluted (in dollars per share) | $ (0.32) | $ (0.60) |
Weighted average shares used in calculating net loss per share: | ||
Basic (in shares) | 230,329 | 45,090 |
Diluted (in shares) | 230,329 | 45,090 |
Comprehensive loss: | ||
Net loss | $ (72,418) | $ (27,067) |
Unrealized (loss) gain on marketable securities | (1,845) | 15 |
Foreign currency translation gain | 28 | 0 |
Comprehensive loss | (74,235) | (27,052) |
Less: Comprehensive loss attributable to noncontrolling interest | 314 | 0 |
Comprehensive loss attributable to Blend Labs, Inc. | $ (73,921) | $ (27,052) |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Redeemable Noncontrolling Interest and Stockholders’ Equity - USD ($) shares in Thousands, $ in Thousands | Total | Redeemable Noncontrolling Interest | Founders convertible preferred stock | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit |
Beginning balance at Dec. 31, 2020 | $ 163,337 | $ 385,225 | $ 1 | $ 50,968 | $ (5) | $ (272,852) | |
Beginning balance (in shares) at Dec. 31, 2020 | 122,379 | 47,948 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Issuance of common stock upon exercise of stock options, net of repurchases (in shares) | 4,773 | ||||||
Issuance of common stock upon exercise of stock options, net of repurchases | 4,172 | 4,172 | |||||
Vesting of early exercised stock options | 157 | 157 | |||||
Stock-based compensation | 4,016 | 4,016 | |||||
Accretion of redeemable noncontrolling interest to redemption value | 0 | ||||||
Issuance of Series G Convertible Preferred Stock, net of issuance costs (in shares) | 22,419 | ||||||
Issuance of Series G Convertible Preferred Stock, net of issuance costs | 309,701 | $ 309,701 | |||||
Exercise of Convertible Preferred Stock warrants (in shares) | 2,075 | ||||||
Exercise of Convertible Preferred Stock warrants | 8,014 | $ 8,014 | |||||
Vesting of performance-based Convertible Preferred Stock warrants | 118 | 118 | |||||
Other comprehensive income | 15 | 15 | |||||
Net loss | (27,067) | (27,067) | |||||
Ending balance (in shares) at Mar. 31, 2021 | 146,873 | 52,721 | |||||
Ending balance at Mar. 31, 2021 | 462,463 | $ 702,940 | $ 1 | 59,431 | 10 | (299,919) | |
Beginning balance at Dec. 31, 2021 | 774,642 | $ 35,949 | $ 2 | 1,218,213 | (808) | (442,765) | |
Beginning balance (in shares) at Dec. 31, 2021 | 230,324 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Issuance of common stock upon exercise of stock options, net of repurchases (in shares) | 1,553 | ||||||
Issuance of common stock upon exercise of stock options, net of repurchases | 1,740 | 1,740 | |||||
Vesting of early exercised stock options | 1,913 | 1,913 | |||||
Vesting of restricted stock units (in shares) | 523 | ||||||
Stock-based compensation | 24,312 | 24,312 | |||||
Unrealized loss on investments in marketable securities | (1,845) | (1,845) | |||||
Foreign currency translation gain | 28 | 28 | |||||
Accretion of redeemable noncontrolling interest to redemption value | (1,442) | 1,442 | (1,442) | ||||
Other | (270) | (270) | |||||
Net loss | (72,104) | (314) | (72,104) | ||||
Ending balance (in shares) at Mar. 31, 2022 | 232,400 | ||||||
Ending balance at Mar. 31, 2022 | $ 726,974 | $ 37,077 | $ 2 | $ 1,244,466 | $ (2,625) | $ (514,869) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Redeemable Noncontrolling Interest and Stockholders’ Equity (Parenthetical) - USD ($) $ in Thousands | Jul. 20, 2021 | Mar. 31, 2021 |
Statement of Stockholders' Equity [Abstract] | ||
Issuance costs | $ 10,400 | $ 299 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Operating activities | ||
Net loss | $ (72,418) | $ (27,067) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Stock-based compensation | 24,312 | 4,016 |
Depreciation and amortization | 4,601 | 823 |
Amortization of deferred contract costs | 1,244 | 1,319 |
Amortization of debt discount and issuance costs | 709 | 0 |
Amortization of operating lease right-of-use assets | 785 | 593 |
Release of valuation allowance and change in deferred taxes | (2,864) | 0 |
Other | 1,049 | 481 |
Changes in operating assets and liabilities: | ||
Trade and other receivables | 409 | 133 |
Prepaid expenses and other assets, current and non-current | 2,830 | (3,728) |
Deferred contract costs, non-current | 852 | 858 |
Accounts payable | (4,314) | 509 |
Deferred revenue | 6,104 | 777 |
Accrued compensation | (4,651) | (1,804) |
Operating lease liabilities | (958) | (665) |
Other liabilities, current and non-current | (3,532) | 3,361 |
Net cash used in operating activities | (45,842) | (20,394) |
Investing activities | ||
Purchases of marketable securities | (30,450) | (25,400) |
Maturities of marketable securities | 30,035 | 34,850 |
Purchases of property and equipment | (268) | (302) |
Purchase of other investment | 0 | (3,000) |
Net cash (used in) provided by investing activities | (683) | 6,148 |
Financing activities | ||
Proceeds from exercises of stock options, including early exercises, net of repurchases | 1,202 | 5,750 |
Proceeds from issuance of Convertible Preferred Stock, net of issuance costs | 0 | 309,701 |
Payment of initial public offering costs | (121) | (158) |
Proceeds from exercises of Convertible Preferred Stock warrants | 0 | 10,172 |
Net cash provided by financing activities | 1,081 | 325,465 |
Effect of exchange rates on cash, cash equivalents, and restricted cash | 28 | 0 |
Net (decrease) increase in cash, cash equivalents, and restricted cash | (45,416) | 311,219 |
Cash, cash equivalents, and restricted cash at beginning of period | 218,440 | 46,288 |
Cash, cash equivalents, and restricted cash at end of period | 173,024 | 357,507 |
Reconciliation of cash, cash equivalents, and restricted cash within the consolidated balance sheets: | ||
Cash and cash equivalents | 167,666 | 352,311 |
Restricted cash | 5,358 | 5,196 |
Total cash, cash equivalents, and restricted cash | 173,024 | 357,507 |
Supplemental disclosure of cash flow information: | ||
Cash paid for income taxes | 11 | 25 |
Cash paid for interest | 4,944 | 0 |
Supplemental disclosure of non-cash investing and financing activities: | ||
Vesting of early exercised stock options | 1,913 | 157 |
Right-of-use assets obtained in exchange for lease obligations | 317 | 0 |
Accretion of redeemable noncontrolling interest to redemption value | $ 1,442 | $ 0 |
Description of Business and Bas
Description of Business and Basis of Presentation | 3 Months Ended |
Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business and Basis of Presentation | Description of Business and Basis of Presentation Description of Business Blend Labs, Inc. (the “Company,” “Blend,” “we,” “us,” or “our”) was incorporated on April 17, 2012. The Company offers a cloud-based software platform for financial services firms that is designed to power the end-to-end consumer journey for banking products. The Company’s solutions make the journey from application to close fast, simple, and transparent for consumers, while helping financial services firms increase productivity, deepen customer relationships, and deliver exceptional consumer experiences. On June 30, 2021, the Company acquired a 90.1% interest in Title365, an underwritten title insurance agency engaged in selling title insurance policies and escrow services throughout the United States. Integrating Title365 with the Company’s software platform enables financial services firms to automate title commitments and streamline communication with consumers and settlement teams, enabling the customers to accelerate the title, settlement, and closing process at scale for mortgages, home equity lines of credit, and home equity loans. Basis of Presentation, Principles of Consolidation, and Use of Estimates The accompanying unaudited condensed consolidated balance sheets as of March 31, 2022 and December 31, 2021, the unaudited condensed consolidated statements of operations and comprehensive loss for the three months ended March 31, 2022 and 2021, the unaudited condensed consolidated statements of redeemable noncontrolling interest and stockholders’ equity for the three months ended March 31, 2022 and 2021, and the unaudited condensed consolidated statements of cash flows for the three months ended March 31, 2022 and 2021 reflect all adjustments that are of a normal, recurring nature and that are considered necessary for a fair presentation of the results for the periods shown in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and the applicable rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”) for interim financial reporting periods. Accordingly, certain information and footnote disclosures have been condensed or omitted that would ordinarily be required under U.S. GAAP for complete financial statements. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. The accompanying unaudited condensed consolidated financial statements include the accounts of Blend Labs, Inc. and its subsidiaries in which the Company holds a controlling financial interest. Noncontrolling interest represents the minority stockholder’s share of the net income and equity in a consolidated subsidiary. All intercompany balances and transactions have been eliminated in consolidation. The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make, on an ongoing basis, estimates and assumptions that affect the amounts reported in the consolidated financial statements and the notes thereto. Actual results may differ from those estimates. Such estimates include, but are not limited to, estimates of variable consideration, estimates of standalone selling prices of performance obligations in customer contracts with multiple performance obligations, evaluation of contingencies, evaluation of collectability of accounts receivable, determination of reserves for title and escrow losses, determination of period of benefit for deferred contract costs, determination of the incremental borrowing rates used in calculations of lease liabilities, determination of fair value of stock-based compensation, determination of fair value of warrants, valuation of deferred tax assets, valuation of acquired intangible assets, valuation of the redeemable noncontrolling interest, determination of useful lives of tangible and intangible assets, and assessment of impairment of goodwill and intangible assets. Initial Public Offering and Capital Structure Change On July 20, 2021, the Company completed its initial public offering (the “IPO”), with a subsequent partial exercise of the underwriters’ option to purchase additional shares on August 17, 2021. The Company issued and sold an aggregate of 22,468,111 shares of Class A common stock, par value $0.00001, at an offering price of $18.00 per share, and received aggregate net proceeds of $366.7 million, after deducting underwriters' discounts and commissions of $27.3 million and offering expenses of $10.4 million. Immediately prior to the completion of the IPO, the Company filed an Amended and Restated Certificate of Incorporation, which authorized the issuance of 3,200,000,000 shares of capital stock, $0.00001 par value per share, consisting of: 1,800,000,000 shares of Class A common stock; 600,000,000 shares of Class B common stock; 600,000,000 shares of Class C common stock; and 200,000,000 shares of preferred stock. Upon the effectiveness of the filing of the Amended and Restated Certificate of Incorporation, (i) all outstanding shares of Convertible Preferred Stock converted into 146,872,568 shares of Class A common stock, (ii) all outstanding shares of Class A common stock converted into shares of Class B common stock on a one-for-one basis, (iii) all shares of Class A common stock were reclassified as Class B common stock and all shares of Class B common stock were reclassified as Class A common stock, and (iv) 12,883,331 shares of Class A common stock (as reclassified) beneficially owned by the Co-Founder and Head of Blend were exchanged for an equivalent number of shares of Class B common stock. At the completion of the IPO, 214,132,175 shares of Class A common stock and 12,883,331 shares of Class B common stock were issued and outstanding. No shares of Class C common stock or preferred stock were issued and outstanding. The following is a summary of the rights of the holders of the Company’s capital stock: Common Stock Subsequent to the IPO, the Company has three classes of authorized common stock: Class A common stock, Class B common stock, and Class C common stock. The rights of the holders of Class A common stock, Class B common stock, and Class C common stock are identical, except with respect to voting and conversion. Dividend Rights Subject to preferences that may apply to any shares of preferred stock outstanding at the time, the holders of the Company’s common stock will be entitled to receive dividends out of funds legally available if the Company’s board of directors, in its discretion, determines to issue dividends and then only at the times and in the amounts that the Company’s board of directors may determine. Voting Rights Holders of the Class A common stock are entitled to one vote for each share held on all matters submitted to a vote of stockholders, holders of the Class B common stock are entitled to 40 votes for each share held on all matters submitted to a vote of stockholders, and holders of the Class C common stock are not entitled to vote on any matter that is submitted to a vote of stockholders, except as otherwise required by law. The holders of the Class A common stock and Class B common stock will vote together as a single class, unless otherwise required by law. At the completion of the IPO, the Co-Founder and Head of Blend held all of the issued and outstanding shares of the Company’s Class B common stock. No Preemptive or Similar Rights The Company’s common stock is not entitled to preemptive rights and is not subject to conversion, redemption, or sinking fund provisions. Right to Receive Liquidation Distributions If the Company becomes subject to a liquidation, dissolution, or winding-up, the assets legally available for distribution to the Company’s stockholders would be distributable ratably among the holders of the Company’s common stock and any participating preferred stock outstanding at that time, subject to prior satisfaction of all outstanding debt and liabilities and the preferential rights of and the payment of liquidation preferences, if any, on any outstanding shares of preferred stock. Conversion of Class B Common Stock Each share of Class B common stock is convertible at any time at the option of the holder into one share of Class A common stock. Shares of Class B common stock will automatically convert into shares of Class A common stock upon sale or transfer except for certain transfers described in the Amended and Restated Certificate of Incorporation, such as certain transfers effected for estate planning or charitable purposes. Conversion of Class C Common Stock After the conversion or exchange of all outstanding shares of the Company’s Class B common stock into shares of Class A common stock, all outstanding shares of Class C common stock will convert automatically into Class A common stock, on a share-for-share basis, on the date or time specified by the holders of a majority of the outstanding shares of Class A common stock, voting as a separate class. Preferred Stock The Company’s board of directors has the authority to issue preferred stock in one or more series, to establish from time to time the number of shares to be included in each series and to fix the designation, powers, preferences, and rights of the shares of each series and any of its qualifications, limitations, or restrictions, in each case without further vote or action by the Company’s stockholders. Reverse Stock Split On June 29, 2021, the Company’s board of directors approved a three-for-one reverse stock split of its capital stock, which the Company’s stockholders subsequently approved on July 2, 2021 and which became effective on July 2, 2021. The authorized number of shares of each class and series of the Company’s capital stock was proportionally decreased in accordance with the three-for-one reverse stock split, and the par value of each class of capital stock was not adjusted as a result of the reverse stock split. All common stock, Convertible Preferred Stock, stock options, warrants, and per share information presented within these consolidated financial statements have been adjusted to reflect this reverse stock split on a retroactive basis for all periods presented. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies The Company’s significant accounting policies are described in Note 2, Summary of Significant Accounting Policies in the Notes to the Consolidated Financial Statements in its Annual Report on Form 10-K for the year ended December 31, 2021. There have been no significant changes to these policies during the three months ended March 31, 2022. Cash and Cash Equivalents The Company places its cash with high credit quality and federally insured institutions. Cash with any one institution may be in excess of federally insured limits. The Company has not experienced any losses in such accounts and management believes the exposure to credit risk is not significant. The Company considers all highly liquid investments with an original maturity date of three months or less at the time of purchase to be cash equivalents. As of March 31, 2022 and December 31, 2021, cash and cash equivalents consisted of cash, money market accounts, and highly liquid investments. The carrying amounts reported in the consolidated balance sheets for cash and cash equivalents approximate fair value due to the short-term nature of the maturities. Restricted Cash The Company has classified cash that is not available for use in its operations as restricted cash. Restricted cash consists primarily of collateral for letters of credit related to security deposits for the Company’s office facility lease arrangements. As of both March 31, 2022 and December 31, 2021, the Company had restricted cash of $5.4 million, all of which was classified as non-current. Escrow or Trust Funds The Company administers escrow and trust deposits held at third-party financial institutions representing funds received under real estate contracts, escrowed funds received under escrow agreements, and undisbursed amounts received for settlement of mortgage and home equity loans. Cash held by the Company for these purposes was approximately $21.1 million, net of outstanding checks in transit of $56.4 million as of March 31, 2022. Cash held by the Company for these purposes was approximately $27.0 million, net of outstanding checks in transit of $56.2 million as of December 31, 2021. These funds are not considered assets of the Company and, therefore, are not included in the accompanying unaudited condensed consolidated balance sheets; however, the Company remains contingently liable for the disposition of these funds on behalf of its customers. Trade and Other Receivables and Credit Loss Reserves The Company reports trade and other receivables net of the allowance for credit losses, in accordance with Accounting Standards Codification (“ASC”) 326, Financial Instruments—Credit Losses . ASC 326 requires an entity to recognize an allowance that reflects the entity’s current estimate of credit losses expected to be incurred over the life of the financial instrument. The Company’s estimate of expected credit losses is determined based on expected lifetime loss rates calculated from historical data and adjusted for the impact of current and future conditions, such as the age of outstanding receivables, historical payment patterns, any known or expected changes to the customers’ ability to fulfill their payment obligations, or assessment of broader economic conditions that may impact the customers’ ability to pay the outstanding balances. As of March 31, 2022, the reserve for expected credit losses was $1.7 million. The provision for expected credit losses was $0.3 million for the three months ended March 31, 2022. The uncollectible portion of the receivables written off against reserve for expected credit losses was not material for the three months ended March 31, 2022. As of December 31, 2021, the reserve for expected credit losses was $1.4 million. Concentrations of Credit Risk and Significant Customers Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents, restricted cash, marketable securities, and trade accounts receivable. The Company maintains its cash equivalents primarily in money market funds and highly liquid investments that are issued or guaranteed by the United States government or its agencies. Collateral is not required for trade accounts receivable. Title365 has agreements with insurance underwriters authorizing the Company to issue title insurance policies on behalf of the insurance underwriters. During the three months ended March 31, 2022, the policies were underwritten by two title insurance companies, which accounted for approximately 62% and 38%, respectively, of title policy fees earned during the period. The following customers, which generate revenue in both Blend Platform and Title365 segments, comprised 10% or more of the Company’s revenue for the following periods. Three Months Ended March 31, Customer 2022 2021 A N/A 1 13% B 36% N/A 1 (1) revenue from this customer did not exceed 10% for the period presented The following customers comprised 10% or more of the Company’s trade and unbilled receivables: Customer March 31, 2022 December 31, 2021 A 10% N/A 1 B 31% 29% (1) trade and unbilled receivable balance from this customer did not exceed 10% as of the date presented Cloud Computing Arrangements The Company capitalizes certain implementation costs incurred under cloud computing arrangements that are service contracts. Capitalized costs incurred during the application development stage related to the implementation of the hosting arrangements were $1.1 million as of March 31, 2022, of which $0.7 million is presented within prepaid expenses and other current assets, and $0.4 million is presented within other non-current assets on the unaudited condensed consolidated balance sheets. Capitalized costs incurred during the application development stage related to the implementation of the hosting arrangements were $0.7 million as of December 31, 2021, of which $0.3 million is presented within prepaid expenses and other current assets, and $0.4 million is presented within other non-current assets on the unaudited condensed consolidated balance sheets. Amortization of capitalized implementation costs is recognized on a straight-line basis over the term of the associated hosting arrangement when it is ready for its intended use. Costs related to preliminary project activities and post-implementation activities are expensed as incurred. Title and Escrow Loss Reserve In the Title365 segment, the Company performs title insurance services and issues a title insurance policy as an agent for a third-party title insurance underwriter. The Company pays part of the title insurance policy fee charged to its customers to the third-party title insurance underwriter as compensation for accepting the risk associated with issuing the title policy. The Company may incur a loss if it does not follow the guidelines outlined in the agency agreements, and in the state of California, the Company is obligated to reimburse the insurance company for up to the first $5,000 in losses related to a claim on a policy issued through Title365. Reserves for estimated future losses on policies issued are established at the time the title insurance revenue is recognized in accordance with ASC 450, Contingencies , and are based on claim loss history, industry trends, legal environment, geographic considerations, and the type of title insurance policies written. As of March 31, 2022 and December 31, 2021, title and escrow loss reserves were $1.6 million, of which $0.2 million is presented within other current liabilities and $1.4 million is presented within other non-current liabilities on the unaudited condensed consolidated balance sheets. Redeemable Noncontrolling Interest The Company’s 90.1% ownership of Title365 results in recognition of 9.9% noncontrolling interest, which represents the minority stockholder’s share of the net income and equity in Title365. The Title365 stockholders agreement includes a provision whereby the Company has a call option to purchase the 9.9% noncontrolling interest at a purchase price equal to the greater of (1) $49.5 million plus an amount of interest calculated using an interest rate of 5.0% per annum compounding annually; or (2) 4.4 multiplied by the trailing 12-month EBITDA multiplied by the noncontrolling interest ownership percentage (the “Title365 Call Option”). The Title365 Call Option is exercisable beginning 2 years following the acquisition closing date. The noncontrolling interest holder also holds an option to compel the Company to purchase the remaining 9.9% noncontrolling interest at a price calculated in the same manner as the Title365 Call Option (the “Title365 Put Option”). The Title365 Put Option is exercisable beginning 5 years following the acquisition closing date. Neither the Title365 Call Option nor the Title365 Put Option have an expiration date. As the Title365 Put Option is not solely within the Company’s control, the Company classified this interest as redeemable noncontrolling interest (“RNCI”) within the mezzanine equity section of the unaudited condensed consolidated balance sheets. The RNCI is accreted to the redemption value under the interest method from the acquisition date through the date the Title365 Put Option becomes exercisable. At each balance sheet date, the RNCI is reported at the greater of the initial carrying amount adjusted for the RNCI's share of earnings or losses and other comprehensive income or loss, or its accreted redemption value. The changes in the redemption amount are recorded with corresponding adjustments against retained earnings or, in the absence of retained earnings, additional paid-in-capital. For each reporting period, the entire periodic change in the redemption amount is reflected in the computation of net loss per share under the two-class method as being akin to a dividend. As of March 31, 2022, the redemption amount of the Title365 Put Option as if it was currently redeemable was $51.4 million. JOBS Act Accounting Election As an emerging growth company (“EGC”), the Jumpstart Our Business Startups Act (“JOBS Act”) allows the Company to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are applicable to private companies (that is, those that have not had a Securities Act of 1933, as amended (the “Securities Act”), registration statement declared effective or do not have a class of securities registered under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)). The Company intends to use this extended transition period under the JOBS Act until such time as the Company is no longer considered to be an EGC. The adoption dates discussed below reflect this election. Recently Issued Accounting Standards Not Yet Adopted In March 2020, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2020-04, Reference Rate Reform (Topic 848) , with amendments in 2021. This update provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions affected by the discontinuation of London Interbank Offered Rate (“LIBOR”) or by another reference rate expected to be discontinued. The guidance in ASU 2020-04 is optional and may be elected over time as reference rate reform activities occur. The Company is currently evaluating the impact this ASU will have on its consolidated financial statements. In August 2020, the FASB issued ASU No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40) . The guidance simplifies the accounting for convertible debt instruments and convertible preferred stock by removing the existing guidance in ASC 470-20 that requires entities to account for beneficial conversion features and cash conversion features in equity separately from the host convertible debt or preferred stock. The guidance is effective for the Company for annual reporting periods, and interim reporting periods within those annual periods, beginning January 1, 2024. ASU 2020-06 should be applied on a full or modified retrospective basis and early adoption is permitted. The Company is currently evaluating the impact this ASU will have on its consolidated financial statements. In October 2021, the FASB issued ASU No. 2021-18, Business Combinations: Accounting for Contract Assets and Contract Liabilities with Customers (Topic 805) . This guidance requires an acquirer in a business combination to use principles in ASC 606 to recognize and measure contract assets and liabilities rather than fair value. The guidance is effective for the Company for annual reporting periods, and interim reporting periods within those annual periods, beginning January 1, 2023. ASU 2021-18 should be applied retrospectively to all business combinations that have occurred since the beginning of the annual period that includes the interim period of adoption. The Company is currently evaluating the impact this ASU will have on its consolidated financial statements. |
Revenue Recognition and Contrac
Revenue Recognition and Contract Costs | 3 Months Ended |
Mar. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition and Contract Costs | Revenue Recognition and Contract Costs Disaggregation of Revenue The following table provides information about disaggregated revenue by service offering: Three Months Ended March 31, 2022 2021 (In thousands) Blend Platform revenue: Mortgage Banking $ 24,484 $ 26,435 Consumer Banking and Marketplace 7,187 4,648 Professional Services 1,122 792 Total Blend Platform revenue 32,793 31,875 Title365 revenue 38,731 — Total revenue $ 71,524 $ 31,875 Mortgage Banking revenue represents revenue related to mortgage transactions processed through the Company’s software platform. Consumer Banking and Marketplace revenue represents revenue related to the Company’s integrated software solutions outside of mortgage banking transactions, such as consumer banking revenue (home equity, personal loans, deposit accounts, and all other consumer banking products), ancillary product revenue (income verification and close products), and marketplace revenue (title, insurance, and realty products). Professional Services revenue represents revenue related to the deployment of the Company’s software platform and consulting services. Title365 revenue represents revenue related to title, escrow and other closing and settlement services provided by the Title365 segment. Contract Balances The following table provides information about contract assets and contract liabilities from contracts with customers: Contract Accounts Balance Sheet Line Reference As of March 31, 2022 As of December 31, 2021 (In thousands) Contract assets—current Prepaid expenses and other current assets $ 2,559 $ 5,359 Contract liabilities—current Deferred revenue, current $ (14,172) $ (8,068) There were no long-term contract assets or deferred revenue as of March 31, 2022 and December 31, 2021. During the three months ended March 31, 2022 and 2021, the Company recognized $4.4 million and $6.9 million, respectively, of revenue that was included in the deferred revenue balances at the beginning of the respective periods. During the three months ended March 31, 2022, revenue from performance obligations satisfied in previous periods was not material. During the three months ended March 31, 2021, the Company recognized approximately $5.6 million of revenue from performance obligations satisfied in previous periods. The revenue recognized from performance obligations satisfied in the prior periods primarily related to changes in the transaction price, including changes in the estimate of variable consideration. Remaining Performance Obligations As of March 31, 2022, the aggregate amount of the transaction price allocated to the remaining performance obligations was $64.6 million. These remaining performance obligations do not include estimates of variable consideration associated with usage-based contracts with termination rights and professional services. The expected timing of recognizing revenue for the transaction price allocated to the remaining performance obligations as of March 31, 2022 was as follows: (In thousands) Within one year $ 36,733 More than one year 27,851 Total transaction price allocated to the remaining performance obligations $ 64,584 Deferred Contract Costs As of March 31, 2022 and December 31, 2021, total unamortized deferred contract costs were $7.5 million and $8.7 million, respectively, of which $4.2 million and $4.5 million was recorded within prepaid expenses and other current assets and $3.3 million and $4.2 million was recorded within deferred contract costs, non-current, on the unaudited condensed consolidated balance sheets as of March 31, 2022 and December 31, 2021, respectively. The amortization of deferred contract costs was $1.2 million and $1.3 million for the three months ended March 31, 2022 and 2021, respectively, and is included in sales and marketing expense in the accompanying unaudited condensed consolidated statements of operations. |
Investments in Marketable Secur
Investments in Marketable Securities and Fair Value Measurements | 3 Months Ended |
Mar. 31, 2022 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments in Marketable Securities and Fair Value Measurements | Investments in Marketable Securities and Fair Value Measurements The carrying amount, unrealized gain and loss, and fair value of investments in marketable securities by major security type were as follows: March 31, 2022 Amortized Gross Gross Fair Value Fair Value Hierarchy (In thousands) Cash equivalents: Money market funds $ 2,572 $ — $ — $ 2,572 Level 1 Commercial paper 2,898 — — 2,898 Level 2 Total cash equivalents 5,470 — — 5,470 Marketable securities: U.S. treasury and agency securities 270,719 — (2,506) 268,213 Level 2 Commercial paper 26,026 1 (12) 26,015 Level 2 Debt securities 32,612 — (126) 32,486 Level 2 Certificates of deposit 5,000 — — 5,000 Level 2 Total marketable securities 334,357 1 (2,644) 331,714 Restricted cash, non-current: Certificates of deposit 335 — — 335 Level 2 Total $ 340,162 $ 1 $ (2,644) $ 337,519 December 31, 2021 Amortized Gross Gross Fair Value Fair Value Hierarchy (In thousands) Cash equivalents: Money market funds $ 2,357 $ — $ — $ 2,357 Level 1 Commercial paper 2,150 — — 2,150 Level 2 Total cash equivalents 4,507 — — 4,507 Marketable securities: U.S. treasury and agency securities 269,393 — (745) 268,648 Level 2 Commercial paper 27,187 — (7) 27,180 Level 2 Debt securities 33,366 — (47) 33,319 Level 2 Certificates of deposit 5,000 — — 5,000 Level 2 Total marketable securities 334,946 — (799) 334,147 Restricted cash, non-current: Certificates of deposit 335 — — 335 Level 2 Total $ 339,788 $ — $ (799) $ 338,989 The Company reports its investments in marketable securities at fair value on the consolidated balance sheets based upon the level of judgment associated with inputs used to measure their fair value. The categories are as follows: Level 1—Observable inputs are unadjusted quoted prices in active markets for identical assets or liabilities. Level 2—Observable inputs are quoted prices for similar assets and liabilities in active markets or inputs other than quoted prices which are observable for the assets or liabilities, either directly or indirectly through market corroboration, for substantially the full term of the financial instruments. Level 3—Unobservable inputs which are supported by little or no market activity and which are significant to the fair value of the assets or liabilities. These inputs are based on the Company’s assumptions used to measure assets and liabilities at fair value and require significant management judgment or estimation. The fair value of the Company’s marketable securities classified as Level 2 of the fair value hierarchy is based on quoted market prices for similar instruments. The following table summarizes the stated maturities of the Company’s marketable securities: March 31, 2022 December 31, 2021 (In thousands) Due within one year $ 331,714 $ 202,895 Due after one year through two years — 131,252 Total marketable securities $ 331,714 $ 334,147 The Company evaluates marketable securities in unrealized loss position to determine whether the impairment is due to credit-related factors or other factors. The Company considers the extent to which the fair value is less than cost, the financial condition and near-term prospects of the security issuer, and the intent and ability of the Company to retain its investment in the security for a period of time sufficient to allow for any anticipated recovery in fair value. The Company does not have an intent to sell any of these securities prior to maturity and believes that it is more likely than not that the Company will not have to sell any such securities before a recovery of cost. The fair value is expected to recover as the securities approach their maturity date. Accordingly, as of March 31, 2022, the Company believes that the unrealized losses are due to noncredit-related factors, including changes in interest rates and other market conditions, and therefore no impairment losses have been recognized in the Company’s unaudited condensed consolidated statements of operations for the three months ended March 31, 2022 and 2021. As of March 31, 2022 and December 31, 2021, the number of investment positions that are in an unrealized loss position were 65 and 57, respectively. As of March 31, 2022 and December 31, 2021, the Company had no securities that have been in a continuous unrealized loss position for twelve months or greater. The Company determines realized gains or losses on the sale of marketable securities based on a specific identification method. Accrued interest receivable related to marketable securities was $1.0 million and $1.2 million, as of March 31, 2022 and December 31, 2021, respectively, and is presented within prepaid expenses and other current assets on the unaudited condensed consolidated balance sheets. The Company does not measure an allowance for credit losses on accrued interest receivable and recognizes interest receivable write offs as a reversal of interest income. No accrued interest was written off during the three months ended March 31, 2022 and 2021. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 3 Months Ended |
Mar. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill There have been no changes in the carrying amount of goodwill for the three months ended March 31, 2022. Intangible Assets Intangible assets consisted of the following: March 31, 2022 Weighted Average Remaining Amortization Gross Amount Accumulated Amortization Net Book Value (In Years) (In thousands) Intangible assets subject to amortization: Acquired customer relationships 10.3 $ 179,000 $ (12,205) $ 166,795 Internally developed software — 11,391 (11,391) — Domain name 9.3 210 (70) 140 Total finite-lived intangible assets, net 10.2 190,601 (23,666) 166,935 Indefinite-lived intangible assets: Acquired licenses 2,000 — 2,000 Total intangible assets, net $ 192,601 $ (23,666) $ 168,935 December 31, 2021 Weighted Average Remaining Amortization Gross Amount Accumulated Amortization Net Book Value (In Years) (In thousands) Intangible assets subject to amortization: Acquired customer relationships 10.5 $ 179,000 $ (8,136) $ 170,864 Internally developed software — 11,391 (11,391) — Domain name 9.5 210 (66) 144 Total finite-lived intangible assets, net 10.5 190,601 (19,593) 171,008 Indefinite-lived intangible assets: Acquired licenses 2,000 — 2,000 Total intangible assets, net $ 192,601 $ (19,593) $ 173,008 Amortization of intangible assets for the three months ended March 31, 2022 and 2021 was $4.1 million and $0.5 million, respectively. Total future amortization expense as of March 31, 2022 was as follows: (In thousands) Remainder of 2022 $ 12,216 2023 16,289 2024 16,289 2025 16,289 2026 16,289 Thereafter 89,563 Total future amortization expense $ 166,935 |
Significant Balance Sheet Compo
Significant Balance Sheet Components | 3 Months Ended |
Mar. 31, 2022 | |
Supplemental Balance Sheet Information [Abstract] | |
Significant Balance Sheet Components | Significant Balance Sheet Components Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consisted of the following: March 31, 2022 December 31, 2021 (In thousands) Contract assets $ 2,559 $ 5,359 Deferred contract costs 4,229 4,564 Prepaid insurance 3,551 6,521 Prepaid other 8,601 7,743 Recording fee advances 4,651 4,243 Other current assets 4,234 3,283 Total prepaid expenses and other current assets $ 27,825 $ 31,713 Recording fee advances represent amounts advanced on behalf of customers in the Title365 segment associated with the recording of mortgage documents. These amounts are primarily recouped within 30 days from funds in the escrow accounts the Company administers. Property and Equipment, Net Property and equipment, net, consisted of the following: March 31, 2022 December 31, 2021 (In thousands) Computer and software $ 4,413 $ 4,287 Furniture and fixtures 1,542 1,559 Leasehold improvements 5,068 4,940 Total property and equipment, gross 11,023 10,786 Accumulated depreciation and amortization (5,128) (4,631) Total property and equipment, net $ 5,895 $ 6,155 Depreciation expense for the three months ended March 31, 2022 and 2021 was $0.5 million and $0.3 million, respectively. Note Receivable In January 2021, the Company made a $3.0 million investment in a privately-held company via a convertible promissory note. Interest accrues at 2% per annum and outstanding principal and accrued interest is due and payable at the earliest of (i) 60 months from the execution of the note, (ii) an initial public offering, or (iii) change in control, unless otherwise converted to shares of the issuer. The outstanding principal and unpaid accrued interest are convertible into 4,500,000 shares of the issuer’s Series Seed Preferred Stock at the option of the issuer, upon a change in control, upon the issuer’s initial public offering, or upon a qualified equity financing. The conversion option is not bifurcated from the promissory note as the option does not meet the net settlement criteria of a derivative instrument due to the option not being readily convertible to cash. The Company also has a call option to merge the issuer with the Company for aggregate consideration of $500.0 million. The value of the call option was determined to be inconsequential. The note receivable is presented within other non-current assets on the unaudited condensed consolidated balance sheets. Investments in Non-Marketable Equity Securities In September 2021, the Company made a $2.5 million equity investment in a privately-held company in exchange for 103,611 shares of Series Growth 1a Preferred Stock. This investment in the equity securities without readily determinable fair value was initially recorded at cost. Subsequently, this investment is measured at cost, less impairment, if any, plus or minus observable price changes in orderly transactions of an identical or similar investment of the same issuer. There were no impairments or adjustments for observable price changes for the three months ended March 31, 2022. This investment is presented within other non-current assets on the unaudited condensed consolidated balance sheets. Other Current Liabilities Other current liabilities consisted of the following: March 31, 2022 December 31, 2021 (In thousands) Accrued expenses $ 5,615 $ 5,798 Accrued interest 3,222 3,397 Accrued professional fees 4,402 3,085 Accrued connectivity fees 3,800 4,753 Operating lease liabilities, current portion 4,138 3,856 Payable to Title365 noncontrolling interest holder under transition services agreement 2,201 5,549 Other 886 1,224 Total other current liabilities $ 24,264 $ 27,662 Other Long-Term Liabilities Other long-term liabilities consisted of the following: March 31, 2022 December 31, 2021 (In thousands) Deferred tax liabilities $ — $ 2,864 Early exercise liabilities 4,547 6,998 Payroll tax liabilities 1,513 1,457 Other liabilities 2,067 2,096 Total other long-term liabilities $ 8,127 $ 13,415 |
Leases
Leases | 3 Months Ended |
Mar. 31, 2022 | |
Leases [Abstract] | |
Leases | Leases The Company leases its facilities under non-cancelable operating leases with various expiration dates. Leases may contain escalating payments. Restricted cash that is not available for use in operations consists of collateral for standby letters of credit related to the Company’s office lease facilities. Restricted cash balances related to lease obligations as of March 31, 2022 and December 31, 2021 were $5.0 million. The Company’s total operating lease costs were $1.8 million and $1.3 million for the three months ended March 31, 2022 and 2021, respectively. The Company’s total operating lease costs include variable costs in the amount of $0.5 million and $0.4 million for the three months ended March 31, 2022 and 2021, respectively. Variable lease costs are primarily comprised of maintenance costs and are determined based on the actual costs incurred during the period. Variable lease payments are expensed in the period incurred and not included in the measurement of lease assets and liabilities. As of March 31, 2022 and December 31, 2021, the weighted average remaining operating lease term was 4.0 years and 4.3 years, respectively. The weighted average discount rate used to estimate operating lease liabilities for leases that existed as of March 31, 2022 and December 31, 2021 was 7.4% and 7.3%, respectively. Cash paid for amounts included in the measurement of operating lease liabilities was $1.3 million and $0.9 million for the three months ended March 31, 2022 and 2021, respectively. As of March 31, 2022, maturities of operating lease liabilities were as follows: (In thousands) Remainder of 2022 $ 3,652 2023 5,525 2024 5,249 2025 3,744 2026 1,048 Thereafter 1,605 Total lease payments 20,823 Less: imputed interest (3,001) Total operating lease liabilities $ 17,822 |
Commitment and Contingencies
Commitment and Contingencies | 3 Months Ended |
Mar. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Contingencies From time to time and in the normal course of business, the Company may be subject to various legal matters, such as threatened or pending claims or proceedings. There were no such material matters as of March 31, 2022 or December 31, 2021. Warranties, Indemnifications, and Contingent Obligations The Company’s platform, products, and services are generally warranted to perform substantially as described in the associated documentation and to satisfy defined levels of uptime reliability. The service-level agreements that provide for defined levels of uptime reliability and performance permit the customers to receive credits or to terminate their agreements in the event that the Company fails to meet those levels. To date, the Company has not experienced any significant failures to meet defined levels of reliability and performance as a result of those agreements and historically the Company has not incurred any material costs associated with warranties. Accordingly, the Company has not accrued any liabilities related to these agreements in the unaudited condensed consolidated financial statements. The Company enters into indemnification provisions under (i) its agreements with other companies in the ordinary course of business, typically with business partners, contractors, customers, and landlords and (ii) its agreements with investors. Under these provisions, the Company generally indemnifies and holds harmless the indemnified party for losses suffered or incurred by the indemnified party as a result of the Company’s activities or, in some cases, as a result of the indemnified party’s activities under the agreement. These indemnification provisions often include indemnifications relating to representations made by the Company with regard to intellectual property rights. These indemnification provisions generally survive termination of the underlying agreement. The maximum potential amount of future payments the Company could be required to make under these indemnification provisions is unlimited. The Company has not incurred material costs to defend lawsuits or settle claims related to these indemnification agreements. Accordingly, the Company has no liabilities recorded for these agreements as of March 31, 2022 or December 31, 2021. The Company has agreed to indemnify its officers and directors to the fullest extent permitted by its amended and restated bylaws and the General Corporation Law of the State of Delaware for certain events or occurrences arising as a result of the officers or directors serving in such capacity. The coverage applies only to acts that occurred during the tenure of the officer or director and has an unlimited term. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is unlimited. The Company believes the estimated fair value of these indemnification agreements is minimal and has no liabilities recorded for these agreements as of March 31, 2022 or December 31, 2021. |
Business Combinations
Business Combinations | 3 Months Ended |
Mar. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Business Combinations | Business Combinations On June 30, 2021, the Company acquired 90.1% of the shares of common stock of Title365, an underwritten title insurance company engaged in the business of selling title insurance policies and escrow services throughout the United States, from Mr. Cooper Group Inc (“Mr. Cooper”). The Title365 acquisition will enable the Company’s customers to streamline the title, settlement, and closing process at scale for mortgages, home equity lines of credit, and home equity loans. The total purchase consideration was $417.7 million, of which $416.8 million was cash consideration. The preliminary purchase price allocation is as follows: June 30, 2021 Preliminary identifiable assets acquired and liabilities assumed (In thousands) Cash and cash equivalents $ 16,500 Trade and other receivables 13,848 Prepaid expenses and other current assets 7,906 Property and equipment, net 1,048 Operating lease right-of-use assets 3,520 Intangible assets 181,000 Restricted cash, non-current 335 Accounts payable (1,165) Accrued compensation (3,492) Other current liabilities (10,911) Operating lease liabilities, non-current (1,963) Other long-term liabilities (42,403) Net identifiable assets 164,223 Redeemable noncontrolling interest (33,748) Goodwill 287,228 Total purchase consideration $ 417,703 June 30, 2021 Fair value of consideration transferred (In thousands) Cash consideration $ 416,848 Fair value of replacement share-based payment awards 855 Total purchase consideration $ 417,703 The acquisition was accounted for as a business combination using the acquisition method of accounting in accordance with ASC 805, Business Combinations . The purchase price was allocated to the assets acquired and liabilities assumed based on the estimated fair values at the date of acquisition. The excess of the purchase price over the fair value of the net identifiable assets acquired was allocated to goodwill, which is not expected to be deductible for tax purposes. However, ASC 805-740-30-3 requires that changes in assumptions about the realizability of an acquirer's valuation allowance as a result of a business combination are recorded separately from the business combination accounting. The goodwill, which was recorded to the Title365 segment, predominantly arises due to synergies the Company expects to achieve through integration of Title365 with the Company’s existing software platform, enabling financial services firms to automate title commitments and streamline communication with consumers and settlement teams. The acquired intangible assets consist of the following: Fair Value Estimated Useful Life (In thousands) (In years) Customer relationships $ 179,000 11 Licenses 2,000 Indefinite Total intangible assets $ 181,000 Customer relationships represent the fair value of future projected revenue that will be derived from sales of products to existing customers of the Title365 business. The fair value of customer relationships was estimated using the multi-period excess earnings method. The significant assumptions used in the valuation included the estimated annual net cash flows expected to be generated from the acquired customer portfolio (including appropriate revenue and profit attributable to the asset, attrition curve, tax rate, contributory asset charges, among other factors) and the discount rate. The economic useful life was determined by evaluating several factors, including the estimated cash flows used in the valuation. Licenses represent intangible assets that legally entitle the Company to conduct business in certain states. The fair value of licenses was determined using the replacement cost method. The significant assumptions used in the valuation included the estimated employee costs and other costs per license application. Restricted cash consists of certificates of deposit maintained to comply with regulatory requirements. Other long-term liabilities represents the deferred tax liability resulting primarily from the allocation of a portion of the purchase consideration to non-deductible identifiable intangible assets. The redemption value of the noncontrolling interest is based on the greater of (1) $49.5 million plus an amount of interest calculated using an interest rate of 5.0% per annum compounding annually; or (2) 4.4 multiplied by the trailing 12-month EBITDA multiplied by the noncontrolling interest ownership percentage. As such, the fair value of the redeemable noncontrolling interest in Title365 was determined using a Monte Carlo simulation whereby a range of possible scenarios of future EBITDA was considered. In each scenario an analysis was performed to determine the optimal decision for the Company on the timing to exercise the call option. Based on the optimal decision in each simulation, the payoff was discounted to the acquisition date and the average of the discounted payoff across the simulation paths was determined to represent the fair value of the noncontrolling interest. The allocation of purchase price to acquired net identifiable assets is preliminary as the review of tax returns that provide the underlying tax basis of Title365 assets and liabilities is not yet complete, thus the provisional measurements of fair value of deferred tax liabilities set forth above are subject to change. The Company expects to finalize the allocation of the purchase price as soon as practical, but not later than one year from the acquisition date. Title365 revenue for three months ended March 31, 2022 was approximately $38.7 million, and Title365 net loss was approximately $3.2 million. Unaudited Pro Forma Financial Information The following unaudited pro forma information gives effect to the acquisition of Title365 as if it had been completed on January 1, 2021 (the beginning of the comparable prior reporting period). The pro forma financial information presented below is for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had taken place at the beginning of fiscal year 2021, nor does it attempt to represent the results of future operations of the combined entities under the ownership and operation of the Company. The pro forma results of operations also do not include any cost savings or other synergies that may result from this business combination or any estimated costs that have been or will be incurred by the Company to integrate the acquired assets. These pro forma results are based on estimates and assumptions, and include the business combination accounting effects resulting from the transaction, including the amortization charges from acquired intangible assets, employee retention costs, interest expense associated with the credit facility proceeds, which were utilized to partially fund the payment of the purchase consideration, and other purchase accounting adjustments and the related tax effects as though the Company and Title365 were combined as of the beginning of January 1, 2021. Three Months Ended March 31, 2022 2021 (In thousands) Revenues (1) $ 71,524 $ 99,662 Net loss $ (71,627) $ (19,109) Net (loss) income attributable to redeemable noncontrolling interest $ (220) $ 1,147 Net loss attributable to Blend Labs, Inc. $ (71,407) $ (20,256) (1) As part of the Company’s evaluation of Title365 accounting policies post-acquisition, Title365 revenue was adjusted to be presented net of insurance premiums paid to the underwriters, in accordance with Principal vs. Agent considerations included in ASC 606, Revenue Recognition. |
Debt Financing
Debt Financing | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Debt Financing | Debt Financing Debt consisted of the following: March 31, 2022 December 31, 2021 (In thousands) Term Loan - principal $ 225,000 $ 225,000 Term Loan - exit fee 4,500 4,500 Less: unamortized debt discounts and issuance costs (14,973) (15,657) Total debt $ 214,527 $ 213,843 On June 30, 2021, in connection with the closing of the acquisition of Title365, the Company entered into a credit agreement (the “Credit Agreement”), which provides for a $225.0 million senior secured term loan (the “Term Loan”) and a $25.0 million senior secured revolving credit facility (the “Revolving Facility”). The Revolving Facility includes $10.0 million sublimit for the issuance of letters of credit. The Revolving Facility also includes a swingline sub-facility (the “Swingline Facility”) that accommodates same-day borrowing of base rate loans. The sublimit for the Swingline Facility is $5.0 million. The Term Loan was fully drawn at closing to provide, in part, the cash consideration paid in connection with the acquisition of Title365. The Term Loan was funded and the cash consideration was transferred on July 1, 2021. The Revolving Facility remained available and undrawn as of March 31, 2022. The borrowings under the Term Loan and Revolving Facility accrue interest at a floating rate which can be, at the Company’s option, either (i) an adjusted LIBOR rate for a specified interest period plus an applicable margin of 7.50% or (ii) a base rate plus an applicable margin of 6.50%. The LIBOR rate applicable to the Term Loan and the Revolving Facility is subject to a floor of 1.00%, and the base rate is subject to a floor of 2.00%. The base rate for any day is a fluctuating rate per annum equal to the highest of (i) the federal funds effective rate in effect on such day, plus 0.50%, (ii) the rate of interest for such day as published in the Wall Street Journal as the “prime rate,” and (iii) the adjusted LIBOR rate for a one-month interest period, plus 1.00%. Interest is payable in cash on a quarterly basis. In addition to paying interest on amounts outstanding under the Term Loan and the Revolving Facility, the Company is required to pay a commitment fee of 0.50% per annum of the unused commitments under the Revolving Facility. The Company is also required to pay letter of credit fees, customary fronting fees, and other customary documentary fees in connection with the issuance of letters of credit. The Company incurred approximately $5.7 million of debt issuance costs in connection with the Term Loan, which have been deferred, and the remaining unamortized portion of these costs is presented as a reduction of long-term debt. Debt issuance costs related to the Revolving Facility amounted to $0.5 million, and the remaining unamortized portion of these costs is presented within other current assets on the unaudited condensed consolidated balance sheets. In connection with the Credit Agreement, the Company issued a Series G preferred stock warrant to purchase 598,431 shares of Class A common stock at an exercise price per share of $13.827822. The terms of the warrant agreement provide the holder with an option to net settle if the fair value of Class A common stock is greater than the exercise price. The net shares to be issued in a cashless exercise are based on the fair value of the Company’s Class A common stock at the time the warrant is exercised. As of March 31, 2022, the warrant has not been exercised. The warrant will expire 10 years from the issue date. The proceeds from the issuance of debt were allocated between the Term Loan and the warrant based on their relative fair values, resulting in a debt discount of approximately $6.8 million for the amount allocated to the warrant and accounted for as paid-in capital. Under the terms of the Credit Agreement, the lender is entitled to an exit fee in an amount equal to 2.00% of the signing date term facility commitment. The exit fee resulted in an additional debt discount of $4.5 million. The exit fee shall be due and payable on the earliest to occur: a) The maturity date of the Term Loan; b) The date on which all amounts then outstanding under the Term Loan are paid in full; c) The acceleration of the obligations with respect to the Term Loan for any reason; d) Any event of default as defined by the Term Loan; and e) Any repayment resulting from or in connection with a change of control. Including the impact of the deferred debt issuance costs and the debt discounts resulting from the exit fee and the warrant, the effective interest rate on the Term Loan was approximately 10.20%. Debt issuance costs, debt discounts, and the Revolving Facility issuance costs are being amortized as interest expense over the term of the Credit Agreement. The fair value of the Term Loan was approximately $221.1 million and $220.5 million as of March 31, 2022 and December 31, 2021, respectively, and is classified as Level 2 in the fair value hierarchy. The fair value of the Term Loan was measured by applying the income approach, which discounts the future contractual cash flows using a current risk-adjusted rate available to borrowers with similar credit ratings. The Term Loan and Revolving Facility will mature on June 30, 2026, and the full principal amount of each is due at maturity. No amortization payments are required with respect to either the Term Loan or the Revolving Facility. |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2022 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation 2012 Stock Option Plan Effective May 1, 2012, the Company adopted the 2012 Stock Plan (the “2012 Plan”). Options granted under the 2012 Plan may be either incentive stock options or nonqualified stock options. Incentive stock options (“ISOs”) may be granted only to employees (including officers and directors). Non-qualified stock options (“NSOs”) may be granted to employees and consultants. The exercise price of ISOs and NSOs shall not be less than 100% of the estimated fair value of the common shares on the date of grant, respectively, as determined by the Company’s board of directors. The exercise price of an ISO granted to a 10% or greater stockholder shall not be less than 110% of the estimated fair value of the common shares on the date of grant. Options generally vest over a period of four years. 2021 Equity Incentive Plan In July 2021, the Company’s board of directors adopted, and the Company’s stockholders approved, the 2021 Equity Incentive Plan (the “2021 Plan”), which became effective on July 14, 2021. The Company’s prior plan, 2012 Stock Option Plan (the “2012 Plan”), was terminated immediately prior to the effectiveness of the 2021 Plan with respect to the grant of future awards. The 2021 Plan provides for the grant of incentive stock options, within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”), to the Company’s employees and any parent and subsidiary corporations’ employees, and for the grant of nonstatutory stock options, stock appreciation rights, restricted stock, restricted stock units (“RSUs”), and performance awards to the Company’s employees, directors, and consultants and the Company’s parent and subsidiary corporations’ employees and consultants. Subject to the adjustment provisions of and the automatic increase described in the 2021 Plan, a total of 23,000,000 shares of the Company’s Class A common stock were reserved for issuance pursuant to the 2021 Plan, plus 36,101,718 shares of the Company’s Class A common stock reserved for future issuance under the 2012 Plan. Subject to the adjustment provisions of the 2021 Plan, the number of shares available for issuance under the 2021 Plan will also include an annual increase on the first day of each fiscal year beginning on January 1, 2022, equal to the least of (a) 34,500,000 shares of Class A common stock, (b) 5% of the total number of shares of all classes of the Company’s common stock outstanding on the last day our immediately preceding fiscal year, or (c) such other amount as the Company’s board of directors (or its committee) may determine. Options granted under the 2021 Plan vest over periods ranging from one A summary of the stock option activity is as follows: Number of Weighted Weighted Aggregate (In thousands) (In years) (In thousands) Balance as of December 31, 2021 31,675 $ 5.81 8.01 $ 108,826 Granted 378 $ 7.98 Exercised (1,654) $ 0.90 $ 7,984 Cancelled and forfeited (1,677) $ 10.20 Balance as of March 31, 2022 28,722 $ 5.86 7.65 $ 67,456 Vested and exercisable as of March 31, 2022 11,491 $ 3.00 6.60 $ 40,385 The weighted average grant-date fair value of options granted during the three months ended March 31, 2022 and 2021 was $3.68 and $7.20 per share, respectively. The total fair value of options vested during the three months ended March 31, 2022 and 2021 was $9.0 million and $2.5 million, respectively. The estimated grant date fair values of the employee stock options granted under the 2012 Plan and 2021 Plan were calculated using the Black-Scholes Merton Option pricing model, based on the following weighted average assumptions: Three Months Ended March 31, 2022 2021 Expected term (years) 5.28 6.07 Expected volatility 49.82% 32.86% Risk-free interest rate 1.82% 1.13% Expected dividend yield — — Risk-Free Interest Rate . The risk-free interest rate is based on U.S. treasury zero-coupon issues with remaining terms similar to the expected term of the options at the date of grant. Expected Term . The expected term represents the period that the Company’s share-based awards are expected to be outstanding. The Company applies the simplified method in determining the expected life of the stock options as the Company has limited historical basis upon which to determine historical exercise periods. Expected Dividend Yield . The Company has never declared or paid any cash dividends and does not plan to pay cash dividends in the foreseeable future, and, therefore, used an expected dividend yield of zero in the valuation model. Expected Volatility . Expected volatility of the stock is based on the average historical volatility of the Company’s peer group after consideration of their size, maturity, profitability, growth, risk, and return on investment as the Company has limited historical volatility. Fair Value . Prior to the IPO, the Company’s board of directors and in part based upon a valuation provided by a third-party valuation firm, determined the fair value of the Company’s common stock in connection with the grant of stock options and stock awards. Due to there being no public market for the Company’s common stock, its board of directors considered the third-party valuation and other factors, including but not limited to, secondary sales of the Company’s common stock, revenue growth, the current status of its operations, its financial condition, its stage of development, and its competition to establish the fair market value of the Company’s common stock at the time of grant of the stock option or stock award. For grants issued subsequent to the Company’s IPO, the Company used the closing market price of its stock on the date of grant. As of March 31, 2022, the total unrecognized stock-based compensation expense for stock options issued under the 2012 Plan and the 2021 Plan was approximately $61.1 million, which is expected to be recognized over a weighted average period of 2.6 years. Early Exercise of Common Stock Options The Company’s board of directors has authorized certain stock option holders to exercise unvested options to purchase shares of Class A common stock. Shares received from such early exercises are subject to repurchase in the event of the optionee’s termination of service as a service provider (as defined in the 2012 Plan and the 2021 Plan), at the lower of the fair market value on the date of the repurchase or the original exercise price, until the options are fully vested. As of March 31, 2022 and December 31, 2021, 1,187,869 and 1,819,558 shares of Class A common stock were subject to repurchase. As of March 31, 2022 and December 31, 2021, the cash proceeds received for unvested shares of Class A common stock presented within other long-term liabilities in the unaudited condensed consolidated balance sheets were $4.5 million and $7.0 million, respectively. Restricted Stock Units A summary of the Company’s RSU activity and related information is as follows: Number of RSUs Weighted (In thousands) Balance as of December 31, 2021 2,589 $ 8.91 Granted 6,259 $ 8.35 Vested (523) $ 8.79 Cancelled and forfeited (313) $ 9.07 Balance as of March 31, 2022 8,012 $ 8.47 As of March 31, 2022, there was $58.4 million of unrecognized stock-based compensation expense related to unvested RSUs, which is expected to be recognized over a weighted average period of 0.8 year. RSUs granted under the 2021 Plan generally vest quarterly over a period of one year from the grant date. The total fair value of RSUs vested during the three months ended March 31, 2022 was $4.7 million. Performance Stock Award In March 2022, the Company’s board of directors granted a performance stock award that provides for the issuance of up to 125,732 shares of Class A common stock that will vest in February 2023 upon satisfaction of a performance condition. As of March 31, 2022, the Company believes it is probable that the performance condition will be satisfied and estimates that 40,888 shares will vest. The expense recognized for the three months ended March 31, 2022 was not material. Non-Plan Co-Founder and Head of Blend Options In March 2021, the Company’s board of directors granted to its Co-Founder and Head of Blend a stand-alone stock option issued outside of the 2012 Plan covering a maximum of 26,057,181 shares of Class B common stock with an exercise price of $8.58 per share. The award has a 15-year term (subject to earlier termination when shares subject to the award are no longer eligible to vest) and vests upon the satisfaction of a service condition, liquidity event-related performance condition, and performance-based market conditions. The terms of the award stipulated that if an IPO is completed within 15 months of the date of grant, the first tranche of 1,954,289 shares will vest. The remaining tranches of shares will vest dependent on performance goals tied to the Company’s stock price hurdles with specified expiration dates for each tranche. On June 30, 2021, the Company’s board of directors approved a modification to the Co-Founder and Head of Blend award related to market-based performance targets that impact the Company stock price hurdles. The impact of the modification did not result in stock-based compensation expense as of the modification date as the satisfaction of the IPO performance condition was not probable at that time. The estimated fair value of the first tranche as of the modification date was determined using Black-Scholes Merton Option pricing model, which resulted in fair value of $12.27 per share based on the following assumptions: Fair value of common stock $18.00 Expected term (years) 7.44 Expected volatility 45.00% Risk-free interest rate 1.71% Expected dividend yield — The remaining tranches were valued using a Monte Carlo simulation model. The weighted average estimated fair value of the remaining tranches as of the modification date was $3.80 per share based on the following assumptions: Fair value of common stock $18.00 Remaining contractual term (years) 14.75 Expected volatility 40.00% Risk-free interest rate 1.71% Expected dividend yield — In July 2021, the first tranche of 1,954,289 shares of the Co-Founder and Head of Blend stock option award vested upon completion of the IPO. The total stock-based compensation expense recognized for this award for the three months ended March 31, 2022 was $4.8 million. No expense was recorded for the three months ended March 31, 2021 because the satisfaction of the IPO performance condition was not yet probable. The total unrecognized compensation expense related to the award for all tranches was $41.1 million as of March 31, 2022, which will be recognized over an estimated weighted average remaining period of 3.3 years. Stock-Based Compensation Expense The Company’s stock-based compensation expense was as follows: Three Months Ended March 31, 2022 2021 (In thousands) Cost of revenue $ 493 $ 58 Research and development 9,866 1,386 Sales and marketing 2,523 1,373 General and administrative 11,430 1,199 Total $ 24,312 $ 4,016 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income TaxesThe Company recorded a benefit for income taxes of $2.8 million for the three months ended March 31, 2022 consisting of a $2.9 million deferred tax benefit resulting from an adjustment to the valuation allowance and a current tax expense of $67 thousand consisting of state and foreign income taxes. The Company recorded a provision for income taxes of $10 thousand for the three months ended March 31, 2021, consisting primarily of U.S. state income taxes. The Company reassessed the ability to realize deferred tax assets by considering the available positive and negative evidence. As of March 31, 2022, the Company concluded that its net deferred tax assets are not more-likely-than-not to be realized and maintained a full valuation allowance against such net deferred tax assets. Primarily as a result of changes in U.S. tax law requiring capitalization and amortization of research and development costs for tax purposes, the Company reduced its valuation allowance by $2.9 million resulting in a corresponding reduction in the net deferred tax liability as of March 31, 2022. As of March 31, 2022, the Company files tax returns in the U.S. federal and various state jurisdictions. Due to the Company’s U.S. net operating loss carryforwards, its income tax returns generally remain subject to examination by federal and most state tax authorities. Beginning in 2022, the Company’s subsidiary files income taxes returns in India which are subject to examination by tax authorities in India. |
Net Loss Per Share
Net Loss Per Share | 3 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | Net Loss Per Share The Company computes net loss per share using the two-class method required for multiple classes of common stock. The Company has three classes of authorized common stock for which voting rights differ by class. Basic net loss per share is computed by dividing net loss attributable to each class of stockholders by the weighted average number of shares of stock outstanding during the period, adjusted for options early exercised and subject to repurchase. For the calculation of diluted net loss per share, net loss per share attributable to the Company for basic net loss per share is adjusted by the effect of dilutive securities, including awards issued under the Company’s equity compensation plans. Diluted net loss per share attributable to the Company is computed by dividing the resulting net loss attributable to the Company by the weighted average number of fully diluted common shares outstanding. In connection with the IPO, upon the effectiveness of the filing of the Amended and Restated Certificate of Incorporation, all shares of the Company’s pre-IPO Class A common stock were reclassified as Class B common stock and all shares of the Company’s pre-IPO Class B common stock were reclassified as Class A common stock. All weighted average common stock outstanding and net loss per share amounts presented within these unaudited condensed consolidated financial statements have been adjusted to reflect this reclassification on a retroactive basis for all periods presented. The following table presents the calculation of basic and diluted net loss per share for Class A and Class B common stock. No shares of Class C common stock were issued and outstanding during the periods presented. Three Months Ended March 31, 2022 2021 Class A Class B Class A Class B (In thousands, except per share data) Numerator: Net loss attributable to Blend Labs, Inc. $ (68,149) $ (3,955) $ (18,039) $ (9,028) Less: accretion of RNCI to redemption value (1,363) (79) — — Net income (loss) attributable to Blend Labs, Inc common stockholders $ (69,512) $ (4,034) $ (18,039) $ (9,028) Denominator: Weighted average common stock outstanding, basic and diluted 217,696 12,633 30,051 15,039 Net loss per share attributable to Blend Labs, Inc.: Basic and diluted $ (0.32) $ (0.32) $ (0.60) $ (0.60) The following potential shares of common stock were excluded from the computation of diluted net earnings per share attributable to the Company for the periods presented because including them would have been antidilutive as the Company has reported net loss for each of the periods presented: As of March 31, 2022 2021 (In thousands) Outstanding stock options 28,722 34,716 Early exercised options subject to repurchase 1,188 748 Options exercised via promissory note — 4,000 Non-plan Co-Founder and Head of Blend options 26,057 26,057 Unvested restricted stock units 8,012 — Unvested performance stock award 126 — Common stock warrants 598 — Convertible preferred stock warrants — 1,270 Founders convertible preferred stock — 692 Convertible preferred stock — 146,181 Total antidilutive securities 64,703 213,664 |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2022 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information The Company’s operating segments are defined in a manner consistent with how the Company manages its operations and how the Company’s Chief Operating Decision Maker (“CODM”) evaluates the results and allocates the Company’s resources. Segment profit, which is the measure used by the Company’s CODM to evaluate the performance of and allocate resources to its segments, is calculated as segment revenue less segment cost of revenue. The Company does not evaluate performance or allocate resources based on segment assets, and therefore, such information is not presented. The following table provides information about each reportable segment: Three Months Ended March 31, 2022 2021 (in thousands) Segment revenue: Blend Platform $ 32,793 $ 31,875 Title365 38,731 — Total revenue $ 71,524 $ 31,875 Segment gross profit: Blend Platform $ 18,591 $ 21,015 Title365 10,278 — Total gross profit 28,869 21,015 Operating expenses: Research and development 35,106 17,074 Sales and marketing 22,341 15,865 General and administrative 37,102 15,283 Amortization of acquired intangible assets 4,068 — Total operating expenses 98,617 48,222 Loss from operations (69,748) (27,207) Interest expense (5,558) — Other income (expense), net 91 150 Loss before income taxes $ (75,215) $ (27,057) |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent EventsIn April 2022, the Company committed to a workforce reduction plan (the “Plan”) as part of its broader efforts to improve cost efficiency and better align its operating structure with its business activities. The focus of the Plan is on streamlining the Company’s title operations as well as its general and administrative functions. The Plan includes the elimination of approximately 200 positions across the Company, or approximately 10% of the Company’s current workforce. The Company estimates that it will incur approximately $6.7 million in charges in connection with the Plan, including approximately $6.5 million in cash expenditures for employee benefits, severance payments, payroll taxes and related facilitation costs and approximately $0.2 million in stock-based compensation. The Company expects that execution of the Plan, including cash payments, will be substantially complete in the second quarter of 2022. In addition to the elimination of certain positions, the Company is implementing non-personnel related cost reductions. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation, Principles of Consolidation, and Use of Estimates The accompanying unaudited condensed consolidated balance sheets as of March 31, 2022 and December 31, 2021, the unaudited condensed consolidated statements of operations and comprehensive loss for the three months ended March 31, 2022 and 2021, the unaudited condensed consolidated statements of redeemable noncontrolling interest and stockholders’ equity for the three months ended March 31, 2022 and 2021, and the unaudited condensed consolidated statements of cash flows for the three months ended March 31, 2022 and 2021 reflect all adjustments that are of a normal, recurring nature and that are considered necessary for a fair presentation of the results for the periods shown in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and the applicable rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”) for interim financial reporting periods. Accordingly, certain information and footnote disclosures have been condensed or omitted that would ordinarily be required under U.S. GAAP for complete financial statements. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. |
Principles of Consolidation | The accompanying unaudited condensed consolidated financial statements include the accounts of Blend Labs, Inc. and its subsidiaries in which the Company holds a controlling financial interest. Noncontrolling interest represents the minority stockholder’s share of the net income and equity in a consolidated subsidiary. All intercompany balances and transactions have been eliminated in consolidation. |
Use of Estimates | The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make, on an ongoing basis, estimates and assumptions that affect the amounts reported in the consolidated financial statements and the notes thereto. Actual results may differ from those estimates. Such estimates include, but are not limited to, estimates of variable consideration, estimates of standalone selling prices of performance obligations in customer contracts with multiple performance obligations, evaluation of contingencies, evaluation of collectability of accounts receivable, determination of reserves for title and escrow losses, determination of period of benefit for deferred contract costs, determination of the incremental borrowing rates used in calculations of lease liabilities, determination of fair value of stock-based compensation, determination of fair value of warrants, valuation of deferred tax assets, valuation of acquired intangible assets, valuation of the redeemable noncontrolling interest, determination of useful lives of tangible and intangible assets, and assessment of impairment of goodwill and intangible assets. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company places its cash with high credit quality and federally insured institutions. Cash with any one institution may be in excess of federally insured limits. The Company has not experienced any losses in such accounts and management believes the exposure to credit risk is not significant. The Company considers all highly liquid investments with an original maturity date of three months or less at the time of purchase to be cash equivalents. As of March 31, 2022 and December 31, 2021, cash and cash equivalents consisted of cash, money market accounts, and highly liquid investments. The carrying amounts reported in the consolidated balance sheets for cash and cash equivalents approximate fair value due to the short-term nature of the maturities. |
Restricted Cash | Restricted CashThe Company has classified cash that is not available for use in its operations as restricted cash. Restricted cash consists primarily of collateral for letters of credit related to security deposits for the Company’s office facility lease arrangements. |
Escrow or Trust Funds | Escrow or Trust Funds The Company administers escrow and trust deposits held at third-party financial institutions representing funds received under real estate contracts, escrowed funds received under escrow agreements, and undisbursed amounts received for settlement of mortgage and home equity loans. Cash held by the Company for these purposes was approximately $21.1 million, net of outstanding checks in transit of $56.4 million as of March 31, 2022. Cash held by the Company for these purposes was approximately $27.0 million, net of outstanding checks in transit of $56.2 million as of December 31, 2021. These funds are not considered assets of the Company and, therefore, are not included in the accompanying unaudited condensed consolidated balance sheets; however, the Company remains contingently liable for the disposition of these funds on behalf of its customers. |
Trade and Other Receivables and Credit Loss Reserves | Trade and Other Receivables and Credit Loss Reserves The Company reports trade and other receivables net of the allowance for credit losses, in accordance with Accounting Standards Codification (“ASC”) 326, Financial Instruments—Credit Losses |
Concentrations of Credit Risk and Significant Customers | Concentrations of Credit Risk and Significant Customers Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents, restricted cash, marketable securities, and trade accounts receivable. The Company maintains its cash equivalents primarily in money market funds and highly liquid investments that are issued or guaranteed by the United States government or its agencies. Collateral is not required for trade accounts receivable. |
Cloud Computing Arrangements | Cloud Computing Arrangements The Company capitalizes certain implementation costs incurred under cloud computing arrangements that are service contracts. Capitalized costs incurred during the application development stage related to the implementation of the hosting arrangements were $1.1 million as of March 31, 2022, of which $0.7 million is presented within prepaid expenses and other current assets, and $0.4 million is presented within other non-current assets on the unaudited condensed consolidated balance sheets. Capitalized costs incurred during the application development stage related to the implementation of the hosting arrangements were $0.7 million as of December 31, 2021, of which $0.3 million is presented within prepaid expenses and other current assets, and $0.4 million is presented within other non-current assets on the unaudited condensed consolidated balance sheets. Amortization of capitalized implementation costs is recognized on a straight-line basis over the term of the associated hosting arrangement when it is ready for its intended use. Costs related to preliminary project activities and post-implementation activities are expensed as incurred. |
Title and Escrow Loss Reserve | Title and Escrow Loss Reserve In the Title365 segment, the Company performs title insurance services and issues a title insurance policy as an agent for a third-party title insurance underwriter. The Company pays part of the title insurance policy fee charged to its customers to the third-party title insurance underwriter as compensation for accepting the risk associated with issuing the title policy. The Company may incur a loss if it does not follow the guidelines outlined in the agency agreements, and in the state of California, the Company is obligated to reimburse the insurance company for up to the first $5,000 in losses related to a claim on a policy issued through Title365. Reserves for estimated future losses on policies issued are established at the time the title insurance revenue is recognized in accordance with ASC 450, Contingencies , and are based on claim loss history, industry trends, legal environment, geographic considerations, and the type of title insurance policies written. As of March 31, 2022 and December 31, 2021, title and escrow loss reserves were $1.6 million, of which $0.2 million is presented within other current liabilities and $1.4 million is presented within other non-current liabilities on the unaudited condensed consolidated balance sheets. |
Redeemable Noncontrolling Interest | Redeemable Noncontrolling Interest The Company’s 90.1% ownership of Title365 results in recognition of 9.9% noncontrolling interest, which represents the minority stockholder’s share of the net income and equity in Title365. The Title365 stockholders agreement includes a provision whereby the Company has a call option to purchase the 9.9% noncontrolling interest at a purchase price equal to the greater of (1) $49.5 million plus an amount of interest calculated using an interest rate of 5.0% per annum compounding annually; or (2) 4.4 multiplied by the trailing 12-month EBITDA multiplied by the noncontrolling interest ownership percentage (the “Title365 Call Option”). The Title365 Call Option is exercisable beginning 2 years following the acquisition closing date. The noncontrolling interest holder also holds an option to compel the Company to purchase the remaining 9.9% noncontrolling interest at a price calculated in the same manner as the Title365 Call Option (the “Title365 Put Option”). The Title365 Put Option is exercisable beginning 5 years following the acquisition closing date. Neither the Title365 Call Option nor the Title365 Put Option have an expiration date. As the Title365 Put Option is not solely within the Company’s control, the Company classified this interest as redeemable noncontrolling interest (“RNCI”) within the mezzanine equity section of the unaudited condensed consolidated balance sheets. The RNCI is accreted to the redemption value under the interest method from the acquisition date through the date the Title365 Put Option becomes exercisable. At each balance sheet date, the RNCI is reported at the greater of the initial carrying amount adjusted for the RNCI's share of earnings or losses and other comprehensive income or loss, or its accreted redemption value. The changes in the redemption amount are recorded with corresponding adjustments against retained earnings or, in the absence of retained earnings, additional paid-in-capital. For each reporting period, the entire periodic change in the redemption amount is reflected in the computation of net loss per share under the two-class method as being akin to a dividend. As of March 31, 2022, the redemption amount of the Title365 Put Option as if it was currently redeemable was $51.4 million. |
Recently Issued Accounting Standards Not Yet Adopted | Recently Issued Accounting Standards Not Yet Adopted In March 2020, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2020-04, Reference Rate Reform (Topic 848) , with amendments in 2021. This update provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions affected by the discontinuation of London Interbank Offered Rate (“LIBOR”) or by another reference rate expected to be discontinued. The guidance in ASU 2020-04 is optional and may be elected over time as reference rate reform activities occur. The Company is currently evaluating the impact this ASU will have on its consolidated financial statements. In August 2020, the FASB issued ASU No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40) . The guidance simplifies the accounting for convertible debt instruments and convertible preferred stock by removing the existing guidance in ASC 470-20 that requires entities to account for beneficial conversion features and cash conversion features in equity separately from the host convertible debt or preferred stock. The guidance is effective for the Company for annual reporting periods, and interim reporting periods within those annual periods, beginning January 1, 2024. ASU 2020-06 should be applied on a full or modified retrospective basis and early adoption is permitted. The Company is currently evaluating the impact this ASU will have on its consolidated financial statements. In October 2021, the FASB issued ASU No. 2021-18, Business Combinations: Accounting for Contract Assets and Contract Liabilities with Customers (Topic 805) . This guidance requires an acquirer in a business combination to use principles in ASC 606 to recognize and measure contract assets and liabilities rather than fair value. The guidance is effective for the Company for annual reporting periods, and interim reporting periods within those annual periods, beginning January 1, 2023. ASU 2021-18 should be applied retrospectively to all business combinations that have occurred since the beginning of the annual period that includes the interim period of adoption. The Company is currently evaluating the impact this ASU will have on its consolidated financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Schedules of Concentration of Credit Risk | The following customers, which generate revenue in both Blend Platform and Title365 segments, comprised 10% or more of the Company’s revenue for the following periods. Three Months Ended March 31, Customer 2022 2021 A N/A 1 13% B 36% N/A 1 (1) revenue from this customer did not exceed 10% for the period presented The following customers comprised 10% or more of the Company’s trade and unbilled receivables: Customer March 31, 2022 December 31, 2021 A 10% N/A 1 B 31% 29% (1) trade and unbilled receivable balance from this customer did not exceed 10% as of the date presented |
Revenue Recognition and Contr_2
Revenue Recognition and Contract Costs (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenue | The following table provides information about disaggregated revenue by service offering: Three Months Ended March 31, 2022 2021 (In thousands) Blend Platform revenue: Mortgage Banking $ 24,484 $ 26,435 Consumer Banking and Marketplace 7,187 4,648 Professional Services 1,122 792 Total Blend Platform revenue 32,793 31,875 Title365 revenue 38,731 — Total revenue $ 71,524 $ 31,875 |
Schedule of Contract Balances | The following table provides information about contract assets and contract liabilities from contracts with customers: Contract Accounts Balance Sheet Line Reference As of March 31, 2022 As of December 31, 2021 (In thousands) Contract assets—current Prepaid expenses and other current assets $ 2,559 $ 5,359 Contract liabilities—current Deferred revenue, current $ (14,172) $ (8,068) |
Schedule of Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | The expected timing of recognizing revenue for the transaction price allocated to the remaining performance obligations as of March 31, 2022 was as follows: (In thousands) Within one year $ 36,733 More than one year 27,851 Total transaction price allocated to the remaining performance obligations $ 64,584 |
Investments in Marketable Sec_2
Investments in Marketable Securities and Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Available For Sale Securities | The carrying amount, unrealized gain and loss, and fair value of investments in marketable securities by major security type were as follows: March 31, 2022 Amortized Gross Gross Fair Value Fair Value Hierarchy (In thousands) Cash equivalents: Money market funds $ 2,572 $ — $ — $ 2,572 Level 1 Commercial paper 2,898 — — 2,898 Level 2 Total cash equivalents 5,470 — — 5,470 Marketable securities: U.S. treasury and agency securities 270,719 — (2,506) 268,213 Level 2 Commercial paper 26,026 1 (12) 26,015 Level 2 Debt securities 32,612 — (126) 32,486 Level 2 Certificates of deposit 5,000 — — 5,000 Level 2 Total marketable securities 334,357 1 (2,644) 331,714 Restricted cash, non-current: Certificates of deposit 335 — — 335 Level 2 Total $ 340,162 $ 1 $ (2,644) $ 337,519 December 31, 2021 Amortized Gross Gross Fair Value Fair Value Hierarchy (In thousands) Cash equivalents: Money market funds $ 2,357 $ — $ — $ 2,357 Level 1 Commercial paper 2,150 — — 2,150 Level 2 Total cash equivalents 4,507 — — 4,507 Marketable securities: U.S. treasury and agency securities 269,393 — (745) 268,648 Level 2 Commercial paper 27,187 — (7) 27,180 Level 2 Debt securities 33,366 — (47) 33,319 Level 2 Certificates of deposit 5,000 — — 5,000 Level 2 Total marketable securities 334,946 — (799) 334,147 Restricted cash, non-current: Certificates of deposit 335 — — 335 Level 2 Total $ 339,788 $ — $ (799) $ 338,989 The following table summarizes the stated maturities of the Company’s marketable securities: March 31, 2022 December 31, 2021 (In thousands) Due within one year $ 331,714 $ 202,895 Due after one year through two years — 131,252 Total marketable securities $ 331,714 $ 334,147 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Indefinite-Lived Intangible Assets | Intangible assets consisted of the following: March 31, 2022 Weighted Average Remaining Amortization Gross Amount Accumulated Amortization Net Book Value (In Years) (In thousands) Intangible assets subject to amortization: Acquired customer relationships 10.3 $ 179,000 $ (12,205) $ 166,795 Internally developed software — 11,391 (11,391) — Domain name 9.3 210 (70) 140 Total finite-lived intangible assets, net 10.2 190,601 (23,666) 166,935 Indefinite-lived intangible assets: Acquired licenses 2,000 — 2,000 Total intangible assets, net $ 192,601 $ (23,666) $ 168,935 December 31, 2021 Weighted Average Remaining Amortization Gross Amount Accumulated Amortization Net Book Value (In Years) (In thousands) Intangible assets subject to amortization: Acquired customer relationships 10.5 $ 179,000 $ (8,136) $ 170,864 Internally developed software — 11,391 (11,391) — Domain name 9.5 210 (66) 144 Total finite-lived intangible assets, net 10.5 190,601 (19,593) 171,008 Indefinite-lived intangible assets: Acquired licenses 2,000 — 2,000 Total intangible assets, net $ 192,601 $ (19,593) $ 173,008 |
Schedule of Finite-Lived Intangible Assets | Intangible assets consisted of the following: March 31, 2022 Weighted Average Remaining Amortization Gross Amount Accumulated Amortization Net Book Value (In Years) (In thousands) Intangible assets subject to amortization: Acquired customer relationships 10.3 $ 179,000 $ (12,205) $ 166,795 Internally developed software — 11,391 (11,391) — Domain name 9.3 210 (70) 140 Total finite-lived intangible assets, net 10.2 190,601 (23,666) 166,935 Indefinite-lived intangible assets: Acquired licenses 2,000 — 2,000 Total intangible assets, net $ 192,601 $ (23,666) $ 168,935 December 31, 2021 Weighted Average Remaining Amortization Gross Amount Accumulated Amortization Net Book Value (In Years) (In thousands) Intangible assets subject to amortization: Acquired customer relationships 10.5 $ 179,000 $ (8,136) $ 170,864 Internally developed software — 11,391 (11,391) — Domain name 9.5 210 (66) 144 Total finite-lived intangible assets, net 10.5 190,601 (19,593) 171,008 Indefinite-lived intangible assets: Acquired licenses 2,000 — 2,000 Total intangible assets, net $ 192,601 $ (19,593) $ 173,008 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | Total future amortization expense as of March 31, 2022 was as follows: (In thousands) Remainder of 2022 $ 12,216 2023 16,289 2024 16,289 2025 16,289 2026 16,289 Thereafter 89,563 Total future amortization expense $ 166,935 |
Significant Balance Sheet Com_2
Significant Balance Sheet Components (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Supplemental Balance Sheet Information [Abstract] | |
Schedule of Prepaid Expenses and Other Current Assets | Prepaid expenses and other current assets consisted of the following: March 31, 2022 December 31, 2021 (In thousands) Contract assets $ 2,559 $ 5,359 Deferred contract costs 4,229 4,564 Prepaid insurance 3,551 6,521 Prepaid other 8,601 7,743 Recording fee advances 4,651 4,243 Other current assets 4,234 3,283 Total prepaid expenses and other current assets $ 27,825 $ 31,713 |
Schedule of Property and Equipment, Net | Property and equipment, net, consisted of the following: March 31, 2022 December 31, 2021 (In thousands) Computer and software $ 4,413 $ 4,287 Furniture and fixtures 1,542 1,559 Leasehold improvements 5,068 4,940 Total property and equipment, gross 11,023 10,786 Accumulated depreciation and amortization (5,128) (4,631) Total property and equipment, net $ 5,895 $ 6,155 |
Other Current Liabilities | Other current liabilities consisted of the following: March 31, 2022 December 31, 2021 (In thousands) Accrued expenses $ 5,615 $ 5,798 Accrued interest 3,222 3,397 Accrued professional fees 4,402 3,085 Accrued connectivity fees 3,800 4,753 Operating lease liabilities, current portion 4,138 3,856 Payable to Title365 noncontrolling interest holder under transition services agreement 2,201 5,549 Other 886 1,224 Total other current liabilities $ 24,264 $ 27,662 |
Other Long-Term Liabilities | Other Long-Term Liabilities Other long-term liabilities consisted of the following: March 31, 2022 December 31, 2021 (In thousands) Deferred tax liabilities $ — $ 2,864 Early exercise liabilities 4,547 6,998 Payroll tax liabilities 1,513 1,457 Other liabilities 2,067 2,096 Total other long-term liabilities $ 8,127 $ 13,415 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Leases [Abstract] | |
Schedule of Maturities of Operating Lease Liabilities | As of March 31, 2022, maturities of operating lease liabilities were as follows: (In thousands) Remainder of 2022 $ 3,652 2023 5,525 2024 5,249 2025 3,744 2026 1,048 Thereafter 1,605 Total lease payments 20,823 Less: imputed interest (3,001) Total operating lease liabilities $ 17,822 |
Business Combinations (Tables)
Business Combinations (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The preliminary purchase price allocation is as follows: June 30, 2021 Preliminary identifiable assets acquired and liabilities assumed (In thousands) Cash and cash equivalents $ 16,500 Trade and other receivables 13,848 Prepaid expenses and other current assets 7,906 Property and equipment, net 1,048 Operating lease right-of-use assets 3,520 Intangible assets 181,000 Restricted cash, non-current 335 Accounts payable (1,165) Accrued compensation (3,492) Other current liabilities (10,911) Operating lease liabilities, non-current (1,963) Other long-term liabilities (42,403) Net identifiable assets 164,223 Redeemable noncontrolling interest (33,748) Goodwill 287,228 Total purchase consideration $ 417,703 |
Schedule of Business Acquisitions | June 30, 2021 Fair value of consideration transferred (In thousands) Cash consideration $ 416,848 Fair value of replacement share-based payment awards 855 Total purchase consideration $ 417,703 |
Schedule of Acquired Finite-Lived Intangible Assets by Major Class | The acquired intangible assets consist of the following: Fair Value Estimated Useful Life (In thousands) (In years) Customer relationships $ 179,000 11 Licenses 2,000 Indefinite Total intangible assets $ 181,000 |
Schedule of Acquired Indefinite-lived Intangible Assets by Major Class | The acquired intangible assets consist of the following: Fair Value Estimated Useful Life (In thousands) (In years) Customer relationships $ 179,000 11 Licenses 2,000 Indefinite Total intangible assets $ 181,000 |
Schedule of Pro Forma Information | The following unaudited pro forma information gives effect to the acquisition of Title365 as if it had been completed on January 1, 2021 (the beginning of the comparable prior reporting period). The pro forma financial information presented below is for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had taken place at the beginning of fiscal year 2021, nor does it attempt to represent the results of future operations of the combined entities under the ownership and operation of the Company. The pro forma results of operations also do not include any cost savings or other synergies that may result from this business combination or any estimated costs that have been or will be incurred by the Company to integrate the acquired assets. These pro forma results are based on estimates and assumptions, and include the business combination accounting effects resulting from the transaction, including the amortization charges from acquired intangible assets, employee retention costs, interest expense associated with the credit facility proceeds, which were utilized to partially fund the payment of the purchase consideration, and other purchase accounting adjustments and the related tax effects as though the Company and Title365 were combined as of the beginning of January 1, 2021. Three Months Ended March 31, 2022 2021 (In thousands) Revenues (1) $ 71,524 $ 99,662 Net loss $ (71,627) $ (19,109) Net (loss) income attributable to redeemable noncontrolling interest $ (220) $ 1,147 Net loss attributable to Blend Labs, Inc. $ (71,407) $ (20,256) (1) As part of the Company’s evaluation of Title365 accounting policies post-acquisition, Title365 revenue was adjusted to be presented net of insurance premiums paid to the underwriters, in accordance with Principal vs. Agent considerations included in ASC 606, Revenue Recognition. |
Debt Financing (Tables)
Debt Financing (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | Debt consisted of the following: March 31, 2022 December 31, 2021 (In thousands) Term Loan - principal $ 225,000 $ 225,000 Term Loan - exit fee 4,500 4,500 Less: unamortized debt discounts and issuance costs (14,973) (15,657) Total debt $ 214,527 $ 213,843 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Option Activity | A summary of the stock option activity is as follows: Number of Weighted Weighted Aggregate (In thousands) (In years) (In thousands) Balance as of December 31, 2021 31,675 $ 5.81 8.01 $ 108,826 Granted 378 $ 7.98 Exercised (1,654) $ 0.90 $ 7,984 Cancelled and forfeited (1,677) $ 10.20 Balance as of March 31, 2022 28,722 $ 5.86 7.65 $ 67,456 Vested and exercisable as of March 31, 2022 11,491 $ 3.00 6.60 $ 40,385 |
Schedule of Valuation Assumptions | The estimated grant date fair values of the employee stock options granted under the 2012 Plan and 2021 Plan were calculated using the Black-Scholes Merton Option pricing model, based on the following weighted average assumptions: Three Months Ended March 31, 2022 2021 Expected term (years) 5.28 6.07 Expected volatility 49.82% 32.86% Risk-free interest rate 1.82% 1.13% Expected dividend yield — — The estimated fair value of the first tranche as of the modification date was determined using Black-Scholes Merton Option pricing model, which resulted in fair value of $12.27 per share based on the following assumptions: Fair value of common stock $18.00 Expected term (years) 7.44 Expected volatility 45.00% Risk-free interest rate 1.71% Expected dividend yield — The remaining tranches were valued using a Monte Carlo simulation model. The weighted average estimated fair value of the remaining tranches as of the modification date was $3.80 per share based on the following assumptions: Fair value of common stock $18.00 Remaining contractual term (years) 14.75 Expected volatility 40.00% Risk-free interest rate 1.71% Expected dividend yield — |
Schedule of RSU Activity | A summary of the Company’s RSU activity and related information is as follows: Number of RSUs Weighted (In thousands) Balance as of December 31, 2021 2,589 $ 8.91 Granted 6,259 $ 8.35 Vested (523) $ 8.79 Cancelled and forfeited (313) $ 9.07 Balance as of March 31, 2022 8,012 $ 8.47 |
Schedule of Stock Based Compensation Expense | The Company’s stock-based compensation expense was as follows: Three Months Ended March 31, 2022 2021 (In thousands) Cost of revenue $ 493 $ 58 Research and development 9,866 1,386 Sales and marketing 2,523 1,373 General and administrative 11,430 1,199 Total $ 24,312 $ 4,016 |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share | The following table presents the calculation of basic and diluted net loss per share for Class A and Class B common stock. No shares of Class C common stock were issued and outstanding during the periods presented. Three Months Ended March 31, 2022 2021 Class A Class B Class A Class B (In thousands, except per share data) Numerator: Net loss attributable to Blend Labs, Inc. $ (68,149) $ (3,955) $ (18,039) $ (9,028) Less: accretion of RNCI to redemption value (1,363) (79) — — Net income (loss) attributable to Blend Labs, Inc common stockholders $ (69,512) $ (4,034) $ (18,039) $ (9,028) Denominator: Weighted average common stock outstanding, basic and diluted 217,696 12,633 30,051 15,039 Net loss per share attributable to Blend Labs, Inc.: Basic and diluted $ (0.32) $ (0.32) $ (0.60) $ (0.60) |
Schedule of Antidilutive Securities | The following potential shares of common stock were excluded from the computation of diluted net earnings per share attributable to the Company for the periods presented because including them would have been antidilutive as the Company has reported net loss for each of the periods presented: As of March 31, 2022 2021 (In thousands) Outstanding stock options 28,722 34,716 Early exercised options subject to repurchase 1,188 748 Options exercised via promissory note — 4,000 Non-plan Co-Founder and Head of Blend options 26,057 26,057 Unvested restricted stock units 8,012 — Unvested performance stock award 126 — Common stock warrants 598 — Convertible preferred stock warrants — 1,270 Founders convertible preferred stock — 692 Convertible preferred stock — 146,181 Total antidilutive securities 64,703 213,664 |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Segment Reporting [Abstract] | |
Schedule of Segment Information | The following table provides information about each reportable segment: Three Months Ended March 31, 2022 2021 (in thousands) Segment revenue: Blend Platform $ 32,793 $ 31,875 Title365 38,731 — Total revenue $ 71,524 $ 31,875 Segment gross profit: Blend Platform $ 18,591 $ 21,015 Title365 10,278 — Total gross profit 28,869 21,015 Operating expenses: Research and development 35,106 17,074 Sales and marketing 22,341 15,865 General and administrative 37,102 15,283 Amortization of acquired intangible assets 4,068 — Total operating expenses 98,617 48,222 Loss from operations (69,748) (27,207) Interest expense (5,558) — Other income (expense), net 91 150 Loss before income taxes $ (75,215) $ (27,057) |
Description of Business and B_2
Description of Business and Basis of Presentation (Details) $ / shares in Units, $ in Thousands | Jul. 20, 2021USD ($)vote$ / sharesshares | Mar. 31, 2022$ / sharesshares | Mar. 31, 2021USD ($) | Dec. 31, 2021$ / sharesshares | Jul. 19, 2021$ / sharesshares | Jun. 30, 2021 |
Subsidiary, Sale of Stock [Line Items] | ||||||
Issuance costs | $ | $ (10,400) | $ (299) | ||||
Common stock, shares authorized (in shares) | 3,000,000,000 | 3,000,000,000 | ||||
Preferred stock, shares authorized (in shares) | 200,000,000 | 200,000,000 | 200,000,000 | |||
Shares issued upon conversion per share (in shares) | 1 | |||||
Shares issued (in shares) | 232,400,000 | 230,324,000 | ||||
Shares outstanding (in shares) | 232,400,000 | 230,324,000 | ||||
Reverse stock split of its capital stock | 0.33 | |||||
Title365 | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Interest acquired | 90.10% | |||||
IPO | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Capital stock reserved for future issuance (in shares) | 3,200,000,000 | |||||
Class A Common Stock | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Par value (in dollars per share) | $ / shares | $ 0.00001 | $ 0.00001 | ||||
Proceeds from initial public offering, net of underwriters' fees and issuance costs | $ | $ 366,700 | |||||
Common stock, shares authorized (in shares) | 1,800,000,000 | 1,800,000,000 | 1,800,000,000 | |||
Shares issued in conversion of convertible preferred stock (in shares) | 146,872,568 | |||||
Shares issued (in shares) | 214,132,175 | 219,767,000 | 217,691,000 | |||
Shares outstanding (in shares) | 214,132,175 | 219,767,000 | 217,691,000 | |||
Voting rights | vote | 1 | |||||
Class A Common Stock | Founder And Head Of Blend | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Shares converted (in shares) | 12,883,331 | |||||
Class A Common Stock | IPO | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Number of shares sold (in shares) | 22,468,111 | |||||
Par value (in dollars per share) | $ / shares | $ 0.00001 | $ 0.00001 | ||||
Share price (in dollars per share) | $ / shares | $ 18 | |||||
Underwriting discounts and commissions expense | $ | $ (27,300) | |||||
Class B Common Stock | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Par value (in dollars per share) | $ / shares | $ 0.00001 | $ 0.00001 | ||||
Common stock, shares authorized (in shares) | 600,000,000 | 600,000,000 | 600,000,000 | |||
Shares converted (in shares) | 1 | |||||
Shares issued (in shares) | 12,883,331 | 12,633,000 | 12,633,000 | |||
Shares outstanding (in shares) | 12,883,331 | 12,633,000 | 12,633,000 | |||
Voting rights | vote | 40 | |||||
Class C Common Stock | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Par value (in dollars per share) | $ / shares | $ 0.00001 | $ 0.00001 | ||||
Common stock, shares authorized (in shares) | 600,000,000 | 600,000,000 | 600,000,000 | |||
Shares issued (in shares) | 0 | 0 | 0 | |||
Shares outstanding (in shares) | 0 | 0 | 0 | |||
Founders convertible preferred stock | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Shares issued (in shares) | 0 | |||||
Shares outstanding (in shares) | 0 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | Jun. 30, 2021 | |
Noncontrolling Interest [Line Items] | ||||
Restricted cash | $ 5,358 | $ 5,196 | $ 5,400 | |
Escrow deposits | 21,100 | 27,000 | ||
Escrow deposit net outstanding amount | 56,400 | 56,200 | ||
Reserve for credit loss | 1,700 | $ 1,400 | ||
Write off for credit losses | 300 | |||
Costs incurred, development costs | 1,100 | 700 | ||
Escrow loss reserves | 1,600 | |||
Redemption amount | 51,400 | |||
Prepaid Expenses and Other Current Assets | ||||
Noncontrolling Interest [Line Items] | ||||
Costs incurred, development costs | 700 | 300 | ||
Other Noncurrent Assets | ||||
Noncontrolling Interest [Line Items] | ||||
Costs incurred, development costs | 400 | $ 400 | ||
Other Current Liabilities | ||||
Noncontrolling Interest [Line Items] | ||||
Loss contingency accrual | 200 | |||
Other Noncurrent Liabilities | ||||
Noncontrolling Interest [Line Items] | ||||
Loss contingency accrual | $ 1,400 | |||
Insurance Company 1 | Revenue | Customer Concentration Risk | ||||
Noncontrolling Interest [Line Items] | ||||
Concentration risk percentage | 62.00% | |||
Insurance Company 2 | Revenue | Customer Concentration Risk | ||||
Noncontrolling Interest [Line Items] | ||||
Concentration risk percentage | 38.00% | |||
Title365 | ||||
Noncontrolling Interest [Line Items] | ||||
Interest acquired | 90.10% | |||
Title365 | ||||
Noncontrolling Interest [Line Items] | ||||
Ownership percentage | 9.90% | |||
Purchase price | $ 49,500 | |||
Interest rate | 5.00% | |||
EBITDA ratio | 4.4 | |||
EBITDA period | 12 months | |||
Title365 | Call Option | ||||
Noncontrolling Interest [Line Items] | ||||
Exercisable period | 2 years | |||
Title365 | Put Option | ||||
Noncontrolling Interest [Line Items] | ||||
Exercisable period | 5 years |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Concentrations of Credit Risk (Details) - Customer Concentration Risk | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Revenue | Customer A | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 13.00% | ||
Revenue | Customer B | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 36.00% | ||
Accounts Receivable | Customer A | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 10.00% | ||
Accounts Receivable | Customer B | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 31.00% | 29.00% |
Revenue Recognition and Contr_3
Revenue Recognition and Contract Costs - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 71,524 | $ 31,875 |
Blend Platform | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 32,793 | 31,875 |
Mortgage Banking | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 24,484 | 26,435 |
Consumer Banking and Marketplace | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 7,187 | 4,648 |
Professional Services | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 1,122 | 792 |
Title365 revenue | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 38,731 | $ 0 |
Revenue Recognition and Contr_4
Revenue Recognition and Contract Costs - Contract Balances (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |||
Contract assets—current | $ 2,559,000 | $ 5,359,000 | |
Contract liabilities—current | 14,172,000 | 8,068,000 | |
Contract assets - noncurrent | 0 | 0 | |
Contract liabilities - noncurrent | 0 | $ 0 | |
Revenue recognized | $ 4,400,000 | $ 6,900,000 | |
Revenue from performance obligations satisfied in previous periods | $ 5,600,000 |
Revenue Recognition and Contr_5
Revenue Recognition and Contract Costs - Remaining Performance Obligations (Details) $ in Thousands | Mar. 31, 2022USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligations | $ 64,584 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-04-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligations | $ 36,733 |
Remaining performance obligations, period | 9 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligations | $ 27,851 |
Remaining performance obligations, period | 1 year |
Revenue Recognition and Contr_6
Revenue Recognition and Contract Costs - Deferred Contract Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Capitalized Contract Cost [Line Items] | |||
Unamortized deferred contract costs | $ 7,500 | $ 8,700 | |
Unamortized deferred contract costs, current | 4,229 | 4,564 | |
Unamortized deferred contract costs, noncurrent | 3,326 | 4,178 | |
Amortization of deferred contract costs | 1,244 | $ 1,319 | |
Prepaid Expenses and Other Current Assets | |||
Capitalized Contract Cost [Line Items] | |||
Unamortized deferred contract costs, current | $ 4,200 | $ 4,500 |
Investments in Marketable Sec_3
Investments in Marketable Securities and Fair Value Measurements (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 | Mar. 31, 2021 |
Debt Securities, Available-for-sale [Line Items] | |||
Cash and cash equivalents | $ 167,666 | $ 213,082 | $ 352,311 |
Gross Unrealized Gain | 1 | 0 | |
Gross Unrealized Loss | (2,644) | (799) | |
Restricted cash | 5,358 | 5,400 | $ 5,196 |
Amortized Cost | 340,162 | 339,788 | |
Fair Value | 337,519 | 338,989 | |
Level 1 | Money market funds | |||
Debt Securities, Available-for-sale [Line Items] | |||
Cash and cash equivalents | 2,572 | 2,357 | |
Level 2 | Commercial paper | |||
Debt Securities, Available-for-sale [Line Items] | |||
Cash and cash equivalents | 2,898 | 2,150 | |
U.S. treasury and agency securities | Level 2 | |||
Debt Securities, Available-for-sale [Line Items] | |||
Amortized Cost | 270,719 | 269,393 | |
Gross Unrealized Gain | 0 | 0 | |
Gross Unrealized Loss | (2,506) | (745) | |
Fair Value | 268,213 | 268,648 | |
Commercial paper | Level 2 | |||
Debt Securities, Available-for-sale [Line Items] | |||
Amortized Cost | 26,026 | 27,187 | |
Gross Unrealized Gain | 1 | 0 | |
Gross Unrealized Loss | (12) | (7) | |
Fair Value | 26,015 | 27,180 | |
Debt securities | Level 2 | |||
Debt Securities, Available-for-sale [Line Items] | |||
Amortized Cost | 32,612 | 33,366 | |
Gross Unrealized Gain | 0 | 0 | |
Gross Unrealized Loss | (126) | (47) | |
Fair Value | 32,486 | 33,319 | |
Certificates of deposit | Level 2 | |||
Debt Securities, Available-for-sale [Line Items] | |||
Amortized Cost | 5,000 | 5,000 | |
Gross Unrealized Gain | 0 | 0 | |
Gross Unrealized Loss | 0 | 0 | |
Fair Value | 5,000 | 5,000 | |
Restricted cash | 335 | 335 | |
Cash equivalents: | |||
Debt Securities, Available-for-sale [Line Items] | |||
Cash and cash equivalents | 5,470 | 4,507 | |
Marketable securities: | |||
Debt Securities, Available-for-sale [Line Items] | |||
Amortized Cost | 334,357 | 334,946 | |
Gross Unrealized Gain | 1 | 0 | |
Gross Unrealized Loss | (2,644) | (799) | |
Fair Value | $ 331,714 | $ 334,147 |
Investments in Marketable Sec_4
Investments in Marketable Securities and Fair Value Measurements - Debt Maturities (Details) $ in Thousands | Mar. 31, 2022USD ($)numberOfInvestment | Dec. 31, 2021USD ($)numberOfInvestment |
Debt Securities, Available-for-sale [Line Items] | ||
Number of investment positions that are in an unrealized loss position | numberOfInvestment | 65 | 57 |
Interest receivable | $ 1,000 | $ 1,200 |
Marketable securities: | ||
Debt Securities, Available-for-sale [Line Items] | ||
Due within one year | 331,714 | 202,895 |
Due after one year through two years | 0 | 131,252 |
Total marketable securities | $ 331,714 | $ 334,147 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Finite-Lived Intangible Assets, Future Amortization Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Remaining Amortization | 10 years 2 months 12 days | 10 years 6 months |
Gross Amount | $ 190,601 | $ 190,601 |
Accumulated Amortization | (23,666) | (19,593) |
Net Book Value | 166,935 | 171,008 |
Total intangible assets, gross | 192,601 | 192,601 |
Total intangible assets, net | 168,935 | 173,008 |
Licenses | ||
Finite-Lived Intangible Assets [Line Items] | ||
Acquired licenses | $ 2,000 | $ 2,000 |
Acquired customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Remaining Amortization | 10 years 3 months 18 days | 10 years 6 months |
Gross Amount | $ 179,000 | $ 179,000 |
Accumulated Amortization | (12,205) | (8,136) |
Net Book Value | 166,795 | 170,864 |
Internally developed software | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Amount | 11,391 | 11,391 |
Accumulated Amortization | (11,391) | (11,391) |
Net Book Value | $ 0 | $ 0 |
Domain name | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Remaining Amortization | 9 years 3 months 18 days | 9 years 6 months |
Gross Amount | $ 210 | $ 210 |
Accumulated Amortization | (70) | (66) |
Net Book Value | $ 140 | $ 144 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization of acquired intangible assets | $ 4.1 | $ 0.5 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Finite-lived Intangible Assets Amortization Expense (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Remainder of 2022 | $ 12,216 | |
2023 | 16,289 | |
2024 | 16,289 | |
2025 | 16,289 | |
2026 | 16,289 | |
Thereafter | 89,563 | |
Net Book Value | $ 166,935 | $ 171,008 |
Significant Balance Sheet Com_3
Significant Balance Sheet Components - Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Supplemental Balance Sheet Information [Abstract] | ||
Contract assets | $ 2,559 | $ 5,359 |
Deferred contract costs | 4,229 | 4,564 |
Prepaid insurance | 3,551 | 6,521 |
Prepaid other | 8,601 | 7,743 |
Recording fee advances | 4,651 | 4,243 |
Other current assets | 4,234 | 3,283 |
Total prepaid expenses and other current assets | $ 27,825 | $ 31,713 |
Significant Balance Sheet Com_4
Significant Balance Sheet Components - Property and Equipment, Net (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Property, Plant and Equipment [Line Items] | |||
Total property and equipment, gross | $ 11,023 | $ 10,786 | |
Accumulated depreciation and amortization | (5,128) | (4,631) | |
Total property and equipment, net | 5,895 | 6,155 | |
Depreciation expense | 500 | $ 300 | |
Computer and software | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment, gross | 4,413 | 4,287 | |
Furniture and fixtures | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment, gross | 1,542 | 1,559 | |
Leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment, gross | $ 5,068 | $ 4,940 |
Significant Balance Sheet Com_5
Significant Balance Sheet Components - Note Receivable (Details) - USD ($) $ in Millions | 1 Months Ended | |
Jan. 31, 2021 | Mar. 31, 2022 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Potential merger consideration | $ 500 | |
Series Seed Preferred Stock | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Shares issuable in debt conversion (in shares) | 4,500,000 | |
Notes Receivable | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Account receivable | $ 3 | |
Interest rate | 2.00% | |
Term of receivable | 60 months |
Significant Balance Sheet Com_6
Significant Balance Sheet Components - Investments in Equity Securities (Details) $ in Millions | Sep. 30, 2021USD ($)shares |
Supplemental Balance Sheet Information [Abstract] | |
Equity method investment cost | $ | $ 2.5 |
Investment shares (in shares) | shares | 103,611 |
Significant Balance Sheet Com_7
Significant Balance Sheet Components - Other Current Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Supplemental Balance Sheet Information [Abstract] | ||
Accrued expenses | $ 5,615 | $ 5,798 |
Accrued interest | 3,222 | 3,397 |
Accrued professional fees | 4,402 | 3,085 |
Accrued connectivity fees | 3,800 | 4,753 |
Operating lease liabilities, current portion | 4,138 | 3,856 |
Payable to Title365 noncontrolling interest holder under transition services agreement | 2,201 | 5,549 |
Other | 886 | 1,224 |
Total other current liabilities | $ 24,264 | $ 27,662 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Total other current liabilities | Total other current liabilities |
Significant Balance Sheet Com_8
Significant Balance Sheet Components - Other Long-Term Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Supplemental Balance Sheet Information [Abstract] | ||
Deferred tax liabilities | $ 0 | $ 2,864 |
Early exercise liabilities | 4,547 | 6,998 |
Payroll tax liabilities | 1,513 | 1,457 |
Other liabilities | 2,067 | 2,096 |
Total other long-term liabilities | $ 8,127 | $ 13,415 |
Leases (Details)
Leases (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Leases [Abstract] | |||
Restricted cash related to lease obligations | $ 5 | $ 5 | |
Operating lease costs | 1.8 | $ 1.3 | |
Variable lease costs | $ 0.5 | 0.4 | |
Weighted average remaining operating lease term | 4 years | 4 years 3 months 18 days | |
Weighted average discount rate | 7.40% | 7.30% | |
Cash paid | $ 1.3 | $ 0.9 |
Leases - Maturities of Operatin
Leases - Maturities of Operating Lease Liabilities (Details) $ in Thousands | Mar. 31, 2022USD ($) |
Leases [Abstract] | |
Remainder of 2022 | $ 3,652 |
2023 | 5,525 |
2024 | 5,249 |
2025 | 3,744 |
2026 | 1,048 |
Thereafter | 1,605 |
Total lease payments | 20,823 |
Less: imputed interest | (3,001) |
Total operating lease liabilities | $ 17,822 |
Business Combinations - Narrati
Business Combinations - Narrative (Details) $ in Thousands | Jun. 30, 2021USD ($) | Mar. 31, 2022USD ($) |
Title365 | ||
Business Acquisition [Line Items] | ||
Purchase price | $ 49,500 | |
Interest rate | 5.00% | |
EBITDA ratio | 4.4 | |
EBITDA period | 12 months | |
Title365 | ||
Business Acquisition [Line Items] | ||
Interest acquired | 90.10% | |
Purchase consideration | $ 417,703 | |
Cash consideration | $ 416,848 | |
Net income from acquiree | $ 38,700 | |
Loss from acquiree | $ 3,200 |
Business Combinations - Assets
Business Combinations - Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 | Jun. 30, 2021 |
Business Acquisition [Line Items] | |||
Goodwill | $ 287,228 | $ 287,228 | |
Title365 | |||
Business Acquisition [Line Items] | |||
Cash and cash equivalents | $ 16,500 | ||
Trade and other receivables | 13,848 | ||
Prepaid expenses and other current assets | 7,906 | ||
Property and equipment, net | 1,048 | ||
Operating lease right-of-use assets | 3,520 | ||
Intangible assets | 181,000 | ||
Restricted cash, non-current | 335 | ||
Accounts payable | (1,165) | ||
Accrued compensation | (3,492) | ||
Other current liabilities | (10,911) | ||
Operating lease liabilities, non-current | (1,963) | ||
Other long-term liabilities | (42,403) | ||
Net identifiable assets | 164,223 | ||
Redeemable noncontrolling interest | (33,748) | ||
Goodwill | 287,228 | ||
Total purchase consideration | $ 417,703 |
Business Combinations - Fair Va
Business Combinations - Fair Value of Consideration Transferred (Details) - Title365 $ in Thousands | Jun. 30, 2021USD ($) |
Business Acquisition [Line Items] | |
Cash consideration | $ 416,848 |
Fair value of replacement share-based payment awards | 855 |
Total purchase consideration | $ 417,703 |
Business Combinations - Acquire
Business Combinations - Acquired Intangible Assets (Details) - Title365 $ in Thousands | Jun. 30, 2021USD ($) |
Business Acquisition [Line Items] | |
Total intangible assets | $ 181,000 |
Licenses | |
Business Acquisition [Line Items] | |
Indefinite-lived asset acquired | 2,000 |
Acquired customer relationships | |
Business Acquisition [Line Items] | |
Finite-lived asset acquired | $ 179,000 |
Finite-lived asset acquired, weighted average remaining useful live | 11 years |
Business Combinations - Pro For
Business Combinations - Pro Forma (Details) - Title365 - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Business Acquisition [Line Items] | ||
Revenues | $ 71,524 | $ 99,662 |
Net loss | (71,627) | (19,109) |
Net (loss) income attributable to redeemable noncontrolling interest | (220) | 1,147 |
Net loss attributable to Blend Labs, Inc. | $ (71,407) | $ (20,256) |
Debt Financing - (Details)
Debt Financing - (Details) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 | Jun. 30, 2021 |
Debt Instrument [Line Items] | |||
Total debt | $ 214,527,000 | $ 213,843,000 | |
Term Loan | Line of Credit | |||
Debt Instrument [Line Items] | |||
Term Loan - principal | 225,000,000 | 225,000,000 | $ 225,000,000 |
Term Loan - exit fee | 4,500,000 | 4,500,000 | |
Less: unamortized debt discounts and issuance costs | (14,973,000) | (15,657,000) | |
Total debt | $ 214,527,000 | $ 213,843,000 |
Debt Financing - Narrative (Det
Debt Financing - Narrative (Details) - USD ($) | Jun. 30, 2021 | Mar. 31, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | |||
Fair value of debt | $ 221,100,000 | $ 220,500,000 | |
Series G Preferred Stock | |||
Debt Instrument [Line Items] | |||
Number shares warrants can purchase (in shares) | 598,431 | ||
Exercise price of warrants (in dollars per share) | $ 13.827822 | ||
Expiration period | 10 years | ||
Line of Credit | |||
Debt Instrument [Line Items] | |||
Exit fee percentage | 2.00% | ||
Line of Credit | LIBOR | |||
Debt Instrument [Line Items] | |||
Variable rate | 7.50% | ||
Floor rate | 1.00% | ||
Line of Credit | Base Rate | |||
Debt Instrument [Line Items] | |||
Variable rate | 6.50% | ||
Floor rate | 2.00% | ||
Unused commitment fee percentage | 0.50% | ||
Line of Credit | Federal Funds Effective Rate | |||
Debt Instrument [Line Items] | |||
Variable rate | 0.50% | ||
Line of Credit | Term Loan | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | $ 225,000,000 | $ 225,000,000 | $ 225,000,000 |
Debt issuance costs | 5,700,000 | ||
Debt discount | 6,800,000 | ||
Fee amount | $ 4,500,000 | ||
Effective percentage | 10.20% | ||
Line of Credit | Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | 25,000,000 | ||
Debt issuance costs | 500,000 | ||
Line of Credit | Revolving Credit Facility | Letter Of Credit Sublimit | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | 10,000,000 | ||
Line of Credit | Revolving Credit Facility | Swingline Sub-Facility | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | $ 5,000,000 |
Stock-Based Compensation - 2012
Stock-Based Compensation - 2012 Stock Option Plan (Details) - 2012 Stock Plan | 3 Months Ended |
Mar. 31, 2022 | |
Outstanding stock options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Percentage of common stock value at grant date | 100.00% |
Vesting period | 4 years |
Incentive Stock Options | Minimum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Percentage of common stock value at grant date | 110.00% |
Stockholder percentage | 10.00% |
Stock-Based Compensation - 2021
Stock-Based Compensation - 2021 Equity Incentive Plan (Details) - shares | Jan. 01, 2022 | Jul. 31, 2021 |
2021 Equity Incentive Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares authorized (in shares) | 23,000,000 | |
Additional shares authorized (in shares) | 34,500,000 | |
Additional shares authorized as a percentage of outstanding common stock | 0.05 | |
2021 Equity Incentive Plan | Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period | 1 year | |
2021 Equity Incentive Plan | Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period | 4 years | |
2012 Stock Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares authorized (in shares) | 36,101,718 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Option Plan (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Weighted average exercise price | |||
Exercised | $ 7,984 | ||
Weighted average grant-date fair value of options granted (in dollars per share) | $ 3.68 | $ 7.20 | |
Vesting of early exercised stock options | $ 1,913 | $ 157 | |
2012 Stock Plan | |||
Number of options | |||
Beginning Balance (in shares) | 31,675,000 | ||
Granted (in shares) | 378,000 | ||
Exercised (in shares) | (1,654,000) | ||
Cancelled and forfeited (in shares) | (1,677,000) | ||
Ending Balance (in shares) | 28,722,000 | 31,675,000 | |
Vested and exercisable (in shares) | 11,491,000 | ||
Weighted average exercise price | |||
Beginning Balance (in dollars per share) | $ 5.81 | ||
Granted (in dollars per share) | 7.98 | ||
Vested (in dollars per share) | 0.90 | ||
Cancelled and forfeited (in dollars per share) | 10.20 | ||
Ending Balance (in dollars per share) | 5.86 | $ 5.81 | |
Vested and exercisable (in dollars per share) | $ 3 | ||
Weighted average remaining contractual life (years) | 7 years 7 months 24 days | 8 years 3 days | |
Weighted average remaining contractual life, vested and exercisable (years) | 6 years 7 months 6 days | ||
Aggregate intrinsic value | $ 67,456 | $ 108,826 | |
Aggregate intrinsic value, vested and exercisable | 40,385 | ||
2021 Equity Incentive Plan | |||
Weighted average exercise price | |||
Vesting of early exercised stock options | $ 9,000 | $ 2,500 |
Stock-Based Compensation - Valu
Stock-Based Compensation - Valuation Assumptions (Details) - $ / shares | Jun. 30, 2021 | Mar. 31, 2022 | Mar. 31, 2021 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected dividend yield | 0.00% | ||
2012 Stock Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vested and exercisable (in dollars per share) | $ 3 | ||
Stock Options | Non-employee | Tranche One | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected term (years) | 7 years 5 months 8 days | ||
Expected volatility | 45.00% | ||
Risk-free interest rate | 1.71% | ||
Expected dividend yield | 0.00% | ||
Vested and exercisable (in dollars per share) | $ 12.27 | ||
Fair value of common stock (in dollars per share) | $ 18 | ||
Stock Options | Non-employee | Tranche Two | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected term (years) | 14 years 9 months | ||
Expected volatility | 40.00% | ||
Risk-free interest rate | 1.71% | ||
Expected dividend yield | 0.00% | ||
Vested and exercisable (in dollars per share) | $ 3.80 | ||
Fair value of common stock (in dollars per share) | $ 18 | ||
Stock Options | 2012 Stock Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected term (years) | 5 years 3 months 10 days | 6 years 25 days | |
Expected volatility | 49.82% | 32.86% | |
Risk-free interest rate | 1.82% | 1.13% | |
Expected dividend yield | 0.00% | 0.00% |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Dec. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected dividend yield | 0.00% | |
Unrecognized compensation expense | $ 61.1 | |
Shares subject to repurchase obligation (in shares) | 1,187,869 | 1,819,558 |
Fair value of shares subject to repurchase obligation | $ 4.5 | $ 7 |
Stock Options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Unrecognized compensation expense, period of recognition | 2 years 7 months 6 days |
Stock-Based Compensation - RSU
Stock-Based Compensation - RSU Activity (Details) - Unvested restricted stock units - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 3 Months Ended |
Mar. 31, 2022 | |
Number of RSUs | |
Beginning Balance (in shares) | 2,589 |
Granted period (in shares) | 6,259 |
Vested (in shares) | (523) |
Cancelled and forfeited (in shares) | (313) |
Ending Balance (in shares) | 8,012 |
Weighted average grant date fair value per share | |
Beginning Balance (in dollars per share) | $ 8.91 |
Granted (in dollars per share) | 8.35 |
Vested (in dollars per share) | 8.79 |
Cancelled and forfeited (in dollars per share) | 9.07 |
Ending Balance (in dollars per share) | $ 8.47 |
Unrecognized compensation expense | $ 58.4 |
Unrecognized compensation expense, period of recognition | 9 months 18 days |
Vesting of early exercised stock options | $ 4.7 |
Stock-Based Compensation - Perf
Stock-Based Compensation - Performance Stock Award (Details) - Unvested performance stock award | 1 Months Ended |
Mar. 31, 2022shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
RSUs granted in period (in shares) | 125,732 |
Vesting of restricted stock units (in shares) | 40,888 |
Stock-Based Compensation - Non-
Stock-Based Compensation - Non-Plan Founder and Blend Options (Details) - USD ($) | 1 Months Ended | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | Jul. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock based compensation expense | $ 24,312,000 | $ 4,016,000 | ||
Unrecognized compensation expense | $ 61,100,000 | |||
Non-employee | Class B Common Stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Granted (in shares) | 26,057,181 | |||
Granted (in dollars per share) | $ 8.58 | |||
Non-employee | Class B Common Stock | Tranche One | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expected to vest (in shares) | 1,954,289 | |||
Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unrecognized compensation expense, period of recognition | 2 years 7 months 6 days | |||
Stock Options | Non-employee | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock based compensation expense | $ 4,800,000 | $ 0 | ||
Unrecognized compensation expense | $ 41,100,000 | |||
Unrecognized compensation expense, period of recognition | 3 years 3 months 18 days | |||
Stock Options | Non-employee | Class B Common Stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 15 years | |||
Performance period | 15 months |
Stock-Based Compensation - St_2
Stock-Based Compensation - Stock Based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Stock based compensation expense | $ 24,312 | $ 4,016 |
Cost of revenue | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Stock based compensation expense | 493 | 58 |
Research and development | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Stock based compensation expense | 9,866 | 1,386 |
Sales and marketing | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Stock based compensation expense | 2,523 | 1,373 |
General and administrative | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Stock based compensation expense | $ 11,430 | $ 1,199 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
Income tax expense (benefit) | $ 2,797 | $ (10) |
Deferred tax benefit | (2,864) | $ 0 |
Current tax expense | $ 67 |
Net Loss Per Share - Schedule o
Net Loss Per Share - Schedule of EPS (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||
Net loss attributable to Blend Labs, Inc. | $ (72,104) | $ (27,067) |
Less: accretion of RNCI to redemption value | (1,442) | 0 |
Net loss attributable to Blend Labs, Inc. common stockholders | (73,546) | (27,067) |
Net loss attributable to Blend Labs, Inc. common stockholders | $ (73,546) | $ (27,067) |
Denominator: | ||
Weighted average common stock outstanding, basic (in shares) | 230,329 | 45,090 |
Weighted average common stock outstanding, diluted (in shares) | 230,329 | 45,090 |
Net loss per share attributable to Blend Labs, Inc. common stockholders: | ||
Basic (in dollars per share) | $ (0.32) | $ (0.60) |
Diluted (in dollars per share) | $ (0.32) | $ (0.60) |
Class A Common Stock | ||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||
Net loss attributable to Blend Labs, Inc. | $ (68,149) | $ (18,039) |
Less: accretion of RNCI to redemption value | (1,363) | 0 |
Net loss attributable to Blend Labs, Inc. common stockholders | (69,512) | (18,039) |
Net loss attributable to Blend Labs, Inc. common stockholders | $ (69,512) | $ (18,039) |
Denominator: | ||
Weighted average common stock outstanding, basic (in shares) | 217,696 | 30,051 |
Weighted average common stock outstanding, diluted (in shares) | 217,696 | 30,051 |
Net loss per share attributable to Blend Labs, Inc. common stockholders: | ||
Basic (in dollars per share) | $ (0.32) | $ (0.60) |
Diluted (in dollars per share) | $ (0.32) | $ (0.60) |
Class B Common Stock | ||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||
Net loss attributable to Blend Labs, Inc. | $ (3,955) | $ (9,028) |
Less: accretion of RNCI to redemption value | (79) | 0 |
Net loss attributable to Blend Labs, Inc. common stockholders | (4,034) | (9,028) |
Net loss attributable to Blend Labs, Inc. common stockholders | $ (4,034) | $ (9,028) |
Denominator: | ||
Weighted average common stock outstanding, basic (in shares) | 12,633 | 15,039 |
Weighted average common stock outstanding, diluted (in shares) | 12,633 | 15,039 |
Net loss per share attributable to Blend Labs, Inc. common stockholders: | ||
Basic (in dollars per share) | $ (0.32) | $ (0.60) |
Diluted (in dollars per share) | $ (0.32) | $ (0.60) |
Net Loss Per Share - Antidiluti
Net Loss Per Share - Antidilutive Securities (Details) - shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total antidilutive securities | 64,703 | 213,664 |
Outstanding stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total antidilutive securities | 28,722 | 34,716 |
Early exercised options subject to repurchase | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total antidilutive securities | 1,188 | 748 |
Options exercised via promissory note | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total antidilutive securities | 0 | 4,000 |
Non-plan Co-Founder and Head of Blend options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total antidilutive securities | 26,057 | 26,057 |
Unvested restricted stock units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total antidilutive securities | 8,012 | 0 |
Unvested performance stock award | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total antidilutive securities | 126 | 0 |
Common stock warrants | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total antidilutive securities | 598 | 0 |
Convertible preferred stock warrants | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total antidilutive securities | 0 | 1,270 |
Founders convertible preferred stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total antidilutive securities | 0 | 692 |
Convertible preferred stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total antidilutive securities | 0 | 146,181 |
Segment Information (Details)
Segment Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Segment Reporting Information [Line Items] | ||
Total revenue | $ 71,524 | $ 31,875 |
Gross profit | 28,869 | 21,015 |
Operating expenses: | ||
Research and development | 35,106 | 17,074 |
Sales and marketing | 22,341 | 15,865 |
General and administrative | 37,102 | 15,283 |
Amortization of acquired intangible assets | 4,068 | 0 |
Total operating expenses | 98,617 | 48,222 |
Loss from operations | (69,748) | (27,207) |
Interest expense | (5,558) | 0 |
Other income (expense), net | 91 | 150 |
Loss before income taxes | (75,215) | (27,057) |
Blend Platform | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 32,793 | 31,875 |
Gross profit | 18,591 | 21,015 |
Title365 | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 38,731 | 0 |
Gross profit | $ 10,278 | $ 0 |
Subsequent Events (Details)
Subsequent Events (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | |
Apr. 30, 2022USD ($)position | Mar. 31, 2022USD ($) | Mar. 31, 2021USD ($) | |
Subsequent Event [Line Items] | |||
Severance payments, payroll taxes and related facilitation costs | $ 24,312 | $ 4,016 | |
Subsequent Event | Workforce Reduction Plan | |||
Subsequent Event [Line Items] | |||
Number of positions eliminated | position | 200 | ||
Number of positions eliminated, period percent | 10.00% | ||
Company estimated charges | $ 6,700 | ||
Payments for restructuring | 6,500 | ||
Severance payments, payroll taxes and related facilitation costs | $ 200 |