Ryan Tomasello

Ryan Tomasello double-clicked on the monetization aspects of the Agora partnership, asking about the Democratized Prime fee rate, upfront tokenization fees, and how Figure Connect monetization for third-party assets compares to first-party assets.

Answer

CEO Michael Tannenbaum stated that third-party asset monetization is pure margin, leveraging existing infrastructure, and that Democratized Prime fee rates could see upside. CFO Macrina Kgil added that the partnership will impact Figure Connect volume and could generate securitization sponsor fees. She noted that shorter-duration auto loans might command a lower net take rate, influencing the 3.5%-4% range.

Ryan Tomasello asked for more specifics on the monetization of the Agora partnership, particularly regarding Democratized Prime's fee rate, upfront tokenization fees, and Figure Connect's monetization relative to first-party assets.

Answer

CEO Michael Tannenbaum clarified that the monetization from Agora represents pure margin, as Figure avoids origination and LOS expenses by leveraging its capital market infrastructure. He noted that while 50 basis points is an estimate for Democratized Prime assets, there's potential for upside, and the contribution dollars and margin basis points from Democratized Prime are expected to increase with additional third-party assets. CFO Macrina Kgil reiterated that the partnership would contribute to Figure Connect volume and potentially securitization sponsor fees, and that the 3.5%-4% net take rate range accounts for shorter-duration auto loans, which typically command a lower take rate than HELOCs.

Ryan Tomasello asked about Figure's strategies to drive adoption for Democratized Prime and Yields, including potential incentives for existing origination partners and consumer borrowers. He also inquired about the value proposition of tokenized equities, considering their existing liquidity and transparency, and the additional benefits unlocked by tokenization.

Answer

Michael Tannenbaum (CEO) stated the focus for Democratized Prime is building out the funding side to ensure sufficient liquidity for tokenized loans. Mike Cagney (Executive Chairman and Co-founder) highlighted Yields' partnerships with Sui and Solana to leverage their builder communities for payments, cross-border remit, and collateral, expecting significant acceleration. He also mentioned progress with Yields as collateral on exchanges and the strategy for Democratized Prime to replicate liquid staking protocols with underlying yielding assets like HELOCs. Regarding tokenized equities, Michael Tannenbaum deferred detailed discussion to an upcoming call, emphasizing Figure's focus on fundamental blockchain infrastructure. Mike Cagney clarified that the real value lies in the DeFi construct, enabling cross-collateralization and unique borrowing pools through Democratized Prime, and the ability to lend stock via a transparent limit order book.

Ryan Tomasello inquired about Figure Technology Solutions' strategies to drive adoption for Democratized Prime and YLDS, including potential incentives for existing partners and consumer borrowers. He also asked about the value proposition of tokenized equities, considering their existing liquidity and transparency, and what additional benefits tokenization unlocks.

Answer

CEO Michael Tannenbaum stated the focus for Democratized Prime is on building out the funding side to support the large volume of tokenized loans originated. Executive Chairman and Co-founder Mike Cagney highlighted YLDS's expansion to Sui and Solana blockchains to leverage builder communities and offer a yielding stablecoin for various uses, and its potential as superior collateral on exchanges. For tokenized equities, Mike Cagney emphasized the real value lies in the DeFi construct, enabling cross-collateralization with other assets, unique borrowing pools via Democratized Prime, and transparent stock lending, which he believes will drive buy-side interest.

Ryan Tomasello inquired about the growth outlook for Apartments.com in the current year and CoStar Group's strategy for Homes.com amidst industry changes regarding MLS and listing ownership.

Answer

CoStar Group CEO Andy Florance discussed the instability in the real estate industry, particularly regarding MLS dissatisfaction, and believes this creates opportunities for Homes.com. CFO Chris Lown referred to the residential segment guidance and Andy's earlier comments for Apartments.com's strong position.

Ryan Tomasello asked for insights into the expected growth of the Apartments.com business for the current year and how CoStar Group plans to navigate the Homes.com strategy amidst the evolving real estate industry landscape, particularly concerning the role of the MLS and listing ownership.

Answer

CoStar Group CEO Andy Florance discussed the instability in the industry, suggesting that dissatisfaction with current MLS practices could create opportunities for Homes.com by resonating more with brokerages, agents, and home sellers. CFO Chris Lown referred to the residential segment guidance for Apartments.com's growth outlook, expressing confidence in its market position.

Ryan Tomasello from KBW questioned Apartments.com's sequential bookings performance compared to Q2's $45 million, the unchanged 11-12% Q4 growth guidance despite sales force expansion, and current demand trends for Apartments.com.

Answer

CFO Chris Lown explained that Apartments.com is seeing continued rooftop and sales force expansion (20% year-to-date), with Q2 historically being the largest quarter. He noted solid growth across all multifamily segments. CEO Andy Florance humorously interjected about the FTC lawsuit against a competitor.

Ryan Tomasello asked for details on Apartments.com's sequential bookings performance relative to Q2's $45 million, the unchanged Q4 multifamily growth guidance of 11-12%, and the underlying demand trends despite sales force expansion.

Answer

CFO Chris Lown explained that Apartments.com continues rooftop expansion and sales force growth, with Q2 historically being the largest quarter. He noted solid growth and increased rooftop expansion across all multifamily segments. CEO Andy Florance humorously reminded the analyst about the FTC lawsuit against a competitor.

Ryan Tomasello of Keefe, Bruyette & Woods asked about the competitive dynamics for Apartments.com, questioning if CoStar has observed any wallet share loss to Zillow or faced pressure on its pricing power.

Answer

Founder & CEO Andy Florance stated that CoStar has not seen any loss of share or pricing power, attributing its strength to a superior product with high NPS and renewal rates. CFO Christian Lown added that the total addressable market is massive, making it less about direct wallet share competition, and emphasized that CoStar focuses on selling leases, not just leads.

Ryan Tomasello asked about the competitive dynamics for Apartments.com, questioning if CoStar has observed any wallet share loss to Zillow or faced pricing pressure.

Answer

CEO Andy Florance stated that CoStar has not seen any loss of share or impact on its ability to capture price value, emphasizing the platform's strong product and high renewal rates. CFO Christian Lown added that the total addressable market is massive, making it not a zero-sum game, and highlighted that CoStar focuses on selling leases, not just leads.

Ryan Tomasello of Keefe, Bruyette & Woods inquired about the drivers of the Q2 growth deceleration in the multifamily segment, the confidence in a back-half acceleration, and the Q1 bookings number for Apartments.com.

Answer

CFO Christian Lown explained the Q2 dynamic is seasonal, as the major industry conference occurs in June, with revenue benefits flowing through in Q3 and Q4. He noted confidence in acceleration comes from this seasonality and the impact of new, experienced sales hires. He also disclosed that Apartments.com net new bookings were in the mid-$20 million range for Q1.

Ryan Tomasello questioned CoStar's approach to margin management, asking about the future trajectory for core commercial margins and the timeline to reach breakeven for the Residential segment.

Answer

CFO Christian Lown reiterated that the core commercial businesses are fixed-cost leveraged and he expects continued margin expansion. For Homes.com, he described 2025 as a 'real full launch' year, with momentum expected to build in the second and third quarters as the sales team scales and early contract renewals are processed, leading to an improving financial picture.

Ryan Tomasello requested the revised annual guidance for residential spending and the nonresidential EBITDA margin, and also asked for an early outlook on 2025 investment levels for Homes.com.

Answer

CEO Andy Florance stated that he does not see a need to increase the investment level for Homes.com in the next year, as the current aggressive spending is sustainable. CFO Christian Lown confirmed they are on track with the previously discussed residential spend for the year and continue to see margin growth in the commercial businesses.

Ryan Tomasello inquired about the anticipated mix of traditional Cash Offer products within the 1,000 transactions per quarter target for 2026 and the Q1 2026 guidance. He also asked about remaining opportunities for expense efficiency and the reliance of the break-even EBITDA target on further OpEx reductions.

Answer

CFO Peter Knag stated that historically, Direct Plus accounted for about one-third of transactions, with Cash Offer making up two-thirds, but expects this to shift towards a 50/50 split with equal focus on all three products. He noted that operating expenses significantly decreased from $24 million in Q4 2024 to $15 million in Q4 2025. While some third-party spend reductions are still being pursued, the primary driver for reaching break-even EBITDA is increasing transaction volumes to 1,000 per quarter. CEO Brian Bair added that scaling through AI and technology will be a key focus for future growth beyond the initial 1,000 transactions per quarter goal.

Ryan Tomasello inquired about the expected mix of traditional Cash Offer products within the 1,000 transactions per quarter target for 2026, and the near-term mix baked into the Q1 guide. He also asked about the remaining opportunities for expense efficiency and how dependent the break-even EBITDA target is on further OpEx reductions.

Answer

Peter Knag, CFO, and Brian Bair, Chairman and CEO, stated that historically, the mix was about 1/3 Direct Plus and 2/3 Cash Offer, but with the focus on three products, they expect to move towards a 50/50 split. They will begin breaking out volumes for the other two products on the IR site. Regarding expenses, Peter Knag highlighted significant reductions already achieved, with Q4 2025 operating expenses down $9 million year-over-year to $15 million. He noted that while some third-party spend reductions are still being pursued, the biggest driver for reaching break-even EBITDA is increasing transaction volumes to 1,000 per quarter. Brian Bair added that scaling through AI and technology will be a key focus for efficiency.

Ryan Tomasello from Keefe, Bruyette & Woods asked for commentary on supply and demand dynamics in key markets, Offerpad's risk management strategy amid rising inventory, and whether the 1,000 homes per quarter target is sufficient for cash flow breakeven.

Answer

CEO Brian Bair noted that active inventory is increasing in most markets, leading them to be very selective and leverage their renovation services to make homes more desirable. CFO Peter Knag confirmed that 1,000 homes per quarter, combined with cost cuts and asset-light growth, is the directional target for EBITDA and cash flow breakeven, but did not provide a specific timeline for hitting that volume.

Asked about the dependency of the 1,000 homes per quarter acquisition target on a pending capital raise, the potential structure of that raise, and how Offerpad is adapting to changes in real estate commission structures.

Answer

Management stated they have a path to the acquisition target regardless of a new capital raise, utilizing existing asset-backed facilities, but are exploring capital markets to enhance liquidity and lower their cost of capital. Regarding commissions, the market uncertainty has benefited their Agent Partnership Program, and they are currently leveraging the agent community to help sell homes, a strategy they will continue to evaluate.

Ryan Tomasello questioned how dependent the 1,000 homes per quarter target is on the pending capital raise and asked for details on the potential size and structure of that raise. He also followed up on the market impact of changing real estate commission structures.

Answer

CFO Peter Knag clarified that Offerpad has a path to its goals regardless of a new capital raise, citing strong relationships with asset-backed partners and current liquidity of $85 million. He noted that capital markets are being explored strategically to enhance liquidity and lower the cost of capital. CEO Brian Bair added that while the commission landscape has settled slightly, lingering confusion is driving growth in their Agent Partnership Program as agents seek certainty. He affirmed Offerpad's goal to be a solution center for agents.

Inquired about the source of the increased annual cost savings, the acquisition volume needed to reach cash flow breakeven, and the observed impacts of the NAR settlement on agent commissions.

Answer

The cost savings are driven by personnel reductions from process improvements, procurement optimization, and more efficient marketing spend. The company is targeting over 1,000 acquisitions per quarter to reach profitability. Regarding the NAR settlement, there has been an initial shock and some early signs of downward pressure on buy-side commissions, which is expected to continue.

Ryan Tomasello asked about the primary macro or pricing drivers preventing Opendoor from achieving faster acquisition contract volumes, noting they are at or below the low end of targets.

Answer

CEO Kaz Nejatian explained that Opendoor is on track and intentionally prioritizing product investment, such as launching a mortgage product in 10 weeks, over immediately hitting the top end of acquisition targets. He affirmed confidence in reaching 6,000 quarterly home acquisitions by year-end for long-term profitability.

Ryan Tomasello from KBW asked about the primary macro or pricing drivers preventing a faster ramp in Opendoor's acquisition contract volumes, noting they are at or below the low end of targets according to the accountability dashboard.

Answer

CEO Kaz Nejatian stated that Opendoor is on track with its four-step plan, with contribution margins improving since September. He explained that the company is intentionally prioritizing product investment over immediate growth to build a stronger foundation, citing the rapid development of their mortgage product as an example.

An analyst for Ryan Tomasello of Keefe, Bruyette & Woods asked for clarification on Q4 revenue guidance, questioning if the sequential decline would be on a percentage or absolute dollar basis. They also asked if the Q3 OpEx guidance is a good run-rate for Q4 and whether the company is seeing increased seller demand in buyer's markets.

Answer

CFO Selim Freiha clarified that the Q4 sequential revenue decline is expected on a percentage basis. He also stated that Q3 OpEx is not a good run-rate for Q4, as marketing spend is seasonally heavier in Q4 and Q1, which will cause OpEx to increase. Freiha noted there has been no notable increase in seller demand, as it is contingent on a recovery in buyer demand, which has not yet occurred.

Ryan Tomasello sought clarification on the drivers behind the $29 million sequential reduction in Q2 operating expense guidance, asking to distinguish between seasonal marketing cuts and more structural reductions. He also asked about the specific economics of the new agent partnership program.

Answer

Executive Selim Freiha explained that the majority of the OpEx reduction is driven by lower marketing spend due to seasonality and higher spreads, along with favorable timing adjustments from inventory levels, with further fixed cost cuts being less material. CEO Carrie Wheeler detailed the partnership economics: Opendoor earns a share of the commission on a listing or its standard margin on a cash offer, minus a referral fee to the agent, with the expectation that higher conversion will outweigh the fee.

Ryan Tomasello asked for color on managing operating expenses throughout 2025 relative to the Q1 guidance and inquired about an updated framework for the acquisition volume and revenue needed to achieve breakeven.

Answer

CFO Selim Freiha clarified that the slight Q1 OpEx increase is due to variable costs from higher inventory, and he expects costs to decline over the year due to savings initiatives and a seasonally adjusted marketing strategy. Regarding breakeven, he stated that while the framework hasn't been formally updated, the required volume and revenue are now significantly lower due to cost structure improvements. He emphasized the focus is on optimizing contribution profit and managing risk in the current macro environment, which positions them well for when conditions improve.

Ryan Tomasello asked for details on Opendoor's approach to buyer concessions following the NAR settlement and whether the decline in direct selling costs reflects this change. He also questioned the potential impact of changes to MLS policies like 'clear cooperation' on Opendoor's business model.

Answer

CEO Carrie Wheeler explained that Opendoor is now offering concessions to buyers, who can choose how to use the funds, rather than paying a blanket buyer agent commission. She noted that while direct selling costs have decreased, the concessions are a contra-revenue item, and it's too early to determine a sustainable trend. Regarding MLS policies, she stated that Opendoor supports consumer-first initiatives like transparency but also sees room for innovation alongside the traditional MLS.

Ryan Tomasello inquired about the magnitude of pricing actions taken to accelerate growth, the flexibility to further adjust pricing given current loss ratios, and the operating leverage in the RWP to adjusted EBITDA conversion, including expectations for 2026.

Answer

CEO Matt Ehrlichman explained that Porch Group's significant margin advantage allows for surgical and targeted pricing adjustments for low-risk new customers, driving meaningful conversion increases without dramatic price changes. CFO Shawn Tabak highlighted the accelerated RWP to adjusted EBITDA conversion due to operating discipline and cost control, projecting an overall adjusted EBITDA margin increase of over 300 basis points for 2026, alongside strong cash conversion.

Ryan Tomasello inquired about the magnitude of price actions taken to accelerate growth, the need for further pricing or agent distribution to achieve the $600 million RWP target, and the company's flexibility to adjust pricing given current loss ratios. He also asked about the operating leverage in RWP to Adjusted EBITDA conversion as RWP scales and the specific RWP to Adjusted EBITDA conversion baked into the 2026 guidance.

Answer

CEO Matt Ehrlichman explained that the company has significant margin flexibility due to low loss ratios, allowing for surgical and targeted price adjustments for low-risk new customers without dramatic changes to overall reciprocal written premium per policy. CFO Shawn Tabak highlighted the accelerated RWP to Adjusted EBITDA conversion, attributing it to operating discipline and cost control, and noted the strong cash conversion of Adjusted EBITDA. He also mentioned that the 2026 guidance implies an increase in the overall Adjusted EBITDA margin for the company.

Ryan Tomasello asked about the percentage of the prior active footprint that has been reopened, the current size of the agent channel compared to its peak, and for clarification on the surplus calculation.

Answer

Executive Matt Ehrlichman stated that most previously closed ZIP codes have been reopened since November, but did not provide a specific percentage, highlighting the ongoing opportunity for expansion into new states. Executive Matthew Neagle added that the agent channel is growing nicely but is still in the early stages of engaging its full potential. Executive Shawn Tabak clarified the components of the surplus, breaking down the ~$105 million statutory amount versus the $198 million figure that includes non-admitted assets, which they view as more representative of the reciprocal's health.

Ryan Tomasello requested more detail on the go-to-market strategy for the Home Factors data product and asked about the current priority of M&A as a growth lever, particularly for scaling the insurance business.

Answer

COO Matthew Neagle described the Home Factors strategy as a targeted sales effort with dedicated engineering support, noting it's a key investment area for 2025. On M&A, CEO Matt Ehrlichman stated that while the company can now consider inorganic growth and sees opportunities in insurance, the current guidance is purely organic and there are no immediate plans to announce.

Ryan Tomasello from Keefe, Bruyette & Woods, Inc. requested an update on the Floify business, asking about its performance in the current sales environment, whether customer attrition has bottomed out, and the status of the embedded insurance marketplace opportunity.

Answer

COO Matthew Neagle acknowledged the challenging market for Floify due to lower mortgage transaction volumes but noted the team has successfully expanded margins and is pursuing new transactional revenue opportunities. CEO Matt Ehrlichman added that attrition rates have stabilized. He also clarified that the embedded insurance initiative has been a lower priority recently as the company focused on core features to help mortgage clients navigate the market turmoil.

Ryan Tomasello from KBW requested an update on DocFox, asking about its pipeline, expected meaningful contribution to ACV, typical implementation and sales cycles, and any updated figures for the ACV uplift. He also asked for an update on the new credit union sales force, including observed traction, number of wins, and cross-sells in that market.

Answer

CEO Sean Desmond stated that DocFox, integrated into nCino's onboarding experience, is one of five core growth initiatives exceeding overall company growth rates in pipeline and ACV. Onboarding has seen a year-over-year pipeline increase in the latter half of the year, with expected ACV conversion next year and typical sales cycles of three to six months. Desmond expressed satisfaction with the credit union go-to-market team, which is on track to meet internal targets and gaining relevance in the market. CFO Greg Orenstein added that the platform sale resonates well with credit unions, enabling standardization across institutions.

Ryan Tomasello asked for an update on DocFox, including its pipeline, expected meaningful ACV contribution, typical implementation and sales cycles, and any updated figures on the ACV uplift. He also requested an update on the new credit union sales force, including traction, number of wins, and cross-sells in that segment.

Answer

Sean Desmond, nCino's Chief Executive Officer, stated that DocFox, covering the onboarding experience, is integrated and is one of five core growth initiatives exceeding overall company growth in pipeline or ACV. Onboarding pipeline has increased year-over-year, with sales cycles of three to six months, and ACV conversion expected next year. He also expressed satisfaction with the credit union go-to-market team's traction, which is on track to meet internal targets and gaining relevance in the market. Greg Orenstein, nCino's Chief Financial Officer, added that the platform sale resonates well with credit unions.

Ryan Tomasello asked for context on the six new credit union logos won in the quarter and the productivity of the new go-to-market team for that segment. He also questioned if there was any way to size the ACV uplift from Banking Advisor usage credits.

Answer

CEO Sean Desmond described the credit union wins as a validation of the focused investment in that team and expects momentum to continue. CFO Greg Orenstein clarified that revenue from Banking Advisor usage is not part of the FY26 financial plan, as the company's current priority is driving widespread adoption of the technology.

Ryan Tomasello from KBW asked about the momentum in consumer lending, specifically if the strong Q4 performance was driven by the new credit union sales team and how to think about ACV targets for that category this year. He also asked for clarity on the flow-through of expense savings to the full-year guidance.

Answer

CEO Sean Desmond clarified that the 20 consumer lending deals in Q4 occurred before the new credit union team was fully activated, suggesting further upside. He noted continued momentum in consumer lending across banks and credit unions. CFO Greg Orenstein explained that of the $18 million in incremental savings, $5 million is being flowed through to guidance to preserve flexibility for potential reinvestments, with updates to follow as the year progresses.

Ryan Tomasello asked about nCino's competitive positioning in U.S. mortgage, particularly in the IMB space, and whether the new conservative guidance philosophy provides greater visibility into the subscription revenue forecast.

Answer

CFO Greg Orenstein expressed confidence in the mortgage business, highlighting a move upmarket and the addition of 24 new IMB customers last year with no significant change in competitive dynamics. He confirmed that under the new guidance philosophy, the company has better visibility into achieving the midpoint of its guidance compared to prior years.

Ryan Tomasello sought confirmation of the implied organic subscription growth exit rate for the year and questioned how it aligns with the 15% growth target for next year, also asking if deregulation was unlocking demand.

Answer

Chief Financial Officer Greg Orenstein confirmed the Q4 organic growth rate would be in the low-double digits and reiterated that 15% remains the target for next year, pending a formal update on the Q4 call. Chief Executive Officer Pierre Naude noted that a positive sentiment around deregulation, combined with an easing of the liquidity crisis, is allowing banks to be more strategic and optimistic, which bodes well for tech investments.

Ryan Tomasello asked for more detail on the international product roadmap, particularly for DocFox, and about the risk of M&A-driven churn in the mortgage business. He also requested a quantification of churn performance in the first half of the year against the annual forecast.

Answer

CEO Pierre Naude identified commercial onboarding (DocFox functionality) as the top international product opportunity, followed by a mortgage solution for markets like Canada and ANZ. CFO Greg Orenstein stated there is no unique M&A risk in mortgage and confirmed that of the $20.5 million annual churn forecast, about $4.75 million occurred in the first half, keeping them on track to meet their goal.

Ryan Tomasello asked about the potential impact of growing stablecoin adoption and payment rails on the fraud management landscape, and if Riskified is exploring opportunities in this area. He followed up by asking if the increased emphasis on agentic commerce solutions has led to a notable uptick in prospect inbounds or new business discussions.

Answer

Eido Gal, Co-founder and CEO, stated that stablecoins, crypto, and agentic commerce introduce complexity and new fraud vectors for merchants, historically driving demand for outside partners like Riskified, which he anticipates will continue to be a net positive. He explained that agentic commerce, while currently a small transaction volume, is helping drive conversations as merchants seek solutions for identifying agentic shoppers, differentiating legitimate from fraudulent transactions, and managing specific policies.

Ryan Tomasello asked for an update on the go-to-market strategy for the mid-tier market and the potential to move down-market. He also inquired about the long-term potential and market size of the growing money transfer and payments vertical.

Answer

CEO Eido Gal stated that while the mid-market remains an interesting opportunity for later in the year, the current pipeline strength is concentrated in the core enterprise segment. On the money transfer vertical, Gal explained it's a key part of expanding their addressable market, covering a broad range of use cases (P2P, remittance) and payment types (ACH, digital currencies). He noted their strategy of building model-specific capabilities is driving performance and merchant adoption.

Ryan Tomasello asked for context on the success of stand-alone non-chargeback products like Policy Protect and sought confirmation on the previously disclosed financial impact of the major home category merchant churn event.

Answer

Eido Gal, Co-Founder and CEO, noted that revenue from new products is projected to grow from approximately $4.5 million in 2024 to the low double-digit millions in 2025, primarily driven by platform sales and cross-sells rather than stand-alone deals at this stage. Aglika Dotcheva, CFO, confirmed that the previously guided impacts from the churn event—$5 million in Q4 2024 and $18 million in 2025—remain accurate approximations.

Ryan Tomasello inquired about the financial impact and underlying reasons for a significant merchant churn in the Home category, and whether this signals broader pricing pressure. He also asked about the annual contract value (ACV) uplift from a large Policy Protect deal.

Answer

CEO Eido Gal explained the churned merchant is moving its volume in-house, a strategy they've unsuccessfully tried before, and noted the decision was likely influenced by the merchant's financial profile and personnel changes, not product performance. CFO Aglika Dotcheva quantified the impact as approximately $5 million in Q4 2024 and $18 million in 2025. Regarding the upsell, Eido Gal confirmed the Policy Protect deal's ACV uplift was significantly larger than the typical 10-30% range, viewing it as a strong proof point for future bundling opportunities.

Ryan Tomasello inquired about the mix of new logos versus expansions within the 23 deals signed in the quarter and asked for more context on the three new Independent Mortgage Bank (IMB) wins, including whether they were competitive takeaways. He also asked for an update on the company's goal of achieving the Rule of 40 by year-end.

Answer

Nima Ghamsari, Co-Founder, Chairman & Head of Blend, confirmed the IMB wins were often competitive takeaways, attributing the success to Blend's continued innovation and the creation of a dedicated IMB business unit. He did not provide a specific new logo versus expansion breakdown. Amir Jafari, CFO and Head of Finance & Operations, stated that the company is not updating its Rule of 40 guidance at this time but will provide an update next quarter.

Ryan Tomasello asked about Blend's strategy for reinvesting in growth following its recent simplification, future product expansion priorities like commercial lending or international, and the scalability of the go-to-market sales organization.

Answer

CEO Nima Ghamsari stated that Blend has 'earned the right' to reinvest in growth, focusing on areas like Rapid Refi, AI, and go-to-market, all within the existing OpEx guide. He noted that while the platform is capable of future expansion into commercial or international markets, the immediate priority is perfecting the current product suite. He also expressed satisfaction with the current sales team's performance and is exploring new models for down-market expansion.

Ryan Tomasello sought to contextualize the potential revenue per funded loan uplift from the next-gen refinance product and asked for an update on the progress of expanding the consumer banking go-to-market strategy to customers beyond the top 40.

Answer

Amir Jafari and Nima Ghamsari explained that while it's too early for specific numbers, the 'Rapid' products command a materially higher price point and revenue per loan due to the significant ROI they deliver. Nima Ghamsari added that the down-market consumer banking strategy involves a different, turnkey product packaging and may include partnerships with major providers to expand reach.

Ryan Tomasello from KBW asked for more detail on what opening the platform to more partnerships could look like over time and requested an update on the strategy for the Title business, including its strategic fit within the company.

Answer

Nima Ghamsari, Co-Founder and Head of Blend, explained that partnerships will extend across both Mortgage and Consumer Banking, involving services like fraud detection, insurance, and payment processing. Regarding the Title business, he affirmed it remains a critical part of the mortgage process where Blend is actively innovating on the software side and exploring partner integrations, though it was too soon to share specific details.

Ryan Tomasello from Keefe, Bruyette & Woods (KBW) asked for more detail on the sources of the $20 million in incremental cost savings and inquired about the potential for further efficiencies. He also asked new CEO Frank Martell for his strategic vision to evolve SmartRent and identify key growth opportunities.

Answer

CEO Frank Martell explained that the cost reductions primarily came from staffing reductions and lower third-party spending, with more productivity gains expected from workflow automation and procurement. Regarding strategy, Martell highlighted the company's sticky customer base, scale advantage, and opportunities to expand into new segments and leverage AI. He noted that moving past bulk hardware sales will create a more predictable revenue trajectory.

Ryan Tomasello of Keefe, Bruyette & Woods inquired about the sources of the $20 million in incremental cost savings and the potential for future efficiencies. He also asked for new CEO Frank Martell's strategic vision for evolving SmartRent and identifying key opportunities to drive growth.

Answer

CEO, President & Director Frank Martell explained that the cost reductions primarily stem from lower staffing levels and reduced third-party spending, with more productivity expected from workflow automation and procurement. Strategically, Martell highlighted the company's strong customer relationships, large installed base, and opportunities in AI and new market segments. He emphasized that moving past bulk hardware sales will lead to more predictable revenue growth.

Ryan Tomasello of Keefe, Bruyette & Woods inquired about the specific sources of the $20 million in incremental cost savings and whether further efficiencies are possible. He also asked new CEO Frank Martell for his strategic vision to evolve SmartRent and identify key opportunities for growth.

Answer

CEO Frank Martell explained that the cost reductions primarily stem from lower staffing levels and reduced third-party spending, adding that there is more runway for productivity via workflow automation and procurement. Regarding strategy, Martell highlighted leveraging the company's large installed base, sticky customer relationships, and scale advantage to expand within existing accounts, enter new segments, and invest in AI to drive both internal efficiency and customer value.

Ryan Tomasello of Keefe, Bruyette & Woods inquired about the specific sources of the incremental $20 million in cost savings and whether further efficiencies are possible. He also asked for new CEO Frank Martell's strategic vision for evolving SmartRent and identifying key growth opportunities.

Answer

CEO Frank Martell explained that the cost reductions primarily stem from lower staffing levels and reduced third-party spending. He affirmed that there is more runway for productivity gains through workflow automation and procurement. Regarding strategy, Martell highlighted leveraging the company's large installed base, sticky customer relationships, and scale advantage to expand into new segments and invest in AI, aiming for more predictable revenue growth as the company moves past bulk hardware sales.

Ryan Tomasello from Keefe, Bruyette & Woods inquired about the timing and full impact of the $10 million in cost savings, the current status of the sales organization build-out, and whether the ongoing CEO search is pausing any strategic initiatives.

Answer

CFO Daryl Stemm clarified that the full benefit of the cost savings will be reflected in Q3 results, as the actions were taken in April. Interim CEO John Dorman stated that the initial sales team build-out is complete but still ramping, and confirmed that no strategic plans are on hold pending the new CEO's arrival, as the board and final candidate are aligned on the current direction.

Ryan Tomasello inquired about how SmartRent's new SaaS-first focus will affect its first-party hardware strategy and asked about the company's plans for scaling unit deployments, including the potential for a new channel partner program.

Answer

CEO Shane Paladin clarified that hardware is not being de-emphasized but rather monetized, creating a symbiotic relationship with software by providing data for SmartOps. He noted he is still reviewing the unit deployment strategy. CFO Daryl Stemm added that the immediate focus is on rebuilding the direct sales team under the new CRO.

Ryan Tomasello inquired about the evolution of macroeconomic headwinds, customer capital expenditure plans for the upcoming year, and any potential guidance for fourth-quarter bookings and unit deliveries. He also asked for more details on the announced $10 million strategic investment, including its allocation, impact on margins, and the timeline to achieve breakeven.

Answer

Daryl Stemm, CFO and Interim Principal Executive Officer, explained that customers remain hesitant about capital expenditures due to uncertainty around interest rates and the election, with no expected loosening of spending in the near term. Regarding the $10 million investment, Stemm stated it will be allocated across sales, marketing, engineering, and operations, guided by the company's four strategic pillars, to enhance the core IoT platform and work management solutions.

Ryan Tomasello asked for an update on a previously mentioned issue with an insurance carrier partner and inquired about the company's assessment of the evolving generative AI search landscape.

Answer

COO & President of Marketplace Scott Peyree clarified that the insurance issue was a technical error that has been resolved, with the segment now seeing record revenue levels and strong carrier demand. On AI, Peyree described it as a 'huge opportunity,' citing new high-quality traffic sources and the potential for AI to create more comparison shoppers. CEO Doug Lebda added that LendingTree's lower reliance on traditional SEO allows for more flexibility and testing in the new AI-driven environment.

Ryan Tomasello asked about the potential impact of tariffs on insurance carrier demand, the components of the revised annual guidance, the company's levers to protect earnings in a downturn, and the status of the QuoteWizard litigation reserve.

Answer

COO Scott Peyree stated that insurance partners feel they can manage tariff impacts without affecting marketing strategies. CFO Jason Bengel detailed the segment-level expectations baked into the guidance, noting no major macro changes are assumed. CEO Douglas Lebda and CFO Jason Bengel elaborated on cost management levers, including marketing spend flexibility and insights from zero-based budgeting. Bengel also clarified the $19 million QuoteWizard settlement is payable in three installments starting in Q4 2025.

Ryan Tomasello questioned the guidance for 'modest growth' in the Insurance segment for 2025, contrasting it with the strong performance in the second half of 2024. He also inquired about the potential for price increases and any lingering benefits from preparations for the now-vacated TCPA rule.

Answer

Scott Peyree, COO and President of Marketplace Businesses, clarified that while year-over-year growth will moderate against tougher comps as 2025 progresses, most carriers remain in a growth position. He stated the company's focus will shift to returning VMM margins to the low-to-mid-30s range. Peyree also mentioned that planned price increases tied to the TCPA rule were rescinded after the favorable court ruling.

Ryan Tomasello inquired about the outlook for the Insurance business's variable marketing margins (VMMs), asking if the current level is a trough and what a stabilized VMM could look like. He also requested Q4 guidance for each segment, considering typical seasonality.

Answer

CEO Douglas Lebda noted that as volume grows, marketing spend increases, so the focus is on VMD dollars, not just percentages. COO Scott Peyree agreed that Q3 VMM was likely a 'trough' and expects margins to improve by a couple of percentage points in Q4, with a long-term stable target in the low- to mid-30s. CFO Jason Bengel provided Q4 segment guidance, expecting Home to see growth offsetting seasonality, Consumer to see a normal seasonal decline while holding margin, and Insurance to be seasonally down but with flat to slightly improving margins.