Blend Labs (NYSE:BLND) closed fiscal 2025 with fourth-quarter results near the high end of its revenue outlook and above the top end of its non-GAAP operating income guidance, as management emphasized a leaner operating model, positive cash generation, and increased focus on AI-driven automation in lending workflows.
Fourth-quarter results and balance sheet highlights
For the fourth quarter of 2025, Blend reported revenue of $32.4 million, up 7% year-over-year. Non-GAAP operating income was $5.4 million, representing a 17% non-GAAP operating margin, and free cash flow was positive $1.3 million. For the full year, Blend generated positive $2.8 million of free cash flow.
Blend ended the year with $68.3 million in cash equivalents and marketable securities and no debt. Management also highlighted stock repurchases, including 5.1 million shares repurchased for approximately $16 million in the quarter, which ????????? the company’s prior $25 million authorization. The board approved a new program authorizing up to an additional $50 million in repurchases.
Segment performance: mortgage returns to growth; consumer banking shows “lumpiness”
Mortgage Suite revenue was $18.8 million, up 3% year-over-year, which management described as a return to growth. Finance chief Jason Ream said stabilizing churn and stronger-than-expected macro conditions supported results, while funded loan growth was 11% in the quarter. Blend’s Economic Value per Funded Loan (EVPFL) was $83, within the range provided previously.
Consumer Banking Suite revenue was $11.5 million, up 21% year-over-year, though down 10% sequentially. Ream attributed the quarter-over-quarter decline primarily to the churn of one large customer discussed on the prior call and to seasonality in home equity, partially offset by new deployments. He reiterated that results can be lumpy due to Blend’s concentration in larger customers, where individual wins and losses can have outsized effects.
Ream also provided additional context for 2026 comparisons. He said consumer banking growth in 2025 (which he cited as 35% year-over-year for the full year) benefited from a large customer that went live late in 2024 and contributed about $5 million to 2025 growth before reaching a steady state. Meanwhile, a large consumer banking customer that was acquired contributed approximately $2.4 million of revenue in 2025, and Blend does not expect any consumer banking revenue from that customer in 2026.
Customer activity, pipeline growth, and go-to-market changes
Co-founder and Head of Blend Nima Ghamsari said the company signed 10 new deals and expansions in the quarter, with activity across both the Mortgage and Consumer Banking suites. He cited two new “notable” mortgage customers, including one cross-sell from an existing consumer banking customer (since 2023) into mortgage. He said the deals included bundled mortgage and close products and should be incrementally accretive to unit economics.
In consumer banking, management pointed to:
- A rapid home equity cross-sell for a large bank already using Blend’s flagship home equity product, expanding Rapid workflows into other steps such as pre-qualification.
- A new top-40 credit union signed for products spanning credit cards, deposit accounts, personal loans, and auto loans, which management characterized as a new seven-figure-per-year logo.
Ghamsari said the pipeline is up about 40% year-over-year and that Blend is seeing a shift toward bundled deals spanning mortgage, Rapid, Close, and consumer banking. Asked what portion of the pipeline is bundled, management did not provide a specific percentage but said the directionally increasing interest in multiple products is contributing to momentum.
Ghamsari also noted a go-to-market change following the hiring of a new chief revenue officer, Matt, describing a new dedicated client sales team focused on expanding within the existing customer base, alongside a separate new-client sales motion.
AI strategy and the launch of Blend Autopilot
A major theme of the call was Blend’s positioning around agentic AI in regulated lending workflows. Ghamsari argued that the company’s depth in origination workflows and the structured data generated through transactions create an advantage, and he emphasized Blend’s success-based pricing tied to funded loans rather than a seat-based model. He described AI-driven efficiency as aligned with a model where Blend monetizes customer success, rather than customer headcount.
Ghamsari said Blend officially launched Blend Autopilot on March 3, calling it an agent that works alongside the origination process by reviewing data fields and documents, checking against guidelines, running calculations, generating follow-ups, taking actions on files, and creating artifacts that make the work visible. He said Autopilot can work with out-of-the-box guidelines such as Fannie Mae and Freddie Mac and also supports custom guidelines.
Within a week of launch, Ghamsari said Blend had seven large customers that had turned Autopilot on or planned to turn it on in the coming days, during a preview period. He described Autopilot’s value proposition in four areas:
- Real-time intelligence that can respond within 15–30 seconds with additional requirements based on what it detects in documents and data.
- Contextual workflows that can trigger native Blend workflows to request and process information from borrowers.
- Seamless updates to application fields, including complex income calculations.
- Built for compliance, with humans overseeing the work and Autopilot not making credit decisions; Ghamsari also said borrower data is not used to train or improve AI models.
On pricing, management said it is still being mapped out. Ghamsari told an anecdote that one customer said they pay an outside vendor more per loan than they pay Blend for a portion of the process Blend now covers with Autopilot, though he said the company’s approach is to “underpromise and overdeliver” on economics.
Ghamsari also said Blend is reimagining internal operations to become an “agent-first company,” applying a model where agents take first passes at work and humans provide oversight. Ream added that he expects AI to improve effectiveness and efficiency over time, beyond software engineering.
Outlook for Q1 2026 and accounting/control updates
For the first quarter of 2026, Blend guided to revenue of $28.5 million to $30.0 million, representing 6%–12% growth over the first quarter of 2025. Ream said Mortgage Suite revenue is expected to grow at or above the high end of that range, while consumer banking growth is expected to be more muted. For Q1, Blend expects the mortgage market to be between 1.1 million and 1.2 million units.
EVPFL is expected to be $84–$85 in Q1, with the year-over-year decline primarily tied to transitioning certain products to a partner model. Blend guided to non-GAAP operating income of $2 million to $3 million, implying a midpoint non-GAAP operating margin just under 10%, with management citing typical first-quarter seasonality and accounting-related impacts.
Ream also noted the company’s early adoption of ASU 2025-06, which changes how software R&D expense is reported due to capitalizing less software development cost. For Q1 2026, Blend expects non-GAAP R&D expense of approximately $7 million (a 20% year-over-year increase), while underlying cash R&D expense before capitalization and amortization is expected to decline roughly 15%. He said investors should view $7 million as a new baseline run rate and ignore prior seasonal patterns influenced by the old capitalization policy.
Finally, Ream disclosed that management identified a material weakness in internal control over financial reporting related to the revenue process for the year ended December 31, 2025. He said the company is also disclosing immaterial out-of-period adjustments related to the first three quarters of 2025, with revised figures to be detailed in the supplemental slides and in the upcoming Form 10-K. In the Q&A, he characterized the changes as a reallocation of revenue between quarters.
About Blend Labs (NYSE:BLND)
Blend Labs, Inc operates as a financial technology company that offers a digital consumer banking platform designed to simplify and automate the lending and account opening processes for banks and credit unions. Its cloud-native software enables financial institutions to deliver a more seamless customer experience by consolidating multiple steps—such as application intake, identity verification, document collection and underwriting—into a unified digital workflow. Blend’s platform is built to integrate with existing core banking systems and third-party data providers, allowing clients to accelerate loan origination and deposit account opening while maintaining compliance and security standards.
The company’s product suite includes solutions for mortgage origination, home equity lending, consumer personal lending and deposit account opening.
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