Blend Labs Q1 Earnings Call Highlights

Key Points

• Blend Labs beat Q1 guidance with revenue of $30.8 million, up 15% year over year, and non-GAAP operating income of $4.1 million. Mortgage suite revenue rose 18% and consumer banking revenue increased 12%, while the company also ended the quarter with $59 million in cash and no debt.
• Autopilot is emerging as a major growth driver after its beta launch, with 65 lenders activated, 22 live in production, and more than 7,000 applications touched. Blend plans to begin charging for the AI product at the end of June and said it could support 10% to 15% incremental top-line growth in 2027.
• Second-quarter guidance remains cautious because of higher mortgage rates and softer refinancing conditions. Blend expects revenue of $32 million to $34 million and warned that 2026 market share could face a roughly 100-basis-point headwind from volume roll-off at one large customer.

Blend Labs NYSE: BLND reported first-quarter 2026 results above its guidance ranges, as management highlighted growth in its mortgage and consumer banking businesses and outlined an expanded artificial intelligence strategy centered on its Autopilot product.

On the company’s earnings call, Nima Ghamsari, Blend’s co-founder and head of Blend, said first-quarter revenue and non-GAAP operating income both came in ahead of expectations. He also pointed to 15 new deals and expansions signed during the quarter, including an eClose deal with a top 20 bank and a new mortgage deal with another top 100 bank.

Ghamsari said Blend’s pipeline as of March 31 was up more than 40% year over year, excluding the pipeline associated with Autopilot, the company’s AI agent and orchestration layer for lending workflows.

First-quarter revenue rises 15%

Jason Ream, Blend’s head of finance and administration, said total revenue for the first quarter was $30.8 million, above the high end of the company’s guidance range and up 15% from a year earlier. He said growth was driven by both mortgage and consumer banking.

Mortgage suite revenue was $17.2 million, up 18% year over year. Blend processed approximately 187,000 funded loans on its platform during the quarter, up 29% year over year and slightly above the company’s expectations entering the period.

Ream said the higher loan volume was partially offset by lower year-over-year economic value per funded loan, which was $84 in the quarter. He said that figure was within the $84 to $85 range discussed on the company’s prior call, but at the lower end because higher mortgage volumes mechanically reduce the per-loan calculation under some fixed-fee customer arrangements.

Consumer banking suite revenue was $10.8 million, up 12% year over year. Professional services revenue was $2.9 million, up from $2.1 million in the fourth quarter. Ream said about $600,000 of the professional services revenue related to work completed in prior periods and recognized in the first quarter under the company’s revenue recognition policies, adding that Blend does not expect a similar catch-up amount in future quarters.

Blend reported non-GAAP gross profit of $24.8 million and a non-GAAP gross margin of 80.3%, up from 72.9% in the first quarter of 2025. Ream said the quarter’s gross margin benefited from the professional services catch-up and a one-time cost-of-revenue benefit that together added about 2 to 3 percentage points.

Non-GAAP operating income was $4.1 million, above the company’s guidance range of $2 million to $3 million, representing a non-GAAP operating margin of nearly 13%. Free cash flow was $7.3 million, compared with $15.5 million in the prior year. Blend ended the quarter with $59 million in cash, cash equivalents and marketable securities and no debt.

The company also repurchased 11.2 million shares during the quarter at an average price of $1.66 per share, deploying $18.6 million of the $50 million authorization announced on its previous earnings call.

Autopilot adoption expands after beta launch

Management devoted much of the call to Autopilot, which Ghamsari described as Blend’s flagship AI agent. The company introduced the product in beta roughly two months before the call and allowed customers to use it free during the second quarter.

As of May 4, Ghamsari said 65 lenders had activated Autopilot, 22 were running it live in production and more than 7,000 applications had been touched by the product since it moved into live production. He said early results showed improvements in cycle time and conversion rate.

Ghamsari said two of Blend’s largest lenders were actively implementing Autopilot with go-lives planned for the second quarter, and that three more top 20 logos in Blend’s net-new pipeline could be influenced by the product. He said the company already had $10 million in Autopilot-related pipeline.

“This is not a small incremental line item for us,” Ghamsari said, describing Autopilot as “a whole new leg of growth” on top of Blend’s existing mortgage and consumer banking suites.

Blend plans to move Autopilot to paid tiers starting at the end of June. Ghamsari said some base AI-enabled capabilities will be included in Blend’s workflow, while paid tiers will include what the company calls “underwriting intelligence,” where Autopilot reads documents, takes action on loan files, runs calculations, reconciles information against guidelines and advances work through the lending process.

Over time, Blend intends to move paid Autopilot tiers to a per-funded-loan model, similar to the rest of its mortgage suite. Ghamsari said that structure aligns Blend’s revenue with customer success when lenders fund more loans.

Management says AI could support 2027 growth

Ghamsari said Blend sees a path for Autopilot and internal AI initiatives to drive 10% to 15% incremental top-line growth in 2027, along with greater efficiency and speed inside the company. In response to a question from Ryan Tomasello of KBW, Ghamsari said that view is supported by the current $10 million Autopilot pipeline and early customer momentum, while noting that the company still has “a lot of work” ahead.

Blend is also using AI agents internally through what Ghamsari called “Blend Background Agents.” He said the goal is for agents to take the first pass on outside inputs such as support tickets, customer issues or feature requests before a team member reviews and approves the work.

Ghamsari said the company’s AI adoption efforts have already resulted in more than 1.5 times productivity in 2026 versus 2025 based on the number of pull requests from the engineering team.

Guidance reflects caution on mortgage rates

For the second quarter, Blend expects total revenue of $32 million to $34 million, representing year-over-year growth of approximately 1% to 7%. The company expects mortgage suite revenue to grow 4% to 10% year over year, with economic value per funded loan in the $79 to $80 range.

Consumer banking suite revenue is expected to range from a 2% decline to 4% growth year over year in the second quarter. Blend guided for non-GAAP operating income of $5.5 million to $6.5 million, implying a non-GAAP operating margin of approximately 18% at the midpoint.

Ream said Blend’s 2026 mortgage market outlook is anchored to Fannie Mae’s updated forecast, which calls for total mortgage market growth of approximately 19% year over year but was reduced earlier in the month as mortgage rates moved higher. He said Blend will remain cautious until rates decline meaningfully and refinancing activity improves.

Ream also said initial 2025 HMDA data showed approximately 4.4 million originations for the year, putting Blend’s 2025 mortgage market share at about 17%, within the company’s prior 16% to 18% guidance range. For 2026, Blend expects a market share headwind of about 100 basis points, primarily due to volume roll-off from one large customer previously discussed by management.

Management said Autopilot revenue upside is not yet included in the company’s expectations. Ream said Blend hopes to provide more detail on the potential impact after the free trial period and more time with customer usage data.

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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