Blend Labs NYSE: BLND reported second-quarter revenue near the high end of its guidance range and non-GAAP operating income above its outlook, while management pointed to continued mortgage-market pressure and early commercialization progress for its Autopilot artificial intelligence product.
Total revenue was $33.8 million, up 7% from a year earlier. Non-GAAP operating income reached $7 million, exceeding the company’s guided range of $5.5 million to $6.5 million. Blend ended the quarter with $44.9 million in cash, cash equivalents and marketable securities and no debt.
“The second quarter was another disciplined, profitable quarter for Blend,” Co-founder and Head of Blend Nima Ghamsari said during the company’s earnings call.
Mortgage and Consumer Banking Results
Mortgage Suite revenue rose 7% year over year to $19.2 million. Funded mortgage loans on Blend’s platform increased 14% to approximately 233,000 during the quarter. Economic value per funded loan was $79, compared with $83 in the first quarter. Head of Finance and Administration Jason Ream said the decline was primarily mathematical, as higher second-quarter loan volumes lower the per-loan calculation when fixed-fee customer arrangements are included.
Consumer Banking Suite revenue increased 6% from a year earlier to $12.2 million, while Professional Services revenue was $2.4 million.
Non-GAAP gross profit totaled $26.5 million, producing a non-GAAP gross margin of 78.3%, compared with 76.1% a year earlier. Ream said the result was in line with the company’s normalized 77% to 78% gross-margin framework, despite growing, though still relatively low, model costs associated with Autopilot.
Non-GAAP operating expenses were approximately flat year over year at $19.5 million. Free cash flow was $6.9 million in the quarter.
Blend also repurchased 11 million shares at an average price of $1.65 per share during the quarter. Year to date, the company has repurchased 22.2 million shares for $36.8 million, leaving about $13.2 million available under its $50 million authorization.
Autopilot Launch and Early Customer Data
Autopilot, Blend’s AI-driven agent platform for lenders, became commercially available July 1. Ghamsari said more than 65 lenders activated the product during a four-month preview period beginning in February, during which cumulative loans processed through Autopilot exceeded 45,000. He later said the number was approaching 50,000 loans.
Based on preliminary data from loans processed through the system, Ghamsari said customers have seen a 10% to 15% improvement in pull-through rates, cycle-time improvements of two to four days and an average of about 4.5 hours of loan-fulfillment work automated per loan.
Six lenders had signed contracts that include Autopilot as of the call, including mortgage servicer Onity. Blend is initially selling the service through flat-fee, one-year agreements that provide full access. Over time, the company intends to shift paid tiers toward a per-funded-loan model, aligning its revenue with customer outcomes rather than the number of tasks performed.
Ghamsari said Blend believes its position at the borrower’s point of contact, its historical loan-processing data, its infrastructure and compliance framework, and its lender relationships distinguish the offering from generic AI tools. He said Autopilot can hand loan files back to lender teams when it is uncertain, while people remain in control of key decisions.
The company has not yet launched Autopilot for Consumer Banking Suite customers, although Ghamsari said the platform has baseline capabilities to support those customers and Blend is engaged with early customers on potential expansion. He described the company’s approach as working deeply with a limited number of “lighthouse customers” before broadening availability.
Internal AI Initiatives and Sales Pipeline
Blend is also applying AI internally under what management calls “Blend 3.0,” an agentic-first operating model. Ghamsari said the company’s engineering team increased throughput, as measured by pull requests, by 3.6 times since January with roughly the same headcount. AI agents are also being used to review incoming support tickets, draft responses and configuration changes, assist with customer-call follow-ups, and perform first-pass work in parts of the finance close process.
Management said the company signed 14 new deals and expansions during the quarter. Those included a new large credit-union customer that selected both Blend and Autopilot at the outset, as well as a cross-sale of Rapid Refi and Rapid Home Equity products to a top-five credit union.
Ghamsari said Blend’s overall pipeline continued to grow, while its late-stage pipeline—deals the company targets for closing within the next quarter—grew nearly 40% between March and June. The pipeline includes a large mortgage customer, a top-20 financial institution, and Rapid and Autopilot opportunities. Management expects two additional large Rapid deals to close in the coming months, though it noted that large institutions may require time for governance reviews of agentic tools.
Outlook Reflects Higher Rates and Churn Notices
Management said mortgage rates had risen from about 6.4% in May to roughly 6.8% in recent weeks, keeping refinance and purchase activity muted. Ream said Blend’s outlook is more conservative than Fannie Mae’s latest mortgage-volume forecast because the company expects refinance volumes to remain weak in a higher-for-longer interest-rate environment.
Blend also saw an increase in churn notices during the quarter. Ream said the affected customers generally planned to move to existing lower-cost or free point solutions, rather than AI-native offerings or in-house tools. The company expects the impact to be manageable, at a low-single-digit percentage of annual revenue.
- Third-quarter revenue is expected to be $31.5 million to $33.5 million, representing a year-over-year change of negative 4% to positive 2%.
- Third-quarter funded loan volume is projected at approximately 200,000 to 210,000 loans.
- Third-quarter non-GAAP operating income is expected to be $3.5 million to $4.5 million.
- Fourth-quarter funded loan volume is expected to be approximately 180,000 to 190,000 loans, down about 10% to 15% year over year.
Ream said investors should remain cautious about incorporating Autopilot revenue into models until more customers progress through the sales and deployment funnel. Management said it sees customer wins, product development velocity and Autopilot commercialization as factors that could support growth acceleration heading into 2027.
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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