Blend Labs 2025 Q2 Earnings Narrowed Losses, Revenue Growth

Blend Labs (BLND) reported its fiscal 2025 Q2 earnings on August 8, 2025, delivering a 9.9% revenue increase and a significant reduction in net losses, though the company continues to post quarterly losses for the sixth consecutive year. The firm provided cautious revenue guidance for Q3 and emphasized strategic initiatives to drive long-term growth.

Blend Labs reported total revenue of $31.52 million for the second quarter of 2025, a 9.9% year-over-year increase from $28.70 million in 2024 Q2. The growth was driven by strong performance across its product lines, with the Mortgage Suite contributing $17.96 million, the Consumer Banking Suite generating $11.43 million, and Professional Services adding $2.13 million to the top line. The company highlighted its ongoing focus on platform innovation and simplified strategies as key drivers behind the growth, particularly in the expanding Consumer Banking segment, which now accounts for 36% of total revenue.

Blend Labs significantly narrowed its net loss in Q2 2025 to $-6.64 million, down from $-19.42 million a year earlier, marking a 65.8% reduction in losses. On an earnings per share basis, the company improved its performance from a loss of $0.09 per share in 2024 Q2 to $0.04 per share in the current quarter, representing a 55.6% improvement. Despite these positive trends, the company has reported losses for the past six years in the same quarter, underscoring ongoing financial challenges.

The stock price of Blend Labs experienced a notable downturn following the earnings release, with a 13.33% decline on the most recent trading day. Over the last full trading week, the stock fell 23.31%, and it has dropped 23.53% month-to-date. These declines reflect investor uncertainty around the company's path to profitability.

Post-earnings price action analysis showed mixed results for a strategy of buying BLND shares on the day of the earnings release and holding for 30 days. While this approach generated a 10.29% compound annual growth rate over the past three years, it underperformed the benchmark by 14.21 percentage points. The strategy also featured a low risk profile, with a maximum drawdown of 0.00% and a Sharpe ratio of 0.12, indicating modest returns relative to its low volatility.

CEO Nima Ghamsari highlighted four consecutive quarters of year-over-year revenue growth and progress toward non-GAAP profitability, attributing the results to the company’s simplified strategy and platform innovation. He emphasized efforts to expand market share through new client acquisitions and customer expansions, with 23 deals closed in Q2, including three in the independent mortgage bank sector. The CEO also noted that churn notices declined to zero in Q2 2025, following a 70% reduction in 2024, demonstrating improved customer retention. Looking ahead, Ghamsari expressed optimism about leveraging AI to modernize processes in the mortgage industry and introduced a pilot AI tool to enhance operational efficiency.

Amir Jafari, Head of Finance & Administration, guided for Q3 2025 total revenue between $31.5 million and $33.5 million, with a midpoint suggesting a 2% year-over-year decline. Non-GAAP operating income is expected to range from $3 million to $4.5 million, with full-year non-GAAP operating expenses projected between $85 million and $90 million. Jafari also provided updated market volume estimates for 2025, projecting 4.24 million to 4.64 million units, with 1.16 million to 1.26 million units expected in Q3 and 1.13 million to 1.23 million in Q4. The estimated economic value per funded loan (EVPFL) for Q3 is between $85 and $86, with an exit rate for the year near the mid- to upper 80s.

Additional News

On the same date as Blend Labs' earnings release, Nigerian media outlet Punch Newspapers reported on a growing trend in the Nigerian used car market, driven by economic hardship leading more private vehicle owners to sell their cars. This market shift reflects broader economic challenges in the country. In politics, former Abia State Deputy Governor resigned from the PDP, while Rivers State stakeholders called on President Tinubu to halt local government elections and reinstate a suspended official. In business, Nigeria’s foreign direct investment (FDI) dropped by 70% over three months, signaling a decline in international investment. Meanwhile, Dangote Cement was recognized as the Cement Company of the Year, reinforcing its leading position in the sector.