- **5Q non-GAAP profitability streak**: Blend's disciplined transition to higher-margin partnerships and AI-driven cost reduction.
- **60% pipeline growth**: Consumer Banking Suite now 39% of revenue, up from 29% YoY, driven by Rapid products.
- **$83-84 Q4 evPFL guidance**: Mortgage Suite headwinds from legacy roll-offs, but 2026 focus on Rapid adoption and AI origination reducing $11k loan costs.
- **Mr. Cooper 2028 contract**: Protects $5M+ annual revenue but creates 100bps 2026 share decline, offset by lower rates' 1.13M-1.23M 2026 funded loans outlook.

**【Management Opening Remarks】**
- Blend has achieved 5 consecutive quarters of non-GAAP operating profitability, reflecting strategic transitions to higher-margin partnerships and disciplined cost management.
- CEO Nima Ghamsari highlighted a 60% year-over-year pipeline growth, driven by high-quality deals in consumer banking and mortgage solutions.

**【CEO Commentary】**
- Consumer Banking Suite revenue now represents 39% of total revenue, up from 29% a year ago, driven by sticky, high-margin solutions like Rapid Home Equity and Blend Close.
- Mortgage Suite faces headwinds from legacy customer roll-offs, but 2026 priorities include expanding adoption of Rapid products and AI-driven origination.
- Blend Intelligent Origination, embedded AI, reduces $11,000 in human labor costs per loan, showcasing long-term operational efficiency.

**【CFO Financial Commentary】**
- Q3 2025 total revenue: $32.9M (down 1% YoY), with Consumer Banking Suite up 11% QoQ, Mortgage Suite down 18% YoY.
- Non-GAAP operating income: $4.6M (14% margin), up from $2.5M in Q2 2025.
- Q4 2025 guidance: Revenue $31-32.5M, operating income $2.5-3.5M, evPFL $83-84.

**【Q&A Highlights】**
- Mr. Cooper's 2028 contract protects $5M+ annual revenue but creates 100bps market share headwind in 2026.
- AI adoption in origination reduces manual review costs by 90%, with 100%+ QoQ internal adoption.
- 2026 macro outlook: Lower rates may drive 1.13M-1.23M funded loans, offsetting Mr. Cooper's 100bps share decline.


Blend Labs, Inc. (BLND) Q3 2025 Earnings Call Transcript

- **Revenue Growth**: 10% YoY to $31.5 million, with consumer banking up 43% to 36% of total revenue.
- **Customer Resilience**: Zero churn in 2025, RPO hits record $190 million, and 17 new mortgage customers signed in last 12 months.
- **EVPFL Recovery**: Near trough at $88, with Q3 expected to dip to $85-$86 before mid-80s recovery by year-end.
- **AI Innovation**: Piloting AI tool to automate loan origination, with potential to save customers thousands per loan.
- **Cash Position**: $93.3 million cash, $20.9 million remaining under buyback program, and 15% non-GAAP operating margin.

**【CEO Summary Section】**
- **Revenue Growth**: Total revenue of $31.5 million, up 10% year-over-year, driven by 43% growth in consumer banking suite to $11.4 million. Mortgage suite revenue declined 3% to $18 million due to strategic shifts in take rate.
- **Sales Momentum**: 23 new deals in Q2 (double Q1), including 3 net new IMB logos and 7-figure expansions. Remaining Performance Obligations (RPO) reached a record $190 million.
- **Customer Retention**: Zero churn notices in 2025, down 70% from 2024. New logos represent 80 bps of 2024 HMDA market volumes.
- **Product Expansion**: EVPFL (economic value per funded loan) at $88, near trough levels, with medium-term recovery expected via Rapid Refi and Blend Close. Consumer banking now 36% of total revenue vs. 28% last year.
- **AI Initiative**: Piloting AI tool to automate loan origination processes, aiming to reduce costs and improve economics for customers.

**【CFO Financial Commentary】**
- **Gross Margin**: Non-GAAP gross margin improved to 76% (vs. 71% in Q2 2024), driven by cost optimization and higher-margin partnerships.
- **Operating Expenses**: Non-GAAP operating expenses down $6.6 million YoY to $19.3 million, resulting in $4.7 million operating income (15% margin).
- **EVPFL Dynamics**: Q2 EVPFL decline ($88 vs. $97 in Q2 2024) due to strategic transition to partnership model. Near-term headwind from a large IMB deal expected to drag Q3 EVPFL to $85-$86, with recovery to mid-80s by year-end.
- **Cash Flow**: Free cash flow negative $9 million, but improving from -$5.1 million in Q2 2024. $93.3 million cash on hand, with $20.9 million remaining under share buyback program.
- **Guidance**: Q3 revenue $31.5-$33.5 million (midpoint -2% YoY), operating income $3-$4.5 million.

**【Q&A Highlights】**
- **Industry Trends**: CEO notes rate volatility impacts volumes but emphasizes home equity growth (Rapid Home Equity adoption) and customer resilience. CFO expects 2025 HMDA volumes 4.24-4.64 million (5-15% YoY growth).
- **Customer Mix**: New logos vs. expansions not disclosed, but 17 mortgage customers signed in last 12 months, 6 live and ramping. IMB wins driven by dedicated business unit and competitive differentiation.
- **AI Investment**: CEO describes early-stage AI pilot as "game-changing," with potential to save customers thousands per loan. No specific investment figures disclosed, but highlights efficiency gains across product lifecycle.
- **Rule of 40**: CFO states no updates to prior guidance, monitoring macro trends for potential adjustments.
- **Home Equity Contribution**: Consumer banking growth driven by both core products and home equity lending, with seasonal home equity uptick in Q2.

Blend Labs, Inc. (BLND) Q2 2025 Earnings Call Transcript

- **Software-First Transformation**: Sale of Title365 enables 73% platform gross margin, up 5% YoY, with $15.5M record free cash flow.
- **Market Catalyst Success**: Rocket-Mr. Cooper deal drove 11 new customer agreements in Q1, 3x prior year pace, with 10 top servicers using Blend's embedded solutions.
- **Product-Driven Growth**: Rapid Refi/Home Equity solutions generate 1.9x higher economic value per loan, with 50%+ conversion rate improvements.
- **Q2 Outlook**: $30.5M - $32.5M revenue (10% YoY growth), $3.5M - $5M operating income, and >90% contribution margin on new add-on products.


**【CEO Summary Section】**
- Blend is transitioning to a software-first model, with the announced sale of its Title365 business to focus on high-margin partnerships and platform solutions.
- The Rocket-Mr. Cooper deal is driving industry-wide digital transformation, with Blend's embedded platform solutions (e.g., Rapid Refi and Home Equity) achieving 50%+ conversion rates.
- Q1 2025 highlights include: 
  - Platform revenue of $26.8M (12% YoY growth)
  - Record free cash flow of $15.5M
  - 11 new customer agreements signed (3x Q1 2024 pace)
  - RPO of $158.1M (vs. $150M annual target)
  - Economic value per funded loan of $93 (near guidance of $94)

**【CFO Financial Commentary】**
- Platform non-GAAP gross profit: $19.5M (73% margin, +5% YoY)
- Operating expenses: $18.5M (-33% YoY)
- Non-GAAP operating income: $1M (4% margin)
- Q2 2025 guidance: 
  - Revenue: $30.5M - $32.5M (10% YoY growth)
  - Operating income: $3.5M - $5M
  - Full-year operating expenses: $85M - $90M
- Contribution profit per funded loan from add-on products rose 67% QoQ to $10 (vs. $6 in Q3 2024), with >90% margin expected in near term.

**【Key Q&A Themes】**
- **Product Expansion**: Rapid Refi and Home Equity solutions generate 1.9x higher economic value per loan than traditional products, with 50%+ conversion rate improvements.
- **Market Strategy**: Prioritizing existing customer satisfaction before upselling, with 10 of top 20 mortgage servicers now using Blend's embedded workflows.
- **AI Investment**: Exploring AI for document analysis and compliance, with potential to enhance lender efficiency and customer experience.
- **Capital Deployment**: Reinvesting in AI, sales team expansion, and platform enhancements while maintaining profitability goals.


Blend Labs (BLND)-8 May 25-2025 Q1 Earnings call transcript

- **Consumer Banking Growth Surpasses Targets**: 42% YoY revenue growth vs. 35% CAGR target, with Q4 at $9.5 million.
- **AI-Driven Efficiency**: Doc AI reduces operational costs by 90%, and Truework partnership improves income verification accuracy.
- **Rapid Products Show Promise**: Rapid Refi EV/Funded pull-through advantage of 1.5x, with 3 customers live.
- **Profitability Milestones**: Q4 non-GAAP operating income $5.2 million, free cash flow improving to -$7.2 million.
- **2025 Outlook**: Free cash flow positive in Q1, Rule of 40+ by year-end, and IMB-focused expansion.

**【CEO Opening Remarks】**
- Blend achieved 15% YoY total revenue growth in Q4 2024, driven by consumer banking (48% YoY growth) and new customer wins like the TOP10 U.S. bank and PHH Mortgage.
- Consumer banking revenue exceeded the 35% CAGR target, growing 42% for the full year, with Q4 reaching $9.5 million.
- The company reported $5.2 million in non-GAAP operating income, marking the second consecutive quarter of profitability.
- Pipeline grew 50% YoY, with a focus on independent mortgage banks (IMBs) and rapid refinance solutions.
- AI integration, such as Doc AI for post-closing automation, is expected to reduce operational costs by 90% and improve loan processing efficiency.

**【CFO Financial Highlights】**
- Q4 2024 total revenue: $41.4 million (15% YoY growth)
- Platform revenue: $30.1 million (16% YoY growth)
- Non-GAAP gross margin: 75% (up from 71% YoY)
- Non-GAAP operating margin: 13% (vs. -42% YoY)
- Free cash flow improved to -$7.2 million (from -$20.8 million YoY)
- RPO reached $123 million (30% YoY growth)
- Economic value per funded loan (EV/Funded) for mortgage suite: $96 (down from $99 Q3, due to HOI business sale)

**【AI & Product Innovations】**
- Rapid Refi solution launched Q4 2024, with 3 customers live and EV/Funded pull-through advantage of 1.5x.
- Rapid Home Equity solution reduced application-to-funding cycle times by 20%.
- AI-driven income verification partnership with Truework to reduce manual workload by 90%.
- BlendBuilder platform enables 80% faster product development compared to legacy methods.

**【Q&A Key Takeaways】**
- Consumer banking growth driven by deposit account opening and tailored lending solutions, with 7 of 10 top home equity originators using Blend's platform.
- IMB-focused business unit launched with Justin Venhousen, targeting branch-level configurations and hybrid closings.
- 2025 guidance: Platform revenue $25-27 million (9% YoY growth), free cash flow positive in Q1, and Rule of 40+ by year-end.
- Sales and marketing investment to accelerate pipeline conversion, with focus on AI and rapid product adoption.

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