Summary
Blend Labs ended its fiscal 2025 first quarter with revenue of $26.77 million, up 12.3% from the prior-year quarter. Gross profit rose 18.2% to $18.96 million, and gross margin expanded to 70.8%, up 3.5 percentage points. The company still posted an operating loss of $7.69 million, but the operating margin of negative 28.7% improved by 60.3 percentage points. Net loss attributable to Blend Labs was $9.23 million, an improvement from a year earlier. Diluted EPS was negative $0.06, also an improvement. The quarter marked a strategic shift. Blend is moving to a software-first model and has entered an exclusive process with a leading title and mortgage services provider for a potential sale of its title insurance business. The results of the former Title segment are presented as discontinued operations, leaving Blend with a single reportable segment.
Operational momentum improved. Blend closed almost three times more deals in the first quarter than in the same period last year. It signed a top 25 credit union by asset size to support a multi-year transformation across deposits, credit cards, personal loans, and home lending. After a new signing and an expansion, Blend now serves 10 of the top 20 mortgage servicers in the country. Adoption of Rapid Refinance and Rapid Home Equity helped drive an average 1.9x increase in economic value per funded loan for signed deals. Total remaining performance obligations reached $158.10 million, up 70.0% year over year. Cash generation was a highlight. Operating cash flow was $20.39 million, up from the year-ago quarter. Free cash flow was $15.5 million, the first positive free cash flow in company history, compared with negative $5.0 million in the prior-year quarter. Capital expenditures were $4.59 million, up 133.6%.
Guidance points to further growth. For the second quarter of 2025, Blend expects Blend Platform revenue of $30.5 million to $32.5 million and non-GAAP net operating income of $3.5 million to $5.0 million. For the full year 2025, the company guides non-GAAP operating expenses to $85.0 million to $90.0 million. The second-quarter outlook assumes U.S. aggregate industry mortgage originations will be higher than in the first quarter, based on application volume through its customer base and macroeconomic data. Blend expects the mortgage market size to be between 1,150,000 and 1,250,000 units. The guidance also incorporates the expected impact from moving add-on products to a partnership model and expanding the platform strategy. Blend did not provide forward-looking GAAP equivalents for non-GAAP net operating income or non-GAAP operating expenses because of uncertainty around stock-based compensation and non-recurring items.
Risks remain tied to the mortgage cycle and customer concentration. The mortgage market depends on government policies, interest rates, housing affordability, inflation, tariffs, trade relations, and consumer confidence. In the first quarter of 2025, Blend saw a decrease in mortgage transactions on its platform compared with the last quarter of 2024, which it attributed to seasonal trends, continued high interest rates, decreased housing affordability, and uncertain political and economic conditions. The company faces execution risks if it fails to retain customers, acquire new customers cost-effectively, or if customers reduce utilization of its products. Key customer terminations or reduced business could hurt results. Competition is intense, and Blend has a limited operating history in an evolving industry. Other risks include restructuring outcomes, impairment charges, the governance rights and potential dilution from the Haveli investment, changes to the share repurchase program, and the title business exit. As of March 31, 2025, Blend had no outstanding debt.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q1 FY2025 | Q4 FY2024 | QoQ | Q1 FY2024 | YoY |
|---|---|---|---|---|---|
| Revenue | $26.8M | $41.4M | -35.4% | $34.9M | -23.4% |
| Gross profit | $19.0M | $24.7M | -23.3% | $18.1M | +4.5% |
| Gross margin | 70.8% | 59.7% | +11.1 pp | 51.9% | +18.9 pp |
| Research & development | $7.5M | $8.9M | -15.1% | $14.2M | -47.0% |
| Sales & marketing | $7.2M | $6.6M | +9.2% | $10.2M | -29.6% |
| General & administrative | $11.2M | $11.0M | +2.4% | $13.9M | -19.5% |
| Total operating expenses | $26.7M | $26.5M | +0.5% | $39.3M | -32.2% |
| Operating income (loss) | -$7.7M | -$1.8M | -330.5% | -$21.2M | +63.7% |
| Operating margin | -28.7% | -4.3% | -24.4 pp | -60.6% | +31.9 pp |
| Net income (loss) | -$9.4M | -$899.0K | -946.9% | -$20.7M | +54.4% |
| Net margin | -35.2% | -2.2% | -33.0 pp | -59.1% | +24.0 pp |
Risks
MD&A states that in the first quarter of 2025 mortgage transactions on the software platform decreased compared to the last quarter of 2024 due to seasonal trends, continued high interest rates, decreased housing affordability, and uncertain worldwide political and economic conditions. Mortgage Suite revenue decreased 3% in Q1 2025 compared to Q1 2024, and the company says changes in mortgage origination volumes have had and are likely to continue to have material effects.
For 2024, the top five customers in the Blend Platform segment accounted for 33.0% of segment revenue, and 23 customers generating more than $1 million represented 62.8% of segment revenue. In the previously reported Title segment, the top five customers accounted for 73.2% of segment revenue, with Mr. Cooper accounting for 46.8%.
In Q1 2025 the company decided to exit its title operations and initiated a formal review of strategic alternatives for the title business, with results presented as discontinued operations. Risk factors note there is no set deadline, no assurance a transaction will occur, and the pendency could disrupt operations, increase near-term costs, divert management attention, and increase undesired workforce turnover.
Risk factors state the company has incorporated and may continue to incorporate AI technology into its platform and expects to rely on AI for future growth, but customers in highly regulated industries may be reluctant to adopt AI features, competitors may incorporate AI more quickly or successfully, and evolving laws such as the EU Artificial Intelligence Act may require significant changes to its use of AI.
The company states its sales cycles are typically lengthy, generally ranging from six to nine months for smaller financial services firms and twelve to eighteen months or more for larger financial services firms. Macroeconomic conditions including rising interest rates and declining demand for mortgage, mortgage-related, and consumer banking products may further impact the sales cycle.
MD&A describes restructuring actions and workforce reductions since 2022, and risk factors state that future workforce reduction plans may adversely affect employee morale, culture, and the ability to attract and retain employees. The company also depends on its founders and senior management team, including Nima Ghamsari.
Holders of Series A Preferred Stock, including Haveli, have voting rights on an as-converted basis, consent rights over certain actions, and redemption rights beginning after the fifth anniversary of issuance. Conversion of the Series A Preferred Stock or exercise of the Haveli Warrant would dilute Class A common stockholders, and repurchase obligations could impact liquidity.
As of March 31, 2025, the company had an accumulated deficit of $1,394.2 million. MD&A states the company may incur operating losses in the future and may require additional capital resources to grow its business, though it believes current cash, cash equivalents, and marketable securities of $104.8 million will fund operations for at least the next 12 months.
SaaS KPIs
All quarters →Free cash flow margin
Free cash flow
Non-GAAP gross margin
Non-GAAP operating margin
Summary, forecast, risks and KPIs are extracted from Blend Labs, Inc.'s SEC filings for Q1 FY2025 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 2, 2026.