Summary
Blend Labs posted fourth-quarter revenue of $31.6 million, up 5.0% from the prior-year quarter. Full-year revenue was $123.6 million, up 6.8%. Gross profit rose to $23.4 million for the quarter, up 4.6%, and to $91.2 million for the year, up 9.5%. Gross margin slipped to 73.8% in the quarter, down 0.3 percentage points. The full-year gross margin of 73.8% was up 1.9 percentage points.
The bottom line is still red. The fourth-quarter operating loss widened to $4.8 million as operating margin fell to -15.3%, down 4.4 percentage points from the prior-year quarter. The full-year trend runs the other way: the operating loss narrowed 55.5% to $21.7 million, and operating margin improved 24.6 percentage points to -17.6%. Net loss attributable to Blend widened to $6.8 million in the quarter. For the full year, net loss narrowed 84.3% to $6.8 million, and diluted loss per share was $0.10.
Cash results improved. Operating cash flow was $1.5 million in the fourth quarter and $11.5 million for the year, up 188.3% from the prior year, when operations consumed cash. Capital expenditures were $1.6 million in the quarter, down 37.6%, and $11.6 million for the year, up 19.0%; Blend reports capital expenditures as a cash outflow shown as a positive amount. Contract backlog grew: remaining performance obligations were $189.4 million at December 31, 2025, up 54.0% from a year earlier, while current deferred revenue was $19.4 million, up 0.8%.
The revenue mix is shifting. Mortgage Suite revenue for the year fell on lower verification of income revenue tied to a partnership model transition, insurance revenue linked to the sale of that business, customer churn and renewal pricing on one large contract, according to the filing. Consumer Banking Suite revenue grew on deployments of several large customers, higher home equity and deposit account opening revenue, and better attach rates on the digital closing product. Management also pointed to a gain on a non-marketable equity security as a lift to full-year other income, net.
Blend has spent the year simplifying. It moved the former Title segment into discontinued operations in the first quarter of 2025 and completed the sale of substantially all of the assets and liabilities of its title insurance business on March 1, 2026. Restructuring charges fell sharply for the year, reflecting a smaller workforce reduction plan than the one taken in 2024.
Guidance for the full fiscal year 2026 is limited. Management expects operating expenses to increase slightly compared with 2025, mainly because adoption of ASU 2025-06 will reduce the amount of internal-use software that qualifies for capitalization. No revenue outlook appears in the filing. The board authorized a new repurchase program of up to $50.0 million of Class A common stock on March 10, 2026, after the prior $25.0 million authorization was used in full during 2025.
Risks sit mostly outside the company's control. Revenue depends heavily on mortgage and mortgage-related transaction volumes, which move with Federal Reserve policy, tariffs, trade relations and the possibility of an economic downturn in the United States or worldwide. Industry forecasters project continued growth in mortgage originations into 2026, a tailwind Blend cites, but customer churn and renewal pricing on large contracts remain live issues. The company keeps a full valuation allowance against its net federal and state deferred tax assets and reports an accumulated deficit, and it says it may need to raise capital if the business needs more investment.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q4 FY2025 | Q3 FY2025 | QoQ | Q4 FY2024 | YoY |
|---|---|---|---|---|---|
| Revenue | $32.4M | $32.9M | -1.3% | $41.4M | -21.7% |
| Gross profit | $24.4M | $24.5M | -0.0% | $24.7M | -1.1% |
| Gross margin | 75.4% | 74.4% | +1.0 pp | 59.7% | +15.7 pp |
| Research & development | $9.5M | $8.5M | +11.1% | $8.9M | +6.9% |
| Sales & marketing | $7.1M | $7.9M | -10.3% | $6.6M | +7.3% |
| General & administrative | $12.4M | $12.9M | -3.8% | $11.0M | +13.1% |
| Total operating expenses | $29.0M | $29.4M | -1.4% | $26.5M | +9.2% |
| Operating income (loss) | -$4.5M | -$4.9M | +8.2% | -$1.8M | -152.2% |
| Operating margin | -13.9% | -14.9% | +1.0 pp | -4.3% | -9.6 pp |
| Net income (loss) | -$3.6M | $12.5M | -129.0% | -$899.0K | -304.9% |
| Net margin | -11.2% | 38.1% | -49.4 pp | -2.2% | -9.1 pp |
| Diluted EPS | -$0.03 | $0.02 | -$0.05 | -$0.03 | ±$0.00 |
| Customers | 25 | — | — | 23 | +8.7% |
Risks
The company identified two material weaknesses in internal control over financial reporting in connection with the FY2025 audit. Failure to remediate in a timely manner could result in errors or restatements and impair reporting obligations.
For 2025, the top five customers accounted for 39% of revenue and 25 customers generating more than $1 million represented 75% of revenue. Many customers lack long-term contractual financial commitments, so loss of a key customer could materially reduce revenue.
The business is substantially dependent on the financial services and mortgage industries, and increases in market interest rates have and will likely continue to adversely affect transaction volumes. FY2025 year to date revenue rose 6.8%, but mortgage origination activity remains sensitive to Federal Reserve policy and macroeconomic uncertainty.
MD&A reports Mortgage Suite revenue decreased for FY2025 while Consumer Banking Suite revenue increased, with the decline tied to verification partnership transition, customer churn, and renewal pricing. Continued reliance on mortgage-related volumes exposes revenue to product and market shifts.
The company expects to rely on AI to drive future growth but faces reluctance from regulated customers, evolving laws such as the EU AI Act and U.S. state AI legislation, and potential claims if AI outputs are deficient, inaccurate, or biased.
Sales cycles are typically six to nine months for smaller financial services firms and twelve to eighteen months or more for larger firms, and macroeconomic conditions can further delay purchases. This creates unpredictability in revenue timing and costs.
In March 2026, the company completed the sale of substantially all assets and liabilities of its title insurance business while it had already classified Title results as discontinued operations. The company may be required to indemnify the purchaser for certain liabilities, and pendency or integration risks could divert management attention.
The multi-class structure concentrates voting power with Nima Ghamsari, who as of December 31, 2025 represented approximately 31% of total voting power and could hold approximately 82% if all equity awards were exercised. Series A Preferred stockholders also have consent rights, redemption rights, and a board designation right, limiting Class A stockholder influence.
Past and potential future restructuring actions, including workforce reductions, may adversely affect the company's reputation and its ability to recruit, retain, and motivate highly skilled personnel. R&D and sales and marketing expenses declined in FY2025 partly due to lower headcount from restructuring.
Although FY2025 year to date net loss narrowed to $6.8 million from $43.3 million in FY2024 year to date and operating cash flow was $11.5 million for FY2025 year to date, the company has a history of net losses and may require additional capital to support growth.
Summary, forecast, risks and KPIs are extracted from Blend Labs, Inc.'s SEC filings for Q4 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.