Blend Labs, Inc. — Third Quarter 2026 Earnings Summary

Financial Performance:

• Total revenue for Q3 2026 was $32.9 million, a 1% increase year-over-year compared to $32.7 million in Q3 2025.
• Software platform revenue was $30.6 million (up 1% YoY), while professional services revenue remained flat at $2.3 million.
• GAAP operating loss was $2.6 million, an improvement from a $5.3 million loss in Q3 2025.
• Non-GAAP operating income was $4.9 million, up from $4.3 million in Q3 2025.
• GAAP diluted net loss per share was $0.03, compared to a GAAP diluted net income per share of $0.02 in Q3 2025.
• Non-GAAP diluted net income per share was $0.00 for both Q3 2026 and Q3 2025.
• GAAP gross profit margin was 72% (down from 74% in Q3 2025); non-GAAP gross profit margin was 77% (down from 78% in Q3 2025).
• Net cash provided by operating activities for the nine months ended September 30, 2026, was $16.1 million, compared to $10.0 million in the prior year period.
• Free cash flow for the nine months ended September 30, 2026, was $14.3 million, with a free cash flow margin of 15%, compared to $1.5 million and 2% margin in the prior year period.
• Cash and cash equivalents were $20.7 million as of September 30, 2026, down from $45.1 million as of December 31, 2025.
• Deferred revenue increased to $27.1 million as of September 30, 2026, from $19.4 million as of December 31, 2025.

Guidance and Future Outlook:

• Q4 2026 total revenue guidance is $27.7 million to $29.7 million.
• Q4 2026 non-GAAP operating income guidance is $2.3 million to $3.3 million.
• The company did not provide forward-looking GAAP equivalents for the non-GAAP operating income outlook due to uncertainty regarding stock-based compensation and non-recurring items.

Business Segments and Product Lines:

• Closed 26 new deals and expansions in Q3 2026, including a new top-10 bank logo.
• Autopilot customer count increased from six to ten during the quarter.
• Mortgage Suite revenue was $17.4 million for Q3 2026, a 2% decrease from $17.8 million in Q3 2025.
• Consumer Banking Suite revenue was $13.2 million for Q3 2026, a 5% increase from $12.6 million in Q3 2025.
• For the nine months ended September 30, 2026, Mortgage Suite revenue grew 7% to $53.9 million, and Consumer Banking Suite revenue grew 7% to $36.1 million.

Market and Competitive Landscape:

• Management described Q3 2026 as the best sales quarter in more than three years.
• The pipeline for Autopilot is described as large enough to size, with a focus on converting that pipeline.
• The company operates in a highly competitive market and notes risks related to the inability to compete effectively.

Risks and Challenges:

• Risks include ongoing economic uncertainty, rising mortgage interest rates, credit availability issues, real estate price fluctuations, tariffs, regulatory changes, inflation, and consumer confidence.
• Potential risks include failure to retain or acquire customers cost-effectively, reduced customer utilization, termination of key customer relationships, and inability to manage growth.
• The company faces risks related to restructuring actions, asset impairment charges, and the potential for share repurchase program changes.
• Stock-based compensation variability due to hiring, retention, and stock price fluctuations impacts GAAP results.

Management Commentary and Tone:

• Nima Ghamsari, Co-founder and Head of Blend, stated the company had its best sales quarter in over three years.
• Management emphasized that while they cannot control the market, they are focused on converting the large Autopilot pipeline.
• The tone regarding Autopilot momentum was positive, noting the customer base expansion and pipeline size.

Other Key Points:

• Share repurchases totaled $37.2 million for the nine months ended September 30, 2026, compared to $9.1 million in the prior year period.
• No share repurchases occurred in Q3 2026.
• The company hosts a live webcast on November 5, 2026, at 4:30 pm ET to discuss results.
• In 2025, Blend helped financial institutions process nearly $1.3 trillion in loan applications.
• The company excluded various non-recurring items from non-GAAP measures, including stock-based compensation, workforce reduction costs, abandoned facility costs, executive transition costs, litigation contingencies, transaction-related costs, and software impairment/amortization.