Blend Labs, Inc. (BLND) Earnings

Management highlights

- Autopilot: 65 lenders have activated Autopilot, 22 are running it live in production, over 7,000 applications touched by Autopilot; Autopilot Chat and Autopilot MCP rolled out; pipeline of $10 million from Autopilot. - Internal AI agents: Agents handle customer issues, code fixes, etc., resulting in over 1.5x productivity in 2026 vs 2025 based on pull requests. - Financial: Q1 revenue and non-GAAP operating income above expected, signed 15 new deals and expansions.

Guidance

- Q2 2026 total revenue expected between $32 - $34 million, ~1%-7% y-o-y growth. - Mortgage suite revenue expected to grow 4%-10% y-o-y, EVPFL in Q2 $79 - $80. - Consumer banking suite revenue expected to be between negative two to positive 4% y-o-y in Q2. - Q2 non-GAAP operating income expected between $5.5 - $6.5 million, non-GAAP operating margin at midpoint ~18%. - Autopilot's revenue impact not quantified at this juncture.

Segment performance

Total revenue in Q1 2026 was $30.8 million. Mortgage street revenue was $17.2 million, up 18% year-over-year. Funded loans on platform were approximately $187,000 in Q1, up 29% year-over-year. Consumer banking suite revenue was $10.8 million, up 12% year-over-year. Professional services revenue was $2.9 million, up sequentially. Non-GAAP gross profit was $24.8 million and non-GAAP gross margin was 80.3%. Non-GAAP operating expenses were $20.7 million, up 10% year over year. Non-GAAP operating income was $4.1 million, with a non-GAAP operating margin of nearly 13%.

Risks & headwinds

None specifically detailed in the provided transcript

Analyst Q&A

• Q: Nima, in your prepared remarks, you mentioned that autopilot and your AI initiatives present a path, I think, to what you said was 10% to 15% more top-line growth. Can you just put a finer point on what you mean by that and what underpins your confidence in quantifying the benefits at this stage?

  A: Yeah, great to hear from you, Ryan. I mean, I'd start with our current pipeline. Our current auto pipeline is about $10 million. We've only been in the market for just over a month now with pricing with our customers. And we have a lot of customers who've turned it on. Really positive feedback we're getting. I mentioned two very large go-lives with customers. And so if we can keep up that momentum, I think of it as 10 to 15 percent incremental on top of whatever other growth you may be forecasting coming from autopilot is what we're, you know, as we see a path to right now. And so we obviously have to keep executing. We have a lot of work in front of us, but the product is awesome and our customers love it.

• Q: Hey, guys. Appreciate it. Nima, I appreciate all the color on autopilot and autopilot MCP, I guess. It sounds like obviously a lot of customers here are interested in piloting. I wonder if you could kind of provide a little bit more color on, like, what that looks like relative to a non-automated process to kind of just tangibly put some value on what customers are seeing and learning, and then maybe how you're also thinking about the deployment or utilization of the first-party agents versus kind of some of the MCP-enabled agents and maybe the economic variability between those.

  A: Yeah, so on the impact, you know, there's two anecdotes I'll share for two of the customers who have been sort of the biggest users of it. We help them track the cycle time and the conversion. The conversion is less obvious why the conversion is. And so I actually talked to one of our customers about this. I'll get to that in a second. The cycle time with one of the customers, for example, from application complete and blend to closing docs being sent to the customer or closing disclosures, I should say, being sent to the customer is It went from 29 to 21 days in one of the customers that we had. And so that's pretty meaningful improvement in their cycle times. It makes sense, I think, fundamentally, because customers have a lot of back and forth with consumers. And what Autopilot does is, in real time, as the consumer is in the flow, it finds those things that are going to be the gotchas down the line. It shows the consumer, hey, we noticed that this account is in the name of a trust. We need to get your trust documentation right now, versus asking for it a few days later once an underwriter reviews it and sends it to a processor, which sends it back to the loan officer. Sort of short circuits the process in a positive way to allow our hope with Autopilot plus some of the Rapid products. If you put those two things together, I'll call it Rapid Pilot, you can get an application started, approved, because Rapid gives you an approval and an offer up front. And then once that customer is ready to go, get them clear to close in a matter of minutes. And that's the world we want to enable for our customers and consumers, or maybe conditionally clear to close on an appraisal if there's an appraisal necessary for a mortgage. So I think that's. That's a, those are some positive numbers. I think where I've been more surprised is why the conversion is so much better, but I guess it makes sense when you can give people more certainty faster, we're seeing good conversion uplift too, which, you know, obviously it's early, but that's a, that's even more valuable to our customers. Cause that, those are customers, those are consumers that would be walking out the door that you'd spent time and money on as a lender, not just on things like credit polls and, and other data polls, but also your, your team's time and energy that went into that. So as we can shorten these cycles and make the process of lending more real time, I think it fundamentally transforms the industry. And one thing I wanted to say about consumer banking, because we're in the process of building out the integrations to all the consumer banking products for autopilot, I think there's opportunity there. Now, there's fewer manual tasks in consumer banking, but there's a lot more volume of those tasks. in terms of number of units that these customers do. And so while it may not be worth thousands of dollars alone to our customers long-term in consumer banking or per new account, the scale of these things does really matter to them. And they have very big operations teams managing these processes. So it's an important thing for them to be able to do a lot more volume with those teams. And I think autopilot enables that. I just was reminded of this. The other thing that I think has been a historical struggle, and I mentioned this in my prepared remarks, is rates really drive refi activity in particular. So if you're a mortgage servicer and you have a lot of your volume in refi, Your only way to handle large amounts of volume is to scale up and scale historically has been to scale up and scale down teams. And you don't get to really predict when rates go down. I mean, you try to, but it's very hard to predict when the next new numbers are going to come out, what the numbers are going to be. And so, you know, the ability to create elasticity of workforce when now you have agents that a lender can spin up and spin down alongside their team before their team is doing the work, the agents are taking a first pass. I mean, it just changes the economic profile of agents. servicing and recapture of servicing. I mean, I think for our large servicing customers, which we have many, I think it's going to change the way that they're able to do business because it's going to allow them to handle these fluctuations in the market even better than, even more importantly for them than someone on the purchase side. Makes sense.

• Q: Hey, guys. Good afternoon. Thanks for taking my questions. Neemai, just a must update on the rapid products. uptake um how how you're seeing uh market reaction to them obviously you know the market backdrop isn't as strong as we'd like but just um you know some of the feedback you're getting enough of a follow-up

  A: yeah i would say i i'd reiterate what i said about this this rapid pilot that seems to be getting the the momentum and focus from our customers rapid plus autopilot together. It's a lot of what I spend my time on. I've had two onsites with two very large banks and lenders in the last two weeks about this specific thing that they want to get live in Q2. Because in practice, our customers want to be able to, especially for refis and home equity, they want to be able to make an offer in real time. And then they want to be able to fulfill the work they need to get done on that offer in real time. And so the combination of those two things has been incredibly powerful. And on top of that, we have, like I said, you know, also earlier in a previous question, we have some very, very large customers going live with Rapid Home Equity, including some of the top home equity originators in the country. And so, you know, it's a It's definitely a good time in the industry. I'd say if I had one criticism of myself here, it would be, how do I make this so easy to adopt that they flip a switch and they turn it on and now they have rapid refi enabled in their environment? I mean, I think that's a challenge for us, something we're thinking about going into the next couple months. And we intend to make that happen. But it's something that as we make that happen, our customers will be able to adopt it so much easier. And that was actually a key learning for us from the autopilot work and rollout that we did, where we made it truly self-serve for a customer to turn that on. And we're seeing the adoption. I mean, the numbers that we shared in terms of number of lenders that have turned this on as a percentage of our total, but just think about large financial institutions turning on a new AI agent for their organization with a flip of a switch without even calling us. I mean, the most surprising part was we had fairly large banks, very large banks, turning this on in beta and production without us even knowing about it. And then we saw it start to stream through our logs and we said, oh, we should probably reach out to them and talk to them about it. And I mean, that's not to say we're a product-led growth company. We do like to talk to our customers to help them get the most of our product. But making things easy to adopt is going to be very good for Blend, and everything comes back to speed. So speed of adoption, speed of iteration for our team. If we're able to do those things, which I'm very confident we showed that with Autopilot, I'm very confident we can do that and take that microculture and microproduct, those concepts to the rest of all the things that we do at Blend, then I think we can help fundamentally change the landscape of of how our products are used and how they can impact our customers. I'll end with one, one last anecdote, you know, that, you know, I think autopilot MCP, I know this wasn't exactly your question, but autopilot MCP has unlocked a lot of doors for us because, you know, I was, I was onsite with one fairly large customer last week and they, you know, they, they had the head of engineering in the room and, and they, the first thing the head of engineering asked was like, hey, we want to build this into our mobile app. And I was like, great, you now have a way to do that. And it's called Autopilot MCP. You can get all the capabilities of Blend and the intelligence layer of Autopilot entirely in your own environment. And so he was like, wow, okay. And his first question to me, which is like a compelling one, was can I use this in other parts of my business? We don't use Blend for these other kinds of loans. And he named a couple other kinds of loans. And I was like, yeah. Sure. Autopilot works. You can put custom guidelines in there yourself. You don't even need to talk to us. And his eyes lit up. And the first thing he asked while we were in the room, it was a pretty big room, was a copy of the Autopilot MCP documentation, which we sent to him. And so now those are people who have historically struggled with how to fit themselves into this blend world or fit their tech stack into the blend world. And now we've opened that up. And we had another really interesting sales call with a fairly large bank. And The digital leader came on the call, and that's historically another one that feels a little bit displaced by us sometimes when we're brought in. And his first question was, can I use this with my current digital stack? And as soon as the answer to that was yes, of course, now with Autopilot MCP. He went from probably being somebody who would be a detractor to someone who was saying, oh, wow, this is actually really interesting. Now I can give new digital capabilities. I can help improve my customer experience and in a powered by way that, you know, would take months, if not years for them to do internally and building agents that are this powerful and this complex. And so I know that wasn't exactly your question, Joe, but I just was remembering that as I was talking.

• Q: Great, thanks for the question. Neema, in your conversations, have customers perceived the value that Autopilot's providing today? Do you feel like it's still primarily being thought of as a component of tech budgets, or are financial institutions increasingly open to viewing agentic products like Autopilot as a component of their labor budget?

  A: You know, it's interesting. I think right now, companies are figuring this out as we speak. So they don't know the answer to that exact question. you have and so it actually goes to how we price this in the short term to allow our customers in the short term to use it both for a few months free of charge but even after that we're going to have sort of flat pricing that's obviously good for us economically but also good for our customers to give them time um you know in the short term to you know make the the right changes they need to make to their process to organizations and so but i'd say long term they're all aligned to the fact that labor is something that doesn't need to be scaled up and down with the volume anymore. And I was having a conversation with the CEO of one of our large customers. And the idea of being able to scale their organization without having to add thousands or more heads is so compelling. And so it naturally ends up being a labor question. But I think probably the more important value proposition, as these numbers around conversion rates sort of get set in stone and we have better understanding of that, that's going to be even more valuable to our customers because there's so many consumers in this country who can benefit from lower interest rates or equity from their homes or consolidating debt or all these things that are happening that that has been historically hard for our customers to capture. And it's hard for consumers because they have to go through a very lengthy process. So now if we can make it really transparent with something like Rapid and then really automated with something like Autopilot, it's going to change you know it's going to make it so that consumers will have less friction in this process and therefore more consumers will do it and they'll do it with our customers Got it