Blend Labs, Inc. Q2 FY2025 earnings call

Key Areas Highlighted

• Expanding market share with new logos and existing customer expansions, with sales momentum accelerating in Q2 with 23 newer expanded deals. Remaining performance obligations (RPO) reached a record $190 million.
• Focus on expanding take rate with existing customers, with EVPFL (economic value per funded loan) at $88 in Q2, near trough levels, and potential for growth from products like Rapid Refi and Blend Close.
• Rapid growth in consumer banking suite, which represented 36% of total revenue in Q2 2025, up from 28% a year ago, with 43% year-over-year growth. Pipeline for consumer banking up 18% year-over-year.
• AI pilot underway, with potential to save customers time and money while capturing better economics for Blend.

Amir's Insights

• Sold Title365, aligning with simplified software-first model. Non-GAAP operating income was $4.7 million, RPO at $190 million. Q3 revenue guidance $31.5M-$33.5M, non-GAAP operating income $3M-$4.5M.

Total revenue in the second quarter of 2025 was $31.5 million, up 10% year-over-year. Consumer banking suite revenue saw a 43% increase to $11.4 million, while mortgage suite revenue decreased 3% to $18 million. Consumer banking represented 36% of total revenue in Q2 2025, up from 28% the previous year.

Q3 Guidance

• Total revenue expected between $31.5 million and $33.5 million, with midpoint representing a year-over-year decline of 2%. Non-GAAP operating income expected between $3 million and $4.5 million.

Market Volumes

• Estimated 2025 market volumes: 4.24 million to 4.64 million. Q3 volumes estimated 1.16 million to 1.26 million, Q4 1.13 million to 1.23 million.

• Forward-looking statements involve substantial risks and uncertainties. Market volumes and rate movements are beyond the company's control. Near-term headwind from a large strategic deal with lower upfront pricing impacting EVPFL.

Q: Dylan Becker asked about rate volatility and how Blend is insulated by home equity products.

A: Nima noted rate movements are out of control but home equity and products like Rapid Refi help insulate.

Q: Ryan Tomasello inquired about deal mix and IMB logos.

A: Nima said IMB wins are competitive takeaways and a dedicated IMB unit is driving momentum.

Q: Ryan Tomasello asked about Rule of 40.

A: Amir said they're monitoring but no change to guidance yet.

Q: Aaron Kimson asked about consumer banking home equity component.

A: Amir explained seasonal uptick, Rapid Home Equity traction, and non-home equity components contributing.

Q: Pallav Saini asked about AI investment.

A: Nima said Blend is early in AI journey, AI makes company more efficient, benefiting customers.