Blend Labs Growth Cools After a Faster First Quarter
Second-quarter revenue was $33.8 million, up 7% from a year earlier, as non-GAAP operating income reached $7.0 million.
Blend Labs, Inc. (BLND), a leading origination platform for digital banking solutions, reported second-quarter revenue of $33.8 million, up 7% from a year earlier, after a 15% year-over-year increase in the first quarter. The result sat near the high end of the guidance range of $32.0 million to $34.0 million.
The slowdown in the growth rate was the quarter’s defining turn. Software platform revenue, the bulk of the business, was $31.4 million, matching the same 7% year-over-year pace as total revenue after a 15% rise in the first quarter. Professional services revenue was $2.4 million.
Profitability still improved. Non-GAAP operating income was $7.0 million, up from $4.6 million a year earlier, and above the high end of the $5.5 million to $6.5 million outlook issued in May. GAAP operating loss narrowed to $1.6 million from $4.8 million a year earlier. GAAP gross profit margin held at 74%. Non-GAAP gross profit margin was 78%.
GAAP diluted net loss from continuing operations attributable to common stockholders was $0.03 a share, unchanged from a year earlier. Non-GAAP diluted net income from continuing operations was $0.00 a share.
Mortgage Suite revenue was $19.2 million, or 57% of the software platform, and Consumer Banking Suite revenue was $12.2 million, or 36%. Together, those two suites accounted for the $31.4 million software platform total.
Cash generation flipped. Free cash flow was $6.9 million, a 20% free cash flow margin, after a $9.0 million outflow and a 29% negative margin in the year-ago quarter. Cash, cash equivalents and restricted cash excluding current assets held for sale from discontinued operations were $25.2 million at June 30.
The company repurchased 11.0 million shares in the second quarter for $18.2 million, leaving $13.2 million remaining on the existing authorization at quarter-end. In the first quarter, it had bought 11.2 million shares for $18.6 million, with $31.4 million left on the authorization.
Co-founder and Head of Blend Nima Ghamsari said the company delivered revenue near the high end and non-GAAP operating income above the high end of guidance “in a market that isn’t giving us much help.” He said Autopilot became commercially available on July 1 and that six lenders had signed on. The company added or expanded 14 customer relationships in the second quarter, including six deals with Autopilot. In the first quarter, it had added or expanded 15 relationships.
Ghamsari said that, paired with an agent-first transformation inside Blend, the company is working toward re-accelerating growth in 2027. In May, he had said an agent-first approach and Autopilot would open a path to growth acceleration in 2027.
For the third quarter of 2026, Blend is providing guidance of $31.5 million to $33.5 million of total revenue and $3.5 million to $4.5 million of non-GAAP operating income. That revenue range sits below the second-quarter guidance of $32.0 million to $34.0 million, and the non-GAAP operating income range is below the $5.5 million to $6.5 million outlook issued in May. The company has not provided a GAAP equivalent of the non-GAAP operating income outlook because of uncertainty around stock-based compensation and non-recurring items.
Autopilot’s commercial launch on July 1 and six signed lenders sit alongside the 14 relationships added or expanded in the quarter. Cash, cash equivalents and restricted cash excluding current assets held for sale from discontinued operations were $25.2 million at June 30. The remaining $13.2 million on the repurchase authorization is the capital-return cushion left after the $18.2 million of second-quarter buybacks.