Blend Labs, Inc. ((BLND)) has held its Q2 earnings call. Read on for the main highlights of the call.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
Blend Labs, Inc. Earnings Call: A Mixed Bag of Growth and Challenges
The recent earnings call for Blend Labs, Inc. presented a blend of optimism and caution. On the positive side, the company reported strong revenue growth, particularly in its consumer banking suite, alongside successful new customer acquisitions. However, challenges such as a decrease in mortgage suite revenue and negative free cash flow were also highlighted. Additionally, near-term headwinds affecting the economic value per funded loan (EVPFL) were noted, indicating a complex financial landscape for the company.
Continuous Revenue Growth
Blend Labs has achieved its fourth consecutive quarter of year-over-year total revenue growth. In the second quarter of 2025, the company reported total revenue of $31.5 million, marking a 10% increase from the previous year. This consistent growth underscores the company’s ability to expand its market presence and drive financial performance.
Consumer Banking Suite Expansion
The consumer banking suite has been a significant contributor to Blend’s revenue, with a remarkable 43% year-over-year growth in the second quarter of 2025. This segment contributed $11.4 million to the total revenue, representing 36% of the overall revenue, up from 28% a year ago. This expansion highlights the strength and potential of Blend’s consumer banking offerings.
Record RPO Balance
Blend Labs reported a record remaining performance obligations (RPO) balance of $190 million, up from $158 million in the first quarter of 2025. This increase reflects the company’s successful sales momentum and its ability to secure long-term commitments from customers.
Successful New Customer Acquisitions
The second quarter of 2025 saw accelerated sales momentum for Blend, with 23 new or expanded deals, including three new logos in the independent mortgage bank vertical. This growth in customer base is a testament to Blend’s strategic initiatives and market appeal.
Decrease in Mortgage Suite Revenue
Despite overall revenue growth, Blend experienced a 3% decrease in mortgage suite revenue, totaling $18 million. This decline was primarily due to a lower economic value per funded loan (EVPFL), which dropped to $88 from $97 a year ago, posing a challenge for the company.
Near-Term EVPFL Headwinds
Blend Labs anticipates continued challenges with its economic value per funded loan, expecting it to remain near trough levels due to a large strategic deal with lower upfront pricing. This situation is expected to impact the company’s third and fourth quarter numbers.
Negative Free Cash Flow
The company reported a negative free cash flow of $9 million for the quarter, compared to negative $5.1 million in the same quarter last year. This increase in negative cash flow highlights the financial pressures Blend is facing despite its revenue growth.
Forward-Looking Guidance
In its forward-looking guidance, Blend Labs emphasized its strategic focus on expanding market share and achieving non-GAAP operating profitability. The company aims to maintain its EVPFL near the mid- to upper 80s by the end of 2025 and is optimistic about leveraging AI to enhance operational efficiency. Blend remains cautious about the EVPFL outlook for the third quarter, expecting it to range between $85 to $86, while focusing on long-term profitability and market positioning.
In summary, Blend Labs, Inc.’s earnings call painted a picture of a company navigating both growth opportunities and financial challenges. While revenue growth and customer acquisition are strong points, the decrease in mortgage suite revenue and negative cash flow present hurdles. The company’s forward-looking guidance reflects a cautious optimism, with strategic initiatives aimed at enhancing market share and profitability.