Blend Labs reports shrinking mortgage revenue even as its partnerships gain steam

Blend Labs Inc. shared its third-quarter earnings on Thursday afternoon, posting revenue of $32.9 million from July to September, down 1% on an annual basis.

The company reported a GAAP gross profit margin of 74% in the third quarter, unchanged from the same period in 2024. Non-GAAP gross profit margin rose to 78%, up from 75% a year earlier.

Blend‘s GAAP operating loss narrowed to $4.9 million, down from $11.3 million in Q3 2024, while non-GAAP operating income increased from $300,000 to $4.6 million during the year.

The company said total revenue and non-GAAP operating income for the quarter exceeded the midpoint of its guidance. In Q2 2025, it estimated third-quarter volume between 1.13 million and 1.23 million units, and total revenue between $31.5 million and $33.5 million.

“In the third quarter, we signed 14 new deals and expansions, including a seven-figure expansion with a top 20 bank and a major renewal and expansion with a consumer banking customer across six product lines,” Nima Ghamsari, co-founder and head of Blend, said in a statement.

“When I look at the macro environment finally showing signs of life — particularly the potential for lower rates — and combine it with the specific momentum we are generating ourselves, I have never been more excited about our business.”

During the company’s earnings call on Thursday afternoon, Ghamsari touted the company’s fifth straight quarter of non-GAAP operating profitability.

Going into 2026, Ghamsari said the company is focusing on three key areas: growing its mortgage take rate, expanding its consumer banking suite and investing in artificial intelligence. He said Blend, like others in the mortgage space, is navigating “the industry’s $11,000 problem,” referring to the high cost to produce a loan.

Revenue by segment

Blend’s mortgage suite, which comprises 54% of its total revenue, totaled $17.7 million for the third quarter. Mortgage suite revenue was down 18% year over year and down 1% from Q2 2025, said Jason Ream, Blend’s head of finance.

Its consumer banking suite represented 39% of total revenue, or $12.7 million, during the same period. Ghamsari noted that this segment accounted for 29% of revenue a year ago.

“We saw continued strength and growth in our consumer banking suite, which was offset by some headwinds to revenue or mortgage business,” Ghamsari said during the call. “But this was not a surprise to us — it reflects the intentional, strategic transitions that we are navigating, specifically moving from lower-margin services businesses to higher-margin partnerships and managing the final rolloff of legacy customers that we’ve discussed in prior quarters.”

Software platform revenue totaled $30.5 million, down 2% from a year earlier, while professional services revenue rose 18% to $2.4 million.

GAAP diluted net income per share attributable to common stockholders was $0.02, compared with a loss of $0.02 in the same period last year. On a non-GAAP basis, diluted net income per share broke even, compared with a loss of $0.01 in the third quarter of 2024.

Looking ahead to the fourth quarter, Blend expects total revenue to come in between $31 million and $32.5 million, with non-GAAP net operating income between $2.5 million and $3.5 million.