Blend Labs, Inc.

Previous wording

In the first quarter of 2025, we saw a decrease in mortgage transactions on our software platform compared to the last quarter of 2024, which can be attributed to seasonal trends, continued high interest rates, decreased housing affordability, and uncertain worldwide political and economic conditions. We expect that the aggregate industry mortgage originations will be higher in the second quarter of 2025 relative to the first quarter based on application volume observed to date through our customer base and our analysis of the latest relevant macroeconomic data.

Current wording

In the second quarter of 2025, we saw an increase in mortgage transactions on our software platform compared to the first quarter of 2025, which can primarily be attributed to seasonal trends. We expect that the aggregate industry mortgage originations in the third quarter of 2025 will be largely in line with the second quarter of 2025 volumes based on application volume observed to date through our customer base and our analysis of the latest relevant macroeconomic data.

Previous wording

As part of our efforts to simplify our business, in the first quarter of 2025, we made a decision to exit our title operations. The divestiture is part of our strategic shift to transform into a platform-first company along with the further expansion of our partner ecosystem. We intend to structure the transaction in a way that would allow us to strategically exit the capital-intensive title agency business while maintaining unit economics that we believe will be beneficial in a macro recovery. In connection with this initiative, the results of our previously reported Title segment are currently presented as discontinued operations. Refer to Note 16, Assets Held for Sale and Discontinued Operations, of the Notes to Unaudited Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q, for additional information.

Current wording

The divestiture is part of our strategic shift to transform into a platform-first company along with the further expansion of our partner ecosystem. We intend to structure the transaction in a way that would allow us to strategically exit the capital-intensive title agency business while maintaining unit economics that we believe will be beneficial in a macro recovery. In connection with this initiative, the results of our previously reported Title segment are currently presented as discontinued operations. Refer to Note 16, Assets Held for Sale and Discontinued Operations, of the Notes to Unaudited Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q, for additional information.

Previous wording

Other income (expense), net consists primarily of interest income earned from our investment portfolio. For the three months ended March 31, 2025, other income (expense), net also includes an adjustment to the carrying value of investment in non-marketable equity securities.

Current wording

Other income (expense), net consists primarily of interest income earned from our investment portfolio. For the six months ended June 30, 2024, other income (expense), net also includes an adjustment to the carrying value of investment in non-marketable equity securities.

Previous wording

During the first quarter of 2025, we classified the results of our previously reported Title segment as discontinued operations. Refer to Note 15, Segment Information, and Note 16, Assets Held for Sale and Discontinued Operations, of the Notes to Unaudited Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q, for additional information. Prior period information has been reclassified to conform to the current period presentation.

Current wording

Starting with the first quarter of 2025, we classified the results of our previously reported Title segment as discontinued operations. Refer to Note 15, Segment Information, and Note 16, Assets Held for Sale and Discontinued Operations, of the Notes to Unaudited Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q, for additional information. Prior period information has been reclassified to conform to the current period presentation.

Previous wording

(2) Net of $1.2 million of additions to capitalized internal-use software for the three months ended March 31, 2025, and $0.6 million for the three months ended March 31, 2024.

Current wording

(2) Net of $1.1 million and $2.3 million of additions to capitalized internal-use software for the three and six months ended June 30, 2025, and $0.5 million and $1.1 million for the three and six months ended June 30, 2024.

Previous wording

•Consumer Banking Suite revenue increased $3.0 million, or 45%, primarily due to an increase in home equity and deposit account opening transaction volumes and an increase in attach rates of our digital closing solution.

Current wording

•Consumer Banking Suite revenue increased by $3.4 million, or 43%, primarily due to an increase in home equity and deposit account opening transaction volumes and an increase in attach rates of our digital closing solution.

Previous wording

Gross margin was 71% for the three months ended March 31, 2025 compared to 67% for the three months ended March 31, 2024. The increase in gross profit was primarily due to expanding Consumer Banking Suite revenue while keeping consistent cost of revenue as the Company continues to focus on operational efficiency.

Current wording

Gross profit increased by $3.0 million, or 15% for the three months ended June 30, 2025 compared to the three months ended June 30, 2024 due to increased revenue. Gross margin was 74% for the three months ended June 30, 2025 compared to 71% for the three months ended June 30, 2024. The increase in gross profit was primarily due to expanding Consumer Banking Suite revenue while keeping consistent cost of revenue as the Company continues to focus on operational efficiency.

Previous wording

Research and development expenses decreased $6.7 million, or 47%, for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. The decrease was primarily due to a $3.1 million decrease due to the capitalization of internal-use software development costs, as well as a $2.3 million decrease in personnel related expenses and a $1.1 million decrease in stock-based compensation expense attributable to a decrease in headcount, in each case, related to our restructuring actions.

Current wording

Research and development expenses decreased by $5.6 million, or 43%, for the three months ended June 30, 2025 compared to the three months ended June 30, 2024. The decrease was primarily due to a $2.3 million increase in the capitalization of internal-use software development costs, as well as a $2.1 million decrease in personnel related expenses and a $0.7 million decrease in stock-based compensation expense attributable to a decrease in headcount, in each case, related to our restructuring actions.

Previous wording

Sales and marketing expenses decreased $2.6 million, or 26%, for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. The decrease was primarily due to a $1.8 million decrease in personnel related expenses attributable to a decrease in headcount related to our restructuring actions and a $0.7 million decrease in commissions.

Current wording

Sales and marketing expenses decreased by $2.1 million, or 23%, for the three months ended June 30, 2025 compared to the three months ended June 30, 2024. The decrease was primarily due to a $1.4 million decrease in personnel related expenses attributable to a decrease in headcount related to our restructuring actions and a $0.6 million decrease in commissions.

Previous wording

Restructuring expenses decreased $0.3 million, or 26%, for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 due to the 2024 workforce reduction plan being larger than the 2025 workforce reduction plan. The costs related to each workforce reduction plan included cash expenditures for compensation and severance payments, employee benefits, payroll taxes and related facilitation costs.

Current wording

Restructuring expenses decreased by $0.1 million, or 75%, for the three months ended June 30, 2025 compared to the three months ended June 30, 2024 due to the 2024 workforce reduction plan being larger than the 2025 workforce reduction plan. The costs related to each workforce reduction plan included cash expenditures for compensation and severance payments, employee benefits, payroll taxes and related facilitation costs.

Previous wording

Interest expense decreased $5.1 million, or 100%, for the three months ended March 31, 2025 compared to the three months ended March 31, 2024, primarily due to the repayment of all remaining amounts outstanding and payable under the Credit Agreement in an aggregate amount of $146.1 million on April 29, 2024. The borrowings under the Credit Agreement accrued interest at a floating rate which could be, at our option, either (i) an adjusted Term SOFR rate for a specified interest period plus an applicable margin of 7.50% or (ii) a base rate plus an applicable margin of 6.50%. The effective interest rate on our Term Loan was approximately 14.55% as of April 29, 2024, the date of its termination.

Current wording

Interest expense decreased by $1.6 million, or 100%, for the three months ended June 30, 2025 compared to the three months ended June 30, 2024, primarily due to the repayment of all remaining amounts outstanding and payable under the Credit Agreement in an aggregate amount of $146.1 million on April 29, 2024. The borrowings under the Credit Agreement accrued interest at a floating rate which could be, at our option, either (i) an adjusted Term SOFR rate for a specified interest period plus an applicable margin of 7.50% or (ii) a base rate plus an applicable margin of 6.50%. The effective interest rate on our Term Loan was approximately 14.55% as of April 29, 2024, the date of its termination.

Previous wording

The decrease in income tax expense for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 was immaterial.

Current wording

The increase in income tax expense for the three months ended June 30, 2025 compared to the three months ended June 30, 2024 was immaterial.

Previous wording

•Professional Services revenue increased by $0.4 million, or 19%, primarily due to an increase in professional services associated with the support of our platform.

Current wording

•Professional Services revenue increased by $0.3 million, or 7%, primarily due to an increase in professional services associated with the support of our platform.

Previous wording

Other income (expense), net decreased $4.5 million, or 80%, for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. The decrease was primarily due to a $4.4 million gain on investment on non-marketable equity securities recognized in the three months ended March 31, 2024 due to an observable price change.

Current wording

Other income (expense), net increased by $0.9 million, or 78%, for the six months ended June 30, 2025 compared to the six months ended June 30, 2024. The increase was primarily due to a $5.5 million loss on extinguishment of debt recognized in the three months ended June 30, 2024, offset by a $4.4 million gain on investment on non-marketable equity securities due to an observable price change in the same period.

Previous wording

Since our inception, we have financed our operations primarily through proceeds from the issuance of our stock and warrants and cash generated from the sale of our product offerings, as well as debt financing. As of March 31, 2025, our principal sources of liquidity were cash, cash equivalents, and marketable securities of $104.8 million. Cash and cash equivalents are comprised of bank deposits and money market funds. Marketable securities are comprised of U.S. treasury and agency securities, commercial paper, and corporate debt securities. Most of our cash and cash equivalents are held in the United States.

Current wording

Since our inception, we have financed our operations primarily through proceeds from the issuance of our stock and warrants and cash generated from the sale of our product offerings, as well as debt financing. As of June 30, 2025, our principal sources of liquidity were cash, cash equivalents, and marketable securities of $88.3 million. Cash and cash equivalents are comprised of bank deposits and money market funds. Marketable securities are comprised of U.S. treasury and agency securities, commercial paper, and corporate debt securities. Most of our cash and cash equivalents are held in the United States.

Previous wording

We have generated significant losses from operations and negative cash flows from operating activities in the past as reflected in our accumulated deficit of $1,394.2 million as of March 31, 2025. We may incur operating losses in the future due to the investments that we intend to make in our business and pressures on revenue growth due to the recent macroeconomic environment, and as a result, we may require additional capital resources to grow our business.

Current wording

We have generated significant losses from operations and negative cash flows from operating activities in the past as reflected in our accumulated deficit of $1,400.9 million as of June 30, 2025. We may incur operating losses in the future due to the investments that we intend to make in our business and pressures on revenue growth due to the recent macroeconomic environment, and as a result, we may require additional capital resources to grow our business.

Previous wording

In August 2024, we announced the authorization of a share repurchase program for the repurchase of shares of our Class A common stock, in an aggregate amount up to $25 million. Repurchases may be made at out discretion from time to time through open market purchases or through privately negotiated transactions subject to market conditions, applicable legal requirements, and other relevant factors. Open market repurchases may be structured to occur in accordance with the requirements of Rule 10b-18 of the Exchange Act. We may also, from time to time, enter into Rule 10b5-1 plans to facilitate repurchases of our Class A common stock under this authorization. The share repurchase program does not obligate us to repurchase any specific dollar amount or to acquire any specific number of shares of our Class A common stock. The timing and actual number of shares repurchased may depend on a variety of factors, including price, general business and market conditions, and alternative investment opportunities. During the three months ended March 31, 2025, we repurchased and retired 922,996 shares of our Class A common stock for $3.1 million. As of March 31, 2025, approximately $21.9 million remained authorized and available under our share repurchase program for future share repurchases. Refer to Note 10, Stockholder’s Equity, of the Notes to Unaudited Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q, for additional information.

Current wording

In August 2024, we announced the authorization of a share repurchase program for the repurchase of shares of our Class A common stock, in an aggregate amount up to $25 million. Repurchases may be made at out discretion from time to time through open market purchases or through privately negotiated transactions subject to market conditions, applicable legal requirements, and other relevant factors. Open market repurchases may be structured to occur in accordance with the requirements of Rule 10b-18 of the Exchange Act. We may also, from time to time, enter into Rule 10b5-1 plans to facilitate repurchases of our Class A common stock under this authorization. The share repurchase program does not obligate us to repurchase any specific dollar amount or to acquire any specific number of shares of our Class A common stock. The timing and actual number of shares repurchased may depend on a variety of factors, including price, general business and market conditions, and alternative investment opportunities. During the three and six months ended June 30, 2025, we repurchased and retired 344,666 and 1,267,662 shares of our Class A common stock for $1.0 million and $4.1 million, respectively. As of June 30, 2025, approximately $20.9 million remained authorized and available under our share repurchase program for future share repurchases. Refer to Note 10, Stockholder’s Equity, of the Notes to Unaudited Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q, for additional information.

Previous wording

Net cash provided by (used in) in operating activities for the three months ended March 31, 2025 and 2024 was $20.1 million and $3.0 million, respectively. The change in cash from operations reflects our net loss adjusted for noncash items, such as charges associated with stock-based compensation, depreciation and amortization, gain on investment in equity securities, amortization of deferred contract costs, amortization of operating lease right-of-use assets, and amortization of debt discount and issuance costs on our long-term debt, and changes in operating assets and liabilities. Fluctuations in operating assets and liabilities are affected primarily by changes in trade and other receivables, prepaid expenses and other current assets, deferred contract costs, accrued compensation, deferred revenue, accounts payable and other liabilities.

Current wording

Net cash provided by operating activities for the six months ended June 30, 2025 was $14.8 million and net cash used in operating activities for the six months ended June 30, 2024 was $6.3 million. The change in cash from operations reflects our net loss adjusted for noncash items, such as charges associated with stock-based compensation, depreciation and amortization, gain on investment in equity securities, amortization of deferred contract costs, amortization of operating lease right-of-use assets, and amortization of debt discount and issuance costs on our long-term debt, and changes in operating assets and liabilities. Fluctuations in operating assets and liabilities are affected primarily by changes in trade and other receivables, prepaid expenses and other current assets, deferred contract costs, accrued compensation, deferred revenue, accounts payable and other liabilities.

Previous wording

Net cash provided by investing activities during the three months ended March 31, 2025 was $3.3 million, which was primarily due to maturities of marketable securities of $18.9 million and sales of marketable securities of $0.8 million, offset by $11.9 million used in the purchase of marketable securities and $4.6 million in additions to property and equipment, primarily related to capitalized internal-use software development costs.

Current wording

Net cash used in investing activities during the six months ended June 30, 2025 was $7.5 million, which was primarily due to $23.7 million used in the purchase of marketable securities and $8.3 million in additions to property and equipment, primarily related to capitalized internal-use software development costs, and a $4.0 million investment in non-marketable equity securities, offset by maturities of marketable securities of $27.7 million.

Previous wording

Net cash provided by investing activities during the three months ended March 31, 2024 was $60.6 million, which was primarily due to sales of marketable securities of $100.3 million and maturities of marketable securities of $10.6 million, offset by $48.3 million used in the purchase of marketable securities and $2.0 million in additions to property and equipment related to capitalized internal-use software development costs.

Current wording

Net cash provided by investing activities during the six months ended June 30, 2024 was $35.6 million, which was primarily due to sales of marketable securities of $100.3 million and maturities of marketable securities of $15.6 million, offset by $76.5 million used in the purchase of marketable securities and $3.8 million in additions to property and equipment related to capitalized internal-use software development costs.

Previous wording

Net cash used in financing activities for the three months ended March 31, 2025 was $5.2 million, primarily consisting of payment of taxes related to net share settlement of equity awards of $3.0 million and $2.6 million related to share repurchases, offset by $0.4 million proceeds from the exercises of stock options.

Current wording

Net cash used in financing activities for the six months ended June 30, 2025 was $8.8 million, primarily consisting of payment of taxes related to net share settlement of equity awards of $5.5 million and $4.1 million related to share repurchases, offset by $0.8 million proceeds from the exercises of stock options.

Previous wording

Net cash used in financing activities for the three months ended March 31, 2024 was $3.2 million, primarily consisting of payment of taxes related to net share settlement of equity awards of $3.8 million, offset by proceeds from the exercises of stock options of $0.6 million.

Current wording

Net cash used in financing activities for the six months ended June 30, 2024 was $10.5 million, primarily consisting of $144.5 million repayment of long-term debt, $9.1 million payment of issuance costs related to the Series A Preferred Stock and the Warrant, payment of taxes related to net share settlement of equity awards of $7.0 million, offset by $149.4 million proceeds from the issuance of Series A Preferred Stock and the Warrant, and proceeds from the exercises of stock options of $0.7 million.