Blend Labs, Inc.

Previous wording

The mortgage market is heavily influenced by government policies and overall economic conditions. The real estate environment, including interest rates and the general economic environment, typically impacts the demand for mortgage and mortgage related products. In the first quarter of 2026, we saw a decrease in mortgage transactions on our software platform compared to the last quarter of 2025, which can be attributed primarily to seasonal trends within the purchase market.

Current wording

The mortgage market is heavily influenced by government policies and overall economic conditions. The real estate environment, including interest rates and the general economic environment, typically impacts the demand for mortgage and mortgage related products. In the second quarter of 2026, we saw an increase in mortgage transactions on our software platform compared to the first quarter of 2026, which can be attributed primarily to seasonal trends within the purchase market.

Previous wording

We generate revenue from fees paid by customers to access our software platform and complete transactions, such as funded loan, new account opening, closing transaction, or API call. Transaction fees are assessed based on completed transactions and are determined by the number and type of software platform components that are needed to support each product offering. We do not charge for abandoned or rejected applications, even though they cause us to incur costs related to these applications. Arrangements with our customers do not provide the contractual right to take possession of our software at any point in time. Revenue is recognized when access to our platform is provisioned to our customers or as transactions are completed, in an amount that reflects the consideration we expect to be entitled to in exchange for those services. We also generate revenue from providing access to Blend Builder, professional services related to the deployment of our platform, premier support services, and consulting services. We also earn revenue from third-party providers which integrate their marketplaces into our platform for services such as property and casualty insurance. We typically charge third-party providers a combination of fixed and variable license fees.

Current wording

We generate revenue from fees paid by customers to access our software platform and complete transactions, such as a funded loan, new account opening, closing transaction, or API call. Transaction fees are assessed based on completed transactions and are determined by the number and type of software platform components that are needed to support each product offering. We do not charge for abandoned or rejected applications, even though they cause us to incur costs related to these applications. Arrangements with our customers do not provide the contractual right to take possession of our software at any point in time. Revenue is recognized when access to our platform is provisioned to our customers or as transactions are completed, in an amount that reflects the consideration we expect to be entitled to in exchange for those services. We also generate revenue from providing access to Blend Builder, professional services related to the deployment of our platform, premier support services, and consulting services. We also earn revenue from third-party providers which integrate their marketplaces into our platform for services such as property and casualty insurance. We typically charge third-party providers a combination of fixed and variable license fees.

Previous wording

(2) Net of $0.1 million, $1.2 million of additions to capitalized internal-use software for the three months ended March 31, 2026 and 2025, respectively.

Current wording

(2) Net of $0.1 million and $0.2 million of additions to capitalized internal-use software for the three and six months ended June 30, 2026, and $1.1 million and $2.3 million for the three and six months ended June 30, 2025, respectively.

Previous wording

Gross profit increased by $4.4 million, or 23%, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025 due to increased revenue, margin expansion from partnership model transitions, and a favorable non-recurring benefit recognized in cost of revenue during the three months ended March 31, 2026. Gross margin was 76% for the three months ended March 31, 2026 compared to 71% for the three months ended March 31, 2025.

Current wording

Gross profit increased by $1.5 million, or 7%, for the three months ended June 30, 2026 compared to the three months ended June 30, 2025 due to the increase in revenue. Gross margin remained relatively consistent at 74% for the three months ended June 30, 2026 compared to 74% for the three months ended June 30, 2025.

Previous wording

Research and development expenses increased by $1.6 million, or 20%, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. The increase was primarily due to a $4.1 million decrease in the capitalization of internal-use software development costs, offset by a $1.8 million decrease in personnel related expenses and a $1.1 million decrease in stock-based compensation expense, both attributable to a decrease in headcount related to our restructuring actions.

Current wording

Research and development expenses increased by $1.2 million, or 16%, for the three months ended June 30, 2026 compared to the three months ended June 30, 2025. The increase was primarily due to a $3.5 million decrease in the capitalization of internal-use software development costs, and a $0.3 million increase in software and hosting costs, offset by a $1.7 million decrease in personnel related expenses and a $0.8 million decrease in stock-based compensation expense attributable to a decrease in headcount, in each case, related to our restructuring actions.

Previous wording

•Professional Services revenue increased by $0.3 million, or 12%, primarily due to an increase in services associated with the support of our platform.

Current wording

•Professional Services revenue increased by $0.6 million, or 12%, primarily due to an increase in services associated with the support of our platform.

Previous wording

Cost of revenue decreased by $0.4 million for the three months ended March 31, 2026 compared to the three months ended March 31, 2025 primarily driven by reduced vendor costs in connection with our transition to a lower-cost partnership model for verification of income services and certain benefits recognized during the period that are not expected to recur at the same level, partially offset by increased usage costs commensurate with revenue growth.

Current wording

Cost of revenue increased by $0.3 million for the six months ended June 30, 2026 compared to the six months ended June 30, 2025 primarily due to increased usage costs commensurate with the growth in our revenue, partially offset by savings from our transition to a partnership model for verification of income and a favorable non-recurring benefit recognized in 2026.

Previous wording

General and administrative expenses increased by $0.9 million, or 8%, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. The increase was primarily due to a $1.2 million increase in stock-based compensation expense attributable to recently granted executive awards, a $0.4 million increase in professional and outside services costs, offset by a $0.4 million decrease in business taxes and a $0.2 million decrease in personnel and related expenses.

Current wording

Sales and marketing expenses decreased by $1.2 million, or 8%, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The decrease was primarily due to $0.5 million decrease in personnel related expenses attributable to a decrease in headcount and a $0.4 million decrease in facilities related expenses, each related to our restructuring actions, and a $0.5 million decrease in professional and outside services costs, offset by a $0.2 million increase in travel and entertainment expenses.

Previous wording

Restructuring expenses were materially consistent across the three months ended March 31, 2026 and the three months ended March 31, 2025, as the smaller headcount impact of the 2026 workforce reduction plan was offset by higher severance costs driven by differences in the composition of the impacted workforce. 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 were materially consistent across the six months ended June 30, 2026 and the six months ended June 30, 2025, as the smaller headcount impact of the 2026 workforce reduction plan was offset by higher severance costs driven by differences in the composition of the impacted workforce. 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

Other income (expense), net decreased by $1.1 million, or 96%, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. The decrease was primarily driven by a $0.5 million reduction in interest income on our investment portfolio, reflecting a smaller invested cash balance and a change in investment mix compared to 2025, a $0.3 million unfavorable change in foreign currency remeasurement on intercompany balances with our Indian subsidiary, and a $0.2 million increase in commission expenses related to our share repurchases.

Current wording

Other income (expense), net decreased by $1.9 million, or 88%, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The decrease was primarily driven by a $1.0 million reduction in interest income on our investment portfolio, reflecting a smaller invested cash balance and a change in investment mix compared to 2025, a $0.3 million unfavorable change in foreign currency remeasurement on intercompany balances with our Indian subsidiary, and a $0.4 million increase in commission expenses related to our share repurchases.

Previous wording

The increase in income tax expense for the three months ended March 31, 2026 compared to the three months ended March 31, 2025 is attributable to increase in business operations in India.

Current wording

The increase in income tax expense for the six months ended June 30, 2026 compared to the six months ended June 30, 2025 is attributable to an increase in business operations in India.

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, 2026, our principal sources of liquidity were cash, cash equivalents, and marketable securities of $59.0 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. 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, 2026, our principal sources of liquidity were cash, cash equivalents, and marketable securities of $44.9 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. Most of our cash and cash equivalents are held in the United States.

Previous wording

Although we generated positive cash flow from operations for the three months ended March 31, 2026, we have generated significant losses from operations and negative cash flows from operating activities in the past as reflected in our accumulated deficit of $1,399.8 million as of March 31, 2026. 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

Although we generated positive cash flow from operations for the six months ended June 30, 2026, we have generated significant losses from operations and negative cash flows from operating activities in the past as reflected in our accumulated deficit of $1,401.3 million as of June 30, 2026. 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

On March 10, 2026, we announced the authorization of a new share repurchase program for the repurchase of shares of our Class A common stock, in an aggregate amount up to $50.0 million. Our prior share repurchase program was fully completed during the year ended December 31, 2025. Repurchases may be made at our 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, 2026 and 2025, we repurchased and retired 10,041,359 and 922,996 shares of our Class A common stock for $16.6 million and $3.1 million, respectively. We repurchased additional 1,192,600 shares for $2.0 million on March 31, 2026, which settled the following business day. Including shares in-transit, we had $31.4 million available to repurchase shares of Class A common stock under our share repurchase program as of March 31, 2026. Refer to Note 9, Stockholders’ 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

On March 10, 2026, 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 $50.0 million. Our prior share repurchase program was fully completed during the year ended December 31, 2025. Repurchases may be made at our 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, 2026, we repurchased and retired 12,177,584 and 22,218,943 shares of our Class A common stock for $20.2 million and $36.8 million, respectively. The Company had $13.2 million available to repurchase shares of Class A common stock under its share repurchase program as of June 30, 2026. Refer to Note 9, Stockholders’ 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 operating activities for the three months ended March 31, 2026 and 2025 was $8.5 million and $19.8 million, respectively. The change in cash from operations reflects our net loss adjusted for noncash items, such as stock-based compensation, depreciation and amortization, amortization of deferred contract costs, amortization of operating lease right-of-use assets, equity in losses of equity method investees, as well as 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, 2026 and 2025 was $16.2 million and $14.4 million, respectively. The change in cash from operations reflects our net loss adjusted for noncash items, such as stock-based compensation, depreciation and amortization, amortization of deferred contract costs, amortization of operating lease right-of-use assets, equity in losses of equity method investees, as well as 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, 2026 was $1.9 million, which was primarily due to the maturities of marketable securities of $8.0 million, offset by $5.0 million used in the purchase of marketable securities and $1.1 million in additions to property and equipment, primarily related to capitalized internal-use software development costs.

Current wording

Net cash provided by investing activities during the six months ended June 30, 2026 was $1.1 million, which was primarily due to the maturities of marketable securities of $8.0 million, offset by $5.0 million used in the purchase of marketable securities and $1.9 million in additions to property and equipment, primarily related to capitalized internal-use software development costs.

Previous wording

Net cash provided by investing activities during the three months ended March 31, 2025 was $3.6 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 $4.3 million in additions to property and equipment 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 $7.1 million, which was primarily due to maturities of marketable securities of $27.7 million and sales of marketable securities of $0.9 million, offset by $23.7 million used in the purchase of marketable securities, $7.9 million in additions to property and equipment related to capitalized internal-use software development costs and $4.0 million investment in non-marketable equity securities.

Previous wording

Net cash used in financing activities for the three months ended March 31, 2026 was $17.9 million, primarily consisting of $16.8 million related to share repurchases and $1.1 million of taxes paid related to net share settlement of equity awards, offset by $0.1 million proceeds from the exercises of stock options.

Current wording

Net cash used in financing activities for the six months ended June 30, 2026 was $39.2 million, primarily consisting of $37.2 million related to share repurchases and $2.1 million of taxes paid related to net share settlement of equity awards, offset by $0.1 million proceeds from the exercises of stock options.

Previous wording

Net cash used in financing activities for the three months ended March 31, 2025 was $5.2 million, which was primarily due to $3.0 million of taxes paid related to net share settlement of equity awards 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, which was primarily due to $5.5 million of taxes paid related to net share settlement of equity awards and $4.1 million related to share repurchases, offset by $0.8 million proceeds from the exercises of stock options.