Results

Blend Labs Inc.

03/16/2026 | Press release | Distributed by Public on 03/16/2026 04:01

Annual Report for Fiscal Year Ending December 31, 2025 (Form 10-K)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our audited consolidated financial statements and the related notes appearing elsewhere in this Annual Report on Form 10-K. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements. You should review the section titled "Special Note Regarding Forward-Looking Statements" for a discussion of forward-looking statements and the section titled "Risk Factors" for a discussion of factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis and elsewhere in this Annual Report on Form 10-K. Our historical results are not necessarily indicative of the results that may be expected for any period in the future.
This section of this Annual Report on Form 10-K generally discusses fiscal years 2025 and 2024 items and year-to-year comparisons between fiscal years 2025 and 2024. Discussions of fiscal year 2023 items and year-to-year comparisons between fiscal years 2024 and 2023 that are not included in this Annual Report on Form 10-K can be found in Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, which was filed with the SEC on March 13, 2025.
During the first quarter of 2025, we classified the results of our previously reported Title segment as discontinued operations in accordance with ASC 205-20. Accordingly, the financial results and related discussion for all periods presented reflect continuing operations only and exclude the results of the Title segment, which are separately presented as discontinued operations elsewhere in this Annual Report on Form 10-K. The 2024 financial results presented herein have been recast to conform to this presentation. As a result, the 2024 figures discussed in this section are not directly comparable to those reported in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, which was filed with the SEC on March 13, 2025, where the Title segment was presented as a consolidated operating segment. Refer to Note 16, "Assets Held for Sale and Discontinued Operations," to the consolidated financial statements included elsewhere in this Annual Report on Form 10-K for additional information regarding the discontinued operations.
Overview
Blend Labs, Inc. was founded in 2012, with a vision to bring simplicity and transparency to financial services, so everyone can gain access to the capital they need to lead better lives. To realize this vision, we have built a market-leading cloud-based software platform and suite of products for financial services firms that is designed to power the end-to-end consumer journey for any banking product. Our software platform was built in an extensible, modular, and configurable fashion to support continued product expansion. We have technology, data, and service providers on our software platform, including access to an extensive marketplace of insurance carriers and settlement agencies. Our products and marketplaces provide multiple opportunities for us to serve financial services firms and consumers and drive revenue growth.
The development of our business reflects ongoing product innovation as we continue to attract financial services firms to our software platform and grow with them as they serve consumers. Financial services firms have been shifting for years to a digital-first approach to acquiring consumers, delivering products, and deepening existing consumer relationships. This imperative to compete through digital-first consumer experiences creates a compelling opportunity for Blend. We believe there is a large, untapped opportunity to provide additional product offerings and drive increased transaction volume for financial institutions and consumers using our software platform.
Our platform also includes Blend Builder, which gives our customers the ability to easily configure or build custom workflows from a pre-built set of components, all while leveraging existing infrastructure. Financial services firms can create custom solutions with Blend Builder, or choose from pre-built solutions for Mortgage and Consumer Banking, including Home Equity, Deposit Accounts, Credit Cards, Personal Lending, Auto Lending and more.
Our growth strategy is focused on growing the value of our existing customer relationships, as well as adding new customer relationships. In addition, we leverage partnerships to drive efficient product expansion. We see opportunities for expansion into new markets, including markets outside the United States.
Our Business Model
Our success-based business model is designed to align our growth with the interests of our customers. We offer our products through software-as-a-service agreements where fees are assessed based on completed transactions, such as a funded loan, new account opening, or API call. For those products that involve a loan or deposit account application, we do not charge for abandoned applications or rejected applications, even though they cause us to incur costs. We provide the platform, including Blend Builder, under (a) subscription arrangements, in which customers commit to a minimum number of completed
transactions at specified prices over the contract term, (b) usage-based arrangements, in which customers pay in arrears a variable amount for completed transactions at a specified price, (c) a fixed price, which provides stand-ready access to one or more of our products and services, or (d) consumption-based arrangements, in which customers commit to a certain amount of consumption at specified prices and prepay a fixed amount in advance of their consumption. Completed transaction fees are determined by the number and type of software platform components that are needed to support each product offering. Completed transaction fees are not impacted by the dollar size of transactions; however, we provide volume-based discounts to customers as they complete a higher volume of transactions on our software platform. Customers also have the opportunity to secure volume-based discounts determined by the size and length of contractual commitments. We may earn additional overage fees if the number of completed transactions exceeds contractual minimums or commitments for customers who elect to enter into subscription or consumption-based agreements, respectively. Other than our usage-based arrangements pursuant to which customers pay for a variable amount of completed transactions, our subscription and consumption-based agreements are generally non-cancelable during the contract term. Our usage-based arrangements generally can be terminated at any time by the customer. With our success-based business model, we are focused on driving revenue growth by enabling our customers to more efficiently process and complete transactions using our software platform.
We focus on customer success to drive transaction volumes and opportunities for follow-on sales. Our products are sold through a direct sales force that continues to manage customer relationships on an ongoing basis post-sale. Customers often complete an initial deployment for one or two products and may then add more products over time. We have demonstrated a flexible land-and-expand strategy, historically winning customers with our flagship mortgage banking products and expanding into consumer banking products, and more recently landing new customers with consumer banking products and expanding into mortgage banking products, underscoring our ability to win, retain, and upsell customers through multiple product entry points.
We offer our products through software-as-a-service agreements, where fees are assessed based on completed transactions, such as a funded loan, new account opening, or closing transaction. We do not charge for abandoned or rejected applications, even though they cause us to incur costs. We also offer certain fixed-fee arrangements for unlimited access to our products within the Consumer Banking suite. Additionally, we generate revenue through integrated partnership models, where we earn a fixed or variable share of revenue from third-party providers for services facilitated through our platform, such as income and identity verification and homeowners and title insurance
Recent Developments
Industry Trends
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 2025, we saw an increase in total mortgage transactions on our software platform compared to 2024, consistent with the growth in overall mortgage origination activity estimated by industry forecasters and partially offset by normal customer churn. Current industry forecasts project continued growth into 2026.
Mortgage origination activity depends on many factors, such as changes in the Federal Reserve's policies or pressures in the macroeconomic environment, including the imposition of tariffs, the impact of trade relations or the possibility of an economic downturn in the United States or worldwide, all of which are uncertain and out of our control. We expect the Federal Reserve's decision-making to continue to have impacts on mortgage origination activity. As a large portion of our revenue is driven by mortgage and mortgage related transaction volumes, changes in the mortgage origination volumes have had, and are likely to continue to have, material effects on our business.
Strategic Initiatives
As part of our efforts to simplify our business, in the first quarter of 2025, we made a decision to exit our title operations, and on March 1, 2026, we completed the sale of substantially all the assets and liabilities of our title insurance business to a third party.
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 structured 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 Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K, for additional information.
Restructuring
We have taken actions to manage our operating expenses and focus our investments on initiatives critical to achieving our broader strategy. As part of our broader efforts to improve cost efficiency and better align our operating structure with our business activities and the current market, since 2022, we implemented several workforce reduction actions and in 2024, we entered into an agreement to fully terminate one of our leases and abandoned another leased facility. Refer to Note 12, Restructuring, of the Notes to Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K, for additional information regarding our workforce reduction actions and leases optimization.
Share Repurchase Program
On March 10, 2026, the Company's board of directors authorized the repurchase of up to $50.0 million of the Company's Class A common stock. Repurchases may be made from time to time through open market repurchases or through privately negotiated transactions subject to market conditions, applicable legal requirements and other relevant factors. The repurchase program does not obligate the Company to acquire any particular amount of its Class A common stock, and it may be suspended at any time at the Company's discretion. 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. The share repurchase program has no set expiration date.
Components of Results of Operations
Revenue
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.
Our customers have the ability to access our platform under subscription arrangements, in which customers commit to a minimum number of completed transactions at specified prices over the contract term, or under usage-based arrangements, in which customers prepay a fixed amount in advance, typically annually or semi-annually, based on their anticipated consumption of specified products at specified prices or pay monthly in arrears a variable amount for completed transactions at specified prices. Our subscription and prepaid usage-based arrangements are generally noncancelable, and we may also earn additional overage fees if the number of completed transactions exceeds the contractual amounts. Our usage-based arrangements paid in arrears can generally be terminated at any time by the customer. We recognize revenue ratably for our subscription arrangements because the customer receives and consumes the benefits of our platform throughout the contract period. We recognize fees for usage-based arrangements as the completed transactions are processed using our platform. Beginning in 2023, we have seen a shift away from subscription arrangements towards prepaid multi-year usage-based arrangements in our customer contracts. Revenue from third-party providers for access to our platform is recognized ratably over the term of the contract.
Cost of Revenue
Cost of revenue consists primarily of software-related costs, which include costs of subscribed hosting and support, costs of premier support services, and the costs of delivering professional services.
Software-related costs of subscribed hosting services and support consist primarily of expenses related to hosting our services, third-party fees related to platform connectivity services, which include verification of income, assets, and employment, software licenses and expenses related to providing support to our customers.
Costs of premier support and professional services consist primarily of personnel-related expenses, including stock-based compensation expense, expenses associated with delivering implementation and other services, travel expenses, and allocated overhead costs.
For each application submission, we incur third-party costs as described above, including costs for incomplete transactions for which we do not charge fees to our customers. The timing of those costs may not be aligned with the revenue recognized. We expect our cost of revenue to continue to increase in dollar amounts as we grow our business and revenue and decrease as a percentage of our revenue over the long term as we achieve greater scale in our business, although the percentage may fluctuate from period to period.
Operating Expenses
We have taken actions to manage our operating expenses and focus our investments on initiatives critical to achieving our broader strategy. We expect to see our expenses slightly increase in 2026 as compared to 2025. This trend is primarily driven by a decrease in software capitalization rates for 2026 compared to the previous year due to the adoption of ASU No. 2025-06, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40), which is expected to result in a decrease in the amount of software costs eligible for capitalization as certain agile development activities may not meet the 'probable-to-complete' threshold as early as they did under the legacy stage-based model, particularly for projects involving novel technology.
Research and Development
Research and development expenses consist primarily of personnel-related expenses, including stock-based compensation expense, associated with our engineering personnel responsible for the design, development, and testing of new products and features, professional and outside services fees, software and hosting costs, facilities costs, and allocated overhead costs. Research and development costs are expensed as incurred, unless they qualify as capitalizable internal-use software development costs.
Sales and Marketing
Sales and marketing expenses consist primarily of personnel-related expenses, including stock-based compensation expense, costs of general marketing activities, advertising and promotional activities, travel-related expenses, facilities costs, and allocated overhead costs. Sales commissions that are incremental costs of acquiring a contract with a customer as well as associated payroll taxes, are deferred and amortized on a straight-line basis over the estimated period of benefit. Sales commissions that are not incremental costs of acquiring a contract with a customer are expensed in the period incurred.
General and Administrative
General and administrative expenses consist primarily of personnel-related expenses, including stock-based compensation expense for our finance, accounting, legal and compliance, human resources, and other administrative teams, certain executives, stock-based compensation expense related to the stand-alone stock option award granted to our Co-Founder and Head of Blend in 2021, professional services fees, including audit, legal and compliance, facilities costs, software and hosting costs, external consulting expenses, and insurance expenses.
Restructuring
Restructuring charges relate to our workforce reduction plans and facilities restructuring actions. Charges related to workforce reduction plans are comprised of cash expenditures for compensation and severance payments, employee benefits, payroll taxes and related facilitation costs. Refer to Note 12, Restructuring, of the Notes to Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K, for additional information.
Other Income (Expense), Net
Other income (expense), net consists primarily of interest income earned from our investment portfolio, as well as adjustments to the carrying value of investment in non-marketable equity securities, a gain on the conversion of a note receivable to an investment in equity securities, a gain on sale of insurance business, loss on extinguishments of debt, and a loss on transfer of a subsidiary.
Interest Expense
Interest expense relates primarily to debt financing used to fund our acquisition of Title365 and includes interest payable under the terms of the Credit Agreement entered into in connection with the closing of the acquisition of Title365 and amortization of debt discounts and debt issuance costs. In connection with the full repayment of the Term Loan and termination of the Credit Agreement, the final interest payment under the Credit Agreement was fully paid in the quarter ended June 30, 2024.
Provision for Income Taxes
Provision for income taxes consists primarily of U.S. state and foreign income taxes. We maintain a full valuation allowance on our net federal and state deferred tax assets as we have concluded that it is not more likely than not that such net deferred tax assets will be realized.
Results of Operations
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 Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K, for additional information. Prior period information has been reclassified to conform to the current period presentation.
The following tables set forth our results of operations for the periods presented in dollars and as a percentage of our revenue:
Year Ended December 31,
2025 2024 2023
(In thousands)
Revenue
Software platform
$ 114,446 $ 106,914 $ 101,204
Professional services 9,139 8,848 8,345
Total revenue 123,585 115,762 109,549
Cost of revenue(1)
Software platform
25,312 23,107 22,025
Professional services 7,106 9,434 11,065
Total cost of revenue 32,418 32,541 33,090
Gross profit 91,167 83,221 76,459
Operating expenses:
Research and development(1)
32,843 46,087 81,257
Sales and marketing(1)
29,073 34,410 57,470
General and administrative(1)
50,115 45,687 61,284
Restructuring 871 5,882 20,056
Total operating expenses 112,902 132,066 220,067
Loss from operations (21,735) (48,845) (143,608)
Interest expense - (6,747) (30,811)
Other income (expense), net 20,857 12,941 7,033
Loss before income taxes (878) (42,651) (167,386)
Income tax expense
(249) (109) (94)
Loss from continuing operations (1,127) (42,760) (167,480)
Loss from discontinued operations (5,856) (659) (12,399)
Net loss $ (6,983) $ (43,419) $ (179,879)
(1)Includes stock-based compensation as follows:
Year Ended December 31,
2025 2024 2023
(In thousands)
Cost of revenue $ 543 $ 510 $ 987
Research and development(2)
6,292 9,870 19,046
Sales and marketing 2,864 3,546 7,035
General and administrative 19,256 14,015 18,489
Total stock-based compensation
$ 28,955 $ 27,941 $ 45,557
____________
(2) Net of $3.2 million, $2.5 million of additions to capitalized internal-use software for the years ended December 31, 2025 and 2024, respectively, and none for the year ended December 31, 2023.
Year Ended December 31,
2025 2024 2023
Revenue
Software platform
93 % 92 % 92 %
Professional services 7 8 8
Total revenue 100 100 100
Cost of revenue
Software platform
20 20 20
Professional services 6 8 10
Total cost of revenue 26 28 30
Gross margin 74 72 70
Operating expenses:
Research and development 27 40 74
Sales and marketing 24 30 52
General and administrative 41 39 56
Restructuring 1 5 18
Total operating expenses 91 114 201
Loss from operations (18) (42) (131)
Interest expense - (6) (27)
Other income (expense), net 17 11 6
Loss before income taxes (1) (37) (153)
Income tax (expense) benefit - - -
Loss from continuing operations (1) (37) (153)
Loss from discontinued operations (5) (1) (11)
Net loss (6) % (38) % (164) %
____________
*Certain percentages may not foot due to rounding.
Comparison of the Years Ended December 31, 2025 and 2024
Revenue and Cost of Revenue
Year Ended December 31,
2025 2024
$ Change
% Change
(In thousands)
Revenue:
Mortgage Suite $ 69,223 $ 73,257 $ (4,034) (6 %)
Consumer Banking Suite 45,223 33,657 11,566 34 %
Professional Services 9,139 8,848 291 3 %
Total revenue
123,585 115,762 7,823 7 %
Cost of revenue: 32,418 32,541 (123) - %
Gross profit and gross margin: $ 91,167 74 % $ 83,221 72 % $ 7,946 10 %
Total revenue increased by $7.8 million, or 7%, for the year ended December 31, 2025 compared to the year ended December 31, 2024.
•Mortgage Suite revenue decreased by $4.0 million, or 6%, primarily due to a decrease in verification of income revenue in connection with our partnership model transition, homeowner's insurance revenue related to the Strategic Partnership and Sale of Insurance Business (Refer to Note 3, Revenue Recognition and Contract Costs), customer churn, and the impact of renewal pricing in one of our large contracts, partially offset by overall mortgage market growth.
•Consumer Banking Suite revenue increased by $11.6 million, or 34%, primarily due to deployments of several large customers, resulting in an increase in home equity and deposit account opening revenue and an increase in attach rates of our digital closing solution.
•Professional Services revenue increased by $0.3 million, or 3%, primarily due to an increase in services associated with the support of our platform.
Cost of revenue decreased by $0.1 million,for the year ended December 31, 2025 compared to the year ended December 31, 2024 primarily driven by a decrease in personnel related expenses related to our restructuring actions, reduced vendor costs in connection with our partnership model transition, and partially offset by increased usage costs commensurate with revenue growth.
Gross profit increased by $7.9 million, or 10%, for the year ended December 31, 2025 compared to the year ended December 31, 2024 due to increased revenue. Gross margin was 74% for the year ended December 31, 2025 compared to 72% for the year ended December 31, 2024. The increase in gross profit was primarily due to expanding Consumer Banking Suite revenue while decreasing cost of revenue as we continue to focus on operational efficiency.
Operating Expenses
Year Ended December 31,
2025 2024
$ Change
% Change
(In thousands)
Operating expenses:
Research and development $ 32,843 $ 46,087 $ (13,244) (29 %)
Sales and marketing 29,073 34,410 (5,337) (16 %)
General and administrative 50,115 45,687 4,428 10 %
Restructuring 871 5,882 (5,011) (85 %)
Total operating expenses $ 112,902 $ 132,066 $ (19,164) (15 %)
Research and Development
Research and development expenses decreased by $13.2 million, or 29%, for the year ended December 31, 2025 compared to the year ended December 31, 2024. The decrease was primarily due to a $8.1 million decrease in personnel related expenses and a $2.9 million decrease in stock-based compensation expense attributable to a decrease in headcount, in each case, related to our restructuring actions, as well as a $2.0 million increase in the capitalization of internal-use software development costs.
Sales and Marketing
Sales and marketing expenses decreased by $5.3 million, or 16%, for the year ended December 31, 2025 compared to the year ended December 31, 2024. The decrease was primarily due to a $4.1 million decrease in personnel related expenses attributable to a decrease in headcount related to our restructuring actions and a $1.8 million decrease in commissions.
General and Administrative
General and administrative expenses increased by $4.4 million, or 10%, for the year ended December 31, 2025 compared to the year ended December 31, 2024. The increase was primarily due to a $5.2 million increase in stock-based compensation expense attributable to executive PSUs, a $1.5 million increase in professional and outside services costs, offset by a $2.7 million decrease in personnel related expenses related to our restructuring actions.
Restructuring
Restructuring expenses decreased by $5.0 million, or 85%, for the year ended December 31, 2025 compared to the year ended December 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.
Interest Expense
Year Ended December 31,
2025 2024
$ Change
% Change
(In thousands)
Interest expense $ - $ (6,747) $ 6,747 (100 %)
Interest expense decreased $6.7 million, or 100%, for the year ended December 31, 2025 compared to the year ended December 31, 2024, 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.
Other Income (Expense), net
Year Ended December 31,
2025 2024
$ Change
% Change
(In thousands)
Other income (expense), net $ 20,857 $ 12,941 $ 7,916 61 %
Other income (expense), net increased by $7.9 million, or 61%, for the year ended December 31, 2025 compared to the year ended December 31, 2024. The increase was primarily due to a $16.6 million gain on investment on non-marketable equity securities due to an observable price change and $0.8 million gain on conversion of notes receivable to an equity method investment in the year ended December 31, 2025, partially offset by the effect of transactions recognized in the year ended December 31, 2024, including a $9.2 million gain on sale of insurance business, a $4.4 million gain on investment on non-marketable equity securities due to an observable price change, and a $5.5 million loss on extinguishment of debt, as well as a $1.9 million decrease in interest income on our investment portfolio due to a smaller invested cash balance in 2025 as compared to 2024.
Income Tax Expense
Year Ended December 31,
2025 2024
$ Change
% Change
(In thousands)
Income tax expense $ (249) $ (109) $ (140) 128 %
The increase in income tax expense for the year ended December 31, 2025 compared to the year ended December 31, 2024 is attributable to our increase in business operations in India.
Liquidity and Capital Resources
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 December 31, 2025, our principal sources of liquidity were cash, cash equivalents, and marketable securities of $68.3 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.
Although we generated positive cash flow from operations for the year ended December 31, 2025, we have generated significant losses from operations and negative cash flows from operating activities in the past as reflected in our accumulated deficit of $1,391.8 million as of December 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.
Share Repurchase Program
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 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 year ended December 31, 2025, we repurchased and retired 7,979,247 shares of our Class A common stock for $25.0 million, which resulted in full completion of the approved repurchase program. Refer to Note 10, Stockholders' Equity,of the Notes to Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K, for additional information.
On March 10, 2026, the Company's board of directors authorized a new share repurchase program for the repurchase of up to $50.0 million of the Company's Class A common stock.
Preferred Stock Investment
On April 29, 2024, we entered into an Investment Agreement (the "Investment Agreement") with Haveli Brooks Aggregator L.P. ("Haveli") and issued 150,000 shares of our Series A Preferred Stock (the "Series A Preferred Stock") for an aggregate purchase price of $150.0 million.In connection with the issuance of the Series A Preferred Stock, we issued the Haveli Warrant to purchase up to 11,111,112 shares of Class A common stock, at a purchase price of $4.50 per share of Class A common stock. The Haveli Warrant is exercisable for a period of 24 months from issuance.
Material Cash Requirements
Our material cash requirements arising from known contractual and other obligations primarily relate to lease obligations for our office locations and purchase commitments.
We believe that current cash, cash equivalents and marketable securities will be sufficient to fund our operations for at least the next 12 months. Our future capital requirements, however, will depend on continued growth in our customer base, the timing and extent of spending to support our research and development efforts, the expansion of sales and marketing activities, the introduction of new and enhanced products and features, the continuing market adoption of Blend's software platform, and the effectiveness of our efforts to improve cost efficiency. We may in the future enter into arrangements to acquire or invest in complementary businesses, services, and technologies, including intellectual property rights; additionally, we may repurchase shares of our Class A common stock from time to time under our share repurchase program. In the event that additional financing is required from outside sources, we may seek to raise additional funds at any time through equity, equity-linked arrangements, and debt. If we are unable to raise additional capital when desired and at reasonable rates, our business, results of operations, and financial condition would be adversely affected. See the section titled "Risk Factors-Risks Related to Our Business and Operations-We may require additional capital to support business growth, and this capital might not be available on acceptable terms, if at all."
Cash Flows
The following table summarizes our cash flows for the periods indicated:
Year Ended December 31,
2025 2024 2023
(In thousands)
Net cash provided by (used in) operating activities - continuing operations
$ 14,398 $ (8,200) $ (116,818)
Net cash provided by investing activities - continuing operations 18,731 45,498 127,858
Net cash used in financing activities - continuing operations (32,587) (21,062) (90,958)
Effect of exchange rates on cash, cash equivalents, and restricted cash - (5) (31)
Net increase (decrease) in cash, cash equivalents, and restricted cash - continuing operations 542 16,231 (79,949)
Net decrease in cash, cash equivalents, and restricted cash - discontinued operations (3,081) (4,947) (11,355)
Net (decrease) increase in cash, cash equivalents, and restricted cash $ (2,539) $ 11,284 $ (91,304)
The Company's liquidity is not expected to be materially impacted from the disposal of the component reported as discontinued operations.
Cash Provided by (Used in) Operating Activities
Our largest source of operating cash is cash collections from our customers, and our primary uses of cash in operations are for employee-related expenditures, sales and marketing expenses, and third-party hosting costs.
Net cash provided by operating activities for the year ended December 31, 2025 was $14.4 million and net cash used in operating activities for the year ended December 31, 2024 was $8.2 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, gain on conversion of note receivable to 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.
Cash Provided by Investing Activities
Net cash provided by investing activities during the year ended December 31, 2025 was $18.7 million, which was primarily due to the sale of available-for-sale securities of $20.8 million and maturities of marketable securities of $46.7 million, offset by $35.5 million used in the purchase of marketable securities and $11.6 million in additions to property and equipment, primarily related to capitalized internal-use software development costs, a $4.0 million investment in non-marketable equity securities, and $2.3 million in cash received in connection with the conversion of a note receivable to an investment in equity securities.
Net cash provided by investing activities during the year ended December 31, 2024 was $45.5 million, which was primarily due to sales of marketable securities of $100.3 million, maturities of marketable securities of $53.2 million, proceeds from sale of insurance business of $9.1 million, offset by $102.0 million used in the purchase of marketable securities, $9.7 million in additions to property and equipment related to capitalized internal-use software development costs, and an investment via issuance of note receivable of $5.0 million.
Cash Used in Financing Activities
Net cash used in financing activities for the year ended December 31, 2025 was $32.6 million, primarily consisting of payment of taxes related to net share settlement of equity awards of $9.4 million and $24.9 million related to share repurchases, offset by $1.7 million proceeds from the exercises of stock options.
Net cash used in financing activities for the year ended December 31, 2024 was $21.1 million, primarily consisting of $144.5 million repayment of long-term debt, $9.5 million payment of issuance costs related to the Series A Preferred Stock and the Haveli Warrant, payment of taxes related to net share settlement of equity awards of $18.1 million, offset by $149.4 million proceeds from the issuance of Series A Preferred Stock and the Haveli Warrant, and proceeds from the exercises of stock options of $1.7 million.
Contingent Obligations
As of December 31, 2025, we did not have relationships with unconsolidated entities or financial partnerships, such as structured finance or special purpose entities that were established for the purpose of facilitating off-balance sheet arrangements or other purposes.
Critical Accounting Estimates
Our consolidated financial statements and the related notes thereto included elsewhere in this Annual Report on Form 10-K are prepared in accordance with the U.S. generally accepted accounting principles ("U.S. GAAP"). The preparation of our consolidated financial statements in accordance with U.S. GAAP requires us to make estimates, judgments, and assumptions that affect the reported amounts of assets, liabilities, revenue, costs, and expenses, and related disclosures. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Our actual results may differ from these estimates under different assumptions or conditions. To the extent that there are differences between our estimates and actual results, our future financial statement presentation, financial condition, results of operations, and cash flows could be affected.
We believe that of our significant accounting policies, which are described further in Note 2, Summary of Significant Accounting Policies,of the Notes to Consolidated Financial Statements in Part II, Item 8 of this Form 10-K, the following accounting estimates involve a greater degree of judgment and complexity. Accordingly, these are the estimates we believe are the most critical to aid in fully understanding and evaluating our consolidated financial condition and results of operations.
Revenue Recognition
We generate revenue from fees paid by our customers to access our platform, to complete mortgage and consumer banking transactions on our software platform, access Blend Builder, and, to a lesser extent, from professional services and premier support.
Our customers have the ability to access our platform under subscription arrangements, consumption arrangements, or usage-based arrangements. We recognize fees for subscription arrangements ratably over the non-cancelable contract term and for consumption and usage-based arrangements as the completed transactions are processed using our platform.
In our subscription arrangements, the customers commit to a minimum number of completed transactions at specified prices over the contract term. We believe the area we apply the most critical judgment in our revenue recognition relates to determination of the transaction price, and specifically, the estimation of variable consideration in our subscription arrangements. The variable consideration relates to the estimated overage fees we expect to earn over the non-cancelable contract term, which is included in the transaction price at contract inception to the extent it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. In estimating overage fees in subscription arrangements, we consider our historical experience and other external factors that may impact the expectation of future completed transactions beyond a customer's contracted minimum number of completed transactions.
The estimated variable consideration is sensitive to the inputs, judgments, and assumptions made by us. Although we believe that our approach to developing estimates of variable consideration is reasonable, actual results could differ, and we may be exposed to increases or decreases in revenue that could be material.
Stock-Based Compensation
We measure and recognize our stock-based compensation based on estimated fair values for all stock awards, which include stock options, RSUs and PSUs. We recognize stock-based compensation expense for stock options and RSUs that vest only based upon the satisfaction of a service condition on a straight-line basis over the requisite service period, which is generally the
vesting period. We recognize stock-based compensation expense for PSUs that vest based upon the satisfaction of a market condition on a straight-line basis over the derived service period. We account for forfeitures as they occur.
We believe the area we apply the most critical judgment in recognition of our stock-based compensation relates to the valuation of stock option awards and PSUs. We use the Black-Scholes-Merton option pricing model to determine the grant date fair value of the stock options and the Monte Carlo simulation to determine the grant date fair value of the PSUs. The assumptions used to determine the fair value of these awards, such as the risk-free interest rate, expected volatility of our stock price, and expected life of the award, represent our estimates, which involve inherent uncertainties and the application of management's judgment.
Certain stock options granted to our Co-Founder and Head of Blend vest upon the satisfaction of a service condition, liquidity event-related performance condition and performance-based market conditions. The first tranche of the award, which vested upon completion of the IPO, was valued using the Black-Scholes-Merton option pricing model. The remaining tranches were valued using a Monte Carlo simulation model, and will vest upon achievement of performance goals tied to our stock price hurdles with specified expiration dates for each tranche.
Recent Accounting Pronouncements
Refer to Note 2, Summary of Significant Accounting Policies,of the Notes to Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K.
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