Blend Labs(BLND) - 2025 Q2 - Quarterly Report

PART I. Financial Information Item 1. Condensed Consolidated Financial Statements (Unaudited) Unaudited financials detail Blend Labs, Inc.'s financial position and performance, highlighting revenue growth and reduced net loss Condensed Consolidated Balance Sheets Balance sheets show total assets of $183.1 million, increased liabilities to $55.4 million, and an improved stockholders' deficit Balance Sheet Summary | Account | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :--- | :--- | :--- | | Total current assets | $126,830 | $135,243 | | Total assets | $183,072 | $178,085 | | Total current liabilities | $52,743 | $39,022 | | Total liabilities | $55,396 | $40,403 | | Total stockholders' equity | $(22,565) | $(56,356) | - Assets and liabilities related to the Title segment, which is being divested, are classified as held for sale from discontinued operations[34] Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) Statements of operations show Q2 2025 revenue increased to $31.5 million, gross profit rose, and operating loss significantly narrowed Statements of Operations Summary | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | | :--- | :--- | :--- | | Total revenue | $31,523 | $28,696 | | Gross profit | $23,305 | $20,341 | | Loss from operations | $(4,624) | $(13,069) | | Loss from continuing operations | $(3,647) | $(19,199) | | Net loss attributable to Blend Labs, Inc. common stockholders | $(11,021) | $(23,595) | | Net loss per share - basic and diluted | $(0.03) (Continuing Ops) | $(0.09) (Continuing Ops) | Condensed Consolidated Statements of Cash Flows Cash flow statements show $14.0 million net cash from operations, a significant improvement, with cash used in investing and financing Cash Flow Summary | Activity | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $14,022 | $(10,534) | | Net cash (used in) provided by investing activities | $(7,603) | $35,537 | | Net cash used in financing activities | $(8,827) | $(10,507) | | Net (decrease) increase in cash, cash equivalents, and restricted cash | $(2,408) | $14,491 | Notes to Condensed Consolidated Financial Statements Notes detail accounting policies, Title segment reclassification, revenue recognition, and the "One Big Beautiful Bill Act" impact - The company's operations are now reported as a single segment after classifying the Title segment as discontinued operations in Q1 2025[34][163] - As of June 30, 2025, the company had $190.4 million in remaining performance obligations, with about half expected to be recognized as revenue over the next 12 months[65] - On June 9, 2025, the company entered into a definitive agreement to sell its title insurance business, which is expected to close later in the fiscal year. An impairment charge of $2.0 million was recorded related to the write-off of intangible assets from this business[167][169] - A new law, the "One Big Beautiful Bill Act," was signed on July 4, 2025, which will allow for immediate expensing of domestic R&D expenditures starting in 2025. The company is currently evaluating its impact[174][175] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses Q2 2025 performance, highlighting 10% revenue growth, reduced operating expenses, and the Title business divestiture strategy Results of Operations Q2 2025 results show 10% total revenue growth to $31.5 million, improved gross margin, and a 16% reduction in operating expenses Revenue by Suite (Three Months Ended June 30) | Revenue Source | 2025 (in thousands) | 2024 (in thousands) | % Change | | :--- | :--- | :--- | :--- | | Mortgage Suite | $17,961 | $18,454 | (3%) | | Consumer Banking Suite | $11,430 | $8,021 | 43% | | Total Revenue | $31,523 | $28,696 | 10% | Operating Expenses (Three Months Ended June 30) | Expense Category | 2025 (in thousands) | 2024 (in thousands) | % Change | | :--- | :--- | :--- | :--- | | Research and development | $7,332 | $12,916 | (43%) | | Sales and marketing | $6,950 | $9,004 | (23%) | | General and administrative | $13,619 | $11,376 | 20% | | Total operating expenses | $27,929 | $33,410 | (16%) | - The decrease in R&D expenses was primarily due to a $2.3 million increase in capitalized internal-use software development costs and a $2.1 million decrease in personnel-related expenses from restructuring[217] Liquidity and Capital Resources Liquidity stands at $88.3 million, deemed sufficient for 12 months, with $14.8 million cash generated from operations in H1 2025 - Principal sources of liquidity as of June 30, 2025, were cash, cash equivalents, and marketable securities of $88.3 million[238] - The company repurchased and retired 1,267,662 shares of Class A common stock for $4.1 million during the six months ended June 30, 2025. Approximately $20.9 million remains authorized under the share repurchase program[240] Cash Flow Summary (Six Months Ended June 30) | Cash Flow from Continuing Operations | 2025 (in thousands) | 2024 (in thousands) | | :--- | :--- | :--- | | Operating Activities | $14,793 | $(6,311) | | Investing Activities | $(7,483) | $35,552 | | Financing Activities | $(8,827) | $(10,507) | Item 3. Quantitative and Qualitative Disclosures About Market Risk The company faces interest rate and inflation risks, with interest rate changes not materially impacting short-term investments - The company's primary market risks are interest rate risk on its investment portfolio and inflation risk on its operating costs[258][259] - Due to the short-term nature of its investments, a hypothetical 100 basis point change in interest rates would not have a material impact on the company's financial statements[258] Item 4. Controls and Procedures Management concluded disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal controls - The principal executive officer and principal financial officer concluded that the company's disclosure controls and procedures were effective as of June 30, 2025[261] - No changes were identified during the quarter that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[262] PART II. OTHER INFORMATION Item 1. Legal Proceedings The company is not currently involved in any legal proceedings expected to have a material adverse effect on its business - As of the report date, the company is not involved in any legal proceedings expected to have a material adverse effect on its business[266] Item 1A. Risk Factors Key risks include dependence on financial services, history of net losses, revenue concentration, intense competition, and concentrated voting power - The business is highly dependent on the financial services industry and is subject to risks from the mortgage market, including the impact of rising interest rates[273][275] - The company has a history of net losses, with an accumulated deficit of $1,400.9 million as of June 30, 2025, and may not achieve or maintain profitability[278] - A large percentage of revenue is concentrated with a small number of key customers, and the loss of any of these could adversely affect the business[279] - The multi-class stock structure concentrates approximately 34% of voting power with Co-Founder Nima Ghamsari, significantly limiting other stockholders' influence[443][444] Item 2. Recent Sales of Unregistered Securities and Use of Proceeds The company repurchased 345,000 Class A common shares for $3.02 per share in Q2 2025, with $20.9 million remaining for repurchases Share Repurchase Activity (Q2 2025) | Period | Total Shares Purchased (in thousands) | Average Price Paid Per Share | Value Remaining Under Program (in millions) | | :--- | :--- | :--- | :--- | | April 2025 | 345 | $3.02 | $20.9 | | May 2025 | — | $— | $20.9 | | June 2025 | — | $— | $20.9 | | Total | 345 | $3.25 | $20.9 | Item 5. Other Information Co-Founder Nima Ghamsari established a Rule 10b5-1 trading plan to sell up to $4 million in Class A Common Stock - On June 13, 2025, Co-Founder Nima Ghamsari established a Rule 10b5-1 trading plan to sell shares of Class A Common Stock, aiming to generate up to approximately $4 million. The plan expires on March 31, 2026[472]