Blend Labs(BLND) - 2025 Q3 - Quarterly Results

Financial Performance - Third quarter 2025 revenue was $32.9 million, a decrease of 1% compared to Q3 2024, with software platform revenue at $30.5 million, down 2% year-over-year[3] - Total revenue for Q3 2025 was $32,860,000, a slight decrease from $33,104,000 in the same period of 2024[50] - Total revenue for Q3 2025 was $32,860 thousand, a slight decrease of 1% from $33,104 thousand in Q3 2024[44] - For the nine months ended September 30, 2025, total revenue increased by 6% to $91,153 thousand compared to $85,640 thousand in the same period of 2024[44] Profitability Metrics - Total GAAP gross profit margin was 74%, flat compared to Q3 2024, while non-GAAP gross profit margin increased to 78% from 75% year-over-year[3] - Gross profit for Q3 2025 was $24,456,000, slightly down from $24,500,000 in Q3 2024[39] - Gross profit for the software platform was $23,835,000 with a gross margin of 78% for Q3 2025, compared to $24,772,000 and 80% in Q3 2024[46] - GAAP operating loss improved to $4.9 million from a loss of $11.3 million in Q3 2024, and non-GAAP operating income rose to $4.6 million from $0.3 million year-over-year[3] - GAAP diluted net income per share was $0.02 compared to a loss of $0.02 in Q3 2024, while non-GAAP diluted net income per share was $0.00 compared to a loss of $0.01 in the same period[4] - Net income from continuing operations for Q3 2025 was $12,410 thousand, a significant improvement compared to a loss of $631 thousand in Q3 2024[41] - The company reported a net income of $12,532,000 in Q3 2025, compared to a net loss of $2,627,000 in Q3 2024[39] - Non-GAAP net income from continuing operations for the nine months ended September 30, 2025, was $13,307,000, compared to a loss of $18,916,000 in the same period of 2024[50] Operating Expenses - Operating expenses for Q3 2025 totaled $29,367,000, a reduction from $35,783,000 in Q3 2024, indicating a 17.8% decrease[39] - Non-GAAP operating expenses for Q3 2025 were $20,966,000, down from $24,500,000 in Q3 2024[48] - The company incurred $93,000 in workforce reduction costs in Q3 2025, down from $4,701,000 in Q3 2024[48] Cash Flow and Assets - Free cash flow for Q3 2025 was $(5,005,000), compared to $(2,054,000) in Q3 2024[50] - Cash, cash equivalents, and restricted cash at the end of Q3 2025 totaled $64,833 thousand, up from $62,335 thousand at the end of Q3 2024[42] - Net cash provided by investing activities for continuing operations was $27,455 thousand in Q3 2025, compared to $11,752 thousand in Q3 2024[42] - The company reported a net cash used in operating activities of $3,490 thousand for Q3 2025, compared to $2,076 thousand provided in Q3 2024[41] Market and Economic Conditions - Economic conditions affecting real estate and mortgage activity remain uncertain, impacting future performance expectations[7] - The mortgage market size expectation for Q4 2025 is between 1.13 million and 1.23 million units, with a sequential volume decline expected in Q1 2026[6] Company Developments - The company signed 14 new deals and expansions in Q3 2025, including a significant expansion with a top 20 bank[5] - Fourth quarter 2025 revenue guidance is projected between $31.0 million and $32.5 million, with non-GAAP net operating income expected to be between $2.5 million and $3.5 million[6] - The company has not provided forward-looking GAAP equivalents for its non-GAAP net operating income outlook due to uncertainties[7] - The company eliminated all debt service obligations in April 2024 by repaying all outstanding amounts under its debt obligations[31] - As of September 30, 2025, total assets increased to $189,566,000 from $178,085,000 as of December 31, 2024[37] - Current liabilities rose to $45,672,000 as of September 30, 2025, compared to $39,022,000 at the end of 2024, reflecting a 17.1% increase[37] Investment and Losses - The company experienced a loss on investment in equity securities amounting to $16,580 thousand for the nine months ended September 30, 2025[41] - Loss on transfer of subsidiary in India resulted in impairment charges and one-time legal costs[58] - Gain on sale of insurance business recognized, partially offset by transaction costs[59] - Loss on extinguishment of debt included write-off of unamortized debt issuance costs[59]