Blend Labs, Inc. Q3 FY2025 Earnings Call

Thank you for standing by. My name is Amy, and I will be your conference operator for today. At this time, I would like to welcome everyone to the Blend Labs, Inc. Third Quarter 2025 Earnings Call. It is now my pleasure to turn the call over to Meg Nunnally. You may begin.

Good afternoon, and welcome to Blend's Financial Results Conference Call for the Third Quarter 2025. I'm Meg Nunnally, Blend's Head of Investor Relations. Joining me today is Nima Ghamsari, our Co-Founder and Head of Blend; and Jason Ream, our Head of Finance and Administration. Before we start today's call, I'd like to note that we also refer to certain non-GAAP measures, which are reconciled to GAAP measures in today's earnings release and in the appendix to our supplemental slides. Non-GAAP measures are not intended to be a substitute for GAAP results. Unless otherwise stated, all financial results we'll discuss today, including our profitability, refer to non-GAAP. Also, certain statements made during today's conference call regarding Blend and its operations, in particular, its guidance for the fourth quarter of 2025, commentary regarding 2026 and expectations about our markets, our strategic investments, product development plans and operational targets may be considered forward-looking statements under federal securities law. The company cautions you that forward-looking statements involve substantial risks and uncertainties and a number of factors, many of which are beyond the company's control, can cause actual results, events or circumstances to differ materially from those described in these statements. Please see the risk factors we have identified in our most recent 10-K, 10-Q and other SEC filings. We are not undertaking any commitment to update these statements if conditions change, except as required by law. All comparisons made in the course of this call are against continuing operations for the same period in the prior year, unless otherwise stated. Lastly, we will be providing a copy of our prepared remarks on our website by the conclusion of today's call, and an audio replay will also be available soon after the call. I'll now turn the call over to Nima.

Thank you, Meg, and welcome, everyone. Our third quarter results demonstrate our team's strong execution and the increasing resilience of our business model. We delivered total revenue just above the midpoint of guidance and more importantly, non-GAAP operating income that exceeded the high end of our guidance. This marks our fifth consecutive quarter of non-GAAP operating profitability, a trend we expect to continue into the fourth quarter. For all of this, I want to personally thank the entire Blend team. This five-quarter streak of profitability is not an accident. It's a direct result of their focus, their discipline, and their deep commitment to our customer success. Their execution is what gives us the stability to invest in our future from a position of strength. This profitability is a result of deliberate work to right-size the business over the past few years and build a foundation for sustainable long-term growth. While our overall top line was steady, it reflects a tale of two dynamics. We saw continued strength and growth in our Consumer Banking Suite, which was offset by some headwinds to revenue in our mortgage business, but this was not a surprise to us. It reflects the intentional strategic transitions that we are navigating, specifically moving from lower-margin services businesses to higher-margin partnerships and managing the final roll-off of legacy customers that we've discussed in prior quarters. We expected and are managing these headwinds, and they are clearing the way for a healthier, more profitable future. I want to spend our time today on three topics. First, the quality of our new customer wins and the strength of our future pipeline. Second, the incredible energy and pull-through we're seeing from our customers around our Rapid Suite and AI; and finally, our key strategic priorities as we drive toward 2026. To start out, in the third quarter, we signed 14 new deals and expansions in line with the prior year. But the quality of these deals is what's most important. Our largest deal was a seven-figure expansion with a top 20 U.S. bank for solar home equity lending. This is a prime example of our platform strategy at work, using our core technology to rapidly deploy and configure complex, high-value solutions with our largest clients. This is precisely what we mean by our platform. Customers can launch new high-margin products in weeks, not years, leveraging the technology they already have. We also had another major renewal and expansion with a consumer banking customer across six product lines. This same customer is now evaluating our mortgage solution, which is a fundamental shift. Our flagship mortgage product used to be the only door in the blend. Today, we have a multi-product platform that allows our customers to land and expand. This is the flywheel we have been building for years, and it is now actively turning. Our consumer banking products create deep daily engagement with customers, which in turn builds trust and provides a natural data-driven pathway to a mortgage. And our mortgage platform creates a high-value data-rich event that our customers can use to offer those consumers deposits, cards, and home equity loans over time. Each side of our business now feeds the other. And this platform momentum is why the small handful of churn notices we saw this quarter are not a strategic concern. The four small customers who left were outside the core market and represented about $200,000 in aggregate annual revenue. We are successfully trading low-value non-core churn for high-value strategic platform expansion. The only noteworthy churn on the horizon is the expected roll-off for Mr. Cooper, which Jason will detail further. So in all, the real story for me is not the legacy share that we're shedding, but the future share that we are building. Our pipeline activity is strong, building sequentially from Q2 and is up approximately 60% year-over-year. This pipeline is our future, and it's robust. We are actively pursuing multiple seven-figure consumer banking deals, sizable top 10 banks in mortgage, and several cross-sell opportunities for our Rapid and Close products. This is the high-quality platform-based business that we are building. And this energy was on full display at our Blend Customer Forum in September. This was our largest forum yet with 120 executives, and the tone was completely different from last year. Last year, AI felt like a science project. This year, we're at an inflection point. The question from customers is no longer what is AI? How can it help me? But how fast can you get it into our hands? The reason for this urgency is clear. The cost to originate a mortgage loan is still stubbornly high, nearly $11,000, and roughly 90% of that is human labor. The industry is realizing that bolting on more point solutions only adds complexity and costs. What we demonstrated at the Forum is the only real path forward, Blend Intelligent Origination. This isn't another tool. It's an entirely new operating model for lending. By embedding agentic AI directly into our core Blend workflow, we can autonomously orchestrate and execute end-to-end processes. And because it's embedded natively into our platform, it's not just another tool for employees to learn or another chatbot for people to talk to. It's a system that works with the rest of the Blend platform and learns for them. This is a fundamental architectural advantage that point solutions simply cannot replicate. Our customers see this as the definitive answer on the path to the industry's $11,000 problem. They are excited, and we are, too, because this is the future, and we are building it with them. We also saw tremendous buzz around our Rapid Home Equity product, which is a very important product for consumers in this day and age. And this was the first forum where early adopters could share their results with peers. The value of this product is its seamless data connectivity and personalized offers in real time, which drive higher conversion by radically reducing the time to approval. The momentum here is palpable. This momentum and the energy from our customers at the Forum is what gives me such great optimism about Blend where I stand today. It is a great way for us to lean into 2026 on offense, where we are laser-focused on three key areas. The first area is our take rate with our customers in the Mortgage Suite. A primary measure of this in our Mortgage Suite is economic value per funded loan, or evPFL. While evPFL has come down in recent quarters, this pressure is a direct and intentional result of our platform strategy, specifically transitioning to higher-margin partnership models and navigating one renewal in this tough market. While this impacts the near-term metric, it is the right decision for our long-term margin structure and profitability and customer base. Our focus is not on this near-term pressure, but instead on the long-term prize. And for 2026, our priority is driving the adoption of the products that create exponential value for our customers in the mortgage case, Rapid Refi and Blend Close. These products are the powerful levers we have to grow our take rate and deliver on the full long-term potential that we see ahead of us. Our second focus is the continued expansion of our Consumer Banking suite. This business is already a strategic powerhouse for us. It now represents 39% of our total revenue, up from just 29% 1 year ago. Our customers are using to solve their most pressing problems, driving high-margin non-interest income and capturing sticky deposits in a highly competitive market. And our engine provides a powerful less cyclical revenue stream that enhances the stability and resilience of our entire company. For 2026, the goal is clear: expand adoption with large accounts and accelerate our speed to market by standardizing more of our out-of-the-box solutions for the rest of our customer base. This is how we scale our business effectively. Our third and final focus is on building the next horizon of growth. As I talked about earlier, we are making targeted disciplined investments in AI and our suite of Rapid products to solve our customers' biggest problems. The great news for us is that these are not massive speculative bets. We are building these world-class solutions with nimble, focused teams. And this innovation is what will keep us and our customers well ahead of the curve. To summarize, when I look at the macro environment broadly, and I see it finally showing signs of life, particularly the potential for us when rates come down, and then I combine that with the specific momentum we are generating for ourselves, I have never been more excited about our business. To be clear, our entire 2026 plan is built to succeed in the current environment and win in the current environment. But the disciplined, profitable and simpler cost structure we have built over the last five quarters gives us incredible operating leverage in a recovery. When the mortgage market turns, we are in prime position to have that recovery flow to our bottom line, all on top of the organic platform growth that we are already driving with our rapid solutions, our closed solution, new customer growth, and over time, AI solutions as well. The team has done the hard work to build a resilient, profitable and scalable platform. We are no longer just ready for what's next. We are building what's next. With that, I'll turn the call over to Jason.

Thank you, Nima, and to everyone on the call today, thank you for joining us. As this is my first earnings call with Blend, I'd like to reflect on my first three months here before I talk about our results. First, the team that I've been lucky enough to join is one of the best I've ever worked with, and they are passionate about making Blend successful. Second, we have a strong portfolio of products that will continue to improve under the leadership of product-focused executives like Nima and Srini. And lastly, the best word I can use to sum up our relationship with customers is partnership. I had the great fortune to be able to attend our annual customer forum only one month into my time at Blend and to talk to a number of our customers. While our customers, of course, have lots of requests and suggestions for our products, everyone I talk to believes that Blend is the best option in the market and that they are on a journey with us. That gives me great confidence in the foundation of this business and our right to win long term. I'm sure I'll talk more with many of you about that over the coming weeks and months. But for now, let's dive into our third quarter financial results and an update on market share trends. Total revenue in the third quarter of 2025 was $32.9 million, ahead of the midpoint of our guidance and down 1% year-over-year. Digging below those headline numbers, Mortgage Suite revenue was down 18% year-over-year, driven by the strategic transition to lower revenue but higher-margin partnership models for some of our products by some churn and by the effect of the large renewal with lower pricing that we talked about last quarter. On a side note, our work with that customer continues to be very positive, and we continue to believe that the customer can provide meaningful upside to 2026 and beyond. Mortgage Suite revenue was down approximately 1% from Q2 to Q3, driven by the ongoing ramp down of several customers that gave churn notices last year, the continued effect of our strategic transition to partnerships, and by some seasonality. Consumer Banking Suite revenue was up 11% quarter-over-quarter based on go-live deployments on some large customer wins as well as ramping usage at some of our larger customers. The increase came across both core consumer banking products and home equity lending products, which are included in our Consumer Banking Suite. Shifting back to consolidated results. Our total gross profit was $24.5 million. After excluding stock-based compensation and the amortization of software development expense, our non-GAAP gross profit was $25.6 million, and our non-GAAP gross margin was 78%, up from 76% last quarter. Non-GAAP operating expenses were $21 million, up 9% quarter-over-quarter, almost entirely driven by a Q3 specific sales and marketing expense related to Blend Forum and by higher non-GAAP R&D expense due to a lower capitalization rate of software development expense. Non-GAAP operating income was $4.6 million, above the high end of our guidance and representing a non-GAAP operating margin of 14%. Free cash flow for the quarter was negative $5 million, bringing our year-to-date total free cash flow to positive $1.5 million. Our balance sheet remains strong, thanks to the work Blend did in 2024 to eliminate debt and realign the cost structure of the business for sustainable growth. As of September 30, 2025, we had approximately $82.3 million of cash, cash equivalents and marketable securities, inclusive of restricted cash. In the third quarter, we repurchased 1.6 million shares worth more than $5 million, bringing the year-to-date total to $9.2 million and leaving $15.8 million remaining under our repurchase authorization as of quarter end. Our evPFL for Q3 was $86, in line with our guidance. We do see some near-term headwinds. And as we look to Q4, we expect evPFL to be approximately $83 to $84. We are not providing specific guidance beyond Q4, but believe that most of the recent issues negatively impacting evPFL will be largely behind us as we enter 2026. It is important to remember that evPFL, while a useful metric, is somewhat incomplete as it does not capture home equity loans, an area where we see significant momentum in our business and which are included in our Consumer Banking Suite. Next, I wanted to provide an update on our market share. We've included a slide in our supplemental deck that provides additional numbers and context, including Blend's annual funded loan volumes. As a reminder, we use Home Mortgage Disclosure Act, or HMDA data as our benchmark for total market size and the market share we report is measured by dividing Blend funded loans by total market volume per HMDA. As anticipated, our 2024 HMDA market share is down from the high watermark of 21.7% in 2023 and landed at 18.6% in 2024. The decline is primarily driven by churn notices that we received from customers in 2023 and 2024 when cyclical pressures in the mortgage industry were at their peak. Since customer roll-off is often a long process, we've continued to see some of the impacts of volume from those customers into 2025. We anticipate further market share headwinds in 2026 of approximately 100 basis points, primarily due to lower volume from Mr. Cooper. As we have said before, we signed a contract with Mr. Cooper shortly before their acquisition by Rocket was announced. That contract runs through June 2028 and protects a significant portion of our revenue from them through that time period. As we look to 2026 and beyond, the trajectory from here is encouraging, given the stabilization of churn trends and the new customer wins and expansions that we've been talking about. For the first nine months of 2025, we've only had a few smaller customers indicate their intention to churn, which in aggregate represent less than 10 basis points of 2024 HMDA share. We believe we've created a solid base for long-term share growth. We're not providing any formal macro outlook or company-specific guidance for 2026 at this time, though we will have more to say in February. Still, it's fair to note that we generally agree with the current consensus expectation that lower mortgage rates in 2026 will drive industry growth, which should more than offset the market share headwinds in mortgage. In consumer banking, we have a solid deployment pipeline heading into 2026, though we expect that consumer banking will face some headwinds from the expected churn of Mr. Cooper's home equity business. Please also keep in mind that consumer banking revenue has a tough prior year comparison due to a large customer that went live late in 2024, contributing about $5 million to growth in 2025 and which is now at steady state. Now, turning to our expectations for the fourth quarter. We expect total revenue for the fourth quarter 2025 to be between $31.0 million and $32.5 million, with the midpoint representing a slight decrease from the third quarter. Within total revenue, we expect Mortgage Suite revenue to be flat to slightly down quarter-over-quarter, driven by some one-time revenue in Q3 that we do not expect to repeat in Q4 and partially offset by flat to slightly up mortgage volume. We expect consumer banking to be down mid-single digit percentages quarter-over-quarter, largely driven by the impact of Mr. Cooper that we mentioned earlier and by typical Q4 seasonality, and partially offset by increased revenue with several large customers that went live in Q3 and which will have a full quarter of revenue in Q4. Lastly, we expect fourth quarter total non-GAAP operating income to be between $2.5 million and $3.5 million. In August, we shared our Q4 2025 market size expectation of 1.13 million to 1.23 million units, and we think this is still a reasonable range. For Q1 2026, we expect a sequential volume decline, in line with normal seasonal patterns. Our current expectation for the first quarter of 2026 is for mortgage volume to be between 1.07 million to 1.17 million units. And now let's take your questions.

Your first question comes from the line of Aaron Kimson with Citizens.

Nima, you talked on the 1Q '25 call about the inflection in pipeline after the Rocket-Cooper deal was initially announced. I appreciate the commentary about Forum in September and pipeline up about 60% year-over-year at the end of Q3. But since the Rocket-Cooper deal closed on October 1, has there been any change in the tone of conversations with FIs that want to keep their largest consumer lending relationships that know they need to upgrade their tech stack to remain competitive?

Yes, good question. The Cooper-Rocket acquisition has led big mortgage servicers to rethink their strategies, and we are particularly strong in this area. We collaborate with most of the top 10 mortgage servicers in the country, which puts us in a good position to benefit from the current opportunities in cash-out refinances and home equity loans. Furthermore, if mortgage rates fall to the mid- to low 5s, a significant number of customers with rates between 6% and 7% will want to take advantage of the lower rates, especially if the economic situation worsens. I have definitely noticed companies responding to this. Some of the largest lenders among our clients have expressed a need to make crucial advancements with AI. They have been reaching out to us regarding AI integration, aiming not just to stay competitive but to use this time—when some companies may be occupied with other priorities—to enhance their operations significantly, aiming for a more automated and higher quality service over the next 6 to 9 months.

That's really helpful. And then switching over to Jason, it's great to have you with us. Given that you were a senior MD at Haveli in April '24 when Haveli made its investment in Blend and with Haveli owning about 20% of the company today, can you talk a little bit about your history with Blend dating back to Haveli? How involved you were in that investment process? And then how you came to be the Head of Finance and Administration at Blend? Was it through prior relationships or third-party recruiters or something else?

Yes. Haveli is a smaller firm, so I had visibility into what was happening. I wasn't part of the investment team for Blend, but I did have some interaction with the company. As an operating partner, I was a resource for all of Haveli's portfolio companies. My transition came from wanting to return to an operating role. When Amir decided to leave Blend, I was in search of a good opportunity. Everyone at Haveli held the team at Blend in high regard, and I had gotten to know Nima and their team a bit as well, making it a great opportunity. They needed a CFO with experience in public markets, which aligned with my goal of getting back into an operating role. Essentially, everything came together perfectly.

Your next question comes from the line of Ryan Tomasello with KBW.

On Mr. Cooper, can you just help us synthesize the moving pieces you called out there in terms of sizing the revenue impact in 2026, just juggling the handful of commentary that you gave between both the mortgage and the consumer banking segment? And then beyond 2026, you're mentioning a part of the revenue still being protected through the expiration of that contract. So, just help us understand exactly what that looks like and what that cumulative impact might look like post-2028?

Yes, Ryan. This is Jason. So the specific commentary we gave on the call is that there will be a share headwind, and that is essentially because we do expect the volume of transactions coming through our system from Mr. Cooper to come down now that the transaction has closed. We didn't really give specific revenue numbers around that. But what I will say is that the majority of the revenue that we've had in the past is protected for some period of time. So, there will be some revenue headwind. We didn't call out a specific number, but the majority is protected through the second quarter of 2028. I'm sorry, the second part of your question, I think we missed that.

No, I think you covered it, but I mean, I have a related follow-up. I think last quarter, you called out a mortgage pipeline consisting of roughly 400 bps of market share. Can you provide an update on where that stands today? And then it sounds like net of Mr. Cooper, we should still be expecting market share growth next year, but correct me if I'm misunderstanding it.

Yes. Sorry, go ahead.

We have not provided guidance for next year on market share, but we will share more details during the Q4 call at the beginning of the year. We still have a very strong mortgage pipeline. Our strategy involves multiple factors. As Nima mentioned, we are experiencing a flywheel effect where the mortgage side supports the consumer banking side and vice versa. We are aiming for growth in both areas. Additionally, we are focused on growing consumer banking, with home equity representing a significant opportunity that resembles mortgage lending, although it is reported under consumer banking. Therefore, you can expect substantial growth in both segments.

We discussed in my prepared remarks that we currently have several top 10 lenders and banks in our pipeline that we are actively pursuing. We believe, and the market seems to agree, that we offer the best product for these clients. I had the opportunity to spend quality time with these prospective partners at the Mortgage Bankers Association Conference. Despite the challenges we've faced, we have maintained our strong reputation and continued to innovate. This positions us well to be the ideal partner for major players in the industry, especially as we enhance our capabilities to become a true platform for them. By integrating AI and developing rapid products, we enable them to derive significant value from our offerings. This is why our pipeline remains robust and why I am particularly enthusiastic about the growth potential within our existing customer base, which can move more swiftly and is eager to expand our collaboration.

Your next question comes from the line of Joseph Vafi with Canaccord Genuity.

Just wanted to maybe just drill down on the big renewal a little bit. Just kind of what was maybe going on there in a little more detail, if possible? Do you see more renewal risk in the pipeline? And it feels like you provide a pretty high-value product to customers. So kind of just wondering why there needs to kind of be a pricing discussion when you're already adding so much value for customers? And I have a quick follow-up.

Yes, that's a great question, Joe. To clarify the timeline for when the initial discussions about the renewal began, it was either late Q1 or early Q2 of 2024, which is over 18 months ago and prior to Jason's arrival. It was a different period for Blend, before our Haveli investment and before securing new capital. At that time, there were concerns about our debt and uncertainty over our longevity in the market. In response to your question, I don't perceive any renewal risk in our current pipeline. If we normalize the contributions from our customers per loan, excluding this one renewal, the value per loan has actually increased year-over-year from Q3 to Q3. We've taken a moment to assess this internally, as there are several factors at play, including this particular renewal and our transition to a partnership model, which I am very optimistic about and believe will yield more opportunities for us next year. While we have faced some impact from one major customer in 2024, notably, they were featured at Forum demonstrating the AI capabilities they're implementing with us. They also discussed our Rapid home equity offerings and potential further collaboration with us. I view these challenges as short-term hurdles that ultimately help strengthen our long-term partnership. This customer is significant and has been an excellent partner for us, and we have numerous engagements with them. I am very pleased with the renewal and would agree to it again at the same rates if given the chance, because of the considerable upside potential. We're addressing this $11,000 challenge in the industry, and we've made substantial headway. After spending time restructuring internally and getting our debt off the balance sheet, we are now in a strong position, actively innovating, and I'm excited about what lies ahead.

Your next question comes from the line of Michael Turrin with Wells Fargo.

There were just a few different mentions throughout the call I wanted to unpack a bit if we could. So it sounded like some of the market share impacts you're seeing likely continue into next year, but there are also some comments from Nima around macro showing signs of life and pipeline growth building back a bit. So just any more context you can give us to help square those two factors? And big picture, just the factors within Blend's control and driving better growth into next year is helpful.

Yes, Michael, thank you for the question. There are two factors to consider. One is our market share and the other is the overall market conditions. As we mentioned earlier, the general expectation is that interest rates will be lower in 2026, which is expected to increase mortgage and refinancing activity, positively impacting the market as a whole. While we haven't provided specific guidance on this yet, we believe this aligns with the market's general outlook. Regarding market share, we have identified a specific challenge with Mr. Cooper. A significant portion of our revenue from them is secured by contract, but if they divert their volume elsewhere, we won't count that towards our market share. This could pose a significant challenge to our share in 2026. However, this doesn't mean our share is limited to just that factor. We have opportunities to acquire new customers and increase our market presence, which can also enhance our share. While we haven't provided guidance for 2026 yet, we want to acknowledge one potential challenge without suggesting it defines our overall outlook.

Okay. That's useful supporting information. Jason, regarding margins, you're exceeding the upper limit of the previous operating income guidance while revenues are within the expected range. Can you explain where the efficiencies are coming from and how you view different investment levels for the business and various growth scenarios as some of what you mentioned potentially unfolds?

Yes. It's challenging to pinpoint a specific area for our efficiencies. We are expanding our presence internationally, particularly in lower-cost regions where we can find talented individuals at reduced costs. That’s one clear area of efficiency. More generally, we are focused on operating in a lean manner, utilizing smaller teams and emphasizing output rather than merely establishing an organizational structure. This approach is more about a mindset than specific efficiencies. Looking ahead, we want to be cautious in our investment decisions, particularly since the mortgage industry is cyclical, and to some extent, this may apply to the home equity segment in consumer banking. We won't let our investment choices solely follow macroeconomic trends. For instance, even if revenue increases due to significantly lower rates, we won't rush to increase operating expenses just because revenues are high. We're building a resilient business that can withstand economic fluctuations. Additionally, we have exciting opportunities before us, and we believe we are well-positioned to seize these opportunities within the current framework we've established. If we continue to gain traction and see significant top-line shifts regardless of the macro environment, we might increase investments in specific areas where new initiatives demand it. However, we are being careful to assess the return on investment for our expenditures, ensuring that we have a clear path to generating returns from any added costs.

Your next question comes from the line of Michael Ng with Goldman Sachs.

I just have two. Just a big picture one. Just on the economic value per funded loan, is there a way to think about where that could be in the long term? I appreciate that you're guiding to $83 to $84 for next quarter. But like where do you see that going in the next 2 to 3 years? And then secondly, we've seen some good revenue growth in Consumer Banking Suite revenue. Just as you think about the business more strategically, what's the right mix to think about now between consumer banking and Mortgage Suite? Like where are you focused on and where do you see the biggest opportunities?

Thank you, Michael. I prefer to start with the opportunity size. We have discussed Rapid Home Equity and Rapid Refi in our recent comments and over the past few quarters. These products, on their own, significantly exceed our core mortgage and home equity rates. I believe we are just beginning to explore this potential. Regarding your question on our position in two to three years, we haven't provided specific guidance yet, but we are actively focused on rolling out these products to our customers. This has become our top priority due to the current strong market demand for Rapid Home Equity, and many market participants aim to assist consumers in leveraging their equity, which aligns with our goals. This segment holds a high profit margin, despite being part of our consumer banking. On the Rapid Refi side, several companies are noting a decline in mortgage rates. With the recent job numbers, they want to be ready for those who could benefit from lower rates, particularly when rates drop to the mid- to low 5s, which I believe will mark a significant turning point in the industry regarding the number of eligible consumers. However, they need to implement this process effectively and efficiently, and our Rapid Refi solution is designed to facilitate that. We have seen solid interest, with some customers beginning to scale its use. We are enthusiastic about it, and our customers share that excitement. While we can't offer specific guidance for the next two to three years, we might provide further insights in a future Investor Day, considering the momentum we are experiencing. The opportunity appears quite substantial, and this doesn't even factor in the advantages that AI can provide, such as reducing the manual effort required in reviewing loan files and improving communication with consumers, which is where AI excels. We're excited to join our customers on this journey. I don't have precise guidance for the medium term, but I'm very optimistic about the long-term prospects. I see significant growth potential for us and our customers, particularly through expanding our evPFL with existing clients. Was there another question, Michael? I think I may have overlooked it.

No, it was just about the long-term trajectory of evPFL and the right mix of consumer banking versus mortgage, but I think you've covered it.

Makes sense. Yes. You've seen our consumer banking segment grow because we've achieved some significant customer wins. One of our largest deals this past quarter was a consumer banking win. Currently, consumer banking represents 39% of our total revenue, which is cyclically low in mortgages. I believe both sides of this business have the potential to grow much larger if we continue to execute well with our customers, who also need to succeed in the market. We're not prioritizing one over the other; we're serving both. Our primary focus is on our existing customers and expanding our relationship with them first and foremost.

Your next question comes from the line of Faith Brunner with William Blair.

Can you maybe double-click on the adoption cadence you're seeing across the different Rapid products within your existing customer base and maybe how that's driving durability into the different product suites? And then just a quick one on top of that about AI and as you get early feedback back from the Intelligent Origination and some of these other solutions, how that can maybe unlock another long-term monetization opportunity for you guys?

Yes. Those are great questions. Currently, there are over 10 Rapid deals being deployed with our customers. I need to confirm the exact number, but our major customers are primarily focused on offering home equity lines of credit or loans within approximately 10 days. Many consumers have high-interest revolving debt, and our customers are eager to provide options that leverage the equity in consumers' homes. Traditionally, obtaining a home equity line of credit from a bank or credit union can take 30 to 60 days. However, with our Rapid Home Equity technology, we can significantly expedite this process and achieve much higher conversion rates. This is the main focus for our largest customers, but there is also growing interest across various segments in both Rapid Refi and getting ahead of potential decreasing rates next year. On the topic of AI, it has become essential for us, almost like water at this point. It has reinvigorated our efforts towards efficiency, allowing us to enhance our internal processes for greater speed and quality. One particular industry challenge I've referred to as the $11,000 problem illustrates the complexity we face. There are many different consumer financial scenarios and countless rules to apply, creating an overwhelming coding challenge due to the constant changes. However, the recent advancements in AI have made it possible to manage these numerous permutations present in loans and lines of credit. During a demo with a significant client, we showcased how seamlessly AI operates within our platform. The consumer experiences their usual workflow while the AI handles all the behind-the-scenes tasks, akin to human preparation. This appears almost magical because understanding the underlying mechanisms is complicated, even for someone deeply immersed in AI. I inquired about their manual fulfillment costs, which were substantial. To answer your question, this capability isn't currently reflected in our financial forecasts. Additionally, I want to highlight that AI has empowered us to build sophisticated solutions with small teams, minimizing communication gaps and fostering strong collaboration. While sharing these innovations with customers and encouraging adoption remains a separate challenge, the development of these capabilities thrives in a tight-knit team environment. I'm involved with a small team working on what we call Blend Intelligent Origination, and the enthusiasm surrounding it is palpable. Our customers are excited, and though we still have work ahead, I consider this initiative to be in its early stages. It isn't incorporated into our financial model, but I see it as a significant growth opportunity beyond what we shared during our last Investor Day regarding long-term business prospects.

Thank you so much. There are no further questions at this time. So on behalf of Blend Labs, Inc., thank you for joining. That concludes today's conference call. You may now disconnect.