Earnings Call Transcript - BLND Q4 2025

Operator, Operator

Hello, everyone. Thank you for joining us and welcome to the Blend Labs Inc. Fourth Quarter 2025 Earnings Call. I will now hand the call over to Meg Nunnally, Head of Investor Relations. Please go ahead.

Meg Nunnally, Head of Investor Relations

Good afternoon and welcome to Blend's financial results conference call for the fourth quarter and full year of 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 will refer to certain non-GAAP measures, which are reconciled to GAAP measures in today's earnings release and in the appendix of our supplemental slides. Non-GAAP measures are not intended to be a substitute for GAAP results. Unless otherwise stated, all financial measures 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, our guidance for the first quarter 2026, other commentary regarding 2026 and our expectations about markets, our strategic investments, product development plans, and operational targets may be considered forward-looking statements under federal securities law. We caution you that forward-looking statements involve substantial risks and uncertainties and a number of factors which are beyond the company's control, could cause actual results, events or circumstances to differ materially from those described in these statements. Please see the risk factors we've identified in our most recent 10-Qs, our upcoming 10-K for the fiscal year 2025 and other SEC filings. We are not undertaking any commitment to update these statements if conditions change, except as required by law. The financial information presented on this call is based on continuing operations and prior periods have been recast to exclude operations that are now discontinued. Furthermore, the financial information presented reflects preliminary estimates and remains subject to completion of the company's financial closing procedures and review by the company's independent registered public accounting firm. Financial results will not be final until Blend files its annual report on Form 10-K for the period. 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.

Nima Ghamsari, Co-Founder & Head of Blend

Thanks, Meg, and welcome, everyone. I'm pleased to report that Blend finished fiscal year 2025 with a strong fourth quarter, coming in near the high end of our revenue guidance and beating the high end of our non-GAAP operating income guidance. But the headline numbers, $32.4 million in revenue and $5.4 million in non-GAAP operating income tell a more important story. They show that we navigated the cycle successfully to emerge as a fundamentally different company. Our consistent performance is not an accident. It is the direct result of the focus and discipline of the entire Blend team. By maintaining a lean software-first cost structure, we have created significant operating leverage. We are generating cash, not spending it. We ended the quarter with 0 debt and over $68 million in cash and securities. We have such conviction in our intrinsic value that we repurchased 5.1 million shares worth $15 million in Q4 alone. And our Board authorized a new program that allows us to repurchase up to another $50 million in stock and we'll continue to strategically execute against this authorization. We are now in a position where we can lean into offense, ensuring that as the market recovers, benefits flow directly to our customers and our bottom line. Let's start by talking about our customer wins and strategic expansions. During the fourth quarter, we signed 10 new deals and expansions. As we look forward towards a potential market recovery, we are seeing a fundamental shift in how financial institutions view their technology stack. And our focus continues to be on winning high-quality logos and deepening our relationship with our existing base. In Q4, we saw notable activity across both Mortgage and Consumer Banking suites. Along those lines, deals included two notable new mortgage customers, one of which has been a Consumer Banking customer since 2023 and represents a great motion for us, a cross-sell from Consumer Banking into mortgage. Both deals include bundled mortgage and close and should be incrementally accretive to our unit economics. And in Consumer Banking, notable new deals include Rapid home equity cross-sell for a large bank — this has been a customer with us since 2020 using our flagship home equity product, but now it allows them to use Rapid workflows in other parts of their process like prequalification. We also signed a new logo with a top 40 credit union with product scope across credit cards, deposit accounts, personal loans and auto loans, highlighting the ability of our Consumer Banking business to bring a new seven-figure per-year logo in addition to selling to our existing mortgage customers. Looking ahead, our overall pipeline remains robust, which is up about 40% year-over-year. And it's not just the volume of the pipeline that excites us with our new focus, it's the composition. We're seeing a structural shift towards bundled deals and that means that we have opportunities that span mortgage, Rapid, Close and Consumer Banking. Momentum we're seeing now is fueled by our customers' desire to build more scalable businesses. Lenders are exhausted by painful hire and fire cycles and by stare and compare and manual work dictated by interest rate volatility and the state of the consumer. And they're no longer willing to ride the highs and lows of the market by simply adding and removing human labor. They want a technology company that can automate the intractable complexity of lending, which will lead to them having elastic capacity — the ability to handle volume spikes seamlessly without adding fixed human overhead. And that turns their businesses into massively efficient businesses that can be 10x more efficient than they are today. But the numbers and our customers and our products and our financial results to date, they only tell the story of where we've been. So I want to spend a moment on where we're going because this is an area of personal passion for me. I've been deep in tech since I was a kid. I was building computers and building programs and building games from my childhood. And when we started Blend, we didn't build Blend just to be a slightly better way to do mortgages. That was a great application form and a great way to close the loan digitally. We built it to completely rewire how the financial system operates and how origination is done. And then as we expanded into Consumer Banking, the same approach, we wanted to make those processes as beautiful and as streamlined as they could be. But that's a difficult problem. That's been an intractable problem because technology to solve such complex regulated originations is not a trivial thing to build. And as a result, as I look at that, and I look at the market turmoil recently as investors are grappling with how AI will impact the software industry, which people are calling the SaaSpocalypse, and we're seeing valuations battered as the market worries about AI and how it will commoditize traditional SaaS and destroy seat-based pricing models, I view this completely differently. I view this as the greatest filter of our generation. There's a brand-new frontier technology available to us that's going to bring some transformation. But it's not going to be generic approaches and generic AI wrappers that win in these highly regulated industries. At Blend, we operate, and we have operated, deeply within the origination space, the revenue generation funnel of financial institutions of all sizes, some small and some of the largest in the country. For them, we're not just a user interface, we're a trusted, secure workflow system of record that reconciles immense complexity across some of the most complicated financial products in the world. And critically, for us, operating at this depth means we continuously are collecting and analyzing and storing data on what's going on in the loan and how it can move along in the process. And that's something the combination of our expertise and our passion around this frontier of technology is something that no competitor can replicate. So I think this is a rich body of structured financial data, including borrower behavior, document processing, underwriting processing, and that sits entirely within how we collect documents, how we process these documents, how we process closings in the Blend flow today. And that compounds over time. That will make our customers smarter, our AI smarter, our platform smarter and stickier for our customers with every single transaction that flows through it. And for our business model, because we monetize the success of our customers, which was always somewhat controversial — people loved seat-based models in the last decade — we've always been a success-based model, and that's a funded loan-based model rather than user seats. AI-driven efficiency in a success-based model is exactly what our customers want and what we want and what you, as our investors, want. We want to find a way to drive more success for our customers. So if that loan officer closes 5x as many loans, they're more successful and our revenue scales with their success. That's how we've always built this company from the very first day and not their headcount. Growing their head count is not a sign of success, growing their seats is not a sign of success for our customers. The SaaSpocalypse, as they call it, that's happening right now, I think of that as our greatest catalyst. And we're using this moment to stay aggressively on offense in two distinct ways. And I always like to start with our customers first. So first, we're going on offense to make the products we deliver to our customers agent-first. By agent-first, what I mean is that the agents are taking a first pass of every single piece of work that's done behind the scenes. So when a new piece of data comes in, a new document comes in, or something's updated on the file, agents take a first pass at underwriting, security, compliance, regulatory checks — all the things that happen manually today behind the scenes that our lenders are required to do. We want the primary way that our customers engage with their customers to be this new approach where agents are taking a first pass and the humans that live there at our customers are the oversight layer to make sure the agents are doing the right things and checking the right things. In this industry, which requires absolute precision, security, and compliance, Blend has been and is a trusted enterprise-grade bridge to agentic AI adoption. While I think highly of the generative AI models out there and the foundation model companies as thoughtful knowledge bases and delivering great tools, what Blend has built is a system to drive the right outcome from the right actions. That's especially important in a heavily regulated industry, subject to fair lending laws; our customers can't afford hallucinations, and calculations around things like income and income verification have to be perfect. They have to know when they have to jump in to oversee what the AI does. They need a system that doesn't just look at documents and make sure they're the right document, but actually understands the documents and reconciles those documents against complex 100-page or 1,000-page guidelines imposed by credit risk teams, regulators and investors. That's a moat that I don't think generative AI companies really want to cross. I think they want to be the tooling layer. It's so specific to the industry. And so that's where I'm excited. It gives us an opportunity as an existing workflow layer for our customers to really step in. Just a few days ago, on March 3, we officially launched our flagship product in this space called Blend Autopilot, which is simple. It's an agent that lives alongside every aspect of the Blend origination process as the customer is going through it. It serves as the product that looks at every data field, every document, checks it against guidelines, runs calculations, creates additional follow-ups, takes action if necessary on that file, generates artifacts so the customer can see all the work that's being done, and it's familiar with the most technical guidelines out there, some of which are 800, 900 pages long. I'm thrilled to share that we now have seven large customers who have turned us on or want to turn this on in the coming days, and that's within a week of launching it. That's in the preview period. We previewed this for a small group of customers that serve on our Customer Advisory Board last month before our public launch. For me it was a profound moment. We spent the morning there and people were talking about the costs in banking and how much manual work there is. Then when we demonstrated Autopilot live — showing that a smart brain could take a first pass at everything, instantly detect something coming in from the consumer and determine if it needs more data or documents, validate that against guidelines, do calculations, and update the loan file without human intervention — you could feel the energy in the room shift. For these leaders, it wasn't just another software update; it was a genuine moment of inspiration. They wanted elastic capacity where, if mortgage rates come down and volumes grow, they don't have to hire hundreds of people and then fire them when volumes decline. They wanted to rewire how they do things. This is their first shot at doing that, thanks to some generative AI capabilities we built into our platform. To give you more color on the product: loan officers or underwriters have manually reviewed documents that come in, and borrowers have to wait a couple of days for that to happen because it's a human process. Someone has to go through all pages of documents and the loan application file, then go back and do stare-and-compare, ask for additional items, and there's back and forth that takes weeks, which is why it takes so long to close a mortgage loan. Blend Autopilot flips that entirely on its head. There are four key things Autopilot brings to our customers. First, real-time intelligence: everything Autopilot sees comes in real time, it does the checks, and within 15 to 30 seconds it can go back to the consumer and request additional items based on what it saw, such as if an account is in a trust. That can be out-of-the-box guidelines like Fannie Mae and Freddie Mac or complete custom guidelines. We launched with the capability for custom guidelines because our customers have their own credit boxes. Second, contextual workflows: the agent is triggered by events in our system that have a lot of context and can trigger native workflows within the Blend infrastructure. We've always driven a better experience for the consumer: when we need an explanation, the borrower enters it in plain text, not a printed and signed physical note. The agent requests things in the same guided workflow. Third, seamless updates: Autopilot can automatically update application fields, for example income calculation, which is complex due to variations in how people make money. I ran this on my own income with W-2, bonus, K-1s, and 1099s and it calculated my income perfectly every time. When you orchestrate generative AI and agents with the right context, you can achieve almost deterministic outcomes, which is crucial here. Fourth, built for compliance: Autopilot is not making credit decisions; it's taking a first pass overseen by a human. That's the future where agents take the first pass of busy work and humans make final decisions. The borrower data our customers have is never used to train or improve external AI models, so we're not risking customers' data, which is important for banks and financial institutions. In summary, about automating the stare-and-compare and calculations that have plagued this industry for decades: I talked about the $11,000 problem on our last earnings call, and Autopilot is our approach to help them solve it head-on. I don't want only our customers to have access to an agent-first world. I also want Blend to be an agent-first company, where agents take a first pass internally. We're reimagining everything internally at Blend: how we build, sell, manage, and support our customers. That doesn't mean just giving teams new tools like Claude CoWork or Gemini or ChatGPT — though we've done that — it means fundamentally changing who does the work, when, and who reviews it. The agent executes and hands it to an employee for oversight. I'm driving this effort personally; our goal is to be in the top 1% of all companies in adopting and operating with AI agents at Blend. Practically, our software developers are already working with agents to write code, but I want the agents to take a first pass on bug fixes and create pull requests that humans then review. I want agents doing the grunt work and passing it to engineers for final review. That means we can handle building and fixing things 24/7. The same goes for go-to-market and back-office teams: agents take a first pass and surface output for humans to review, letting our employees focus on judgment and final decisions. This will let us move faster, be more efficient, and handle growth without a lot of new capacity because agents scale well. We'll use that to grow margins and do more for the industry. When agents handle background work, we're no longer bottlenecked by multi-day cycles. The first pass is done within minutes and we become leaner and more agile, able to outpace competitors. To wrap up, I don't think the market recovery is fully in the rearview mirror, but we've spent the last two years clearing away debt, simplifying the business and building a foundation for sustainable growth. Now I'm thinking about building an agent-first world for ourselves and our customers. We have a profitable, scalable platform ready to win in any environment. Whether rates stay flat or come down, we are in pole position to serve customers and drive massive value for shareholders. So with that, I'll turn it over to Jason to walk through the financials.

Jason Ream, Head of Finance & Administration

Thank you, Nima, and thanks to everyone else on the call. I am pleased to report that we delivered another quarter of solid financial performance to close out 2025. This quarter's results once again demonstrate the resilience of our core business and the significant operating leverage we have created through disciplined cost management. Total revenue in the fourth quarter of 2025 was $32.4 million, which was just slightly below the high end of our guidance range and was up 7% year-over-year. This performance was helped by a return to growth in our Mortgage Suite, which generated $18.8 million in revenue, up 3% year-over-year. Stabilizing churn and stronger-than-expected macro bolstered our mortgage revenue results, and Blend's funded loan growth was solid, growing 11% in Q4, and our economic value per funded loan came in at $83 in the fourth quarter, within the guidance range that we gave on our last call. Consumer Banking Suite revenue for the fourth quarter was $11.5 million, representing 21% year-over-year growth. The sequential decline of 10% from the third quarter was driven primarily by the churn of one large customer that we talked about last quarter as well as seasonality in home equity, but partially offset by new deployments. Shifting back to the consolidated results, our total gross profit was $24.5 million. After excluding stock-based compensation and the amortization of capitalized software development costs, our non-GAAP gross profit was $25.8 million, and our non-GAAP gross margin was 80%, up from 78% last quarter. Non-GAAP operating expenses were $20.3 million, down 4% quarter-over-quarter. Non-GAAP operating income was $5.4 million, above the high end of our guidance range and representing a non-GAAP operating margin of 17%. Free cash flow for the quarter was positive $1.3 million. For the full year of 2025, we generated total free cash flow of positive $2.8 million. Our balance sheet remains strong. We ended the year with $68.3 million in cash, cash equivalents and marketable securities and with 0 debt. During the fourth quarter, we continued to execute our share repurchase program. We repurchased 5.1 million shares worth approximately $16 million, concluding our $25 million repurchase authorization. This last repurchase, like the new $50 million authorization that we are announcing today, is driven by and reflects our confidence in the long-term value of the business and our commitment to disciplined capital allocation. Before I turn to our guidance for the first quarter, I'd like to talk about how we're thinking about the business right now and what that means for how our results might play out over the coming quarters. First, our mortgage business returned to year-over-year growth in the fourth quarter. Based on the stability of our customer base, new deployments that are ramping up in 2026 and a positive mortgage market outlook, we expect to see that trend continue. We will remain cautious in our optimism until rates really come down and mortgage volume, particularly refi, really picks up. But we have seen early signs of improvement and are ready to take advantage of a market uptick. Second, we remain optimistic about our Consumer Banking business. But as we've told you before, we are still concentrated at the higher end of the market for Consumer Banking and both wins and losses can create lumpiness in our results. To give you some specifics, 2025, in which we saw Consumer Banking growth of 35% year-over-year, was bolstered by a large customer that went live late in 2024, contributing about $5 million to growth in 2025 and which is now at a steady state. Conversely, we talked last quarter about the roll-off of a large customer that was acquired. This customer contributed approximately $2.4 million of Consumer Banking revenue in 2025 largely through home equity loans, and we do not expect any Consumer Banking revenue from this customer in 2026. Net-net, you should think about Consumer Banking starting off with a little under $11 million of revenue in Q1 and then having similar seasonality in 2026 as it did in 2025. We'll remain conservative in our outlook for the Consumer Banking business, given the shape of the customer base, but we do see a lot of opportunity going forward, and we're excited about what is to come. Third, as you know, we have been very diligent regarding our costs, both in terms of trimming unnecessary spend, as well as being judicious about any spend that we add. We will continue that mindset going forward. In fact, I expect that over time, we will get even more effectiveness and efficiency from the leverage of AI in our internal processes, an effort that Nima talked about and that is already prevalent across the company, not just in software engineering. As you model Q1, please note that our early adoption of ASU 2025-06 significantly changes how we report software R&D expense. Because we are now capitalizing less software development costs, you will see a divergence between the growth of our reported expense and the growth of our actual cash outlay for R&D. Specifically, for the first quarter of 2026, we expect non-GAAP R&D expense to be approximately $7 million, which represents a 20% year-over-year increase. However, our underlying cash R&D expense before capitalization and amortization is actually expected to decline by roughly 15% in that same period. While this creates a year-over-year headwind in our reported leverage for Q1, we expect this gap to narrow as the year progresses and we lap prior period comps. You should view this Q1 $7 million figure as the new baseline run rate for your models and ignore the seasonal patterns in our R&D expense that you saw last year as those were influenced by our prior capitalization policy. Now turning to our expectations for the first quarter. We expect total revenue for the first quarter to be between $28.5 million and $30 million, which represents approximately 6% to 12% growth over the first quarter of 2025. Underneath those headline numbers, we are expecting Mortgage Suite revenue to grow at or above the high end of that range, but for Consumer Banking growth to be more muted based on the factors I discussed earlier. We expect Mortgage Suite revenue growth to be driven by solid growth in mortgage volumes, where we expect the market in Q1 to be between 1.1 million and 1.2 million units. This growth should be partially offset by lower year-over-year economic value per funded loan, which we expect to be in the range of $84 to $85 in Q1 with the decline primarily due to the transition of certain products to a partner model. Turning to profitability, we expect first quarter total non-GAAP operating income to be between $2 million to $3 million. This range implies a non-GAAP operating margin at the midpoint of just under 10%. Seasonality typically pushes down operating margins in the first quarter of the year, but the accounting changes I discussed earlier also had a material impact, especially as you compare year-over-year trends. Before we turn the call over for questions, I did want to add that through our assessment of internal control over financial reporting, we identified a material weakness in our revenue process for the year ended December 31, 2025. While the material weakness was confirmed in the fourth quarter, we're also disclosing immaterial out-of-period adjustments related to the first three quarters of 2025. Revised figures are available in the appendix of our supplemental slides on our website and will also be detailed in our upcoming 10-K filing. In conclusion, I want to say that we are incredibly excited about a number of aspects of our business in terms of what we can deliver to customers through some of the innovative product initiatives that Nima talked about, in terms of our execution as we focus on what matters and we leverage AI to get more done than we ever have before, in terms of our mortgage revenue returning to year-over-year growth last quarter, and in terms of a market that looks like it might show some real improvement for the first time in several years. We hope that you all are as excited about the journey as we are. And now let's take your questions.

Operator, Operator

Your first question comes from Dylan Becker of William Blair.

Dylan Becker, Analyst, William Blair

Appreciate the question here. And Nima, I appreciate all the comments around the strategic positioning with vertical AI. If we're to think about Autopilot, I know you said the existing process today costs about $11,000. I guess how much of that is directly targetable with your current agentic capabilities? And as we think about those capabilities evolving over time, how much value do you think you can extract away against that cost? And what does that mean for long-term EV per funded loan economics in your mind as we look to chip away at that relatively large cost in the process?

Nima Ghamsari, Co-Founder & Head of Blend

Yes, great question, Dylan. My approach here is to under-promise and over-deliver on the economics. Just to share context, of the $11,000 cost, about $4,000 is operational cost, and then there's a decent amount of commissions and marketing costs included as well. There's a material amount of manual effort involved. If we can make the humans in the process two to three times more efficient, I think there's a very good market opportunity for us, which is why we're attacking this swiftly. The team working on this is moving day-to-day. Every week our customers should see material new updates and capabilities because it's an area we're passionate about and can move the needle for them. We've always been here for our customers, and I think this is our magnum opus. I'll leave you with one anecdote: I was talking to a customer who does similar work, maybe a bit less scope than our product today, and I asked how we should charge for this long term. Short term, we have a preview period. He said, "I do this with an outside vendor and pay them a lot more than I pay you per loan by a decent margin just to do a part of the process you do." So the opportunity is there. It's on us to execute. Let us execute, and we'll come back to you every few months with updates.

Dylan Becker, Analyst, William Blair

That's helpful. Appreciate the anecdote. The fact of elevated customer momentum and activity despite it being in preview for less than a week does speak to that value proposition. Maybe, Jason, for you, it's impressive what you guys have been able to do on the expense side and appreciate the color on some of the accounting. But as we think about the potential recovery and the volume dynamic, could you remind us what to expect from incremental operating leverage? How should we think about cost growth relative to potential revenue growth in that scenario? Any way to think about the operating leverage as you look at the model?

Jason Ream, Head of Finance & Administration

Yes, Dylan, good question. We haven't guided to the rest of the year, so I can't give you specific long-term guidance. Implicit in our Q1 guide is a rebased starting point that you can model from. We do have some variable costs in cost of revenue that will scale with revenue. On the operating side, it's largely a question of where we choose to invest and where we can get efficiencies. Think of Q1 as the starting point for that.

Operator, Operator

Your next question comes from Ryan Tomasello of KBW.

Ryan Tomasello, Analyst, KBW

Everyone, sorry, am I coming through?

Nima Ghamsari, Co-Founder & Head of Blend

Yes.

Ryan Tomasello, Analyst, KBW

Regarding the two new mortgage customers you cited that you won in the quarter, can you provide color on whether those were competitive takeaways? If so, what do you think were the drivers of those wins?

Nima Ghamsari, Co-Founder & Head of Blend

I think the driver of those wins is that we made a commitment to our customers that we would invest through the cycle and keep innovating. We've innovated on our mortgage product, our consumer products, our closing product, and now we're building an agentic suite that spans all those things. They see that commitment. It's not easy to rely on partners in this cyclical industry; we committed early to continue investing. People have seen that commitment and it leads customers to believe in us and want to work with us.

Ryan Tomasello, Analyst, KBW

Great. And on the new Rapid products that you've rolled out over the last few quarters, can you talk about the level of uptake you're seeing and whether that's tracking in line with expectations? And on pricing, the type of uplift you're seeing from earlier adopters of Rapid products?

Nima Ghamsari, Co-Founder & Head of Blend

Yes, great question. We mentioned one such customer signed in Q4, and it represents a fairly material uptick in pricing from their EV per funded loan. It's not live yet. Rapid serves two main areas: home equity and mortgage refinances. With home equity, customers want to serve the equity their consumers have and drive savings for them if they need to consolidate debt. We have a flagship home equity product and Rapid provides a personalized real-time pre-approval and tailored experience. I was on a call today with a top-10 home equity lender going live in a few months; they consider Rapid table stakes going forward. Pairing Rapid with Autopilot leads to lower cost of operation due to reduced variable costs because many actions can happen in real time as the consumer moves through, enabling self-fulfillment. Uptake has been good. It's a bigger change management exercise than Autopilot in some ways because it changes the top of the funnel, but results are promising. We'll let those outcomes play out and report back.

Operator, Operator

Your next question comes from the line of Griffin MacMaster of Wells Fargo.

Griffin Joseph MacMaster, Analyst, Wells Fargo

I just wanted to ask on the top of funnel. It's great to see that a Consumer Banking customer is also looking at you for mortgage solutions. Can you describe how many customers across the base or overall landscape could be target customers for all of these products? And with the recent hire of a new Chief Revenue Officer, are there changes to the go-to-market we should think about?

Nima Ghamsari, Co-Founder & Head of Blend

I'll start with the go-to-market. We're excited to welcome Matt as our new Chief Revenue Officer. One key shift is a dedicated client sales team focused on existing clients to help them adopt more products, both free capabilities and new paid products. That's a dedicated motion to deepen existing relationships while having a separate new-client sales motion to win new logos. Regarding target market, when I look at current practice in the industry, low-friction conversion funnels tied to automated self-fulfillment are basically in place nowhere — some of the required technology and data sources were not prevalent until recently. Timing is good for us to serve that need. Most customers offer multiple products; many IMBs already offer multiple products like home equity, cash-out refi, and personal loans. I'm excited about building unified technology and agentic experiences across mortgage, Consumer Banking, and home equity. We're just scratching the surface, and we have to show outcomes before we claim victory.

Operator, Operator

Your next question comes from the line of Aaron Kimson of Citizens.

Aaron Kimson, Analyst, Citizens

The OpenAI and Better partnership made headlines late last week. Better historically focused on originating loans and now is talking about doing more of what you do: using technology to accelerate the mortgage process for banks, credit unions and IMBs. Do you view that partnership as a validation of your business model? And can you help us think about why, in an agentic world, banks, credit unions and IMBs might try to take back some mortgage market share they've ceded since the GFC?

Nima Ghamsari, Co-Founder & Head of Blend

I view that as highlighting two things. One, there's a big opportunity in this space, and I know that team well and think highly of them. But building technology is different from building software that's integrated and delivers end workflows. I do view these developments as validation of our space and expect increased awareness. Ten years ago Rocket Mortgage catalyzed the industry by demonstrating what's possible. Similarly, these AI and partnership developments are raising awareness, which is good for the industry. From our perspective, our approach centers on agents taking a first pass of work that humans then oversee. I don't think a background human-first approach is the right future. The highest-leverage approach is agents doing much of the background work with the right context and instructions so humans can focus on oversight and final decisions. That background worker approach has only recently become practical and it's what we're betting heavily on.

Aaron Kimson, Analyst, Citizens

Appreciate that. As a follow-up, Autopilot is the first agent for Blend Intelligent Origination. How should investors think about cadence for additional agents? Which consumer loans would you be most excited for next?

Nima Ghamsari, Co-Founder & Head of Blend

We'll make Autopilot available for all product types. It currently works for mortgage and home equity and supports custom overlays or custom guidelines that could be used for other product lines. Beyond Autopilot, you'll see agents around analytics — pushing insights instead of requiring dashboard queries — so customers can see metrics like whether loans with Autopilot close faster. We're building agents around the closing process to improve QC, ensuring every signature, initial, and field is perfect for the closing table. While we'll expand into other agents, we plan to build out Autopilot as a core capability because it can manage much of the work humans currently handle.

Operator, Operator

Your next question comes from the line of Seth Gilbert of UBS. I will invite Pallav Saini, your next speaker, to ask a question. Pallav Saini of Canaccord Genuity.

Pallav Saini, Analyst, Canaccord Genuity

Nima, you mentioned in the prepared remarks that the pipeline is up 40% year-over-year and that you're seeing a shift towards bundled deals. Roughly what percentage of the pipeline would you say is leaning towards bundled deals right now for you?

Nima Ghamsari, Co-Founder & Head of Blend

Good question. I don't have the exact percentage off the top of my head. Directionally, a key driver of momentum is customers interested in multiple products from us — either multiple products within the Mortgage Suite or mortgage plus Consumer Banking products with similar feel, capabilities and integration.

Jason Ream, Head of Finance & Administration

I don't have that in front of me either, Pallav, but directionally it's a meaningful part of the momentum — customers are more interested in multiple products and deeper integrations.

Pallav Saini, Analyst, Canaccord Genuity

Got it. Any commentary on your market share in Q4 and how you see it evolving in 2026?

Jason Ream, Head of Finance & Administration

We only release our actual market share once a year when the HMDA data is released in the fall. As we mentioned last quarter, one large customer was going to be with us contractually for some period but we expect that volume to roll off, which is a headwind of roughly 100 basis points for us. We talked about ending the year at 17% market share, so you can think about that headwind building from there.

Operator, Operator

Your final question comes from the line of Seth Gilbert of UBS.

Seth Gilbert, Analyst, UBS

Maybe first a quick one on the revenue restatement. It looks like it was about $15,000, fairly immaterial. Is that right? Anything else you want to add on the restatement?

Jason Ream, Head of Finance & Administration

Revision, first of all. Yes, it was immaterial. We essentially reallocated some revenue between different quarters in 2025. Revised figures are available in the appendix of our supplemental slides and will be detailed in our 10-K.

Seth Gilbert, Analyst, UBS

Got it. And on the RPO side, you signed 10 new deals and expansions, including one big seven-figure customer. By our model you have around $100 million in short-term RPO. When should we expect some of this to fall off into revenue more materially?

Jason Ream, Head of Finance & Administration

It's always great to have RPO since it's committed and will turn into revenue. I do want to caution that in our business, especially on the mortgage side where we're primarily based on funded loans, success-based pricing means RPO isn't a great gauge for you. Other than that, the short-term RPO should roll off within the next year.

Seth Gilbert, Analyst, UBS

Got it. Quick follow-up on Blend Autopilot: pricing still being mapped out, but is it applicable to your entire base of mortgage customers, or are there customers who will never use AI for cost, security, or other reasons?

Nima Ghamsari, Co-Founder & Head of Blend

A year and a half ago, I would have said there would be fast movers and slow movers. Applicability of the work — the human work of stare-and-compare, back-and-forth documents, reading guidelines, doing calculations — exists across our customer base, so applicability is broad. Will we get 100% adoption? No. But customers are much more eager around AI today. 2026 has been a statement year; people are seeing what AI can do on their desktops and it's opening their eyes to background automation. I haven't yet heard a customer say they won't consider it. One anecdote: at our Customer Advisory Board, a large bank wanted its larger team to see the product and asked us to identify reasons it couldn't be done so we could address them because they really need this capability. Customers have experienced staffing up and down cycles and want a better solution. The work Autopilot addresses — checking matches between documents, precise guideline calculations — is tedious but necessary and AI is very good at it now. The capability wasn't strong enough a few years ago, but now it is, and we're launching background agents to serve this industry. That's been our position from day one: drive the frontier, don't copy it.

Operator, Operator

There are no further questions at this time. This concludes today's call. Thank you for attending. You may now disconnect.