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Hello, everyone. Thank you for joining us, and welcome to Blend Labs' first quarter 2026 earnings call. After today's prepared remarks, we will hold a question and answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. I would now like to hand the conference over to management for prepared remarks. Please go ahead.

Good afternoon, and welcome to Blend's financial results conference call for the first quarter of 2026. 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 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 second quarter of 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 laws. We caution you that forward-looking statements involve substantial risks and uncertainties, and a number of factors, many of 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-K for fiscal year 2025 and our 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. 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 will now turn the call over to Nima.

Thanks, Meg, and welcome everyone. It's been a whirlwind two months since our last call. We reported our Q1 numbers today, which Jason will spend time on, but came in higher on revenue and non-GAAP operating income than expected. We also signed 15 new deals and expansions in the quarter, including an eClose deal with a top 20 bank, along with a new mortgage deal with another top 100 bank. Our pipeline as of March 31st is up more than 40% year-over-year, and that doesn't include the Autopilot pipeline, which I will cover in a minute. The world has shifted underneath us in those two months. Increased global conflict, inflation, and a rise in mortgage rates. That leads me to be a little conservative in the short-term numbers, but I am incredibly optimistic about the future.

My optimism comes from two things, and they are both tied to artificial intelligence. The first is Autopilot, which is our AI agent and orchestration layer that we put right alongside our customers' work as they work with consumers. The second is the agents we're building inside Blend, which are starting to do our own work. Together, I believe these two pillars give us a path to see 10%-15% incremental growth already for us in 2027 on the top line and more efficiency and speed as a company internally. Let's start with Autopilot. For those new to the story, Autopilot is our flagship AI agent. We unveiled it and rolled it out in beta almost exactly two months ago, telling our customers they could use it for free and try it out for all of Q2 to see it in action and help their business.

As of Monday, May 4th, 65 lenders have activated Autopilot. 22 are running it live in production, over 7,000 applications have already been touched by Autopilot since we moved it to live production. We're seeing their early results are improving, both in cycle time and in conversion rate. Two of our largest lenders are actively implementing Autopilot right now with go-lives planned for Q2, we have three more top 20 logos in our net new pipeline that we expect Autopilot to be a meaningful catalyst for closing those new logos. In total, we're already sitting on $10 million in pipeline because it solves a real problem for our customers and the consumers they serve. The more important story for me and for our company and for our customers and our shareholders is how quickly that product is evolving.

We've been publishing details to our blog every week. There are two that I wanna call out. The first is Autopilot Chat. That was rolled out about a month ago, a conversational interface where the borrower can ask Autopilot questions about their loan in plain language as they're going through the process. What documents are still needed? Why'd you ask me for this specific thing? Why does it matter in my situation? What happens next? Instead of a static task list or making a phone call, the borrower can have a real contextual understanding of what's going on to help them through the process. This is the kind of interaction that consumers are starting to expect. We are right on top of it. The second is something I'm even more excited about, which is Autopilot MCP.

That opens up the Blend Platform so that our customers can build their own agents on top of Blend or use Blend in a headless way in their existing workflows and still get the benefit of all the compliance, all the data model, the workflows, all the native integrations we built, and the intelligence layer of Autopilot. One of our large mortgage company customers has already built a voice agent using it, and I'm seeing this really important and really promising for our customers who want to own more and more things they can do, but to move really fast. That pattern, customers innovating with us and around us rather than instead of us, is exactly what we want and exactly what we expect to see more of going forward. This all adds up to is something I think is really powerful.

Our customers can now see a path from initial borrower touch all the way to clear to close without a team member ever having to touch a file. They still can work on the file, but they won't have to. That is fundamentally different value than we could ever offer before or the industry could ever offer, and something that I dreamed of being able to offer when I started the company in 2012, and now agentic AI has made that dream possible. On top of that, eight weeks in, we're shipping at a cadence that Blend of years ago and most enterprise software companies would measure in quarters. Every one of those updates is ground on what our customers need, what they're telling us they want, and how we can help impact and improve their business.

With adoption well underway, let me give you an update on how we're gonna monetize this. Autopilot has been in preview to date, and our priority has been getting real customers live and proving the value. Starting at the end of June, we're gonna move to paid tiers. Just like any modern software company, there's gonna be some base capabilities just built into our workflow that are gonna provide intelligence, like did you upload the right document. That's useful. That's gonna lower some friction for consumers to get started and understand AI. The paid tiers are where the full product lives, what we call underwriting intelligence, where Autopilot is reading the documents, taking real action on the loan file, running calculations, reconciling against guidelines, and driving the work forward.

Over time, our intent is to move the paid tiers of Autopilot to a per-funded loan model, just like the rest of our mortgage suite. It's the right long-term structure, our customers like that because it allows them to see and track the value on a per-loan basis, and we get paid when they make a successful loan. That's a great product for us. It's a great alignment for us with our customers, and it incentivizes us to make sure this is providing real loan-level funded value improvements. When Autopilot helps a lender fund more loans with the same number of people, our revenue scales with their success, not with their headcount, and that is how we've always built Blend, and that's even more important today in an agent-first world.

We're gonna continue to provide updates on Autopilot as more customers sign on. I want investors to understand this is not a small incremental line item for us. Autopilot is a whole new leg of growth for the company on top of the great mortgage and consumer banking suite that are already growing. We plan to keep growing it. Before we move off Autopilot, I wanna spend a minute on something that I think is really important. I keep getting asked about from investors. The billion-dollar question is: where does the durable value in enterprise AI actually accrue? This is an ongoing debate. It's important to understand where Blend fits and where how I see this. For the last couple years, the focus of the industry and the world broadly has been on the foundation models.

Which model is the fastest, the smartest, does the best in benchmarks, the cheapest? That focus is understandable. As models converge in capability and keep innovating, the durable value is shifting up the stack to the orchestration layer between the model and the workflow, to the area what people call the harness and the thing that's driving actual end business outcomes. The harness, to put it clearly, is it's the system that channels the engine and all the tools around it into a reliable, controlled outcome, which is so important for an industry like ours, like financial services. The data and the documents and the specific context of any moment is the fuel that makes any of that work actually useful. Autopilot is exactly that. It is not a model.

In Autopilot, we use the best available models underneath. Instead, it's the orchestration layer that decides what to do given that exact moment in a loan. It retrieves the specific guidelines, gets the full context of the loan, runs the right calculations, validates the outputs against investor and regulatory requirements, updates the loan file, and triggers the native Blend workflows that move the file forward. That logic is specific to that exact loan and exact consumer in front of it, and it's the kind of work that generic AI isn't built to do. It needs a system around it. That's where Autopilot fits in. Autopilot MCP just takes that to the next level.

It allows the Blend Platform users to build their own agents or even build work with Blend in a completely headless way, which means the harness becomes a platform for them to move really fast because they get all the regulation, the compliance, the integrations, and the Autopilot intelligence out of the box, and they can build their own experiences and their own agents around that, which is just a meaningfully a different level of importance because now you become more of the engine, the powered by, instead of the interface, and that's where agents can be really powerful. That compounds more as we open up more capabilities for our customers to build faster and on top of us. That is why I get more confident every quarter about where Blend sits in the AI landscape. We are the vertical industry harness for origination.

We have the proprietary data to make that harness work. We have the business model already to help capture the benefit of automation and still give most of the benefit to the end, to the customer and hopefully the consumer, but that's the durable place to be, and that's why I'm excited that's where Autopilot is. Yeah, so we're bullish on our first pillar, which is agents for our customers. I'm even more bullish on something which is what our internal work, how we're using agents there. Over the last few months, we've been building something that we're boringly calling Blend Background Agents. It's not a new idea, but it's a simple idea.

Anytime we get an input from the outside world, it could be a ticket, a customer issue, a feature request, before that reaches a team member, we want an agent to take the first pass of that work and take action on that, and the team member reviews and approves it. In practice, that could be something like a ticket comes in that outlines a bug in our system. An agent immediately picks it up from our support queue, looks at it, identifies the bug, writes the code to fix the bug, tests the code to make sure the bug is now fixed, and then sends it to a human and says, hey, I had to change these 10 lines or 50 lines of code. Can you approve this?

That moves our team from manually driving the car and making the turns and figuring how to get from A to B to playing air traffic control with hopefully dozens of cars. To support that, we've given our agents access to our internal tools, our entire code base, the ability to stand up environments, and they will now take up the first pass before our engineers, our support team ever see that issue. When I look at the numbers, the new process of how we're adopting AI at Blend has already resulted in more than 1.5x productivity in 2026 versus 2025 based on number of pull requests our engineering team is doing. That we're just getting started with that. Prospects and customers are already taking notice of how fast we're moving. I get notes from customers all the time.

I've been on site with our biggest customers in the last month, and I can tell you that momentum is palpable. Our customers have noticed a change in our quality and speed. I want to be clear, this is not a one-team experiment. This exact same pattern of agents doing the first pass of work should apply to every role in every company, and specifically in Blend, it will apply to our roles here. That could be something like onboarding a new customer, preparing for a customer business review or going on site with them, or even something as esoteric as getting a manual Excel worksheet that comes in that outlines what loans have been funded for our accounting team, doing that work before our accounting team even has to pick it up.

I said on the last call that we aim to be in the top 1% of all companies in terms of agentic AI adoption, and I really meant it. We're going to do it. It's something I'm very passionate about, we're going to keep driving for that. When done, I believe this effort, combined with Autopilot, that's created the path to 10%-15% more top-line growth and a lot more efficiency and speed for us. That speed is probably the most important thing for any business, and especially for a company like Blend. It means more customer issues fixed, more great features developed, more things like we've done with Autopilot, continuing to grow Autopilot, faster time closing a quarter, better preparedness for customer business reviews. These will be the new Blend.

To wrap up, transforming a company of our size into an agent-first company is definitely more work and more complicated than the world understands, but it's worth it. We have a really important mission. Our customers serve millions of consumers across the country every single year, so this change cannot come fast enough. We are taking it as fast as we can, and we feel like, to be quite candid, from my perspective, the best positioned company in the space. It is something that I spend a lot of my time on and the team is even more passionate about.

You know, while the war and tariffs and oil and all those things might have create some conservatism around short-term mortgage market numbers because the macro and the rollout time for building might also take some time, I have never been more energized about kind of the medium term and hopefully even the long term for our customers, our team, and our investors. With that, I'll turn it over to Jason to walk through the financials.

Thanks, Nima, and thank you to everyone else joining us on the call. We delivered a strong start to 2026, with both revenue and non-GAAP operating income above the high end of our guidance ranges. Revenue grew 15% year-over-year, and our non-GAAP operating margin expanded to 13%, reflecting growth across the business and reflecting the operating leverage we have continued to build into the model. Total revenue in the first quarter of 2026 was $30.8 million above the high end of our guidance range, driven by growth in mortgage and consumer banking alike. Mortgage suite revenue was $17.2 million, up 18% year-over-year. Funded loans on our platform were approximately 187,000 in Q1, up 29% year-over-year and slightly better than we had assumed coming into the quarter.

That strong volume growth was partially offset by a lower year-over-year economic value per funded loan, which came in at $84 in Q1, within the $84-$85 range we discussed on our last call. We were at the lower end of our range primarily because of higher mortgage volumes, which mechanically lowers the per loan economics calculation given some of the fixed fee arrangements that we have within our customer base. Consumer banking suite revenue for this first quarter was $10.8 million, up 12% year-over-year and consistent with the color we shared on our last call.

Professional services revenue for the first quarter was $2.9 million, up sequentially from $2.1 million in Q4. Of the $2.9 million in professional services revenue, approximately $600,000 related to work completed in prior periods that was recognized this quarter under our revenue recognition policies. We would not expect a similar catch-up amount in future quarters. Turning to profitability, non-GAAP gross profit was $24.8 million, and our non-GAAP gross margin was 80.3%, up from 72.9% in the first quarter of 2025. I would note that gross profit in the quarter benefited from the PS catch-up that I just mentioned, as well as some one-time cost of revenue benefit that together brought gross margin for the quarter up by about 2-3 points.

Please keep that in mind as you think about modeling gross margin going forward. Non-GAAP operating expenses were $20.7 million in Q1, up 10% year-over-year. As a reminder, the year-over-year comparison reflects the change in our internally developed software capitalization methodology that we discussed last quarter, where we are capitalizing less of our R&D personnel cost than we did in 2025. This is an accounting treatment change rather than a change in the nature of our R&D investment. As a result, reported R&D looks elevated on a year-over-year basis, an effect that will persist to some extent throughout 2026 until we lap prior year periods.

Non-GAAP operating income was $4.1 million above the high end of our $2 million-$3 million guidance range and representing a non-GAAP operating margin of nearly 13%. An improvement of approximately 10 points compared with the first quarter of 2025. Free cash flow for the quarter was $7.3 million compared to $15.5 million in the prior year. We're pleased with the strong cash flow generation and want to remind you of our seasonal patterns, where Q1 is typically a strong collections quarter in our business. Our balance sheet remains strong. We ended the quarter with $59 million in cash, cash equivalents and marketable securities, and zero debt.

Putting our cash to work, we repurchased 11.2 million shares during the quarter at an average price of $1.66 per share under our share repurchase program, deploying $18.6 million of the $50 million authorization we announced on our last call. As we said last quarter, this program reflects our conviction in the long-term value of the business and our commitment to disciplined capital allocation. With zero debt and a solid liquidity position, we have the balance sheet to invest in both the business and in our shareholders simultaneously. Before I turn to outlook, I want to spend a moment on market share and on the macro environment.

On market share, the initial release of 2025 HMDA data in early April showed approximately 4.4 million originations for the year, which puts our 2025 mortgage market share at approximately 17%, squarely in the middle of the 16%-18% range we guided to back in November. The HMDA data will continue to settle as late filings come in, but we don't expect that figure to move meaningfully. As we look into 2026, we expect a market share headwind of approximately 100 basis points, primarily reflecting the volume roll-off of one large customer that we've discussed previously. At this time, we don't see any other significant headwinds to our market share. On the macro side, the spring housing market started on stronger footing than many had expected, supported by improving affordability and slowly rebuilding inventory.

That said, the recent rise in mortgage interest rates adds uncertainty to the outlook. Fannie Mae's most recent forecast calls for total mortgage market growth of approximately 19% year-over-year in 2026, but Fannie reduced both its second quarter and full year 2026 outlooks earlier this month as rates have moved higher. Our own 2026 view is anchored to that updated Fannie outlook. We will remain cautious in our outlook until rates come down meaningfully and refi activity picks up. We have the platform and the customer base in place to capture the upside when conditions improve. Now, let's turn to guidance. For the second quarter of 2026, we expect total revenue to be between $32 million and $34 million, representing approximately 1%-7% year-over-year growth.

Underneath those headline numbers, we expect mortgage suite revenue to grow 4%-10% year-over-year, driven by mortgage market volume growth and partially offset by a year-over-year decline in economic value per funded loan, which we expect to be in the $79-$80 range in Q2. The decline in evPFL from Q1 to Q2 is primarily driven by increased volume, which as I mentioned earlier, mechanically lowers evPFL. We expect year-over-year consumer banking suite revenue growth to be between -2% to +4% in Q2. We expect Q2 non-GAAP operating income to be between $5.5 million and $6.5 million, implying a non-GAAP operating margin at the midpoint of approximately 18%. A few additional notes on what's embedded in our expectations.

Our mortgage suite business continues to be subject to macro volume fluctuations. Depending on the trajectory of mortgage rates and the broader housing market from here, mortgage suite revenue could moderate or even flatten out in the back half of 2026, particularly if refi activity remains soft. On per loan economics, Q1 is typically the high watermark due to seasonality. Which is why we are guiding to a Q1 to Q2 step down from $84 in Q1 to $79-$80 in Q2. In the absence of an uplift from Autopilot, which is too early to quantify and is not baked into any of our expectations, we would expect evPFL in the second half of 2026 to fluctuate with seasonality but still stay below Q1 levels. On consumer banking, growth is moderating based on the headwinds we discussed on our last earnings call.

In addition, we've also seen softer macro-driven volumes on home equity as rates have moved higher. Combining these two factors, we expect single-digit year-over-year growth in consumer banking in the back half of 2026, with Q3 growth likely lower than Q4 given the year-over-year compares. There is macro sensitivity in the home equity portion of our consumer banking business. If rates rise from here, our expectation would be to see additional pressure on those growth rates. Finally, I'd like to touch specifically on Autopilot. While we are incredibly excited about the potential for Autopilot to generate revenue upside, we'd encourage investors to be cautious about incorporating this into models at this juncture. We hope and plan to provide additional information on potential impact to the outlook as we get past the free trial period and have a little bit more time under our belt.

In summary, we feel very good about the shape of the business heading into the rest of 2026. Q1 marked our second consecutive quarter of year-over-year growth in mortgage. With churn now stabilized and the partnership model transition behind us, we expect most of the variability in mortgage revenue from here to be macro-driven. Cost discipline remains intact. We expect to continue to drive additional productivity and efficiency over the year as AI-enabled workflows compound across our internal processes, an effort that, as Nima discussed, is now well underway across the company. This is indeed an exciting time for Blend. We hope that you're excited to be part of it too. With that, let's open up the call to your questions.

Thank you. We will now begin the question and answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you're muted locally, please remember to unmute your device. Please stand by now while we compile the Q&A roster. Your first question comes from the line of Ryan Tomasello with KBW. Your line is open. Please go ahead.

Thanks, everyone. Nima, in your prepared remarks, you mentioned that Autopilot and your AI initiatives present a path, I think, to what you said was 10%-15% more top-line growth. Can you just put a finer point on what you mean by that and what underpins your confidence in quantifying the benefits at this stage?

Yeah. Great, great to hear from you, Ryan. I mean, I'd say I'd start with our current pipeline. Our current [Autopilot] pipeline is about $10 million. We've only been in the market for just over a month now with pricing with our customers. You know, we have a lot of customers who've turned it on. Really positive feedback we're getting. I mentioned two really large go-lives with customers. If we can keep up that momentum, I think of it as 10%-15% incremental on top of whatever other growth you may be forecasting coming from Autopilot is what we're, you know, as we see a path to right now. We obviously have to keep executing. We have a lot of work in front of us. The product is awesome, and our customers love it.

Great. Maybe just turning to consumer banking. Given the noise in that segment from the large customer churn, maybe you can just help us understand where the underlying revenue growth is running in that business, both for 1Q, you know, just at a higher level, based on the data points you've given previously about, I think, was it $2.5 million Impact from that large client in consumer banking? It just seems like the growth profile there is coming in a bit weaker than what was initially hoped for. Nima, just your broader commentary around how you feel about the strength of that business going forward. Thanks.

Yeah. I'd say, yeah, the biggest is from that large customer and, you know, they had a pretty big consumer banking line item that you called out. But I'd say on the positive side, we have some very, you know, good, you know, good-sized financial institutions going live with our wall-to-wall suite this year. Those rollouts are in progress, we're excited about that. Once that hits, I think that'll be a positive benefit. We also have great customers rolling out our Rapid Home Equity product as we speak, that'll be another positive catalyst for us as that happens. You know, I, obviously, the home equity market has other macro things as well that are going on.

You know, there's enough new things that are happening on the consumer banking side broadly that makes me feel really good about the consumer banking business.

Great. Thanks, guys.

Your next question comes from the line of Dylan Becker with William Blair. Your line is open. Please go ahead.

Hey, guys. Appreciate it. Nima, I appreciate all the color on Autopilot and Autopilot MCP, I guess. It sounds like obviously a lot of customers here are interested in piloting. I think you called out some of the early proof points around improved cycle times and conversion rates. I wonder if you could kind of provide a little bit more color on, like, what that looks like relative to a non-automated process to try to just tangibly put some value on what customers are seeing and learning, and then maybe how you're also thinking about the deployment or utilization of the first-party agents versus kind of some of the MCP-enabled agents and maybe the economic variability between those. Thank you.

Yeah. On the impact, you know, there's two anecdotes I'll share for two of the customers who have been sort of the biggest users of it. We helped them track the cycle time and the conversion. The conversion is less obvious why the conversion is, I actually had talked to one of our customers about this. I'll get to that in a second. The cycle time with one of the customers, for example, from application complete and Blend to closing docs being sent to the customer, or closing disclosures I should say, being sent to the customer, it went from 29 to 21 days in, you know, one of the customers that we had. That's pretty meaningful improvement in their cycle times.

It makes sense, I think, fundamentally, because customers have a lot of back and forth with consumers. What Autopilot does is, in real time, as the consumer's in the flow, it finds those things that are going to be the gotchas down the line. It shows the consumer, hey, we noticed that this account is in the name of a trust. We need to get your trust documentation right now, versus asking for it a few days later once an underwriter reviews it and sends it to a processor, which sends it back to the loan officer.

It sort of short-circuits the process in a positive way to allow the. You know, our hope with Autopilot plus some of the Rapid products is you put, you know, those two things together, I'll call it Rapid Pilot, you can get an application started, approved, because Rapid gives you an approval and an offer upfront. Then once that customer is ready to go, get them clear to close in a matter of minutes. That's the world we wanna enable for our customers and consumers, or maybe conditionally clear to close on an appraisal if there's an appraisal necessary for a mortgage. I think those are some positive numbers.

I think where I've been more surprised is why the conversion is so much better, but I guess it makes sense. When you can give people more certainty, faster, we're seeing good conversion uplift too, which, you know, obviously it's early, but that's even more valuable to our customers. Cause those are consumers that would be walking out the door that you'd spent time and money on as a lender, not just on things like credit pulls and, other data pulls, but also your team's time and energy that went into that. As we can shorten these cycles and make the process of lending more real time, I think it fundamentally transforms the industry.

One thing I wanted to say about consumer banking, because we're in the process of building out the integrations to all the consumer banking products for Autopilot, I think there's opportunity there. Now, there's fewer manual tasks in consumer banking, but there's a lot more volume of those tasks in terms of number of units that these customers do. While it may not be worth thousands of dollars a loan to our customers long-term in consumer banking or per new account, you know, the scale of these things does really matter to them, and they have very big operations teams managing these processes. It's an important thing for them to be able to do a lot more volume with those teams, and I think Autopilot enables that.

Got it.

One other thing.

Maybe other, yeah.

I just was reminded of this. The other thing that I think has been a historical struggle, I mentioned this in my prepared remarks, is rates are. They really drive refi activity in particular. If you're a mortgage servicer and you have a lot of your volume in refi, your only way to handle large amounts of volume is to scale up and scale to, historically, has been to scale up and scale down teams. You don't get to really predict when rates go down. I mean, you try to, but it's very hard to predict when the next, you know, new numbers are gonna come out, what the numbers are gonna be. You know, the ability to create elasticity of workforce when now you have agents that a lender can spin up and spin down alongside their team.

Before their team is doing the work, the agents are taking a first pass. I mean, it just changes the economic profile of servicing and recapture of servicing. I mean, I think for our large servicing customers, which we have many, it's gonna change the way that they're able to do business, because it's gonna allow them to handle these fluctuations in the market even better than even more importantly for them than someone on the purchase side.

Makes sense. Thank you, Nima. Then maybe for Jason as a follow-up to that too, you kind of called out the per-funded loan dynamics and market share dynamics. I'd love to kind of double-click. Again, if you can remind us, cause it sounds like you're actually increasing market share with the customer momentum and the customers that are coming on online or being onboarded, but that's kind of working inversely upfront against per-funded loan volume. I guess remind us kind of the mechanics as to that, as well as maybe when we would expect that to flip and those two tailwinds maybe to work in tandem or in parallel to where you see market share growth inflection as well as per-funded loan expansion over time. Thank you.

Yeah. Good question, Dylan. I think, you know, we're seeing volume growth. As I mentioned, we had better volume in Q1 than we had expected even coming into the quarter. You know, part of that is I think our customers doing better. Part of that was the market was a little bit better than we expected in the quarter. Of course, yes, we're always trying to add, you know, add share and bring new customers onto the platform. As far as the per-funded loan, putting aside, you know, the seasonal variability that comes from the mechanics I talked about, you know, we are, I think, doing a much more concerted effort now to drive growth year-over-year with existing customers.

I think that, look, things like Autopilot give us better pricing leverage coming in to new customer situations. Obviously, that drives its own revenue stream, but it also gives us leverage in the sort of the core platform as well. You know, I think Rapid, you know, remains a driver as well on the refi side in particular. As Nima mentioned, you know, refi is even more sensitive to rates than purchase. We don't have a Rapid purchase, you know, product. We have a Rapid refi product. As rates come down, we should see a benefit in volume and revenue in that sense. Also, you know, as we get more customers up on Rapid refi, see a benefit in PFL as well.

Great. Thank you.

Your next question comes from the line of Joseph Vafi with Canaccord Genuity. Your line is open. Please go ahead.

Hey, guys. Good afternoon. Thanks for taking my questions. Nima, what's the update on the Rapid products uptake, how you're seeing market reaction to them? Obviously, you know, the market backdrop isn't as strong as we'd like, but you know, some of the feedback you're getting. I'll have a follow-up.

I would say, you know, I'd reiterate what I said about this Rapid Pilot that seems to be getting the momentum and focus from our customers. You know, Rapid plus Autopilot together, it's a lot of what I spend my time on. I've had two on-sites with two very large banks and lenders in the last two weeks about this specific thing, that they want to get live in Q2. In practice, you know, our customers want to be able to, especially for refis and home equity, they want to be able to make an offer in real time, and then they want to be able to fulfill the work that they need to get done on that offer in real time. The combination of those two things has been incredibly powerful.

On top of that, we have, like I said, you know, also earlier in a previous question, we have some very, very large customers going live with Rapid Home Equity, including some of the top home equity originators in the country. You know, it's definitely a good time in the industry. I'd say if I had to, you know, if I had one criticism of myself here, it would be, how do I make this so easy to adopt that they flip a switch and they turn it on, and now they have Rapid refi enabled in their environment? I mean, I think that's a challenge for us, something we're thinking about going into the next couple months. We intend to make that happen.

It's something that as we make that happen, our customers will be able to adopt it so much easier. That was actually a key learning for us from the Autopilot work and rollout that we did, where, you know, we made it truly self-serve for a customer to turn that on, and we're seeing the adoption. I mean, the numbers that we shared in terms of number of lenders that have turned this on as a percentage of our total, but just in a, you know, think about large financial institutions turning on a new AI agent for their organization with the flip of a switch without even calling us. I mean, the most surprising part was we had fairly large banks, very large banks, turning this on in beta and production without us even knowing about it.

Then we saw it start to stream through our logs, and we said, oh, we should probably reach out to them and talk to them about it. I mean, that's not to say we're a product-led growth company. We do like to talk to our customers to help them get the most of our product. Making things easy to adopt is going to be very good for Blend, and everything comes back to speed. Speed of adoption, speed of iteration for our team.

If we're able to do those things, which I'm very confident we showed that with Autopilot, I'm very confident we can do that and take that micro culture and micro product, those concepts to the rest of all the things that we do at Blend, then I think we can help fundamentally change the landscape of how our products are used and how they can impact our customers. I'll end with one last anecdote, you know, that, you know, I think Autopilot MCP, I know this wasn't exactly your question, but Autopilot MCP has unlocked a lot of doors for us because, you know, I was on site with one fairly large customer last week, and they, you know, they had their head of engineering in the room.

They, you know, the first thing the head of engineering asked was like, hey, we want to build this into our mobile app. I was like, great, you now have a way to do that, and it's called Autopilot MCP. You can get all the capabilities of Blend and the intelligence layer of Autopilot entirely in your own environment. So he was like, wow, okay. His first question to me, which was, is like a compelling one, was, can I use this in other parts of my business? We don't use Blend for, you know, these other kinds of loans. He named a couple other kinds of loans. I was like, yeah, sure. Autopilot works. You can put custom guidelines in there yourself. You don't even need to talk to us.

His eyes lit up, and he asked the first thing he asked while we were in the room, it was a pretty big room, was a copy of the Autopilot MCP documentation, which we sent to him. So, you know, those are people who have historically, you know, struggled with how to fit themselves into this Blend world or fit their tech stack into the Blend world, and now we've opened that up. We had another really interesting sales call with a fairly large bank, you know, the digital leader came on the call. That's historically another one that feels a little bit displaced by us in sometimes when we're brought in.

His first question was, can I use this with my current digital stack? As soon as that, the answer to that was, yes, of course, now with Autopilot MCP, he went from probably being somebody who would be a detractor to someone who was saying, oh, wow, this is actually really interesting. Now I can give new digital capabilities. How can it help improve my customer experience in a powered by way that you know, would take months, if not years to, for them to do internally and building agents that are this powerful and this complex. I know that wasn't exactly your question, Joe, but I just was remembering that as I was talking.

Yeah, no, it's an exciting setup for sure. Thanks for that color and looking forward to progress on that front. Thank you.

A reminder, if you would like to ask a question, please press star one now to raise your hand. Your next question comes from the line of Aaron Kimson with Citizens. Your line is open. Please go ahead.

Great. Thanks for the questions. Nima, in your conversations, how do customers perceive the value that Autopilot's providing today? Do you feel like it's still primarily being thought of as a component of tech budgets? Are financial institutions increasingly open to viewing agentic products like Autopilot as a component of their labor budgets?

I, you know, it's, it's interesting. I think right now companies are figuring this out as we speak. They don't know the answer to that exact question that you have. It actually goes to how we price this in the short term to allow our customers in the short term to use it both for a few months free of charge. Even after that, we're gonna have sort of flat pricing that's obviously good for us economically, but also good for our customers to give them time, you know, in the short term to, you know, make the right changes they need to make to their process, to organizations. I'd say long term, they're all aligned to the fact that labor is something that doesn't need to be scaled up and down with volume anymore.

I was having a conversation with the CEO of one of our large customers, and, you know, the idea of being able to scale their organization without having to add, you know, thousands or more heads is so compelling. It naturally ends up being a labor question. I think the, probably the more important value proposition, it, you know, as these numbers around conversion rates sort of get set in stone and we have better understanding of that's gonna be even more valuable to our customers cause there's so many consumers in this country who can benefit from lower interest rates or equity from their homes or consolidating debt or all these things that are happening that has been historically hard for our customers to capture.

It's hard for consumers because they have to go through a very lengthy process. Now if we can make it really transparent with something like Rapid and then really automated with something like Autopilot, it's gonna change, you know, it's gonna make it so that consumers will have less friction in this process and therefore more consumers will do it, and they'll do it with our customers.

Got it. That's helpful. One more. You've been working with financial institutions for a long time now. Can you talk about the appetite for adopting new products faster today than in the past, and how they're thinking about build versus buy, the balance between adopting AI products from AI-native startups versus established software vendors like Blend, and then where the Frontier Labs fit in? I think we're all trying to figure this out for application software in general. Thank you.

I think, you know, we're kind of in this interesting place where I, a switch flipped sometime in the first quarter of this year, I think February timeframe, where our customers started to realize, and maybe it was because of all the Anthropic Claude Code explosion that was happening in the market. They started to realize how important of a transformation this was going to be, and they've all put budgets behind AI and AI initiatives because they know it's important. It's important for their customers, it's important for their users, and it's really important for their long-term economics as a business. It can do really powerful things, and I think people are starting to believe that. It was no longer something that they felt was a future 2027, 2028 thing.

It was like, well, I can actually do this now. I think it sort of speaks for itself and then just the sheer number of our large financial institution customers that have turned this on, turned these capabilities on on their own and are in active discussions with us or in process with us of rolling out these capabilities broadly. Yeah, I think a switch flipped sometime early this year. They do sort of think through how do they fit this into our, into their stack. Is it a company like Blend that's already driving a lot of their work internally and for their customers?

Are they working with Anthropic or OpenAI or some other company in a, you know, sort of a big project in a consulting-like fashion, or are they working with a small startup? I'd say, you know, in the Blend versus or Autopilot versus small startup, where I view that is, you know, because we have so much of the workflow happening in our system already, which are natural entry points to invoke and spin up AI agents and then spin them back down, we have a pretty good advantage there to help move very, very quickly in those ways for our customers. Our job is to make sure Autopilot is the best product on the market for the exact types of work that our customers need to do.

In this case, maybe it's underwriting intelligence like I referenced in the prepared remarks. As long as we do those things, I don't think they're gonna go to a small startup. Like, we have to move fast, and we are moving fast, and we have to build a great product, and Autopilot is a great product. It's doing things that a year ago would have seemed like science fiction to our customers. I think there's a separate discussion around how do they think about the labs versus the large labs like Anthropic and OpenAI versus someone like a Blend. You know, I think some of that still remains to be seen.

I've heard of really great things the Labs are doing with a lot of our customers, and I think there's so much of the industry that's gonna change. The size of the pie is probably a lot bigger than anybody really understands. The Labs won't go in and try to build something into our workflow so that they can drive value for our customers. I mean, I don't think they would. But even if they would, we're already there. We already have it. Speed is very important in adoption, and if you have to do a nine month or 12-month project to get something versus being able to flip a switch, our job is to make that possible.

Great. Thanks for the perspective there.

We have now reached the end of the Q&A session. This concludes today's call. Thank you all for attending. You may now disconnect.

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

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.

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 2 new notable new mortgage customers, 1 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 which -- 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 7-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 consumer -- 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 spike seamlessly without adding fixed human overhead. And that turns their businesses into massively efficient businesses that can be 10x efficient as 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 to date. So I want to spend a moment on where we're going because this is an area of personal passion for mine. 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 ability 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 than them. 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 a 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 of the small ones and some of the largest ones 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 2 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. And 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. And so that means when a new piece of data comes in, a new document comes in, something that's updated on the file, agents take a first pass of 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 like -- to be this new way where agents are taking a first pass and the humans that live there at our customers are the oversight layer to make sure that agents are doing the right things and checking the right things. And in this industry, which requires absolute precision, security, compliance, Blend has been a trusted and is a trusted enterprise-grade bridge to AI adoption, agentic AI adoption. And while I think really highly of the generative AI models that are out there and the foundation model companies as thoughtful knowledge bases and delivering really great tools around building agents. What Blend has built is to drive the right outcome from the right actions. And that's especially important in a heavily regulated industry, subject to fair lending laws, and our customers can't afford hallucinations and they -- the calculations around things like income and income verification have to be perfect. And 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 that are imposed on them by the credit risk teams, by regulators and investors. And 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. And so just a few days ago, exactly a week ago, in fact, 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. And 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 that some of them are 800, 900 pages long. I'm thrilled to share that we now have 7 large customers who have turned us on or wanting to turn this on in the coming days, and that's just within a week of us launching it. That's in the preview period. And so we're very excited about that. And that came on the backs of -- we have a small group of customers that serve on our Customer Advisory Board, which was last month. And we previewed this for them before our public launch last week. I have to tell you, for me, it was a profound moment because we spent the morning there and there were -- people were talking about the costs in banking and how much manual work there is, how much stare and compare that is -- there is. And then that was in a morning session we had a third-party come in and demonstrate that to them and what's going on in the industry. But then when we demonstrated Autopilot live, showing them that if you had a really smart brain that was taking a first pass at everything that was doing, could instantly detect something coming in from the consumer and where it needs more data and more documents, validating that against guidelines, doing calculations, updating the loan file without human intervention. I mean you could feel the energy in the room shift. For these leaders, it wasn't just another software update, another little feature improvement from Blend. It was a genuine moment of inspiration. Because they wanted to have this elastic capacity where in order to grow their loan volume, let's say, mortgage rates come down, where they're growing their personal loan business or whatever it may be, they didn't want to have to hire hundreds of people. And then if volumes come down, have to go back and fire those people. They wanted to rewire how they do things. And I think this is their first shot at really being able to do that, and it's thanks to some of the generative AI capabilities that we built into our platform. And so traditional, just to give you a little more color on the product. Loan officers or underwriters have manually reviewed documents that come in as an example, and borrowers have to wait a couple of days for that to happen because that's a human process and somebody has to go through all the pages of their documents and all the pages of their loan application file. And then go back to them and do some stare and compare. Go back to them and say, "Hey, I need these 3 or 4 other things." And then there's this back and forth that takes a few weeks, which is why it takes so long to close a mortgage loan, for example. That's something that Blend Autopilot flips entirely on its head. And so there's 4 key things that Blend Autopilot brings for our customers. The first is real-time intelligence. So like I said, everything that Autopilot sees comes in, in real time, it does the checks. And within 15 to 30 seconds, it's going back to the consumer and saying, "Hey, I need this additional thing based on the fact that I saw that your bank account is in a trust." And that could be with out-of-the-box guidelines like Fannie Mae and Freddie Mac or it could be complete custom guidelines. A lot of our customers do home equity lending or auto lending or personal lending. And so we launched with the capability of custom guidelines because we know our customers have their own credit boxes that they have to be able to fit these things into. So the first is that real-time intelligence. The second is contextual workflows. And by that, I mean, the agent is triggered by events in our system that have a lot of context to them. And then as the output, they have the ability to trigger native workflows that already exist within the Blend infrastructure. And that's which has always been part of our core value proposition. We've always wanted to and we have driven a better experience for the consumer, where we aren't going to them when they need to provide an explanation for something and saying, "Hey, write up an explanation, print it, sign it, take a photo of it and upload it." When we need an explanation from them, they enter it in plain text. And so when we have those things that we need from the borrower, just like a human would request that in our system, the agent requested in the same way with that nice workflow that guides the borrower through that. And so it's almost like you're working in a dynamic experience that is aware of everything that's going on in your credit file as a consumer. And so we have made a ways of handling that at Blend already and the agent is aware of that and takes the right actions. That's the second, which is these contextual workflows. The third is the seamless updates that we get allow Autopilot to automatically update application fields. So for example, income calculation is a very complex part of the lending guidelines usually. Because it's just -- it's 1 the things where there's such a variation in how people make money in this country. And just to give you an example, I ran this on my income, which was tax return at W2 with bonus and some other kinds of income and then K-1s and 1099s. And I ran it dozens of times to see the outcome. And it was calculating my income perfectly every time. And so that's the power when you orchestrate the generative AI in the right ways and you orchestrate the agents in the right way and you give them the right context, you can be almost deterministic in the outcomes that you get, which is very important for this industry. And last, the fourth thing I'd say is it's built for compliance. Autopilot is not making credit decisions. It's taking a first pass, which is overseen by a human ultimately. It's not triggered by a human, but it's overseen by a human. And I think that's the future where agents are going to live. And I said that earlier today, but agents are going to take a first pass of all this busy work and humans are going to be there to make final decisions, and that's exactly how Autopilot is built. The borrower data that our customers have. I know they're very -- that's never used to train or improve AI models. So we're not risking our customers' data, which is important in this regulated industry and especially for banks and financial institutions, it's very important that we do that in the right way. So in summary, to say about automating the stare and compare and calculations and guideline work that's plagued this industry for decades. I talked about the $11,000 problem on our last earnings, and this is our approach to help them solve it head on. But I don't want only our customers to have access to an agent first world. As somebody who is very passionate about this and thinks about how agents can do so many things today and they're only getting better. I also want Blend to be an agent first company, where agents are taking a first pass of our work. And so we're reimagining everything internally at Blend. And it started with how we build and to now how we sell, how we manage and support our customers. And that, to me, that doesn't mean just getting our teams access to new tools like Claude Cowork or Gemini or ChatGPT, which, of course, we've done those things. But it means fundamentally changing who does the work, when and who reviews it. And it's the same model that we're building for our customers. The agent gets triggered, it executes something and it goes to the employee to oversee. And I am personally so passionate about this effort. I'm driving this effort myself, and our goal is to be in the top 1% of all companies, not just public companies, but all companies in how we adopt and operate with AI agents at Blend. So what that means for us is that, in practice, our software developers are working with agents to write the code already, but I actually want the agents to take a first pass. So as new tickets are created, new support tickets come in that outline a bug. The agent should take a first pass and saying, "Hey, here was the bug. Here's a pull request of the code that needs to change." But then goes to an agent -- sorry, to a human to do a final review to make sure that fixed the bug in the right way. I want the agents to be doing the grunt work and passing that work onto our software engineers to make sure that it's solved. And that means that we're able to handle things like new things -- new -- building new things or fixing things 24/7. And that's the same with go-to-market. If there's an upcoming business for you, I want the agents to take a first pass or if there's internal back office teams, IT support our revenue teams, I want -- I just want to get agents working for them as well. Surfacing output and letting people, the humans that we have focused on judgment and final decisions and reviewing the work the agents do. And for me and for Blend broadly, I think, this means we'll be able to move a lot faster and we'll be a lot more efficient. We'll be able to handle growth in our company without having to have tons of new capacity because agents scale really well and we'll use that to grow our margins. But more importantly, in all of that, because it lets us move faster, we'll be able to do a lot more for this industry. When agents are handling all this work behind the scenes. We're no longer bottlenecked with the same multi-day or multiweek cycle that exists for our customers that we have internally with some of the things we have to do. Something comes in, the first pass is done within minutes and we become a leaner and more agile organization and one that I hope can simply outpace anybody in our space. And so to wrap up, I don't think Blend is -- the market recovery and all those things that I said in the beginning, those are fully in the rear window. We have spent the last 2 years doing the hard work of clearing away debt, simplifying our business and building a foundation for sustainable growth. And I'm not even thinking about those. Now I'm thinking about how do we build an agent first world, both for ourselves and for our customers. And so we have a profitable, scalable platform that is ready to win in any environment. And whether rates stay flat or they come down and we see big improvements in volume, we are in pole position to serve our customers and drive massive value for our shareholders. So with that, I'll turn it over to Jason to walk through the financials.

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 for 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 1 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 or 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%. And 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. And 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 35% year-over-year, was bolstered by a large customer that went late -- 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. And 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 25%. 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 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 quarter -- first 3 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 Instructions] Your first question comes from Dylan Becker of William Blair.

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

Yes. Great question. Thanks, Dylan. My approach on this one is going to be to under promise and over deliver on the economics. Just to share sort of some context though, which is the cost of $11,000, about $4,000 is, I'll call it, operational cost, and then there's a decent amount of commissions and marketing costs that are also in there. And so I think there's a material amount of manual effort that goes into these. And so if we can make the humans in the process, 2x efficient, 3x efficient, I think there's a very good market opportunity for us, which is why we're attacking this so swiftly. And the team that's working on this, just to give you a little bit of perspective is we're moving day-to-day. Like every week, our customers are going to see material new updates to this and new capabilities because it's an area that we're passionate about and we think can really move the needle for them. We've always been here for our customers, and I think this is sort of the -- our magnum opus if you will. And so I think for me, while I want to under promise and over deliver, I'll leave you with 1 anecdote, which is I was talking to 1 of our customers who does similar things, maybe a little bit less scope than what our product does today. And I was like, how should we charge for this long term. And short term, we have this preview period, which we gave to our customers. And he said, "Well, just so you know, I do this with an outside vendor and I pay them a lot more than I pay you per loan by a decent margin just to do a part of the process that you do." And so I think the opportunity is there. It's on us to execute. And so let us go execute, and we'll come back to you every few months with updates.

That's helpful. Appreciate the anecdote. And I do think that's your point. The fact of kind 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 pretty impressive what you guys have been able to do on the expense side and appreciate the color on kind of some of the moving accounting parts there. But as we kind of think about the potential recovery taking place, around the volume dynamic. I guess, could you remind us what to maybe expect from kind of like the potential for incremental operating leverage? How we should think about cost growth relative to potential revenue growth in that scenario? Just kind of any way to think about the operating leverage as you kind of think about and sit there looking at the model.

Yes. Dylan, good question. Obviously, we haven't guided to the rest of the year, so I can't give you that sort of guidance. But I think implicit in our Q1 guide is sort of a rebased lining and I think you can think about that as our starting point. Obviously, we do have some variable costs in our cost of revenue that will scale with revenue. But on the operating side, it's really a question of where we choose to invest and where we are able to get efficiencies. And I think you can think about Q1 as the starting point for that.

Your next question comes from Ryan Tomasello of KBW.

Everyone, sorry, am I coming through?

Yes.

Sorry about that. Regarding the 2 new mortgage customers, I believe you cited that you won in the quarter. Can you just provide some color there on whether those were competitive takeaways? And if so, what you think were the drivers of those wins?

I think the driver of those wins is that we made a commitment to our customers that we would invest through the cycle. And we would keep innovating and we've innovated on our mortgage product. We've innovated on our consumer products. We've innovated on our closing product and now we're building an agentic suite that can live across all those things. And they see that. I mean it's not easy to rely on partners in this industry because it is such a cyclical industry and we made the commitment early on. And we're going to keep growing. And obviously, we have our own things that we've had to deal with the last few years, but I think people have seen that. There's our commitment and my commitment is there, and we're going to make sure that they're successful. And I think that that's ultimately what leads to customers believing in us and wanting to work with us.

Great. And then on the new Rapid products that you've rolled out over the last few quarters, can you just talk about the level of uptake you've been seeing there if that's tracking in line with what you were expecting? And then on the pricing side, the type of uplift you're seeing from earlier adopters of the Rapid products.

Yes, great question. And one of the -- we mentioned one of the ones in the -- that signed with us in Q4. And it's a pretty material uptick in pricing from their EV PFL. It's not live yet. As an example, it's a fairly large bank. But the way I think of Rapid, and it has been something that our customers do really want, and they want it for 2 reasons. So the 2 areas that we serve with Rapid are home equity and mortgage refinances. With home equity, it's definitely something that our customers care about and they want to be able to serve the $315,000 in equity that their consumers have and drive savings to them on their debt if they need to consolidate debt. And so it's something where we have a flagship home equity product, and this is just more of a personalized real-time offer with a real-time pre-approval that is sort of a beautiful tailor experience to that specific consumer. And so I was on a call earlier today with a very large customer, 1 of the top 10 home equity lenders in the country who's going live here in a few months. And this is going to be table stakes for them going forward. And being able to serve a high conversion experience at that top of the funnel and then pairing that with Autopilot, which is going to lead to a lower cost of operation because of lower variable costs because they'll be able to have these things happen in real time as the consumer is going through, self-fulfillment, if you will. I mean that's sort of the dream combination. And so the uptake has been good. I mean it is a big shift for them. I'd say business-wise, that's a much bigger change management exercise in some ways than the Autopilot product because it's sort of doing work in the background versus changing your entire up funnel. But yes, the uptake has been good. And again, let's let those results continue to play out, and we'll try to under promise and over deliver there as well.

[Operator Instructions] Your next question comes from the line of Griffin MacMaster of Wells Fargo.

I just wanted to ask on the top of funnel, and it's great to kind of see that Consumer Banking customer also kind of looking at you guys for mortgage solutions. Just wanted to ask you around if there's any way to think about how many customers across the base or your kind of overall landscape could be target customers for all of these products? And then kind of along with that, with the recent hires as new Chief Revenue Officer, if there's any changes around the go-to-market and kind of how to think about this going forward?

Yes. Maybe I'll start with the second question, yes, we're excited to welcome Matt on board. And one of the key shifts we're making there is having a dedicated client sales team that's focused on our existing clients for the exact reason that you asked your question, I think. And helping our customers, existing customers, both adopt more products that are free as well as new products that can grow value for them and we charge for. And so that's a dedicated new motion that we have, which we're very excited about, and it will help those people be a lot more focused on the existing customer base and then a separate new client sales motion. That will help us go and get more and more of these great logos that we have added to our roster. And I think that's a nice change for us. And then to answer to your first question around what's the target market for all of these things. It's interesting. I think when I look at what's actually in place and practice in the industry today, these extremely low friction conversion funnels tied to a very automated, self-fulfillment process are basically in place nowhere. I mean some of the technology wasn't there until 6 months ago. And on the low conversion funnel, some of the data sources that were required to drive that level of low friction weren't really prevalent until about 1 year, 1.5 years ago. And so I think the timing is good for us in the market to be able to serve that. And then I'd say maybe most importantly, the thing I'm most excited about across all of these things, especially for that customer you mentioned, that's using us for all the -- actually all the non-home lending products that we won a top 40 credit union. What I really want to do and what they're excited about is help them make their members, members for life. And so a lot of this is not dependent on the why that consumer comes in the door? Why that member comes in the door with them? In the sense that a member can come in thinking they want 1 thing from you. Thinking, "Hey, I just want a new credit card." And you're like, "Hey, did you know that we can -- you have a ton of equity in your home, and we can save you a $1,000 a month if you consolidate these other credit cards and things -- and personal loans that you have into a home equity line." And so this idea of serving the best thing up for the person at that moment in time. It's something that I'm excited about long term for our customers. To be clear, we haven't executed on that yet. That's something that we're excited to start working on at some point soon. But that's where we can have not just individual product lines in these consumer and mortgage and home equity, but have it be a holistic solution for our customers and their consumers and members that are coming in the door. And so -- and almost all of our customers, even the IMBs that work with us now offer multiple products. They'll offer a home equity and a cash out refi, for example, for somebody who wants cash. And some of them want to start offering things like personal loans. And so I think that this industry is in need of having unified technology across these things alongside the agentic experiences that I mentioned earlier. And so again, I think, we're just scratching the surface. We obviously have a lot of work to do. And the fact that we're moving a lot faster as a company is great promise towards that. But I realize that we have to show the outcome, show the ultimate outcome to you all before we can really claim victory.

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

Great. The OpenAI and Better partnership made headlines late last week, and I think the most interesting part of that announcement is -- there's a bit of a pivot there for Better, which is historically focused on originating loans. And now the company is talking about doing more of what you do, using technology to help accelerate the mortgage process for banks and 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, it may make sense for banks, credit unions and IMBs to try and take back some of the mortgage market share they've ceded since the GFC?

Yes. I mean I view -- I think that kind of highlights 2 things. One is that there is a big opportunity in this space. And I know that team very well. I think very highly of them. And it's just different. Building software is different than building technology. It's something I explain to our customers a lot. Building technology is one thing, but building software that's integrated and actually delivers your end workflow is just different. And so I do view it as a big validation of our space. And I view it as something that I'm hopeful -- I mean, I think, I talked about this in 1 of our calls, maybe I don't know, a few years ago. But about 10 years ago, Rocket Mortgage came out and said, "We're going to make it so you can push a button and get a mortgage." And I think that really catalyzed the industry and feeling like, hey, the sky is the limit for us. We don't have to do things the old way. And that was a big catalyst for Blend. So I view this all these things that are happening with AI and some of their competitors doing things with AI and maybe some of their potential partners doing things with AI, as I think it's going to drive up awareness and that's a good thing. That's a good thing for the industry. The industry is actually, I would say, one of the most surprising things I know we said we've been live for a week with this Autopilot product, but the fact that we had 7 people turn it on without us even -- actually without us even really knowing except for the 2 that e-mailed us because they had -- they wanted help turning it on. A year and half -- and a lot of those were banks and some of those are very large banks. And 1.5 years ago, if you had told me that large banks would adopt AI, I would have said, yes, I think they will, too. I think it's just going to take a long time to convince them and a long time to make sure they understand that it's trustworthy. And now I'd say that the momentum and the appetite and the desire to do something great is not just limited to tech companies. People are trying to feel and see what's possible. And so obviously, I have different thoughts on what's possible. And I think the approach is something where humans are the central drivers in doing the first pass of the work. I mentioned that in my prepared remarks. I don't think that's the right future. I don't think that's a future you want to drive towards. I think the future we want to drive towards is a lot of this work is done in a first pass by these agents that are really, really smart and winning international math competitions. That just need the right context and the right instructions, and they can do things that before a human even has to look at it, to prepare it in a nice package way for a human. And so that's our approach. It's a little different than the approach of the rest of the market. I think that background agent, background worker approach has only really been possible for a few months and something that we're betting heavily on it because we think it's the highest leverage way for this industry to adopt agentic AI.

Okay. I appreciate that perspective. And then as a follow-up, Autopilot is the first agent for Blend intelligent origination, how should investors think about the cadence for additional agents to be rolled out? And what type of consumer loans would you be most excited for next?

Well, we're going to make Autopilot available for all product types. It currently works for mortgage and home equity and custom overlays or custom guidelines or overlays, which could be used for other product lines as well. But we don't think of that capability, which is call it a real-time underwriter -- pre underwriter that's looking at all this work. But there's other things that I think it could -- you'll see coming from us and some of that might be an agent around analytics. So instead of having to go to dashboards, the agent should be pushing you the insights as a customer of ours. What loans that -- how did your -- for the loans that had Autopilot. Just use Autopilot as an example, for loans that are Autopilot on, are they closing faster? Is doing all that background work helping you? And so we're building out some agents there. We're building agents around the closing process where the QC is very important. Making sure that every single signature line and initial and everything is perfect to make sure that our customers don't have any issues at the closing table. But we really want to build, I would say, with all that being said, we really want to build on Autopilot and grow that out as a capability because it is something that we're just scratching the surface on, and I think can be something that can manage a lot of the things that humans are required to trudge through today.

[Operator Instructions] 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.

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, which is great. Roughly what percentage of the pipeline would you say is leaning towards bundled deals right now for you?

It's a good question. I don't know the exact percentage of customers. I don't know, Jason, if you have that off the top of your head?

I don't have that in front of me, but I would say, directionally, that's sort of a key driver of momentum is customers that are interested in multiple products from us, either multiple products within the Mortgage Suite, but more and more customers are interested in the fact that we can deliver mortgage and Consumer Banking products, all with similar feel, similar capabilities and integration.

Got it. And any commentary on your market share in Q4? And how do you see it evolving in 2026?

Yes. We only release our actual market share as we calculate it once a year when the HMDA data is released in the fall. What I'll remind you is that we talked about last quarter, 1 large customer that was going to be with us from a contractual standpoint for some period of time, but we expect that volume to be rolling off. And when the volume rolls off, we no longer count the volume in our market share. And we mentioned that, that customer will probably have a circa 100 bps headwind for us. And we talked last year about, I think, we ended the year at 17% market share. So if you put that headwind on top of there, is the right way -- probably the right way for you to think about it, building from there.

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

Maybe just first, a quick one on the revenue restatement. It looks like it was just in the neighborhood of about $15,000. So I just wanted to make sure I got that right, fairly immaterial. And is there anything else you wanted to add on about the restatement?

Revision, first of all. But yes, no, we essentially just reallocated some of the revenue between different quarters in 2025.

Got it. Okay. That's helpful. And then maybe on the RPO side, you signed 10 new deals expansion. I think you mentioned one big annual 7-figure customer as well. By our model, you have around $100 million in the short-term RPO. So I was just curious if you can talk about when we should maybe expect some of this to fall off into revenue more materially?

Yes. Look, I'll say that it's always great to have RPO in the sense that it is committed and it will turn into revenue at some point. I do want to caution you that in our business, especially on the mortgage side where we're primarily based on funded loans, as Nima talked about, success-based pricing. RPO isn't really a great gauge for you. But other than that, yes, the short-term RPO, obviously, will roll off within the next year.

Got it. And then maybe just a quick follow-up. On Blend Autopilot, it sounds like the pricing is still being mapped out. But can you talk about applicability? Is it applicable to your entire base of mortgage customers? Or are there certain customers you think who will never use AI for cost, security, other reasons?

Yes, I'd say 1.5 years ago, Seth, if you'd ask me who's going to use it. I would say there's going to be fast movers and slow movers. And I think -- now -- I mean applicability in terms of the work, the human work of stare and compare and back and forth and reading guidelines and doing calculations, I think that exists no matter what kind of customer of ours you are. So applicability is pretty broad. Do I think we'll get 100% adoption? No, of course not. But I do think that our customers are much more eager around AI. I think something is in the air this year. 2026 has been sort of a statement year for AI and people are seeing what it can do on their desktops and Microsoft made a big announcement today around their Copilot -- yesterday about their Copilot Cowork and Anthropic has been making headlines around that. And so people are starting to see what it can do when they're driving with AI and it opens their eyes to the possibility of, "Hey, couldn't it do that in the background while I'm sleeping." And so yes. I mean I haven't yet heard a customer in all of our discussions. I'll just tell one more anecdote, I was giving an early preview to a customer who came to our customer advisory board, they wanted their longer -- their larger teams. This is one of the very, very large bank. And they wanted their larger team to look at the product because they were really excited about it. And the first question I asked on the call was, can somebody find me all the reasons why we couldn't possibly do this so we can work through these issues because we really need this. And so the mindset has shifted from, hey, like let's look at this, let's consider it to, hey, we really need this capability because everyone's been through this cycle of staffing up, staffing down, having undercapacity when volumes are high and having overcapacity when volumes are low. And nobody likes doing that extremely, I shouldn't say nobody. It's not the favorite activity of most people to do that extremely tedious, manually checking that the names on 2 different documents match letter for letter. That the guidelines tell you exactly how to calculate and your calculation is exactly right. And so it's not something that is prized work, but it's real work that has to get done, and that's whether it's a car loan or a personal loan or a mortgage or a home equity loan or line. And that's work that actually, AI is really, really good at. And so I view this as something that they've all been waiting for in some ways. They've probably been waiting for, for a long time, a lot long. They probably wanted us to deliver this 10 years ago. It just wasn't -- because there's so much complexity and so much unstructured content in this industry, it's something that non-generative ML or other AI approaches. It's just something we that wasn't that -- it wasn't good enough to do that a couple of years or 3 years or 4 years ago. And now the capability is there. And so the fact that we're launching this, and we're the first as far as I know, to launch these background agents to serve this industry. I mean that's something that was -- that's been our position from day 1. We want to be driving the frontier. We don't want to be copying the frontier. And the frontier is going to keep growing. And so as long as we're driving the frontier, I feel really good about our business.

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