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The slow pace of home sales during the first quarter dented mortgage revenue for technology provider Blend Labs Inc., but growth in its consumer banking services helped the company trim its losses from a year ago.
The San Francisco-based banking software and services provider grew Q1 revenue 12 percent from a year ago, to $26.8 million, enabling it to trim its loss for the quarter to $9.4 million, down from $20.7 million a year ago.
While Blend expects Q2 revenue to bounce back to between $30.5 million and $32.5 million, it has entered exclusive negotiations to sell its Title365 business to “a leading title and mortgage services provider” as it pursues a “software-first” business model.
Blend went public in 2021 and acquired a 90 percent stake in national title insurance and settlement services provider Title365 from Mr. Cooper Group for $422 million. But rising mortgage rates curtailed demand for title insurance.
Company executives said Thurseay that they closed almost three times more deals with clients in Q1 than they did a year ago, including a top 25 credit union. With the signing of another loan servicer, Blend now counts 10 of the top 20 U.S. loan servicers as clients.
Nima Ghamsari
“With a pipeline nearly double what it was a year ago—and demand coming from across the industry, from leading banks and mortgage servicers to independent mortgage banks and credit unions—it’s clear the need for effortless, personalized banking and lending is only growing,” Blend co-founder and CEO Nima Ghamsari said in a statement.
Shares in Blend, which in the past year have traded for as little as $2.08 cents and as much as $5.52, were up slightly from Thursday’s close of $3.29 in after hours trading.
Mortgage software revenue down 22% from Q4
Blend’s mortgage suite brought in $14.6 million in revenue during the first quarter of 2025, down 22 percent from the previous quarter and 3 percent from a year ago.
With revenue from consumer banking up 45 percent from a year ago, to $9.6 million, Blend’s mortgage suite generated 60 percent of software platform revenue, down from 79 percent in Q2 2023.
The company brought in another $2.5 million in professional services revenue.
“In the first quarter of 2025, we saw a decrease in mortgage transactions on our software platform compared to the last quarter of 2024, which can be attributed to seasonal trends, continued high interest rates, decreased housing affordability, and uncertain worldwide political and economic conditions,” the company said in its quarterly earnings report.
“We expect that the aggregate industry mortgage originations will be higher in the second quarter of 2025 relative to the first quarter based on application volume observed to date through our customer base and our analysis of the latest relevant macroeconomic data.”
Every mortgage funded by Blend’s clients represented about $93 in economic value for the company, including $78 from software revenue, $10 from partnerships, and $5 from add-on products, the company said.
Last year, Blend’s clients handled nearly $1.2 trillion in loan applications, with 18 of the top 50 U.S. mortgage originators relying on the company’s services.
Last month Blend announced it was expanding a partnership with CrossCountry Mortgage to drive innovation for independent mortgage banks (IMBs), naming former Compass Mortgage executive Justin Venhousen as appointed general manager of Blend’s newly-formed IMB division.
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