Blend Labs Inc-A (NYSE:BLND), a provider of a cloud-based software platform for digital banking, reported financial results for the third quarter of 2025 that presented a mixed picture, leading to a negative reaction in after-hours trading.
Earnings and Revenue Versus Estimates
The company's performance against analyst expectations was the primary focus for investors following the report. While Blend demonstrated significant progress on profitability, it fell short on the top-line revenue figure.
- Revenue: The company reported total revenue of $32.9 million for the quarter, which represents a slight decrease of 1% compared to the same period last year. This result came in below the analyst consensus estimate of approximately $33.45 million.
- Earnings Per Share (Non-GAAP): On a profitability basis, Blend reported non-GAAP diluted net income per share of $0.00. This was below the analyst estimate of $0.01 per share.
The market's immediate reaction reflected this mixed outcome. The stock traded lower in the after-hours session, suggesting investor disappointment over the revenue miss and flat earnings per share, despite the company's internal progress on cost management.
Third Quarter Financial and Operational Highlights
Beyond the headline earnings miss, the press release detailed several positive developments for the company. Management emphasized that both total revenue and non-GAAP operating income exceeded the mid-point of their own guidance for the quarter.
Key operational and financial takeaways from the period include:
- Profitability Improvement: The company showcased a dramatic improvement in its operating loss. The GAAP operating loss narrowed to $4.9 million, a significant improvement from a loss of $11.3 million in the third quarter of 2024.
- Non-GAAP Operating Income: Perhaps the most notable positive was the surge in non-GAAP operating income, which reached $4.6 million, up substantially from $0.3 million a year ago.
- Customer Growth: Blend added or expanded 14 customer relationships during the quarter. The company also reported that its sales pipeline has grown approximately 60% year-over-year, indicating strong future demand.
- Balance Sheet: The company's cash and cash equivalents position strengthened, rising to $55.0 million as of September 30, 2025, up from $38.0 million at the end of 2024.
Nima Ghamsari, Co-founder and Head of Blend, pointed to a improving macroeconomic environment and internal momentum as reasons for optimism, specifically citing "the potential for lower rates" as a tailwind for the mortgage and banking origination market.
Fourth Quarter Outlook and Comparison to Estimates
Looking ahead, Blend provided its financial guidance for the fourth quarter of 2025. The company's outlook appears cautious when held against existing analyst projections.
- Blend's Q4 2025 Revenue Guidance: $31.0 million to $32.5 million.
- Analyst Estimate for Q4 2025 Revenue: Approximately $34.27 million.
The company's revenue guidance range falls notably below the current analyst consensus. This softer outlook for the next quarter likely contributed to the negative market sentiment following the earnings release, as it suggests the top-line challenges may persist in the near term. The company's guidance for non-GAAP net operating income is between $2.5 million and $3.5 million.
Conclusion
Blend Labs' third quarter results paint a picture of a company successfully navigating toward profitability through stringent cost control, as evidenced by its soaring non-GAAP operating income. However, this progress was overshadowed by a revenue miss against estimates and the issuance of fourth-quarter revenue guidance that fell short of Wall Street's expectations. The subsequent drop in the stock price indicates that investors are currently prioritizing top-line growth and future revenue visibility over improvements in bottom-line profitability.
For a detailed look at Blend's historical earnings performance and future analyst estimates, you can review the data here.
Disclaimer: This article is for informational purposes only and is not intended as investment advice. All investment and financial decisions involve risk, including the loss of principal, and readers should conduct their own research before making any decisions.
