Blend Labs, Inc. (BLND): Business Model Canvas [Dec-2025 Updated]

You're looking at Blend Labs, Inc. (BLND) trying to figure out if their aggressive shift to a software-first model is actually working after all the recent streamlining. Honestly, the data suggests a real inflection point: they are now seeing high-margin growth from the Consumer Banking Suite, posting a non-GAAP gross margin of 82% on the Software Platform as of Q3 2025, while their backlog remains solid with $190 million in Remaining Performance Obligations reported in Q2 2025. This isn't just a minor tweak; it's a fundamental re-engineering of their revenue engine, moving away from pure transaction volume toward sticky, high-margin subscriptions. See the full nine-block breakdown below to understand the exact resources and activities powering this new structure.

Blend Labs, Inc. (BLND) - Canvas Business Model: Key Partnerships

You're looking at how Blend Labs, Inc. (BLND) is structuring its external relationships to drive revenue, especially as it pivots toward a software-first model. The partnership strategy is key to this transition, focusing on higher-margin revenue streams.

Strategic partnerships for higher-margin product distribution

Blend Labs, Inc. is intentionally shifting its focus to partnerships that yield better margins. This strategic transition is evident in the Q3 2025 results, where the company noted headwinds in Mortgage Suite revenue due to this move. The focus is on platform-centric deals. For example, in Q3 2025, Blend signed 14 new deals and expansions. One notable win was a 7-figure expansion with a top 20 U.S. bank specifically for solar home equity lending. The company's contribution margin per funded loan from partnerships and add-on products was 67% in Q1 2025, with a near-term target set to exceed 90%. This focus on higher-margin revenue is central to their ongoing operational profitability.

Integrations with core banking and loan origination systems (LOS)

The platform's value is heavily reliant on its open-stack architecture and the breadth of its integrations. In 2024, Blend's platform powered $1.2 trillion in loan applications. As of Q1 2025, 18 of the top 50 U.S. mortgage originators by loan volume use the platform. Furthermore, 7 of the top 10 home equity lenders leverage the Blend platform for their digital customer experience. The Consumer Banking Suite, a major growth area, represented 39% of total revenue in Q3 2025, up from 29% a year prior, indicating successful integration across banking products.

Collaboration with 10 of the top 20 U.S. mortgage servicers

While the specific count of top 20 mortgage servicers using the platform as of late 2025 isn't explicitly stated, the company maintains relationships with major industry players. For instance, in late 2024, Blend announced a partnership with PHH Mortgage, which is noted as one of the largest servicers in the country. The platform's reach among originators is substantial, with 18 of the top 50 U.S. mortgage originators relying on it as of Q1 2025. The former Title365 business, prior to its sale, served top lenders and servicers.

Exclusive process for the sale of Title365 to Covius

Blend Labs, Inc. entered into a definitive agreement on June 9, 2025, to sell its Title365 subsidiary to Covius Services, LLC, to sharpen its focus on the software-first model. Blend had acquired Title365 in 2021 for nearly $500 million (or $422 million from Mr. Cooper). The terms of the sale to Covius were not disclosed, but the transaction was subject to regulatory approvals and expected to close in the months following the announcement. As part of the agreement, Title365 will continue to partner with Blend to provide integrated title and closing services for Blend customers.

Ecosystem partners for add-on products and data verification

Blend Labs, Inc. manages relationships with a wide array of digital service providers, letting them handle the heavy lifting of vetting and maintaining these connections. This network supports the platform's functionality across lending and banking suites. The economic value per funded loan in Q2 2025 was $90, with $2 of that attributed to partnerships and $10 to add-on products. An expanded partnership with Doma Technology LLC was announced in July 2025 to bring instant title decisioning to lenders on the platform. Here's a look at some of the categories and named partners:

• Identity Verification: Alloy
• PMI Integration: Arch MI
• Account Funding: Astra
• LOS Integration: Byte Software, Calyx Software - Point
• Insurance Verification: Canopy Connect
• Fees/Title & Settlement: ClosingCorp
• Credit Reporting: CoreLogic Credco
• Insurance Carriers: Covered

Finance: draft 13-week cash view by Friday.

Blend Labs, Inc. (BLND) - Canvas Business Model: Key Activities

You're looking at the core actions Blend Labs, Inc. (BLND) is taking to keep the platform relevant and profitable in late 2025. Honestly, the numbers tell a story of strategic trade-offs, leaning hard on software margins while navigating a tough mortgage market.

Developing and maintaining the core Blend Builder Platform.

The Blend Builder Platform remains the foundation, the single source for their digital banking solutions. While the focus has shifted to higher-margin software, maintaining this core is non-negotiable for existing and new customers. The platform supports the entire origination process for mortgages, consumer loans, and deposit accounts. The company's strategic priorities for 2026 include growing the take rate within the Mortgage Suite, which is built on this core.

Investing in AI-powered Intelligent Origination technology.

Blend Labs, Inc. is embedding agentic AI directly into its core workflow to autonomously orchestrate and execute end-to-end processes. This is a key differentiator, with the goal of cutting the average mortgage cost by over $11,000. To be fair, the investment in R&D shows signs of cost rationalization, as Research & Development expenses in Q2 2025 were $5.0 million, a significant drop from $10.2 million in Q2 2024. Still, the CEO stressed that AI is 'almost like water for us at this point,' indicating its foundational role in future product development.

Enterprise sales and complex customer onboarding.

Securing and expanding large financial institution relationships is a critical activity driving future revenue visibility. In Q3 2025, Blend Labs, Inc. added or expanded 14 customer relationships. The pipeline activity supporting this sales effort is strong, showing an approximately 60% year-over-year increase. This included signing a seven-figure expansion with a top 20 U.S. bank for solar home equity lending, and a major renewal across 6 product lines with a consumer banking customer. That pipeline growth suggests sales activity is definitely ramping up.

Diversifying the product suite beyond mortgage lending.

This is where the action is, moving away from the cyclical nature of mortgage lending. The Consumer Banking Suite is the primary growth engine, a clear strategic pivot. This diversification is quantifiable in their recent results, which is what you want to see.

The company's 2025 priorities included expanding accretive add-ons like Close and Rapid, and cross-selling into additional product lines once value is proven.

Aggressive cost rationalization to improve non-GAAP operating income.

Driving efficiency through cost control is directly translating into bottom-line results, marking the fifth consecutive quarter of non-GAAP operating profitability. This focus on margin improvement is a key activity for sustainable growth.

• Non-GAAP operating income in Q3 2025 reached $4.6 million, a significant jump from just $0.3 million in Q3 2024.
• The resulting non-GAAP operating margin for Q3 2025 was 14%.
• Total non-GAAP operating expenses for Q3 2025 were $21 million.
• Full-year 2025 platform non-GAAP operating expenses are anticipated to be in the range of $85 million to $90 million.
• Non-GAAP gross margin improved to 78% in Q3 2025, up from 75% in the same period last year.

Finance: draft 13-week cash view by Friday.

Blend Labs, Inc. (BLND) - Canvas Business Model: Key Resources

You're looking at the core assets Blend Labs, Inc. (BLND) relies on to run its business as of late 2025. These aren't just line items; they are the engine room.

The technology foundation is centered on the proprietary platform. This is the digital origination platform that serves banks, credit unions, and mortgage lenders. In 2024, this platform powered $1.2 trillion in loan applications. This core infrastructure supports the latest innovations.

• Proprietary Blend Builder Platform and API infrastructure, including the BlendX Platform for agentic AI delivery.
• Agentic AI technology embedded in lending workflows via the Intelligent Origination system, which orchestrates data and documents for end-to-end execution.
• Highly skilled software engineering and product teams, evidenced by achieving an 80% success rate from pilot to production for agentic AI deployments using the Critical 7 Framework.

The financial footing provides the runway to invest in these resources. Here's the quick math on the balance sheet items you asked about from the recent filings.

That record RPO balance of $190.4 million at the end of Q2 2025 was fueled by a significant renewal and expansion announced in May. Still, the cash position of $82.3 million as of September 30, 2025, is what keeps the lights on and the engineers coding.

Finance: draft 13-week cash view by Friday.

Blend Labs, Inc. (BLND) - Canvas Business Model: Value Propositions

You're looking at the core promises Blend Labs, Inc. (BLND) makes to its financial institution customers as of late 2025. These aren't just features; they are quantified outcomes tied to their platform and the new Intelligent Origination system.

Digital-first, seamless consumer origination experience is a major pillar. For home equity products, for example, the friction is drastically reduced. Pre-filled data helps cut drop-off rates, shortening the application process to under 5 minutes for borrowers. This speed is a direct contrast to older, paper-intensive processes.

The value proposition around cost reduction is framed against the current industry pain point. While Blend Labs, Inc. helps institutions digitize the process, the industry's cost structure remains stubbornly high, averaging more than $11,000 per mortgage and $2,000 per home equity loan, with cycle times often stretching 20 to 30 days. Blend Labs, Inc. aims to fundamentally change this cost basis through platform efficiency and AI execution.

Rapid deployment of new products like Rapid Home Equity delivers immediate operational improvements. For home equity lending specifically, the traditional process time of 30-45 days has been cut down to a range of 5-10 days for initial customers using the Rapid Home Lending suite. Furthermore, early adoption showed an average of 1.9x increase in economic value per funded loan for signed deals incorporating these rapid solutions as of Q1 2025.

The financial performance of the core software business demonstrates the inherent value capture. The Software Platform segment achieved a non-GAAP gross margin of 82% in Q3 2025, an improvement from 80% the prior year. This high margin reflects the scalability of the technology.

Manufactured certainty through autonomous, auditable AI execution is delivered via the Intelligent Origination system announced in October 2025. This system embeds agentic intelligence directly into the execution layer of lending, moving beyond tools that only assist to systems that execute with speed and oversight. This aims to deliver shorter cycle times, lower labor costs, and full audit transparency.

Here is a quick summary of the key quantified value points supporting these propositions:

Finance: draft 13-week cash view by Friday.

Blend Labs, Inc. (BLND) - Canvas Business Model: Customer Relationships

You're looking at how Blend Labs, Inc. (BLND) keeps its enterprise clients locked in and growing their spend. The relationship strategy centers on deep integration and demonstrable value across their platform, not just one product.

Dedicated, high-touch enterprise account management.

The focus on large financial institutions necessitates a high-touch approach. You see this reflected in the deal structure, such as the signing of a seven-figure expansion with a top 20 bank during the third quarter of 2025. This level of engagement is key to driving adoption across the entire suite, not just the initial point of contact.

Land and expand strategy across multiple product lines.

The expansion motion is clearly quantified by new and expanded deals. In the second quarter of 2025, Blend Labs signed or expanded 23 deals, which was more than double the count from the first quarter. Following that, the third quarter of 2025 saw the addition or expansion of 14 customer relationships. The success of this strategy is visible in the Consumer Banking Suite revenue, which grew 43% year-over-year in Q2 2025 and reached 39% of total revenue by Q3 2025, up from 29% a year prior.

Here's a quick look at the expansion metrics:

The goal is clearly to move customers from a single product to a multi-product relationship; for instance, one major renewal in Q3 involved a customer across six product lines.

Long-term, multi-year subscription and renewal contracts.

Securing long-term commitments provides revenue visibility. Blend Labs ended the second quarter of 2025 with a record Remaining Performance Obligations (RPO) balance of $190.4 million, which was bolstered by a $50 million contract renewal announced in May. Furthermore, even with a major customer, Mr. Cooper, migrating volume, the associated contract is structured to protect a significant portion of revenue through Q2 2028. This shows a commitment to multi-year agreements that smooth out the impact of market volatility on transaction-based revenue.

Focus on zero churn notices, indicating strong retention.

Retention is a major success story for Blend Labs in 2025. The company reported receiving zero churn notices in 2025 to date as of the Q2 call. This represents a 70% decline in churn notices year-over-year. The CEO stated, 'Our customer base always comes first'. This focus on retention is critical, especially as the company navigates headwinds in its core mortgage suite revenue.

Key retention indicators include:

• Zero churn notices received in 2025 to date.
• 70% decline in churn notices year-over-year.
• Strong non-GAAP operating profitability for five consecutive quarters as of Q3 2025.
• Non-GAAP Gross Margin improved to 78% in Q3 2025.

Finance: draft the Q4 2025 contract renewal pipeline analysis by next Tuesday.

Blend Labs, Inc. (BLND) - Canvas Business Model: Channels

You're looking at how Blend Labs, Inc. (BLND) gets its platform and services into the hands of financial institutions. It's a mix of direct selling, strategic alliances, and hands-on setup help. This approach reflects their pivot toward a higher-margin software focus, even as the mortgage market shifts.

Direct enterprise sales team targeting financial institutions

The direct sales force is key for landing those big, sticky relationships. They staff accounts with teams responsible for making customers successful post-sale, using a defintely "land and expand" strategy. Compensation for these teams ties directly to closing new deals and growing the transaction volume through the software platform.

The momentum here looks solid heading into the end of 2025. In the third quarter of 2025, Blend Labs, Inc. added or expanded 14 customer relationships. This included a notable seven-figure expansion with one of the top 20 banks. Looking back a bit, in the second quarter of 2025, sales momentum accelerated significantly, with 23 new or expanded deals, which was more than double the count from the first quarter.

These direct sales efforts target a broad base of financial providers. The customer segments include:

• Large banks and credit unions.
• Fintechs and community lenders.
• Independent Mortgage Banks (IMBs).

Partner-first model for specific product distribution

Blend Labs, Inc. is actively leaning into a partner-first model, especially as they streamline their focus to a pure software offering. This is most visible in the strategic transition away from owning certain services outright. For instance, the company entered an exclusive process for the potential sale of its Title insurance business to a leading title and mortgage services provider.

This strategic shift impacts revenue mix. In Q3 2025, the decline in Mortgage Suite revenue was partly attributed to this transition toward higher margin partnership models for some products. To support this, the company has cultivated a wide network. As of early 2025, Blend had built an extensive partner ecosystem comprising over 130 technology vendors and data service providers. The success of the Consumer Banking Suite, which grew revenue by 34% year-over-year to $12.7 million in Q3 2025, shows the diversification strategy is working alongside these channel shifts.

Professional services for platform implementation and configuration

Getting complex financial platforms live requires dedicated setup, which is captured in the Professional Services revenue stream. This channel is showing growth, supporting the overall platform adoption.

Here's the quick math on the financial contribution from Professional Services as of the third quarter of 2025:

The gross margins for this service component are also tracked closely as part of the overall platform profitability. For the first quarter of 2025, the GAAP Professional services gross margin was 22%, while the non-GAAP margin stood at 29%. This revenue stream, which was $2.5 million in Q1 2025, is important for ensuring initial customer success and organizational change within the financial institutions using the platform.

Blend Labs, Inc. (BLND) - Canvas Business Model: Customer Segments

You're looking at who Blend Labs, Inc. (BLND) is actually selling to as of late 2025. It's not just one type of lender anymore; the focus has clearly shifted to diversify away from pure mortgage volume.

Large U.S. banks and top-tier financial institutions

These big players are key, especially as Blend Labs pushes its Consumer Banking Suite. You saw them sign a significant deal in the third quarter of 2025: a seven-figure expansion with a top 20 bank specifically for solar home equity lending. That shows the platform is moving into specialized, higher-value products within the largest institutions. Honestly, landing that kind of deal suggests deep integration potential across their operations.

Regional banks and credit unions

This group, alongside community lenders, forms the backbone of the customer base that uses Blend for digital lending transformation. While specific numbers for this exact cohort aren't broken out separately in the latest reports, the overall growth in the Consumer Banking Suite, which generated $12.7 million in revenue in Q3 2025, is being driven by ramping usage among these larger customers. They are adopting more than just the core mortgage product.

Independent Mortgage Banks (IMBs)

The IMB segment remains important, even as the overall mortgage market faces headwinds. Back in Q2 2025, the sales momentum included securing three net new logos specifically within the IMB vertical. This indicates that even smaller, specialized originators are still looking to Blend to streamline their processes, though the Mortgage Suite revenue saw a decline to $17.7 million in Q3 2025.

Financial providers seeking digital transformation across multiple product lines

This is where the strategic shift is most visible. The goal is clearly to increase the 'take rate' across existing customers. In Q3 2025, Blend signed a major renewal and expansion with a consumer banking customer that spanned six product lines. This focus is paying off in the revenue mix: the Consumer Banking Suite now accounts for 39% of total revenue as of Q3 2025, a solid increase from 29% just one year prior. They are definitely selling the platform, not just the point solution.

Here's a quick look at how the customer-facing metrics stacked up in the third quarter of 2025:

You can see the platform adoption is driving the revenue diversification. The pipeline activity is also strong, up approximately 60% year-over-year as of the third quarter, which suggests more of these segments are entering the sales funnel. The company added or expanded 14 customer relationships in that quarter alone.

Finance: draft 13-week cash view by Friday.

Blend Labs, Inc. (BLND) - Canvas Business Model: Cost Structure

You're looking at how Blend Labs, Inc. (BLND) manages its outflows as it pushes toward a software-first model. The cost structure is heavily influenced by ongoing investment in the platform and the drive to acquire larger enterprise customers.

High fixed costs for Research and Development (R&D) and platform hosting remain a core component, though management has aggressively reduced these expenses from prior years. For example, Research & Development expenses were $5.6 million in Q1 2025, which then slightly decreased to $5.0 million in Q2 2025. This shows a focus on efficiency even within the development pipeline, which is crucial for platform hosting and innovation.

Sales and Marketing (S&M) expenses are the variable side of the equation, tied directly to enterprise customer acquisition efforts. You can see the tight control here as well; Sales & Marketing expenses were $6.3 million in Q1 2025 and slightly lower at $6.2 million in Q2 2025. The company is clearly managing its go-to-market spend while pipeline activity was reported up approximately 60% year-over-year as of Q3 2025.

The overall spending envelope for the year is clearly defined by management guidance. The full-year 2025 guidance for Platform Non-GAAP Operating Expenses is set between $85.0 million and $90.0 million. This represents a significant reduction, showing nearly a 60% cut from the $211.8 million reported in FY 2022.

Here's a look at the recent quarterly expense trends for the key operating categories:

Stock-based compensation is a defintely significant non-cash expense that is explicitly excluded when calculating the non-GAAP profitability metrics you often see highlighted. For context on the scale of this non-cash charge, the annual stock-based compensation for the 2024 reporting period was $28.08 million. The company excludes this cost because valuation methodologies and assumptions can cause it to vary significantly.

You should track these specific cost elements:

• FY 2025 Platform Non-GAAP Operating Expenses guidance range: $85.0 - $90.0 million.
• Q3 2025 Non-GAAP Operating Expenses were $21 million.
• The Consumer Banking Suite revenue reached 39% of total revenue in Q3 2025.
• The company reported a record free cash flow of $15.5 million in Q1 2025.

Blend Labs, Inc. (BLND) - Canvas Business Model: Revenue Streams

You're looking at how Blend Labs, Inc. brings in money as of late 2025. The revenue picture shows a clear shift in focus, moving from a near-total reliance on mortgage to a more balanced, though still challenged, structure.

The core of the business still relies on its platform, which pulls revenue from two main buckets: the Mortgage Suite and the Consumer Banking Suite. The overall revenue for the third quarter of 2025 landed at $32.9 million, which was down just 1% compared to the same quarter last year.

The platform fees, which represent the Software platform revenue, totaled $30.5 million in Q3 2025, though this figure was down 2% year-over-year. This software component is where you find the recurring Subscription-based platform fees (SaaS model) that provide a base level of income, separate from per-loan activity.

The transaction-based revenue is best captured by the Economic Value per Funded Loan (evPFL). For Q3 2025, the evPFL stood at $86. This number is key because it shows the value captured for each loan processed through the platform, regardless of the overall market volume.

Here's how the two main revenue segments broke down for the third quarter of 2025:

The Mortgage Suite revenue was $17.7 million in Q3 2025. This segment saw an 18% drop year-over-year, which management attributed to a strategic shift toward partnership models that generate lower initial revenue but carry higher margins, plus some customer churn.

On the growth side, the Consumer Banking Suite revenue was $12.7 million in Q3 2025. That's a strong 34% increase from the prior year, showing the diversification strategy is gaining traction. This suite now accounts for 39% of total revenue, up from 29% a year ago.

To give you a clearer picture of that transaction value, the $86 Economic Value per Funded Loan in Q3 2025 was composed of these elements:

• Core software contribution was $76.
• Partnerships added $10.
• Add-on products provided $1.

Also, remember that total revenue includes Professional services revenue, which was $2.4 million in Q3 2025, marking an 18% increase from the year prior. The overall non-GAAP gross profit margin for the quarter was strong at 78%.

Finance: draft 13-week cash view by Friday.