Blend Q2 2026 earnings: Revenue rises 7% as operating loss narrows

Blend Labs (NYSE: BLND) reported Q2 2026 revenue of $33.8 million, up 7% from $31.6 million a year earlier, while its GAAP diluted net loss from continuing operations attributable to common stockholders remained $0.03 per share. For the quarter ended June 30, 2026, the GAAP operating loss narrowed to $1.6 million and continuing-operations operating cash flow turned positive at $7.7 million.

Core financial results

Revenue growth and a 6% reduction in total operating expenses improved Blend’s operating results, although the company remained unprofitable under GAAP. The reported GAAP gross margin was unchanged at 74%, while non-GAAP gross margin increased by two percentage points to 78%.

Non-GAAP diluted net income from continuing operations was $0.00 per share in both periods. The difference between GAAP and non-GAAP results remains material because Blend excludes stock-based compensation and several other items from its adjusted measures.

Software revenue and Autopilot adoption

Software platform revenue increased 7% to $31.4 million and continued to account for most of Blend’s revenue. Professional services revenue rose to $2.4 million from $2.2 million, an increase of approximately 12%.

Blend added or expanded 14 customer relationships during the quarter. Six involved Autopilot, which became commercially available on July 1. These agreements provide an early measure of customer interest, but the release did not quantify their expected revenue contribution or implementation timing.

Management described the industry backdrop as offering limited assistance to growth. Co-founder and Head of Blend Nima Ghamsari said the company is combining the Autopilot launch with an internal “agent-first” transformation as it works toward reaccelerating growth in 2027.

Expense discipline amplified modest revenue growth

Total operating expenses declined to $26.5 million from $28.2 million. General and administrative expense fell approximately 20% to $11.0 million, while sales and marketing expense decreased about 3% to $6.7 million. These reductions more than offset a 16% increase in research and development expense to $8.7 million.

That expense mix helps explain why 7% revenue growth produced a much larger improvement in operating results. The GAAP operating loss narrowed by approximately $3.3 million, while the non-GAAP operating margin rose to about 21% from 15%.

The company still recorded $7.0 million of stock-based compensation during the quarter, compared with $7.6 million a year earlier. This noncash expense was one reason positive non-GAAP operating income did not translate into GAAP operating profitability, although other adjustments also affect the reconciliation.

Cash flow and capital allocation

Total operating cash flow was $7.9 million, reversing a $6.5 million outflow in Q2 2025. After $825,000 of spending on property, equipment and internal-use software, free cash flow was approximately $7.1 million based on Blend’s stated definition.

Cash flow exceeded reported earnings partly because stock-based compensation added back $7.0 million and changes in receivables contributed $3.4 million. Deferred revenue, by contrast, represented a $2.5 million use of cash during the quarter.

Blend used $20.4 million of cash for share repurchases in its financing cash flow statement. Separately, the company said it repurchased 11.0 million shares for $18.2 million during the quarter and had $13.2 million remaining under its authorization. The release does not reconcile the difference between the cash flow figure and the amount cited in the quarterly highlight.

At June 30, cash and cash equivalents stood at $23.3 million, with another $21.6 million in marketable securities and other investments. Their combined value of approximately $44.9 million was down from $69.8 million at December 31, 2025.

Q3 2026 guidance

Blend’s third-quarter outlook points to lower revenue and non-GAAP operating income than the Q2 actual results. At the midpoint, revenue would decline approximately 4% sequentially and non-GAAP operating income would fall about 43%.

Blend did not provide a GAAP equivalent for its non-GAAP operating income guidance, citing uncertainty around stock-based compensation and nonrecurring or unusual items.

Recent insider transactions

The supplied insider summary shows 7.4 million shares purchased and 11,250 shares sold over the past six months, for net purchases of approximately 7.39 million shares. Most of the latest disclosed transaction value came from Haveli Investments, a greater-than-10% beneficial owner.

These disclosures describe transactions but do not, by themselves, establish insiders’ expectations for Blend’s future performance.

Risks investors should monitor

• Sequential moderation in the Q3 outlook: Both guidance midpoints are below Q2 actual results, with a particularly notable reduction in expected non-GAAP operating income.
• Continued exposure to mortgage conditions: Management said the market provided limited help. Interest rates, credit availability, real estate prices and regulatory changes can affect customer activity and use of Blend’s platform.
• GAAP and non-GAAP results remain far apart: Blend generated positive adjusted operating income but still posted a GAAP operating loss. Stock-based compensation and other exclusions can materially affect comparisons between the two measures.
• Buybacks are using significant liquidity: Operating cash flow improved, but cash used for repurchases exceeded the quarter’s operating cash generation. Continued capital returns must be considered alongside the decline in cash and investments since year-end.
• Autopilot is still at an early commercial stage: Six lender agreements are an initial adoption signal, but Blend did not disclose their revenue contribution or deployment schedule.

Summary

Blend’s Q2 2026 results combined 7% revenue growth with lower operating expenses, producing a substantially smaller GAAP operating loss and positive cash flow. Software platform revenue remained the primary growth driver, while early Autopilot agreements supported management’s longer-term growth plans. The next points to watch are the sequential decline implied by Q3 guidance, the conversion of new product agreements into revenue, and the balance between cash generation and share repurchases.