Blend Labs at Wells Fargo's Summit: AI-Driven Mortgage Innovations

On Wednesday, 19 November 2025, Blend Labs (NYSE:BLND) showcased its strategic initiatives at Wells Fargo's 9th Annual TMT Summit. The discussion, led by CEO Nima Ghamsari, highlighted Blend's focus on integrating AI into its platform, while addressing both challenges and opportunities in the current housing market landscape.

Key Takeaways

• Blend Labs is emphasizing AI integration to automate mortgage processing and improve efficiency.
• The company achieved a significant milestone with a gross margin increase to 78%.
• Restructuring efforts have led to non-GAAP operating profitability.
• Blend Labs is developing a Rapid Suite of products to enhance loan application processes.
• The company is optimistic about its market position and future growth potential.

Financial Results

• Gross Margins: Increased to 78%, reflecting a shift towards a software-centric business model.
• Economic Value Per Funded Loan: The introduction of Rapid Home Equity is expected to double revenue per unit. Rapid Refi aims to further boost profitability.
• Profitability: Achieved non-GAAP operating profitability following restructuring efforts.

Operational Updates

• Restructuring: Exited non-core businesses like income verification and homeowners insurance to focus on core software offerings.
• Customer Churn: Experienced churn during restructuring but stabilized with net new churn effectively at zero.
• New Customer Acquisition: Secured partnerships with major servicers and banks, strengthening the client pipeline.
• Product Development: Focused on the Rapid Suite and agentic AI to streamline processes and improve accuracy with technologies like Gemini 3.0.

Future Outlook

• Strategic Focus: Prioritizing large financial institutions while serving smaller clients, with an emphasis on home equity lending and AI integration.
• Growth Drivers: Anticipating increased demand for home equity lending and refinance activity. AI adoption by lenders is seen as a key growth area.
• AI Integration: Aiming to automate loan processing and underwriting, allowing banks to autonomously offer products with human oversight.

Q&A Highlights

• Nima Ghamsari emphasized the alignment of Blend's incentives with customer success, stating, "We're gonna charge on success."
• He highlighted the transformative potential of agentic AI, describing it as "the big unlock" for the mortgage industry.
• Ghamsari expressed confidence in Blend's market position, stating, "The thing that makes me the most bullish on Blend is our position in the market."

For a more detailed understanding of Blend Labs' strategic direction, readers are encouraged to refer to the full transcript.

Full transcript - Wells Fargo's 9th Annual TMT Summit:

Michael Turn, Wells Fargo Software Team, Wells Fargo: Great. Thanks. Good afternoon. Appreciate everyone joining. This is Michael Turn with the Wells Fargo software team. Please step Nima Ghamsari, founder, CEO, Blend Labs. Appreciate you making time.

Nima Ghamsari, Founder, CEO, Blend Labs: Thanks for having me.

Michael Turn, Wells Fargo Software Team, Wells Fargo: Yes. In sunny Southern California. Before I go into more detailed questions, I think it's useful to hear your origin story, the founder story, what led you to the mortgage market, and how you've diversified. Maybe kinda just set the stage with the, the founding of Blend.

Nima Ghamsari, Founder, CEO, Blend Labs: Yeah, sure. You know, when I graduated from college in computer science in 2008, right when the housing crisis was hitting. I joined Palantir as one of the first employees there. We were just going into the commercial, the non-government sector there. All the customers that were potentially gonna work with us or wanted to work with us were struggling with their mortgage books. I get in there and I was like, "Oh, you know, $10 trillion of assets." You know, we'll figure something out. We just have to get the data out of the systems. It turns out that the systems that they were using were like these systems written, built in the 1960s.

Michael Turn, Wells Fargo Software Team, Wells Fargo: Yeah.

Nima Ghamsari, Founder, CEO, Blend Labs: First line of code in the 1960s, still on 1960s technology.

Michael Turn, Wells Fargo Software Team, Wells Fargo: Right.

Nima Ghamsari, Founder, CEO, Blend Labs: I couldn't believe for what was at the time was $10 trillion, it is a much bigger industry now, in real estate finance in the U.S. It was that it was being run on these systems that, you know, I would be embarrassed to use for anything, let alone.

Michael Turn, Wells Fargo Software Team, Wells Fargo: Right.

Nima Ghamsari, Founder, CEO, Blend Labs: Such a big industry. Anyways, fast forward a couple years, 2012, started Blend. We started saying, "Look, we're gonna go bring modern technology to mortgage origination," which was a lot easier said than done as someone who had never been in the mortgage industry before other than what I had seen at Palantir.

Michael Turn, Wells Fargo Software Team, Wells Fargo: Mm-hmm.

Nima Ghamsari, Founder, CEO, Blend Labs: Then we somehow got traction with a lot of really large banks and credit unions and independent mortgage companies. Over time they've kind of brought us into different verticals that they serve their consumers, starting with mortgage, then home equity, credit cards, personal loans, auto loans. We have pretty big businesses across all those areas, deposit accounts. I'd say where we really dominate is the top 100 banks and credit unions and some of the very largest independent mortgage companies, because we're enterprise-grade software that's meant to be used at large scale. It doesn't mean it isn't used. We do have smaller customers, but that's where we really dominate.

Michael Turn, Wells Fargo Software Team, Wells Fargo: Yeah.

Nima Ghamsari, Founder, CEO, Blend Labs: Something that's unique about Blend is that we're, we've been able to penetrate, you know, probably like 30 or 40 of the top 100.

Michael Turn, Wells Fargo Software Team, Wells Fargo: Yep.

Nima Ghamsari, Founder, CEO, Blend Labs: Logos.

Michael Turn, Wells Fargo Software Team, Wells Fargo: Yeah. I mean, can you speak to, I guess on the mortgage side, it's important, I think, just to level set the business model, you know, the puts and takes of what drives growth and then, the evolution to consumer and how that's acted as a diversifier and kind of a way to draft off of those positions within some of the larger banks.

Nima Ghamsari, Founder, CEO, Blend Labs: Yeah. So, you know, one thing that I think is, was pretty unique about Blend and probably to some extent is, but it's getting less. Most companies would go out and sell software and say, "I'll charge you $500,000 for this software," or, "I'll charge you $1,000 a user a year." We said, "No, actually we're gonna charge on success." This is something I learned at Palantir. "We're gonna charge on success." Every time you do a loan and we create some value for that loan, that's how we're gonna get paid. We had a per-loan business model from the beginning where we would charge, originally $60, then $70, then $80, and growing per loan and for every mortgage that happens through our system.

The more value we create, we go back to our customers and say, "Hey, it's, it's either it's a separate SKU or we increase the price of our core SKU, but here's the value that, that corresponds to that increase in our price that we're, we're getting from you." We've taken that same business model. That doesn't mean that, that we, you know, we don't offer volume discounts. We do offer volume discounts that allows our customers to commit to us over a certain period of time, a certain amount of volume. It's not like we're only getting paid transactionally. We're getting paid a guaranteed amount plus, you know, potentially some additional amount if they go above those volumes.

Michael Turn, Wells Fargo Software Team, Wells Fargo: Yeah.

Nima Ghamsari, Founder, CEO, Blend Labs: We've taken the same approach to the other aspects of consumer banking as well. If you're opening a checking account or a savings account or a credit card or an auto loan, same business model there.

Michael Turn, Wells Fargo Software Team, Wells Fargo: Can you just speak because I feel like sometimes this is underappreciated, but just both of those examples or segments are, I think, something that most everyone in the room has some intuition around the user experience. What it is that Blend is doing with technology to kind of help modernize that experience and how it works from both the user, the consumer perspective, but also, you know, the mortgage agent or whoever is working on the bank side of the transaction.

Nima Ghamsari, Founder, CEO, Blend Labs: Sure. Yeah. The base, I'll tell you what we've done to date and then where I think we're going from here.

Michael Turn, Wells Fargo Software Team, Wells Fargo: Okay.

Nima Ghamsari, Founder, CEO, Blend Labs: We've done when we got into the industry, it was the way you'd get a mortgage is you would talk to a loan officer, and they would ask a bunch of questions of you. They would ask you for a package of documents. Humans would go review the documents and they would come back to you with additional questions or documentation. The process was very expensive, very time-consuming for the consumer, terrible experience. I just one quick anecdote. One of our very first customers was the largest mortgage lender in the country, largest bank in the country at the time. I remember we they were bringing us on.

I asked the guy who was running the business and he is like, "Hey, can you talk to this digital person?" I was asking her like how, you know, it is 2016, just to put this into perspective. The iPhone had been around for nine years. I asked her, I was like, "Hey, how come when I go to try to apply for a mortgage in your current experience," which, you know, obviously was not great, I was like, "Why cannot I apply from my iPhone? This is the seventh-generation or eighth-generation iPhone.

Michael Turn, Wells Fargo Software Team, Wells Fargo: Right.

Nima Ghamsari, Founder, CEO, Blend Labs: She said, "Oh, we did user research and consumers, like they, you know, we don't really need to support mobile yet." It was more like there's just a business that had been done a certain way for a very long time.

Michael Turn, Wells Fargo Software Team, Wells Fargo: Yeah.

Nima Ghamsari, Founder, CEO, Blend Labs: We wanted to make this not just mobile and digital first, which I think is something we've done a really good job over the past 10, 12 years. We also made it data first. Where we can, we collect data from source documents so that there's no back and forth between the consumer and the lender on getting that information and making sure it's accurate and up to date. That's what I think we've done to date. We offer a platform that our customers use to white label that and offer that to their customers. The internal team members also have their mirrored version of that experience where they can help, you know, walk a customer through and follow through on a loan themselves. I think that's what we've done really over the last 10 years.

Michael Turn, Wells Fargo Software Team, Wells Fargo: Yep.

Nima Ghamsari, Founder, CEO, Blend Labs: Do that across all major product lines that the banks offer on the consumer side. I think where it goes from here though, there's still this big problem of even when you get data and documents digitally and even if the system processes some of that digitally, most of the cost in producing a mortgage today is somebody has to review that document and compare it to what Fannie Mae says is okay to underwrite a mortgage or compare it to your internal guidelines or whatever it is. That goes back and that guideline, those instructions that are given to you as an originator are like a 1,000-page long PDF.

Michael Turn, Wells Fargo Software Team, Wells Fargo: Mm-hmm.

Nima Ghamsari, Founder, CEO, Blend Labs: It is a non-trivial amount of work that goes into actually processing and underwriting these, these loans. It was sort of an intractable problem for a long time to solve that because you can't really code a 1,000-page PDF across 200 lenders that are on our system that are using 100 different investors to buy those loans from them. You can't build a generalized system that can solve such a large problem or such a complex problem. There are hundreds of thousands of consumer situations that are different, which is why I'm so grateful for the advent we were just talking about Gemini 3.0, which came out yesterday, before we got in here. Even before Gemini 3.0, 2.5, which came out last year, now has the capability to follow a 1,000-page long instruction manual extremely accurately.

Michael Turn, Wells Fargo Software Team, Wells Fargo: Yeah.

Nima Ghamsari, Founder, CEO, Blend Labs: Better than humans. I think the next phase of our evolution is we have all this engagement in our system in Blend today.

Michael Turn, Wells Fargo Software Team, Wells Fargo: Mm-hmm.

Nima Ghamsari, Founder, CEO, Blend Labs: Where consumers are doing all their work there. The loan officer's doing all their work there. They're getting all the documentation around the consumer. The consumer's signing all the closing documents. They're even doing the closing in Blend. Instead of having, you know, a consumer upload a document and then it goes to somebody to review on the back end, having our system review it, process it in real time, not just for the consumer to get that feedback, which is super valuable, but also it's a bunch of manual labor costs for the lender. I think I wanna make it so that a bank can fully autonomously offer these products to their consumer in a way that they can still have human oversight.

Michael Turn, Wells Fargo Software Team, Wells Fargo: Mm-hmm.

Nima Ghamsari, Founder, CEO, Blend Labs: They still check the work that the system is doing, but in a way that's much lower cost for them, which means some of that will hopefully go back to consumers in the form of better rates and better products. Some of that will go to them in the form of more profits. Some of that will come to us in the form of supporting that value chain.

Michael Turn, Wells Fargo Software Team, Wells Fargo: I'd be curious to know how much of that it comes up in your customer conversations currently because AI is kind of a it's been the topic du jour at this conference for several years now, but it's definitely more palpable now, right? I think both companies and executives are wrapping their heads around what the technology can do and how they could use it. Your business model seems in some ways more naturally aligned because you're not seat-based, right? So you're not necessarily running into the friction of like, "Well, that would remove seats. And so how do we do that?

Nima Ghamsari, Founder, CEO, Blend Labs: Yeah. It is like the first nine years of this company's existence, everyone was telling me we need to move to a seat-based model instead of a consumption-based or success-based model.

Michael Turn, Wells Fargo Software Team, Wells Fargo: Yep.

Nima Ghamsari, Founder, CEO, Blend Labs: I kept telling them, "I just don't think that's right.

Michael Turn, Wells Fargo Software Team, Wells Fargo: Yeah.

Nima Ghamsari, Founder, CEO, Blend Labs: Like you wanna be aligned in outcomes with your consumer.

Michael Turn, Wells Fargo Software Team, Wells Fargo: Yep.

Nima Ghamsari, Founder, CEO, Blend Labs: Or your end customer, in which case the bank for us.

Michael Turn, Wells Fargo Software Team, Wells Fargo: Yep.

Nima Ghamsari, Founder, CEO, Blend Labs: You know, I learned that from Palantir. Palantir, we were, they were infamous for that at the time. Now they're famous for that, 12 years later or 15 years later. It is just so much better to be aligned with your incentives. If our incentive is to drive down cost for them or to drive up revenue for them, like I wanna be aligned with that.

Michael Turn, Wells Fargo Software Team, Wells Fargo: Yeah.

Nima Ghamsari, Founder, CEO, Blend Labs: Yeah, 100%. It is, it is not, I think, I think the reason that Blend is uniquely positioned to do this is not really our business model, although I think it helps.

Michael Turn, Wells Fargo Software Team, Wells Fargo: Mm-hmm.

Nima Ghamsari, Founder, CEO, Blend Labs: It's because we're the system of engagement that all these people already use.

Michael Turn, Wells Fargo Software Team, Wells Fargo: Right.

Nima Ghamsari, Founder, CEO, Blend Labs: To do all of this work. We're not some 60-year-old green screen technology either.

Michael Turn, Wells Fargo Software Team, Wells Fargo: Mm-hmm.

Nima Ghamsari, Founder, CEO, Blend Labs: It is not like it is hard for us to incorporate this into the core workflow that these banks and lenders are using for almost 20% of the mortgages and, you know, millions of personal loans and checking accounts and things like that. Like we are gonna do it.

Michael Turn, Wells Fargo Software Team, Wells Fargo: Yeah.

Nima Ghamsari, Founder, CEO, Blend Labs: Our customers are gonna benefit from it. We're gonna ask for a small portion of that benefit back to us.

Michael Turn, Wells Fargo Software Team, Wells Fargo: Back to just the initial question. The reason I ask is because there are kind of a few different factors in weighing when I'm asking this. One is like financial services slower to adopt new technology.

Nima Ghamsari, Founder, CEO, Blend Labs: True. Yeah. Yeah.

Michael Turn, Wells Fargo Software Team, Wells Fargo: Other is like mortgage industry though, high degree of complexity in what you're talking about, documentation and things that lend themselves naturally to the, the way the technology works. How quickly do you think this will start to come up? Is it coming up in conversations you're having with companies, with banks currently around kind of finding ways to implement generative technology to become more efficient?

Nima Ghamsari, Founder, CEO, Blend Labs: I think just to clarify one thing, I think the big unlock here and this is important to the story I'm about to tell.

Michael Turn, Wells Fargo Software Team, Wells Fargo: Yep.

Nima Ghamsari, Founder, CEO, Blend Labs: The big unlock here is agentic AI.

Michael Turn, Wells Fargo Software Team, Wells Fargo: Yep.

Nima Ghamsari, Founder, CEO, Blend Labs: Where you give it some instructions and some tools and it goes and it serves a certain persona. We'll have agentic AI that serves as the loan officer assistant or the loan processor assistant or the underwriter assistant that's now gonna get pulled way up to the front of the process that would previously be something that would happen 7, 10, 12 days down in the process.

Michael Turn, Wells Fargo Software Team, Wells Fargo: Yep.

Nima Ghamsari, Founder, CEO, Blend Labs: can be a big source of frustration and cost for everyone involved. The agentic AI is a big unlock for us and for our customers. To your point though, people are moving at different paces in banking. Some of it is just kind of standard FUD, you know, fear, uncertainty, doubt. Some of it is, you know, less of that and more of they're worried they're gonna get hammered by regulators.

Michael Turn, Wells Fargo Software Team, Wells Fargo: Sure.

Nima Ghamsari, Founder, CEO, Blend Labs: They do feel a little bit more unchained in this.

Michael Turn, Wells Fargo Software Team, Wells Fargo: Sure.

Nima Ghamsari, Founder, CEO, Blend Labs: Economy in this administration. And then some of it is I think that there's, it's something that at the very top of the house like, oh, this is the story I was gonna tell. I was on site with the CEO of one of the top, you know, 10 or 15 banks, in the last two months. And I'm, you know, I'm meeting with, you know, I'm talking to him. And he's like, "There's two things I really care about right now. One is stablecoins 'cause I wanna understand if that can help us with our international businesses and things like that. And the other one is agentic AI." Like, "I wanna be all in on those two things.

Michael Turn, Wells Fargo Software Team, Wells Fargo: Mm-hmm.

Nima Ghamsari, Founder, CEO, Blend Labs: I know it's my job to push that." The next meeting, a person I talked to there was a CTO of this bank. This is already a customer of ours, by the way. This is not like some prospect discussion. She's like, "Yeah. We're getting ourselves ready. We're gonna start with, like, you know, sort of internal chatbots. Then maybe next year we're gonna move into potentially external chatbots. In 2026 or 2027, we're gonna start using generative capabilities. We really wanna get into agentic AI in 2028." I had to go back to the CEO and say, "I just, like, yeah, I don't know if you're gonna get lapped.

I can't say with certainty, but I can tell you that you'd be a lot better off if you move faster. I think that the market will sort of evolve organically. There will be winners and losers.

Michael Turn, Wells Fargo Software Team, Wells Fargo: Yep.

Nima Ghamsari, Founder, CEO, Blend Labs: I can say in aggregate, it's in almost every discussion I have with our customers, there are some that are moving super fast with us.

Michael Turn, Wells Fargo Software Team, Wells Fargo: Yep.

Nima Ghamsari, Founder, CEO, Blend Labs: There are some that are, you know, gonna take their time.

Michael Turn, Wells Fargo Software Team, Wells Fargo: Yep. That's all super interesting.

Nima Ghamsari, Founder, CEO, Blend Labs: You look at you work at a very large bank.

Michael Turn, Wells Fargo Software Team, Wells Fargo: I do. AI is very top of mind.

Nima Ghamsari, Founder, CEO, Blend Labs: Yeah.

Michael Turn, Wells Fargo Software Team, Wells Fargo: And you know, the thing that is, the thing that leaves an impression on me is I always say, you know, cloud was a major tech cycle for software. But I don't think there was as significant buy-in from executives this early as there is with AI, right? I think cloud was like a it's a tech shift where we can see the value in getting there, but it was gradual. And I think AI has the attention of most senior decision makers we speak with, right, across this conference and just across various industries. So that's definitely opportunity.

Nima Ghamsari, Founder, CEO, Blend Labs: There are more practical implications 'cause they.

Michael Turn, Wells Fargo Software Team, Wells Fargo: For sure.

Nima Ghamsari, Founder, CEO, Blend Labs: The beauty of when I was saying the example I just gave around the loan officer assistant agent and the processor agent and the underwriter agent that we I just talked about.

Michael Turn, Wells Fargo Software Team, Wells Fargo: Mm-hmm.

Nima Ghamsari, Founder, CEO, Blend Labs: Those are real people that are employed that that executive can understand how this is gonna make my workflow better and how.

Michael Turn, Wells Fargo Software Team, Wells Fargo: Yep.

Nima Ghamsari, Founder, CEO, Blend Labs: What, where that is, where that fits in my workflow. It is more tangible.

Michael Turn, Wells Fargo Software Team, Wells Fargo: Yep.

Nima Ghamsari, Founder, CEO, Blend Labs: I think to senior executives.

Michael Turn, Wells Fargo Software Team, Wells Fargo: Companies have always had this idea that we know our data is valuable. You know, our workflows can be improved, but there hasn't been this kind of like tangible technology trend.

Nima Ghamsari, Founder, CEO, Blend Labs: Exactly.

Michael Turn, Wells Fargo Software Team, Wells Fargo: That kinda expresses that.

Nima Ghamsari, Founder, CEO, Blend Labs: Cloud is not as tangible as that.

Michael Turn, Wells Fargo Software Team, Wells Fargo: No.

Nima Ghamsari, Founder, CEO, Blend Labs: The val.

Michael Turn, Wells Fargo Software Team, Wells Fargo: No, it was moving CapEx to OpEx, getting more predictable expense base, right?

Nima Ghamsari, Founder, CEO, Blend Labs: Yeah.

Michael Turn, Wells Fargo Software Team, Wells Fargo: Nice having browser-based technology. Things that were nice but more kind of gradual, right, versus a big potential step function change.

Nima Ghamsari, Founder, CEO, Blend Labs: Yeah. By the way, most of your spend is probably people.

Michael Turn, Wells Fargo Software Team, Wells Fargo: Yep.

Nima Ghamsari, Founder, CEO, Blend Labs: If there's opportunities to do twice as much business with the same staff, I think you guys would take it.

Michael Turn, Wells Fargo Software Team, Wells Fargo: Yep. Yeah. I mean, for better or worse, we're seeing that across a lot of software companies too, right? Before we get into, because this is a, it's an investor conference too, and we'll spend some time on the results. I think it's also useful for you to kinda set the stage of the market backdrop. You know, I think, you know, things have changed within just the overall U.S. housing market over the past couple of years. Maybe before we kinda get into the nuts and bolts of the Q3 print and, you know, what you're kind of operating within currently, just set the stage in terms of macro and, you know, what you've been doing within Blend to position better within that macro.

Nima Ghamsari, Founder, CEO, Blend Labs: Yeah. I mean, everyone's familiar with interest rates and where they are. Interest rates are high. On top of house prices being high, it has been a really negative effect for the mortgage market and the housing market more broadly, I would say. You see it with home builders a little bit too. You know, we, I'd say we went through, you know, at Blend, we went through this tough period in 2022 where we had sort of a moment where we're like, "Hey, not only are rates high, but they're gonna stay high for a while.

Michael Turn, Wells Fargo Software Team, Wells Fargo: Yeah.

Nima Ghamsari, Founder, CEO, Blend Labs: That was a painful realization when initially when rates started going up in 2022, people were like, "Oh, you know, by the end of this year, we'll have, you know, the 10-year treasury yields will be back to 2%.

Michael Turn, Wells Fargo Software Team, Wells Fargo: Yeah.

Nima Ghamsari, Founder, CEO, Blend Labs: It just did not seem like that was gonna happen. We made the decision to say, "Hey, like, let's go be profitable as an institution. Let's get really focused." I'll talk about what we're focused on here in a second 'cause I think this focus is a really good thing for us.

Michael Turn, Wells Fargo Software Team, Wells Fargo: Agreed.

Nima Ghamsari, Founder, CEO, Blend Labs: Let's go and execute against the one or two things we're focused on. We've set ourselves up. We're profitable, non-GAAP operating profitable, trending in all the right directions on that front. I feel really good about what we're spending in terms of our capability for output with that spend. Those are all things that I had to spend two and a half years really working with the team on. Now we feel good there. Now we're fully on offense. What are we focused on? We're focused on our core customer base, which is the largest financial institutions in the country. At the same time, we still serve, like I said, we have a great product that we serve the rest of the market with.

We have good medium small credit unions, medium small mortgage companies that we do a really good job of serving. In terms of what we're gonna help them with going forward, it's in the immediate term, taking advantage of, there's been a lot of equity. When house prices go up, there's a lot of equity that's built in homes.

Michael Turn, Wells Fargo Software Team, Wells Fargo: Mm-hmm.

Nima Ghamsari, Founder, CEO, Blend Labs: A lot of our customers are very interested in doing a lot better job of capturing home equity lending business to their customers. That has been a good business for us. I think that has an opportunity to be a great business for us. We have a lot of very interested customers. That is an immediate term focus for us. I think it has big upside for us next year. Following that, I would say getting them prepared for refinance. This is all on the mortgage and home lending side. Getting them prepared for refinances if rates come down.

Michael Turn, Wells Fargo Software Team, Wells Fargo: Yeah.

Nima Ghamsari, Founder, CEO, Blend Labs: All that with a backdrop of we're building this agentic AI framework that's built on top of our platform that will be behind everything that our system does.

Michael Turn, Wells Fargo Software Team, Wells Fargo: Yeah.

Nima Ghamsari, Founder, CEO, Blend Labs: Those are the three things on the real estate lending side. On the consumer banking side, I'd say where we're really special there is we do millions of new checking and savings accounts. We help banks gather deposits, credit unions gather deposits, which is so important to them. Then all the lending products that tie into that are built on our platform too. Making that not just point solutions for the bank, but tying those things together is where our focus is going into next year.

Michael Turn, Wells Fargo Software Team, Wells Fargo: Okay. That's great. I do wanna spend a little bit of time on the recent quarter. Just maybe frame for investors the Q3 results. I think consumer banking remains a bright spot, but just kinda the puts and takes, indicators you'd suggest investors who maybe aren't paying as close of attention to Blend or paying attention to, you know, and how you'd frame the quarter.

Nima Ghamsari, Founder, CEO, Blend Labs: I'd say that let's start with the takes or the puts. Which one's the bad one? The puts? The puts.

Michael Turn, Wells Fargo Software Team, Wells Fargo: Put or, or probably puts.

Nima Ghamsari, Founder, CEO, Blend Labs: Yeah. Let's start with the puts. I'd say the, the negative things in the quarter, we have been getting out of these. We used to, before we were really focused, when I could not get on a stage and say with like clear conviction, "Here's the only two or three things we're doing." We were trying to sort of help our customers vertically integrate the industry. That meant things like income verification, but that also meant things like homeowners insurance and real estate, you know, real estate partnerships, referral partnerships, title insurance. We were doing a lot of those things built into the mortgage process, which actually all of those businesses can be really good businesses. They all make sense 'cause they're all attached to a mortgage transaction.

Michael Turn, Wells Fargo Software Team, Wells Fargo: Yep.

Nima Ghamsari, Founder, CEO, Blend Labs: I felt really important we had this concept of end-to-end. Like we're gonna be end-to-end. We're gonna solve this problem end-to-end for consumers, for our customers. It's a really good idea in theory. It's probably a really good idea if real estate markets or mortgage markets hadn't taken such a dive.

Michael Turn, Wells Fargo Software Team, Wells Fargo: Right.

Nima Ghamsari, Founder, CEO, Blend Labs: They did. In the process of that, we had to pull out of some of those businesses or at this point now, pretty much all of those, call it non-software businesses. We've said, "Look, we're gonna focus on our core software. We're not gonna do those." One of the puts is those were all part of our top line revenue a year ago.

Michael Turn, Wells Fargo Software Team, Wells Fargo: Right.

Nima Ghamsari, Founder, CEO, Blend Labs: Not all of them, but many of them are part of our top line revenue a year ago. They aren't really anymore.

Michael Turn, Wells Fargo Software Team, Wells Fargo: Yep.

Nima Ghamsari, Founder, CEO, Blend Labs: You know, one of the key metrics we share is our top line revenue in mortgage on a per-funded loan or top line we call economic value per funded loan. It is sort of hard for investors to model out what is happening there. Most of what is happening is we are taking things that were low contribution or negative contribution businesses.

Michael Turn, Wells Fargo Software Team, Wells Fargo: Yep.

Nima Ghamsari, Founder, CEO, Blend Labs: In low markets like this and pushing them out. Our core business outside of one renewal that we talked about on the call is increasing overall. I think that's one of the puts.

Michael Turn, Wells Fargo Software Team, Wells Fargo: Yep.

Nima Ghamsari, Founder, CEO, Blend Labs: Another put that I'll talk about is in 2023, when we were doing all that restructuring, we did lose or start to churn. It takes a few years to churn off of Blend, which is a I think is a take.

Michael Turn, Wells Fargo Software Team, Wells Fargo: Yep.

Nima Ghamsari, Founder, CEO, Blend Labs: It's not to say that I wanna make it hard to get off our system, but I'd rather.

Michael Turn, Wells Fargo Software Team, Wells Fargo: Yep.

Nima Ghamsari, Founder, CEO, Blend Labs: People actually, you know, be really integrated with us so that it is naturally harder for them to get off our system. We had people start to churn in late 2023, early 2024 as a result of restructuring. There's a lot of companies that thought we were going out of business.

Michael Turn, Wells Fargo Software Team, Wells Fargo: Yeah.

Nima Ghamsari, Founder, CEO, Blend Labs: Which we aren't, obviously, now that we're non-GAAP operating profitable and we had a few good cash flow quarters and whatnot. That churn hit and it hit our market share number.

Michael Turn, Wells Fargo Software Team, Wells Fargo: Yep.

Nima Ghamsari, Founder, CEO, Blend Labs: Now, on the flip side though, now I'll switch to the takes. Takes on market share, we've had almost effectively zero. We gave certain numbers around churn on the call. Effectively, you know, rounding to the nearest %, zero net new churn this year or net new notice of churn this year. And we've had a lot of customers signed. Some of the largest servicers in the last 12 months, some of the largest servicers, some of the largest banks. We have a really good pipeline with some of the largest banks in it. Like we're full steam ahead on that. So that's one take.

Another take I would say is, you know, we're sort of knee-deep in getting what we call our rapid suite of products, which is instead of a typical application process, we sort of take and integrate all the things we integrate over the last 10 years: income, assets, credit, pricing of a loan, decisioning of a loan. We move that to the front of the process. We give an offer in the first few screens and lock, you know, get the customer a deal that they like and lock them in early in the process. That rapid suite, which is both for home equity and for mortgage, is in incredibly high demand.

And for us, what that means, going back to, you know, puts and takes, the value that we get per unit, starting with home equity, if these rollouts are successful with customers who are very interested in pushing us really hard to get these live because they want to go out and compete in the market, will go up dramatically.

Michael Turn, Wells Fargo Software Team, Wells Fargo: Yeah.

Nima Ghamsari, Founder, CEO, Blend Labs: Which is really good. I like it because they make more money and they're giving us a small portion of that, which happens to be a lot of money, on a per unit basis. Same, the next one after that will be Rapid Refi. Those will be takes for EVPFL. The consumer business, like you said, doing extremely well there. We're gonna continue to invest in that business. It's just a good, it's a nice thing for us to have for our customers to be able to serve all these products on one platform.

Michael Turn, Wells Fargo Software Team, Wells Fargo: Yeah. I wanna give you a chance to just stay there for a moment because, like, you're, you're, I think what you're taking, you're setting the foundation in some ways. You haven't, like, your gross margins are 78% now, right? So aligned with kinda the move to software, we can kinda see it in the gross margins.

Nima Ghamsari, Founder, CEO, Blend Labs: Our OpEx is a lot better.

Michael Turn, Wells Fargo Software Team, Wells Fargo: Right.

Nima Ghamsari, Founder, CEO, Blend Labs: Partially, partially due to some restructuring stuff, but partially because we're not in businesses that are as OpEx heavy either.

Michael Turn, Wells Fargo Software Team, Wells Fargo: Right.

Nima Ghamsari, Founder, CEO, Blend Labs: We got out of some of those businesses. Yeah, go on.

Michael Turn, Wells Fargo Software Team, Wells Fargo: If you wanna just go further into what some of the new products enable, where you're more enthusiastic, if you wanna talk about kind of incremental margin or the things that you're doing to kinda build back stronger from that foundation, I think it's a good thing to spend more time on.

Nima Ghamsari, Founder, CEO, Blend Labs: Yeah. Let's just talk about the three things that I just highlighted.

Michael Turn, Wells Fargo Software Team, Wells Fargo: Yep.

Nima Ghamsari, Founder, CEO, Blend Labs: On the home lending and one that applies to all of our products. Rapid Home Equity has three really big value propositions to our customers who already use Blend today. Because we give the offer upfront, it has higher conversion. Because we give the offer upfront and as part of that offer, we allow them to consolidate debt to get approved for a higher offer.

Michael Turn, Wells Fargo Software Team, Wells Fargo: Mm-hmm.

Nima Ghamsari, Founder, CEO, Blend Labs: That's more line utilization for the bank, which they make money when these lines are utilized. There's more benefit there. It also decreases cycle time pretty dramatically because, you know, we just do more stuff upfront. That Rapid Home Equity, something I'm very excited about, should be a pretty big increase. Let's say, you know, let's say our home equity product was $1 per unit. You know, I expect Rapid Home Equity to be double that.

Michael Turn, Wells Fargo Software Team, Wells Fargo: Okay.

Nima Ghamsari, Founder, CEO, Blend Labs: potentially or more, all in. Shifting to Rapid Refi, which is the next thing after Rapid Home Equity. Rapid Refi is the same concept. The challenge that our customers have with refis is that they have a book of customers who would, in theory, do business. Like if you're a bank like Wells Fargo or if you're a big servicer on Blend or you're a big mortgage company and you have a million customers that got a mortgage in 2022 to 2025, at some point when rates come down, you have to be ready to capture that book. Most companies, put Rocket aside for a second, most companies are not great at recapturing their portfolio.

Michael Turn, Wells Fargo Software Team, Wells Fargo: Right.

Nima Ghamsari, Founder, CEO, Blend Labs: Because, you know, the person going through the process still has to take 30-45 days to get through a refi, even though it's an existing customer. Rapid Refi is just like Rapid Home Equity. We give the offer upfront. Here's your old payment. Here's your new payment. We drive real simplicity in the process tied to the specific financial situation the consumer's in and the specific loan they're in. We drive them towards completion. We lock them in early on, give them that offer, get them excited, and then help drive that to completion. The bank wins. They get more recapture rate of their existing book, lower operating cost in processing those things. I think similarly, we expect that to have a positive if we execute, right? Like there's a lot of execution. These are not simple things to build.

Nobody's really built these before.

Michael Turn, Wells Fargo Software Team, Wells Fargo: Sure.

Nima Ghamsari, Founder, CEO, Blend Labs: I expect it'll be a lot more EVPFL for us on the mortgage side. The third horizon that I'll talk about is the AI horizon, which is sort of an unbounded size problem because there's thousands of dollars spent manually processing these loans. It's early days there. I don't wanna overpromise anything there, but it's getting a lot of uptake from our customers in terms of interest. We're building as fast as we can. Gemini 3.0 coming out yesterday, I think will be a nice benefit to the accuracy of our system, which I already think can be more accurate than humans even before that launch yesterday.

Michael Turn, Wells Fargo Software Team, Wells Fargo: That's great. A couple more things I wanna hit on if we have time. One is just the partnership with Haveli, I think from the investor standpoint, gets a lot of attention, right? It seems like a win-win. I think it's helped with the kind of the foundational elements we've touched on. You know, what kind of context would you add just in kind of framing that relationship?

Nima Ghamsari, Founder, CEO, Blend Labs: I've known the Haveli team for a long time. You know, I'm somebody who's a skeptic of a lot of things, especially investors. No offense to the people in this room.

Michael Turn, Wells Fargo Software Team, Wells Fargo: They're skeptical too.

Nima Ghamsari, Founder, CEO, Blend Labs: Yeah. They should be skeptical of operators, founders, I guess, too. I got to know them for years.

Michael Turn, Wells Fargo Software Team, Wells Fargo: Yeah.

Nima Ghamsari, Founder, CEO, Blend Labs: It, you know, it's a I think there's, there's sort of a there's certain things, you know, one thing that I learned early on in my career is it's, it's like really double down on your strengths. Don't overly focus on trying to shore up your weaknesses. There are things that Blend is amazing at. We build amazing, we have an amazing customer base. We build amazing technology. We have a really dedicated team who's focused on that. We're amazing at those three things.

Michael Turn, Wells Fargo Software Team, Wells Fargo: Mm-hmm.

Nima Ghamsari, Founder, CEO, Blend Labs: There were things, there are things, and a lot of that stems from like my passion for technology and my passion and focus on the customer. I don't think that these things are set at the top of the house and they have to be driven down from there. There are things that I'm not good at, which then I think manifested in 2020, 2019 to 2024 Blend.

Michael Turn, Wells Fargo Software Team, Wells Fargo: Mm-hmm.

Nima Ghamsari, Founder, CEO, Blend Labs: Which is there were certain aspects of how to operate a company that I was still learning and I was learning on the job. This is basically the first.

Michael Turn, Wells Fargo Software Team, Wells Fargo: Sure.

Nima Ghamsari, Founder, CEO, Blend Labs: This is the second job I've ever had. This is obviously the first time I've been running a public company, and definitely the first time I've been running a company of this scale. Going back to the partnership with Haveli, I think that's where I saw sort of like, you know, somebody coming in, getting a minority position, but then bringing all of their force multiplication around our weaknesses and saying, "We're gonna help you handle that so you can focus on what you're really good at," has been super helpful. I love them as a partner. I think they're a great partner.

Michael Turn, Wells Fargo Software Team, Wells Fargo: I wanna try to fit two more in. I guess the first one is this is kind of a big picture question. Sorry if this is a curveball, but you touched on affordability in the housing market, and it just seems like there's a bottleneck. You see little suggestions of things that could change that, whether it's extending the duration of mortgages or allowing you to bridge like a prior rate over to a kind of a transition to a new home. Are there solutions that you see on the horizon that make sense? Do you have just thoughts on how to kind of improve the situation that we're in as a country?

Nima Ghamsari, Founder, CEO, Blend Labs: On affordability?

Michael Turn, Wells Fargo Software Team, Wells Fargo: Yeah.

Nima Ghamsari, Founder, CEO, Blend Labs: I mean, look, I do think it's sort of an arbitrary time horizon, the 30-year thing.

Michael Turn, Wells Fargo Software Team, Wells Fargo: Yeah.

Nima Ghamsari, Founder, CEO, Blend Labs: Like why wasn't there a 50-year mortgage?

Michael Turn, Wells Fargo Software Team, Wells Fargo: Life expectancies.

Nima Ghamsari, Founder, CEO, Blend Labs: You know, it's like it's your life expectancies changed. The cost of the thing that you were mortgaging changed dramatically higher.

Michael Turn, Wells Fargo Software Team, Wells Fargo: Yeah.

Nima Ghamsari, Founder, CEO, Blend Labs: It doesn't, I don't, you know, I don't think a lot of people ridiculed the 50-year mortgage. I just think 30-year is also an arbitrary number.

Michael Turn, Wells Fargo Software Team, Wells Fargo: Yeah.

Nima Ghamsari, Founder, CEO, Blend Labs: You know, why not offer different, different time periods for that? And then there's sort of a localized problem around being able to build more housing. It's sort of, it's sort of a universal truth at this point. I think almost everybody agrees on this. That doesn't matter what, what level of housing you build unless it's in the very extremes. If you build anywhere in this middle, you know, 90% of price ranges, it'll help affordability across pretty much all price ranges.

Michael Turn, Wells Fargo Software Team, Wells Fargo: Yeah.

Nima Ghamsari, Founder, CEO, Blend Labs: That's a local problem.

Michael Turn, Wells Fargo Software Team, Wells Fargo: Yeah.

Nima Ghamsari, Founder, CEO, Blend Labs: You know, that's a local jurisdictional. Like some, some states it's very hard. I was going through, you know, it, over here near Malibu, there was a bunch of fires last year around this time.

Michael Turn, Wells Fargo Software Team, Wells Fargo: Yeah. Yeah.

Nima Ghamsari, Founder, CEO, Blend Labs: They still haven't built. Like there's a lot of places, I drove through it. There are a lot of places that still you haven't broken ground there.

Michael Turn, Wells Fargo Software Team, Wells Fargo: Yeah.

Nima Ghamsari, Founder, CEO, Blend Labs: Which is not good, especially where when house price in LA are very high. That's a that's another solution to the problem. I think a big on a, a, a third one though is that that $11,000, and this is where I think we can help, that $11,000, there's about $11,000 in cost per mortgage. That $11,000 and the lender side cost, what they not what they charge to the consumer, what, what it costs the lender to offer that mortgage to the consumer. If you can chip away at that, you know, that is that represents about three-quarters of a point in rate to the consumer, which is a few hundred dollars a month.

Michael Turn, Wells Fargo Software Team, Wells Fargo: Yeah.

Nima Ghamsari, Founder, CEO, Blend Labs: These things all add up. I think there's it's gonna be like probably a decent amount of things that have to all come together. I think it will happen though. It's all trending in the right direction. House prices are actually coming down in most MSAs.

Michael Turn, Wells Fargo Software Team, Wells Fargo: Yeah.

Nima Ghamsari, Founder, CEO, Blend Labs: Just positive.

Michael Turn, Wells Fargo Software Team, Wells Fargo: That's good. You have 100 seconds left. I'm gonna leave it to you for closing thoughts. You can go one year, three years, five years out, but things that you would like investors to take away. You've hit on a lot of good points across Blend, but any closing thoughts you'd have?

Nima Ghamsari, Founder, CEO, Blend Labs: I think my, you know, my biggest, the thing that makes me the most bullish on Blend is our position in the market, who we've been able, you know, one of our board members was talking to me after our last board meeting. He's like, "Man, like you don't under," he also, you know, works with a lot of smaller venture-backed companies. And he's like, "Man, you have no idea how many companies would kill to be in your position where you're in all the, all these doors and these banks and credit unions and independent mortgage companies, small and large. Like they would kill to be in your position." You know, we're, we're like, I don't know.

It's, you know, I think a lot of people in our investor base focus on some of the key metrics and disclosures we think about or talk about. What I wanna get everyone focused on over the next few quarters is our execution around these three key areas that I talked about. That's the thing that I think is the difference between this being, you know, a very large, very dominant software company for decades, and, you know, us being a really good but potentially eventually the dinosaur if we can't help them solve the way that they offer these products and the embedding of AI. Like if we can't solve that, I think we'll be extinct too. That's why we're very focused on it. I wanna get our investors focused on it. I really believe in it.

Michael Turn, Wells Fargo Software Team, Wells Fargo: Yeah.

Nima Ghamsari, Founder, CEO, Blend Labs: It's embedded in our DNA at Blend as a result.

Michael Turn, Wells Fargo Software Team, Wells Fargo: Right on time. Nicely done, Nima.

Nima Ghamsari, Founder, CEO, Blend Labs: Yeah.

Michael Turn, Wells Fargo Software Team, Wells Fargo: Appreciate you making time.

Nima Ghamsari, Founder, CEO, Blend Labs: Thank you. Thanks, Michael.

Michael Turn, Wells Fargo Software Team, Wells Fargo: Yep.

Nima Ghamsari, Founder, CEO, Blend Labs: Thanks, everyone.

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