According to HousingWire, Blend Labs reported second quarter revenue of $33.8 million, representing a seven percent increase from the same period last year. The company's software platform business, which makes up the bulk of their revenue, grew to $31.4 million, while their professional services arm brought in $2.4 million. On the bottom line, Blend narrowed its operating loss significantly, moving from a $4.8 million loss the prior year to just $1.6 million this quarter.
The San Francisco mortgage technology company has been focusing heavily on a new artificial intelligence product called Autopilot, which became available commercially on July first. According to the reporting, six lenders have already adopted the platform, with preliminary data showing some impressive results. Customers using Autopilot are seeing improvements in pull-through rates ranging from ten to fifteen percent, and they're experiencing cycle-time improvements of two to four days. The system is automating an average of four and a half hours of fulfillment work per loan.
Blend's management highlighted that the company is taking its own internal operations seriously with what they call Blend 3.0, an approach centered on using AI agents not just in their products but throughout their organization. The company reported that its engineering team has increased its output by 3.6 times since January while maintaining roughly the same number of employees. Beyond the product side, Blend added or expanded fourteen customer contracts during the quarter, with six of those specifically involving the new Autopilot offering.
On the financial health front, Blend ended the quarter with $44.9 million in cash and no debt. The company also returned capital to shareholders through a share buyback program, repurchasing eleven million shares for $18.2 million during the period. Their non-GAAP operating margin improved to seventy-eight percent from seventy-six percent the previous year.
Looking forward, Blend is offering guidance for the third quarter but taking a more cautious stance for the fourth quarter. The company expects fourth quarter mortgage volumes to decline about eleven percent year over year, citing concerns about refinance activity in what they describe as a higher for longer rate environment. They're forecasting their own funded loan volumes could drop between ten and fifteen percent in that quarter.
What I am seeing locally in the Bay Area and across the East Bay is that technology companies serving the mortgage and real estate space are still trying to figure out how to navigate this market. Tools like Autopilot that genuinely speed up the lending process and improve conversion rates are valuable to lenders right now, but the underlying market challenges remain. For our buyers and sellers, this kind of automation might eventually mean faster closings and smoother transactions, though the macro headwinds affecting affordability and inventory are bigger factors in what we're experiencing day to day.
