Company: BLND
Filing Date: 2025-03-13
Form Type: 10-K
Source: 0001855747-25-000017
Chunk: 4

Company: Blend Labs, Inc.
Filing Date: 2025-03-13
Form: 10-K
Item: Item 7
Chunk 4
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, we entered into a strategic partnership agreement with Covered whereby we granted Covered a five-year term license allowing Covered to integrate their insurance solutions into our platform for an annual license fee plus variable charges and sold our insurance business to Covered for cash proceeds of $10.1 million and a warrant to purchase up to 177,516 of Covered’s Class B Units, at a purchase price of $0.001 per unit (the “Covered Warrant”). Refer to Note 10, Redeemable Convertible Stock, and Note 16, Strategic Partnership and Sale of Insurance Business, of the Notes to Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K, for additional information regarding these strategic transactions. 

Components of Results of Operations

Revenue

Blend Platform

In our Blend Platform segment, we generate revenue from fees paid by customers to access our software platform and complete the transactions. Fees are assessed based on completed transactions, such as a funded loan, new account opening, closing transaction or API call. Completed transaction fees are determined by the number and type of software platform components that are needed to support each product offering. We do not charge for abandoned or rejected applications, even though they cause us to incur costs related to these applications. Arrangements with our customers do not provide the contractual right to take possession of our software at any point in time. Revenue is recognized when access to our platform is provisioned to our customers or as transactions are completed, in an amount that reflects the consideration we expect to be entitled to in exchange for those services. We also generate revenue from providing access to Blend Builder, professional services related to the deployment of our platform, premier support services, and consulting services. We also earn revenue from third-party providers which integrate their marketplaces into our platform for services such as property and casualty insurance. We typically charge third-party providers a combination of fixed and variable license fees.

Our customers have the ability to access our platform under subscription arrangements, in which customers commit to a minimum number of completed transactions at specified prices over the contract term, or under usage-based arrangements, in which customers prepay a fixed amount in advance, typically annually or semi-annually, based on their anticipated consumption of specified products at specified prices or pay monthly in arrears a variable amount for completed transactions at specified prices. Our subscription and prepaid usage-based arrangements are generally noncancelable, and we may also earn additional overage fees if the number of completed transactions exceeds the contractual amounts. Our usage-based arrangements paid in