Company: BLND
Filing Date: 2025-03-13
Form Type: 10-K
Source: 0001855747-25-000017
Chunk: 47

Company: Blend Labs, Inc.
Filing Date: 2025-03-13
Form: 10-K
Item: Item 8
Chunk 47
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 services, not to receive financing from its customers or to provide customers with financing. Deferred Contract Costs The Company capitalizes incremental and recoverable costs of obtaining contracts with customers as deferred contract costs, which consist of sales commissions paid to the Company’s sales force. The Company applies the practical expedient to expense sales commissions as incurred when the amortization period is one year or less.

90

Blend Labs, Inc.Notes to Consolidated Financial Statements

Sales commissions paid to obtain renewal contracts are not considered commensurate with commissions paid for new contracts.  Therefore, deferred contract costs are amortized on a straight-line basis over an estimated period of benefit of five years, which includes subsequent renewal periods. The Company determined the period of benefit by taking into consideration customer attrition and estimated technology life cycles. Amortization expense is included in sales and marketing expenses in the consolidated statements of operations and comprehensive income (loss). The Company evaluates the period of benefit for its new revenue contracts on an annual basis, and reviews deferred contract costs for impairment as of each balance sheet date or whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.Cost of RevenueSoftware-related costs of subscribed hosting, support, and costs of delivering professional services are expensed as incurred.  Costs of subscribed hosting and support are comprised of third-party web hosting costs and software licenses, customer support, and other customer related activities. Costs of professional services consist primarily of personnel and related direct costs, including employee salaries, payroll taxes, business expenses (e.g., employee travel and lodging expenses for customer projects), as well as allocated overhead.  Amortization of capitalized internal-use software development costs is also included within cost of revenue.Cost of revenue related to Title365 services consists of costs of title, escrow and other trustee services, which represent primarily personnel-related expenses of the Company’s Title segment as well as title abstractor, notary, and recording service expense provided by external vendors.Title and Escrow Loss Reserve The Company serves as policy issuing agent for third party underwriters.  The Company may be liable to the underwriter for certain policy claims losses pursuant to the terms of the agency agreement with the underwriter. Reserves for estimated future losses on policies issued are established at the time the title insurance revenue is recognized in accordance with ASC 450, Contingencies, and are based on claim loss history, industry trends, legal environment, geographic considerations, and the type of title insurance policies written.  Title and escrow loss reserves are presented within other current liabilities and other