Financial Data and Key Metrics Changes - Revenue for Q3 2024 was $32.6 million, representing a 29% year-over-year growth, in line with guidance [22] - B2 Cloud Storage revenue was $16.2 million, reflecting a 39% increase year-over-year [22] - Adjusted EBITDA margin reached 12%, the highest since going public, compared to a negative 3% in the prior year [24] - Net Revenue Retention (NRR) improved to 118% from 108% year-over-year, while gross customer retention was 90% [23] Business Line Data and Key Metrics Changes - B2 Cloud Storage showed strong growth at 39%, although it was lower than expected due to early churn and large deals closing later in the quarter [22][8] - Computer Backup revenue totaled $16.4 million, reflecting a 20% growth, exceeding expectations due to better retention [22] Market Data and Key Metrics Changes - The company announced the opening of a new data center region in Canada, enhancing its service offerings for Canadian customers [15] - The amount of data stored by AI customers has more than doubled year-over-year, with three AI customers contributing an annual revenue run rate of over $0.5 million [17] Company Strategy and Development Direction - The company is focusing on two major initiatives: driving revenue growth, particularly in B2 Cloud Storage, and achieving cost efficiencies [8] - A go-to-market transformation is underway, emphasizing upskilling, partnerships, and streamlined sales plays to enhance sales productivity [12][13] - The company aims to become a Rule of 40 company over time, balancing revenue growth and free cash flow margin [14][29] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to capture the $55 billion cloud storage opportunity [19] - The company plans to be free cash flow positive by Q4 2025, with an adjusted EBITDA margin of approximately 20% by the end of 2025 [28][29] - Management acknowledged the challenges of churn but highlighted strong NRR and customer retention as indicators of product importance [32][23] Other Important Information - A comprehensive zero-based budgeting exercise is being implemented, resulting in a projected year-over-year cost reduction of over $8 million [21] - The company is on track to end the year with at least $20 million in cash, with significant improvements in cash flow from operations [25][27] Q&A Session Summary Question: Discussion on B2 churn and NRR improvement - Management noted that churn occurred earlier in the quarter than expected, but strong NRR and gross retention were still achieved [32] Question: Upmarket potential for B2 - Management indicated no specific limit to how far B2 can go, with significant storage capacity already in place and recent large deals signed [34] Question: Revenue growth expectations post-price increase - Management expects B2 revenue growth to accelerate after the price increase lapses, with leading indicators suggesting positive momentum [41] Question: Details on workforce reduction - The 12% workforce reduction was part of a zero-based budgeting exercise, with cuts made across various departments, particularly in marketing [43] Question: Gross margin outlook with new data center investment - Management does not anticipate a significant impact on gross margin from the new data center, as it involves colocation and leased hardware [53] Question: Quality of the sales pipeline post-Jason's arrival - Management confirmed that the quality and size of the sales pipeline have improved under the new leadership, with more rigorous controls implemented [54] Question: Sales team expansion amidst cost efficiency initiatives - Management plans to reinvest savings from cost reductions into expanding the sales team to enhance revenue generation [58]

Company Performance - Backblaze, Inc. reported a quarterly loss of $0.10 per share, better than the Zacks Consensus Estimate of a loss of $0.11, and an improvement from a loss of $0.21 per share a year ago, representing an earnings surprise of 9.09% [1] - The company posted revenues of $32.59 million for the quarter ended September 2024, surpassing the Zacks Consensus Estimate by 0.16% and showing an increase from $25.3 million in the same quarter last year [2] - Over the last four quarters, Backblaze has exceeded consensus EPS estimates four times and has also topped consensus revenue estimates four times [2] Stock Outlook - Backblaze shares have increased by approximately 5.3% since the beginning of the year, while the S&P 500 has gained 24.3% [3] - The company's earnings outlook will be crucial for future stock performance, with current consensus EPS estimates at -$0.08 for the coming quarter and -$0.44 for the current fiscal year [4][7] Industry Context - The Internet - Software industry, to which Backblaze belongs, is currently ranked in the top 25% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact Backblaze's stock performance [5]

Customer Base and Revenue Growth - As of September 30, 2024, Backblaze has over 500,000 customers and manages over 3 billion gigabytes of data storage across more than 175 countries[131]. - The Annual Recurring Revenue (ARR) for B2 Cloud Storage increased by $18.1 million, or 39%, to $64.9 million as of September 30, 2024, compared to $46.8 million in the prior year[144][153]. - The ARR for Computer Backup increased by $11.5 million, or 21%, to $65.6 million as of September 30, 2024, compared to $54.1 million in the prior year[144][153]. - Total revenue for Q3 2024 was $32,589,000, a 29% increase from $25,299,000 in Q3 2023[174]. - B2 Cloud Storage revenue increased by $4,574,000 (39%) in Q3 2024, driven by a price increase and increased storage[178]. - Computer Backup revenue rose by $2,716,000 (20%) in Q3 2024, primarily due to price increases implemented in October 2023[178]. Customer Retention and Market Expansion - The Net Revenue Retention Rate (NRR) for B2 Cloud Storage improved to 128% as of September 30, 2024, up from 120% a year earlier, primarily due to a price increase[144][147]. - Backblaze's total company NRR reached 118% as of September 30, 2024, compared to 108% a year earlier[144]. - The Gross Customer Retention Rate for B2 Cloud Storage decreased to 89% as of September 30, 2024, down from 90% in the previous year[144][149]. - Approximately 27% of Backblaze's total revenue for the nine months ended September 30, 2024, originated outside the United States, indicating significant international expansion opportunities[143]. - Backblaze plans to open a new data region in Canada as part of a partnership with a leader in hybrid cloud solutions, aiming to extend market reach[134]. Financial Performance and Cost Management - Gross profit margin improved to 55% in Q3 2024, compared to 46% in Q3 2023[177]. - Operating expenses totaled $29,998,000 in Q3 2024, up from $27,319,000 in Q3 2023[174]. - The net loss for Q3 2024 was $12,753,000, an improvement from a net loss of $16,055,000 in Q3 2023[174]. - The company expects a favorable impact on gross margin over the remainder of 2024 due to recent price increases[162]. - Operating expenses are anticipated to decrease in the near term due to the 2024 Restructuring Plan[163]. - The company is focused on cost-saving initiatives and margin growth, including a restructuring plan approved in November 2024 to improve cost structure and operating efficiency[135]. Research and Development Investments - The company continues to invest in research and development to maintain product quality and drive revenue growth through new product launches[141]. - Research and development expenses were $10,734,000 in Q3 2024, compared to $9,639,000 in Q3 2023[174]. - Investment in research and development is expected to increase in absolute dollars as the company focuses on enhancing its platform and cloud services[165]. - Research and development expenses rose by $1.1 million, or 11%, for the three months ended September 30, 2024, mainly due to increased personnel-related expenses[184]. Cash Flow and Financing - Cash provided by operating activities for the nine months ended September 30, 2024, was $10.3 million, compared to cash used of $10.6 million in the same period of 2023[218][219]. - The company had cash and cash equivalents of $3.0 million and short-term investments of $17.9 million as of September 30, 2024[232]. - The outstanding balance under the revolving credit agreement was $4.7 million, with $15.3 million available for borrowing[208]. - Cash used in investing activities for the nine months ended September 30, 2024, was $11.9 million, primarily due to the purchase of short-term maturity investments of $32.5 million[220]. - The company may seek additional equity or debt financing in the future, but there is no guarantee that it will be able to raise such financing on acceptable terms[204]. Risk Management and Accounting - The company has minimal foreign currency risk as most sales and operating expenses are denominated in U.S. dollars[233]. - Future international sales increases may expose the company to foreign currency exchange rate fluctuations[233]. - The company has not used derivative financial instruments to manage interest rate risk exposure[232]. - There have been no material changes to critical accounting estimates compared to the previous Annual Report[227]. - The company does not believe that a 100 basis point change in interest rates would materially affect its operating results or financial position[232].

Exhibit 99.1 Backblaze Announces Record Adjusted EBITDA Margin as Part of Third Quarter 2024 Financial Results 39% Revenue Growth in B2 Cloud Storage, 29% Revenue Growth Overall in Q3 2024 San Mateo, CA (November 7, 2024)—Backblaze, Inc. (Nasdaq: BLZE), the cloud storage innovator delivering a modern alternative to traditional cloud providers, today announced results for its third quarter ended September 30, 2024. "I'm excited that we have kicked off a go-to-market transformation and continue to build our u ...

SAN MATEO, Calif., Oct. 30, 2024 (GLOBE NEWSWIRE) -- Backblaze, Inc. (Nasdaq: BLZE), the cloud storage innovator providing a modern alternative to traditional cloud providers, and Opti9, an international leader in hybrid cloud solutions, today announced a partnership to bring the performance of Backblaze B2 Cloud Storage to Opti9's suite of managed service offerings and solutions. As part of the partnership, Backblaze announced plans to open a new data region in Canada. Opti9 will be the exclusive Canadian ...

SAN MATEO, Calif., Oct. 17, 2024 (GLOBE NEWSWIRE) -- Backblaze, Inc. (Nasdaq: BLZE), the cloud storage innovator providing a modern alternative to traditional cloud providers, will report financial results for its third quarter ending September 30, 2024 on Thursday, November 7, 2024 after market close. Following the release of results, Backblaze will host a conference call and webcast at 1:30 p.m. PT (4:30 p.m. ET) on November 7, 2024 to discuss the results. Attend the webcast: https://edge.media-server.com ...

Backblaze (NASDAQ: BLZE ) is gaining significant traction in the SMB segment for its B2 Cloud Storage product, which is both simpler and priced significantly lower than offerings from major cloud vendors. The B2 An individual investor primarily focused on undercovered companies, with more than 50 companies on my watchlist. My areas include technology, software, electronics and the energy transition. I have been investing my personal capital for over 7 years in a broad range of companies globally. Through my ...

SAN MATEO, Calif., Sept. 12, 2024 (GLOBE NEWSWIRE) -- Backblaze, Inc. (Nasdaq: BLZE), the cloud storage innovator providing a modern alternative to traditional cloud providers, today announced that Dave Cotten and Teresa Dodson joined the company's sales leadership team. "Adding these seasoned, senior-level sales leaders reinforces our commitment to delivering open cloud solutions that allow our customers to do more with their data," said Jason Wakeam, Chief Revenue Officer at Backblaze. "Dave and Teresa br ...

Shares of Backblaze, Inc. (BLZE) have gained 2.7% over the past four weeks to close the last trading session at $6.51, but there could still be a solid upside left in the stock if short-term price targets of Wall Street analysts are any indication. Going by the price targets, the mean estimate of $11.13 indicates a potential upside of 71%. The mean estimate comprises four short-term price targets with a standard deviation of $1.44. While the lowest estimate of $10 indicates a 53.6% increase from the current ...

Investors might want to bet on Backblaze, Inc. (BLZE) , as it has been recently upgraded to a Zacks Rank #2 (Buy). This upgrade primarily reflects an upward trend in earnings estimates, which is one of the most powerful forces impacting stock prices. A company's changing earnings picture is at the core of the Zacks rating. The system tracks the Zacks Consensus Estimate -- the consensus measure of EPS estimates from the sell-side analysts covering the stock -- for the current and following years. Individual ...