Revenue Performance - Revenue for Q3 2025 was $37.2 million, representing a 14% year-over-year increase[3] - Revenue for Q3 2025 was $37,162,000, representing a 14.8% increase from $32,589,000 in Q3 2024[27] - B2 Cloud Storage revenue reached $20.7 million, reflecting a 28% year-over-year growth[3] - Annual recurring revenue (ARR) was $147.2 million, a 13% year-over-year increase[7] - B2 Cloud Storage ARR was $81.8 million, showing a 26% year-over-year growth[7] - The company expects Q4 2025 revenue to be between $37.3 million and $37.9 million[6] Profitability Metrics - Gross profit was $23.1 million, or 62% of revenue, up from 55% in Q3 2024[3] - Gross profit for Q3 2025 was $23,071,000, up 29.5% from $17,800,000 in Q3 2024, resulting in a gross margin of 62%[27][31] - Adjusted EBITDA was $8.4 million, or 23% of revenue, compared to 12% in Q3 2024[3] - Adjusted EBITDA for Q3 2025 was $8,387,000, compared to $3,749,000 in Q3 2024, reflecting an adjusted EBITDA margin of 23%[32] - Adjusted gross margin for Q3 2025 was 79%, up from 78% in Q3 2024[33] - Non-GAAP net income for Q3 2025 was $1,886,000, compared to a loss of $4,137,000 in Q3 2024[34] Cash Flow and Expenses - Cash flow from operations for the nine months ended September 30, 2025, was $14.2 million, compared to $10.3 million in the same period of 2024[3] - Adjusted Free Cash Flow for the nine months ended September 30, 2025 was $(9,485,000), an improvement from $(15,603,000) in the same period of 2024[35] - Adjusted Free Cash Flow Margin for the nine months ended September 30, 2025 was -9%, an improvement from -17% in the same period of 2024[35] - Operating expenses for Q3 2025 totaled $26,392,000, down from $29,998,000 in Q3 2024[27] - Adjusted operating expenses for Q3 2025 totaled $20,972,000, slightly lower than $21,720,000 in Q3 2024[33] - Total stock-based compensation expense for Q3 2025 was $5,445,000, down from $8,438,000 in Q3 2024[36] Balance Sheet and Equity - Total assets increased to $191,530,000 as of September 30, 2025, up from $168,558,000 as of December 31, 2024[26] - Cash and cash equivalents decreased to $29,077,000 from $45,776,000 at the end of 2024[29] - The company reported a total stockholders' equity of $82,829,000 as of September 30, 2025, up from $77,622,000 at the end of 2024[26] - The weighted average common shares outstanding for Q3 2025 was 56,977,764, compared to 43,515,110 in Q3 2024[27] Losses and Improvements - Net loss for the nine months ended September 30, 2025, was $20,199,000, an improvement from a net loss of $34,154,000 for the same period in 2024[29][32] - The company reported a net loss of $3,778,000 for Q3 2025, an improvement from a loss of $12,753,000 in Q3 2024[34] - Net revenue retention rate (NRR) was 106%, down from 118% in Q3 2024[7] Research and Development - Research and development expenses increased to $11,235,000 in Q3 2025, compared to $10,734,000 in Q3 2024[27] - Research and development expenses for Q3 2025 were $11,235,000, compared to $10,734,000 in Q3 2024[33] Future Projections - Adjusted EBITDA margin for full-year 2025 is projected to be between 18% and 20%, raised from 17% to 19%[6]

Core Insights - BackBlaze (BLZE) is expected to report third-quarter 2025 results on November 6, with revenues estimated at $36.95 million, reflecting a year-over-year increase of 13.37% [1] - The consensus estimate for loss is projected at one cent per share, indicating a 90% improvement from the previous year's loss of ten cents [1] - The company has shown a strong earnings surprise history, with an average positive surprise of 51.02% over the last four quarters [2] Revenue Estimates - The Zacks Consensus Estimate for third-quarter 2025 B2 Cloud Storage revenues is $20.9 million, representing a growth of 29.17% year over year [9] - The estimate for Computer Backup revenues is $16.05 million, indicating a decline of 2.2% from the previous year [9] Operational Momentum - Backblaze has entered the third quarter with solid operational momentum, particularly in its B2 Cloud Storage business, which saw a 29% year-over-year revenue increase [4] - The company aims for third-quarter revenue between $36.7 million and $37.1 million, with adjusted EBITDA margins of 17-19% [4] Growth Drivers - The company's sales pipeline has doubled year over year, contributing to growth [5] - Backblaze added its first six-figure B2 Overdrive customer, indicating strong product fit for high-throughput AI workloads [5][6] Competitive Landscape - Challenges persist in the Computer Backup segment, which has been experiencing low-to-mid single-digit declines [8] - Competition from established players like Dropbox, Datadog, and Snowflake has intensified, impacting market share [8] Stock Performance - Backblaze has seen a 72.9% surge year-to-date, outperforming the Zacks Internet-Software industry and the Computer and Technology sector [10] - The stock is currently trading at 3.58X forward 12-month price-to-sales, below the industry average of 5.34X, indicating attractive valuation [13] Investment Considerations - The company is positioned for growth in its B2 Cloud Storage business and AI workloads, supported by new enterprise security features [15] - However, the stock's sharp year-to-date rally may have priced in much of the optimism, and competition could temper near-term gains [15][16]

Group 1 - Backblaze, Inc. (NASDAQ:BLZE) is gaining attention from hedge funds, indicating a positive sentiment in the small-cap tech sector [1] - Oppenheimer analyst Ittai Kidron has raised the price target for Backblaze from $10 to $11, reflecting confidence in the company's revenue growth and customer acquisition strategies [1][2] - The company is experiencing steady deal flow in Q3 and a healthy pipeline momentum heading into Q4, with the competitive landscape described as "normal" [1][2] Group 2 - Backblaze is recognized for its affordable and scalable B2 cloud platform, catering to developers, SMBs, and enterprise clients with object storage and backup solutions [3] - The company positions itself as a cost-effective alternative to larger hyperscalers in the cloud storage market [3]

Core Insights - The explosive growth of enterprise data presents significant opportunities for cloud infrastructure providers, specifically Backblaze (BLZE) and Snowflake (SNOW), which cater to different segments of the market [1][2] Market Overview - The global cloud analytics market was valued at $35.39 billion in 2024 and is projected to reach $130.63 billion by 2030, with a CAGR of 25.5%, benefiting both BLZE and SNOW as organizations modernize their data architecture [2] Backblaze (BLZE) Analysis - Backblaze has transitioned from a consumer backup provider to an enterprise-focused cloud storage company, with its B2 Cloud Storage business targeting developers and mid-sized enterprises [3] - The Zacks Consensus Estimate for BLZE's Q3 2025 revenues is $36.9 million, indicating a 17% year-over-year growth, while the loss per share is expected to improve by 90% year-over-year [4] - Backblaze faces competitive pressure from major players like AWS, Google Cloud, and Microsoft Azure, while balancing its legacy Computer Backup business with its growing enterprise cloud segment [5] Snowflake (SNOW) Analysis - Snowflake has become integral to enterprise data strategy, enabling organizations to analyze large datasets through its AI-native cloud platform [6] - The Zacks Consensus Estimate for Snowflake's Q3 2025 revenues is $1.18 billion, reflecting a 25.39% year-over-year growth, with EPS projected to increase by 55% year-over-year [8] - Snowflake's AI-driven innovations, such as Snowflake Intelligence and Cortex AI, enhance customer engagement and platform adoption [7] Performance Comparison - Year-to-date, BLZE shares have risen 78% due to optimism around its cloud storage turnaround, while SNOW shares have increased 73% supported by consistent revenue growth and AI integration [9][12] - Snowflake's forward price-to-sales ratio is 16.89x, significantly higher than Backblaze's 3.7x, indicating stronger investor confidence in Snowflake's scale and profitability [10] Conclusion - Both companies are well-positioned to benefit from the growing demand for cloud data infrastructure and AI analytics, but Snowflake's scale, profitability, and consistent execution provide a competitive advantage over Backblaze [15]

Core Insights - Backblaze is committed to the open cloud movement and will participate as a Silver sponsor at KubeCon + CloudNativeCon North America in Atlanta from November 10-13 [1][2] - The conference is expected to attract over 9,000 attendees and focuses on cloud-native developments, particularly in AI applications, allowing Backblaze to showcase its high-throughput cloud object storage [2][4] Company Highlights - Backblaze provides a modern alternative to traditional cloud providers, emphasizing fast, affordable, and independent cloud storage solutions [3] - The company serves over 500,000 customers across 175 countries, offering high-performance, secure cloud object storage for various applications including AI workflows and media management [4] Industry Context - Kubernetes is utilized by 70% of enterprise companies operating in the cloud, highlighting the significance of cloud-native technologies in the current market [2] - The conference will feature a dedicated learning track on AI and machine learning advancements in cloud-native settings, indicating a growing trend in the integration of AI with cloud infrastructure [4]

Core Insights - Backblaze (BLZE) is experiencing growth driven by increasing demand for artificial intelligence and data-heavy workloads, necessitating scalable and cost-efficient storage solutions [1][3] - The B2 Cloud Storage platform is pivotal to this growth, with a significant rise in data stored by AI customers and an increase in AI-focused clients [2][7] - Backblaze's competitive positioning is challenged by companies like Dropbox and Datadog, which are enhancing their AI-enabled cloud infrastructure offerings [4] Company Performance - In Q2 2025, data stored by AI customers increased 40 times year over year, and the number of AI-focused clients grew by 70% [2] - Backblaze anticipates Q3 2025 revenues between $36.7 million and $37.1 million, reflecting approximately 29% year-over-year growth [2] - Year-to-date, Backblaze shares have risen by 51.7%, outperforming the Zacks Internet-Software industry and the Computer and Technology sector [5] Valuation Metrics - Backblaze's forward 12-month price-to-sales ratio stands at 3.16, which is lower than the industry average of 5.45 [9] - The Zacks Consensus Estimate for Q3 2025 indicates a loss of one cent per share, representing a 90% improvement year over year [11]

Core Viewpoint - Backblaze, Inc. is set to report its financial results for the third quarter ending September 30, 2025, on November 6, 2025, before the market opens [1] Financial Results Announcement - The financial results will be released before market open on November 6, 2025 [1] - Following the results release, Backblaze will host a conference call and webcast at 5:00 a.m. PT (8:00 a.m. ET) on the same day to discuss the results [1] - The webcast can be attended via the provided link [1]

Core Insights - Backblaze will showcase new research on cloud storage costs affecting media workflows at NAB Show New York on October 22-23, 2025 [2][8] - The research indicates that 93% of media organizations face unexpected cloud storage fees, with nearly half experiencing these fees monthly [3][4] Cloud Storage Costs Impact - Rising egress fees and unpredictable billing models are forcing media and entertainment companies to make compromises that affect content availability and production strategies [3][4] - 61% of organizations reduce dataset sizes to manage costs, limiting access to valuable content archives [6] - 49% shorten retention policies, risking the loss of media that could be repurposed [6] - 41% curtail usage of existing libraries, reducing monetization opportunities [6] - 29% cut staff allocation tied to content workflows [6] Barriers to Switching Providers - 50% of media leaders cite egress and data movement costs as the biggest barrier to switching providers [7] - 34% are contract-locked, while 42% mention technical complexity as another major barrier [7] - Despite these challenges, 64% are at least slightly likely to consider switching providers in the next year, indicating a rising demand for transparent options [7] Industry Preferences - 67% of media and entertainment organizations prefer best-of-breed technology approaches over one-stop-shop solutions, reflecting frustration with restrictive ecosystems [8] - Key attributes valued in storage providers include compliance (50%), ease of use (42%), customer support (37%), and high throughput (31%) [5]

Core Insights - Backblaze (BLZE) has seen a significant year-to-date (YTD) increase of 56.8%, outperforming the Zacks Internet-Software industry and Zacks Computer and Technology sector, which returned 16.7% and 19.6% respectively [1] - The company is capitalizing on the AI revolution and executing its growth strategy effectively, leading to a critical decision for investors regarding holding positions or seeking better entry points [1] B2 Cloud Storage Growth - Backblaze's B2 Cloud Storage business is the main driver of its expansion, benefiting from increased enterprise adoption and demand for scalable, cost-efficient infrastructure for AI, media, and cybersecurity workloads [4][6] - The company anticipates B2 Cloud Storage revenue growth of 28% to 30% for Q3 2025, with a Zacks Consensus Estimate of $20.88 million, indicating a 29% year-over-year increase [5][8] - The focus on enterprise scale, predictable pricing, and AI-aligned product innovation strengthens B2 Cloud Storage as a durable and profitable growth engine [6] AI and Cybersecurity Integration - Backblaze is enhancing its market position by integrating AI and cybersecurity features into its cloud storage platform, capitalizing on the rising demand for scalable and secure infrastructure [7][9] - AI-related customers are increasingly contributing to enterprise revenues, diversifying growth and improving visibility across data-intensive use cases [9] - New cybersecurity features such as Anomaly Alerts and Enterprise Web Console enhance threat detection and compliance capabilities for enterprises [9] Competitive Landscape - Backblaze faces competition from Dropbox, Datadog, and Amazon, which are targeting overlapping enterprise workloads and expanding their service offerings [12] - Despite its transparent pricing and open-cloud design, competition from larger rivals may limit near-term market share gains [13] Valuation and Market Position - Backblaze's forward price-to-sales ratio stands at 3.27X, compared to 3.12X for Dropbox and 3.06X for Amazon, indicating a relatively high valuation [14] - The company holds a Zacks Value Score of F, suggesting that the stock may be overvalued following its substantial rally [14] - Continued growth in B2 Cloud Storage and strong demand for AI-related services could justify the current valuation, but investors may prefer to hold existing positions while waiting for more attractive entry points [14][16]

Market Overview - The current stock market environment is challenging, with the S&P 500 showing signs of weakness and potential for decline with negative news [1] Investment Strategy - The suggested strategy involves a rotation out of certain sectors, reflecting a cautious approach to current market conditions [1] Analyst Background - Gary Alexander has extensive experience in technology sectors, having worked on Wall Street and in Silicon Valley, and has been advising seed-round startups [1]