Financial Performance - Backblaze reported Q3 revenue of $37.2 million, a 14% year-over-year increase, exceeding market expectations [1] - Non-GAAP EPS was $0.03, surpassing market expectations, compared to a loss of $0.10 per share in the same period last year [1] - Adjusted gross profit for Q3 was $29.4 million, representing 79% of revenue, up from $25.5 million or 78% of revenue in the previous year [2] Business Segments - B2 cloud storage revenue reached $20.7 million, a 28% year-over-year growth, while computer backup revenue remained flat at $16.5 million [1] - The company secured a seven-figure expansion deal with an existing customer, highlighting the value of its offerings in the AI and data-intensive workflow space [2] Profitability and Cash Flow - Adjusted EBITDA for Q3 was $8.4 million, accounting for 23% of revenue, compared to $3.7 million or 12% of revenue in the previous year [2] - The company achieved a significant milestone in profitability, with non-GAAP net profit of $1.9 million, compared to a net loss of $4.1 million in the same quarter last year [2][3] - Cash and cash equivalents totaled $50.3 million as of September 30, 2025 [2] Future Outlook - For Q4, the company expects revenue between $37.3 million and $37.9 million, with adjusted EBITDA margin between 20% and 22% [3] - Full-year revenue guidance for 2025 is narrowed to between $145.4 million and $146.0 million, with adjusted EBITDA margin expectations raised to between 18% and 20% [3]

Financial Performance - B2 Cloud Storage revenue grew by 29% year-over-year in Q2 2025[11, 19, 33], accelerating from 23% growth in Q1 2025[11] - Total company revenue reached $36.3 million in Q2 2025, representing a 16% year-over-year increase[42] - The company's adjusted EBITDA margin doubled year-over-year[33, 61], reaching 18% in 1H 2025[44] - The company is targeting 30%+ B2 growth in Q4 2025[34, 35, 40] Customer Growth and Value - The number of customers with ARR (Annual Recurring Revenue) above $50,000 increased by 30% year-over-year[19, 20] - AI customers' data stored grew by 40x year-over-year[28] - The AI customer count increased by 70% year-over-year[28] - 3 of the top 10 customers are AI companies[28] Financial Strategy - The company secured a new $20 million line of credit[32, 33] - A stock buyback program of up to $10 million was approved[32, 33, 49, 50] - The company aims to reduce equity dilution by 15% to 25%[34]

Revenue Growth - Backblaze reported a revenue growth of 28% for B2 Cloud Storage in the current quarter compared to the same period last year[128]. - The annual recurring revenue (ARR) for B2 Cloud Storage increased to $81.8 million as of September 30, 2025, up from $64.9 million in the previous year, representing a growth of 26%[144]. - Backblaze's total annual recurring revenue reached $147.2 million as of September 30, 2025, compared to $130.5 million in the previous year[144]. - Revenue for the three months ended September 30, 2025, was $37,162 thousand, a 14% increase from $32,589 thousand in the same period of 2024[168]. Customer Retention - The net revenue retention rate for B2 Cloud Storage was 110% as of September 30, 2025, down from 128% in the previous year, attributed to the impact of a price increase announced in October 2023[145]. - Backblaze's gross customer retention rate remained stable at 89% for B2 Cloud Storage and 90% for Computer Backup as of September 30, 2025[144]. Product Development - The company launched B2 Overdrive, a premium cloud storage solution, in April 2025 to cater to data-intensive workloads[139]. - The company is focusing on expanding revenue within existing customers through new features and enhanced customer success programs[136]. - Backblaze's direct sales activities are increasingly contributing to the acquisition of larger customers as the company moves up-market[126]. Financial Performance - Gross margin improved to 62% for the three months ended September 30, 2025, compared to 55% for the same period in 2024, primarily due to a decrease in depreciation expense[174]. - The net loss for the three months ended September 30, 2025, was $3,778 thousand, compared to a net loss of $12,753 thousand in the same period of 2024[168]. - Adjusted gross profit increased to $29,359 thousand for the three months ended September 30, 2025, compared to $25,469 thousand for the same period in 2024, with an adjusted gross margin of 79%[186]. - Adjusted EBITDA increased to $8,387 thousand for the three months ended September 30, 2025, compared to $3,749 thousand for the same period in 2024, with an adjusted EBITDA margin of 23%[189]. Expenses - Research and development expenses for the three months ended September 30, 2025, were $11,235 thousand, representing 30% of total revenue[168]. - Sales and marketing expenses for the three months ended September 30, 2025, were $8,996 thousand, accounting for 24% of total revenue[168]. - The company expects operating expenses, excluding depreciation and stock-based compensation, to remain flat in 2025 compared to the prior year[158]. - Investment in research and development is anticipated to increase in absolute dollars as the company focuses on enhancing cloud service offerings[160]. Cash Flow and Investments - Net cash provided by operating activities was $14,231 thousand for the nine months ended September 30, 2025, compared to $10,272 thousand for the same period in 2024[195]. - Adjusted free cash flow was $(9,485) thousand for the nine months ended September 30, 2025, improving from $(15,603) thousand for the same period in 2024, with an adjusted free cash flow margin of (9%) compared to (17%) in 2024[195]. - The company incurred cash used in investing activities of $22.2 million for the nine months ended September 30, 2025, up from $11.9 million in the same period of 2024[220]. Debt and Financing - The company has $20.0 million available under a senior secured revolving credit facility, with $2.5 million outstanding as of September 30, 2025, and an interest rate of 7.51%[204]. - The company amended its credit agreement in August 2025 to permit share repurchases, allowing up to $10.0 million to be excluded from covenant restrictions[206]. - The company was in compliance with the covenants under the credit agreement as of September 30, 2025, which includes a minimum liquidity requirement of $10.0 million[207]. Market and Currency Risks - The company has minimal foreign currency risk as most sales and operating expenses are denominated in U.S. dollars[230]. - Future international sales increases may expose the company to foreign currency exchange rate fluctuations[230]. - The company may consider using derivatives or other financial instruments in the future to hedge foreign currency exchange risk[230].

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]