Group 1 - The S&P 500 has recently returned to positive territory for the year, but there are concerns about high valuations in a volatile macroeconomic environment [1] - Small-cap stocks are identified as a significant area of value, with valuation discounts noted [1] Group 2 - Gary Alexander has extensive experience in technology sectors, having worked on Wall Street and in Silicon Valley, and advises seed-round startups [1] - He has been a contributor to Seeking Alpha since 2017 and has been featured in various web publications [1]

Backblaze (BLZE) FY Conference Summary Company Overview - Backblaze is a cloud storage company that provides inexpensive, high-performance cloud storage primarily for businesses [2][3] - The company competes with traditional cloud providers like Amazon, Google, and Microsoft, focusing on object storage [3][4] Core Business and Product Offerings - Backblaze started with a focus on backup but has expanded to support various use cases, including media storage and AI [3][8] - The company offers object storage, which is cost-efficient for large-scale unstructured data [4] - Backblaze's pricing is approximately 80% lower than traditional cloud providers, with free egress, allowing customers to move data easily [5][6] Recent Product Launches - The company launched "OverDrive," a high-throughput offering for large datasets, aimed at customers with intensive data transfer needs [6][8] - "Shard Stash," a patent-pending technology, enhances upload speeds by up to 30% compared to traditional providers [5][12] Customer Use Cases - Backblaze supports various high-performance workloads, including streaming video, surveillance, and analytics [8] - A notable customer example involves a company collecting vast amounts of internet data for LLMs, benefiting from Backblaze's cost efficiency and rapid data transfer capabilities [8][12] Customer Retention and Growth Metrics - Backblaze has a 90% gross customer retention rate, with an average customer staying for about a decade [25] - The company reported a 17% net revenue retention rate, indicating strong customer expansion [25][26] - The largest total contract value customer recently switched from AWS to Backblaze, highlighting competitive advantages [26][29] Go-to-Market Strategy - Backblaze has transitioned to a more direct sales approach, hiring a new chief revenue officer and expanding the sales team [32][33] - The company utilizes self-serve, direct sales, channel partnerships, and OEM strategies to reach customers [35][36] Partnerships and Industry Applications - Backblaze has formed partnerships with companies like PureNodal for GPU infrastructure, integrating their storage solutions into GPU offerings [36][37] - The company is also targeting the media and entertainment sector, providing storage solutions for media asset management and distribution [41][44] Market Conditions and Customer Behavior - Despite macroeconomic concerns, Backblaze has not seen significant impacts on self-serve customer acquisition, with thousands of new customers each quarter [46][47] - The company noted a 66% increase in AI customers and a 25-fold increase in data volume from these customers, indicating strong growth in this segment [58][59] Financial Outlook - Backblaze anticipates continued growth, with expectations for quarter-over-quarter acceleration in 2025, aiming for at least 30% growth by Q4 [62][63] - The company is focused on optimizing gross margins through operational efficiencies and extended useful life of hardware [69][71] Conclusion - Backblaze is well-positioned in the cloud storage market, leveraging competitive pricing, innovative technology, and a strong focus on customer retention and growth. The company is actively expanding its product offerings and partnerships, particularly in the AI and media sectors, while navigating macroeconomic challenges effectively.

Core Insights - Backblaze, Inc. reported a quarterly loss of $0.03 per share, better than the Zacks Consensus Estimate of a loss of $0.06, and improved from a loss of $0.14 per share a year ago, representing a 50% earnings surprise [1] - The company achieved revenues of $34.61 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 1.08% and showing a year-over-year increase from $29.97 million [2] - Backblaze has consistently exceeded consensus EPS estimates over the last four quarters [2] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is -$0.05 on revenues of $35.18 million, and for the current fiscal year, it is -$0.15 on revenues of $143.8 million [7] - The estimate revisions trend for Backblaze is currently unfavorable, leading to a Zacks Rank 4 (Sell) for the stock, indicating expected underperformance in the near future [6] Industry Context - The Internet - Software industry, to which Backblaze belongs, is currently ranked in the top 37% of over 250 Zacks industries, suggesting a favorable environment compared to the bottom 50% [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact Backblaze's stock performance [5]

Q1 2025 Performance - Backblaze beat revenue and adjusted EBITDA margin expectations for Q1 2025[8, 9, 21, 22] - Total company revenue grew by 15% year-over-year, reaching $34.6 million in Q1 2025[23, 24] - B2 Cloud Storage revenue experienced a 23% year-over-year increase in Q1 2025, up from 22% in Q4[21, 22, 23, 24] - The company's ARR(Annual Recurring Revenue) for Q1 2025 was $140.8 million for the total company and $73.8 million for B2 Cloud Storage[24] - Adjusted EBITDA margin was 18% in Q1 2025, compared to 6% in Q1 2024[47] - Adjusted Free Cash Flow margin improved to -6% in Q1 2025, compared to -17% in Q1 2024[48] AI Momentum - AI customer data grew by 25x year-over-year[8, 9, 10] - The company launched the new "B2 Overdrive Offering" to cater to AI/ML and HPC workloads[9, 11] Go-to-Market Transformation - Bookings more than doubled year-over-year in Q1 2025[9, 15, 16] - The company signed its largest Total Contract Value (TCV) deal ever, a multi-million dollar contract over a multi-year period[8, 9, 15, 16, 17] Outlook - The company raised its full-year adjusted EBITDA margin guidance for 2025 from 16%-18% to 17%-19%[21, 22, 39] - Q2 2025 revenue is projected to be between $35.2 million and $35.6 million[38] - Q2 2025 adjusted EBITDA margin is projected to be between 14% and 16%[39]

Financial Data and Key Metrics Changes - Company revenue grew 15% year-over-year, reaching $34.6 million in Q1 2025 [24][8] - Adjusted EBITDA margin tripled to 18% compared to 6% in the prior year [31][24] - Adjusted free cash flow margin improved from negative 17% to negative 6% year-over-year [33][31] Business Line Data and Key Metrics Changes - B2 cloud storage revenue growth accelerated to 23% year-over-year, up from 22% in the previous quarter [24][8] - Computer backup business grew 8% from the prior year, primarily driven by a price increase [25][24] - Net revenue retention (NRR) for B2 segment was 117%, down from 126% due to the lapping of a price increase [25][24] Market Data and Key Metrics Changes - AI customer base grew by 66%, with data usage increasing by 25 times [13][8] - Gross customer retention remained strong at approximately 90% across both B2 and Computer Backup segments [25][24] Company Strategy and Development Direction - The company is focused on a go-to-market transformation emphasizing upscaling, partnerships, and sales plays [15][20] - New product offering, B2 Cloud Storage OverDrive, aims to optimize performance for large datasets and high-performance throughput [14][8] - Partnerships with high-performance compute providers and media companies are being established to support AI workloads and modern workflows [18][20] Management's Comments on Operating Environment and Future Outlook - Management noted that some customers are taking longer to make decisions due to macroeconomic factors, but self-serve business continues to grow [86][8] - The company remains confident in achieving 30% B2 growth and positive adjusted free cash flow by Q4 2025 [36][88] - Management highlighted the importance of accurate information in combating market manipulation schemes [12][11] Other Important Information - The company has successfully resolved SOX material weaknesses and appointed Deloitte as new auditors [34][35] - Anticipated Q2 2025 revenues are projected to be between $35.2 million and $35.6 million, reflecting B2 revenue growth of 23% to 25% [35][36] Q&A Session Summary Question: Can you elaborate on the AI side and its impact on the pipeline? - Management expressed excitement about AI opportunities, noting it was the fastest-growing part of the business in Q1 [40][39] Question: What progress has been made in the B2 sales build? - Management confirmed that organic growth has accelerated and sales bookings have more than doubled [43][42] Question: What should be assumed for dilution in the next year or two? - Management indicated that reducing dilution is a priority, but specific projections are not yet available [46][45] Question: Can you discuss the negotiation process for the record TCV deal? - Management explained that the deal involved displacing AWS and was a result of the customer’s growing familiarity with Backblaze's platform [55][54] Question: What are the dynamics around demand generation? - Management noted that changes in their marketing strategy have led to increased outbound efforts, which are expected to ramp up in Q2 [61][60] Question: How has the competitive landscape changed since the IPO? - Management stated that while the market remains competitive, Backblaze continues to win customers from larger players and is seeing strong win rates [92][91]

Financial Data and Key Metrics Changes - Company revenue grew 15% year-over-year, reaching $34.6 million in Q1 2025 [21][22] - Adjusted EBITDA margin tripled to 18% compared to 6% in the prior year [29] - Adjusted free cash flow margin improved from negative 17% to negative 6% year-over-year [31] Business Line Data and Key Metrics Changes - B2 cloud storage revenue growth accelerated to 23% year-over-year, up from 22% in the previous quarter [22] - Computer backup business grew 8% year-over-year, primarily driven by a price increase [23] - Net revenue retention (NRR) for B2 segment was 117%, down from 126% due to the lapping of a price increase [23] Market Data and Key Metrics Changes - AI customer base grew by 66%, with their data increasing by 25 times [11] - Gross customer retention remained strong at approximately 90% across both B2 and Computer Backup segments [24] Company Strategy and Development Direction - The company is focused on a go-to-market transformation emphasizing upscaling, partnerships, and sales plays [13] - New product offering, B2 Cloud Storage OverDrive, aims to optimize performance for large datasets and high-performance throughput [12] - Partnerships with high-performance compute providers and media companies are being established to support AI workloads and modern workflows [15] Management's Comments on Operating Environment and Future Outlook - Management noted that some customers are taking longer to make decisions due to macroeconomic factors, but self-serve business continues to grow [82] - The company remains confident in achieving 30% B2 growth and positive adjusted free cash flow by Q4 2025 [84][86] Other Important Information - The company has successfully remediated SOX material weaknesses and appointed new auditors [32] - Anticipated Q2 2025 revenues are projected to be between $35.2 million and $35.6 million, with B2 revenue growth expected between 23% and 25% [33] Q&A Session Summary Question: Can you elaborate on the AI side and its impact on revenue? - Management expressed excitement about AI being the fastest-growing part of the business, with significant momentum and various use cases [38][40] Question: What progress has been made in the B2 sales build? - Management confirmed that organic growth has accelerated and sales bookings have more than doubled, but there is still work to be done in partner and demand generation [41] Question: What should be assumed for dilution in the next year or two? - Management indicated that reducing dilution is a priority, but specific projections are not yet available [44] Question: Can you discuss the record contract signed and the negotiation process? - The contract involved displacing AWS, and the customer was impressed with Backblaze's performance and customer service [50][52] Question: What are the dynamics around demand generation and lead flow? - Management noted that restructuring has led to increased outbound efforts, and they are seeing solid momentum in demand generation [58] Question: How has the competitive landscape changed since the IPO? - Management stated that while the market remains competitive with major players, there are still significant opportunities for growth and customer acquisition [90][92]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ___________________________________ FORM 10-Q ___________________________________ (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-41026 ________________________________ ...

Revenue Growth - Revenue for Q1 2025 was $34.6 million, representing a 15% year-over-year growth[3] - B2 Cloud Storage revenue reached $18.0 million, an increase of 23% year-over-year[3] - Annual recurring revenue (ARR) was $140.8 million, up 15% year-over-year, with B2 Cloud Storage ARR at $73.8 million, a 24% increase[8] - For Q2 2025, the company expects revenue growth of 21-23%[7] - Revenue for Q1 2025 was $34,613, an increase of 15% from $29,968 in Q1 2024[31] Profitability and Loss - Net loss for Q1 2025 was $9.3 million, improved from a net loss of $11.1 million in Q1 2024[3] - Adjusted EBITDA for Q1 2025 was $6.4 million, or 18% of revenue, compared to $1.9 million or 6% of revenue in Q1 2024[3] - Non-GAAP net loss for Q1 2025 was $1,816,000, an improvement from a loss of $5,542,000 in Q1 2024, representing a 67.2% reduction[39] - Non-GAAP net loss per share decreased to $0.03 in Q1 2025 from $0.14 in Q1 2024, indicating a significant improvement in per-share performance[39] - Adjusted Free Cash Flow for Q1 2025 was $(2,111,000), compared to $(5,132,000) in Q1 2024, reflecting a 58.8% improvement[40] - Adjusted Free Cash Flow Margin improved to -6% in Q1 2025 from -17% in Q1 2024, indicating better cash flow management[40] Customer Metrics - The net revenue retention rate (NRR) was 113%, compared to 112% in Q1 2024[8] - Gross customer retention rate reflects the company's ability to retain customers, calculated as a trailing four-quarter average[25] - In Q4 2023, the number of customers was refined to include end-user customers purchasing through resellers, resulting in a 1% decrease in the 120% NRR metric reported for Q3 2023[26] Cash and Assets - Cash and marketable securities totaled $53.2 million as of March 31, 2025[3] - Cash and cash equivalents at the end of Q1 2025 were $40,606, down from $45,776 at the beginning of the period[33] - Total assets as of March 31, 2025, were $170,164, compared to $168,558 as of December 31, 2024[30] Stock-Based Compensation - Total stock-based compensation expense increased to $7,359,000 in Q1 2025 from $5,529,000 in Q1 2024, a rise of 33.1%[41] - Research and development stock-based compensation rose to $3,467,000 in Q1 2025, up from $2,108,000 in Q1 2024, marking a 64.4% increase[41] Shareholder Metrics - The weighted average common shares outstanding increased to 54,060,249 in Q1 2025 from 40,225,239 in Q1 2024, reflecting a 34.4% increase in shares[39] Operating Activities - Net cash provided by operating activities for Q1 2025 was $4,943,000, compared to $3,416,000 in Q1 2024, showing a 44.8% increase[40] - Capital expenditures decreased to $2,626,000 in Q1 2025 from $3,746,000 in Q1 2024, a reduction of 29.9%[40] New Initiatives - The company signed its largest contractual commitment, a multi-million dollar contract over a multi-year period[2] - B2 Cloud Storage Overdrive was launched, optimized for AI customer demands[3]

Core Viewpoint - Rosen Law Firm is investigating potential securities claims on behalf of shareholders of Backblaze, Inc. due to allegations of materially misleading business information issued by the company [1]. Group 1: Investigation and Allegations - The investigation is prompted by a report from Morpheus Research, which accused Backblaze of financial missteps and questionable accounting practices since its IPO in November 2021 [3]. - Following the release of the Morpheus Research report, Backblaze's stock experienced a decline of 2.1% on April 24, 2025 [3]. Group 2: Class Action Details - Shareholders who purchased Backblaze securities may be entitled to compensation through a class action lawsuit, with no out-of-pocket fees due to a contingency fee arrangement [2]. - Interested investors can join the class action by submitting a form or contacting the Rosen Law Firm directly [2]. Group 3: Rosen Law Firm's Credentials - The Rosen Law Firm has a strong track record in securities class actions, having achieved the largest settlement against a Chinese company and consistently ranking among the top firms for securities class action settlements since 2013 [4]. - In 2019, the firm secured over $438 million for investors, showcasing its capability in recovering significant amounts for its clients [4].

NEW YORK, May 05, 2025 (GLOBE NEWSWIRE) -- Pomerantz LLP is investigating claims on behalf of investors of Backblaze, Inc. (“Backblaze” or the “Company”) (NASDAQ: BLZE). Such investors are advised to contact Danielle Peyton at newaction@pomlaw.com or 646-581-9980, ext. 7980. The investigation concerns whether Backblaze and certain of its officers and/or directors have engaged in securities fraud or other unlawful business practices.  [Click here for information about joining the class action] On April 24, 2 ...