Core Insights - Backblaze's strategic shift towards cybersecurity innovations positions the company for sustained growth, capitalizing on the increasing demand for data protection and artificial intelligence solutions [1][4] - The company has reported a 16% year-over-year revenue increase in Q2 2025, with B2 Cloud Storage revenue rising by 29%, and expects Q3 revenue to be between $36.7 million and $37.1 million, reflecting a year-over-year growth of 28-30% [3][4] Company Developments - Backblaze is enhancing its enterprise security architecture with tools like AI-powered Anomaly Alerts and the Enterprise Web Console, which improve threat detection and data visibility [2][8] - The Zacks Consensus Estimate for Q3 2025 B2 Cloud Storage revenues is projected at $20.88 million, indicating a 29.05% year-over-year increase, showcasing confidence in the company's growth trajectory [4][8] Competitive Landscape - Backblaze faces competition from Dropbox and Datadog, both of which are intensifying their focus on cybersecurity innovations, integrating AI-based analytics for enhanced data visibility [5] - The competitive environment is becoming increasingly challenging as these companies enhance their threat detection and security monitoring capabilities [5] Financial Performance - Backblaze's shares have increased by 66% year-to-date, outperforming the Zacks Internet-Software industry and the Computer and Technology sector, which returned 19.7% and 24.4% respectively [6] - The company is trading at a forward 12-month price-to-sales ratio of 3.47X, which is lower than the industry's 5.57X, indicating a potentially favorable valuation [10] Earnings Outlook - The Zacks Consensus Estimate for Backblaze's Q3 2025 loss is projected at a penny per share, reflecting a 90% improvement year-over-year [12]

Company Overview - Backblaze, Inc. (BLZE) shares increased by 7.6% to $10.75 in the last trading session, with a notable trading volume and a 21.5% gain over the past four weeks [1] - The company is experiencing accelerated B2 revenue growth, AI-driven opportunities, and innovative product offerings such as B2 Overdrive and enhanced security features [1] Financial Expectations - Backblaze is projected to report a quarterly loss of $0.01 per share, reflecting a year-over-year improvement of +90% [2] - Expected revenues for the upcoming quarter are $36.95 million, which is a 13.4% increase compared to the same quarter last year [2] Earnings Estimates and Stock Performance - The consensus EPS estimate for Backblaze has remained unchanged over the last 30 days, indicating that stock price movements may not continue without trends in earnings estimate revisions [3] - The stock currently holds a Zacks Rank of 2 (Buy), suggesting positive sentiment in the market [3] Industry Comparison - Backblaze operates within the Zacks Internet - Software industry, where Reddit Inc. (RDDT) also competes, having closed 2.6% lower at $257.56 in the last trading session [3] - Reddit Inc. has seen a +212.5% change in its EPS estimate year-over-year, with a current Zacks Rank of 1 (Strong Buy) [4]

Core Viewpoint - Momentum investing focuses on following a stock's recent price trends, aiming to buy high and sell even higher, with the expectation that established trends will continue [1] Company Overview: Backblaze, Inc. (BLZE) - Backblaze, Inc. currently holds a Momentum Style Score of B and a Zacks Rank of 2 (Buy), indicating strong potential for outperformance [2][3] - The stock has seen significant price increases, with a 48.31% rise over the past quarter and a 36.66% increase over the last year, compared to the S&P 500's 9.8% and 15.8% respectively [6] Price Performance - Over the past week, BLZE shares increased by 1.58%, while the Zacks Internet - Software industry rose by 0.24% [5] - The monthly price change for BLZE is 61.51%, significantly outperforming the industry's 0.52% [5] Trading Volume - BLZE has an average 20-day trading volume of 737,278 shares, which is a useful indicator of market interest and can signal bullish or bearish trends [7] Earnings Outlook - In the past two months, four earnings estimates for BLZE have been revised upwards, with the consensus estimate improving from -$0.13 to -$0.03 [9] - For the next fiscal year, three estimates have also moved upwards, indicating positive sentiment regarding future earnings [9] Conclusion - Given the strong momentum indicators and positive earnings revisions, BLZE is positioned as a promising investment opportunity [11]

Group 1 - Backblaze, Inc. (BLZE) has reached a key level of support, with its 50-day simple moving average crossing above the 200-day simple moving average, indicating a "golden cross" which is a bullish signal for potential breakout [1] - The golden cross consists of three stages: a downtrend that bottoms out, the shorter moving average crossing above the longer moving average, and the stock continuing to rise [2] - Over the past four weeks, BLZE has gained 50.8%, and it currently holds a 2 (Buy) rating on the Zacks Rank, suggesting a strong bullish case [3] Group 2 - The positive earnings outlook for BLZE is supported by four upward revisions in earnings estimates over the past 60 days, with no downward revisions, indicating a favorable trend [3] - Investors are encouraged to consider adding BLZE to their watchlist due to the significant technical indicator and the positive movement in earnings estimates [5]

Company Performance - Backblaze, Inc. (BLZE) shares have increased by 50.8% over the past month, reaching a new 52-week high of $8.25 [1] - Year-to-date, Backblaze has gained 36.5%, outperforming the Zacks Computer and Technology sector's 12.4% and the Zacks Internet - Software industry's 19.5% [1] Earnings and Revenue - Backblaze has consistently exceeded earnings expectations, reporting EPS of $0.01 against a consensus estimate of -$0.05 in its last earnings report [2] - For the current fiscal year, Backblaze is projected to have earnings of -$0.03 per share on revenues of $146.26 million, reflecting a 92.5% change in EPS and a 14.59% change in revenues [3] - The next fiscal year forecasts earnings of $0.12 per share on revenues of $167.45 million, indicating a year-over-year change of 475% in EPS and 14.49% in revenues [3] Valuation Metrics - Backblaze has a Value Score of F, while its Growth and Momentum Scores are both A, resulting in a combined VGM Score of B [6] - The stock currently holds a Zacks Rank of 2 (Buy), supported by rising earnings estimates, suggesting potential for further gains [7] Industry Comparison - The Internet - Software industry is positioned in the top 29% of all industries, indicating favorable conditions for both Backblaze and its peer, Karooooo Ltd. (KARO) [10] - Karooooo Ltd. has a Zacks Rank of 2 (Buy) and is expected to post earnings of $1.93 per share on revenues of $308.19 million for the current fiscal year [8][9]

Core Viewpoint - Backblaze, Inc. (BLZE) shares have increased by 39.3% in the past four weeks, closing at $7.65, with a potential upside indicated by Wall Street analysts' price targets suggesting a mean estimate of $10.64, representing a 39.1% upside [1] Price Targets - The average price target consists of seven short-term estimates ranging from a low of $8.00 to a high of $14.00, with a standard deviation of $2.06, indicating variability among analysts [2] - The lowest estimate suggests a 4.6% increase from the current price, while the highest estimate indicates an 83% upside [2] Analyst Sentiment - Analysts show strong agreement regarding BLZE's ability to report better earnings than previously predicted, which supports the view of potential upside [4] - The Zacks Consensus Estimate for the current year has risen by 16.4% over the past month, with four estimates increasing and no negative revisions [12] Zacks Rank - BLZE holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate factors, indicating a strong potential upside [13] Conclusion on Price Targets - While the consensus price target may not be a reliable indicator of the extent of potential gains, the direction implied by these targets appears to be a useful guide for further research [14]

Group 1: SkyWater Technology - SkyWater Technology has a 12-month stock price forecast of $13.00, indicating a 13.50% upside from the current price of $11.45, based on three analyst ratings [2] - The company reported a significant revenue drop of 37% year-over-year in Q2 2025, leading to widened losses per share, although gross margin improved by 20 basis points to 18.5% [2][3] - The acquisition of Fab 25 from Infineon Technologies is expected to generate at least $300 million in annual revenue and enhance EBITDA, with positive impacts anticipated as early as the current quarter [3][4] - SkyWater's acquisition supports a multi-year supply agreement exceeding $1 billion and positions the company favorably amid U.S. regulations favoring onshore semiconductor manufacturing [4] Group 2: Emergent BioSolutions - Emergent BioSolutions has a 12-month stock price forecast of $14.33, representing a 56.61% upside from the current price of $9.15, based on three analyst ratings [5] - The company experienced mixed results in Q2 but improved EPS significantly, beating expectations by 42 cents per share, driven by strong NARCAN sales and cost optimization strategies [6][7] - Emergent secured a $65 million contract with the Ontario Ministry of Health for NARCAN, contributing to the rapid growth of its international medical countermeasures business [8] Group 3: Backblaze - Backblaze has a 12-month stock price forecast of $10.07, indicating a 32.05% upside from the current price of $7.63, based on seven analyst ratings [9] - The company reported a 16% year-over-year revenue increase and a 29% surge in storage revenue due to rising demand from AI, despite wider-than-expected GAAP losses per share [9][10] - Backblaze's adjusted EBITDA margin is improving, and the successful launch of its B2 OverDrive platform is a positive indicator for future growth [10][11] - The stock has gained over 48% in the past month, with unanimous Buy ratings from all seven analysts and a consensus price target suggesting an additional 31% upside [11]

Financial Data and Key Metrics Changes - Total revenue for Q2 2025 was $36.3 million, representing a 16% year-over-year increase [5][22] - B2 revenue reached $19.8 million, up 29% year-over-year [5][22] - Adjusted EBITDA margin doubled year-over-year to 18%, exceeding guidance [6][26] - Gross margin improved to 63% from 55% in the prior year, primarily due to a change in the estimated useful life of fixed assets [25] - Adjusted free cash flow for the quarter was negative 11%, an improvement from negative 21% a year ago [26] Business Line Data and Key Metrics Changes - Computer backup revenue grew 4% year-over-year, but is expected to decline in the low to mid-single digits on a quarterly basis moving forward [23] - The number of customers generating over $50,000 in ARR increased to 150,000, a 30% year-over-year increase [10] - The B2 growth rate accelerated to 29% in Q2, driven by strong direct sales bookings and AI tailwinds [22][26] Market Data and Key Metrics Changes - The number of AI customers grew 70% year-over-year, with data stored by these customers increasing 40 times [15] - AI companies now represent three of the top ten customers, highlighting the growing importance of AI in the market [14] Company Strategy and Development Direction - The company is focused on becoming a profitable Rule of 40 company, emphasizing B2 growth and adjusted free cash flow positivity by Q4 [6][20] - A go-to-market transformation is underway, with significant changes in account-based marketing and customer success strategies [10][12] - The introduction of B2 OverDrive aims to capture high-performance needs in the AI sector, indicating a strategic shift towards high-value customers [8][13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to continue delivering durable and efficient B2 revenue growth, with expectations of exiting the year with at least 30% B2 revenue growth [30] - The management team highlighted the importance of AI as a significant market opportunity, with plans to leverage AI across products and internal initiatives [15][16] Other Important Information - The company announced a stock repurchase program of up to $10 million to reduce equity dilution [29] - A new $20 million line of credit was established to enhance financial flexibility [27] Q&A Session Summary Question: Background on the 7-figure customer deal - The 7-figure customer was an existing smaller customer that significantly increased their data usage due to AI needs, leading to a displacement from a hyperscaler [34][36] Question: Pipeline for B2 OverDrive - The pipeline for B2 OverDrive is still early, with about a dozen companies in discussions, all of which are multi-petabyte customers [40][41] Question: Update on channel efforts - The company is seeing an increasing number and value of leads and closed ARR business through a focused approach on a smaller number of channel partners [42] Question: Customer count decline in computer backup - The gross customer retention rate for computer backup remains strong at 90%, but the business is experiencing a secular decline due to changing consumer behaviors [66] Question: B2 NRR outlook - The decline in B2 NRR is primarily due to price increases lapping, with expectations for stabilization in the coming quarters [90][91] Question: AI storage side disadvantage - The company believes it is at an advantage by participating in all five stages of the AI data pipeline, rather than being limited to just GPU offerings [95][100]

Financial Performance - B2 Cloud Storage revenue grew by 29% year-over-year in Q2 2025 [11, 19, 33], reaching $19.8 million [42] - Total company revenue reached $36.3 million in Q2 2025, representing a 16% year-over-year growth [42] - Adjusted EBITDA margin was 18% in Q2 2025, doubling compared to the previous year [33, 61] - The company is targeting 30%+ B2 growth in Q4 2025 [34] - Adjusted Free Cash Flow margin improved to -11% in Q2 2025 [62] Strategic Initiatives and Growth Drivers - AI is a significant growth driver, with a 70% increase in AI customer count year-over-year [28] and a 40x growth in data stored by AI customers [28] - The company secured a new $20 million line of credit [33] - A stock buyback program of up to $10 million was approved [33, 49, 50] - The company launched new cyber security features, including Anomaly Alerts, Enterprise Web Console, and Bucket Access Logs [16] Customer Success - The company highlighted a B2 Overdrive customer win with a Generative AI Video Company [21] - The company closed a six-figure deal with a hyperscaler displacement customer [24] - The number of customers with ARR above $50,000 increased by 30% year-over-year, reaching 150 [19, 20]

Part I [Part I - Financial Information](index=5&type=section&id=Part%20I%20-%20Financial%20Information) [Item 1. Condensed Consolidated Financial Statements (Unaudited)](index=5&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) The unaudited condensed consolidated financial statements present Backblaze's financial position, operations, and cash flows, highlighting a 16% revenue increase, improved gross margin, and narrowed net loss [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets increased to **$186.0 million** as of June 30, 2025, driven by property and equipment, while total liabilities and stockholders' equity also rose Condensed Consolidated Balance Sheet Data (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $32,187 | $45,776 | | Total current assets | $64,453 | $65,748 | | Property and equipment, net | $49,938 | $42,949 | | Total assets | $186,045 | $168,558 | | **Liabilities & Stockholders' Equity** | | | | Total current liabilities | $59,914 | $59,803 | | Total liabilities | $106,403 | $90,936 | | Total stockholders' equity | $79,642 | $77,622 | | Total liabilities and stockholders' equity | $186,045 | $168,558 | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) Q2 2025 revenue grew **16%** to **$36.3 million**, with gross profit up **34%** and gross margin expanding to **63%**, significantly narrowing the net loss Statement of Operations Highlights (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | :--- | :--- | | Revenue | $36,298 | $31,285 | $70,911 | $61,253 | | Gross Profit | $23,041 | $17,229 | $42,297 | $33,040 | | Loss from operations | $(6,717) | $(9,809) | $(15,637) | $(20,319) | | Net loss | $(7,097) | $(10,348) | $(16,421) | $(21,401) | | Net loss per share | $(0.13) | $(0.25) | $(0.30) | $(0.52) | [Condensed Consolidated Statements of Changes in Stockholders' Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity) Total stockholders' equity increased to **$79.6 million** by June 30, 2025, driven by stock-based compensation and option exercises, partially offset by net loss - The accumulated deficit grew to **$(212.4) million** as of June 30, 2025, from **$(196.0) million** at the end of 2024, reflecting the net loss for the period[20](index=20&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash provided by operating activities improved to **$8.5 million** for the first six months of 2025, though overall cash and equivalents decreased by **$13.6 million** due to investing and financing activities Cash Flow Summary (in thousands) | Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $8,488 | $5,643 | | Net cash used in investing activities | $(14,689) | $(4,942) | | Net cash used in financing activities | $(7,388) | $(3,376) | | **Net decrease in cash and cash equivalents** | **$(13,589)** | **$(2,675)** | [Notes to Condensed Consolidated Financial Statements (Unaudited)](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) Notes detail accounting policies, including a change in equipment useful life, strong B2 Cloud Storage revenue growth, a new **$20 million** credit facility, and a **$10 million** share repurchase program - Effective April 1, 2025, the company extended the estimated useful lives of its data center equipment to a uniform **6 years**, reducing depreciation expense by approximately **$2.4 million** for the three and six months ended June 30, 2025[32](index=32&type=chunk)[33](index=33&type=chunk) Revenue by Product (in thousands) | Product | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | B2 Cloud Storage | $19,841 | $15,415 | 28.7% | | Computer Backup | $16,457 | $15,870 | 3.7% | | **Total revenue** | **$36,298** | **$31,285** | **16.0%** | - In June 2025, the company entered into a new **$20.0 million** senior secured revolving credit facility with Citizens Bank, N.A., maturing in June 2027[74](index=74&type=chunk) - In August 2025, the company announced a share repurchase program to purchase up to **$10.0 million** of its common stock through August 1, 2026, intended to be cash neutral by using proceeds from employee stock option exercises and ESPP purchases[109](index=109&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=29&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the strategic shift to up-market, **16%** revenue growth driven by B2 Cloud Storage, improved gross margin and non-GAAP metrics, and solid liquidity with a new **$20 million** credit facility [Overview](index=29&type=section&id=MD%26A%20Overview) Backblaze is transforming its go-to-market strategy to target up-market enterprise and AI customers with new product launches, serving over **500,000** customers globally - The company is actively moving up-market, evidenced by signing multiple deals with total contract values over **$1.0 million** each[117](index=117&type=chunk) - Recent product launches include B2 Overdrive, a premium high-throughput storage solution for AI/ML workloads, and a suite of enterprise cybersecurity features to expand the addressable market[118](index=118&type=chunk) [Key Business Metrics](index=31&type=section&id=Key%20Business%20Metrics) Total Annual Recurring Revenue (ARR) reached **$145.9 million** as of June 30, 2025, driven by **29%** growth in B2 Cloud Storage ARR, with overall NRR at **109%** Key Business Metrics as of June 30 | Metric | 2025 | 2024 | | :--- | :--- | :--- | | **Total Company** | | | | Net revenue retention rate | 109% | 114% | | Gross customer retention rate | 90% | 90% | | Annual recurring revenue (in millions) | $145.9 | $126.3 | | **B2 Cloud Storage** | | | | Net revenue retention rate | 112% | 126% | | Annual recurring revenue (in millions) | $80.7 | $62.8 | | **Computer Backup** | | | | Net revenue retention rate | 106% | 105% | | Annual recurring revenue (in millions) | $65.2 | $63.5 | - The decrease in the NRR for B2 Cloud Storage is largely attributed to lapping the impact of the October 2023 price increase[129](index=129&type=chunk) [Results of Operations](index=35&type=section&id=Results%20of%20Operations) Q2 2025 revenue grew **16%** to **$36.3 million**, with gross margin expanding to **63%** due to extended asset life, leading to a reduced operating loss - The **16%** YoY revenue growth in Q2 2025 was primarily driven by a **$4.4 million (29%)** increase in B2 Cloud Storage revenue, stemming from higher usage by existing customers and sales to new customers[154](index=154&type=chunk)[155](index=155&type=chunk)[156](index=156&type=chunk) - Gross margin improved to **63%** in Q2 2025 from **55%** in Q2 2024, with the extension of infrastructure equipment's useful life contributing **7 percentage points** to the margin improvement for the quarter[159](index=159&type=chunk) - Sales and Marketing expenses decreased by **$0.8 million (7%)** in Q2 2025 compared to Q2 2024, due to reduced headcount and more efficient, targeted marketing efforts[161](index=161&type=chunk)[163](index=163&type=chunk) [Non-GAAP Financial Measures](index=39&type=section&id=Non-GAAP%20Financial%20Measures) Non-GAAP financial performance improved significantly, with Adjusted Gross Margin at **79%** and Adjusted EBITDA more than doubling to **$6.6 million (18% margin)** in Q2 2025 Reconciliation to Adjusted EBITDA (in thousands) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net loss and comprehensive loss | $(7,097) | $(10,348) | | Adjustments (Depreciation, Stock-Comp, etc.) | $13,703 | $13,091 | | **Adjusted EBITDA** | **$6,610** | **$2,743** | | **Adjusted EBITDA Margin** | **18%** | **9%** | Reconciliation to Adjusted Free Cash Flow (in thousands) | Metric | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $8,488 | $5,643 | | Capital expenditures | $(5,471) | $(7,522) | | Principal payments on finance leases | $(9,277) | $(9,711) | | Other adjustments | $242 | $0 | | **Adjusted Free Cash Flow** | **$(6,018)** | **$(11,590)** | | **Adjusted Free Cash Flow Margin** | **(8)%** | **(19)%** | [Liquidity and Capital Resources](index=42&type=section&id=Liquidity%20and%20Capital%20Resources) Liquidity as of June 30, 2025, totaled **$50.5 million** in cash and marketable securities, supplemented by a new **$20.0 million** revolving credit facility, deemed sufficient for the next 12 months - Principal sources of liquidity as of June 30, 2025, were cash, cash equivalents, and marketable securities totaling **$50.5 million**[181](index=181&type=chunk) - On June 4, 2025, the company entered into a new **$20.0 million** senior secured revolving credit facility with Citizens Bank, N.A., which was undrawn as of June 30, 2025[184](index=184&type=chunk)[187](index=187&type=chunk) - In August 2025, the company announced a new share repurchase program of up to **$10 million**, intended to be funded by proceeds from employee stock exercises to be cash neutral[196](index=196&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=46&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's market risk exposures are primarily interest rates and foreign currency, both considered minimal due to short-term investments and U.S. dollar-denominated sales - Interest rate risk primarily relates to future finance lease arrangements, with a **100 basis point** change not expected to materially affect financial position due to the short-term nature of investments[212](index=212&type=chunk) - Foreign currency risk is considered minimal as most sales are denominated in U.S. dollars, despite some expenses in foreign currencies[213](index=213&type=chunk) [Item 4. Controls and Procedures](index=46&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of the end of the period covered by this report (June 30, 2025)[216](index=216&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, these controls[217](index=217&type=chunk) Part II [Part II - Other Information](index=48&type=section&id=Part%20II%20-%20Other%20Information) [Item 1. Legal Proceedings](index=48&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently involved in any legal proceedings expected to have a material adverse effect on its business or financial condition - From time to time, the company may be involved in legal proceedings in the ordinary course of business, but it is not presently a party to any that are considered material[220](index=220&type=chunk) [Item 1A. Risk Factors](index=48&type=section&id=Item%201A.%20Risk%20Factors) This section details numerous risks, including cumulative losses, intense competition, service disruptions, cybersecurity threats, and reliance on third-party vendors for critical infrastructure - The company has a history of cumulative losses (**$212.4 million** accumulated deficit as of June 30, 2025) and does not expect to be profitable for the foreseeable future due to continued investments in scaling the business[223](index=223&type=chunk) - The markets for cloud services are intensely competitive, with major competitors like AWS, Google Cloud, and Microsoft Azure having significantly greater resources, brand recognition, and broader service offerings[224](index=224&type=chunk) - The business relies on third-party vendors for critical components and services, including data centers and hard drives from limited sources, exposing it to potential supply chain and service disruptions[272](index=272&type=chunk) - Cybersecurity attacks, data breaches, or other system disruptions could damage the company's reputation, harm the business, and lead to significant costs and liabilities[225](index=225&type=chunk)[229](index=229&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=73&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities, no use of proceeds from registered securities, and no purchases of its equity securities during the period - There were no unregistered sales of equity securities during the reporting period[324](index=324&type=chunk) [Item 5. Other Information](index=73&type=section&id=Item%205.%20Other%20Information) CEO Gleb Budman terminated a Rule 10b5-1 trading plan on May 5, 2025 - CEO Gleb Budman terminated a previously adopted Rule 10b5-1 trading plan on May 5, 2025[327](index=327&type=chunk) [Item 6. Exhibits](index=74&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Quarterly Report on Form 10-Q, including officer certifications and Interactive Data Files (XBRL) - The report includes certifications from the Principal Executive Officer and Principal Financial Officer as required by Sections 302 and 906 of the Sarbanes-Oxley Act[329](index=329&type=chunk) Signatures - The report was duly signed on August 7, 2025, by Gleb Budman, Chief Executive Officer, and Marc Suidan, Chief Financial Officer[333](index=333&type=chunk)