[Financial & Operational Highlights](index=1&type=section&id=Financial%20%26%20Operational%20Highlights) Backblaze reported strong Q2 2025 results with 16% total revenue growth, 29% B2 Cloud Storage growth, significantly improved profitability, and key operational achievements in AI and cybersecurity Q2 2025 Financial Highlights (YoY) | Metric | Q2 2025 (USD) | Q2 2024 (USD) | % Change | | :--- | :--- | :--- | :--- | | **Total Revenue** | $36.3 million | $31.3 million | +16% | | B2 Cloud Storage Revenue | $19.8 million | $15.3 million | +29% | | Computer Backup Revenue | $16.5 million | $15.9 million | +4% | | **Gross Profit** | $23.0 million | $17.2 million | +33.7% | | Gross Margin | 63% | 55% | +8 p.p. | | **Net Loss** | $(7.1) million | $(10.3) million | N/A | | Net Loss Per Share | $(0.13) | $(0.25) | N/A | | **Adjusted EBITDA** | $6.6 million | $2.7 million | +144% | | Adjusted EBITDA Margin | 18% | 9% | +9 p.p. | | **Non-GAAP Net Income (Loss)** | $0.8 million | $(4.8) million | N/A | - B2 Cloud Storage revenue growth accelerated sequentially from **23%** in Q1 to **29%** in Q2, solidifying the company's path to be Adjusted Free Cash Flow positive in **Q4 2025**[2](index=2&type=chunk) - Key operational developments include: - **AI Momentum**: Signed the first six-figure B2 Overdrive customer for AI workloads just two months after launch - **Cybersecurity**: Launched a suite of enterprise security features, including AI-powered 'Anomaly Alerts' - **Up-Market Growth**: The number of customers contributing over $50,000 in ARR grew **53%** year-over-year[2](index=2&type=chunk)[7](index=7&type=chunk) Key Business Metrics (YoY) | Metric | Q2 2025 (USD) | Q2 2024 (USD) | | :--- | :--- | :--- | | Annual Recurring Revenue (ARR) | $145.9 million (+16%) | N/A | | B2 Cloud Storage ARR | $80.7 million (+29%) | N/A | | Computer Backup ARR | $65.2 million (+3%) | N/A | | Net Revenue Retention (NRR) | 109% | 114% | | B2 Cloud Storage NRR | 112% | 126% | [Financial Outlook](index=2&type=section&id=Financial%20Outlook) The company issued positive Q3 2025 guidance and raised its full-year revenue forecast, expecting continued strong B2 Cloud Storage growth accelerating to over 30% by Q4 2025 Q3 and Full-Year 2025 Guidance | Metric | Q3 2025 Outlook (USD) | Full-Year 2025 Outlook (USD) | Previous FY2025 Outlook (USD) | | :--- | :--- | :--- | :--- | | **Revenue** | $36.7 million - $37.1 million | $145.0 million - $147.0 million | $144.0 million - $146.0 million | | **Adjusted EBITDA Margin** | 17% - 19% | 17% - 19% | N/A | B2 Business YoY Growth Outlook for 2025 | Quarter | Q1 2025 (Actual) | Q2 2025 (Actual) | Q3 2025 (Outlook) | Q4 2025 (Outlook) | | :--- | :--- | :--- | :--- | :--- | | **YoY Growth** | 23% | 29% | 28-30% | 30%+ | [Consolidated Financial Statements](index=7&type=section&id=Consolidated%20Financial%20Statements) The consolidated financial statements detail the company's financial position and performance, reflecting growth in assets and liabilities, increased revenue, improved gross margins, a smaller net loss, and positive cash from operations [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets increased to $186.0 million and total liabilities grew to $106.4 million, with cash and marketable securities totaling $50.5 million Balance Sheet Summary (in thousands) | Account | June 30, 2025 (in thousands USD) | December 31, 2024 (in thousands USD) | | :--- | :--- | :--- | | Cash and cash equivalents | $32,187 | $45,776 | | Marketable securities | $18,354 | $9,139 | | **Total Assets** | **$186,045** | **$168,558** | | Total current liabilities | $59,914 | $59,803 | | **Total Liabilities** | **$106,403** | **$90,936** | | **Total Stockholders' Equity** | **$79,642** | **$77,622** | [Condensed Consolidated Statements of Operations](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For Q2 2025, revenue grew 16% to $36.3 million, gross profit increased 33.7% to $23.0 million with margin expanding to 63%, and net loss significantly reduced to $7.1 million Statement of Operations Summary - Q2 (in thousands) | Account | Three Months Ended June 30, 2025 (in thousands USD) | Three Months Ended June 30, 2024 (in thousands USD) | | :--- | :--- | :--- | | **Revenue** | $36,298 | $31,285 | | **Gross Profit** | $23,041 | $17,229 | | Total operating expenses | $29,758 | $27,038 | | Loss from operations | $(6,717) | $(9,809) | | **Net Loss** | **$(7,097)** | **$(10,348)** | | Net loss per share | $(0.13) | $(0.25) | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2025, net cash from operations improved to $8.5 million, while investing and financing activities resulted in a net decrease in cash of $13.6 million Cash Flow Summary (in thousands) | Activity | Six Months Ended June 30, 2025 (in thousands USD) | Six Months Ended June 30, 2024 (in thousands USD) | | :--- | :--- | :--- | | 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) | $(3,376) | | **Net decrease in cash** | **$(13,589)** | **$(2,675)** | [Reconciliation of GAAP to Non-GAAP Measures](index=10&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Measures) This section reconciles key non-GAAP financial measures to GAAP, demonstrating significant improvement in underlying profitability with positive Non-GAAP net income, doubled Adjusted EBITDA, and nearly halved adjusted free cash flow burn [Adjusted Gross Profit](index=10&type=section&id=Adjusted%20Gross%20Profit) Adjusted gross profit for Q2 2025 was $28.8 million, with an adjusted gross margin of 79%, a slight improvement from 78% in Q2 2024 after excluding non-cash items Adjusted Gross Profit Reconciliation - Q2 (in thousands) | Metric | Q2 2025 (in thousands USD) | Q2 2024 (in thousands USD) | | :--- | :--- | :--- | | GAAP Gross Profit | $23,041 | $17,229 | | Stock-based compensation | $432 | $354 | | Depreciation and amortization | $5,384 | $6,879 | | **Adjusted Gross Profit** | **$28,844** | **$24,462** | | **Adjusted Gross Margin** | **79%** | **78%** | [Adjusted EBITDA](index=10&type=section&id=Adjusted%20EBITDA) Adjusted EBITDA for Q2 2025 more than doubled to $6.6 million from $2.7 million, with the margin expanding significantly to 18% from 9%, reflecting strong operating profitability improvement Adjusted EBITDA Reconciliation - Q2 (in thousands) | Metric | Q2 2025 (in thousands USD) | Q2 2024 (in thousands USD) | | :--- | :--- | :--- | | Net Loss | $(7,097) | $(10,348) | | Depreciation and amortization | $5,474 | $7,025 | | Stock-based compensation | $7,304 | $5,528 | | Other adjustments | $929 | $538 | | **Adjusted EBITDA** | **$6,610** | **$2,743** | | **Adjusted EBITDA Margin** | **18%** | **9%** | [Non-GAAP Net Income (Loss)](index=12&type=section&id=Non-GAAP%20Net%20Income%20%28Loss%29) In Q2 2025, Backblaze achieved a Non-GAAP net income of $0.8 million ($0.01 per share), a significant turnaround from a $4.8 million loss in Q2 2024, primarily by excluding stock-based compensation Non-GAAP Net Income (Loss) Reconciliation - Q2 (in thousands) | Metric | Q2 2025 (in thousands USD) | Q2 2024 (in thousands USD) | | :--- | :--- | :--- | | Net Loss | $(7,097) | $(10,348) | | Stock-based compensation | $7,304 | $5,528 | | Other adjustments | $549 | $(1) | | **Non-GAAP Net Income (Loss)** | **$756** | **$(4,821)** | | **Non-GAAP Net Income (Loss) per share** | **$0.01** | **$(0.11)** | [Adjusted Free Cash Flow](index=12&type=section&id=Adjusted%20Free%20Cash%20Flow) For the first six months of 2025, adjusted free cash flow outflow significantly improved to $(6.0) million from $(11.6) million, with the margin improving to (8)% from (19)%, indicating progress towards cash flow positivity Adjusted Free Cash Flow Reconciliation (in thousands) | Metric | Six Months Ended June 30, 2025 (in thousands USD) | Six Months Ended June 30, 2024 (in thousands USD) | | :--- | :--- | :--- | | 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)** | [Definitions of Key Metrics & Non-GAAP Measures](index=4&type=section&id=Definitions%20of%20Key%20Metrics%20%26%20Non-GAAP%20Measures) This section defines key business metrics like ARR, NRR, and Gross Customer Retention Rate, alongside non-GAAP financial measures such as Adjusted Gross Profit, Adjusted EBITDA, and Adjusted Free Cash Flow, used to assess performance and provide a clearer view of core operations - **Annual Recurring Revenue (ARR)**: Defined as the annualized value of all B2 and Computer Backup arrangements as of the end of a period, calculated by multiplying the last month's revenue by 12[21](index=21&type=chunk) - **Net Revenue Retention Rate (NRR)**: Calculated as the average of the last four quarters' NRR. A quarterly NRR is the revenue from a cohort of customers in the current quarter divided by the revenue from the same cohort in the prior-year quarter[22](index=22&type=chunk) - **Gross Customer Retention Rate**: Measures the ability to retain customers, irrespective of revenue changes. It is the trailing four-quarter average of the quarterly retention rate[23](index=23&type=chunk) - **Non-GAAP Measures**: The company uses several non-GAAP metrics, including **Adjusted Gross Profit**, **Adjusted EBITDA**, **Non-GAAP Net Income**, and **Adjusted Free Cash Flow**, to supplement GAAP results. These typically exclude expenses such as stock-based compensation, depreciation & amortization, and other non-recurring charges to better reflect core operational performance[13](index=13&type=chunk)[16](index=16&type=chunk)[17](index=17&type=chunk)

Group 1 - The article discusses the services provided by IPO Edge, which includes actionable information on growth stocks, first-look IPO filings, previews on upcoming IPOs, an IPO calendar, a database of U.S. IPOs, and a comprehensive guide to IPO investing [1]

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 Details - The investigation is prompted by a report from Morpheus Research that 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 Information - 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 visiting the provided link 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 significant settlements, including the largest securities class action settlement against a Chinese company at the time [4]. - The firm has been consistently ranked among the top firms for securities class action settlements and has recovered hundreds of millions of dollars for investors [4].

Core Viewpoint - Backblaze, Inc. (BLZE) shows significant potential for upside, with a mean price target of $10.83 indicating a 90% upside from the current price of $5.70 [1] Price Targets - The average price target consists of six estimates ranging from a low of $8 to a high of $14, with a standard deviation of $1.94, suggesting a variability in analyst estimates [2] - The lowest estimate indicates a potential increase of 40.4%, while the highest suggests a 145.6% upside [2] Analyst Sentiment - Analysts exhibit strong agreement regarding BLZE's ability to report better earnings than previously predicted, which supports the view of potential upside [4] - Over the last 30 days, the Zacks Consensus Estimate for the current year has increased by 4%, with four estimates moving higher 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 estimates [13] - This rank, along with a strong externally-audited track record, serves as a conclusive indicator of the stock's potential upside in the near term [13] Caution on Price Targets - While price targets are a common metric for investors, relying solely on them may not be wise due to the questionable ability and unbiasedness of analysts in setting these targets [3][7] - Analysts often set overly optimistic price targets influenced by business relationships, which can lead to inflated estimates [8]

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 Details - 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 Information - 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 significant settlements, including the largest securities class action settlement against a Chinese company at the time [4]. - The firm has consistently ranked among the top firms for securities class action settlements and has recovered hundreds of millions of dollars for investors [4].

Core Viewpoint - Backblaze, Inc. (BLZE) has received an upgrade to a Zacks Rank 2 (Buy), indicating a positive trend in earnings estimates which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Impact - The Zacks rating system is based on changes in earnings estimates, which have a strong correlation with near-term stock price movements [4][6]. - An increase in earnings estimates typically leads to institutional investors adjusting their valuations, resulting in stock price movements [4]. Company Performance Indicators - For the fiscal year ending December 2025, Backblaze is expected to earn -$0.13 per share, reflecting a 67.5% change from the previous year's reported number [8]. - Over the past three months, the Zacks Consensus Estimate for Backblaze has increased by 9%, indicating a positive trend in earnings outlook [8]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 (Strong Buy) stocks historically generating an average annual return of +25% since 1988 [7]. - Backblaze's upgrade to Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, suggesting potential for market-beating returns in the near term [10].

Core Viewpoint - Backblaze, Inc. (BLZE) shares have increased by 13.4% in the past four weeks, closing at $5.32, with a potential upside indicated by Wall Street analysts' price targets suggesting a mean estimate of $10.83, representing a 103.6% upside [1] Price Targets - The average price targets from analysts range from a low of $8 to a high of $14, with a standard deviation of $1.94, indicating variability in estimates; the lowest estimate suggests a 50.4% increase, while the highest points to a 163.2% upside [2] - A low standard deviation among price targets suggests a high degree of agreement among analysts regarding the stock's price movement direction [9] Earnings Estimates - Analysts have shown increasing optimism about BLZE's earnings prospects, with a strong consensus in revising EPS estimates higher, which correlates with potential stock price increases [11] - The Zacks Consensus Estimate for the current year has risen by 3.3% 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 in the near term [13]

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]