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]

[Part I - Financial Information](index=5&type=section&id=Part%20I%20-%20Financial%20Information) This section provides the unaudited condensed consolidated financial statements and management's discussion and analysis of financial condition and results of operations [Item 1. Condensed Consolidated Financial Statements (Unaudited)](index=5&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) This section presents the unaudited condensed consolidated financial statements, including balance sheets, statements of operations, equity changes, and cash flows, with accompanying notes [Condensed Consolidated Balance Sheets (Unaudited)](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20(Unaudited)) Presents the company's financial position, including assets, liabilities, and equity, at specific reporting dates Condensed Consolidated Balance Sheets Summary | Metric | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------------------- | :------------------------------ | :------------------------------- | | Cash and cash equivalents | $40,606 | $45,776 | | Marketable securities | $12,626 | $9,139 | | Total current assets | $65,016 | $65,748 | | Total assets | $170,164 | $168,558 | | Total current liabilities | $59,475 | $59,803 | | Total liabilities | $92,396 | $90,936 | | Total stockholders' equity | $77,768 | $77,622 | - Total assets increased by **$1.6 million** from December 31, 2024, to March 31, 2025, primarily driven by an increase in property and equipment, net, and capitalized internal-use software, net[16](index=16&type=chunk) - Cash and cash equivalents decreased by **$5.17 million**, while marketable securities increased by **$3.487 million** during the three months ended March 31, 2025[16](index=16&type=chunk) [Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited)](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss%20(Unaudited)) Details the company's revenues, expenses, and net loss over specific reporting periods Condensed Consolidated Statements of Operations Summary | Metric (in thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Change (YoY) | % Change (YoY) | | :-------------------- | :-------------------------------- | :-------------------------------- | :----------- | :------------- | | Revenue | $34,613 | $29,968 | $4,645 | 15.5% | | Cost of revenue | $15,357 | $14,157 | $1,200 | 8.5% | | Gross profit | $19,256 | $15,811 | $3,445 | 21.8% | | Operating expenses | $28,176 | $26,321 | $1,855 | 7.0% | | Loss from operations | $(8,920) | $(10,510) | $1,590 | -15.1% | | Net loss | $(9,324) | $(11,053) | $1,729 | -15.6% | | Net loss per share | $(0.17) | $(0.27) | $0.10 | -37.0% | - The company reported a reduced net loss of **$9.3 million** for Q1 2025, an improvement from **$11.1 million** in Q1 2024, driven by a **15% increase in revenue** and a **higher gross margin**[17](index=17&type=chunk) - **Gross profit increased by 21.8% year-over-year**, reaching **$19.3 million**, and **gross margin improved from 53% to 56%**[17](index=17&type=chunk) [Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited)](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity%20(Unaudited)) Outlines changes in the company's equity components, including net loss and additional paid-in capital Condensed Consolidated Statements of Changes in Stockholders' Equity Summary | Item (in thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :------------------ | :-------------------------------- | :-------------------------------- | | Net loss | $(9,324) | $(11,053) | | Additional Paid-in Capital | $9,470 | $13,569 | | Total Stockholders' Equity | $77,768 | $47,454 | - Stockholders' equity increased slightly from **$77.6 million** at December 31, 2024, to **$77.8 million** at March 31, 2025, primarily due to stock-based compensation and issuance of common stock, partially offset by net loss[19](index=19&type=chunk) [Condensed Consolidated Statements of Cash Flows (Unaudited)](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20(Unaudited)) Reports cash inflows and outflows from operating, investing, and financing activities Condensed Consolidated Statements of Cash Flows Summary | Cash Flow Activity (in thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Net cash provided by operating activities | $4,943 | $3,416 | | Net cash used in investing activities | $(6,132) | $(8,781) | | Net cash used in financing activities | $(3,981) | $(264) | | Net decrease in cash and cash equivalents | $(5,170) | $(5,629) | | Cash and cash equivalents, end of period | $40,606 | $11,001 | - **Net cash provided by operating activities increased to $4.9 million** in Q1 2025 from **$3.4 million** in Q1 2024, primarily due to a reduced net loss and higher non-cash adjustments[22](index=22&type=chunk) - **Net cash used in investing activities decreased to $6.1 million** in Q1 2025 from **$8.8 million** in Q1 2024, mainly due to lower net purchases of marketable securities and reduced capitalized internal-use software costs[22](index=22&type=chunk) [Notes to Condensed Consolidated Financial Statements (Unaudited)](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) Provides detailed explanations and disclosures supporting the condensed consolidated financial statements [Note 1. Organization and Description of Business](index=9&type=section&id=Note%201.%20Organization%20and%20Description%20of%20Business) Backblaze, Inc. is a Delaware-incorporated storage cloud platform providing data storage solutions for businesses and consumers through web-scale software on commodity hardware - Backblaze, Inc. provides cloud services for data storage and usage to businesses and consumers, utilizing purpose-built, web-scale software on commodity hardware[25](index=25&type=chunk) [Note 2. Basis of Presentation and Summary of Significant Accounting Policies](index=9&type=section&id=Note%202.%20Basis%20of%20Presentation%20and%20Summary%20of%20Significant%20Accounting%20Policies) The condensed consolidated financial statements are prepared in accordance with GAAP and SEC rules for interim reporting, consolidating wholly-owned subsidiaries - The Company is an **Emerging Growth Company (EGC)** and has elected to use the extended transition period for complying with new or revised accounting standards, which may affect comparability with other public companies[28](index=28&type=chunk) - The effective tax rate for the three months ended March 31, 2025, and 2024, was **zero** due to continuous operating losses[32](index=32&type=chunk) Concentration Risks | Concentration Type | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :----------------- | :----- | :-------------------------------- | :-------------------------------- | | Cash Disbursement | Number of vendors | 2 | 2 | | | Total cash disbursements represented by vendors listed above | 27% | 24% | | Accounts Payable | Number of vendors | 4 | 1 | | | Total accounts payable balance represented by vendors listed above | 70% | 14% | | Accounts Receivable| Number of customers | 2 | 2 | | | Total accounts receivable balance represented by customers listed above | 34% | 35% | [Note 3. Revenues](index=12&type=section&id=Note%203.%20Revenues) Total revenue increased by 15.5% year-over-year to $34.6 million for Q1 2025, primarily driven by B2 Cloud Storage Revenue Disaggregation | Revenue Disaggregation (in thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :------------------------------------ | :-------------------------------- | :-------------------------------- | | **By Product:** | | | | B2 Cloud Storage | $18,048 | $14,622 | | Computer Backup | $16,565 | $15,346 | | Total Revenue | $34,613 | $29,968 | | **By Timing of Recognition:** | | | | Consumption-based arrangements | $17,413 | $14,278 | | Subscription-based arrangements | $17,108 | $15,567 | | Physical Media (point in time) | $92 | $123 | | Total Revenue | $34,613 | $29,968 | | **By Geographic Area:** | | | | United States | $25,381 | $21,927 | | United Kingdom | $1,752 | $1,628 | | Canada | $1,654 | $1,398 | | Other | $5,826 | $5,015 | | Total Revenue | $34,613 | $29,968 | - Remaining performance obligations (RPOs) were **$44.9 million** as of March 31, 2025, with approximately **79%** expected to be recognized over the next 12 months[42](index=42&type=chunk) Deferred Contract Costs and Amortization | Deferred Contract Costs (in thousands) | March 31, 2025 | December 31, 2024 | | :------------------------------------- | :------------- | :---------------- | | Marketing affiliates | $558 | $542 | | Sales commission | $1,144 | $972 | | **Amortization (Q1 2025 vs Q1 2024):** | | | | Marketing affiliates | $295 | $281 | | Sales commission | $98 | $0 | [Note 4. Marketable Securities](index=14&type=section&id=Note%204.%20Marketable%20Securities) The Company's marketable securities primarily consist of U.S. treasury, corporate debt, and money market funds, totaling $12.6 million as of March 31, 2025 Marketable Securities Portfolio | Investment Category (in thousands) | Amortized Cost (March 31, 2025) | Fair Value (March 31, 2025) | Unrealized Gains (March 31, 2025) | Unrealized Losses (March 31, 2025) | | :--------------------------------- | :------------------------------ | :-------------------------- | :-------------------------------- | :--------------------------------- | | Money market funds | $19,182 | $19,182 | $0 | $0 | | U.S. treasury securities | $998 | $999 | $1 | $0 | | Corporate debt securities | $997 | $996 | $0 | $(1) | | Total cash equivalents | $21,177 | $21,177 | $1 | $(1) | | U.S. treasury securities (investments) | $4,972 | $4,975 | $3 | $0 | | Corporate debt securities (investments) | $7,654 | $7,654 | $0 | $0 | | Total investments | $12,626 | $12,629 | $3 | $0 | - As of March 31, 2025, the majority of marketable securities (**$14.6 million amortized cost**) are scheduled to mature within one year[48](index=48&type=chunk) [Note 5. Fair Value Measurements](index=15&type=section&id=Note%205.%20Fair%20Value%20Measurements) The Company classifies its marketable securities within the fair value hierarchy, with U.S. treasury securities and money market funds in Level 1 Fair Value Hierarchy Classification | Investment Category (in thousands) | Level 1 (March 31, 2025) | Level 2 (March 31, 2025) | Total (March 31, 2025) | | :--------------------------------- | :----------------------- | :----------------------- | :--------------------- | | Money market funds | $19,182 | $0 | $19,182 | | U.S. treasury securities | $999 | $0 | $999 | | Corporate debt securities | $0 | $996 | $996 | | U.S. treasury securities (investments) | $4,975 | $0 | $4,975 | | Corporate debt securities (investments) | $0 | $7,654 | $7,654 | | Total | $25,156 | $8,650 | $33,806 | - U.S. treasury securities and money market funds are classified within **Level 1**, while corporate debt securities are classified within **Level 2** of the fair value hierarchy[51](index=51&type=chunk) [Note 6. Property and Equipment, Net](index=16&type=section&id=Note%206.%20Property%20and%20Equipment,%20Net) Property and equipment, net, increased to $45.7 million as of March 31, 2025, with the majority located in the United States Property and Equipment, Net Summary | Asset Category (in thousands) | March 31, 2025 | December 31, 2024 | | :---------------------------- | :------------- | :---------------- | | Data center equipment | $57,079 | $54,552 | | Leased and financed data center equipment | $68,496 | $65,037 | | Total property and equipment, net | $45,661 | $42,949 | Property and Equipment by Geographic Area | Geographic Area (in thousands) | March 31, 2025 | December 31, 2024 | | :----------------------------- | :------------- | :---------------- | | United States | $49,967 | $47,930 | | Canada | $3,145 | $3,309 | | The Netherlands | $7,514 | $7,583 | | Total | $60,626 | $58,822 | [Note 7. Capitalized Internal-Use Software, Net](index=17&type=section&id=Note%207.%20Capitalized%20Internal-Use%20Software,%20Net) Capitalized internal-use software, net, increased to $42.2 million as of March 31, 2025, with amortization expense of $2.4 million for Q1 2025 Capitalized Internal-Use Software, Net | Item (in thousands) | March 31, 2025 | December 31, 2024 | | :------------------ | :------------- | :---------------- | | Developed software | $62,235 | $59,435 | | Accumulated amortization | $(20,226) | $(17,778) | | Total capitalized internal-use software, net | $42,153 | $41,801 | Amortization Expense for Capitalized Internal-Use Software | Amortization Expense (in thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :---------------------------------- | :-------------------------------- | :-------------------------------- | | Cost of revenue | $2,446 | $1,424 | | General and administrative | $2 | $2 | | Total amortization expense | $2,448 | $1,426 | [Note 8. Leases](index=17&type=section&id=Note%208.%20Leases) The Company utilizes both finance and operating leases for data center equipment and facilities, with total finance lease obligations of $32.5 million Lease Terms and Discount Rates | Lease Type | March 31, 2025 | December 31, 2024 | | :--------- | :------------- | :---------------- | | Operating leases - Remaining lease term | 4.2 years | 4.4 years | | Operating leases - Discount rate | 7.0 % | 7.2 % | | Finance Leases - Remaining lease term | 2.0 years | 1.9 years | | Finance Leases - Discount rate | 11.7 % | 11.9 % | Lease Expense Components | Lease Expense Component (in thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :------------------------------------- | :-------------------------------- | :-------------------------------- | | Finance lease depreciation expense | $2,840 | $3,564 | | Finance lease interest expense | $755 | $593 | | Operating lease rental expense | $1,186 | $691 | | Total operating lease costs | $3,378 | $2,983 | - Future minimum commitments for finance leases and lease financing obligations totaled **$36.5 million** as of March 31, 2025, with **$15.3 million** due in the remainder of 2025[61](index=61&type=chunk) [Note 9. Commitments and Contingencies](index=19&type=section&id=Note%209.%20Commitments%20and%20Contingencies) The Company has non-cancellable contractual commitments totaling $2.8 million through 2027 and is involved in legal claims not expected to be material - Contractual commitments for service agreements total **$0.8 million** for the remainder of 2025, **$1.3 million** for 2026, and **$0.7 million** for 2027[62](index=62&type=chunk) - The Company contributed **$0.5 million** to its 401(k) plan for both the three months ended March 31, 2025, and 2024[64](index=64&type=chunk) - The Company believes that current legal proceedings are not likely to have a **material adverse effect** on its financial position, results of operations, or cash flows[65](index=65&type=chunk) [Note 10. Debt](index=20&type=section&id=Note%2010.%20Debt) The Company voluntarily terminated its revolving credit agreement with City National Bank on December 10, 2024 - The Company voluntarily terminated its revolving credit agreement with City National Bank on **December 10, 2024**[67](index=67&type=chunk) [Note 11. Stockholders' Equity](index=20&type=section&id=Note%2011.%20Stockholders'%20Equity) As of March 31, 2025, the Company had reserved 18.6 million shares of common stock for future issuance under its equity incentive plans Equity Incentive Plan Summary | Equity Plan Item | March 31, 2025 | December 31, 2024 | | :--------------- | :------------- | :---------------- | | Options outstanding (2011 Plan) | 4,783,610 | 5,264,351 | | Options outstanding (2021 Plan) | 1,111,155 | 1,114,620 | | Restricted stock units outstanding (2021 Plan) | 6,311,667 | 4,351,393 | | Shares available for future grants (2021 Plan) | 3,963,750 | 6,933,867 | | Shares available for future purchases (2021 ESPP) | 2,033,281 | 965,766 | | Restricted stock units outstanding (2024 Inducement Plan) | 412,740 | 412,740 | | Total reserved shares | 18,618,203 | 19,044,737 | [Note 12. Stock-Based Compensation](index=20&type=section&id=Note%2012.%20Stock-Based%20Compensation) Total stock-based compensation expense increased to $7.4 million in Q1 2025, with $40.2 million in unrecognized RSU costs Restricted Stock Unit (RSU) Activity | RSU Activity | RSUs (shares) | Weighted-average grant date fair value per unit | | :----------- | :------------ | :---------------------------------------------- | | Unvested as of December 31, 2024 | 4,764,133 | $6.18 | | Granted | 3,234,491 | $6.99 | | Vested | (1,159,608) | $6.17 | | Forfeited | (114,609) | $6.23 | | Unvested as of March 31, 2025 | 6,724,407 | $6.57 | - Total unrecognized compensation cost related to RSUs was **$40.2 million**, to be recognized over a weighted-average period of **2.3 years**[74](index=74&type=chunk) Stock-Based Compensation Expense | Stock-Based Compensation Expense (in thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :---------------------------------------------- | :-------------------------------- | :-------------------------------- | | Cost of revenue | $420 | $386 | | Research and development | $3,467 | $2,108 | | Sales and marketing | $1,797 | $1,822 | | General and administrative | $1,675 | $1,213 | | Total stock-based compensation expense | $7,359 | $5,529 | [Note 13. Net Loss per Share Attributable to Common Stockholders](index=22&type=section&id=Note%2013.%20Net%20Loss%20per%20Share%20Attributable%20to%20Common%20Stockholders) Basic and diluted net loss per share was $(0.17) for Q1 2025, an improvement from $(0.27) in Q1 2024 Net Loss per Share Details | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :----- | :-------------------------------- | :-------------------------------- | | Net loss attributable to common stockholders | $(9,324) | $(11,053) | | Weighted average common shares outstanding | 54,060,249 | 40,225,239 | | Net loss per share, basic and diluted | $(0.17) | $(0.27) | - Potential common shares (RSUs, stock options, ESPP shares, Bonus Plan shares) were excluded from diluted net loss per share calculation as their effect was **antidilutive**[84](index=84&type=chunk) [Note 14. Restructuring](index=23&type=section&id=Note%2014.%20Restructuring) The 2024 Restructuring Plan, completed by December 31, 2024, resulted in $4.9 million in charges, primarily for employee severance and benefits - The 2024 Restructuring Plan, completed by **December 31, 2024**, involved a **12% workforce reduction** and reduced corporate headquarters footprint[85](index=85&type=chunk) - Total restructuring charges were **$4.9 million**, including **$3.9 million** for employee severance and benefits and **$0.9 million** for operating right-of-use asset impairment[86](index=86&type=chunk) Restructuring Liability | Restructuring Liability (in thousands) | Amount | | :------------------------------------- | :----- | | Balance as of December 31, 2024 | $355 | | Cash payments during the period | $(115) | | Balance as of March 31, 2025 | $240 | [Note 15. Segment Reporting](index=23&type=section&id=Note%2015.%20Segment%20Reporting) The Company operates as a single operating and reportable segment, with the CEO serving as the chief operating decision maker - The Company operates in **one operating and reportable segment**, deriving revenue from its storage platform services[88](index=88&type=chunk) Adjusted Segment Expenses | Adjusted Segment Item (in thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :----------------------------------- | :-------------------------------- | :-------------------------------- | | Adjusted cost of revenue | $7,293 | $6,997 | | Adjusted research and development | $8,330 | $7,574 | | Adjusted sales and marketing | $7,426 | $8,153 | | Adjusted general and administrative | $5,212 | $5,331 | [Note 16. Subsequent Events](index=24&type=section&id=Note%2016.%20Subsequent%20Events) In Q2 2025, the Company extended the useful life of its Data center equipment to 6 years, expected to reduce depreciation by $5.0 million - The Company extended the useful life of its Data center equipment and Machinery and equipment from **3-5 years to a uniform 6 years**, effective **April 1, 2025**[91](index=91&type=chunk) - This change is anticipated to result in a reduction in depreciation expense of approximately **$5.0 million** for the remainder of 2025[91](index=91&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the Company's financial condition and results of operations, highlighting key business developments, performance drivers, and financial metrics [Overview](index=25&type=section&id=Overview) Backblaze is a leading specialized storage cloud platform offering B2 Cloud Storage and Computer Backup solutions to over 500,000 customers - Backblaze is a leading specialized storage cloud platform offering B2 Cloud Storage (IaaS) and Backblaze Computer Backup (SaaS) solutions to over **500,000 customers** across **175+ countries**, managing approximately **4 billion gigabytes of data**[95](index=95&type=chunk)[96](index=96&type=chunk) - The Company initiated a **go-to-market transformation** in H2 2024, moving up-market and signing multiple deals valued over **$1.0 million** each[97](index=97&type=chunk) - A recent study in Q2 2025 extended the useful life of infrastructure equipment, expected to reduce depreciation expense by approximately **$5.0 million** for the remainder of the year[98](index=98&type=chunk) [Factors Affecting Our Performance](index=26&type=section&id=Factors%20Affecting%20Our%20Performance) Discusses key drivers of future growth, including sales efforts, customer acquisition, expansion, platform investment, and international presence - Future growth depends on scaling direct sales efforts for larger customers and expanding the partner ecosystem[100](index=100&type=chunk)[101](index=101&type=chunk) - Continued investment in self-service customer acquisition through blog content, case studies, social sharing, and optimizing conversion rates is crucial[102](index=102&type=chunk) - Expansion within existing customers is driven by new features (e.g., Enterprise Control, multi-region selection), Customer Success initiatives, and natural data growth[103](index=103&type=chunk) - Ongoing platform investment and new product launches, such as B2 Overdrive for AI use cases, are key to maintaining market leadership and driving cross-sell/upsell opportunities[104](index=104&type=chunk) - International expansion, including a new data center in Canada in **January 2025**, represents a meaningful growth opportunity[105](index=105&type=chunk) [Key Business Metrics](index=27&type=section&id=Key%20Business%20Metrics) Presents critical performance indicators such as net revenue retention rate and annual recurring revenue for both B2 Cloud Storage and Computer Backup Key Business Metrics Summary | Metric | March 31, 2025 | March 31, 2024 | | :-------------------------- | :------------- | :------------- | | **B2 Cloud Storage:** | | | | Net revenue retention rate | 117 % | 126 % | | Gross customer retention rate | 89 % | 89 % | | Annual recurring revenue (in millions) | $73.8 | $59.5 | | **Computer Backup:** | | | | Net revenue retention rate | 108 % | 101 % | | Gross customer retention rate | 90 % | 91 % | | Annual recurring revenue (in millions) | $67.0 | $62.6 | | **Total Company:** | | | | Net revenue retention rate | 113 % | 112 % | | Gross customer retention rate | 90 % | 91 % | | Annual recurring revenue (in millions) | $140.8 | $122.1 | - Total Company Net Revenue Retention Rate (NRR) increased to **113%** as of March 31, 2025, from **112%** in the prior year, indicating strong revenue expansion from existing customers[109](index=109&type=chunk) - Annual Recurring Revenue (ARR) for B2 Cloud Storage grew by **24% to $73.8 million**, and for Computer Backup by **7% to $67.0 million**, year-over-year[115](index=115&type=chunk) [Key Components of Results of Operations](index=28&type=section&id=Key%20Components%20of%20Results%20of%20Operations) Explains the primary sources of revenue and the composition of cost of revenue and operating expenses - Revenue is primarily generated from B2 Cloud Storage (consumption-based) and Computer Backup (subscription-based), with subscription arrangements typically ranging from **one month to five years**[117](index=117&type=chunk)[118](index=118&type=chunk) - Cost of revenue includes colocation facilities, network costs, depreciation of equipment, personnel-related costs, credit card fees, and amortization of capitalized internal-use software[119](index=119&type=chunk) - Operating expenses, excluding depreciation, amortization, and stock-based compensation, are expected to remain relatively flat in **2025** due to **2024 restructuring activities**, though sales and marketing may increase with business growth[122](index=122&type=chunk) [Results of Operations](index=30&type=section&id=Results%20of%20Operations) Analyzes the company's financial performance, including revenue, gross profit, and operating expenses, for the reported periods [Comparison of the Three Months Ended March 31, 2025 and 2024](index=31&type=section&id=Comparison%20of%20the%20Three%20Months%20Ended%20March%2031,%202025%20and%202024) Total revenue increased by 15% to $34.6 million, driven by a 23% increase in B2 Cloud Storage revenue and an 8% increase in Computer Backup revenue Revenue Comparison | Revenue (in thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Change | % Change | | :--------------------- | :-------------------------------- | :-------------------------------- | :----- | :------- | | B2 Cloud Storage revenue | $18,048 | $14,622 | $3,426 | 23 % | | Computer Backup revenue | $16,565 | $15,346 | $1,219 | 8 % | | Total revenue | $34,613 | $29,968 | $4,645 | 15 % | - B2 Cloud Storage revenue increased by **$3.4 million**, primarily due to a **$2.4 million** increase from higher storage usage by existing customers and **$1.0 million** from new customer sales[135](index=135&type=chunk)[138](index=138&type=chunk) - Computer Backup revenue increased by **$1.2 million**, influenced by a **$2.1 million** increase from October 2023 price adjustments, partially offset by a **$0.9 million** decrease due to declining license counts[135](index=135&type=chunk) Expense and Gross Margin Comparison | Expense (in thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Change | % Change | | :--------------------- | :-------------------------------- | :-------------------------------- | :----- | :------- | | Cost of revenue | $15,357 | $14,157 | $1,200 | 8 % | | Gross margin | 56 % | 53 % | 3 pp | |\ | Research and development | $11,855 | $9,746 | $2,109 | 22 % | | Sales and marketing | $9,263 | $10,022 | $(759) | (8)% | | General and administrative | $7,058 | $6,553 | $505 | 8 % | [Non-GAAP Financial Measures](index=33&type=section&id=Non-GAAP%20Financial%20Measures) Presents financial performance metrics adjusted for non-cash and non-recurring items, including adjusted gross profit, EBITDA, and free cash flow [Adjusted Gross Profit and Margin](index=33&type=section&id=Adjusted%20Gross%20Profit%20and%20Margin) Adjusted gross profit excludes stock-based compensation, depreciation, amortization, and restructuring charges from cost of revenue Adjusted Gross Profit and Margin Reconciliation | Metric (in thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :-------------------- | :-------------------------------- | :-------------------------------- | | Gross profit | $19,256 | $15,811 | | Stock-based compensation | $420 | $386 | | Depreciation and amortization | $7,644 | $6,774 | | Adjusted gross profit | $27,320 | $22,971 | | Gross margin | 56 % | 53 % | | Adjusted gross margin | 79 % | 77 % | [Adjusted EBITDA and Adjusted EBITDA Margin](index=34&type=section&id=Adjusted%20EBITDA%20and%20Adjusted%20EBITDA%20Margin) Adjusted EBITDA excludes non-cash and non-recurring items from net loss, showing a significant increase to $6.4 million (18%) in Q1 2025 Adjusted EBITDA Reconciliation | Metric (in thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :-------------------- | :-------------------------------- | :-------------------------------- | | Net loss | $(9,324) | $(11,053) | | Depreciation and amortization | $7,764 | $6,912 | | Stock-based compensation | $7,359 | $5,529 | | Interest expense and investment income, net | $320 | $537 | | Income tax provision | $84 | $6 | | Foreign exchange loss (gain) | $149 | $(18) | | Adjusted EBITDA | $6,352 | $1,913 | | Adjusted EBITDA Margin | 18 % | 6 % | [Adjusted Free Cash Flow and Adjusted Free Cash Flow Margin](index=34&type=section&id=Adjusted%20Free%20Cash%20Flow%20and%20Adjusted%20Free%20Cash%20Flow%20Margin) Adjusted Free Cash Flow is derived from net cash provided by operating activities, adjusted for capital expenditures, principal payments on leases, and restructuring payments Adjusted Free Cash Flow Reconciliation | Metric (in thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :-------------------- | :-------------------------------- | :-------------------------------- | | Net cash provided by operating activities | $4,943 | $3,416 | | Capital expenditures | $(2,626) | $(3,746) | | Principal payments on finance leases and lease financing obligations | $(4,543) | $(4,802) | | Payment of workforce reduction and related severance charges | $115 | $0 | | Adjusted Free Cash Flow | $(2,111) | $(5,132) | | Adjusted Free Cash Flow Margin | (6)% | (17)% | [Liquidity and Capital Resources](index=35&type=section&id=Liquidity%20and%20Capital%20Resources) Examines the company's ability to generate and manage cash, focusing on operating, investing, and financing activities [Operating Activities](index=36&type=section&id=Operating%20Activities) Net cash provided by operating activities increased to $4.9 million in Q1 2025, driven by reduced net loss and higher non-cash adjustments - Cash provided by operating activities was **$4.9 million** in Q1 2025, resulting from a net loss of **$9.3 million**, adjusted for **$16.0 million** in non-cash charges and a **$1.8 million** net cash outflow from changes in operating assets and liabilities[169](index=169&type=chunk) - Non-cash charges primarily included **$7.8 million** for depreciation and amortization and **$7.4 million** for stock-based compensation[169](index=169&type=chunk) - The increase in cash provided by operations in Q1 2025 was primarily driven by a strategy to secure larger contracts and cost savings from recent restructuring efforts, partially offset by increased R&D investment[170](index=170&type=chunk) [Investing Activities](index=37&type=section&id=Investing%20Activities) Net cash used in investing activities decreased to $6.1 million in Q1 2025, mainly due to lower purchases of marketable securities and reduced capitalized software costs - Cash used in investing activities was **$6.1 million** in Q1 2025, primarily due to **$18.3 million** in marketable securities purchases, **$2.1 million** in capitalized internal-use software costs, and **$0.5 million** in property and equipment purchases, partially offset by **$14.8 million** from marketable securities maturities[172](index=172&type=chunk) [Financing Activities](index=37&type=section&id=Financing%20Activities) Net cash used in financing activities increased significantly to $4.0 million in Q1 2025, primarily due to principal payments on finance leases and taxes for equity awards - Cash used in financing activities was **$4.0 million** in Q1 2025, primarily due to **$4.5 million** in principal payments on finance leases and lease financing obligations, and **$0.5 million** for taxes paid for net share settlements of equity awards, partially offset by **$1.1 million** in proceeds from stock option exercises[172](index=172&type=chunk) [Critical Accounting Estimates](index=37&type=section&id=Critical%20Accounting%20Estimates) Highlights key accounting judgments and assumptions that significantly impact the financial statements - No material changes to critical accounting estimates were reported compared to the Annual Report[175](index=175&type=chunk) - Significant estimates include costs capitalized as internal-use software (determining new/additional functionality) and valuation of Employee Stock Purchase Plan (ESPP) expense[30](index=30&type=chunk)[174](index=174&type=chunk) [JOBS Act Accounting Election](index=38&type=section&id=JOBS%20Act%20Accounting%20Election) Explains the Company's election to use the extended transition period for new accounting standards as an emerging growth company - The Company is an **emerging growth company (EGC)** and has elected to use the extended transition period under the JOBS Act for adopting new or revised accounting standards[178](index=178&type=chunk) - This election means the Company's financial statements may not be comparable to public companies not utilizing this extended transition period[178](index=178&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=38&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The Company is exposed to market risks primarily from fluctuations in interest rates and foreign currency exchange rates, though foreign currency risk is currently minimal - The Company's exposure to interest rate risk primarily relates to finance lease arrangements and interest income from cash, cash equivalents, and marketable securities[180](index=180&type=chunk) - Due to the short-term nature of investments and intent to hold to maturity, a **100 basis point change** in interest rates is not expected to materially affect operating results or financial position[180](index=180&type=chunk) - Foreign currency exchange rate risk is minimal as most sales and operating expenses are U.S. dollar-denominated, but international expansion could increase this exposure[181](index=181&type=chunk) [Item 4. Controls and Procedures](index=38&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the Company's disclosure controls and procedures were effective as of March 31, 2025, with no material changes in internal control over financial reporting [Evaluation of Disclosure Controls and Procedures](index=38&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) Management's assessment of the effectiveness of the company's disclosure controls and procedures - As of **March 31, 2025**, the Company's chief executive officer and chief financial officer concluded that its disclosure controls and procedures are **effective**[184](index=184&type=chunk) [Changes in Internal Control over Financial Reporting](index=39&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) Reports on any material changes in the company's internal control over financial reporting during the quarter - No changes in internal control over financial reporting materially affected, or are reasonably likely to to materially affect, the Company's internal control over financial reporting during the quarter ended **March 31, 2025**[185](index=185&type=chunk) [Inherent Limitations on Effectiveness of Controls](index=39&type=section&id=Inherent%20Limitations%20on%20Effectiveness%20of%20Controls) Acknowledges that any control system has inherent limitations and can only provide reasonable assurance - A control system, no matter how well conceived and operated, can provide only **reasonable, not absolute, assurance** that its objectives are met, acknowledging inherent limitations[186](index=186&type=chunk) [Part II - Other Information](index=40&type=section&id=Part%20II%20-%20Other%20Information) This section covers legal proceedings, risk factors, equity sales, other information, and exhibits [Item 1. Legal Proceedings](index=40&type=section&id=Item%201.%20Legal%20Proceedings) The Company is not currently a party to any legal proceedings that are likely to have a material adverse effect on its business, financial condition, or operating results - The Company is not presently a party to any legal proceedings likely to have a **material adverse effect** on its business, financial condition, or operating results[188](index=188&type=chunk) [Item 1A. Risk Factors](index=40&type=section&id=Item%201A.%20Risk%20Factors) This section outlines various factors that could materially and adversely affect the Company's business, financial condition, and results of operations [Risk Factors Summary](index=40&type=section&id=Risk%20Factors%20Summary) Summarizes the key risks facing the company, including operational, competitive, and financial challenges - Key risks include a history of **cumulative losses**, intense market competition, potential service disruptions, maintaining brand and reputation, cybersecurity attacks, cost-effective customer acquisition, successful product enhancements, software defects, reliance on third-party vendors, strategic relationships, and maintaining effective internal controls[190](index=190&type=chunk) [Risks Related to Our Business and Our Industry](index=41&type=section&id=Risks%20Related%20to%20Our%20Business%20and%20Our%20Industry) Details risks associated with the company's operations, market competition, service disruptions, and growth management - The Company has a history of cumulative losses (**$205.3 million accumulated deficit** as of March 31, 2025) and does not expect to be profitable in the foreseeable future due to ongoing investments in scaling the business[191](index=191&type=chunk) - The markets are intensely competitive, with larger competitors like **Amazon Web Services, Google Cloud Platform, and Microsoft Azure**, posing risks of pricing pressures and potential customer loss from future price increases[192](index=192&type=chunk) - Significant service disruptions, data loss, or cybersecurity attacks could damage reputation, harm business, and lead to substantial costs, despite incident response plans[193](index=193&type=chunk)[197](index=197&type=chunk)[198](index=198&type=chunk) - Failure to effectively manage rapid growth, including workforce fluctuations and strain on infrastructure, could negatively affect service quality, brand, and ability to retain/attract customers and employees[204](index=204&type=chunk)[206](index=206&type=chunk) - The business is dependent on retaining and increasing revenue from existing customers, with many able to terminate services with little notice, and future financial performance relies on successful adoption of new features and additional paid products[208](index=208&type=chunk)[209](index=209&type=chunk) - International operations (**27% of Q1 2025 revenue** from outside the U.S.) are subject to increased business, regulatory, and economic risks, including compliance costs, cultural differences, and geopolitical instability[220](index=220&type=chunk)[221](index=221&type=chunk) [Risks Related to Reliance on Infrastructure and Third Parties](index=54&type=section&id=Risks%20Related%20to%20Reliance%20on%20Infrastructure%20and%20Third%20Parties) Addresses risks stemming from dependence on third-party data centers, suppliers, channel partners, and payment processors - The Company relies on a limited number of third-party data centers and suppliers for key components like hard drives and semiconductors, exposing it to potential supply chain disruptions, increased costs, and service interruptions[241](index=241&type=chunk)[242](index=242&type=chunk)[244](index=244&type=chunk) - Success depends on strategic relationships with channel partners and integrators; failure to maintain these relationships or interoperability could impair competitiveness and revenue growth[245](index=245&type=chunk) - Exposure to risks associated with online payment processing methods, including increased fees, changes in regulations, or disruptions in payment systems, could adversely impact revenue and operating expenses[246](index=246&type=chunk) - Reliance on third-party software for essential financial and operational services (e.g., HubSpot, NetSuite) means failures or disruptions in these services could materially affect business management and financial reporting[247](index=247&type=chunk) [Risks Related to Accounting and Tax Matters](index=56&type=section&id=Risks%20Related%20to%20Accounting%20and%20Tax%20Matters) Covers risks related to internal controls, revenue recognition, net operating loss carryforwards, and changes in tax laws - Failure to maintain effective internal controls over financial reporting could harm the business and negatively impact stock value, as the Company has previously identified and remediated material weaknesses[250](index=250&type=chunk)[251](index=251&type=chunk)[253](index=253&type=chunk) - Revenue from subscription services is recognized ratably over the term, meaning downturns or upturns in new business may not be immediately reflected in operating results[255](index=255&type=chunk) - The Company's ability to use its net operating loss carryforwards (**$123.3 million federal, $95.6 million state** as of Dec 31, 2024) and other tax attributes may be limited by ownership changes under Sections 382 and 383 of the Code[257](index=257&type=chunk)[258](index=258&type=chunk) - Changes in U.S. federal, state, local, and international tax laws could materially affect financial condition, results of operations, and cash flows, potentially increasing tax liabilities[259](index=259&type=chunk)[261](index=261&type=chunk) [Risks Related to Intellectual Property](index=58&type=section&id=Risks%20Related%20to%20Intellectual%20Property) Discusses risks concerning intellectual property infringement claims, limited protection, and the use of open-source software - Assertions by third parties that the Company's cloud services infringe intellectual property rights could lead to costly litigation, diversion of management attention, and substantial monetary damages[263](index=263&type=chunk)[264](index=264&type=chunk) - The Company relies on trademark, copyright, and trade secret laws, as it does not currently own any issued patents, which provides limited protection and may not prevent unauthorized use or misappropriation of technologies[266](index=266&type=chunk)[267](index=267&type=chunk) - Use of 'open-source' software could subject the Company to unfavorable license conditions, potential litigation, or requirements to release proprietary source code, impacting its ability to sell cloud services[268](index=268&type=chunk)[269](index=269&type=chunk) [Risks Related to Ownership of Our Common Stock](index=60&type=section&id=Risks%20Related%20to%20Ownership%20of%20Our%20Common%20Stock) Outlines risks affecting common stock ownership, including anti-takeover provisions, stock price volatility, and lack of dividends - Anti-takeover provisions in the Company's charter and Delaware law could delay or prevent an acquisition, limiting stockholders' opportunity to receive a premium for their shares[270](index=270&type=chunk)[272](index=272&type=chunk) - The market price of the common stock has been, and is likely to remain, volatile due to various factors, including operating performance, market conditions, and competitor actions, potentially leading to investment losses[273](index=273&type=chunk)[274](index=274&type=chunk) - Sales of a substantial number of common stock shares in the public market, or future issuances of equity, could cause the share price to fall and dilute existing investors[278](index=278&type=chunk)[279](index=279&type=chunk) - The Company does not anticipate declaring any cash dividends in the foreseeable future, requiring investors to rely on stock price appreciation for gains[282](index=282&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=63&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section states that there were no unregistered sales of equity securities and no use of proceeds to report for the period - No unregistered sales of equity securities were reported[290](index=290&type=chunk) - No use of proceeds from unregistered sales of equity securities was reported[291](index=291&type=chunk) [Item 5. Other Information](index=64&type=section&id=Item%205.%20Other%20Information) Gleb Budman, the CEO, adopted a Rule 10b5-1 Trading Plan on March 7, 2025, for the sale of up to 360,000 shares, but subsequently terminated the plan on May 5, 2025, prior to any trading - On **March 7, 2025**, CEO Gleb Budman adopted a Rule 10b5-1 Trading Plan for the sale of up to **360,000 shares** of common stock[293](index=293&type=chunk) - Mr. Budman terminated the Rule 10b5-1 Trading Plan on **May 5, 2025**, before any trading occurred under the plan[294](index=294&type=chunk) [Item 6. Exhibits](index=65&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Quarterly Report on Form 10-Q, including certifications from the Principal Executive Officer and Principal Financial Officer, and Inline XBRL documents - Exhibits include certifications from the Principal Executive Officer (**31.1, 32.1**) and Principal Financial Officer (**31.2, 32.2**) as required by the Securities Exchange Act and Sarbanes-Oxley Act[295](index=295&type=chunk) - The report also includes various Inline XBRL taxonomy extension documents (**101.INS, 101.SCH, 101.CAL, 101.DEF, 101.LAB, 101.PRE**) and the Cover Page Interactive Data File (**104**)[295](index=295&type=chunk) [Signatures](index=66&type=section&id=Signatures) The report is duly signed on behalf of Backblaze, Inc. by its Chief Executive Officer and Chairperson, Gleb Budman, and its Chief Financial Officer, Marc Suidan, on May 7, 2025 - The report is signed by **Gleb Budman**, Chief Executive Officer and Chairperson, and **Marc Suidan**, Chief Financial Officer, on **May 7, 2025**[299](index=299&type=chunk)

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 ...

Core Viewpoint - Backblaze, Inc. is under investigation for potential violations of federal securities laws and unlawful business practices following a negative report from Morpheus Research that highlighted financial missteps and questionable accounting practices [1][2]. Group 1: Investigation and Legal Actions - Bragar Eagel & Squire, P.C. is investigating potential claims against Backblaze on behalf of its stockholders [1]. - The investigation is focused on whether Backblaze has engaged in unlawful business practices and violated federal securities laws [1]. - Stockholders who have suffered losses or have information regarding these claims are encouraged to contact the law firm [3]. Group 2: Financial Performance and Market Reaction - Backblaze's stock experienced a significant decline following the release of a critical report from Morpheus Research, which detailed alleged financial missteps since the company's IPO in November 2021 [2]. - The report accused Backblaze of questionable accounting practices, including financial manipulations and inflated forecasts [2]. - The stock price dropped during intraday trading on April 24, 2025, in response to the report [2].

Core Viewpoint - Pomerantz LLP is investigating claims of potential securities fraud and unlawful business practices by Backblaze, Inc. following a critical report from Morpheus Research that accused the company of failing to disclose key metrics and improper financial practices [1][2]. Group 1: Investigation and Allegations - Pomerantz LLP is representing investors of Backblaze, Inc. in an investigation regarding possible securities fraud and misconduct by the company's officers and directors [1]. - Morpheus Research published a report on April 24, 2025, alleging that Backblaze did not consistently disclose important financial metrics and engaged in improper capitalization of expenses [2]. - The report characterized Backblaze's leadership as lacking transparency and suggested that they may have taken aggressive and potentially illegal actions to create a misleading financial performance [2]. Group 2: Market Impact - Following the release of the Morpheus report, Backblaze's stock price experienced a significant decline during intraday trading, negatively impacting investors [2].

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 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].