BLZE Set to Report Q3 Earnings: How Should Investors Play the Stock?

Core Insights - BackBlaze (BLZE) is expected to report third-quarter 2025 results on November 6, with revenues estimated at $36.95 million, reflecting a year-over-year increase of 13.37% [1] - The consensus estimate for loss is projected at one cent per share, indicating a 90% improvement from the previous year's loss of ten cents [1] - The company has shown a strong earnings surprise history, with an average positive surprise of 51.02% over the last four quarters [2] Revenue Estimates - The Zacks Consensus Estimate for third-quarter 2025 B2 Cloud Storage revenues is $20.9 million, representing a growth of 29.17% year over year [9] - The estimate for Computer Backup revenues is $16.05 million, indicating a decline of 2.2% from the previous year [9] Operational Momentum - Backblaze has entered the third quarter with solid operational momentum, particularly in its B2 Cloud Storage business, which saw a 29% year-over-year revenue increase [4] - The company aims for third-quarter revenue between $36.7 million and $37.1 million, with adjusted EBITDA margins of 17-19% [4] Growth Drivers - The company's sales pipeline has doubled year over year, contributing to growth [5] - Backblaze added its first six-figure B2 Overdrive customer, indicating strong product fit for high-throughput AI workloads [5][6] Competitive Landscape - Challenges persist in the Computer Backup segment, which has been experiencing low-to-mid single-digit declines [8] - Competition from established players like Dropbox, Datadog, and Snowflake has intensified, impacting market share [8] Stock Performance - Backblaze has seen a 72.9% surge year-to-date, outperforming the Zacks Internet-Software industry and the Computer and Technology sector [10] - The stock is currently trading at 3.58X forward 12-month price-to-sales, below the industry average of 5.34X, indicating attractive valuation [13] Investment Considerations - The company is positioned for growth in its B2 Cloud Storage business and AI workloads, supported by new enterprise security features [15] - However, the stock's sharp year-to-date rally may have priced in much of the optimism, and competition could temper near-term gains [15][16]