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]

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 - Revenue grew 18% year-over-year to $33.8 million in Q4 2024, slightly ahead of guidance [35] - Adjusted EBITDA margin improved to 14%, more than doubling from the previous year [39] - Net revenue retention (NRR) increased to 116% compared to 109% last year, benefiting from a price increase [38] - Average revenue per user (ARPU) rose to $268, an 18% increase year-over-year [39] Business Line Data and Key Metrics Changes - B2 Cloud Storage revenue reached $17.1 million, representing a 22% year-over-year growth, driven by customer expansion and new acquisitions [35] - Computer Backup revenue was $16.7 million, reflecting a 13% year-over-year growth primarily due to a price increase [35] - B2 annual recurring revenue (ARR) increased by $5 million sequentially, marking the largest organic sequential increase since the IPO [37] Market Data and Key Metrics Changes - The company has seen a nearly tenfold increase in data stored by AI customers, with three out of the top ten customers now being AI companies [30] - The average deal size from channel leads nearly doubled year-over-year, indicating strong growth in partnerships [18] Company Strategy and Development Direction - The company aims to become a "Rule of 40" company, focusing on both growth and profitability [11] - A go-to-market transformation is underway, emphasizing B2 growth and aiming for adjusted free cash flow positivity by Q4 2025 [12][45] - The company is expanding its partnerships and sales strategies, including co-build, co-market, and co-sell initiatives [18] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the acceleration in B2 growth, expecting it to exceed 30% by the end of 2025 [46] - The company anticipates adjusted EBITDA margins to exceed 20% by Q4 2025, with a focus on operational efficiency [47] - Management highlighted the importance of flexibility and data mobility in the evolving AI landscape, positioning Backblaze as a key player [28] Other Important Information - The company completed a secondary offering for $37 million in net proceeds to strengthen its balance sheet [33] - Cash flow from operations improved significantly, showing a $20 million improvement year-over-year [44] Q&A Session Summary Question: Key metrics for partners in 2025 - Management monitors pipeline and sales productivity for channel partners, while alliance metrics focus on co-build, co-market, and co-sell initiatives [51][52] Question: Long-term growth outlook for B2 and Computer Backup - B2 is expected to grow over 30% year-over-year by the end of 2025, while Computer Backup may see flattish growth due to consumer decline [55][56] Question: Progress of gross margins - Management expects adjusted gross margins to remain stable at 78% [59] Question: AI use cases and their impact on growth - AI customers utilize Backblaze for data collection, processing, model training, and inference, indicating a direct correlation between their growth and Backblaze's growth [66][70] Question: Competitive landscape update - The competitive landscape remains similar, with major players like Amazon, Google, and Microsoft still present, but new partnerships have emerged [118][120]