Backblaze(US:BLZE)2022-02-18 02:36Financial Data and Key Metrics Changes - Overall revenue grew 28% year-on-year to $18.7 million in Q4 2021, with B2 Cloud Storage growing 56% and Computer Backup growing 16% [7][16] - Annual Recurring Revenue (ARR) reached $75 million, with B2 Cloud Storage contributing approximately $27 million [7][20] - Adjusted EBITDA was a loss of $1.3 million, down from a positive $2 million in Q4 2020 [20] Business Line Data and Key Metrics Changes - B2 Cloud Storage revenue was $6.6 million, reflecting 56% growth, while Computer Backup revenue totaled $11.9 million, reflecting 16% growth [16][17] - B2 Cloud Storage represented 35% of total revenue in Q4 2021 [17] - Net Revenue Retention (NRR) was 110% overall, with B2 at 130% and Computer Backup at 102% [18] Market Data and Key Metrics Changes - The number of paid customers increased to 499,000 from 466,000 in Q4 2020, with B2 customers growing to 74,000 from 59,000 [18][19] - Annual Average Revenue Per User (ARPU) increased to $147 from $124 in Q4 2020, with B2 ARPU growing to $348 from $292 [19] Company Strategy and Development Direction - The company plans to increase sales and marketing investments by over 100% in 2022, amounting to an additional $10 million [8][20] - Focus areas include outbound sales, paid advertising, partnerships, and targeting developers [9][10][11] - The company aims to become the leading independent cloud for data storage, particularly in the underserved mid-market [6][15] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the growth potential in the B2 Cloud Storage segment and the overall market for data storage [7][63] - The company anticipates revenue for Q1 2022 to be in the range of $19 million to $19.5 million, with full-year 2022 revenue expected between $83 million and $86 million [21][60] - Management acknowledged that investments in growth may lead to short-term EBITDA losses but are necessary for long-term success [34][65] Other Important Information - Cash and cash equivalents were approximately $105 million as of December 31, 2021, including IPO proceeds [20] - The company plans to release a Cloud replication feature by mid-2022, which is expected to enhance revenue potential [16][60] Q&A Session Summary Question: Insights on investment areas and ROI - Management noted positive returns from outbound sales and plans to continue scaling that team [24] - The partnership marketing team is expected to enhance partner success and onboarding [25] Question: NRR trends and pricing strategies - NRR for B2 remains strong at 130%, with expectations for improvement as pricing adjustments take effect [29] Question: Investment strategy and EBITDA outlook - Management is prioritizing growth over short-term profitability, with a focus on strategic investments [34][65] Question: Market opportunities and customer profiles - The company is exploring various verticals and has seen interest in ransomware protection solutions [36][37] Question: Cash impact of accelerated investments - Management clarified that the cash balance is expected to remain healthy despite increased investments [40] Question: Headcount growth and hiring challenges - The company plans to increase headcount from 270 to approximately 450 by the end of 2022, facing challenges in hiring quality talent [42] Question: Competitive landscape and AWS pricing changes - No significant changes in the competitive landscape were noted following AWS's pricing adjustments [46][47]