Backblaze(US:BLZE)2025-05-07 22:00Financial 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]