Backblaze Earnings Call Transcripts
Fiscal Year 2026
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Cloud storage revenue is rapidly growing, driven by AI and data proliferation, with a strategic shift toward larger enterprise and neocloud customers. The company maintains a significant cost advantage over hyperscalers, is prudently guiding revenue, and is leveraging its legacy backup business to fund expansion.
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Founded in 2007, the company evolved from cloud backup to a leading IaaS provider, now serving AI builders and Neoclouds with high-performance, cost-effective storage. Recent innovations and rapid AI market traction have driven multi-million dollar deals, positioning the firm for significant growth as the industry shifts away from hyperscalers.
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The meeting established a quorum, approved the election of a Class two director for a three-year term, and ratified the independent auditor. Final voting results will be filed with the SEC.
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Cloud storage revenue is accelerating, fueled by AI sector demand and rapid product innovation. Go-to-market transformation and a new CRO are driving larger deals and improved pipeline predictability, while internal AI adoption and strong supply chain management support scalable growth.
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Q1 revenue and EBITDA exceeded guidance, driven by 24% B2 growth and strong AI demand. Full-year guidance was raised, with continued momentum in large deals, improved margins, and a focus on the expanding Neocloud and AI storage markets.
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Network traffic analysis revealed dynamic, high-bandwidth NeoCloud and hyperscaler flows, especially in US East, driving upgrades to 400Gbps+ links. Regional patterns and new geo-data inform expansion, while steady CDN and ISP traffic aid planning.
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Revenue growth and free cash flow margins have improved, driven by B2 Cloud Storage and a revamped go-to-market strategy. New product launches and partnerships, especially in the Neocloud segment, are expanding market reach, while pipeline generation and customer expansion remain key growth levers.
Fiscal Year 2025
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Revenue and adjusted EBITDA margin met or exceeded guidance, with strong B2 Cloud Storage growth and first-time adjusted free cash flow profitability. Launched B2 Neo and signed a $15M+ neocloud deal, while guiding for stable growth and margin discipline in 2026.
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Revenue and Adjusted EBITDA margin exceeded guidance, with B2 Cloud Storage up 28% year-over-year. The company is on track for positive adjusted free cash flow in Q4, driven by AI demand and ongoing go-to-market transformation.
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Q2 saw 16% revenue growth and a doubling of adjusted EBITDA margin, driven by strong B2 Cloud Storage performance and rapid AI customer adoption. Guidance was raised for the year, with continued innovation and upmarket momentum supporting future growth.
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The company is expanding its high-performance, low-cost cloud storage offerings, with recent innovations like Overdrive and Shard Stash targeting AI and large data workloads. Strong customer retention, growing OEM and channel partnerships, and a focus on operational efficiency are driving sequential growth, with AI use cases providing significant momentum.
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Q1 revenue grew 15% year-over-year, with B2 Cloud Storage accelerating to 23% growth and adjusted EBITDA margin tripling to 18%. The company launched B2 Overdrive, signed its largest TCV deal, and remains on track for 30%+ B2 growth and positive free cash flow in Q4.
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Cloud storage ARR grew 22% year over year, now surpassing legacy backup, with AI driving rapid data usage growth. Strategic focus on upskilling, partnerships, and targeted sales has doubled productivity, while financial targets aim for 30% B2 growth and positive free cash flow by Q4 2025.
Fiscal Year 2024
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Q4 revenue grew 18% year-over-year, with B2 Cloud Storage up 22% and now over half of total business. Adjusted EBITDA margin doubled to 14%, and the company projects B2 growth to exceed 30% by end of 2025, targeting free cash flow positivity and continued margin expansion.
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Q3 revenue grew 29% year-over-year, with B2 cloud storage up 39% and record adjusted EBITDA margin of 12%. Cost reductions, including a 12% workforce cut, are being reinvested in sales, with positive free cash flow targeted by Q4 2025.
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Q2 revenue grew 27% year-over-year, with B2 Cloud Storage up 43% and adjusted EBITDA at $2.7 million. Raised full-year guidance, citing strong upmarket momentum, innovation, and resilient demand despite macro headwinds.