Backblaze Announces Fourth Quarter and Full Year 2024 Financial Results

Rhea-AI Summary

Backblaze (BLZE) reported strong Q4 2024 financial results with 18% year-over-year revenue growth to $33.8 million. B2 Cloud Storage revenue grew 22% to $17.1 million, while Computer Backup revenue increased 13% to $16.7 million.

Key Q4 metrics include gross profit of $18.5 million (55% margin), adjusted EBITDA of $4.6 million (14% margin), and a net loss of $14.4 million. The company achieved notable success with AI customers, reporting 65% YoY growth and 3 AI companies among their top 10 customers.

For full-year 2024, total revenue reached $127.6 million, up 25% YoY, with B2 Cloud Storage revenue growing 36% to $63.3 million. The company secured a significant customer deal exceeding $1 million in annual contract value and completed a secondary offering raising $37 million in net proceeds.

Positive

• Revenue grew 18% YoY to $33.8M in Q4
• B2 Cloud Storage revenue up 22% YoY
• Adjusted EBITDA margin doubled to 14%
• Secured $1M+ annual contract value customer
• 65% YoY growth in AI customers
• Achieved $8M in annualized cost savings
• Operating cash flow positive at $12.5M for 2024
• Net revenue retention improved to 116% from 109%

Negative

• Net loss increased to $14.4M from $12.2M in Q4
• Total customer count decreased to 507,647 from 511,942
• Computer Backup customers declined to 417,845 from 431,745
• Customer retention rate slightly decreased to 90% from 91%

Insights

Financial Analyst

Backblaze's Q4 and full-year 2024 results mark a significant inflection point in the company's financial trajectory, showcasing both accelerating growth and substantial profitability improvements. The headline Q4 revenue of $33.8 million (+18% YoY) underscores the company's continued expansion, but the real story lies in the shifting business mix and margin enhancement.

The company has crossed a important milestone with B2 Cloud Storage ($17.1 million, +22% YoY) now representing over 50% of total sales, outpacing Computer Backup ($16.7 million, +13% YoY). This business mix shift is strategically significant as B2 Cloud Storage offers higher growth potential, stronger competitive differentiation against hyperscalers, and superior unit economics with ARPU of $645 versus $159 for Computer Backup.

Profitability metrics show remarkable improvement, with Q4 adjusted EBITDA margin more than doubling to 14% ($4.6 million), while full-year adjusted EBITDA reached $13.0 million (10% margin) compared to negative $3.8 million in 2023. This profitability inflection coincides with $8 million in annualized cost savings, demonstrating management's commitment to operational efficiency while still investing in growth.

The company's AI strategy is bearing fruit, with AI-related data growing nearly 10-fold year-over-year and three AI companies now ranking among Backblaze's top 10 customers. This represents an emerging growth vector as AI workloads typically require substantial data storage with predictable, ongoing usage patterns.

Cash flow dynamics have dramatically improved, with operations generating $12.5 million in 2024 compared to consuming $7.4 million in 2023. Combined with $37 million in net proceeds from a secondary offering, Backblaze now holds $54.9 million in cash and short-term investments, providing ample runway to pursue growth opportunities.

Customer metrics reveal an intentional strategy shift: while total customer count declined slightly to 507,647 (from 511,942), this masks divergent trends between growing B2 Cloud Storage customers (107,616, +10%) and declining Computer Backup customers (417,845, -3.2%). Meanwhile, ARPU increased 17.5% to $268, and Net Revenue Retention improved to 116%, indicating successful monetization of the existing customer base.

The 2025 outlook projects continued momentum, with full-year revenue guidance of $144-146 million and adjusted EBITDA margin expected to expand to 16-18%. At the current $355 million market cap, Backblaze trades at approximately 2.8x trailing revenue and 2.4x forward revenue - a valuation that appears disconnected from the company's improving growth and profitability profile, especially compared to other cloud infrastructure providers.

Technology Strategist

Backblaze's Q4 and full-year 2024 results reveal a company executing a strategic pivot that positions it as a specialized challenger in the cloud storage market. The milestone of B2 Cloud Storage crossing 50% of company sales represents more than just a revenue shift – it signals a fundamental transformation in Backblaze's market positioning and technological focus.

Backblaze's B2 Cloud Storage platform has achieved its 22% YoY growth by exploiting a critical gap in the market: while hyperscalers offer comprehensive but complex storage solutions with intricate pricing models and egress fees, Backblaze delivers object storage with predictable pricing ($5/TB/month), minimal egress fees, and an API-compatible alternative that doesn't require application rewrites. This architectural approach explains their G2 recognition for ease of use and implementation speed – customers can integrate B2 without the steep learning curve associated with AWS S3 or Azure Blob Storage.

The company's traction in AI applications is particularly revealing of its technological strategy. The nearly 10-fold increase in AI-related data stems from Backblaze's suitability for the "cold" and "cool" storage tiers of AI workflows – where training datasets and intermediate results need cost-effective storage with acceptable retrieval times. Unlike hyperscalers that optimize for hot data access patterns, Backblaze's infrastructure is architected for efficient long-term storage with reasonable accessibility – precisely what many AI applications require for their extensive datasets.

The expansion of an existing customer into a white-label partnership represents a significant technological leverage point. This "Powered by Backblaze" model allows partners to offer storage services without building infrastructure, creating a force-multiplier effect for Backblaze's technology stack. This approach mirrors successful strategies from companies like Twilio and Stripe, who expanded by becoming infrastructure providers to other businesses.

From an infrastructure efficiency perspective, Backblaze's improving adjusted gross margins (78% in Q4, up from 77% YoY) suggest they're optimizing their storage architecture while scaling. The company's proprietary "Storage Pod" design and custom "Vault" software architecture provide cost advantages over off-the-shelf solutions, enabling them to profitably operate at price points that would challenge hyperscalers' existing business models.

Looking ahead, Backblaze faces both opportunities and challenges in the evolving storage landscape. The growing adoption of multi-cloud strategies benefits specialized providers who can integrate with diverse ecosystems. However, Backblaze must continue enhancing its developer tools and API capabilities to remain competitive as hyperscalers inevitably simplify their offerings.

The $8 million in annualized cost savings, coupled with continued revenue growth, indicates the company is finding the elusive balance between operational efficiency and technical innovation. This efficiency will be important as they scale to meet the demands of data-intensive workloads like AI, which require not just raw storage capacity but optimized data management capabilities.

As Backblaze projects 16-18% adjusted EBITDA margins for 2025, the technical foundation they've built appears increasingly capable of supporting profitable growth – a rare achievement in the capital-intensive infrastructure space where many competitors struggle to balance scale economics with customer accessibility.

22% Revenue Growth in B2 Cloud Storage, 18% Revenue Growth Overall in Q4 2024

Q4 Adjusted EBITDA Margin More than Doubled Year Over Year to 14%

SAN MATEO, Calif.--(BUSINESS WIRE)-- Backblaze, Inc. (Nasdaq: BLZE), the cloud storage innovator delivering a modern alternative to traditional cloud providers, today announced results for its fourth quarter and year ended December 31, 2024.

“Record Q4 sales bookings capped a strong year, validating early traction in our Go-To-Market transformation," said Gleb Budman, CEO of Backblaze. "Not only did we increase sales productivity and won an over $1 million ACV customer in the quarter, we also saw AI starting to meaningfully contribute to the business, with 3 AI companies now in our top 10 customers in December 2024."

Fourth Quarter 2024 Financial Highlights:

• Revenue of $33.8 million, an increase of 18% year-over-year (YoY).
  • B2 Cloud Storage revenue was $17.1 million, an increase of 22% YoY.
  • Computer Backup revenue was $16.7 million, an increase of 13%YoY.
• Gross profit of $18.5 million, or 55% of revenue, compared to $15.1 million or 52% of revenue, in Q4 2023.
• Adjusted gross profit of $26.3 million, or 78% of revenue, compared to $22.1 million or 77% of revenue in Q4 2023.
• Net loss was $14.4 million compared to a net loss of $12.2 million in Q4 2023.
• Net loss per share was $0.30 for compared to a net loss per share of $0.32 in Q4 2023.
• Adjusted EBITDA was $4.6 million, or 14% of revenue, compared to $1.7 million or 6% of revenue in Q4 2023.
• Non-GAAP net loss of $3.0 million compared to non-GAAP net loss of $5.5 million in 2023.
• Non-GAAP net loss per share of $0.06 compared to a non-GAAP net loss per share of $0.14 in 2023.
• Cash and short-term investments totaled $54.9 million as of December 31, 2024.

Full-Year 2024 Financial Highlights:

• Revenue of $127.6 million, an increase of 25% year-over-year (YoY).
  • B2 Cloud Storage revenue was $63.3 million, an increase of 36% YoY.
  • Computer Backup revenue was $64.3 million, an increase of 16% YoY.
• Gross profit of $69.3 million, or 54% of revenue, compared to $49.9 million or 49% of revenue, in 2023.
• Adjusted gross profit of $99.2 million, or 78% of revenue, compared to $76.2 million or 75% of revenue in 2023.
• Net loss was $48.5 million compared to a net loss of $59.7 million in 2023.
• Net loss per share was $1.11 compared to a net loss per share of $1.66 in 2023.
• Adjusted EBITDA was $13.0 million, or 10% of revenue, compared to $(3.8) million or (4)% of revenue in 2023.
• Non-GAAP net loss of $17.5 million compared to non-GAAP net loss of $30.5 million in 2023.
• Non-GAAP net loss per share of $0.40 compared to a non-GAAP net loss per share of $0.85 in 2023.
• Net cash provided by operating activities during the year ended December 31, 2024 was $12.5 million, compared to cash used in operating activities of $7.4 million during the year ended December 31, 2023.
• Adjusted free cash flow during the year ended December 31, 2024 was $(20.1) million, compared to $(43.2) million during the year ended December 31, 2023.

Fourth Quarter 2024 Operational Highlights:

• Annual recurring revenue (ARR) was $136.7 million, an increase of 16% YoY.
  • B2 Cloud Storage ARR was $70.2 million, an increase of 22% YoY.
  • Computer Backup ARR was $66.5 million, an increase of 11% YoY.
• Net revenue retention (NRR) rate was 116% compared to 109% in Q4 2023.
  • B2 Cloud Storage NRR was 123% compared to 122% in Q4 2023.
  • Computer Backup NRR was 109% compared to 100% in Q4 2023.
• Gross customer retention rate was 90% in Q4 2024 compared to 91% in Q4 2023.
  • B2 Cloud Storage gross customer retention rate was 89% in Q4 2024 compared to 90% in Q4 2023.
  • Computer Backup gross customer retention rate was 90% in Q4 2024 compared to 91% in Q4 2023.
• Number of customers was 507,647 versus 511,942 in Q4 2023.
  • B2 Cloud Storage number of customers was 107,616 versus 97,842 in Q4 2023.
  • Computer Backup number of customers was 417,845 versus 431,745 in Q4 2023.
• Total Annual Average Revenue Per Customer (ARPU) was $268 versus $228 in Q4 2023.
  • B2 Cloud Storage ARPU was $645 versus $577 in Q4 2023.
  • Computer Backup ARPU was $159 versus $140 in Q4 2023.

Recent Business Highlights

• Signed A Deal for Over $1 Million in Annual Contract Value: An existing customer expanded into a Powered by Backblaze white label partnership to unlock greater market opportunities.
• AI Tailwinds Accelerate: 65% more AI customers year over year drove a nearly 10-fold increase in AI related data, with 3 AI companies now in our top 10 customers in December 2024.
• B2 Cloud Storage Crossed Over 50% of Company Sales: Fastest growing offering is now also the dominant part of the business.
• Executed a Successful Secondary Offering: This oversubscribed offering reinforces our balance sheet with $37 million in net proceeds.
• Unlocked $8 Million in Annualized Cost Savings: Increased operating efficiency enables re-investment in sales capacity.
• Named the 'Easiest to Use' and the 'Fastest Implementation' Object Storage Solution: G2, a popular software review site, recognized Backblaze in their Winter 2025 Report.

Financial Outlook:

Based on information available as of the date of this press release,

For the first quarter of 2025 we expect:

• Revenue between $34.1 million to $34.5 million.
• Adjusted EBITDA margin between 13% to 15%.
• Basic weighted average shares outstanding of 54.0 million to 54.3 million shares.

For full-year 2025 we expect:

• Revenue between $144.0 million to $146.0 million.
• Adjusted EBITDA margin between 16% to 18%.
• For YoY growth in our B2 business, refer to table below:

Q1 2025	Q2 2025	Q3 2025	Q4 2025
21 - 23%	23 - 25%	25-28%	30%+

Conference Call Information:

Backblaze will host a conference call today, February 25, 2025, at 2:00 p.m. PT (5:00 p.m. ET) to review its financial results.

Attend the webcast here: https://events.q4inc.com/attendee/327945335
Register to listen by phone here: https://registrations.events/direct/Q4I489011

Phone registrants will receive dial-in information via email.

An archive of the webcast will be available shortly after its completion on the Investor Relations section of the Backblaze website at https://ir.backblaze.com.

About Backblaze

Backblaze is the cloud storage innovator delivering a modern alternative to traditional cloud providers. We offer high-performance, secure cloud object storage that customers use to develop applications, manage media, secure backups, build AI workflows, protect from ransomware, and more. Backblaze helps businesses break free from the walled gardens that traditional providers lock customers into, enabling customers to use their data in open cloud workflows with the providers they prefer at a fraction of the cost. Headquartered in San Mateo, CA, Backblaze (Nasdaq: BLZE) was founded in 2007 and serves over 500,000 customers in 175 countries around the world. For more information, please go to www.backblaze.com.

Cautionary Note Regarding Forward-looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which involve risks and uncertainties. These forward-looking statements are frequently identified by the use of forward-looking terminology, including the terms “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “likely,” “may,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “target,” “will,” “would,” or other similar terms or expressions that relate to our future performance, expectations, strategy, plans or intentions, and include statements in the section titled “Financial Outlook.”

Our actual results could differ materially from those stated in or implied by the forward-looking statements in this press release due to a number of factors, including but not limited to: the impact of our go-to-market transformation and ability to attract and retain customers, including increasingly larger customers; the continued growth of data stored by our customers; continued growth of AI related business; realizing the anticipated benefits relating to cost savings initiatives and the re-investment of savings in additional sales capacity; market competition, including competitors that may have greater size, offerings and resources; effectively managing growth; ability to offer new features and other offerings on a timely basis, including geographic expansion in Canada or other jurisdictions, and achieve desired market adoption; disruption in our service or loss of availability of customers’ data; cyberattacks; continued growth consistent with historical levels; the impact of pricing and other product offering changes; material defects or errors in our software; supply chain disruption; ability to maintain existing relationships with partners and to enter into new partnerships; ability to remediate and prevent material weaknesses in our internal controls over financial reporting; hiring and retention of key employees; the impact of war or hostilities, and other significant world or regional events on our business and the business of our customers, vendors, supply chain and partners; litigation and other disputes; the impact of tariffs on other trade restrictions and actions; and general market, political, economic, and business conditions. Further information on these and additional risks, uncertainties, assumptions, and other factors that could cause actual results or outcomes to differ materially from those included in or implied by the forward-looking statements contained in this release are included under the caption “Risk Factors” and elsewhere in our Quarterly Reports on Form 10-Q and other filings and reports we make with the SEC from time to time.

The forward-looking statements made in this release reflect our views as of the date of this press release. We undertake no obligation to update any forward-looking statements in this press release, whether as a result of new information, future events or otherwise.

Non-GAAP Financial Measures

To supplement the financial measures prepared in accordance with generally accepted accounting principles (GAAP), we use (i) non-GAAP adjusted gross profit and margin, (ii) adjusted EBITDA and adjusted EBITDA margin, (iii) non-GAAP net income (loss), and (iv) adjusted free cash flow and adjusted free cash flow margin. These non-GAAP financial measures exclude certain items and are not prepared in accordance with GAAP; therefore, the information is not necessarily comparable to other companies and should be considered as a supplement to, not a substitute for, or superior to, the corresponding measures calculated in accordance with GAAP. We present these non-GAAP measures because management believes they are a useful measure of our performance and provide an additional basis for assessing our operating results. Please see the appendix attached to this press release for a reconciliation of non-GAAP adjusted gross margin and adjusted EBITDA margin to the most directly comparable GAAP financial measures.

A reconciliation of non-GAAP guidance measures to corresponding GAAP measures is not available on a forward-looking basis without unreasonable effort due to the uncertainty regarding, and the potential variability of, expenses and other factors in the future. For example, stock-based compensation expense-related charges are impacted by the timing of employee stock transactions, the future fair market value of our common stock, and our future hiring and retention needs, all of which are difficult to predict with reasonable accuracy and subject to constant change.

Adjusted Gross Profit (and Margin)

We believe adjusted gross profit (and margin), when taken together with our GAAP financial results, provides a meaningful assessment of our performance and is useful to us for evaluating our ongoing operations and for internal planning and forecasting purposes.

We define adjusted gross margin as gross profit, excluding stock-based compensation expense, depreciation and amortization and restructuring charges within cost of revenue, as a percentage of adjusted gross profit to revenue. We exclude stock-based compensation, which is a non-cash item, and restructuring costs because we do not consider it indicative of our core operating performance. We exclude depreciation expense of our property and equipment and amortization expense of capitalized internal-use software because these may not reflect current or future cash spending levels to support our business. We believe adjusted gross margin provides consistency and comparability with our past financial performance and facilitates period-to-period comparisons of operations, as this metric eliminates the effects of depreciation and amortization.

Adjusted EBITDA and Adjusted EBITDA Margin

We define adjusted EBITDA as net loss adjusted to exclude depreciation and amortization, stock-based compensation, interest expense, net, investment income, income tax provision, realized and unrealized gains and losses on foreign currency transactions, impairment of long-lived assets, restructuring costs, legal settlement costs, and other non-recurring charges. Adjusted EBITDA Margin is defined as Adjusted EBITDA divided by revenues for the period. We use adjusted EBITDA and Adjusted EBITDA Margin to evaluate our ongoing operations and for internal planning and forecasting purposes. We believe that adjusted EBITDA and Adjusted EBITDA Margin, when taken together with our GAAP financial results, provides meaningful supplemental information regarding our operating performance by excluding certain items that may not be indicative of our business, results of operations, or outlook. We consider Adjusted EBITDA and Adjusted EBITDA Margin to be important measures because they help illustrate underlying trends in our business and our historical operating performance on a more consistent basis.

Non-GAAP Net Income (Loss)

We define non-GAAP net income (loss) as net income adjusted to exclude stock-based compensation, realized and unrealized gains and losses on foreign currency transactions, restructuring costs, legal settlement costs, and other items we deem non-recurring. We believe that non-GAAP net income (loss), when taken together with our GAAP financial results, provides meaningful supplemental information regarding our operating performance by excluding certain items that may not be indicative of our business, results of operations, or outlook.

Adjusted Free Cash Flow and Adjusted Free Cash Flow Margin

We define adjusted free cash flow as net cash provided by (used in) operating activities less purchases of property and equipment, capitalized internal-use software costs, principal payments on finance leases and lease financing obligations, as reflected in our consolidated statements of cash flows, and excluding restructuring costs, legal settlement costs, and other non-recurring charges. Adjusted free cash flow margin is calculated as adjusted free cash flow divided by revenue.

Key Business Metrics:

Annual Recurring Revenue (ARR)

We define annual recurring revenue (ARR) as the annualized value of all Backblaze B2 and Computer Backup arrangements as of the end of a period. Given the renewable nature of our business, we view ARR as an important indicator of our financial performance and operating results, and we believe it is a useful metric for internal planning and analysis. ARR is calculated based on multiplying the monthly revenue from all Backblaze B2 and Computer Backup arrangements, which represent greater than 98% of our revenue for the periods presented for the last month of a period by 12. Our annual recurring revenue for Computer Backup and B2 Cloud Storage is calculated in the same manner as our overall annual recurring revenue based on the revenue from our Computer Backup and B2 Cloud Storage solutions, respectively.

Net Revenue Retention Rate (NRR)

Our overall net revenue retention rate (NRR) is a trailing four-quarter average of the recurring revenue from a cohort of customers in a quarter as compared to the same quarter in the prior year. We calculate our overall net revenue retention rate for a quarter by dividing (i) recurring revenue in the current quarter from any accounts that were active at the end of the same quarter of the prior year by (ii) recurring revenue in the current corresponding quarter from those same accounts. Our overall net revenue retention rate includes any expansion of revenue from existing customers and is net of revenue contraction and customer attrition, and excludes revenue from new customers in the current period. Our net revenue retention rate for Computer Backup and B2 Cloud Storage is calculated in the same manner as our overall net revenue retention rate based on the revenue from our Computer Backup and B2 Cloud Storage solutions, respectively.

Gross Customer Retention Rate

We use gross customer retention rate to measure our ability to retain our customers. Our gross customer retention rate reflects only customer losses and does not reflect the expansion or contraction of revenue we earn from our existing customers. We believe our high gross customer retention rates demonstrate that we serve a vital service to our customers, as the vast majority of our customers tend to continue to use our platform from one period to the next. To calculate our gross customer retention rate, we take the trailing four-quarter average of the percentage of cohort of customers who were active at the end of the quarter in the prior year that are still active at the end of the current quarter. We calculate our gross customer retention rate for a quarter by dividing (i) the number of accounts that generated revenue in the last month of the current quarter that also generated recurring revenue during the last month of the corresponding quarter in the prior year, by (ii) the number of accounts that generated recurring revenue during the last month of the corresponding quarter in the prior year.

Number of Customers

We define a customer at the end of any period as a distinct account, as identified by a unique account identifier, that has paid for our cloud services, which makes up substantially all of our user base. In Q4 2023, we refined our customer definition to include end-user customers that purchase through a reseller. This resulted in no impact to previously reported metrics other than a 1% decrease to the 120% NRR metric reported for Q3 2023.

Annual Average Revenue Per User

We define annual average revenue per user (Annual ARPU) as the annualized value for the average revenue per customer. Annual ARPU is calculated by dividing our revenue for the last month of a period by the total number of customers as of the last day of the same period, and then multiplying the resulting quotient by 12. Our annual average revenue per user for Computer Backup and B2 Cloud Storage is calculated in the same manner based on the revenue and number of customers from our Computer Backup and B2 Cloud Storage solutions, respectively.

BACKBLAZE, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)
	December 31,
		2024				2023
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	45,776			$	12,502
Accounts receivable, net		1,831				800
Short-term investments, net		9,139				16,799
Prepaid expenses and other current assets		9,002				8,413
Total current assets		65,748				38,514
Restricted cash, non-current		—				4,128
Property and equipment, net		42,949				45,600
Operating lease right-of-use assets, net		15,873				9,980
Capitalized internal-use software, net		41,801				32,521
Other assets		2,187				944
Total assets	$	168,558			$	131,687
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	1,459			$	1,973
Accrued expenses and other current liabilities		7,584				8,768
Finance lease liabilities and lease financing obligations, current		16,327				18,492
Operating lease liabilities, current		4,026				1,878
Deferred revenue, current		30,407				25,976
Total current liabilities		59,803				57,087
Finance lease liabilities and lease financing obligations, non-current		13,142				13,310
Operating lease liabilities, non-current		12,844				8,151
Deferred revenue, non-current		5,147				4,073
Debt facility, non-current		—				4,128
Total liabilities		90,936				86,749
Commitments and contingencies
Stockholders’ Equity
Class A common stock, $0.0001 par value; 113,000,000 shares authorized as of December 31, 2024 and 2023; 53,375,770 and 39,150,610 shares issued and outstanding as of December 31, 2024 and 2023, respectively.		5				4
Additional paid-in capital		273,602				192,388
Accumulated deficit		(195,985	)			(147,454	)
Total stockholders’ equity		77,622				44,938
Total liabilities and stockholders’ equity	$	168,558			$	131,687

BACKBLAZE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share data)
	Three Months Ended December 31,								For the Years Ended December 31,
		2024				2023				2024				2023
	(unaudited)								(unaudited)
Revenue	$	33,786			$	28,737			$	127,628			$	102,019
Cost of revenue		15,283				13,653				58,285				52,162
Gross profit		18,503				15,084				69,343				49,857
Operating expenses:
Research and development		12,029				9,430				42,098				39,527
Sales and marketing		11,704				10,100				44,440				41,270
General and administrative		8,542				7,179				29,094				26,965
Total operating expenses		32,275				26,709				115,632				107,762
Loss from operations		(13,772	)			(11,625	)			(46,289	)			(57,905	)
Investment income		363				408				1,422				1,984
Interest expense, net		(968	)			(991	)			(3,658	)			(3,792	)
Loss before provision for income taxes		(14,377	)			(12,208	)			(48,525	)			(59,713	)
Income tax provision		—				—				6				—
Net loss and comprehensive loss	$	(14,377	)		$	(12,208	)		$	(48,531	)		$	(59,713	)
Net loss per share attributable to Class A and Class B common stockholders, basic and diluted	$	(0.30	)		$	(0.32	)		$	(1.11	)		$	(1.66	)
Weighted average shares used in computing net loss per share attributable to Class A and Class B common stockholders, basic and diluted(1)		48,212,796				38,254,122				43,543,023				36,011,446
(1) On July 6, 2023, all shares of our then outstanding Class B common stock were automatically converted into the same number of Class A common stock, pursuant to the terms of our Amended and Restated Certificate of Incorporation. No additional shares of Class B common stock will be issued following such conversion.

BACKBLAZE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
	For the Years Ended December 31,
		2024				2023
CASH FLOWS FROM OPERATING ACTIVITIES	(unaudited)
Net loss	$	(48,531	)		$	(59,713	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Net accretion of discount on investment securities and net realized investment gains		64				417
Noncash lease expense on operating leases		2,727				2,350
Depreciation and amortization		28,328				24,912
Impairment loss on right-of-use assets		898				—
Stock-based compensation		28,628				25,177
Impairment of capitalized internal-use software		—				232
Gain on disposal of assets		(154	)			(292	)
Other		345				—
Changes in operating assets and liabilities:
Accounts receivable		(1,031	)			56
Prepaid expenses and other current assets		(741	)			(445	)
Other assets		(1,346	)			(389	)
Accounts payable		(547	)			(295	)
Accrued expenses and other current liabilities		948				(1,422	)
Deferred revenue		5,505				4,526
Operating lease liabilities		(2,588	)			(2,464	)
Net cash provided by (used in) operating activities		12,505				(7,350	)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of marketable securities		(38,097	)			(26,358	)
Maturities of marketable securities		45,693				67,874
Proceeds from disposal of property and equipment		455				369
Purchases of property and equipment		(1,711	)			(5,512	)
Capitalized internal-use software costs		(12,471	)			(14,716	)
Net cash (used in) provided by investing activities		(6,131	)			21,657
CASH FLOWS FROM FINANCING ACTIVITIES
Principal payments on finance lease and lease financing obligations		(19,503	)			(19,510	)
Proceeds from issuance of common stock upon public offering, net of underwriting discounts and commission and other offering costs		37,434				—
Payments of offering costs		(383	)			—
Proceeds from debt facility		554				4,273
Repayment of debt facility		(4,682	)			(4,450	)
Proceeds from insurance premium financing		—				893
Principal payments on insurance premium financing		(893	)			(1,545	)
Proceeds from lease financing obligations		—				4,450
Proceeds from exercises of stock options		7,477				4,708
Proceeds from ESPP		2,768				2,339
Net cash provided by (used in) financing activities		22,772				(8,842	)
Net increase in cash		29,146				5,465
Cash and cash equivalents and restricted cash, at beginning of period		16,630				11,165
Cash and cash equivalents, at end of period	$	45,776			$	16,630
RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH
Cash and cash equivalents	$	45,776			$	12,502
Restricted cash, non-current		—			$	4,128
Total cash and cash equivalents and restricted cash, non-current	$	45,776			$	16,630

BACKBLAZE, INC.
RECONCILIATION OF GAAP TO NON-GAAP DATA
(in thousands, except percentages)
Adjusted Gross Profit and Adjusted Gross Margin
	For the Three Months Ended December 31,								For the Years Ended December 31,
		2024				2023				2024				2023
	(unaudited)								(unaudited)
Gross profit	$	18,503			$	15,084			$	69,343			$	49,857
Adjustments:
Stock-based compensation		398				530				1,616				1,986
Depreciation and amortization		6,917				6,439				27,761				24,330
Restructuring charges		460				—				460				—
Adjusted gross profit	$	26,278			$	22,053			$	99,180			$	76,173
Gross margin		55	%			52	%			54	%			49	%
Adjusted gross margin		78	%			77	%			78	%			75	%

Adjusted EBITDA and Adjusted EBITDA Margin
	For the Three Months Ended December 31,								For the Years Ended December 31,
		2024				2023				2024				2023
	(unaudited)								(unaudited)
Net loss	$	(14,377	)		$	(12,208	)		$	(48,531	)		$	(59,713	)
Adjustments:
Depreciation and amortization		7,060				6,575				28,328				24,912
Stock-based compensation (1)		6,609				6,507				26,104				25,052
Interest expense and investment income		605				583				2,236				1,808
Income tax provision		—				—				6				—
Foreign exchange (gain) loss (2)		(127	)			65				32				123
Non-recurring professional services		—				129				—				411
Restructuring charges (3)		4,861				—				4,861				3,616
Adjusted EBITDA	$	4,631			$	1,651			$	13,036			$	(3,791	)
Adjusted EBITDA Margin		14	%			6	%			10	%			(4	)%
(1) During the three months ended December 31, 2024, $2.5 million of stock-based compensation expense is classified as restructuring charges in the table above, as it was incurred as part of our restructuring program. No stock-based compensation related to restructuring charges was recognized during the three months ended December 31, 2023. During the years ended December 31, 2024 and 2023, $2.5 million and $0.1 million, respectively, of stock-based compensation is classified as restructuring charges in the table above.
(2) As of December 31, 2024, we included foreign exchange (gain) loss in its reconciliation of net loss to Adjusted EBITDA. Adjusted EBITDA and Adjusted EBITDA Margin for the prior periods presented have been updated to conform with current presentation.
(3) Restructuring charges represent costs incurred in connection with our restructuring plans. Costs incurred in connection with the 2024 Restructuring Plan include: (i) $3.9 million of severance and benefits related to impacted employees, (ii) $0.9 million related to the expected sublease of a portion of our corporate headquarters, and (iii) $0.1 million of professional service fees related to the execution of the 2024 Restructuring Plan. Costs incurred during the year ended December 31, 2023 relate to severance and benefits for the employees impacted by the restructuring plan initiated in Q1 2023.

BACKBLAZE, INC.
SUPPLEMENTAL FINANCIAL INFORMATION
(in thousands, except share and per share data)
Non-GAAP Net Loss
	For the Three Months Ended December 31,								For the Years Ended December 31,
		2024				2023				2024				2023
	(unaudited)								(unaudited)
Net loss	$	(14,377	)		$	(12,208	)		$	(48,531	)		$	(59,713	)
Adjustments:
Stock-based compensation (1)		6,609				6,507				26,104				25,052
Foreign exchange (gain) loss (2)		(127	)			65				32				123
Non-recurring professional services		—				129				—				411
Restructuring charges (3)		4,861				—				4,861				3,616
Non-GAAP net loss	$	(3,034	)		$	(5,507	)		$	(17,534	)		$	(30,511	)
Non-GAAP net loss per share, basic and diluted	$	(0.06	)		$	(0.14	)		$	(0.40	)		$	(0.85	)
Weighted average shares used in computing net loss per share attributable to Class A and Class B common stockholders, basic and diluted		48,212,796				38,254,122				43,543,023				36,011,446
(1) During the three months ended December 31, 2024, $2.5 million of stock-based compensation expense is classified as restructuring charges in the table above, as it was incurred as part of our restructuring program. No stock-based compensation related to restructuring charges was recognized during the three months ended December 31, 2023. During the years ended December 31, 2024 and 2023, $2.5 million and $0.1 million, respectively, of stock-based compensation is classified as restructuring charges in the table above.
(2) As of December 31, 2024, we included foreign exchange loss (gain) in its reconciliation of net loss to Adjusted EBITDA. Adjusted EBITDA and Adjusted EBITDA Margin for the prior periods presented have been updated to conform with current presentation.
(3) Restructuring charges represent costs incurred in connection with our restructuring plans. Costs incurred in connection with the 2024 Restructuring Plan include: (i) $3.9 million of severance and benefits related to impacted employees, (ii) $0.9 million related to the expected sublease of a portion of our corporate headquarters, and (iii) $0.1 million of professional service fees related to the execution of the 2024 Restructuring Plan. Costs incurred during the year ended December 31, 2023 relate to severance and benefits for the employees impacted by the restructuring plan initiated in Q1 2023.

Adjusted Free Cash Flow and Adjusted Free Cash Flow Margin
	Three Months Ended December 31,								Year Ended December 31,
		2024				2023				2024				2023
	(unaudited)								(unaudited)
Net cash provided by (used in) operating activities	$	2,233			$	3,248			$	12,505			$	(7,350	)
Capital Expenditures (1)		(3,062	)			(4,101	)			(14,182	)			(20,228	)
Principal payments on finance leases and lease financing obligations		(4,748	)			(4,632	)			(19,503	)			(19,510	)
Non-recurring professional services		—				129				—				411
Cash payments for workforce reduction and severance charges		1,049				12				1,049				3,491
Adjusted Free Cash Flow	$	(4,528	)		$	(5,344	)		$	(20,131	)		$	(43,186	)
Adjusted Free Cash Flow Margin		(13	)%			(19	)%			(16	)%			(42	)%
(1) Capital expenditures are defined as cash used for purchases of property and equipment and capitalized internal-use software costs.

Stock-based Compensation
	For the Three Months Ended December 31,						For the Years Ended December 31,
		2024			2023			2024			2023
	(unaudited)						(unaudited)
Cost of revenue	$	689		$	530		$	1,907		$	1,986
Research and development		3,822			2,432			11,277			9,218
Sales and marketing		3,013			2,185			9,505			8,801
General and administrative		1,609			1,360			5,939			5,172
Total stock-based compensation expense (1)	$	9,133		$	6,507		$	28,628		$	25,177
(1) Stock-based compensation expense includes restructuring charges of $2.5 million incurred during the three months and year ended December 31, 2024. Of the $2.5 million in stock-based compensation restructuring charges incurred, $0.3 million related to cost of revenue, $0.9 million related to research and development costs, $1.2 million related to sales and marketing costs, and $0.1 million related to general and administrative costs. Stock-based compensation restructuring charges of $0.1 million incurred during the year ended December 31, 2023 were related to sales and marketing and general and administrative costs.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20250225725352/en/

Investors Contact

Mimi Kong

Senior Director, Investor Relations and Corporate Development

ir@backblaze.com

Press Contact

Yev Pusin

Sr. Director, Marketing

press@backblaze.com

Source: Backblaze, Inc.

FAQ

What was Backblaze (BLZE) Q4 2024 revenue growth and performance?

BLZE reported Q4 2024 revenue of $33.8M, up 18% YoY, with B2 Cloud Storage growing 22% and Computer Backup up 13%.

How much did Backblaze (BLZE) improve its EBITDA margin in Q4 2024?

BLZE's Q4 2024 Adjusted EBITDA margin more than doubled YoY to 14% from 6% in Q4 2023.

What are Backblaze's (BLZE) revenue projections for 2025?

BLZE expects 2025 revenue between $144.0M to $146.0M with Adjusted EBITDA margin of 16% to 18%.

How significant is AI business growth for Backblaze (BLZE)?

BLZE reported 65% YoY growth in AI customers with 10x increase in AI-related data, and 3 AI companies now among top 10 customers.

What was the impact of Backblaze's (BLZE) secondary offering in 2024?

BLZE's secondary offering was oversubscribed and strengthened the balance sheet with $37M in net proceeds.