GICS Sector : Technology
Backblaze, Inc., a storage cloud platform, provides businesses and consumers cloud services to store, use, and protect data in the United States and internationally.The company offers cloud services through a web-scale software infrastructure built on commodity hardware.It also provides Backblaze B2 Cloud Storage, which enables customers to store data, developers to build applications, and partners to expand their use cases.
Backblaze reported a robust third quarter, with total revenue growing 14% year-over-year to $37.2 million, exceeding the high end of guidance. The B2 Cloud Storage segment delivered 28% growth, driving the overall revenue increase. Adjusted EBITDA margin also came in above expectations, reflecting the company's operating leverage and benefits from a recent useful life study. Gross margin expanded to 62%, up from 55% a year ago, while adjusted gross margin reached 79%. Earnings per share (EPS) was $0.03, beating estimates of -$0.01. Operating expenses as a percentage of revenue improved to 71% from 92% a year ago, demonstrating the company's efforts to optimize its cost structure.
Publication Date: Nov -10
The company's AI business is gaining traction, with various use cases, including large-scale vision language models and surveillance. Backblaze has signed new deals with AI start-ups and expanded existing relationships, showcasing its technology and innovation strength. The platform offers a valuable multi-cloud upload that streamlines workflows, and it has received industry recognition in cloud security and technology innovation. With 100,000 customers on B2, the company has a distributed customer base across various use cases, providing core predictability in the business.
Backblaze is launching Phase 2 of its go-to-market transformation, focusing on accelerating the velocity of both self-serve and direct sales motions. The company expects revenue in the range of $37.3 million to $37.9 million in Q4 and B2 growth between 25% and 28%. For 2025, B2 is on track for mid-20s year-over-year growth rate, and 2026 is expected to be in a similar range, driven by the second phase of go-to-market transformation and potential large deals.
With a current P/S Ratio of 2.36 and EV/EBITDA of -18.99, the market is pricing in significant growth expectations. The company's strong balance sheet, with $50 million in cash and marketable securities, positions it well to support continued growth and investment. As Backblaze continues to execute on its go-to-market transformation and drive growth in its AI business, investors will be watching closely to see if the company can meet its ambitious targets.
Backblaze to Present Strategy for Future-Proofing AI Initiatives at Gartner IT Infrastructure, Operations, & Cloud Strategies Conference 2025
Dec -02
Backblaze B2 Cloud Storage Partners with Shareio's Creator Monetization Platform
Nov -18
Backblaze Publishes First Performance Stats Report: Transparent Cloud Storage Benchmarking
Nov -12
Backblaze Q3 2025 Drive Stats: Rethinking Failure, Celebrating High-Capacity Drive Strength
Nov -11
Backblaze Publishes Q3 2025 Network Stats: The Magnitude of AI Workflows
Nov -10
Backblaze, Inc. (BLZE) Q3 2025 Earnings Call Transcript
Nov -06
Backblaze, Inc. (BLZE) Surpasses Q3 Earnings and Revenue Estimates
Nov -06
Backblaze Announces Third Quarter 2025 Financial Results
Nov -06
Backblaze's subscription-based arrangements for computer backup are driven by increasing demand for cloud-based data storage, growing adoption of remote work, and rising concerns about data security and ransomware attacks. Additionally, the company's competitive pricing, user-friendly interface, and reliable backup services contribute to its 12.53% growth.
Backblaze's Consumption-based Arrangements (B2 Cloud Storage) growth of 24.67% is driven by increasing adoption of cloud storage solutions, rising demand for data backup and archiving, and the company's competitive pricing strategy. Additionally, the growing need for scalable and secure data storage, coupled with the shift towards hybrid and multi-cloud environments, contributes to the segment's rapid expansion.
Backblaze's Physical Media segment growth of 10.27% is driven by increasing demand for cloud-based data storage, rising adoption of hybrid cloud strategies, and growing need for data archiving and compliance. Additionally, the company's focus on providing low-cost, high-capacity storage solutions and expanding its partner network contribute to its growth momentum.
A cloud-based backup service that automatically backs up data from computers and external drives
A cloud-based object storage service that allows users to store and serve large amounts of data
A cloud-based backup service designed for businesses to protect their data across multiple computers and locations
Backblaze's cloud backup service is a niche product, and customers have limited alternatives. However, the company's focus on providing a low-cost, high-capacity backup solution reduces the threat of substitutes.
Backblaze's customers have some bargaining power due to the availability of alternative cloud backup services. However, the company's competitive pricing and feature set help to mitigate this power.
Backblaze's suppliers of hardware and infrastructure have limited bargaining power due to the company's ability to negotiate favorable terms and its focus on vertical integration.
The threat of new entrants in the cloud backup market is moderate, as it requires significant investment in infrastructure and technology. However, the low barriers to entry in the software industry make it easier for new competitors to emerge.
The cloud backup market is highly competitive, with several established players competing for market share. Backblaze's focus on providing a low-cost, high-capacity solution helps the company to differentiate itself in this competitive landscape.
| Value | |
|---|---|
| Debt Weight | 36.10% |
| Debt Cost | 8.09% |
| Equity Weight | 63.90% |
| Equity Cost | 10.01% |
| WACC | 9.32% |
| Leverage | 56.50% |
Value: 4.3
Growth: 7.9
Quality: 4.3
Yield: 0.0
Momentum: 6.0
Volatility: 5.3
1-Year Total Return ->
Value: 3.2
Growth: 6.8
Quality: 6.4
Yield: 0.0
Momentum: 6.0
Volatility: 4.7
1-Year Total Return ->
Value: 9.2
Growth: 5.1
Quality: 4.3
Yield: 0.0
Momentum: 1.5
Volatility: 3.3
1-Year Total Return ->
Value: 6.8
Growth: 7.1
Quality: 2.6
Yield: 0.0
Momentum: 4.0
Volatility: 3.0
1-Year Total Return ->
Value: 4.8
Growth: 3.2
Quality: 3.2
Yield: 0.0
Momentum: 8.0
Volatility: 2.0
1-Year Total Return ->
Value: 8.4
Growth: 6.2
Quality: 3.2
Yield: 0.0
Momentum: 0.5
Volatility: 1.7
1-Year Total Return ->