• Revenue: $33.8 million in Q4, representing 18% year-over-year growth.
• B2 Cloud Storage Revenue: $17.1 million, 22% year-over-year growth.
• Computer Backup Revenue: $16.7 million, 13% year-over-year growth.
• Adjusted EBITDA Margin: 14% for Q4, doubling over the same period last year.
• Net Revenue Retention (NRR): 116%, up from 109% last year.
• Adjusted Gross Margin: 78% for the quarter.
• Cash and Short-term Investments: $55 million at the end of Q4.
• Cash Flow from Operations: $12.5 million for the year, a $20 million improvement over the prior year.
• Adjusted Free Cash Flow: Negative $20 million for the full year, improved by $23 million from last year.
• Annual Recurring Revenue (ARR) for B2: $70 million, a $5 million increase from Q3.
• Full Year 2025 Revenue Guidance: $144 million to $146 million.
• Q1 2025 Revenue Guidance: $34.1 million to $34.5 million.
• Adjusted EBITDA Guidance for Full Year 2025: 16% to 18%.
• Adjusted EBITDA Guidance for Q1 2025: 13% to 15%.

• Warning! GuruFocus has detected 2 Warning Signs with BLZE.

Release Date: February 25, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Backblaze Inc (NASDAQ:BLZE) reported an 18% year-over-year revenue growth, with B2 Cloud Storage growing by 22%.
• The company achieved a record sales booking quarter, surpassing the combined total of the previous three quarters.
• Backblaze Inc (NASDAQ:BLZE) successfully completed an oversubscribed secondary offering, raising $37 million in net proceeds.
• The company has made significant progress in its go-to-market transformation, with ARR win rates and sales productivity doubling year-over-year.
• Backblaze Inc (NASDAQ:BLZE) is seeing strong momentum in its AI customer segment, with a tenfold increase in data stored by AI companies.

Negative Points

• The consumer side of the computer backup business is in a long-term secular decline.
• Despite improvements, the company still reported negative adjusted free cash flows for the full year.
• Backblaze Inc (NASDAQ:BLZE) experienced a larger customer loss in Q1, impacting growth numbers.
• The company faces competition from major cloud providers like Amazon, Google, and Microsoft, as well as other storage offerings from partners.
• There is a lag in translating leading indicators from the go-to-market transformation into revenue due to the nature of the business.

Q & A Highlights

Q: On the partner front, what are the key metrics you're monitoring for the year, specifically any quantitative goals for partners in '25? A: Gleb Budman, CEO: On the partner side, we have two parts: the channel and the alliance. For the channel, we look at pipeline and sales productivity, measured as average ARR closed per person. For alliances, we focus on co-build, co-market, and co-sell strategies to solve customer problems.

Q: How do you see B2 and computer backup growth rates over a 3- to 5-year period? A: Marc Suidan, CFO: We expect B2 to grow over 30% by the end of 2025, outpacing the market growth of 18-19%. Computer backup will grow in the first half due to price increases but will exit the year at around -3%. The consumer side is in decline, but the business side offers growth opportunities.

Q: Can you provide more color on AI use cases and how they translate into growth for Backblaze? A: Gleb Budman, CEO: We are a strategic vendor for AI customers, supporting data collection, processing, model training, inference, and monitoring. Our storage solutions enable customers to manage large datasets and leverage multi-cloud GPU environments, positioning us as a core component in their AI pipelines.

Q: How do you see gross margins progressing through the year? A: Marc Suidan, CFO: We expect gross margins to remain stable at around 78% into next year, with no major changes anticipated.

Q: What is the impact of the new data center in Canada, and are there any foreign exchange risks? A: Gleb Budman, CEO: The Canada data center is our fourth region, launched with an anchor partner to mitigate investment risks. Marc Suidan, CFO: There is minimal foreign exchange risk as most Canadian billings are in USD, and expenses are low.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.