Backblaze, Inc.

Backblaze, Inc. operates as a high-performance cloud storage platform, catering to data-intensive use cases in the artificial intelligence (AI) era and across a broad spectrum of modern cloud workloads. The company's mission is to address complex storage needs by mitigating barriers of lock-in, complexity, and cost, leveraging its purpose-built, web-scale software infrastructure built on commodity hardware. As of December 31, 2025, Backblaze serves over 500,000 customers across more than 175 countries, managing an aggregate of approximately 5 billion gigabytes of data storage ¹. The company's direct sales activities, channel and technology partners, and referrals from its community of brand advocates contribute to its customer acquisition, with direct sales increasingly focused on larger customers, including leading neocloud platforms through its "Powered by Backblaze" program. The worldwide market for Public Cloud IaaS Storage is projected to grow to $118 billion by 2028, according to International Data Corporation forecasts.

Backblaze's core business model revolves around providing cloud services through its proprietary "Backblaze Storage Cloud" platform, which is designed for high-performance, secure, reliable object storage at exabyte scale. The platform manages over 1 trillion files and intelligently allocates storage across hundreds of thousands of hard drives in multiple data centers globally. Revenue is substantially recurring, driven by a "land-and-expand" model where increased data generation and usage by existing customers, along with adoption of new features, lead to revenue expansion. The company offers a free tier for B2 Cloud Storage and a 14-day free trial for Computer Backup to facilitate customer onboarding.

The company offers two primary cloud services: B2 Cloud Storage and Computer Backup. B2 Cloud Storage is an Infrastructure-as-a-Service (IaaS) solution, providing direct access to the Backblaze Storage Cloud for a wide range of use cases, including AI and machine learning (ML) workflows, public, hybrid, and multi-cloud data storage, application development, content delivery, security, and media management. It operates on a pay-as-you-go basis or through capacity/committed contracts. A premium offering, B2 Overdrive, provides throughput up to 1Tbps, unlimited free egress, and private networking support for data-intensive workloads. Computer Backup is a Software-as-a-Service (SaaS) solution that continuously and automatically backs up laptops, desktops, and external hard drives with transparent, flat-rate pricing for virtually unlimited files.

For the fiscal year ended December 31, 2025, total revenue increased by $18.2 million, or 14%, to $145.835 million ² from $127.628 million ³ in 2024. B2 Cloud Storage revenue grew by 26% to $79.897 million ⁴ from $63.335 million ⁵ in 2024, driven by a $10.1 million ⁶ increase from new customers and a $6.5 million ⁷ increase from higher storage usage by existing customers. Computer Backup revenue grew by 3% to $65.938 million ⁸ from $64.293 million ⁹ in 2024, with a $4.5 million ¹⁰ increase due to price adjustments and a $0.7 million ¹¹ increase from existing customer utilization, partially offset by a $3.6 million ¹² decrease from declining license counts.

Gross profit for 2025 was $88.793 million ¹³, up from $69.343 million ¹⁴ in 2024, resulting in a gross margin of 61% ¹⁵, an increase from 54% ¹⁶ in the prior year. This margin expansion was primarily due to higher revenue and lower fixed costs, including a $6.0 million ¹⁷ decrease in depreciation expense from extending the useful life of infrastructure equipment, which contributed approximately 4% ¹⁸ to the gross margin increase. Operating expenses totaled $112.416 million ¹⁹ in 2025, a decrease from $115.632 million ²⁰ in 2024. Research and development expenses increased by $4.011 million ²¹ to $46.109 million ²², while sales and marketing expenses decreased by $7.043 million ²³ to $37.397 million ²⁴. General and administrative expenses remained relatively flat at $28.910 million ²⁵.

The company reported a net loss of $25.612 million ²⁶ for the year ended December 31, 2025, an improvement from a net loss of $48.531 million ²⁷ in 2024. Diluted EPS was $(0.46) ²⁸ in 2025, compared to $(1.11) ²⁹ in 2024. Cash and cash equivalents stood at $29.182 million ³⁰ as of December 31, 2025, down from $45.776 million ³¹ in 2024. Marketable securities increased to $22.199 million ³² from $9.139 million ³³. Total liabilities were $108.605 million ³⁴ and total stockholders' equity was $83.221 million ³⁵ as of December 31, 2025. Net cash provided by operating activities was $23.544 million ³⁶ in 2025, up from $12.505 million ³⁷ in 2024.

During 2025, Backblaze initiated a "2025 Restructuring and Transformation Plan" in November, incurring charges of approximately $2.5 million ³⁸, including employee termination expenses and an impairment charge related to exiting its corporate headquarters. The company also launched B2 Overdrive, a premium high-performance cloud storage solution, and a suite of enterprise cybersecurity features including AI-powered anomaly alerts and an Enterprise Web Console. In June 2025, Backblaze entered into a senior secured revolving credit facility with Citizens Bank, N.A., providing borrowing capacity of up to $20.0 million ³⁹, with no outstanding borrowings as of December 31, 2025. An existing data center lease was amended in June 2025 to extend its non-cancellable term and expand into additional infrastructure, with the expansion expected to commence in Q2 2026. In August 2025, the Board approved a share repurchase program authorizing up to $10.0 million ⁴⁰ of Class A common stock repurchases through August 1, 2026, with $8.0 million ⁴¹ remaining available as of December 31, 2025.

Backblaze anticipates continued investment in its technology platform and related features to drive customer, community, and product milestones, particularly as it moves up-market. The company expects its operating expenses, excluding depreciation, amortization, restructuring charges, and stock-based compensation, to remain relatively flat in 2026 compared to 2025, as efficiencies from 2025 restructuring activities are expected to offset increased investments in research and development and other growth-related costs. However, sales and marketing expenses may increase in absolute dollars due to investments in marketing initiatives to support business growth.

A major growth area for Backblaze is its focus on high-value customers with enterprise-scale workloads, including leading neocloud and AI customers, through its direct sales organization and "Powered by Backblaze" program. The company launched B2 Overdrive in April 2025, a premium-priced, ultra high-throughput performance cloud storage solution specifically designed for data-intensive workloads such as AI and machine-learning training, large-scale analytics, high-performance computing, and media processing. This offering is intended to expand the addressable market among enterprise and AI-driven customers and lay the groundwork for further innovation. Additionally, the Enterprise Web Console for B2 Cloud Storage was introduced in May 2025 to streamline role-based administration in complex enterprise environments, further supporting the up-market transformation.

Backblaze is also investing in targeted marketing initiatives to increase brand awareness, generate demand, and convert new customers, with a focus on improving the efficiency of these efforts by optimizing conversion rates. Key initiatives include creating opportunities for frictionless AI adoption through open source ecosystems, expanding developer relations, and launching "Flamethrower," a startup program offering product credits, technical support, and ecosystem partnerships to early-stage companies. The company aims to cultivate long-term relationships that foster brand advocates, partners, and referrals.

The company is committed to continued investment in capital and research and development activities to meet the performance requirements of modern enterprise and AI workloads. Research and development expenses are expected to increase in absolute dollars for the foreseeable future as new features are added, advanced technologies like AI are integrated into the development lifecycle, and the functionality of existing features is enhanced. Capital expenditures are expected to fluctuate in the near term, with an anticipated increase in early 2026 to support ongoing platform development, future product launches, and the up-market strategy.

International expansion represents another meaningful opportunity, with 28% ⁴² of total revenue originating outside the United States for the year ended December 31, 2025. The company plans to invest in international operations to reach new customers in targeted key geographies, as evidenced by the January 2025 agreement with a leading hybrid cloud solutions provider in Canada, which led to the launch of a new data center region in Canada in January 2025.

Backblaze may require additional capital to support its operations or business growth, and its ability to obtain such financing depends on investor and lender demand, operating performance, capital market conditions, and compliance with covenants. The company often uses leases to finance infrastructure equipment and has a Revolving Credit Facility with Citizens Bank, N.A. for up to $20.0 million ⁴³. The company expects to increase capital expenditures and continue leveraging finance lease agreements for infrastructure investments to support its up-market transformation. When strategic opportunities arise, Backblaze may supplement its revolving credit facility with additional equity or debt funding to accelerate enterprise-focused growth.

Backblaze faces several material risks, including a history of cumulative losses and no expectation of profitability for the foreseeable future, with an accumulated deficit of $221.6 million ⁴⁴ as of December 31, 2025. The markets in which the company operates are intensely competitive, with larger competitors possessing greater resources and brand recognition, potentially leading to pricing pressures or reduced sales. Any significant disruption in service, loss, or delay in data availability due to events like extreme weather, human error, war, or cybersecurity attacks could damage reputation and harm operating results. The company's reliance on a limited number of third-party data centers and suppliers for key components like hard drives exposes it to supply chain disruptions, increased costs, and potential service interruptions. The growth strategy's dependence on attracting and retaining larger enterprise and AI-driven customers introduces risks such as rapid technological obsolescence, intense competition, and increased infrastructure costs due to higher performance demands. The evolving legal and regulatory landscape around AI, including data usage and intellectual property, could impact customer adoption and lead to litigation or regulatory actions. Furthermore, the company's use of AI internally carries risks of inaccurate or biased outputs, data leakage, and intellectual property uncertainty. Compliance with various data privacy laws, such as GDPR and CCPA, is complex and costly, with potential for significant fines and reputational damage for non-compliance. The company's credit facility imposes restrictive covenants, including maintaining minimum liquidity of $10.0 million ⁴⁵ and a maximum total leverage ratio of 2.75 to 1.00 ⁴⁶, which could constrain strategic and operational flexibility if not met. Fluctuations in currency exchange rates, particularly a strengthening U.S. dollar, could negatively affect results of operations, and inflation may increase operating and interest costs.

Management's message to shareholders emphasizes a strategic transformation focused on moving up-market to serve high-value enterprise and AI-driven customers, while continuing to invest in the core platform and expand internationally. The company is optimizing its direct sales organization and enhancing marketing and demand generation efforts, including account-based marketing and developer relations, to support this shift. Key strategic priorities include the continued investment in capital and research and development to meet the performance requirements of modern enterprise and AI workloads, as evidenced by the launch of B2 Overdrive and enterprise cybersecurity features. Management expects operating expenses, excluding certain non-cash and restructuring items, to remain relatively flat in 2026 compared to 2025, with sales and marketing expenses potentially increasing in absolute dollars due to growth initiatives. Capital expenditures are anticipated to increase in early 2026 to support platform development and product launches. The company also highlights international expansion as a meaningful opportunity, with 28% ⁴⁷ of total revenue originating outside the United States in 2025, and plans to invest in targeted key geographies.