Backblaze Stock Earnings Reports

Backblaze reported a strong Q1 2026: revenue $38.7M (up 12% YoY), B2 Cloud Storage grew 24% YoY and ARR rose to $158M (B2 ARR +28% YoY). The company beat revenue and adjusted EBITDA guidance, with adjusted EBITDA $10M (26% margin). Key drivers were larger deal sizes (average sales deal size more than doubled), growth in AI-related customers (AI customers +76% YoY; >1/3 of new bookings from AI), and increased customer data consumption on B2. Management highlighted a strategic focus on the AI opportunity and Neoclouds (estimating a $14B addressable opportunity by 2030) and is embedding Backblaze into AI developer tools (Hugging Face, MLflow, CVAT, ComfyUI). They completed go‑to‑market systems upgrades, launched the Flamethrower startup program, and hired a CRO (Anuj Kumar) to accelerate upmarket execution. Financially, gross margin improved to 61% (vs 56% prior year) helped by asset-life changes and operating leverage; Q1 adjusted free cash flow was negative $1.8M due to timing and pulled‑forward CapEx, but management expects adjusted free cash flow positive for the full year with improvement in H2. They implemented a May 1 pricing & packaging update (removing API transaction fees) that they expect to be accretive to revenue and margins and raised full‑year revenue guidance to $161.5M–$163.5M and adjusted EBITDA margin guidance to 23%–25%. CapEx will be higher (accelerating some 2027 spend into 2026) to meet demand and capacity needs; they have >$100M capital lease capacity (about half used) and do not expect to raise equity. Risks remain (customer concentration/variability, execution on GTM transformation, competition, and macro supply/cost pressures), but management emphasizes momentum in bookings, pipeline engagement with top Neoclouds, and a path to sustained profitability and cash generation.