Summary
Backblaze reported first-quarter revenue of $29.97 million, up 28.1% from the prior-year quarter. Gross profit rose 44.1% to $15.81 million. Gross margin was 52.8%, up 5.9 percentage points. The operating loss narrowed to $10.51 million. The net loss narrowed to $11.05 million. Diluted loss per share narrowed to $0.27. Operating margin was negative 35.1%, up 36.7 percentage points. Adjusted EBITDA was $1.9 million, or 6% of revenue, compared to $(2.9) million, or (12%) of revenue, in the prior-year quarter. Non-GAAP net loss was $5.5 million, and non-GAAP net loss per share was $0.14. The MD&A attributed the revenue increase to higher storage, the October 2023 price increase, and B2 Reserve sales, with Computer Backup helped by price increases and partly offset by a lower license count.
Annual recurring revenue was $122.1 million, up 27%. B2 Cloud Storage ARR was $59.5 million, up 43%. Computer Backup ARR was $62.6 million, up 15%. Net revenue retention was 112%, compared with 111% in the prior-year quarter. B2 Cloud Storage net revenue retention was 126%, compared with 120%. Computer Backup net revenue retention was 101%, compared with 106%. Gross customer retention was 91% in both periods. B2 Cloud Storage gross customer retention was 89%, compared with 90%. Computer Backup gross customer retention was 91%, compared with 90%. The company introduced Event Notifications, earned a Carahsoft ValuePoint approved vendor designation, joined StateRAMP Progressing Snapshot and the Motion Picture Association's Trusted Partner Network, and announced a partnership with Axle AI. Backblaze works with over 500,000 customers in over 175 countries and manages over three billion gigabytes of data storage. International customers generated 27% of total revenue in the quarter.
Operating cash flow was $3.42 million, an increase of $8.61 million. Capital expenditures were $0.42 million, down 86.0%. Deferred revenue was $33.22 million, up 25.4%. Remaining performance obligations were $35.90 million. The MD&A said the October 2023 price increases had a favorable impact on revenue and gross margin, but also flagged inherent uncertainty. Customer retention was not materially impacted as of March 31, 2024. Computer Backup net revenue retention fell due to churn, while B2 Cloud Storage net revenue retention rose on the price increase and growth from existing customers. The MD&A also said gross customer retention was essentially flat for both B2 Cloud Storage and Computer Backup.
For the second quarter of 2024, management guided revenue to $30.7 million to $31.1 million, adjusted EBITDA margin to 6% to 8%, and basic shares outstanding to 42.0 million to 42.5 million. For full-year 2024, management guided revenue to $126.0 million to $128.0 million and adjusted EBITDA margin to 8% to 10%. Chief Financial Officer Frank Patchel plans to retire later this year, and a search for his successor is underway. Mr. Patchel intends to remain through the hiring and onboarding of the new CFO. The company also noted that its revolving credit agreement matures in December 2025 and does not have financial covenants.
The company faces risks from market competition, including competitors with greater size and resources, service disruption, loss of customer data availability, cyberattacks, and the ability to attract and retain customers. Other risks include managing growth, launching new features on time, pricing changes, software defects, supply chain disruption, partner relationships, material weaknesses in internal controls, hiring and retention of key employees, the Israel-Hamas conflict, litigation, and general market conditions. The 10-K risk factors also mention the impact of a pandemic, war, or hostilities on the business and the business of customers, vendors, supply chain, and partners. Backblaze's growth depends on adding new customers, expanding within existing customers, scaling sales efforts, continued platform investment, and international expansion.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q1 FY2024 | Q4 FY2023 | QoQ | Q1 FY2023 | YoY |
|---|---|---|---|---|---|
| Revenue | $30.0M | $28.7M | +4.3% | $23.4M | +28.1% |
| Gross profit | $15.8M | $15.1M | +4.8% | $11.0M | +44.1% |
| Gross margin | 52.8% | 52.5% | +0.3 pp | 46.9% | +5.9 pp |
| Research & development | $9.7M | $9.4M | +3.4% | $10.5M | -7.5% |
| Sales & marketing | $10.0M | $10.1M | -0.8% | $10.6M | -5.1% |
| General & administrative | $6.6M | $7.2M | -8.7% | $6.7M | -1.9% |
| Total operating expenses | $26.3M | $26.7M | -1.5% | $27.8M | -5.2% |
| Operating income (loss) | -$10.5M | -$11.6M | +9.6% | -$16.8M | +37.4% |
| Operating margin | -35.1% | -40.5% | +5.4 pp | -71.8% | +36.7 pp |
| Net income (loss) | -$11.1M | -$12.2M | +9.5% | -$17.1M | +35.4% |
| Net margin | -36.9% | -42.5% | +5.6 pp | -73.2% | +36.3 pp |
| Diluted EPS | -$0.27 | -$0.34 | +$0.07 | -$0.50 | +$0.23 |
| Customers | 500,000 | 500,000 | ±0.0% | 500,000 | ±0.0% |
| Net retention rate | 112.0% | — | — | 111.0% | +1.0 pp |
Risks
During Q3 2023 the company announced price increases for Computer Backup and B2 Cloud Storage that took effect in Q4 2023. The filing says the full impact may not yet be realized and could cause existing customers not to renew, reduce new customer additions, or decrease data stored, and Computer Backup net revenue retention rate decreased by 5% as of March 31, 2024 compared to March 31, 2023, primarily due to customer churn.
The filing states the markets are intensely competitive and names Amazon Web Services, Google Cloud Platform, Microsoft Azure, EMC/Dell and NetApp as competitors with greater name recognition, broader offerings and significantly greater resources. Competitive pricing pressure could result in reduced sales, increased customer churn, lower margins or losses.
B2 Cloud Storage and Computer Backup have accounted for substantially all of total revenue, and the filing states the company is dependent on a small number of offerings focused on cloud storage and computer backup. A general or industry decline in demand for cloud-based storage solutions would not be offset by meaningful revenue from other market sectors.
The risk factor summary states the company has identified material weaknesses in internal controls over financial reporting. The failure to achieve and maintain effective internal controls over financial reporting could harm the business and negatively impact the value of Class A common stock.
The filing cites reliance on a limited number of third-party data centers and hard drive suppliers. It notes a third-party data center vendor bankruptcy in 2022, Toshiba's buy-out by private equity firms, and Western Digital's planned spin-out of its hard drive business as events that could disrupt supply, increase costs, or make customer data unavailable.
The filing states competition for executive, software developer, sales and operations personnel is intense, and in 2024 the company implemented a new sales commission structure. If the new commission program does not effectively incentivize the sales team, the company may not retain or hire qualified sales personnel or obtain new customers.
The filing says the business is substantially dependent on mid-market organizations, which can have limited budgets and are more vulnerable to economic downturns, inflation and recession concerns. This could reduce spending on cloud services, lengthen sales cycles, and increase customer churn.
The filing states that use of generative artificial intelligence tools could expose the company to inadvertent disclosure of trade secrets or other confidential information, or cause violation of third-party intellectual property rights, and could increase the likelihood of cybersecurity incidents.
SaaS KPIs
All quarters →Adjusted Gross Margin
Adjusted EBITDA Margin
B2 Cloud Storage Gross Customer Retention Rate
Computer Backup Gross Customer Retention Rate
Gross Customer Retention Rate
Annual Recurring Revenue (ARR)
Net Revenue Retention (NRR)
Total Customers
B2 Cloud Storage Net Revenue Retention (NRR)
Computer Backup Net Revenue Retention (NRR)
B2 Cloud Storage Annual Recurring Revenue (ARR)
Computer Backup Annual Recurring Revenue (ARR)
Summary, forecast, risks and KPIs are extracted from Backblaze, Inc.'s SEC filings for Q1 FY2024 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 2, 2026.