Summary
Backblaze opened fiscal 2025 with first-quarter revenue of $34.6 million, up 15% from the prior-year quarter. Total company growth came alongside faster growth in B2 Cloud Storage, up 23% year over year, while Computer Backup grew 8%. Gross profit rose 21.8% to $19.3 million, and gross margin climbed to 55.6% from 52.8%. The operating loss narrowed to $8.9 million from $10.5 million, and operating margin was -25.8%, up from -35.1%. Net loss narrowed to $9.3 million from $11.1 million, and net loss per share narrowed to $0.17 from $0.27.
Non-GAAP results show the operating leverage management is aiming for. Adjusted EBITDA was $6.4 million, or 18% of revenue, against $1.9 million, or 6% of revenue, a year earlier. Adjusted gross profit reached $27.3 million, or 79% of revenue, compared with $23.0 million, or 77%. Non-GAAP net loss was $1.8 million versus $5.5 million, and non-GAAP net loss per share was $0.03 versus $0.14. Operating cash flow for the quarter was $4.9 million, up from $3.4 million. Adjusted free cash flow is a separate measure that also subtracts capital expenditures and finance lease principal payments, and it was $(2.1) million compared with $(5.1) million. Capital expenditures were $0.5 million, up from $0.4 million. Cash and marketable securities totaled $53.2 million at March 31, 2025.
Annual recurring revenue reached $140.8 million, up 15% year over year. B2 Cloud Storage ARR was $73.8 million, up 24%, and Computer Backup ARR was $67.0 million, up 7%. Total company net revenue retention was 113% compared with 112%. B2 net revenue retention decreased to 117% from 126%, which the company attributes largely to the lapped effect of the October 2023 price increase. Computer Backup net revenue retention improved to 108% from 101%. Gross customer retention was 90% compared with 91%. Deferred revenue of $36.4 million was up 9.4%, and remaining performance obligations of $44.9 million were up 25.1%.
The quarter also brought the largest total contract value deal in company history, a multi-million dollar contract over a multi-year period with an existing customer that displaces Amazon AWS. Management said bookings doubled year over year, the AI customer count grew 66%, and data stored for AI customers grew 25x. Backblaze launched B2 Overdrive in April 2025, an offering priced from $15 per TB for throughput-heavy AI and high performance computing workloads.
Guidance for the second quarter of 2025, the next quarter, includes an adjusted EBITDA margin of 14% to 16%. For the full fiscal year 2025, the adjusted EBITDA margin range was raised to 17% to 19% from 16% to 18%.
Risks sit in execution and in the cost of growth. Backblaze lists competition from larger providers, cyberattacks, supply chain disruption, tariffs and other trade policy changes, difficulty attracting and retaining increasingly larger customers, litigation, and third-party attempts to generate negative news. The company addressed a false short-and-distort report in the quarter, and an independent review confirmed no wrongdoing and no issues with the financial statements. The capital structure deserves attention. Finance leases carried a weighted average discount rate of 11.7% at March 31, 2025. The company banks with City National Bank and warns that deposits above the $250,000 limit insured by the Federal Deposit Insurance Corporation could be at risk, and it is evaluating other banking options. Revenue from outside the United States was 27% of the total for the quarter. A study of equipment useful lives extended the life of infrastructure equipment, which is expected to reduce depreciation expense by approximately $5.0 million for the remainder of the year and support margins.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q1 FY2025 | Q4 FY2024 | QoQ | Q1 FY2024 | YoY |
|---|---|---|---|---|---|
| Revenue | $34.6M | $33.8M | +2.4% | $30.0M | +15.5% |
| Gross profit | $19.3M | $18.5M | +4.1% | $15.8M | +21.8% |
| Gross margin | 55.6% | 54.8% | +0.9 pp | 52.8% | +2.9 pp |
| Research & development | $11.9M | $12.0M | -1.4% | $9.7M | +21.6% |
| Sales & marketing | $9.3M | $11.7M | -20.9% | $10.0M | -7.6% |
| General & administrative | $7.1M | $8.5M | -17.4% | $6.6M | +7.7% |
| Total operating expenses | $28.2M | $32.3M | -12.7% | $26.3M | +7.0% |
| Operating income (loss) | -$8.9M | -$13.8M | +35.2% | -$10.5M | +15.1% |
| Operating margin | -25.8% | -40.8% | +15.0 pp | -35.1% | +9.3 pp |
| Net income (loss) | -$9.3M | -$14.4M | +35.1% | -$11.1M | +15.6% |
| Net margin | -26.9% | -42.5% | +15.6 pp | -36.9% | +9.9 pp |
| Diluted EPS | -$0.17 | -$0.33 | +$0.16 | -$0.27 | +$0.10 |
| Customers | 500,000 | 500,000 | ±0.0% | 500,000 | ±0.0% |
| Net retention rate | 113.0% | — | — | 112.0% | +1.0 pp |
Risks
Backblaze faces intense competition from hyperscalers such as AWS, Google Cloud Platform, and Microsoft Azure, and its April 2025 launch of B2 Overdrive targets AI use cases that require moving large data volumes quickly. Failure to keep pace with AI-driven storage demands or competitor pricing could harm revenue and margins.
The go-to-market transformation is moving the company up-market, evidenced by multiple deals valued at over $1.0 million each. Larger customers may have longer sales cycles, less predictability, higher volatility in data stored, and greater pricing leverage, which could increase costs and cause financial results to fluctuate.
B2 Cloud Storage net revenue retention rate decreased to 117% as of March 31, 2025 from 126% as of March 31, 2024, largely due to the lapped impact of the October 2023 price increase. Future price increases or competitor price reductions could cause customer churn or reduce data stored.
The company must manage data center capacity and costs, including capital expenditures, finance leases, and energy costs, while expanding to a new Toronto region in January 2025. Underestimating or overestimating capacity needs could disrupt service, increase costs, or reduce operating margins.
In December 2024, Backblaze terminated its loan and security agreement with City National Bank, which included a revolving line of credit, and does not currently have a replacement line of credit. Without additional capital on reasonable terms, it may not be able to respond to increased demand or fund growth.
B2 Cloud Storage and Computer Backup have accounted for substantially all of total revenue, and the company remains dependent on a small number of offerings focused on cloud storage and computer backup. A decline in demand for these offerings would not be offset by other market sectors.
Changes in global trade policies, including tariffs and trade restrictions, could increase direct costs and costs from suppliers and data center partners, and may reduce customer demand. The risk factor notes uncertainty and impact on small-cap stocks such as Backblaze.
The business is substantially dependent on mid-market organizations, which may be more vulnerable to market fluctuations, have limited budgets, and are more likely to curtail spending during economic downturns. Failure to successfully sell to these customers would harm revenue growth and profitability.
SaaS KPIs
All quarters →Adjusted Gross Margin
Adjusted EBITDA Margin
Annual Recurring Revenue (B2 Cloud Storage)
Annual Recurring Revenue (Computer Backup)
Non-GAAP Net Income Margin
Annual Recurring Revenue (Total Company)
Net Revenue Retention (B2 Cloud Storage)
Net Revenue Retention (Computer Backup)
Summary, forecast, risks and KPIs are extracted from Backblaze, Inc.'s SEC filings for Q1 FY2025 (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.