Summary
Backblaze closed fiscal 2024 with Q4 revenue of $33.8 million, an 18% increase year over year. Full-year revenue reached $127.6 million, up 25%. B2 Cloud Storage crossed over 50% of company sales, a threshold that marks the fastest-growing offering as the dominant part of the business. Gross profit for the quarter was $18.5 million, and gross margin was 54.8%, up from 52.5% a year earlier. Adjusted gross profit was $26.3 million, or 78% of revenue, compared with $22.1 million, or 77%, in Q4 2023. Adjusted EBITDA was $4.6 million, or 14% of revenue, compared with $1.7 million, or 6%, a year earlier. Net loss widened to $14.4 million from $12.2 million.
Operational metrics showed a mixed picture. Annual recurring revenue was $136.7 million, up 16% year over year. B2 Cloud Storage ARR was $70.2 million, up 22%, and Computer Backup ARR was $66.5 million, up 11%. Net revenue retention rate was 116%, compared with 109% in Q4 2023. B2 NRR was 123%, compared with 122%, and Computer Backup NRR was 109%, compared with 100%. Gross customer retention rate slipped to 90% from 91%. The total number of customers was 507,647, down from 511,942 a year earlier. B2 customers rose to 107,616 from 97,842, while Computer Backup customers fell to 417,845 from 431,745. Total annual ARPU was $268, up from $228. B2 ARPU was $645, up from $577, and Computer Backup ARPU was $159, up from $140. AI became a more visible contributor: the company had 65% more AI customers year over year, saw a nearly 10-fold increase in AI related data, and had 3 AI companies among its top 10 customers in December 2024. Backblaze also signed a deal for over $1 million in annual contract value with an existing customer expanding into a Powered by Backblaze white label partnership.
Guidance points to continued growth. For Q1 2025, management expects revenue between $34.1 million and $34.5 million, an adjusted EBITDA margin between 13% and 15%, and basic weighted average shares outstanding of 54.0 million to 54.3 million. For full-year 2025, revenue guidance is $144.0 million to $146.0 million, with an adjusted EBITDA margin between 16% and 18%. The company also provided B2 year-over-year growth expectations by quarter: 21% to 23% in Q1 2025, 23% to 25% in Q2, 25% to 28% in Q3, and 30% or more in Q4. On cash, full-year operating cash flow was $12.5 million, up from a cash outflow of $7.4 million in 2023. Adjusted free cash flow was $(20.1) million, compared with $(43.2) million in 2023. Capital expenditures for the full year were $1.7 million, down from $5.5 million. The November 2024 follow-on offering raised $37.4 million in net proceeds.
Risks remain. The company implemented a 2024 Restructuring Plan in November 2024, cutting headcount and reducing its corporate headquarters footprint. The plan is expected to unlock $8 million in annualized cost savings, which Backblaze plans to re-invest in sales capacity. The quarter also showed the cost of the transition: operating loss was $13.8 million, and the full-year operating loss was $46.3 million. Full-year net loss was $48.5 million, and diluted EPS was -$1.11. Gross margin for the full year was 54.3%, up from 48.9%. Operating margin was negative 40.8% in Q4 and negative 36.3% for the full year. Deferred revenue was $35.6 million, up from $30.0 million a year earlier, and remaining performance obligations were $41.3 million, up from $33.1 million. Management calls out risks tied to the go-to-market transformation, attracting and retaining larger customers, AI related business growth, competition, service disruptions, cyberattacks, material weaknesses in internal controls, tariffs, and general market conditions.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q4 FY2024 | Q3 FY2024 | QoQ | Q4 FY2023 | YoY |
|---|---|---|---|---|---|
| Revenue | $33.8M | $32.6M | +3.7% | $28.7M | +17.6% |
| Gross profit | $18.5M | $17.8M | +3.9% | $15.1M | +22.7% |
| Gross margin | 54.8% | 54.6% | +0.2 pp | 52.5% | +2.3 pp |
| Research & development | $12.0M | $10.7M | +12.1% | $9.4M | +27.6% |
| Sales & marketing | $11.7M | $11.7M | -0.2% | $10.1M | +15.9% |
| General & administrative | $8.5M | $7.5M | +13.3% | $7.2M | +19.0% |
| Total operating expenses | $32.3M | $30.0M | +7.6% | $26.7M | +20.8% |
| Operating income (loss) | -$13.8M | -$12.2M | -12.9% | -$11.6M | -18.5% |
| Operating margin | -40.8% | -37.4% | -3.3 pp | -40.5% | -0.3 pp |
| Net income (loss) | -$14.4M | -$12.8M | -12.7% | -$12.2M | -17.8% |
| Net margin | -42.5% | -39.1% | -3.4 pp | -42.5% | -0.1 pp |
| Diluted EPS | -$0.33 | -$0.29 | -$0.04 | -$0.34 | +$0.01 |
| Customers | 500,000 | 500,000 | ±0.0% | 500,000 | ±0.0% |
Risks
The market is intensely competitive with AWS, Google Cloud, Microsoft Azure, EMC/Dell, and NetApp, many with greater resources and broader offerings. Backblaze raised prices in October 2023 and future price increases or competitor price cuts could cause customer loss, reduced data stored, churn, or lower margins.
The company has faced an industry-wide Log4j zero-day vulnerability and regular DDoS and false account attempts, and generative AI may increase attack frequency and sophistication. A breach of customer data could cause reputational harm, litigation, fines, and reduced demand.
Data privacy laws including GDPR, CCPA/CPRA, and HIPAA impose complex and evolving compliance obligations. GDPR fines can reach €20 million or 4% of worldwide annual turnover, and the EU-US Privacy Shield invalidation required additional measures such as standard contractual clauses.
Platform or third-party data center disruption could harm reputation and make customer data unavailable. A third-party data center vendor filed for Chapter 11 in 2022, and geopolitical conflicts including Russia-Ukraine and Israel-Hamas could escalate and disrupt operations.
Substantially all revenue comes from B2 Cloud Storage and Computer Backup, with limited corresponding use cases. A general or industry decline in cloud storage demand would not be offset by other market sectors.
Many customers can terminate at will with little notice, and the October 2023 price increase could make retention harder. Total customers decreased to 507,647 at December 31, 2024 from 511,942 a year earlier, and Computer Backup customers fell to 417,845 from 431,745; gross customer retention rate decreased 1% for both B2 and Computer Backup for FY2024.
AI results could replace traffic from search engines such as Google, Bing, and Yahoo, reducing lead generation for a self-serve model that produced approximately 73% of total revenue in 2024. Generative AI also increases the likelihood of cybersecurity incidents and may expose trade secrets.
Mid-market organizations are a substantial customer base and are more vulnerable to market fluctuations, inflation, and recession, and may curtail spending on cloud services. The risk factor cites recent high inflation and recession concerns in the United States and potential tariff or trade restrictions from the 2024 U.S. presidential election change.
Computer Backup is offered at a fixed price, and B2 offers up to three times free egress. If customers back up unusually large data or egress exceeds expectations, costs and gross margins could be adversely affected.
The company relies on third-party vendors and suppliers, including data center and hard drive providers, which may have limited sources of supply. A vendor bankruptcy or supply disruption could make customer data unavailable or delay full service resumption.
Data center capacity needs are difficult to predict, and overestimating capacity could increase capital expenditures and reduce operating margins while underestimating could prevent timely customer data upload or download. Many data center sites are subject to multi-year leases.
Competition for software developers, sales, and operations personnel is intense, particularly in the San Francisco Bay Area, and key employees are at-will with some holding largely vested equity. The 2024 new sales commission structure may affect the ability to retain or hire qualified sales personnel.
The November 2024 restructuring plan reduced headcount and the corporate headquarters footprint, with $4.9 million in restructuring charges for FY2024 including $3.9 million of severance and benefits and $0.9 million related to the expected headquarters sublease. Failure to manage growth or right-size the workforce could strain operations.
In 2024, approximately 26% of revenue came from customers outside the United States, and the company opened a Toronto data center and Canadian subsidiary in January 2025. International growth increases compliance, tax, data sovereignty, and operational risks.
The software underlying the cloud services is complex and may contain material defects or errors, and hardware failures may interrupt availability. Deletion or corruption of encryption keys could make encrypted customer data unrecoverable and require refunds or credits.
The company has no issued patents and relies on trade secret, trademark, and copyright protections, and non-practicing entities have asserted patent claims in the past. Use of generative AI tools could inadvertently disclose trade secrets or violate third-party intellectual property rights.
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
Adjusted EBITDA
Annual Recurring Revenue (ARR)
Net Revenue Retention (NRR)
B2 Cloud Storage Net Revenue Retention (NRR)
Computer Backup Net Revenue Retention (NRR)
Adjusted Free Cash Flow
Adjusted Free Cash Flow Margin
Adjusted Gross Profit
B2 Cloud Storage Annual Recurring Revenue (ARR)
Computer Backup Annual Recurring Revenue (ARR)
B2 Cloud Storage Number of Customers
Computer Backup Number of Customers
Number of Customers
Summary, forecast, risks and KPIs are extracted from Backblaze, Inc.'s SEC filings for Q4 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.