0001628280-26-016395
SEC filingRevenue grew 14% YoY driven by B2 Cloud Storage, with gross margin expansion to 61% from 54%.
Backblaze is a high-performance cloud storage platform for data-intensive use cases in the AI era. The company’s mission is to help customers solve their toughest data storage challenges by reducing barriers of lock-in, complexity, and cost. Its purpose-built, web-scale software infrastructure is designed to deliver reliable, scalable storage at a lower price point than traditional hyperscale providers.
The company does not report formal business segments but offers two primary services: B2 Cloud Storage (IaaS) and Computer Backup (SaaS). B2 Cloud Storage provides direct access to the Backblaze Storage Cloud for a range of use cases, including AI/ML workflows, media management, and multi-cloud architectures. Computer Backup offers continuous automated backup for end-user devices. For the year ended December 31, 2025, B2 Cloud Storage revenue grew 26% year-over-year, while Computer Backup revenue grew 3%.
The core platform is the Backblaze Storage Cloud, which manages over 1 trillion files and is designed for exabyte scale. Key service offerings include B2 Cloud Storage and its premium tier B2 Overdrive (with up to 1 Tbps throughput, unlimited free egress, and private networking). Computer Backup provides flat-rate, unlimited backup. The Powered by Backblaze white-label program enables third parties to integrate Backblaze storage under their own brand. Additionally, the Flamethrower startup program offers credits and support to early-stage companies.
Backblaze employs a dual go-to-market motion: self-service (via website and onboarding tools) and sales-assisted (direct sales, channel sales, and alliances). The partner ecosystem includes technology partners, channel partners, and MSPs. The customer base exceeds 500,000 across 175+ countries, spanning individuals, developers, SMBs, and large enterprises. No customer represents more than 10% of revenue. Key industries include media, AI, creative agencies, and government.
Backblaze competes primarily on the efficiency of its proprietary infrastructure, claiming lower costs than traditional hyperscale providers. Differentiation comes from ease of use, interoperability, and an open cloud ecosystem that integrates with multiple partners and multi-cloud environments. The company emphasizes price predictability and performance for data-intensive workloads.
Strategic pillars include focusing on emerging data-heavy workloads (AI/ML training and inference), expanding the open cloud ecosystem to avoid vendor lock-in, growing direct sales for larger accounts, continuing investment in self-serve acquisition for developers, and building a transparent community brand. The company also targets neocloud platforms through its Powered by Backblaze program.
As of December 31, 2025, Backblaze had approximately 320 full-time employees. The workforce is largely remote, with no union representation. A significant portion of employees are software engineers and operations personnel. The company emphasizes an inclusive, collaborative culture and has adopted an AI-first model to boost productivity and customer outcomes.
For the year ended December 31, 2025, total revenue increased 14% to $145.8 million from $127.6 million in 2024. The growth was primarily driven by B2 Cloud Storage revenue, which rose 26% to $79.9 million. This was attributable to $10.1 million from new customers and $6.5 million from higher storage usage from existing customers. Computer Backup revenue grew 3% to $65.9 million, supported by a price increase effective October 2023, which added $4.5 million, partially offset by a $3.6 million decline in license counts.
Gross profit increased 28% to $88.8 million, with gross margin expanding 700 basis points to 61% from 54% in the prior year. The margin improvement was primarily driven by a $5.2 million reduction in depreciation expense resulting from an extension of the useful life of infrastructure equipment (effective April 2025), which increased gross margin by approximately 4%. Improved economies of scale in personnel costs also contributed, partially offset by higher variable data center costs.
Operating expenses decreased to $112.4 million from $115.6 million. Sales and marketing expenses declined 16% to $37.4 million, mainly due to reduced headcount and stock-based compensation from restructuring. Research and development expenses increased 10% to $46.1 million, driven by lower capitalization of internally developed software and higher stock-based compensation. General and administrative expenses were relatively flat at $28.9 million.
Net loss improved to $25.6 million from $48.5 million. Adjusted EBITDA turned positive to $31.8 million (22% margin) compared to $13.0 million (10% margin) in 2024, reflecting improved operational leverage.
B2 Cloud Storage remains the primary growth engine, with revenue increasing 26% YoY. Its net revenue retention rate was 111%, down from 123% due to the lapping of a 2023 price increase, while annual recurring revenue grew 27% to $88.9 million. Computer Backup saw modest revenue growth of 3%, with annual recurring revenue declining slightly to $65.5 million. The segment’s net revenue retention rate fell to 98% from 109%, reflecting lower expansion from existing customers.
Total Company annual recurring revenue increased 13% to $154.4 million. The number of customers decreased slightly to 503,866, while annual average revenue per user rose 15% to $307, driven by upmarket moves and increased storage usage.
Management expects operating expenses (excluding depreciation, amortization, restructuring, and stock-based compensation) to remain relatively flat in 2026 compared to 2025, with efficiency gains from restructuring offsetting increased investments in research and development. Capital expenditures are anticipated to increase in early 2026 to support platform development and up-market strategy. The 2025 Restructuring and Transformation Plan is expected to incur additional charges of $4.7 million to $7.5 million through Q1 2027. The extension of infrastructure equipment useful lives is projected to reduce depreciation by approximately $2.8 million in 2026. The company believes existing cash, cash equivalents, marketable securities, operating cash flows, and its $20.0 million revolving credit facility will be sufficient for at least the next 12 months.
Backblaze continues to operate at a loss, with an accumulated deficit of $221.6M and net losses of $25.6M in 2025. The company does not expect near-term profitability due to ongoing investments in sales, marketing, R&D, and infrastructure. This is a core risk for investors.
The cloud storage market is intensely competitive, with major players like AWS, Google Cloud, and Azure, as well as emerging competitors like Cloudflare and CoreWeave. Backblaze's price increases in 2023 may not be sustainable, and competitive pricing pressure could erode margins and customer base.
Service disruptions (e.g., October 2025 cooling failure) and data loss remain critical risks. The company relies on third-party data centers and hard drive suppliers (Toshiba, Western Digital) with limited sources, exposing it to supply chain disruptions. Cybersecurity threats, including DDoS and phishing, are ongoing; the Log4j incident required temporary system shutdown.
International operations (28% of revenue) expose Backblaze to the EU Data Act, GDPR, CCPA, and evolving AI regulations (EU AI Act). Compliance costs are rising, and non-compliance could result in fines up to 4% of global turnover. Geopolitical tensions (Russia-Ukraine, Middle East) and tariffs add uncertainty.
The launch of B2 Overdrive and focus on AI/neocloud customers (e.g., AI model builders) introduces risks of high upfront investment, rapid technological obsolescence, and customer concentration. The AI market is volatile, and failure to meet specialized requirements could harm growth.
The company has a $20M credit facility with restrictive covenants, and past material weaknesses in internal controls have been remediated but remain a risk. As an emerging growth company, Backblaze faces increased compliance costs post-2026, which could strain resources.
The provided document excerpt does not include the Consolidated Statements of Cash Flows. The text contains balance sheets and audit reports but cuts off before the cash flow statement. Therefore, no cash flow data can be extracted or analyzed.