BLZE — Backblaze, Inc.

Summary of Backblaze, Inc. (BLZE) Q1 2026 Earnings Call

1. Key Financial Results and Metrics:

• Revenue: $38.7 million, exceeding guidance of $38 million and up 12% year-over-year.
• B2 Cloud Storage Revenue: Grew 24% year-over-year to $22.4 million; ARR increased by 28% year-over-year to $158 million.
• Adjusted EBITDA: $10 million, representing a 26% margin, up from $6 million (18%) year-over-year.
• Gross Margin: Improved to 61% from 56% year-over-year.
• Net Revenue Retention (NRR): 110%, up from 105% a year ago.
• Adjusted Free Cash Flow: Negative $1.8 million in Q1, but expected to be positive for the full year.

2. Strategic Updates and Business Highlights:

• Backblaze is focusing on the AI market, with over one-third of new bookings coming from AI-related customers, which grew by 76% year-over-year.
• The company is enhancing its go-to-market strategy, including the launch of the Flamethrower startup program, which has attracted approximately 100 companies in three months.
• New leadership includes Anuj Kumar as Chief Revenue Officer, aimed at scaling the go-to-market efforts.
• Backblaze is positioned to capitalize on the Neocloud market, estimating a $14 billion opportunity by 2030, and has signed multiple significant deals with Neocloud customers.

3. Forward Guidance and Outlook:

• Q2 Revenue Guidance: Expected to be between $39.8 million and $40.2 million, with B2 growth projected at around 20%.
• Full-Year Revenue Guidance: Increased to $161.5 million to $163.5 million, up $5 million from previous estimates.
• Adjusted EBITDA Margin Guidance: Raised to 23% to 25%, up from 19% to 21%.

4. Bad News, Challenges, or Points of Concern:

• Computer Backup Segment: Expected to decline by 5% year-over-year, with NRR falling below 100%.
• Adjusted Free Cash Flow: Negative in Q1 due to earlier payments and pulled-forward CapEx, though expected to improve in the latter half of the year.
• Competitive Pressures: The company faces ongoing challenges from larger competitors in the cloud storage space, though it maintains a significant cost advantage.

5. Notable Q&A Insights:

• Gleb Budman highlighted that AI customers are growing three times faster than average customers, indicating strong demand in the AI sector.
• Marc Suidan clarified that the recent pricing update is expected to be accretive to revenue and margins, with half of the revenue guidance increase attributed to this change.
• Concerns were raised about potential insourcing by Neoclouds, but Budman emphasized the unique value Backblaze provides, which is difficult for competitors to replicate.
• The company is actively engaged with many top Neoclouds and has filled key sales roles to strengthen its market position.

Overall, Backblaze reported a strong quarter with significant growth in AI-related business, while also addressing challenges in its Computer Backup segment and the need for ongoing strategic execution to maintain momentum.