Key Highlights

  • BLZE reported record third quarter 2026 Revenue of $46.7 million, up 25.5% from $37.2 million a year earlier.
  • B2 Cloud Storage revenue rose to $30.5 million, up about 47%, and B2 annual Recurring Revenue reached $127 million.
  • Net loss narrowed to $2.4 million, or $0.04 per share, from $3.8 million, or $0.07 per share.
  • Adjusted EBITDA Margin was 33%, about 1,000 basis points above the prior year.
  • Full-year revenue guidance was raised to $177.8 million to $178.2 million, up $5 million at the midpoint.

B2 Cloud Storage Climbs to $30.5 Million as Revenue Hits a Record

Backblaze (NASDAQ:BLZE) reported third quarter 2026 results on Nov 2, 2026, for the quarter ended Sep 30, 2026. Revenue totaled $46.7 million versus $37.2 million a year earlier, a record for the company. Nine-month revenue was $128.0 million, up 18.5% (calculated).

Backblaze provides cloud storage through its B2 Cloud Storage service and Computer Backup product, and describes itself as the capacity storage layer for AI. B2 revenue grew from $20.7 million to $30.5 million, accelerating from 34% growth in the second quarter. A May 1 price increase added roughly 12 percentage points, leaving organic growth near 35%.

B2 annual recurring revenue climbed to $127 million, up 53% year over year, and net revenue retention improved to 115% from 113%. Annual recurring revenue from customers above $50,000 grew 109% to $50 million, and four new agreements exceeded $500,000. Computer Backup revenue slipped 2% to $16.2 million but rose sequentially.

Operating Leverage Narrows the Loss to $2.4 Million

Gross profit rose to $29.8 million from $23.1 million, a margin of about 64% (calculated), up from 62%. Operating expenses were $31.2 million, down to 67% of revenue from 72%. The loss from operations narrowed to $1.4 million from $3.5 million.

Net loss was $2.4 million, or $0.04 per share, versus $3.8 million, or $0.07. Management reported non-GAAP Net Income of $6.7 million, more than triple the $1.9 million a year ago, and an adjusted EBITDA margin of 33%. Both revenue and adjusted EBITDA exceeded the high end of guidance.

Interest expense rose to $2.0 million from $0.9 million. Operating Cash Flow was $23 million for the first nine months, compared with $14 million a year earlier, and adjusted free cash flow was $2 million versus negative $10 million.

Convertible Notes and Heavy Capital Spending Fund the AI Capacity Build

On Aug 24, 2026, the company issued $201.3 million of zero coupon convertible senior notes due in 2031 and spent $17.5 million on capped calls to limit dilution. Cash, cash equivalents and marketable securities were $230 million at quarter end, and cash and equivalents alone were $189.0 million.

Management said two large agreements, with an AI-focused cloud provider and a neocloud, have started to ramp and each carries a multi-year minimum commitment, though neither contributed significantly to third quarter growth. Capital expenditures are expected at 55% to 65% of full-year revenue, implying $65 million to $83 million in the fourth quarter. Depreciation will begin ahead of revenue, temporarily lowering GAAP gross margin by 3 to 6 percentage points.

Fourth Quarter Guide Points to About 60% B2 Growth

For the fourth quarter, Backblaze expects revenue of $49.8 million to $50.2 million, B2 growth near 60% at the midpoint and an adjusted EBITDA margin of 32% to 34%. Full-year adjusted EBITDA margin guidance rose to 30% to 31% from 27% to 29%, and management cited a B2 growth outlook above 40% for 2027. Guidance excludes new deals above $500,000 and usage over contracted minimums.