Key Highlights

  • Revenue rose 26% to USD 46.7 million, USD 2 million above the high end of company guidance.
  • B2 cloud storage Revenue grew 47%, with net revenue retention of 115% versus 113% in the second quarter.
  • The net loss narrowed to USD 2.4 million, and non-GAAP Net Income was USD 6.7 million.
  • Gross Margin rose to 64% from 62%, and cash and marketable securities reached USD 230.2 million.

Quarter in Numbers

Backblaze, Inc. (NASDAQ:BLZE), a cloud storage and backup provider, reported third-quarter 2026 revenue of USD 46.7 million, up 26% from USD 37.2 million. Management said revenue exceeded the high end of guidance by USD 2 million on strength in B2 direct sales bookings, higher B2 self-serve customer growth and lower-than-expected churn. B2 revenue grew 47% year over year, and net revenue retention for B2 was 115%, up from 113% in the second quarter. Computer backup revenue was USD 16 million, down 2% year over year but up sequentially as growth and retention initiatives stabilized the business.

Gross profit was USD 29.8 million versus USD 23.1 million, and gross margin was 64% versus 62%, helped by a pricing update. Operating expenses were USD 31.2 million versus USD 26.6 million, with general and administrative expense rising to USD 9.2 million from USD 6.4 million. The loss from operations narrowed to USD 1.4 million from USD 3.5 million, and the net loss narrowed to USD 2.4 million from USD 3.8 million.

Profitability and Cash

Adjusted EBITDA margin reached 33%, above guidance on the revenue strength. Non-GAAP net income was USD 6.7 million, more than three times the USD 1.9 million of a year ago. For the nine months, revenue was USD 128.0 million versus USD 108.1 million and the net loss was USD 13.6 million versus USD 20.2 million. Cash Flow from operations was USD 23 million year to date versus USD 14 million, and adjusted free cash flow was USD 2 million versus negative USD 10 million.

The August 2026 convertible senior notes lifted Investment income to USD 1.0 million from USD 0.5 million and interest expense to USD 2.0 million from USD 0.9 million. Cash, cash equivalents and marketable securities were USD 230.2 million. There were no share repurchases in the quarter.

AI Infrastructure Build-Out

Management said revenue from larger AI infrastructure agreements was minimal in the third quarter and is projected to become meaningful beginning in the first quarter of 2027. The company described a build-out for CoreWeave starting in the fourth quarter and another neocloud commitment, along with 11 deals greater than USD 500 thousand and self-serve sign-ups that more than quadrupled. Chief executive Gleb Budman said Capital Expenditure would rise by roughly a Factor of ten over the next year or so, supported by hardware allocations from vendors, with order-to-fulfillment times shortening to four to five months from a planning assumption of nine.

Guidance Signposts

The company raised its full-year guidance again, and said it continues to guide computer backup revenue conservatively until the stabilization pattern solidifies. Items to track include the timing of AI infrastructure revenue, the scale of capital expenditure against cash raised, B2 net revenue retention and interest expense after the convertible issuance.