Key Highlights

  • Shares jumped 37.30% pre-market to $10.16 from a $7.40 close.
  • Q3 Revenue rose 26% to $46.7 million, with B2 revenue up 47%.
  • Full-year revenue guidance was raised to $177.8 million to $178.2 million.

Backblaze (NASDAQ:BLZE) shares jumped 37.30% in pre-market trading on Tuesday to $10.16, from a Monday close of $7.40. The move followed third quarter results and a raised full-year outlook.

Backblaze is a San Mateo, California cloud storage company that sells S3-compatible B2 Cloud Storage and a Computer Backup subscription. It has about 320 employees and describes itself as the capacity storage layer for AI.

B2 Momentum Drives the Quarter

Revenue was $46.7 million, up 26% year over year. B2 Cloud Storage revenue rose 47% to $30.5 million, up from 28% growth a year earlier, while Computer Backup revenue fell 2% to $16.2 million. B2 annual Recurring Revenue was $126.8 million, up 53%.

The company added a record number of net new B2 self-serve customers, four times the prior-year level, and signed four large agreements, including a $4 million AI builder expansion. Customers contributing more than $50,000 in annual recurring revenue grew 57% to 254.

Profitability Improves and Guidance Moves Higher

Gross profit was $29.8 million, a 64% margin. Adjusted EBITDA was $15.2 million, a 33% Margin versus 23% a year ago, and the net loss narrowed to $2.4 million from $3.8 million.

Full-year revenue guidance was raised to $177.8 million to $178.2 million from $172.0 million to $174.0 million. The adjusted EBITDA margin range was raised to 30% to 31% from 27% to 29%.

Convertible Notes and Balance Sheet Context

The company completed a $201 million offering of 0% convertible senior notes due 2031 with related capped call transactions. Proceeds are intended for capital expenditures supporting contracted growth and general corporate purposes. Cash and marketable securities totaled $230.2 million at the end of September.

At $10.16, the shares sit about 58% below the 52-week high of $23.99 and about 212% above the 52-week low of $3.26. Market Capitalization is about $458.06 million, with a forward price-to-earnings ratio of 55.6.

Fourth-Quarter Revenue and AI Customer Ramp to Watch

Fourth quarter revenue is guided to $49.8 million to $50.2 million with an adjusted EBITDA margin of 32% to 34%. Investors will follow how quickly the large AI agreements ramp.