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Backblaze, Inc. (BLZE)
NASDAQ:BLZE
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Backblaze
(NASDAQ:BLZE)
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Rating:56Neutral
Price Target:
$4.00
▲(9.29% Upside)
Action:ReiteratedDate:02/25/26
The score is driven primarily by improving financial fundamentals—especially the sharp turnaround to positive operating and free cash flow—plus constructive but cautious guidance and backlog strength from the latest earnings call. These positives are moderated by persistent GAAP losses and rising debt, while the technical setup remains weak with the stock in a clear downtrend below key moving averages.
Positive Factors
Cash Generation
Backblaze produced sustained positive operating and free cash flow in 2024–2025 despite GAAP losses, showing improved cash efficiency and working-capital discipline. Durable cash generation supports funding growth, product investment and capital-lease financed expansion without immediate equity raises.
B2 Cloud Growth
Consistent double-digit B2 growth reflects scalable demand for cost-effective cloud storage. This structural growth in the higher‑margin platform is a durable revenue engine that can compound with enterprise wins and broadened product use cases over multiple quarters and economic cycles.
Upmarket Traction & Backlog
Large enterprise wins, a 60% RPO increase and record bookings signal durable upmarket penetration and backlog conversion potential. Enterprise contracts lengthen visibility, support higher average revenue per customer, and improve revenue predictability beyond transactional, self‑serve demand.
Negative Factors
Persistent Net Losses
Despite revenue and margin progress, the company remains meaningfully unprofitable on a GAAP basis. Continued net losses can erode equity over time, limit reinvestment ability, and require sustained cash generation to fund growth until operating profitability is demonstrated across cycles.
Rising Debt
Higher absolute debt increases fixed obligations and reduces financial flexibility. Although leverage improved versus earlier years, rising debt amid ongoing net losses raises refinancing and covenant risk if cash generation weakens, constraining capital allocation choices long term.
Margin Headwinds & Guidance Derisking
Planned CapEx acceleration and higher data center costs compress gross margins while management derisked 2026 guidance by excluding swing deals. Combined margin pressure and conservative modeling increase earnings volatility and slow near-term margin expansion despite structural opportunity.
Backblaze (BLZE) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$219.97M
Dividend YieldN/A
Average Volume (3M)1.03M
Price to Earnings (P/E)―
Beta (1Y)1.57
Revenue Growth15.73%
EPS Growth40.14%
CountryUS
Employees346
SectorTechnology
Sector Strength88
IndustrySoftware - Infrastructure
Share Statistics
EPS (TTM)0.06
Shares Outstanding60,100,000
10 Day Avg. Volume822,102
30 Day Avg. Volume1,031,015
Financial Highlights & Ratios
PEG Ratio0.17
Price to Book (P/B)3.15
Price to Sales (P/S)1.80
P/FCF Ratio13.90
Enterprise Value/Market Cap1.24
Enterprise Value/Revenue1.86
Enterprise Value/Gross Profit3.06
Enterprise Value/Ebitda70.98
Forecast
1Y Price Target
$6.90Price Target Upside88.52% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering6
EPS Forecast (FY)0.02
Revenue Forecast (FY)$160.30M
Backblaze Business Overview & Revenue Model
Company DescriptionBackblaze, Inc., a storage cloud platform, provides businesses and consumers cloud services to store, use, and protect data in the United States and internationally. The company offers cloud services through a web-scale software infrastructure built on commodity hardware. It also provides Backblaze B2 Cloud Storage, which enables customers to store data, developers to build applications, and partners to expand their use cases. This service is offered as a consumption-based Infrastructure-as-a-Service (IaaS) and serves use cases, such as backups, multi-cloud, application development, and ransomware protection. In addition, the company offers Backblaze Computer Backup that automatically backs up data from laptops and desktops for businesses and individuals, which provides a subscription-based Software-as-a-Service and serves use cases, including computer backup, ransomware protection, theft and loss protection, and remote access. It serves the public cloud IaaS storage and Data-Protection-as-a-Service markets. The company was incorporated in 2007 and is headquartered in San Mateo, California.
How the Company Makes MoneyBackblaze generates revenue primarily through its subscription-based services. Its Personal Backup service operates on a monthly or annual subscription model, allowing users to back up their data for a fixed fee. The B2 Cloud Storage platform is priced based on the amount of data stored and the bandwidth used, providing a flexible payment structure that scales with customer needs. Additionally, Backblaze benefits from partnerships with various technology companies and resellers, which help to expand its customer base and enhance its service offerings. The company's focus on competitive pricing and customer satisfaction has also contributed significantly to customer retention and growth.
Backblaze Earnings Call Summary
Earnings Call Date:Feb 23, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 13, 2026
Earnings Call Sentiment Positive
The call highlighted major operational and financial milestones: first adjusted free cash flow positive quarter, doubled adjusted EBITDA margin, strong B2 growth (26% FY) and notable upmarket traction including a >$15M TCV neocloud deal and the launch of B2 Neo. Management also detailed a disciplined, derisked guidance approach and plans to invest in AI-focused product and GTM initiatives. Offsetting these positives are near-term headwinds: guidance removes upside from swing deals, NRR showed sequential variability driven by a large usage customer, computer backup is expected to decline ~5% in 2026, and gross margins will face pressure from higher data center costs and accelerated CapEx. Overall, the company portrays durable long-term opportunity and improved capital efficiency while acknowledging short-term lumpiness and margin pressure.Q4-2025 Updates
Positive Updates
Q4 Revenue and Profitability Milestones
Total revenue in Q4 was $37.8M (in line with guidance). Adjusted EBITDA margin reached 28% (doubled year-over-year) and adjusted free cash flow was positive $4M (11% margin), marking the company's first adjusted free cash flow profitability as a public company.
Full-Year Revenue Growth and B2 Strength
Full-year total company revenue grew 14% year-over-year while B2 Cloud Storage grew 26% year-over-year. Q4 B2 revenue grew 24% year-over-year (up from 22% prior year).
Upmarket Progress and Customer Expansion
Customers generating >$50k ARR reached 168, up 35% year-over-year; ARR of this cohort increased 73% year-over-year to $26M. Company added ~12,000 self-serve customers in the year and serves more than 119,000 B2 customers overall.
Record Bookings and Large Enterprise Win
Delivered record bookings in the quarter and closed the company's largest contract to date: an 8-figure TCV deal (over $15M, 3-year duration). RPO rose 60% year-over-year to $66M, reflecting strong booked backlog.
Product and GTM Investments for AI and Scale
Launched B2 Neo (white-label, high-performance storage for neoclouds) and Flamethrower (startup program); strengthened product and engineering leadership with key hires (SVP Engineering, SVP Product) and added strategic transformation and advisory talent to scale go-to-market.
Pipeline and Rule of 40 Progress
Pipeline roughly doubled from ~$15M in 2024 to ~$30M in 2025; combined B2 revenue growth plus free cash flow margin (Rule of 40 proxy) improved from 9% to 35%, indicating improved capital efficiency.
Improved Margins Despite Cost Pressures
Q4 GAAP gross margin was 62% (up from 55% YoY) and adjusted gross margin was 80% (vs. 78% prior year), reflecting infrastructure efficiency and disciplined operations despite higher data center costs.
Negative Updates
Quarterly B2 Growth Miss and Guidance Derisking
Q4 B2 growth was modestly below the previously outlined range; management has derisked 2026 guidance by excluding large swing deals and modeling customers with minimum contractual commitments only, reducing upside in the official outlook.
NRR Variability and Sequential Decline
In-quarter B2 net revenue retention (NRR) was 111%, down from 116% sequentially. Management attributes the decline to variability from a large, high-usage customer and expects NRR could dip closer to 100% for one or two quarters.
Computer Backup Decline
The legacy computer backup business is expected to decline ~5% year-over-year in 2026 (Q1 ~-3%), contributing to pressure on total company growth and requiring stabilization efforts.
Gross Margin Headwinds and CapEx Acceleration
Management expects gross margin pressure of a few hundred basis points in 2026 driven by higher data center costs and accelerated CapEx to prepare for large deals; CapEx will be higher with PP&E targeted in the high-20s percent of revenue and financing via capital leases.
Lumpiness from Large Variable Customers
A previously mentioned large variable-usage customer caused timing and predictability issues (late deal closings), leading to lumpy quarterly results and conservative guidance assumptions for 2026 (B2 growth Q2–Q3: 12%–19%).
One-Time Items Contributing to EBITDA Outperformance
Q4 adjusted EBITDA outperformance was aided by nonrecurring items (variable compensation alignment, office restructuring savings); while adjusted EBITDA would remain strong excluding these, some of the beat is not recurring.
Delayed Revenue Recognition from Large Win
The >$15M TCV neocloud customer is not expected to produce meaningful revenue until 2027 (management is not factoring material revenue from this customer into 2026 guidance), adding near-term revenue timing risk despite long-term upside.
Company Guidance
Backblaze guided to Q1 2026 revenue of $37.6–$38.0M with adjusted EBITDA margins of 18–20%, and full‑year 2026 revenue of $156.5–$158.5M with full‑year adjusted EBITDA margins of 19–21%, while expecting adjusted free cash flow to be roughly neutral for the year (noting normal quarterly variability) after reporting Q4 adjusted free cash flow of $4M (11% margin) and a Q4 adjusted EBITDA margin of 28%. Management said it derisked the outlook by excluding large swing deals and anchoring assumptions to contractual minimums, expects B2 revenue of approximately 20% for the year (with Q2–Q3 B2 YoY growth of 12–19% given a difficult comp), noted RPO up 60% YoY to $66M and $51M in cash and marketable securities, and plans to fund growth through operating cash flow and capital leases without raising additional capital.Backblaze Financial Statement Overview
Summary
Revenue and gross margin have improved, and cash generation is the key strength with operating cash flow and free cash flow turning strongly positive in 2024–2025. Offsetting this, the company remains meaningfully unprofitable on a net basis and debt has increased, keeping overall fundamentals in the “improving but not yet proven” category.Income Statement
Revenue has scaled meaningfully over time (from $53.8M in 2020 to $145.8M in 2025), and gross margin has improved to ~61% in 2025 from the high-40%/low-50% range earlier in the period. However, profitability remains the key overhang: net losses persist (2025 net margin ~-17.6%), and operating profitability is still negative despite better loss levels versus 2023–2024. The setup looks like improving unit economics with an incomplete path to sustained earnings.44
Neutral
Balance Sheet
The balance sheet looks more stable than earlier years, with positive equity ($83.2M in 2025) and moderate leverage (debt-to-equity ~0.74 in 2025, improved from ~1.02 in 2023). Total debt has risen (to ~$61.6M in 2025 from ~$45–46M in 2022–2024), which increases fixed obligations, but the company is not showing extreme leverage based on the provided ratios. The main weakness is that continued net losses can pressure equity over time if profitability does not improve.56
Neutral
Cash Flow
Cash flow momentum is a clear bright spot. Operating cash flow turned strongly positive in 2024–2025 (to $23.5M in 2025), and free cash flow also improved materially to $18.9M in 2025 with strong growth versus 2024. Importantly, cash generation is occurring even while net income is negative, suggesting improved cash efficiency and working-capital discipline. The key risk is durability—cash flow was negative in 2022–2023, so investors will want to see consistency across cycles.72
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 145.84M | 127.63M | 102.02M | 85.16M | 67.48M |
| Gross Profit | 88.79M | 69.34M | 49.86M | 43.86M | 34.34M |
| EBITDA | 3.83M | -16.54M | -31.01M | -27.00M | -1.61M |
| Net Income | -25.61M | -48.53M | -59.71M | -51.40M | -21.70M |
Balance Sheet | |||||
| Total Assets | 191.83M | 168.56M | 131.69M | 152.46M | 163.58M |
| Cash, Cash Equivalents and Short-Term Investments | 51.38M | 54.91M | 29.30M | 65.42M | 104.84M |
| Total Debt | 81.75M | 46.34M | 45.96M | 45.49M | 33.25M |
| Total Liabilities | 108.61M | 90.94M | 86.75M | 83.71M | 68.09M |
| Stockholders Equity | 83.22M | 77.62M | 44.94M | 68.75M | 95.49M |
Cash Flow | |||||
| Free Cash Flow | 18.85M | 10.79M | -27.58M | -29.76M | -7.67M |
| Operating Cash Flow | 23.54M | 12.51M | -7.35M | -13.78M | 3.52M |
| Investing Cash Flow | -25.34M | -6.13M | 21.66M | -73.85M | -11.19M |
| Financing Cash Flow | -14.80M | 22.77M | -8.84M | -6.21M | 106.61M |
Backblaze Technical Analysis
Negative
3.66
Price Trends
4.24
Negative
4.98
Negative
6.19
Negative
Market Momentum
-0.17
Negative
37.89
Neutral
24.10
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BLZE, the sentiment is Negative. The current price of 3.66 is below the 20-day moving average (MA) of 3.79, below the 50-day MA of 4.24, and below the 200-day MA of 6.19, indicating a bearish trend. The MACD of -0.17 indicates Negative momentum. The RSI at 37.89 is Neutral, neither overbought nor oversold. The STOCH value of 24.10 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for BLZE.
Backblaze Risk Analysis
Backblaze disclosed 55 risk factors in its most recent earnings report. Backblaze reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Backblaze Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
67 Neutral | $7.60B | 42.89 | -214.15% | ― | 14.20% | 204.86% | |
66 Neutral | $2.22B | 82.10 | 7.96% | ― | 24.71% | 99.52% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
60 Neutral | $5.83B | 14.67 | -35.62% | ― | -0.44% | 2.47% | |
58 Neutral | $46.70M | 640.13 | 0.58% | ― | 20.68% | 84.51% | |
56 Neutral | $219.97M | ― | -31.67% | ― | 15.73% | 40.14% | |
47 Neutral | $261.31M | -0.40 | -139.50% | ― | 101.97% | 58.61% |
* Technology Sector Average
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Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.