Backblaze: First Quarter 2022 Financial Results

Backblaze, Inc. announced results for its first quarter, ended March 31, 2022.

“In Q1, our business hit $79 million in annual recurring revenue and grew 27%, an acceleration vs. 24% growth in the same period a year ago,” said Gleb Budman, CEO. “We also recently announced numerous product and platform enhancements, including our Universal Data Migration, B2 Reserve, Partner API, and the beta launch of Cloud Replication. These advances make it easier, more strategic, and more cost-effective to store more data with Backblaze. Our fast-growing team continues to execute on our mission of making it astonishingly easy to store, use, and protect data.”

1FQ22 Financial Highlights:
• Revenue of $19.5 million, an increase of 27% Y/Y.

• B2 Cloud Storage revenue was $7.0 million, an increase of 48% Y/Y.
• Computer Backup revenue was $12.3 million, an increase of 18% Y/Y.

• Gross profit of $9.8 million, or 50% of revenue, compared to $7.5 million and 49% of revenue in 1FQ21.
• Adjusted gross profit of $14.8 million, or 76% of revenue, compared to $11.4 million and 75% of revenue in 1FQ21.
• Net loss of $(12.5) million compared to a net loss of $(3.7) million in 1FQ21.
• Net loss per share of $(0.41) compared to a net loss per share of $(0.20) in 1FQ21.
• Adjusted EBITDA of $(3.0) million, or (15)% of revenue, compared to $2.1 million and 14% of revenue 1FQ21.
• Non-GAAP net loss of $(8.7) million compared to non-GAAP net loss of $(2.8) million in 1FQ21.
• Non-GAAP net loss per share of $(0.28) compared to a non-GAAP net loss per share of $(0.15) in 1FQ21.
• Cash, cash equivalents, and short-term investments totaled $99.1 million as of March 31, 2022.

1FQ22 Operational Highlights:
• Annual recurring revenue (ARR) was $79.0 million, an increase of 28% Y/Y.

• B2 Cloud Storage ARR was $28.4 million, an increase of 47% Y/Y.
• Computer Backup ARR was $50.6 million, an increase of 19% Y/Y.

• Net revenue retention (NRR) rate was 112% compared to 111% in 1FQ21.

• B2 Cloud Storage NRR was 129% compared to 133% in 1FQ21.
• Computer Backup NRR was 104% compared to 104% in 1FQ21.

• Gross customer retention rate was 91% compared to 91% in 1FQ21.

• B2 Cloud Storage gross customer retention rate was 90% compared to 89% in 1FQ21.
• Computer Backup gross customer retention rate was 91% compared to 90% in 1FQ21.

1FQ22 and Recent Business Highlights:
Cloud products and platform:
• Universal Data Migration: set of integrated services to make it easy and free for eligible customers to migrate data from a variety of cloud and on-premises storage solutions.
• Partner API: interface that enables easy integration and management of B2 Cloud Storage within Alliance Partner products and platforms.
• B2 Reserve: new offering that provides predictable, capacity-based pricing model.
• Cloud Replication (beta): functionality that enables automated data replication for multiple use cases, including geographic distribution to support DR objectives, reduce concentration risk, serve compliance needs, or move data closer to end users for faster access.

Sales and marketing:
• Partnership with SoDA: data management software company, leverages B2 Cloud Storage to free businesses currently trapped in on-premises storage solutions.
• Partnership with Catalogic: VM and Kubernetes backup provider, features immutable backup protection and instant recovery options using B2 Cloud Storage for the developer market.
• Joint solution with Ctera: cloud NAS software company, uses B2 Cloud Storage to ease cloud adoption for businesses moving from on-premises to cloud-based NAS.

Financial Outlook:
For 2FQ22:
• Revenue between $20.2 million to $20.6 million.
• Adjusted EBITDA margin between (19)% to (15)%.
• Basic weighted average shares outstanding of 31.0 million to 33.0 million shares.
For FY22:
• Revenue between $83 million to $86 million.
• Adjusted EBITDA margin between (18)% to (14)%.