Backblaze: Fiscal 3Q23 Financial Results

Backblaze, Inc. announced results for its third quarter ended September 30, 2023.

“In 3FQ23, we passed the $100 million in ARR milestone and are on track to achieve adjusted EBITDA profitability in 4Q23 through continued strong growth and efficient execution. As part of our leadership in the open cloud movement, we recently added free egress, significant performance improvements, and new functionality to increasingly support our customers’ ability to break free from limitations on their data,” said Gleb Budman, CEO. “Looking ahead, our recent price increase supports continued investments in the platform and positions us for profitable growth while continuing to offer customers a compelling and cost effective storage solution.”

3FQ23 financial highlights:

• Revenue of $25.3 million, an increase of 15% Y/Y.
• B2 Cloud Storage revenue was $11.6 million, an increase of 31% Y/Y.
• Computer Backup revenue was $13.7 million, an increase of 4% Y/Y.
• Gross profit of $11.8 million, or 46% of revenue, compared to $11.2 million and 51% of revenue in 3Q22.
• Adjusted gross profit of $18.7 million, or 74% of revenue, compared to $16.7 million and 76% of revenue in 3Q22.
• Net loss of $16.1 million compared to a net loss of $12.8 million in 3Q22.
• Net loss per share of $0.44 compared to a net loss per share of $0.40 in 3Q22.
• Adjusted EBITDA of $(0.8) million, or (3%) of revenue, compared to $(1.9) million and (8%) of revenue in 3Q22.
• Non-GAAP net loss of $7.8 million compared to non-GAAP net loss of $8.0 million in 3Q22.
• Non-GAAP net loss per share of $0.21 compared to a non-GAAP net loss per share of $0.25 in 3Q22.
• Cash, short-term investments and restricted cash, current totaled $35.8 million as of September 30, 2023.

3FQ23 operational highlights:

• ARR was $100.9 million, an increase of 15% Y/Y.
• B2 Cloud Storage ARR was $46.8 million, an increase of 31% Y/Y.
• Computer Backup ARR was $54.1 million, an increase of 3% Y/Y.
• Net revenue retention (NRR) rate was 108% compared to 115% in 3Q22.
• B2 Cloud Storage NRR was 120% compared to 125% in 3Q22.
• Computer Backup NRR was 100% compared to 109% in 3Q22.
• Gross customer retention rate was 91% in 3FQ23 and 3Q22.
• B2 Cloud Storage gross customer retention rate was 90% in 3Q23 and 3Q22.
• Computer Backup gross customer retention rate was 91% in 3Q23 compared to 90% in 3Q22.

For 4FQ23 the company expects:

• Revenue between $27.9 million to $28.7 million
• Adjusted EBITDA margin between 1% to 3%
• Basic weighted average shares outstanding of 38.0 million to 39.0 million shares

For FY23 it expects:

• Revenue between $101.2 million to $102.0 million (midpoint raised)
• Adjusted EBITDA margin between (6.0)% to (4.0)% (raised)