Backblaze (BLZE) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenue grew 15% year-over-year to $34.6 million, driven by 23% B2 Cloud Storage growth and 8% Computer Backup growth, with adjusted EBITDA margin tripling to 18%.

• B2 Cloud Storage became the largest segment, with AI use cases fueling a 66% increase in AI customers and 25x growth in AI customer data.

• Signed the largest-ever multi-million dollar, multi-year TCV deal, displacing AWS, and doubled sales bookings year-over-year.

• Launched B2 Overdrive, a high-performance storage solution targeting AI, analytics, and high-throughput workloads, and deepened AI/media partnerships.

• International revenue represented 27% of total, with a new Canadian data center launched in January 2025.

Financial highlights

• Total Q1 2025 revenue: $34.6 million, up 15% year-over-year; B2 Cloud Storage revenue: $18.0 million, up 23%; Computer Backup revenue: $14.6–$16.6 million, up 8%.

• Adjusted gross margin improved to 79% (from 77%); GAAP gross margin rose to 56% (from 53%).

• Adjusted EBITDA margin reached 18%, up from 6% a year ago; adjusted EBITDA was $6.4 million.

• Net loss narrowed to $9.3 million (GAAP, -27% margin) from $11.1 million; non-GAAP net loss was $1.8 million (-5% margin).

• Adjusted free cash flow margin improved to -6% from -17%; adjusted free cash flow was $(2.1) million, up from $(5.1) million.

• Cash, cash equivalents, and marketable securities totaled $53.2 million at quarter end.

Outlook and guidance

• Q2 2025 revenue guidance: $35.2M–$35.6M; adjusted EBITDA margin: 14%–16%; B2 growth expected at 23%–25%.

• Full-year 2025 revenue guidance: $144M–$146M; adjusted EBITDA margin raised to 17%–19%.

• B2 Cloud Storage projected to grow 21%–30%+ year-over-year across 2025 quarters; targeting positive adjusted free cash flow in Q4 2025.

• Extension of infrastructure equipment useful life expected to reduce 2025 depreciation expense by ~$5 million.

• Operating expenses (excluding D&A and stock-based comp) expected to remain flat in 2025 due to 2024 restructuring.