Backblaze (BLZE) Q4 2024 earnings summary

Executive summary

• Revenue grew 18% year-over-year in Q4, with B2 Cloud Storage up 22% and now over 50% of total business, becoming the largest revenue contributor.

• Adjusted EBITDA margin doubled to 14% year-over-year, driven by revenue growth and cost management.

• Go-to-market transformation and cost restructuring initiatives led to record sales bookings, improved sales productivity, and a $1M+ ACV customer win.

• B2 Cloud Storage is positioned as the primary growth driver, with significant momentum in AI and enterprise segments; AI customer data stored grew nearly tenfold and AI customer base grew 65% YoY.

• Adjusted Free Cash Flow is projected to turn positive by Q4 2025, reflecting improved operational efficiency.

Financial highlights

• Q4 2024 revenue was $33.8 million, up 18% year-over-year; full-year revenue was $127.6 million, up 25%.

• B2 Cloud Storage revenue reached $17.1 million (+22% YoY); Computer Backup revenue was $16.7 million (+13% YoY).

• Adjusted gross margin was 78%, maintaining an all-time high; adjusted EBITDA for Q4 was $4.6 million (14% margin), more than doubling YoY.

• Cash and short-term investments at quarter-end were $54.9 million, bolstered by a $37 million secondary offering.

• Adjusted free cash flow for 2024 was $(20.1) million, improved from $(43.2) million in 2023.

Outlook and guidance

• 2025 full-year revenue expected between $144 million and $146 million; Q1 revenue guidance is $34.1–$34.5 million.

• B2 Cloud Storage projected to exit 2025 with over 30% growth, driven by new customer acquisition and expansion.

• Adjusted EBITDA margin guidance for 2025 is 16–18%, with Q1 at 13–15%.

• Adjusted Free Cash Flow expected to be positive by Q4 2025.

• Targeting adjusted free cash flow positivity and Adjusted EBITDA margin above 20% by Q4 2025.