Backblaze (BLZE) Q2 2024 earnings summary

Executive summary

• Achieved 27% year-over-year revenue growth in Q2 2024 to $31.3 million, exceeding guidance, with B2 Cloud Storage up 43% and Computer Backup up 15%.

• Adjusted EBITDA was $2.7 million (9% margin), marking the third consecutive quarter of profitability and a turnaround from a loss in Q2 2023.

• Net loss narrowed to $10.3 million from $14.3 million in Q2 2023; non-GAAP net loss improved to $4.8 million.

• Significant upmarket momentum, with a 55% year-over-year increase in customers contributing over $50,000 in ARR, and notable wins in AI, app development, and media.

• Launched B2 Live Read, a patent-pending service for real-time file access during upload, and appointed new CRO and incoming CFO.

Financial highlights

• Q2 2024 revenue reached $31.3 million (+27% YoY); B2 Cloud Storage revenue was $15.4 million (+43% YoY); Computer Backup revenue was $15.9 million (+15% YoY).

• Adjusted gross margin hit 78% (up from 75% in Q2 2023); GAAP gross margin was 55% (up from 49%).

• Net revenue retention was 114% overall (B2 at 126%, Computer Backup at 105%); gross customer retention was 90%.

• Cash, investments, and restricted cash totaled $28.3 million at quarter end.

• Operating cash flow for the first half of 2024 was $5.6 million, up from $(10.4) million in 2023.

Outlook and guidance

• Q3 2024 revenue expected between $32.4 million and $32.8 million; adjusted EBITDA margin forecasted at 9%-11%.

• Full-year 2024 revenue guidance raised to $126.5-$128.5 million, with B2 Cloud Storage growth projected at 40%.

• Adjusted EBITDA margin for the year now expected at 9%-11%, up from prior guidance.

• Management expects continued favorable impact on revenue and gross margin from 2023 price increases through 2024.

• Projecting total cash usage break-even by mid-to-late 2025 and free cash flow positive shortly thereafter.