On November 8, 2023, Backblaze Inc (BLZE, Financial), a leader in specialized storage cloud solutions, released its financial results for the third quarter ended September 30, 2023. The company reported a significant milestone, surpassing $100 million in annual recurring revenue (ARR) and projecting adjusted EBITDA profitability in the fourth quarter through robust growth and efficient execution.
Financial Performance Overview
Backblaze Inc (BLZE, Financial) experienced a 15% increase in overall revenue year-over-year, amounting to $25.3 million for Q3 2023. This growth was driven by a notable 31% increase in B2 Cloud Storage revenue, which reached $11.6 million. Computer Backup revenue also saw a rise, albeit a more modest 4% year-over-year, totaling $13.7 million.
The company's gross profit stood at $11.8 million, representing 46% of revenue, a decrease from 51% in Q3 2022. Adjusted gross profit, which excludes certain non-cash items, was $18.7 million or 74% of revenue, compared to $16.7 million and 76% of revenue in the same quarter of the previous year.
Despite the revenue growth, Backblaze Inc (BLZE, Financial) reported a net loss of $16.1 million, which widened from a net loss of $12.8 million in Q3 2022. The net loss per share also increased to $0.44 from $0.40 year-over-year. However, the adjusted EBITDA loss improved to $(0.8) million or (3%) of revenue from $(1.9) million and (8%) of revenue in Q3 2022.
Operational and Strategic Highlights
Backblaze Inc (BLZE, Financial) achieved a 15% year-over-year growth in ARR, reaching $100.9 million. The B2 Cloud Storage segment was particularly strong, with a 31% increase in ARR. The company's net revenue retention (NRR) rate was 108%, indicating the ability to expand revenue from existing customers, although this was a decrease from 115% in Q3 2022.
Strategically, Backblaze Inc (BLZE, Financial) focused on driving cost efficiencies, upgrading B2 Cloud Storage performance, and launching expanded offerings alongside a price increase. The company also signed its largest multi-year commitment to date and expanded partnerships to reach new customers and markets.
Balance Sheet and Cash Flow Statements
As of September 30, 2023, Backblaze Inc (BLZE, Financial) had $35.8 million in cash, short-term investments, and restricted cash. The balance sheet showed total assets of $134.7 million and total liabilities of $87.4 million. The company used $10.6 million in operating activities and invested $22.1 million, mainly in marketable securities and capital expenditures.
Financial Outlook
Looking forward, Backblaze Inc (BLZE, Financial) expects Q4 2023 revenue to be between $27.9 million and $28.7 million, with an adjusted EBITDA margin between 1% to 3%. For the full year of 2023, the company anticipates revenue between $101.2 million to $102.0 million, with an improved adjusted EBITDA margin forecast.
For more detailed information and analysis on Backblaze Inc (BLZE, Financial)'s financial performance, visit GuruFocus.com.
Explore the complete 8-K earnings release (here) from Backblaze Inc for further details.
