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Backblaze (BLZE)
NASDAQ:BLZE
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Backblaze
(NASDAQ:BLZE)
52Neutral
Positive Factors
Financial Performance
Backblaze reported a strong B2 Cloud Storage revenue growth of 39% year-over-year, contributing significantly to overall revenue growth.
Market Position
Backblaze is viewed as an attractive turn-around story with reaccelerating growth at a discounted multiple.
Strategic Initiatives
Backblaze's focus on more strategic partnerships and tailwinds from GenAI should drive sustainable growth and profitability.
Negative Factors
Revenue Guidance
The company maintained its previous outlook to be adjusted FCF positive by Q4'25, with improved cash generation expected.
Stock Dilution
The recent secondary offering added 7.2M shares to the share count, leading to a lower $11 price target due to dilution.
Backblaze (BLZE) vs. S&P 500 (SPY)
Market Cap
$282.36M
Dividend YieldN/A
Average Volume (3M)585.85K
Price to Earnings (P/E)―
Beta (1Y)1.62
Revenue Growth25.10%
EPS Growth32.52%
CountryUS
Employees346
SectorTechnology
Sector Strength46
IndustrySoftware - Infrastructure
Share Statistics
EPS (TTM)-1.11
Shares Outstanding54,300,000
10 Day Avg. Volume427,473
30 Day Avg. Volume585,851
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)2.30
Price to Cash Flow (P/CF)32.80
P/FCF Ratio32.80
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$10.33Price Target Upside98.65% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering5
Backblaze Business Overview & Revenue Model
Company DescriptionBackblaze, Inc., a storage cloud platform, provides businesses and consumers cloud services to store, use, and protect data in the United States and internationally. The company offers cloud services through a web-scale software infrastructure built on commodity hardware. It also provides Backblaze B2 Cloud Storage, which enables customers to store data, developers to build applications, and partners to expand their use cases. This service is offered as a consumption-based Infrastructure-as-a-Service (IaaS) and serves use cases, such as backups, multi-cloud, application development, and ransomware protection. In addition, the company offers Backblaze Computer Backup that automatically backs up data from laptops and desktops for businesses and individuals, which provides a subscription-based Software-as-a-Service and serves use cases, including computer backup, ransomware protection, theft and loss protection, and remote access. It serves the public cloud IaaS storage and Data-Protection-as-a-Service markets. The company was incorporated in 2007 and is headquartered in San Mateo, California.
How the Company Makes MoneyBackblaze generates revenue through its subscription-based pricing model for cloud storage and backup services. The company's primary revenue streams include personal backup plans, business backup solutions, and B2 cloud storage services. Customers subscribe to these services on a monthly or annual basis, providing a steady stream of recurring revenue. Backblaze's competitive pricing and straightforward service offerings attract a broad customer base, from individual users to large organizations. Additionally, Backblaze has formed strategic partnerships to enhance its service offerings and expand its market reach, further contributing to its revenue growth.
Backblaze Financial Statement Overview
Summary
Backblaze demonstrates strong revenue growth and improving cash flow, yet faces profitability challenges. Enhancing cost management and reducing dependency on debt could improve financial health. The company shows potential but must manage operational inefficiencies to achieve sustainable profitability.Income Statement
Backblaze's revenue has shown a strong growth trend, with a 25.1% increase in TTM. However, profitability metrics like net and EBIT margins remain negative, indicating operational challenges. The gross profit margin has improved to 54.3%, which is a positive sign. Continuing to grow revenue while addressing cost efficiency could enhance future profitability.55
Neutral
Balance Sheet
The debt-to-equity ratio is 0.60, indicating moderate leverage. Stockholders' equity has significantly improved, but the equity ratio at 46.0% suggests potential reliance on debt financing. Improving profitability could enhance financial stability, but current liabilities remain substantial.45
Neutral
Cash Flow
Operating cash flow has turned positive in the TTM, a positive development from previous years. Free cash flow is positive, but the growth rate remains a concern. Cash flow ratios like operating cash flow to net income are favorable due to negative net income, but improving net income remains crucial.50
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 127.63M | 102.02M | 85.16M | 67.48M | 53.78M | Gross Profit |
| 69.34M | 49.86M | 43.86M | 34.34M | 27.98M | EBIT |
| -46.29M | -57.91M | -48.41M | -18.79M | -3.73M | EBITDA |
| -16.54M | -31.02M | -24.54M | -1.61M | 9.22M | Net Income Common Stockholders |
| -48.53M | -59.71M | -51.70M | -21.70M | -6.62M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 45.78M | 29.30M | 65.42M | 104.84M | 6.08M | Total Assets |
| 168.56M | 131.69M | 150.91M | 163.58M | 54.47M | Total Debt |
| 46.34M | 46.85M | 44.87M | 33.25M | 31.48M | Net Debt |
| 563.00K | 34.35M | 38.18M | -71.59M | 25.40M | Total Liabilities |
| 90.94M | 86.75M | 82.36M | 68.09M | 61.31M | Stockholders Equity |
| 77.62M | 44.94M | 68.56M | 95.49M | -6.84M |
| Cash Flow | Free Cash Flow | |||
| 10.79M | -27.58M | -29.76M | -7.69M | 7.84M | Operating Cash Flow |
| 12.51M | -7.35M | -13.78M | 3.52M | 12.82M | Investing Cash Flow |
| -6.13M | 21.66M | -73.85M | -11.19M | -4.97M | Financing Cash Flow |
| 22.77M | -8.84M | -6.21M | 106.61M | -8.75M |
Backblaze Technical Analysis
Negative
5.20
Price Trends
6.19
Negative
6.41
Negative
6.37
Negative
Market Momentum
-0.29
Negative
38.41
Neutral
44.50
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BLZE, the sentiment is Negative. The current price of 5.2 is below the 20-day moving average (MA) of 5.50, below the 50-day MA of 6.19, and below the 200-day MA of 6.37, indicating a bearish trend. The MACD of -0.29 indicates Negative momentum. The RSI at 38.41 is Neutral, neither overbought nor oversold. The STOCH value of 44.50 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for BLZE.
Backblaze Risk Analysis
Backblaze disclosed 52 risk factors in its most recent earnings report. Backblaze reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Backblaze Peers Comparison
Overall Rating
UnderperformOutperform
Sector (58)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $33.38B | ― | -1.21% | ― | 27.77% | 89.39% | |
73 Outperform | $90.86B | 721.64 | -0.69% | ― | 29.39% | -119.62% | |
72 Outperform | $4.46B | 23.08 | 189.40% | ― | 5.05% | 103.11% | |
70 Neutral | $7.91B | ― | -1.22% | ― | 18.55% | 93.84% | |
68 Neutral | $8.10B | 19.14 | -60.11% | ― | 1.86% | 6.21% | |
58 Neutral | $21.67B | 10.60 | -18.43% | 2.42% | 4.66% | -24.45% | |
52 Neutral | $282.36M | ― | -79.20% | ― | 25.10% | 32.52% |
* Technology Sector Average
Performance Comparison
BLZE
Backblaze
5.20
-5.02
-49.12%
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Box
31.64
3.10
10.86%
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Zscaler
209.45
17.32
9.01%
DBX
Dropbox
26.94
2.63
10.82%
SMAR
Smartsheet
56.47
18.07
47.06%
CRWD
CrowdStrike Holdings
366.56
46.97
14.70%
Backblaze Earnings Call Summary
Earnings Call Date: Feb 25, 2025 | % Change Since: -17.85% | Next Earnings Date: May 7, 2025
Earnings Call Sentiment Positive
The earnings call presented a strong performance in revenue and growth metrics, especially in B2 Cloud Storage and AI segments. The successful go-to-market transformation and financial health improvements offset the challenges faced in Computer Backup growth and a notable customer loss. Overall, the positive aspects significantly outweigh the negative ones, suggesting a strong future outlook.Highlights
Revenue and Growth Metrics
Revenue grew 18% year-over-year, with B2 Cloud Storage growing 22%. B2 Cloud Storage now accounts for over 50% of the business in Q4, and adjusted EBITDA margin doubled to 14%.
Go-to-Market Transformation Success
ARR win rates and sales productivity doubled year-over-year. Record sales bookings were achieved, greater than the prior three quarters combined.
AI Customer Segment Growth
AI segment saw nearly a 10-fold increase in data stored, with three out of the top 10 customers being AI companies.
Financial Health and Cash Flow
Adjusted EBITDA improved to $4.6 million or 14% of revenue. Cash flow from operations for the year improved by $20 million over the prior year.
New Data Center in Canada
Opened a new data center region in Canada, structured with an anchor partner to reduce risk and establish a new playbook for future expansions.
Lowlights
Challenges in Computer Backup Growth
Computer Backup revenue grew only 13% year-over-year, primarily driven by a prior price increase, with a secular decline in the consumer side of the business.
Large Customer Loss
A larger customer was lost in Q1, which affected growth projections, although mitigated by new customer acquisition efforts.
Company Guidance
During Backblaze's fourth quarter and full-year 2024 earnings call, the company reported an 18% year-over-year revenue growth, with B2 Cloud Storage growing by 22% and now accounting for over 50% of the business. The adjusted EBITDA margin doubled to 14% compared to the previous year. Backblaze aims to achieve a 30% growth in B2 by the end of 2025, with the adjusted EBITDA margin expected to exceed 20% in Q4 2025, and the company plans to be adjusted free cash flow positive by then. The net revenue retention rate stood at 116%, while gross customer retention was 90%. The company also highlighted a record sales booking quarter, with a significant customer expansion exceeding $1 million in annual contract value. The call emphasized the strategic focus on increasing sales productivity and expanding partnerships, with a notable increase in average deal size from channel leads. Backblaze also underscored its potential to capitalize on the growing AI industry, noting a tenfold increase in data stored by AI companies and a strong momentum in acquiring AI customers.Backblaze Corporate Events
Private Placements and FinancingBusiness Operations and Strategy
Backblaze Ends Loan Agreement After Successful Offering
Positive
Dec 13, 2024
Backblaze, Inc. has voluntarily terminated its Loan and Security Agreement with City National Bank. The termination follows the company’s successful follow-on public offering in November 2024, which raised approximately $37.5 million, allowing the company to fully pay down the revolving credit amount.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.