Backblaze Inc. (BLZE) shares witnessed a notable increase in after-hours trading on Thursday, climbing 2.1% to $6.31, a direct consequence of its recently disclosed strong third-quarter financial performance.
The company's financial results for the quarter ending September 30 showcased significant growth, with total revenue reaching $37.2 million, marking a 14% improvement compared to the previous year. This impressive revenue surge was primarily fueled by the strong performance of its B2 Cloud Storage segment. Furthermore, Backblaze demonstrated enhanced operational efficiency, with adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) soaring to $8.4 million, representing a substantial 23% of revenue, up from 12% in the prior year. The gross margin also expanded by approximately 700 basis points, reaching 62%, underscoring the company's improved profitability.
Backblaze's CEO, Gleb Budman, emphasized that these results surpassed internal projections, attributing the success to diligent cost management and increasing demand from clients in the artificial intelligence and data-intensive sectors. A significant milestone for the company was achieving its first non-generally accepted accounting principles (GAAP) net income of $1.9 million, while simultaneously reducing its net loss to $3.8 million from $12.8 million a year ago. With a healthy cash and marketable securities balance of $50.3 million, the company anticipates achieving free-cash-flow positivity in the upcoming fourth quarter, signaling continued financial strength and stability. Looking ahead, Backblaze projects fourth-quarter revenue to range between $37.3 million and $37.9 million, with an adjusted EBITDA margin of 20%–22%, indicating a moderate yet steady growth trajectory.
Backblaze's recent financial achievements highlight its strategic growth and effective management, positioning the company for continued success in the competitive cloud storage market. The positive momentum in its financial metrics, coupled with a clear path to free cash flow positivity, reflects a robust business model and a promising future. This upward trend encourages investors to view the company as a strong contender in the tech industry, poised for further innovation and expansion.