Cloud storage platform Backblaze, Inc. (BLZE.US) reported its Q3 2025 earnings before market open on Thursday. Revenue reached $37.2 million, up 14% year-over-year, surpassing market expectations. Non-GAAP earnings per share stood at $0.03, outperforming estimates and marking a turnaround from a net loss of $0.10 per share in the same period last year.
CEO Gleb Budman highlighted, "Our Q3 results exceeded the upper bounds of both revenue and Adjusted EBITDA guidance, with gross margin expanding approximately 700 basis points to 62%. We remain on track to achieve positive free cash flow in Q4."
The B2 Cloud Storage segment grew 28% year-over-year to $20.7 million, driven by another seven-figure expansion deal with an existing client, underscoring Backblaze’s value proposition in cost efficiency and open-platform flexibility. "As customers build AI and data-intensive workflows, they seek high-performance, predictable-cost solutions with S3 compatibility and no vendor lock-in—areas where we excel," Budman added.
Meanwhile, Computer Backup revenue remained flat at $16.5 million. Adjusted gross profit rose to $29.4 million (79% of revenue), up from $25.5 million (78%) a year earlier. Adjusted EBITDA surged to $8.4 million (23% of revenue), compared to $3.7 million (12%) in Q3 2024.
Non-GAAP net income hit $1.9 million, reversing a $4.1 million loss in the prior-year quarter. Year-to-date operating cash flow improved to $14.2 million, while adjusted free cash flow narrowed to -$9.5 million (vs. -$15.6 million in 2024). Cash and equivalents totaled $50.3 million as of September 30, 2025.
Operational metrics showed Annual Recurring Revenue (ARR) at $147.2 million (+13% YoY), though Net Revenue Retention (NRR) dipped to 106% from 118%. Customer retention edged up to 91% (vs. 90%).
Notably, Backblaze secured a seven-figure expansion deal with an AI-powered video surveillance client, reflecting strong product adoption. Both Non-GAAP net income and Adjusted EBITDA margins reached record highs, signaling progress toward sustainable profitability.
For Q4, the company projects revenue between $37.3 million and $37.9 million, with Adjusted EBITDA margins of 20%-22%. Full-year 2025 revenue guidance was tightened to $145.4 million-$146.0 million (previously $145.0 million-$147.0 million), while Adjusted EBITDA margin expectations were raised to 18%-20% (from 17%-19%).
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