Key Highlights

  • BLZE booked a company-record $46.7 million of third-quarter 2026 revenue, a 25.5% increase over $37.2 million a year earlier.
  • Annual recurring Revenue on B2 hit $127 million, while B2 income itself grew to $30.5 million, roughly 47% higher.
  • Net loss came to $2.4 million, down from $3.8 million; the per-share loss was $0.04, versus $0.07.
  • Profitability on an adjusted EBITDA basis hit 33%, about 1,000 basis points above a year before.
  • Revenue guidance for the full year rose, with $177.8 million at the low end, $178.2 million at the top and a $5 million lift at the midpoint.

Revenue Milestone Driven by B2 Cloud Storage Reaching $30.5 Million

Backblaze (NASDAQ:BLZE) released third quarter 2026 figures on Nov 2, 2026, for the period ended Sep 30, 2026. The Top Line was $46.7 million, against $37.2 million one year earlier, marking the highest quarterly figure in company history.

The company runs B2 Cloud Storage and a Computer Backup product, and it markets its storage as a capacity layer for AI. B2 revenue went up to $30.5 million from $20.7 million, a pace that picked up from 34% growth in Q2. A May 1 price increase contributed about 12 percentage points, so organic growth was close to 35%.

Annual Recurring Revenue for B2 reached $127 million, up 53% annually, while net revenue retention rose to 115% from 113%. ARR from customers spending above $50,000 jumped 109% to $50 million, and four fresh agreements topped $500,000. Computer Backup slipped 2% to $16.2 million but grew sequentially.

Gross Profit Gains Shrink the Deficit to $2.4 Million

Gross profit reached $29.8 million, up from $23.1 million, a gross Margin of roughly 64% (calculated), compared with 62% previously. Operating expenses totaled $31.2 million, equal to 67% of revenue versus 72%. The operating deficit shrank to $1.4 million, down from $3.5 million.

Losses fell to $2.4 million, which equals $0.04 a share, after $3.8 million (seven cents) a year back. Non-GAAP Net Income was $6.7 million, over three times the $1.9 million reported a year ago, and adjusted EBITDA margin was 33%.

Zero-Coupon Notes Due 2031 Finance the Expansion of AI Storage Capacity

Backblaze issued $201.3 million of Zero-Coupon Convertible notes maturing 2031 on Aug 24, 2026, and capped call purchases totaled $17.5 million to restrain dilution. Cash and marketable securities totaled $230 million at quarter end, while cash and equivalents alone stood at $189.0 million.

A pair of major agreements, one involving an AI-oriented cloud company and the other a neocloud operator, have begun ramping. Each carries a minimum commitment spanning multiple years, though neither moved third-quarter growth materially. Management estimates Capital spending will land between 55% and 65% of annual revenue, which translates to $65 million to $83 million in Q4. Depreciation charges begin before the revenue they support, pushing GAAP gross margin down for a while, in a range of 3 to 6 percentage points.

Q4 Outlook Calls for Near-60% B2 Expansion and Higher Full-Year Margin Targets

The fourth-quarter guide calls for $49.8 million to $50.2 million in revenue, B2 expansion close to 60% at the center of the range, and margin between 32% and 34% on the adjusted measure. The yearly margin outlook now reads 30% to 31%, previously 27% to 29%, and management pointed to B2 expansion beyond 40% during 2027. Projections leave out new contracts larger than $500,000 as well as consumption above committed minimums.