Backblaze: Fiscal 4Q23 Financial Results

Backblaze, Inc. announced results for its fourth quarter and year ended December 31, 2022.

“We were pleased to finish 2022 with strong Q4 overall revenue growth of 23% driven by an increasing proportion of our B2 Cloud Storage service, which grew 44% in Q4,” said Gleb Budman, CEO. “We are excited as we begin 2023 as we see the opportunity to help more small and large businesses reduce the cost of their cloud infrastructure.“

“Given the uncertain macroeconomic environment, businesses have even more reason to seek cost savings with best-of-breed cloud services-and Backblaze provides them a solution with B2 Cloud Storage, which is one-fifth the price of traditional cloud storage providers such as Amazon S3. Further, Backblaze B2 is very easy to use, saving users up to 90% of the time it takes to manage traditional cloud services. Turning to our own financial picture, as we continue to grow revenue, we’re moderating expense growth and are targeting to approach adjusted EBITDA breakeven in Q4 of this year,” he continued

4FQ22 financial highlights:

• Revenue of $22.9 million, an increase of 23% Y/Y.
• B2 Cloud Storage revenue was $9.5 million, an increase of 44% Y/Y.
• Computer Backup revenue was $13.3 million, an increase of 11% Y/Y.
• Gross profit of $11.7 million or 51% of revenue, compared to $9.8 million or 53% of revenue in 4FQ21.
• Adjusted gross profit of $17.3 million or 75% of revenue, compared to $14.1 million or 75% of revenue in 4FQ21.
• Net loss was $14.8 million compared to a net loss of $9.6 million in 4FQ21.
• Net loss per share was $0.45 compared to a net loss per share of $0.38 in 4FQ21.
• Adjusted EBITDA was $(2.5) million or (11)% of revenue, compared to $(1.3) million or (7)% of revenue in 4FQ21.
• Non-GAAP net loss of $9.0 million compared to non-GAAP net loss of $6.5 million in 4FQ21.
• Non-GAAP net loss per share of $0.27 compared to a non-GAAP net loss per share of $0.26 in 4FQ21.
• Cash, short-term investments and restricted cash, non-current totaled $69.7 million as of December 31, 2022.

FY22 financial highlights:

• Revenue of $85.2 million, an increase of 26% Y/Y.
• B2 Cloud Storage revenue was $33.0 million, an increase of 46% Y/Y.
• Computer Backup revenue was $51.4 million, an increase of 17% Y/Y.
• Gross profit of $43.9 million or 52% of revenue, compared to $34.3 million or 51% of revenue in 2021.
• Adjusted gross profit of $64.6 million or 76% of revenue, compared to $50.5 million or 75% of revenue in 2021.
• Net loss was $51.7 million compared to $21.7 million in 2021.
• Net loss per share was $1.63 compared to $1.07 in 2021.
• Adjusted EBITDA was $(9.4) million or (11)% of revenue, compared to $3.2 million and 5% of revenue in 2021.
• Non-GAAP net loss of $32.8 million compared to non-GAAP net loss of $16.9 million in 2021.
• Non-GAAP net loss per share of $1.04 compared to a non-GAAP net loss per share of $0.83 in 2021.

4FQ22 operational highlights:

• Annual recurring revenue (ARR) was $92.0 million, an increase of 22% Y/Y.
• B2 Cloud Storage ARR was $38.6 million, an increase of 44% Y/Y.
• Computer Backup ARR was $53.4 million, an increase of 10% Y/Y.
• Net revenue retention (NRR) rate was 113% compared to 111% in 4FQ21.
• B2 Cloud Storage NRR was 122% compared to 132% in 4FQ21.
• Computer Backup NRR was 108% compared to 102% in 4FQ21.
• Gross customer retention rate was 91% compared to 91% in 4FQ21.
• B2 Cloud Storage gross customer retention rate was 90% compared to 89% in 4FQ21.
• Computer Backup gross customer retention rate was 90% compared to 91% in 4FQ21.
• Number of customers was 506,456 vs. 493,023 in 4FQ21.
• B2 Cloud Storage number of customers was 86,874 vs. 74,349 in 4FQ21.
• Computer Backup number of customers was 436,080 vs. 433,079 in 4FQ21.
• Total Annual Average Revenue Per Customer (ARPU) was $181 vs. $153 in 4FQ21.
• B2 Cloud Storage ARPU was $437 vs. $360 in 4FQ21.
• Computer Backup ARPU was $124 vs. $113 in 4FQ21.

For 1FQ23 the company expects:

• Revenue between $23.1 million to $23.5 million.
• Adjusted EBITDA margin between (15)% to (11)%.
• Basic shares outstanding of 33.5 to 35.5 million shares.

For FY23 it expects:

• Revenue between $81 million to $102 million.
• Adjusted EBITDA margin between (10)% to (6)%.