Backblaze Inc (BLZE) Reports Revenue Growth and Adjusted EBITDA Profitability in Q4 2023
Revenue Growth: Q4 revenue increased by 25% YoY to $28.7 million, with B2 Cloud Storage revenue up by 47%.
Adjusted EBITDA: Achieved profitability with $1.6 million in Q4, a significant improvement from a $(2.5) million loss in Q4 2022.
Net Loss Improvement: Q4 net loss narrowed to $11.4 million from $14.5 million in the same period last year.
Gross Margin: Q4 gross profit margin improved to 53% of revenue, up from 51% in Q4 2022.
Annual Recurring Revenue (ARR): ARR increased by 28% YoY to $117.6 million.
Customer Growth: The number of customers grew modestly to 511,942 in Q4 2023 from 506,456 in Q4 2022.
Financial Outlook: For Q1 2024, revenue is expected between $29.6 million to $30.0 million, with an adjusted EBITDA margin of 4% to 6%.
On February 15, 2024, Backblaze Inc (NASDAQ:BLZE), a leading provider of cloud storage services, released its 8-K filing, announcing financial results for the fourth quarter and full year ended December 31, 2023. The company, known for its Backblaze B2 Cloud Storage and Computer Backup services, reported a 25% year-over-year (YoY) increase in Q4 revenue, reaching $28.7 million. This growth was particularly driven by a 47% increase in B2 Cloud Storage revenue, which amounted to $14.0 million. The company also achieved a milestone by delivering adjusted EBITDA profitability for the first time as a public company.
Backblaze Inc (NASDAQ:BLZE) operates primarily in the United States and has established itself as a significant player in the cloud storage market, catering to a variety of use cases such as backups, multi-cloud strategies, application development, and ransomware protection. The company's Computer Backup service, which automatically backs up data from laptops and desktops, also saw a revenue increase of 10% YoY, contributing $14.7 million.
The company's performance is noteworthy as it reflects its ability to grow its core business segments and achieve operational efficiencies. The improved gross profit margin, which rose to 53% of revenue in Q4 from 51% in the same period last year, indicates better cost management and a stronger value proposition to its customers. Additionally, the company's net loss per share decreased to $0.30 from $0.44 YoY, signaling a move towards greater financial stability.
Backblaze Inc (NASDAQ:BLZE) also highlighted its operational achievements, including a 28% YoY increase in Annual Recurring Revenue (ARR) to $117.6 million. The company's Net Revenue Retention (NRR) rate stood at 109%, indicating that existing customers are expanding their use of Backblaze's services. The gross customer retention rate remained strong at 91%, showcasing the company's ability to maintain a loyal customer base.
Despite the positive trends, the company still faces challenges, including a competitive market landscape and the need to continuously innovate to retain and attract customers. The company's net loss for the full year 2023 was $58.9 million, although this was an improvement from the $51.4 million net loss in 2022. The non-GAAP net loss for the year also improved to $30.6 million from $32.8 million in the previous year.
Looking ahead, Backblaze Inc (NASDAQ:BLZE) provided a financial outlook for the first quarter of 2024, expecting revenue between $29.6 million to $30.0 million and an adjusted EBITDA margin between 4% to 6%. For the full year 2024, the company anticipates revenue between $126.0 million to $128.0 million with an adjusted EBITDA margin between 8% to 10%.
The company's CEO, Gleb Budman, expressed optimism about the future, stating,
We exited 2023 with accelerated revenue growth and dramatically improved profitability and cash usage metrics. Im excited for the coming year as Backblaze continues to move up in the mid-market and help customers who are poorly served by legacy solutions to break free with our differentiated cloud services."
Backblaze Inc (NASDAQ:BLZE)'s earnings report demonstrates a company on the rise, with significant growth in its B2 Cloud Storage segment and a firm commitment to improving its financial health. Value investors and potential GuruFocus.com members may find the company's progress in achieving adjusted EBITDA profitability and its positive revenue trends particularly appealing as indicators of its potential for sustainable growth.
For more detailed financial information and future updates on Backblaze Inc (NASDAQ:BLZE), stay tuned to GuruFocus.com.
Explore the complete 8-K earnings release (here) from Backblaze Inc for further details.
This article first appeared on GuruFocus.
