Backblaze, Inc. reported first‑quarter 2026 results that included $38.7 million in revenue, a 12% year‑over‑year increase, and an adjusted earnings per share of $0.04, beating the consensus estimate of $0.00 by $0.04. The earnings beat was driven largely by a 24% rise in the company’s B2 Cloud Storage segment, which generated $22.4 million in revenue, while the legacy Computer Backup segment remained flat at $16.2 million. The shift toward higher‑margin B2 storage has been a key factor in the company’s improved profitability profile.
Gross margin expanded to 61% from 56% year‑over‑year, and adjusted EBITDA margin rose to 26% from 18%. The company’s adjusted free cash flow, however, remained negative at $1.8 million, an improvement from the $2.1 million negative cash flow reported in Q1 2025. The margin expansion reflects the higher mix of B2 contracts and operational leverage, while the continued negative cash flow is attributed to accelerated capital expenditures associated with scaling the AI‑optimized storage platform.
Backblaze raised its full‑year 2026 revenue guidance to $161.5 million–$163.5 million, up from the prior $156.5 million–$158.5 million range, and lifted its adjusted EBITDA margin guidance to 23%–25% from 19%–21%. Management said the guidance increase reflects “stronger first‑quarter performance impacting the rest of 2026 and the benefit of the new B2 pricing and offering,” indicating confidence in sustained demand for its AI‑driven storage services.
CEO Gleb Budman noted that “we are seeing growing traction with AI customers, including winning a training‑data company and a generative‑AI video‑creation company, jointly contributing about $1.5 million in annual contract value, along with a 76% growth in AI customers year over year.” CFO Marc Suidan added that “we exceeded the top end of both revenue and adjusted EBITDA guidance. The Q1 outperformance reflects stronger sales execution, and the EBITDA beat demonstrates the operating leverage in the model.”
Investors reacted positively to the results, citing the robust 24% growth in B2 Cloud Storage, the 76% increase in AI‑related customer bookings, and the company’s ability to raise full‑year guidance. The market’s enthusiasm underscores confidence in Backblaze’s strategic pivot toward high‑margin, AI‑optimized storage and its growing share of the expanding neocloud market.
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