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01/10 16:34
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call presents strong financial performance with 18% revenue growth and improved cash flow, alongside optimistic guidance for B2 growth and EBITDA margins. The Q&A reveals stable gross margins and strategic AI use cases, though there's a minor concern about Computer Backup's decline. Despite a secondary offering, the positive outlook for cash flow and B2 growth, plus the new data center, indicates a likely positive stock reaction.
Revenue $33.8 million, representing 18% year-over-year growth.
B2 Cloud Storage Revenue $17.1 million, representing 22% year-over-year growth, primarily driven by existing customer data expansion and new customer acquisition.
Computer Backup Revenue $16.7 million, representing 13% year-over-year growth, primarily driven by a price increase implemented in Q4 of 2023.
Adjusted EBITDA Margin 14%, more than doubled from the prior year, driven by revenue growth and strong cost management.
Net Revenue Retention (NRR) 116%, compared to 109% last year, mainly benefiting from the price increase implemented in Q4 2023.
Total Customer Retention 90%, compared to 91% in the prior year, remaining consistent since going public in 2021.
Average Revenue Per User (ARPU) $268, up 18% year-over-year; B2 ARPU climbed to $645, a 12% improvement over last year.
Cash Flow from Operations $12.5 million, a dramatic improvement from cash usage of $7.4 million for the same period last year.
Adjusted Free Cash Flow Negative $20 million, compared to negative $43 million last year, showing a significant improvement of $23 million, primarily due to revenue growth and cost-cutting initiatives.
Cash and Short-term Investments $55 million at the end of the quarter, improved liquidity with a current ratio above one for the first time since Q1 of 2023.
New Product Launches: Launched the 'Powered by Backblaze' white label solution, enabling partners to offer cloud storage to their customers.
Market Expansion: B2 Cloud Storage revenue grew 22% year-over-year, now over 50% of total business, with significant customer expansions in AI, media, and surveillance sectors.
Customer Acquisition: Signed multiple larger customers, including a $1 million annual contract value deal and several others in the $50,000 to $100,000 ARR range.
Operational Efficiencies: Sales productivity doubled year-over-year, with significant improvements in ARR win rates and record sales bookings.
Cost Management: Adjusted EBITDA margin improved to 14%, more than doubling from the previous year.
Strategic Shifts: Transitioned from primarily SMB sales to a self-serve model supporting enterprises, focusing on a go-to-market transformation.
Focus on AI Market: Targeting AI customers, with a tenfold increase in data stored by AI companies, indicating strong momentum in this segment.
Competitive Pressures: Backblaze is transitioning from a company primarily serving SMB customers to one that also supports enterprises, which involves navigating competitive pressures from larger cloud providers.
Regulatory Issues: The company acknowledges that their forward-looking statements are subject to risks and uncertainties, including regulatory issues that could impact their business.
Supply Chain Challenges: While not explicitly mentioned, the discussion of partnerships and the need for a flexible AI tech stack suggests potential supply chain challenges in meeting customer demands.
Economic Factors: The company is focused on becoming adjusted free cash flow positive and navigating economic factors that could affect their growth and profitability.
Customer Retention: Customer retention has slightly decreased from 91% to 90%, indicating potential challenges in maintaining existing customer relationships.
Market Awareness: The need for increased market awareness and effective positioning against competitors is highlighted as a challenge in driving sales efficiency.
Go-to-Market Transformation: Backblaze is focused on a go-to-market transformation aimed at driving B2 growth, with early signs of success including increased ARR win rates and sales productivity.
Partnerships and Alliances: The company is enhancing its alliance strategy with a co-build, co-market, and co-sell approach, working on joint solutions with key technology partners.
Sales Plays: Backblaze is concentrating on four key sales plays to drive efficiency: application storage, IT backup, media and entertainment, and Powered by Backblaze.
AI Customer Segment: The company is experiencing strong momentum in the AI customer segment, serving hundreds of AI customers and seeing a nearly 10-fold increase in data stored by these companies.
2025 Full-Year Revenue Guidance: Expected to be in the range of $144 million to $146 million.
Q1 Revenue Guidance: Projected to be within the range of $34.1 million to $34.5 million.
B2 Growth Expectation: Expected to grow over 30% by the end of 2025, driven by new customer acquisition and expansion.
Adjusted EBITDA Guidance: Projected to be in the range of 16% to 18% for the full year and 13% to 15% for Q1.
Free Cash Flow Expectation: Expected to be adjusted free cash flow positive in Q4 of 2025.
Secondary Offering: Completed an oversubscribed secondary offering for $37 million in net proceeds in November 2024.
Adjusted Free Cash Flow: Expect to be adjusted free cash flow positive in Q4 2025.
B2 Revenue Growth: Expect B2 revenue to grow over 30% by the end of 2025.
Adjusted EBITDA Margin: Projected adjusted EBITDA margin to be above 20% by Q4 2025.
The earnings call reveals mixed signals: while there's optimism with raised revenue guidance and strong B2 growth, concerns arise from AI customer variability, delays in large deals, and lack of clear timelines for growth targets. The restructuring and focus on operational efficiency are positive, but uncertainties remain. Given these factors, the overall sentiment is neutral, reflecting both potential and risks.
The earnings call summary highlights several positive aspects, such as growth in AI-related opportunities, strong customer retention, strategic alliances, and progress in go-to-market transformation. The Q&A section reveals management's focus on customer needs and value, with no immediate plans for price increases, maintaining stability. Despite some unclear responses, the overall sentiment is positive, supported by strategic investments and optimistic guidance on financial health and market strategies. The prediction is a positive stock movement of 2% to 8%.
The earnings call presents strong financial performance with 18% revenue growth and improved cash flow, alongside optimistic guidance for B2 growth and EBITDA margins. The Q&A reveals stable gross margins and strategic AI use cases, though there's a minor concern about Computer Backup's decline. Despite a secondary offering, the positive outlook for cash flow and B2 growth, plus the new data center, indicates a likely positive stock reaction.
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