TLDR: Backblaze, a cloud storage provider, reported robust financial results for Q2 2025, with total revenue increasing by 16% year-over-year to $36.3 million. The significant acceleration was primarily driven by its B2 Cloud Storage segment, which saw a 29% year-over-year revenue growth, largely attributed to a rapidly expanding base of artificial intelligence (AI) customers. The company noted a 70% increase in AI customers and a staggering 40x year-over-year growth in data stored by these customers, highlighting AI’s pivotal role in its recent performance.
Backblaze Inc. (Nasdaq: BLZE) announced strong financial results for its second quarter ended June 30, 2025, showcasing accelerated growth in its cloud storage business, significantly propelled by its burgeoning artificial intelligence (AI) customer segment. The company’s stock surged by 18.27% following the announcement, reflecting investor confidence in its performance and strategic direction.
For Q2 2025, Backblaze reported total revenue of $36.3 million, marking a 16% increase year-over-year. The B2 Cloud Storage segment emerged as the primary growth engine, with its revenue reaching $19.8 million, a substantial 29% increase year-over-year. This represents an acceleration from the 23% growth recorded in Q1 2025. In contrast, the Computer Backup segment generated $16.5 million in revenue, growing at a more modest 4% year-over-year.
Profitability also saw improvements, with a net loss of $7.1 million, an improvement from the $10.3 million loss in Q2 2024. Adjusted EBITDA reached $6.6 million, or 18% of revenue, a significant jump from $2.7 million or 9% of revenue in the prior year’s quarter. Gross profit stood at $23.0 million, or 63% of revenue.
A key driver behind this accelerated growth is Backblaze’s strategic focus on the AI sector. The company revealed that three of its top 10 customers are now AI companies. Furthermore, the number of AI customers grew by 70% year-over-year, and the data stored by these customers expanded by an astounding 40 times over the same period. CEO Gleb Budman emphasized the impact, stating, “This quarter, the number of AI customers grew 70 percent and data stored by these customers grew 40 times year over year. AI use cases drove the outperformance on our financial metrics this quarter. And this is by far the most data hungry industry we have witnessed and we’re confident that AI will significantly drive our market opportunity.”
Backblaze’s B2 Overdrive product, designed for higher data access speeds crucial for AI and high-performance computing (HPC) workloads, is gaining traction. The company signed its first six-figure B2 Overdrive customer in early Q3, just two months after its launch. This customer, a generative AI video company, migrated from a hyperscale public cloud provider due to high egress fees, seeking the fast data feed to GPUs that B2 Overdrive provides. Additionally, a second AI company upgraded its contract to a 7-figure level during the quarter.
Backblaze also maintained strong customer retention, with a 90% gross customer retention rate across all products. The net revenue retention (NRR) rate was 109% for the total company and 112% specifically for B2 Cloud Storage.
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Looking ahead, Backblaze raised its full-year 2025 revenue guidance to $145-147 million, up from the previous guidance of $144-146 million. For Q3 2025, the company anticipates revenue between $36.7 million and $37.1 million, with an Adjusted EBITDA margin between 17% and 19%. CFO Marc Suidan noted, “Our subsequent aim will be to achieve GAAP net income positivity as operating leverage kicks in.” The company’s pipeline has also grown significantly year-over-year, with a steady increase in six-figure opportunities, signaling continued momentum.
