Backblaze, Inc. (BLZE): Business Model Canvas [Apr-2026 Updated]

You're digging into the mechanics of Backblaze, Inc. because, honestly, understanding how a company makes money is the whole game, especially now as they push hard into the high-growth B2 Cloud Storage market. As an analyst who's seen a few cycles, what stands out here is the clear strategic split: you have the steady, flat Computer Backup revenue at $16.5 million for Q3 2025, but the real story is B2, which grew 28% year-over-year to $20.7 million and is supported by a very healthy 62% Gross Margin. This canvas lays out exactly how their proprietary hardware and free egress strategy translate into value for everyone from individual users to those demanding AI/ML workloads, so let's break down the nine essential blocks that define their current business engine.

Backblaze, Inc. (BLZE) - Canvas Business Model: Key Partnerships

The Key Partnerships for Backblaze, Inc. are crucial for extending its reach, ensuring infrastructure scale, and delivering on its promise of an open, cost-effective cloud alternative to the large hyperscalers.

Technology partners for integrated workflows

Backblaze, Inc. actively cultivates an Alliance Partner ecosystem to embed its B2 Cloud Storage into specialized workflows, particularly for media and AI. For instance, the integration with Axle AI Cloud, which is Powered By Backblaze, combines B2 object storage with automated AI tagging for media management workflows. This focus on open cloud workflows is a key differentiator, enabling customers to use their data with any application on any cloud.

The breadth of these technology integrations is significant, including established names in backup and media management:

• Alliance Partners mentioned include Veeam, MSP360, Arq, rclone, Commvault, and Veritas.
• Media workflow partners include iconik, LucidLink, and Synology.
• Cyber-resiliency is supported through integrations like CloudCasa.
• A recent strategic integration was announced with Shareio's Creator Monetization Platform.

Content Delivery Network (CDN) and Compute partners for unlimited free egress

A core value proposition is the free egress policy, which is enhanced through specific partner agreements. Backblaze, Inc. offers free egress up to 3x the average monthly storage amount, and unlimited free egress when data is downloaded to or through specific partners. This directly combats vendor lock-in associated with high egress fees from competitors.

The primary partners enabling this unlimited free egress include:

Partner Type	Specific Partners Mentioned	Egress Benefit
Content Delivery Networks (CDNs)	Fastly, Cloudflare, Bunny.net, CacheFly	Unlimited Free Egress
Compute Services	Vultr, CoreWeave, Equinix Metal, phoenixNAP	Unlimited Free Egress

Furthermore, the B2 Overdrive solution includes unlimited free egress to any destinations, specifically supporting throughput-intensive workloads.

Managed Service Providers (MSPs) and Channel Partners for cyber resilience solutions

Channel partners and MSPs are critical for delivering cyber resilience solutions, a major focus area for the market in 2025. Backblaze, Inc. enables these partners to offer services at a competitive price point, often at list price, while maintaining higher margins because Backblaze B2 is approximately 80% less expensive than traditional cloud providers like Amazon, Google, and Microsoft.

Key aspects of the channel strategy include:

• The industry trend for value-added reseller involvement in direct sales is typically between 20 percent to 30 percent.
• The company has a dedicated team engaged with partners on AI and cyber resilience use cases.
• For the Canada East data region launch in Q1 2025, Opti9 Technologies was named the exclusive Canadian channel partner.

The B2 Cloud Storage segment is showing strong growth, with revenue reaching $18.0 million in Q1 2025 (up 23% YoY) and $19.8 million in Q2 2025 (up 29% YoY). By Q3 2025, B2 Cloud Storage growth was reported at 28% year-over-year.

Independent Software Vendors (ISVs) leveraging the Powered By Backblaze white-label API

The Powered By Backblaze program, featuring the Backblaze Partner API, allows ISVs and other companies to embed object storage directly into their branded user experience, removing infrastructure complexity. This API supports provisioning storage accounts and running reports from within the partner platform.

Recent activity highlights the program's appeal:

• The API was enhanced in early 2025 to automatically provision customers with trial storage accounts.
• In Q3 2025, Backblaze announced a new 6-figure white label win with a media app developer.
• The program is specifically targeted at ISVs, SaaS platforms, CDN operators, and MSPs.

Data center co-location providers for global infrastructure expansion

Global infrastructure expansion is managed through strategic co-location partnerships to ensure geographic diversity and meet data sovereignty needs. Backblaze, Inc. announced the opening of its Canada East (CA East) region in Toronto in January 2025.

Significant infrastructure milestones achieved in 2025 include:

Expansion Focus	Partner/Location	Key Detail/Metric
Canadian Expansion	Cologix (TOR3 data center, Toronto)	Deployment announced March 2025 to ensure data sovereignty in Canada. Cologix operates 40+ data centers across 12 North American markets.
US-East Capacity Increase	Internal US-East Region	Capacity was doubled in July 2025 to support AI and HPC workflows.
US-East Geographic Diversity	CoreSite (Reston, VA2 data center)	CoreSite contributes an exabyte of capacity for the East Coast location.

Backblaze, Inc. serves over 500,000 customers across 175 countries as of late 2025.

Backblaze, Inc. (BLZE) - Canvas Business Model: Key Activities

Developing and maintaining the B2 Cloud Storage platform and B2 Overdrive.

Backblaze, Inc. focuses significant activity on evolving the B2 Cloud Storage platform, which is positioned as a high-performance cloud object storage solution for AI workflows. The company reported that AI-related storage now accounts for approximately 25% of new business. The development of B2 Overdrive is a key activity, evidenced by signing the first six-figure B2 Overdrive customer in early Q3 2025, just two months after its product launch. The overall B2 Cloud Storage segment is the primary growth engine, with revenue reaching $20.7 million in Q3 2025, representing 28% year-over-year growth. The Annual Recurring Revenue (ARR) for B2 Cloud Storage stood at $81.8 million as of Q3 2025, up 26% year-over-year.

Operating and scaling proprietary Storage Pod hardware and data centers.

Operating and scaling the infrastructure involves managing a massive fleet of drives across multiple data centers. As of September 30, 2025, Backblaze, Inc. had 332,915 drives under management, with 328,348 of those being active data drives. The company operates across six data centers in four regions, having recently added Toronto (CA East O6) in early 2025. Infrastructure reliability monitoring is continuous, with the overall annualized failure rate (AFR) for the fleet rising to 1.55% in Q3 2025, up from 1.36% in Q2 2025. The company continues to decommission older 4TB drives, with only 11 ALE models and 187 BLE models remaining in the population as of Q3 2025.

Metric	Value (Q3 2025)	Context/YoY Change
Total Revenue	$37.2 million	+14% Year-over-Year
B2 Cloud Storage Revenue	$20.7 million	+28% Year-over-Year
Total Annual Recurring Revenue (ARR)	$147.2 million	+13% Year-over-Year
Gross Margin	62%	Expanded ~700 bps Year-over-Year
Adjusted EBITDA	$8.4 million	23% of Revenue
Total Customers	507,647	107,616 B2 customers

Executing Phase 2 of the go-to-market transformation to accelerate B2 sales.

Backblaze, Inc. launched Phase 2 of its go-to-market transformation, which is focused on accelerating the velocity of both self-serve and direct sales motions. This strategic shift comes as the company finds that larger deals are taking longer to execute. The company is reinforcing its sales and marketing engine, including partnering with a consulting team that previously assisted Snowflake and Databricks with go-to-market execution. Management acknowledged that the B2 growth rate moderated, projecting Q4 2025 growth between 25% and 28%, which is below the earlier target of 30%+ growth for the end of the year. The company remains on track to achieve adjusted free-cash-flow positivity in Q4 2025.

Continuous software development for security features like Anomaly Alerts.

While specific numbers for Anomaly Alerts adoption weren't detailed, the overall focus on security and data integrity is inherent in the infrastructure monitoring. The Drive Stats program runs on every Storage Pod every few minutes, collecting SMART stats and other attributes to generate .xml files pushed to a central host. This data intelligence layer adds context to drive health, which is critical for maintaining service levels and security posture for customers storing data for AI and other demanding applications. The company is actively managing the transition to higher-capacity drives, with 20TB+ drives representing 67,939 units, or about 21% of the drive pool as of Q3 2025.

Managing the global self-serve and direct sales motions.

The management of sales motions is bifurcated, with a push to scale self-serve for data-heavy AI use cases alongside investments in direct sales talent and systems. The company is focused on increasing execution speed and deal flow predictability across both motions. The direct sales focus targets larger customers, evidenced by a recent win of a seven-figure Total Contract Value (TCV) expansion with an existing customer. The total customer base is over 500,000, with 107,616 of those being B2 Cloud Storage customers. The Net Revenue Retention (NRR) for B2 Cloud Storage was 110% for the trailing four quarters ending in Q3 2025.

Backblaze, Inc. (BLZE) - Canvas Business Model: Key Resources

You're looking at the core assets that let Backblaze, Inc. compete against the hyperscalers, and honestly, it boils down to engineering efficiency and scale. The company's entire cost advantage stems from how they build and operate their infrastructure, which is a key differentiator, especially as AI workloads demand more storage.

Let's lay out the hard numbers we have from the Q3 2025 results to ground this discussion. This is the operational reality as of late 2025:

Metric	Value (Q3 2025)	Context/YoY Change
Total Revenue	$37.2 million	14% increase year-over-year (YoY)
B2 Cloud Storage Revenue	$20.7 million	28% YoY growth
Total ARR	$147.2 million	13% YoY increase
Gross Profit Margin	62%	Expanded ~700 basis points YoY
Adjusted EBITDA Margin	23%	Achieved one quarter ahead of target
B2 Cloud Storage NRR	110%	Net Revenue Retention

Proprietary, cost-optimized Storage Pod hardware design. This is the foundation of their low-cost structure. They openly share the designs, which is unusual for a cloud provider, but it builds community trust and validates their engineering choices. For instance, their architecture is built around Storage Servers containing 26, 45, or 60 drives, which are then grouped into a logical Vault consisting of 20 Storage Pods or servers. This modularity helps them scale predictably.

Global data center footprint, including the new Canada East region in 2025. You need to know they are expanding to meet data sovereignty needs. The new Canada East (CA East) region, located in Toronto, Ontario, was announced as open for business in Q1 2025. That initial deployment in CA East started with just under 60PB of storage capacity. Also, as of July 2025, Backblaze announced they doubled the data footprint in their US-East region to meet growing demand, particularly for AI workloads.

Over 5 exabytes of data under management. This is the sheer scale that underpins their cost efficiency; you can't get the same drive purchasing power or operational leverage without this volume. While the exact Q3 2025 figure isn't explicitly stated in the latest press releases, the company operates at this scale, which is critical for their cost-per-gigabyte model.

Core intellectual property in high-density, low-cost cloud storage architecture. This IP is embodied in their data protection scheme, which shards every object across 20 servers in a Vault for durability, similar to a massive-scale RAID concept. Their drive reliability data is also a form of IP; for Q3 2025, the annualized failure rate (AFR) for all drives under management was 1.55%, with a lifetime AFR holding steady at 1.31%.

Skilled engineering and sales teams focused on AI/HPC workloads. The market focus is clearly shifting. As of Q3 2025, storage traffic associated with "neoclouds" (AI-related services) represented nearly one-quarter of total ingress and egress across their global network. Furthermore, AI-related storage now accounts for approximately 25% of new business, showing where the talent focus is translating into revenue.

• Storage Server Drive Counts: 26, 45, or 60 drives.
• Vault Composition: 20 Storage Pods/Servers.
• CA East Initial Capacity: Under 60PB.
• AI New Business Contribution: Approx. 25%.

Finance: review the Q4 2025 guidance for revenue ($145.4M to $146.0M total) against the current run rate by Monday.

Backblaze, Inc. (BLZE) - Canvas Business Model: Value Propositions

You're looking at the core reasons customers choose Backblaze, Inc. over the established hyperscalers. It's about clear economics and performance that lets you build without fear of surprise bills.

Dramatically lower Total Cost of Ownership (TCO), up to 3.2x savings over hyperscalers

The independent analysis by Enterprise Strategy Group (ESG) validated significant cost advantages for Backblaze B2 Cloud Storage compared to legacy providers. This isn't just a small discount; it's a structural difference in TCO.

The key savings points from that validation include:

• Up to 3.2x lower Total Cost of Ownership (TCO).
• Up to 56% lower monthly storage cost.
• Up to 100% lower cost of downloads and transactions.
• Up to 92% less time and effort required to manage data.
• Up to 91% savings on cloud-to-cloud (C2C) migration costs.

Predictable pricing with free egress up to 3x stored data capacity

Backblaze, Inc. offers transparent pricing, avoiding the complicated tiers that bog down budgeting. For the standard pay-as-you-go model, you see a rate of $6/TB/month, with the first 10GB of storage always free. The predictability is heavily supported by the egress policy.

Here's a quick look at how the pricing structure compares on key elements:

Feature	Backblaze B2 Pay-As-You-Go	B2 Reserve (Capacity Bundle Example)	Hyperscaler Comparison Point
Storage Price	$6/TB/month	Starts at $1,560/20TB/year	Higher base rate
Free Egress Allowance	Up to 3x average monthly storage	Unlimited free egress	Egress often a major cost driver
Minimum Storage Duration	None	None on Pay-As-You-Go; 1-5 years on Reserve	Often has minimum duration fees
Transaction Fees (API calls)	Included up to 3x free egress threshold	Included	Often charged separately

Egress that goes above that 3x average is priced at $0.01/GB. For those with large, consistent needs, B2 Reserve bundles start at 20TB for terms of one to five years, which includes unlimited free egress.

High-performance, S3-compatible object storage for application development

You get the industry standard compatibility you need to build applications without vendor lock-in. Backblaze B2 Cloud Storage claims 100% the performance of S3 at 1/5 the cost. The Q3 2025 Performance Stats report showed that for sustained throughput, Backblaze B2 won 6 out of 8 categories when tested against AWS S3, Cloudflare R2, and Wasabi.

For small file workloads, which often stress latency, the performance is particularly strong. For instance, in multi-threaded upload benchmarking for 256KiB files, Backblaze B2 achieved a sustained throughput of 163.80MiB/s.

Simple, reliable, unlimited Computer Backup for individuals and SMBs

This is the original offering, focused on simplicity for endpoints. In Q3 2025, Computer Backup revenue held steady at $16.5 million, showing flat year-over-year performance. The service maintains a healthy customer base with a gross customer retention rate of 90% in Q3 2025.

B2 Overdrive: High-throughput storage for demanding AI/ML and HPC workloads

For the most data-intensive workflows, B2 Overdrive was engineered for massive throughput. Pricing for this high-performance tier starts at $15 per TB/month. This service is designed to deliver sustained throughput up to a terabit per second, which is key for processing exabyte-scale datasets.

A major differentiator here is the egress policy: B2 Overdrive includes unlimited free egress to any destination, which directly addresses the prohibitive costs associated with moving large AI/ML training sets. Backblaze, Inc. signed its first six-figure B2 Overdrive customer in early Q3 2025, validating its product-market fit for these demanding use cases.

Finance: draft 13-week cash view by Friday.

Backblaze, Inc. (BLZE) - Canvas Business Model: Customer Relationships

You're looking at how Backblaze, Inc. (BLZE) connects with its diverse customer base, which spans from individual users to large enterprise AI workloads. The approach isn't one-size-fits-all; it's segmented based on the product and the customer's scale.

For the Computer Backup service and smaller B2 Cloud Storage accounts, the relationship is primarily a self-serve, high-volume transactional model. This is the engine for broad adoption, relying on ease of use and low friction to bring customers onto the platform. This segment contributed $16.5 million in revenue in Q3 2025. The company is focused on scaling this self-serve motion, making it more frictionless specifically for data-heavy AI use cases as part of its Phase 2 go-to-market transformation.

Moving upmarket to mid-market and enterprise B2 customers, the relationship shifts to a dedicated Direct Sales and Field Enablement structure. This is necessary for closing the larger deals that require more consultative selling, which management noted sometimes face longer execution cycles due to committee and compliance processes. These larger customers are driving significant expansion, evidenced by the company winning a seven-figure TCV (Total Contract Value) expansion deal with an existing AI-powered video surveillance customer in Q3 2025. AI-related storage now accounts for approximately 25% of new business.

The Partner-led sales and customer success motion is crucial for Channel and Managed Service Provider (MSP) engagements. This leverages third parties to reach a wider audience and embed the service within other offerings. The launch of the Enterprise Web Console, which simplifies B2 Cloud Storage management for MSPs and includes role-based access controls, directly supports this channel relationship by providing enterprise-grade management tools.

Overall customer loyalty is strong, as reflected in the retention figures. The high gross customer retention rate of 91% in Q3 2025 shows that the core value proposition is resonating and keeping customers engaged. This is a key metric that management points to as validation of their focus on performance, predictable pricing, and ease of use.

Here's a breakdown of the key retention and revenue metrics from Q3 2025:

Metric	Computer Backup	B2 Cloud Storage	Total Business
Gross Customer Retention Rate (GCR)	90%	89%	91%
Net Revenue Retention Rate (NRR)	101%	110%	106%

The difference in retention and expansion across segments highlights the different relationship needs:

• The 110% B2 NRR shows strong expansion from existing cloud storage customers, especially those in AI workloads.
• The Computer Backup segment revenue was flat at $16.5 million in Q3 2025, with an NRR of 101%.
• The B2 Cloud Storage segment grew revenue by 28% year-over-year to $20.7 million in Q3 2025.
• The company serves over 500,000 customers globally across 175 countries.

Finance: draft 13-week cash view by Friday.

Backblaze, Inc. (BLZE) - Canvas Business Model: Channels

You're looking at how Backblaze, Inc. gets its storage and backup services into the hands of customers as of late 2025. It's a mix of high-volume, low-touch self-service and targeted, high-value direct sales, especially for the B2 Cloud Storage business.

The direct website and self-serve portal is the engine for the Computer Backup business and smaller B2 users. As of the third quarter of 2025, Backblaze, Inc. served a total of 507,647 customers, with 417,845 of those on Computer Backup, which is largely a self-serve product. The B2 Cloud Storage segment, which is heavily reliant on developer adoption and self-serve sign-ups, had 107,616 customers in Q3 2025. This channel drives the majority of the Computer Backup revenue, which was $16.5 million in Q3 2025, remaining flat year-over-year.

For the B2 Cloud Storage, which generated $20.7 million in revenue in Q3 2025, the channel strategy broadens significantly. While self-serve is key, the company is actively scaling its Global network of Channel Partners and Managed Service Providers (MSPs). This is part of the go-to-market transformation aimed at increasing efficiency and reach beyond the direct developer relationship. The focus here is on partners who can embed Backblaze, Inc.'s storage into their managed offerings.

The Independent Software Vendors (ISVs) integrating B2 via API (Powered By Backblaze) represent a crucial, often indirect, channel, especially in the AI space. This strategy positions Backblaze, Inc. as underlying infrastructure. For example, in Q1 2025, the company noted deepening a strategic AI partnership where PureNodal, a GPU infrastructure provider, leverages Powered By Backblaze to support the AI ecosystem. AI-related storage now accounts for approximately 25% of new business as of Q3 2025.

The direct sales team is specifically tasked with capturing the larger, more complex deals, primarily within B2 Cloud Storage. This team focuses on six- and seven-figure B2 opportunities. The success of this upmarket push is evident: customers contributing over $50,000 in Annual Recurring Revenue (ARR) grew 30% year-over-year as of Q2 2025. The team is closing significant contracts; in Q3 2025, management highlighted recent wins including a new 6-figure deal with an AI start-up, a 7-figure Total Contract Value (TCV) deal in the surveillance space, and another 6-figure white label win with a media app developer. They also signed their first six-figure B2 Overdrive customer in early Q3 2025, just two months after that product launched.

Here's a quick look at the revenue segmentation from Q3 2025, which shows the relative weight of the two main product lines that flow through these channels:

Metric	Amount (Q3 2025)	Year-over-Year Growth (Q3 2025)
Total Revenue	$37.2 million	14%
B2 Cloud Storage Revenue	$20.7 million	28%
Computer Backup Revenue	$16.5 million	Flat
B2 Cloud Storage ARR	$81.8 million	26%

The direct sales focus is clearly driving the growth in the B2 segment, which is the primary focus for landing those larger deals. The self-serve and partner channels likely feed the long tail of the 107,616 B2 customers.

The company is also seeing success in attracting larger customers through its technical positioning, which is a direct result of the sales and marketing channel alignment. The focus on AI workloads is a key driver for the direct sales channel:

• AI-related storage accounted for approximately 25% of new business in Q3 2025.
• The company signed its first six-figure B2 Overdrive customer in early Q3 2025.
• Customers contributing over $50,000 in ARR grew 30% year-over-year in Q2 2025.
• A 7-figure TCV deal was closed in the surveillance space in Q3 2025.

Finance: draft 13-week cash view by Friday.

Backblaze, Inc. (BLZE) - Canvas Business Model: Customer Segments

You're looking at the customer base for Backblaze, Inc. as of late 2025. The business clearly splits its focus between its established Computer Backup service and the rapidly growing B2 Cloud Storage platform, which is seeing massive tailwinds from AI workloads.

The Individual Users and Small Businesses segment, served by Computer Backup, is showing signs of maturity, defintely. For the third quarter of 2025, the revenue from this segment was precisely $16.5 million, which was flat year-over-year. This segment's gross customer retention rate held steady at 90% in Q3 2025.

The more dynamic part of the customer base is within B2 Cloud Storage, which serves Mid-market and Enterprise customers needing backup, archive, and application data hosting. In Q3 2025, B2 Cloud Storage revenue hit $20.7 million, marking a strong 28% year-over-year growth. The Annual Recurring Revenue (ARR) for B2 Cloud Storage reached $81.8 million as of Q3 2025.

Here's a quick comparison of the two primary revenue-generating segments based on the latest reported quarter, Q3 2025:

Metric	Computer Backup	B2 Cloud Storage
Q3 2025 Revenue	$16.5 million	$20.7 million
YoY Revenue Growth (Q3 2025)	Flat	28%
Q3 2025 Gross Customer Retention Rate	90%	89%

The High-growth AI/ML, Media & Entertainment, and HPC companies are a critical focus for B2 Cloud Storage, especially with the introduction of B2 Overdrive. This focus is driving significant data consumption. As of the Q3 2025 reporting period, the number of AI customers grew by 70% year-over-year, and the data stored by these AI customers exploded, growing 40 times year-over-year. Backblaze, Inc. also signed its first six-figure B2 Overdrive customer in early Q3 2025, just two months after the product launched.

The company is successfully moving upmarket, which is visible in the growth of its largest accounts. You can see this trend in the statistics for the larger B2 customers:

• Customers contributing over $50,000 in Annual Recurring Revenue (ARR) grew 30% year-over-year in Q2 2025.
• There were 150 customers with $50k+ ARR as of Q2 2025, representing a 30% year-on-year increase.
• Backblaze, Inc. secured a deal for over $1 million in Annual Contract Value (ACV) in Q4 2024.
• A second AI company upgraded its contract to a 7-figure level in Q2 2025.

Backblaze, Inc. (BLZE) - Canvas Business Model: Cost Structure

You're looking at the hard costs driving Backblaze, Inc.'s storage cloud. The structure centers on massive infrastructure investment balanced by improving operational leverage, which you see clearly in the latest quarterly results.

Capital expenditure (CapEx) on Storage Pods and data center infrastructure is a major outlay. For the third quarter ended September 30, 2025, Capital Expenditures totaled ($10.319 million). This spending supports the platform managing approximately 5 billion gigabytes of data for over 500,000 customers across more than 175 countries. This investment is critical for scaling capacity, especially with the launch of B2 Overdrive for data-intensive workloads.

The significant operating costs for network bandwidth and power consumption are embedded within the Cost of Revenue, which Backblaze, Inc. is managing to drive better profitability. The company's focus on cost efficiencies, including a Zero-Based-Budgeting program, is designed to directly lower these variable costs relative to revenue growth.

Regarding Sales and Marketing (S&M) investment to drive B2 growth and go-to-market transformation, the company has been actively executing this transformation, including hiring new key senior sales leadership to accelerate growth. While a specific S&M dollar amount for Q3 2025 isn't isolated here, the strategic shift is clear, aiming to capture more of the B2 Cloud Storage market, which grew revenue by 28% year-over-year in the quarter.

Personnel costs for engineering and customer support are a fixed component of the operating structure, supporting the platform that serves both B2 Cloud Storage and Computer Backup. The overall operational leverage improvement, evidenced by the margin expansion, suggests these costs are being managed effectively against the revenue base. The company is working toward being adjusted free-cash-flow positive in Q4 2025.

The success of these cost management efforts is reflected in achieving a strong Q3 2025 Gross Margin of 62%. This represents a significant expansion of approximately 700 basis points year-over-year from the 55% margin reported in Q3 2024. Gross profit for Q3 2025 reached $23.1 million on total revenue of $37.2 million.

Here's a quick look at the key financial results that define the cost structure's impact for the third quarter ended September 30, 2025:

Metric	Amount (Q3 2025)
Total Revenue	$37.2 million
Gross Profit	$23.1 million
Gross Margin	62%
B2 Cloud Storage Revenue	$20.7 million
Computer Backup Revenue	$16.5 million
Adjusted EBITDA	$8.4 million
Capital Expenditures (Quarter)	($10.319 million)

The cost structure is also reflected in the cash generation metrics:

• Cash flow from operations for the nine months ended September 30, 2025, was $14.2 million.
• This compares to $10.3 million in cash flow from operations for the same nine-month period in 2024.
• B2 Cloud Storage Annual Recurring Revenue (ARR) was $81.8 million, up 26% year-over-year.
• Total Annual Recurring Revenue (ARR) was $147.2 million, a 13% increase year-over-year.

The cost of serving the B2 segment, which is the primary growth driver, is being managed to maintain competitive pricing while improving gross margin. The B2 Cloud Storage gross customer retention rate was 89% in Q3 2025.

Finance: draft 13-week cash view by Friday.

Backblaze, Inc. (BLZE) - Canvas Business Model: Revenue Streams

You're looking at the core ways Backblaze, Inc. takes in cash, and right now, it's a tale of two segments. The business model clearly separates the steady, predictable income from the faster-growing, usage-based cloud services.

Subscription revenue from Computer Backup remains a stable base, though it isn't driving top-line acceleration. For the third quarter of 2025, this segment was flat year-over-year at exactly $16.5 million. This is the annuity part of the business, providing a reliable floor.

Usage-based revenue from B2 Cloud Storage is the clear growth engine. This segment saw significant momentum, climbing 28% year-over-year to bring in $20.7 million in Q3 2025. The company is actively pushing this, noting that AI-related storage now accounts for approximately 25% of new business.

Here's a quick look at how the Q3 2025 revenue broke down:

Revenue Stream	Q3 2025 Revenue (USD)	Year-over-Year Growth
B2 Cloud Storage	$20.7 million	28%
Computer Backup	$16.5 million	Flat
Total Revenue	$37.2 million	14%

The Annual Recurring Revenue (ARR) figures from the end of Q3 2025 further illustrate this dynamic. Total ARR stood at $147.2 million, up 13% year-over-year. The B2 Cloud Storage ARR was $81.8 million (up 26% YoY), while Computer Backup ARR was $65.4 million (flat YoY).

For larger enterprise customers, Backblaze, Inc. offers reserved capacity contracts, known as B2 Reserve, to secure predictable pricing for significant storage commitments. While specific dollar amounts for B2 Reserve revenue aren't explicitly broken out in the latest reports, the focus on moving upmarket is clear, evidenced by securing a new seven-figure expansion deal with an existing customer.

Regarding data download (egress) fees, the strategy inherently minimizes this as a major revenue driver. Management specifically highlighted that Backblaze, Inc. enables AI companies to avoid the high egress costs typically associated with larger cloud providers. This suggests that while egress fees exist beyond any free allowance, they are not a primary, emphasized revenue stream due to the competitive positioning.

Looking ahead, the full-year 2025 revenue is projected to be narrowed to a range between $145.4 million and $146.0 million. This implies the fourth quarter will need to land between $37.3 million and $37.9 million to meet that full-year target.

You should track the following key metrics as they relate to revenue generation:

• B2 Cloud Storage ARR growth rate of 26% as of Q3 2025.
• Computer Backup Net Revenue Retention Rate (NRR) at 101% in Q3 2025.
• B2 Cloud Storage NRR at 110% in Q3 2025.
• Gross customer retention rate across the business was 91% in Q3 2025.

Finance: draft 13-week cash view by Friday.