Backblaze Inc (NASDAQ:BLZE) Reports Mixed Q3 2025 Results with Earnings Beat and Revenue Miss

Backblaze Inc (NASDAQ:BLZE) reported financial results for the third quarter of 2025 that presented a complex picture for investors, marked by a significant earnings beat but a slight revenue miss against analyst expectations. The market's initial reaction appeared to weigh the mixed performance against the company's improved profitability and strong forward guidance.

Earnings and Revenue Versus Estimates

The company's performance against Wall Street projections was the focal point of the earnings release. Backblaze demonstrated a substantial improvement in profitability, comfortably exceeding earnings estimates, while its top-line growth came in slightly below what analysts had forecast.

• Earnings Per Share (Non-GAAP): Reported $0.03 per share, significantly surpassing the analyst estimate of a $0.12 loss per share.
• Revenue: Reported $37.2 million, a 14% year-over-year increase, but narrowly missing the analyst consensus estimate of $37.7 million.

This earnings beat represents a notable swing from the non-GAAP net loss of $4.1 million, or $0.10 per share, reported in the same quarter last year. The market's muted reaction, with pre-market trading showing modest movement, suggests investors are balancing the positive profit surprise with the slight revenue shortfall.

Financial and Operational Highlights

Beyond the headline earnings and revenue figures, the third-quarter results revealed several strengths, particularly in the company's core growth engine and its path to profitability.

• B2 Cloud Storage Growth: Revenue from the B2 segment grew 28% year-over-year to $20.7 million, underscoring its role as the primary growth driver.
• Profitability Metrics: The company achieved a gross margin of 62%, a 700 basis point expansion from the year-ago period. Adjusted EBITDA reached $8.4 million, or 23% of revenue, a substantial increase from $3.7 million, or 12% of revenue, in Q3 2024.
• Net Loss Improvement: The GAAP net loss narrowed dramatically to $3.8 million from $12.8 million in the prior year.
• Annual Recurring Revenue (ARR): Total ARR grew 13% to $147.2 million, with B2 Cloud Storage ARR up 26% to $81.8 million.

Management Commentary and Business Highlights

CEO Gleb Budman highlighted the company's execution and its strategic positioning in the AI era, stating the results exceeded the high end of their revenue and Adjusted EBITDA guidance. He emphasized the value of Backblaze's "price-performance and open platform," citing a seven-figure expansion deal with an existing AI-powered video surveillance customer. Other recent business highlights included recognition for its B2 Overdrive product and a Cloud Computing Security Excellence Award.

Financial Outlook and Comparison to Analyst Estimates

The company provided an optimistic outlook for the fourth quarter and raised its full-year guidance, which appears to be a key factor for investors evaluating the stock's potential.

• Q4 2025 Revenue Guidance: Backblaze expects revenue between $37.3 million and $37.9 million. This range is below the current analyst sales estimate of $39.0 million for the quarter.
• Full-Year 2025 Revenue Guidance: The company narrowed its full-year revenue outlook to a range of $145.4 million to $146.0 million. This is slightly below the analyst consensus of $149.1 million for the full year.
• Raised Profitability Outlook: For the full year, Backblaze raised its Adjusted EBITDA margin forecast to a range of 18%-20%, up from the previous guidance of 17%-19%.

While the company's revenue guidance for both Q4 and the full year falls short of analyst expectations, the raised profitability margin forecast signals confidence in its ongoing operational efficiency and cost management.

Conclusion

Backblaze's third-quarter earnings report paints a picture of a company successfully navigating a transition toward sustainable profitability, even as top-line growth moderates. The decisive earnings beat and significantly improved bottom-line metrics demonstrate tangible progress in its financial discipline. However, the slight revenue miss and guidance that trails analyst sales estimates for the coming periods introduce an element of caution, likely contributing to a measured market reaction. Investors will be watching closely to see if the strong profitability trends can continue and if the B2 Cloud Storage segment can re-accelerate growth to meet longer-term expectations.

For a more detailed look at historical earnings and future analyst estimates, you can review the data here.

Disclaimer: This article is for informational purposes only and does not constitute investment advice, financial advice, or a recommendation to buy or sell any security.