Backblaze's Q2 2025 Earnings Call: Unpacking Key Contradictions in B2 Strategy and AI Growth

B2 Overdrive Pricing and Tier Strategy, B2 Growth Expectations, B2 Growth Strategy, AI Growth Opportunity, and AI Data Growth Impact on B2 are the key contradictions discussed in Backblaze's latest 2025Q2 earnings call.



Revenue and B2 Growth:
- Backblaze delivered a strong Q2 2025 with total revenue of $36.3 million, up 16% year-over-year, and B2 revenue at $19.8 million, up 29% year-over-year.
- The growth was driven by an increase in B2 revenue through solid direct sales bookings bolstered by strong AI tailwinds.

AI Market Opportunity and Impact:
- In Q2, the number of AI customers grew 70%, and data stored by these customers increased by 40x year-over-year.
- AI is significantly driving the company's market opportunity, with three AI companies among the top ten customers, indicating a substantial increase in data-hungry industries.

Innovation and Go-to-Market Strategy:
- Backblaze launched B2 Overdrive, achieving its first six-figure customer within two months, and new features like Anomaly Alerts and Enterprise Web Console.
- These innovations and a revamped go-to-market strategy, including account-based marketing and customer success improvements, contributed to B2 growth acceleration.

Adjusted EBITDA and Free Cash Flow Projections:
- Adjusted EBITDA margin doubled year-over-year to 18%, and adjusted free cash flow improved by 1,000 basis points from negative 21% a year ago.
- The positive financial performance was due to robust cost controls and strategic investments, putting Backblaze on track for adjusted free cash flow positiveness in Q4.