Backblaze 2025 Q3 Earnings Narrows Net Loss by 70.4% Despite Revenue Growth

Backblaze (BLZE) reported fiscal 2025 Q3 earnings on November 7, 2025, with revenue rising 14.0% to $37.16 million and a narrowed net loss of $3.78 million, a 70.4% improvement year-over-year. The stock, however, faced sharp declines post-earnings, with a 26.43% drop in a single trading day. The company raised its full-year 2025 adjusted EBITDA margin forecast to 18%-20% and provided Q4 revenue guidance of $37.3-$37.9 million.

Revenue

Backblaze’s total revenue surged 14.0% year-over-year to $37.16 million in Q3 2025, driven by a 28% increase in B2 Cloud Storage, its core segment. The Computer Backup division contributed stable revenue, though growth was flat compared to the prior year. The B2 Cloud Storage segment’s expansion was fueled by competitive pricing and demand for AI-related storage solutions, which now account for 25% of new business.

Earnings/Net Income

The company narrowed its net loss to $3.78 million in Q3 2025, a 70.4% reduction from $12.75 million in the same period last year. Adjusted net income reached $1.9 million, reflecting improved gross margins of 62% and disciplined cost management. While the per-share loss improved to $0.07 from $0.29, the narrowing of losses underscores ongoing challenges in achieving profitability.

Post-Earnings Price Action Review

Despite beating revenue and adjusted EPS estimates, Backblaze’s stock plummeted 26.43% in a single trading day and 40.23% over the subsequent week. Month-to-date, the share price declined 34.04%, signaling mixed investor sentiment. The sharp sell-off contrasts with the company’s positive earnings surprise and improved financial metrics, highlighting concerns about future growth sustainability and broader market conditions.

CEO Commentary

CEO Gleb Budman emphasized that Backblaze “delivered strong results,” with revenue and adjusted EBITDA exceeding guidance. He highlighted AI as a central growth driver, citing a seven-figure contract in AI video surveillance and a focus on expanding self-serve solutions for data-heavy use cases. Budman also outlined a go-to-market transformation, including investments in sales operations and direct sales acceleration. The leadership team reiterated confidence in achieving adjusted free-cash-flow positivity in Q4 2025.

Guidance

For Q4 2025, Backblaze expects revenue between $37.3 million and $37.9 million, with B2 Cloud Storage growth projected at 25-28% year-over-year. The company raised its full-year 2025 adjusted EBITDA margin forecast to 18%-20% and narrowed revenue guidance to $145.4-$146.0 million.

Additional News

1. Restructuring Plan: Backblaze announced a restructuring initiative to enhance sales and marketing efficiency, with expected charges of $4.4-$6.0 million in Q4 2025.

2. Product Launch: In April 2025, the company launched B2 Overdrive, a high-throughput storage solution for AI and media processing, priced at a premium.

3. Cybersecurity Enhancements: In May 2025, Backblaze introduced enterprise-grade cybersecurity features, including AI-powered anomaly detection and multifactor authentication.

The earnings report reflects progress in cost control and margin expansion, yet persistent net losses and volatile stock performance underscore the need for sustained growth in high-margin segments to solidify long-term investor confidence.