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What factors drove the changes in Backblaze's revenue and profit?

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- **B2 Segment Outperforms**: 28% YoY growth, 7-figure AI deals, and Phase 2 go-to-market acceleration.
- **AI Workload Momentum**: 25% of new business from AI companies, Overdrive product closing 6-figure deals quickly.
- **Financial Milestones**: Q3 $37.2M revenue, 23% EBITDA margin, on track for Q4 free cash flow positivity.
- **Challenges**: Large AI customer data variability and delayed deal closures.

**【CEO Summary Section】**
- B2 segment grew 28% year-over-year, exceeding expectations, driven by AI workloads and Phase 2 go-to-market transformation.
- Signed 7-figure deals with AI companies, including a video surveillance startup and media developer, highlighting upmarket movement.
- Phase 2 focuses on self-serve efficiency (e.g., AI-native developer workflows) and direct sales acceleration with Neo cloud integrations.
- Challenges include variability in large AI customers' data usage and delayed deal closures due to complex buying committees.

**【CFO Financial Commentary】**
- Q3 revenue $37.2M (14% YoY growth), beating high-end guidance; B2 revenue up 28% YoY.
- Adjusted EBITDA margin 23%, up from 12% YoY; on track for Q4 adjusted free cash flow positivity.
- Restructuring costs ($3.5M) allocated to Phase 2 go-to-market, including talent and system upgrades.
- Computer Backup Unit (CBU) flat YoY due to 2023 price roll-off, but B2 NRR improved to 116% QoQ.

**【Q&A Key Highlights】**
- **Phase 2 Go-To-Market**: $21-23M sales & marketing spend stable as % of revenue; 100+ AI companies now account for 25% of new business.
- **Large Deal Dynamics**: 7-figure ARR customers up 41% YoY; Overdrive product closed 6-figure deals within 3 months.
- **Self-Serve Growth**: Self-serve account creation up 56% YoY, driven by AI-native search optimization.
- **Free Cash Flow**: $3.5M negative in Q3, but on track for Q4 positivity; $50M cash balance provides flexibility.
- **2026 Outlook**: B2 expected 25-28% YoY growth; CBU low-single-digit contraction as focus shifts to B2 expansion.

Backblaze, Inc. (BLZE) Q3 2025 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

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Cost of Financing Services

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Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

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Net Income

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BLZE

BLZE fundamentals

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