Backblaze, Inc. (BLZE) - Q2 2026 10-Q Summary
Business Context and Reporting Period
This summary covers the quarterly period ended June 30, 2026. Backblaze, Inc. operates a high-performance cloud storage platform serving data-intensive use cases, including artificial intelligence (AI) workloads, cyber-resilience, and media workflows. The company offers B2 Cloud Storage (IaaS) and Computer Backup (SaaS). As of June 30, 2026, the company serves over 500,000 customers across 175+ countries with over 5 billion gigabytes of data under management.
Key Financial Metrics
| Metric | Q2 2026 | Q2 2025 | YTD 2026 | YTD 2025 |
|---|---|---|---|---|
| Revenue | $42.7M | $36.3M | $81.4M | $70.9M |
| Gross Profit | $26.8M | $23.0M | $50.4M | $42.3M |
| Gross Margin | 63% | 63% | 62% | 60% |
| Net Loss | $(5.1M) | $(7.1M) | $(11.2M) | $(16.4M) |
| Adjusted EBITDA | $12.8M | $6.6M | $22.9M | $13.0M |
| Operating Cash Flow (YTD) | $13.8M | $8.5M | $13.8M | $8.5M |
| Cash & Equivalents | $32.4M | $29.2M | $32.4M | $29.2M |
| Total Debt (Lease Liabilities) | $46.7M | $36.2M | $46.7M | $36.2M |
Note: Debt figures represent total finance and operating lease liabilities. The company has a $20.0M revolving credit facility with no outstanding borrowings as of June 30, 2026.
Material Changes vs. Prior Period
- Revenue Growth: Revenue increased 18% QoQ and 15% YTD, driven primarily by a 34% increase in B2 Cloud Storage revenue. This growth was fueled by new customer sales, a price increase effective May 1, 2026 (raising rates from $6.00 to $6.95 per TB/month), and higher usage from existing customers.
- Computer Backup Decline: Computer Backup revenue decreased slightly (2% QoQ) due to a decline in license counts, partially offset by increased utilization and prior price increases.
- Profitability Improvement: Net loss narrowed significantly compared to the prior year periods. Adjusted EBITDA margin improved to 30% in Q2 2026 from 18% in Q2 2025.
- Strategic Agreement: In June 2026, Backblaze entered a Master Strategic Agreement with CoreWeave, Inc., a leading AI cloud platform. The agreement has an estimated total contract value of approximately $335.1 million (net of warrant value) over 5-7 years. This deal significantly increased Remaining Performance Obligations (RPOs) to $396.0 million.
- Restructuring: The company incurred $1.3M in restructuring costs in Q2 2026 as part of its 2025 Restructuring and Transformation Plan, aimed at improving sales efficiency and product innovation.
Guidance, Outlook, and Risks
- Outlook: Management expects continued growth in B2 Cloud Storage driven by the CoreWeave agreement and the May 2026 price increase. Revenue recognition from the CoreWeave managed storage services is expected to commence in Q3 2026.
- Restructuring Completion: The 2025 Restructuring Plan is expected to be completed by Q1 2027, with an additional $2.4M to $3.7M in charges anticipated.
- Key Risks:
- Customer Concentration: The company expects to become substantially dependent on a limited number of large customers, specifically CoreWeave.
- AI Market Volatility: Growth strategy relies heavily on the AI ecosystem; demand fluctuations or regulatory changes in AI could impact revenue.
- Infrastructure Costs: Rising costs for data center equipment and energy, driven by AI demand, could pressure margins.
- Cybersecurity: Increased risk of AI-enabled cyberattacks and zero-day vulnerabilities.
Investor Verification Checklist
- CoreWeave Deal Execution: Verify the ramp-up of revenue recognition from the CoreWeave agreement and the vesting schedule of the associated warrants (4.2M shares).
- Price Increase Impact: Monitor customer churn and usage trends following the May 2026 B2 Cloud Storage price increase to ensure revenue gains are not offset by volume loss.
- Restructuring Costs: Track the remaining $2.4M-$3.7M in expected restructuring charges and their impact on future operating expenses.
- Liquidity Position: Confirm that operating cash flow remains positive and sufficient to cover capital expenditures and lease obligations without needing immediate external financing.
- AI Dependency: Assess the concentration of revenue from AI-related workloads and the potential impact of a slowdown in the AI infrastructure buildout.