BLZE - Earnings call transcript Q1 2022

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Operator

Good afternoon, ladies and gentlemen, thank you for standing by. And welcome to Backblaze's First Quarter Fiscal Year 2022 Earnings Conference Call. At this time all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. [Operator Instructions] I would now like to turn the conference over to your speaker host, James Kisner, Vice President of Investor Relations. ahead. go Please

James Kisner

good of and welcome Backblaze's to Thank year afternoon, XXXX quarter fiscal earnings first you, and call.

described to use call Chief Board; On and proceeds, the IPO results CEO be Frank new with and year will that personnel, the risks new Risk those Co-Founder, financial customers and statements product in earlier and this results results and in retain Gleb XX, our this included our the statements are include Today for that our Patchel, customers, discuss key and were to to the call and with subject and other include will afternoon. me uncertainties Statements Chairperson differ ended today XX-K expand Financial December acquiring that our of These Backblaze Officer. that our retaining distributed Budman, our announcements, growth. compete our Form ability XXXX are partner existing business forward-looking could on Factors In future effectively filings. cause effectively, our financial results, from in manage hiring materially. of financial actual particular,

rely not future All on forward-looking required law. undertake we statements update except statements on as to them events. and make based predictions as this by of that of we on are and today, our forward-looking call assumptions should as You beliefs no obligation

today our SEC. considered should GAAP earnings for in discussion the furnished addition financial our Our measures of may A These and be X-K results. our reconciliation Form was results which to be in non-GAAP not today will filed with a GAAP include with to, release, non-GAAP non-GAAP as found substitute measures.

the comments webcast, presentation be You call. related will slide after Investor our to a also can Relations in page also the our posted to which find

retail announce the Backblaze gathered latter be investors in turn or call, like stock we from call planning addressing in questions have shares period mention like additional for in is individual rewards of platform. I'd also over coming portion Say exclusive We're shareholders would through tuned to gather details. Gleb, that will over Stay weeks the the pleased to minimum call non-institutional a I Technologies to specified to to that our we Before which that we I of participate for to turn purchase who time gifts. amount the a hold with of also Gleb? a program, Gleb. the now

Gleb Budman

all reflecting growth great compared XXXX of Thank had of to higher joining million, a growth to you us. in you, in to start $XX.X the growth James. XXXX. revenue QX year-on-year XX% And We XX% business thanks for with to

over Cloud Computer comprising at comprising BX Storage million business BX revenue, Backup reached XX% and grew $XX XX% $XX company Backup of million our XX% with year-on-year. strong approximately comprising ARR Our Computer the for grew total and million. business $XX

the As to we use Backblaze, at leading and storage, data. continue store, independent easy astonishingly make protect data to cloud for it

the two for those we offerings that cloud. on our cloud call on may operate service a story, to reminder newer be As have storage that the

and and for developers Computer our And individuals. public service dramatically service provides price for is IT that one-fifth unlimited Backup service cloud Storage Cloud cloud provides easier others. and and second, personnel Web BX Amazon our First, and SX of backup companies desktops a Services the storage laptops

on-premise often Migration; gigabytes of data to set storage, to wide in To Data Customers but of want has cloud as and storage. are data and Cloud complexity $XXX from and Migration other complex our by service variety the cloud getting stored cloud move markets have migrating moment, program, prospective including across roughly one, the Storage around approximately and for capitalizing make sources, eligible of diversified storage locked excited on-premise our their business customers for it start from offerings free platform their by excessive help Backup increasing launch Customers often center at Number larger three total storage cloud combined through integrated the out the investments and trillion which strategy there legacy Computer we of and the highlighting want Universal providers that a XX the to all I but egress the services want providers across on-premise key projected systems product a enhancements. of is and been remains of were fees. data providers BX easy time IDC. been Data While common benefits of XXXX solutions. recent the cloud two data our consuming. to customers, with world, data leave, billion Universal addressable on

We also egress of lock-in. the cover costs to their fees customers from cumulative the free vendor

with company that this We SaaS squarely also announced SoDA challenge. the partnership a has aimed at

as dramatic want BX. when Reserve transit it other products the BX benefits and partners in well Migration, backup, on-premise With paying are migrate including storage to model. offerings giving SoDA an easily ready basis, secure include in structured our as data over easier platform. a their of strategic to ensuring or in that an to capacity-based support data the cloud is that specializes of makes use and are on BX freely is channel Reserve. services, ease Data all while who pricing. sell to over. in for We BX and locked customers Backblaze's in provides love Number accustomed customer annualized set attractive purchase the such work security for more SoDA that need be is needed customers new predictable just storage Reserve the also they savings data their they and offering businesses alternative Cloud start today it not those Storage, may BX that manages more cloud. cost with data, immediately to of move or can BX customers getting our access a Reserve pricing. helping Cloud pay-as-you-go from data predictable from up to exactly and on-premise some a Universal where the Customers but Storage, developed offering BX two, move BX solution a consumption to

known offers Alliance our Cloud Customers help into for benefits, Universal Migration our premium move BX been able use support Reserve our and who named of solutions. Storage have Storage, storage API. ISVs, to vendors, Cloud Partners integrate their cloud as inside including BX are data Number into A reminder, Additionally, independent years. products Partner new Alliance Partner also customers Data BX service more. to the software their for three,

our to customers. their benefits interest directly of expressed to those able cloud Additionally, storage offer partners the have being in

to Our beta drives experience BX had We remain June, update announced of their as which BX Cloud new seamlessly our unlocking recently easily within these storage Cloud We empowers product their integrate back Cloud intend allows previously improved that milestone customer the ship track Reapplication. also end those to Partner API this we cloud share to Partner that. do for launching a API them the we By and turn key services Partners, an to I Reapplication. easily Alliance portfolio, in for an services. for on partners on want to Backblaze into those in increased build and cloud offerings. manage functionality demand additional Storage

data our or recovery, it for These our copy not users for of enhancements help but move makes reminder, closer for customers access. data a distributed to end add faster keep customers objectives partners compliance geographically easy a for and only Reapplication platform their support to As well. to disaster the to product value as Cloud

new two SoDA Our which by partner the in I I'd solution to ecosystem to continues to describing joint partnerships earlier. grow, underscore addition mentioned like with

deletion backups to data protect specified used recovery data Backblaze's and over is with a that first are a Catalogic Kubernetes. Catalogic. immutability a developers impervious that leading The partnership designed provides and BX to the applications immutable for machines virtual customers, ransomware feature open efficiently be provide frequently Catalogic source Kubernetes to against with that particularly is to period protection use and build developers integrates is time, and of now deploy backup tax. to cybercriminals. prevents instant platform

recent our is the largest cloud. NAS Pairing services cloud rebuilding Defense This underlying to including by cloud-based uses CTERA's U.S. trusted joint provides solution CTERA Unilever cloud. Department solution their the and step cloud to benefits file to customers small painful the and move medium as companies, by path on-premise Live NAS allowing the enterprise BX short, enterprises GE, Backblaze and worldwide. agencies CTERA partner workflows Attached their adoption to Backblaze's a Storage structures of system cloud with cloud-based or without of securely BX data and world's joint McDonald's, Another with platform the safely in looking adopt them Nation as as government offering. CTERA. and storage Network announcement the the was other for offers and well

can new more enhancements and partnerships backblaze.com/blog. these about learn You platform our at

executive Frank, customer its Corporation bring predecessor could businesses. enterprise, Fortune archive, Media two company, and Media. of assets that Fortune there most into stories to Storage Magazine Before share its video want valuable of out interviews, When think discussions that handing Many are Media, its more. company people they can it one over I the you extensive think parent limitations you the the with demonstrate Fortune Fortune future. Cloud includes independent of with infrastructure but likely Most to that for needed panel technology of BX value recordings, conference avoid familiar are serve spun new a to when the up set which of of Fortune's to well and become Meredith an is

they future use. hundreds amassed that has Fortune thousands of years, the for of serve video hours Over of

switching BX, finding dramatically by and for illustration This two-third do Media that pain affordability was to Fortune when those included of the keep and our from but major to accessing cloud revenue video reducing They significant point platform Fortune great Backblaze's able to brands more. to reducing store historical eliminating support. cost quickly archiving video them their for a was previously hours solution This enabled ease a layers major to footage, a need repurposing how thus came limitations of multiple almost was it it Media source. cold a and archives needed of provider, used significant uniquely to is on because storage becoming By storage a content any a legacy system, historical previous access storage place extensive a effectively. these thousands of content. hundreds storage IT costs Fortune their empower of

support customer alternative Big felt to single the Amazon and Fastly, point like caused failure features storage about demonstrates customer, sell given Cartel includes work. reasons. their unique content. and developer egress Big to Etsy to case. learning The their online service for of SX worry make obvious ethos the sell they a simple their Amazon artists using storing as Cartel's content count to They've as platform Bit outages our several aspects about Backblaze to company and and is to it recognized partnership for Big and for for But second an used a independent a they that conflicted ethically success Amazon had Cartel owners, and Amazon date story build SX of I'd them, mission $X.X share mission their fit SX which ideals strength Big having that Further, of with an and our to to about for and past, Shopify recent Cartel's creators business to helped Amazon artists In work opportunity Fastly billion of store among their as After well competitors. use for their network. free delivery Cartel adopt developers. the

So, Backblaze the Then Backblaze primary. to BX. Backblaze preferentially customer SX in uploads use Amazon delivers BX Fastly, content the from customer as case BX. content, both sorted gets a now It's multi-cloud a when and sites it that with

in trusted XX% to This gone As migration alone. why BX our costs and is all Data their an of open they new storage storage with is in between Amazon service. so SX they by provider partner Fastly, solutions. ease for ecosystem, of as Even footprint. how of have Universal adding Cartel's our makes example saving Backblaze our and better, a wonderful the Big versus result infrastructure legacy were of using service independent alternative able doubled a powerful partnership operating example Big An data their data Migration cartel a valuable. even costs as status is a us of now origin use transfer Backblaze our to day down single

and As data we outlined during our November, opportunity market IPO independent see we cloud our in as storage. large back the leading for a

I We Based in are strategy our to who our dedicated certified want Backblaze the Work on their make platform marketing to feedback, laid February. significantly this thank of talented by all and of Great and employees our executing and this Place team a on possible. we was and efforts. products sales to moment take in as out investing a

to continue call and of to remains the welcoming we a growth, we help over best talent many review advantage As competitive detail. members a hire differentiating culture people now our factor our to look team. who more the new can the Frank? more in to to in our financial Patchel, forward turn results drive and Frank quarter team I'll the attracting

Frank Patchel

Thank everyone, you, Gleb, for today. and thanks, us joining

before benefits noted, expense nonrecurring. and Turning to other interest, compensation on are our noncash non-GAAP the adjusted will are I year-on-year. to revenue Adjusted referring deem is We key depreciation, otherwise metrics remain or growth or focused EBITDA. EBITDA financial that rates earnings stock-based expenses and QX results, be and we defined unless metrics: that growth amortization two as and mentioned

Our higher implemented customers per which increase, two-year to in Recall, phase or QX price Computer of month totaled trend. last BX this from Backup $X totaled XXXX. month the on XX% across growth. contributed next million, per Computer in to Storage continued at roughly an annual the BX backup we an continuing most Cloud renew million, total of they from of years Backup In its QX benefit of increase month, increase upward two to $XX.X $XX.X revenue XX% reflecting the represented since Backblaze $X growth. continue QX, year-on-year. as will revenue, subscriptions, million, $X XX% revenue XX% was sales price. reflecting the are

excludes initial in and detail retention trailing Both remain for down in improving company XXX%. the G&A stock-based the metrics increase compensation, retention market one of from metrics expenses for well was line sales filings. release the increased revenue BX investments XX% potential one We related higher expectations. P&L, Cloud customers. million in both two Storage points of adjusted of Cloud or Gross Working retention, large million customer the XXXX. These amortization XX% our These revenue and values strong. quarter R&D or marketing with XX% two were reflects positive in gross retention gross metrics, BX measures point NRR margin, and pursuing as of at $X.X growth are XXX% metrics continue NRR XXX% or investments, which gross with last Our net as metrics XX% retention depreciation, and while for of Storage track averages. This as customers, and to with the more earnings customer the retention from XX% expenses we Total an to of QX Storage, expenses recurring basically, Cloud But and chiefly XXXX. public gross for and all quarter defined company and planned key and customer retention. for NRR; was costs. at Backup. Adjusted in are down our XX%, customer overall of set a quarter from four NRR was Backup noncash Computer $X revenue, BX was within EBITDA XX% is loss of Computer

Turning of balance Cash, March sheet. short-term equivalents XX, $XX.X to totaled the XXXX. cash as million investments and

for like QX. Now, to our I'd outlook provide

to million to For $XX.X $XX.X revenue of range be the the quarter, second expect in we million.

We EBITDA margin negative negative XX% expect of to QX adjusted XX%.

in share make business basic of also XXXX. general count million. our our on to XXXX I expectations QX for the comment expect We current million want XX a approximately XX to mix

for provide revenue our While near texture to by additional expectations in we some Storage the would Cloud BX guide term. growth on we product, do not like

in has growth revenue remained steady Our QX. overall

growth. We headwinds, high want some we in very to considering data are be for Consequently, inflation and cautious, various softness mid-market. other seeing particularly the

dollar we purposes quarter estimate that four growth a As absolute reasonable at modeling Storage quarters think two. such, of BX last sequentially for looking for average the of is for the growth Cloud

unchanged remains at revenue XXXX million. million guidance $XX to full-year Our range $XX

plan Turning negative I increase to back continues our materially call full-year opportunity in margin turn to now will market to of long-term guidance reflect EBITDA expect our growth. with to address negative we our and the XX%. James. to to XXXX the to XXXX our significant margin adjusted continue aim XXXX This to a investments EBITDA XX% guidance, accelerate

James Kisner

Operator, take from we are questions now ready analysts. to

Operator

the first of you. coming Thank question [Operator Ittai from Instructions] line Our with Oppenheimer. Kidron

Your line is open.

Ittai Kidron

in you talk reason you customers Maybe guys. data it? for Thanks Can give When you what around customers, you can – this? finish, have the the I'll And start is Frank. quarter seeing before what type any there we the of us this? growth color you And in unpack when to they seen are this? Is growth? softness give

Frank Patchel

in to and be could what transparent reiterate, we just growth we for customers. were that quarter that about answer growth growth, we to models seeing regard. don't the first of BX your in accurate being our happened by the but BX could What everyone data Well, your guide something of added how be really it part we've was wanted understand and that seen question so is in to first

looking modeling the to best been growth as a we're of way reflect can that the better doing sequential we that. that looking is way to what at at Now, of start we've

seeing. it's just but it, what overly we concerned to we to certainly about point want – want we So, don't be out actually not are

Ittai Kidron

why a softness, Frank, sounds I a to sounds mean, But Okay. it is good be clear, reason you it like as to don't there have like?

Frank Patchel

and companies expense, peers of do more maybe what line that that's than and inflate mid-market in interest cetera, we're inflation with Well, others affect we other the and from the presume et quickly pressures that seeing we reason. and suspect

Ittai Kidron

what isn't that a no isn't raising is company on vertical there matter inflation, it given Okay. And prices. planet the

in raise about there your in XX help me But clearly. think is months? for the that Backup You any plan Computer prices have next BX, raised to

Frank Patchel

We're we a There save their to isn't. as And great on storage expenses, do committed as us way a pressure hope on they companies really to value. being to look have costs.

So, we as possible economical really keep to want as there.

Ittai Kidron

Okay.

how on of a peer-to-peer centers So, I'm cost I should data basis? gross building think your margin your rising sure because that is about

Frank Patchel

We've had – doing we're fine there.

up margin is that We're being the prior of gross deal the a great infrastructure. there quarter, we're reason Our seeing seeing actually not X%. is is bit little capital not cost a the on yet. okay. It's The increase of from

of gross a all with labor for monitoring there's we're We in it our on too and margin our of like rates half are remain but – okay And year. very purchases closely, this expected. first line

are that as as we So, doing far fine goes.

Ittai Kidron

Okay. Gleb, Very so good. a Last the is clarify available you who you when this about you But to eligible. very can I – that for want Gleb. someone like talk Maybe Data interesting one Migration. by be you plan. the – you It for they this? How talk about so Universal which perhaps is you? plan who are what would said sounds like do dollars for XX-or a back they are Meaning, something eligible you them, end? to two-, do this those terms what one-, is back three-year it Meaning, committed migrate? on the for get And that for relationship? can if they do

Gleb Budman

question. it's Frank, good a Yes

providers So to move Universal out that Migration on-premise storage into want like or to they are get who like benefit a to customers do locked fees other the and good are excessive egress the there's cloud cloud. Data is for you said, they a lots feel and where either

at to with for need For is the least that XX data of us keep terabytes they us. what is one-year. migrating And means data be to that the eligible customers, commitment they

price their is there. thing competitive out of there's that [indiscernible] they'll fees, nice additional them, actually offerings during saving the obviously, So, because that no of both for storage we're the the be off money one-year,

period. lower is free for for XX-month us, So, keep It to get to the out we perspective we free will it's them subsidize what by other And that it our the the for offer customers cost providers for to for the data will because fees. switching their those actually data from be customers. of

Ittai Kidron

Very good. queue. guys. back I in Got it. jump will Thanks

Gleb Budman

Ittai. you Thank

Operator

James. Our line Leopold next with Raymond Simon question coming from of the

open. is line Your

Unidentified Analyst

and you of is guys for were a in you've Victor Hi of are to that bit. noted Last speak in Can for and your quarter, sales some the actions Simon. that about plans XXXX? balance taken going investments increase this what you you the marketing specific

Gleb Budman

stepping Hi, meeting Thanks in. Victor, for nice you.

exactly said we sales we in So, that investment the and that. increase and would marketing done we've

scaled sales We outbound up have efforts. the

several models. were So, and In We've inbound before. we primarily take to for team of the self-serve quarters to outbound benefits may to as know, effort results an our We up started those. to early in sales those our motion start years XXXX, you the this we of hired those first at had complement year, or of least reaping quarter sales see the primarily.

just item investments there. that. also effective optimizing seeing we're traction a key last and published coming so That advertising with seeing enthusiastic Cloudflare, team. some got – I cases And developer team. other early. [indiscernible] of the quarter variety marketing that month. how QX. GlueCon early scale. and use last we're our for team We and it's own we've in to of the use We've from And scaling BX Fastly And with a continued to We're up. partner our the hosting highlighted from developer-focused we earlier We We're this continued be And opportunity paid brought on partners then meet-up was testing scale about pipeline But Ultra. has year. sponsoring and do developer the including events evangelism our to content our

the blog team. joint Catalogic, that in partners, already press And events including posts, others. CTERA plethora Beam, few that and of last case started studies our we done and has other months, team webinars, a with So, releases,

scale and efforts. in So we to we've overall, marketing investing and sales continue and those invest been scaling

Unidentified Analyst

helpful. any from affect speak from you've their observed adjustments if proposition And competitive the value recently that the peers to about Backblaze? some environment? might strategy That's you Can pricing

Gleb Budman

landscape. think that So, competitive don't changed has the I in much

there. We continue Microsoft to Amazon, see the cloud diversified out vendor, Google, the

easier access is to Migration to of lower helping that Cartel [indiscernible], the want cost also mentioned that switch customers Big that's take from platform Data part to And want independent and other as and have focus those with an providers. them switch they to I customers an to moving Universal over continue because to to provider. with We them customers best-of-breed allows want we see be the that

that storage new haven't to that offer we companies front. ones sometimes wouldn't cloud last has up. There are competitive of and too materially pop But a seen quarter. So, end the much variety on say the landscape changed smaller I

Unidentified Analyst

Great. That's helpful. Thank much. very you

Operator

next Our the Erik Suppiger line with from question Securities. coming JMP of

open. Your line is

Erik Suppiger

want Thanks data. for slowing follow there what – are they're Is question. Backblaze? taking are do doing? Yes. is storing at What data the to Or they're I data up just on storing with you – and the not the in it doing the they slowing growth slowing? those customers is that at if it think

Frank Patchel

to want growth say is slightly I growth. We're BX and mean that really our XX% – just Just BX business seeing product to data I still very reiterate good. slower very what our is rapid.

things they reason concerned higher about that work think placing the that it's customers data not creating thinking someplace the storage. It's them added or that like and reason rates But and is pressures might that. maybe out. they're back of already is no because of be because the really are incurring that much inflationary as for would to there we that. were do for So, happen is interest that expenses they it are pulling they're not we're what that There if their some

to what we're now. it attributing So, right that's

Erik Suppiger

trend? seeing have similar any AWS believe a reason you Do to is

Gleb Budman

AWS a is products. trend. very diversified [Technical with lot At of a seeing we're tiers Difficulty] similar whole of

So, up-market. of it's the in different And course, the we markets not same, are, course, are we're, quite very than in of mid-market.

look – relation don't doing what are really really all in wouldn't of to that. I So, look they I at

Erik Suppiger

question. last Then Okay.

how spend of you do give upfront data think on any perspective? the – how from us take that's sense that you usage those the part you going On on migrate a will service, much cash Can take customers? migration to think to do much what Backblaze

Frank Patchel

cash robust very also very the manageable. economics not It's amount And – because so we good is there. a balance have

Gleb Budman

also some to of Erik, outlay don't clarify cash Just amount preemptively. we large

As data. each migrate we data, customer each decides help migrate customer to

is And so other egress of the of own. customer do that have systems there's which just customer way usage in things – much our to some cost current that are what data that that the different lowers these migrates. would is the migrating on the have done their we note significantly the thing optimize done it is the And to that out cost of for below to

Erik Suppiger

example how What can egress an would of reduce be you the cost?

Gleb Budman

So, an together is a clients likely and example do to cost direct that be that not will bundle efficient up multiple set systems it that of one-off and them for where on complicated connect we basis.

Erik Suppiger

you. Okay. Great. Thank

Operator

Our next Lake question coming Capital. Eric from the line Street of Martinuzzi with

Your line is open.

Eric Martinuzzi

last ahead that you're down reiterating QX, that's wanted in range and XX% the to revisit had that. QX assume you back talked What margin. slightly gross you QX? takes – The I Yes. believe XX% what I I was guided. call; of XXXX. about to XX% for FY

Gleb Budman

repeat didn't I'm bit Frank Eric, question last hear your as it. the to going of

with the that higher we're quarters margin does year gross imply lower year? was, what with fiscal have for that recalls think our going XX% he gross was and margin the further in this asking – to Eric I XXXX, there So, that slightly was XX%, to of quarter

Frank Patchel

as said had for the that areas our likely gross other expenses was over simply growing time We slightly necessarily. fast margin we're not data and that not of case. that's headcount the increasing No, and because centers very would the still

Eric Martinuzzi

Okay.

at? to margins you XXXX, what year and the the gross do FY want think all when out for So, is you finish done do said –

Frank Patchel

year, think gross the really in We the been you whole for about of margin now. should guide it don't but range talking that we've

Eric Martinuzzi

that and out in XX%. you've for about year given XX% on full adding XXX been was employees that is pace? expansion finished the run you average, had where making numeric employees Are you XX you Expense-wise, about about talked to that I an growth just to on with Okay. going I'm XXX XX per some to on the to the for employee wanted to I going prior you year. And and and expectation quarter. R&D. that of be to investments from know we of a sales got up track know, this – marketing

Frank Patchel

it's Yes, slower. Yes. slightly

a we always constantly pace. it's So, but evaluating, challenge and technology we're also the that yes, to on always people evaluate or hire

Eric Martinuzzi

Got it. Thanks for taking my questions.

Operator

Our next with the of question from coming Blair. William Ader Jason line

open. is line Your

Billy Fitzsimmons

you months Hey for a Fitzsimmons And maybe competitive on know there maybe changes impacts then back are on kind partner their made bit is AWS guys, question September. those guys to Can know kind expanding I And from are little couple if deeper, a up conversations? Gleb, in back? you but announced policies second, some they the Simon's competitive what Ader. before. but Cloudflare really of coming speak hasn't of of three to dynamics little very this for landscape obviously egress digging important is Jason said the solutions in Billy I changed, are? you on a a

Gleb Budman

joining Yes. Thanks for us, Billy.

make I what And different. to to materially of little by is, be certainly, AWS going they last from to a it change that then sometimes. keep happy drop prior think were earnings would I announced if egress they talked egress it's about their for our customers we egress there hasn't to very, why fees migrate away be easier small up. AWS. it That's a bit fees been And mean some they their that call. that anything them lowering very their completely, Frankly, I'd

change such haven't a material that anything seen we because pricing. small their it from to So, was

we and forward on to partnership side, with that Cloudfare Cloudfare move have the continue front. that customers continue and efforts to On work we

they haven't other seen put than – We announcement that anything out haven't the year. new back had last we original

Billy Fitzsimmons

thoughts I side. upside Gleb. you called originally And it just I some attribute dynamics the give increase important the mostly that that BX Got Backup of I maybe on help also guys there? remember annually. count it. price it Got data the it's think But only maybe aided not customer was or dynamics factors, the to to guys the curious Cloud quarter Can came your to by But then forget important better-than-expected side. on know expand had another to one out that maybe the some you from the anticipated, ends customer you, growth if than it. would drive for you it's you maybe say know you of in the that? for Computer you

Gleb Budman

clarify question. me your Let

prior up You're growth asking quarter. – accelerate the quarter prior XX% to how versus in in did the year's XX% we

Billy Fitzsimmons

Yes.

guys deeper Computer at up trying if the business. the you can get that? to Backup for good wondering kind of put of dig you will that drive numbers Just And dynamics some some – on

Gleb Budman

the we to increase growth through year we proven customers, side, there Backup in continue that acceleration it Computer entire last price continues Yes, business through is but in that roll more it. to as the base. grow the strong acquiring did Got

Billy Fitzsimmons

Thank Perfect. you.

Operator

And with question line Cummins from Riley. B. the coming of our next Zach

is line Your open.

Zach Cummins

already. customers of Hi. been my spending months. Good I Gleb, hearing what from what's you've of sentiment kind dynamics some given over overall you're afternoon and about gone with the initiatives from recent it what I don't different conversations these you've your they I in in base, plans perspective? kind of just for that across seeing or mean and all your strategic be, know, But questions thinking if headlines, curious are customer whether apologize the taking I was them of macro

Gleb Budman

businesses question good own most running they are The we they run have customers means, initiatives. their their their fundamentals from a continue of and for Zach. them hear It’s digital to businesses trying to that

Some systems to of them cloud. their the are into get

way just Some that of them [indiscernible] streamline the their works. are to

multi-cloud is of that setup. that Some

run they paying things their around of things they're to their want the They're But paying So, to to attention all run COVID, macro situation. they're are inflation, attention trying to attention face that, attention to the with continue in the to they're trends; businesses. how Russia-Ukraine paying they're to businesses. paying

their continue would minds. them their And continuing on they're run certainly it's are say, can. certainly to also with paying the to inflation certainly trying different we initiatives. the aspects trying the that help the But of they businesses, they're something so business is But that customers, they're to run attention concerning to people's it. And I are some to extent try – to to there's as

Zach Cummins

And other at me half same product. second of to the been And incremental year? line you on customers just that in is I this question Cloud have it's are for mean launched the can any around Understood. of thus this maybe the you your the feedback It you've update give beta sort sounds of that from really any juncture. product get like of received time still kind used this fully far? Replication

Gleb Budman

half is we've up We and experimenting line that target customers who – interested getting using first the were time beta. that they're request to which and year, the – a launched the We're had before our signed been in do on track with of lot of a customers it for for it. We've it. of this customers put we're in still are that. And out

positive launched customers far, available continue so signs to that get – and to So before of plan the we June. end all are and to

Zach Cummins

quarter. rest taking appreciate that's for all the and questions. the Thanks my Great. I of for

Gleb Budman

Thank you. it. Appreciate

James Kisner

for I great more does those questions questions. that that now I that questions already all few been those a want time from to of sell-side to the questions popular submitted like going handful thank came non-institutional read address investors to Thanks would have investors. analyst those remains. in look questions It the of community. those we're a from answered;

The first the be in is years' you Gleb, company Gleb. where expect do time? for to one two

Gleb Budman

James the community. non-institutional taking questions the thanks from for

the who great questions really to I engagement them, those on submitted It's it. appreciate from For broad voted hear base. the and

Cloud We the mission In to we terms on that over role our there. in astonishingly the continue protect most focus world's and a And use grow the to for leading independent as with company storage company us cloud to continue digital next store of easy opportunity resource. our to to and of it to that time, years' the our precious need is to both data. make and Storage data and in BX particular with our years believe offerings continue the cloud come. enables do And our we'll that storage cloud two

James Kisner

also is one Next for Gleb.

macroeconomic the of already post months leadership total push During why when decided tough of few did IPO line team the their shares receiving time [ph] conditions, suffering a back Founder planned tremendously? is sale XX% and enough with these the ongoing the share price

Gleb Budman

proactive It's fair like would be and to and question, a we transparent.

to of our backblaze.com/blog. a we our detailed read post So, that encourage few weeks in everyone at motivation on a I ago. a blog put explanation

time be a keep and small to and And even in remain this impact we the designed long-term holders in knowing market thing is still the we'll longer-term to has place understand each put the for after to the stock large of on months, and February, Founder's in a year, important stock do price. minimize in business. low positive of some completes are day time sales program the diversification to personal time or mind to side appearance any attempting avoid was the he Also, this The for for many the his holdings. of back very impact that to that start would outlook even

James Kisner

one is looking your 'XX us in for [ph] volatility Frank. the Next market? the directory Tell given current

Frank Patchel

press overall, that, unprecedented for of of just think peers and world good did our top the revenue inflation, data QX we results But and deliver strong because our you saw some we've we're reported at the we're are we growth. live our now, business and our medium-tier reiterating some we continuing in I range. growth we cognizant the commented, year, which Well, for we very of in the guidance the above slower in of seen especially risks release, QX at $XX.X right And range is like million potential customers. EBITDA the very guidance as

James Kisner

to price used the of is storage and company industry? be one the be back business to releasing on up Will different needs or servers meet next the commercial tiers that The for new network Gleb. products could

Gleb Budman

storage migration, servers. we're API and such and the our about as up Cloud So, upcoming products and Reserve feature. backing recently specific be announcements continually new Partner our around Data Universal BX releasing Replication To network the

question be backups for laptop our supports which service, and Backup users Computer coming from assume desktop I this So, of businesses. may

And them Our supports part laptop, service computer users came they BX more. and BX needs. work the and to TrueNAS backups their MSPXXX with much Beam, up businesses data devices. backup. and backup their as of storage partners us in they our about others actually of ransomware Retrospect machine Catalogic us by We data customers server businesses Cloud partners offering network, came protect Lock loved their these help to being network help And backups. Object many to helps Cloud saying as Commvault these partners network stored. such hundreds Netgear customers number virtual and server Backblaze. with work functionality enable today QNAP, our work Storage other and protect BX so the server such other Alliance wanted as for for their so thousands already are and virtual with storage, storage back and and are machine well. Storage We a enables for to with desktop because cloud with and Partners We with to these Synology, from us today where storage

for for network of storage thousands use needs use backup both and our able and easy desktop and Storage and laptops Computer already being customers and BX today, Cloud server it types this available So use cost-efficient to Backup makes their for cases. backup of

James Kisner

Okay.

when are overtake the years? What you BX backup it offering? five rate to for personal And Next in for is next growth you carrying the do Frank. one expect

Frank Patchel

our And of Well, Backup. we expect most faster Computer BX than we investments don't to to but guide growth BX. remember going do by grow that product line, are

has overall high, as business that per very to the overtake a So user, larger retention expect very very the high rate given growth Backup do rate the coming is years. revenue BX we eventually revenue in high and BX

James Kisner

in easily The be Gleb. with that and automation or Will [indiscernible], better use management Group the a in used can residential? the overhauled next better the it's spaces one industry for is MSP management for can Products way used commercial in be that a IT

Gleb Budman

is question at service more attracted providers I and make to think our managed products IT that whether to getting we'll departments. company's

managed of have to with dashboard to not a both view central notifications central have but users, get multiple to Cloud Backup reports and launched have person multiple building. companies set MSP, companies access up So, is familiar, products BX and only and manage Groups years to all administrators, Storage, And departments. this a easier each or five Computer and it it for functionality, for we them users, ago, service allows to made those Groups. departments not for which IT

and or desktops endpoint few authentication any our support mass Over last deployment Microsoft GEM also integrate sign-on and services, functionality added such have of across others. support device to as and for of Backup the for service years, single number Google laptops Computer tools we management with

even to handle to their providers continued innovate mid-market it make IT service organizations to easier needs. and for We managed storage

James Kisner

will with company Over of to storage the end available commercial? home on and focused user through Is continued residential the Gleb. a SX, development both the residential or and company groups in team the and goal marketplace, back shared

Gleb Budman

So that on more asking or think focusing businesses. if we're that's I consumers

large are Storage services primarily Backup BX Backup putting Computer businesses our and individuals. BX developers. Both on Cloud is significant and with growing supporting opportunity. serves and businesses Computer and both rapidly, businesses we're behind focused Our increased Storage resources net And higher each and higher said, are offering. the as we Frank broad market dollar the Cloud user, revenue range use our cases per putting of BX retention, energy the behind

James Kisner

to to plan company products? bring for do new Gleb one and your Another here. value How you more

Gleb Budman

there's we data. Sentimentally believe tremendous value in

we offer to customers, new and as benefits add that to and And so innovate mission features protect Backblaze. as and value those investing as that sales announcement which the just marketing and serve in and to to products, customers benefits showed store, value to to to continue much data, we we by quarter value as results that in with – today for make our and bring it continue use easy add more this our to features we and to

James Kisner

Does compete any contracts? for Backblaze government currently large

Gleb Budman

but support underserved XX% the us. We of that's for organization, not governments customers, market contracts represented by both mid-market. focus we serving a any can Fortune large XXX or on companies Backblaze government have as are primarily the focus side the and company and

James Kisner

major Last quarter? acquisitions any one, Backblaze next Is planning or in partnerships again for Gleb. the

Gleb Budman

opportunities, customers. look for pre-announce for just anything open as don't that focused with mind we partnership a an the significant of keep and can strategy. SoDA, new announcements we accelerate continue that Generally, CTERA to And just acquisitions made, we've but reasons. we opportunities that we're benefit on our to organic Catalogic So number our our

James Kisner

Thank for answers. those you, Gleb and Frank

I XX to XX. Gleb, like to York Before handing hosted mention investor Oppenheimer on May meetings and back by attending just and that in Boston New be we'll

Institutional on in be and We Riley XXth the May XXth will Angeles. doing Los Investor also B. May Conference

and a Conference [indiscernible]. we're and by in to for William meetings hosted in the back now I on Xth investors closing turn Minneapolis Blair visiting comments. Additionally, Chicago will Gleb Growth attending June call

Gleb Budman

end and James. months. our the forward your short and Operator, thanks to And Thanks, look again all few interest updating you to now just we you call. may for in participation, you of again on progress

Operator

Ladies and Thank gentlemen, conference that does you conclude participation. your today. our for for

You now disconnect. may

Backblaze (BLZE) 7 May 222022 Q1 Earnings call transcript