BLZE - Earnings call transcript Q4 2024

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Operator

Thank you for standing by. And at this time, I would like to welcome everyone to today's Backblaze's Fourth Quarter and Full Year 2024 Earnings Call. [Operator Instructions] After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions]

I would now like to turn the call over to Mimi Kong, Head of Investor Relations. ahead. go please Mimi,

Mimi Kong

afternoon, Earnings to Call. Good Full Fourth Year XXXX and you. Backblaze's welcome Quarter Thank

and Financial On Gleb and Board; Budman call Co-Founder, Suidan, the with CEO Chairperson me of Officer. today are Marc Chief the

compete Today, about earlier this afternoon. distributed that marketing this transformation, financial future cost-saving discuss results, Backblaze forward-looking of Statements effectively initiatives, statements sales initiatives, our customers changes, the to results our go-to-market from our will our customers. and include results impact were financial call features, our and on existing expand the new manage impact and price of and strategy new the and business acquire growth with our ability to retain

materially are are risk risks These subject including other in could included and described to cause filings. in our annual XX-K factors and that Form our report to financial on that statements uncertainties those our differ actual results

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

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

NRR, free press and retention slide flow. presentation presentation call. Relations also customer definitions the find release ARPU to page a will Investor our cash be rate, adjusted such additional the metrics for also can You our which see or Please as of comments to gross also related our in posted webcast after

X that tomorrow February March We'd to Oppenheimer Tech X. Growth see inform you and Emerging in you We Conference there. the Conference to XX the on on JMP and hope we will Citizens also participating be like

the turn Gleb. like joining would for and us call Thank over now to you to

Gleb Budman

the and you, Mimi, to welcome, everyone, Thank call.

Storage and grew solution, over came adjusted period XX% last over QX the same over period grew fastest-growing Cloud Revenue XX% doubling BX the business now XX%. and XX%, Cloud of in same the EBITDA margin year. Storage, BX at in our last year is

SMB sales both about the we adjusted revenue a going. margin. moment, also but doubled customers a company where have model. I'll We we've than quarter take and model one supports self-serve wanted and the we're the stock more more to talk and from to partnership last I in selling been years, X first, where direct In transitioned a with EBITDA a that to primarily to enterprises of

doubled to We provide a data of partners with launched value. innovations regions of also host more and and customers our number

next to and delivering XX and the X.X few to As era. growth the storage build leading Rule focused continuing becoming both years, on a company, of we for we look are cloud profitability Cloud the

talk recent results. let's our about Now

During positive growth our free a key last by earnings our BX adjusted on QX. and focused call, plan cash be X we go-to-market initiatives: to flow driving transformation shared

update an strong our go-to-market our to made share I and as cash positive. our has on then becoming are transformation our the progress flow already we with provide signs. I'll on pleased Marc details about free transformation, will adjusted impressive First, seeing team go-to-market path am early

beat significantly, despite full leading quota year-over-year, ARR Revenue new behind team the quota arrived Officer in our Jason, year QX for win the July. up doubled and productivity Chief the in rates being sales quarter were when and meaningfully to

on sales we sales across productivity for increase value. annual $X also over significant Not customer signed the only we team, an for a based expansion did but existing million contract

driven million, greater transformation X by a had the net growth Storage than of increase. quarter, sequential new working. sales record quarters combined. booking which $X are go-to-market a that the excellent ARR Cloud that early had signs was price BX is of prior the record These We outside

an is us due of the as-is business, nature translate there into revenue. to generally reminder, these a a As being leading lag indicators before

low in seeing that an growth QX, into believe call. was in do are point will BX already us more later we behind on the and organic acceleration Marc growth. details in we the However, go in

Now we we about how place. done acceleration through achieved upskilling have talked quarter, last the focus and main and sales partnerships We've that results these to date? X areas

ensure and upskilling help Jason is to robust a repeatable up has implemented the He and market. at up team period short the set of more to in well on an First, impact team, moving is rigorous process outsized has training speed continue move sales that lightning time. a and to

additional the last sales and experienced In increase of quota-carrying with Demand a to we the leadership help capacity sales hired reps pipeline. fill to also along Generation skilled few VP months,

happy of size Last to average on headway. in the channel share significant that made from front, year-over-year. the Second, the we deal partnership I has coming the in are the quarter, channel with our making we QX spoke I'm doubled changes program. leads nearly about

are solution needs along ] and to our for To another co-build, strategy. co-sell and This to co-build how to colored program with alliance solution partner joint X working are we compute a to a technology Examples, key partners sets. partners. around strategy. create AI meaningfully joint like a workflows AI create media working storage with support with [ is co-market we we're I'd about large Next, and solutions currently joint data talk up-leveling on now structured

plays. sales Third, the

is We to and Backblaze, and repeatability IT are label storage, focusing are which and These by offering. entertainment drive plays key media white application on efficiency. our X powered backup,

ensure becoming have and are collateral, efficiency greater plays and we with right these positioning, awareness. programs sales to aligned to more sales drive tightly more the market efforts marketing Our

review for data recognized ease GX, market as solution high we I'll storage On the best use software and implementation, that note [ site awareness, were recently a ] fastest popular of by performance.

to for business the highlights Turning our quarter.

in customers of a larger number industries. diverse a add range to of continued We

data developer in ARR. over from $XXX,XXX platform an chose warehouse. signed to This Just their sampling, a Backblaze solution a that for a customer looking they we were quick archive for because company provides application data cost-effective

to social Backblaze A recognizing And company for for were their hot Japanese an in store deal music content. committed we affordable media $XX,XXX as for using in signed a and content. a their that digital $XX,XXX about large for ARR origin their ARR media archive streaming Backblaze solution over is company and

with to addition number expand In signing customers, also to larger a customers our of continue us.

in and and the additional platform their often customers we've $XXX,XXX value see an our a the significant they It's X in exisiting seen example, run to in ARR where as at expanded industries scale. customers pattern an gaming usage rate. provides AI As each service, QX, lean start small in

value. signed They I'll significant Backblaze QX And our highlight $X annual for enabling in customers. a a thus customer [indiscernible]. offering, them in by their offer Powered million chose expansion cloud to to who over storage contract

white last R&D $X solution growth including innovate QX innovative This number of in Backblaze million-plus ACV and speaks to We've channel offer of our Powered by investments. to signed this this launched already First, drive from our and year. our a to latest deal. capability label technology partners ability

And demonstrates because market. egress, progress move their this chose a rare our deliver our customer affordability, performance which Second, and free in to our business. this combination, being up for continued in third, platform's and ability key able Backblaze part was high to to

this AI announcement to to I'd tech the ago, place effectively. in seismic is happening major that weeks DeepSeek can need dynamic is few the and leverage industry. innovation everywhere. illustrated stack the AI shift taking adapt of clear that that rapidly Thus, A address companies like and data it Next, AI increasingly flexible environment

data to And the constrained as We the happening, the believe that they by their who are to where flow cloud in those landscape. innovation walled AI freely win evolving will with gardens best this those pace. keep of struggle Backblaze, providers to who can may can traditional positioned is be

is customers and a translated top strong this seeing a December We believe stored why AI factor has AI now increase of of in big now This hundreds we're being by with need out momentum XX AI XX-fold for of such companies customers. X We companies. segment. our as into of in data flexibility customer XXXX mobility these our serve data

we the looked quote, but made investments "we the customer massive we combination have AI didn't Recently, at endorsement. are us of delivered I from we tailwinds. AI and it on glowing and all to our right price of usability not anything Backblaze side CapEx work." another storage would gave on burdened you GPUs, cloud benefit make change expect. providers a to being the Because still And layer, focus in we by the

Our opportunity will to AI be and the is years major for power exciting, at Backblaze driver come. I AI many a expect growth revolution to

move and growth, company to target a pivotal toward to year of accelerate ideal expect Rule platform positive for is a free the the Backblaze for in XXXX as and cash cloud adjusted cloud. QX open flow being revenue Finally, storage being continue build XX we BX

over it turn Marc? will I to Now Marc.

Marc Suidan

Gleb, you, deployed good Thank growth a position free and cash joined months where very changes been busy everybody. for profitability. and we've flow It's since numerous ourselves I higher company the X to afternoon,

We change results. agenda launched are executing good which on quickly. a go-to-market and transformation early We showing drive initiative, cost aggressive an both to are a restructuring

offering for need We to prudent secondary positive, turn our reinforce that cash I while strengthen felt was flow XXXX. liquidity oversubscribed additional generally an of company to it net did million to offering execute capital completed sheet. in want a our not $XX November also the in note secondary to successfully and free proceeds balance we

million, results of revenue by XX% Now primarily QX quarter. implemented QX year-over-year guidance. ahead for growth slightly revenue million, $XX.X in share year-over-year our $XX.X midpoint representing representing of let was was and backup me the price of increase Computer our the XX% XXXX. growth driven

and the revenue of I'd customer we Storage BX easier the fully is point if new BX the out acquisition. primarily to in see QX, we impact XX% our million, growth Cloud data in the price price expansion growth strength of exclude increase. increase driven The that QX by was BX prior year-over-year period. existing lapped to customer from representing like $XX.X

the growth quarter of of been the organic XX%, low would view have which BX approximately Excluding third we our benefit as point growth. increase, price

was fourth our XXX sequential XX%, representing growth point a to quarter, improvement. basis Compared

in As revenue Gleb we should will that BX growth noted, section. further I which to expect on go-to-market guidance the accelerate continue comment XXXX, transformation throughout our

organic sequential is transformation, ARR gives This indicator Gleb million us QX representing is a of confidence success dollar from BX IPO increase our the since ARR this the increase BX go-to-market largest for leading and XXXX. million, in in QX given for that revenue. as further Our a early our is mentioned, $X $XX of

year. Net total XXX% compared customer total The compared put retention or last prior improvement benefited NRR, year. to in quarter the that revenue from QX XX% increase company was the XXX% The XXXX. XX% mainly was we price year-over-year for in retention, the in place to the in

has XXXX. since in retention consistent customer going remained Our public

Overall, company year-over-year. ARPU is $XXX, XX% up

Our XX% BX with to climbing year. continues strength $XXX, ARPU to show business a last over improvement

continued for driven to by income Moving at margin revenue continues showing all-time cost was quarter, in Adjusted for down seen XX% statement. growth strong the XX% strength improve QX of high or the the management. XXXX. with Adjusted the and to million gross revenue of $X.X EBITDA quarter,

of The flowing on an EBITDA which doubled XXX adjusted the line. revenue benefited rate that because efficiently XX% dollars prior run incremental improvement. bottom basis points operating leverage of further included from roughly our from quarter represents the than more and basis. is margin half QX the is partially the This demonstrates year benefit a to working, the the only about restructuring QX

$XX sheet. balance short-term We with cash million the to finished investments. in the quarter Turning and

reminder, paid had in of million off As credit secondary the in in a and million a offering raised which line proceeds $X.X outstanding. net QX we $XX

with in $XX we the million disclosed end on payoff, credit expected of we have to cash. that that at hand. the pleased of year, share least million we the the offering ended year year and to excluding would I Last cash secondary am line with $XX

money. maintain merit secondary the off decided paying which not with relatively After to it of unfavorable to offering, see credit, was line pay and XXX% line a cash fees borrowed we of terms. of best the had the restriction credit of did close successful We

highlight of XXXX for first X QX going with ratio like or I'd liquidity as above our current that has our to since QX X improved time ago. quarters the of

lines quarter. the double and access Additionally, in we have to than prior credit have significantly over $XX which more equipment increased leasing credit, now from is million our

represents improvement Our period dramatic operations year usage $X.X million $XX.X year. improvement for for year cash cash from This operations. cash prior the the of from million in a flow the same million, $XX are flow last a from over

primarily showing for negative flows last flow year revenue as significant a million to us. $XX a cash growth will free year a adjusted for be Our cost-cutting improvement negative continue of full primary the result were focus and million, Free compared $XX $XX million to cash initiatives. of

guidance. to Moving

full We be million to million. range in be year $XX.X expect and QX $XXX $XX.X our of revenues to to XXXX $XXX our the to revenue range million the million of within

As a which reminder, fully the percent increase, exception drive has helped our on with left Computer revenue lapped of the growth Backup price business. last a year, small

you'll by for hit that of driven a of the increase In BX customer expect with by is BX XXXX, We significant see XXXX XX%, XXXX over our of BX customers. and primarily a and forward What low expansion quarterly and we new accelerates to acquisition outlook growing exit of highlights over presentation, which earnings growth from our end XXXX. driven our in by go-to-market just posted existing that transformation. to XX% point point QX

on remain in above and with to EBITDA in for we of exit XX% XXXX adjusted for XX% in flow XX% well. the range QX guidance QX of be cash Finally, QX We as adjusted we adjusted EBITDA to adjusted to track full XXXX XX% of of positive range year EBITDA free to project be the the to XX%. be and margin to expect

the From our flow leverage kick given cost. there we operating will a way us cash free sustainable variable help to in expect on, low grow in

we As to our we deliver go-to-market on a XX increasing be these executing results. of strategy are Rule move on company, to and profitability laser-focused

let's place take is summary, create Operator? And ahead excited value. path that, are about already very questions. the with In in the your and momentum shareholder we that to

Operator

Instructions] looks from our Rhee Jeff with It the Craig-Hallum of Van Capital question [Operator first comes today line Group. like

Jeff Van Rhee

for few a me. Just

like key metrics partner any are for monitoring goals you've front, On the in got partners changing. what of it a sounds the fast, hard things year, like you're 'XX? lot the and quantitative for Any, specifically

Gleb Budman

you, this hear to from Gleb. Good is

of on have it. parts the side, the we partner So X different

and alliance channel we of have then the have it. the We side

On the channel, style metrics. it's somewhat traditional

pipeline at look and then sales productivity. we So

we when team. measure the ARR Sales closed on productivity, it, per person average X it's

so And as that way it channel through flows the to well.

little nuanced. co-build, more On We're co-market the a side, it's co-sell. doing alliances and

to we So that to and market specific is build solve looking problems. jointly to what customer we're there the solutions with do go up

Jeff Van Rhee

just last one me. then And helpful. Very for

terms you envision? maybe What you for You look and growth out, rates? at the a playing Computer Backup see further you little X of over, it subsegments, you BX to how think same say, a period see X- do in do of X-year out? do How

Marc Suidan

then solution way the Jeff, we is a I should with it year-over-year should a already continue. at finish disruptive at XXXX XX%. we growing see mean, market BX XX% that in growing that's plus It's and XX%,

So the there. we'll market beat

side, would And side, On of the the the for because of half contracts. the about mean, at afterwards, the multiyear price the is you they'll year increase of if since I pretty backup on exit grow I -- X%. tailwinds first the the minus will think customer so much it say backup that it we the the majority from follow count consumers so have that would earnings -- would release year

be the year. for will flattish it overall, So

longer is the it's versus overall consumer. growth side base, business a BX we're solution. side, cross-selling that business, backup the term, versus The a opportunity opportunity. decline installed building since there's secular the backup side between about in but is And and the business macro it's the good a consumer the good frankly, more

Jeff Van Rhee

one progressing how just Marc, the as last sneak in. just Yes. could you through If year? see do them I margins, go Gross we

Marc Suidan

that stable. into Pretty margin. any changes should year. pretty don't next adjusted gross exited we major the with XX% That be We year see in stable

Operator

next Kidron excuse of Oppenheimer. with question call line from or -- next the comes our Ittai And me, the

Ittai Kidron

I levered us they're to within you customer. is cases the one Looks that guess use use not dig the customer. an little wanted if into customer are it on on to thing the another towards AI, business just meaning color using more well, great I actually the give Gleb interesting. But who what for Marc a perhaps as stuff. commentary. maybe it's it's in cases they're can AI doing, have commentary, Gleb, and Great bit a AI

growth. their growth into will help translate me be understand your is to going helpful. way what in So That

Gleb Budman

Yes. the these customers, question. makes to -- Thanks their absolute tied many very The from directly it sense. And for are growth. of we

We are succeed. to vendor them their strategic enables that

pipeline -- the down data what. bit, which think components breaking we the different of little of AI AI broadly, a doing pipeline So depending on there's are X that customers

There's it that's some it actual then cetera. So data GPUs inference processing, there's There's place, and the model train and to the data create wherever of somewhere. where all monitoring store models the run ] to coming over training, labeling, it tagging, they bring collection, data, and applications to et they get where need is to which all The use systems. they get model. of [ then the from all bot and take data where there's the the a insights, from

So each that the we most have it use one who of one uses customers these -- areas. Data areas is the customer of for. largest in of collection it

that We they're and for using have model as using us data that the across collections scraping data. all that for of are Internet the training, destination customers from for

who We around insights. from built have for they've different that to that data train years large AI photography, cetera, they're videography, models sell up or that over using have sets -- et customers

all We of have storage those customers who and using are data kinds collection for them of components.

and then of take the tools out part third-party and open-source labeling. our free which egress data use it then that next for processing, is data, data customers The to storage

piece And so they of it. use us that for

companies to is GPU the are also. on actually don't of limited because for the one heard you've AI access themselves, things innovation the availability. but one us on being significant a of training do often Model GPUs is probably We that limited

get do stack. a their they're multi-cloud to tech finding they GPU-type so And need data what is to

us using data egress it availability then is they're GPUs has whichever need. GPU of to all keep for what so with the the cloud And us, they

GPU the where are core starting pipeline. point for data building they're And so we these environments multi-cloud their

for the on for inference the we application use they've model it where models Backblaze we their then storage have of one or actual it, who of one And either their information. open-source own and they're customers where side, the are the they where built of run the lots places for inferencing through then

with on the side, And falls ] then a us. of log they monitoring the keep [ finally, obviously, lot

we are the because for customers, strategic of So these thrives the itself. data the many AI on actually obviously, location core

Marc Suidan

want to obviously front. But the on is very add nascent traction approach more and to say about incorporate I to we're What took outlook enthusiastic the everybody. because it's a that for year of rest of AI a industry incredibly we the prudent I'd the what into us

So of it And QX does. continuing pace. us bet at this just on XX% by the achieving hopefully, we XXXX,

And did loss frankly, and what be makes just that's the a also, guide QX, We not any reflecting it's out have to the clear reflected numbers. so growth up larger these this, of in there. numbers on customer in but

our what acquisition running. is and kind says. engine it pretty hot customer That's of new So much

Gleb Budman

it thing point construction just other a -- company. your one customers they're Yes. maybe on has is, one billion And specific actually, $X our of

take and to at they been an us is about not But what their AI. using do business a how talking for data backup advantage us all for They've cyber they're So while started evolve to of they actually have now company. resilience. AI

sites from safety then other the that all they're of looking their us train and that Tagging jackets, understanding components construction actually sure with for construction captured new path rest, the all all construction where doing and sites. that's hats, measures by the and proper at and are requirements capturing that the their that models they taken. cameras, up making drones that using gloves look using video of on the construction the is of to can as safety site so at footage the going inference being part the the are then And safety

are AI do include us at looking expanding to AI to that actually them. in general companies nothing cases their even with use in So have with

Ittai Kidron

BX it's That's interesting. on you're the a booking you all way, go-to-market that understand and me the year. a then, I bit through changes and -- help Marc, I in your guess, in -- made me Help anticipating commentary counterintuitive quite in right? -- is helpful. all the on understand And acceleration the growth

but because very I heading it direction for you mind in to what what, But strong needs -- happen your of here in in feels the have this? your to still like kind guess, mind you're visibility right into here,

through to And acceleration. -- not again, of because see pattern it's of the common year this type

wanted to for good hands your kind pocket about so already very needs to and And I of able still you kind you the in have to my I feel get it kind this? be to view, of make around, sure to what, just of come in versus deliver

Marc Suidan

Ittai, Yes. No, point, that's a good right.

right? if off BX. think a I So we would the factor QX, really XX% in what I we're price good in out say is Because you grew to start, increase, year-over-year

you're improvement an already in seeing So QX.

So all through and quarters these things we're so talking there. about, flowing already are on, record

all incredibly this think is win I healthy like I time, have rate. we execution right? mean this

execution. of sales consistency about is it capacity. We've doubled So our

the So up people, the you sure pipelines right terms make them generates, got right where your to train it in the it align how of ramp generates. obviously, way way, new

kind Gleb more activated right? much direct a wouldn't that sales and I that's yet, I what as too our I mean, the And we that alliance, of boils bake into numbers, into nor further right? I XXXX. that's of, to the flowing So it spoke benefits call, continuing model, did down say the for channel see think execution. these the I about

Ittai Kidron

future basis, price comment going the the it. just of I the one for a that on kind as 'XX, year, business you foreseeable just is think not year-over-year to about I forward, X% business? increase this a the exiting previous Got the made guess, think fades answer last we individual going the the or away. negative to declining you should said back on Maybe X%, on Computer Backup, but

proactive and think Is why just to squeeze price take increases the that's just and trying not long-term more there I'm and through more price the it increases? if more a about and business. of on more this longevity the case, -- approach the

Gleb Budman

actually. Yes. Ittai, this is Gleb,

as Let for Marc then well. this on add maybe touch me will a and second,

So what think decline. that in talked We I business that secular of consumer to about a change. that side is don't the expect Marc is macro specifically

businesses a us ransomware computer signing On opportunity customers, cyber also Computer do their that functionality, of year. is we for portion backup, prevention, and QX there. using significant in that enterprise launched of are resilience Backup up we business we the last see the control And

and there, we see and So do interest engagement we see some opportunity.

It's focus not plus end for some focus, as a opportunity growth the of our core it the to us growth primary getting where there. putting BX core of back is but is energy by there year company, is right? we're XX% most the

In terms the and rule increases like, it we out. don't of price

Backblaze we've we time, we one community. to a customers of who us we are thousands and an But do have of as view it's as that As the option. of support fans refer same think who customers something is the talked things worldwide hundreds before, at us it of

want to to getting make to So great a they're like value, us recommend sure others. service continue great we continue to and they feel

Operator

next Leopold the question Raymond our of from comes And Simon with line James.

Simon Leopold

is thing therefore, way the coming store data what trying data in of the a put and sizing of And than Do I'm a just some to these get to to first of about stored you to way this? use from from coming get was these I wanted a historical, The ask is sets maybe AI where BX context. I have AI sizing higher cases? percent proportion data a guess trying larger are but I imagine relatively

Gleb Budman

question. that's This Gleb. is Simon, good a

And now top things XX mentioned of one our data So the things we has that talked tenfold. the they of is are customers. of is the we grown about one X that

So newer for compared say It's growth it's of being I not a XX it but because, years is the of obviously, massive terms data fast-growing to of percentage set yet would it's business in in meaningful a part a business. as that the organization.

customer, In varies. terms sizing the of it per

us. startups. have are starting They're individual are brand-new who lots who petabytes storing with And double-digit We of we customers. customers then have small already as customers

range. the across it's So

is data Certainly, segment. is a AI -- data-intensive very very

And of companies, at So years. So moment they're revenue around XXX there's at very side starting customers ours lot that a we talked a but it's storing we something doing right? they're that are when of -- them of AI of construction of look believe that's ago some double-digit these new company. petabytes, I been opportunity. are AI They're into with billion us. this the it. about company They've just looking $X for some

a are of storing multiple companies these last X the lot in us years, with started But X year, years. that petabytes

we that companies wouldn't surprised or so many these little multiple-petabyte just and I of lots have within be lots a And those years. customers started. year if becoming up of end X

Simon Leopold

Great.

track bit announced ask I new have. of thing was lost many had here in how and other little where I've you of a The you in I'm because data about locations January, wanted to a context center Canada. And hoping get to

understand, the So new is basically how a opening one, material center? of trying to data

the efforts. the Just do are price exchange you risk or foreign a question other is, you exposed of understanding any little bit dollars? help And international to in everywhere

Gleb Budman

Yes. Thanks, Simon.

let I'll and touch component. currency on start Marc I'll the then So

So customers Europe. West in U.S. that have the U.S., Coast, can regions we and choose East Central Coast

fourth. fourth region our is this is that opened. we've So Canada the

So It's January. significant just you it's like X. said, of fairly in out us new, for in launched brand terms X it's of

that unique and did partner. the this One in things region did anchor tenant partnership with was anchor that an is an it with of we we

worked we partner, a hoping together that so data to will up built and building opposed data signed center then actually and with come, And they a center with them. the as in partnership

also go we regions how want in region, new investment us, created behind future. the for to of a and derisks that opening So it playbook effectively, other the about the

side about the and it, of that little talk bit a Marc the of on that's maybe part can then question. So

Marc Suidan

that foreign exposure no the The USD. be expenses what meaningful lower side Canadian I to are our in the Simon, and in Canadian billings there's say would on the currency Yes, would is risk. billings, majority of

in there's That sure did region risk opened get also, we started whenever with. we then make off there. that Canada, minimal quickly. quickly an and or like So we anchor the a the, first scale cost in it, set to really way the from up cost client there, initial an pretty then is data fixed to call we And also client, center by sum recovered

exposures the there's say Canada. I'd for So side on no FX major

Operator

And Ader line with the of our from next question Jason comes WB.

Jason Ader

of in after to you, just backup resurgence we've Gleb, for first a of seen as is growing resurgence software long kind wanted at market back of in double wondering, or for seen for remember growing in this target a cyber-resilience the I'm the of And protection. digits. and backup in digits have kind software that Just ransomware backups? mid-single ask benefit is plays maybe theme as I kind The market you market nice impact can the

Gleb Budman

it's good Jason. a question, Yes,

I some side in Computer think of business the additional Backup. we've interest seen

so the we long-term talked decline, secular ago, see few opportunity side in side. about on And as consumer but minutes a the we is business a

is for protection talk It's has for for companies. conversation. backup, hot obviously risk risk to not while becoming about. board-level been that Ransomware a companies the continuing against -- is a ransomware It's and very really and of And often the companies. it's best term is as form a a #X larger factor often larger become while

for Computer And so the support how But us. think that an around is the focused for an larger the some especially BX Backup opportunity that, And cyber-resilience it heavily offering. our It is go-to-market especially on with of The looking at of organizations opportunity I business. need. larger is is of opportunity there, believe our we also is that to messaging with side organizations. side us, do do there we transformation

Jason Ader

the BX Cloud as actually if was backup target. Sorry I a confusing. question meant

growth. Veeam words, others because customer the secular store acceleration and was in just of backup the trend through software, backup a Commvault are BX target other so backups is in kind this I in selling Cloud like of of case to backup folks So of -- where use obviously, like market needs that the kind the wondering software seeing and percolate

Gleb Budman

I your see. Thanks question. I for clarifying. misunderstood

So been one backup core of has and focus. cyber-resiliency -- areas is of it one is of and our

are white on that backup and plays application entertainment includes and storage, cyber solution. plays AI, which Powered So we our the and focused application we sales resilience, by all talked sales the media and IT label are including items about

significant one sales a it plays, X area us. core is be is it for absolutely growth that has been continues a So and of area to our and

Jason Ader

or one Okay. a competition, competitive then like you, would Great. we the I mean, Gleb, I maybe storage at think terms there the of you had of the couple Wasabi when last platform. for much SMB-oriented like in and and cloud for wasn't about a IPO, one also me And like competition say, know you landscape, time of with other less or like us did more today? time -- IPO But the you of partnering you very I kind competitive small same? folks at Cloudflare. you and were seeing update sits landscape and the than where closely about Can DigitalOcean just of guys. Are the on the

Gleb Budman

the of competitive currently possibly a IPO, that with where space and play in right, It's lot conversation because a time are the actually and Google the funny entering market into question remember most Amazon of you the how I some largest in. competing you at and of Microsoft, world's could isn't the a was there, companies are

Microsoft So the in in some a the companies storage that think say, and Amazon, tech has way, incredibly ways, Google evolved said then that are because have has Having happened things would there. stack. since the Google and Amazon, still Microsoft cloud much competitively realized broadly that, is not is component of I that one were I there, market important an of also

variety having with a necessarily Amazon for Microsoft that choice. data is best not reasons, and Google And the of or

other of launched of pre-IPO. storage, were a partner including our ours a various partners, storage companies a a Cloudflare is ours. partner of kind started of variety They right? offering offering. so They So have some And

the did, open had variety of performance, who's very DigitalOcean have are OVH, for want mean did, that -- because ours cloud Many I offerings. Backblaze these someone of high Vultr -- of their storage best-of-breed very these provider own for companies for who still there's a partners choose are that. companies affordable, other designed storage, customers scalable,

customers of And requirements. with support those want to partners so our their still kinds

Operator

the question next Maxwell from Capital Michaelis our of comes with Markets. And Street line Lake

Maxwell Michaelis

rate wondering year. ARR potentially was $XX,XXX growth the over I could for with you a of share if in customers

curious number shared was that in I think was what like believe QX. I related to was XX%. a I for like had you it that the year.

mean, $XX,XXX insinuate for XXXX? for growth guess BX I of for with a the guide I over does customers in that And follow-up, ARR

Marc Suidan

on it Max, this I quite $XX,XXX above, Thanks. that's what Yes. million-plus around deal that range I we in our didn't million. winning also -- moving the is or quarter. is disclose now third we're momentum kind $X on right But and what's We but really upmarket about is good. this interesting obviously Marc. of would talked there's $X has say a we're that front been mean

ongoing really we're that we're assumes been going, momentum and on that front. it's So positive headed, growth where rate where

Operator

Zach from our of Cummins final Securities. B. the line Riley with And today comes question

Unknown Analyst

Nathan what Zach core wondering X It powered When kind Backblaze your sales of are? extent sounds you Whitehill plays. to like sort was your maybe calling I ] of in upmarket by speak is Cummins. strategy. [ X other for to to key the

Gleb Budman

good Yes, question. it's a

X first So a different we're customers to are getting all in of what storage are core application have our slightly what upmarket say, the all, approach bigger. of our is to I customers. They But strategy. terms offering would

bigger. They're by customers Our customers integrated are getting because powered entertainment bigger backup deals into platforms. Media are are bigger. their are and other -- IT they getting

X all them frankly, But organizations. are larger of

the of did we whom If ARR, -- $XX,XXX ARR. the you X sample think gave which which at about -- $XXX,XXX of a talked did we one -- customers about

storage Those we about customers. customers. storage of customers that the existing expanded All from application the are talked were application The over on -- those each customers. call, $XXX,XXX by

meaningful X our momentum. say to and So upmarket I would all strategic are

Unknown Analyst

in other those it. levers the BX can you That's a aim besides you then ramp-up cost any pull are Got coming that And to for margins year, helpful. for for quarter? nice there you last as spoke

Gleb Budman

Nathan gross to margin margin cash or Zach [ operating (sic) free or you ], flows? are referring

Unknown Analyst

speak but More that can margin, Yes. operating to. anything you

Marc Suidan

$X.XX of roughly kind XXXX. will the in So be right? Yes. our leverage OpEx it -- XXXX on dollar the in is I dollar, on listen, our operating what mean, in line was for dollar

allowing line that holding the OpEx all budgeting because investments holding whole there. while us we're sales to to redeploy X-based where that line that's fund the we've able and growth, And exercise into did So capacity. been we

free that will create what of 'XX. really around and So us should leverage, some cash flow operating that's be QX to positive good right get

in Now cost opportunities, additional terms of

tell always instilling do. that's to you more the I and efficiently, that always look rethink that could culture we're Anything is everything. to going would and been available scrutiny that's at this do always we we're company

kind just just exercise the is onetime part of not we this our forward. So It's of did. that going ongoing a culture

Operator

closing And I the session now that does today. over to Gleb? will Gleb conclude for Q&A our turn that, And remarks. with call back

Gleb Budman

it. appreciate I you. Thank

this think in we're be on financial of getting I adjusted to excited free about and where QX, flow. free the getting over and both getting EBITDA over to for to growth be adjusted our EBITDA adjusted BX flow in we're QX positive, headed, basis cash an cash XX% really year, XX%

and Rule product progress I have to XX. the AI that innovations, are, Those about our opportunities excited path We're of think, general transformation and the the improvements meaningful financial way that with making go-to-market our we're to the company. seeing we we're

the want today. want feat. I the extend thank no our to Backblaze small joining special improvements platform to we've go-to-market changes and is I everyone a So front on and the team, us thanks to made for on

did amazing changes. the In embracing hard, in addition, cost-cutting the while was our employees QX job we have an done

commitment Thank as partners the storage of I see next will for believe call. to We'll for drive a quarter. proud in the result. on team's value joining us and you you significant customers innovation create and I'm shareholder our

Operator

today's disconnect. and great Thanks, everyone. Ladies call. you day, gentlemen, may that a concludes Once Have Gleb. again,

Backblaze (BLZE) 25 Feb 252024 Q4 Earnings call transcript