A cloud storage and backup company whose platform holds over a trillion files, it sells two main services: B2 Cloud Storage for apps and AI workloads, and Computer Backup for automatically backing up people's devices. It started in 2007 in a one-bedroom Palo Alto apartment when the founders wanted to stop losing data, and it famously built and open-sourced its own cheap "Storage Pod" servers instead of buying pricey equipment. The founders even filmed early promo videos using actual flamethrowers, a theme that still echoes in its "Flamethrower" startup program.
Backblaze signed a $335.1M CoreWeave contract as Q2 revenue rose 18% to $42.7M
Backblaze signed a $335.1M multi-year CoreWeave contract expected to begin recognition in Q3. Revenue rose 18% to $42.7M and held at 63% as B2 Cloud Storage grew 34%, while the net loss narrowed to $5.1M from $6.1M a year earlier. The company is scaling toward profitability but now carries concentrated customer dependency on that one agreement.
Key takeaways
Backblaze signed a multi-year agreement with CoreWeave carrying an estimated $335.1M total contract value, with recognition expected to begin in Q3 2026.
rose 18% to $42.7M and 10.5% from Q1, driven by B2 Cloud Storage up 34% to $26.6M from $4.5M of new customers, a $1.5M May 2026 price increase, and $0.7M of existing-customer expansion, while Computer Backup declined 2% to $16.1M.
remained at 63% as higher was offset by increased and data center costs; the six-month margin improved to 62% from 60% on lower depreciation from extended asset lives and reduced personnel costs.
Section summaries
Management's Discussion and Analysis
Revenue rose 18% YoY to $42.7M driven by B2 Cloud Storage growth and a May 2026 price increase, while net loss narrowed to $5.1M.
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Total Q2 2026 grew 18% to $42.7M, with B2 Cloud Storage up 34% to $26.6M, offsetting a 2% decline in Computer Backup to $16.1M.
more than doubled to $12.8M (30% margin) from $6.6M (18% margin) a year earlier, reflecting growth and .
The operating loss narrowed to $4.2M from $5.4M in Q1 and $5.1M net loss from $6.1M a year earlier, with operating expenses falling as a percentage of to 73% from 81% as R&D dropped 7% on higher software capitalization.
G&A rose 35% on higher and restructuring costs, and the reached $232.8M with no profitability expected for the foreseeable future.
What changed
B2 Cloud Storage growth against the 24% Q1 base continued at 34% in Q2, above the flagged watch level, as the go-to-market transformation persisted.
held at 63% versus the 61% Q1 level and the 60.9% FY2025 close, with new data center costs offset by the remaining reduction rather than declining.
The $20M remained undrawn with no borrowings at quarter-end, and the $10M program announced August 2025 was not reported as used.
R&D rose on while Sales & Marketing stayed flat after headcount reductions, continuing the prior trend rather than reversing it.
Since the FY2025 10-K, a new large-customer risk emerged: the CoreWeave Agreement is expected to make results substantially dependent on a limited number of customers, a change from prior competition and cost risks.
What to watch
Start of CoreWeave recognition in Q3 2026 and whether the $335.1M contract value converts to recorded revenue as usage ramps.
B2 Cloud Storage growth next quarter against the 34% Q2 base as the May 2026 price increase annualizes.
trajectory as new data center costs and AI-infrastructure inflation meet the fading reduction through 2026.
Any draw on the $20M or execution of the $10M program.
B2 Cloud Storage growth was fueled by $4.5M from new customers, a $1.5M benefit from the May 2026 price increase, and $0.7M from existing customer expansion.
remained at 63% as higher was offset by increased and data center costs; six-month margin improved to 62% from 60% due to lower depreciation from extended asset lives and reduced personnel costs.
Operating expenses fell as a percentage of to 73% from 81%, with R&D down 7% on higher software capitalization and Sales & Marketing flat, while G&A rose 35% on higher and restructuring costs.
more than doubled to $12.8M (30% margin) from $6.6M (18% margin), reflecting growth and .
The company signed a multi-year agreement with CoreWeave with an estimated $335.1M total contract value, with recognition expected to begin in Q3 2026.
Quantitative and Qualitative Disclosures About Market Risk
Market risk arises from interest rates on leases and variable-rate debt, plus foreign-currency lease obligations; no derivatives are used.
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Interest rate risk stems from finance leases and lease financing obligations for data center hard drives, with no borrowings outstanding under the variable-rate as of June 30, 2026.
A hypothetical 100-basis-point change in interest rates is not expected to materially affect operating results or financial position, given the short-term, hold-to-maturity nature of the $32.4M in cash equivalents and $17.5M in marketable securities.
Inflation and elevated demand for AI infrastructure are raising costs for data center equipment, hard drives, semiconductors, and logistics, while tariffs and geopolitical conflicts add further cost pressure.
The company aims to mitigate inflation through upmarket growth, productivity improvements, and cost reductions, but warns it may not fully offset increased costs.
Foreign-currency exposure is limited to operating leases and certain finance lease purchase options denominated in British pounds, Canadian dollars, and Euros, with no derivative hedges currently used.
and operating expenses are entirely U.S.-dollar-denominated, so core operations are not directly subject to foreign-exchange risk.
From time to time, we may become involved in legal proceedings or be subject to claims arising in the ordinary course of our business. We are not presently a party to any legal proceedings that we believe are likely to have a material adverse effect on our business, financial co…
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From time to time, we may become involved in legal proceedings or be subject to claims arising in the ordinary course of our business. We are not presently a party to any legal proceedings that we believe are likely to have a material adverse effect on our business, financial condition, or operating results. We also generally maintain insurance to cover certain types of litigation claims, subject to policy limits, retentions and deductibles, and other factors. However, the outcome of litigation is inherently uncertain. Regardless of the outcome, litigation can also have an adverse impact on us because of defense and settlement costs, diversion of management resources, and other factors.
Persistent losses, customer concentration around CoreWeave, AI-driven infrastructure demands, and intensifying competition are the most material risks.
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The company has a history of cumulative losses ($232.8M ) and does not expect to be profitable for the foreseeable future due to ongoing scaling investments.
A new large-customer dependency is emerging: the CoreWeave Agreement is expected to make results substantially dependent on a limited number of customers, with volatility if usage ramps slower than expected.
Intensifying competition from major cloud providers (AWS, Azure, Google Cloud) and on-premises vendors could lead to pricing pressure, , or loss of market share, especially after recent price increases.
Serving AI and neocloud workloads introduces new operational and financial risks, including higher infrastructure demands, rapid technological obsolescence, and potential reputational harm from customers' AI model issues.
Cybersecurity threats are heightened by AI-enabled attacks exploiting zero-day vulnerabilities, which could lead to data breaches, service disruptions, and significant reputational and financial damage.
Managing data center capacity is increasingly challenging due to AI-driven demand, supply constraints, and equipment inflation, risking service disruptions or from over- or under-investment.