Backblaze (BLZE) Q2 2026 Earnings Call Transcript

Backblaze (NASDAQ: BLZE) reported Q2 revenue of $42.7M (+18% YoY) and adjusted EBITDA of $12.8–$13.0M, with the EBITDA margin expanding 1,200 bps to ~30%. The company signed a multiyear $335M CoreWeave agreement (largest in its history) and grew B2 Cloud Storage revenue to $26.6M (+34% YoY), while total company ARR reached $177.3M (+21% YoY). Guidance was raised: Q3 2026 revenue to $44.4M–$44.8M and full-year 2026 revenue to $172M–$174M (vs. $161.5M–$163.5M prior) and adjusted EBITDA margin to 27%–29% (vs. 23%–25%). Management expects B2 revenue growth to exceed 40% YoY in 2027, supported by contracted demand.

Analysis

Backblaze is starting to look like a real toll booth on AI data gravity, not just a legacy backup story. The important second-order effect is that the CoreWeave win validates an entire buying motion for neoclouds: once one scaled player standardizes on a capacity layer, smaller players are pressured to outsource rather than build, which should lift BLZE's average contract size and reduce reliance on low-ACV self-serve churn.

The market will likely focus on the visible contract backlog, but the nearer-term earnings quality is less clean than it appears. A meaningful share of the upside came from pricing and mix, while capex and depreciation are being pulled forward; that means reported gross margin can wobble for 1-2 quarters even if contract economics are intact. If BLZE cannot convert the current RPO into sequential B2 acceleration without a margin reset, the multiple can compress quickly because investors are already paying for a higher-growth, higher-confidence narrative.

Contrarianly, the consensus may be underestimating how much optionality is embedded in the managed-storage model. If that offering scales beyond a handful of large accounts, BLZE can win revenue without tying up as much balance sheet, which would make the equity story much better than a normal infra vendor; the flip side is execution risk rises because service delivery becomes more people- and process-intensive. For now this is a constructive but not clean buy: the stock likely has upside if investor day confirms repeatability, but it is vulnerable if management has to acknowledge slower ramp timing or a 200-300 bp gross-margin dip from depreciation before the revenue catches up.

Key Decisions for Investors

• Initiate a small starter long in BLZE common now, but size it as a validation trade rather than a full position; thesis works best if the next 1-2 quarters confirm that B2 growth stays above the low-30s and the new contract base keeps converting into RPO.
• Prefer adding on post-earnings consolidation or after the Sep. 9 investor day, not into the immediate spike; the risk/reward is better once the market digests that part of the upside was price-driven and that capex/depreciation will pressure near-term optics.
• Use a downside watch level on the operating story: if Q3/Q4 gross margin falls by more than ~200 bps sequentially or B2 NRR slips below ~110, cut the position because the market will likely re-rate the name as a growth-with-headwinds story.
• If you want defined risk, replace common stock with a call-spread structure into late 2026 to capture a rerating from contract visibility while limiting exposure to execution misses and margin volatility.
• Do not chase CRWV as a proxy for this call; BLZE is the cleaner expression of storage-layer monetization, while CoreWeave is more exposed to capex intensity and broader AI infrastructure sentiment.