Backblaze, Inc. Q2 2026 Earnings Call Summary

Backblaze, Inc. Q2 2026 Earnings Call Summary

Moby Intelligence

Tue, August 4, 2026 at 3:30 PM GMT+3 3 min read

• BLZE -5.91%

Strategic Performance Drivers

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• Performance beat was driven by broad-based momentum across the business, particularly in the B2 cloud storage segment which saw growth accelerate to 34% year-over-year.

• Management attributes the successful move upmarket to the increasing storage demands of AI workloads, resulting in a 57% year-over-year increase in customers contributing over $50,000 in ARR.

• The company signed the largest contract in its history, a $335 million multi-year agreement with CoreWeave, validating Backblaze as a critical capacity tier for AI infrastructure.

• Strategic focus has shifted toward providing 'architectural freedom,' allowing AI native companies to move data between fragmented cloud providers without prohibitive egress fees.

• A new managed storage approach was introduced, allowing Backblaze to run its software on customer-owned hardware to address regional data sovereignty and capital-light expansion needs.

• Operational efficiency improved significantly, with adjusted EBITDA margins expanding by 1,200 basis points due to revenue growth outpacing operating expense increases.

Outlook and Strategic Assumptions

• Full-year 2026 revenue guidance was raised by over $10 million, reflecting increased visibility from contracted demand and the anticipated ramp of the CoreWeave agreement.

• Management provided early directional commentary for 2027, expecting B2 revenue to grow over 40% year-over-year based on current minimum commitment trajectories.

• CapEx is expected to accelerate in the second half of 2026 to 55%-65% of revenue to build capacity for signed customer commitments, though the company expects to remain adjusted free cash flow neutral.

• The CoreWeave contract is expected to reach its minimum commitment levels by mid-2027, providing a predictable revenue floor for the next several years.

• Guidance philosophy remains conservative, excluding variable usage above contracted minimums and potential large deals exceeding $500,000.

Risk Factors and Structural Dynamics

• A price increase implemented on May 1 contributed 8 percentage points to B2 growth; management noted that anticipated churn from this change has not materialized.

• The CoreWeave agreement includes $22 million in warrant values which will be treated as contra-revenue, impacting reported GAAP revenue figures over the five-year term.

• Computer backup revenue declined 2% year-over-year, as the company manages this legacy segment for cash flow while focusing investment on the B2 growth engine.

• Gross margins may face a temporary headwind of a few hundred basis points as depreciation from accelerated CapEx precedes the full revenue ramp of new large-scale contracts.

Q&A Session Insights

Drivers of the 2026 guidance raise and CoreWeave ramp timing

• The $10.5 million raise is a 'healthy mix' of the Q2 beat, the May price increase, and the initial CoreWeave ramp, rather than being dominated by a single factor.

• CoreWeave is expected to hit its minimum revenue commitment levels by mid-2027.

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Status of go-to-market transformation and sales leadership changes

• The company has completed its core GTM leadership team, including a new CRO, Head of RevOps, and Head of Sales Development.

• Repeatability is improving, evidenced by adding 50 customers to the $50k+ ARR cohort in a single quarter, a volume typically seen over a full year.

Competitive dynamics and customer interest following the CoreWeave announcement

• The deal has served as a 'stamp of validation,' elevating Backblaze's status in the AI infrastructure stack and accelerating conversations with other neocloud providers.

• Management noted that the most engaged prospects are those already feeling the 'pain' of expensive flash-only storage tiers.

Economics and mechanics of the new Managed Storage offering

• Managed storage involves Backblaze personnel racking and managing software on hardware owned by the customer, creating a capital-light model for Backblaze.

• This model is particularly attractive for customers with specific data sovereignty needs or those who wish to keep assets on their own balance sheets.

Capital requirements for infrastructure build-out through 2027

• Backblaze intends to fund its accelerated CapEx through a combination of cash on hand, $150 million in available capital lease lines, and improving operating cash flows.

• Management believes they are currently well-positioned to meet demand without immediate additional equity capital raises.