BLZE

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How BLZE rewrote its risk factors

10-K ITEM 1A · FY2024 → FY2025

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A discussion and analysis of our financial condition and results of operations for the year ended December 31, 2025 compared to the year ended December 31, 2024 is presented below.
A discussion regarding our financial condition and results of operations for the year ended December 31, 2024 compared to the year ended December 31, 2023 can be found under Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2024 , filed with the SEC on March 11, 2025.
Overview We are a high-performance cloud storage platform for data-intensive use cases in the artificial intelligence (“AI”) era and across a broad range of modern cloud workloads, designed to help customers address complex storage needs by reducing the barriers of lock-in, complexity, and cost.
Our mission is to make customers succeed by solving their toughest data storage challenges.
We aim to achieve this mission through our purpose-built, web-scale software infrastructure, which is essential to the global data center and compute infrastructure buildout.
We provide cloud services through a purpose-built, web-scale software infrastructure built on commodity hardware.
We believe that by offering a cloud storage solution optimized for price-to-performance at scale, engineered for efficiency, and priced predictably, we substantially reduce the cost, complexity and frustration of storing, using, and protecting data, and we empower customers to focus on their core business operations.
Customers use us to support their AI workflows, help ensure the cyber-resilience of their organizations, streamline their media workflows, and enable a variety of other data-focused application and information technology (“IT”) needs.
Our direct sales activities, channel and technology partners, and referrals from our community of brand advocates, combined with our highly efficient and self-serve customer acquisition model have allowed us to attract over 500,000 customers as of December 31, 2025, and our direct sales activities have historically supported us in acquiring larger customers, including leading neocloud platforms via our Powered by Backblaze program.
As we move up-market, we expect our direct sales activities to increasingly contribute to the acquisition of customers like these.
Our customers use our Backblaze Storage Cloud platform across more than 175 countries to store and protect their data with an aggregate of approximately 5 billion gigabytes of data storage under management.
Our Backblaze Storage Cloud provides a platform that is the foundation for our B2 Cloud Storage Infrastructure-as-a-Service (“IaaS”) offering, our B2 Overdrive high-performance IaaS offering, our Powered by Backblaze white label IaaS offering, and our Computer Backup Software-as-a-Service (“SaaS”) offering.
B2 Overdrive is built on the foundation of B2 Cloud Storage.
It enables AI and data-driven workloads with up to 1Tbps throughput, unlimited free egress, and private networking support.
Powered by Backblaze is also built on the foundation of B2 Cloud Storage.
It enables neocloud and application platforms to bolster existing products or expand their product offerings with cloud storage via the Backblaze Partner API and custom domains (CNAME) technology.
Computer Backup automatically backs up data from laptops and desktops for businesses and individuals.
We focus on specialized storage and an open cloud ecosystem that integrates with a broad range of partners.
Ongoing investment in our technology platform and related features has driven customer, community, and product milestones.
Starting in the second half of 2024, we initiated a go-to-market transformation that is actively moving the company up-market, which has been evidenced by the signing of multiple deals with total contract values over $1.0 million each and revenue growth for B2 Cloud Storage of 26% for the year ended December 31, 2025 compared to 2024.
Product Updates To support our up-market expansion and evolving customer needs, we recently launched B2 Overdrive, our premium-priced, ultra high-throughput performance cloud storage solution, designed to meet the demands of data-intensive workloads including AI and machine-learning training, large-scale analytics, high-performance computing, and media processing.
We also introduced a suite of enterprise cyber security features including AI-powered anomaly alerts, mandatory multifactor authentication, bucket access logging, and Enterprise Web Console which streamlines role-based administrative control in complex environments to help with cybersecurity and account management.
These launches expand our addressable market among enterprise and AI-driven customers and lay the groundwork for further innovation to drive differentiated value for these customers.
Financial Developments Banking Relationship and Line of Credit On June 4, 2025, we entered into a credit agreement with Citizens Bank, N.A., establishing a senior secured revolving credit facility with a total borrowing capacity of up to $20.0 million to be used for general corporate purposes and working capital needs.
As of December 31, 2025, the Company had no outstanding borrowings under this facility. 2025 Restructuring and Transformation Plan In November 2025, we initiated a restructuring and transformation plan designed primarily to improve efficiency and enhance the performance of our sales and marketing functions to support our go-to-market initiatives (the “2025 Restructuring and Transformation Plan”).
The 2025 Restructuring and Transformation Plan includes the reallocation of resources, the redesign of sales and marketing strategies and processes, and other corporate actions.
During the year ended December 31, 2025, we incurred charges of approximately $2.5 million, including employee termination expenses, an impairment charge related to our exit from our corporate headquarters facility, and other transformation costs.
We expect to incur additional charges of approximately $4.7 million to $7.5 million through the first quarter of 2027, at which time the 2025 Restructuring Plan is expected to be completed.
These charges include estimated employee termination expenses of approximately $ 0.8 million to $ 1.2 million, and other business transformation costs.
Share Repurchase Program In August 2025, our Board of Directors approved a share repurchase program authorizing us to repurchase up to $10.0 million of our Class A common stock through August 1, 2026.
The program is intended to offset dilution resulting from stock-based compensation.
Repurchases are to be funded from the proceeds of employee stock option exercises and from employee contributions under the 2021 Employee Stock Purchase Plan.
Our Business Model Our solutions are designed to serve a wide range of customers from individuals and small businesses to large enterprises across all industries.
Our business model is supported by a highly efficient cloud storage platform built on proprietary software and commodity hardware, which enables us to deliver predictable pricing and attractive price-to-performance at scale.
Our two primary cloud services are B2 Cloud Storage and Computer Backup, which together enable customers to store, use, and protect their data across a broad variety of use cases. • B2 Cloud Storage enables customers to store and manage data for use cases ranging from backup and archive to application storage, ransomware protection, and AI/ML workloads.
B2 Cloud Storage operates as an IaaS model, allowing customers to scale usage dynamically on a pay-as-you-go basis or purchase capacity or committed contracts for greater predictability.
In addition to our standard B2 Cloud Storage offering, we provide B2 Overdrive, a premium high-performance storage option designed for data-intensive and AI-driven workloads that require high sustained throughput and low latency.
Developers and partners can embed our storage into their applications, while enterprise customers use B2 Cloud Storage to support large-scale, data-intensive workflows. • Computer Backup is designed to provide virtually unlimited backup for businesses and individuals in a SaaS subscription model using primarily flat-rate pricing.
Customers use Computer Backup to automatically and continuously back up data from desktops, laptops, and external drives, with data recoverable at any time through our Backblaze Storage Cloud.
We believe our pricing is simple and transparent, with fees and terms that are generally shared publicly on our website.

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Overview We are a leading specialized storage cloud platform, providing businesses and consumers cloud services to store, use, and protect their data in an easy and affordable manner.
We provide these cloud services through a purpose-built, web-scale software infrastructure built on commodity hardware.
We believe that by offering an easy to use, cost-effective, performant cloud storage solution, and thereby substantially reducing the cost, complexity and frustration of storing, using, and protecting data, we can empower customers to focus on their core business operations.
Customers use us to support their AI workflows, help ensure the cyber-resilience of their organizations, streamline their media workflows, and enable a variety of other data-focused application and IT needs.
Our direct sales activities, channel and technology partners, and referrals from our community of brand advocates, com bined with our highly efficient and self-serve customer acquisition model have allowed us to attract over 500,000 customers as of December 31, 2024, and our direct sales activities have historically supported us in acquiring larger customers.
As we seek to move up-market, we expect our direct sales activities to increasingly contribute to the acquisition of these customers.
Our customers use our Storage Cloud platform across more than 175 countries to store and protect their data with an aggregate of approximately 4 billion gigabytes of data storage under management.
Our Backblaze Storage Cloud provides a platform that is the foundation for our B2 Cloud Storage Infrastructure-as-a-Service (IaaS) offering and our Backblaze Computer Backup Software-as-a-Service (SaaS) offering.
Backblaze Computer Backup automatically backs up data from laptops and desktops for businesses and individuals.
We believe that focusing on storage use cases and promoting an open cloud ecosystem allows us to integrate well with a broad range of partners.
We have consistently invested in innovation, showcased by our technology platform and related features, allowing us to achieve customer, community, and product milestones.
In 2024, we partnered with a leader in hybrid cloud solutions in Canada, which will extend our market reach in this region.
As part of the partnership, we opened a new data center region in Canada.
Our partner delivers managed cloud services, application development and modernization, backup and disaster recovery, security, and compliance solutions to businesses in Canada and around the world.
Our operations and financial performance depend in part on economic conditions, regulatory changes, and the impact these factors have on our business.
The change in administration as a result of the 2024 U.S. presidential election could lead to changes in these and other areas.
We are monitoring actions and proposals, evaluating potential impacts, working with our vendors to understand any potential impacts on them, and at this point do not foresee any material impact on our business based on the actions taken to date.
Price Increases and Product Updates During the third quarter of 2023, we announced pricing increases and product updates across our Computer Backup and B2 Cloud Storage products, which became effective in October 2023.
Effective October 3, 2023, we increased the monthly B2 pay-as-you-go storage rate from $5 to $6 per terabyte; the price of our B2 Reserve offering and other committed contracts did not change.
We also made egress free for all B2 Cloud Storage customers up to 3x per month the amount of data they store with us.
In addition, we increased the pricing of our Computer Backup offering to $9 per month, or $99 for a 1-year subscription plan and $189 for a 2-year subscription plan.
As part of the Computer Backup price increase, we also bundled One Year Extended Version History, which previously had been a $2 per month add-on expense if customers selected that option.
The Computer Backup price increase is being phased in over time based on renewal timing.
As part of our leadership in the open cloud movement, we also announced free egress (up to 3x), significant performance improvements, and new functionality to increasingly support our customers’ ability to break free from limitations on their data. 2024 Financial Developments Follow-On Public Offering On November 20, 2024, we issued and sold an aggregate of 6,250,000 shares (the “Shares”) of our Class A common stock, par value $0.0001 per share (the “Common Stock”) at a public offering price of $5.60 per share (the “Follow-On Offering”).
We also granted the underwriters an option to purchase up to an additional 937,500 shares of Common Stock at the same per-share price of $5.60 per share, which they exercised.
We received net proceeds of $37.4 million from the offering, after deducting the underwriting discounts and commissions and other offering expenses.
Banking Relationship and Line of Credit On December 10, 2024, we voluntarily terminated our Loan and Security Agreement with City National Bank, dated October 21, 2021, as amended, which included a revolving line of credit that was 100% collateralized by cash held by us.
At the time of termination, no amounts were outstanding under the revolving line of credit, as we had fully paid down the revolving credit amount following the completion of our Follow-On Offering in November 2024. 2024 Restructuring Plan In November 2024, we implemented a restructuring plan intended to improve our cost structure and operating efficiency (the “2024 Restructuring Plan”).
The 2024 Restructuring Plan included a reduction in headcount and in our facilities footprint at our corporate headquarters.
Consolidated Financial Statements — Note 16.
Restructuring — Restructuring Plans” for additional information.
Our Business Model Our solutions are designed for individuals and businesses of all sizes, from large-scale enterprise businesses to small and medium-sized businesses (“SMB”) and across all industries.
We generate revenue primarily from our two cloud services: • Backblaze B2 Cloud Storage, which enables customers to store data for a wide range of use cases, and for developers to embed our platform into their applications.
In both cases, our customers use this offering on a consumption-based or capacity-based model or committed contract basis, and • Backblaze Computer Backup, which provides virtually unlimited backup to businesses and consumers in a SaaS subscription model using primarily flat-rate pricing.
We believe our pricing is simple and straightforward, with fees and terms that are generally shared transparently on our website.
We believe we provide simple pricing for usage of our cloud services and increase revenue per customer through our customers’ natural data growth.
Additionally, we provide customers with additional value through cross-sell, upsell, and use case expansion that can result in additional revenue per customer.
These options for cross-selling and upselling include the following: • Cross-Sell: After adopting any of our products, customers may expand to other products as their use cases grow, including Computer Backup customers who adopt B2 Cloud Storage to facilitate broader use cases.
Adopting additional products expands usage of our platform. • Upsell: Customers can choose to use various features and services for additional fees, such as Enterprise Control, Snapshots, cloud replication, and enhanced support tiers.
For example, our Computer Backup cloud service offers Enterprise Control, which provides larger customers with more management for an additional cost.

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