Shares of Backblaze (BLZE +26.94%) rose sharply on Tuesday after the cloud storage platform's second-quarter financial results exceeded investors' expectations.
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AI-fueled gains
Backblaze's revenue climbed 18% year over year to $42.7 million, driven by a 34% surge in its B2 Cloud Storage revenue to $26.6 million.
By integrating specialized hardware and software, Backblaze can offer high-performance yet affordable storage solutions for artificial intelligence (AI) and other data-intensive workloads.
That value proposition is helping Backblaze win new customers. Clients generating annual recurring revenue of $50,000 or more surged 57%.
Backblaze is also doing an admirable job of retaining and expanding its relationships with its existing customers. The company's net revenue retention rate for its B2 Cloud Storage offering checked in at an impressive 113%.
NASDAQ: BLZE
Key Data Points
All told, Backblaze's adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) nearly doubled to $12.8 million.
Moreover, Backblaze's adjusted earnings per share of $0.08 were four times Wall Street's estimate of $0.02.
Partnering with an AI leader
These strong results prompted Backblaze to boost its full-year revenue guidance to roughly $173 million, up from a prior forecast of $162.5 million. Management also lifted its adjusted EBITDA margin target to 28% from 24%.
Better still, the storage specialist entered into a more than 5-year $335 million collaboration with AI cloud infrastructure developer CoreWeave, which Backblaze says validates its status as a "strategic storage tier provider for AI workloads at massive scale."
As part of the deal, CoreWeave acquired warrants valued at roughly $22 million, giving the AI leader a vested interest in Backblaze's success.
"AI workloads need a capacity storage layer that can scale to exabytes, while delivering performance at attractive economics," CEO Gleb Budman said. "That is where Backblaze is built to win."
