Backblaze Blazes Path To Profitability: CFO Marc Suidan

‘Now we want to go upmarket with cloud engineers that consume more complex workloads, but we weren’t appealing to them as much. All our marketing over the past six months has gotten a lot more technical, so it’s starting to attract those people, and those people are the ones that spend more,’ says Backblaze CFO Marc Suidan.

Cloud storage technology developer Backblaze is on the way to profitability.

Marc Suidan, Backblaze CFO, told CRN after the San Mateo, Calif.-based company released its fiscal 2025 second-quarter financial results that it saw revenue increase year over year by 16 percent, and that revenue for its flagship B2 cloud storage offering was up 29 percent. Cash flow from operations for the first six months ended June 30 of fiscal 2025 was $8.5 million compared with $5.6 million in the same period last year.

Backblaze’s next milestone is to become GAAP net-income-positive, Suidan said.

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“This quarter was actually the first quarter that our non-GAAP operating income was positive, so another milestone in that right direction,” Suidan said. “Within a few years, we’ll become GAAP net-income-positive. I cannot give a specific year, but it’ll be a few years out.”

The growth Backblaze is experiencing stems from a review the company made of its operations and the positioning of its Backblaze B2 cloud storage platform starting about a year ago when Suidan was brought on as CFO and Jason Wakeam came in as the company’s first CRO, Suidan said.

“My role was to come and help the company change the trajectory,” he said. “The company went public in 2021, and it was all about B2 growth, but the B2 growth kept decelerating. It hit bottom in Q3 of last year, but since then it’s been going up every quarter. You know, you can’t be a growth company and have a growth company valuation if your growth is disappearing. We’ve gotten our growth back to 29 percent for the B2 platform. It’s phenomenal.”

After Suidan and Wakeam joined, Backblaze did a zero-based budget exercise in which a company allocates every dollar before spending it, Suidan said.

“We identified $8 million that we don’t need to spend anymore,” he said. “We took half of that $8 million and said, ‘Let’s put it into our go-to-market activity while revamping the way we go to market.’ So Jason, our new CRO, changed the way salespeople were selling, and then we totally transformed everything in our marketing.”

The legacy of Backblaze was very much consumer-focused but then shifted to self-serve where customers worked directly with the vendor, Suidan said.

“Now we want to go upmarket with cloud engineers that consume more complex workloads, but we weren’t appealing to them as much,” he said. “All our marketing over the past six months has gotten a lot more technical, so it’s starting to attract those people, and those people are the ones that spend more. That’s been a big driver of revenue. We used to have an average of $675 per customer. Now we’ve been landing a customer each quarter with seven-figure spends.”

As a result, he said, customers contributing over $50,000 in annual recurring revenue grew 30 percent year over year in the quarter.

The results of that change were dramatic, Suidan said.

“We were a pick-and-shovel story,” he said. “Now we have hundreds of AI companies using us as a platform to store their data to either do their training or their inference or whatever they’re doing. We’re the right platform for that.”

Looking ahead, Backblaze Thursday raised its full-year 2025 revenue expectations to between $145.0 million ans $147.0 million, up from its previous guidance of $144.0 million to $146 million.

The company also expects its third fiscal quarter B2 revenue to grow by 28 percent to 30 percent over last year, up from its previous guidance of 25 percent to 28 percent growth, with an additional 30-percent-plus growth expected in its fiscal fourth quarter.

For now, Backblaze is primarily a direct-channel vendor, with the majority of customers signing up for its service on a self-serve basis versus a minority working with the company’s sales staff, Suidan said.

He declined to discuss the actual percentage of sales that currently goes through indirect channels.

“If we consider a value-added kind of reseller, a real channel partner, where they’re bringing the lead or we’re sending our lead or selling together, we don’t disclose the rate, but it kind of follows industry trends,” he said. “I think the industry trend is usually around 20 [percent] to 30 percent of direct sales are done that way. We’re kind of consistent with that metric.”

Backblaze By The Numbers

For its fiscal 2025 second quarter ended June 30, Backblaze reported total revenue of $36.3 million, up about 16 percent over the $31.3 million the company reported for its fiscal 2024 second quarter.

Revenue topped analyst expectations by 2.42 percent, according to Zacks Consensus Estimate.

Backblaze reported a GAAP net loss of $7.1 million, or 13 cents per share, a significant improvement over the net loss of $10.3 million, or 25 cents per share, it reported last year. On a non-GAAP basis, the company reported net income of $756,000, or 1 cent per share, up from last year’s net loss of $4.8 million, or 11 cents per share.

Non-GAAP earnings beat analyst expectations of a loss of 5 cents per share, according to Zacks Consensus Estimate.