Backblaze, Inc. (BLZE): BCG Matrix [Dec-2025 Updated]

You're looking for a clear-eyed view of Backblaze, Inc. (BLZE)'s business mix as of late 2025, and the BCG Matrix perfectly maps their capital priorities: it's a classic pivot where the stable Computer Backup Cash Cow, generating $65.4 million in ARR with 90% retention, is funding the high-growth B2 Cloud Storage Star, which saw revenue hit $20.7 million with 28% year-over-year growth in Q3 2025. This dynamic shows management is clearly investing the dependable revenue into the enterprise platform, but you'll want to see which new ventures like B2 Overdrive are still unproven Question Marks and which legacy areas are becoming Dogs. Dive in below to see the full strategic breakdown of where Backblaze, Inc. is placing its bets right now.

Background of Backblaze, Inc. (BLZE)

You're looking at Backblaze, Inc. (BLZE) as of late 2025, and the story is one of improving operational efficiency while navigating growth in a competitive cloud market. Backblaze, Inc. positions itself as the high-performance cloud storage platform built for the AI era, focusing on offering predictable costs and S3-compatibility without vendor lock-in. Honestly, their pitch centers on being the cost-effective infrastructure layer for data-intensive workflows, which is definitely resonating with some customers, especially in AI.

The company's revenue streams are clearly split between two main product lines. First, you have B2 Cloud Storage, which is clearly the growth engine right now. In the third quarter of 2025, B2 Cloud Storage revenue hit $20.7 million, marking a strong 28% year-over-year increase. This segment is also driving the overall Annual Recurring Revenue (ARR), which stood at $147.2 million as of the end of Q3 2025, with B2 ARR at $81.8 million.

The second segment is Computer Backup, which, to be fair, is much more mature and is currently showing flat performance. For the same third quarter of 2025, Computer Backup revenue was $16.5 million, which was flat compared to the prior year, and its ARR remained steady at $65.4 million. This contrast between the two segments-high growth in B2 versus stagnation in Computer Backup-is key to understanding their portfolio dynamics.

Financially, the story in Q3 2025 was about margin expansion and loss reduction, even if total revenue growth was a bit tempered. Total revenue for the quarter was $37.2 million, a 14% increase YoY, which narrowly missed some analyst forecasts. However, the profitability metrics looked much better; gross margin expanded to 62%, and Adjusted EBITDA reached $8.4 million, representing a 23% margin. The GAAP net loss significantly narrowed to $3.8 million from $12.8 million in Q3 2024, and CEO Gleb Budman noted they remained on track to be free-cash-flow positive in Q4.

Strategically, Backblaze, Inc. is leaning hard into the AI trend, noting that AI-related storage now accounts for roughly 25% of their new business. They even launched B2 Overdrive in April 2025, which is a premium offering designed for ultra-high throughput needed for machine-learning training and large analytics. They are actively trying to move up-market, focusing on larger enterprise customers, though this shift has also meant some larger deals are taking longer to close, which impacted the B2 growth rate slightly in the quarter.

Backblaze, Inc. (BLZE) - BCG Matrix: Stars

You're looking at the engine driving the current growth story for Backblaze, Inc., which firmly places the B2 Cloud Storage segment in the Star quadrant. This unit is characterized by high market share in a rapidly expanding market-the cloud storage space, particularly for data-intensive applications like Artificial Intelligence (AI). The numbers from the third quarter of 2025 clearly show this momentum.

Backblaze B2 Cloud Storage posted a revenue of $20.7 million for Q3 2025. This figure represents a significant year-over-year (YoY) revenue growth rate of 28%, which is substantially outpacing the overall company revenue growth of 14% YoY ($37.2 million total revenue). This high growth rate is exactly what defines a Star; it's leading the charge, but it definitely consumes cash to maintain that pace and capture market share.

The strength in customer expansion is concrete, evidenced by the B2 Cloud Storage Net Revenue Retention (NRR) rate hitting 110% in Q3 2025. This means existing customers spent 10% more on average than they did in the prior comparable period, which is a strong indicator of product stickiness and successful upselling within a growing base. The strategic narrative supporting this performance positions Backblaze B2 Cloud Storage as the cost-effective, S3-compatible alternative when compared directly against the hyperscalers, especially for customers running data-intensive AI workloads.

The market is clearly responding to this value proposition, as management noted that AI-related storage now accounts for approximately 25% of new business. To sustain this leadership position, Backblaze, Inc. must continue investing heavily in promotion and placement, which is typical for a Star. Here's a quick look at the indicators confirming this high-growth, high-share status:

• B2 Cloud Storage Annual Recurring Revenue (ARR): $81.8 million.
• B2 Cloud Storage YoY ARR Growth: 26%.
• Gross Customer Retention Rate (B2): 89%.
• Recent Wins: Including a new seven-figure expansion deal.
• Strategic Focus: Avoiding high egress costs associated with larger cloud providers.

If Backblaze, Inc. can maintain this success as the high-growth market for cloud storage matures-or as they successfully transition this segment into a more established, cash-generating role-this unit is definitely positioned to evolve into a Cash Cow down the line. Finance: draft the Q4 2025 cash flow projection factoring in continued B2 investment by Monday.

Backblaze, Inc. (BLZE) - BCG Matrix: Cash Cows

You're looking at the bedrock of Backblaze, Inc.'s current financial stability, which is definitely the Computer Backup business unit. This product line fits the Cash Cow profile perfectly: it operates in a mature market, has achieved a high market share, and now primarily serves to generate predictable cash flow rather than drive aggressive top-line growth. It's the engine that keeps the lights on while the newer, higher-growth B2 Cloud Storage segment chases market leadership.

Backblaze Computer Backup is a mature, sticky consumer/prosumer product. Its established nature is clearly reflected in the customer loyalty metrics we see for Q3 2025. The gross customer retention rate for this segment held steady at 90% in Q3 2025, the same as in Q3 2024. This high rate shows that once customers adopt the service, they find it vital and keep paying for it, which is exactly what you want from a Cash Cow.

Here are the key operational figures for the Computer Backup segment as of the end of Q3 2025:

This segment generates a stable Annual Recurring Revenue (ARR) of $65.4 million as of Q3 2025. The fact that this ARR is flat YoY, alongside a Net Revenue Retention Rate (NRR) of 101%, confirms its low-growth status. The NRR being just over 100% means that while you are keeping almost all your customers, the expansion revenue from them is barely outpacing any contraction or churn, which is typical for a fully penetrated, mature product.

The stability of this revenue stream is critical because it provides the capital and operating leverage to fund the high-growth B2 investments. While segment-specific gross margin isn't always broken out, the overall company performance suggests strong underlying profitability in the mature segments. For instance, Backblaze, Inc. reported an overall Gross Profit Margin of 62% in Q3 2025, up from 55% in Q3 2024. If you look at the Adjusted Gross Profit Margin, it hit 79% in Q3 2025. You can bet the Computer Backup business, with its high stickiness and low need for new customer acquisition spending, is contributing significantly to that high margin profile.

Because this segment is a market leader that generates more cash than it consumes, management's focus shifts from aggressive promotion to efficiency. You see this in the low growth expectations and the focus on maintaining the user base. The strategy here is to 'milk' the gains passively, which means investments are targeted:

• Maintain current service levels to preserve the 90% GCR.
• Invest in infrastructure efficiency to improve the overall 62% gross margin.
• Use the resulting cash flow to cover corporate administrative costs.
• Fund the R&D and marketing required for the Question Mark/Star segments, like B2 Cloud Storage.

The Computer Backup unit provides the financial cushion. For example, the company's Adjusted EBITDA was $8.4 million in Q3 2025, representing 23% of revenue, a major improvement from 12% a year prior. That operating leverage is built on the predictable revenue base of the Cash Cows.

Finance: draft the capital allocation plan showing Computer Backup's contribution to the $8.4 million Adjusted EBITDA by next Tuesday.

Backblaze, Inc. (BLZE) - BCG Matrix: Dogs

The core Computer Backup segment's performance in the third quarter of 2025 signals market maturity, with its revenue holding steady at $16.5 million, representing 0% year-over-year growth. This flat trajectory contrasts sharply with the growth engine of the business.

Retention metrics further define this segment as a Dog. The Net Revenue Retention (NRR) for Computer Backup customers settled at 101% for Q3 2025. This figure is a notable drop from the 109% recorded in the third quarter of 2024, indicating that expansion revenue from existing customers is barely outpacing revenue lost from churn.

Here's a quick comparison of the two main segments as of Q3 2025:

The low market share and low growth profile, evidenced by the flat revenue and NRR barely above parity, position Computer Backup as a unit where resources should be minimized. The segment requires ongoing maintenance costs to support its installed base, yet it consumes cash flow potential by tying up capital that could be deployed to higher-growth areas like B2 Cloud Storage, which posted $20.7 million in revenue and 28% YoY growth in the same period.

The low-value, high-churn portion of the Computer Backup customer base is quantified by that 101% NRR. This suggests that the effort to retain and grow these specific customers yields minimal incremental return relative to the resources expended on support and infrastructure.

Backblaze, Inc. (BLZE) - BCG Matrix: Question Marks

You're looking at the new, high-potential areas of Backblaze, Inc. that are soaking up cash now but could become major revenue drivers later. These are the Question Marks-products in fast-growing markets, like AI infrastructure, where Backblaze, Inc. has yet to secure a dominant position. The entire strategy here is about aggressive investment to capture market share quickly, or risk letting these units become Dogs.

B2 Cloud Storage Overdrive: The High-Performance Bet

The B2 Cloud Storage Overdrive tier, launched in April 2025, is a prime example of a Question Mark. It targets AI/ML training and HPC workloads demanding speed, offering up to 1 Tbps sustained throughput. The pricing starts at $15 per terabyte per month, which Backblaze, Inc. positions as a fraction of competitors' costs, especially since it includes unlimited free egress. This product is designed for sales-assisted organizations with multi-petabyte workloads. The early traction is there; Backblaze, Inc. signed its first six-figure B2 Overdrive customer in early Q3 2025, just two months post-launch. This product consumes cash to build out the necessary networking and storage pods, aiming to convert high-demand, high-growth AI workloads into stable revenue.

Go-to-Market Phase 2 and Large Deal Velocity

Backblaze, Inc. is actively trying to convert this high-growth potential into realized revenue through its go-to-market (GTM) transformation Phase 2, which started in Q3 2025. The goal is accelerating both self-serve and direct sales velocity. The company wants a higher 30 percent growth rate for B2 Cloud Storage, but is finding that securing the large, multi-million dollar, multi-year contracts is taking longer. This effort is cash-intensive, requiring investment in sales operations talent and systems. The market is responding to the enterprise push, evidenced by signing a record Total Contract Value Deal in Q1 2025, a multi-million dollar, multi-year commitment. Still, the B2 Cloud Storage growth rate for Q3 2025 came in at 28 percent year-over-year, which management noted was below the 30 percent target set at the start of the year.

Here's a look at the recent financial context for these growth investments:

New Geographic Expansion Efforts

To support the high-growth AI/HPC segment and offer geographically diverse options, Backblaze, Inc. made significant upfront investments in infrastructure expansion. In July 2025, the company announced a significant expansion of its data center presence in its US-East region. This move doubled the data footprint in the US-East region, requiring substantial capital expenditure for capacity and networking upgrades, including connection to Internet2's network (I2PX) for high-speed data transfer. This expansion is aimed at capturing market share in complex workflows where current market penetration is low compared to established players, fitting the Question Mark profile perfectly.

The key characteristics driving these units into the Question Mark quadrant are:

• High growth market focus (AI/HPC workloads)
• New product launch (B2 Overdrive)
• Low current market share in the high-performance tier
• Significant upfront investment required (GTM Phase 2, US-East expansion)
• Cash consumption, with Adjusted Free Cash Flow at $(9.5) million for the nine months ended September 30, 2025