GET DAILY SIGNALSBackblaze (BLZE) Delivers Strong Q3 Beat as B2 Cloud Storage Accelerates and Shares Jump +33% After Hours
Key Takeaways
- Backblaze reported adjusted earnings per share (EPS, or profit per share) of $0.09, beating the consensus estimate of $0.05.
- Total revenue rose 26% year over year (YoY) to $46.7 million, above Wall Street's expectations.
- B2 Cloud Storage revenue climbed 47% to $30.5 million, its fastest growth rate in ten quarters.
- The company raised its full-year 2026 revenue guidance to $177.8 million–$178.2 million, up from a prior range of $172 million–$174 million.
- On a Generally Accepted Accounting Principles (GAAP) basis, the net loss narrowed to $2.4 million, or $0.04 per share, from a $3.8 million loss a year earlier.
- Shares jumped about 33% in after-hours trading following the report, according to MarketWatch.
- For more context on the company's Major News, Today's Price Move, Price Targets, and Forecast, explore the additional pages dedicated to BLZE.
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Earnings Context and Why It Matters
Backblaze, a specialized cloud storage and data backup platform, has spent recent quarters pivoting upmarket through its B2 Cloud Storage business while managing a slower-growing Computer Backup segment. Heading into the third quarter of 2026, I was watching whether B2's accelerating demand for artificial intelligence (AI) and data-intensive workloads could offset rising infrastructure costs. This report matters because it tests whether that growth is durable enough to justify a sharp increase in capital spending. With the company also carrying a history of cumulative losses, the market is focused not only on top-line momentum but also on profitability metrics such as adjusted EBITDA and free cash flow. I also checked this using Tickeron’s AI Screener to see how the stock compares to others in the industry.
Reported Results
Backblaze posted third-quarter 2026 revenue of $46.7 million, a 26% increase year over year and ahead of analyst forecasts. Adjusted EPS came in at $0.09, exceeding the consensus estimate of $0.05. On a GAAP basis, the company recorded a net loss of $2.4 million, or $0.04 per share, narrowing from a $3.8 million loss, or $0.07 per share, in the same period last year.
The standout was B2 Cloud Storage, which grew 47% to $30.5 million and now represents nearly two-thirds of total revenue. B2 Annual Recurring Revenue (ARR) rose 53% to $127 million, while net revenue retention improved to 115%. Adjusted EBITDA margin expanded to 33% from 23% a year earlier. Management also lifted its full-year 2026 revenue outlook to $177.8 million–$178.2 million and guided fourth-quarter revenue to $49.8 million–$50.2 million, both above consensus. From what I see, the acceleration in B2 stands out as the clearest signal of demand strength.
Market Reaction and Investor Sentiment
Investors responded enthusiastically to the report. BLZE shares closed the regular session down 2.5% at $7.40, then surged roughly 33% to $9.84 in after-hours trading, according to MarketWatch. The stock was up about 59% year to date entering the report.
The positive reaction reflects a combination of factors: revenue growth that accelerated from 18% in the second quarter, a meaningful EPS beat, and a third consecutive raise to full-year guidance. However, sentiment is tempered by the capital-intensive nature of the growth. Management signaled that capital expenditures are expected to rise sharply over the next year to support capacity for large AI-related contracts, a dynamic that some analysts view as a key source of risk. One thing that stands out is how quickly the market priced in the improved outlook.
Forward Outlook and Key Factors to Monitor
Following this earnings event, several themes will shape how investors evaluate BLZE in the coming quarters. First is the pace and funding of capacity expansion. Management has guided for a roughly tenfold increase in capex over the next year, with fourth-quarter property and equipment spending projected between $65 million and $83 million. That heavy investment supports major neocloud and AI-related contracts, but it also means gross margin could compress by an estimated three to six percentage points in the first half of 2027 as depreciation runs ahead of revenue.
Second, watch B2 Cloud Storage growth sustainability. Much of the current acceleration is tied to large customer ramps and a pay-as-you-go price increase that took effect in May. Investors will look for evidence that demand is broadening beyond a handful of large accounts rather than becoming concentrated in a few high-value contracts. I’m watching this closely as the next few quarters will clarify whether the momentum broadens.
Finally, monitor the Computer Backup segment, which has been a long-running drag but declined only modestly year over year. Any stabilization there could further support overall growth and retention metrics. While management's raised guidance signals confidence, the balance between top-line acceleration and rising infrastructure costs will remain the central question for the stock.
Integrating Tickeron AI Tools into My Research
I regularly turn to Tickeron’s AI Screener when evaluating names like Backblaze. It allows me to filter for technical patterns, fundamentals, and AI-driven signals across thousands of stocks and ETFs, helping surface comparable ideas in the cloud storage space more efficiently than manual checks. The tool has become a standard part of how I cross-reference earnings momentum with broader sector trends.
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Contributor
Sergey Savastiouk, Ph.D. has a degree in Applied Mathematics from Moscow University and has extensive experience as an entrepreneur, investor, manager, and mathematician. His professional expertise is in applied mathematics, mathematical modeling, system and pattern analysis, and software and hardware system integration. He has served as the CEO of several hi-tech start-up companies and nonprofit organizations, which has given him proven capabilities in business strategy for high-tech start-up companies, market assessment, company formation, team building, product development, marketing, and sales. He has published numerous articles in journals and magazines on related fields. As a retail investor, he spent 15 years developing his proprietary trading and quantitative algorithms (now Tickeron’s A.I.), which brought him significant returns in trading the stock market. His current work and goal in founding Tickeron is to bring professional, sophisticated stock market analysis capabilities to retail investors via an easy-to-use interface.
BLZE's RSI Oscillator descends into oversold zone
The RSI Oscillator for BLZE moved into overbought territory on October 30, 2026. Be on the watch for a price drop or consolidation in the future -- when this happens, think about selling the stock or exploring put options.
Technical Analysis (Indicators)
Bullish Trend Analysis
The Stochastic Oscillator suggests the stock price trend may be in a reversal from a downward trend to an upward trend. 52 of 64 cases where BLZE's Stochastic Oscillator exited the oversold zone resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are 81%.
Following a +10.91% 3-day Advance, the price is estimated to grow further. Considering data from situations where BLZE advanced for three days, in 234 of 291 cases, the price rose further within the following month. The odds of a continued upward trend are 80%.
BLZE may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.
Bearish Trend Analysis
The Momentum Indicator moved below the 0 level on October 06, 2026. You may want to consider selling the stock, shorting the stock, or exploring put options on BLZE as a result. In 70 of 86 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are 81%.
The Moving Average Convergence Divergence Histogram (MACD) for BLZE turned negative on October 09, 2026. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 44 similar instances when the indicator turned negative. In 34 of the 44 cases the stock turned lower in the days that followed. This puts the odds of success at 77%.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where BLZE declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 83%.
The Aroon Indicator for BLZE entered a downward trend on October 30, 2026. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
Fundamental Analysis (Ratings)
The Tickeron PE Growth Rating for this company is 12 (best 1 - 100 worst), pointing to outstanding earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Valuation Rating of 20 (best 1 - 100 worst) indicates that the company is slightly undervalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (5.306) is normal, around the industry mean (16.752). P/E Ratio (-21.686) is within average values for comparable stocks, (58.881). Projected Growth (PEG Ratio) (0.000) is also within normal values, averaging (3.648). Dividend Yield (0.000) settles around the average of (0.269) among similar stocks. P/S Ratio (4.936) is also within normal values, averaging (103.889).
The Tickeron Price Growth Rating for this company is 65 (best 1 - 100 worst), indicating fairly steady price growth. BLZE’s price grows at a lower rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron SMR rating for this company is 96 (best 1 - 100 worst), indicating weak sales and an unprofitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Profit vs. Risk Rating rating for this company is 100 (best 1 - 100 worst), indicating that the returns do not compensate for the risks. BLZE’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 91, placing this stock worse than average.
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