Backblaze Revenue Growth Accelerates as CoreWeave Deal Lifts Cloud Unit
The cloud storage provider's B2 segment grew 34% year over year as a $335 million agreement with CoreWeave pushed remaining performance obligations to $396 million.
Backblaze (BLZE), the cloud storage and backup provider, reported revenue growth that accelerated to 18% year over year in the second quarter of 2026, a sharp step up from 12% growth in each of the prior two quarters.
The acceleration traced to a five-year, $335 million storage agreement with CoreWeave, first announced June 23 and reiterated as the quarter's central development, which included roughly $22 million in warrants issued to the AI infrastructure company. The deal pushed remaining performance obligations up $319.5 million quarter over quarter to $396 million, giving the company a level of forward revenue visibility it had not previously disclosed.
Revenue reached $42.7 million in the quarter, up from $38.7 million in the first quarter of 2026. Net loss narrowed to $5.1 million, or $0.08 a share, from $7.1 million, or $0.13 a share, a year earlier, while non-GAAP net income rose to $5.0 million, or $0.08 a share, from $0.8 million in the year-ago quarter and $2.7 million in the first quarter of 2026. Adjusted EBITDA nearly doubled year over year to $12.8 million from $6.6 million, lifting the adjusted EBITDA margin to 30% from 26% in the prior quarter.
B2 Cloud Storage revenue rose 34% year over year to $26.6 million, accelerating from 24% growth in each of the two preceding quarters. Computer Backup revenue declined 2% year over year to $16.1 million, turning negative after holding roughly flat in the previous two quarters. Backblaze's total annual recurring revenue reached $177.3 million, up 21% year over year, while B2 ARR climbed 39% to $113.3 million, itself an acceleration from 28% growth in the first quarter.
Net revenue retention held at 103% sequentially but slipped from 106% a year earlier, with B2 retention compressing slightly to 113% from 114% and Computer Backup retention falling to 94% from 99%. Gross customer retention improved to 91% from 90%, driven by a rebound in Computer Backup retention to 91% from 90%, while B2 gross retention held flat at 89%. ARR from customers spending $50,000 or more annually grew 67% year over year, with that customer count up 57%, though both figures decelerated from 72% and 51% growth, respectively, in the first quarter.
Backblaze raised its full-year 2026 revenue guidance to a range of $172.0 million to $174.0 million from a prior $161.5 million to $163.5 million, and lifted its adjusted EBITDA margin target to 27% to 29% from 23% to 25%. For the third quarter, the company guides to revenue of $44.4 million to $44.8 million and an adjusted EBITDA margin of 27% to 29%.
Adjusted gross margin rose to 80% from 79% a year earlier, and gross margin improved sequentially to 63% from 61% in the first quarter. Cash and marketable securities stood at $49.9 million as of June 30, down from $51.4 million at year-end 2025 but up from $45.5 million at the end of the first quarter. Restructuring charges of $1.3 million were added back to adjusted EBITDA in the quarter, bringing the cumulative first-half total to $3.5 million, against a small credit in the prior-year period. Adjusted free cash flow for the first half of 2026 turned positive at $1.4 million, compared with a $6.0 million shortfall a year earlier.