Cloud service provider BackBlaze went public on Thursday on NASDAQ (BLZE), selling 6.25 million shares for $100 million. They claim to have 500,000 customers. After a day of trading, the stock closed higher at $22.04 today.

Looking at their financials, I was a bit disappointed.

First, they are pulling in $53 million in revenue annually, which seems surprisingly low to me. Their investor presentation claims $65m annual, which is Q2 of 2021 if taken on an annual basis.

So looking at that $65m,

• two-thirds (almost exactly) is computer backup ($43m), which has 430,000 customers.
• one-third is B2 cloud storage ($22m, with 70,000 customers).

My reaction to this is that if 2/3 of their revenue is computer backup, they should be profitable given that is a 14-year-old, mature product that should be paying handsome profits by now.  But they are losing money at present.

Your average B2 customer is spending $314/year, or $26.19/month.  It’d be interesting so see what that breakdown is – are there a few large enterprise whales and a long tail of other users, or is it more flat?

The average computer backup customer is paying $100/year, which is confusing since their product tops out at $84 a year if you pay month-to-month.  Most users are probably paying the annual $70/year subscription, so where is the other $30/year?  Their product is “one computer, one subscription”.   BTW, this product was priced at $50/year about two years ago.

Out of that $53m revenue in their TTM comes $31.7m in operating costs, which includes $11.9m in selling and marketing expense. R&D is $13m/year. They also have $31.5m in debt. I’m not sure how good those ratios are, though their lean and mean R&D reminds me of their prowess in designing and running their own storage subsystems and networks.

It’s interesting that both of their business continue to grow at nice clips (23% annually for computer backup, 66% for B2) so I guess they’re doing the right thing and getting into the market while they have a nice story to sell.  If they can profitably scale then this may be a good time to get in, given that they’re at only a $50-60m company.  On the other hand, they’re not making a profit despite having a core business than goes back to 2007, and have a nice chunk of debt.

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raindog308

Dread Lord of LowEnd Content at LowEndBox

I'm raindog308, techno polymath and long-time LowEndTalk community Administrator. My technical interests include all things Unix, perl, python, golang, shell scripting, vintage operating systems such as MVS, and relational database systems such as Oracle, PostgreSQL, and MySQL.

I also enjoy using LEBs! I have an empire of little guys for VPNs, larger guys for apps, and big guys for databases and storage. When I'm not in front a screen I'm into German Shepherd dogs, quality knives, target shooting, theology, tabletop roleplaying games, and forest hiking.

I enjoy writing technical articles here on LowEndBox to help people get more out of their systems. You can find me on LowEndTalk @raindog308

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