Achieved first-ever adjusted free cash flow profitability as a public company, demonstrating inherent operating leverage as the platform scales.

Stabilized B2 Cloud Storage growth at approximately 20% over the last five quarters by focusing on core use cases and upmarket expansion.

Launched B2 Neo, a white-label high-performance storage offering designed to serve as the backend for the roughly 200 emerging 'neocloud' GPU providers.

Secured the company's first eight-figure deal, a $15 million-plus TCV contract with a publicly traded neocloud provider, validating product-market fit at scale.

Attributed upmarket success to a 73% year-over-year increase in ARR from customers generating over $50,000, now totaling 168 customers.

Strengthened the leadership bench with specialized hires in engineering, product, and revenue operations to transition from founder-led to system-driven growth.

Adopted a 'derisked' guidance philosophy for 2026 that excludes large, unpredictable 'swing deals' and anchors on contractual minimums rather than variable upside.

Anticipates B2 revenue growth of approximately 20% for the full year 2026, with quarterly variability in Q2 and Q3 due to difficult comparisons from a large 2025 customer.

Expects the $15 million neocloud deal to contribute over 300 basis points to B2 revenue growth starting in 2027 following a year of technical integration.

Projects computer backup revenue to decline by approximately 5% in 2026, acting as a headwind to total company growth while stabilization programs are implemented.

Forecasts adjusted free cash flow to remain roughly neutral for the full year 2026 as the company funds growth through operating cash and capital leases.

Identified gross margin pressure from rising data center and equipment costs, prompting a new optimization initiative focused on pricing and infrastructure efficiency.

Noted that white-label neocloud deals may carry lower gross margins but are offset by lower sales and marketing expenses, maintaining the overall economic model.

Shifted executive compensation toward performance-based stock units to better align management incentives with shareholder objectives and specific performance targets.

Increased capital expenditure requirements to high-20s percentage of revenue to build capacity in advance of large-scale AI deployments.

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B2 Neo is a white-label API-integrated version of the core platform, allowing neoclouds to offer storage without building their own backend.

The one-year lead time for the $15 million deal reflects the complexity of replacing the customer's existing storage infrastructure with Backblaze's solution.

Management views hyperscalers as competitors to neoclouds rather than vendors, positioning Backblaze as the preferred neutral storage partner.

The 'moat' is built on providing high-performance, exabyte-scale storage at predictable economics that open-source tools cannot match.

AI-native customers are growing their data footprints approximately 3x faster than the average customer base.

While NRR may dip toward 100% temporarily due to 2025 comparisons, management expects it to return to the 110% range as AI workloads scale.

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