Backblaze Aims Zero Net Churn, Boosts B2 Growth to 24% with +11% FCF Margin
Backblaze’s B2 Cloud Storage revenue growth slowed to 21% in Q4 2024 with free-cash-flow margin at –13%, but improved to 24% growth and +11% margin by year-end. CFO Marc Suidan targets zero net churn in its Computer Backup segment (currently –3%) to free cash cow economics for B2 expansion.
1. B2 Growth and Cash Flow Recovery
Backblaze’s B2 Cloud Storage segment decelerated to 21% revenue growth in Q4 2024 with a free-cash-flow margin of –13%, then accelerated to 24% growth and achieved a +11% free-cash-flow margin by the end of the period, reflecting improvements in operating efficiency and go-to-market adjustments.
2. Computer Backup Churn Stabilization
The Computer Backup business experiences roughly 10% annual churn and adds about 7% customers annually for a net decline of 3%; CFO Suidan aims to eliminate that net decline and achieve zero churn to sustain stability and generate cash for B2 investment.
3. B2 Neo and Neocloud Partnerships
Backblaze has positioned its B2 Neo offering for white-label Neocloud partnerships, targeting a Neocloud market projected to grow 46% annually to $230 billion in five years, translating into a $14 billion storage opportunity based on a 6% storage share assumption.
4. Pipeline Expansion and Go-to-Market Strategy
The company expanded its B2 sales pipeline from $15 million in 2024 to $30 million in 2025, with a goal of $60 million in 2026; this pipeline growth underpins a target of 30%+ revenue growth and emphasizes predictable mid-market bookings over reliance on a few large deals.