Backblaze's AI traffic hit a record while the stock fell 32% to $8.63; Q3 report due November 2
The company's own Q3 Network Stats, published October 22 and covered by no outlet, shows AI demand reaching the network while the shares have fallen about a third in twelve days. The Q3 print on November 2, guided to $44.4-44.8 million, is the first reading that can show demand parking as revenue.
Vincent Jiang · 4 min read
Backblaze−0.55% — Backblaze, down 0.55 percent today, the Nasdaq-listed budget storage company that now bills itself as the high-performance capacity storage layer for AI, set an all-time traffic record on its network in July, according to its own Q3 Network Stats published on October 22 1. The report shows content delivery network (CDN, the delivery layer that serves content to end users) traffic peaking in July and settling at a baseline significantly higher than the same time last year, neocloud (AI-focused GPU cloud provider) traffic expanding to record heights, and fresh migration bursts in July, August and September 1. No outlet has covered the report; it reached the wider press only as a distribution abstract 2. It is the last company document before third-quarter results land after the close on November 2 3.
The stock that traffic is meant to carry has been moving the other way. Backblaze traded near $8.63 on October 23 4, down about 32% from the $12.69 it fetched when The Inference last wrote on the company, on October 11 5.
It is also roughly half its August level: the stock closed at $16.88 on the day it priced an upsized $175 million convertible notes offering, August 19 11. The AI story had priced the shares up before. When first-quarter results beat forecasts, $0.04 of earnings per share on $38.7 million of revenue against expectations of roughly nil on $37.8 million, the stock traded 68% higher that day and retail sentiment ran "extremely bullish" 6. The AI money named that day was small: two contracts, an AI training-data firm and a generative-video company, worth about $1.5 million of combined annual contract value (ACV, the yearly value of signed deals) 6.
A third of the stock's August value is gone in twelve days
Data
| Value | |
|---|---|
| Aug 19 | $16.88 |
| Oct 11 | $12.69 |
| Oct 23 | $8.63 |
What the traffic record can and cannot show
The complication is that traffic is not revenue. CDN delivery and one-time migrations are bytes passing through, billed as they move or not at all; storage revenue builds from bytes that park and accrue monthly. The Network Stats show demand reaching the network 1. They cannot show whether it stays. Only the Q3 print can 3.
The receipts cut both ways
The bull ledger is real. The second-quarter print on August 3 delivered revenue of $42.7 million, up 18% year over year and the strongest growth in six quarters, and raised the full-year guide to $172-174 million from $161.5-163.5 million 7. The $335 million CoreWeave pact, the largest contract in company history and Backblaze's fourth major AI cloud customer, added about $313 million of contracted future revenue (RPO, remaining performance obligations) net of $22 million in warrant values 7.
Two documents already reported this month round it out: the October 12 WEKA deal making B2 the cold-storage tier beneath NeuralMesh, WEKA's~$1.2B — WEKA, private, latest valuation ~$1.2B high-performance AI file system 8, and SemiAnalysis's ClusterMAX 3.0 of October 20, in which the research firm gave medallion ratings to only 19 of 77 neoclouds tested 9. After the Q1 beat, brokerage analysts turned bullish: Lake Street raised its target to $11 from $8, Needham to $8.5 from $6 6.
The bear ledger counts too
Backblaze's chief financial officer credited the May 1 price increase with about 8 points of B2's 34% growth, leaving core growth near 26% 7. CoreWeave's−1.47% — CoreWeave, down 1.47 percent today contract minimums do not bite until mid-2027 57, and the counterparty is wobbling: CoreWeave and Nebius+0.85% — Nebius, up 0.85 percent today plunged more than 25% this week amid AI financing fears 7.
Capital expenditure will run 55-65% of revenue this year, with a gross margin setback of a few hundred basis points while capacity is built ahead of revenue 7; the $175 million of 0.00% notes due 2031, convertible at about $21.94 a share, pre-funds it 11. Wasabi, a rival storage firm, raised $70 million in January and arranged a $250 million credit facility for a dedicated AI storage unit 8.
Growth halved into Q1 2026, then re-accelerated in Q2
Data
| Value | |
|---|---|
| Q2 '24 | 27.2% |
| Q3 '24 | 28.8% |
| Q4 '24 | 17.6% |
| Q1 '25 | 15.5% |
| Q2 '25 | 16% |
| Q3 '25 | 14% |
| Q4 '25 | 11.8% |
| Q1 '26 | 11.7% |
| Q2 '26 | 17.7% |
November 2 is the referee
Third-quarter results land after the market close on Monday November 2, with the call at 5:00 p.m 37. ET 3, against revenue guidance of $44.4-44.8 million 7.
Revenue re-accelerated in Q2; the guide implies another step up
- Revenue
- Estimate
Data
| Revenue | |
|---|---|
| Q1 '24 | $29.97M |
| Q2 '24 | $31.29M |
| Q3 '24 | $32.59M |
| Q4 '24 | $33.79M |
| Q1 '25 | $34.61M |
| Q2 '25 | $36.3M |
| Q3 '25 | $37.16M |
| Q4 '25 | $37.76M |
| Q1 '26 | $38.67M |
| Q2 '26 | $42.71M |
| Q3 '26e (estimate) | $44.6M ($44.4–44.8M) |
Two lines settle the argument between the AI-platform bulls and the dollar-counting bears: whether B2 growth beats the 34% of Q2, or the 26% core growth excluding price 7, and whether the neocloud and CDN traffic of the Network Stats converts into stored, billable petabytes or stays bytes passing through 1. The company walks through the traffic data in a webinar on October 29 1. Until the print, the stock at $8.63 is priced on bytes in motion 1.
What happens next
BLZEWhat does the company say about whether record traffic is converting into stored, billable petabytes?
The case for
July traffic set an all-time record, with CDN and neocloud traffic settling well above last year's baseline and migration bursts in July, August and September
The case against
Traffic is bytes in motion, not stored billable petabytes; only the Q3 print can show whether it stays
- Wednesday Oct 29Backblaze webinar walking through the Q3 Network Stats traffic data.
- Mon Nov 2, after the closeBackblaze Q3 2026 results, call at 5:00 p.m. ET. Does B2 growth beat Q2's 34% (26% core), and do neocloud and CDN traffic convert into stored, billable petabytes?
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