---
title: "Backblaze's B2 grew 47%, but CoreWeave's deal is paid in $21.94 converts, triple the $7.40 share price"
description: "B2 storage grew 47% while CoreWeave barely contributed; the same night's 10-Q prices the anchor deal in customer warrants, zero-coupon debt and a conversion strike about triple the share price."
publisher: "The Inference"
section: "Data Center"
published: 2026-11-05T17:07:45.867Z
modified: 2026-11-05T17:07:45.867Z
canonical: https://theinference.org/article/backblaze-s-b2-grew-47-but-coreweave-s-deal-is-paid-in-21-94-converts-triple-the-7-40-share-price
language: en
keywords: "Earnings, Cloud Storage, Convertible Notes, AI Infrastructure"
---

# Backblaze's B2 grew 47%, but CoreWeave's deal is paid in $21.94 converts, triple the $7.40 share price

> B2 storage grew 47% while CoreWeave barely contributed; the same night's 10-Q prices the anchor deal in customer warrants, zero-coupon debt and a conversion strike about triple the share price.

[Backblaze](https://theinference.org/markets/companies/backblaze)'s November 2 report settles one argument and prices another [1]. B2 Cloud Storage, the object-storage tier built on the commodity drive pods behind its consumer backup business, grew 47% from a year earlier, and [full-year guidance went up](https://www.kucoin.com/news/flash/backblaze-stock-rises-12-after-earnings-beat-and-raised-revenue-guidance) [1].

The telling detail came from chief financial officer [Marc Suidan](https://theinference.org/markets/people/marc-suidan): neither [CoreWeave](https://theinference.org/markets/companies/coreweave) nor the other large "neocloud", as GPU-centric clouds are known, contributed significantly to that acceleration [2]. The AI demand underneath Backblaze is broad. What it costs the people funding the company sits in [the 10-Q filed the same night](https://www.stocktitan.net/sec-filings/BLZE/10-q-backblaze-inc-quarterly-earnings-report-d15c9dd121fc.html) [3].

## Cheap drives became the capacity tier AI builders rent

The chain runs from hardware up. Backblaze runs its own storage cloud on commodity hardware and sells S3-compatible object storage with egress free up to three times the data stored, which is what makes it the cheap tier where AI shops park training data behind expensive GPUs [3] [4].

*Chart: **Revenue growth bottomed near 12% in early 2026, then snapped back to 26%** Line chart of Backblaze's year-over-year quarterly revenue growth from Q4 2023 to Q3 2026, showing a dip to about 12 percent in early 2026 and a rebound to 25.5 percent*

*Year-over-year total revenue growth by quarter, from Backblaze's SEC filings [10]*

CoreWeave, the GPU cloud serving AI labs, [signed a master agreement on June 16, 2026](https://www.computelabs.ai/research/2026-11-02/storage-provider-backblaze-blze-disclosed-five-seven-year-coreweave-orders), for committed capacity, about 70% of it hosted in Backblaze's own data centers: two order forms, five and seven years, worth about $335 million, a deal [we covered in October as a credit bet](https://theinference.org/article/backblaze-stock-fell-59-to-8-34-as-its-335-million-coreweave-deal-becomes-a-credit-bet) [2] [5]. About $21.7 million of that value is warrants issued to CoreWeave, netted out of the contract's stated worth [3] [5].

## The anchor customer is paid partly in Backblaze's own stock

The build is funded with $201 million of convertible notes due 2031 that pay no interest [3]. They convert into about 9.2 million shares at $21.94, roughly triple the $7.40 the stock closed at before the report, and capped calls offset the dilution only up to a $33.76 ceiling: old holders pay if the AI story works [3] [6]. The signed order book, what the filing calls [remaining performance obligations](https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0001462056), jumped from $70 million to $400 million at quarter-end, chiefly on CoreWeave [3].

*Chart: **CoreWeave's converts strike about triple where the stock traded before the report** Bar chart of five per-share prices: the $7.40 pre-report share price, the $15 Needham and $21 Citizens targets, the $21.94 conversion price and the $33.76 capped-call ceiling*

*Per-share prices from Backblaze's filings and analyst notes as of the November 2 report; the converts and capped calls set the band where dilution begins and ends. [3][6][9]*

Net of the warrants, the two order forms work out to roughly $45–63 million a year over five- and seven-year terms [3]. Against guidance of $177.8–178.2 million for 2026, that is between a quarter and a third of revenue riding on one customer [1].

## The bottleneck moved from demand to deployment

The growth is broader than the anchor. Strip out a May price increase worth about 12 points and organic B2 growth still accelerated, from 26% to 35% [7]. Management guides B2 growth near 60% this quarter while CoreWeave's minimum commitments step up monthly through July 2027, and equipment arriving ahead of usage will temporarily cost 3 to 6 points of gross margin [2] [7] [8].

The stock jumped 12% on November 3, from that $7.40 pre-report close [1] [6]. Analysts at Needham kept their Buy but [cut their target by about a third, to $15](https://www.tradingview.com/news/tradingview:74418395c8b6e:0-needham-maintains-backblaze-at-buy-lowers-price-target-to-15-from-23/); analysts at Citizens (Rustam Kanga) reiterated $21 [6] [9].

CoreWeave is, in effect, buying storage with Backblaze's own stock. What that costs existing holders depends on two measurable things: whether B2 growth holds near this pace as the anchor minimums step up through July 2027, and how much of the warrants and the $21.94 converts turns into real shares. The first shows up in revenue; the second, in the share count.

## Takeaway

B2's 47% growth is broad and real, but the CoreWeave anchor deal's cost to shareholders is set in zero-coupon converts striking at $21.94, near triple the pre-report share price.

## Sources

1. [Benzinga via KuCoin, Backblaze Stock Rises 12% After Earnings Beat and Raised Revenue Guidance, 3 November 2026](https://www.kucoin.com/news/flash/backblaze-stock-rises-12-after-earnings-beat-and-raised-revenue-guidance)
2. [MarketBeat via Yahoo Finance, What Backblaze (BLZE) Said on Its Q3 Earnings Call, 2 November 2026](https://finance.yahoo.com/markets/stocks/articles/backblaze-blze-said-q3-earnings-001411932.html)
3. [StockTitan, Backblaze Q3 2026 revenue climbs to $46.7M (10-Q summary, quarter ended 30 September 2026), 2 November 2026](https://www.stocktitan.net/sec-filings/BLZE/10-q-backblaze-inc-quarterly-earnings-report-d15c9dd121fc.html)
4. [Backblaze, The object storage layer for AI | Backblaze B2, product page, fetched 5 November 2026](https://www.backblaze.com/cloud-storage)
5. [ComputeLabs, Storage provider Backblaze (BLZE) disclosed five- and seven-year CoreWeave orders, 2 November 2026](https://www.computelabs.ai/research/2026-11-02/storage-provider-backblaze-blze-disclosed-five-seven-year-coreweave-orders)
6. [TradingView, Needham maintains Backblaze at Buy, lowers price target to $15 from $23, 3 November 2026](https://www.tradingview.com/news/tradingview:74418395c8b6e:0-needham-maintains-backblaze-at-buy-lowers-price-target-to-15-from-23/)
7. [Moby via Yahoo Finance, Backblaze, Inc. Q3 2026 Earnings Call Summary, 3 November 2026](https://finance.yahoo.com/markets/stocks/articles/backblaze-inc-q3-2026-earnings-133000247.html)
8. [Traders Union, Backblaze projects B2 cloud storage growth to 60 percent in Q4, November 2026](https://tradersunion.com/news/companies/show/4101217-backblaze-q3-revenue-growth/)
9. [StreetInsider, Backblaze (BLZE) Reiterated at Market Outperform by Citizens, 3 November 2026](https://www.streetinsider.com/Analyst+Comments/Backblaze+%28BLZE%29+Reiterated+at+Market+Outperform+by+Citizens+-+Has+Faster+Relative+Growth+Rate/27276088.html)
10. [Backblaze quarterly figures from its SEC filings (EDGAR), retrieved 5 November 2026](https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0001462056)


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Backblaze's B2 grew 47%, but CoreWeave's deal is paid in $21.94 converts, triple the $7.40 share price — The Inference. Canonical: https://theinference.org/article/backblaze-s-b2-grew-47-but-coreweave-s-deal-is-paid-in-21-94-converts-triple-the-7-40-share-price