Ethan Widell

Ethan Widell from B. Riley Securities asked for a definition of the incremental revenue opportunity or overlap between neoclouds (leveraging AI and HPC) and B2 Overdrive, considering customer base, function, or revenue. He also sought clarification on whether the large TCV deal was with an existing customer and if revenue upside from existing customers is primarily driven by increasing usage.

Answer

Gleb Budman (Co-founder, CEO and Chairperson, Backblaze) clarified that B2 Overdrive is for end customers needing high-performance storage to send data to neoclouds or hyperscalers, while B2 Neo is a white-label offering for neoclouds to provide storage to their customers, thus serving different market sides but both supporting AI/HPC. He stated the $15+ million TCV deal was with a completely new customer. Gleb added that roughly half of the $1 million+ deals over the last year were new customers, and the other half were existing customers expanding from smaller engagements. Marc Suidan (CFO, Backblaze) reinforced this 50/50 split between new and expansion revenue, noting diversification across self-serve and direct sales. Gleb also mentioned doubling pipeline from $15 million in 2024 to $30 million in 2025, aiming to double it again in 2026.

Ethan Widell from B. Riley Securities inquired about the incremental revenue opportunity and overlap between B2 Neo and B2 Overdrive, particularly concerning AI and HPC leverage. He also asked if the large TCV deal was with an existing customer and about the general revenue upside from increasing usage by existing customers, as well as the pipeline generation in 2024 and 2025.

Answer

Gleb Budman, Co-founder, CEO, and Chairperson of the Board, clarified that B2 Overdrive is for end customers needing high-performance storage for NeoClouds or hyperscalers, while B2 Neo is a white-label offering for NeoClouds to provide storage to their customers. They serve different market sides but both address AI/HPC. He confirmed the $15+ million TCV deal was with a new customer, but noted that roughly half of $1M+ deals over the past year were new, and half were expansions from existing customers. Marc Suidan, Chief Financial Officer, added that new vs. expansion is roughly 50/50 across self-serve and direct sales. Gleb Budman also mentioned that pipeline generation doubled from $15 million in 2024 to $30 million in 2025, with an aim to double it again in 2026.

Ethan Widell, on behalf of Zach Cummins, questioned if the downtick in B2 NRR was solely due to lapping price increases and asked which specific AI use cases are showing the most traction for the new Overdrive solution.

Answer

CFO Marc Suidan confirmed the B2 NRR moderation is primarily due to lapping the 2023 price increase and expects the metric to stabilize before improving as B2 growth accelerates. CEO Gleb Budman identified model building and inferencing as the two core AI use cases driving interest, citing examples like data collection for training models and applications in autonomous vehicles, robotics, and drug discovery.

Ethan Widell, on behalf of Zach Cummins at B. Riley Securities, inquired about the key levers for improving retention beyond product-led initiatives and asked how the increasing rate of multi-year commitments would impact the slope of future revenue growth.

Answer

Josh Resnik, President & CEO, detailed that retention improvements stem from multiple factors. Beyond PolicyNote's strong user engagement, he cited new global data packages driving expansion revenue and significant operational changes to correct prior execution issues. Resnik highlighted that more than doubling the rate of new multi-year contracts directly translates to improved gross retention in 2026, providing stability and making new logo wins more additive to growth.

Ethan Widell, on behalf of Zach Cummins from B. Riley Securities, asked for the rationale behind the timing of the CEO leadership transition. He also inquired about the key assumptions underpinning the company's confidence in returning to growth in fiscal year 2025.

Answer

Timothy Hwang, outgoing CEO, explained that after 12 years and with the company well-positioned with record profitability, it was the right time for the transition, noting he will remain highly involved as Executive Chair. President and incoming CEO Joshua Resnik outlined the confidence in future growth, citing strong promise in international markets and the corporate segment, coupled with product experience improvements designed to boost retention and cross-selling.

Ethan Widell of B. Riley Securities inquired about the progress of the Apple partnership and its potential timeline to become a significant revenue source. He also asked for feedback on the 'Max Conversions' tool and the types of advertisers adopting it.

Answer

CEO Adam Singolda expressed satisfaction with the Apple partnership, highlighting its role in attracting premium advertisers via the Taboola Select offering and its validation in the market. He noted that the adoption rate for Max Conversions is around 70%, with significant quarter-over-quarter growth in both advertisers and campaigns using the tool, particularly driving performance for advertisers from China and in verticals like healthcare and auto.