Backblaze, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Organization and Description of Business

Description of Business

Backblaze, Inc. and its subsidiaries (collectively, “Backblaze” or the “Company”) is a storage cloud platform, providing businesses and consumers with solutions to store and use their data. Backblaze provides these cloud services through purpose-built, web-scale software built on commodity hardware.

Note 2. Basis of Presentation and Summary of Significant Accounting Policies

Basis of Presentation and Principles of Consolidation

The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. Intercompany accounts and transactions have been eliminated. The accompanying condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and applicable rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”) regarding interim financial reporting. Accordingly, they do not include all disclosures normally required in annual consolidated financial statements prepared in accordance with GAAP. Therefore, these unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes for the year ended December 31, 2024 included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, which was filed with the SEC on March 11, 2025 (the “Annual Report”). In management’s opinion, these unaudited condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements and reflect all adjustments, which include normal recurring adjustments necessary for fair presentation. The results of operations for the three and nine months ended September 30, 2025 and 2024 are not necessarily indicative of the results to be expected for the full year or any other future interim or annual period.

Reclassifications

To conform to the current period’s presentation, certain prior-period amounts have been reclassified as follows:

•Prepaid expenses that were previously included in “Prepaid and other current assets” are now presented as a separate line item in the condensed consolidated balance sheet as of December 31, 2024, and in the condensed consolidated statement of cash flows for thenine months ended September 30, 2024.

•Accounts payable has been combined with ‘”Accrued expenses and other current liabilities” in the condensed consolidated balance sheet as of December 31, 2024 and in the condensed consolidated statement of cash flows for thenine months ended September 30, 2024.

•Net accretion of discount on investment securities and net realized investment gains has been combined with “Other” in the condensed consolidated statement of cash flows for thenine months ended September 30, 2024.

These reclassifications had no impact on total assets, liabilities, or stockholders’ equity.

Emerging Growth Company

The Company is an emerging growth company (“EGC”), as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). Under the JOBS Act, EGCs can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. The Company has elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that it (i) is no longer an EGC or (ii) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act. As a result, these condensed consolidated financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates. The Company will maintain its EGC status until December 31, 2026, which is the last day of the fiscal year following either of the following triggering events: (i) if the Company’s public float exceeds $700 million as of June 30, 2026, or (ii) the fifth anniversary of the Company’s initial public offering in November 2026. The Company intends to use the extended transition period for any other new or revised accounting standards during the period in which it remains an EGC.

Significant accounting policies

The Company’s significant accounting policies are disclosed in the Company’s audited consolidated financial statements and related notes thereto included in the Annual Report.

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported and disclosed in the condensed consolidated financial statements and the accompanying notes. Such estimates and assumptions include the costs to be capitalized as internal-use software, which include determining whether projects will result in new or additional functionality, the useful lives of other long-lived assets, impairment considerations for long-lived assets, the incremental borrowing rate for lease agreements, lease and non-lease component allocation, estimates related to variable consideration, the expected period of benefit of deferred contract acquisition costs, and accounting for income taxes, including estimates for deferred tax assets, valuation allowance, and uncertain tax positions. The Company bases its estimates on historical experience and on assumptions that management considers reasonable. Future actual results could differ materially from these estimates.

During the second quarter of 2025, the Company completed a study of the useful lives of its property and equipment. Effective April 1, 2025, the estimated lives of (i) data center equipment, which includes hard drives, and (ii) machinery and equipment, which includes servers and other infrastructure equipment, were extended on a prospective basis from a range of 3 to 5 years to a uniform 6 years. The reassessment was based on historical data and continuous improvements made to the efficiency and durability of the Company’s storage infrastructure.

The change in estimate reduced depreciation expense and increased net income by approximately $1.7 million and $4.1 million for the three and nine months ended September 30, 2025, respectively, resulting in increases of $0.03 and $0.07 per basic and diluted share for the three and nine months ended September 30, 2025, respectively. The Company expects an additional reduction in depreciation expense and increase in net income of approximately $1.1 million for the remainder of the year ending December 31, 2025.

Comprehensive Loss

The Company does not have any components of other comprehensive income recorded within the condensed consolidated financial statements and therefore does not separately present a statement of comprehensive income in the condensed consolidated financial statements.

Foreign Currency

The reporting currency and functional currency of the Company and its wholly owned foreign subsidiaries is the U.S. dollar (“USD”). Transactions denominated in currencies other than USD are remeasured into USD at exchange rates in effect on the transaction date. Monetary assets and liabilities denominated in foreign currencies are subsequently remeasured at exchange rates in effect at the balance sheet date, with resulting transaction gains and losses recognized in loss from operations in the condensed consolidated statements of operations and comprehensive loss.

Foreign exchange (gain) loss included in the condensed consolidated statements of operations was as follows (in thousands):

Income Taxes

The Company is subject to U.S. federal and state income taxes as a corporation. The Company’s tax provision and the resulting effective tax rate for interim periods is determined based upon its estimated annual effective tax rate adjusted for the effect of discrete items arising in that quarter. The effective tax rate for each of thethree and nine months ended September 30, 2025 and 2024 waszero as the Company has incurred continuous operating losses.

On July 4, 2025, the One Big Beautiful Bill Act (the “OBBB Act”) was enacted, introducing amendments to U.S. tax laws with various effective dates from 2025 to 2027. The OBBB Act includes significant provisions, such as the permanent extension of certain expiring provisions of the 2017 Tax Cuts and Jobs Act, international tax framework, and the restoration of favorable tax treatment for certain business provisions including the immediate expensing of the US research and development expenditure. The Company continues to assess the implications of these tax law changes; however, based on a preliminary assessment, the OBBB Act did not have a material impact on the Company’s condensed consolidated financial statements for the three and nine months ended September 30, 2025 and the Company does not expect that the OBBB Act will have material impact on the Company’s consolidated financial statements for the fiscal year 2025.

Concentrations and Risks and Uncertainties

Credit risk. Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash, cash equivalents, marketable securities, accounts receivable, and unbilled receivables.

The Company maintains its cash, cash equivalents, and marketable securities with high-quality financial institutions that have investment-grade credit ratings. Although these institutions are considered to be financially sound, deposits may exceed the amounts insured or guaranteed by the Federal Deposit Insurance Corporation, which could subject the Company to risk of loss in the event of the failure of any such financial institution.

The Company is also exposed to credit risk related to accounts receivable and unbilled receivables from customers. The Company does not have separate collateral requirements to support financial instruments subject to credit risk.

Concentration of vendors. The Company acquires infrastructure equipment from third-party vendors. Vendors may have limited sources of equipment and supplies, which may expose the Company to potential supply-chain and service disruptions that could harm the Company’s business.

The following table presents concentrations related to the Company’s cash disbursements, accounts payable transactions, and accounts receivable transactions:

Revenue. The Company derives substantially all of its revenue from the services operating on its Backblaze Storage Cloud platform: its Backblaze B2 Cloud Storage (“B2 Cloud Storage”) and Backblaze Computer Backup (“Computer Backup”) offerings. The potential for severe impact on the Company’s business could result if the Company was unable to operate its platform or serve customers through its platform for an extended period of time.

Regulatory Developments

In January 2024, the European Union (“EU”) enacted the EU Data Act, which became effective in September 2025. The legislation establishes statutory rights for EU and European Economic Area (“EEA”) customers, including the ability to terminate contracts with no more than two months’ notice, reimbursement of unused prepaid service, and limitations on early termination penalties, among other changes. These provisions primarily affect the Company’s subscription arrangements with EU and EEA customers by shortening the enforceable contract term and requiring consideration of expanded refund rights.

The Company evaluated the implications of the EU Data Act on its customer arrangements, including remaining performance obligations, and determined that it did not have a material impact on the Company’s consolidated financial statements for the current reporting period. The Company has incorporated the provisions of the EU Data Act into its revenue recognition policies and contract assessments and expects to reflect any impact prospectively as customer arrangements are modified or renewed under the new requirements.

Recently Issued Accounting Pronouncements

In September 2025, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2025-06,“Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software.” This standard updates the recognition model for internal-use software by eliminating the project stage framework and requiring capitalization once projects are approved and completion is probable, and also clarifies related disclosure requirements. This ASU is effective for all entities fiscal years beginning after December 15, 2027, including interim periods within those years, with early adoption permitted. The Company is currently evaluating the impact of the adoption of this standard.

In July 2025, the FASB issued ASU 2025-05, “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets.” This standard allows entities to apply a practical expedient when estimating expected credit losses for current accounts receivable and current contract assets that arise from transactions accounted for under Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers. The standard is effective for all entities for fiscal years beginning after December 15, 2025, including interim periods within those fiscal years. Early adoption is permitted, and the standard is to be applied prospectively. The Company is currently evaluating the impact of the adoption of this standard.

In November 2024, the FASB issued ASU 2024-03, “Income Statement (Subtopic 220-40) - Reporting Comprehensive Income - Expense Disaggregation Disclosures.” The ASU requires disclosure of specified information about certain costs and expenses, including (i) certain amounts already required to be disclosed in the same disclosure as the other disaggregation requirements, (ii) a qualitative description of amounts remaining in relevant expense captions that are not separately disaggregated quantitatively, and (iii) the total amount of selling expenses and an entity’s definition of such expenses. For public companies, this ASU is effective for fiscal years beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027 on either a prospective or retrospective basis. Early adoption is permitted. The Company is currently evaluating the impact of the adoption of this standard.

In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740) - Improvements to Income Tax Disclosures” requiring enhancements and further transparency to certain income tax disclosures, most notably the tax rate reconciliation and income taxes paid. This ASU is effective for fiscal years beginning after December 15, 2024 for public companies and is effective for fiscal years beginning after December 15, 2025 for non-public business entities. In accordance with our EGC status, the Company will implement the standard beginning with its annual reporting period ending December 31, 2026. This amendment should be applied on a prospective basis and retrospective application is permitted. The Company is currently evaluating the impact of the adoption of this standard.

Note 3. Revenues

Disaggregation of Total Revenue

The following table presents the Company’s total revenue disaggregated by product (in thousands):

(1) For the periods presented, Physical Media revenue has been allocated to B2 Cloud Storage or Computer Backup revenue based on the underlying offering from which it originates.

The following table presents the Company’s total revenue disaggregated by timing of revenue recognition (in thousands):

Total revenue by geographic area, based on the location of the Company’s customers, was as follows (in thousands):

Earned, Unbilled Revenue

As of September 30, 2025 and December 31, 2024, the Company had $3.5 million and $2.9 million, respectively, of unbilled accounts receivable included within other current assets in the condensed consolidated balance sheets.

Deferred Revenue

The following table presents information regarding the Company’s total deferred revenue (in thousands):

Deferred revenue represents the invoiced portion of the Company’s contract liabilities for which the related performance obligations are still outstanding. The Company’s remaining performance obligations (“RPOs”) include deferred revenue as well as future committed revenue under existing customer contracts which exceed one year. As of September 30, 2025, the Company's RPOs were $46.1 million. As of September 30, 2025, the Company expects to recognize approximately 75% of its RPOs over the next 12 months, and substantially all of its RPOs over the next 24 months.

Deferred Contract Costs

The Company’s deferred contract costs are composed of third-party affiliate commissions and, starting in 2024, a commission structure for its sales team. See Note 2 to the audited consolidated financial statements included in the Annual Report for additional information on the commission structure. Deferred contract costs are included within other current assets and other assets in the condensed consolidated balance sheets.

The following tables present the Company’s deferred contract costs and amortization of deferred contract costs (in thousands):

Note 4. Marketable Securities

Fair Values and Gross Unrealized Gains and Losses on Held-to-Maturity Investments

The following table summarizes adjusted cost, gross unrealized gains and losses, and fair value by significant investment category. The Company’s investments with original maturities greater than 90 days are classified as held-to-maturity investments on its condensed consolidated balance sheets as of September 30, 2025 and December 31, 2024. See additional information on the Company’s investments in Note 5—Fair Value Measurements.

Scheduled Maturities

The amortized cost and fair value of the Company’s held-to-maturity investments as of September 30, 2025, by contractual maturity, are shown below.

Aging of Unrealized Losses

There wereno securities in an unrealized loss position as of September 30, 2025. As of December 31, 2024, certain securities were in an immaterial unrealized loss position for less than twelve months.

Note 5. Fair Value Measurements

The Company classifies its U.S. treasury securities and money market funds within Level 1 of the fair value hierarchy, as their fair value is determined by quoted prices in active markets for identical assets. The Company classifies its corporate debt securities within Level 2 of the fair value hierarchy as the fair value of these securities is determined using inputs other than quoted prices that are directly or indirectly observable in the market, including readily available pricing sources for underlying securities that may not be actively traded.

The following table presents the level within the fair value hierarchy at which the Company’s held-to-maturity investments are measured (in thousands):

There were no transfers between levels of the fair value hierarchy during the three and nine months ended September 30, 2025 and the year ended December 31, 2024, respectively. The Company heldno assets or liabilities that were measured at fair value on a recurring basis as of September 30, 2025 or December 31, 2024, respectively.

Note 6. Property and Equipment, Net

Property and equipment, net consisted of the following (in thousands):

(1) The carrying value of the Company’s equipment under finance lease agreements and lease financing obligations was $44.3 million and $35.7 million as of September 30, 2025 and December 31, 2024, respectively.

The Company has long-lived assets, comprising of property and equipment, net and operating lease right-of-use assets in the following geographic areas (in thousands):

Note 7. Capitalized Internal-Use Software, Net

Capitalized internal-use software, net consisted of the following (in thousands):

Amortization expense of capitalized internal-use software for the three and nine months ended September 30, 2025 and 2024 is included in the condensed consolidated statements of operations and comprehensive loss as follows (in thousands):

As of September 30, 2025, future amortization expense is expected to be as follows (in thousands):

Note 8. Leases

The Company generally enters into finance lease arrangements to obtain hard drives and related equipment for its data center operations. The terms of these agreements generally range fromtwo tofour years and certain of these arrangements have optional renewals to extend the term of the lease generally at a fixed price. Finance leases are generally secured by the underlying leased equipment. The Company's finance leases have original lease periods expiring between 2025 and 2029. Financing lease right-of-use assets are included in property and equipment, net in the Company’s condensed consolidated balance sheets.

The Company leases data center spaces and office space under non-cancelable operating leases with various expiration dates. Certain lease agreements include renewal options to extend the lease term at a price to be determined upon exercise. These options are not reasonably certain to be exercised and therefore are not factored in the determination of lease payments. Contingent rental payments are generally not included in the Company’s lease agreements. The Company’s lease agreements do not contain any material residual value guarantees or restrictive covenants. The Company's leases have original lease periods expiring between 2026 and 2033.

The weighted average remaining lease terms and discount rates as of September 30, 2025 and December 31, 2024 were as follows:

(1) Includes lease financing obligation costs.

The following table presents the components of lease expense (in thousands):

(1) The presentation of prior period data has been revised to conform to current year presentation. There have been no changes to the reported amounts, rather certain amounts have been disaggregated to further improve clarity and transparency.

(2)Substantially all of the depreciation expense on assets acquired through the Company’s finance leases and lease financing obligations is included in cost of revenue in its condensed consolidated statements of operations and comprehensive loss.

(3) Non-lease components are related to non-tangible utilities and services used in the Company’s co-location data center spaces, which are not recorded on the Company’s condensed consolidated balance sheets. The Company used judgment and third-party data in determining the stand-alone price for allocating consideration to lease and non-lease components under these co-location lease agreements, such as the price of utilities as compared to its tangible data center footprint within each co-location facility.

The following table presents supplemental cash flow information relating to the Company’s leases (in thousands):

The future minimum commitments for finance leases and lease financing obligations as of September 30, 2025 were as follows (in thousands):

As of September 30, 2025, the Company's future minimum obligations for operating leases and non-cancellable contractual commitments related to non-lease components were as follows (in thousands):

In June 2025, the Company amended an existing lease for a data center facility to (i) extend the non-cancellable term of the original lease and (ii) expand into additional infrastructure designed to support multiple-storage offerings. This expansion is expected to commence in the second quarter of 2026 and includes a non-cancellable lease term of approximately seven years. The original lease term was also extended to align with this period.

The multi-storage data center space is considered a separate asset class from the original co-location infrastructure due to its differentiated architectural characteristics, service delivery model, and operational risk profile. The lease and non-lease components of this new asset class are combined in accordance with the Company’s established lease accounting policy. The Company’s current asset classes of operating lease agreements include rentals of (i) office space, (ii) multi-storage data center spaces, and (iii) co-location data center spaces. The Company refers to multi-storage data center spaces and co-location data center spaces collectively as “data center spaces.”

The Company accounted for the lease amendment as a modification under ASC 842. The amendment consists of two components: (i) an extension of the original lease term, which was remeasured as of the modification date, and (ii) a lease for additional, distinct space, which will be accounted for as a separate lease component and measured at its commencement date in the second quarter of 2026. The Company applied an incremental borrowing rate (“IBR”) of 6.8% to remeasure the lease liability. The IBR was estimated based on current market rates for secured borrowings with similar terms and adjusted for the Company’s credit profile. The lease amendment increased total undiscounted minimum lease payments by approximately $34.5 million, of which $17.5 million relates to the expanded space.

Note 9. Commitments and Contingencies

Contractual Commitments

The Company has non-cancellable commitments related mainly to service agreements used to facilitate the Company’s operations. As of September 30, 2025, the Company had $0.5 million, $2.8 million, $2.2 million, and $0.9 million payable for these commitments during the remainder of the year ending December 31, 2025 and the years ending December 31, 2026, 2027, and 2028 respectively.

During the nine months ended September 30, 2024, the Company made payments of $0.2 million to a related party, Meaningful Works, for marketing services per terms of an agreement. An executive officer of Meaningful Works is an immediate family member of the Company’s CEO. As of December 31, 2024, the scope of services has been completed per terms of the agreement.

401(k) Plan

The Company sponsors a 401(k) defined contribution plan covering all eligible U.S. employees. Contributions to the 401(k) plan are discretionary. The Company contrib uted $0.4 million and $0.5 million to the 401(k) plan for the three months ended September 30, 2025 and 2024, respectively, and $1.4 million and $1.5 million for the nine months ended September 30, 2025 and 2024, respectively.

Legal Matters

The Company is involved from time to time in various claims and legal actions arising in the ordinary course of business. Where appropriate, the Company has established accruals for matters that are both probable and reasonably estimable. We also generally maintain insurance to cover certain types of litigation claims, subject to policy limits, retentions and deductibles, and other factors. Based on information currently available, management does not expect the resolution of any such matters, individually or in the aggregate, to have a material adverse effect on the Company’s financial position, results of operations, or cash flows. Nonetheless, the outcome of litigation is inherently uncertain, and unforeseen developments could result in an adverse impact on the Company, including defense and settlement costs, diversion of management resources, and other factors.

Indemnification

The Company enters into indemnification provisions under agreements with other parties from time to time in the ordinary course of business. These agreements may require the Company to indemnify and defend the indemnified party against third-party claims arising from the Company’s activities or from any breaches of representations or warranties made by the Company. To date, the Company has not incurred any material costs or losses in connection with such indemnification obligations. However, it is not possible to reasonably estimate the maximum potential amount under these indemnification agreements due to the unique facts and circumstances of each arrangement. As a result, the Company has not recorded any liabilities related to these obligations in its condensed consolidated financial statements as of the periods presented.

Note 10. Debt

Revolving Credit Facility

On June 4, 2025, the Company entered into a credit agreement (the “Credit Agreement”) with Citizens Bank, N.A. (the “Lender”), establishing a senior secured revolving credit facility with a total capacity of $20.0 million (the “Revolving Credit Facility”) to be used for general corporate purposes and working capital needs. The Revolving Credit Facility allows for borrowings, repayments, and reborrowings up to the total capacity, subject to compliance with the terms of the Credit

Agreement. The Revolving Credit Facility includes a sub-limit of up to $3.0 million for the issuance of letters of credit. The Credit Agreement is scheduled to mature on June 4, 2027, at which point all obligations become due. The Credit Agreement includes an option that allows the Company to extend the maturity date byone year, subject to certain conditions. We incurred $0.6 million of deferred financing costs in connection with the establishment of the Revolving Credit Facility, which is included in other assets in the condensed consolidated balance sheet as of September 30, 2025, and will be amortized on a straight-line basis over thetwo-year term of the facility.

The Revolving Credit Facility is secured by a first-priority lien on substantially all assets of the Company and its consolidated subsidiaries, each of which also guarantees the obligations under the facility. Borrowings under the facility bear interest at a variable rate, at the Company’s discretion, equal to either (a) the average Secured Overnight Financing Rate plus 3.25% or (b) a base rate, as defined in the Credit Agreement, plus 2.25%. Additionally, the Credit Agreement requires the payment of a commitment fee of 0.35% on the unused portion of the Revolving Credit Facility and a letter of credit availability fee of 0.125% on outstanding letters of credit.

As of September 30, 2025, the Company had $2.5 million outstanding under the Revolving Credit Facility. The interest rate in effect under the Revolving Credit Facility as of September 30, 2025 was 7.51%. As of September 30, 2025, no letters of credit were outstanding and $17.5 million was available for borrowing under the Revolving Credit Facility. The fair value (level 2 of the fair value hierarchy described in Note 5) of this debt instrument approximates the carrying value as borrowings under this debt instrument are based on a current variable market interest rate.

In October 2025, the Company repaid in full the outstanding balance of $2.5 million under its Revolving Credit Facility.

Debt Covenants under the Credit Agreement

The Credit Agreement contains customary restrictive financial and operating covenants, including limitations on our ability to incur additional indebtedness, pay dividends, make certain investments, sell assets, and engage in other specified transactions. In August 2025, in connection with the establishment of a new share repurchase program (see Note 11 for further information), the Company amended the Credit Agreement to permit share repurchases of up to $10.0 million, thereby excluding such repurchases from the covenant restrictions. The Credit Agreement also requires the Company to comply with the following financial covenants on a quarterly basis: (i) a minimum liquidity of $10.0 million held on deposit with the Lender, over which the Company retains control and considers as cash and cash equivalents, (ii) a minimum consolidated earnings before interest, taxes, depreciation and amortization (“EBITDA”) (as defined below) threshold, and (iii) a maximum total leverage ratio of 2.75 to 1.00, which is calculated based on consolidated EBITDA.

The Credit Agreement defines consolidated EBITDA on a trailing four fiscal quarter basis and includes specified adjustments and exclusions. As a result, EBITDA as defined under the Credit Agreement may differ materially from Adjusted EBITDA as presented elsewhere in this report. For example, the calculation of EBITDA under the Credit Agreement includes exceptions and caps related to adjustments for (i) restructuring and other strategic initiatives, (ii) legal settlements, (iii) completed acquisitions, and (iv) all other non-cash and non-specified non-recurring charges. As of September 30, 2025, the Company was in compliance with the covenants under the Credit Agreement.

RCA Debt Facility

On December 10, 2024, the Company voluntarily terminated its revolving credit agreement (as amended, the “RCA”) with City National Bank.

As of September 30, 2024, the interest rate associated with the outstanding balance under the RCA was 8.1% per annum. Total interest expense and amortization of debt issuance costs related to the RCA was $0.1 million and $0.4 million for the three and nine months ended September 30, 2024, respectively. As of September 30, 2024, restricted cash, non-current on the Company’s condensed consolidated statement of cash flows represented collateral pledged under the RCA.

Note 11. Stockholders’ Equity

Equity Incentive Plans

2021 Equity Incentive Plan (the “2021 Plan”)

Under the 2021 Plan, the Company may grant options, stock appreciation rights, restricted stock units (“RSUs”), restricted stock awards, other equity-based awards and incentive bonuses to employees, officers, non-employee directorsand other service providers of the Company and its affiliates.

The number of shares available for issuance under the 2021 Plan automatically increases on January 1 of each year from 2022 through 2031 by an amount equal to the lesser of: (i)4,784,100 shares, (ii)5% of the total number of shares of Class A common stock outstanding on the preceding December 31, or (iii) a smaller number of shares determined by the Company’s Board of Directors.

2021 Employee Stock Purchase Plan (the “2021 ESPP”)

The number of shares available for issuance under the 2021 ESPP automatically increases on January 1 of each year from 2022 through 2041 in an amount equal to the lesser of: (i)1,913,630 shares, (ii)2% of the total number of shares of Class A common stock outstanding on the preceding December 31, or (iii) a smaller number of shares determined by the Company’s Board of Directors.

2024 New Employee Equity Incentive Plan (the “Inducement Plan”)

On August 2, 2024, the Company adopted the Inducement Plan, pursuant to which the Company reserved 414,740 shares of its Class A common stock to be used exclusively for grants of equity-based awards to individuals who were not previously employees or directors of the Company.

Reserved Shares for Future Issuance

The Company had reserved shares of common stock for future issuance as follows:

Share Repurchase Program

In August 2025, the Company’s Board of Directors approved a share repurchase program authorizing the Company to repurchase up to $10.0 million of its common stock through August 1, 2026. The program is intended to offset dilution resulting from stock-based compensation. Repurchases are to be funded from the proceeds of employee stock option exercises and employee contributions under the 2021 ESPP.

Repurchases may be made from time to time in open market transactions, pursuant to Rule 10b5-1 trading plans, or through other means, in accordance with Rule 10b-18 under the Securities Exchange Act of 1934, as amended. The timing, number of shares repurchased, and prices paid for the shares under this program will depend on general business and market conditions as well as corporate and regulatory limitations, prevailing stock prices, and other considerations. The share repurchase program may be suspended, modified, or discontinued at any time and does not obligate the Company to acquire any amount of common stock.

During the nine months ended September 30, 2025, the Company repurchased a total of 142,069 shares of its common stock for $1.2 million. As of September 30, 2025, approximately $8.8 million remained available for repurchases under the program.

Note 12. Stock-Based Compensation

Restricted Stock Units

RSUs granted under the 2021 Plan and the Inducement Plan generally vest based on continued service up to afour-year period for employees and over aone-year period for non-employee directors.

RSU activity for thenine months ended September 30, 2025 was as follows:

As of September 30, 2025, total unrecognized compensation cost related to RSUs was $31.1 million, which will be recognized over a weighted-average period of 2.2 years.

Bonus Plan

In January 2025, the Compensation Committee approved a new bonus structure (the “2025 Bonus Plan”) for its employees. The 2025 Bonus Plan is contingent upon the achievement of annual corporate performance targets. In each respective calendar year, the Company accrues for the 2025 Bonus Plan. The Compensation Committee assesses the actual performance against these targets to determine the payout amount which is disbursed in the following year. Payouts include both cash and RSU components, which are accounted for under ASC 710, Compensation-General and ASC 718, Compensation-Stock Compensation, respectively. The RSUs will be issued under the 2021 Plan and are subject to performance and service condition vesting requirements, beginning from the grant date to the payout date, with the number of RSUs calculated in accordance with the established payout amount. Participants must remain employed with the Company through the date of payout to maintain eligibility under the 2025 Bonus Plan.

During March 2022, the Compensation Committee approved the Bonus Plan (as defined in Note 14 to Notes to Consolidated Financial Statements in the Annual Report) for its employees. In February 2025, the Compensation Committee approved the issuance of 301,571 RSUs that vested based on actual performance against the targets set in the Bonus Plan for the year ended December 31, 2024.

Pursuant to the bonus plans, the Company recognized animmaterial amount and $0.5 million in stock-based compensation during the three months ended September 30, 2025 and 2024, respectively, of which the Company capitalized animmaterial amount and $0.1 million in each period for the development of internal-use software. The Company recognized $2.0 million and $1.8 million in stock-based compensation during the nine months ended September 30, 2025 and 2024, respectively, of which the Company capitalized $0.2 million in both periods for the development of internal-use software.

Stock Options

Stock options granted under the equity plans generally vest based on continued service over four years and expireten years from the date of grant.

A summary of stock option activity under the Company’s equity plans and related information is as follows (in thousands, except share, price and year data):

The intrinsic value of options exercised for the nine months ended September 30, 2025 and 2024 was $4.7 million and $12.5 million, respectively. As of September 30, 2025, total unrecognized compensation cost related to stock options was $0.2 million, which will be recognized over a weighted-average period of 0.1 years.

ESPP

Stock-based compensation under the 2021 ESPP was $0.7 million and $0.4 million for the three months ended September 30, 2025 and 2024, respectively, of which the Company capitalized animmaterial amount and $0.1 million in each period for the development of internal-use software. The Company recorded stock-based compensation under the 2021 ESPP plan of $1.7 million and $1.2 million for the nine months ended September 30, 2025 and 2024, respectively, of which the Company capitalized $0.2 million and $0.4 million, respectively, for the development of internal-use software. The reset provision under the ESPP was triggered on May 20, 2025 resulting in an incremental modification expense of $1.0 million, which will be recognized on a straight-line basis over the new offering period.

As of September 30, 2025, the total unrecognized stock-based compensation expense related to the ESPP was $2.6 million and is expected to be recognized over a weighted average period of 0.8 years.

The following table summarizes the Black-Scholes option pricing model used in estimating the fair value of the stock purchase rights under the ESPP during the nine months ended September 30, 2025 and 2024. There were no ESPP offerings or modification events requiring an estimation of fair value during the three months ended September 30, 2025 and 2024.

Total Stock-Based Compensation Expense

Stock-based compensation expense included in the condensed consolidated statements of operations and comprehensive loss was as follows (in thousands):

During thethree and nine months ended September 30, 2025, the Company capitalized $0.5 million and $2.0 million, respectively, of stock-based compensation for the development of internal-use software. During the three and nine months ended September 30, 2024, the Company capitalized $1.2 million and $3.2 million, respectively.

Additionally, during the third quarter of 2024, the Compensation Committee approved amendments to outstanding vested stock options held by certain former employees in connection with their separation from the Company to extend the option expiration and also accelerate the vesting of RSU’s. As a result of the modifications, the Company recognized $1.0 million of expense, of which $0.7 million is recorded in sales and marketing, and $0.3 million is recorded in general and administrative expense on the Company’s condensed consolidated statements of operations and comprehensive loss for the period ending September 30, 2024.

Note 13. Net Loss per Share Attributable to Common Stockholders

Basic net loss per share attributable to common stockholders is computed by dividing the net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period. The diluted net loss per share attributable to common stockholders is computed by giving effect to all potentially dilutive common stock equivalents during the period. For purposes of this calculation, the Company’s stock options, share purchase rights pursuant to the Company’s ESPP, unvested restricted stock, and share-based bonus awards granted under the Company’s bonus plans are considered to be potential common stock equivalents, but have been excluded from the calculation of diluted net loss per share attributable to common stockholders as their effect is antidilutive.

The following table presents the calculation of basic and diluted net loss per share (in thousands, except share and per share data):

Since the Company was in a loss position for all periods presented, basic net loss per share is the same as diluted net loss per share as the inclusion of all potential common shares outstanding would have been antidilutive. The weighted average potential shares of common stock that were excluded from the computation of diluted net loss per share attributable to common stockholders for the periods presented are as follows:

(1)Historically, the Company computed potentially dilutive securities excluded from the calculation of diluted net loss per share as of the end of each reporting period. The Company now presents these excluded shares as the weighted average number of potentially dilutive securities outstanding during the respective periods. Accordingly, the three and nine months ended September 30, 2024, have been updated to conform to the current presentation.

Note 14. Restructuring

In November 2024, management approved a restructuring plan intended to improve the Company’s cost structure and operating efficiency (the “2024 Restructuring Plan”). The 2024 Restructuring Plan included an involuntary reduction in headcount of approximately 12% of the Company’s workforce. In addition, as part of the 2024 Restructuring Plan, the Company reduced its footprint at its corporate headquarters. The 2024 Restructuring Plan was substantially completed as of December 31, 2024.

The 2024 Restructuring Plan resulted in total restructuring charges of $4.9 million, which were recognized in the fourth quarter of 2024, primarily consisting of employee severance and benefits of $3.9 million, impairment charges of $0.9 million on its operating right-of-use assets related to the lease of the Company’s corporate headquarters, and professional fees of $0.1 million. In the second quarter of 2025, the Company recorded a $0.1 million reversal to the estimated severance and benefits costs and an incremental impairment charge of $0.1 million related to the execution of the sublease of the Company’s corporate headquarters.

The following table presents a summary of the liabilities related to the 2024 Restructuring Plan that are included within accounts payable, accrued expenses and other current liabilities in the condensed consolidated balance sheets (in thousands):

Note 15. Segment Reporting

The Company operates inone operating and reportable segment, which derives revenue from the services operating on its storage platform. The Company’schief operating decision maker (the “CODM”)is its Chief Executive Officer, who reviews financial information presented on a consolidated basis for purposes of making operating decisions, assessing financial performance and allocating resources.

Measure of Segment Profit or Loss

The key measure of segment profit or loss utilized by the CODM to assess the performance of and allocate resources to the Company’s operating segment is consolidated net income (loss). Net income (loss) is used in monitoring budget versus actual results and is presented on the condensed consolidated statements of operations and comprehensive loss. The measure of segment assets is reported on the condensed consolidated balance sheet as total consolidated assets.

The CODM reviews cost of revenue, research and development, sales and marketing, and general and administrative expenses exclusive of depreciation, amortization, stock-based compensation, foreign exchange (gain) loss, restructuring charges, and legal settlement costs. The segment information for the three and nine months ended September 30, 2025 and 2024 is presented below in the following table (in thousands):

(1) Other segment items include investment income, interest expense, foreign exchange (gain) loss, restructuring charges, legal settlement costs, impairment of long-lived assets, and income tax provision.

Note 16. Subsequent Events

In November 2025, the Company initiated certain transformation and restructuring actions designed primarily to improve efficiency and enhance the performance of its sales and marketing functions, including the reallocation of resources to deepen marketing and sales capabilities, and other corporate actions (the “2025 Restructuring Plan”). As part of the 2025 Restructuring Plan, the Company expects to incur total charges of approximately $4.4 million to $6.0 million, primarily in the fourth quarter of 2025. These charges include an estimated impairment of approximately $0.9 million to $1.2 million related to the reduction of the Company’s footprint at its office facilities, as well as employee termination expenses and other business transformation costs.