Backblaze, Inc.

Previous wording

Our mission is to make customers successful by solving their toughest data storage challenges. We aim to achieve this mission through purpose-built software and operational expertise that together enable a cloud storage solution optimized for price-to-performance at scale. By substantially reducing the cost, complexity and frustration of storing, using, and protecting data, we empower customers to focus on their core business operations. Customers use us to support AI workflows, help ensure the cyber-resilience of their organizations, streamline media workflows, and enable a variety of other data-focused application and information technology needs. More recently, some companies, especially neoclouds, have integrated Backblaze to offer or enhance cloud storage for their customers. They chose Backblaze for our software and operational experience that together provide a capacity tier of storage that can scale with business' growth without sacrificing performance or economics. Through these companies, Backblaze is supporting the storage needs of the global data center and compute infrastructure buildout the industry is experiencing today.

Current wording

Our mission is to make customers successful by solving their toughest data storage challenges. We aim to achieve this mission through purpose-built software and operational expertise that together enable a cloud storage solution optimized for price-to-performance at scale. By substantially reducing the cost, complexity and frustration of storing, using, and protecting data, we empower customers to focus on their core business operations. Customers use us to support AI workflows, help ensure the cyber-resilience of their organizations, streamline media workflows, and enable a variety of other data-focused application and information technology needs. More recently, some companies, especially neoclouds, have integrated Backblaze to offer or enhance cloud storage for their customers. They choose Backblaze for our software and operational experience that together provide a capacity tier of storage that can scale with a business's growth without sacrificing performance or economics. Through these companies, Backblaze is supporting the storage needs of the global data center and compute infrastructure buildout the industry is experiencing today.

Previous wording

Backblaze has multiple go-to-market motions. Through our blog and culture of transparency, we have built a community of millions of readers and brand advocates. Our direct sales activities, channel and technology partners, and referrals from our community of brand advocates, combined with our self-serve customer acquisition model have allowed us to attract over 500,000 customers as of June 30, 2026. Our direct sales activities have also supported our efforts to acquire larger customers, including leading neocloud platforms. As we continue expanding and accelerating our movement up-market, we expect our direct sales activities to increasingly contribute to the acquisition of customers like these. Customers use the Backblaze Storage Cloud platform across more than 175 countries to store and protect their data with an aggregate of more than 5 billion gigabytes of data storage under management.

Current wording

Backblaze has multiple go-to-market motions. Through our blog and culture of transparency, we have built a community of millions of readers and brand advocates. Our direct sales activities, channel and technology partners, and referrals from our community of brand advocates, combined with our self-serve customer acquisition model have allowed us to attract over 500,000 customers as of September 30, 2026. Our direct sales activities have also supported our efforts to acquire larger customers, including AI builders and leading neocloud and AI infrastructure platforms. As we continue expanding and accelerating our movement up-market, we expect our direct sales activities to increasingly contribute to the acquisition of customers like these. Customers use the Backblaze Storage Cloud platform across more than 175 countries to store and protect their data with an aggregate of more than 6 billion gigabytes of data storage under management.

Previous wording

B2 Cloud Storage enables customers to store data, AI platform providers to deliver new services, developers to build applications, and partners to expand their use cases. The amount of data stored in this cloud service can scale up and down as needed, on a pay-as-you-go basis or can be paid for on a capacity or committed contract basis for greater predictability. B2 Overdrive, B2 Neo, and Powered by Backblaze are all built on the foundation of B2 Cloud Storage. B2 Overdrive enables AI and data-driven workloads with up to 1Tbps throughput, unlimited free egress, and private networking support.

Current wording

B2 Cloud Storage enables customers to store data, AI platform providers to deliver new services, developers to build applications, and partners to expand their use cases. The amount of data stored in this cloud service can scale up and down as needed, on a pay-as-you-go basis or can be paid for on a capacity or committed contract basis for greater predictability. B2 Overdrive, Powered by Backblaze, and B2 Neo are all built on the foundation of B2 Cloud Storage. B2 Overdrive enables AI and data-driven workloads with up to 1 Tbps throughput, unlimited free egress, and private networking support. Powered by Backblaze enables platforms to bolster existing products or expand their product offerings with cloud storage via the Backblaze Partner API and custom domains technology. B2 Neo enables neocloud platforms to offer native, branded object storage alongside their GPU and compute services.

Previous wording

In June 2026, we entered into a multi-year Master Strategic Agreement with CoreWeave, Inc. (“CoreWeave”), a leading AI cloud platform provider, under which we will provide committed B2 Cloud Storage capacity and managed storage services on CoreWeave’s infrastructure (the “CoreWeave Agreement”). The two initial order forms under the agreement have terms of five and seven years, respectively, and an aggregate estimated total contract value of approximately $335.1 million, less approximately $21.7 million attributable to the fair value of warrants issued to the customer. We view this agreement as a significant example of the value Backblaze provides to neoclouds and in the AI infrastructure ecosystem.

Current wording

In June 2026, we entered into a multi-year Master Strategic Agreement with CoreWeave, Inc. (“CoreWeave”), a leading AI cloud platform provider, under which we will provide committed B2 Cloud Storage capacity and managed storage on CoreWeave’s infrastructure (the “CoreWeave Agreement”). The two initial order forms under the agreement have terms of five and seven years, respectively, and an aggregate estimated total contract value of approximately $335.1 million, less approximately $21.7 million attributable to the fair value of warrants issued to the customer. We view this agreement as a significant example of the value Backblaze provides to neoclouds and in the AI infrastructure ecosystem.

Previous wording

In November 2025, we initiated a restructuring and transformation plan designed primarily to improve the effectiveness and efficiency of our sales and marketing functions and enhance the pace of product innovation in support of our go-to-market objectives (the “2025 Restructuring and Transformation Plan”). The 2025 Restructuring and Transformation Plan includes the redesign and implementation of new strategies and processes, organizational realignment and reallocation of resources, and other corporate actions. From inception to date, we have incurred charges of approximately $6.1 million, including employee termination expenses, an impairment charge related to our exit from our corporate headquarters facility, and other transformation costs. For the three and six months ended June 30, 2026, we have incurred charges of approximately $1.3 million and $3.5 million, respectively, primarily related to employee termination expenses and other transformation costs.

Current wording

In November 2025, we initiated a restructuring and transformation plan designed primarily to improve the effectiveness and efficiency of our sales and marketing functions and enhance the pace of product innovation in support of our go-to-market objectives (the “2025 Restructuring and Transformation Plan”). The 2025 Restructuring and Transformation Plan includes the redesign and implementation of new strategies and processes, organizational realignment and reallocation of resources, and other corporate actions. From inception to date, we have incurred charges of approximately $7.8 million, including employee termination expenses, an impairment charge related to our exit from our corporate headquarters facility, and other transformation costs. For the three and nine months ended September 30, 2026, we have incurred charges of approximately $1.7 million and $5.2 million, respectively, primarily related to employee termination expenses and other transformation costs.

Previous wording

We expect to incur additional charges of approximately $2.4 million to $3.7 million through the first quarter of 2027, at which time the 2025 Restructuring and Transformation Plan is expected to be completed. These charges include estimated employee termination expenses of approximately $1.0 million to $1.1 million, and other business transformation costs.

Current wording

We expect to incur additional charges of approximately $0.9 million to $2.0 million through the first quarter of 2027, at which time the 2025 Restructuring and Transformation Plan is expected to be completed. These charges include estimated employee termination expenses of approximately $0.2 million and other business transformation costs.

Previous wording

In the second half of 2025, we initiated a multi-faceted go-to-market transformation designed to scale our business more efficiently and further accelerate our movement up-market. This includes scaling our direct sales organization, enhancing our marketing and demand generation capabilities, and driving expansion within our existing customer base.

Current wording

In the second half of 2025, we initiated a multi-faceted go-to-market transformation designed to scale our business more efficiently and further accelerate our movement up-market. These efforts have provided a foundation for our current go-to-market strategy, which includes scaling our direct sales organization, enhancing our marketing and demand generation capabilities, and driving expansion within our existing customer base.

Previous wording

We are continuing to optimize our direct sales organization to focus on larger customer opportunities and strategic accounts, while continuing to grow business in traditional segments. Our refined go-to-market motion is designed to improve sales productivity while preserving the cost-efficient self-serve model that has historically supported our customer acquisition. We believe effective execution of this transformation will continue to improve customer acquisition efficiency, increase average contract values, and to drive long-term revenue growth.

Current wording

We are continuing to optimize our direct sales organization to focus on larger customer opportunities and strategic accounts, while continuing to grow business in traditional segments. Our refined go-to-market motion is designed to improve sales productivity while preserving the cost-efficient self-serve model that has historically supported our customer acquisition. We believe effective execution of this transformation will continue to improve customer acquisition efficiency, increase average contract values, and drive long-term revenue growth.

Previous wording

Finally, we are focused on expanding revenue within our current customer base by introducing new features and addressing new use cases, continuing enhancement of our Customer Success programs under new leadership, and benefitting from natural growth of customer data stored on our platform. Customers continue to broaden their use of Backblaze for complementary workloads within their organizations, including AI training data storage, media storage, hybrid cloud support, and analytics repositories.

Current wording

Finally, we are focused on expanding revenue within our current customer base by introducing new features and addressing new use cases, continuing enhancement of our Customer Success programs under new leadership, and benefitting from natural growth of customer data stored on our platform. Customers continue to broaden their use of Backblaze across traditional and emerging workloads, including increasingly data-intensive AI use cases, media storage, hybrid cloud support, and analytics repositories.

Previous wording

B2 Neo, our white-label, cloud object storage solution, is designed to serve neocloud platforms, which deliver GPU and other compute capacity to their end users. B2 Neo enables these platforms to offer native, branded object-storage as a new service to their end customers. The neocloud market is projected to grow from $35 billion this year to over $236 billion by 2031, driven almost entirely by demand for AI compute. As enterprise customers increasingly seek full-stack cloud platforms rather than raw GPU capacity alone, object storage is a critical data foundation these enterprise customers require. While some neoclouds have some level of object storage offering today, B2 Neo provides neoclouds with a scalable capacity storage tier, where data from a flash tier (the low latency tier that GPUs require to function at optimal levels) can be moved when it’s not being utilized in an active model training run. What differentiates B2 Neo in the space is its ability to scale without sacrificing performance or economics. The value this provides these companies includes more functional capacity in the flash tier, better margins for their storage products, and a solution that can be operationalized now, rather than spending years developing those capabilities in-house.

Current wording

B2 Neo, our white-label cloud object storage solution, is designed to serve neocloud platforms, which deliver GPU and other compute capacity to their end users. B2 Neo enables these platforms to offer native, branded object storage as a new service to their end customers. The neocloud market is projected to grow from $35 billion this year to over $236 billion by 2031, driven almost entirely by demand for AI compute. As customers increasingly seek full-stack cloud platforms rather than raw GPU capacity alone, object storage is a critical data foundation these enterprise customers require. While some neoclouds have some level of object storage offering today, B2 Neo provides neoclouds with a scalable capacity storage tier, where data from a flash tier (the low-latency tier that GPUs require to function at optimal levels) can be moved when it’s not being utilized in an active model training run. What differentiates B2 Neo in the space is its ability to scale without sacrificing performance or economics. The value this provides to these companies includes more functional capacity in the flash tier, better margins for their storage products, and a solution that can be operationalized now, rather than spending years developing those capabilities in-house.

Previous wording

This trend also informs our strategy for serving and attracting the next generation of developers. Our new AI developer team, which comprises AI-native engineers and product leaders within our Research and Development organization, is focused on incorporating B2 Cloud Storage into the tooling, documentation, and sample applications that AI developers use to evaluate and deploy new solutions, particularly generative AI applications. Developers increasingly use AI coding agents to assist in building applications that rely on foundational services, including storage. By integrating B2 Cloud Storage with open-source projects, our AI developer team is working to position our platform as a default selection for generative AI projects.

Current wording

This trend also informs our strategy for serving and attracting the next generation of developers. Our new AI developer team, which comprises AI-native engineers and product leaders within our Research and Development organization, is focused on incorporating B2 Cloud Storage into the tooling, documentation, and sample applications that AI developers use to evaluate and deploy new solutions, particularly generative AI applications. By integrating B2 Cloud Storage with open-source projects, our AI developer team is working to position our platform as a default selection for generative AI projects.

Previous wording

We remain committed to continued investment in our technology platform to meet the performance, durability, security, compliance, and integration requirements of modern enterprise and AI workloads. This includes continued development of our core B2 Cloud Storage platform, B2 Overdrive, B2 Neo, partner APIs, custom domains technology, private networking support, managed storage capabilities, and other platform features designed to support data-intensive use cases. We believe this continued focus on enhancing our core platform is critical to supporting existing customers, driving increased usage over time, and enabling larger strategic relationships.

Current wording

We remain committed to continued investment in our technology platform to meet the performance, durability, security, compliance, and integration requirements of modern enterprise and AI workloads. This includes continued development of our core B2 Cloud Storage platform, B2 Overdrive, B2 Neo, partner APIs, TypeScript and Genblaze SDKs, AI agent tools, custom domains technology, private networking support, managed storage capabilities, and other platform features designed to support data-intensive use cases. As part of these efforts, we recently launched our Agentic MCP Server, designed to facilitate interactions between AI agents and our platform. Developers increasingly use AI coding agents to assist in building applications that rely on foundational services, including storage. We believe this continued focus on enhancing our core platform is critical to supporting existing customers, driving increased usage over time, and enabling larger strategic relationships.

Previous wording

While our sales and marketing efforts have primarily focused on the United States, our existing customer base spans more than 175 countries, with 28% of our total revenue originating outside of the United States for each of thesix months ended June 30, 2026 and 2025, respectively. We believe international expansion may represent a meaningful opportunity. We may invest in our operations internationally to reach new customers by expanding into targeted key geographies where we believe there are opportunities for significant return on investment.

Current wording

While our sales and marketing efforts have primarily focused on the United States, our existing customer base spans more than 175 countries, with 28% of our total revenue originating outside of the United States for both thenine months ended September 30, 2026 and 2025. We believe international expansion may represent a meaningful opportunity. We may invest in our operations internationally to reach new customers by expanding into targeted key geographies where we believe there are opportunities for significant return on investment.

Previous wording

We believe the growth in the use of our platform by our existing customers is an important measure of the health of our business and our future growth prospects. We measure this growth by monitoring our overall net revenue retention rate, which measures our ability to retain and expand revenue from existing customers. The enhancement of our B2 Cloud Storage offerings is driving significant revenue retention, resulting in NRRs of 113%and 114% as of June 30, 2026 and June 30, 2025, respectively. The decrease in the NRR for Computer Backup reflects the prior-year period benefit from the phased impact of earlier price increases on renewing subscriptions, whereas pricing was stabilized in the NRRbeginning in 2026.

Current wording

We believe the growth in the use of our platform by our existing customers is an important measure of the health of our business and our future growth prospects. We measure this growth by monitoring our overall net revenue retention rate, which measures our ability to retain and expand revenue from existing customers. The enhancement of our B2 Cloud Storage offerings is driving significant revenue retention, resulting in NRRs of 115%and 116% as of September 30, 2026 and September 30, 2025, respectively. The decrease in the NRR for Computer Backup reflects the prior-year period benefit from the phased impact of earlier price increases on renewing subscriptions, whereas pricing was stabilized in the NRRbeginning in 2026.

Previous wording

We use gross customer retention rate to measure our ability to retain our customers. Our gross customer retention rate reflects only customer losses and does not reflect the expansion or contraction of revenue we earn from our existing customers. As of June 30, 2026 and 2025, gross customer retention rates across our revenue products were approximately 91% and 90%, equivalent to approximately ten years of customer retention. We believe our high gross customer retention rates demonstrate that we provide a vital service to our customers, as the vast majority of our customers tend to continue to use our platform from one period to the next.

Current wording

We use gross customer retention rate to measure our ability to retain our customers. Our gross customer retention rate reflects only customer losses and does not reflect the expansion or contraction of revenue we earn from our existing customers. As of September 30, 2026 and 2025, gross customer retention rates across our revenue products were approximately 91% for both periods, equivalent to approximately ten years of customer retention. We believe our high gross customer retention rates demonstrate that we provide a vital service to our customers, as the vast majority of our customers tend to continue to use our platform from one period to the next.

Previous wording

While ARR is not a guarantee of future revenue, we consider substantially all of our revenue as recurring in nature for the periods presented. As noted above, our gross customer retention rate has been consis tent over the periods presented at approximately 90%. Although B2 Cloud Storage is generally consumption-based and paid for by customers in arrears, we recognize revenue in the month these storage services are delivered and consider this revenue recurring as customers are charged as long as their data is stored with us. Further, during the periods presented, customers who store data with us generally increase the amount of their data stored over time, as evidenced by our B2 Cloud Storage NRR rate of 113% as of June 30, 2026. Computer Backup (subscription-based arrangements) revenue is recognized on a straight-line basis over the contractual term of the arrangement beginning on the date that the service commences, provided that all other revenue recognition criteria have been met. See Note 2 to our audited consolidated financial statements included in our Annual Report for details on our revenue recognition policy. Additional limitations of ARR include the fact that consumption-based revenue is not guaranteed for future periods, although we believe that our high historic gross customer retention rate support the recurring nature of ARR, and the fact that our subscription terms can be on a monthly basis, although the significant majority of our customers have subscription terms of one year or longer during the periods presented above.

Current wording

While ARR is not a guarantee of future revenue, we consider substantially all of our revenue as recurring in nature for the periods presented. As noted above, our gross customer retention rate has been consis tent over the periods presented at approximately 91%. Although B2 Cloud Storage is generally consumption-based and paid for by customers in arrears, we recognize revenue in the month these storage services are delivered and consider this revenue recurring as customers are charged as long as their data is stored with us. Further, during the periods presented, customers who store data with us generally increase the amount of their data stored over time, as evidenced by our B2 Cloud Storage NRR rate of 115% as of September 30, 2026. Computer Backup (subscription-based arrangements) revenue is recognized on a straight-line basis over the contractual term of the arrangement beginning on the date that the service commences, provided that all other revenue recognition criteria have been met. See Note 2 to our audited consolidated financial statements included in our Annual Report for details on our revenue recognition policy. Additional limitations of ARR include the fact that consumption-based revenue is not guaranteed for future periods, although we believe that our high historic gross customer retention rate supports the recurring nature of ARR, and the fact that our subscription terms can be on a monthly basis, although the significant majority of our customers have subscription terms of one year or longer during the periods presented above.

Previous wording

Changes to recurring revenue may result from the expansion of our offerings to our existing customers, as well as new customer acquisition and the timing of customer renewals. Our ARR increased by $31.5 million for B2 Cloud Storage as of June 30, 2026 compared to June 30, 2025, representing 39% growth. The increase in B2 Cloud Storage ARR was primarily driven by the May 2026 price increase, as well as revenue recognized from a new enterprise customer engagement. ARR for Computer Backup experienced a slight decline of$1.3 million compared to the prior year, but continues to serve as a stable source of recurring revenue, supported by multi-year subscription commitments and increased demand from business environments.

Current wording

Changes to recurring revenue may result from the expansion of our offerings to our existing customers, as well as new customer acquisition and the timing of customer renewals. Our ARR increased by $44.0 million for B2 Cloud Storage as of September 30, 2026 compared to September 30, 2025, representing 53% growth. The increase in B2 Cloud Storage ARR was primarily driven by revenue recognized from new enterprise customer engagements, as well as the May 2026 price increase. ARR for Computer Backup experienced a decline of$1.6 million compared to the prior year, but continues to serve as a stable source of recurring revenue, supported by multi-year subscription commitments and increased demand from business environments.

Previous wording

We generate revenue primarily from our B2 Cloud Storage and Computer Backup cloud services offered on our platform. Our platform is offered to customers primarily through two pricing models: a consumption- or committed-contract basis for B2 Cloud Storage, and a subscription-based arrangement for Computer Backup. Our subscription arrangements generally range in duration from one month to five years, forwhich we bill our customers up front for the entire period.

Current wording

We generate revenue primarily from our B2 Cloud Storage and Computer Backup cloud services offered on our platform. Our platform is offered to customers primarily through two pricing models: consumption- or committed-contract basis for B2 Cloud Storage, and subscription-based arrangements primarily for Computer Backup. Our subscription arrangements generally range in duration from one month to five years, forwhich we bill our customers up front for the entire period.

Previous wording

We expect our go-to-market transformation and recently entered customer contracts to support continued growth in B2 Cloud Storage revenue over time. The pace and magnitude of this growth will depend on the execution of our go-to-market initiatives, customer deployment schedules and usage levels, and the commencement of contracted services.

Current wording

We expect our go-to-market strategy and recently entered customer contracts to support continued growth in B2 Cloud Storage revenue over time. Revenue contributions from our larger AI infrastructure agreements were minimal in the third quarter of 2026 and are expected to become meaningful beginning in the first quarter of 2027. The pace and magnitude of this growth will depend on the execution of our go-to-market initiatives, customer deployment schedules and usage levels, and the commencement of contracted services.

Previous wording

We recently began offering committed storage capacity and managed storage services. Under committed-capacity arrangements, the provision of reserved storage capacity over the contractual term represents a single performance obligation that is satisfied over time as the capacity is made available to the customer. Revenue is recognized under these arrangements using an output method based on the proportion of contracted storage capacity made available, which reflects the transfer of services to the customer. Under managed storage arrangements, the related managed storage services generally represent a single performance obligation that is satisfied over time, with revenue recognition commencing when the applicable storage capacity is deployed and the related services become available to the customer.

Current wording

We recently began offering committed storage capacity and managed storage. Under committed-capacity arrangements, theprovision of reserved storage capacity over the contractual term represents a single performance obligation that is satisfied over time as the capacity is made available to the customer. Revenue is recognized under these arrangements using an output method based on the proportion of contracted storage capacity made available, which reflects the transfer of services to the customer. Under managed storage arrangements, the Company evaluates contract terms to identify one or more distinct performance obligations, which are satisfied either over time as services are rendered or at a point in time upon transfer of control. Revenue recognition commences when the related managed storage become available to the customer, and either the applicable minimum contract commitment begins or the storage capacity is deployed. To date, the Company has not generated revenue from managed storage arrangements and does not anticipate recognizing revenue from these offerings during fiscal 2026.

Previous wording

We plan to continue investing in our infrastructure to support the growth of our business. These investments include the purchase and expansion of infrastructure equipment (and related depreciation) as well as software development activities and associated amortization. These investments may also be affected by higher equipment prices and supply chain constraints, which could adversely affect our gross margin. Because these costs are often incurred ahead of revenue generation, delays in realizing anticipated revenue or fluctuations in the timing of revenue could adversely affect our gross margin from period to period.

Current wording

We plan to continue investing in our infrastructure to support the growth of our business. These investments include the expansion of our data center footprint and capacity, the purchase and expansion of infrastructure equipment and related depreciation, as well as software development activities and associated amortization. These investments may also be affected by higher equipment prices and supply chain constraints, which could adversely affect our gross margin. Because these costs are often incurred ahead of revenue generation, delays in realizing anticipated revenue or fluctuations in the timing of revenue could adversely affect our gross margin from period to period.

Previous wording

During the second quarter of 2025, we completed a study that resulted in an extension of the useful lives of certain infrastructure equipment. The change in estimate reduced depreciation expense by approximately $0.9 million for the six months ended June 30, 2026 compared with the prior-year period, reflecting the benefit recognized in the first quarter of 2026.

Current wording

During the second quarter of 2025, we completed a study that resulted in an extension of the useful lives of certain infrastructure equipment. The change in estimate reduced depreciation expense by approximately $0.9 million for the nine months ended September 30, 2026 compared with the prior-year period, reflecting the benefit recognized in the first quarter of 2026.

Previous wording

The most significant components of our operating expenses are personnel costs, which consist of salaries, benefits, bonuses, and stock-based compensation. We expect our operating expenses, excluding depreciation, amortization, restructuring charges, and stock-based compensation expenses, to remain relatively flat in 2026 compared to 2025, as efficiencies from our restructuring activities in 2025 offset increased investments in research and development and other growth-related costs. However, sales and marketing expenses may increase in absolute dollars as we invest in marketing initiatives to support business growth.

Current wording

The most significant components of our operating expenses are personnel costs, which consist of salaries, benefits, bonuses, and stock-based compensation. We expect our operating expenses, excluding depreciation, amortization, restructuring charges, and stock-based compensation expenses, to remain relatively flat in 2026 compared to 2025, as efficiencies from our 2025 restructuring activities offset increased research and development investments, higher sales and marketing expenses related to initiatives supporting business growth, and other growth-related costs.

Previous wording

We expect our investments in research and development to increase in absolute dollars for the foreseeable future as we continue to add new features to our platform, integrate advanced technologies such as AI into our development lifecycle, further enhancing our cloud service offerings, and increase the functionality of our existing features. Our research and development expenses may fluctuate as a percentage of total revenue from period to period due to the timing, nature, and extent of these expenses.

Current wording

We expect our investments in research and development to increase in absolute dollars for the foreseeable future as we continue to add new features to our platform, integrate advanced technologies such as AI into our development lifecycle, further enhance our cloud service offerings, and increase the functionality of our existing features. Our research and development expenses may fluctuate as a percentage of total revenue from period to period due to the timing, nature, and extent of these expenses.

Previous wording

Sales and marketing expenses also reflect ongoing investments in sales initiatives, including supplementing our self-serve model with a direct sales approach, expanding our partner ecosystem, building our lead generation and brand awareness, and sponsoring marketing events.

Current wording

Sales and marketing expenses also reflect ongoing investments in sales initiatives, including supplementing our self-serve model with a direct sales approach, expanding our partner ecosystem, building our lead generation and brand awareness, and sponsoring marketing events. We expect sales and marketing expenses to increase in absolute dollars as we continue to make targeted investments in key go-to-market initiatives to support business growth.

Previous wording

General and administrative expenses consist primarily of personnel costs for our accounting, finance, legal, security, human resources, and administrative support personnel and executives. General and administrative expenses also include costs related to legal and other professional services fees, sales and other taxes; depreciation and amortization; and an allocation of our general overhead expenses. While we expect general and administrative expenses to increase in absolute dollars as our business scales, we anticipate that these costs will decline as a percentage of revenue over time.

Current wording

General and administrative expenses consist primarily of personnel costs for our accounting, finance, legal, security, human resources, and administrative support personnel and executives. General and administrative expenses also include costs related to legal and other professional services fees, sales and other taxes, depreciation and amortization, and an allocation of our general overhead expenses. While we expect general and administrative expenses to increase in absolute dollars as our business scales, we anticipate that these costs will modestly decline as a percentage of revenue as growth in our revenue base outpaces the incremental administrative costs required to support our business.

Previous wording

(1)$0.4 million and $0.6 million of stock-based compensation expense incurred during the three and six months ended June 30, 2026, respectively, are classified as restructuring charges in the table above, including an immaterial amount and $0.1 million, respectively, related to sales and marketing costs, and $0.4 million and $0.5 million, respectively, related to general and administrative costs. For further information on our restructuring plans, see Note 14 to our condensed consolidated financial statements in this Quarterly Report on Form 10-Q.

Current wording

(1)$0.4 million and $0.9 million of stock-based compensation expense incurred during the three and nine months ended September 30, 2026, respectively, are classified as restructuring charges in the table above, including an immaterial amount and $0.1 million, respectively, related to sales and marketing costs, and $0.3 million and $0.8 million, respectively, related to general and administrative costs. For further information on our restructuring plans, see Note 14 to our condensed consolidated financial statements in this Quarterly Report on Form 10-Q.

Previous wording

(3)$0.1 million and $0.3 million of depreciation and amortization expense recorded to cost of revenue for the three and six months ended June 30, 2026, respectively, are classified as restructuring charges in the table above.

Current wording

(2)$0.1 million and $0.4 million of depreciation and amortization expense recorded to cost of revenue for the three and nine months ended September 30, 2026, respectively, are classified as restructuring charges in the table above.

Previous wording

Comparison of the Three and Six Months Ended June 30, 2026 and 2025

Current wording

Comparison of the Three and Nine Months Ended September 30, 2026 and 2025

Previous wording

Total revenue increased by $6.4 million, or 18%, for the three months ended June 30, 2026 compared to the same period in 2025.

Current wording

Total revenue increased by $9.5 million, or 26%, for the three months ended September 30, 2026 compared to the same period in 2025.

Previous wording

•a $4.5 million increase in sales to new customers;

Current wording

•a $6.7 million increase in sales to new customers;

Previous wording

•a $1.5 million increase due to the price increase effective May 2026; and

Current wording

•a $2.5 million increase due to the price increase effective May 2026; and

Previous wording

•a $0.7 million increase driven by higher storage usage as a result of upselling and organic growth by existing customers.

Current wording

•a $0.6 million increase driven by higher storage usage as a result of upselling and organic growth by existing customers.

Previous wording

•a $1.6 million decrease from a decline in license counts;

Current wording

•a $0.6 million decrease from a decline in license counts; and

Previous wording

•a $0.3 million increase driven by increased utilization by existing customers; and

Current wording

•a $0.3 million increase driven by increased utilization by existing customers.

Previous wording

Total revenue increased by $10.5 million, or 15%, for the six months ended June 30, 2026 compared to the same period in 2025.

Current wording

Total revenue increased by $20.0 million, or 18%, for the nine months ended September 30, 2026 compared to the same period in 2025.

Previous wording

•a $7.2 million increase in sales to new customers;

Current wording

•a $13.9 million increase in sales to new customers;

Previous wording

•a $2.4 million increase driven by higher storage usage as a result of upselling and organic growth by existing customers; and

Current wording

•a $3.0 million increase driven by higher storage usage as a result of upselling and organic growth by existing customers; and

Previous wording

•a $1.5 million increase due to the price increase effective May 2026.

Current wording

•a $4.0 million increase due to the price increase effective May 2026.

Previous wording

Primary factors influencing the $0.6 million decrease in Computer Backup revenue include the following:

Current wording

Primary factors influencing the $0.9 million decrease in Computer Backup revenue include the following: