Backblaze, Inc. (NASDAQ:BLZE) Q4 2022 Earnings Call Transcript

Frank Patchel: Yes. So we, I think, you remember we talked about how – we have this efficient self-serve motion that includes generating good content, and then bringing people to the website, and then converting them through the website experience. And we have actually worked on both of those areas, both in terms of generating good content, things like our drive stats where we publish statistics around the hard drive reliability that is been thriving. We have had higher numbers on both total traffic on the drive stats, and recent drive traffic on the drive stats. So, it is driving interest from that front. And then also on the conversion side of it, we did invest last year in additional resources for the team who focuses on optimizing the website flow for customers, making it even easier.

And so that then translates into additional people coming through the funnel once they are – once they have come to the website. And this is an area that we have continued to focus on this year. It is a continued, it is not a one and done, it is a continued focus that will be doing throughout the year. It talks about great example, we have talked about how we moderate and measure our different investments and that investment is one that we actually increased during the year because we were seeing good preliminary results. So I’m really pleased with that investment is coming to fruition.

Erik Suppige: Got it. Thanks.

Operator: Our next question comes from Zach Cummins with B. Riley Securities. Please go ahead.

Zach Cummins: Yes. Hi, good afternoon. Gleb and Frank congrats again on the solid results and thanks for taking my questions. Gleb, could you go a little bit deeper into the traction you have seen so far with channel partners and your B2 Reserve product? Seems to be some pretty encouraging early progress and just curious how you are thinking about the potential growth from that channel in 2023?

Gleb Budman: Sure. It is something that we are excited about. I think the combination of feature reserve and channel is a great mix. And we have seen that because it is all the needs that the customers have. So typically IT buyers solving backup archiving ransom ware type use cases. And so it makes it easier for them to purchase, because it is a prepaid fixed price amount. It is predictable and it is easier for them to go to their finance department, their CFO and say, this is what it is going to cost me, which is especially this year is something they are more focused on getting clear answers to. It is something where the channel is accustomed to selling a SKU. So it is a good way for the channels to sell. And so it is a good fit, product market fit on that front.

B2 Reserve, as I noted, it is grown very rapidly over the last couple of quarters. We have signed several national retailers and distributors. We signed another distributor just this quarter. And basically what we are doing is, we have hired up additional people into the partnership team to go and pursue various strategies on, primarily getting more traction with these large national resource. It is not so much a strategy of get lots and lots and lots of the retailers and distributors. It is a strategy of getting more traction increasingly with the ones that we signed because they are major significant ones. And so that is basically how we are looking at it. We are putting people added. We are putting programs added and we are aligning around a core handful of strategies to execute on that price.

Zach Cummins: Understood. That is helpful. And final question for me is any sort of update you can give on the cloud vacation product, any sort of feedback from early adopters? And do you think, I guess, and standing up your East Coast data center is going to help to drive further adoption of that product here in 2023?