Backblaze, Inc. (NASDAQ:BLZE) saw its stock surge 5.02% in intraday trading, building on a 2.1% after-hours gain following the release of its third-quarter earnings report. The cloud storage and data backup company reported revenue of $37.2 million for the quarter ended September 30, marking a 14% year-over-year increase, primarily driven by its B2 Cloud Storage division.

The company's financial performance showed significant improvements across several metrics. Backblaze's gross margin expanded by approximately 700 basis points to 62%, while adjusted EBITDA reached $8.4 million, representing 23% of revenue, up from 12% a year earlier. Notably, the company reported its first non-GAAP net income of $1.9 million, substantially narrowing its net loss to $3.8 million from $12.8 million in the previous year. CEO Gleb Budman attributed the strong results to disciplined cost management and growing demand from AI and data-heavy customers.

Looking ahead, Backblaze provided an optimistic forecast for the fourth quarter, projecting revenue between $37.3 million and $37.9 million, with an adjusted EBITDA margin of 20%-22%. The company also expects to achieve free cash flow positivity in Q4. However, investors should note that Needham has cut its price target for BLZE from $12 to $8, which may temper some of the enthusiasm surrounding the stock's recent performance.