BLACKBERRY Ltd (BB): Results of Operations and Financial Condition
BLACKBERRY Ltd (BB) filed an SEC Form 8-K — Results of Operations and Financial Condition. Exhibit 99.1 September 24, 2026 BlackBerry Reports Second Quarter Fiscal Year 2027 Results • Revenue increased 26% year-over-year to $163 million • QNX delivered record quarterly revenue and secured its first Alloy Kore TM design win, the largest design win in QNX history • Adjus
How this was made
The 30-second read
Why it matters
The earnings beat and raised guidance are likely to attract buying interest, especially given the record QNX performance and new design win.
Market read
Earnings beat and raised outlook provide a clear catalyst for BB, with potential spillover to related tech and automotive software stocks.
What to watch
Potential headwinds from supply chain constraints in automotive OEMs could temper growth.
Revenue increased 26% year-over-year to $163.3 million, while GAAP operating income rose 192% year-over-year to $33.6 million and BlackBerry raised its fiscal year 2027 revenue and Adjusted EBITDA outlook.
Q2 combined 26% revenue growth, expanded gross margin, sharply higher GAAP operating income, positive operating cash flow, and higher FY27 revenue and Adjusted EBITDA guidance. QNX was the principal growth and profitability contributor, while Secure Communications grew modestly and saw lower segment adjusted EBITDA.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Total company revenueGAAP | $163.3 million | – | 26% |
| Cost of salesGAAP | $36.2 million | – | – |
| Gross marginGAAP | $127.1 million | – | – |
| Gross margin %GAAP | 77.8% | – | improved by 3 percentage points year-over-year |
| Adjusted gross marginnon-GAAP | $127.7 million | – | – |
| Adjusted gross margin %non-GAAP | 78.2% | – | improved 3 percentage points year-over-year |
| Research and development expenseGAAP | $33.2 million | – | – |
| Sales and marketing expenseGAAP | $25.3 million | – | – |
| General and administrative expenseGAAP | $31.8 million | – | – |
| Amortization expenseGAAP | $2.5 million | – | – |
| Impairment of long-lived assetsGAAP | $0.7 million | – | – |
| Operating expensesGAAP | $93.5 million | – | – |
| Operating incomeGAAP | $33.6 million | – | 192% |
| Adjusted operating incomenon-GAAP | $42.9 million | – | – |
| Adjusted operating income margin %non-GAAP | 26% | – | – |
| Adjusted EBITDAnon-GAAP | $47.0 million | – | 81% |
| Adjusted EBITDA margin %non-GAAP | 29% | – | – |
| Investment income, netGAAP | $1.6 million | – | – |
| Income before income taxGAAP | $35.2 million | – | – |
| Provision for income taxesGAAP | $1.3 million | – | – |
| Net incomeGAAP | $33.9 million | – | – |
| Adjusted net incomenon-GAAP | $43.2 million | – | 79% |
| Basic earnings per shareGAAP | $0.06 | – | – |
| Diluted earnings per shareGAAP | $0.05 | – | – |
| Adjusted basic earnings per sharenon-GAAP | $0.07 | – | – |
| Operating cash flowGAAP | $29.3 million | – | an improvement of $25.9 million |
| Free cash flownon-GAAP | $28.1 million | – | – |
| Secure Communications Annual Recurring Revenueother | $221 million | – | $8 million |
| Secure Communications Dollar-Based Net Retention Rateother | 91% | – | (2%) |
| QNX segment adjusted gross marginGAAP | $69.7 million | – | – |
| QNX segment adjusted EBITDAnon-GAAP | $29.0 million | – | 41% |
| Secure Communications segment adjusted gross marginGAAP | $37.4 million | – | – |
| Secure Communications segment adjusted EBITDAnon-GAAP | $8.0 million | – | decreased 18% year-over-year |
| Licensing segment adjusted gross marginGAAP | $20.6 million | – | – |
| Licensing segment adjusted EBITDAnon-GAAP | $20.0 million | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| QNXRecord quarterly revenue driven by strength in its core automotive business. Coretura selected Alloy Kore for its next-generation commercial vehicle software platform. | $80.3 million | – | 27% |
| Secure CommunicationsManagement described Secure Communications as a stable and profitable contributor following a particularly strong first quarter. | $60.9 million | – | 2% |
| LicensingNot stated. | $22.1 million | – | – |
Q3 FY27 and FY27 outlook
- RevenueQ3 FY27 Total BlackBerry revenue: $143 - $154 million; FY27 Total BlackBerry revenue: $616- $636 million
- NoteQ3 FY27 QNX revenue: $82 - $88 million; FY27 QNX revenue: $315 - $325 million
- NoteQ3 FY27 Secure Communications revenue: $55 - $60 million; FY27 Secure Communications revenue: $260 - $270 million
- NoteQ3 FY27 Licensing revenue: Approximately $6 million; FY27 Licensing revenue: Approximately $41 million
- NoteQ3 FY27 Total Company adjusted EBITDA: $28 - $37 million; FY27 Total Company adjusted EBITDA: $141 - $158 million
- NoteQ3 FY27 QNX segment adjusted EBITDA: $27 - $32 million; FY27 QNX segment adjusted EBITDA: $95 - $105 million
- NoteQ3 FY27 Secure Communications segment adjusted EBITDA: $6 - $10 million; FY27 Secure Communications segment adjusted EBITDA: $50 - $58 million
- NoteQ3 FY27 Licensing segment adjusted EBITDA: Approximately $5 million; FY27 Licensing segment adjusted EBITDA: Approximately $36 million
- NoteQ3 FY27 Adjusted basic EPS: $0.04 – $0.05; FY27 Adjusted basic EPS: $0.19 – $0.22
- NoteQ3 FY27 Operating cash flow: $20 – $30 million; FY27 Operating cash flow: Approximately $115 million
Capital returns
- Common shares repurchased: $10.0 million for the six months ended August 31, 2026.
- Issuance of common shares: $1.3 million for the six months ended August 31, 2026.
What drove it
- QNX revenue increased 27% year-over-year to $80.3 million, and QNX segment adjusted gross margin expanded by 4 percentage points year-over-year to 87%.
- Coretura's Alloy Kore design win was the largest in QNX history and added over $100 million to the QNX royalty backlog.
- Licensing revenue was $22.1 million and Licensing segment adjusted EBITDA was $20.0 million.
- Total company adjusted gross margin improved 3 percentage points year-over-year to 78.2%, while GAAP gross margin improved by 3 percentage points year-over-year to 77.8%.
- Operating cash flow was $29.3 million and free cash flow was $28.1 million.
Concerns
- Secure Communications segment adjusted gross margin decreased by 5 percentage points year-over-year to 61%.
- Secure Communications segment adjusted EBITDA decreased 18% year-over-year to $8.0 million.
- Secure Communications Dollar-Based Net Retention Rate was 91%, compared with 93%.
- The company cited uncertainty around future restructuring charges and impairment charges as reasons it could not reconcile expected Adjusted EBITDA and expected Adjusted basic EPS to the most directly comparable expected GAAP measures.
What to watch
- Q3 FY27 Total BlackBerry revenue guidance of $143 - $154 million.
- Q3 FY27 QNX revenue guidance of $82 - $88 million and QNX segment adjusted EBITDA guidance of $27 - $32 million.
- Q3 FY27 Secure Communications revenue guidance of $55 - $60 million and segment adjusted EBITDA guidance of $6 - $10 million.
- Conversion of the over $100 million addition to QNX royalty backlog from the first Alloy Kore design win.
- FY27 Total BlackBerry revenue guidance of $616- $636 million and Total Company adjusted EBITDA guidance of $141 - $158 million.
- FY27 operating cash flow guidance of Approximately $115 million.
Balance sheet and cash flow
- Cash and cash equivalents: $266.2 million as at August 31, 2026, compared with $274.7 million as at February 28, 2026.
- Short-term investments: $111.3 million as at August 31, 2026, compared with $85.2 million as at February 28, 2026.
- Long-term investments: $55.5 million as at August 31, 2026, compared with $58.3 million as at February 28, 2026.
- Cash, cash equivalents, short-term investments and long-term investments: $447.1 million as at August 31, 2026, compared with $432.4 million as at February 28, 2026.
- Long-term notes: $197.1 million as at August 31, 2026, compared with $196.5 million as at February 28, 2026.
- Net cash provided by operating activities: $33.9 million for the six months ended August 31, 2026, compared with net cash used in operating activities of $(14.1) million for the six months ended August 31, 2025.
- Net cash used in investing activities: $(33.2) million for the six months ended August 31, 2026, compared with net cash provided by investing activities of $52.8 million for the six months ended August 31, 2025.
- Net cash used in financing activities: $(8.7) million for the six months ended August 31, 2026, compared with $(28.8) million for the six months ended August 31, 2025.
- Free cash flow: $29.8 million for the six months ended August 31, 2026, compared with free cash flow usage of $(15.8) million for the six months ended August 31, 2025.
Analysis
BlackBerry reported a strong second quarter of fiscal 2027. Total revenue increased 26% year-over-year to $163.3 million, with GAAP gross margin improving to 77.8% from 74.5% and adjusted gross margin improving to 78.2% from 75.0%. GAAP operating income increased 192% year-over-year to $33.6 million, while adjusted EBITDA increased 81% to $47.0 million. GAAP net income was $33.9 million and adjusted net income was $43.2 million.
QNX was the principal source of growth and segment earnings. Its revenue increased 27% year-over-year to $80.3 million, segment adjusted gross margin expanded by 4 percentage points to 87%, and segment adjusted EBITDA increased 41% to $29.0 million. Management attributed the record QNX quarter to core automotive strength. The Coretura Alloy Kore design win, characterized as the largest in QNX history, added over $100 million to QNX royalty backlog.
Secure Communications delivered $60.9 million of revenue, up 2% year-over-year, but its segment adjusted gross margin declined by 5 percentage points to 61% and segment adjusted EBITDA decreased 18% to $8.0 million. Secure Communications ARR was $221 million, compared with $213 million, while DBNRR was 91%, compared with 93%. Licensing supplied $22.1 million of revenue and $20.0 million of segment adjusted EBITDA, materially supporting consolidated profitability in the quarter.
Cash generation improved materially. Operating cash flow was $29.3 million, compared with $3.4 million in the prior-year quarter, and free cash flow was $28.1 million, compared with $2.6 million. The company ended the quarter with $447.1 million in cash and investments, while long-term notes were $197.1 million. It repurchased $10.0 million of common shares in the first six months.
Management raised fiscal 2027 outlook, guiding to Total BlackBerry revenue of $616- $636 million and Total Company adjusted EBITDA of $141 - $158 million. Q3 guidance calls for Total BlackBerry revenue of $143 - $154 million, adjusted EBITDA of $28 - $37 million, adjusted basic EPS of $0.04 – $0.05, and operating cash flow of $20 – $30 million. The main execution points are QNX growth and royalty-backlog conversion, the trajectory of Secure Communications profitability and retention, and delivery of the full-year cash flow outlook.
Management, verbatim
Our strong second quarter performance provides further evidence that BlackBerry’s profitable growth model is working, with revenue, profitability, and cash flow generation all exceeding our expectations.
John J. Giamatteo, CEO, BlackBerry
QNX delivered record performance in the quarter, driven by strength in our core automotive business. The first Alloy Kore design win, the largest design win in QNX history, marks an important commercial milestone.
John J. Giamatteo, CEO, BlackBerry
Not in the filing
stated, not guessed- Previous-release outlook was not provided, so comparisons with prior guidance are unavailable.
- Q2 FY27 dividend declaration or payment was not reported.
- Q2 FY27 share repurchases were not separately reported; only six-month common shares repurchased were reported.
- Q2 FY27 investing cash flow and financing cash flow were not separately reported.
- Q2 FY27 adjusted diluted earnings per share was not reported.
- Q3 FY27 and FY27 guidance for gross margin, operating expenses, and tax rate was not reported.
- Prior-quarter segment revenue and segment adjusted EBITDA comparisons were not reported.
- A reconciliation of Q3 FY27 and FY27 expected Adjusted EBITDA and expected Adjusted basic EPS to comparable expected GAAP measures was not provided.
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
BlackBerry's Q2 FY2027 earnings release via SEC Form 8‑K.
Ticker impact
BlackBerry reported Q2 FY2027 results with 26% revenue growth and issued guidance raising FY2027 revenue and Adjusted EBITDA outlook.
Expect short-term price appreciation as investors price in higher growth expectations.
Revenue and EBITDA growth were robust, and the company lifted its full-year outlook, which typically drives buying pressure.
Market effects
Positive momentum for the automotive software and cybersecurity segments.
May boost sentiment for Canadian tech stocks.
Highlights strength in embedded automotive software globally.
Counterpoint
If the raised outlook is already priced in, the stock may face a short-term pullback.
Key entities
- CompanyBlackBerry Ltd
Provider of enterprise software and automotive OS solutions.
