Total Revenue Beat and Strong Growth
Total company revenue of $153 million, above the high end of guidance, representing 26% year-over-year growth.
BlackBerry
· BB
June 25th, 2026
Summary
- Earnings Call Date:
- 2026-06-25
- Next Earnings Date:
- 2026-06-25
Earnings Call Sentiment
PositiveThe call presented a strong quarter with multiple positive operational and financial indicators: revenue and adjusted EBITDA materially beat guidance, margins expanded, QNX and Secure Communications both delivered double-digit growth and Rule of 40 performance, ARR increased, cash generation improved, and the company raised full-year guidance. Key growth initiatives (GEM, physical AI, Alloy Kore) show encouraging pipeline and design-win momentum. Offsetting risks include a DBNRR below 100%, some remaining churn, reliance on lumpy large government deals that introduce quarter-to-quarter volatility, and Alloy Kore execution/timing risk. Overall, positive operational momentum and upgraded guidance outweigh the near-term risks and execution uncertainties.
Company Guidance
BlackBerry raised its outlook, driving QNX full‑year revenue to $295–$312M with adjusted EBITDA of $74–$86M (Q2 QNX revenue $70–$75M; Q2 adj. EBITDA $16–$21M); Secure Communications was reiterated to grow 4%–8% for the year with Q2 revenue guided to $57–$63M and Q2 adjusted EBITDA $5–$10M; Licensing is now pegged at roughly $29M of full‑year revenue and ~$25M of adj. EBITDA (Q2 licensing ~$10M revenue; ~$9M adj. EBITDA); at the total‑company level management raised full‑year revenue to $594–$621M and adjusted EBITDA to $119–$139M (noting ~90% flow‑through of incremental revenue), and guided Q2 total revenue of $137–$148M, adjusted EBITDA $20–$30M, adjusted basic EPS $0.03–$0.04, and Q2 operating cash flow between breakeven and $10M.
Adjusted EBITDA and Profitability Expansion
Adjusted EBITDA of approximately $36 million (24% of revenue), more than doubled year-over-year; adjusted net income of ~$25 million and positive GAAP net income for the fifth consecutive quarter; adjusted EPS at $0.04 (high end of guidance).
Margin Expansion
Total company adjusted gross margin expanded by ~4 percentage points year-over-year to 79%; QNX adjusted gross margin expanded ~5 points to 86%; Secure Communications adjusted gross margin expanded ~2 points.
QNX Outperformance and Rule of 40/50
QNX revenue of approximately $72 million, growing 26% year-over-year and exceeding guidance; QNX adjusted EBITDA ~ $19 million (27% margin), up ~52% year-over-year — characterized as a Rule of 40 quarter and effectively a Rule of 50 quarter.
QNX Product and Design Win Momentum
Development license revenue was the highest in eight quarters (early indicator of future royalty growth). Multiple new design wins across automotive and GEM, including SDP8 wins (European automaker ADAS on Qualcomm Snapdragon, Tier 1 driver monitoring on TI for Japanese OEM, commercial vehicle multi-domain SDP8 win, SDP8 sale to U.S.-based software developer supplying a major Asian OEM).
GEM Traction and Physical AI Opportunity
GEM remains the fastest-growing QNX segment with wins including a semiconductor equipment manufacturer royalty commitment and expanded medical diagnostics relationship (Luminex); physical AI highlighted as a strategic, long-term growth driver leveraging QNX's deterministic, safety-certified platform.
Alloy Kore Potential
Alloy Kore is positioned to expand BlackBerry from OS provider to platform provider, expected to increase software content and ASP per vehicle by multiples; company expects to secure a first design win this fiscal year (pipeline traction reported).
Secure Communications Strength and Government Wins
Secure Communications revenue of approximately $74 million, up 24% year-over-year and above guidance; ARR stabilized and grew >5% year-over-year to $220 million; DBNRR at 92%; notable multi-year expansion with Shared Services Canada drove significant in-quarter revenue; additional wins across U.S. and EMEA government and defense customers.
Licensing Profitability
Licensing revenue of ~$7 million for the quarter (ahead of guidance); licensing contributed approximately $6 million of adjusted EBITDA and license FY revenue guidance raised to ~$29 million with adjusted EBITDA guidance of ~$25 million.
Cash Generation and Balance Sheet Strength
Operating cash flow of approximately $5 million in Q1 (first positive Q1 cash flow in nine years excluding a prior patent sale); cash and investments of $423 million with net cash of approximately $223 million; ongoing share buyback activity (2.6M shares for ~$10M in the quarter; total repurchased 18M shares for ~$70M).
Upgraded Full-Year Outlook
Company raised full-year guidance: total revenue $594M-$621M and adjusted EBITDA $119M-$139M; QNX FY revenue guidance raised to $295M-$312M and adjusted EBITDA to $74M-$86M; licensing and Q2 guidance also raised; company highlighted ~90% flow-through of incremental revenue to adjusted EBITDA.
All of those values that go into how we support the auto industry, we think give us an edge up on some of these use cases and categories in the GEM space. We always try to be really focused and disciplined on particular categories. Chasing every sector, it's a big market out there. In GEM, we've been really clear
robotics, medical instrumentation, industrial automation. Those are probably the three most significant categories that the values of what we provide in auto really adjust well to those sectors of GEM.