BlackBerry(BB) - 2026 Q2 - Quarterly Results

Executive Summary BlackBerry delivered year-over-year revenue growth, expanded gross margins, and reduced operating expenses, achieving GAAP profitability for Q2 FY26 Overview of Q2 FY26 Results BlackBerry delivered year-over-year revenue growth, expanded gross margins, and reduced operating expenses, achieving GAAP profitability for the second consecutive quarter in Q2 FY26. Both the QNX and Secure Communications divisions exceeded expectations and raised full-year guidance, while the company also returned $20 million to shareholders - BlackBerry delivered year-over-year revenue growth, expanded gross margins, and reduced operating expenses, achieving a second consecutive quarter of GAAP profitability[3] - QNX division recorded a 'rule of 40' quarter and made progress across key growth initiatives. Secure Communications division exceeded expectations at both the top and bottom line[3] - The company returned $20 million to shareholders as part of a share buyback program[5] Second Quarter Fiscal 2026 Financial Highlights BlackBerry exceeded Q2 FY26 revenue guidance, achieving 3% YoY growth, 75% gross margin, and positive GAAP operating income Overall Company Performance BlackBerry's total revenue for Q2 FY26 exceeded guidance at $129.6 million, marking a 3% year-over-year increase. The company also saw its GAAP and adjusted gross margin rise by 4 percentage points year-over-year to 75%, and achieved GAAP Operating Income of $11.5 million and adjusted EBITDA of $25.9 million Q2 FY26 Overall Company Financial Performance | Metric | Value (Millions USD) | YoY Change | | :-------------------------------- | :------------------- | :--------- | | Total Company Revenue | $129.6 | +3% | | Total Company GAAP Gross Margin | 75% | +4 ppts | | Total Company Adjusted Gross Margin | 75% | +4 ppts | | Total Company GAAP Operating Income | $11.5 | +$9.3 million | | Total Company Adjusted EBITDA | $25.9 | Exceeded guidance | | Adjusted EBITDA as % of Revenue | 20% | | - BlackBerry achieved GAAP net income of $13.3 million and non-GAAP basic earnings per share of $0.04, beating previously provided guidance[10] - Operating cash flow for the second quarter was positive $3.4 million, beating expectations[10] Segment Performance In Q2 FY26, the QNX division reported strong performance with revenue growing 15% year-over-year to $63.1 million and adjusted EBITDA of $20.5 million. The Secure Communications division, despite a 10% year-over-year revenue decrease to $59.9 million, improved its adjusted gross margin to 66% and saw its Annual Recurring Revenue (ARR) increase. Licensing revenue was $6.6 million Q2 FY26 Segment Financial Performance | Segment | Revenue (Millions USD) | YoY Growth | Adj. Gross Margin | Adj. EBITDA (Millions USD) | | :---------------------- | :------------------- | :--------- | :---------------- | :------------------------- | | QNX | $63.1 | +15% | 83% | $20.5 | | Secure Communications | $59.9 | -10% | 66% | $9.7 | | Licensing | $6.6 | | | $5.6 | - Secure Communications ARR increased year-over-year and sequentially to $213 million[6] - Secure Communications DBNRR was flat year-over-year, and increased by 1 percentage point sequentially to 93%[6] Business Highlights & Strategic Announcements BlackBerry announced key product developments and strategic partnerships, including NVIDIA DRIVE AGX Thor integration with QNX OS for Safety 8 and BSI certification for UEM Key Developments and Partnerships BlackBerry announced key product developments and partnerships, including the general availability of the NVIDIA DRIVE AGX Thor development kit integrated with QNX® OS for Safety 8, and the launch of QNX OS for Safety 8. The company also achieved BSI certification for BlackBerry UEM deployment and expanded cybersecurity training in Malaysia - QNX and NVIDIA announced general availability of NVIDIA DRIVE AGX Thor development kit, integrated with QNX® OS for Safety 8 to accelerate autonomous drive systems development[10] - QNX launched its foundational, safety-certified QNX OS for Safety 8 to streamline the development and certification of safety- and security-critical embedded systems[10] - BlackBerry became the first Mobile Device Management (MDM) vendor to achieve BSI certification for BlackBerry UEM deployment with Apple Indigo and Samsung Knox[10] Financial Outlook BlackBerry provided Q3 FY26 and full fiscal year 2026 guidance, projecting continued revenue growth and positive adjusted EBITDA across all segments Q3 FY26 Guidance For the third fiscal quarter ending November 30, 2025, BlackBerry projects total revenue between $132-$140 million, with QNX revenue at $66-$70 million and Secure Communications revenue at $60-$64 million. Total company adjusted EBITDA is expected to be $20-$28 million Q3 FY26 Financial Guidance | Metric | Q3 FY26 Guidance (Millions USD) | | :-------------------------------------- | :----------------------------- | | Total BlackBerry Revenue | $132 - $140 | | QNX Revenue | $66 - $70 | | Secure Communications Revenue | $60 - $64 | | Licensing Revenue | Approximately $6 | | QNX Segment Adjusted EBITDA | $13 - $17 | | Secure Communications Segment Adjusted EBITDA | $12 - $16 | | Licensing Segment Adjusted EBITDA | Approximately $5 | | Total Company Adjusted EBITDA | $20 - $28 | | Non-GAAP Basic EPS | $0.02 – $0.04 | | Operating Cash Flow | $10 – $20 | Full Fiscal Year FY26 Guidance For the full fiscal year 2026 ending February 28, 2026, BlackBerry anticipates total revenue of $519-$541 million, with QNX revenue of $256-$270 million and Secure Communications revenue of $239-$247 million. Total company adjusted EBITDA is expected to be $82-$101 million Full Fiscal Year FY26 Financial Guidance | Metric | Full FY26 Guidance (Millions USD) | | :-------------------------------------- | :------------------------------- | | Total BlackBerry Revenue | $519 - $541 | | QNX Revenue | $256 - $270 | | Secure Communications Revenue | $239 - $247 | | Licensing Revenue | Approximately $24 | | QNX Segment Adjusted EBITDA | $64 - $73 | | Secure Communications Segment Adjusted EBITDA | $38 - $48 | | Licensing Segment Adjusted EBITDA | Approximately $20 | | Total Company Adjusted EBITDA | $82 - $101 | | Non-GAAP Basic EPS | $0.11 – $0.15 | | Operating Cash Flow | $35 - $40 | Consolidated Financial Statements BlackBerry's Q2 FY26 consolidated statements show improved net income, stable assets with reduced liabilities, and positive operating cash flow Consolidated Statements of Operations For the three months ended August 31, 2025, BlackBerry reported revenue of $129.6 million, a gross margin of 74.5%, and net income of $13.3 million, resulting in basic earnings per share of $0.02. This marks a significant improvement from a net loss of $(19.7) million in the prior year period Consolidated Statements of Operations (Selected Data) | Metric | 3 Months Ended Aug 31, 2025 (Millions USD) | 3 Months Ended Aug 31, 2024 (Millions USD) | 6 Months Ended Aug 31, 2025 (Millions USD) | 6 Months Ended Aug 31, 2024 (Millions USD) | | :-------------------------- | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | | Revenue | $129.6 | $126.2 | $251.3 | $249.6 | | Gross margin % | 74.5% | 70.2% | 74.4% | 71.6% | | Operating income (loss) | $11.5 | $2.2 | $13.5 | $(10.7) | | Net income (loss) | $13.3 | $(19.7) | $15.2 | $(61.1) | | Basic earnings (loss) per share | $0.02 | $(0.03) | $0.03 | $(0.10) | Consolidated Balance Sheets As of August 31, 2025, BlackBerry reported total assets of $1,184.1 million, a decrease from $1,295.6 million at February 28, 2025. Current assets stood at $507.2 million, while total liabilities were $459.0 million, and shareholders' equity increased slightly to $725.1 million Consolidated Balance Sheets (Selected Data) | Metric | As at Aug 31, 2025 (Millions USD) | As at Feb 28, 2025 (Millions USD) | | :-------------------------- | :-------------------------------- | :-------------------------------- | | Total Assets | $1,184.1 | $1,295.6 | | Current Assets | $507.2 | $591.5 | | Cash and cash equivalents | $276.4 | $266.7 | | Short-term investments | $14.1 | $71.1 | | Total Liabilities | $459.0 | $575.7 | | Shareholders' Equity | $725.1 | $719.9 | Consolidated Statements of Cash Flows For the six months ended August 31, 2025, net cash used in operating activities was $(14.1) million, an improvement from $(31.1) million in the prior year. Net cash provided by investing activities was $52.8 million, while net cash used in financing activities was $(28.8) million, primarily due to common shares repurchased Consolidated Statements of Cash Flows (Selected Data) | Metric | 6 Months Ended Aug 31, 2025 (Millions USD) | 6 Months Ended Aug 31, 2024 (Millions USD) | | :-------------------------------------------------------------------------------- | :--------------------------------------- | :--------------------------------------- | | Net cash used in operating activities | $(14.1) | $(31.1) | | Net cash provided by investing activities | $52.8 | $16.6 | | Net cash provided by (used in) financing activities | $(28.8) | $1.5 | | Net increase (decrease) in cash, cash equivalents, restricted cash, and restricted cash equivalents during the period | $10.3 | $(12.8) | | Cash, cash equivalents, restricted cash, and restricted cash equivalents, end of period | $290.6 | $187.7 | - Common shares repurchased amounted to $30.0 million during the six months ended August 31, 2025[25] Segment Results and Adjusted EBITDA Reconciliation This section details QNX, Secure Communications, and Licensing segment revenues and adjusted EBITDA for Q2 FY26 and Q2 FY25, highlighting year-over-year performance changes Three Months Ended August 31, 2025 For the three months ended August 31, 2025, the QNX segment reported $63.1 million in revenue and $20.5 million in adjusted EBITDA. The Secure Communications segment had $59.9 million in revenue and $9.7 million in adjusted EBITDA, while Licensing contributed $6.6 million in revenue and $5.6 million in adjusted EBITDA Segment Performance (Q2 FY26) | Segment | Revenue (Millions USD) | Adj. Gross Margin (Millions USD) | Adj. EBITDA (Millions USD) | | :--------------------- | :--------------------- | :------------------------------- | :------------------------- | | QNX | $63.1 | $52.4 | $20.5 | | Secure Communications | $59.9 | $39.7 | $9.7 | | Licensing | $6.6 | $5.1 | $5.6 | | Total Segment Adjusted EBITDA | $35.8 | | | Three Months Ended August 31, 2024 For the three months ended August 31, 2024, the QNX segment generated $54.7 million in revenue and $13.1 million in adjusted EBITDA. The Secure Communications segment reported $66.5 million in revenue and $7.4 million in adjusted EBITDA, with Licensing revenue at $5.0 million and adjusted EBITDA at $4.0 million Segment Performance (Q2 FY25) | Segment | Revenue (Millions USD) | Adj. Gross Margin (Millions USD) | Adj. EBITDA (Millions USD) | | :--------------------- | :--------------------- | :------------------------------- | :------------------------- | | QNX | $54.7 | $45.4 | $13.1 | | Secure Communications | $66.5 | $40.4 | $7.4 | | Licensing | $5.0 | $3.4 | $4.0 | | Total Segment Adjusted EBITDA | $25.0 | | | - Reconciliation of Total Segment Adjusted EBITDA to Consolidated income before income taxes for Q2 FY26 was $13.4 million (from $35.8 million Adjusted EBITDA) and for Q2 FY25 was $4.9 million (from $25.0 million Adjusted EBITDA), after various adjustments[30] Non-GAAP Financial Measures Reconciliation This section explains BlackBerry's use of non-GAAP financial measures and provides detailed reconciliations for adjusted gross margin, net income, EPS, and EBITDA for both quarterly and half-yearly periods Introduction to Non-GAAP Measures BlackBerry utilizes non-GAAP financial measures to provide a consistent basis for comparison across accounting periods and to help management and readers understand the company's operating results and underlying operational trends. However, the company cautions that these non-GAAP measures may not be comparable to similarly titled measures reported by other companies - Non-GAAP financial measures provide a consistent basis for comparison across accounting periods and are useful in understanding operating results and underlying operational trends[33] - Readers are cautioned that non-GAAP measures do not have any standardized meaning prescribed by U.S. GAAP and are therefore unlikely to be comparable to similarly titled measures reported by other companies[34] - The company does not provide a reconciliation of expected Adjusted EBITDA and expected Non-GAAP basic EPS for Q3 FY26 to GAAP measures due to the inability to predict certain uncertain items like restructuring and impairment charges[11] Three Months Ended August 31, 2025 and 2024 This section provides reconciliations for various non-GAAP measures for the three months ended August 31, 2025 and 2024, including adjusted gross margin, adjusted operating expense, adjusted corporate operating costs, adjusted net income, adjusted EPS, and adjusted EBITDA, detailing the impact of non-recurring and non-cash items Adjusted Gross Margin Reconciliation (Q2 FY26 vs Q2 FY25) | Metric | Aug 31, 2025 (Millions USD) | Aug 31, 2024 (Millions USD) | | :-------------------------- | :-------------------------- | :-------------------------- | | Gross margin | $96.6 | $88.6 | | Stock compensation expense | $0.6 | $0.6 | | Adjusted gross margin | $97.2 | $89.2 | | Gross margin % | 74.5% | 70.2% | | Adjusted gross margin % | 75.0% | 70.7% | Adjusted Net Income (Loss) and EPS Reconciliation (Q2 FY26 vs Q2 FY25) | Metric | Aug 31, 2025 (Millions USD) | Basic EPS | Aug 31, 2024 (Millions USD) | Basic EPS | | :-------------------------- | :-------------------------- | :-------- | :-------------------------- | :-------- | | Net income (loss) | $13.3 | $0.02 | $(19.7) | $(0.03) | | Restructuring charges | $3.4 | | $0.9 | | | Stock compensation expense | $5.9 | | $7.1 | | | Acquired intangibles amortization | $1.1 | | $8.5 | | | LLA impairment charge | $0.5 | | $0.6 | | | Adjusted net income (loss) | $24.2 | $0.04 | $(2.6) | $0.00 | Adjusted EBITDA Reconciliation (Q2 FY26 vs Q2 FY25) | Metric | Aug 31, 2025 (Millions USD) | Aug 31, 2024 (Millions USD) | | :-------------------------- | :-------------------------- | :-------------------------- | | Operating income | $11.5 | $2.2 | | Total non-GAAP adjustments to operating income | $10.9 | $8.5 | | Adjusted operating income | $22.4 | $10.7 | | Amortization (net of acquired intangibles) | $3.5 | $4.4 | | Adjusted EBITDA | $25.9 | $15.1 | | Adjusted EBITDA margin % | 20.0% | 12.0% | Six Months Ended August 31, 2025 and 2024 This section provides reconciliations for various non-GAAP measures for the six months ended August 31, 2025 and 2024, including adjusted gross margin, adjusted operating expense, adjusted corporate operating costs, adjusted net income, adjusted EPS, and adjusted EBITDA, offering a half-year perspective on non-GAAP performance and free cash flow Adjusted Gross Margin Reconciliation (H1 FY26 vs H1 FY25) | Metric | Aug 31, 2025 (Millions USD) | Aug 31, 2024 (Millions USD) | | :-------------------------- | :-------------------------- | :-------------------------- | | Gross margin | $186.9 | $178.6 | | Stock compensation expense | $1.1 | $1.3 | | Adjusted gross margin | $188.0 | $179.9 | | Gross margin % | 74.4% | 71.6% | | Adjusted gross margin % | 74.8% | 72.1% | Adjusted Net Income (Loss) and EPS Reconciliation (H1 FY26 vs H1 FY25) | Metric | Aug 31, 2025 (Millions USD) | Basic EPS | Aug 31, 2024 (Millions USD) | Basic EPS | | :-------------------------- | :-------------------------- | :-------- | :-------------------------- | :-------- | | Net income (loss) | $15.2 | $0.03 | $(61.1) | $(0.10) | | Restructuring charges | $6.3 | | $8.2 | | | Stock compensation expense | $11.6 | | $14.8 | | | Acquired intangibles amortization | $2.8 | | $17.1 | | | LLA impairment charge | $0.6 | | $4.1 | | | Adjusted net income (loss) | $36.5 | $0.06 | $(16.9) | $(0.03) | Adjusted EBITDA and Free Cash Flow Reconciliation (H1 FY26 vs H1 FY25) | Metric | Aug 31, 2025 (Millions USD) | Aug 31, 2024 (Millions USD) | | :---------------------------------------- | :-------------------------- | :-------------------------- | | Adjusted EBITDA | $42.3 | $25.6 | | Adjusted EBITDA margin % | 17% | 10% | | Net cash provided by (used in) operating activities | $3.4 | $(16.0) | | Acquisition of property, plant and equipment | $(0.8) | $(0.5) | | Free cash flow (usage) | $2.6 | $(16.5) | Key Metrics BlackBerry monitors Secure Communications operational metrics, including Annual Recurring Revenue (ARR) and Dollar-Based Net Retention Rate (DBNRR), to assess performance Secure Communications Operational Metrics BlackBerry monitors specific operational metrics for its Secure Communications segment, including Annual Recurring Revenue (ARR) and Dollar-Based Net Retention Rate (DBNRR), to measure current and estimated future performance, noting that these are non-standardized measures Secure Communications Key Metrics (Q2 FY26) | Metric | Aug 31, 2025 (Millions USD) | | :---------------------------------------- | :-------------------------- | | Secure Communications Annual Recurring Revenue | $213 | | Secure Communications Dollar-Based Net Retention Rate | 93% | - Readers are cautioned that Secure Communications ARR and DBNRR do not have any standardized meaning and are unlikely to be comparable to similarly titled measures reported by other companies[45] Corporate Information This section provides details on BlackBerry's Q2 FY26 conference call, an overview of the company's intelligent software and services, and important disclosures regarding forward-looking statements Conference Call and Webcast BlackBerry hosted a conference call and live webcast on September 25, 2025, at 8:00 a.m. ET to discuss its financial results, with a replay available for those unable to attend live - A conference call and live webcast were held on September 25, 2025, beginning at 8:00 a.m. ET[12] - A replay of the conference call was made available at approximately 11:00 a.m. ET on the same day[13] About BlackBerry BlackBerry provides intelligent software and services to enterprises and governments, specializing in high-performance foundational software for major automakers and industrial giants. The company delivers operational resiliency through a comprehensive, highly secure, and extensively certified portfolio for mobile fortification, mission-critical communications, and critical events management - BlackBerry provides intelligent software and services that power enterprises and governments[14] - The company's high-performance foundational software enables major automakers and industrial giants to unlock transformative applications, drive new revenue streams, and launch innovative business models without sacrificing safety, security, and reliability[14] - BlackBerry delivers operational resiliency with a comprehensive, highly secure, and extensively certified portfolio for mobile fortification, mission-critical communications, and critical events management[14] Forward-Looking Statements This news release contains forward-looking statements regarding BlackBerry's plans, strategies, and objectives, which are based on estimates and assumptions. These statements are subject to various factors and risks, including competition, product development, cybersecurity, and macroeconomic conditions, which could cause actual results to differ materially from expectations. Readers are cautioned not to place undue reliance on these statements - The news release contains forward-looking statements regarding BlackBerry's plans, strategies, and objectives, identified by words like 'expect', 'anticipate', and 'estimate'[15][16] - Forward-looking statements are based on estimates and assumptions and are subject to many factors that could cause actual results to differ materially, including competition, product development, government demand, cybersecurity, and macroeconomic conditions[16][17] - Readers should consider these risk factors carefully and not place undue reliance on forward-looking statements, which are made only as of the date of the release and are not subject to updates unless required by law[18]