BB's Q4 Earnings Top, Sales Fall Y/Y, Stock Tanks on Weak Outlook

Core Insights - BlackBerry Limited reported a non-GAAP EPS of 3 cents for Q4 fiscal 2025, surpassing the company's estimate of a loss of 1 cent and the Zacks Consensus Estimate of 2 cents per share [1][2] - Total revenues for Q4 were $141.7 million, down from $152.9 million in the prior quarter, but exceeded management's guidance of $126-$135 million [2][5] - The company anticipates revenue volatility in the automotive sector and macroeconomic uncertainties to impact its fiscal 2026 guidance [3][4] Revenue Breakdown - QNX business revenues totaled $65.8 million, slightly down from $65.9 million year-over-year, but exceeded guidance of $60-$65 million [6] - Secure Communications revenues were $67.3 million, down from $71.6 million year-over-year, yet surpassed expectations of $62-$66 million [7] - Licensing revenues reached $8.6 million, exceeding guidance of $4 million, driven by strong sales from existing arrangements [8] Margin and Cash Flow Performance - Adjusted gross margin was 73.5%, down from 79.9% in the previous year [11] - Adjusted EBITDA was $21.1 million, a decrease from $38.2 million year-over-year, with expectations of $10-$20 million [11] - The company generated $42 million in net cash from operating activities, an improvement of $57 million from the prior year, and had $410 million in cash and investments as of Feb. 28, 2025 [12] Future Guidance - For fiscal 2026, total revenues are projected to be between $504 million and $534 million, with Secure Communications expected to generate between $250 million and $270 million [4] - Fiscal Q1 2026 revenues are estimated to be in the range of $107-$115 million, with Secure Communications revenues expected between $50-$54 million [13]