Financial Data and Key Metrics Changes - Company revenue for Q2 fiscal year 2026 was $129.6 million, a 3% year-over-year increase, exceeding expectations [5][15] - Adjusted EBITDA reached 20% of revenue, with total company adjusted EBITDA growing 72% year-over-year to $25.9 million [5][16] - GAAP net income was positive at $13.3 million, marking a significant turnaround from a $19.7 million loss in the prior year [16][18] - Non-GAAP EPS was positive at $0.04, beating guidance [5][16] Business Line Data and Key Metrics Changes - QNX revenue was $63.1 million, representing a 15% year-over-year growth, with an adjusted EBITDA margin of 32% [6][17] - Secure Communications division reported quarterly revenue of $59.9 million, driven by reduced customer churn and a $4 million increase in annual recurring revenue (ARR) to $213 million [11][17] - Licensing division generated revenue of $6.6 million, exceeding expectations [14][18] Market Data and Key Metrics Changes - QNX design wins were ahead of plan in Q2, with a solid pipeline for the second half of the fiscal year [6][10] - The Secure Communications division saw traction with government contracts, including a five-year deal with a key German government agency [12][13] Company Strategy and Development Direction - The company is focusing on expanding its QNX business and enhancing its software-defined vehicle capabilities [9][10] - BlackBerry is investing in R&D and sales and marketing to drive growth in its GEM expansion and vehicle software platform [28][19] - The company aims to strengthen its position in the market through initiatives like QNX-centric training programs and partnerships with universities [10] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the second half of fiscal year 2026, citing reduced uncertainty in the automotive market and a solid pipeline of opportunities [20][38] - The company expects revenue for QNX in Q3 to be between $66 to $70 million, with adjusted EBITDA between $13 to $17 million [21][22] - Full-year revenue guidance has been raised to a range of $519 to $541 million, reflecting stronger than expected performance [22][23] Other Important Information - The company repurchased approximately $20 million worth of shares during the quarter, reducing the total number of shares by 7.6 million [18][19] - BlackBerry's UEM became the first solution certified by Germany's Federal Office for Information Security, opening up expansion opportunities in Germany [14] Q&A Session Summary Question: Operating leverage in QNX - Management sees significant leverage in the QNX model, with expectations for improved gross margins as royalty mix increases [28] Question: Approach to the China market - The company is focusing on safety-critical software in China, responding to market shifts towards higher performance capabilities [31][32] Question: Drivers of QNX's back-end loaded revenue - Revenue trends for QNX have historically been back-end loaded, driven by the start of programs and design work [35][36] Question: Backlog growth in QNX - The backlog is expected to grow, with a solid pipeline of opportunities for the second half of the year [42] Question: Sustainability of QNX's growth - Management is optimistic about maintaining double-digit growth in QNX, supported by new programs and market demand [44]