BlackBerry(US:BB)2025-09-25 13:02Financial Data and Key Metrics Changes - Company revenue for Q2 fiscal year 2026 was $129.6 million, a 3% year-over-year increase [5] - 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] - 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% [5][17] - Secure Communications revenue was $59.9 million, with annual recurring revenue (ARR) growing by $4 million to $213 million [11][12] - Licensing division revenue was $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 reduced customer churn and improved dollar-based net retention rate (DVNRR) to 93% [11][13] Company Strategy and Development Direction - The company is focusing on growth in the QNX division, particularly in automotive and safety-critical software [10][25] - Strategic partnerships with companies like BMW and Qualcomm are being leveraged to enhance product offerings [6][9] - The introduction of a new recurring revenue business model through hosted services is expected to create a more predictable revenue profile for the SecuSmart business [12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the second half of the fiscal year, citing a stronger than expected first half and reduced uncertainty in the market [20][23] - The company anticipates continued growth in QNX and Secure Communications, with raised full-year revenue and adjusted EBITDA guidance [21][22] Other Important Information - The company repurchased approximately $20 million worth of shares during the quarter, totaling 5 million shares at an average price of $3.97 [18][19] - The company expects to generate between $35 and $40 million in operating cash flow for the full fiscal year [23] Q&A Session Summary Question: Insights on QNX operating leverage and guidance - Management highlighted strong operating leverage in QNX, with expectations for improved gross margins as royalty mix increases [28] Question: Strategic approach to the China market - Management noted a shift in the China market towards safety-critical software, which aligns with the company's strengths [31][33] Question: Drivers of QNX's back-end loaded revenue outlook - Management indicated that the revenue pattern for QNX has historically been back-end loaded, driven by the timing of design work and development seat licenses [36][38] Question: Update on backlog and growth sustainability for QNX - Management confirmed a solid pipeline of opportunities for QNX, with optimism for maintaining double-digit growth [44][45]