Sign in

You're signed outSign in or to get full access.

BL

BLACKBERRY Ltd (BB)·Q1 2026 Earnings Summary

Executive Summary

  • BlackBerry delivered a stronger-than-expected Q1 FY26 with total revenue $121.7M, adjusted EBITDA $16.4M, non‑GAAP EPS $0.02, and operating cash usage better than plan at $18M; GAAP net income turned positive at $1.9M for the first time since Q4 FY22 .
  • Versus estimates, Q1 revenue beat by ~$9.5M and EPS beat by ~$0.017; Secure Communications and QNX both exceeded divisional guidance, while Licensing came in at $4.7M .
  • Guidance was raised for FY26 total company revenue ($508–$538M) and Secure Communications revenue ($234–$244M); Q2 outlook calls for $115–$125M revenue and adjusted EBITDA $8–$14M .
  • Stock catalysts: ongoing buybacks ($10M in Q1; optionality up to $100M), raised FY guidance, QNX pipeline momentum (SDP 8.0, Vehicle Platform, GEM expansion), and SecuSmart/AtHoc government traction; risks include auto tariff-related production uncertainties and elongated design-win cycles .

What Went Well and What Went Wrong

What Went Well

  • QNX revenue up 8% YoY to $57.5M, beating guidance; adjusted EBITDA $12.7M (22% margin) on royalty and seat license growth; management emphasized secular tailwinds and diversification beyond auto into robotics/industrial/medical, with GEM representing 43% of the SDP 8.0 pipeline and overall pipeline up 55% QoQ .
  • Secure Communications exceeded guidance with revenue $59.5M and adjusted EBITDA $9.6M; ARR stable at $209M and DBNRR 92%; strong SecuSmart sales to German government and AtHoc winning FedRAMP High authorization with multiple U.S. federal wins .
  • Company-level profitability improved: adjusted EBITDA $16.4M, adjusted gross margin 74.6%, and GAAP net income $1.9M; CFO cited ~$4.5M of Canadian SIF grant funding offsetting FX OpEx headwinds and tight cost control .

Quotes:

  • “We made a very solid start… beating the top end of guidance almost entirely across the board.” — CEO John Giamatteo .
  • “GEM currently represents 43% of our total SDP 8.0 pipeline, with the overall pipeline having grown by 55% in the quarter.” — CEO John Giamatteo .
  • “Adjusted net income for Q1 was $12.3M… GAAP net income positive for the first time in over three years.” — CFO Tim Foote .

What Went Wrong

  • QNX gross margin dipped to 81% due to unfavorable FX; Secure Communications DBNRR decreased 1ppt sequentially to 92%; Licensing revenue fell YoY to $4.7M .
  • Macro uncertainties: auto tariffs elongated customer decision timelines and could impact royalties via production volumes; management took a prudent stance in Q2 guidance for QNX ($55–$60M) .
  • Q1 was a seasonal cash burn quarter (operating cash usage $18M), including ~$11M restructuring cash (severance and exited leases), though better than guidance; total cash/investments declined $28.4M sequentially to $381.9M after buybacks .

Financial Results

Headline Results vs Prior Periods

MetricQ4 FY25Q1 FY26Q2 FY26
Revenue ($M)$141.7 $121.7 $129.6
Adjusted Gross Margin (%)73.7 74.6 75.0
Adjusted EBITDA ($M)$21.1 $16.4 $25.9
Adjusted EBITDA Margin (%)15% 13.5% 20.0%
GAAP Net Income ($M)$(7.4) $1.9 $13.3
GAAP Diluted EPS (Cont. Ops)$(0.01) $0.00 $0.02
Non-GAAP Basic EPS$0.03 $0.02 $0.04
Operating Cash Flow ($M)$42.0 $(18.0) $3.4

Prior Year Comparisons (Q1 FY25 vs Q1 FY26)

MetricQ1 FY25Q1 FY26
Revenue ($M)$123.4 $121.7
Gross Margin ($M)$90.0 $90.3
Gross Margin (%)72.9% 74.2%
GAAP Net Income ($M)$(41.4) $1.9
GAAP Diluted EPS (Cont. Ops)$(0.03) $0.00
Adjusted EBITDA ($M)$10.5 $16.4

Segment Breakdown (Q1 FY26 vs Q1 FY25)

SegmentRevenue Q1 FY25 ($M)Revenue Q1 FY26 ($M)Adjusted EBITDA Q1 FY25 ($M)Adjusted EBITDA Q1 FY26 ($M)
QNX$53.2 $57.5 $8.9 $12.7
Secure Communications$64.2 $59.5 $9.3 $9.6
Licensing$6.0 $4.7 $4.7 $3.8
Total$123.4 $121.7 $22.9 $26.1

KPIs (Secure Communications)

KPIQ4 FY25Q1 FY26Q2 FY26
ARR ($M)$208 $209 $213
DBNRR (%)93% 92% 93%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Total Co. RevenueFY26$504–$534M $508–$538M Raised midpt (+$7M)
Total Co. Adjusted EBITDAFY26$69–$84M $72–$87M Raised
Non-GAAP Basic EPSFY26$0.08–$0.10 $0.08–$0.10 Maintained
Operating Cash FlowFY26~$35M ~$35M Maintained
QNX RevenueFY26$250–$270M $250–$270M Maintained
QNX Adjusted EBITDAFY26$55–$60M $55–$60M Maintained
Secure Comms RevenueFY26$230–$240M $234–$244M Raised by ~$4M
Secure Comms Adjusted EBITDAFY26$34–$44M $37–$47M Raised
Licensing RevenueFY26~$24M ~$24M Maintained
Licensing Adjusted EBITDAFY26~$20M ~$20M Maintained
Total Co. RevenueQ2 FY26N/A$115–$125M New
Total Co. Adjusted EBITDAQ2 FY26N/A$8–$14M New
Non-GAAP Basic EPSQ2 FY26N/ABreakeven–$0.01 New
Operating Cash FlowQ2 FY26N/A$(5)–$(15)M New
QNX RevenueQ2 FY26N/A$55–$60M New
Secure Comms RevenueQ2 FY26N/A$54–$59M New
Licensing RevenueQ2 FY26N/A~$6M New

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 FY25)Q1 FY26 (Current Period)Trend
QNX SDP 8.0 and Vehicle PlatformCES launch; TTTech/Vector collaboration; Azure support; expanding content per vehicle Launch of QNX Hypervisor 8.0; MOU with Vector; targeting early access this calendar year Building execution momentum
Diversification to GEM (industrial/medical/robotics)GEDP launch; new logos in medical/rail/aerospace; GEM investment focus GEM = 43% of SDP8 pipeline; overall pipeline +55%; India education program expanding Strengthening pipeline and go-to-market
Auto macro, tariffs, productionPrudent FY26 QNX range broadened due to tariffs; seasonality (back-end loaded) No direct tariff impact yet; elongated decisions; cautious Q2 QNX guide ($55–$60M) Uncertainty persists; managed conservatively
SecuSmart/AtHoc in Gov’tMalaysian expansion; U.S. DHS/Treasury/MDA wins Strong German SecuSmart deals; AtHoc FedRAMP High; U.S. Marine Corps/Air Force/Senate/White House wins Moat expanding; pipeline robust
UEM data sovereignty/on-premiseBanking/law renewals; U.S. federal stickiness Non-gov renewals; BSI certification in Germany; on-premise moat deepening Improving retention metrics
Share BuybackProgram not yet active; balance sheet strengthened $10M repurchased (~2.6M shares at $3.89) before quiet period Active capital returns

Management Commentary

  • Strategic focus: “Increase diversification beyond automotive… and increase our share of the automotive software stack by offering pre-integrated middleware as part of a vehicle platform.” — CEO John Giamatteo .
  • GEM push: “GEM currently represents 43% of our total SDP 8.0 pipeline, with the overall pipeline having grown by 55% in the quarter.” — CEO John Giamatteo .
  • Capital allocation: “Program allows repurchase up to $100M… we repurchased ~$10M… Actions illustrate our belief BB shares are undervalued.” — CFO Tim Foote .
  • Macro stance: “We are taking a prudent position for QNX in Q2… allowing for elongated buying decisions… expect QNX revenue $55–$60M.” — CFO Tim Foote .

Q&A Highlights

  • QNX royalties and tariffs: Management built downside protection into Q2 QNX guidance ($55–$60M) given potential production disruptions; final model production data arrives in Q2, reinforcing caution .
  • Share buyback approach: Opportunistic deployment based on cash flow, share price, and alternative uses of capital rather than linear timing .
  • GEM pipeline maturity: Early innings but promising quality; SDP 8.0 offers uplift vs prior versions; GEM pipeline needs conversion time yet shows strong demand .
  • U.S. federal churn: No material churn; mission-critical nature reduces cut risk; DBNRR/ARR held up .
  • Integrated vs open systems: Vehicle platform aims to pre-integrate middleware to accelerate OEM time-to-market; QNX Everywhere expands ecosystem .

Estimates Context

MetricQ1 FY26 Consensus*Q1 FY26 ActualDelta
Revenue ($M)112.2*121.7 +9.5
Primary EPS ($)0.0026*0.02 +0.0174
# of Estimates (EPS / Rev)6 / 4*N/AN/A

Values retrieved from S&P Global.*

Implications:

  • Significant beats on both revenue and EPS suggest upward revisions risk to FY26 estimates, particularly for Secure Communications and total company adjusted EBITDA ranges .
  • Given cautious Q2 QNX outlook, near-term models should reflect seasonality and macro headwinds offset by robust pipeline and government demand stability .

Key Takeaways for Investors

  • BlackBerry’s beat-and-raise quarter, GAAP profitability, and active buybacks are near-term stock positives; watch for Q2 execution on tempered QNX guidance .
  • QNX’s SDP 8.0 and Vehicle Platform plus GEM expansion broaden TAM and support margin durability; pipeline breadth (auto and GEM) is improving .
  • Secure Communications has durable ARR and improving DBNRR with deep government wins; AtHoc’s FedRAMP High and BSI certification for UEM add defensibility and growth pathways .
  • FX headwinds impacted QNX margins; SIF grants partially offset OpEx; ongoing cost discipline underpins expanding adjusted EBITDA margins .
  • Cash trajectory remains constructive: burn in H1 (seasonal/tax/severance), but company guides to ~$35M operating cash flow for FY26; buyback optionality is a lever .
  • Risk monitor: auto tariffs and production shifts; elongated design-win cycles; near-term licensing variability; however, diversification (GEM) and government strength mitigate .
  • Trading lens: Momentum on profitability/guidance and buybacks vs macro caution in Q2; catalysts include new QNX platform milestones, GEM wins, additional government contracts, and estimate revisions .

Notes

  • Cross-references: Financials and guidance from Q1 FY26 8-K and press release ; Q1 FY26 earnings call transcript –; Prior results/trends from Q4 FY25 8-K and call – –; Q2 FY26 8-K and call – –.