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BLACKBERRY Ltd (BB)·Q2 2026 Earnings Summary

Executive Summary

  • Beat across the board: revenue $129.6M (+3% y/y) vs S&P Global consensus ~$122.0M*, non‑GAAP EPS $0.04 vs ~$0.01*; adjusted EBITDA $25.9M vs ~$11.9M*; second consecutive GAAP profitability (NI $13.3M) .
  • QNX delivered a “Rule of 40” quarter (revenue $63.1M, +15% y/y; adj. EBITDA $20.5M, 32% margin), while Secure Communications exceeded guidance (revenue $59.9M; adj. EBITDA $9.7M); Licensing was $6.6M .
  • Full‑year FY26 guidance raised for total revenue ($519–$541M), total adj. EBITDA ($82–$101M), non‑GAAP EPS ($0.11–$0.15), operating cash flow ($35–$40M) and both QNX and Secure Comms segment targets; new Q3 revenue guide $132–$140M, non‑GAAP EPS $0.02–$0.04 .
  • Capital returns/cash: $20M buyback (~5M shares @ $3.97) and positive operating cash flow $3.4M despite ~$19M tax payments; cash and investments $363.5M at quarter end .

What Went Well and What Went Wrong

  • What Went Well
    • QNX momentum: +15% y/y revenue to $63.1M, 83% gross margin, record adj. EBITDA $20.5M (32% margin) and “Rule of 40” performance; pipeline/design wins ahead of plan, including a mid‑eight‑figure China ADAS award and NVIDIA DRIVE AGX Thor integration (“facilitates generative AI”) .
    • Secure Comms execution: revenue $59.9M beat guide; ARR rose to $213M and DBNRR improved to 93%; won five‑year hosted SecuSmart deal with a German agency and AtHoc renewal/upsell with U.S. State Dept (FedRAMP High a driver) .
    • Profitability/CF: GAAP NI $13.3M; adj. EBITDA $25.9M (20% margin); positive op. cash flow $3.4M despite ~$19M tax; cost discipline lowered adj. OpEx to $74.8M (‑5% y/y) while still investing in QNX growth .
  • What Went Wrong
    • Secure Comms y/y decline: revenue down 10% y/y on tough device refresh comp; segment gross margin mix impacted by hardware elements, though still 66% .
    • Macro/tariff headwinds and elongated auto cycles: management cited ongoing tariff uncertainty (now an explicit headwind) and slower platform ramps; QNX outlook remains back‑end loaded and seasonally skewed to H2 .
    • One‑time/temporary supports fade: ~US$4M Strategic Innovation Fund benefit in Q2 will not recur in H2, reducing a P&L tailwind used in Q1/Q2 .

Financial Results

Quarterly performance (oldest → newest)

MetricQ4 FY25Q1 FY26Q2 FY26
Revenue ($M)$141.7 $121.7 $129.6
Gross Margin % (GAAP)73.5% 74.2% 74.5%
Adjusted EBITDA ($M)$21.1 $16.4 $25.9
Adjusted EBITDA Margin %15% 13.5% 20.0%
Operating Income ($M)$(8.0) $2.0 $11.5
GAAP Net Income ($M)$(7.4) $1.9 $13.3
GAAP Basic EPS ($)$(0.01) $0.00 $0.02
Non‑GAAP Basic EPS ($)$0.03 $0.02 $0.04

Q2 FY26 vs S&P Global consensus

MetricEstimateActual
Revenue ($M)$122.0M*$129.6M
Primary EPS ($)$0.01*$0.04
EBITDA ($M)$11.9M*$20.0M*

Values with * are from S&P Global.

Segment breakdown (revenue and segment adjusted EBITDA)

MetricQ4 FY25Q1 FY26Q2 FY26
QNX Revenue ($M)$65.8 $57.5 $63.1
Secure Comms Revenue ($M)$67.3 $59.5 $59.9
Licensing Revenue ($M)$8.6 $4.7 $6.6
QNX Adj. EBITDA ($M)$19.2 $12.7 $20.5
Secure Comms Adj. EBITDA ($M)$12.6 $9.6 $9.7
Licensing Adj. EBITDA ($M)$1.4 $3.8 $5.6

KPIs

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

Non‑GAAP context and adjustments: Q2 adjusted operating income was $22.4M (vs GAAP OI $11.5M), adding back $3.4M restructuring, $5.9M stock comp, $1.1M acquired intangibles amortization, and $0.5M LLA impairment; adjusted EBITDA $25.9M (20.0% margin) .

Guidance Changes

Full‑year FY26 guidance changes (previous from Q1 vs current from Q2)

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Total RevenueFY26$508–$538M $519–$541M Raised (midpoint +$7M)
QNX RevenueFY26$250–$270M $256–$270M Raised/narrowed
Secure Comms RevenueFY26$234–$244M $239–$247M Raised
Licensing RevenueFY26~$24M ~$24M Maintained
Total Adj. EBITDAFY26$72–$87M $82–$101M Raised
QNX Adj. EBITDAFY26$55–$60M $64–$73M Raised
Secure Comms Adj. EBITDAFY26$37–$47M $38–$48M Raised
Licensing Adj. EBITDAFY26~$20M ~$20M Maintained
Adjusted Corporate Costs (ex‑amort.)FY26~$40M ~$40M Maintained
Non‑GAAP Basic EPSFY26$0.08–$0.10 $0.11–$0.15 Raised
Operating Cash FlowFY26~+$35M $35–$40M Raised (range)

Current Q3 FY26 guidance

MetricPeriodCurrent Guidance
Total RevenueQ3 FY26$132–$140M
QNX RevenueQ3 FY26$66–$70M
Secure Comms RevenueQ3 FY26$60–$64M
Licensing RevenueQ3 FY26~+$6M
Total Adj. EBITDAQ3 FY26$20–$28M
QNX Adj. EBITDAQ3 FY26$13–$17M
Secure Comms Adj. EBITDAQ3 FY26$12–$16M
Licensing Adj. EBITDAQ3 FY26~+$5M
Non‑GAAP Basic EPSQ3 FY26$0.02–$0.04
Operating Cash FlowQ3 FY26$10–$20M

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 FY25 and Q1 FY26)Current Period (Q2 FY26)Trend
QNX growth and marginsFY25: QNX revenue $236M (+10% y/y), backlog ~$865M; Q4 revenue $65.8M, adj. EBITDA $19.2M (29%) . Q1: revenue $57.5M (+8% y/y), adj. EBITDA $12.7M (22%) .Q2: revenue $63.1M (+15% y/y), 83% GM; adj. EBITDA $20.5M (32%); “Rule of 40” achieved .Improving
Auto cycle, tariffs, macroFY25: beat across divisions, strong cash, but restructuring and macro actions highlighted . Q1: guide prudent; Secure Comms DBNRR dipped to 92% .Tariff uncertainty remains a headwind; OEM programs “shifted right” but stabilizing; H2 back‑end loaded .Stabilizing with headwinds
Platform/AI initiatives (NVIDIA/Vector)FY25: announced Vector partnership for vehicle software platform . Q1: launched QNX Hypervisor 8.0; AtHoc FedRAMP High .QNX OS for Safety 8 integrated into NVIDIA DRIVE AGX Thor; Snapdragon RidePilot on QNX; early access for platform with Vector .Accelerating
Secure Comms metrics/bookingsFY25: ARR $208M, DBNRR 93% . Q1: ARR $209M, DBNRR 92% .ARR $213M, DBNRR 93%; wins across German gov’t (hosted), U.S. State Dept, DHS, IRS etc. .Improving
R&D execution/cost disciplineFY25: adj. OpEx reduced vs prior year . Q1: adj. OpEx $78.4M; buyback $10M .Adj. OpEx $74.8M (‑5% y/y) despite growth investments; ~$4M Canadian SIF benefit won’t recur .Lean/investing
Capital allocationFY25: cash/investments $410M; first Cylance proceeds . Q1: buyback $10M .Q2 buyback $20M; cash/investments $363.5M after buyback/taxes .Shareholder returns ongoing

Management Commentary

  • “BlackBerry delivered year‑over‑year revenue growth and expanded gross margins while reducing operating expenses…beating expectations and achieving a second consecutive quarter of GAAP profitability.” — John J. Giamatteo, CEO .
  • “QNX…achieve a rule of 40 quarter…15% year‑over‑year revenue growth and a 32% adjusted EBITDA margin.” — CEO .
  • “Total company adjusted gross margins expanded by 4% year over year to 75%…Adjusted operating expenses were approximately 5% lower year over year at $74.8 million.” — Tim Foote, CFO .
  • “We benefited from approximately $4 million of grant funding from the Canadian Government Strategic Innovation Fund. We do not expect to receive any further P&L benefit…for the remainder of the fiscal year.” — CFO .
  • “We are raising the midpoint for total company revenue by $7 million… and… adjusted EBITDA at the midpoint by $12 million.” — CFO .

Q&A Highlights

  • QNX operating leverage: CFO sees sustained leverage from 83% gross margins and rising royalties; OpEx investment to stabilize, implying strong future margins .
  • China strategy/design wins: CEO cited shift toward safety‑critical software after high‑profile incidents, supporting adoption of QNX SDP8 and partnerships with Qualcomm/NVIDIA; secured a mid‑eight‑figure ADAS design win via a global tier‑one .
  • Seasonality/back‑end loading: QNX revenue historically back‑end loaded due to design starts and development seat licensing; royalties also growing q/q .
  • Macro/tariffs: Programs are coming online but “shifted to the right”; tariff uncertainty now a concrete headwind, though visibility improved vs start of year .

Estimates Context

  • Q2 beats: Revenue $129.6M vs ~$122.0M*; EPS $0.04 vs ~$0.01*; EBITDA ~$20.0M* vs ~$11.9M* — broad‑based beat on revenue, earnings and profitability ; S&P Global*.
  • Q1 also exceeded: Revenue $121.7M vs ~$112.2M*; EPS $0.02 vs ~$0.00*; EBITDA ~$10.7M* vs ~$6.2M* — supports the trend of upside vs consensus ; S&P Global*.
  • Forward (Q3): Company guides revenue $132–$140M and non‑GAAP EPS $0.02–$0.04, broadly bracketing S&P Global revenue ~$137.5M* and EPS ~$0.0367*, suggesting guidance aligns with Street midpoints ; S&P Global*.

Values with * are from S&P Global.

Key Takeaways for Investors

  • QNX is driving the thesis: sustained double‑digit growth, 80%+ gross margins, and increasing royalty mix underpin expanding profitability; the “Rule of 40” milestone and ecosystem wins (Qualcomm/NVIDIA/Vector) are stock‑supportive catalysts .
  • Secure Comms stabilization improving quality of revenue: ARR up to $213M and DBNRR back to 93%; government wins (Germany, U.S.) and iOS expansion for SecuSmart broaden TAM and visibility .
  • Guidance momentum matters near‑term: raised FY26 revenue/EBITDA/EPS/OCF and constructive Q3 guide set a higher bar; watch execution vs H2 skew and the loss of ~$4M SIF benefit in H2 .
  • Cash returns and balance sheet optionality: positive operating cash flow and $20M buyback signal confidence; $363.5M cash/investments provides flexibility for continued repurchases or investment .
  • Risks: tariff/macro headwinds and elongated auto software ramps can shift timing; Secure Comms hardware mix can weigh on margins; one‑off grant tailwind fades in H2 .
  • Trading setup: narrative leans positive on execution and raised outlook; catalysts include additional QNX design wins/royalty ramps, large Secure Comms awards, and Q3 delivery within guided ranges .

Appendix: Other Relevant Press Releases (Q2 FY26 window)

  • QNX/Vector/MotorTrend: Call for entries for SDV Innovator Awards — underscores QNX ecosystem visibility and leadership in software‑defined vehicles .

S&P Global disclaimer: All figures marked with an asterisk (*) are values retrieved from S&P Global.