Executive Summary

Q3 FY25 was an inflection quarter: total company revenue was $162M, non-GAAP EPS was $0.02, adjusted EBITDA was $23M, and operating/free cash flow turned positive at $3M, all exceeding management’s guidance; GAAP basic loss per share improved to $(0.02) and gross margin reached 74% .
IoT revenue rose to $62M with 85% gross margin and segment EBITDA of $18M; Cybersecurity (Secure Communications + Cylance) reached $93M with 67% gross margin and $8M adjusted EBITDA; Licensing was $7M revenue and $6M EBITDA .
Guidance was reset to reflect continuing operations given the pending sale of Cylance to Arctic Wolf; FY25 IoT revenue range was raised at the low end to $230–$235M (from $225–$235M), and total company adjusted EBITDA (continuing ops) is now $60–$70M vs prior breakeven to +$10M (non-comparable due to methodology change) .
Management highlighted stronger top line, tighter cost control, and the Cylance divestiture as key profitability catalysts; they also flagged FedRAMP High progress for AtHoc as a near-term milestone and driver for Secure Communications growth .

What Went Well and What Went Wrong

What Went Well
- “BlackBerry achieved a significant inflection… delivered stronger than expected profitability and a return to positive cash flow ahead of schedule,” driven by strength in both divisions and cost discipline (CEO) .
- IoT posted 13% sequential growth to $62M, 85% gross margin (+3ppt q/q), and adjusted EBITDA of $18M (+38% q/q), with QNX traction highlighted by 255M vehicles and new wins (e.g., Hyundai Mobis) .
- Cybersecurity improved profitability with gross margin +12ppt sequentially to 67% and adjusted EBITDA +$14M q/q to $8M; ARR ticked up to $281M and DBNRR rose to 90% (fifth straight q/q improvement) .
What Went Wrong
- Total company revenue (including discontinued ops) declined year-over-year to $162M from $175M as legacy areas continue to normalize despite sequential gains .
- GAAP results still show a net loss of $(11)M (driven by discontinued operations) even as adjusted profitability improved; non-GAAP excludes restructuring ($7M), stock comp ($6M), acquired intangibles amortization ($9M), and LLA impairment ($1M) in Q3 .
- Segment re-baselining and the pending Cylance sale create comparability noise and forced the company to “stand down” prior Cybersecurity guidance and reset consolidated outlook to continuing operations only (CFO) .

Financial Results

Overall performance by quarter (oldest → newest)

Metric	Q1 FY25	Q2 FY25	Q3 FY25
Total Company Revenue ($M)	$144	$145	$162 (incl. discontinued)
Gross Margin % (non-GAAP/Company)	67%	66%	74%
GAAP Basic EPS (Total)	$(0.07)	$(0.03)	$(0.02)
Non-GAAP Basic EPS	$(0.03)	$0.00	$0.02
Adjusted EBITDA ($M)	$(7)	$0	$23
Operating Cash Flow ($M)	$(15)	$(13)	$3

Q3 year-over-year context

Metric	Q3 FY24	Q3 FY25
Revenue, Continuing + Discontinued ($M)	$175	$162
Non-GAAP Gross Margin % (Cont. + Disc.)	74.3%	74.1%
Non-GAAP Basic EPS	$0.01	$0.02
GAAP Basic EPS (Total)	$(0.04)	$(0.02)

Segment revenue trends (company segmentation used in each period)

Segment Revenue ($M)	Q1 FY25	Q2 FY25	Q3 FY25
Cybersecurity (incl. Cylance)	$85	$87	$93 (Secure Comms + Cylance)
IoT	$53	$55	$62
Licensing	$6	$3	$7

Q3 profitability by segment

Segment EBITDA ($M)	Q3 FY25
IoT	$18
Cybersecurity (incl. Cylance)	$8
Licensing	$6

Key KPIs

KPI	Q1 FY25	Q2 FY25	Q3 FY25
Cybersecurity ARR ($M)	$285	$279	$281
Cybersecurity DBNRR (%)	87%	88%	90%
Secure Communications ARR ($M)	N/A	N/A	$215
Secure Communications DBNRR (%)	N/A	N/A	95%
Recurring Software Product Revenue (%)	~80%	~80%	80%

Estimates vs. results (S&P Global)

S&P Global consensus EPS and revenue for Q3 FY25 could not be retrieved due to access limits; therefore, we cannot provide a Street vs. actual comparison at this time. Management stated the quarter beat its guidance for both non-GAAP EPS and consolidated revenue segments .
S&P Global consensus values unavailable.

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Total BlackBerry Revenue ($M)	FY25	$591–$616 (pre-divestiture basis)	$517–$526 (continuing ops)	Re-baselined to continuing ops; not comparable
IoT Revenue ($M)	FY25	$225–$235	$230–$235	Raised bottom end
Cybersecurity/Secure Comms Revenue ($M)	FY25	Cybersecurity: $350–$365	Secure Comms: $267–$271	Re-segmented excl. Cylance
Licensing Revenue ($M)	FY25	~ $16	~ $20	Increased
Total Adjusted EBITDA ($M)	FY25	Breakeven to +$10 (pre-divestiture)	$60–$70 (continuing ops)	Materially higher (methodology change)
Non-GAAP Basic EPS	FY25	$(0.05) to $(0.02)	$(0.02) to Breakeven	Tightened upward
Total BlackBerry Revenue ($M)	Q4 FY25	N/A	$126–$135	New Q4 outlook
IoT Revenue ($M)	Q4 FY25	N/A	$60–$65	New Q4 outlook
Secure Communications Revenue ($M)	Q4 FY25	N/A	$62–$66	New Q4 outlook
Licensing Revenue ($M)	Q4 FY25	N/A	~ $4	New Q4 outlook
IoT Segment EBITDA ($M)	Q4 FY25	N/A	$8–$10	New Q4 outlook
Secure Comms Segment EBITDA ($M)	Q4 FY25	N/A	$4–$6	New Q4 outlook
Licensing Segment EBITDA ($M)	Q4 FY25	N/A	~ $3	New Q4 outlook
Total Adjusted EBITDA ($M)	Q4 FY25	N/A	$10–$20	New Q4 outlook
Non-GAAP Basic EPS	Q4 FY25	N/A	$(0.01) to +$0.01	New Q4 outlook

Note: Current guidance reflects continuing operations given the pending sale of Cylance; prior guidance included full company pre-divestiture .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1–Q2 FY25)	Current Period (Q3 FY25)	Trend
Profitability/Cash Generation	Q1: Targeting Q4 non-GAAP profitability and cash flow; free cash usage improving . Q2: Breakeven adjusted EBITDA and non-GAAP EPS; opex −24% y/y vs baseline .	Returned to positive adjusted EBITDA ($23M), non-GAAP EPS ($0.02), and operating/free cash flow ($3M) ahead of schedule .	Improving inflection
IoT/QNX momentum	Q1: IoT +18% y/y revenue; QNX royalties “solid” . Q2: IoT +12% y/y; QNX strong royalties .	IoT +13% q/q to $62M; 85% gross margin; QNX installed base at 255M vehicles; Hyundai Mobis win; Intel collaboration .	Strengthening
Cybersecurity/Secure Comms	Q1: ARR +2% q/q to $285M; DBNRR improving . Q2: ARR flat at $279M; DBNRR +7ppt y/y to 88% .	Cybersecurity (incl. Cylance) revenue $93M; DBNRR up to 90%; segment adjusted EBITDA +$14M q/q to $8M .	Sequential improvement
AI strategy (Cylance)	Q1: Cylance Assistant, MDR launch . Q2: CylanceMDR Pro launch .	Sale of Cylance endpoint security assets to Arctic Wolf as “transformational step” to accelerate profitability post-close .	Portfolio pivot
FedRAMP/AtHoc (Secure Comms)	–	AtHoc “in process” for FedRAMP High; timing likely to extend beyond Q4 per CEO Q&A .	Positive progress; timing risk
Cost structure	Q2: Opex down vs baseline; ongoing rationalization .	Opex ~flat q/q at ~$101M, well below prior baseline; continued cost focus (CFO) .	Sustained discipline

Management Commentary

CEO: “BlackBerry achieved a significant inflection… delivered stronger than expected profitability and a return to positive cash flow ahead of schedule,” citing strong divisional revenue and cost efficiency; the Cylance sale is a “transformational step” toward accelerating profitability post-close .
CFO: Stronger top line and tight cost control produced positive adjusted EBITDA above the guidance range ($23M), adjusted net income of $12M, non-GAAP EPS of $0.02, and positive operating/free cash flow of $3M; opex remained well below the historic baseline .
Non-GAAP adjustments this quarter included restructuring ($7M), stock comp ($6M), amortization of acquired intangibles ($9M), and LLA impairment ($1M), bridging GAAP net loss of $(11)M to adjusted net income of $12M .

Q&A Highlights

Guidance framework reset: With Cylance reported as discontinued operations, management “stood down” prior Cybersecurity and full-company guidance and provided Q4 and FY25 guidance for continuing operations, including Secure Communications and IoT; total adjusted EBITDA (continuing) expected at $60–$70M for FY25 .
FedRAMP High timeline: AtHoc is “in process” for FedRAMP High; CEO suggested heavy lifting is done but final approval may extend beyond Q4 given government timing .
Profitability cadence: Management emphasized continued cost control and strong mix (e.g., Secusmart licenses) driving margin expansion and EBITDA in Secure Communications (implied 30% EBITDA margin ex-Cylance) .

Estimates Context

We attempted to retrieve S&P Global consensus for Q3 FY25 EPS and revenue but were unable to access the data due to request limits; as a result, Street-vs-actual comparisons are not provided. Management indicated the company exceeded its guidance on both non-GAAP EPS and divisional revenues .
Where estimates may need to adjust: Given the step-up in adjusted EBITDA guidance to $60–$70M for FY25 on a continuing-operations basis, Street models may need to reflect higher profitability run-rate for Secure Communications and IoT and remove Cylance contributions post-close .

Other Relevant Press Releases (Q3 FY25)

AtHoc + Avathon integration: BlackBerry integrated Avathon’s computer vision AI into AtHoc, bolstering real-time incident response capabilities—supportive of Secure Communications growth and FedRAMP positioning .
Additional business highlights were included in the company’s Q3 press release: QNX to 255M vehicles, Hyundai Mobis cockpit selection, QNX functional safety platform with Intel, and the definitive agreement to sell Cylance endpoint assets to Arctic Wolf .

Key Takeaways for Investors

Profitability inflection appears durable: positive adjusted EBITDA, positive non-GAAP EPS, and positive operating/free cash flow, aided by cost control and mix; monitoring the continuation of 70%+ gross margins and opex discipline is key .
IoT momentum is tangible: sequential revenue growth, high gross margins, and wins (Hyundai Mobis; 255M vehicle installed base) underpin the segment’s raised FY25 outlook; QNX royalty trajectory remains a central driver .
Secure Communications strengthening: mix-driven margin expansion (e.g., Secusmart licenses) and improving DBNRR; FedRAMP High could unlock federal opportunities, though timing beyond Q4 is possible .
Portfolio simplification is a catalyst: divesting Cylance is positioned as a “transformational” step to accelerate profitability; investors should reframe models to continuing ops and focus on EBITDA conversion .
Guidance reset lifts EBITDA outlook materially on a continuing-ops basis; watch execution against Q4 ranges and the FY26 framework expected at Q4 results .
Near-term trading setup: momentum in profitability and cash generation, plus IoT strength, are supportive; headline risk tied to Cylance close timing and FedRAMP approval cadence remains.
Medium-term thesis: focus on operating leverage in Secure Communications, sustained QNX royalty growth, and disciplined capital allocation post-divestiture to drive durable cash generation .

Citations: All figures and statements are sourced from BlackBerry’s Q3 FY25 Form 8-K and press release and prior-quarter 8-Ks unless otherwise noted. Earnings call statements are cited to The Motley Fool transcript page and are used for management commentary and Q&A context.

BLACKBERRY Ltd (BB)·Q3 2025 Earnings Summary