Name: BLACKBERRY Ltd Q4 2025 Earnings Call
Start: 2025-04-02T12:01:00.000Z

Executive Summary

Q4 FY25 beat across revenue ($141.7M), adjusted EBITDA ($21.1M), and adjusted EPS ($0.03), exceeding the top end of guidance; GAAP loss per share improved to $(0.01) with operating cash flow of $42.0M, aided by the first $~80M tranche from the Cylance sale closing in February .
Segment execution was solid: QNX revenue $65.8M (flat YoY, +6% QoQ) with 83% gross margin and $19.2M adj. EBITDA; Secure Communications revenue $67.3M with 64% gross margin and $12.6M adj. EBITDA; Licensing $8.6M with $1.4M adj. EBITDA .
FY26 outlook introduced: total revenue $504–$534M, adj. EBITDA $69–$84M, non‑GAAP EPS $0.08–$0.10; Q1 FY26 revenue $107–$115M, adj. EBITDA breakeven to $7M, non‑GAAP EPS $(0.01) to breakeven. Licensing quarterly revenue was raised to ~$6M (from ~$4M) going forward, with ~$5M quarterly EBITDA .
Stock reaction catalysts: multi‑quarter beat/raise cadence, visible cost takeout (> $150M), strengthened net cash (> $200M) for optionality, plus narrative on vehicle OS/content expansion and GEM (adjacent verticals) pipeline offset by uncertainties around auto tariffs and public sector budget dynamics .

What Went Well and What Went Wrong

What Went Well
- Broad beat: “another strong quarter that beat expectations across the board” with total revenue $141.7M, adj. EBITDA $21.1M, adj. EPS $0.03; cash and investments increased $144M QoQ to $410M .
- QNX resilience and future growth: QNX revenue $65.8M, backlog grew to ~$865M; progress on SDP 8.0, QNX Cabin, and partnerships (Microsoft Azure, TTTech, Vector) to increase content per vehicle and address GEM verticals .
- Secure Communications profitability: revenue $67.3M with adj. EBITDA $12.6M; ARR $208M (up 3% YoY); continued wins/renewals with U.S. government and Malaysian government expansion .
What Went Wrong
- Mixed demand/mix pressure: total GAAP gross margin 73.5% (down QoQ/YoY) on revenue mix; Secure Comms ARR declined 3% QoQ to $208M; Secure Comms DBNRR slipped 2ppt QoQ to 93% .
- Licensing variability: revenue $8.6M but Q4 adj. EBITDA only $1.4M due to onetime bad debt expense on a legacy contract dispute .
- Macro/tariff uncertainty: Management broadened FY26 ranges (QNX revenue $250–$270M) citing uncertain impacts from automotive tariffs and public sector spending dynamics; bottom ends prudently set wider .

Financial Results

Headline P&L vs Prior Periods and Consensus

Metric	Q4 FY2024	Q3 FY2025	Q4 FY2025 (Actual)	Q4 FY2025 (Consensus*)
Total Revenue ($M)	$152.9	$143.6	$141.7	$132.8*
GAAP Gross Margin %	79.9%	78.3%	73.5%	N/A
Adjusted Gross Margin %	80.4%	78.3%	73.7%	N/A
Adjusted EBITDA ($M)	$38.2	$23	$21.1	$12.9*
Adjusted EPS	$0.03	$0.02	$0.03	$0.005*
GAAP EPS	$(0.10)	$(0.02)	$(0.01)	N/A
Operating Cash Flow ($M)	$(14.7)	$3	$42.0	N/A
Note: Consensus estimates from S&P Global. Values marked with * are retrieved from S&P Global.

Segment Breakdown

Segment	Q4 FY2024	Q3 FY2025	Q4 FY2025
QNX Revenue ($M)	$65.9	$62	$65.8
QNX Segment Adjusted EBITDA ($M)	$17.7	$18	$19.2
Secure Communications Revenue ($M)	$71.6	$74	$67.3
Secure Comms Segment Adjusted EBITDA ($M)	$17.1	$22	$12.6
Licensing Revenue ($M)	$15.4	$7	$8.6
Licensing Segment Adjusted EBITDA ($M)	$12.7	$6	$1.4

KPIs

KPI	Q3 FY2025	Q4 FY2025
Secure Communications ARR ($M)	$215	$208
Secure Communications DBNRR	95%	93%
QNX Royalty Backlog ($M)	N/A	$865

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Total Revenue	Q1 FY26	N/A	$107–$115M	New
Total Revenue	FY26	N/A (Investor Day top-end reiterated; bottom widened)	$504–$534M	Range widened lower end
QNX Revenue	Q1 FY26	N/A	$51–$55M	New
QNX Revenue	FY26	N/A (top-end maintained)	$250–$270M	Maintained top-end; broader range
Secure Comms Revenue	Q1 FY26	N/A	$50–$54M	New
Secure Comms Revenue	FY26	N/A	$230–$240M	New
Licensing Revenue	Q1 FY26	N/A	~ $6M	New
Licensing Revenue	Run-rate	Prior ~$4M/quarter	~$6M/quarter going forward	Raised
Total Adj. EBITDA	Q1 FY26	N/A	Breakeven–$7M	New
Total Adj. EBITDA	FY26	N/A	$69–$84M	New
Non‑GAAP Basic EPS	Q1 FY26	N/A	$(0.01) to breakeven	New
Non‑GAAP Basic EPS	FY26	N/A	$0.08–$0.10	New
Operating Cash Flow	FY26	N/A	~ $35M	New

Context: Management cited tariff and public sector uncertainties driving broader ranges near-term; reiterated confidence in QNX growth and Secure Comms profitability focus .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 FY25)	Previous Mentions (Q3 FY25)	Current Period (Q4 FY25)	Trend
AI/technology initiatives	Launched CylanceMDR Pro; QNX Containers announced	N/A	Focus on QNX SDP 8.0, QNX Cabin; Azure support; TTTech/Vector collaborations	Broadening platform ecosystem; content expansion opportunity
Supply chain/tariffs/macro	Not highlighted	Not highlighted	Tariff uncertainty acknowledged; broadened ranges; ~50% QNX revenue ex‑NA mitigating risk	Cautious stance; diversified exposure
Product performance (QNX)	Double-digit YoY growth (IoT)	QNX revenue +13% QoQ; gross margin 85%	QNX revenue $65.8M; 83% GM; backlog ~$865M; multi-vertical traction	Resilient; building backlog and vertical adjacencies
Secure Communications/government	Cybersecurity ARR flat; DBNRR improving	AtHoc progressing toward FedRAMP High (in process)	Government renewals (DHS, Treasury, MDA); Malaysia extension; ARR $208M (−3% QoQ, +3% YoY)	Stable base; ARR mixed QoQ
Regulatory/legal	N/A	N/A	Licensing had onetime bad debt expense from legacy contract dispute	One‑off headwind in Licensing
R&D execution/cost actions	OpEx −24% YoY; breakeven adj. EBITDA	Positive adj. EBITDA; positive operating/free cash flow	Run‑rate cost reductions >$150M achieved; sustained profitability focus	Structural margin improvement

Management Commentary

“We finished the year with another strong quarter that beat expectations across the board… We started the year with a goal to deliver profitability and positive cash flow, and we’re pleased we delivered across the board.” — CEO John Giamatteo .
“QNX royalty backlog grew yet again year‑over‑year to approximately $865 million… solid indicator of ongoing future health” .
“We have now exceeded [the] target… to remove approximately $150 million of costs from our run rate… profitability has transformed.” .
“Total cash and investments increased by $144 million… [to] $410 million… BlackBerry now has a solid net cash position in excess of $200 million.” — CFO Tim Foote .
On FY26 outlook: maintaining QNX top‑end from Investor Day but broadening the lower end given tariff uncertainty; Secure Comms FY26 revenue $230–$240M, EBITDA 17% margin midpoint; Licensing ~$6M revenue and ~$5M EBITDA per quarter .

Q&A Highlights

Tariffs and auto demand: No material supply chain issues flagged by OEMs yet; uncertainty persists, but ~50% of QNX revenue is outside North America, providing some insulation .
U.S. Federal exposure: ~20–25% of Secure Comms; no material impacts observed; mission‑critical nature supports stickiness; potential for consolidation opportunities .
Vehicle OS/content per vehicle: OEMs asking QNX to do more pre‑integration; potential significant step‑up in content/vehicle if QNX supplies own and partner components; early innings .
Geographic and vertical expansion: Strong dialogues in Europe on vehicle OS; push into GEM verticals (medical, industrial, rail, robotics) leveraging SDP 8.0 .

Estimates Context

Q4 FY25 vs S&P Global consensus: Revenue $141.7M vs $132.8M* (beat), Adjusted EBITDA $21.1M vs $12.9M* (beat), Adjusted EPS $0.03 vs $0.005* (beat) .
FY25 vs S&P Global consensus: Revenue $534.9M vs $564.5M* (miss), Adjusted EPS $0.02 vs $0.0075* (beat) .
Note: Consensus estimates marked with * are retrieved from S&P Global.

Estimates Comparison Table

Metric	Period	Actual	Consensus*	Delta
Revenue ($M)	Q4 FY25	$141.7	$132.8*	+$8.9
Adjusted EBITDA ($M)	Q4 FY25	$21.1	$12.9*	+$8.2
Adjusted EPS	Q4 FY25	$0.03	$0.005*	+$0.025
Revenue ($M)	FY25	$534.9	$564.5*	−$29.6
Adjusted EPS	FY25	$0.02	$0.0075*	+$0.0125
Note: Consensus estimates marked with * are retrieved from S&P Global.

Key Takeaways for Investors

Broad Q4 beat with strengthened cash and visible cost structurals position BB to reinvest in QNX growth vectors (vehicle OS, GEM) while maintaining Secure Comms profitability discipline .
QNX backlog ~$865M and expanding partnerships (Azure, TTTech/Vector) underpin medium‑term revenue visibility and content/vehicle upside, albeit timing depends on auto program ramps and OEM adoption .
Secure Comms ARR dipped QoQ and DBNRR softened, but public sector stickiness and Malaysia expansion support stability; watch U.S./Canada/Germany policy dynamics into FY26 .
Licensing raised to ~$6M per quarter with ~$5M EBITDA per quarter improves baseline profitability and cash conversion visibility in FY26 .
Monitor tariff/policy headlines as near‑term stock drivers; management broadened ranges prudently—execution against QNX $250–$270M and Secure Comms $230–$240M will be key sentiment levers .
Cash/investments $410M and net cash >$200M create optionality (buybacks, targeted investments, M&A/JVs) if execution remains on plan .
Near‑term trading: positive estimate revisions likely for near‑term EPS/EBITDA given Q4 beat and higher Licensing run‑rate; medium‑term thesis turns on vehicle OS design‑win cadence and GEM revenue contribution .

Additional Notes

Cylance divestiture closed Feb 3, 2025; BB received ~$80M cash and 5.5M Arctic Wolf shares at close, with an additional ~$40M due on first anniversary; BB retains AI/ML endpoint security patents and tax assets .
Non‑GAAP adjustments in Q4 included restructuring, stock comp, amortization, litigation settlements, and LLA impairments; adjusted operating expense fell to $87.4M from $89.3M YoY .

BLACKBERRY Ltd (BB)·Q4 2025 Earnings Summary