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Who remembers the phrase "BBM me?"

In its heyday, BlackBerry was one of the biggest phone makers in the world. BlackBerry Messenger (BBM) was the instant messaging service that became a fixture of early smartphone culture. But while, BlackBerry remains an iconic brand, its business today looks vastly different from what it was nearly two decades ago.

While far off its 2008 highs, BlackBerry's share price has doubled this year as investors reward the company's strategy to focus on critical software for cars and secure communications. 

John Giamatteo, CEO of BlackBerry, joined me for the latest episode of "The Tech Download" to discuss how the company is positioning for a future in AI.

"While the products that we offer to our customers around the world can't necessarily be held in the palm of your hands like the old devices, those values of security, trust and innovation still shine through in the software and services and the other solutions that we deliver to the market today," Giamatteo said as he summed up the current business.

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New look business modelTwo businesses drive the bulk of BlackBerry's revenue. 

The first is secure communications. BlackBerry sells encrypted and secure communications products to customers like governments.

The second is QNX, a business through which BlackBerry sells operating systems and other embedded software for cars to underpin features ranging from braking systems to some semi-autonomous driving functions.

QNX has become a strong player in safety-critical automotive software and is embedded in 275 million vehicles, according to BlackBerry.

But Giamatteo sees the QNX business as key to a future in AI, specifically, physical AI, a term that encompasses products like autonomous cars and robotics. BlackBerry has crafted its software to have high safety standards, a non-negotiable for cars and other moving objects. That could also work in areas like robotics.

"We think that could be even a faster-growing segment of the industry for things like robotics," Giamatteo said.

The CEO is not talking about humanoid robots, like the ones you've probably seen videos of in China recently. Instead, he is referring to robots in an industrial, factory or medical setting.

Robotics is one of the company's "fastest-growing businesses inside the QNX portfolio," the CEO told me.

BlackBerry is also now making money from the sector. The company has a backlog of orders for QNX worth $950 million and "a portion of that is robotics," Giamatteo said. He did not disclose specific numbers around the robotics orders.

After the launch of the iPhone in 2007 transformed the smartphone industry, BlackBerry fought hard to keep its consumer mobile division alive with new devices — but ultimately lost the battle. 

Its reinvention has been a remarkable one, and for now, investors seem to be embracing the new direction.

News editA San Francisco federal judge on Thursday ruled that the Pentagon's blacklisting of Anthropic earlier this year was illegal.

Anthropic has inked a roughly $45 billion cloud deal with Nscale, a U.K.-based AI infrastructure company, sources told CNBC.

Nvidia's near-monopoly over the most advanced AI chips is under "threat" as OpenAI's and other tech giants announce custom-built semiconductors, according to analysts.

OpenAI has rolled out ads on ChatGPT for select plans in India, one of its largest and most active markets, as the company looks to maximize its revenue ahead of its planned listing next year.

SK Hynix is bolstering its U.S. presence, with a new factory in Indiana that CEO Kwak Noh-Jung says will make the state a "key HBM production base in America" by 2030.

One more thing

Nvidia stock

Bucking the trend — Nvidia's stock boost on Thursday was a sharp change to its fortunes in the previous four earnings quarters. Despite meeting or beating estimates, shares dropped as investors remained unimpressed. Not so this time out.

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Robotics is one of BlackBerry's fastest-growing businesses within its key software division, the CEO told CNBC, as the company positions itself for a future in physical AI.

BlackBerry, once one of the biggest mobile phone makers in the world with its iconic handsets that featured keyboards, has pivoted over the years to focus on other areas. One of its biggest businesses is QNX, which it calls "safety-critical" software that runs in cars.

QNX provides operating systems and other embedded software to underpin features ranging from braking systems to some semi-autonomous driving functions.

QNX has become a strong player in safety-critical automotive software and is embedded in 275 million vehicles, according to BlackBerry. CEO John Giamatteo said QNX is now being used in robotics.

"We think that could be even a faster-growing segment of the industry for things like robotics," Giamatteo told CNBC's "The Tech Download" podcast.

The focus won't be on humanoid robots like those that have gained attention in China recently. Instead, the CEO mentioned robots in industrial settings like warehouses, robotic forklifts, and those used in the medical space.

"As excited as we are about the dynamics of the automotive industry and where that's going, these other applications around robotics and medical instruments and industrial automation represent a tremendous growth opportunity. And one that I think BlackBerry and our QNX portfolio is really well positioned to address," Giamatteo said.

Robotics is one of the company's "fastest-growing businesses inside the QNX portfolio," the CEO said.

The company has a backlog of orders for QNX worth $950 million and "a portion of that is robotics," he added. The CEO did not disclose specific numbers around the robotics orders.

BlackBerry's stock has doubled this year amid improving margins and profitability. The company has positioned itself for future growth areas like robotics and autonomous cars, which are often dubbed examples of physical AI.

BlackBerry stock price year-to-date.

Newer generations of robots can combine specialized hardware with artificial intelligence models and other software. This is where BlackBerry sees its QNX software having an edge, given its experience in the automotive space.

In April, BlackBerry announced an expanded partnership with Nvidia to deploy its software alongside Nvidia's systems in robotics, medical technologies and industrial applications.

"Robotics is going to shift in a hardcore way ... and we couldn't be more excited about the opportunity in front of us," Giamatteo said.

SHANGHAI, CN / ACCESS Newswire / August 18, 2026 / Momenta, a leading Physical AI company, together with XHEART, has selected QNX® OS for Safety from QNX, a division of BlackBerry Limited (NYSE:BB)(TSX:BB), as the foundation for its Physical AI-defined autonomous driving platform.

Integrating Momenta's full-stack autonomous driving solution, XHEART X7 automotive-grade SoC, and QNX OS for Safety, built on QNX® SDP 8.0, the three collaborators are delivering a production-ready solution designed to help automakers accelerate deployment while meeting global functional safety standards.

Certified to ISO 26262 ASIL D, this solution enhances driving safety and intelligence, and gives OEMs a functionally safe foundation for vehicles destined for stringent markets, such as those requiring compliance with Europe's UN R171 (DCAS).

"The global scale for Physical AI demands safety first. Through our collaboration with QNX and XHEART we are proud to deliver a production-ready system built to one of the highest global safety benchmarks, empowering automakers to confidently introduce intelligent vehicles to markets everywhere," said Huan Sun, SVP of Momenta.

"Momenta and XHEART are helping enable the next generation of Physical AI technology, and QNX is proud to be the Safety-Certified Operating System underpinning that future," said Grant Courville, SVP of Products and Strategy at QNX. "This collaboration with Momenta and XHEART strengthens our position as a trusted foundational software provider for the world's leading autonomous driving systems."

"Building next-generation autonomous driving requires AI-native silicon," said TL Lee, CEO of XHEART. "The XHEART X7 SoC, paired with QNX's certified OS and Momenta's algorithms, gives OEMs the performance, safety and scalability required for global markets."

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About Momenta

Momenta is a global leader in Physical AI, committed to creating a better life through breakthrough AI technologies.

From seeing the world to foreseeing it - built on the World Model, and guided by the technical insight behind its data flywheel, Momenta advances two tracks in parallel, Mass Production and Scalable Robo, bringing Physical AI into everyday life.

In collaboration with top global OEMs and mobility platforms, Momenta is accelerating mass production and expanding across markets and vehicle platforms - from passenger cars to Robovans, Robotrucks and Robotaxis.

About XHEART

XHEART is committed to defining the core computing foundation for the era of large models-providing a purpose-built hardware platform that enables intelligent systems to scale with exceptional performance. Through chips redefined from the ground up for large-model workloads, XHEART serves as the "core engine" driving Physical AI in autonomous driving, robotics, and beyond. We are charting the future with silicon.

About BlackBerry

BlackBerry (NYSE:BB)(TSX:BB) provides enterprises and governments the intelligent software and services that power the world around us. Based in Waterloo, Ontario, the company's high-performance foundational software enables major automakers and industrial giants alike to unlock transformative applications, drive new revenue streams and launch innovative business models, all without sacrificing safety, security, and reliability. With a deep heritage in Secure Communications, BlackBerry delivers operational resiliency with a comprehensive, highly secure, and extensively certified portfolio for mobile fortification, mission-critical communications, and critical events management.

About QNX

QNX, a division of BlackBerry Limited (NYSE:BB)(TSX:BB), provides the trusted foundation that software-defined and Physical AI systems depend on to operate safely and predictably in the real world. For nearly half a century, QNX has powered safety-critical applications where failure is not an option. The business leads the way in delivering safe and secure operating systems, hypervisors, middleware, solutions, and development tools, along with the support and services delivered by trusted embedded software experts. Today, QNX technology underpins hundreds of millions of vehicles on the road and a wide range of mission-critical systems across industrial controls, robotics, medical devices, commercial transportation, rail, and aerospace and defense. QNX is headquartered in Ottawa, Canada. Learn more at qnx.software.

©2026 BlackBerry Limited. Trademarks, including but not limited to BLACKBERRY and EMBLEM Design, QNX and the QNX logo design are the trademarks or registered trademarks of BlackBerry Limited, and the exclusive rights to such trademarks are expressly reserved. All other trademarks are the property of their respective owners. BlackBerry is not responsible for any third-party products or services.

Media Contacts:

BlackBerry Media Relations
+1 (519) 597-7273
[email protected]

SOURCE: QNX

Key Takeaways BB expects about $100 million in fiscal 2027 operating cash flow, boosting capital-allocation flexibility. BlackBerry bought back 2.6 million shares for about $10 million and authorized nearly 27 million more shares.QNX and Secure Communications momentum could strengthen BlackBerry's cash flows and support future buybacks. BlackBerry Limited (BB - Free Report) is experiencing an improving financial position, with stronger profitability and liquidity, offering greater flexibility to return capital to its shareholders.

With management expecting approximately $100 million of operating cash flow for fiscal 2027, the key question is whether stronger cash generation can pave the way for additional buybacks.

BB delivered strong first-quarter fiscal 2027 results, with quarterly revenues of $152.9 million, representing a 26% year-over-year increase. Adjusted EBITDA more than doubled to $36.3 million.

For the quarter ended on May 31, 2026, BlackBerry generated $4.6 million in operating cash flow, marking its first cash-positive fiscal first quarter in nine years (excluding special items related to patent sales) against usage of $18 million a year ago.

Free cash flow was $1.7 million for the quarter against an outflow of $18.9 million in the previous quarter. The company ended the quarter with $422.9 million in cash and investments.

This financial flexibility provides management with multiple options for capital allocation, including investments in growth opportunities, strategic initiatives and shareholder returns.

BlackBerry repurchased 2.6 million shares during the quarter for approximately $10 million. Since its launch in May last year, the company has bought back 18 million shares at an average price of $3.85 per share.

Encouraged by its financial position, management recently renewed and expanded the program, authorizing the repurchase of approximately 27 million additional shares.

With QNX benefiting from software-defined vehicle adoption, General Embedded Markets and Physical AI opportunities, and Secure Communications gaining momentum from government and digital sovereignty initiatives, BlackBerry appears positioned to generate stronger cash flows over time. If that trend continues, the company could have higher capacity to return capital to its shareholders through future buybacks while investing in long-term growth.

BlackBerry noted that 90% of incremental revenues are expected to flow through to adjusted EBITDA, highlighting the increasing operating leverage.

Let’s Look at Capital Allocation for CompetitorsWithin the cybersecurity space, BlackBerry competes with several giants, including CrowdStrike (CRWD - Free Report) . While BlackBerry’s focus remains on encrypted communications and sovereign-grade infrastructure, CRWD is a leading pure-play cybersecurity company. CrowdStrike is seeing strong adoption across cloud, identity and next-gen SIEM, with these newer categories exceeding $2 billion in ARR.

CrowdStrike generated $590.9 million in operating cash flow and $468.5 million in free cash flow in the fiscal first quarter. The company repurchased $176 million of shares and had approximately $1.3 billion remaining under its existing authorization. Management said the company would remain opportunistic in returning capital while continuing to invest in its growth opportunities. The company expects fiscal second quarter revenues to be between $1.436 billion and $1.442 billion.

Aptiv PLC (APTV - Free Report) is an automotive technology peer for BlackBerry's QNX business. The company repurchased $250 million worth of shares in the second quarter of 2026, bringing the year-to-date repurchases to $325 million. APTV intends to buy back a similar amount in the second half, which will bring the total repurchases for the year to more than $600 million.

2026 free cash flow is expected at $625-$725 million. Importantly, Aptiv added that it plans to use approximately 50% of expected free cash flow for regular share repurchases over the next few years, with 2026 repurchases expected to be materially above that level.

BB Price Performance, Valuation & EstimatesShares of BlackBerry have edged up 0.7% in the past month compared with the Internet-Software industry’s 5% growth.

Image Source: Zacks Investment Research

Regarding the price/book ratio, BB is trading at 6.95, higher than the industry’s multiple of 4.56.

Image Source: Zacks Investment Research

The Zacks Consensus Estimate for BB earnings for fiscal 2027 has been revised downward over the past 60 days.

Image Source: Zacks Investment Research

BlackBerry currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Key Takeaways BlackBerry's shares have surged 124.8% in 2026 as revenues, EBITDA and cash flow improved.QNX revenues rose 26% to $72 million, with new licenses and partnerships supporting long-term growth.BlackBerry raised its revenue outlook, though valuation, competition and execution risks remain. BlackBerry Limited (BB - Free Report) has staged an impressive comeback in 2026 with shares having rallied 124.8% year to date (“YTD”), outperforming the Internet Software industry (down 11.4%) and the S&P 500 composite (up 9.5%). The rally is underpinned by structural growth drivers and a strong business model.

Price Performance
Image Source: Zacks Investment Research

Yet, despite this strong run, the stock remains well below the 52-week high of $13.59, closing its last day at $8.52. This raises a key question for investors: has the easy money already been made, or does BlackBerry still offer meaningful upside?

BB: Continued Execution MomentumBlackBerry delivered a strong start to fiscal 2027 with first-quarter revenues marking a 26% year-over-year increase. Profitability was equally impressive, with adjusted EBITDA more than doubling to $36 million. BlackBerry also reported positive GAAP net income for the fifth consecutive quarter

Image Source: Zacks Investment Research

Management highlighted that both its core segments — QNX and Secure Communications — achieved “Rule of 40” performance, reflecting a combination of strong growth and profitability.

The company also generated positive free cash flow, even in a seasonally weaker quarter. 

The balance sheet remains strong, with $423 million in cash and investments and continued repurchases reinforce capital allocation discipline.

BlackBerry repurchased 2.6 million shares during the quarter for approximately $10 million. Since its launch in May last year, the company has bought back 18 million shares totaling $17 million. Last month, BlackBerry renewed and expanded its share repurchase program, authorizing the buyback of approximately 27 million additional shares.

QNX: The Core Growth EngineQNX remained the key catalyst, with revenues climbing 26% year over year to $72 million. The segment benefited from broad-based strength, particularly in development licenses, which hit their highest level in eight quarters. This metric serves as an early indicator of future royalty streams, reflecting customer investments in new software platforms that will take years to reach production.

Management emphasized that these tools are tied to new platforms, including its SDP 8 architecture, which positions the company for multi-year revenue visibility.
Management highlighted partnerships with major chipmakers such as NVIDIA and Qualcomm, underscoring QNX’s role as a foundational software layer in next-generation intelligent systems.

Beyond automotive, General Embedded Markets and Physical AI are emerging as a fast-growing opportunity, expanding QNX’s reach into industrial automation, robotics and medical devices.

Additionally, the company continues to advance Alloy Kore, a platform expected to significantly increase software content per vehicle, boost average selling price by multiples and drive backlog. While still early, management remains positive about securing a design win within the current fiscal year.

Secure Comms: Headwind to Growth ContributorSecure Communications also delivered a standout quarter, with revenues increasing 24% year over year to $74 million. The segment is witnessing improved performance anchored by government demand, recurring revenues and customer retention. Rising demand for digital sovereignty and cybersecurity modernization by governments across the globe is creating a powerful tailwind.

Underlying metrics such as annual recurring revenue (“ARR”) and customer retention indicate a steady base. ARR grew 5% to $220 million, with a healthy dollar-based net retention rate, or DBNRR came in at 92%. 

BB’s Strong OutlookEncouraged by the strong start, BlackBerry now expects total revenues between $594 million and $621 million compared with $584-$611 million projected earlier. Adjusted EBITDA is projected between $119 million and $139 million.

QNX revenues are expected in the range of $295-$312 million and adjusted EBITDA at $74-$86 million. It expects Secure Communications revenues of $270-$280 million and adjusted EBITDA of $57-$65 million. Licensing & Other revenues are expected to be roughly $29 million.

The strong start to fiscal 2027 and subsequent outlook revision reinforces that BlackBerry’s turnaround strategy is gaining traction.

However, the path is not without challenges. Secure Communications remains exposed to deal-timing variability and this could impact performance. In addition, some of BlackBerry’s most exciting opportunities, such as physical AI, robotics and the Alloy Kore platform, remain in the early stages, introducing execution risk. Heavy reliance on the automotive industry is a concern. The QNX platform remains heavily exposed to vehicle production cycles and OEM spending, which, in turn, are highly dependent on macro conditions. BlackBerry faces increasing competitive pressures in both QNX and cybersecurity businesses.

Within QNX, it faces Wind River (VxWorks) and Alphabet’s (GOOGL - Free Report) Android Automotive OS. The cybersecurity business is pitted against CrowdStrike (CRWD - Free Report) , Palo Alto Networks (PANW - Free Report) and a host of other cybersecurity companies.

Image Source: Zacks Investment Research

Given all this, the estimates for the current fiscal year have been revised downward over the past 60 days.

What to Make of BB’s Premium Valuation?After a sharp rally, valuation becomes a key consideration.

Image Source: Zacks Investment Research

In terms of the forward 12-month price/earnings ratio, BB is trading at 43.83X, way higher than the Internet-Software sector’s multiple of 27.32X. The premium appears somewhat justified given the company’s improving fundamentals and long-term growth prospects.  

In comparison, GOOGL trades at a forward 12-month P/E multiple of 21.86, while CRWD and PANW are trading at multiples of 144.45X and 91.99X, respectively.

Shares of GOOGL, CRWD and PANW have gained 19.3%, 72.8% and 88.4%, respectively, year to date.

Investment View: Here’s Why BB Is Still a BuyBB currently carries a Zacks Rank #2 (Buy).

Strong QNX momentum, emerging opportunities in the GEM space and a resurgent Secure Communications segment all point to meaningful long-term potential. With significant gains already, the buying opportunity may no longer be as attractive as earlier, but for investors with a long-term horizon, BlackBerry’s transformation suggests that the rally may not be over just yet.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

BlackBerry stock price has pulled back in the past two weeks in New York and Toronto. It dropped to $8.83 on Monday, down by 35% from its highest point this year. Even so, it is one of the best-performing stocks as it jumped by over 130% this year as investors cheer its turnaround and its positioning in the AI and robotics market.

BlackBerry, a company that once played a big role in the smartphone industry, has done well in the past few months as the turnaround efforts by John Giamatteo continued paying off. 

This recovery has been helped by its QNX business, which provides a real-time operating system used in connected and autonomous vehicles. Its system is now embedded in over 275 million vehicles.

At the same time, investors believe that it is one of the top players in the AI and robotics market, especially after its partnerships with companies like Nvidia, Qualcomm, and Arm.

BlackBerry stock jumped after it reported upbeat first-quarter results, indicating its business was doing relatively well. Its revenue jumped by 26% to $152.9 million, with its gross margin growing by 4 percentage points.

The company’s growth was largely driven by its QNX segment, whose revenue rose by 26% to $72.3 million. QNX expanded its partnership with Nvidia to advance safety-critical AI across robotics, medical, and industrial systems.

Its secure communications revenue soared by 24% to $73.6 million. BlackBerry made $7 million from licensing.

The company reached several major milestones in the quarter, including achieving FedRAMP Class D recertification for the BlackBerry AtHoc solution.

This certification will strengthen its position for US government contracts.

Still, there are concerns about BlackBerry shares. One of the key concerns is whether it can sustain its organic growth.

Yahoo Finance data shows that its second-quarter revenue will come in at $145.53 million, up by 12.2% from the same period last year. This will mark a deceleration from the previous quarter.

For the year, the company’s revenue is expected to be $614 million, up by 12% YoY. It is then expected to hit $678 million next year, up by 10% YoY. 

Another concern, which may explain the recent pullback, is valuation. The stock has become expensive after this year's rally.

Data shows that the forward price-to-earnings ratio has moved to 78, much higher than most companies, including popular names like Nvidia and Micron. 

BB stock price chart | Source: TradingView

The weekly chart shows that the BB stock price has pulled back in the past few days, moving from a high of $13.57 to the current $8.83. 

This retreat is happening as investors book profits after the stock surged from last year’s low of $1.96 to a high of $13.57. It remains substantially above the 50 and 200 moving averages.

Therefore, there is a risk that mean reversion will pull it much lower in the near term. If this happens, the stock will drop towards the 50 EMA level of $5.9 as traders wait for its second quarter earnings report.

READ MORE: BlackBerry stock hits 52-week high: take profit or let it run?

Key Takeaways BlackBerry says QNX's GEM segment is expanding beyond automotive into safety-critical embedded markets.BB secured a royalty commitment and expanded a customer relationship through its latest SDP 8 platform.BlackBerry says its strongest robotics pipeline yet supports long-term Physical AI growth opportunities. BlackBerry Limited (BB - Free Report) continues to see growing opportunities for its QNX business across robotics and industrial automation through its General Embedded Market (GEM) strategy. The company stated that GEM remains the fastest-growing segment within QNX, expanding its long-term opportunity beyond automotive into robotics, industrial automation, medical devices and other safety-critical applications.

During first-quarter fiscal 2027, BlackBerry secured a significant royalty commitment from a leading semiconductor equipment manufacturer and expanded its relationship with Luminex through an upgrade to its latest SDP 8 platform. These wins reflect continued progress in expanding QNX adoption and deployment across embedded markets.

The company highlighted Physical AI as a key long-term growth driver. As intelligent machines become increasingly autonomous and operate around people, BlackBerry said that safety, security, reliability and real-time determinism become more important. QNX technology is deterministic and safety certified, making it suitable for systems where failure is not an option. BlackBerry noted that automotive has served as a proving ground for Physical AI, describing modern vehicles as robots on wheels and emphasizing QNX’s role in supporting advanced autonomous and safety-critical systems.

BlackBerry also stated that its experience in the automotive market positions it well for opportunities in robotics and industrial automation. The company believes the capabilities it developed for automotive applications, including real-time determinism, safety certification, security and reliability, translate well to these adjacent markets. Management identified robotics, industrial automation and medical instrumentation as the three primary GEM categories where QNX’s technology is well aligned with customer requirements.

On the last earnings call, the company stated that its pipeline across robotics and industrial automation is the strongest it has been, with encouraging opportunities developing in both markets. Management expects to report additional wins as they materialize and noted that GEM continues to be the fastest-growing segment within QNX.

Taking a Look at BB’s CompetitorsCrowdStrike (CRWD - Free Report) continues to strengthen its growth pipeline through product innovation, AI expansion and broader platform adoption. The company introduced Charlotte AI AgentWorks, a no-code platform developed with AWS, NVIDIA and OpenAI, along with Agentic MDR to automate security workflows. Falcon Data Security expanded protection across endpoints, cloud, SaaS and AI environments. Management highlighted a record second-quarter pipeline and increased partner engagement, supporting demand across enterprise and public sector customers. Falcon Flex also gained momentum, adding more than 300 accounts in the first quarter and reaching more than $1.9 billion in ending ARR, reflecting stronger customer commitments and expanding platform adoption.

Palo Alto Networks (PANW - Free Report) continues to benefit from higher cybersecurity priority as enterprises deploy AI and look to consolidate vendors onto fewer platforms. Platformization is translating into larger commitments, supported by expanding next-generation security ARR and RPO, and management guidance implies continued growth in the fourth quarter of fiscal 2026. Momentum in Network Security, SASE and Prisma AIRS, along with early execution on the CyberArk and Chronosphere integrations, supports the long-term revenue mix shift toward recurring software and free cash flow. For fiscal 2026, Palo Alto Networks now expects revenues in the range of $11.41 billion to $11.42 billion, suggesting year-over-year growth of 24%.

BB Price Performance, Valuation & EstimatesShares of BlackBerry have surged 25.6% in the past month compared with the Internet-Software industry’s growth of 5.3%.

Image Source: Zacks Investment Research

Regarding the price/book ratio, BB is trading at 8.67, higher than the industry’s multiple of 4.71.

Image Source: Zacks Investment Research

The Zacks Consensus Estimate for BB earnings for fiscal 2027 has been revised downward over the past 60 days.

Image Source: Zacks Investment Research

BlackBerry currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Key Takeaways BlackBerry posted stronger first-quarter results with higher margins, cash flow and raised guidance.BB continues expanding QNX across software-defined vehicles, embedded markets and Secure Communications.BlackBerry's richer valuation means future gains hinge on sustained execution and profitable growth. BlackBerry Limited (BB - Free Report) has been one of the market's biggest turnaround stories in 2026, with its shares surging as investors increasingly recognize the company's successful transformation into a software and cybersecurity business. Strong execution across QNX and Secure Communications, improving profitability and higher financial guidance have fundamentally changed sentiment surrounding the stock.

BB’s shares have gained 148.9% in the past year, significantly outpacing the Internet Software industry’s fall of 23.6%. The broader Zacks Computer & Technology sector and the S&P 500 composite have registered gains of 33.2% and 21.8%, respectively.

Image Source: Zacks Investment Research

However, after such a dramatic rally, the investment question has shifted. Rather than asking whether BlackBerry's business is improving, investors must determine whether those operational gains are sufficient to justify today's valuation. While the company continues to benefit from several long-term growth catalysts, expectations have also risen considerably, making execution increasingly important.

BlackBerry Delivers Better ResultsBlackBerry's latest quarterly results demonstrated that its turnaround is translating into stronger financial performance.

Fiscal first-quarter 2027 revenue increased 26% year over year to approximately $153 million, exceeding the high end of management's guidance. Adjusted earnings per share came in at 4 cents, while adjusted EBITDA more than doubled from the prior-year period to approximately $36 million, representing a 24% margin. Gross margin expanded four percentage points year over year to roughly 79%, highlighting improving operating leverage as higher-margin software revenue becomes a larger portion of the business.

Cash generation also improved meaningfully. BlackBerry produced approximately $5 million in operating cash flow during what management described as a seasonally weaker quarter and generated positive free cash flow while reporting its fifth consecutive quarter of positive GAAP net income. The company also raised its full-year operating cash flow expectation to approximately $100 million, reinforcing management's confidence that revenue growth is increasingly translating into sustainable profitability.

Image Source: Zacks Investment Research

Why BB Still Has Growth CatalystsDespite the stock's sharp advance, BlackBerry still has several long-term growth drivers.

QNX remains the company's primary growth engine as automakers continue adopting software-defined vehicle architectures that require increasingly sophisticated operating systems. Development license revenue reached its highest level in eight quarters, an encouraging indicator because these licenses are typically purchased years before production royalties begin. Management also continues to expand QNX's footprint across advanced driver assistance systems, centralized vehicle computing and commercial vehicles.

Beyond automotive, General Embedded Markets (GEM) represent another attractive opportunity. Robotics, industrial automation, medical devices and semiconductor equipment all require safety-certified embedded operating systems; while emerging Physical AI applications could significantly expand BlackBerry's addressable market over time. Alloy Core also offers the potential to increase software content per vehicle, raising average selling prices and expanding future royalty revenue if customer adoption accelerates.

Licensing has also improved, with fiscal first-quarter revenue exceeding expectations due to stronger licensing agreements and one-time deals. Meanwhile, Secure Communications continues benefiting from digital sovereignty initiatives, cybersecurity modernization and increasing government demand for encrypted communications. Stable recurring revenue, healthy customer retention and opportunities for additional large government contracts provide another avenue for long-term growth.

What Could Slow BlackBerryWhile the long-term outlook has improved, several risks remain.

Macroeconomic uncertainty continues to affect automotive customers, with some manufacturers delaying development programs because of supply chain challenges, tariff concerns and broader economic caution. Since QNX royalties ultimately depend on vehicle production, prolonged delays could slow revenue realization even if design wins remain healthy.

Secure Communications also faces inherent variability because government procurement cycles are unpredictable. Large contracts often require lengthy approval processes, meaning quarterly revenue can fluctuate significantly depending on the timing of major awards. Geopolitical changes across the United States, Canada, Germany and other key markets could also delay procurement decisions or alter government spending priorities.

Competition remains another important consideration. BlackBerry operates in rapidly evolving markets where continuous investment in research and development is necessary to maintain technological leadership. The company competes against well-capitalized software and cybersecurity providers, including CrowdStrike (CRWD - Free Report) and Palo Alto Networks (PANW - Free Report) , requiring ongoing innovation to preserve its competitive position.

BB Trades at a Premium ValuationBlackBerry's improving fundamentals have been accompanied by a significantly richer valuation following the stock's powerful 2026 rally.

The stock currently trades at a forward 12-month P/E of 76.62, compared with the sub-industry average of 24.93. Those multiples represent a substantial premium compared with where the company traded before investors began pricing in its improving growth outlook.

Image Source: Zacks Investment Research

The current Zacks price target of $13 implies additional upside from recent trading levels but suggests a more measured return potential than earlier in the turnaround. While BlackBerry's operational progress clearly supports a higher valuation than in prior years, investors are now paying for anticipated future growth rather than simply a restructuring story.

As a result, future share appreciation will likely depend more on sustained execution across QNX, Secure Communications and cash generation than on multiple expansion alone.

How BB's Ratings Fit Investor DecisionsBlackBerry currently carries a Zacks Rank #2 (Buy), reflecting improving earnings expectations and constructive near-term sentiment. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The stock also earns a Growth Score of A, supported by accelerating revenue growth, expanding margins and improving operating cash flow. However, its Value Score of F indicates that shares no longer appear inexpensive after the rally, while its Momentum Score of F suggests recent price action already reflects much of the improving outlook. Together, these produce an overall VGM Score of D.

Taken together, the ratings reinforce a balanced investment case. BlackBerry continues to benefit from strong execution, expanding QNX opportunities and improving financial performance that support a favorable near-term outlook. At the same time, richer valuation metrics mean investors should expect future returns to depend increasingly on the company's ability to sustain profitable growth rather than simply improving sentiment.

For investors with a long-term horizon, BlackBerry's transformation appears increasingly credible. However, after its massive 2026 rally, the stock now offers a more balanced risk-reward profile, where continued operational execution will be essential to justify further upside.

Revenue increased 26% year-over-year to approximately $153 million

Adjusted EBITDA grew 144% year-over-year; GAAP operating income increased year-over-year to approximately $15 million

Both QNX and Secure Communications achieved Rule of 401 performance, contributing to BlackBerry's fifth consecutive quarter of positive GAAP net income; Adjusted EPS exceeded expectations

First fiscal quarter of positive operating cash flow in nine years, excluding the patent sale in FY24

WATERLOO, ON / ACCESS Newswire / June 25, 2026 / BlackBerry Limited (NYSE:BB)(TSX:BB) today reported financial results for the three months ended May 31, 2026 (all figures in U.S. dollars and U.S. GAAP, except where otherwise indicated).

"Our first quarter results demonstrate continued momentum following our transformation, as we advance our strategy to drive profitable growth. We exceeded expectations for revenue, profitability, and cash generation through solid performance by our world class QNX and Secure Communications teams," said John J. Giamatteo, CEO, BlackBerry. "We are particularly encouraged by the multi-year growth opportunities ahead in software-defined vehicles, including significant content expansion with the Alloy Kore platform, as well as broad opportunities in the general embedded market, especially physical AI. We believe these opportunities significantly enhance QNX's long-term potential. While we remain early in the fiscal year, the foundation of the business is stronger than it has been in years, and we continue to focus on disciplined execution and creating long-term value for our shareholders."

First Quarter Fiscal 2027 Financial Highlights

Total company revenue of $152.9 million increased 26% year-over-year.

Total company adjusted gross margin improved approximately 4 percentage points year-over-year to 78.6%; GAAP gross margin improved by approximately 4 percentage points year-over-year to 78.3%.

Total company adjusted EBITDA increased by 144% year-over-year to $36.3 million; GAAP operating income improved by $13.3 million year-over-year to $15.3 million.

QNX revenue increased 26% year-over-year to $72.3 million; QNX segment adjusted gross margin expanded by 5 percentage points year-over-year to 86%.

QNX segment adjusted EBITDA increased 52% year-over-year to $19.3 million, representing a 27% margin.

Secure Communications revenue increased by 24% year-over-year to $73.6 million; Secure Communications segment adjusted gross margin increased by 2 percentage points year-over-year to 72%.

Secure Communications segment adjusted EBITDA increased 110% year-over-year to $20.2 million, representing a 27% margin.

Secure Communications ARR remained stable at $220 million and DBNRR was 92%.

Licensing revenue was $7.0 million; Licensing segment adjusted EBITDA was $6.2 million.

Adjusted net income increased 135% year-over-year to $25.4 million; GAAP net income was positive for the fifth consecutive quarter at $8.5 million.

Adjusted basic earnings per share was $0.04; GAAP basic earnings per share was $0.01.

Operating cash flow was $4.6 million, marking BlackBerry's first cash positive fiscal first quarter in nine years, when allowing for the sale of the non-core patent portfolio to Malikie in fiscal year 2024.

Repurchased 2.6 million shares for $10.0 million during the quarter.

Ended the first quarter with $422.9 million in cash and investments.

1 The company defines the Rule of 40 metric as the sum of its GAAP revenue year-over-year growth percentage and its non-GAAP adjusted EBITDA margin percentage. Where the sum equals or exceeds 40, then the Rule of 40 is considered to have been achieved.

Business Highlights & Strategic Announcements

Expanded QNX's collaboration with NVIDIA to advance safety-critical edge AI across robotics, medical, and industrial systems through the integration of QNX OS for Safety 8.0 with NVIDIA IGX Thor and the NVIDIA Halos Safety Stack.

Released QNX Hypervisor 8.0 for Safety, further strengthening QNX's position as a foundational software platform for software-defined vehicles, robotics, medical devices, and other safety critical applications.

Leading Chinese electric vehicle company, Leapmotor, selected the QNX® Software Development Platform 8.0 and QNX® Hypervisor for Safety 8.0 to serve as the foundational software platform for its forthcoming premium electric SUV, the D19.

Announced a collaboration with TKMS, one of the world's leading naval defence companies, for strategic collaboration in support of Canada's submarine program. TKMS will adopt QNX's trusted foundational software across its next‑generation naval platforms.

Achieved FedRAMP Class D (High) re-certification for BlackBerry® AtHoc®.

Announced a strategic partnership between BlackBerry Secure Communications and The IP Company to bring highly secure, certified communications capabilities to naval and military environments worldwide.

Announced the renewal of its normal course issuer bid ("NCIB") share buyback program for up to 26.8 million common shares.

Financial Outlook

BlackBerry is providing the following guidance for the second fiscal quarter ending August 31, 2026 and the fiscal year ending February 28, 2027.

Q2 FY27

FY27

Total BlackBerry revenue:

$137 - $148 million

$594 - $621 million

QNX revenue:

$70 - $75 million

$295 - $312 million

Secure Communications revenue:

$57 - $63 million

$270 - $280 million

Licensing revenue:

Approximately $10 million

Approximately $29 million

Total Company adjusted EBITDA:

$20 - $30 million

$119 - $139 million

QNX segment adjusted EBITDA:

$16 - $21 million

$74 - $86 million

Secure Communications segment adjusted EBITDA:

$5 - $10 million

$57 - $65 million

Licensing segment adjusted EBITDA:

Approximately $9 million

Approximately $25 million

Non-GAAP basic EPS2:

$0.03 - $0.04

$0.16 - $0.20

Operating cash flow

Breakeven - $10 million

Approximately $100 million

2 EPS guidance does not include the effect of any potential future share repurchases not yet completed as of the date of this release.

Use of Non-GAAP Financial Measures

The tables at the end of this press release include a reconciliation of the non-GAAP financial measures and non-GAAP financial ratios used by the Company to comparable U.S. GAAP measures and an explanation of why the Company uses them. The Company does not provide a reconciliation of expected Adjusted EBITDA and expected Non-GAAP basic EPS for the second quarter and full fiscal year 2027 to the most directly comparable expected GAAP measures because it is unable to predict with reasonable certainty, among other things, restructuring charges and impairment charges and, accordingly, a reconciliation is not available without unreasonable effort. These items are uncertain, depend on various factors, and could have a material impact on GAAP reported results for the guidance period. For more information on the non-GAAP financial measures, please refer to the tables at the end of this press release.

Conference Call and Webcast

A conference call and live webcast will be held today beginning at 8:00 a.m. ET, which can be accessed using the following link (here) or through the Company's investor webpage (BlackBerry.com/Investors) or by dialing toll free +1 (877) 883-0383 and entering Entry Number 1747488.

A replay of the conference call will be available at approximately one hour after the event using the same webcast link (here) or by dialing toll free +1 (855) 669-9658 and entering Replay Access Code 4857611.

About BlackBerry

BlackBerry (NYSE:BB)(TSX:BB) provides enterprises and governments the intelligent software and services that power the world around us. Based in Waterloo, Ontario, the company's high-performance foundational software enables major automakers and industrial giants alike to unlock transformative applications, drive new revenue streams and launch innovative business models, all without sacrificing safety, security, and reliability. With a deep heritage in Secure Communications, BlackBerry delivers operational resiliency with a comprehensive, highly secure, and extensively certified portfolio for mobile fortification, mission-critical communications, and critical events management.

For more information, visit BlackBerry.com and follow @BlackBerry.

Investor Contact:

BlackBerry Investor Relations
+1 (519) 888-7465
[email protected]

Media Contact:

BlackBerry Media Relations
+1 (519) 597-7273
[email protected]

###

This news release contains forward-looking statements within the meaning of certain securities laws, including under the U.S. Private Securities Litigation Reform Act of 1995 and applicable Canadian securities laws, including statements regarding BlackBerry's plans, strategies and objectives.

The words "expect", "anticipate", "estimate", "may", "will", "should", "could", "intend", "believe", "target", "plan" and similar expressions are intended to identify these forward-looking statements. Forward-looking statements are based on estimates and assumptions made by BlackBerry in light of its experience and its perception of historical trends, current conditions and expected future developments, as well as other factors that BlackBerry believes are appropriate in the circumstances, including but not limited to, BlackBerry's expectations regarding its business, strategy, opportunities and prospects, the launch of new products and services, general economic conditions, competition, and BlackBerry's expectations regarding its financial performance. Many factors could cause BlackBerry's actual results, performance or achievements to differ materially from those expressed or implied by the forward-looking statements, including, without limitation, risks related to the following factors: BlackBerry's ability to maintain or expand its customer base for its software and services offerings to grow revenue or achieve sustained profitability; the intense competition faced by BlackBerry; BlackBerry's ability to enhance, develop, introduce or monetize its products and services in a timely manner with competitive pricing, features and performance; significant changes in government customer demand or procurement requirements; BlackBerry's sales cycles and the time and expense of its sales efforts; the occurrence or perception of a breach of BlackBerry's network cybersecurity measures, or an inappropriate disclosure of confidential or personal information; BlackBerry's use of artificial intelligence technology and tools in its operations and in product development; adverse macroeconomic and geopolitical conditions, including trade policies and national security concerns; risks arising from a failure or perceived failure of the security features or functionality of BlackBerry's solutions; litigation against BlackBerry; BlackBerry's continuing ability to attract new personnel, retain existing key personnel and manage its staffing effectively; network disruptions or other business interruptions; BlackBerry's ability to foster an ecosystem of third-party application developers; BlackBerry's dependence in part on its relationships with resellers and channel partners; BlackBerry's products and services being dependent upon interoperability with rapidly changing systems provided by third parties; failure to protect BlackBerry's intellectual property and to earn expected revenues from intellectual property rights; BlackBerry's use of open source software and its ability to obtain rights to use third-party software; BlackBerry potentially being found to have infringed on the intellectual property rights of others; BlackBerry's indebtedness, which could impact its operating flexibility and financial condition; the asset risk faced by BlackBerry, including the potential for charges related to its long-lived assets and goodwill; tax provision changes, the adoption of new tax legislation or exposure to additional tax liabilities; the use and management of user data and personal information; government regulations applicable to BlackBerry's products and services, including products containing encryption capabilities; environmental, social and governance expectations and standards; the failure of BlackBerry's suppliers, subcontractors, channel partners and representatives to use acceptable ethical business practices or comply with applicable laws; potential impacts of acquisitions, divestitures and other business initiatives; risks associated with foreign operations, including fluctuations in foreign currencies; environmental events; the fluctuation of BlackBerry's quarterly revenue and operating results; and the volatility of the market price of BlackBerry's common shares.

These risk factors and others relating to BlackBerry are discussed in greater detail in BlackBerry's Annual Report on Form 10-K and the "Cautionary Note Regarding Forward-Looking Statements" section of BlackBerry's MD&A (copies of which filings may be obtained at www.sedarplus.ca or www.sec.gov). All of these factors should be considered carefully, and readers should not place undue reliance on BlackBerry's forward-looking statements. Any statements that are forward-looking statements are intended to enable BlackBerry's shareholders to view the anticipated performance and prospects of BlackBerry from management's perspective at the time such statements are made, and they are subject to the risks that are inherent in all forward-looking statements, as described above, as well as difficulties in forecasting BlackBerry's financial results and performance for future periods, particularly over longer periods, given changes in technology and BlackBerry's business strategy, evolving industry standards, intense competition and short product life cycles that characterize the industries in which BlackBerry operates. Any forward-looking statements are made only as of today and BlackBerry has no intention and undertakes no obligation to update or revise any of them, except as required by law.

BlackBerry Limited
Incorporated under the Laws of Ontario
(United States dollars, in millions except share and per share amounts)

Consolidated Statements of Operations

Three Months Ended

May 31, 2026

May 31, 2025

Revenue

$

152.9

$

121.7

Cost of sales

33.2

31.4

Gross margin

119.7

90.3

Gross margin %

78.3

%

74.2

%

Operating expenses

Research and development

33.0

25.0

Sales and marketing

29.5

28.7

General and administrative

39.3

30.5

Amortization

2.5

4.0

Impairment of long-lived assets

0.1

0.1

104.4

88.3

Operating income

15.3

2.0

Investment income, net

1.1

2.9

Income before income tax

16.4

4.9

Provision for income taxes

7.9

3.0

Net income

$

8.5

$

1.9

Earnings per share

Basic

$

0.01

$

0.00

Diluted

$

0.01

$

0.00

Weighted-average number of common shares outstanding (000s)

Basic

586,741

596,300

Diluted

593,193

600,831

Total common shares outstanding (000s)

586,061

594,529

BlackBerry Limited
Incorporated under the Laws of Ontario
(United States dollars, in millions)

Consolidated Balance Sheets

As at

May 31,
2026

February 28,
2026

Assets

Current

Cash and cash equivalents

$

256.8

$

274.7

Short-term investments

94.1

85.2

Accounts receivable, net of allowance of $3.6 and $3.4, respectively

160.6

156.0

Other receivables

5.5

7.5

Income taxes receivable

2.5

2.6

Other current assets

40.9

42.2

560.4

568.2

Restricted cash and cash equivalents

14.2

14.2

Long-term investments

57.8

58.3

Other long-term assets

53.8

56.3

Operating lease right-of-use assets, net

23.8

16.7

Property, plant and equipment, net

13.1

12.3

Intangible assets, net

39.2

40.1

Goodwill

478.4

479.1

$

1,240.7

$

1,245.2

Liabilities

Current

Accounts payable

$

16.3

$

5.5

Accrued liabilities

99.0

111.7

Income taxes payable

18.3

12.4

Deferred revenue, current

121.5

138.5

255.1

268.1

Deferred revenue, non-current

12.4

14.1

Operating lease liabilities

24.3

18.8

Other long-term liabilities

1.4

1.7

Long-term notes

196.8

196.5

490.0

499.2

Shareholders' equity

Capital stock and additional paid-in capital

2,919.3

2,924.4

Deficit

(2,155.8

)

(2,167.2

)

Accumulated other comprehensive loss

(12.8

)

(11.2

)

750.7

746.0

$

1,240.7

$

1,245.2

BlackBerry Limited
Incorporated under the Laws of Ontario
(United States dollars, in millions)

Consolidated Statements of Cash Flows

Three Months Ended

May 31, 2026

May 31, 2025

Cash flows from operating activities

Net income

$

8.5

$

1.9

Adjustments to reconcile net income to net cash provided by (used in) operating activities:

Amortization

4.1

5.7

Stock-based compensation

6.5

5.7

Operating leases

1.0

(1.6

)

Other

1.0

(0.6

)

Net changes in working capital items

Accounts receivable, net of allowance

(4.6

)

43.8

Other receivables

2.0

(3.3

)

Income taxes receivable

0.1

(0.1

)

Other assets

3.0

17.0

Accounts payable

11.0

(25.9

)

Accrued liabilities

(15.2

)

(41.7

)

Income taxes payable

5.9

3.1

Deferred revenue

(18.7

)

(22.0

)

Net cash provided by (used in) operating activities

4.6

(18.0

)

Cash flows from investing activities

Proceeds on sale, maturity or distribution from long-term investments

-

0.1

Acquisition of property, plant and equipment

(2.9

)

(0.9

)

Acquisition of intangible assets

(1.6

)

(1.2

)

Acquisition of short-term investments

(70.4

)

(21.7

)

Proceeds on sale or maturity of short-term investments

61.4

62.2

Net cash provided by (used in) investing activities

(13.5

)

38.5

Cash flows from financing activities

Issuance of common shares

1.3

1.2

Common shares repurchased

(10.0

)

(10.0

)

Net cash used in financing activities

(8.7

)

(8.8

)

Effect of foreign exchange gain (loss) on cash, cash equivalents, restricted cash, and restricted cash equivalents

(0.3

)

0.5

Net increase (decrease) in cash, cash equivalents, restricted cash, and restricted cash equivalents during the period

(17.9

)

12.2

Cash, cash equivalents, restricted cash, and restricted cash equivalents, beginning of period

288.9

280.3

Cash, cash equivalents, restricted cash, and restricted cash equivalents, end of period

$

271.0

$

292.5

As at

May 31,
2026

February 28,
2026

Cash and cash equivalents

$

256.8

$

274.7

Restricted cash and cash equivalents

14.2

14.2

Short-term investments

94.1

85.2

Long-term investments

57.8

58.3

$

422.9

$

432.4

Reconciliations of the Company's Segment Results and Segment Adjusted EBITDA to the Consolidated Results

The following table shows information by operating segments for the three months ended May 31, 2026 and May 31, 2025. The Company reports segment information in accordance with U.S. GAAP, pursuant to the Financial Accounting Standards Board's Accounting Standard Codification Topic 280, Segment Reporting, based on the "management" approach. The management approach designates the internal reporting used by the Chief Operating Decision Maker ("CODM") for making decisions and assessing performance of the Company's reportable operating segments. The measure of segment profit or loss disclosed by the Company in the Consolidated Financial Statements under the "management" approach in reviewing the results of the Company's operating segments is segment adjusted gross margin. Additionally, the following tables include the additional measures of segment profit or loss used by the CODM which is segment adjusted EBITDA, a non-GAAP financial measure, which excludes amounts related to investment income, taxes, amortization, restructuring charges, stock compensation expenses and long-lived asset impairment charge. For the three months ended May 31, 2026, the Company presented segment adjusted EBITDA results excluding amortization in segment research and development, segment sales and marketing and segment general and administrative to align to the operating expense presentation on the Consolidated Statement of Operations. For purposes of comparability, the Company's segment adjusted EBITDA for the three months ended May 31, 2025 has been updated to conform to the current year's presentation. See Note 10 to the Consolidated Financial Statements for a description of the Company's operating segments.

For the Three Months Ended

(in millions)

QNX

Secure Communications

Licensing

May 31,

Change

May 31,

Change

May 31,

Change

2026

2025

2026

2025

2026

2025

Segment revenue

$

72.3

$

57.5

$

14.8

$

73.6

$

59.5

$

14.1

$

7.0

$

4.7

$

2.3

Segment cost of sales

10.4

11.2

(0.8

)

20.8

18.1

2.7

1.5

1.6

(0.1

)

Segment adjusted gross margin

$

61.9

$

46.3

$

15.6

$

52.8

$

41.4

$

11.4

$

5.5

$

3.1

$

2.4

Segment research and development

18.9

12.3

6.6

12.6

11.2

1.4

-

-

-

Segment sales and marketing

15.6

13.2

2.4

12.3

13.6

(1.3

)

-

-

-

Segment general and administrative

8.1

8.1

-

7.8

7.1

0.7

0.8

0.9

(0.1

)

Less amortization included in segment cost of sales

-

-

-

0.1

0.1

-

1.5

1.6

(0.1

)

Segment adjusted EBITDA

$

19.3

$

12.7

$

6.6

$

20.2

$

9.6

$

10.6

$

6.2

$

3.8

$

2.4

Reconciliation of Non-GAAP Measures with the Nearest Comparable U.S. GAAP Measures

In the Company's internal reports, management evaluates the performance of the Company's business on a non-GAAP basis by excluding the impact of certain items from the Company's U.S. GAAP financial results. The Company believes that these non-GAAP financial measures and non-GAAP ratios provide management, as well as readers of the Company's financial statements, with a consistent basis for comparison across accounting periods and are useful in helping management and readers understand the Company's operating results and underlying operational trends. Beginning with the fiscal quarter ended May 31, 2026, the Company has included deferred share units revaluation adjustment as a non-GAAP adjustment and has applied this adjustment to comparative period.

Readers are cautioned that adjusted gross margin, adjusted gross margin percentage, adjusted operating expenses, adjusted net income, adjusted earnings per share, adjusted research and development expense, adjusted sales and marketing expense, adjusted general and administrative expense, adjusted amortization expense, adjusted operating income, adjusted EBITDA, segment adjusted EBITDA, adjusted operating income margin percentage, adjusted EBITDA margin percentage and free cash flow (usage) and similar measures do not have any standardized meaning prescribed by U.S. GAAP and are therefore unlikely to be comparable to similarly titled measures reported by other companies.

Reconciliation of non-GAAP based measures with most directly comparable U.S. GAAP based measures for the three months ended May 31, 2026 and May 31, 2025

A reconciliation of the most directly comparable U.S. GAAP gross margin and gross margin percentage for the three months ended May 31, 2026 and May 31, 2025 to both adjusted gross margin and adjusted gross margin percentage are reflected in the table below:

For the Three Months Ended (in millions)

May 31, 2026

May 31, 2025

Gross margin

$

119.7

$

90.3

Stock compensation expense

0.5

0.5

Adjusted gross margin

$

120.2

$

90.8

Gross margin %

78.3

%

74.2

%

Stock compensation expense

0.3

%

0.4

%

Adjusted gross margin %

78.6

%

74.6

%

Reconciliation of U.S. GAAP operating expenses for the three months ended May 31, 2026, and May 31, 2025 to adjusted operating expenses is reflected in the table below:

For the Three Months Ended (in millions)

May 31, 2026

May 31, 2025

Operating expenses

$

104.4

$

88.3

Restructuring charges

0.3

2.9

Stock compensation expense

6.0

5.2

Acquired intangibles amortization

-

1.7

LLA impairment charge

0.1

0.1

Deferred share units revaluation adjustment

10.0

(1.5

)

Adjusted operating expenses

$

88.0

$

79.9

Reconciliation of U.S. GAAP net income and U.S. GAAP basic earnings per share for the three months ended May 31, 2026 and May 31, 2025 to adjusted net income and adjusted basic earnings per share is reflected in the table below:

For the Three Months Ended (in millions, except per share amounts)

May 31, 2026

May 31, 2025

Basic earnings

per share

Basic earnings per share

Net income

$

8.5

$

0.01

$

1.9

$

0.00

Restructuring charges

0.3

2.9

Stock compensation expense

6.5

5.7

Acquired intangibles amortization

-

1.7

LLA impairment charge

0.1

0.1

Deferred share units revaluation adjustment

10.0

(1.5

)

Adjusted net income

$

25.4

$

0.04

$

10.8

$

0.02

Reconciliation of U.S. GAAP research and development, sales and marketing, general and administrative, and amortization expense for the three months ended May 31, 2026 and May 31, 2025 to adjusted research and development, sales and marketing, general and administrative, and amortization expense is reflected in the table below:

For the Three Months Ended (in millions)

May 31, 2026

May 31, 2025

Research and development

$

33.0

$

25.0

Stock compensation expense

1.5

1.3

Adjusted research and development expense

$

31.5

$

23.7

Sales and marketing

$

29.5

$

28.7

Stock compensation expense

1.1

1.4

Adjusted sales and marketing expense

$

28.4

$

27.3

General and administrative

$

39.3

$

30.5

Restructuring charges

0.3

2.9

Stock compensation expense

3.4

2.5

Deferred share units revaluation adjustment

10.0

(1.5

)

Adjusted general and administrative expense

$

25.6

$

26.6

Amortization

$

2.5

$

4.0

Acquired intangibles amortization

-

1.7

Adjusted amortization expense

$

2.5

$

2.3

Reconciliation of U.S GAAP operating income to adjusted operating income, adjusted EBITDA, adjusted operating income margin percentage and adjusted EBITDA margin percentage for the three months ended May 31, 2026 and May 31, 2025 is reflected in the table below.

For the Three Months Ended (in millions)

May 31, 2026

May 31, 2025

Operating income

$

15.3

$

2.0

Non-GAAP adjustments to operating income

Restructuring charges

0.3

2.9

Stock compensation expense

6.5

5.7

Acquired intangibles amortization

-

1.7

LLA impairment charge

0.1

0.1

Deferred share units revaluation adjustment

10.0

(1.5

)

Total non-GAAP adjustments to operating income

16.9

8.9

Adjusted operating income

32.2

10.9

Amortization

4.1

5.7

Acquired intangibles amortization

-

(1.7

)

Adjusted EBITDA

$

36.3

$

14.9

Revenue

$

152.9

$

121.7

Adjusted operating income margin % (1)

21

%

9

%

Adjusted EBITDA margin % (2)

24

%

12

%

______________________________

(1) Adjusted operating income margin % is calculated by dividing adjusted operating income by revenue.

(2) Adjusted EBITDA margin % is calculated by dividing adjusted EBITDA by revenue.

The CODM also uses the segment metric of segment adjusted EBITDA, which is a non-GAAP measure including segment expenses that exclude amounts related to investment income, taxes, amortization, restructuring charges, stock compensation expenses and long-lived asset impairment. The following table reconciles the U.S. GAAP measures of segment profit or loss disclosed by the Company in the Consolidated Financial Statements from segment adjusted gross margin to segment adjusted EBITDA for the three months ended May 31, 2026 and May 31, 2025.

For the Three Months Ended

(in millions)

QNX

Secure Communications

Licensing

May 31,

May 31,

May 31,

2026

2025

2026

2025

2026

2025

Segment adjusted gross margin

$

61.9

$

46.3

$

52.8

$

41.4

$

5.5

$

3.1

Segment research and development

18.9

12.3

12.6

11.2

-

-

Segment sales and marketing

15.6

13.2

12.3

13.6

-

-

Segment general and administrative

8.1

8.1

7.8

7.1

0.8

0.9

Less amortization included in segment cost of sales

-

-

0.1

0.1

1.5

1.6

Segment adjusted EBITDA

$

19.3

$

12.7

$

20.2

$

9.6

$

6.2

$

3.8

Free cash flow (usage)

The Company uses free cash flow (usage) when assessing its sources of liquidity, capital resources, and quality of earnings. The Company believes that free cash flow (usage) is helpful in understanding the Company's capital requirements and provides an additional means to reflect the cash flow (usage) trends in the Company's business.

Reconciliation of U.S. GAAP net cash provided by (used in) operating activities for the three months ended May 31, 2026 and May 31, 2025 to free cash flow (usage) is reflected in the table below:

For the Three Months Ended (in millions)

May 31, 2026

May 31, 2025

Net cash provided by (used in) operating activities

$

4.6

$

(18.0

)

Acquisition of property, plant and equipment

(2.9

)

(0.9

)

Free cash flow (usage)

$

1.7

$

(18.9

)

Key Metrics

The Company regularly monitors a number of financial and operating metrics, including the following key metrics, in order to measure the Company's current performance and estimated future performance. Readers are cautioned that Secure Communications annual recurring revenue ("ARR") and Secure Communications dollar-based net retention rate ("DBNRR") do not have any standardized meaning and are unlikely to be comparable to similarly titled measures reported by other companies.

Comparative breakdowns of certain key metrics for the three months ended or as at May 31, 2026 and May 31, 2025 are set forth below:

For the Three Months Ended (in millions)

May 31, 2026

May 31, 2025

Change

Secure Communications Annual Recurring Revenue

$

220

$

209

$

11

Secure Communications Dollar-Based Net Retention Rate

92

%

92

%

-

%

SOURCE: BlackBerry

Key Takeaways BlackBerry's QNX royalty backlog reached about $950M, supporting durable multi-year growth visibility.BB expects QNX revenue of $60-$64M and Secure Comms revenue of $66-$70M for fiscal Q1.BlackBerry sees positive operating cash flow for the first time in three years despite risks. BlackBerry Limited (BB - Free Report) is set to report first-quarter fiscal 2027 results on June 25.

The Zacks Consensus Estimate for the bottom line is currently pegged at 3 cents and has remained unchanged over the past 60 days. The company expects non-GAAP EPS to be in the range of 2-3 cents.

The company expects fiscal first-quarter revenues to be in the $132-$140 million range.

BlackBerry’s earnings outpaced the Zacks Consensus Estimate in three of the trailing four quarters, while meeting once, with the average beat being 115%.

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What Our Model Unveils for BBOur proven model does not conclusively predict an earnings beat for BlackBerry this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that is not the case here. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

BB has an Earnings ESP of 0.00% and a Zacks Rank #3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Key Catalysts for BB’s Q1 EarningsBlackBerry enters this earnings season from a position of improving operational strength along with growing momentum across its QNX and Secure Communications divisions. QNX's royalty backlog has expanded to approximately $950 million, with new additions significantly exceeding recognized revenue, providing strong visibility into durable multi-year growth. The continued expansion of backlog highlights a business that is compounding rather than slowing, supported by its leadership in automotive and growing opportunities in physical AI, robotics, industrial, medical and other emerging markets.

While quarterly results can be uneven due to the timing of design wins and development tool purchases, the long-term growth outlook remains strong. Most revenue from new design wins is realized only after products enter production, typically two to three years later. After delivering 14% growth in fiscal 2026 despite a softer first quarter, management expects a similar pattern in fiscal 2027 and believes QNX will remain a Rule of 40 business. QNX is evolving into a high-quality, scalable and profitable growth engine. Beyond automotive, it is gaining traction in industrial automation, medical devices and robotics, with a growing pipeline increasingly converting into signed deals. Higher ASPs in these markets are supporting margin expansion, and GEM now represents nearly half of the SDP 8.0 pipeline, highlighting greater diversification.

Non-automotive markets account for about 20% of QNX revenue and may ultimately present a larger opportunity than automotive. Robotics, driven by the rise of physical AI, is a promising long-term growth area, backed by QNX’s expertise in autonomous systems. BlackBerry’s durable growth is anchored in a strong, multi-layered moat across QNX and Secure Communications. At scale, QNX also benefits from a cost advantage that in-house solutions struggle to replicate. Similarly, Secure Comm operates in mission-critical settings where certifications and long-standing relationships create high barriers to entry. Rather than a threat, BB sees AI as a tailwind, enhancing productivity, accelerating development and reinforcing its position in safety-critical and physical AI applications.

The Secure Comms business is benefiting from the growing demand for digital sovereignty, as governments and enterprises seek secure communication platforms that protect sensitive data from foreign access. A key validation of this trend was the Government of Canada's expanded adoption of BlackBerry's SecuSUITE platform, which is expected to contribute meaningfully to fiscal 2027 revenue. The segment nearly achieved the Rule of 40 in the fiscal fourth quarter, led by rising NATO and global defense spending. Expanded support for iOS alongside Android has strengthened the pipeline, while investments in Secusmart iOS support, FedRAMP High certification for AtHoc and UEM BSI certification are helping stabilize UEM and drive growth in AtHoc and Secusmart.

For the Secure Comm unit, revenues are estimated to be in the band of $66-$70 million. For the QNX business, revenues are expected to be in the range of $60-$64 million for the fiscal first quarter. Licensing & Other revenues are expected to be roughly $6 million. Adjusted EBITDA is expected to be between $14 million and $22 million. QNX segment adjusted EBITDA is estimated at $4-$8 million, while Secure Comm segment adjusted EBITDA is projected at $14-$18 million.

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BlackBerry is driving shareholder returns by prudently allocating capital across its three profitable divisions—QNX, Secure Communications and Licensing—all of which contribute positive adjusted EBITDA. The fiscal first quarter is expected to be a seasonal low for cash flow due to billing and payment timing, but for the first time in three years, BlackBerry anticipates positive operating cash flow of breakeven to $10 million.

Despite the improving trajectory, BB is facing multiple challenges. QNX revenue is still partially tied to automotive manufacturing cycles. Macroeconomic uncertainty, particularly in the automotive sector, is adversely impacting customer buying decisions, with some OEMs delaying projects due to supply chain concerns and tariff-related disruptions. Global production slowdowns or weaker electric vehicle demand could affect licensing revenue. Dependence on government procurement cycles and broader macroeconomic volatility continues to pose risks, especially within the Secure Comm.

Moreover, BB competes with much larger cybersecurity firms, such as CrowdStrike Holdings, Inc. (CRWD - Free Report) and Palo Alto Networks (PANW - Free Report) , that invest billions annually in R&D. To address the constant risk of technological obsolescence, BB needs to invest heavily in R&D, thereby depleting margins.

BB Stock vs. IndustryBB’s shares have gained 109.5% in the past six months, significantly outpacing the Internet Software industry’s fall of 15.7%. The broader Zacks Computer & Technology sector and the S&P 500 composite have registered declines of 18.4% and 8.7%, respectively.

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Blackberry has outperformed its peers (within the cybersecurity space). PANW has gained 52.9%, while CrowdStrike is up 43% over the same time frame.

Valuation After Recent GainsRegarding the price/book ratio, BB is trading at 6.58, higher than the industry’s multiple of 4.39.

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PANW and CrowdStrike are trading at a 12-month price/book multiple of 8.48X and 37.29X, respectively, compared with the Security industry’s multiple of 26.02X.

Investment Outlook: Buy, Hold, or Wait?For long-term investors, BlackBerry appears increasingly attractive. The company now boasts improving profitability, positive cash generation, strong exposure to automotive software, growing cybersecurity demand and expansion into AI-enabled industrial markets. These factors support a stronger long-term investment thesis.

The upcoming fiscal first-quarter earnings report will be an important test of whether BlackBerry's turnaround is sustainable. Strong execution, continued QNX growth and solid guidance could further boost investor confidence. For current shareholders, holding through earnings may be worthwhile if they believe in the company's long-term growth story. For new investors, the report could provide clearer evidence on whether BlackBerry's recent momentum reflects a lasting recovery rather than a short-term rebound.