BlackBerry Limited

BlackBerry reported Q2 revenue of $163 million, up 26% year over year. Adjusted gross margin was 78%, up 3 percentage points year over year, and adjusted EBITDA was $47 million, or 29% of revenue. Adjusted net income was $43 million, GAAP net income was $34 million, and adjusted EPS was $0.07. By segment, QNX revenue was $80 million, up 27% year over year, with adjusted gross margin of 87% and adjusted EBITDA of $29 million; Secure Communications revenue was $61 million, up 2%, with adjusted EBITDA of $8 million; Licensing revenue was $22 million, above expectations, with adjusted EBITDA of $20 million. For the full year, management raised total company revenue guidance to $616 million to $636 million and adjusted EBITDA to $141 million to $158 million. QNX full-year revenue guidance was raised to $315 million to $325 million and adjusted EBITDA to $95 million to $105 million. Secure Communications full-year revenue guidance was revised to $260 million to $270 million and adjusted EBITDA to $50 million to $58 million. Licensing full-year revenue guidance was raised to approximately $41 million and adjusted EBITDA to approximately $36 million. Full-year adjusted basic EPS guidance increased to $0.19 to $0.22, and operating cash flow outlook was raised to approximately $115 million. For Q3, BlackBerry guided to total company revenue of $143 million to $154 million and adjusted EBITDA of $28 million to $37 million; QNX revenue of $82 million to $88 million and adjusted EBITDA of $27 million to $32 million; Secure Communications revenue of $55 million to $60 million and adjusted EBITDA of $6 million to $10 million; licensing revenue of about $6 million and adjusted EBITDA of about $5 million; and operating cash flow of $20 million to $30 million.

John Joseph Giamatteo framed the quarter as proof that BlackBerry’s “profitable growth model” is working, pointing to strong revenue growth, Rule of 40-type performance, cash generation, and a raised outlook. He emphasized that QNX is benefiting from automotive central compute trends, while Alloy Core is moving from strategy to commercial validation after the Cortica win. He also highlighted broader opportunities in adjacent embedded markets, including physical AI and robotaxis, while stressing that the company is still early in that expansion and is building the ecosystem with programs like QNX Everywhere and Launchpad.

Tim Foote emphasized operating leverage across the business: total revenue of $163 million, adjusted EBITDA of $47 million, gross margin of 78%, and $29 million of operating cash flow. He said QNX’s margin expansion was driven by higher-margin royalty revenue, while Secure Communications remained stable and profitable despite lower-margin device revenue, and licensing contributed strong incremental EBITDA due to its high leverage. He also highlighted a cash balance of about $447 million in cash and investments, with about $247 million of net cash, and said capital allocation priorities remain investment in QNX, disciplined buybacks, and selective M&A, especially if it can accelerate JEM.

Analysts focused on QNX cadence, the role of royalties and backlog conversion, the size and timing of the Alloy Core pipeline, the effect of contracted minimum royalties, and whether U.S. federal/geopolitical uncertainty was weighing on Secure Communications guidance. Management said QNX is not slowing down but will be lumpy quarter to quarter, and that the 950 million backlog reported previously is starting to convert as programs move into production. On Secure Communications, they said the caution is prudent rather than based on any material issue today, and on M&A they said the bar is high but the balance sheet gives them flexibility if a strategic JEM opportunity emerges.