BlackBerry Limited

BlackBerry reported Q1 revenue of approximately $153 million, up 26% year over year. Adjusted gross margin expanded four points to 79%, adjusted EBITDA more than doubled to approximately $36 million, and adjusted EPS was $0.04. QNX revenue was approximately $72 million, up 26% year over year, with adjusted gross margin of 86% and adjusted EBITDA of about $19 million; Secure Communications revenue was approximately $74 million, up 24% year over year, with adjusted EBITDA of about $20 million; licensing revenue was about $7 million. For guidance, the company raised full-year QNX revenue to $295 million-$312 million and adjusted EBITDA to $74 million-$86 million, full-year licensing revenue to approximately $29 million and adjusted EBITDA to approximately $25 million, and total company revenue to $594 million-$621 million with adjusted EBITDA of $119 million-$139 million. For Q2, it guided to total company revenue of $137 million-$148 million, adjusted EBITDA of $20 million-$30 million, adjusted basic EPS of $0.03-$0.04, and operating cash flow between breakeven and $10 million.

John Giamatteo framed the quarter as proof that BlackBerry has moved from cost restructuring to profitable growth, saying the company delivered “exactly” what it set out to do. He emphasized strength in both QNX and Secure Communications, calling out Rule of 40 performance, a record in eight quarters for QNX development license revenue, and the highest confidence yet in long-term opportunities like GEM, physical AI, and Alloy Kore. His tone was upbeat but measured, repeatedly noting the company is still early in the new chapter and that growth will not be linear.

Tim Foote said the quality of growth was as important as the top-line beat, pointing to operating leverage as royalty revenue grows in QNX. He highlighted Q1 adjusted EBITDA of about $36 million, QNX adjusted gross margin of 86%, Secure Communications gross margin expansion, and positive operating cash flow of about $5 million; excluding the prior patent sale, he said this was the first cash-flow-positive fiscal first quarter in nine years. He also noted $423 million of cash and investments, net cash of about $223 million, and share repurchases of 2.6 million shares for about $10 million in Q1, bringing the program total to 18 million shares for about $70 million at an average price of $3.85.

Analysts pressed on whether ARR is still the best way to view Secure Communications after the big Shared Services Canada deal; management said ARR remains a solid stability indicator, but that big government opportunities can create meaningful in-quarter revenue recognition and that pipeline conversion may be the better measure of upside. Questions also focused on Alloy Kore’s scope and timing, with management saying it is mainly aimed at new programs and new models but can also retrofit existing platforms and may pull some programs forward. Other notable questions covered GEM, where management said win volume may be higher but initial deal sizes smaller than auto, and geopolitical exposure to China, where BlackBerry said it maintains a deep presence and believes its safety-certification strengths fit export-oriented use cases.