BlackBerry (NYSE: BB) shares surged more than 22% in Thursday morning trading after the company reported stronger-than-expected fiscal first-quarter results and raised its full-year outlook, marking a significant turnaround for the former smartphone pioneer.
The Waterloo, Ontario-based software and cybersecurity company posted Q1 revenue of $152.9 million, up 26% year-over-year and well above the $137.9 million consensus estimate compiled by Fiscal AI. Adjusted earnings per share came in at $0.04, slightly topping the $0.03 analyst forecast.
First Positive Cash Flow in Nine Years
BlackBerry achieved operating cash flow of $4.6 million in the quarter, which management described as its first cash-positive fiscal quarter in nine years, excluding the non-core patent sale in 2024. This milestone was a key catalyst for the stock's rally, as it signals improving financial health and operational discipline.
The company also raised its fiscal 2027 revenue guidance to a range of $594 million to $621 million, up from its prior forecast of $584 million to $611 million. Adjusted earnings for the full year are now projected between $0.16 and $0.20 per share, in line with Wall Street expectations of $0.18.
QNX and Secure Communications Drive Growth
BlackBerry's growth was led by its two core business segments, both of which posted double-digit percentage gains. QNX, the company's embedded software platform for vehicles and industrial systems, generated $72.3 million in revenue, up 26% year-over-year. Secure Communications, which includes encrypted messaging and cybersecurity solutions, brought in $73.6 million, a 24% increase. Licensing revenue contributed approximately $10 million.
“Demand across our markets remains healthy. Customer engagement is strong, and our backlog continues to expand,” the company said during its earnings call with analysts. “Governments around the world continue to prioritize digital sovereignty, cybersecurity modernization, and secure communications infrastructure, creating favorable demand conditions for our solutions.”
BlackBerry also highlighted emerging opportunities in artificial intelligence and automation, particularly in what it calls “physical AI.” The company noted that modern vehicles are essentially “robots on wheels,” and QNX has established itself as a trusted platform for autonomous and safety-critical systems. This positions BlackBerry to benefit from the broader trend of AI-driven demand for secure, real-time software, similar to themes driving gains in other tech names like Cloudflare and Broadcom.
Raised Outlook and Forward Guidance
For fiscal 2027, BlackBerry now expects QNX revenue of $295 million to $312 million, up from a prior forecast of $290 million to $307 million, while Secure Communications guidance remains unchanged. Licensing revenue is expected to be slightly higher.
For the current quarter, the company forecast revenue between $137 million and $148 million, above prior expectations, with adjusted EBITDA of $20 million to $30 million and adjusted earnings of $0.03 to $0.04 per share.
Chief Executive John Giamatteo expressed confidence in the company's multi-year growth potential, particularly in software-defined vehicles and broader embedded systems markets. “We believe these opportunities significantly enhance QNX's long-term potential,” he said.
The strong results and raised outlook have sparked investor optimism that BlackBerry's turnaround is gaining traction, driven by secular trends in cybersecurity and automotive software. However, risks remain, including potential slowdowns in government and automaker spending, as well as the possibility that the raised guidance proves too optimistic.
This article is for informational purposes only and does not constitute financial advice.
