Executive Summary
BlackBerry delivered a solid start to fiscal year 2026 (QQ1 2026), surpassing guidance across multiple dimensions. Total quarterly revenue of $121.7 million topped expectations, with adjusted EBITDA of $16.4 million and non-GAAP EPS of $0.02, while GAAP net income was positive at $1.9 million. The quarter showcased robust momentum in QNX, SecuSmart, and UEM, supported by a diversified mix that includes royalties, development seats, and professional services. Importantly, BlackBerry announced a $100 million share buyback program, signaling capital allocation optionality and confidence in long-term cash generation, alongside an initial $10 million repurchase during the quarter.
From a segment perspective, QNX achieved $57.5 million in revenue, up 8% YoY, driven by royalties and development seats. Secure communications posted $59.5 million in revenue, with ARR of $209 million and a DBNRR of ~92%, underpinned by secular strength in SecuSmart and regulatory milestones (FedRAMP High for AtHoc). Licensing contributed $4.7 million in revenue but slightly lagged top-end expectations. The quarter also featured ongoing macro uncertainty (tariffs, sequencing of OEM production), which informed conservative Q2 guidance and the full-year outlook. Management remains positive about medium-to-long-term growth prospects, particularly through QNX SDP8.0, GEM expansion beyond automotive, and middleware-driven vehicle platforms, while maintaining an eye on near-term cash flow dynamics.
Looking ahead, BlackBerry guided to stronger second-half execution and reaffirmed full-year targets: total revenue in the $508–$538 million range and adjusted EBITDA of $72–$87 million for FY2026, with Q2 revenue of $115–$125 million and EBITDA of $8–$14 million. The company also signaled a focus on cash flow generation for the year, projecting roughly $35 million of operating cash flow for FY2026, aided by the Arctic Wolf/Cylance monetization and disciplined cost controls.
Key Performance Indicators
QoQ: -15.43% | YoY:-15.46%
QoQ: 132.26% | YoY:107.15%
QoQ: 127.14% | YoY:104.53%
QoQ: 127.12% | YoY:104.49%
Key Insights
Revenue and profitability mix: Total revenue for QQ1 2026 was $121.7 million, with QNX at $57.5 million, Secure Communications at $59.5 million, and Licensing at $4.7 million. Adjusted gross margin expanded 1 point YoY to 75%. Adjusted EBITDA reached $16.4 million (vs. guided expectations), and GAAP net income was positive at $1.9 million. Adjusted net income was $12.3 million, and diluted EPS was $0.0032, with GAAP EPS of $0.0032. Cash flow and liquidity: Cash used by operating activities was $...
Financial Highlights
Revenue and profitability mix: Total revenue for QQ1 2026 was $121.7 million, with QNX at $57.5 million, Secure Communications at $59.5 million, and Licensing at $4.7 million. Adjusted gross margin expanded 1 point YoY to 75%. Adjusted EBITDA reached $16.4 million (vs. guided expectations), and GAAP net income was positive at $1.9 million. Adjusted net income was $12.3 million, and diluted EPS was $0.0032, with GAAP EPS of $0.0032. Cash flow and liquidity: Cash used by operating activities was $18.0 million, reflecting seasonality in the first fiscal quarter and restructuring/lease-related cash outlays; cash and investments totaled $382 million at period-end. Share repurchases: Approximately $10 million of shares were repurchased, under a $100 million program; average repurchase price was $3.89. Balance sheet health: Cash and cash equivalents of $292.5 million; total assets $1.2104 billion; total liabilities $485.3 million; total stockholders’ equity $725.1 million; net debt stood at -$266.2 million (net cash). Segment highlights and gross margins: QNX revenue of $57.5 million with gross margin ~81% (slightly pressured by FX). Secure Communications gross margin was ~70%, contributing to $9.6 million in adjusted EBITDA. Licensing delivered $4.7 million in revenue with $3.8 million in adjusted EBITDA. Guidance and outlook: Q2 revenue guidance of $115–$125 million with EBITDA of $8–$14 million; full-year revenue guidance of $508–$538 million and adjusted EBITDA of $72–$87 million; non-GAAP EPS for Q2 of breakeven to $0.01 and full-year EPS of $0.08–$0.10. Earnings mix and margins reflect FX headwinds in OpEx and a one-time Canadian government grant (~$4.5 million) offsetting incremental QNX R&D, contributing to a net favorable margin trajectory over the year. YoY/QoQ momentum: Revenue declined 15.5% YoY and 15.4% QoQ in QQ1 2026, while gross profit grew 7.5% YoY and declined 14.7% QoQ; operating income rose 107% YoY and 132% QoQ in the quarter; net income grew 105% YoY and 127% QoQ; EPS grew 104% YoY and 127% QoQ, highlighting improved profitability despite a challenging comparator period.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
121.70M |
-15.46% |
-15.43% |
| Gross Profit |
90.30M |
7.53% |
-14.73% |
| Operating Income |
2.00M |
107.15% |
132.26% |
| Net Income |
1.90M |
104.53% |
127.14% |
| EPS |
0.00 |
104.49% |
127.12% |
Management Commentary
Themes and management insights from the QQ1 2026 earnings call: Strategy and growth drivers — John Giamatteo emphasized diversification of QNX beyond automotive into adjacent verticals and the expansion of the SMB/GEM ecosystem, noting SDP8.0 pipeline growth and a 43% GEM contribution to the pipeline, with a 55% overall pipeline growth in the quarter. He highlighted the QNX vehicle platform and partnerships with Vector and TT Tech to shorten time-to-market and bolster royalty ASPs. Management signaled ongoing focus on software-defined vehicle enablement and middleware as value-add and route-to-market. Execution and monetization — Tim Foote underscored operating discipline and FX headwinds offset by grant funding (~$4.5 million) from Canada's strategic innovation fund, contributing to a 1pp gross margin expansion to 75% and a robust adjusted EBITDA of $16.4 million. He framed Q2 as a prudent period given tariff-driven uncertainty in auto production, with anticipated royalty timing impacts. Capital allocation — The company committed to a $100 million share buyback program and completed an initial $10 million repurchase, signaling confidence in intrinsic value and capital flexibility. Market conditions — The management team acknowledged macro uncertainty affecting customer decision timelines, potential production slowdowns, and longer sales cycles in government and enterprise segments, while noting offsetting demand in SecuSmart from German government deals and FedRAMP High authorization for AtHoc.
We beat the top end of guidance almost entirely across the board. Total company revenue for the quarter was stronger than expected, beating guidance at $121.7 million. BlackBerry delivered solid profitability with adjusted EBITDA growing over 55% year over year, and beating the top end of the guidance range at $16.4 million.
— John Giamatteo
QNX revenue for Q1 beat the upper end of our guidance range at $57.5 million. This represents 8% year over year growth despite the uncertainty facing the auto market...
— John Giamatteo
Forward Guidance
Outlook and risk assessment: For Q2, BlackBerry expects total revenue of $115–$125 million and adjusted EBITDA of $8–$14 million, reflecting cautious procurement timing and potential auto production volatility. Full-year guidance is reaffirmed at $508–$538 million in revenue and $72–$87 million in adjusted EBITDA, with non-GAAP EPS projected to be breakeven to $0.01 in Q2 and $0.08–$0.10 for the full year. Management expects Q2 royalty revenue to be sensitive to early calendar-quarter production volumes and tariff effects, particularly for QNX, while non-automotive applications and GEM-based opportunities could provide offsetting momentum. The firm remains focused on cash flow generation, targeting approximately $35 million of operating cash flow for FY2026, aided by Arctic Wolf/Cylance proceeds and ongoing cost controls. Key monitoring factors for investors include (1) the conversion of SDP8.0 pipeline in GEM and automotive segments, (2) secular demand in SecuSmart and AtHoc with FedRAMP High traction, (3) gross margin trajectory and FX exposure, and (4) progress of the QNX middleware platform and accompanying royalty ASP uplift.