BlackBerry Limited (BB Quick QuoteBB - Free Report) used its fiscal second-quarter 2027 earnings call to emphasize improving operating leverage, record QNX performance and stronger cash generation. Management also raised its full-year company revenue and adjusted EBITDA outlook after a strong first half.

CEO John Giamatteo said QNX’s automotive momentum, the first Alloy Kore design win and growing physical AI opportunities broaden the company’s growth avenues. Management remained more cautious on Secure Communications because of uncertainty around the timing of government transactions.

BB Results Top Consensus Estimates

BlackBerry reported adjusted earnings of 7 cents per share, exceeding the Zacks Consensus Estimate of 4 cents. Revenues of $163.3 million also surpassed the consensus estimate of $143 million. Revenues increased 26% year over year.

BlackBerry Limited Price, Consensus and EPS Surprise

BlackBerry Limited price-consensus-eps-surprise-chart | BlackBerry Limited Quote

CFO Tim Foote said adjusted EBITDA reached $47 million, representing 29% of revenues, while adjusted gross margin expanded three percentage points year over year to 78%. GAAP net income was $34 million.

Foote attributed the operating leverage to revenue growth, gross-margin expansion and disciplined expense management, with higher-margin QNX royalties and licensing providing particular support.

BlackBerry Raises Its Full-Year Outlook

BlackBerry raised its fiscal 2027 revenue forecast to $616-$636 million, up $19 million at the midpoint from its prior outlook. Adjusted EBITDA guidance rose $21 million at the midpoint to $141-$158 million.

For the fiscal third quarter, management expects revenues of $143-$154 million and adjusted EBITDA of $28-$37 million. Adjusted basic earnings are projected to be 4-5 cents per share.

The full-year operating cash flow forecast was raised by $15 million to approximately $115 million. Second-quarter operating cash flow was $29 million, while free cash flow reached $28 million.

BB Sees QNX Growth Broadening

QNX delivered record quarterly revenues of $80 million, up 27% year over year. Giamatteo said strength spanned development licenses, professional services and royalties, while first-half design-win value exceeded BlackBerry’s previous record for any full fiscal year.

Management highlighted the transition toward software-defined vehicles and centralized computing architectures as important drivers. Foote said newer and larger design wins are beginning to enter production, allowing the previously reported QNX backlog to convert into revenues.

BlackBerry raised full-year QNX revenue guidance to $315-$325 million. The company expects fiscal third-quarter QNX revenues of $82-$88 million and adjusted EBITDA of $27-$32 million.

BlackBerry Lands Its First Alloy Kore Win

Giamatteo highlighted Coretura’s selection of Alloy Kore as a major commercial milestone. The Volvo Group-Daimler Truck joint venture plans to use the platform across multiple software domains in next-generation commercial vehicles.

Management estimates future royalties from the award at more than $100 million, making it QNX’s largest design win. Giamatteo said the average selling price per instance is approximately three times higher than the customer’s existing QNX operating-system deployment.

During Q&A, a CIBC Capital Markets analyst asked about the Alloy Kore pipeline. Giamatteo said engagements span global automakers and Tier 1 suppliers, with particularly active discussions in Europe and Asia.

BB Balances Physical AI With Secure Comms Caution

Giamatteo described physical AI as an early-stage opportunity for QNX. BlackBerry secured a design win with Uber and reported engagement with more than 20 companies around NVIDIA-based platforms, including robotics and autonomous-system developers.

Secure Communications revenues totaled $61 million, up 2% year over year. ARR was approximately $221 million, up 4%, while dollar-based net retention remained relatively stable at 91%.

Management reduced full-year Secure Communications revenue guidance to $260-$270 million. In Q&A, executives stressed that they had not seen a material deterioration but were taking a more cautious view of government-deal timing amid geopolitical and trade uncertainty.

BlackBerry Keeps Capital Allocation Disciplined

Foote said BlackBerry ended the quarter with approximately $447 million of cash and investments and about $247 million of net cash. Capital priorities remain organic QNX investment, disciplined share repurchases and selective acquisitions.

Management’s broader message centered on profitable growth, cash generation and continued investment in QNX. The company intends to prioritize core automotive, Alloy Kore and general embedded markets while maintaining a high strategic and financial threshold for acquisitions.

Zacks Rank and Style Scores Signal

BB currently carries a Zacks Rank #3 (Hold), alongside an A Growth Score, F Value Score, C Momentum Score and C VGM Score. The A Growth Score indicates comparatively favorable growth characteristics under the Style Scores framework, while the other scores are less favorable. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Rank #3 indicates a neutral near-term earnings-estimate-revision signal. BB’s mixed Style Scores likewise provide varied signals across growth, value and momentum factors. The Zacks Rank can change as analysts revise estimates following the newly reported results.