We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
BB Q2 Earnings Top, Sales Up Y/Y on QNX Strength, FY27 Outlook Raised
Read MoreHide Full Article
Key Takeaways
BlackBerry's Q2 revenue rose 26% to $163.3M, while non-GAAP EPS climbed 75% to 7 cents.
QNX hit record revenue of $80.3M, and its largest design win added over $100M to royalty backlog.
BlackBerry raised fiscal 2027 revenue guidance to $616-$636M and adjusted EBITDA to $141-$158M.
BlackBerry Limited (BB - Free Report) reported second-quarter fiscal 2027 non-GAAP earnings of 7 cents per share, up 75% year over year. The figure beat the Zacks Consensus Estimate of 4 cents.
Revenues rose 26% year over year to $163.3 million and topped the consensus estimate by 14.2%. Record QNX revenue and a large licensing transaction supported the upside, while Secure Communications annual recurring revenue reached $221 million, up 4% year over year.
BlackBerry Limited Price, Consensus and EPS Surprise
QNX revenue increased 27.3% year over year to $80.3 million, marking a quarterly record. Segment adjusted gross margin expanded 4 percentage points to 87%, while adjusted EBITDA rose 41.5% to $29 million, representing a 36% margin. Performance was broad-based across development licenses, professional services and royalties, with royalty revenue benefiting as earlier design wins moved into production.
QNX also secured its first Alloy Kore design win with Coretura, the commercial-vehicle software joint venture between Volvo Group and Daimler Truck. The award adds more than $100 million to QNX royalty backlog and is the largest design win in QNX history. Management said the Alloy Kore average selling price per instance is about three times the customer’s current QNX operating-system deployment.
Secure Communications revenue rose 1.7% year over year to $60.9 million. Segment adjusted gross margin fell 5 percentage points to 61%, reflecting lower-margin Secusmart device revenue. Adjusted EBITDA was $8 million, down 17.5%, with a 13% margin. Dollar-based net retention rate was 91% compared with 93% a year earlier.
The business continued to secure renewals and expansions across government, critical infrastructure and regulated sectors. Management said larger government opportunities can create quarter-to-quarter variability because of long sales cycles. It also cited greater uncertainty around deal timing amid geopolitical developments and Canada-U.S. trade tensions, though no material impact had emerged during the quarter.
BB’s Licensing Revenue Jumps on New Deal
Licensing revenue climbed to $22.1 million from $6.6 million a year ago, driven primarily by a new licensing arrangement. Segment adjusted EBITDA reached $20 million from $5.6 million in the prior-year quarter, reflecting the business’s high incremental operating leverage.
Following the strong quarter, BlackBerry raised its fiscal 2027 Licensing revenue outlook to approximately $41 million and adjusted EBITDA forecast to about $36 million. Management expects Licensing revenue to return to roughly $6 million in each of the third and fourth quarters, with adjusted EBITDA of around $5 million per quarter.
BlackBerry Expands Margins and Cash Flow
Adjusted gross margin improved to 78.2% from 75% a year earlier. Adjusted EBITDA increased 81% to $47 million and represented 29% of revenues.
Adjusted operating expenses rose to $84.8 million from $74.8 million, while higher-margin QNX royalties and licensing aided operating leverage.
Operating cash flow improved to $29.3 million from $3.4 million in the year-ago quarter. Free cash flow reached $28.1 million, up from $2.6 million.
BlackBerry ended the quarter with $447.1 million in cash and investments compared with $432.4 million on Feb. 28, 2026.
BB Raises Fiscal 2027 Outlook
BlackBerry raised fiscal 2027 revenue guidance to $616-$636 million and adjusted EBITDA guidance to $141-$158 million. The company also lifted its adjusted basic earnings forecast to 19-22 cents per share and operating cash flow outlook to approximately $115 million.
For the third quarter of fiscal 2027, BB expects revenues of $143-$154 million and adjusted EBITDA of $28-$37 million.
Basic earnings are projected at 4-5 cents per share, while operating cash flow is expected between $20 million and $30 million.
BlackBerry Lifts QNX, Revises Secure Comms View
The company raised its fiscal 2027 QNX revenue outlook to $315-$325 million and adjusted EBITDA guidance to $95-$105 million.
For the third quarter, QNX revenue is expected to be between $82 million and $88 million, with adjusted EBITDA of $27-$32 million. Management cited strong core automotive momentum and conversion of the royalty backlog into production revenue.
For Secure Communications, BlackBerry revised fiscal 2027 revenue guidance to $260-$270 million and adjusted EBITDA guidance to $50-$58 million.
Third-quarter revenue is expected at $55-$60 million, with adjusted EBITDA of $6-$10 million, reflecting a more cautious view of the timing of larger government opportunities.
NetApp, Inc. (NTAP - Free Report) delivered a record first quarter of fiscal 2027, with non-GAAP earnings of $2.58 per share, up 66.5% year over year. The figure beat the Zacks Consensus Estimate of $2.13 by 21.1%. Net revenues rose 29.9% to $2,025 million and surpassed the $1,843 million consensus mark by 9.9%. Strong AI and modernization spending, accelerated purchases and pricing benefits supported growth. Billings increased 36.1% to $2,057 million.
Ciena Corporation (CIEN - Free Report) reported third-quarter fiscal 2026 adjusted earnings of $2.11 per share, which soared 215% year over year and beat the Zacks Consensus Estimate of $1.74. Quarterly revenues rose 37% to $1.67 billion and topped the $1.65 billion consensus mark. AI-driven networking demand remained the key growth engine. Cloud provider revenues accounted for 53% of total sales and jumped 82% year over year, underscoring the scale of hyperscaler spending behind Ciena’s record quarter.
Autodesk (ADSK - Free Report) reported second-quarter fiscal 2027 non-GAAP earnings of $3.30 per share, up 26% year over year, aided by operating leverage and benefits from sales optimization. The figure surpassed the Zacks Consensus Estimate of $3.12 by 5.77%. Revenues increased 16% year over year to $2.05 billion, beating the Zacks Consensus Estimate of $2.01 billion by 1.84%. Strength in construction and emerging markets supported results, while net revenue retention approximated the top end of the 100-110% range in constant currency.
View the Zacks #1 Rank List
Image: Bigstock
BB Q2 Earnings Top, Sales Up Y/Y on QNX Strength, FY27 Outlook Raised
Key Takeaways
BlackBerry Limited (BB - Free Report) reported second-quarter fiscal 2027 non-GAAP earnings of 7 cents per share, up 75% year over year. The figure beat the Zacks Consensus Estimate of 4 cents.
Revenues rose 26% year over year to $163.3 million and topped the consensus estimate by 14.2%. Record QNX revenue and a large licensing transaction supported the upside, while Secure Communications annual recurring revenue reached $221 million, up 4% year over year.
BlackBerry Limited Price, Consensus and EPS Surprise
BlackBerry Limited price-consensus-eps-surprise-chart | BlackBerry Limited Quote
BB’s QNX Revenue Sets Record
QNX revenue increased 27.3% year over year to $80.3 million, marking a quarterly record. Segment adjusted gross margin expanded 4 percentage points to 87%, while adjusted EBITDA rose 41.5% to $29 million, representing a 36% margin. Performance was broad-based across development licenses, professional services and royalties, with royalty revenue benefiting as earlier design wins moved into production.
QNX also secured its first Alloy Kore design win with Coretura, the commercial-vehicle software joint venture between Volvo Group and Daimler Truck. The award adds more than $100 million to QNX royalty backlog and is the largest design win in QNX history. Management said the Alloy Kore average selling price per instance is about three times the customer’s current QNX operating-system deployment.
BlackBerry’s Secure Communications Stays Profitable
Secure Communications revenue rose 1.7% year over year to $60.9 million. Segment adjusted gross margin fell 5 percentage points to 61%, reflecting lower-margin Secusmart device revenue. Adjusted EBITDA was $8 million, down 17.5%, with a 13% margin. Dollar-based net retention rate was 91% compared with 93% a year earlier.
The business continued to secure renewals and expansions across government, critical infrastructure and regulated sectors. Management said larger government opportunities can create quarter-to-quarter variability because of long sales cycles. It also cited greater uncertainty around deal timing amid geopolitical developments and Canada-U.S. trade tensions, though no material impact had emerged during the quarter.
BB’s Licensing Revenue Jumps on New Deal
Licensing revenue climbed to $22.1 million from $6.6 million a year ago, driven primarily by a new licensing arrangement. Segment adjusted EBITDA reached $20 million from $5.6 million in the prior-year quarter, reflecting the business’s high incremental operating leverage.
Following the strong quarter, BlackBerry raised its fiscal 2027 Licensing revenue outlook to approximately $41 million and adjusted EBITDA forecast to about $36 million. Management expects Licensing revenue to return to roughly $6 million in each of the third and fourth quarters, with adjusted EBITDA of around $5 million per quarter.
BlackBerry Expands Margins and Cash Flow
Adjusted gross margin improved to 78.2% from 75% a year earlier. Adjusted EBITDA increased 81% to $47 million and represented 29% of revenues.
Adjusted operating expenses rose to $84.8 million from $74.8 million, while higher-margin QNX royalties and licensing aided operating leverage.
Operating cash flow improved to $29.3 million from $3.4 million in the year-ago quarter. Free cash flow reached $28.1 million, up from $2.6 million.
BlackBerry ended the quarter with $447.1 million in cash and investments compared with $432.4 million on Feb. 28, 2026.
BB Raises Fiscal 2027 Outlook
BlackBerry raised fiscal 2027 revenue guidance to $616-$636 million and adjusted EBITDA guidance to $141-$158 million. The company also lifted its adjusted basic earnings forecast to 19-22 cents per share and operating cash flow outlook to approximately $115 million.
For the third quarter of fiscal 2027, BB expects revenues of $143-$154 million and adjusted EBITDA of $28-$37 million.
Basic earnings are projected at 4-5 cents per share, while operating cash flow is expected between $20 million and $30 million.
BlackBerry Lifts QNX, Revises Secure Comms View
The company raised its fiscal 2027 QNX revenue outlook to $315-$325 million and adjusted EBITDA guidance to $95-$105 million.
For the third quarter, QNX revenue is expected to be between $82 million and $88 million, with adjusted EBITDA of $27-$32 million. Management cited strong core automotive momentum and conversion of the royalty backlog into production revenue.
For Secure Communications, BlackBerry revised fiscal 2027 revenue guidance to $260-$270 million and adjusted EBITDA guidance to $50-$58 million.
Third-quarter revenue is expected at $55-$60 million, with adjusted EBITDA of $6-$10 million, reflecting a more cautious view of the timing of larger government opportunities.
BB’s Zacks Rank
At present, BlackBerry carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Performances
NetApp, Inc. (NTAP - Free Report) delivered a record first quarter of fiscal 2027, with non-GAAP earnings of $2.58 per share, up 66.5% year over year. The figure beat the Zacks Consensus Estimate of $2.13 by 21.1%. Net revenues rose 29.9% to $2,025 million and surpassed the $1,843 million consensus mark by 9.9%. Strong AI and modernization spending, accelerated purchases and pricing benefits supported growth. Billings increased 36.1% to $2,057 million.
Ciena Corporation (CIEN - Free Report) reported third-quarter fiscal 2026 adjusted earnings of $2.11 per share, which soared 215% year over year and beat the Zacks Consensus Estimate of $1.74. Quarterly revenues rose 37% to $1.67 billion and topped the $1.65 billion consensus mark. AI-driven networking demand remained the key growth engine. Cloud provider revenues accounted for 53% of total sales and jumped 82% year over year, underscoring the scale of hyperscaler spending behind Ciena’s record quarter.
Autodesk (ADSK - Free Report) reported second-quarter fiscal 2027 non-GAAP earnings of $3.30 per share, up 26% year over year, aided by operating leverage and benefits from sales optimization. The figure surpassed the Zacks Consensus Estimate of $3.12 by 5.77%. Revenues increased 16% year over year to $2.05 billion, beating the Zacks Consensus Estimate of $2.01 billion by 1.84%. Strength in construction and emerging markets supported results, while net revenue retention approximated the top end of the 100-110% range in constant currency.