Shares of BlackBerry (NYSE:BB) are trading higher Monday afternoon as investors continue to weigh the company’s fiscal second-quarter earnings report released last week. Here’s what investors need to know.
- BlackBerry stock is charging ahead with explosive momentum. What’s driving BB stock higher?
Q2 Driven by Record QNX Growth
BlackBerry’s second quarter results beat market expectations and showcased operational improvements. Total company revenue reached $163.3 million, marking a 26% year-over-year increase and surpassed analyst estimates of $142.55 million, while adjusted EPS of 7 cents beating the 4 cent forecast.
Profitability was equally strong, with adjusted EBITDA surging 81% year-over-year to $47 million. GAAP net income landed at $34 million, making it the strongest quarterly result since fiscal fourth-quarter of 2022. The company generated $29.3 million in operating cash flow and $28.1 million in free cash flow. BlackBerry ended the quarter with roughly $447 million in cash and investments, establishing a net cash position of approximately $247 million.
The IoT and QNX division was the primary growth engine, delivering record quarterly revenue of $80.3 million, which is up 27% year-over-year. Adjusted gross margins for the QNX segment also expanded by 4 percentage points year-over-year to hit 87%. Additionally, licensing revenue came in at $22 million, bolstered by a new arrangement, and the Secure Communications segment generated $61 million in revenue for the quarter.
Alloy Kore Milestone, Management Commentary
Another company-specific catalyst investors are weighing on Monday is BlackBerry’s first-ever design win for its Alloy Kore automotive software platform. The company secured this contract with Coretura, which selected Alloy Kore as the foundational software platform for its next-generation high-performance compute architecture.
Management was optimistic during the Sept. 24 earnings call. CEO John Giamatteo celebrated the results, stating, “We’re pleased to report another very strong quarter for BlackBerry, reflecting meaningful progress, both financially and strategically.” Giamatteo noted that the strong revenue and adjusted EBITDA growth resulted in the company’s “second consecutive Rule of 40 quarter.”
Regarding the new automotive software win, Giamatteo highlighted its long-term impact on the company: “The value of future royalties from this design win is estimated to be more than $100 million,” officially marking the largest single design win in BlackBerry’s history.
Chief Financial Officer Tim Foote praised the company’s bottom-line execution, noting, “What stands out to me is how efficiently our revenue is translating into higher profitability and cash generation while we continue to invest for growth.”
Raised FY2027 Outlook
Looking ahead, management confidently raised full-year fiscal 2027 guidance across several key metrics. BlackBerry now forecasts full-year revenue between $616 million and $636 million.
Adjusted EBITDA expectations were lifted to a range of $141 million to $158 million, while full-year EPS is expected to be 19 cents to 22 cents. The full-year operating cash flow target was also raised to $115 million.
BB Stock Climbs Monday Afternoon
BB Price Action: BlackBerry shares were up 5.72% at $8.68 at the time of publication on Monday, according to Benzinga Pro data.
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