BlackBerry Limited BB is experiencing an improving financial position, with stronger profitability and liquidity, offering greater flexibility to return capital to its shareholders.
With management expecting approximately $100 million of operating cash flow for fiscal 2027, the key question is whether stronger cash generation can pave the way for additional buybacks.
BB delivered strong first-quarter fiscal 2027 results, with quarterly revenues of $152.9 million, representing a 26% year-over-year increase. Adjusted EBITDA more than doubled to $36.3 million.
For the quarter ended on May 31, 2026, BlackBerry generated $4.6 million in operating cash flow, marking its first cash-positive fiscal first quarter in nine years (excluding special items related to patent sales) against usage of $18 million a year ago.
Free cash flow was $1.7 million for the quarter against an outflow of $18.9 million in the previous quarter. The company ended the quarter with $422.9 million in cash and investments.
BlackBerry Limited Free Cash Flow (Quarterly)
BlackBerry Limited free-cash-flow-quarterly | BlackBerry Limited Quote
This financial flexibility provides management with multiple options for capital allocation, including investments in growth opportunities, strategic initiatives and shareholder returns.
BlackBerry repurchased 2.6 million shares during the quarter for approximately $10 million. Since its launch in May last year, the company has bought back 18 million shares at an average price of $3.85 per share.
Encouraged by its financial position, management recently renewed and expanded the program, authorizing the repurchase of approximately 27 million additional shares.
With QNX benefiting from software-defined vehicle adoption, General Embedded Markets and Physical AI opportunities, and Secure Communications gaining momentum from government and digital sovereignty initiatives, BlackBerry appears positioned to generate stronger cash flows over time. If that trend continues, the company could have higher capacity to return capital to its shareholders through future buybacks while investing in long-term growth.
BlackBerry noted that 90% of incremental revenues are expected to flow through to adjusted EBITDA, highlighting the increasing operating leverage.
Let’s Look at Capital Allocation for Competitors
Within the cybersecurity space, BlackBerry competes with several giants, including CrowdStrike CRWD. While BlackBerry’s focus remains on encrypted communications and sovereign-grade infrastructure, CRWD is a leading pure-play cybersecurity company. CrowdStrike is seeing strong adoption across cloud, identity and next-gen SIEM, with these newer categories exceeding $2 billion in ARR.
CrowdStrike generated $590.9 million in operating cash flow and $468.5 million in free cash flow in the fiscal first quarter. The company repurchased $176 million of shares and had approximately $1.3 billion remaining under its existing authorization. Management said the company would remain opportunistic in returning capital while continuing to invest in its growth opportunities. The company expects fiscal second quarter revenues to be between $1.436 billion and $1.442 billion.
Aptiv PLC (APTV is an automotive technology peer for BlackBerry's QNX business. The company repurchased $250 million worth of shares in the second quarter of 2026, bringing the year-to-date repurchases to $325 million. APTV intends to buy back a similar amount in the second half, which will bring the total repurchases for the year to more than $600 million.
2026 free cash flow is expected at $625-$725 million. Importantly, Aptiv added that it plans to use approximately 50% of expected free cash flow for regular share repurchases over the next few years, with 2026 repurchases expected to be materially above that level.
BB Price Performance, Valuation & Estimates
Shares of BlackBerry have edged up 0.7% in the past month compared with the Internet-Software industry’s 5% growth.
Image Source: Zacks Investment Research
Regarding the price/book ratio, BB is trading at 6.95, higher than the industry’s multiple of 4.56.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for BB earnings for fiscal 2027 has been revised downward over the past 60 days.
Image Source: Zacks Investment Research
BlackBerry currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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This article originally published on Zacks Investment Research (zacks.com).