BlackBerry BB kicked off fiscal 2027 on a strong note, delivering better-than-expected first-quarter results and raising its fiscal year outlook. The performance was anchored by strong QNX and Secure Communications businesses, but the key question remains whether this momentum can sustain.
Quarterly revenues came in at $152.9 million, marking a 26% year-over-year increase. Profitability was equally impressive, with adjusted EBITDA more than doubling to $36 million.
QNX remained the key catalyst, with revenues climbing 26% year over year to $72 million. The segment benefited from broad-based strength, particularly in development licenses, which hit their highest level in eight quarters. This metric serves as an early indicator of future royalty streams, reflecting customer investments in new software platforms that will take years to reach production.
Beyond automotive, General Embedded Markets and Physical AI are emerging as a fast-growing opportunity, expanding QNX’s reach into industrial automation, robotics and medical devices.
Additionally, the company continues to advance Alloy Kore, a platform expected to significantly increase software content per vehicle, boost average selling price by multiples and driving backlog. While still early, management remains positive about securing a design win within the current fiscal year.
BlackBerry Limited Revenue (Quarterly)
BlackBerry Limited revenue-quarterly | BlackBerry Limited Quote
Secure Communications also delivered a standout quarter, with revenues increasing 24% year over year to $74 million. The segment is witnessing improved performance anchored by government demand, recurring revenues and customer retention. Rising demand for digital sovereignty and cybersecurity modernization by governments across the globe is creating a powerful tailwind.
Encouraged by the strong start, BlackBerry now expects total revenues between $594 million and $621 million compared with $584-$611 million projected earlier.
The strong start to fiscal 2027 and subsequent outlook revision reinforces that BlackBerry’s turnaround strategy is gaining traction. However, the path is not without challenges. Secure Communications remains exposed to deal-timing variability and this could impact performance.
In addition, some of BlackBerry’s most exciting opportunities, such as physical AI, robotics and the Alloy Kore platform, remain in the early stages, introducing execution risk. Heavy reliance on the automotive industry is a concern. The QNX platform remains heavily exposed to vehicle production cycles and OEM spending, which, in turn, are highly dependent on macro conditions. BlackBerry faces increasing competitive pressures in both QNX and cybersecurity businesses.
Let’s Take a Look at BB’s Peers
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 one of the leading pureplay companies. CRWD entered fiscal 2027 with strong momentum, with the fiscal first quarter revenues rising 26% year over year to $1.39 billion and ARR reaching $5.51 billion (up 24%), alongside record net new ARR of $256 million (up 32%). Management emphasized that as enterprises rapidly adopt AI, cybersecurity has become a critical component, creating a massive demand pipeline.
CrowdStrike is seeing strong adoption across cloud, identity and next-gen SIEM, with these newer categories exceeding $2 billion in ARR. The company expects fiscal second quarter revenues to be between $1.436 billion and $1.442 billion. CRWD raised its fiscal 2027 net new ARR growth guidance by 520 basis points at the midpoint
Aptiv PLC APTV Intelligent Systems segment is seeing increased activity around next-generation ADAS, user experience and vehicle architecture solutions. However, in the near-term Aptiv is navigating a volatile macro backdrop amid OEM and auto industry disruptions and inflationary pressure. For the second quarter of 2026, Aptiv expects revenues (excluding its EDS segment, which spun-off into a new publicly traded company, Versigent) to be between $3.2 billion and $3.4 billion.
APTV has only about 25% of its business outside automotive. The company is seeking to increase penetration in markets such as commercial aerospace and telecom and remains focused on accelerating product development and go-to-market activities.
BB Price Performance, Valuation & Estimates
Shares of BlackBerry have lost 16.5% in the past month against the Internet-Software industry’s growth of 11%.
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Regarding the price/book ratio, BB is trading at 6.74, higher than the industry’s multiple of 4.65.
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The Zacks Consensus Estimate for BB earnings for fiscal 2027 has been revised downward over the past 60 days.
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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).