BlackBerry Limited BB reported first-quarter fiscal 2027 non-GAAP earnings per share (EPS) of 4 cents. The figure beat the company’s estimate of 2-3 cents. In the year-ago quarter, it reported a non-GAAP EPS of 2 cents. The Zacks Consensus Estimate was pegged at 3 cents per share.
BlackBerry generated $152.9 million in fiscal first-quarter revenue, representing 26% year-over-year growth. During the quarter, BlackBerry delivered strong execution across both QNX and Secure Communications, with each achieving Rule of 40 performance through a combination of solid growth and profitability. QNX continues to gain traction for software-defined vehicles, robotics, industrial automation and physical AI, while Secure Comm remains a dependable source of high-margin revenue backed by government and defense customers.
After a strong start to fiscal 2027, BB raised its full-year QNX revenue guidance to $295–$312 million and adjusted EBITDA view to $74–$86 million. Secure Comm continues to be a stable and growing business. The company reaffirmed its full-year revenue guidance of $270–$280 million, representing 4–8% growth. For Licensing, it raised its guidance to approximately $29 million in revenue and $25 million in adjusted EBITDA.
Fueled by improved outlook for QNX and Licensing, BlackBerry raised fiscal 2027 guidance to $594–$621 million in revenue and $119–$139 million in adjusted EBITDA. Earlier, it expected revenue to grow 6–11% to $584–$611 million, with adjusted EBITDA of $110–$130 million. The 90%flow-through of incremental revenue to adjusted EBITDA highlights the strong operating leverage of BlackBerry's business model. Non-GAAP EPS is now estimated at 16-20 cents, up from the prior expected 15–19 cents. Stronger cash conversion is expected to drive full-year operating cash flow to about $100 million, nearly double.
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Following stronger-than-expected momentum and bolstered guidance, BB’s shares rose 20% in trading and closed at $10.34 yesterday. The stock has gained 119% over the past year, outperforming the Zacks Internet-Software industry’s fall of 25%.
BB’s Fiscal Q1 in Details
Revenue from the QNX business rose 26% to $72.3 million, exceeding the upper end of guidance ($60-$64 million). QNX's strong results were driven by software-defined vehicles and centralized computing, record development license revenue (the highest in eight quarters) and growing opportunities in Physical AI, supported by a robust silicon ecosystem and the Alloy platform.
Secure Communication revenues increased 24% to $73.6 million, nearly matching QNX's growth rate. The segment benefited from strong government demand fueled by digital sovereignty, cybersecurity modernization and secure communications initiatives. The solid performance was led by an expansion and multi-year extension with Shared Services Canada, including a larger deployment of Secusmart's encrypted communications solutions, resulting in the business's best performance in several years.
While large government contracts cause quarterly fluctuations due to long sales cycles, the business continues to develop into a steady growth driver. During the quarter, BB also secured several renewals, expansions and new customer acquisitions across government, defense and regulated industries.
BlackBerry Limited Price, Consensus and EPS Surprise
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Licensing revenue reached $7 million, up from $4.7 million in the prior-year quarter and surpassed guidance of around $6 million, driven by stronger-than-expected revenue from existing agreements and several new one-time licensing deals.
BB’s Margin Performance
Adjusted gross margin was 78.6%, up from 74.6% in the year-ago period. QNX gross margin improved 5 percentage points (pp) year over year to 86%. Secure Comms adjusted gross margin expanded by roughly 2 pp year over year to 72%, benefiting from a more favorable software revenue mix.
Adjusted operating expenses totaled $88 million, up from $79.9 million in the previous-year quarter.
Adjusted EBITDA more than doubled year over year, reaching approximately $36 million and exceeding expectations ($14-$22 million). QNX’s adjusted EBITDA for the quarter came in much above the high end of guidance ($4-$8 million) at $19.3 million, up 52% year over year. Secure Communications’ adjusted EBITDA beat expectations ($14-$18 million) of $20.2 million, up 110% year over year.
The licensing business generated $6.2 million in adjusted EBITDA for the quarter, up from $3.8 million in the previous year quarter.
BB’s Cash Flow & Liquidity
For the quarter that 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 at the end of 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 compared with $432.4 million as of Feb. 28, 2026.
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 totaling $17 million. Last month, it renewed and expanded its share repurchase program, authorizing the buyback of approximately 27 million additional shares. The program remains a key tool in the company's disciplined, shareholder-focused capital allocation strategy.
BB’s Fiscal Q2 Guidance
For the fiscal second quarter, BlackBerry expects QNX revenue of $70–$75 million and adjusted EBITDA of $16–$21 million. It expects Secure Communications revenue of $57–$63 million and adjusted EBITDA of $5–$10 million. Licensing & Other revenues are expected to be roughly $10 million.
It has guided total revenue of $137–$148 million and adjusted EBITDA of $20–$30 million. Non-GAAP EPS is expected in the range of 3-4 cents.
BlackBerry anticipates positive operating cash flow of breakeven to $10 million.
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.
Performance of Recent Companies
Guidewire Software, Inc. GWRE reported non-GAAP earnings per share of 82 cents for the third-quarter fiscal 2026 compared with 55 cents in the same period last year. Earnings surpassed the Zacks Consensus Estimate of 79 cents. The company reported revenues of $372.5 million, up 26.9% year over year. Revenues beat the Zacks Consensus Estimate by 4.6%. The figure also surpassed the company’s guided range of $352-$358 million. This uptick was driven by solid momentum in Subscription and support and Services segments.
Micron Technology MU reported third-quarter fiscal 2026 non-GAAP earnings of $25.11 per share, beating the Zacks Consensus Estimate by 17.39%. The company reported earnings of $1.91 per share in the year-ago quarter. Revenues soared 345.7% year over year to $41.46 billion and surpassed the Zacks Consensus Estimate by 12.91%. Revenues jumped 73.7% sequentially. The upside was driven by robust AI-led memory demand, with data center revenues exceeding $25 billion, an annualized run rate of more than $100 billion.
McCormick & Company, Incorporated MKC reported second-quarter fiscal 2026 results, wherein both top and bottom lines beat the Zacks Consensus Estimate and increased year over year. Adjusted earnings rose 15.9% to 80 cents per share from 69 cents in the year-ago quarter. The metric beats the Zacks Consensus Estimate of 69 cents per share. The increase was driven by elevated adjusted operating income and a reduced adjusted effective tax rate, partially offset by weaker unconsolidated income and increased interest expense.
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