For the quarter ended August 31, 2026, BlackBerry generated $33.9 million in GAAP net income, compared with $13.3 million in the prior-year period. Diluted earnings increased to $0.05 per share, compared with $0.02 a year earlier.
Operating income rose to $33.6 million from $11.5 million, while gross profit increased to $127.1 million from $96.6 million. The company’s GAAP gross margin improved to 77.8% from 74.5%, reflecting a greater contribution from its higher-margin QNX and Licensing businesses.
On an adjusted basis, BlackBerry reported $43.2 million in net income, compared with $24.2 million a year earlier. Adjusted EBITDA increased to $47 million from $25.9 million, representing an adjusted EBITDA margin of approximately 29%.
BlackBerry’s QNX division generated $80.3 million in quarterly revenue, compared with $63.1 million in the previous year.
The $17.2 million increase was primarily attributable to higher royalties, development license revenue, and professional services. Royalty revenue alone increased by $10.4 million, while development license revenue rose by $3.9 million.
The performance exceeded BlackBerry’s previous second-quarter QNX revenue guidance of $70 million to $75 million.
QNX develops software for embedded systems used in automotive technology, medical devices, robotics, and industrial automation. According to BlackBerry, its technology is deployed in more than 275 million vehicles.
During the quarter, QNX and Vector Informatik secured their first Alloy Kore design win with Coretura, the commercial vehicle software joint venture between Volvo Group and Daimler Truck.
BlackBerry described the agreement as the largest design win in QNX’s history, adding more than $100 million to its royalty backlog. The backlog represents anticipated royalties associated with design wins rather than revenue already recognized.
The company also announced that Momenta and XHEART selected QNX OS for Safety for an autonomous driving platform. Separately, QNX expanded its AI ecosystem by adding support for the Hailo-8 AI Accelerator.
BlackBerry’s Secure Communications division generated $60.9 million in revenue, compared with $59.9 million a year earlier.
Growth in BlackBerry SecuSUITE revenue was partially offset by declines in BlackBerry UEM and professional services revenue.
The division’s adjusted EBITDA declined to $8 million from $9.7 million, partly because of a greater contribution from lower-margin hardware devices.
Secure Communications annual recurring revenue reached $221 million, up from $213 million a year earlier. However, its dollar-based net retention rate declined to 91% from 93%, indicating that revenue from the prior-year customer cohort decreased after accounting for expansions and contractions.
The company’s Licensing division reported $22.1 million in revenue, compared with $6.6 million in the prior-year quarter.
The increase was primarily attributable to a new intellectual property licensing agreement. BlackBerry noted that the timing and size of licensing transactions can cause substantial quarterly fluctuations.
BlackBerry also reported improving cash generation. Operating cash flow reached $29.3 million during the quarter, compared with $3.4 million a year earlier, while free cash flow increased to $28.1 million from $2.6 million.
For the first six months of fiscal 2027, BlackBerry generated $33.9 million in operating cash flow, reversing a $14.1 million outflow during the comparable period.
The company ended August with approximately $447.1 million in cash, cash equivalents, and investments, compared with $432.4 million at the end of February. This total includes restricted cash and certain illiquid private-company investments.
BlackBerry also repurchased approximately 2.6 million common shares for $10 million during the first six months of fiscal 2027.
Following its second-quarter performance, BlackBerry increased its full-year revenue guidance to $616 million to $636 million, compared with its previous outlook of $594 million to $621 million.
The company raised its fiscal 2027 QNX revenue forecast to $315 million to $325 million, up from $295 million to $312 million. It also increased its Licensing revenue outlook to approximately $41 million, compared with its previous expectation of $29 million.
However, BlackBerry reduced its Secure Communications revenue guidance to $260 million to $270 million, down from $270 million to $280 million, citing a more cautious outlook for certain government opportunities during the second half of the fiscal year.
For the third quarter, BlackBerry expects consolidated revenue of $143 million to $154 million.
The updated guidance reflects the company’s stronger first-half performance, continued demand for QNX software, and the contribution of intellectual property licensing transactions.
