Company Reports

BlackBerry reported upside to its August-quarter guidance and raised its fiscal 2027 outlook. Strong results included a one-time licensing win, but the underlying business still came in at the high end of guidance. Core software and services revenue rose 15% year over year to $141 million.

We believe BlackBerry offers investors a solid small-cap software opportunity with an attractive market niche. We like BlackBerry’s portfolio focus on two core competencies: secure embedded software for vehicles and secure communications software for regulated industries and governments. These are both relatively low-revenue niches of the market, but with solid growth runways and strong incumbency for BlackBerry. We also like BlackBerry’s newfound emphasis on operating efficiency, profitability, cash flow, and shareholder returns.

BlackBerry reported good fiscal first-quarter results well above guidance. Revenue rose 26% year over year to $153 million, while non-GAAP operating margin of 21% was up about 1,000 basis points year over year. Management raised fiscal 2027 guidance by about the level of the first-quarter beat.

We believe BlackBerry offers investors a solid small-cap software opportunity with an attractive market niche. We like BlackBerry’s portfolio focus on two core competencies: secure embedded software for vehicles and secure communications software for regulated industries and governments. These are both relatively low-revenue niches of the market, but with solid growth runways and strong incumbency for BlackBerry. We also like BlackBerry’s newfound emphasis on operating efficiency, profitability, cash flow, and shareholder returns.

BlackBerry's fiscal fourth-quarter results beat guidance, and management provided a bullish outlook for fiscal 2027. Fourth-quarter revenue rose 10% year over year to $156 million, and management is guiding to 9% growth in fiscal 2027 at the midpoint.

We believe BlackBerry offers investors a solid small-cap software opportunity with an attractive market niche. We like BlackBerry’s portfolio focus on two core competencies: secure embedded software for vehicles and secure communications software for regulated industries and governments. These are both relative low-revenue niches of the market, but with solid growth runways and strong incumbency for BlackBerry. We also like BlackBerry’s newfound emphasis on operating efficiency, profitability, cash flow, and shareholder returns.

BlackBerry held an investor briefing at the Consumer Electronics Show in Las Vegas this week, which covered the firm's overarching strategy, focused on QNX. It also announced the launch of Alloy Kore, a new software platform for automotive OEMs, in partnership with Vector.

BlackBerry's fiscal third-quarter results and fourth-quarter guidance were positive. November-quarter sales rose 9% sequentially to $142 million, while non-GAAP operating margin rose 30 basis points sequentially to 17.6% Guidance implies roughly flat sales and profitability.

We believe BlackBerry presents a mixed bag for investors, but we like management’s renewed focus on investing in its stronger automotive software business. We like the firm’s automotive software portfolio but see the larger enterprise security business as an underperformer that weighs on results. BlackBerry sells software into enterprise cybersecurity applications and embedded applications like cars. Its products in enterprise security focus on secure communications. In the automotive market, BlackBerry’s QNX software underpins automotive chips, safety systems, and cabin features.

BlackBerry's fiscal second-quarter results exceeded the top ends of guidance, with revenue rising 6% sequentially to $130 million, and non-GAAP operating margin rising 710 basis points sequentially to 17.3%. Management also raised its fiscal 2026 guidance ranges on the top and bottom lines.

We believe BlackBerry presents a mixed bag for investors, but we like management’s renewed focus on investing in its stronger automotive software business. We like the firm’s automotive software portfolio but see the larger enterprise security business as an underperformer that weighs on results. BlackBerry sells software into enterprise cybersecurity applications and embedded applications like cars. Its products in enterprise security focus on secure communications. In the automotive market, BlackBerry’s QNX software underpins automotive chips, safety systems, and cabin features.

We believe BlackBerry presents a mixed bag for investors, but we like management’s renewed focus on investing in its stronger automotive software business. We like the firm’s automotive software portfolio but see the larger enterprise security business as an underperformer that weighs on results. BlackBerry sells software into enterprise cybersecurity applications and embedded applications like cars. Its products in enterprise security focus on secure communications. In the automotive market, BlackBerry’s QNX software underpins automotive chips, safety systems, and cabin features.

BlackBerry's fiscal first-quarter results beat management guidance across the top and bottom lines. Revenue fell 15% year over year to $122 million. Management lightly raised its fiscal 2026 revenue guidance, which still implies a modest decline, while keeping the rest of its fiscal year outlook.

No-moat Blackberry reported good fourth-quarter earnings that beat our model and consensus on both revenue and profitability fronts. However, management unveiled a weak outlook for fiscal 2026 largely due to headwinds from US federal contract cuts and geopolitical uncertainty in its Secure Communications (previously Cybersecurity) business. Management is uncertain on the impact of automotive tariffs on the firm’s QNX (Internet of Things) business, but we anticipate some indirect headwinds from conservative automotive spending in the near to medium term. We have tempered our estimates in accordance with guidance. As a result, we have reduced our fair value estimate to $3.60 from $3.80. Nevertheless, we maintain our long-term thesis of high-single digits to low-teens revenue growth driven by a recovery in demand for automotive software applications and the firm’s growing content-per-vehicle. Shares were down 9% for the day and we view them as fairly valued.

We believe BlackBerry presents a mixed bag for investors, but we like management’s renewed focus on investing in its stronger automotive software business. We like the firm’s automotive software portfolio but see the larger enterprise security business as an underperformer that weighs on results. BlackBerry sells software into enterprise cybersecurity applications and embedded applications like cars. Its products in enterprise security focus on secure communications. In the automotive market, BlackBerry’s QNX software underpins automotive chips, safety systems, and cabin features.

We believe BlackBerry presents a mixed bag for investors, but we like management’s renewed focus on investing in its stronger automotive software business. We like the firm’s automotive software portfolio but see the larger enterprise security business as an underperformer that weighs on results. BlackBerry sells software into enterprise cybersecurity applications and embedded applications like cars. Its products in enterprise security focus on secure communications. In the automotive market, BlackBerry’s QNX software underpins automotive chips, safety systems, and cabin features.

We visited BlackBerry's booth at CES 2025 in Las Vegas, which showcased new developments for its QNX software platform. BlackBerry highlighted a new cloud partnership with Microsoft Azure, as well as collaborations with other software-defined vehicle platforms TTTech and Vector.

BlackBerry reported its first quarterly results since announcing the divestment of Cylance to Arctic Wolf earlier in December 2024. Fiscal third-quarter sales were $143 million, dipping 1% sequentially. Adjusted EBITDA margin was 16%, up from 0% in the fiscal second quarter.

BlackBerry announced the sale of its Cylance endpoint security business to Arctic Wolf, a privately held cybersecurity firm. BlackBerry will receive USD 120 million in net cash from the sale and 5.5 million shares of Arctic Wolf. Management expects the deal to close in the next three months.

We believe BlackBerry presents a mixed bag for investors, but we like management’s renewed focus on investing in its stronger automotive software business. We like the firm’s automotive software portfolio, but see the larger enterprise security business as an underperformer that weighs on results. BlackBerry sells software into enterprise cybersecurity applications and embedded applications like cars. Its products in enterprise security focus on secure communications. In the automotive market, BlackBerry’s QNX software underpins automotive chips, safety systems, and cabin features.