BlackBerry Raises FY2027 Outlook as Quarterly Revenue Jumps 26%

BlackBerry raised its fiscal 2027 revenue and adjusted EBITDA forecasts on Thursday after second-quarter revenue climbed 26% from a year earlier to $163.3 million. The new full-year revenue range is $616 million to $636 million, up from the $594 million to $621 million range the company issued in June for the fiscal year ending February 28, 2027.

Profitability also moved higher than BlackBerry had anticipated. Adjusted EBITDA reached $47.0 million in the quarter, up 81% year over year, and GAAP operating income rose 192% to $33.6 million. BlackBerry now expects $141 million to $158 million of adjusted EBITDA for the year, compared with its previous forecast of $119 million to $139 million.

Second-quarter results came in above BlackBerry’s own ranges

The quarter ended August 31 was stronger than the guidance BlackBerry gave with its first-quarter results. Management had forecast second-quarter revenue of $137 million to $148 million. Actual revenue of $163.3 million exceeded the top of that range by $15.3 million.

BlackBerry’s second-quarter earnings release filed with the SEC showed that QNX revenue reached $80.3 million, versus prior guidance of $70 million to $75 million. Secure Communications revenue was $60.9 million, within its $57 million to $63 million range, while licensing revenue came in at $22.1 million against an earlier expectation of about $10 million.

The upside was visible below the revenue line as well. Adjusted basic earnings were $0.07 per share, compared with BlackBerry’s earlier second-quarter range of $0.03 to $0.04. Operating cash flow totaled $29.3 million, above the company’s prior guidance of breakeven to $10 million. Adjusted gross margin was 78.2%, and GAAP gross margin was 77.8%, each about three percentage points higher than a year earlier.

Cash and investments stood at $447.1 million at quarter-end. GAAP net income was $33.9 million, marking what BlackBerry described as its sixth consecutive quarter of positive GAAP net income, and adjusted net income rose 79% year over year to $43.2 million. Through the first six months of fiscal 2027, revenue reached $316.2 million, compared with $251.3 million a year earlier, while GAAP net income increased to $42.4 million from $15.2 million.

QNX and licensing account for most of the full-year upgrade

QNX was the clearest operating driver behind the revised outlook. Revenue from the embedded software business rose 27% year over year to a record $80.3 million. QNX segment adjusted EBITDA increased 41% to $29.0 million, equal to a 36% margin, and the segment’s adjusted gross margin expanded four percentage points to 87%.

For the full fiscal year, BlackBerry now expects QNX revenue of $315 million to $325 million, compared with the previous $295 million to $312 million range. QNX segment adjusted EBITDA guidance moved to $95 million to $105 million from $74 million to $86 million.

A major QNX commercial milestone arrived just before the earnings report. Coretura, the software-defined vehicle venture founded by Daimler Truck and Volvo Group, selected Alloy Kore, the vehicle software platform developed by QNX and Vector Informatik, for a next-generation commercial vehicle program. BlackBerry said the award adds more than $100 million to QNX royalty backlog and is the largest design win in QNX history. The company defines that backlog as estimated future revenue from forecast royalties, so the figure is not the same as revenue already recognized or guaranteed and remains dependent on production volumes and other assumptions.

Licensing provided another large contribution in the quarter. Revenue of $22.1 million was more than double the roughly $10 million BlackBerry had expected for the period, and licensing segment adjusted EBITDA was $20.0 million. Full-year licensing revenue guidance is now approximately $41 million, up from approximately $29 million, with segment adjusted EBITDA expected at about $36 million instead of about $25 million.

Secure Communications outlook moves lower despite company-wide raise

The upgraded company-wide forecast does not reflect stronger expectations across every business. Secure Communications revenue increased 2% year over year to $60.9 million in the second quarter, but segment adjusted EBITDA fell 18% to $8.0 million. Annual recurring revenue was stable at $221 million, and dollar-based net retention rate was 91%.

Full-year Secure Communications revenue is now expected at $260 million to $270 million, down from the previous $270 million to $280 million range. Segment adjusted EBITDA guidance was lowered to $50 million to $58 million from $57 million to $65 million. The higher consolidated forecast is therefore being supported by stronger QNX and licensing expectations rather than an across-the-board increase.

Adjusted basic earnings-per-share guidance also moved up to $0.19 to $0.22 from $0.16 to $0.20, and BlackBerry increased its operating cash flow expectation to approximately $115 million from approximately $100 million.

For the third quarter ending November 30, BlackBerry expects total revenue of $143 million to $154 million, including $82 million to $88 million from QNX, $55 million to $60 million from Secure Communications and about $6 million from licensing. Adjusted EBITDA is projected at $28 million to $37 million, adjusted basic earnings at $0.04 to $0.05 per share, and operating cash flow at $20 million to $30 million. Those ranges will provide the next test of whether the first-half strength behind the fiscal 2027 upgrade carries into the second half.