0001070235-26-000076
SEC filingQNX and Secure Communications drove strong revenue growth, with total revenue up 26% YoY and net income rising to $8.5M.
For the first quarter of fiscal 2027, BlackBerry reported total revenue of $152.9 million, a 26% increase year-over-year from $121.7 million. The revenue beat was driven by stronger-than-expected performance in both QNX and Secure Communications segments. Gross profit rose 33% to $119.7 million, with gross margin expanding 410 basis points to 78.3%, primarily due to a favorable mix shift toward higher-margin software license revenue. Operating income surged to $15.3 million from $2.0 million in the prior year, reflecting revenue growth and operating leverage. Net income increased to $8.5 million ($0.01 per share) from $1.9 million ($0.00 per share). On an adjusted basis, non-GAAP net income was $25.4 million ($0.04 per share), compared to $10.8 million ($0.02 per share) in the prior-year period.
All three segments delivered revenue growth. QNX revenue increased 26% to $72.3 million, driven by a $7.5 million increase in development license revenue and a $4.2 million increase in royalty revenue. Segment adjusted EBITDA rose 52% to $19.3 million, with margin improving to 26.7%. Secure Communications revenue grew 24% to $73.6 million, led by a $15.3 million surge in SecuSUITE product revenue, partially offset by a decline in UEM. Segment adjusted EBITDA more than doubled to $20.2 million, with margin of 27.4%. Licensing revenue rose 49% to $7.0 million, and segment adjusted EBITDA increased to $6.2 million (88.6% margin), driven by higher IP licensing income.
Management provided guidance for the second quarter and updated full-year fiscal 2027 expectations. For Q2, total revenue is expected to be $137-$148 million, adjusted EBITDA $20-$30 million, and non-GAAP EPS $0.03-$0.04. For the full year, revenue guidance was raised to $594-$621 million, adjusted EBITDA to $119-$139 million, and non-GAAP EPS to $0.16-$0.20. The upward revisions reflect stronger QNX royalty revenue and improved Licensing pipeline. Management also noted that the company expects operating cash flow to be roughly breakeven to $10 million in Q2. The company remains focused on executing its strategy, including the Alloy Kore vehicle software platform and expansion of Secure Communications contracts.
As of May 31, 2026, BlackBerry held $256.8M in cash and cash equivalents, $94.1M in short-term investments, and $57.8M in long-term investments, totaling $422.9M (including $14.2M restricted). Total debt was $196.8M from the 3.00% senior convertible notes due 2029. Shareholders' equity was $750.7M. The company has no inventory disclosed.
The company had $14.2M in collateralized letters of credit and a performance bond supporting a government contract. Remaining performance obligations (transaction price allocated to unsatisfied performance obligations) were $133.9M, with $121.5M expected within 12 months. Operating lease liabilities totaled $24.3M. No significant purchase commitments for inventory or capacity were disclosed.
During Q1 fiscal 2027, BlackBerry repurchased 2.6M common shares for $10.0M under the 2025 NCIB. On May 8, 2026, a new NCIB was authorized for up to 26.8M shares (commenced May 12, 2026). No dividends were paid. Capital expenditures were $4.5M ($2.9M PP&E, $1.6M intangible assets). Debt increased marginally by $0.3M due to amortization of issuance costs.
Revenue by segment: QNX $72.3M (adjusted gross margin $61.9M), Secure Communications $73.6M ($52.8M), Licensing $7.0M ($5.5M). Year-over-year growth: QNX +25.7%, Secure Communications +23.7%, Licensing +48.9%. Geographically, North America generated 48.3% of revenue (including all Licensing due to global patent portfolio), EMEA 29.1%, and other regions 22.6%.
Net income of $8.5M exceeded operating cash flow of $4.6M, indicating significant working capital outflows. Key adjustments: amortization $4.1M, stock-based compensation $6.5M, but offset by a large decrease in deferred revenue ($18.7M) and accrued liabilities ($15.2M). Accounts receivable improved, but payables swung positive. Capital expenditures of $4.5M (PP&E $2.9M, intangibles $1.6M) consumed most of operating cash flow, yielding minimal free cash flow coverage of capital returns (share repurchases $10.0M). Investing activities also included net short-term investment sales. Financing activities were dominated by share repurchases ($10.0M) and small equity issuance ($1.3M). Overall, the company's cash flow generation is weak, with core operations barely covering capex and requiring external financing for buybacks.