- BlackBerry (TSX:BB) returned to profitability, posting US$13.3 million in net income and beating revenue and EBITDA guidance with strong margin expansion and positive cash flow
- QNX automotive software surged 15 per cent YoY, boosted by its integration with Nvidia’s (NASDAQ:NVDA) autonomous driving platform and broader adoption in robotics, aerospace, and medical devices
- Secure communications showed resilience, with rising recurring revenue and major government contracts, despite a slight dip in year-over-year revenue
- BlackBerry stock (TSX:BB) opened trading at C$6.97
BlackBerry’s (TSX:BB), the Canadian enterprise software and cybersecurity firm, delivered a surprisingly strong second-quarter performance for fiscal year 2026, marking a potential inflection point for the company. With revenue growth, margin expansion, and renewed profitability, BlackBerry is showing signs of a strategic revival that investors may want to pay close attention to.
Earnings beat and return to profitability
For the quarter ended August 31, 2025, BlackBerry reported revenue of US$129.6 million, up 3 per cent year-over-year, exceeding both internal and analyst expectations. The company posted GAAP net income of US$13.3 million, marking its second consecutive profitable quarter, and delivered adjusted EBITDA of US$25.9 million, or 20 per cent of revenue, well above guidance.
Gross margins expanded to 75 per cent, up four percentage points from the prior year, while operating cash flow turned positive at US$3.4 million, a notable reversal from prior quarters.
QNX: The growth engine
BlackBerry’s QNX division, which provides embedded software for automotive and industrial applications, was a standout performer. It achieved 15 per cent revenue growth year-over-year, reaching US$63.1 million, and posted an adjusted EBITDA margin of 32 per cent, qualifying as a “Rule of 40” quarter (growth + margin > 40 per cent).
Strategic partnerships are fueling this momentum. In August, BlackBerry announced that QNX OS for Safety 8 is now integrated into Nvidia’s (NASDAQ:NVDA) DRIVE AGX Thor platform, positioning the company at the forefront of autonomous vehicle development. On top of this, QNX OS for Safety 8.0 is gaining traction in robotics, aerospace, and medical devices, expanding its relevance beyond automotive.
Secure communications: Resilient despite revenue dip
While revenue in the Secure Communications division declined 10 per cent year-over-year to US$59.9 million, the segment still beat guidance and improved its adjusted gross margin to 66 per cent. Even better, Annual Recurring Revenue (ARR) rose to US$213 million, and the dollar-based net retention rate (DBNRR) increased sequentially to 93 per cent, indicating strong customer retention and upsell success.
Key wins included multi-year contracts with the German government, U.S. State Department, and Canadian federal entities, reinforcing BlackBerry’s strength in regulated industries.
Targeted execution and rising shareholder value
BlackBerry also returned US$20 million to shareholders through a share buyback program, demonstrating financial discipline and confidence in its trajectory. The company ended the quarter with US$363.5 million in cash and investments, providing a solid foundation for future growth.
Leadership insights
“BlackBerry delivered year-over-year revenue growth and expanded gross margins while reducing operating expenses. This combination ensured strong profitability in the second quarter, beating expectations and achieving a second consecutive quarter of GAAP profitability,” BlackBerry’s CEO, John Giamatteo, said in a news release. “Our QNX division recorded a “rule of 40” quarter and progress across all our key growth initiatives. Our Secure Communications division exceeded expectations at both the top and bottom line and delivered improvements in its key metrics.”
A company repositioned for the future?
BlackBerry’s Q2 results reflect more than just a financial rebound—they signal a company successfully executing a pivot toward future-facing technologies like embedded AI, secure enterprise communications, and autonomous systems. With improving fundamentals, strategic partnerships, and growing traction in high-value verticals, BlackBerry may be setting up for a stronger future than many expected.
For investors who’ve overlooked BlackBerry in recent years, now might be the time to revisit this Canadian tech veteran.
Blackberries aren’t always sour
BlackBerry Ltd. offers intelligent security software and services to enterprises and governments worldwide. The company leverages AI and machine learning to deliver cybersecurity, safety and data privacy solutions.
BlackBerry stock (TSX:BB) finished Friday trading 6.49 per cent higher and pushed
0.29 per cent higher at ’ open at C$6.97 and has climbed 27.29 per cent since the year began and 95.22 per cent since this time last year.
Join the discussion: Find out what everybody’s saying about Blackberry, and check out the rest of Stockhouse’s stock forums and message boards.
Stockhouse does not provide investment advice or recommendations. All investment decisions should be made based on your own research and consultation with a registered investment professional. The issuer is solely responsible for the accuracy of the information contained herein. For full disclaimer information, please click here.
