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Yahoo
11 hours ago
- Business
- Yahoo
BlackBerry posts strong Q1 as QNX and Secure Comms lead growth, shares gain
-- BlackBerry Ltd (TSX:BB) reported financial results for the first quarter of fiscal year 2026 that exceeded expectations across key metrics, sending its shares up 3.7% in after-hours trading. The performance marked a solid entry into the fiscal year for the Waterloo, Ontario-based technology firm, with robust showings from both its QNX automotive software and Secure Communications divisions. Total company revenue came in at $121.7 million, topping the high end of guidance, while gross margin reached 74% and adjusted EBITDA totaled $16.4 million. First-quarter GAAP net income was $1.9 million, BlackBerry's first GAAP profit since Q4 FY22, while non-GAAP earnings beat expectations at $0.02 per share. QNX, the embedded software platform widely used in automotive systems, delivered 8% year-over-year revenue growth to $57.5 million. Adjusted EBITDA for the segment reached $12.7 million, representing 22% of revenue, and an indication of continued demand in the automotive technology sector. The Secure Communications unit also beat both revenue and profitability guidance, booking $59.5 million in revenue and $9.6 million in adjusted EBITDA. Segment adjusted gross margin improved to 70%, climbing 6 percentage points sequentially and 4 percentage points year-over-year. CEO John J. Giamatteo highlighted the execution by both divisions and the company's trajectory toward consistent profitability and disciplined capital allocation. 'BlackBerry made a strong start to the new fiscal year, building on the solid foundation we as a company have laid over the past year,' Giamatteo said. 'BlackBerry's solid balance sheet and plan for continuing profitability and cash generation this fiscal year enable us to allocate capital efficiently, with $10 million of share buybacks executed this past quarter.' BlackBerry returned $10 million to shareholders via repurchase of 2.57 million common shares and confirmed implementation of a normal course issuer bid. The company ended the quarter with $381.9 million in cash, cash equivalents, and investments, down $28.4 million sequentially, reflecting investments into operations and a seasonally low cash flow quarter. Looking ahead, BlackBerry raised its full-year guidance, now forecasting revenue between $508 million and $538 million, adjusted EBITDA of $72 million to $87 million, and non-GAAP EPS between $0.08 and $0.10. For the second quarter, guidance calls for revenue of $115 million to $125 million and adjusted EBITDA of $8 million to $14 million, reinforcing investor optimism surrounding the company's turnaround strategy. Related articles BlackBerry posts strong Q1 as QNX and Secure Comms lead growth, shares gain FedEx shares drop in afterhours as soft guidance overshadows Q4 results beat AeroVironment shares fall despite earnings beat, strong guidance Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
16 hours ago
- Business
- Yahoo
BlackBerry Reports First Quarter Fiscal Year 2026 Results
Exceeds top end of guidance range for revenue, adjusted EBITDA, adjusted EPS and operating cash flow for the total Company Delivers revenue and adjusted EBITDA above guidance for QNX division Beats revenue and adjusted EBITDA guidance for Secure Communications division, raising full year guidance Returns $10 million to shareholders as part of share buyback program WATERLOO, ON / / June 24, 2025 / BlackBerry Limited (NYSE:BB)(TSX:BB) today reported financial results for the three months ended May 31, 2025 (all figures in U.S. dollars and U.S. GAAP, except where otherwise indicated). "BlackBerry made a strong start to the new fiscal year, building on the solid foundation we as a company have laid over the past year," said John J. Giamatteo, CEO, BlackBerry. "Both our QNX and Secure Communications divisions continue to execute effectively against their strategies, beating both top line and profitability expectations. BlackBerry's solid balance sheet and plan for continuing profitability and cash generation this fiscal year enable us to allocate capital efficiently, with $10 million of share buybacks executed this past quarter." First Quarter Fiscal 2026 Financial Highlights Total company revenue exceeded previously-provided guidance at $121.7 million Total company gross margin was 74% and non-GAAP gross margin was 75% QNX revenue beat guidance and delivered 8% year-over-year growth to $57.5 million; QNX gross margin and adjusted gross margin was 81% QNX adjusted EBITDA beat previously-provided guidance at $12.7 million, or 22% of revenue Secure Communications revenue exceeded previously-provided guidance at $59.5 million; Secure Communications adjusted gross margin increased by 6 percentage points sequentially and 4 percentage points year-over-year to 70% Secure Communications ARR remained stable, relatively flat sequentially at $209 million; Secure Communications DBNRR decreased by 1 percentage point to 92% Secure Communications adjusted EBITDA exceeded previously provided guidance at $9.6 million Licensing revenue was $4.7 million, and adjusted EBITDA was $3.8 million BlackBerry achieved GAAP profitability for first time since Q4 FY22, with net income of $1.9 million and non-GAAP net income was $12.3 million Total company adjusted EBITDA exceeded previously-provided guidance at $16.4 million GAAP basic earnings per share was breakeven and non-GAAP basic earnings per share was $0.02, beating the previously-provided guidance Operating cash usage for the seasonally-low first quarter beat expectations at $18 million $10 million was returned to shareholders by the repurchase of 2.57 million common shares during the quarter Total cash, cash equivalents, short-term and long-term investments decreased by $28.4 million sequentially to $381.9 million Business Highlights & Strategic Announcements BlackBerry announced a normal course issuer bid share buyback program QNX launched QNX® Hypervisor 8.0, built on the next-generation SDP 8.0 architecture, facilitating high-performance virtualization of multiple operating systems on a single SoC WeRide launched its next-generation ADAS platform for L2++ autonomous drive, built upon QNX® OS for Safety Leapmotor selected QNX® technology as the foundation of its intelligent digital cockpit and autonomous drive domain controllers in its new B10 electric SUV Direct ChassisLink Inc (DCLI) announced the deployment of BlackBerry® Radar® across 100,000 chassis BlackBerry® AtHoc® became the first critical event management provider to achieve FedRAMP High authorization Malaysia Cybersecurity Center of Excellence celebrated its first anniversary with new partnerships, scholarships and expanded education programs Financial Outlook BlackBerry is providing the following guidance for the second fiscal quarter (ending August 31, 2025) and the full fiscal year 2026 (ending February 28, 2026). Q2 FY26 Full fiscal year FY26 Total BlackBerry revenue: $115 - $125 million $508 - $538 million QNX revenue: $55 - $60 million $250 - $270 million Secure Communications revenue: $54 - $59 million $234 - $244 million Licensing revenue: Approximately $6 million Approximately $24 million QNX segment adjusted EBITDA: $10 - $13 million $55 - $60 million Secure Communications segment adjusted EBITDA: $3 - $6 million $37 - $47 million Licensing segment adjusted EBITDA: Approximately $5 million Approximately $20 million Adjusted Corporate Costs1: Approximately $10 million Approximately $40 million Total Company adjusted EBITDA: $8 - $14 million $72 - $87 million Non-GAAP basic EPS: Breakeven - $0.01 $0.08 - $0.10 Operating cash flow (usage) ($5) - ($15) million Approximately $35 million 1 Excluding amortization costs. Use of Non-GAAP Financial Measures The tables at the end of this press release include a reconciliation of the non-GAAP financial measures and non-GAAP financial ratios used by the Company to comparable U.S. GAAP measures and an explanation of why the Company uses them. The Company does not provide a reconciliation of expected Adjusted EBITDA and expected Non-GAAP basic EPS for the second quarter of 2026 to the most directly comparable expected GAAP measures because it is unable to predict with reasonable certainty, among other things, restructuring charges and impairment charges and, accordingly, a reconciliation is not available without unreasonable effort. These items are uncertain, depend on various factors, and could have a material impact on GAAP reported results for the guidance period. For more information on the non-GAAP financial measures, please refer to the tables at the end of this press release. Conference Call and Webcast A conference call and live webcast will be held today beginning at 5:30 p.m. ET, which can be accessed using the following link (here) or through the Company's investor webpage ( or by dialing toll free +1 (844) 763-8275 and entering Elite Entry Number 52549. A replay of the conference call will be available at approximately 8:30 p.m. ET today, using the same webcast link (here) or by dialing toll free +1 (877) 481-4010 and entering Replay Access Code 52549. About BlackBerry BlackBerry (NYSE:BB)(TSX:BB) provides enterprises and governments the intelligent software and services that power the world around us. Based in Waterloo, Ontario, the company's high-performance foundational software enables major automakers and industrial giants alike to unlock transformative applications, drive new revenue streams and launch innovative business models, all without sacrificing safety, security, and reliability. With a deep heritage in Secure Communications, BlackBerry delivers operational resiliency with a comprehensive, highly secure, and extensively certified portfolio for mobile fortification, mission-critical communications, and critical events management. For more information, visit and follow @BlackBerry. Investor Contact: BlackBerry Investor Relations+1 (519) 888-7465investorrelations@ Media Contact: BlackBerry Media Relations+1 (519) 597-7273mediarelations@ ### This news release contains forward-looking statements within the meaning of certain securities laws, including under the U.S. Private Securities Litigation Reform Act of 1995 and applicable Canadian securities laws, including statements regarding BlackBerry's plans, strategies and objectives. The words "expect", "anticipate", "estimate", "may", "will", "should", "could", "intend", "believe", "target", "plan" and similar expressions are intended to identify these forward-looking statements. Forward-looking statements are based on estimates and assumptions made by BlackBerry in light of its experience and its perception of historical trends, current conditions and expected future developments, as well as other factors that BlackBerry believes are appropriate in the circumstances, including but not limited to, BlackBerry's expectations regarding its business, financial performance, strategy, opportunities and prospects, the launch of new products and services, general economic conditions, and competition. Many factors could cause BlackBerry's actual results, performance or achievements to differ materially from those expressed or implied by the forward-looking statements, including, without limitation, risks related to the following factors: BlackBerry's ability to maintain or expand its customer base for its software and services offerings to grow revenue or achieve sustained profitability; the intense competition faced by BlackBerry; BlackBerry's ability to enhance, develop, introduce or monetize its products and services in a timely manner with competitive pricing, features and performance; significant changes in government customer demand or procurement requirements; BlackBerry's sales cycles and the time and expense of its sales efforts; the occurrence or perception of a breach of BlackBerry's network cybersecurity measures, or an inappropriate disclosure of confidential or personal information; BlackBerry's continuing ability to attract new personnel, retain existing key personnel and manage its staffing effectively; risks arising from a failure or perceived failure of the security features of BlackBerry's solutions; adverse macroeconomic and geopolitical conditions, including trade policies; litigation against BlackBerry; network disruptions or other business interruptions; BlackBerry's ability to foster an ecosystem of third-party application developers; BlackBerry's dependence in part on its relationships with resellers and channel partners; BlackBerry's products and services being dependent upon interoperability with rapidly changing systems provided by third parties; BlackBerry's use of artificial intelligence solutions; failure to protect BlackBerry's intellectual property and to earn expected revenues from intellectual property rights; BlackBerry's use of open source software and its ability to obtain rights to use third-party software ; BlackBerry potentially being found to have infringed on the intellectual property rights of others; BlackBerry's indebtedness, which could impact its operating flexibility and financial condition; the asset risk faced by BlackBerry, including the potential for charges related to its long-lived assets and goodwill; tax provision changes, the adoption of new tax legislation or exposure to additional tax liabilities; the use and management of user data and personal information; government regulations applicable to BlackBerry's products and services, including products containing encryption capabilities; environmental, social and governance expectations and standards; the failure of BlackBerry's suppliers, subcontractors, channel partners and representatives to use acceptable ethical business practices or comply with applicable laws; potential impacts of acquisitions, divestitures and other business initiatives; risks associated with foreign operations, including fluctuations in foreign currencies; environmental events; the fluctuation of BlackBerry's quarterly revenue and operating results; and the volatility of the market price of BlackBerry's common shares. These risk factors and others relating to BlackBerry are discussed in greater detail in BlackBerry's Annual Report on Form 10-K and the "Cautionary Note Regarding Forward-Looking Statements" section of BlackBerry's MD&A (copies of which filings may be obtained at or All of these factors should be considered carefully, and readers should not place undue reliance on BlackBerry's forward-looking statements. Any statements that are forward-looking statements are intended to enable BlackBerry's shareholders to view the anticipated performance and prospects of BlackBerry from management's perspective at the time such statements are made, and they are subject to the risks that are inherent in all forward-looking statements, as described above, as well as difficulties in forecasting BlackBerry's financial results and performance for future periods, particularly over longer periods, given changes in technology and BlackBerry's business strategy, evolving industry standards, intense competition and short product life cycles that characterize the industries in which BlackBerry operates. Any forward-looking statements are made only as of today and BlackBerry has no intention and undertakes no obligation to update or revise any of them, except as required by law. ### BlackBerry LimitedIncorporated under the Laws of Ontario(United States dollars, in millions except share and per share amounts) Consolidated Statements of Operations Three Months Ended May 31, 2025 February 28, 2025 May 31, 2024 Revenue $ 121.7 $ 141.7 $ 123.4 Cost of sales 31.4 37.6 33.4 Gross margin 90.3 104.1 90.0 Gross margin % 74.2 % 73.5 % 72.9 % Operating expenses Research and development 25.0 23.2 30.6 Sales and marketing 28.7 27.1 23.8 General and administrative 30.5 50.0 40.3 Amortization 4.0 4.1 4.7 Impairment of long-lived assets 0.1 4.9 3.5 Litigation settlements - 2.8 - 88.3 112.1 102.9 Operating income (loss) 2.0 (8.0 ) (12.9 ) Investment income, net 2.9 1.6 4.0 Income (loss) before income taxes 4.9 (6.4 ) (8.9 ) Provision for income taxes 3.0 1.4 7.6 Income (loss) from continuing operations 1.9 (7.8 ) (16.5 ) Gain from disposal of discontinued operation, net of tax - 10.2 - Loss from discontinued operations, net of tax - (9.8 ) (24.9 ) Net income (loss) $ 1.9 $ (7.4 ) $ (41.4 ) Earnings (loss) per share Basic earnings (loss) per share from continuing operations $ 0.00 $ (0.01 ) $ (0.03 ) Total basic earnings (loss) per share $ 0.00 $ (0.01 ) $ (0.07 ) Diluted earnings (loss) per share from continuing operations $ 0.00 $ (0.01 ) $ (0.03 ) Total diluted earnings (loss) per share $ 0.00 $ (0.01 ) $ (0.07 ) Weighted-average number of common shares outstanding (000s) Basic 596,300 594,267 589,821 Diluted 600,831 594,267 589,821 Total common shares outstanding (000s) 594,529 596,231 590,171 BlackBerry LimitedIncorporated under the Laws of Ontario(United States dollars, in millions) Consolidated Balance Sheets As at May 31, 2025 February 28, 2025 Assets Current Cash and cash equivalents $ 276.0 $ 266.7 Short-term investments 30.6 71.1 Accounts receivable, net of allowance of $6.0 and $6.6, respectively 129.9 173.7 Other receivables 51.7 48.4 Income taxes receivable 1.7 1.6 Other current assets 43.3 30.0 533.2 591.5 Restricted cash and cash equivalents 16.5 13.6 Long-term investments 58.8 58.9 Other long-term assets 48.0 76.5 Operating lease right-of-use assets, net 20.1 22.0 Property, plant and equipment, net 12.7 13.4 Intangible assets, net 44.2 47.3 Goodwill 476.9 472.4 $ 1,210.4 $ 1,295.6 Liabilities Current Accounts payable $ 5.2 $ 31.1 Accrued liabilities 83.3 126.2 Income taxes payable 28.6 25.5 Deferred revenue, current 136.3 161.5 253.4 344.3 Deferred revenue, non-current 8.8 5.6 Operating lease liabilities 26.3 28.7 Other long-term liabilities 1.2 1.8 Long-term notes 195.6 195.3 485.3 575.7 Shareholders' equity Capital stock and additional paid-in capital 2,970.5 2,976.4 Deficit (2,232.6 ) (2,237.3 ) Accumulated other comprehensive loss (12.8 ) (19.2 ) 725.1 719.9 $ 1,210.4 $ 1,295.6 BlackBerry LimitedIncorporated under the Laws of Ontario(United States dollars, in millions) Consolidated Statements of Cash Flows Three Months Ended May 31, 2025 May 31, 2024 Cash flows from operating activities Net income (loss) $ 1.9 $ (41.4 ) Adjustments to reconcile net income (loss) to net cash used in operating activities: Amortization 5.7 13.2 Stock-based compensation 5.7 7.7 Impairment of long-lived assets 0.1 3.5 Operating leases (1.6 ) (2.7 ) Other (0.7 ) (2.9 ) Net changes in working capital items Accounts receivable, net of allowance 43.8 51.0 Other receivables (3.3 ) 0.7 Income taxes receivable (0.1 ) 0.9 Other assets 17.0 (11.6 ) Accounts payable (25.9 ) (11.1 ) Accrued liabilities (41.7 ) (6.5 ) Income taxes payable 3.1 0.5 Deferred revenue (22.0 ) (16.4 ) Net cash used in operating activities (18.0 ) (15.1 ) Cash flows from investing activities Proceeds on sale, maturity or distribution from long-term investments 0.1 - Acquisition of property, plant and equipment (0.9 ) (1.4 ) Proceeds on sale of property, plant and equipment - 0.1 Acquisition of intangible assets (1.2 ) (1.5 ) Acquisition of short-term investments (21.7 ) (48.9 ) Proceeds on sale or maturity of short-term investments 62.2 24.5 Net cash provided by (used in) investing activities 38.5 (27.2 ) Cash flows from financing activities Issuance of common shares 1.2 1.5 Common shares repurchased (10.0 ) - Net cash provided by (used in) financing activities (8.8 ) 1.5 Effect of foreign exchange gain on cash, cash equivalents, restricted cash, and restricted cash equivalents 0.5 - Net increase (decrease) in cash, cash equivalents, restricted cash, and restricted cash equivalents during the period 12.2 (40.8 ) Cash, cash equivalents, restricted cash, and restricted cash equivalents, beginning of period 280.3 200.5 Cash, cash equivalents, restricted cash, and restricted cash equivalents, end of period $ 292.5 $ 159.7 As at May 31, 2025 February 28, 2025 Cash and cash equivalents $ 276.0 $ 266.7 Restricted cash and cash equivalents 16.5 13.6 Short-term investments 30.6 71.1 Long-term investments 58.8 58.9 $ 381.9 $ 410.3 Reconciliations of the Company's Segment Results and Segment Adjusted EBITDA to the Consolidated Results The following tables show information by operating segment for the three months ended May 31, 2025 and May 31, 2024. The Company reports segment information in accordance with U.S. GAAP, pursuant to the Financial Standards Accounting Board's Accounting Standard Codification Topic 280, Segment Reporting, based on the "management" approach. The management approach designates the internal reporting used by the Chief Operating Decision Maker ("CODM") for making decisions and assessing performance of the Company's reportable operating segments. The measure of segment profit or loss disclosed by the Company in the Consolidated Financial Statements under the "management" approach in reviewing the results of the Company's operating segments is segment adjusted gross margin. Additionally, the following tables include the additional measures of segment profit or loss used by the CODM which is segment adjusted EBITDA, a non-GAAP financial measure. See Note 11 to the Consolidated Financial Statements for a description of the Company's operating segments. For the Three Months Ended (in millions) QNX Secure Communications Licensing Segment Totals May 31, May 31, May 31, May 31, Change Change Change Change 2025 2024 2025 2024 2025 2024 2025 2024 Segment revenue $ 57.5 $ 53.2 $ 4.3 $ 59.5 $ 64.2 $ (4.7 ) $ 4.7 $ 6.0 $ (1.3 ) $ 121.7 $ 123.4 $ (1.7 ) Segment cost of sales 11.2 9.5 1.7 18.1 21.8 (3.7 ) 1.6 1.4 0.2 30.9 32.7 (1.8 ) Segment adjusted gross margin $ 46.3 $ 43.7 $ 2.6 $ 41.4 $ 42.4 $ (1.0 ) $ 3.1 $ 4.6 $ (1.5 ) $ 90.8 $ 90.7 $ 0.1 Segment research and development 12.4 16.4 (4.0 ) 11.3 12.3 (1.0 ) - - - 23.7 28.7 (5.0 ) Segment sales and marketing 13.3 10.7 2.6 13.6 12.2 1.4 - - - 26.9 22.9 4.0 Segment general and administrative 8.6 8.2 0.4 7.5 9.6 (2.1 ) 1.6 2.1 (0.5 ) 17.7 19.9 (2.2 ) Less amortization included in the above 0.7 0.5 0.2 0.6 1.0 (0.4 ) 2.3 2.2 0.1 3.6 3.7 (0.1 ) Segment adjusted EBITDA $ 12.7 $ 8.9 $ 3.8 $ 9.6 $ 9.3 $ 0.3 $ 3.8 $ 4.7 $ (0.9 ) $ 26.1 $ 22.9 $ 3.2 The following tables reconcile the Company's segment adjusted gross margin results for the three months ended May 31, 2025 to consolidated U.S. GAAP results: For the Three Months Ended May 31, 2025(in millions)QNX Secure Communications Licensing Segment Totals Reconciling Items Consolidated U.S. GAAP Revenue $ 57.5 $ 59.5 $ 4.7 $ 121.7 $ - $ 121.7 Cost of sales 11.2 18.1 1.6 30.9 0.5 31.4 Gross margin (1) $ 46.3 $ 41.4 $ 3.1 $ 90.8 $ (0.5 ) $ 90.3 Operating expenses 88.3 88.3 Investment income, net 2.9 2.9 Income before income taxes $ 4.9 For the Three Months Ended May 31, 2024 (in millions) (unaudited) QNX Secure Communications Licensing Segment Totals Reconciling Items Consolidated U.S. GAAP Revenue $ 53.2 $ 64.2 $ 6.0 $ 123.4 $ - $ 123.4 Cost of sales 9.5 21.8 1.4 32.7 0.7 33.4 Gross margin (1) $ 43.7 $ 42.4 $ 4.6 $ 90.7 $ (0.7 ) $ 90.0 Operating expenses 102.9 102.9 Investment income, net 4.0 4.0 Loss before income taxes $ (8.9 ) (1) See "Reconciliation of Non-GAAP Measures with the Nearest Comparable U.S. GAAP Measures" for a reconciliation of selected U.S. GAAP-based measures to adjusted measures for the three months ended May 31, 2025 and May 31, 2024. The following table reconciles total segment adjusted EBITDA for the three months ended May 31, 2025 and May 31, 2024 to the Company's consolidated totals: Three Months Ended May 31, 2025 May 31, 2024 Total Segment Adjusted EBITDA $ 26.1 $ 22.9 Adjustments (1): Stock compensation expense 5.7 6.2 Restructuring charges 2.9 7.3 Less: Corporate general and administrative expense 9.7 12.4 Amortization 5.7 6.4 Impairment of long-lived assets 0.1 3.5 Investment income (2.9 ) (4.0 ) Consolidated income (loss) from continuing operations before income taxes $ 4.9 $ (8.9 ) (1) The CODM reviews segment information on an adjusted EBITDA basis, which excludes certain amounts as described below: Stock compensation expenses - Equity compensation is a non-cash expense and does not impact the ongoing operating decisions taken by the Company's management. Restructuring charges - Restructuring charges relate to employee termination benefits, facilities, streamlining many of the Company's centralized corporate functions into Secure Communications and QNX specific teams, and other costs pursuant to programs to reduce the Company's annual expenses amongst R&D, infrastructure and other functions and do not reflect expected future operating expenses, are not indicative of the Company's core operating performance, and may not be meaningful when comparing the Company's operating performance against that of prior periods. Reconciliation of Non-GAAP Measures with the Nearest Comparable U.S. GAAP Measures In the Company's internal reports, management evaluates the performance of the Company's business on a non-GAAP basis by excluding the impact of certain items from the Company's U.S. GAAP financial results. The Company believes that these non-GAAP financial measures and non-GAAP ratios provide management, as well as readers of the Company's financial statements, with a consistent basis for comparison across accounting periods and are useful in helping management and readers understand the Company's operating results and underlying operational trends. Readers are cautioned that adjusted gross margin, adjusted gross margin percentage, adjusted operating expense, adjusted corporate operating costs, adjusted corporate operating costs excluding amortization, adjusted net income (loss), adjusted earnings (loss) per share, adjusted research and development expense, adjusted sales and marketing expense, adjusted general and administrative expense, adjusted amortization expense, adjusted operating income (loss), adjusted EBITDA, adjusted segment EBITDA, adjusted operating income (loss) margin percentage, adjusted EBITDA margin percentage and free cash flow (usage) and similar measures do not have any standardized meaning prescribed by U.S. GAAP and are therefore unlikely to be comparable to similarly titled measures reported by other companies. Reconciliation of non-GAAP based measures with most directly comparable U.S. GAAP based measures for the three months ended May 31, 2025 and May 31, 2024 A reconciliation of the most directly comparable U.S. GAAP financial measures for the three months ended May 31, 2025 and May 31, 2024 to adjusted financial measures is reflected in the table below: For the Three Months Ended (in millions) May 31, 2025 May 31, 2024 Gross margin $ 90.3 $ 90.0 Stock compensation expense 0.5 0.7 Adjusted gross margin $ 90.8 $ 90.7 Gross margin % 74.2 % 72.9 % Stock compensation expense 0.4 % 0.6 % Adjusted gross margin % 74.6 % 73.5 % Reconciliation of U.S. GAAP operating expense for the three months ended May 31, 2025, and May 31, 2024 to adjusted operating expense is reflected in the table below: For the Three Months Ended (in millions) May 31, 2025 May 31, 2024 Operating expense $ 88.3 $ 102.9 Restructuring charges 2.9 7.3 Stock compensation expense 5.2 5.5 Acquired intangibles amortization 1.7 1.8 LLA impairment charge 0.1 3.5 Adjusted operating expense $ 78.4 $ 84.8 Reconciliation of U.S. GAAP corporate operating costs for the three months ended May 31, 2025 and May 31, 2024 to adjusted corporate operating costs excluding amortization is reflected in the table below: For the Three Months Ended (in millions) May 31, 2025 May 31, 2024 Corporate operating costs $ 14.9 $ 25.4 Restructuring charges 2.9 7.3 Stock compensation expense 1.9 1.3 LLA impairment charge - 3.5 Adjusted corporate operating costs 10.1 13.3 Amortization 0.4 0.9 Adjusted corporate operating costs excluding amortization $ 9.7 $ 12.4 Reconciliation of U.S. GAAP net income (loss) and U.S. GAAP basic earnings (loss) per share for the three months ended May 31, 2025 and May 31, 2024 to adjusted net income (loss) and adjusted basic earnings (loss) per share is reflected in the table below: For the Three Months Ended (in millions, except per share amounts) May 31, 2025 May 31, 2024Basic earnings per shareBasic loss per share Net income (loss) $ 1.9 $ 0.00 $ (41.4 ) $ (0.07 ) Restructuring charges 2.9 7.3 Stock compensation expense 5.7 7.7 Acquired intangibles amortization 1.7 8.6 LLA impairment charge 0.1 3.5 Adjusted net income (loss) $ 12.3 $ 0.02 $ (14.3 ) $ (0.02 ) Reconciliation of U.S. GAAP research and development, sales and marketing, general and administrative, and amortization expense for the three months ended May 31, 2025 and May 31, 2024 to adjusted research and development, sales and marketing, general and administrative, and amortization expense is reflected in the table below: For the Three Months Ended (in millions) May 31, 2025 May 31, 2024 Research and development $ 25.0 $ 30.6 Stock compensation expense 1.3 1.8 Adjusted research and development expense $ 23.7 $ 28.8 Sales and marketing $ 28.7 $ 23.8 Stock compensation expense 1.4 0.8 Adjusted sales and marketing expense $ 27.3 $ 23.0 General and administrative $ 30.5 $ 40.3 Restructuring charges 2.9 7.3 Stock compensation expense 2.5 2.9 Adjusted general and administrative expense $ 25.1 $ 30.1 Amortization $ 4.0 $ 4.7 Acquired intangibles amortization 1.7 1.8 Adjusted amortization expense $ 2.3 $ 2.9 Adjusted operating income, adjusted EBITDA, adjusted operating income margin percentage and adjusted EBITDA margin percentage for the three months ended May 31, 2025 and May 31, 2024 are reflected in the table below. For the Three Months Ended (in millions) May 31, 2025 May 31, 2024 Operating income (loss) $ 2.0 $ (12.9 ) Non-GAAP adjustments to operating income (loss) Restructuring charges 2.9 7.3 Stock compensation expense 5.7 6.2 Acquired intangibles amortization 1.7 1.8 LLA impairment charge 0.1 3.5 Total non-GAAP adjustments to operating income (loss) 10.4 18.8 Adjusted operating income 12.4 5.9 Amortization 5.7 6.4 Acquired intangibles amortization (1.7 ) (1.8 ) Adjusted EBITDA $ 16.4 $ 10.5 Revenue $ 121.7 $ 123.4 Adjusted operating income margin % (1) 10.2 % 4.8 % Adjusted EBITDA margin % (2) 13.5 % 8.5 % (1) Adjusted operating income margin % is calculated by dividing adjusted operating income by revenue.(2) Adjusted EBITDA margin % is calculated by dividing adjusted EBITDA by revenue. The Company uses free cash flow (usage) when assessing its sources of liquidity, capital resources, and quality of earnings. The Company believes that free cash flow (usage) is helpful in understanding the Company's capital requirements and provides an additional means to reflect the cash flow trends in the Company's business. Reconciliation of U.S. GAAP net cash used in operating activities for the three months ended May 31, 2025 and May 31, 2024 to free cash flow (usage) is reflected in the table below: For the Three Months Ended (in millions) May 31, 2025 May 31, 2024 Net cash used in operating activities $ (18.0 ) $ (15.1 ) Acquisition of property, plant and equipment (0.9 ) (1.4 ) Free cash usage $ (18.9 ) $ (16.5 ) Key Metrics The Company regularly monitors a number of financial and operating metrics, including the following key metrics, in order to measure the Company's current performance and estimated future performance. Readers are cautioned that Secure Communications annual recurring revenue ("ARR") and Secure Communications dollar-based net retention rate ("DBNRR") do not have any standardized meaning and are unlikely to be comparable to similarly titled measures reported by other companies. For the Three Months Ended (in millions) May 31, 2025 Secure Communications Annual Recurring Revenue $ 209 Secure Communications Dollar-Based Net Retention Rate 92 % SOURCE: BlackBerry View the original press release on ACCESS Newswire
Yahoo
16-06-2025
- Business
- Yahoo
BB's Secure Comms Gains Traction: Will This Fuel a Turnaround?
BlackBerry Limited BB continues to shift its focus toward enterprise software and cybersecurity. Its Secure Communications revenues of $67.3 million contributed nearly 50% of total revenues in the last reported quarter, outpacing management's expectations ($62-$66 million).BlackBerry's Secure Communications division encompasses encrypted voice, messaging and critical event management solutions. These products are trusted by governments, defense departments and enterprises worldwide that require military-grade protection. Key offerings include Secusuite, AtHoc and UEM. Secusuite has a strong foundation with the German government and is expanding its focus to a new mobile app suite and growth beyond Germany. Its key competitive advantages are NSA-certified end-to-end encryption, cryptographic proof of identity, full data sovereignty and a wide range of industry certifications, making it a trusted choice for secure is expanding its presence in the U.S. government sector, focusing on police, fire and ambulance services. Known for its scalability, reliability and extensive alerting integrations, it is supported by essential U.S. and global certifications to meet vital public safety requirements. UEM drives robust cybersecurity revenues with an emphasis on retention, efficiency and profitability. Its strengths include data sovereignty, on-premise multi-tenant support, strong app and data security and important regulatory the past fiscal year, Secure Comms underwent major changes, including the sale of Cylance and cost-cutting. Amid this, BB reported strong results with stable revenues, improved profitability and solid underlying metrics. The focus is on delivering solid margins and strong cash flow, which are key goals for this part of the business. It is showing positive momentum, with ARR trends moving in a healthier and more stable direction, reflecting improving fundamentals and long-term growth potential. It is also a strong contributor to BB's EBITDA and cash flow. BlackBerry Limited price-consensus-chart | BlackBerry Limited Quote Several macro and geopolitical factors are fueling growth in BlackBerry's secure communication offerings. Increased defense budgets in the United States, Europe and Asia are driving demand for secure, sovereign communication systems. With hybrid work continuing, companies, especially in finance, healthcare and legal, are investing in secure communication tools to prevent data breaches, cyber-attacks and compliance BB is taking a cautious stance on the Secure Communications unit due to ongoing turmoil in its core government markets. The potential impact of DOGE and other shifts within the U.S. administration, as well as political changes in Canada, Germany and other regions, are likely to create a challenging and unstable environment. While significant effects are yet to be seen, the situation remains unpredictable. These developments could lead to short-term disruptions for the business. Although there may be long-term opportunities through consolidation, the current outlook is uncertain and carries risks. Fortinet FTNT has been making steady progress in AI-driven cybersecurity, with strong customer adoption across security operations. In the first quarter of 2025, its AI-powered SecOps business grew 29% year over year and now contributes 10% of its business. The company has been expanding its FortiAI product line, including FortiAI Assist for automation, FortiAI Protect for threat detection and FortiAI Secure AI for safeguarding AI Fortinet's SecOps growth faces pressure from economic uncertainty. Deal sizes and timelines may be adversely impacted, and sales teams are cautious about short-term growth. While AI-driven security offers promise, balancing innovation with cautious enterprise spending could be challenging in the second half of the CRWD is doubling down on the next generation of Security Information and Event Management (SIEM) as part of its mission to protect enterprises against evolving cyber threats. The company's Falcon Next-Gen SIEM is modernizing the way businesses detect, investigate and respond to security incidents. Enterprises can now use its Falcon agent to automate data collection for endpoints and cloud workloads. CRWD has unified threat detection, added AI-based investigations and streamlined response with Falcon Fusion SOAR. Its Next-Gen SIEM also offers 24/7 managed detection and response services. Shares of BB have gained 77.4% in the past year compared with the Zacks Internet – Software industry's growth of 33.2%. Image Source: Zacks Investment Research From a valuation standpoint, BB trades at a forward price-to-sales of 4.53X, lower than the industry's average of 5.6X. Image Source: Zacks Investment Research BB currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Fortinet, Inc. (FTNT) : Free Stock Analysis Report BlackBerry Limited (BB) : Free Stock Analysis Report CrowdStrike (CRWD) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research
Yahoo
27-05-2025
- Business
- Yahoo
BB vs. CRWD: Which Cybersecurity Stock Is the Smarter Buy Now?
BlackBerry Limited BB and CrowdStrike Holdings, Inc. CRWD offer cybersecurity solutions, including endpoint protection and enterprise security solutions, making them contenders in a high-growth industry driven by increasing digital threats. Amid rapid cloud deployment and digital transformation, as well as the proliferation of smart and IoT devices, cyberattacks have become highly sophisticated. This creates a more complex attack surface, necessitating advanced cybersecurity solutions for endpoints, networks and cloud environments. High-profile data breaches have heightened awareness and urgency across industries, leading to heavy investment in cyber defense. Per a Grand View Research report, the cybersecurity market is projected to witness a CAGR of 12.9% from 2025 to 2030. This creates strong tailwinds for companies like CrowdStrike, BlackBerry and others operating in this fast-evolving industry. So, now the question arises: Which stock makes for a better investment pick at present? Let's dive into the pros and cons of each company. Once a smartphone giant, BlackBerry has now pivoted its focus on cybersecurity and Internet of Things (IoT) solutions. BlackBerry's Secure Communications division now consists of BlackBerry Unified endpoint management ('UEM'), BlackBerry SecuSUITE and BlackBerry AtHoc solutions. BB recently offloaded its underperforming Cylance business to Arctic Wolf and reviewed the cost structure of the Secure Communications division to better focus on a more targeted customer base and improve overall cost efficiency. Secure Communications' fiscal fourth-quarter revenues of $67.3 million beat the high limit of the company's forecast ($62-$66 million), driven by strong AtHoc revenues and renewals in the core German market. Healthy momentum in UEM stemmed from rising deal wins from government agencies, top banks and law firms. The rising demand for UEM solutions is being driven by the snowballing complexity of managing a growing number of endpoints while maintaining data security and regulatory compliance. BlackBerry highlights that the major trends fueling this growth include the integration of AI and machine learning to improve device management and the transition to cloud-based UEM platforms for enhanced scalability and flexibility. BlackBerry has developed strong ties with U.S. and international government agencies. The company's solutions power more than 255 million vehicles and secure 17 of the G20 governments. This provides a relatively stable revenue stream and brand credibility in high-trust environments, such as defense, critical infrastructure and public safety. Expansion of the deal with the Malaysian government bolsters both the contract length and the number of licenses. The Malaysian government has successfully used its full Secure Communications portfolio and is working to replicate this model in other regions. Management highlighted that this division is a key contributor to BlackBerry's overall EBITDA and cash flow. It has successfully achieved its initial target of cutting back roughly $150 million from its run rate. BlackBerry's total adjusted EBITDA for fiscal 2025 was $39.3 million, including Cylance. This marks a $54 million improvement from last year after adjusting for the patent sale in early fiscal 2024. Cash and investments grew $144 million, mainly due to a strong boost in operating cash flow, which reached $42 million, along with the receipt of the first $80 million payment from the Cylance deal. Management expects an additional $75 million of cash to be added in fiscal 2026, including the second Cylance payment of $40 million, positioning the company to reinvest or return capital opportunistically. Sunnyvale, CA-based CrowdStrike is a leader in next-generation endpoint protection, threat intelligence and cyberattack response services. CrowdStrike's strong product innovation pipeline continues to enhance its market position. In the fourth quarter of fiscal 2025, the company introduced Falcon Data Protection, a new solution aimed at preventing data loss and ensuring compliance, which addresses rising concerns around data security. This product expansion strengthens the platform's value proposition and opens new revenue streams. CrowdStrike's Falcon platform is gaining popularity as an 'AI-native SOC,' with strong adoption in Charlotte AI Agentic Detection Triage, Workflows and Response. CrowdStrike is partnering with other AI companies to expand its capabilities. In the last reported quarter, Subscription revenues of $1.01 billion rose 27% from the year-ago quarter's level. This was partly due to the Falcon Flex Subscription Model, which allows customers to commit upfront and later choose modules, eliminating procurement friction. However, CrowdStrike is facing several challenges related to customers' negative sentiments since the global IT outage incident on July 19, 2024. The company has been implementing the Customer Commitment Package (to retain its customers), which includes product additions and discounts, hence compressing its revenue recognition and profitability. The cybersecurity landscape is intensely competitive, with major players like Palo Alto Networks, SentinelOne and Cisco expanding aggressively. Over the past few years, CrowdStrike has invested heavily to enhance its sales and marketing capabilities, particularly by increasing the sales force. As a result, its sales and marketing expenses flared up nearly ninefold to $1.52 billion in fiscal 2025 from $173 million in fiscal 2019. Additionally, investment in R&D is a top priority for CrowdStrike. The company has increased its R&D expenses to improve the design, architecture, operation and quality of its cloud platform. Higher sales and marketing, and R&D expenses might weigh on the company's bottom-line results. In the last reported quarter, CrowdStrike's non-GAAP R&D expenses climbed 31.6% year over year to $199.7 million. Over the past month, BB and CRWD have registered gains of 10.5% and 7.6%, respectively. Image Source: Zacks Investment Research In terms of the forward 12-month Price/sales ratio, BB is trading at 4.21X, lower than CRWD's 22.17X. Image Source: Zacks Investment Research Analysts have significantly raised BB's earnings estimates for the current fiscal year in the past 60 days. Image Source: Zacks Investment Research Meanwhile, for CRWD, there is a marginal upward estimate revision. Image Source: Zacks Investment Research Both BB and CRWD are well-positioned to gain from the rapidly growing cybersecurity market. BB, at present, flaunts a Zacks Rank #1 (Strong Buy) while CrowdStrike carries a Zacks Rank #4 (Sell). Hence, in terms of Zacks Rank, BB seems to be a better pick at the moment. You can see the complete list of today's Zacks #1 Rank stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report BlackBerry Limited (BB) : Free Stock Analysis Report CrowdStrike (CRWD) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research
Yahoo
03-04-2025
- Business
- Yahoo
BlackBerry Ltd (BB) Q4 2025 Earnings Call Highlights: Surpassing Expectations Across All Divisions
Total Revenue: $141.7 million, beating the top end of guidance. QNX Revenue: $65.8 million, exceeding guidance. Secure Communications Revenue: $67.3 million, surpassing guidance. Licensing Revenue: $8.6 million, above expectations. Adjusted EBITDA: $21.1 million for Q4; $39.3 million for the full fiscal year. EPS: Positive $0.03 for Q4; Positive $0.02 for the full fiscal year. Operating Cash Flow: $42 million, significantly exceeding expectations. Total Cash and Investments: Increased by $144 million to $410 million. QNX Gross Margin: 83% for Q4; 84% for the full fiscal year. Secure Communications Gross Margin: 64% for Q4; 66% for the full fiscal year. QNX Royalty Backlog: Approximately $865 million, indicating future revenue growth. Secure Communications ARR: $208 million, up $6 million year over year. Net Cash Position: In excess of $200 million. Warning! GuruFocus has detected 5 Warning Signs with BB. Release Date: April 02, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. BlackBerry Ltd (NYSE:BB) exceeded revenue expectations across all divisions, with total company revenues reaching $141.7 million. The QNX division achieved a strong performance, with revenue beating guidance at $65.8 million and a growing royalty backlog of approximately $865 million. The Secure Communications division also surpassed expectations, with Q4 revenue at $67.3 million and new business secured with government agencies and leading banks. BlackBerry Ltd (NYSE:BB) successfully closed the Cylance transaction with Arctic Wolf, receiving $80 million in cash and 5.5 million common shares, which strengthened its balance sheet. The company achieved a significant cost reduction, exceeding its target by removing over $150 million from its run rate, leading to improved profitability with adjusted EBITDA of $39.3 million for the year. Despite strong performance, the Secure Communications division experienced a year-over-year revenue decline in Q4 due to a tough comparison with the previous year's large deal with the Malaysian government. The QNX division faces uncertainty in the automotive sector due to recent tariff changes, which could indirectly impact BlackBerry Ltd (NYSE:BB) through supply chain and macroeconomic demand challenges. The Secure Communications division's annual recurring revenue decreased by $7 million sequentially, and the dollar-based net retention rate decreased marginally. Licensing revenue, while above guidance, was affected by a one-time bad debt expense due to a legacy contract dispute, impacting adjusted EBITDA. The company anticipates a seasonal low for cash flow in Q1, with expected operating cash usage between $20 million to $30 million, influenced by various one-time factors. Q: Can you elaborate on the impact of tariffs on auto OEMs and any changes in production or vehicle introductions due to this uncertainty? A: John Giamatteo, President - Cyber Security: We haven't seen any significant supply chain issues reported by our large customers. Over 50% of our revenue comes from outside the US, providing some insulation from US-specific impacts. However, the situation is fluid, and we remain vigilant. Q: How significant is the US federal market for your secure communications division, and have you seen any impact from agencies cutting seats? A: John Giamatteo, President - Cyber Security: The US federal market constitutes about 20-25% of our secure communications business. We haven't seen any material impact, as our products are mission-critical, and agencies are cautious about cutting such essential services. Q: What are OEMs saying about adjusting to the tariff impact, and how does this affect your guidance? A: John Giamatteo, President - Cyber Security: OEMs are still navigating the situation, and while there's uncertainty, no one has flagged a material downturn. Tim Foote, CFO, added that modeling the impact is difficult, so they've broadened the guidance range to reflect this uncertainty. Q: Can you discuss the potential of expanding QNX into adjacent markets and the opportunities there? A: John Giamatteo, President - Cyber Security: We're investing in the general embedded market (GEM), targeting verticals like medical and industrial. This expansion leverages our existing technology with minimal modification, presenting significant opportunities. Q: Could you provide more details on the vehicle OS initiative and its potential impact on your business? A: John Giamatteo, President - Cyber Security: OEMs are increasingly looking to us for software solutions, and expanding our content per vehicle is a trend that benefits us. Tim Foote, CFO, noted that this initiative could significantly increase content per vehicle, though it's still early days. Q: How do you view the risk of contract cancellations with government agencies amid political changes? A: John Giamatteo, President - Cyber Security: Our contracts are long-term and deeply integrated into mission-critical operations, making sudden cancellations unlikely. We see potential opportunities to consolidate and expand our role with these agencies. Q: What are the key drivers for your business outside the US, and how do you plan to capitalize on them? A: John Giamatteo, President - Cyber Security: We're optimistic about growth outside the US, particularly in Europe, where OEMs are seeking more from us. We're also expanding into adjacent markets like medical and industrial, which present massive opportunities. Q: How do you plan to address the challenges and opportunities in the current fiscal year? A: John Giamatteo, President - Cyber Security: We're focusing on expanding QNX into adjacent markets, deepening relationships with OEMs, and leveraging our strong position in mission-critical communications to drive growth and profitability. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Sign in to access your portfolio
