BlackBerry Q1 Earnings Call Highlights QNX Growth & Higher Outlook

BlackBerry Limited BB used its first-quarter fiscal 2027 earnings call to press a forward-looking message rather than dwell on the headline beat. Management framed the quarter as evidence that its turnaround has moved from cost repair to profitable growth.That mattered because the results came with stronger cash generation, higher QNX and licensing expectations, and fresh emphasis on longer-cycle opportunities in software-defined vehicles, embedded systems and government secure communications.BB Starts FY27 With LeverageChief executive officer John Giamatteo said that both QNX and Secure Communications delivered Rule of 40 performance in the quarter, reinforcing management’s argument that the portfolio is now producing healthier growth with stronger profitability.Revenues rose 26% year over year to $152.9 million, whereas adjusted EBITDA climbed to $36.3 million from $14.9 million. Adjusted EPS was $0.04, beating the Zacks Consensus Estimate of $0.03 by 33.3%, and revenues surpassed the Zacks Consensus Estimate of $136.10 million by 12.3%.Chief financial officer Tim Foote also pointed to a positive operating cash flow of $4.6 million, which management described as BlackBerry’s first cash-positive fiscal first quarter in nine years, excluding the fiscal 2024 patent sale.BlackBerry Limited Price, Consensus and EPS Surprise BlackBerry Limited price-consensus-eps-surprise-chart | BlackBerry Limited QuoteBlackBerry Pushes QNX Beyond AutoGiamatteo spent much of the call on QNX, which generated $72.3 million in revenues, up 26% from a year earlier, with adjusted EBITDA of $19.3 million. He said that development license revenues reached the highest level in eight quarters, which management views as an early signal of royalty growth.The company highlighted wins spanning automotive and general embedded markets, including ADAS, driver monitoring, commercial vehicles, semiconductor equipment and medical diagnostics. Giamatteo tied that pipeline to growing demand for safety-certified, deterministic software in robotics, industrial automation and what he repeatedly called Physical AI.Management also gave Alloy Kore unusual prominence. Giamatteo said that the platform could move BlackBerry from operating system supplier to deeper platform provider, lifting software content per vehicle by multiples, and he maintained confidence that a first design win can be secured this fiscal year.BB Finds Stability in Secure CommunicationsSecure Communications delivered $73.6 million in revenues, up 24% year over year, with adjusted EBITDA of $20.2 million. ARR was stable sequentially at $220 million, whereas dollar-based net retention held at 92%.Giamatteo said that the quarter showed what the segment can do when a steadier recurring base is paired with a large government award. The biggest contributor was the previously disclosed Shared Services Canada expansion, which drove strong in-quarter revenue recognition tied to sovereign architecture deployment.He also stressed that these large contracts do not arrive every quarter. Even so, management said that demand trends remain favorable as governments prioritize digital sovereignty, cybersecurity modernization and secure communications infrastructure.BlackBerry Lifts QNX & EBITDA ViewFoote raised the company’s full-year QNX revenue guidance to $295-$312 million and the QNX adjusted EBITDA guidance to $74-$86 million. Licensing guidance also moved higher, with revenues expected at $29 million and adjusted EBITDA at $25 million.At the total-company level, BlackBerry sees fiscal 2027 revenues of $594-$621 million and adjusted EBITDA of $119-$139 million. Fiscal second-quarter revenues are projected at $137-$148 million, with an adjusted EPS of $0.03-$0.04 and the operating cash flow between breakeven and $10 million.Secure Communications’ guidance was not lifted in the same way, which fits management’s message that the business is improving but still subject to quarter-to-quarter variability, depending on deal timing and mix.BB Q&A Centers on Alloy KoreAnalysts pressed hardest on Secure Communications’ durability and the scale of Alloy Kore. In response to Canaccord Genuity, Giamatteo said that ARR remains the best measure of the segment’s baseline stability, while upside comes from large, lumpy government contracts with long sales cycles.On Alloy Kore, management sounded more explicit than in prepared remarks. Giamatteo told Canaccord that the platform could increase addressable revenues per vehicle by “hundreds of percents,” while Foote later told Stifel that some existing programs could migrate faster and create backlog uplift.Questions from Stifel, Raymond James and RBC also drew a consistent message on GEM: it is growing materially faster than automotive from a smaller base, and management expects meaningful wins there this year, even if automotive remains the larger long-term dollar opportunity.BlackBerry Sticks With Disciplined GrowthThe closing tone was measured rather than celebratory. Giamatteo said that growth will not be linear, but he argued that the company’s long-term value drivers are now better established across QNX, Secure Communications and licensing.Foote reinforced that posture by linking stronger profitability to operating leverage and by highlighting the company’s $422.9-million cash and investments balance, alongside continued buybacks. That combination left management focused on disciplined execution, capital allocation and backlog expansion rather than near-term quarter management.Zacks Signals Remain CautiousBB currently carries a Zacks Rank #3 (Hold), with a Value Score of F, a Growth Score of C, a Momentum Score of C and a VGM Score of F. Under the Zacks framework, a Rank #3 can be held, but it does not carry the stronger near-term return profile associated with a Zacks Rank #1 (Strong Buy) or a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.Style Scores also remain mixed. Zacks says that higher grades are better, while weak scores can limit the upside potential over the next 30 days, especially when they are not paired with a top rank. That makes BB’s current setup more balanced than aggressive, and the rank can still change as earnings estimate revisions adjust after the quarter.Research Chief Names "Single Best Pick to Double"From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.Free: See Our Top Stock And 4 Runners UpThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks