BlackBerry (NYSE:BB) executives highlighted what they described as a completed turnaround and a shift to a “growth story” during the company’s fourth quarter and full fiscal year 2026 earnings call, pointing to double-digit quarterly revenue growth, improving profitability, and a stronger cash position.
Chief Executive Officer John Giamatteo said the company ended the year with “another strong quarter,” including “the eighth consecutive quarter of improving GAAP profitability.” He added that management delivered on its turnaround promise, stating, “The turnaround is complete, and the BlackBerry story is now a growth story.”
QNX posts record quarter, backlog grows to about $950 million
He also said QNX royalty backlog increased to approximately $950 million, adding that the company “added significantly more into the backlog than we recognized in the P&L this year.” Giamatteo described the backlog as providing “line of sight to ongoing multi-year durable revenue growth,” and argued the business “is not…slowing down, but rather one that is compounding.”
Management cautioned against reading QNX performance on a quarter-to-quarter basis due to the timing of design wins and development tool purchases, as well as production ramps that can take “two to three years.” Giamatteo said Q1 tends to be “seasonally softer,” while Q4 is “typically much stronger,” and he expects “a similar cadence” in fiscal 2027. Even with that seasonality, he said the company expects QNX to “remain a Rule of 40 business for fiscal year 2027.”
Giamatteo outlined automotive design wins across several domains, including:
- A “largest win of the quarter” with a Tier 1 supplier for China, deploying QNX on Asera SoCs for smart sensors used by multiple OEMs.
- A digital cockpit win with a top-five North American automaker, where BlackBerry “upsell[ed]…to a broader range” of its portfolio for a platform expected to enter production this year.
- An ADAS safety system design win in Europe with another top-five OEM deploying a Qualcomm Snapdragon chipset.
He also pointed to two “key growth accelerators”: expanding up the automotive software stack into middleware with the Alloy Core platform (built with partner Vector) and growing in general embedded markets. On Alloy Core, Giamatteo said the company remains on track for general release this calendar year. While BlackBerry has not yet secured design wins for Alloy Core, he said discussions with OEMs including Mercedes-Benz are “progressing well,” and described the platform as an opportunity for “significant ASP expansion” versus the core operating system.
In general embedded markets, Giamatteo said about 20% of QNX revenue comes from non-automotive verticals. He highlighted a win for the General Embedded Development Platform in industrial automation controls for a major North American OEM and noted wins in medical instrumentation, including with Johnson & Johnson, where QNX OS for Safety will power “a new AI-driven heart pump.” He also described robotics and “physical AI” as long-term opportunities, citing partnerships with silicon providers including Arm, NVIDIA, and Qualcomm.
Secure Communications returns to growth amid “digital sovereignty” tailwinds
Giamatteo said Secure Communications, which he noted was “barely discussed” just over a year ago, has improved materially. In Q4, the segment delivered $72.5 million of revenue, which he said exceeded the top end of guidance by 12% and grew 8% year-over-year. He attributed demand strength to digital sovereignty becoming “a budget line item for governments worldwide,” alongside rising defense budgets.
He said Secusmart posted meaningful year-over-year revenue growth, driven primarily by sales to the German government and supported by the platform’s ability to support iOS devices as well as Android. Giamatteo also highlighted a “multi-year extension and expansion” with Shared Services Canada, including a significant increase in Secusmart licenses, with “meaningful revenue” expected in fiscal 2027. Additional wins in the quarter included NATO and the Malaysian Anti-Corruption Commission, he said.
Giamatteo said UEM “continues to stabilize,” noting that while full-year revenue declined year-over-year, renewal rates improved and the value of multi-year deals increased by 47% year-over-year. He cited Q4 new-logo wins including the IRS, Deutsche Bundesbank, the Council of the European Union, the Netherlands’ Rijkswaterstaat, and Switzerland’s Bank Julius Bär.
AtHoc delivered “double-digit year-over-year revenue growth for Q4” and “high single-digit growth” for the full year, according to Giamatteo. He said the company secured expansions and renewals with the U.S. Air Force, the U.S. Coast Guard, and the U.S. Department of the Treasury, along with a new-logo win with Australia’s Department of Foreign Affairs and Trade.
Key metrics also improved, management said. Secure communications ARR increased $2 million sequentially to $218 million, up $10 million year-over-year. Dollar-based net retention improved to 94%, up two points sequentially and one point versus the prior year’s Q4.
Financial results show margin expansion and improved cash generation
Chief Financial Officer Tim Foote said both QNX and Secure Communications delivered stronger-than-expected revenue in the quarter, driving operating leverage. He reported QNX gross margin expanded by 1 point to 84% and QNX adjusted EBITDA rose 11% year-over-year to $21.4 million, representing 27% of QNX revenue in Q4. For the full year, Foote said QNX adjusted EBITDA was $71 million, or 26% of revenue, and with 14% revenue growth, QNX met the Rule of 40 standard for both the quarter and full fiscal year.
For Secure Communications, Foote said Q4 gross margins expanded by 8 percentage points year-over-year, helped by stronger Secusmart software license revenue. He reported adjusted EBITDA of $19.5 million in Q4 and $56.1 million for the full year, with a 27% adjusted EBITDA margin in the quarter.
Foote said licensing contributed $6.3 million of adjusted EBITDA in Q4 and $21 million for the full year, calling it “a solid source of both profitability and cash flow.” Giamatteo separately noted Q4 licensing revenue of $4.8 million, “slightly below guidance” due to quarterly variability in preexisting arrangements.
At the total company level, Foote said revenue grew 10% year-over-year in Q4 and 3% year-over-year for fiscal 2026. Q4 gross margin expanded about five points to 78.2%, while adjusted EBITDA margin increased eight points to 23%. BlackBerry generated $36.1 million of adjusted EBITDA in Q4 and $107.1 million for the full year, exceeding the top end of its guidance range, he said. Adjusted EPS for Q4 was $0.06, which Foote said also beat the top end of guidance.
On cash and capital return, Foote said the company generated $45.6 million of operating cash flow in Q4 and received an additional $38 million in deferred proceeds from the Cylance sale to Arctic Wolf. BlackBerry ended fiscal 2026 with $432.4 million of cash and investments, or $232 million of net cash. Foote said the company repurchased 6.7 million shares for $25 million in Q4, bringing total repurchases since the program’s May launch to 15.5 million shares, or $60 million. He also said the company is “actively considering tuck-in M&A” to accelerate QNX growth, while emphasizing the bar for deals remains high.
Outlook: seasonal Q1 expected, with growth and cash flow targets for fiscal 2027
Foote provided guidance for fiscal 2027, reiterating expected seasonality in QNX. For QNX, the company expects Q1 revenue of $60 million to $64 million and full-year revenue of $290 million to $307 million. Foote said the top end implies about 15% growth and is the company’s target, while the lower end reflects macro uncertainty. QNX adjusted EBITDA is expected to be $69 million to $81 million for the year, with Foote noting management is holding EBITDA “relatively flat” to fund investments in R&D and go-to-market.
For Secure Communications, Foote said BlackBerry expects a return to full-year growth “for the first time in six years.” Q1 revenue is expected to be $66 million to $70 million, with full-year revenue of $270 million to $280 million, representing 4% to 8% growth. Adjusted EBITDA is expected to be $57 million to $65 million.
For licensing, Foote said BlackBerry continues to expect about $6 million of revenue per quarter and approximately $5 million of adjusted EBITDA per quarter. At the total company level, BlackBerry expects fiscal 2027 revenue of $584 million to $611 million, adjusted EBITDA of $110 million to $130 million, and non-GAAP EPS of $0.15 to $0.19. Foote added that EPS guidance does not reflect any impact from potential future share repurchases.
On cash flow, Foote said Q1 is typically a seasonal low due to billing and payments timing, but BlackBerry expects to maintain positive operating cash flow in Q1, ranging from breakeven to $10 million. He said improved cash conversion is expected to drive full-year operating cash flow of about $100 million, “nearly doubling year-over-year.”
During Q&A, executives discussed “physical AI” and robotics as areas where BlackBerry believes its safety-certified automotive experience translates to other embedded environments. Foote said general embedded markets can be less price-sensitive than automotive, and he believes growth in that segment could be accretive to gross margins. Asked about Alloy Core’s potential impact, Giamatteo said it could be “one of the most underappreciated” upside drivers, though he declined to quantify the impact on backlog.
In closing remarks, Giamatteo said BlackBerry’s QNX team will attend the Robotics Summit & Expo in Boston on May 27-28, where the company plans to showcase QNX’s role as a “trusted foundation” for robotics and physical AI systems.
About BlackBerry (NYSE:BB)
BlackBerry Limited, formerly known as Research In Motion (RIM), is a Canadian enterprise software and cybersecurity company based in Waterloo, Ontario. Since its founding in 1984, the firm has evolved from a pioneer in mobile devices into a specialist in secure communications, endpoint management, and embedded systems software. BlackBerry’s core mission today centers on delivering security-first solutions that protect critical data and infrastructure across diverse industries.
At the heart of BlackBerry’s offerings is the BlackBerry Spark® platform, which combines unified endpoint management (UEM), secure communications, and artificial intelligence–driven threat detection into a single framework.
