BlackBerry Limited Q1 FY2026 earnings call

• Q1 was a good quarter for BlackBerry with total company revenue, adjusted EBITDA, EPS, and cash usage beating guidance.
• QNX delivered better than expected results despite automotive challenges, with a solid strategy for diversification into non-automotive verticals and development of the QNX vehicle platform.
• Secure communications performed better than expected, with strong performance from SecuSmart and wins for AtHoc; guidance for full year is raised.
• BlackBerry initiated a $100 million share buyback program and repurchased $10 million worth of shares during the quarter.

QNX: Revenue for Q1 beat the upper end of guidance range at $57.5 million, 8% year over year growth despite auto market uncertainty; royalties and development seat licenses grew 923% respectively. Secure communications: Quarterly revenue $59.5 million, beating upper guidance range; ARR stable at $209 million, DBNRR 92%. Licensing: Revenue of $4.7 million, slightly below expectations due to lower revenue from existing licensing arrangements in the quarter.

• QNX: Expected revenue for Q2 $55-$60 million, adjusted EBITDA $10-$13 million; full year revenue guidance $250-$270 million, adjusted EBITDA $55-$60 million.
• Secure communications: Expected revenue for Q2 $54-$59 million, adjusted EBITDA $3-$6 million; full year revenue guidance raised to $234-$244 million, adjusted EBITDA $37-$47 million.
• Total company: Expected revenue for Q2 $115-$125 million, adjusted EBITDA $8-$14 million; full year revenue $508-$538 million, adjusted EBITDA $72-$87 million; non-GAAP EPS expected breakeven to 1¢ in Q2, 8-10¢ full year.

• Macro uncertainty in the market causing some customers to pull guidance and delays in customer buying decisions.
• Potential impacts on production volumes due to OEMs navigating supply chain changes, which could affect royalty revenue.

Q: Todd Coupland with CIBC Capital Markets asked about QNX and macro environment, whether production schedule changes are already realized or just built into guidance.

A: Tim Foote said Q2 royalty revenue is a function of Q1 production, and they priced in risk in guidance as they don't have final production numbers yet.

Q: Luke Junk with Baird asked about STP8.0 pipeline size and share buyback approach.

A: John Giamatteo said STP8.0 is a hot product with interest in automotive and GEM spaces; Tim Foote said share buyback is opportunistic, considering cash flow, share price, and alternative uses of capital.

Q: Trip Chowdhry with Global Equities Research asked about US federal defense spending wins and QNX automotive strength.

A: John Giamatteo said no material impact from DoD on secure communications, and QNX has traction across automotive with high-performance compute needs; Tim Foote added QNX thrives in high-performance safety-critical use cases like autonomous drive.

Q: Paul Treiber with RBC Capital Markets asked about US federal government churn and QNX SDP8 transition.

A: John Giamatteo said no material impact from DoD on secure communications; Tim Foote said they want migration to STP8 as it's a future-proof platform with higher ASP.

Q: Kingsley Crane with Canaccord asked about balance between integrated and open systems in software-defined vehicle space.

A: John Giamatteo said QNX is expanding into middleware and integration to help customers with time to market, and QNX everywhere expands the ecosystem and partnerships.