BlackBerry beats Q2 estimates as QNX surges and FY27 guidance rises

BlackBerry is in the middle of shifting from a legacy communications company toward higher-growth foundational software, with QNX targeting automotive, software-defined vehicles, embedded systems and Physical AI, while Secure Communications remains the steadier cash-generating business. Its investor-relations calendar identifies this as the fiscal Q2 FY27 report, not Q3.

This was a clear earnings beat, not merely a favorable presentation. Revenue reached $163.3 million versus published expectations of roughly $144 million, while adjusted basic EPS was $0.07 versus consensus near $0.04. That is a meaningful upside surprise against a market framework that had already expected growth after the strong first quarter.

QNX is now doing the strategic heavy lifting. QNX revenue rose about 27% year over year to $80.3 million, and segment adjusted EBITDA increased to $29.0 million from $20.5 million (Segment results — QNX). Management says, “QNX delivered record performance in the quarter, driven by strength in our core automotive business.” 〔0〕 The result gives substance to the automotive and embedded-software transition rather than leaving it as a long-dated product story.

The quarter also benefited from an unusually strong licensing contribution. Licensing revenue jumped to $22.1 million from $6.6 million, with segment adjusted EBITDA reaching $20.0 million from $5.6 million (Segment results — Licensing). That materially helped the beat, but licensing is less representative of the recurring growth engine than QNX, so the quality of the upside is strongest in QNX and profitability—not in recurring revenue alone.

Secure Communications was stable, but not accelerating. Revenue was essentially flat at $60.9 million versus $59.9 million a year earlier, while segment adjusted EBITDA declined to $8.0 million from $9.7 million (Segment results — Secure Communications). Annual recurring revenue rose to $221 million from $213 million, but dollar-based net retention fell to 91% from 93% (Secure Communications operating metrics). That keeps the division profitable and useful, but it is not adding momentum to the growth narrative.

The outlook moved higher and confirms the beat was operational, not just quarterly timing. FY27 revenue guidance is now $616–$636 million and adjusted EBITDA guidance is $141–$158 million, above the prior framework of roughly $594–$621 million revenue and $119–$139 million EBITDA. The new Q3 guide calls for $143–$154 million of revenue and $0.04–$0.05 adjusted EPS (Guidance table). The higher full-year targets are the more important signal: management is carrying better QNX execution and profitability into the rest of the year.

The Alloy Kore milestone strengthens the longer-term QNX story, but it was already public before this filing. The Coretura design win, announced on September 22, adds more than $100 million to QNX’s royalty backlog and is the largest design win in QNX history. The release calls it “an important commercial milestone.” 〔1〕 Because that announcement preceded the September 24 earnings release, it is partly known rather than a fresh earnings surprise.

Bottom line: This materially advances BlackBerry’s software-transition story: QNX growth, stronger margins, cash generation and a raised FY27 outlook all landed above expectations. The main qualification is that licensing amplified the quarter and Secure Communications remains stable rather than expanding rapidly.