The news
BlackBerry earnings for the fiscal second quarter, released September 24, showed revenue of $163.3 million, up 26% from $129.6 million a year earlier, as BlackBerry (BB) posted record sales at QNX, its automotive and embedded software unit, and a jump in Licensing revenue.
QNX revenue rose 27% to $80.3 million in the three months ended August 31, 2026. The segment's adjusted EBITDA, a measure of operating profit that excludes items such as depreciation and stock compensation, climbed 41% to $29.0 million, a 36% margin. Its adjusted gross margin widened four percentage points to 87%, the company said.
The company also announced the first design win for Alloy Kore, which it called the largest in QNX history. Coretura, a joint venture of Volvo and Daimler Truck, selected the platform for commercial vehicles, adding more than $100 million to QNX's royalty backlog, according to BlackBerry. Royalty backlog is revenue the company expects to collect as customers ship products that use its software.
Licensing, BlackBerry's third and smallest segment, added $15.5 million of the $33.7 million revenue increase. Its revenue rose to $22.1 million from $6.6 million, and its adjusted EBITDA to $20.0 million from $5.6 million.
BlackBerry's Secure Communications segment grew revenue just 2% to $60.9 million. Its adjusted EBITDA fell 18% to $8.0 million, a 13% margin. Annual recurring revenue held at $221 million, and the dollar-based net retention rate was 91%, meaning existing customers, taken together, spent less than a year earlier.
Company-wide profitability improved sharply, though not in every segment. Adjusted EBITDA rose 81% to $47.0 million, with Licensing supplying about two-thirds of the $21.1 million gain. GAAP operating income reached $33.6 million, up from $11.5 million. Net income was $33.9 million versus $13.3 million, the sixth straight quarter of positive GAAP net income. Operating cash flow was $29.3 million, and cash and investments stood at $447.1 million. BlackBerry said it bought back $10.0 million of stock in the first half.
BlackBerry said it raised its fiscal 2027 outlook, now calling for revenue of $616 million to $636 million, adjusted EBITDA of $141 million to $158 million and adjusted earnings per share of $0.19 to $0.22. In June it had forecast $594 million to $621 million in revenue and $119 million to $139 million in adjusted EBITDA.
For the third quarter it guided to revenue of $143 million to $154 million, below the $163.3 million just reported. The release gave no reason, but it expects Licensing revenue of only about $6 million. Chief executive John J. Giamatteo said the results show the company's profitable growth model is working.
The numbers
- Q2 FY2027 revenue
- $163.3 million (+26%)
- QNX revenue
- $80.3 million (+27%)
- Secure Communications revenue
- $60.9 million (+2%)
- Licensing revenue
- $22.1 million (vs. $6.6 million)
- Adjusted EBITDA
- $47.0 million (+81%)
- Net income
- $33.9 million
- FY2027 revenue outlook
- $616-$636 million
- Cash and investments
- $447.1 million
Why CEOs should care
For automakers, truck makers and industrial buyers, the Coretura win is a signal that QNX is moving beyond individual components toward vehicle-wide platforms. If you are evaluating software-defined vehicle architectures, ask how royalty pricing scales with volume, what long-term support commitments cover, and how Alloy Kore's roadmap is funded now that QNX is generating a 36% segment margin.
CFOs and procurement teams that buy BlackBerry's security products should read the 91% net retention figure carefully. It shows the existing customer base is spending slightly less, while overall segment revenue grew only 2% and profit fell. That can create room to negotiate on renewals, but it also warrants questions about product investment. Ask your account team for the roadmap and support commitments for the products you rely on, and confirm terms for multi-year contracts.
Boards can take a governance lesson from the numbers. BlackBerry's three-segment reporting shows QNX growing strongly, a Licensing gain the company does not expect to repeat next quarter, and Secure Communications roughly flat. Directors of any multi-product software company should ask whether their own reporting shows that split as clearly, and whether capital is flowing to the unit earning the highest return.
The bigger picture
Within BlackBerry, value is concentrating in QNX, an embedded, long-cycle platform where revenue arrives over years through royalties, while Secure Communications grows slowly. BlackBerry says it met the Rule of 40, a common software benchmark where revenue growth plus adjusted EBITDA margin equals or exceeds 40, for the second quarter in a row, with help this quarter from Licensing. The test now is whether QNX backlog converts to revenue on schedule as vehicle programs ship.
What’s next
BlackBerry guided third-quarter revenue to $143 million to $154 million, adjusted EBITDA to $28 million to $37 million and adjusted EPS to $0.04 to $0.05. Watch whether QNX signs further Alloy Kore customers and whether Secure Communications retention moves above 100%.
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