0001070235-25-000198
SEC filingNet income improved to $13.7M on revenue of $141.8M, driven by QNX growth and absence of discontinued operations.
In Q3 FY26, BlackBerry reported revenue of $141.8M, down 1.3% YoY from $143.6M, but net income swung to $13.7M from a loss of $10.5M in the prior year. The improvement was driven by the absence of discontinued operations (Cylance) and higher QNX contribution. GAAP operating income fell to $11.9M from $19.5M, reflecting increased operating expenses. Adjusted EBITDA of $28.7M exceeded guidance of $20-28M, while adjusted net income rose to $26.8M ($0.05 per share) from $11.7M ($0.02 per share).
QNX was the standout segment, with revenue up 10.3% YoY to $68.7M, driven by royalty (+$2.7M), Radar (+$1.9M), and development seats. Segment adjusted EBITDA declined to $16.4M from $17.9M due to higher consulting and salary costs. Secure Communications revenue fell 10.2% to $67.0M, primarily on a $11.9M drop in Secusmart product revenue, partially offset by AtHoc and services growth. Its adjusted EBITDA decreased to $17.3M from $22.5M. Licensing revenue was $6.1M (down from $6.7M) and adjusted EBITDA of $5.3M remained stable.
For Q4 FY26, BlackBerry expects total revenue of $138-148M, QNX revenue of $71-77M, Secure Communications revenue of $61-65M, and Licensing ~$6M. Adjusted EBITDA is guided at $22-32M, non-GAAP EPS $0.03-0.05, and operating cash flow $40-45M. For full-year FY26, revenue guidance was raised to $531-541M (prior $519-541M), adjusted EBITDA to $94-104M (prior $82-101M), and non-GAAP EPS to $0.14-0.16 (prior $0.11-0.15). The company noted stronger-than-expected performance in Secure Communications renewals and a reduction in tax expense. QNX continues to benefit from design wins, while Secure Communications faces headwinds from Secusmart cyclicality.
As of November 30, 2025, BlackBerry held $270.3M in cash and cash equivalents, $33.9M in short-term investments, and $59.3M in long-term investments (including $52.6M in privately-held companies and $6.7M in Level 3 investments). Total liquidity (cash, cash equivalents, and investments) was $377.5M, up from $410.3M at February 28, 2025. Restricted cash and cash equivalents were $14.0M. The company's total debt consisted of $196.2M in 3.00% senior convertible notes due 2029 (fair value $284.4M). Shareholders' equity was $741.1M, with a deficit of $2,199.6M and accumulated other comprehensive loss of $13.1M. Goodwill increased to $478.1M from $472.4M due to foreign exchange effects.
The Notes section disclosed $13.9M in collateralized outstanding letters of credit and a performance bond supporting a government contract. The company recognized $29.0M in funds from claims filed with the Ministry of Innovation, Science and Economic Development Canada (SIF), a portion of which may be repayable under certain conditions. No material purchase commitments or contractual obligations were disclosed beyond the Notes and operating lease liabilities ($21.2M non-current). Deferred revenue totaled $126.1M ($121.3M current, $4.8M non-current), representing remaining performance obligations.
During the nine months ended November 30, 2025, BlackBerry repurchased 8.6 million common shares for $34.0M under its NCIB program (authorized May 8, 2025 for up to 27.9 million shares). An additional 0.2 million shares were repurchased on November 28, 2025 for $1.0M, settling on December 1, 2025. No dividends were paid. The company issued $2.5M in common shares under the employee share purchase plan. Debt issuance costs amortized by $0.9M, increasing the carrying value of the Notes to $196.2M. Capital expenditures were $2.6M (0.66% of sales), and intangible asset additions were $4.0M.
BlackBerry reports three operating segments: QNX ($68.7M revenue, +10.3% YoY), Secure Communications ($67.0M, -10.2% YoY), and Licensing ($6.1M, -9.0% YoY). Segment adjusted gross margins were $57.4M, $48.4M, and $4.6M respectively. Geographically, North America contributed 45.5% of revenue, Europe/Middle East/Africa 35.8%, and other regions 18.7%. Revenue recognized over time was $65.4M (46.1%) and at a point in time $76.4M (53.9%). No single customer exceeded 10% of revenue in Q3 FY2026.
For the nine months ended November 30, 2025, BlackBerry reported net income of $28.9 million, a significant improvement from a net loss of $(71.6) million in the prior-year period. Operating cash flow turned positive at $4.2 million, compared to $(25.1) million in the prior period, indicating improved cash generation from operations. The primary driver was a net working capital inflow of $50.0 million, led by a $24.2 million decrease in accounts receivable and a $14.8 million decrease in other assets, partially offset by a $41.0 million decrease in deferred revenue and a $17.7 million decrease in accounts payable.
Capital expenditures (capex) totaled $6.6 million ($2.6 million for property, plant and equipment and $4.0 million for intangible assets), representing a modest 1.6% of operating cash flow. Free cash flow (not explicitly stated) would be approximately $(2.4) million after subtracting capex from operating cash flow.
Capital returns to shareholders included $34.0 million in share repurchases, which exceeded operating cash flow, indicating reliance on investing cash inflows (primarily from short-term investment maturities) to fund buybacks. No dividends were paid. The company ended the period with $284.3 million in cash, cash equivalents, restricted cash, and restricted cash equivalents, up from $280.3 million at the beginning of the period.