Elizabeth H. Volk
2 min read
BlackBerry (BB) last night reported Q1 FY2026 results that marked a significant milestone, as the company returned to GAAP profitability for the first time since Q4 FY2022, posting a net income of $1.9 million. The company's total revenue reached $121.7 million, surpassing guidance expectations, despite showing a slight decline from the previous year's $123.4 million. BlackBerry’s QNX division delivered particularly strong growth, increasing by 8% year-over-year to $57.5 million, while Secure Communications generated revenue of $59.5 million.
BB stock is up more than 11% in premarket trading this morning, on pace to open at 3-month highs. The stock is gapping away from recent support at its rising 20-day moving average ahead of the bell, and is looking to break away from resistance in the $4.50 area.
The company's strategic focus on cybersecurity and embedded systems continues to yield positive results, with the QNX segment showing particular strength in both automotive and non-automotive verticals. This is evidenced by the impressive 55% growth in the SDP8.0 pipeline during the quarter, and BlackBerry's efforts to expand QNX beyond automotive into industrial automation and medical devices.
BlackBerry maintains a strong financial position with $381.9 million in cash and investments, and has initiated a $100 million share buyback program, of which $10 million was executed in Q1.
Management's decision to raise full-year revenue guidance to $508-538 million reflects growing optimism about the company's trajectory, particularly in the cybersecurity space. The secure communications segment's forecast was notably increased to $234-244 million from $230-240 million, driven by robust demand for cybersecurity services amid rising online crimes. BlackBerry's gross margin expanded to 74%, while its Secure Communications division maintained a stable annual recurring revenue (ARR) of $209 million.
Looking ahead, BlackBerry's transformation continues as it distances itself from its historical operations, focusing instead on emerging technology verticals and cybersecurity solutions. The company expects to generate approximately $35 million in operating cash flow for fiscal 2026, though some near-term caution exists regarding potential auto production impacts from recent tariff changes.
