BlackBerry’s latest numbers make clear how far its centre of gravity has moved from handheld devices to embedded software. The Waterloo, Ontario-based company reported US$163.3 million in revenue for its fiscal second quarter ended Aug. 31, 2026, up 26% from a year earlier, while its QNX division delivered record quarterly revenue. Management responded by lifting its full-year fiscal 2027 revenue outlook to US$616 million to US$636 million. The stronger forecast reflects more than a single good quarter: automotive royalties, new vehicle-platform design wins, improving margins and healthier cash generation are giving BlackBerry a more durable software story. The most important signal is coming from QNX, whose safety-critical technology sits deep inside modern vehicles and is becoming more valuable as automakers shift toward centralized, software-defined architectures.
The Revenue Outlook Moves Higher Again
BlackBerry’s raised forecast is notable because it follows an earlier increase only three months ago. After its first fiscal quarter, the company guided to US$594 million to US$621 million in full-year revenue. Following the second quarter, that range moved to US$616 million to US$636 million. It also raised its adjusted EBITDA outlook to US$141 million to US$158 million, while full-year adjusted basic earnings guidance increased to US$0.19 to US$0.22 per share.
The latest quarter gave management room to make those changes. Revenue reached US$163.3 million, up 26% year over year, and surpassed the US$137 million to US$148 million range BlackBerry had previously provided for the quarter. Reuters reported that the result also topped the US$145.6 million analyst estimate compiled by LSEG. For a company that spent years trying to stabilize its post-smartphone identity, repeated upward revisions carry more weight than a one-off earnings beat because they suggest the underlying operating model is becoming more predictable.
QNX Becomes the Main Growth Engine
QNX generated US$80.3 million in second-quarter revenue, a company record and a 27% increase from the same period a year earlier. The division’s adjusted gross margin expanded four percentage points to 87%, while adjusted EBITDA rose 41% to US$29 million. That combination matters because it shows BlackBerry is not simply buying growth with heavier spending; its most strategically important unit is growing while also producing high software margins.
Automotive remains the centre of that business. QNX supplies operating systems, hypervisors and middleware used in safety-critical environments where reliability and certification can matter as much as raw computing power. The economics can become attractive when a design win moves into production, because royalty revenue may continue over the life of a vehicle program. That model helps explain why stronger automotive royalties can lift both revenue and profitability at the same time. BlackBerry is still investing in QNX research, development and go-to-market efforts, but the latest quarter showed increasingly visible operating leverage.
The Coretura Win Changes the Scale of the Backlog
One of the quarter’s most important developments arrived just before the earnings release. Coretura, the software-defined vehicle platform company founded by Daimler Truck and Volvo Group, selected Alloy Kore as a foundational software layer for its next-generation commercial vehicle platform. Alloy Kore was developed jointly by QNX and Vector Informatik, and Coretura’s selection represents the platform’s first design win.
BlackBerry disclosed that the contract adds more than US$100 million to QNX’s royalty backlog and called it the largest design win in QNX history. The significance goes beyond the dollar figure. Coretura is attempting to create a common software foundation for commercial vehicles, allowing manufacturers to concentrate more engineering resources on differentiating applications rather than rebuilding lower-level infrastructure for each program. Alloy Kore is aimed at high-performance compute environments and combines a safety-certified real-time operating system with pre-integrated automotive services. If that approach gains wider adoption, QNX could capture more software content per vehicle rather than relying only on unit growth.
Software-Defined Vehicles Expand QNX’s Role
The automotive industry is gradually moving from architectures built around many separate electronic control units toward more centralized computing platforms. That shift creates an opening for foundational software that can support several vehicle domains at once. Reuters reported that BlackBerry CEO John Giamatteo said QNX is being deployed across digital cockpit, advanced driver-assistance and body-control applications, illustrating how the company is trying to widen its footprint inside each vehicle.
Scale already gives QNX a useful starting point. BlackBerry says its technology is deployed in more than 255 million vehicles worldwide, and Reuters listed Audi, Daimler, General Motors, Hyundai and Mercedes-Benz among the major automakers using QNX software. The strategic opportunity is therefore not simply to win more automaker logos. It is to increase the number of QNX components used within each architecture as software becomes more central to vehicle functionality. That helps explain why software-defined vehicles are important to BlackBerry’s financial outlook even when global vehicle production itself is not surging.
Profitability Is Improving Alongside Revenue
BlackBerry’s second-quarter improvement extended well beyond the top line. Company-wide adjusted EBITDA rose 81% year over year to US$47 million, while GAAP operating income increased 192% to US$33.6 million. Adjusted gross margin reached 78.2%, three percentage points higher than a year earlier. Those figures are particularly important for a business that spent years restructuring around software and trying to prove that its remaining operations could generate sustainable profits.
GAAP net income was US$33.9 million, marking BlackBerry’s sixth consecutive quarter of positive GAAP net income. Adjusted net income climbed 79% to US$43.2 million, and adjusted basic earnings were US$0.07 per share. Management also said the company achieved its second consecutive “Rule of 40” performance, a software-industry shorthand BlackBerry defines as revenue growth plus adjusted EBITDA margin reaching at least 40. The metric is not a substitute for cash or GAAP earnings, but it highlights the balance management is trying to strike between expansion and profitability.
Cash Flow Gives the Turnaround More Credibility
Earnings improvements are easier to trust when they are accompanied by cash. BlackBerry generated US$29.3 million in operating cash flow during the second quarter, compared with just US$3.4 million in the same period a year earlier. Free cash flow was US$28.1 million, up from US$2.6 million. For the first six months of fiscal 2027, operating cash flow reached US$33.9 million versus a US$14.1 million use of cash in the comparable prior-year period.
The balance sheet also provides room to keep investing. BlackBerry ended the quarter with US$447.1 million in cash and investments. That financial cushion matters because QNX’s opportunity is tied to long automotive development cycles, continued certification work and partnerships that may take years to translate design wins into full production royalties. Stronger internal cash generation reduces the pressure to choose between funding product development and protecting liquidity. It also makes the broader transformation more tangible: the company is not only reporting higher software revenue, but increasingly turning that revenue into cash it can redeploy.
Secure Communications Provides Stability, Not the Main Growth Story
QNX is drawing most of the attention, but BlackBerry still has a sizeable Secure Communications business serving governments and enterprises. The segment produced US$60.9 million in second-quarter revenue, up 2% year over year. Annual recurring revenue stood at US$221 million, while dollar-based net retention was 91%. Those figures point to a business that remains meaningful, although its growth profile is much more restrained than QNX’s.
There were also softer numbers beneath the revenue increase. Secure Communications adjusted gross margin fell five percentage points to 61%, and segment adjusted EBITDA dropped 18% to US$8 million. BlackBerry nevertheless continues to add capabilities and certifications: SecuSUITE renewed its NIAP Common Criteria certification, while AtHoc added integrations with Microsoft Teams and Entra ID. The division therefore plays a different role in the overall story. It can provide recurring revenue and mission-critical customer relationships, but the latest quarter reinforces that the automotive and embedded-software side is currently doing more of the work in driving BlackBerry’s growth expectations higher.
Licensing Helped the Quarter, but It Is Lumpy
BlackBerry’s licensing business supplied an additional boost that should not be mistaken for a new quarterly baseline. Licensing revenue reached US$22.1 million in the second quarter, and the segment produced US$20 million in adjusted EBITDA. That was a large contribution relative to a business that generated only US$22.2 million of licensing revenue during all of fiscal 2026.
Management raised its fiscal 2027 licensing revenue outlook to approximately US$41 million, up from about US$29 million in the guidance issued after the first quarter. However, the company expects licensing revenue of only about US$6 million in the third quarter. That sharp expected step-down illustrates why BlackBerry’s core operating momentum is better judged through QNX, Secure Communications and cash flow rather than assuming unusually large licensing transactions will repeat every quarter. Licensing can still create valuable high-margin upside, but its timing is inherently uneven. The healthier interpretation of the quarter is that BlackBerry benefited from licensing while QNX simultaneously delivered record performance.
The Third-Quarter Forecast Keeps Expectations Grounded
BlackBerry’s outlook for the third quarter is solid but not explosive. The company expects total revenue of US$143 million to US$154 million and QNX revenue of US$82 million to US$88 million. Adjusted EBITDA is projected at US$28 million to US$37 million, while operating cash flow is expected to land between US$20 million and US$30 million. The QNX guidance would put the automotive and embedded-software unit above its second-quarter record at the midpoint of the range.
Investors nevertheless reacted cautiously to the report. Reuters said BlackBerry shares slipped about 3% after the company issued a third-quarter revenue range that roughly bracketed the US$149.6 million analyst estimate compiled by LSEG. That response is a reminder that the market is already giving the company more credit for its turnaround; Reuters noted that the shares had more than doubled in 2026 by the time of the results. Stronger annual guidance matters, but investors are also watching whether QNX can keep compounding growth without quarterly volatility elsewhere masking the progress.
The Biggest Opportunity Still Comes With Automotive Timing Risk
The new QNX wins create a long runway, but they do not convert instantly into reported revenue. BlackBerry’s fiscal 2026 annual report put QNX royalty backlog at approximately US$950 million at the end of that year, and the Coretura award is expected to add more than US$100 million. The company also cautions that backlog is an estimate based on royalty rates and projected production volumes, not a guaranteed future-revenue figure.
That distinction is important in automotive software. A design can be won years before vehicles reach meaningful production, and actual royalties depend on how many vehicles customers ultimately build, along with any contract modifications or terminations. Even so, the direction of travel is clearer than it was a few years ago. BlackBerry is generating record QNX revenue, winning larger software-defined vehicle programs, expanding margins and producing positive cash flow. The raised outlook does not remove execution risk, but it strengthens the case that the company’s future is increasingly tied to the software underneath connected vehicles rather than the phones that once defined its name.
