BlackBerry's Q3 Earnings Ahead: Will QNX Emerge as Key Growth Engine?

BlackBerry Limited BB is set to report third-quarter fiscal 2026 results on Dec. 18.

The Zacks Consensus Estimate for the bottom line is pinned at 4 cents and has remained unchanged in the past 60 days. The company expects non-GAAP EPS to be in the range of 2-4 cents.

For the third-quarter fiscal 2026, the company anticipates revenues to be between $132 million and $140 million. The consensus estimate is pinned at $139 million.

BB has an impressive earnings surprise history. Its earnings outpaced the Zacks Consensus Estimate in each of the trailing four quarters, the average beat being 183.3%. The stock has gained 38.5% in the past year compared with the Zacks Internet-Software industry’s growth of 0.9%.

Factors At Play

Solid QNX execution, fresh design wins, and growing traction in Secure Communications are likely to have aided BB’s fiscal third-quarter results, even as management remains cautious about broader macro and market uncertainties. It projects QNX revenues to be in the range of $66 million to $70 million, Secure Communications revenues between $60 million and $64 million and Licensing revenues to be $6 million for the quarter under review.

Management is prioritizing organic investments to capitalize on secular growth, especially within QNX, while targeting selective tuck-in M&A over the medium term. Going ahead, growth will be driven by expanding QNX beyond automotive into markets such as robotics, industrial automation, and medical devices, alongside deeper automotive penetration via a new vehicle platform. This strategy is gaining momentum, with GEM accounting for 43% of the SDP 8.0 pipeline and recent industrial automation wins. Partnerships with Vector and TTTech on a pre-integrated, hardware-agnostic middleware platform could further accelerate OEM adoption and royalty growth.

Lower-than-anticipated UEM customer churn and solid demand across ad hoc services and SecuSUITE are likely to have fueled performance in the Secure Comm wing. After offloading Cylance, the company is placing greater emphasis on Secure Communications, supported by a stronger financial position. The hosted service marks a new recurring revenue model for BlackBerry, which, alongside more software-only sales, can help make SecuSUITE’s revenue stream more stable and predictable. The global pipeline is growing, especially in defense, as governments seek more secure alternatives to consumer-grade platforms. Despite longer sales cycles, BlackBerry remains confident in closing more Secusmart deals this year.

BlackBerry is driving shareholder returns by prudently allocating capital across its three profitable divisions — QNX, Secure Communications and Licensing — all of which contribute positive adjusted EBITDA. For the fiscal third quarter, adjusted EBITDA is projected at $13 million to $17 million for QNX, $12 million to $16 million for Secure Communications and about $5 million for Licensing.

BlackBerry Limited Price and EPS Surprise

BlackBerry Limited price-eps-surprise | BlackBerry Limited Quote

However, macroeconomic uncertainty, particularly in the automotive sector, is likely to have impacted customer buying decisions, with some OEMs delaying projects due to supply chain concerns and tariff-related disruptions.

Key Business Updates

QNX recently secured a major design win with a leading Chinese automaker, which will deploy QNX Sound in its next-generation luxury EV lineup starting in 2026, highlighting growing OEM adoption of its software-defined, high-performance in-car audio platform.

In October 2025, BlackBerry announced the expansion of BlackBerry SecuSUITE to include Windows laptops and workstations, extending its sovereign-grade secure communications platform trusted by governments and critical enterprises worldwide. This enhancement brings secure voice, messaging and file sharing to desktop and laptop environments, ensuring consistent, end-to-end protection across all devices.

What Our Model Predicts for BB

Our proven model does not conclusively predict an earnings beat for BlackBerry this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that is not the case here. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

BB has an Earnings ESP of 0.00% and a Zacks Rank #3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks With the Favorable Combination

Here are some companies that, according to our model, have the right combination of elements to post an earnings beat this season:

Micron Technology MU is slated to report first-quarter fiscal 2026 results on Dec. 17. It has an Earnings ESP of +3.31% and sports a Zacks Rank #1 at present. The Zacks Consensus Estimate for revenues is pegged at $12.7 billion, implying 45.7% growth from the year-ago quarter. The consensus estimate for MU’s earnings is pegged at $3.89 per share, implying a 117.3% surge from the year-ago quarter.

FactSet Research Systems Inc. FDS is set to report first-quarter fiscal 2026 results on Dec. 18, before market open. FDS has an Earnings ESP of +1.77% and a Zacks Rank of 3 at present. The consensus estimate for FactSet’s first-quarter fiscal 2026 revenues is pinned at $599.5 million, indicating 5.4% growth from the year-ago quarter’s reported figure. The consensus mark for earnings is at $4.39 per share, hinting at a marginal rise on a year-over-year basis.

FedEx Corporation FDX is set to release its second-quarter fiscal 2026 (ended Nov. 28, 2025) results on Dec. 18, after market close. FedEx has an Earnings ESP of +1.38% and currently carries a Zacks Rank #2. The Zacks Consensus Estimate for the to-be-reported quarter’s earnings per share and revenues is pegged at $4.05 and $22.9 billion, respectively. The Zacks Consensus Estimate for second-quarter fiscal 2026 earnings has been revised upward by 1.5% in the past 60 days. The Zacks Consensus Estimate for second-quarter fiscal 2026 revenues indicates a 4.2% upward movement from the year-ago actual.

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This article originally published on Zacks Investment Research (zacks.com).

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