BlackBerry Q3 Earnings & Revenues Beat Estimates Despite Headwinds

BlackBerry Limited BB reported third-quarter fiscal 2026 non-GAAP earnings per share (EPS) of 5 cents. The figure surpassed the company’s estimate of 2-4 cents. In the year-ago quarter, it reported non-GAAP EPS of 2 cents. The Zacks Consensus Estimate was pegged at 4 cents per share. 

BlackBerry reported quarterly revenue of $141.8 million, beating the top end of its guidance ($132-$140 million), driven by upbeat strength across its QNX division. The top line, however, dipped 1.3% year over year owing to soft sales across Secure Communications and Licensing arms. The consensus estimate was pinned at $139 million.

For fiscal 2026, BB has lifted the midpoint of its total revenue outlook by $6 million to a new range of $531 million–$541 million, and increased the adjusted EBITDA midpoint by $7.5 million to a band of $94 million–$104 million. For QNX, it reaffirmed its full-year revenue guidance at the midpoint while tightening the forecast range to $260 million–$266 million.  It raised the lower end and midpoint of its full-year adjusted EBITDA guidance to $67 million–$73 million, driven by QNX’s double-digit growth and strong margins.

For the third straight quarter, it raised its full-year Secure Communications revenue outlook, lifting the range to $247 million–$251 million, with last quarter’s high end now the new low end. Adjusted EBITDA outlook is raised to $47 million–$51 million, while reaffirming licensing guidance of about $24 million in revenue and roughly $20 million in adjusted EBITDA.

BB’s Fiscal Q3 in Details

QNX posted a record quarterly revenue of $68.7 million, marking 10% year-over-year growth and coming in at the top end of guidance ($66 million to $70 million), driven mainly by higher royalties alongside sequential and annual growth in development seats and professional services. It witnessed stronger-than-expected design win momentum, driven by new automotive design wins across ADAS, QNX Cabin and QNX Sound, improving vehicle platform pricing discussions and growing traction in General Embedded Market verticals, including adoption by leading industrial automation players and NASA’s addition of SDP 8.0 to its supported operating systems, surpassing internal targets, with a growing pipeline of potential wins heading into fourth quarter.

Secure Communications revenue of $67 million beat the top end of guidance ($60-$64 million) and consensus despite the U.S. government shutdown. Results were driven by stronger-than-expected UEM renewals and effective navigation of the shutdown, with UEM accounting for just over half of segment revenue, while Secusmart and AtHoc made up the balance. Secusmart grew sequentially but declined year over year due to a tough prior-year comparison, while AtHoc delivered both sequential and annual growth despite its higher exposure to the shutdown. It, however, fell 10.2% year over year.

Licensing revenues reached $6.1 million compared with $6.7 million in the previous-year quarter, meeting expectations.

BB’s Margin Performance

Adjusted gross margin held steady year over year at 78%, driven by a more favorable revenue mix and ongoing cost-of-sales optimization. QNX gross margin improved by one percentage point sequentially but declined two percentage points year over year to 84%. Secure Communications’ gross margin came in at 72%, down one percentage point year over year but higher sequentially, reflecting operating leverage and a favorable revenue mix.

Adjusted operating expenses totaled $85.4 million, rising 7% year over year as BB continued investing strategically to support growth in its QNX business.

Adjusted EBITDA was $28.7 million, down from $37.5 million in the year-ago quarter. Adjusted EBITDA margin was 20% versus 26% a year ago.

QNX’s adjusted EBITDA for the quarter came in at the high end of guidance ($13-$17 million) at $16.4 million. Secure Communications’ adjusted EBITDA beat expectations ($12-$16 million) of $17.3 million. Licensing adjusted EBITDA beat projection (around $5 million) at $5.3 million.

BB’s Cash Flow & Liquidity

At the end of the fiscal third quarter, operating cash flow was $17.9 million, soaring more than 200% year over year. Management had guided the inflow of $10-$20 million.

Free cash flow was $17 million at the end of the quarter compared with $5 million in the previous quarter.

As of Nov. 30, 2025, BlackBerry had $378 million in cash, cash equivalents, short and long-term investments, up from $290.5 million as of Aug. 31, 2025.

BlackBerry also returned $5 million to shareholders through the repurchase of approximately 1.2 million shares, signaling management’s confidence in the company’s trajectory.

BB’s Fiscal Q4 Guidance

BB expects QNX revenue of $71 million–$77 million, which would mark another record quarter, following the all-time high in the fiscal third quarter. Adjusted EBITDA is projected at $17 million–$23 million. It has raised its outlook for Secure Communications, now expecting revenue of $61 million–$65 million and adjusted EBITDA of $11 million–$15 million. Management reaffirmed its licensing outlook, with quarterly revenue expected to be about $6 million and adjusted EBITDA around $5 million.

The company anticipates total revenues to be between $138 million and $148 million and adjusted EBITDA to be between $22 million and $32 million. Non-GAAP EPS is expected in the range of 3-5 cents.

It expects fiscal fourth quarter operating cash flow to rise sequentially to $40 million–$45 million, lifting full-year guidance to $43 million–$48 million. Excluding an additional $38 million from the Cylance sale to Arctic Wolf, total fiscal fourth-quarter cash generation is expected to exceed $80 million, further strengthening the balance sheet.

BB’s Zacks Rank

At present, BlackBerry carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Peer Companies

Guidewire Software, Inc. GWRE reported non-GAAP earnings per share of 66 cents for first-quarter fiscal 2026 (ended Oct. 31, 2025), up 53.5% year over year and in line with the Zacks Consensus Estimate. The company reported revenues of $332.6 million, up 26.5% year over year. Revenues beat the Zacks Consensus Estimate by 4.9%. The figure also surpassed the company’s guided range of $315-$321 million. This uptick was driven by solid momentum across all business segments.

Atlassian TEAM came out with first-quarter fiscal 2026 earnings of $1.04 per share, which beat the Zacks Consensus Estimate of 83 cents. This compares to earnings of 77 cents per share a year ago. Atlassian posted revenues of $1.43 billion for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 2.40%. The company reported revenues of $1.19 billion in the year-ago quarter.

Chegg, Inc. CHGG reported breakeven earnings for the third quarter of 2025, which topped the Zacks Consensus Estimate but declined year over year. Net revenues topped the consensus mark but tumbled year over year. The company’s breakeven earnings were above the Zacks Consensus Estimate of adjusted loss per share of 14 cents by 100%. In the year-ago quarter, it reported adjusted EPS of 9 cents. Net revenues of $77.7 million surpassed the consensus mark of $76 million by 1.8% but declined 43% year over year.

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