BlackBerry reported first-quarter fiscal 2027 revenue of USD $152.9 million and posted its fifth consecutive quarter of positive GAAP net income.
Revenue rose 26% from USD $121.7 million a year earlier, while GAAP operating income increased to USD $15.3 million from USD $2.0 million. Net income rose to USD $8.5 million from USD $1.9 million, and adjusted EBITDA climbed 144% to USD $36.3 million.
The quarter also marked BlackBerry's first positive operating cash flow in a fiscal first quarter in nine years, excluding the patent sale recorded in fiscal 2024. Operating cash flow was USD $4.6 million, compared with an outflow of USD $18.0 million in the same period last year.
Adjusted basic earnings per share were USD $0.04, while GAAP basic earnings per share were USD $0.01. GAAP gross margin improved to 78.3% from 74.2% a year earlier, while adjusted gross margin rose to 78.6% from 74.6%.
BlackBerry said the main growth drivers were its QNX and Secure Communications divisions, both of which met the company's Rule of 40 measure, defined as the sum of GAAP revenue growth and adjusted EBITDA margin.
QNX revenue increased 26% to USD $72.3 million from USD $57.5 million. Segment adjusted EBITDA rose 52% to USD $19.3 million, while adjusted gross margin widened by five percentage points to 86%.
Secure Communications revenue grew 24% to USD $73.6 million from USD $59.5 million. Segment adjusted EBITDA more than doubled to USD $20.2 million from USD $9.6 million, while adjusted gross margin improved to 72% from 70%.
Licensing revenue reached USD $7.0 million, up from USD $4.7 million, and segment adjusted EBITDA rose to USD $6.2 million from USD $3.8 million.
BlackBerry ended the quarter with USD $422.9 million in cash and investments, down from USD $432.4 million at the end of the previous quarter. During the period, it repurchased 2.6 million shares for USD $10.0 million.
In Secure Communications, annual recurring revenue was stable at USD $220 million, while dollar-based net retention remained at 92%.
Business focus
Alongside the results, BlackBerry outlined a series of commercial developments in its software businesses. QNX expanded its work with Nvidia on safety-related edge AI for robotics, medical, and industrial systems by integrating QNX OS for Safety 8.0 with Nvidia IGX Thor and the Nvidia Halos Safety Stack.
It also released QNX Hypervisor 8.0 for Safety. Leapmotor selected the QNX Software Development Platform 8.0 and QNX Hypervisor for Safety 8.0 for a forthcoming premium electric sport utility vehicle. Elsewhere, TKMS will adopt QNX software across its next-generation naval platforms as part of work linked to Canada's submarine programme.
In Secure Communications, BlackBerry AtHoc achieved FedRAMP Class D re-certification. BlackBerry also announced a partnership with The IP Company focused on communications products for naval and military use.
Outlook
For the second quarter, BlackBerry forecast total revenue of between USD $137 million and USD $148 million. It expects full-year revenue of between USD $594 million and USD $621 million.
Within that guidance, QNX revenue is expected to be USD $70 million to USD $75 million in the second quarter and USD $295 million to USD $312 million for the full year. Secure Communications revenue is forecast at USD $57 million to USD $63 million for the quarter and USD $270 million to USD $280 million for the year, while Licensing revenue is expected to be about USD $10 million in the quarter and about USD $29 million for the full year.
BlackBerry forecasts second-quarter adjusted EBITDA of USD $20 million to USD $30 million and full-year adjusted EBITDA of USD $119 million to USD $139 million. It expects second-quarter operating cash flow to range from break-even to USD $10 million, with full-year operating cash flow of about USD $100 million.
John J. Giamatteo, Chief Executive Officer of BlackBerry, linked the results to the company's reshaped operating model and the performance of its two core software units.
"Our first quarter results demonstrate continued momentum following our transformation, as we advance our strategy to drive profitable growth. We exceeded expectations for revenue, profitability, and cash generation through solid performance by our world class QNX and Secure Communications teams," Giamatteo said.
He also pointed to the company's automotive and embedded software markets.
"We are particularly encouraged by the multi-year growth opportunities ahead in software-defined vehicles, including significant content expansion with the Alloy Kore platform, as well as broad opportunities in the general embedded market, especially physical AI. We believe these opportunities significantly enhance QNX's long-term potential. While we remain early in the fiscal year, the foundation of the business is stronger than it has been in years, and we continue to focus on disciplined execution and creating long-term value for our shareholders," he said.