BlackBerry Limited (NYSE: BB) has reported a robust performance for the fourth quarter of fiscal year 2025, showcasing significant achievements across all its divisions. The company recorded a total revenue of $141.7 million, surpassing the expectations set for the quarter. This revenue growth was driven by strong performances in the QNX, Secure Communications, and Licensing divisions.
The company’s adjusted gross margin stood at an impressive 74%, with a GAAP gross margin of 73%, indicating efficient cost management and operational effectiveness. The QNX division, a key player in BlackBerry’s portfolio, reported a revenue of $65.8 million, marking a 6% sequential growth. Although the gross margin for QNX decreased by a few percentage points both sequentially and year-over-year, the division’s adjusted EBITDA of $19.2 million, representing a 29% margin, exceeded expectations. Secure Communications also demonstrated resilience with a revenue of $67.3 million, despite a sequential decrease in gross margin due to product mix changes.
Licensing revenue, meanwhile, came in at $8.6 million, further contributing to the company’s strong financial results. In terms of profitability, BlackBerry exceeded expectations with an adjusted EBITDA of $21.1 million and an adjusted net income of $17.7 million. The company also reported a GAAP net loss of $7.4 million, a notable year-over-year improvement. The adjusted basic income per share was $0.03, beating the guidance, while GAAP basic loss per share was recorded at $0.01. Operating cash flow improved significantly, reaching $42 million, bolstered by the first tranche of cash from the sale of Cylance to Arctic Wolf.
BlackBerry Reports Better than Expected Results for Q4 FY’25
BlackBerry’s performance in the fourth quarter of fiscal year 2025 not only met but exceeded the market’s expectations. Analysts had projected an earnings per share (EPS) of $0.0026 and revenue of $129.26 million for the quarter. However, BlackBerry reported an adjusted EPS of $0.03 and a total revenue of $141.7 million, significantly surpassing these expectations.
The QNX division, which was anticipated to remain flat, managed to achieve a 6% sequential growth in revenue, reaching $65.8 million. This was a positive deviation from the expectations, demonstrating the division’s strong market presence and the successful execution of its growth strategies. Secure Communications also outperformed, with a revenue of $67.3 million, despite challenges in maintaining its gross margin due to product mix variations. The Licensing division, with revenue exceeding guidance at $8.6 million, further contributed to the company’s overall success.
BlackBerry’s ability to exceed expectations in profitability metrics was particularly noteworthy. The adjusted EBITDA of $21.1 million was well above the guidance range, showcasing effective cost controls and operational efficiencies. The company’s adjusted net income of $17.7 million and operating cash flow improvement by $57 million year-over-year were significant milestones, reflecting its strong financial management and strategic focus on cash generation.
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BlackBerry Posts Optimistic Guidance for Q1 and Full Year FY’26
Looking ahead, BlackBerry has provided guidance for the first fiscal quarter and the full fiscal year 2026, setting the stage for continued growth and strategic focus. For the first quarter, the company anticipates total revenue to range between $107 million and $115 million, with QNX revenue projected between $51 million and $55 million. Secure Communications is expected to contribute $50 million to $54 million, while Licensing revenue is projected at approximately $6 million.
For the full fiscal year 2026, BlackBerry forecasts total revenue between $504 million and $530 million. The QNX division is expected to generate between $250 million and $270 million, reflecting its ongoing strategic initiatives and market expansion efforts.
Secure Communications is projected to bring in $230 million to $240 million, while Licensing revenue is anticipated to be approximately $24 million. The company’s focus on maintaining profitability is evident, with an expected total company adjusted EBITDA ranging from breakeven to $7 million for the first quarter and $69 million to $80 million for the full year.
Disclaimer: The author does not hold or have a position in any securities discussed in the article. All stock prices were quoted at the time of writing.
About the author
Tim Fries is the cofounder of The Tokenist. He has a B. Sc. in Mechanical Engineering from the University of Michigan, and an MBA from the University of Chicago Booth School of Business. Tim served as a Senior Associate on the investment team at RW Baird’s US Private Equity division, and is also the co-founder of Protective Technologies Capital, an investment firm specializing in sensing, protection and control solutions.