This Isn't Your Father's BlackBerry, And Its Comeback Is Gaining Traction

BlackBerry BB shares experienced a significant surge on Wednesday after the company reported better-than-expected first-quarter financial results and raised its fiscal 2026 sales guidance on Tuesday.

BlackBerry reported quarterly earnings of two cents per share, which beat the analyst consensus estimate of zero cents. Quarterly revenue of $121.7 million beat the Street estimate of $112.18 million.

QNX revenue increased 8% to $57.5 million, while Secure Communications’ revenue exceeded previously provided guidance at $59.5 million.

Also Read: BlackBerry’s QNX, Secure Comms Growth Weighed Down By Tariff Uncertainties, Government Election Shifts: Analyst

BlackBerry affirmed its fiscal 2026 adjusted EPS guidance of 8 cents to 10 cents. The company raised its fiscal 2026 revenue guidance from $504 million-$534 million to $508 million-$538 million versus the $513.51 million estimate.

Following the strong results, Wall Street analysts re-evaluated their positions and raised their price forecasts for BlackBerry.

RBC Capital analyst Paul Treiber maintained a Sector Perform rating on BlackBerry while slightly increasing his price forecast from $3.75 to $4.

Treiber’s assessment highlighted that BlackBerry’s first-quarter results surpassed both RBC’s and consensus estimates, primarily due to stronger-than-expected revenue from the Secure Communications and QNX segments.

However, he noted that the company’s slightly raised fiscal 2026 guidance remains conservative, as it still anticipates an uncertain automotive and broader macro-environment.

Despite experiencing healthy pipeline growth, Treiber emphasized that visibility into auto production remains low, and new deals might face delays.

Canaccord Genuity analyst Kingsley Crane maintained a Hold rating on BlackBerry shares while modestly increasing the price forecast from $4.25 to $4.60.

BlackBerry reported first-quarter results meaningfully ahead of Crane’s expectations, highlighted by strong IoT or QNX results, which continues to be the standout leader within the business.

The analyst noted that Secure Communications turned in a solid performance amidst a challenging backdrop, driven by ongoing headwinds in the UEM portion of the business.

He said that Unified Endpoint Management (UEM) revenue grew sequentially in the fourth quarter, but challenges in the segment were cited to have affected the decline in ARR.

As Crane looks ahead to the remainder of the calendar year 2025, he sees a distinctly improved outlook for BlackBerry’s business compared to the previous year.

The analyst noted that strategic initiatives will be incrementally streamlined, and meaningfully positive adjusted EBITDA creates new organic and inorganic investment opportunities.

A ~$865 million QNX backlog offers significant revenue opportunities in the coming years. However, Crane, while acknowledging this significant opportunity, expressed a need for greater clarity on the precise timing and pace at which this backlog will translate into a substantial acceleration, or “inflection,” in IoT (Internet of Things) growth.

This visibility challenge is further exacerbated by ongoing uncertainties surrounding auto tariffs. These tariffs can disrupt automotive production volumes, potentially delaying the conversion of QNX backlog into recognized revenue, even though the contracts themselves remain intact.

Crane said management’s tone has improved considerably in one quarter, but fiscal guidance raised by less than the in-quarter beat ultimately reflects ongoing prudence as the company navigates a dynamic macroeconomic environment.

The analyst noted that less than half of BlackBerry’s QNX revenue was driven by North America in fiscal 2025, as well as a budding general embedded opportunity (medical, industrial automation, robotics), which represented 18% of QNX revenue in fiscal 2025.

Looking ahead, the general embedded opportunity is poised for substantial expansion, representing a considerable 43% of the overall pipeline for SDV (Software-Defined Vehicle) 8.0.

This strong pipeline suggests that BlackBerry is strategically positioned to make more material sales and marketing investments to accelerate conversions and capitalize on these promising non-automotive end markets.

Price Action: BB stock is trading higher by 15.5% to $5.00 at last check Wednesday.

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