BlackBerry Stock Slips Despite Strong Q2, CEO Highlights Shift To System-Critical Software And Margin Gains

BlackBerry (NYSE: BB) stock dropped after it released its second-quarter results on Thursday. 

The Details: BlackBerry reported quarterly earnings of $0.04 per share, which beat the analyst consensus estimate of $0.01. Quarterly revenue of $129.6 million, up 3% year-over-year, beating the Street estimate of $122.1 million.

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BlackBerry reported that the company’s adjusted gross margin was 75%, up 430 basis points.

QNX revenue delivered 15% year-over-year growth to $63.1 million; QNX adjusted gross margin was 83%, flat Y/Y.

Secure Communications revenue exceeded previously-provided guidance at $59.9 million; adjusted gross margin increased by five percentage points Y/Y to 66%.

Licensing revenue was $6.6 million, and adjusted EBITDA was $5.6 million.

Blackberry ended the quarter with $290.5 million in cash and equivalents as of August 31, 2025, down from $337.8 million as of February 28, 2025. The company stated that it repurchased 5 million shares during the quarter.

BlackBerry CEO John J. Giamatteo highlighted that the QNX division delivered a “rule of 40” quarter, while the Secure Communications division outperformed in both revenue and earnings, showing improvements across key metrics. He noted that China's market is shifting toward system-critical software and demand is rising. He stated that the company is investing in R&D and marketing, while expecting EBITDA margins to improve.

Q3 Outlook: BlackBerry expects earnings per share of 2 cents-4 cents, versus the consensus estimate of 3 cents. Furthermore, the company expects sales to be between $132 million and $140 million, compared to the consensus estimate of $137.73 million.

FY26 Outlook: Blackberry anticipates adjusted earnings per share of 11 cents-15 cents (prior 8 cents-10 cents), versus the consensus estimate of 9 cents. Additionally, the company expects sales to be between $519 million and $541 million (prior: $508 million to $538 million), compared to the consensus estimate of $530.61 million.

Price Action: BB stock is trading lower by 1.64% to $4.19 premarket at last check on Thursday.

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