BB: Beats Q1 Guidance

BlackBerry (TSX: BB ) held its first-quarter earnings conference call on Thursday. Below is the complete transcript from the call. This content is powered APIs. For comprehensive financial data and transcripts, visit View the webcast at Summary BlackBerry reported strong financial performance for Q1 FY2027 with total revenue of $153 million, exceeding guidance and showing a 26% year-over-year growth.

QNX revenue was $72 million, representing 26% growth year-over-year, driven by significant design wins in the automotive and GEM sectors; development license revenue was notably high, indicating future growth potential. Secure Communications revenue was $74 million, up 24% year-over-year, supported by large government contracts, including a significant deal with Shared Services Canada. The company raised its full-year revenue and adjusted EBITDA outlook, with QNX expected to deliver between $295 to $312 million in revenue.

Strategic initiatives included expanding partnerships with Nvidia and Qualcomm in physical AI, and strong momentum in the GEM market, especially in robotics and industrial automation. Management expressed confidence in long-term growth drivers, particularly in GEM and Alloy Core, and emphasized the importance of maintaining operating leverage and profitability improvement. Full Transcript OPERATOR Good morning and welcome to the BlackBerry first quarter fiscal year 2027 results conference call. My name is Betsy and I will be your conference moderator for today's call.

During the presentation, all participants will be in a listen-only mode. We will be facilitating a brief question and answer session towards the end of the conference. Should you need assistance during the call, please signal a conference specialist by pressing 0. As a reminder, this conference is being recorded for replay purposes.

I would now like to turn today's call over to Suzanne Spira, Senior Director of Investor Relations, BlackBerry. Please go ahead. Suzanne Spira, Senior Director of Investor Relations Thank you, Betsy. Good morning, everyone, and welcome to BlackBerry's fiscal first quarter 2027 earnings conference call.

Joining me on today's call is BlackBerry's Chief Executive Officer John Giamatteo and Chief Financial Officer Tim Foote. After I read our cautionary note regarding forward-looking statements, John will provide a business update and Tim will review the financial results. We will then open the call for a brief Q and A session. com.

As part of today's webcast presentation, slides will be displayed. com, as will the replay of today's call. S. and Canadian securities laws.

We'll indicate forward-looking statements by using words such as expectations, will, should, model, intend, believe, and similar expressions. Forward-looking statements are based on estimates and assumptions made by the Company in light of its experience and its perception of historical trends, current conditions, and expected future developments, as well as other factors that the Company believes are relevant. Many factors could cause the Company's actual results or performance to differ materially from those expressed or implied by the forward-looking statements. These factors include the risk factors that are discussed in the Company's annual filings and MD&A.

You should not place undue reliance on the Company's forward-looking statements by law. As is customary during the call, John and Tim will reference certain non-GAAP numbers in their summary of our quarterly results. com websites. And with that, let me now turn the call over to John.

Mattias Eriksson, President, BlackBerry QNX Thanks, Suzanne, and good morning, and thank everyone for joining today's call. We're excited to report a strong start to the fiscal year. Last quarter, we talked about turning the page from cost restructuring to value creation through profitable growth, and this quarter we delivered exactly that. In Q1, we saw rock-solid execution across both QNX and Secure Communications, with both businesses delivering rule of 40 performance during the quarter, reflecting a combination of healthy growth and strong profitability.

In QNX, we continue to benefit from the long-term trends we discussed for several quarters, including software-defined vehicles, centralized compute, the general embedded market, and physical AI. In Secure Communications, we continue to see stabilizing fundamentals combined with tailwinds from growing government demand and the impact of large customer wins. Total company revenue came in at 153 million, well above the high end of our guidance. Adjusted EBITDA more than doubled year over year, and we achieved positive GAAP net income for the fifth consecutive quarter.

We also continue to generate positive operating and free cash flow despite Q1 being a seasonal low. We're proud of the quarter, but also recognize that we're still early in this next chapter with more work to do. It is important to remember our focus is on driving long-term shareholder value, not managing to individual quarters. Let me start my review of the quarter with the QNX business.

This was another rule of 40 quarter for QNX. Revenue came in significantly above the top end of guidance at approximately 72 million, representing 26% year-over-year growth. This performance was driven by strength across all components of QNX, including de