BB.TO - Earnings call transcript Q3 2025

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Operator

Good afternoon and welcome to the BlackBerry Third Quarter Fiscal Year 2025 Results Conference Call. My name is Alicia, and I'll be your conference moderator for today's call. [Operator Instructions] As a reminder, this conference is being recorded for replay purposes. I would now like to turn today's call over to Martha Gonder, Director of Investor Relations, BlackBerry. Please go ahead.

Martha Gonder

Thank you, Alicia. welcome Call. Third and XXXX Fiscal everyone, Conference Earnings afternoon, to Quarter BlackBerry's Year Good

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

Information via We section on in available to is session. This will then call replay webcast A open blackberry.com. blackberry.com via the general at call call-in public will for the available and Investor a brief Q&A be numbers the also website.

using we be Canadian such are and harbor should, will, statements the of believe as statements the of forward-looking provisions today securities and laws. Some similar expect, pursuant safe words to expressions. intend, will by model, making We'll U.S. constitute and indicate applicable made statements forward-looking

differ materially forward-looking factors factors company's the line future consummate assumptions company's to the the are Forward-looking by conditions business and implied perception statements or from factors of of made historical its the are or could Cylance other risk relevant. all. as the company MD&A anticipated the the performance Many believes on results annual company expected as estimates time with expressed discussed in based and current as our ability by experience on that filings or include light well of statements. These associated those risks factors that its developments, cause the are trends, to the at sale actual well as and in and

has except by as revise to forward-looking undue of the any undertakes no or statements only obligation made law. statements. no of place forward-looking and on Any reliance not them, required should intention You today. as The company update are company's

non-GAAP their numbers As and is of will results. quarterly during John summary in our the reference Tim call, customary

blackberry.com websites. the see numbers, and press today, earlier between available For is on non-GAAP a and GAAP EDGAR, the which reconciliation please earnings our SEDAR+ published release

that of division Tim results given that, and both John and Cylance to the for with was that discontinued when Cybersecurity call over total, for will for referring we've investors, into results of that BlackBerry to the the given sale as let rules, and Additionally, definitive entered be turn and now now liabilities this assets its Cylance's a We continuing believe helpful end held operation a as will shown accordance agreement results in the me be quarter. And referencing accounting Cylance, after Therefore, sale. the in be of entered and with operations. will into GAAP the the especially to John. agreement discontinued

John Giamatteo

into a profitability to the when free year in controlling for flow was cash return QX This top of which Thanks, quarter both has Martha, XXXX generation exceeded fiscal marked since today's company this the thanks divisions, delivered able time to operating efficiency EPS back quarter. BlackBerry positive inflection and our guidance of convert our solid EBITDA the and point in last first this top top ranges. to Malikie and positive and joining that the IoT BlackBerry. line for flow. sale both the end XX for and past everyone generated the This enabled continued cash is cost fiscal strong Cybersecurity to free positive to operating focus on the of recording call. for We both That and has significant performance impact profitability, for pivot QX. of time control BlackBerry a means line quarters first and

as how strong in we've performance Malikie illustrates far transaction, QX In year. to last. come excluding a is flow cash QX, the this year-to-date, year than for operating $XXX the better just company fact, million past This

for which for announced financial we agreement the the subject is definitive closing Wolf a transformational to and of week, aligns simultaneously places profile with going the on quickly challenges This a a the This Arctic sheet. Cylance company we our BlackBerry Day that with is deal, address clear our balance signed strong strengthen as we've will conditions, further outlined our at trajectory Investor Cylance. and recent forward. earlier move this addition, strategic sale In of direction

the was me top revenue quarter let to the by above another the $XX range. difficult So begin for IoT backdrop deliver end overcame our reviewing ongoing guidance division. of what our good million, IoT This space in growth. cockpit sequential digital of Assistance and seat predominantly or was and by year-over-year from Driver quarter XX% Systems both by past licenses. Automotive ADAS. revenue driven development both this performer, and the led The Advanced royalties represents was the strength strongest automotive

design of automakers. X this quarter past terms wins, leading largest the with In were

automaker The vehicles. first across foundation stack with will form QNX of a software digital the next-generation German chipset for a of luxury the that used on a range to a Hypervisor was full be cockpit

in with The domain. was to the second deployed auto for one the largest system of be OEMs QNX ADAS operating Asia's

to elected to of of be use is of the illustrates a with the one This quarter, OEMs industrial version secured for our from see secured QNX partnerships X. upgrade wins. for announced The in silicon outside XX X.X. that is point than next-generation this cases. Despite We launched SDP only industrial of market QX, to opportunity we OS a Day used have have of of in verticals supporting number SDP had strong our significant leading we system, design Investor ever more version and past vendors continue who high-performance already momentum a At data to prior having automotive. exciting traction The committed design X. largest earlier been operating year, automation already that number one This we absolutely version in GEM to to building. wins October, leading we X

past rail, progress made Universal we Signalling new significant Progress fact, net In logos, number medical, Rail. a of secured industrial verticals. and This rail across we and quarter, in including

customer We are the QNX reception of offering. also pleased with our cabin

the a a huge the and digital of quarter, in of down a an cloud a this order well As to and is by Japanese product the cloud-first securing a approach achieve In They allows this made that forward for QNX with creation a twin for efficiency. reminder, we OEM. next-generation cockpit. as step digital by subscription-based major a platform drive development time as developing start to scale cost will market cockpit from their vehicle's

discussions number are of in QNX's we we solid position The leading for of face OEMs. reflects continuing the IoT. addition, with auto in backdrop other proud a the In markets strong very I'm address. the results of a challenging growth

a provided to over sequential top Cybersecurity exceeding We end growth X% move cyber quarter. or revenue achieved Cyber compare we This UEM, to was the Communications good a $XX quarter basis, we year. due relating Secusmart including collectively. now government guidance time large significant revenue this AtHoc for deal On our to when well. division Secure division. XX% that secured me the last million, Let revenue year-over-year division multi-year of with of Malaysian as for that had a the the really is our the tough and Cylance delivered last range

and Within and Dutch deals deals its government management a global banks, the government included secured also position approval Justice. strong included Other and including a large Water financial workflows the leading University had had solid both to the division, new core renewals Communications German Department past continued Other of expansions a of wins within Johns sequential a securing strengthening recording quarter, year-over-year our iOS new with the number this with Hopkins and alert by U.S. quarter sector renewal enhancements, wins KfW. with Security. and It endpoint including quarter. the bank Ministry. AtHoc These also demonstrate the Scottish UEM Police, competitive of included position in and federal significant services. Department Secure with AtHoc's U.S. Homeland applications. of and growth. We native product We're further solid number expansion a Android

Moving of we Secusmart. of grow with We've ability our product. the software-based over been to leverage where to version our outside Germany, pleased

largely some annual sequential However, largely for a strong renewals Cylance, performance year-over-year revenue agencies. ARR where we basis million. or stable, recurring The including driven and QX's recording increase within by increase German market, relationships X% with remained have a the small Cybersecurity, a of government was a $XXX strong metric to on number solid

pronounced, the retention sequentially or Similar $XXX improve, even X continued X% net by increasing ARR, is DBNRR rate, to much rate that For percentage XX%. for Secure was points to points more for stronger. Communications by percentage increased Secure division dollar-based is ARR to excluding this X% quarter year-over-year XX%. sequentially The net Cybersecurity million. and for to Communications, Cylance, X DBNRR, retention year-over-year past where and increase was dollar-based The

for So a expectations. was in really Cybersecurity where the summary, solid beat this quarter we division,

growth operational Secure engines As our the Arctic strategy with attention Communications our and we it. maximizing business the Wolf, the for of close deal towards head Cylance we focusing within are the on

million, Turning guidance which revenue in now to non-core that relate slightly licensing. improvement predate to continues legacy IP of This our largely better $X XX%. portion drove of to sequential came a the gross Malikie. deals in than briefly to sale Revenue the margin to portfolio at

revenue all that, further the sequentially provided million, exceeding past delivered quarter to now financials. Tim, both provide who the this end let year-over-year this our and turn of margins company me previously BlackBerry CFO, Total upper over $XXX bringing our range. XX%. With on details of So the together, guidance gross call to improved will

Tim Foote

and everyone. afternoon, Thank you, John, good

And our we our Investor commitment provide numbers As IoT October, I'll by non-GAAP. usual, representing report growth. division. sequential delivered on to be EBITDA, happy I'm of XX% million to the $XX At profitability the reference that division will Day delivered in

that prior improvement. and strong Communications the which XX%. margins mentioned John from sequential $XX expanded to Given delivered positive quarter $X top line was both a earlier, EBITDA gross Cybersecurity, including Secure million Cylance, of the million, performance

Cybersecurity Excluding for prior XX% Communications versus Gross EBITDA were Secusmart Communications, million, to software margins to And strong Cylance, licenses. XX%. was XX%, mix improved quarter division primarily points margin. a EBITDA by Secure the due meaning XX a margins gross the $XX strong for of for Secure percentage

at revenue million expenses million And division quarter OpEx drove that prior Licensing the maintains year. million, which a stronger-than-expected Finally, reference control. we baseline $X line of cost a on at solid point remained provided QX focus $X broadly in million new the with cost our EBITDA. The team significantly past close below $XXX streamlining to and for operating as this management a over delivered $XXX

end of and strong was QX positive Given $XX BlackBerry cost above solid at and expectations our has at net guidance plus the $XX EBITDA EPS line tight $X.XX. top control, quarter for profitability non-GAAP income this range with million delivered beat million. Adjusted adjusted top the

both a return quarter achieved to of and operating positive to million. schedule the compared $X of flow fiscal improvement X million This represents addition flow year-over-year ahead operating to quarter prior BlackBerry In a free $XX year. when cash cash and profitability, of third plus was the of

Turning now to fiscal financial outlook for fourth quarter. the

Cylance for our reporting guidance for and pending we'll of we guidance total the and a full the company. Communications for only closure all new as Secure current of Cylance for the to BlackBerry Wolf for Cybersecurity previously Given fourth it, sale provide Secure guidance revised relating down fiscal the we'll with QX and division then and Instead, provided provide only standing discontinued the quarter, to during operation, Arctic the are division 'XX year and fiscal Communications guidance both earnings. our division

be Comms the We $XX of $XX in quarter. to division expect revenue for million million to the the Secure fourth range in

expect million EBITDA in be of $X Comms for million. to positive positive also to the We Secure range $X

of be of end we our to which million range $XXX quarter means For for $XXX this year million again, now revenue, range $XX in guidance expect are the is revenue such million. once to $XX we full to the the raising range million, bottom that IoT IoT,

expect million. to $XX $X the For of for QX range in be we EBITDA IoT, million to

company. be a fourth the expect year. million range Cylance, QX $XX meaning EBITDA be $XX million approximately shift basis, positive in EBITDA fiscal continue from that a BlackBerry continuing to $X revenue to and for the million a and approximately total is We million operations business company we expect EBITDA in fiscal for is this for expect the This this for million. to of positive generate continuing of $XX At be of level, to our to $X we profitability significant quarter million, adjusted $XX to excluding licensing on between

plus EPS, For the expect operations, will include quarter. be which non-GAAP to it discontinued we in $X.XX minus to fourth $X.XX between

with turn call further in me for let to we expect back QX. And Finally, flow operating a sequential now improvement John. the cash that,

John Giamatteo

for Tim. summary, Thanks the

$XX Cybersecurity end million the said quarter, The top Cylance, Wolf and to Q&A, BlackBerry. ahead cash This Cylance, the that generated a of past key this, exceeding from generated part this $X range. Standing of the quarter, both inflection guidance powered Communications true this engines by IoT see increasing this profitability X summarize we move stakeholders, BlackBerry all cash IoT for win-win me we announced of before, EBITDA Cyber that for rapid Secure and revenue division, of quarter. excluding million. and and million flow past Arctic excited made ahead. our $XX a flow before quickly for at point a about providing as were Now, including sale I back achieved profitability we've profitable. will path generation. Even here BlackBerry takeaways progress business I'm the million. generated past further tremendous an in Licensing provide positive the let $X our we've past Cylance the was path QX, was that to expectations. contributed including to charted about with BlackBerry for and year and

maybe you open up we why Alicia, lines. now can So move the And Q&A? to don't

Operator

question the Todd Our line of comes with Instructions] Coupland first from [Operator CIBC.

Thomas Ingham

wondering question. disclosure. a is corporate adjustment in or for first and QX less And to down -- and EBITDA that could then small Appreciate ex would then flat is step this you question. the us That was what bridge on by the the additional a follow-up be with The give is segmented if revenue EBITDA is the strong segment costs? I sequentially. just more very EBITDA sequential my guide,

talk us that. through Just

Tim Foote

from nice always to you. hear Todd, Yes.

So the the the take part. first part question. I'll second of

Mix So there. function of part driver the is the a second main really mix. is

margin. hardware lower revenue In quarter prepared business, see a So for is was towards that the as of strong is more which my some just for this we which I very components, in shifting a mentioned QX, Secusmart the remarks, licensing mix strong margin.

On QNX royalties had we this side, the strong some time around.

more little regular mix. time, a Next we bit being a that see of

the from You and development to goes some that on be we're continuing That invest. QNX down. And seat quarter-to-quarter finally, licenses. side, know there up shifts, can particularly around

than that have said for expected, our we focus have quicker Investor our So achieve would the we one things opportunities Day some of to we this much growth at which potentially QNX the managed transaction, was that pending the we've on business. attention might

So and in sales we're increasing that functions our and headcount side. R&D actively on marketing expense and

Thomas Ingham

[indiscernible]

Tim Foote

No, please go ahead.

Thomas Ingham

going the Day, post clean segmented pre-corporate just Analyst could is you at was if to I Is just pre gave corporate or up, results overhead say you this Well, EBITDA. the overhead?

Tim Foote

Yes.

Comms and the then have So X segments IoT, of at when you look segments, we also the Licensing, Secure corporate.

reconciliation. the in that find can You

million stand-alone it segment. think I it doesn't show an just thing. really this But was a $X around quarter. That's accounting as about

that So to that you need the to to for add total in company. the other get Does components the sense? make to

Thomas Ingham

That does.

Operator

line Our from next Junk Luke with comes question the of Baird.

Luke Junk

the John, with closes, thinking with of maybe do maybe Cylance allocation and into preliminary with and priorities relative the some start you're between things the assuming investing strengthening just QNX, a back if what Tim deal sheet consideration? your question to I now, mentioned to going that business, higher-level especially. the balance Just could into just that leaning

John Giamatteo

time different question again kind this get to position. in were a because great last bit of a I we little it's of Luke, year, Yes. guess this

to of that's definitely we our something utilize able being some minds. on that's this would about where capital, deploy So or talk

thing things get As let's you think strong and excellent. The first Wolf been mentioned, the really closing. to dynamics there. first, there's with a good has Arctic We relationship path this

options. there, from to at And So the closing we're the the get going work to all kind we'll finish then on line of look a diligently that. of to take different

I drive we Tim strengthening we're in conservative we well. Most growth, mentioned, you there's to drive opportunities right love to more at do. the more think drive of time, kind growth as make kinds We're that same shareholder mentioned, to from organically capital As value, those to exploring tremendous something term, as the going placing a deploying earnings, But likely is of we to would perspective, going that balance sheet still through, say sure at be IoT. small sure, and term, short have better with think the is finally utilization opportunities we're forward. At the look say, we to gives is Board some I us consideration to have a look for propel M&A longer things good stock it would a And on space. price like little drive buyback, the I tuck-in bets point, business think today, we of there's more that the a at that that scale of capital. that where in say, to always I some IoT take when a

are some certainly you. we'll we over the right those both now. our communicating come firmer of the in So line, and Board, consultation once with me get things, mind as transaction with we be that's all on decisions, to Arctic more our disclosing Wolf And and Tim, the

Luke Junk

follow-up, was my really just for That helpful. for Tim. Maybe

mentioned mix this you in flow-through, across basis 'XX? right maybe of rate the QNX was predominantly major just driven us quarter of the strength that there. set in into moving level Can also fiscal as kind margin where in run on now? but some royalties in remarks thoughts by license parts the in You is us to streams, QNX give revenue seat the high-level some And on a terms

Tim Foote

Yes, great question.

So getting cheat been piece shifts discussed of OEMs. kind and before that the sheet I dev mix the dev, design answer of in XX% and around quarter-to-quarter, you XX% being as main some I've running programs with shorthand there's given royalties. particularly And challenges we've That card. wild up think seat from XX% of at terms services

down. I'd yes, in of long out, So be to it But little quarter-to-quarter, speaking, the kind some a can and run. say, flexible. and kind generally be as still mentioned back we're there of things from can broadly back tracking bit just we've go come in overall, up where

seat there mean, uptick an we it around to backdrop hope some a the challenges has winning the revenue, out fiscal have I this hopeful. bit over start last OEMs But it's into which and designs richer we've the that these ultimately do out to And see see to we'll dev a of get backlog. some in year. into number our challenged arms been of been come does, the year, eventually. these of when still years we're then Going that their few come new challenging

a we're obviously, I forward. But So right there's some place think challenges. in still going good now,

Operator

comes of Canaccord Crane Kingsley from with Our next question the Genuity. line

William Kingsley Crane

And how to for segment, -- that talk in performed can Now an it's we move XX% you DBNRR that where you trended? Secure segment felt should that's expect like going DBNRR forward? about the quarter? Comms that how independent then

John Giamatteo

question, in really we're see -- Yes. Kingsley. It's to direction. pleased Good it move that

would say renewals. was pretty products As we've couple the that very sure a resilient try I'm quarter only to of to been growth much of a nice A number it's stabilize. it. all And generate now at Comms it's -- banks see nice within to some but some renewed, working Across UEM Mostly licenses. the board, it with some been hard out added I government it really contributed. strong, Secure big not it's

in pretty they're think I AtHoc best-in-class, I particular renewal well. to this So say that business DBNRR. probably ARR, would run was helpful quarter. The rates, strongest our tends

dropped between we quarter and we're is that a be think did there another and surprised points maybe have to be closer to I so a XXX%. of we wouldn't of ambitiously trying XXX couple always couple it quarter up I in points goes that This XX% it can So if one get how it quarter-to-quarter. target plus. fluctuations or But aspirationally, -- some do to

that that a what And think -- you'll So performance the volatility more you'll find business see it stronger it's going than drove of forward. without a with -- is was be it's in Cylance much much a volatility. Cylance But going I to I lot little the because probably there. stable around think bit of

William Kingsley Crane

I'm for feel in do And that's the the going finished FedRAMP next unlock? process be helpful. high. for timing for to being about really That's you you AtHoc, of that's think how a XQ? fiscal meaningful then And then curious, achieving do that potentially

John Giamatteo

documentation done be all the investments. the a associated component this point. We've -- Yes. product big heavy and honest, high. at lifting the is guess It's to FedRAMP with the lot configurations, done It's -- a my is, the of networking

really it -- government's of us through on going it love level, position I to getting so to linger to the competitors because the going But I'd existing that strengthen now get it's it a had all lot them the got -- some a to end opportunistically to it's a really have be So of to lot things more think power, of lot you mark. think some of are be I with if slowly. little a matter up something of going by QX. of our for and bit of to out but ones. -- filing, open more our process, guess, I existing moving to will a staying And government, with to it's lock opportunities, think their to up secure their kind give will open a the on, going things a probably footprint seem that think now process. I especially do new it's even of lot But will right that investment, that's this check lot because I going

Operator

comes Treiber line of RBC next with Our from Markets. question the Capital Paul

Paul Treiber

Comms A quarter. the question the in on ARR growth Secure

up that there tracking number been from last heard good quarters? has X%. And has variability I How that think been several in quarter-to-quarter? over sounds like number. the It a I

Tim Foote

Yes, I'll take that one.

in been it's up fact. actual So tracking

largely been obviously, if take trending it's has we've or up. ex pleased the X, you down stable. been it is trend Occasionally, been X cyber up. actually line But So but Cylance, that goes

Paul Treiber

in growth That's you follow-up have about helpful. think QX. the year-over-year to QX? do what regards the mean we sequentially, in but Secure I just Comms, -- And that tough implies in how it the for guidance is do comp QX see we for

growth understand to business. that the trying in Just year-over-year

Tim Foote

Yes.

at on is fairly But significant think little year-on-year. you a QX a the particularly think as that's Obviously, was that, Day, had than division. Ultimately, stable relating Malaysia a stable as a pointed stable generating obviously helped, we've quarter. the in Certainly, there to XX% Investor of quarter. but if for because this QX, a was be see deal we to I compare Cybersecurity bit this in was the I going out margin house. it's amount of more of of this down business we it's margin the control revenue So -- a Secusmart profit lot business there couple kind things EBITDA as the this because of this side it that it a decent

So being the this we see that? house growth anything QNX huge you side are as engine BlackBerry. and add opportunities but want a Apptock to Comms, the in really particularly ] [ stable. John, Secusmart There business, the the of Secure for more see It's as we grower. to don't

John Giamatteo

I think think right. I that's -- that's

Comms, I that think are relates I it's as is stability of -- introduced a now business -- And to would thing with more based. is Secure a that type. Secusmart, when subscription software-only say we increasingly more ARR of the of the on product it one model we

these with So It the a swings perpetual. very lumpy -- a -- sold because we'd and were device. was which it'll -- it a will complex it more device. We -- have was drive historically big think I so we

I trajectory time Germany, that's been more a more even a historically customer, stabilize a we as our think grow which that's basis. hardware-centric kind business type over over of that think good software version to to migrate customers on we and going-forward outside of more us -- of of and our we -- for a adopt has as grow of the

that's providing stability. But and forward. ARR of go Secusmart phenomenon version that fairly we the some more new as as that on you introduce we software a update we'll So

Operator

Our with next the question TD of Chan Cowen. from comes line Daniel

Daniel Chan

we macro IoT's You driven royalty mentioned partly reconcile this relative How do royalties. backdrop? was that the strength the by strength weak quarter higher to

Tim Foote

narrative this in. start and Yes. really the per dependent it have I'll not to produced, QNX much mean, is of vehicles in it's the we feel chime as number ultimately, growth I the vehicle. SAAR, free on for the as John, is Maybe content one, that on

growing see in So order we necessarily don't grow. directionally, need SAAR a to for QNX to

a into Dan. directionally, So content piece that that, there's comes

Daniel Chan

guys to tax losses the -- there. get now use mentioned are losses you it Cylance, what's then That's And the How profitable? helpful. you're And tax those that to on much keeping keep? do that you opportunity does you

Tim Foote

millions. into Oh, hundreds it's of significant. well the It's

hope that ultimately, in businesses. So for significant profits shelter that make to we provides our a U.S.

us, for value to see we that. So significant

So those that really we losses. pleased continue to maintain we're

Operator

the like call over I BlackBerry, closing for turn would CEO now to of back remarks. John to Giamatteo,

John Giamatteo

Very good. Thanks, Alicia.

auto BlackBerry call, Hall. So, West everybody a I'd January but Las before XXXX to only X and team always today's as is will we how great Vegas the within that positioned just CES in at QNX at to catch to participating we're see for developments January in like from let strong the other be not our the end opportunity latest know XX, booth This Friday, business QNX with up industry, also the opportunities well. Tuesday,

by Bye January. And just you you season, holiday great next have of joining time. for and today. So for everybody it to any conclude can why by encourage to I visit really forward talking all that stop make We in a don't now. in thanking Vegas with and hope that, to the booth you look us down

Operator

your for This participation. concludes today's call. Thank you

You may now disconnect.

BlackBerry Limited (BB) 19 Dec 242025 Q3 Earnings call transcript