BlackBerry Ltd. raised its full-year revenue forecast for a second consecutive quarter, the Waterloo, Ont.-based company said Sept. 24, after its automotive software division posted another quarter of sharp growth.
Second-quarter revenue for the period ended Aug. 31 came in at US$163.3 million, up 26 per cent from a year earlier and ahead of analyst estimates, according to the company’s earnings release. Revenue from QNX, the embedded operating system used widely across the auto industry, rose 27 per cent to US$80.3 million. Adjusted earnings before interest, taxes, depreciation and amortization climbed 81 per cent to US$47 million, while GAAP operating income nearly tripled to US$33.6 million.
“Our strong second quarter performance provides further evidence that BlackBerry’s profitable growth model is working, with revenue, profitability and cash flow generation all exceeding our expectations,” chief executive John Giamatteo said in the release.
The company now expects full-year revenue of between US$616 million and US$636 million, up from its previous outlook, and forecasts adjusted per-share earnings of 19 to 22 cents US, according to the filing.
Much of the improved outlook traces to a deal with Coretura, a joint venture between Volvo Group and Daimler Truck, which selected BlackBerry’s Alloy Kore software for a next-generation commercial vehicle platform. BlackBerry called it the largest design win in QNX’s history, adding more than US$100 million to its royalty backlog, according to the earnings release and Toronto-based technology outlet BetaKit, which also covered the results.
On the earnings call, chief financial officer Tim Foote gave analysts a rare glimpse of how cross-border friction is shaping a different corner of the business, telling investors that “trade tensions between Canada and the United States” are complicating the outlook for BlackBerry’s secure communications division, according to a transcript of the call. That unit, which sells encrypted messaging and endpoint security to governments and regulated industries, brought in US$60.9 million in revenue, up just two per cent from a year earlier, far behind QNX’s pace.
Giamatteo also told analysts the addressable market for QNX could more than double over the next five years. He pointed to industry estimates that roughly 90 million vehicles are built globally each year, with only about a third currently using the centralized computing architecture QNX specializes in, a share he expects to climb toward three-quarters of production within five years as automakers redesign vehicles around software.
Shares of BlackBerry, which trade on both the Toronto Stock Exchange and the New York Stock Exchange, rose about five per cent to C$12.14 in Toronto trading following the results, extending a rally that has more than doubled the stock’s value since Giamatteo became chief executive in late 2023.
For a company once synonymous with the smartphones that popularized mobile email before losing the consumer market to Apple and Android devices in the early 2010s, the QNX-driven turnaround marks its most sustained run of growth in more than a decade, positioning the Waterloo region’s original tech icon as a supplier now deeply embedded in the auto industry’s shift toward software-defined vehicles.
