BlackBerry Swings to Profit on Revenue Growth, Cylance Divestiture

Ticker: BB · Form: 10-Q · Filed: 2025-09-25T00:00:00.000Z

Sentiment: mixed

Topics: Earnings, Profitability, Divestiture, Cybersecurity, Embedded Systems, Share Repurchase, Financial Turnaround

Related Tickers: BB, AWN

TL;DR

**BlackBerry's back in the black, but don't pop the champagne just yet – the real test is sustained growth beyond the Cylance sale.**

AI Summary

BlackBerry Ltd. reported a significant turnaround in its financial performance for the three and six months ended August 31, 2025. Revenue increased to $129.6 million for the three months ended August 31, 2025, up from $126.2 million in the prior year, and to $251.3 million for the six months, up from $249.6 million. The company achieved a net income of $13.3 million ($0.02 per share) for the three-month period, a substantial improvement from a net loss of $19.7 million ($0.03 per share) in the same period last year. For the six-month period, net income was $15.2 million ($0.03 per share), reversing a net loss of $61.1 million ($0.10 per share) in the previous year. This positive shift is largely attributed to the reclassification of the Cylance business as discontinued operations, which previously incurred significant losses. Operating income also improved to $11.5 million for the quarter and $13.5 million for the six months, compared to $2.2 million and an operating loss of $10.7 million, respectively, in the prior year. The company repurchased $30.0 million in common shares during the six-month period, reducing outstanding shares to 590,361,084 as of September 22, 2025.

Why It Matters

This return to profitability, driven by the divestiture of the loss-making Cylance business and modest revenue growth, signals a potential turning point for BlackBerry. For investors, it suggests a more focused and potentially stable business model, primarily centered on QNX and Secure Communications. Employees might see increased job security as the company streamlines operations and improves financial health. Customers could benefit from a more concentrated effort on core product development and support. In the competitive landscape, this strategic shift allows BlackBerry to better compete in its niche markets by shedding underperforming assets and focusing on its strengths in embedded systems and cybersecurity.

Risk Assessment

Risk Level: medium — While the company achieved net income, current assets decreased from $591.5 million to $507.2 million, and current liabilities decreased from $344.3 million to $230.2 million, indicating a tightening of the balance sheet. The company's long-term notes remain substantial at $195.9 million, and the overall asset base declined from $1,295.6 million to $1,184.1 million, suggesting ongoing challenges in asset utilization and growth.

Analyst Insight

Investors should closely monitor BlackBerry's revenue growth in its core QNX and Secure Communications segments in upcoming quarters. While the return to profitability is positive, it's largely due to the Cylance divestiture. Look for sustained organic growth and improved cash flow from operations to confirm a true turnaround before making significant long-term commitments.

Financial Highlights

debt To Equity
N/A
revenue
$129.6M
operating Margin
N/A
total Assets
$1,184.1M
total Debt
$195.9M
net Income
$13.3M
eps
$0.02
gross Margin
N/A
cash Position
$276.4M
revenue Growth
+2.7%

Revenue Breakdown

SegmentRevenueGrowth
Total Revenue$129.6M+2.7%

Key Numbers

Key Players & Entities

FAQ

What was BlackBerry's net income for the three months ended August 31, 2025?

BlackBerry Limited reported a net income of $13.3 million for the three months ended August 31, 2025, a significant improvement from a net loss of $19.7 million in the same period of 2024.

How did BlackBerry's revenue change in the latest quarter?

BlackBerry's revenue for the three months ended August 31, 2025, was $129.6 million, an increase from $126.2 million reported for the three months ended August 31, 2024.

What impact did the Cylance divestiture have on BlackBerry's financials?

The Cylance business, classified as discontinued operations, contributed a loss of $23.2 million for the three months ended August 31, 2024. Its divestiture allowed BlackBerry to recognize a gain on disposal of $10.4 million in Q4 fiscal 2025 and significantly improved the company's net income by removing these losses from continuing operations.

What were BlackBerry's earnings per share for the six months ended August 31, 2025?

BlackBerry reported total basic earnings per share of $0.03 for the six months ended August 31, 2025, a positive shift from a basic loss per share of $0.10 in the prior year.

Did BlackBerry repurchase any shares during the period?

Yes, BlackBerry repurchased common shares totaling $30.0 million during the six months ended August 31, 2025, reducing the number of outstanding shares to 590,361,084 as of September 22, 2025.

What are BlackBerry's main operating segments?

BlackBerry Limited is organized and managed as three reportable operating segments: QNX, Secure Communications, and Licensing, as detailed in Note 11 of the filing.

How did BlackBerry's operating expenses change for the six months ended August 31, 2025?

Total operating expenses for BlackBerry decreased to $173.4 million for the six months ended August 31, 2025, from $189.3 million in the same period last year, contributing to improved operating income.

What is BlackBerry's current cash and cash equivalents position?

As of August 31, 2025, BlackBerry reported cash and cash equivalents of $276.4 million, an increase from $266.7 million as of February 28, 2025.

What new accounting standards will BlackBerry adopt in the future?

BlackBerry will adopt ASU 2023-09 "Income Taxes (Topic 740): Improvements to Income Tax Disclosures" for annual periods beginning after December 15, 2024, and ASU 2024-03 "Expense Disaggregation Disclosure" in fiscal 2028.

What was BlackBerry's gross margin for the three months ended August 31, 2025?

BlackBerry's gross margin for the three months ended August 31, 2025, was $96.6 million, an increase from $88.6 million in the same period of 2024, reflecting improved profitability on sales.

Risk Factors

Industry Context

BlackBerry operates in the cybersecurity and IoT software markets. The cybersecurity landscape is highly competitive with rapid technological advancements and evolving threat landscapes. The IoT sector is growing, driven by increased connectivity and data generation, but also presents challenges in standardization and security.

Regulatory Implications

As a global technology company, BlackBerry is subject to various regulations including data privacy laws (e.g., GDPR, CCPA) and cybersecurity standards. Compliance with these evolving regulations is critical to avoid penalties and maintain customer trust.

What Investors Should Do

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Key Dates

Glossary

Discontinued Operations
A component of a business that has been disposed of or is classified as held for sale, and whose results are reported separately from continuing operations. (The reclassification of Cylance as discontinued operations significantly improved BlackBerry's reported net income for the period.)
Deferred Revenue
Revenue that has been received by a company but not yet earned, typically from services or products to be delivered in the future. (Changes in deferred revenue can indicate future revenue streams or shifts in customer contract terms.)
Goodwill
An intangible asset that arises when a company acquires another company for a price greater than the fair value of its identifiable net assets. (BlackBerry has a substantial goodwill balance ($478.5M), which is subject to impairment testing.)
Accumulated Other Comprehensive Loss
A component of shareholders' equity that includes unrealized gains and losses on certain investments, foreign currency translation adjustments, and pension adjustments. (This account reflects unrealized gains/losses not yet recognized in net income, showing a reduction from $(19.2)M to $(12.0)M.)

Year-Over-Year Comparison

Compared to the prior year's comparable period, BlackBerry has demonstrated a significant financial turnaround, reporting net income of $13.3 million versus a net loss of $19.7 million for the three months ended August 31, 2025. Revenue saw a modest increase to $129.6 million from $126.2 million. This positive shift is primarily attributed to the strategic reclassification of the Cylance business as discontinued operations, which previously weighed on profitability. Operating income also saw a substantial improvement, reflecting better operational efficiency or cost management in the core business.

Filing Stats: 4,740 words · 19 min read · ~16 pages · Grade level 7.9 · Accepted 2025-09-25 16:20:22

Filing Documents

FINANCIAL INFORMATION

PART I FINANCIAL INFORMATION

Financial Statements

Item 1 Financial Statements Consolidated Balance Sheets as of August 31, 2025 (unaudited) and February 28, 2025 5 Consolidated Statements of Shareholders' Equity - Three and Six Months Ended August 31, 2025 and 2024 (unaudited) 7 Consolidated Statements of Operations - Three and Six Months Ended August 31, 2025 and 2024 (unaudited) 8 Consolidated Statements of Comprehensive Income (Loss) - Three and Six Months Ended August 31, 2025 and 2024 (unaudited) 9 Consolidated Statements of Cash Flows - Six Months Ended August 31, 2025 and 2024 (unaudited) 10 Notes to the Consolidated Financial Statements 11

Management's Discussion and Analysis of Financial Condition and Results of Operations 31

Item 2 Management's Discussion and Analysis of Financial Condition and Results of Operations 31

Quantitative and Qualitative Disclosures about Market Risk 60

Item 3 Quantitative and Qualitative Disclosures about Market Risk 60

Controls and Procedures 61

Item 4 Controls and Procedures 61

OTHER INFORMATION

PART II OTHER INFORMATION

Legal Proceedings 62

Item 1 Legal Proceedings 62

Unregistered Sales of Equity Securities and Use of Proceeds 62

Item 2 Unregistered Sales of Equity Securities and Use of Proceeds 62

Other Information 62

Item 5 Other Information 62

Exhibits 62

Item 6 Exhibits 62 Signatures 64 3 Unless the context otherwise requires, all references to the "Company" and "BlackBerry" include BlackBerry Limited and its subsidiaries.

- FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION

FINANCIAL STATEMENTS

ITEM 1. FINANCIAL STATEMENTS 4 BlackBerry Limited Incorporated under the Laws of Ontario (United States dollars, in millions) (unaudited) Consolidated Balance Sheets As at August 31, 2025 February 28, 2025 Assets Current Cash and cash equivalents (note 3) $ 276.4 $ 266.7 Short-term investments (note 3) 14.1 71.1 Accounts receivable, net of allowance of $ 5.4 and $ 6.6 , respectively (note 4) 125.0 173.7 Other receivables (note 4) 48.7 48.4 Income taxes receivable 2.6 1.6 Other current assets (note 4) 40.4 30.0 507.2 591.5 Restricted cash and cash equivalents (note 3) 14.2 13.6 Long-term investments (note 3) 58.8 58.9 Other long-term assets (note 4) 51.1 76.5 Operating lease right-of-use assets, net 20.1 22.0 Property, plant and equipment, net (note 4) 12.2 13.4 Intangible assets, net (note 4) 42.0 47.3 Goodwill (note 4) 478.5 472.4 $ 1,184.1 $ 1,295.6 Liabilities Current Accounts payable $ 4.0 $ 31.1 Accrued liabilities (note 4) 83.9 126.2 Income taxes payable (note 5) 13.8 25.5 Deferred revenue, current (note 11) 128.5 161.5 230.2 344.3 Deferred revenue, non-current (note 11) 6.7 5.6 Operating lease liabilities 25.0 28.7 Other long-term liabilities 1.2 1.8 Long-term notes (note 6) 195.9 195.3 459.0 575.7 Commitments and contingencies (note 10) Shareholders' equity Capital stock and additional paid-in capital Preferred shares: authorized unlimited number of non-voting, cumulative, redeemable and retractable — — Common shares: authorized unlimited number of non-voting, redeemable, retractable Class A common shares and unlimited number of voting common shares Issued and outstanding - 590,361,084 voting common shares (February 28, 2025 - 596,230,655 ) 2,951.3 2,976.4 Deficit ( 2,214.2 ) ( 2,237.3 ) Accumulated other comprehensive loss (note 9) ( 12.0 ) ( 19.2 ) 725.1 719.9 $ 1,184.1 $ 1,295.6 See notes to consolidated financial statements. On behalf of the Board: John Giamatteo Lisa Disbrow Director Directo

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