BlackBerry Swings to Profit Amid Flat Revenue, Cylance Sale Boosts Bottom Line

Ticker: BB · Form: 10-Q · Filed: 2025-12-19T00:00:00.000Z

Sentiment: mixed

Topics: Cybersecurity, IoT, Software, Financial Results, Divestiture, Profitability, Revenue

Related Tickers: BB, AWN

TL;DR

**BlackBerry's profit swing is a green light for long-term investors, signaling a leaner, more focused operation post-Cylance sale.**

AI Summary

BlackBerry Limited reported a net income of $13.7 million for the three months ended November 30, 2025, a significant improvement from a net loss of $10.5 million in the same period last year. For the nine months ended November 30, 2025, net income was $28.9 million, compared to a net loss of $71.6 million in the prior year. Revenue remained relatively flat, at $141.8 million for the three-month period in 2025, a slight decrease from $143.6 million in 2024, and $393.1 million for the nine-month period in 2025, compared to $393.2 million in 2024. The company's operating income increased to $11.9 million for the quarter, up from $19.5 million in the prior year, and $25.4 million for the nine months, up from $8.8 million. Key business changes include the sale of its Cylance endpoint security assets to Arctic Wolf Networks, Inc. on February 3, 2025, which significantly reduced losses from discontinued operations. Cash and cash equivalents increased to $270.3 million as of November 30, 2025, from $266.7 million at February 28, 2025. Strategic outlook involves continued focus on its QNX, Secure Communications, and Licensing segments, with ongoing evaluation of new accounting standards like ASU 2023-09 for income tax disclosures.

Why It Matters

BlackBerry's return to profitability, with a net income of $13.7 million this quarter, is a critical signal for investors, demonstrating the impact of strategic divestitures like the Cylance sale. This shift from a $10.5 million loss indicates a more focused business model, potentially increasing investor confidence in its core QNX and Secure Communications segments. For employees, this could mean greater stability and investment in the remaining business units. Customers might see enhanced product development in these core areas as resources are concentrated. In the broader market, this move positions BlackBerry more clearly as a specialized software and cybersecurity player, intensifying competition with established industry leaders.

Risk Assessment

Risk Level: medium — While BlackBerry achieved profitability, revenue remained flat at $141.8 million for the quarter, indicating a lack of top-line growth. The company's long-term notes stand at $196.2 million, and deferred revenue, a key indicator of future business, decreased from $161.5 million to $121.3 million, suggesting potential challenges in securing future recurring income.

Analyst Insight

Investors should closely monitor BlackBerry's revenue growth in its core QNX and Secure Communications segments in upcoming quarters. A sustained increase in deferred revenue would be a strong indicator of future business health and could justify a bullish position.

Financial Highlights

debt To Equity
0.65
revenue
$141.8M
operating Margin
8.4%
total Assets
$1,218.4M
total Debt
$201.0M
net Income
$13.7M
eps
N/A
gross Margin
N/A
cash Position
$270.3M
revenue Growth
-1.2%

Revenue Breakdown

SegmentRevenueGrowth
Total Revenue$141.8M-1.2%

Key Numbers

Key Players & Entities

FAQ

What was BlackBerry's net income for the quarter ended November 30, 2025?

BlackBerry Limited reported a net income of $13.7 million for the three months ended November 30, 2025, a substantial improvement from a net loss of $10.5 million in the same period last year.

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

BlackBerry's revenue for the three months ended November 30, 2025, was $141.8 million, a slight decrease from $143.6 million reported in the corresponding period of 2024.

What was the impact of the Cylance sale on BlackBerry's financial results?

The sale of the Cylance business to Arctic Wolf Networks, Inc. on February 3, 2025, significantly reduced losses from discontinued operations, contributing to BlackBerry's swing to profitability with a net income of $13.7 million for the quarter.

What are BlackBerry's key 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 financial statements.

What is BlackBerry's cash position as of November 30, 2025?

As of November 30, 2025, BlackBerry's cash and cash equivalents stood at $270.3 million, an increase from $266.7 million at February 28, 2025.

What is the trend in BlackBerry's deferred revenue?

BlackBerry's current deferred revenue decreased to $121.3 million as of November 30, 2025, from $161.5 million at February 28, 2025, indicating a reduction in future recognized revenue.

Are there any new accounting standards BlackBerry will adopt soon?

BlackBerry will adopt ASU 2023-09, "Improvements to Income Tax Disclosures," for annual periods beginning after December 15, 2024, which will expand its disclosures but is not expected to materially impact its financial statements.

How many common shares did BlackBerry have outstanding?

BlackBerry Limited had 590,147,550 common shares issued and outstanding as of December 16, 2025.

What was BlackBerry's operating income for the nine months ended November 30, 2025?

For the nine months ended November 30, 2025, BlackBerry's operating income was $25.4 million, a significant increase from $8.8 million in the same period of 2024.

What is BlackBerry's risk level regarding its long-term notes?

BlackBerry's long-term notes increased slightly to $196.2 million as of November 30, 2025, from $195.3 million at February 28, 2025, representing a consistent debt obligation that contributes to a medium risk level.

Risk Factors

Industry Context

BlackBerry operates in the cybersecurity and IoT software markets. The cybersecurity landscape is highly competitive, with constant evolution in threats and solutions. The IoT sector, particularly automotive (QNX), is experiencing significant growth driven by connected and autonomous vehicle trends. Companies like BlackBerry must continuously innovate to maintain market share against larger tech players and specialized security firms.

Regulatory Implications

BlackBerry's focus on secure communications and IoT solutions means it is subject to various data privacy regulations (e.g., GDPR, CCPA) and cybersecurity standards globally. Compliance with these evolving regulations is critical to avoid penalties and maintain customer trust. The company also notes ongoing evaluation of new accounting standards like ASU 2023-09 for income tax disclosures, indicating a proactive approach to regulatory compliance.

What Investors Should Do

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Key Dates

Glossary

Deficit
A negative balance in shareholders' equity, representing accumulated losses exceeding capital contributions. (BlackBerry's deficit decreased to $2,199.6M from $2,237.3M, indicating a reduction in cumulative losses.)
Deferred Revenue, Current
Revenue that has been received by a company but not yet earned, related to goods or services that will be provided in the near future (within one year). (The decrease from $161.5M to $121.3M may impact short-term revenue recognition.)
Goodwill
An intangible asset that arises when one company acquires another for a price greater than the fair market value of its identifiable net assets. (Represents a significant portion of BlackBerry's assets ($478.1M), subject to impairment testing.)
Accumulated Other Comprehensive Loss
A component of shareholders' equity that includes unrealized gains and losses on certain investments and foreign currency translations. (Decreased from $19.2M to $13.1M, reflecting positive adjustments in these areas.)

Year-Over-Year Comparison

Compared to the prior year's comparable period, BlackBerry has shown a significant turnaround in profitability, swinging from a net loss of $10.5 million to a net income of $13.7 million for the third quarter. This improvement is largely attributed to the reduction of losses from discontinued operations, notably the sale of its Cylance assets. While revenue remained relatively flat year-over-year, operating income saw an increase for the nine-month period, indicating improved operational efficiency. Key balance sheet changes include a slight increase in cash and cash equivalents and a notable decrease in current deferred revenue.

Filing Stats: 4,615 words · 18 min read · ~15 pages · Grade level 9.3 · Accepted 2025-12-19 16:20:39

Filing Documents

FINANCIAL INFORMATION

PART I FINANCIAL INFORMATION

Financial Statements

Item 1 Financial Statements Consolidated Balance Sheets as of November 30, 2025 (unaudited) and February 28, 2025 5 Consolidated Statements of Shareholders' Equity - Three and Nine Months Ended November 30, 2025 and 2024 (unaudited) 7 Consolidated Statements of Operations - Three and Nine Months Ended November 30, 2025 and 2024 (unaudited) 8 Consolidated Statements of Comprehensive Income (Loss) - Three and Nine Months Ended November 30, 2025 and 2024 (unaudited) 9 Consolidated Statements of Cash Flows - Nine Months Ended November 30, 2025 and 2024 (unaudited) 10 Notes to the Consolidated Financial Statements 11

Management's Discussion and Analysis of Financial Condition and Results of Operations 30

Item 2 Management's Discussion and Analysis of Financial Condition and Results of Operations 30

Quantitative and Qualitative Disclosures about Market Risk 58

Item 3 Quantitative and Qualitative Disclosures about Market Risk 58

Controls and Procedures 59

Item 4 Controls and Procedures 59

OTHER INFORMATION

PART II OTHER INFORMATION

Legal Proceedings 59

Item 1 Legal Proceedings 59

Unregistered Sales of Equity Securities and Use of Proceeds 60

Item 2 Unregistered Sales of Equity Securities and Use of Proceeds 60

Other Information 60

Item 5 Other Information 60

Exhibits 60

Item 6 Exhibits 60 Signatures 61 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 November 30, 2025 February 28, 2025 Assets Current Cash and cash equivalents (note 3) $ 270.3 $ 266.7 Short-term investments (note 3) 33.9 71.1 Accounts receivable, net of allowance of $ 5.7 and $ 6.6 , respectively (note 4) 149.5 173.7 Other receivables (note 4) 48.7 48.4 Income taxes receivable 2.4 1.6 Other current assets (note 4) 38.4 30.0 543.2 591.5 Restricted cash and cash equivalents (note 3) 14.0 13.6 Long-term investments (note 3) 59.3 58.9 Other long-term assets (note 4) 53.7 76.5 Operating lease right-of-use assets, net 17.7 22.0 Property, plant and equipment, net (note 4) 11.7 13.4 Intangible assets, net (note 4) 40.7 47.3 Goodwill (note 4) 478.1 472.4 $ 1,218.4 $ 1,295.6 Liabilities Current Accounts payable $ 13.4 $ 31.1 Accrued liabilities (note 4) 106.1 126.2 Income taxes payable (note 5) 12.5 25.5 Deferred revenue, current (note 11) 121.3 161.5 253.3 344.3 Deferred revenue, non-current (note 11) 4.8 5.6 Operating lease liabilities 21.2 28.7 Other long-term liabilities 1.8 1.8 Long-term notes (note 6) 196.2 195.3 477.3 575.7 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 - 590,392,106 voting common shares (February 28, 2025 - 596,230,655 ) 2,953.8 2,976.4 Deficit ( 2,199.6 ) ( 2,237.3 ) Accumulated other comprehensive loss (note 9) ( 13.1 ) ( 19.2 ) 741.1 719.9 $ 1,218.4 $ 1,295.6 See notes to consolidated financial statements. On behalf of the Board: John Giamatteo Lisa Disbrow Director Dir

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