BlackBerry Q2 FY 2025 Earnings Report

On [date], BlackBerry Limited (NYSE: BB) reported its financial results for the second quarter of fiscal year 2025, with total revenue reaching $145 million, surpassing the guidance of $144 million. The company’s CEO, John Giamatteo, and newly appointed CFO, Tim Foote, discussed strong performance in both the IoT and Cybersecurity divisions, achieving 12% and 10% year-over-year growth, respectively.

BlackBerry highlighted its focus on cost management and operational efficiency, resulting in a 24% reduction in operating expenses. The company announced plans for an upcoming Investor Day on October 16th, where detailed financial insights and growth strategies will be presented.

Key Takeaways

• BlackBerry’s Q2 revenue exceeded guidance, reaching $145 million.
• IoT division generated $55 million, reflecting a 12% year-over-year growth.
• Cybersecurity division reported $87 million, a 10% growth from the previous year.
• Operating expenses decreased by 24% to $99 million.
• Non-GAAP EPS and adjusted EBITDA achieved breakeven.
• New design wins in automotive ADAS and advancements in QNX products were highlighted.
• Launched XDR-focused MDR Pro offering to mitigate customer churn.
• Annual Recurring Revenue (ARR) remained stable at $279 million.
• Dollar-Based Net Retention Rate (DBNRR) increased to 88%, up 7 percentage points year-over-year.
• Gross margins held steady at 67%.
• Financial outlook for Q3 includes expected IoT revenue of $56 to $60 million and Cyber revenue of $86 to $90 million.
• BlackBerry aims to achieve positive cash flow and EBITDA in Q4.

Company Outlook

• Expect IoT revenue of $56 to $60 million and Cyber revenue of $86 to $90 million for Q3.
• Anticipate adjusted EBITDA ranging from break-even to a positive $10 million in Q3.
• Targeting positive cash flow and EBITDA for Q4.

Bearish Highlights

• Delays in automotive software development affecting the IVY program.
• Cylance revenue declined due to churn.

Bullish Highlights

• New design wins in automotive ADAS and advancements in QNX products.
• Growth in UEM, AtHoc, and Secusmart cybersecurity segments.
• Strong traction in managed services within Cybersecurity.

Misses

• Reported a non-GAAP operating loss of $4 million.

Q&A Highlights

• Discussed strategic integration of the IVY platform with QNX teams.
• Update on separation process indicating substantial progress in aligning IT systems.
• Noted potential impacts from a proposed ban on Chinese automotive software.
• Transition to managed detection and response (MDR) services seen as a positive trend.

During the call, BlackBerry’s executives emphasized the significance of innovation and efficiency in driving growth. The upcoming Investor Day will provide further details on BlackBerry’s capital allocation strategy and performance across divisions. As BlackBerry navigates the dynamic tech landscape, it remains committed to delivering shareholder value and positioning itself for sustainable growth in global markets.

InvestingPro Insights

BlackBerry’s recent financial results and future outlook are contextualized by real-time data from InvestingPro. As of the latest data, BlackBerry’s market capitalization stands at $1.51 billion. The revenue for the last twelve months as of Q1 2025 was $624 million, reflecting a notable revenue decline of 27.53% over the same period.

InvestingPro highlights that BlackBerry operates with a moderate level of debt, which could offer some financial flexibility during the transition and growth strategies. However, it’s noted that BlackBerry has not been profitable over the last twelve months, with an operating income margin of -12.66%. Analysts expect a sales decline in the current year, aligning with the company’s cautious outlook and discussed challenges.

For a more comprehensive analysis, InvestingPro offers additional insights, totaling six more tips for BlackBerry.

Full Transcript – BlackBerry Ltd (BB) Q2 2025

Operator: Good day, and welcome to BlackBerry’s Second Quarter Fiscal Year 2025 Earnings Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Martha Gonder, Director of Investor Relations, BlackBerry. Please go ahead.

Unidentified Company Representative: Thank you, Dave. Good afternoon, everyone, and welcome to BlackBerry’s second quarter fiscal year 2025 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&A session. This call is available to the general public via call-in numbers and via webcast in the Investor Information section at blackberry.com. A replay will also be available on the blackberry.com website. Some statements will be made today that constitute forward-looking statements that are made pursuant to the Safe Harbor provisions applicable to US and Canadian Securities Laws. We’ll indicate forward-looking statements by using the words such as expect, 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. Many factors could cause the company’s actual results or performance to differ materially from those expressed or implied by the forward-looking statements.

For more details on the earnings call and additional insights, please refer to the complete transcript from the event on the BlackBerry website.