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Investing.com -- BlackBerry Ltd (NYSE:BB) (TSX:BB) reported financial results for the first quarter of fiscal year 2026 that exceeded expectations across key metrics and raised its annual revenue outlook, sending its shares up more than 8% in premarket trading Wednesday.
The performance marked a solid entry into the fiscal year for the Waterloo, Ontario-based technology firm, with robust showings from both its QNX automotive software and Secure Communications divisions.
Total (EPA:TTEF) company revenue came in at $121.7 million, topping the high end of guidance, while gross margin reached 74% and adjusted EBITDA totaled $16.4 million. First-quarter GAAP net income was $1.9 million, BlackBerry’s first GAAP profit since Q4 FY22, while non-GAAP earnings beat expectations at $0.02 per share.
QNX, the embedded software platform widely used in automotive systems, delivered 8% year-over-year revenue growth to $57.5 million. Adjusted EBITDA for the segment reached $12.7 million, representing 22% of revenue, and an indication of continued demand in the automotive technology sector.
The Secure Communications unit also beat both revenue and profitability guidance, booking $59.5 million in revenue and $9.6 million in adjusted EBITDA. Segment adjusted gross margin improved to 70%, climbing 6 percentage points sequentially and 4 percentage points year-over-year.
"A rise in cybercrimes and hacks has spurred companies to invest heavily in cybersecurity, benefiting firms such as BlackBerry that provide security services," Phillip Securities analysts said in a note.
"Cybersecurity remains largely insulated from broader spending volatility and is likely to continue as a top investment priority for customers," they added.
CEO John J. Giamatteo highlighted the execution by both divisions and the company’s trajectory toward consistent profitability and disciplined capital allocation. “BlackBerry made a strong start to the new fiscal year, building on the solid foundation we as a company have laid over the past year,” Giamatteo said. “BlackBerry’s solid balance sheet and plan for continuing profitability and cash generation this fiscal year enable us to allocate capital efficiently, with $10 million of share buybacks executed this past quarter.”
BlackBerry returned $10 million to shareholders via repurchase of 2.57 million common shares and confirmed implementation of a normal course issuer bid. The company ended the quarter with $381.9 million in cash, cash equivalents, and investments, down $28.4 million sequentially, reflecting investments into operations and a seasonally low cash flow quarter.
Looking ahead, BlackBerry raised its full-year guidance, now forecasting revenue between $508 million and $538 million, adjusted EBITDA of $72 million to $87 million, and non-GAAP EPS between $0.08 and $0.10.
For the second quarter, guidance calls for revenue of $115 million to $125 million and adjusted EBITDA of $8 million to $14 million, reinforcing investor optimism surrounding the company’s turnaround strategy.
(Luke Juricic contributed to this report.)