For most of the past decade, BlackBerry (TSX: BB) stock was a punchline. Once the dominant force in mobile communications, the company spent years trying to convince investors that its shift to software was durable and worth owning. Most investors weren’t convinced; as recently as a few weeks ago, the consensus analyst price target on BB was less than $5.
Then the company reported earnings before the market opened on June 25 — and things started to change.
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What happened with BlackBerry’s Q1 earnings
BlackBerry shares jumped 20% on Thursday after posting first-quarter fiscal 2027 results that beat analyst expectations on every key metric. Analysts had projected revenue of $137.9 million for the quarter ended May 31, 2026. But BlackBerry reported $152.9 million — roughly 11% above expectations and representing 26% growth year-over-year. On the bottom line, adjusted EPS of $0.04 topped the consensus estimate of $0.03, and adjusted EBITDA surged 144% year-over-year to $36.3 million.
Perhaps the single most meaningful number in the whole earnings report wasn’t revenue or earnings: It was cash flow. BlackBerry reported operating cash flow of $4.6 million for the quarter, marking its first cash-positive fiscal first quarter in nine (!) years, excluding a non-core patent sale in 2024. For a company that spent years burning through cash, this milestone seriously matters.
How BlackBerry makes money today
BlackBerry today is essentially two businesses operating under one brand, and both are firing.
QNX (the embedded operating system that powers critical vehicle and industrial systems) had revenue of $72.3 million, up 26% year over year, while Secure Communications, which serves government and enterprise customers, generated revenue of $73.6 million, a 24% increase. Both QNX and Secure Communications achieved the “Rule of 40” benchmark — a widely used software industry measure that combines revenue growth rate and profit margin — a signal that these are healthy, scaling businesses, not just growth for growth’s sake.
The growth in Secure Communications is being driven by something that transcends any single quarter. Governments around the world are prioritizing digital sovereignty, cybersecurity modernization, and secure communications infrastructure — and BlackBerry sits squarely in the path of that spending wave.
At the same time, QNX has been positioning itself as a key player in what BlackBerry calls “physical AI” — the next frontier of autonomous machines, robotics, and AI-powered industrial systems. BlackBerry described automotive applications as a “proving ground” for the demands of physical AI, where the requirements for safety, security, reliability, and real-time determinism are the strictest. As those same requirements eventually spread to robotics and industrial automation, QNX’s addressable market can expand with them.
Analysts take notice
BlackBerry’s earnings beat alone would have moved the stock price Thursday. But the surge was also amplified by a wave of analyst activity.
Stifel launched coverage on BB with a Buy rating and a $12 price target, backing the stock even after a 130% year-to-date surge and describing BlackBerry as a mission-critical “physical AI” software player and key partner to major chipmakers. CIBC simultaneously raised its price target from $8.50 to $10 and maintained its “outperform” rating, pointing directly to QNX and Secure Communications as the growth engines.
Looking ahead, BlackBerry itself guided for full-year fiscal 2027 revenue of $594 to $621 million (with the midpoint ahead of consensus) and operating cash flow of about $100 million. That forward guidance reinforced the idea that the company won’t be a one-quarter wonder.
BlackBerry’s recent transformation
It’s worth stepping back to appreciate just how dramatic this turnaround has been. For the full fiscal year 2026, BlackBerry posted net income of $53.2 million, compared with a net loss of $79 million the prior year. Adjusted EPS rose to $0.16 from $0.02. The company that investors wrote off as permanently impaired has now delivered multiple consecutive quarters of profitability, expanding margins, and accelerating revenue growth.
BB is now one of the market’s most impressive performers in 2026, climbing roughly 133% year-to-date before Thursday’s surge. The stock that had a consensus price target of $4.88 a few weeks ago just closed above $10.
The doubters had built a compelling case. But it looks as if BlackBerry just made a very persuasive counter-argument.
Claude Sonnet 4.6 contributed to this report.
