BlackBerry rises after Q2 beat, raises FY26 outlook

BlackBerry's shares rose by 1% in premarket trading following a strong second-quarter report, which highlighted a non-GAAP EPS of $0.04 and a 3% increase in revenue to $129.6 million, both exceeding analyst expectations.

The company's QNX division saw significant growth with a 15.36% year-over-year revenue increase, while the Secure Communications segment experienced a decline of approximately 9.9%.

BlackBerry has raised its financial outlook for fiscal year 2026, projecting revenues between $519 million and $541 million, surpassing previous estimates and consensus, as well as improving its EPS forecast.

Recommendation Rating: Positive Outlook for BlackBerry

On Thursday, shares of BlackBerry (NYSE:BB) increased by approximately 1% in premarket trading, following the release of strong second-quarter results that exceeded expectations. Additionally, the company has elevated its financial outlook for fiscal year 2026.

For its fiscal second quarter, which concluded on August 31, BlackBerry reported a non-GAAP earnings per share (EPS) of $0.04, alongside a year-over-year revenue rise of about 3%, totaling $129.6 million. Both the revenue and EPS figures surpassed analyst forecasts.

CEO John Giamatteo commented, "BlackBerry demonstrated year-over-year revenue growth while enhancing its gross margins and effectively reducing operating expenses. This synergy translated into robust profitability for the second quarter, outpacing expectations and marking our second straight quarter of GAAP profitability."

In terms of performance by segment, BlackBerry's QNX division experienced significant growth, with revenue increasing by 15.36% year over year to reach $63.1 million. Conversely, revenue from the Secure Communications segment saw a decline of roughly 9.9% year over year, standing at $59.9 million.

The company returned $20 million to shareholders during the quarter by repurchasing about 5 million common shares.

Looking ahead, BlackBerry has revised its full fiscal year 2026 revenue forecast, now projecting between $519 million and $541 million, with a midpoint of $530 million. This is a notable increase from the previous estimate range of $508 million to $538 million, with a midpoint of $523 million, and it also exceeds the consensus estimate of $519.74 million.

The company anticipates that its non-GAAP basic EPS will range from $0.11 to $0.15, with a midpoint of $0.13, which is an improvement compared to the prior range of $0.08 to $0.10 and surpassing the consensus of $0.09.

For the upcoming fiscal third quarter, BlackBerry projects revenues between $132 million and $140 million, with a midpoint of $136 million, slightly lower than the consensus estimate of $138.04 million. The anticipated non-GAAP basic EPS for this quarter is expected to fall between $0.02 to $0.04, with a midpoint of $0.03, aligning closely with the consensus of $0.03.