Why is Blackberry stock surging over 20% today?

Shares of BlackBerry BB traded higher on Thursday morning after the company reported stronger-than-expected first-quarter results and raised its financial outlook for fiscal 2027.

At the time of writing, BB stock was up more than 22% on the NYSE following the earnings release.

The company said it achieved operating cash flow of $4.6 million (approx. ₦6.4 billion) in the first quarter, describing it as its "first cash-positive fiscal quarter in nine years," excluding the non-core patent sale in 2024.

The result was supported by growing demand for its vehicle software and encrypted communications offerings.

BlackBerry reported revenue of $152.9 million (approx. ₦211.9 billion) for Q1, up 26% year-on-year and ahead of the $137.9 million (approx. ₦191.1 billion) estimate polled by Fiscal AI.

Adjusted earnings per share came in at $0.04, slightly above the $0.03 estimate.

The company also raised its fiscal 2027 revenue outlook to a range of $594 million (approx. ₦823.1 billion) to $621 million (approx. ₦860.5 billion), compared with its previous forecast of $584 million (approx. ₦809.2 billion) to $611 million (approx. ₦846.6 billion).

Growth driven by QNX, Secure Communications and AI opportunities

BlackBerry said growth was driven by strong performance across its core business segments, particularly QNX and Secure Communications, which both recorded double-digit percentage gains.

QNX revenue rose 26% to $72.3 million (approx. ₦100.2 billion), while Secure Communications increased 24% to $73.6 million (approx. ₦102 billion). Licensing revenue also contributed modestly at about $10 million (approx. ₦13.9 billion).

“Demand across our markets remains healthy. Customer engagement is strong, and our backlog continues to expand,” the company said during its earnings call with analysts. “Governments around the world continue to prioritize digital sovereignty, cybersecurity modernization, and secure communications infrastructure, creating favorable demand conditions for our solutions.”

The company also highlighted emerging opportunities in artificial intelligence and automation.

“Where particularly excited about the long-term opportunity in physical AI. As intelligent machines become increasingly autonomous and operate around people, the requirements for safety, security, reliability, and real-time determinism become even more important,” BlackBerry said.

It added: “In many ways, automotive has been a proving ground for the demands of physical AI. Modern vehicles are essentially robots on wheels, and QNX has established itself as a trusted platform supporting many of the industry's most advanced autonomous and safety-critical systems.”

Fiscal 2027 outlook raised as embedded software momentum builds

BlackBerry raised its fiscal 2027 outlook, citing stronger embedded software performance and expanding AI-related opportunities.

The company now expects QNX revenue of $295 million (approx. ₦408.8 billion) to $312 million (approx. ₦432.3 billion), up from a prior forecast of $290 million (approx. ₦401.8 billion) to $307 million (approx. ₦425.4 billion), while Secure Communications guidance remains unchanged.

Licensing revenue is expected to be slightly higher.

Adjusted earnings for fiscal 2027 are projected in the range of 16 to 20 cents per share, compared with Wall Street expectations of 18 cents per share.

Chief Executive John Giamatteo said the company sees multi-year growth potential ahead, particularly in software-defined vehicles and broader embedded systems markets.

“We believe these opportunities significantly enhance QNX's long-term potential,” Giamatteo said.

For the current quarter, BlackBerry expects revenue between $137 million (approx. ₦189.8 billion) and $148 million (approx. ₦205.1 billion), above prior expectations, with adjusted EBITDA forecast at $20 million (approx. ₦27.7 billion) to $30 million (approx. ₦41.6 billion) and adjusted earnings of 3 to 4 cents per share.