Q1 2026 BlackBerry Ltd Earnings Call
All participants will be in a listen only mode. We will be facilitating a brief question and answer session towards the end of the conference.
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As a reminder, this conference is being recorded for replay purposes.
I would now like to turn the call over to Martha Gondar director of Investor Relations with Blackberry.
Speaker Change: Thank you you may begin.
Speaker Change: Thank you Julien good afternoon, everyone and welcome to Blackberrys first quarter fiscal year 2026 earnings Conference call. Joining me on today's call is Blackberry, Chief Executive Officer, Jon <unk>, and Chief Financial Officer, Jim Foote.
Speaker Change: After I read our cautionary note regarding forward looking statements John will provide a business update and Tim will review the financial results.
Speaker Change: We'll then open the call for a brief Q&A session.
Speaker Change: This call is available to the general public via call in numbers and via webcast in the Investor information section at Blackberry Dot Com.
Speaker Change: A replay will also be available on the Blackberry Dotcom website. Some of the statements we'll be making today constitute forward looking statements and are made pursuant to the safe Harbor provisions of applicable U S and Canadian Securities laws, we'll indicate forward looking statements by using words, such as expect will should model Intel.
Speaker Change: And believe and similar expressions.
Speaker Change: <unk> 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 as well as other factors that the company believes are relevant.
Speaker Change: Many factors could cause the company's actual results or performance to differ materially from those expressed or implied by the forward looking statements. These factors include the risk factors that are discussed in the Companys annual filings and MD&A.
Speaker Change: You should not place undue reliance on the company's forward looking statements.
Speaker Change: Any forward looking statements are made only as of today and the company has no intention and undertakes no obligation to update or revise any of them except as required by law.
Speaker Change: As is customary during the call John and Ken will reference non-GAAP numbers in their summary of our quarterly results for a reconciliation between our GAAP and non-GAAP numbers. Please see.
Speaker Change: The earnings press release published earlier today, which is available on Edgar SEDAR and Blackberry Dot Com website.
Speaker Change: And with that let me now turn the call over to John.
John: Thanks, Martin and thanks to everyone for joining today's call.
John: We made a very solid start to fiscal year 2026, with our results, beating the top end of guidance almost entirely across the board.
John: Total company revenue for the quarter was stronger than expected, beating guidance at $121 7 million.
John: Blackberry delivered solid profitability with adjusted EBITDA growing over 55% year over year and beating the top end of the guidance range at $16 4 million.
John: Likewise non-GAAP earnings per share beat guidance at positive too.
John: And despite seasonality in our cash flow for the first half of the year the stronger profitability helped to deliver better than expected operating cash usage of $18 million.
John: In May we announced the $100 million share buyback program based on our confidence in our in our plan to both continue generating cash as well as driving increased shareholder value.
John: During the quarter, we started to utilize the capital allocation Optionality that this facility brings by repurchasing $10 million worth of shares.
Tim: Tim will provide more details on this later in the call.
Speaker Change: I'll now give some color on how we executed at a divisional level starting with Q&A.
Speaker Change: <unk> revenue for Q1 beat the upper end of our guidance range at $57 5 million.
John: This represents 8% year over year growth, despite the uncertainty facing the auto market, including the impact of various tariff announcements.
John: Royalties and development seat licenses were the main drivers of year over year revenue growth for the quarter growing 9% and 23% respectively.
Speaker Change: We have a strong plan for profitable growth in Q1 ex capitalizing on both our market position and the multiyear secular tailwind that are driving this business forward.
Speaker Change: As part of this for fiscal year 'twenty six we have two key strategies that we believe will help drive future growth.
Speaker Change: These are took both increased diversification of the business beyond automotive into adjacent verticals.
Speaker Change: And to increase our share of the automotive software stack by offering pre integrated middleware as part of a vehicle platform.
Speaker Change: Starting with increasing diversification beyond automotive.
Speaker Change: We believe this has a number of benefits.
Speaker Change: First we see a very significant addressable market in the general embedded space, which we believe could be larger than the auto opportunity.
Speaker Change: Second, although we're very diversified across auto Oems and geographies diversification into other markets can reduce cyclical exposures.
Speaker Change: We're targeting substantial expansion of our beachheads, and robotics, industrial automation and medical devices and equipment.
Speaker Change: Similar to automotive these verticals are seeing significant growth in compute and safety critical software at the edge, which is where <unk> really excels.
Speaker Change: With minimal adaptations to the core <unk> code base.
Speaker Change: We are able to meet the needs of customers and therefore, we see this as primarily a go to market task.
Speaker Change: No.
Speaker Change: Accordingly, we're all we're adding industry expertise in growing our gym focused sales force.
Speaker Change: We're also working towards engaging new channel partners that will greatly increase our reach in these markets.
Speaker Change: SDP a dot O. Our next generation version of <unk> operating system is progressing well in this market and we have a strong non automotive mix in the pipeline.
Speaker Change: In fact, Jim currently represents 43% of our total SDP eight dot O pipeline with the overall pipeline, having grown by 55% in the quarter.
Speaker Change: Further our largest SDP eight Dod old design win to date was with a leading industrial automation Oems.
Speaker Change: They will deploy the latest version of <unk> across multiple applications.
Speaker Change: These are clear data points that show, how our increased investment in Jim is already starting to generate real returns.
Speaker Change: The second focus is the queue Nx vehicle platform that was announced earlier this year at CES.
Speaker Change: We're developing this product in response to requests from some leading Oems who have identified the importance of focusing their teams on customer facing applications, rather than spending time on on differentiated parts of the software stack.
Speaker Change: Yesterday, we announced the memorandum of understanding with a leading middleware provider vector.
Speaker Change: To provide a highly integrated hardware agnostic solution that customers can leverage across the vehicles.
Speaker Change: This builds on an earlier announcement with both vector and T T Chek at CES in January.
Speaker Change: The goal is to help our customers simplify development and shorten time to market.
Speaker Change: We are in conversations with several Oems for this solution and are targeting delivery of an early access version of the product this calendar year.
Speaker Change: We continue to refine the business model for this platform, but should it be successful directionally, we expect it to provide a significant uplift to our royalty ISP once deployed in vehicles.
Speaker Change: We were excited to announce the launch of <unk> Hypervisor eight Dod Oh at the end of the quarter.
Speaker Change: The Hypervisor is an important part of our portfolio, allowing customers to virtually host guest operating systems like Android and Linux alongside safety critical applications running on Q N X all on the same chip.
Speaker Change: Upgrading the Hypervisor. So the next generation performance standards of our STP eight donahoe operating system can help cement our leadership position with a mixed criticality domains like the digital cockpit.
Speaker Change: <unk> Nx thrives in high performance safety critical use cases are.
Speaker Change: <unk> drive is a great example.
Speaker Change: This past quarter, we announced that we ride a global leader in autonomous drive technology is using Q and acts as the foundation for L. Two class passenger vehicles.
Speaker Change: In fact, this technology is already being deployed in a couple of sherri's vehicle models that are on the road in China today.
Speaker Change: As autonomous drive continues to ramp worldwide, we see this as an exciting opportunity for Blackberry.
Speaker Change: Yeah.
Speaker Change: We're working to build the <unk> ecosystem through the availability of <unk> products for non commercial use and the development of Q N X centric training programs.
Speaker Change: We believe that having a stronger community of developers and partners with Q and ex experience will help drive adoption across Oems, especially in the general embedded market.
Speaker Change: This quarter, we initiated a program in India with more than 30 educational institutions developing or currently offering <unk> focus courses.
Speaker Change: We're also working with institutions in North America with the goal of launching additional courses this calendar year.
Speaker Change: Okay.
Speaker Change: In terms of the macro there is clearly uncertainty in the market, which we are currently having to navigate with some of our customers pulling guidance until market conditions become clearer.
Speaker Change: While we have not seen any direct impact from the automotive tariffs there have been some delays to customer buying decisions due to this macro uncertainty.
Speaker Change: As the Oems navigate possible disruption to supply chains, there could also potentially be impacts on production volumes, which could impact royalty revenue.
Speaker Change: We're taking these factors into account in our guidance and we will continue to monitor closely as we head through this fiscal year.
Speaker Change: Yeah.
Speaker Change: Moving now to our secure communications Division.
Speaker Change: This was a strong quarter for the division, beating the top end of our guidance range with quarterly revenue of $59 5 million.
Speaker Change: Annual recurring our recurring revenue or <unk> was stable at $209 million.
Speaker Change: Our dollar based net retention rate or D. B NR are also remained relatively flat at 92%.
Speaker Change: These stable fundamentals position to secure communications division well as a solid source of EBITDA and cash flow for Blackberry.
It could also potentially be impacts on production volumes, which could impact royalty revenue.
Speaker Change: The stronger than expected revenue number was in large part driven by the strength of our secchi smart product.
Speaker Change: This was another strong quarter for sales to the German government, where we closed some large deals earlier than expected.
Speaker Change: In addition to the core German market the pipeline of potential deals with customers around the world continues to grow.
Speaker Change: Especially where we're seeing significantly increase budgets, particularly in defense.
Speaker Change: Governments are increasingly evaluating the tools they use in the wake of vulnerabilities seen in using consumer focused platforms for critical communications.
Speaker Change: While sales cycles and governments are typically long we are optimistic about our ability to close additional deals for <unk> smart this fiscal year.
Speaker Change: During Q1 AD hoc earned fed ramp high authorization, the highest level of attainment for safe care safeguarding mission critical sensitive data within the U S Federal government.
Unknown Executive: During the presentation, all participants will be in a listen-only mode. We will be facilitating a brief question and answer session towards the end of the conference. Should you need assistance during the call, please signal a conference specialist by pressing star. As a reminder, this conference is being recorded for replay purposes.
<unk>, the German government, where we closed some large deals earlier than expected.
Speaker Change: As the first critical event management platform to achieve fed ramp hi, This further strengthens our moat and further expands our addressable market.
In addition to the core German market the pipeline of potential deals with customers around the world continues to grow.
Especially where we're seeing significantly increased budgets, particularly in defense.
Martha Gonder: I would now like to turn the call over to Martha Gonder, Director of Investment Relations with BlackBerry. Thank you.
Speaker Change: During the quarter, we secured wins for AD hoc with several U S federal organizations, including the U S Marine Corps U.
Governments are increasingly evaluating the tools they use in the wake of vulnerability seen in using consumer focused platforms for critical communications.
Unknown Executive: You may be dismissed. Thank you, Julian.
Unknown Executive: Good afternoon, everyone, and welcome to BlackBerry's first quarter Fiscal Year 2026 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.
Speaker Change: S Air Force Senate FEMA, the White House communications agencies, as well as other organizations in Germany and Canada.
While sales cycles and governments are typically long we are optimistic about our ability to close additional deals for <unk> smart this fiscal year.
Speaker Change: Moving on to our unified endpoint management product Blackberry Uhm.
Speaker Change: Uhm continues to perform as expected with some ongoing churn with customers moving to a cloud based architecture, partially offset by a deepening of our on premise mode for those customers, who particularly value data sovereignty.
During Q1 AD hoc earned fed ramp high authorization.
Unknown Executive: 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 of the statements we'll be making today constitute forward-looking statements, and are made pursuant to the safe harbor provisions of applicable U.S. and Canadian securities laws. will indicate forward-looking statements by using 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, as well as other factors that the company believes are relevant.
The highest level of attainment for safe care safeguarding mission critical sensitive data within the U S Federal government.
As the first critical event management platform to achieve fed ramp hi.
Speaker Change: One of the legacy players in this market has signaled the end of life for their on premise solution.
This further strengthens our moat.
And further expands our addressable market.
Speaker Change: In contrast, we continue to make targeted investments.
The quarter, we secured wins for AD hoc with several U S federal organizations, including the U S Marine Corps.
Speaker Change: This quarter, we secured deals for <unk> with a broad spectrum of customers, including the U S Special operations command.
Therefore.
Senate.
FEMA, the Whitehouse communications agencies as well as other organizations in Germany and Canada.
Speaker Change: <unk> Air Force, the U K Sellafield nuclear power establishment and national grid, the Qatar National Bank.
Moving onto our unified endpoint management product.
Unknown Executive: Many factors could cause a company's actual results or performance to differ materially from those expressed or implied by the forward-looking statement. These factors include the risk factors that are discussed in the company's annual filings and MD&A. You should not place undue reliance on the company's forward-looking statements. Any forward-looking statements are made only as of today and the company has no intention and undertakes no obligation to update or revise any of them, except as required by law. As is customary during the call, John and Tim will reference non-GAAP numbers in their summary of our quarterly results.
Speaker Change: A leading U S Bank Oppenheimer.
Speaker Change: And the Netherlands government shared services.
Liam.
UBS continues to perform Asics.
Speaker Change: These data points increase our confidence in both defending and expanding our UE am on premise customer base.
With some ongoing churn with customers moving to a cloud based architecture.
Partially offset.
By a deepening of our on premise for.
Speaker Change: Yeah.
Speaker Change: Touching briefly on IP licensing this was a solid quarter, where revenue from pre existing licensing deals.
For those customers, who particularly value data sovereignty.
One of the legacy players in this market has signaled the end of life for their on premise solution.
Speaker Change: Drove the quarterly result of $4 7 million.
Speaker Change: We understand that Maliki the party that purchased our non core patents in 2024 is pursuing a number of potential licensing opportunities.
In contrast, we continue to make targeted investments.
Unknown Executive: For a reconciliation between our GAAP and non-GAAP numbers, please see the earnings press release published earlier today, which is available on Anchor, CedarPlus, and BlackBerry.com websites.
This quarter, we secured deal for <unk>.
With a broad spectrum of customers, including the U S Special operations Command U.
Speaker Change: Should they be successful Blackberry will participate in the profit they generate.
John Giamatteo: And with that, let me now turn the call over to John. Thanks, Martha. And thanks to everyone for joining today's call. We made a very solid start to fiscal year 2026 with our results beating the top end of guidance almost entirely across the board. Total company revenue for the quarter was stronger than expected, beating guidance at $121.7 million. BlackBerry delivered solid profitability with adjusted EBITDA growing over 55% year over year and beating the top end of the guidance range at $16.4 million. Likewise, non-GAAP earnings per share beat guidance at positive two cents. And despite seasonality in our cash flow for the first half of the year, this stronger profitability helped to deliver better than expected operating cash usage of $18 million.
U S Air Force the U K Sellafield nuclear power establishment and national grid.
Speaker Change: While we do not expect incremental revenue. This current year it could provide upside in fiscal year 'twenty seven in fiscal year 2008.
Because of our National Bank.
Leading USA Oppenheimer.
Speaker Change: Yeah.
Speaker Change: With that let me now turn the call over to Tim who will provide further details on our financials.
And the Netherlands government shared services.
These data points increase our confidence in both defending and expanding our UE am on premise customer base.
Tim: Thank you Joe and good afternoon, everyone as Joe mentioned revenue for the total company in the quarter exceeded the top end of guidance at $121 7 million.
Yeah.
Hudson briefly on IP licensing this was a solid quarter, where revenue from pre existing licensing deals.
Speaker Change: On the cost side. This was a quarter of puts and takes.
Drove the quarterly result of $4 7 million.
Speaker Change: So opex headwinds from FX due to a weakening U S dollar.
We understand that Maliki the party that purchased our non core patents in 2024.
Speaker Change: A significant portion of our costs are denominated in other currencies, especially the Canadian dollar and euro.
Pursuing a number of potential licensing opportunities.
Should they be successful Blackberry will participate in the profit they generate.
Speaker Change: However, we also had some items go in Hawaii, including approximately $4 5 million of grant funding as a result of a newly reinvigorated partnership the Canadian government a strategic innovation fund.
While we do not expect incremental revenue. This current year it could provide upside in fiscal year 2007 in fiscal year 2008.
John Giamatteo: In May, we announced a $100 million share buyback program based on our confidence in our plan to both continue generating cash as well as driving increased shareholder value. During the quarter, we started to utilize the capital allocation optionality that this facility brings by repurchasing $10 million worth of shares. Tim will provide more details on this later in the call.
Speaker Change: The fund is to support the development of cutting edge technology in Canada.
Tim: With that let me now turn the call over to Tim who will provide further details on our financials.
Speaker Change: Helped offset some of the incremental R&D investment in Q&A eggs during the quarter.
Tim: Thank you and good afternoon, everyone.
As Joe mentioned revenue for the total company in the quarter exceeded the top end of guidance at 121 7 million.
Speaker Change: Total company adjusted gross margin expanded by 1% year over year to 75% and total company adjusted EBITDA beat expectations.
On the cost side. This was a quarter of puts and takes.
Speaker Change: $16 4 million.
We so opex headwinds from FX due to a weakening U S dollar.
Speaker Change: <unk> grew the hard work the team has done over the past year to implement time to cost controls is really showing benefits.
A significant portion of our costs are denominated in other currencies.
John Giamatteo: I'll now give some color on how we executed at a divisional level, starting with Q&A. QNX revenue for Q1 beat the upper end of our guidance range at $57.5 million. This represents 8% year over year growth, despite the uncertainty facing the auto market, including the impact of various tariff announcements. Royalties and development seat licenses were the main drivers of year-over-year revenue growth in the quarter, growing 9% and 23% respectively. We have a strong plan for profitable growth in QNX, capitalizing on both our market position and the multi-year secular tailwinds that are driving this business forward.
Especially the Canadian dollar and euro.
Speaker Change: Adjusted net income for Q1 was $12 3 million.
However, we also had some items going away.
Speaker Change: Blackberry achieved positive quarterly GAAP net income for the first time three years at $1 $9 million.
Tim: <unk> approximately $4 5 million of grant funding as a result of.
Tim: Our newly reinvigorated partnership the Canadian government's strategic innovation fund.
Speaker Change: Adjusted EPS also beat expectations up two cents.
Tim: The fund is to support the development of cutting edge technology in Canada.
Speaker Change: Given that revenue beat the top end of the guidance range of 57 5 million.
It helped offset.
Speaker Change: <unk> gross margins were slightly down 1%, primarily as a result of the effects of unfavorable exchange rates.
Some of our incremental R&D.
In Q&A extra in the quarter.
Total company adjusted gross profit.
Speaker Change: Adjusted EBITDA for Q, an X in the quarter exceeded the top end of guidance at 12 7 million.
Only about 1% year over year.
75%.
And total company adjusted EBITDA.
John Giamatteo: As part of this, for fiscal year 26, we have two key strategies that we believe will help drive future growth. These are to both increase diversification of the business beyond automotive into adjacent verticals and to increase our share of the automotive software stack by offering pre-integrated middleware as part of a vehicle platform. Starting with increasing diversification beyond automotive, we believe this has a number of benefits. First, we see a very significant addressable market in the general embedded space, which we believe could be larger than the auto opportunity. Second, although we're very diversified across auto OEMs and geographies, diversification into other markets can reduce cyclical exposure.
Speaker Change: Revenue for secure communications exceeded the top end of guidance in the quarter of 59.
Our expectations at $16 4 million.
Overall, our hard work the team has dominated Austria to implement tight cost controls is really showing benefits.
Speaker Change: 8 million.
Speaker Change: Primarily as a result of strong performance from second small.
Speaker Change: This is higher than expected revenue helped drive the sequential and year over year gross margin expansion in Q1 to 17%.
Adjusted net income for Q1 was $12 3 million.
Blackberry achieved.
Quarterly GAAP net income for the first time over three years at $1 $9 million.
Speaker Change: Leverage in the secure communications model helped the division to exceed our expectations for adjusted EBITDA of $9 6 million.
Adjusted EPS also beat expectations up too.
Speaker Change: Finally, our licensing division delivered revenue of $4 7 million and adjusted EBITDA of $3 8 million, both slightly below expectations due to lower revenue from existing licensing arrangements in the quarter.
Given that revenue.
Top end of the guidance range of $57 5 million.
<unk> gross margins.
81%, primarily as a result of the effects of unfavorable exchange rates.
Speaker Change: Adjusted corporate operating costs, excluding amortization came in at $9 7 million in Q1 in line items.
Adjusted EBITDA for Q <unk> in the quarter exceeded the top end of guidance at 12 7 million.
John Giamatteo: We're targeting substantial expansion of our beachheads in robotics, industrial automation, and medical devices and equipment. Similar to automotive, these verticals are seeing significant growth in compute and safety-critical software at the edge, which is where QNX really excels. With minimal adaptations to the core QNX codebase, we are able to meet the needs of customers, and therefore, we see this as primarily a go-to-market task. Accordingly, we're adding industry expertise and growing our gem-focused sales force. We're also working towards engaging new channel partners that will greatly increase our reach in these markets. SDP 8.0, our next generation version of the QNX operating system is progressing well in this market.
Speaker Change: As previously outlined Q1 is a phase normalized cash with Blackberry.
Revenue for secure communications exceeded the top end of guidance in the quarter of 59.
Speaker Change: The combination of our billings profile.
$5 million.
Primarily as a result of strong performance from say small.
Speaker Change: Timing of certain annual income statements.
Speaker Change: The first quarter is always the burn quarter.
This higher than expected revenue helped drive sequential and year over year gross margin expansion in Q1, 17%.
Speaker Change: That said cash used by operations was better than guidance.
Speaker Change: Usage of $18 million.
Leverage in the secure communications model.
Speaker Change: This includes approximately $11 million of cash relating to restructuring costs.
The division to exceed expectations for adjusted EBITDA of $9 6 million.
Speaker Change: Excluding $6 million of employee severance and the $5 million for lease payments for properties that we've exited.
Finally, our licensing division delivered revenue of $4 7 million and adjusted EBITDA of $3 8 million, both slightly below expectations due to lower revenue from existing licensing arrangements in the quarter.
Speaker Change: We expect the cash commitments for these leases to reduce as the fiscal year goes on.
Speaker Change: In addition to cash used by operations, we returned $10 million to shareholders.
Adjusted corporate operating costs, excluding amortization.
Speaker Change: Lots of the share buyback program.
Speaker Change: Therefore, total cash and investments decreased by $28 million during the quarter to $392 million, which remains almost $100 million better than this time last year.
Came in at $9 7 million in Q1 in line items.
John Giamatteo: And we have a strong non automotive mix in the pipeline. In fact, GEM currently represents 43% of our total SDP 8.0 pipeline with the overall pipeline having grown by 55% in the quarter. Further, our largest SDP 8.0 design win to date was with a leading industrial automation OEM. They will deploy the latest version of QNX across multiple applications. These are clear data points that show how our increased investment in GEM is already starting to generate real returns.
As previously outlined.
One is a seasonal.
Cash.
The combination of our billings profile and timing of certain annual cash payments.
Speaker Change: The number was $283 million.
Speaker Change: As Joe mentioned, we received approval for a share buyback program during the quarter.
This is the first quarter is always.
With the burden of water.
That said cash used by operations was excellent.
Speaker Change: Grandma allows for the repurchase of up to $100 million of shares grew approximately four 7% of the <unk>.
Guidance.
Page $18 million.
This includes approximately $11 million of cash relating to restructuring costs.
Speaker Change: Our outstanding at the time of approval.
Speaker Change: I'm pleased to report that we took solid steps in this program.
$6 million of employee severance and the $5 million ALLETE properties.
Speaker Change: We purchased approximately $10 million or two 6 million shares.
We have exited.
We expect the cash commitments for these leases to Ritchie Bros. The fiscal year goes on.
Speaker Change: The average price per share of $3.89.
John Giamatteo: The second focus is the QNX vehicle platform that was announced earlier this year at CES. We're developing this product in response to requests from some leading OEMs who have identified the importance of focusing their teams on customer facing applications, rather than spending time on undifferentiated parts of the software stack. Yesterday, we announced the Memorandum of Understanding with a leading middleware provider, Vector, to provide a highly integrated hardware agnostic solution that customers can leverage across the vehicle. This builds on an earlier announcement with both Vector and TT Tech at CES in January. The goal is to help our customers simplify development and shorten time to market.
Speaker Change: But prior periods commenced.
In addition to cash used by operations, we returned $10 million to shareholders as part of the share buyback program.
Speaker Change: He says I've been subsequently canceled.
Speaker Change: These actions illustrate our belief.
Therefore, total cash investments decreased by 28 million during the quarter to $392 million.
Speaker Change: Barry shares are undervalued and that we have a strong plan to continue to generate cash on an annual basis.
Which remains almost $100 million.
Speaker Change: While we are known for clients to repurchase shares. The program will continue to provide capital allocation optionality as we continue through the rest of the year, allowing for further repurchases if the conditions are favorable.
Uh huh.
And this time last year.
And $83 million.
As Joe mentioned, we received approval for share buyback program during the quarter.
The program allows for the repurchase.
Speaker Change: Turning now to financial outlook for the second fiscal quarter and the full fiscal year.
Up to $100 million.
Yes.
Grew approximately four 7% of the number of outstanding.
Speaker Change: Overall, we are not getting carried away with what was the best in unexpected first quarter.
Approvals.
I'm pleased to report solid first.
Speaker Change: We're of course very pleased to have been some expectations almost across the board.
This program.
We repurchased approximately $10 million or two 6 million shares.
John Giamatteo: We are in conversations with several OEMs for this solution and are targeting delivery of an early access version of the product this calendar year. We continue to refine the business model for this platform, but should it be successful, directionally, we expect it to provide a significant uplift to our royalty ASP once deployed in vehicle.
Speaker Change: We expect the remainder of the year to look very different than how it did 90 days ago.
At an average price per share.
$3.89.
Speaker Change: We are taking a prudent position for Q <unk> and Q2, given that any slowdown in production volumes in the first calendar quarter. As a result of recent tariff changes are likely to impact Q2 royalty revenues.
Before by prior periods can manage.
These shares have been subsequently canceled.
These actions illustrate our belief the Blackberry shares are undervalued.
We have a strong plan to continue to generate cash on an annual basis.
Speaker Change: We are also allowing for elongated buying decisions and new design wins, especially newer products like Q&A cabinet.
While we are non stop loss.
John Giamatteo: We were excited to announce the launch of QNX Hypervisor 8.0 at the end of the quarter. The hypervisor is an important part of our portfolio, allowing customers to virtually host guest operating systems like Android and Linux alongside safety critical applications running on QNX, all on the same chip. Upgrading the hypervisor to the next generation performance standards of our SDP 8.0 operating system can help cement our leadership position within mixed criticality domains like the digital cockpit. QNX thrives in high-performance, safety-critical use cases. Autonomous Drive is a great example. This past quarter, we announced that WeRide, a global leader in autonomous drive technology is using QNX as the foundation for L2 plus passenger vehicles.
Speaker Change: She says.
Speaker Change: Graeme will continue to provide capital preservation.
Speaker Change: As a result, we expect revenue for Q and exiting Q2 being in the range of $55 million to $60 million.
Speaker Change: As we continue through the rest of the year, allowing for further repurchases if the conditions are favorable.
Speaker Change: For adjusted EBITDA to be in the range of $10 million to $30 million.
Speaker Change: Turning now to financial outlook.
Speaker Change: Despite the uncertainty in the market, we continue to hold our full year revenue guidance range of $2 $50 million to $70 million and adjusted EBITDA between 55 and $60 million.
Speaker Change: Second fiscal quarter.
Speaker Change: Yeah.
Speaker Change: Overall, we are not getting carried away.
Speaker Change: What was the best of unexpected first quarter.
Speaker Change: There are of course very pleased to have beaten expectations almost across the board.
Speaker Change: For secure communications, we are optimistic around the pipeline of opportunities we see.
Speaker Change: We expect the remainder of the year, so look very different than how it did 90 days.
Speaker Change: <unk> for the division.
Speaker Change: We expect revenue for Q2 to be in the range of $54 million to $59 million and for adjusted EBITDA to be between three and 6 million.
Speaker Change: We are taking a prudent position for Q&A.
Speaker Change: Given that any slowdown in production volumes.
Speaker Change: Yes.
Speaker Change: The quarter.
Speaker Change: As a result of recent tariff changes and luggage.
Speaker Change: We performed better than expected in Q1.
Speaker Change: Q2.
Speaker Change: Primarily due to closing some large safety smart deals earlier than expected.
Speaker Change: Royalty revenues.
Speaker Change: We're also allowing for elongated buying decisions.
Speaker Change: We see those deals being replaced in later quarters.
Speaker Change: Tom.
Speaker Change: Especially newer products like Q&A cabinet.
John Giamatteo: In fact, this technology is already being deployed in a couple of Sherry's vehicle models that are on the road in China today. As autonomous drive continues to ramp worldwide, we see this as an exciting opportunity for BlackBerry.
Speaker Change: Increased pipeline opportunities.
Speaker Change: As a result, we expect revenue for Q, <unk> and Q2, expanding the range of $55 million to $60 million.
Speaker Change: Therefore, we are raising our full year revenue guidance.
Speaker Change: 4 million such that the range is now 234 $244 million.
Speaker Change: For adjusted EBITDA to be in the range of $10 million to $13 million.
Speaker Change: Adjusted EBITDA to be between 37, and 47 million or 16% to 96%.
Speaker Change: Despite the uncertainty in the market, we continue to hold our full year revenue guidance range of two.
John Giamatteo: We're working to build the QNX ecosystem through the availability of QNX products for non-commercial use and the development of QNX-centric training programs. We believe that having a stronger community of developers and partners with QNX experience will help drive adoption across OEMs, especially in the general embedded market. This quarter we initiated a program in India with more than 30 educational institutions developing or currently offering QNX focused courses. We're also working with institutions in North America with the goal of launching additional courses this calendar year.
Speaker Change: $2 50.
Speaker Change: <unk> hundred $17 million.
Speaker Change: For licensing we reiterate our guidance for revenue to be approximately 6 billion and adjusted EBITDA to be approximately $5 million a quarter.
Speaker Change: And adjusted EBITDA between 55 and $60 million.
Speaker Change: Secure communications, we are optimistic around our pipeline of opportunities.
Speaker Change: The full fiscal year, we're holding guidance of $24 million revenue.
Speaker Change: The division.
Speaker Change: We expect revenue for Q2 to be in a range of $54 million to $59 million and.
Speaker Change: EBITDA approximately $20 million.
Speaker Change: We continue to expect adjusted corporate overheads.
Speaker Change: And adjusted EBITDA to be between.
Speaker Change: Q3 and $6 million.
Speaker Change: Excluding amortization to be approximately $10 million, a quarter or $40 million for the full fiscal year.
Speaker Change: We performed better than expected in Q1.
Speaker Change: Primarily due to placing some large surface mount deals earlier than expected.
Speaker Change: The total company level, we expect revenue for Q2 to be the range of $115 million to $125 million.
Speaker Change: We see those deals being replaced like two quarters.
Speaker Change: Increased pipeline.
Speaker Change: Disease.
Speaker Change: Adjusted EBITDA to be between eight and 14.
Speaker Change: Therefore, we are raising our full year revenue guidance by 4 million such that the range is now 234 $244 million.
John Giamatteo: In terms of the macro, there is clearly uncertainty in the market, which we are currently having to navigate with some of our customers pulling guidance until market conditions become clearer. While we have not seen any direct impacts from the automotive tariffs, there have been some delays to customer buying decisions due to this macro uncertainty. As the OEMs navigate possible disruption to supply chains, there could also potentially be impacts on production volumes, which could impact royalty revenue. We're taking these factors into account in our guidance and we'll continue to monitor closely as we head through this fiscal year.
Speaker Change: Given the increased guidance for both secure communications revenue and adjusted EBITDA, We are raising guidance for the total company as well.
Speaker Change: For adjusted EBITDA.
Speaker Change: For the full fiscal year 2026, we now expect total company revenue to be between 590 <unk>.
Speaker Change: <unk> 37, and 47 million or 16 to 19.
Speaker Change: For licensing, we reiterate our guidance for revenue to be.
Speaker Change: $538 million.
Speaker Change: And adjusted EBITDA to be in the range of 70 to.
Speaker Change: And adjusted EBITDA to be approximately 5 million.
Speaker Change: A $2 7 million.
Speaker Change: non-GAAP EPS, we expect it to be between breakeven and 1% in the second quarter and to remain between eight and 10 cents for the full fiscal year.
Speaker Change: Yes.
Speaker Change: The phone fiscal year, we're holding guidance of $24 million revenue and adjusted EBITDA of approximately $20 million.
Speaker Change: We continue to expect to Josh Siegel.
Speaker Change: As mentioned during the Q4 earnings announcement.
Speaker Change: Excluding amortization.
Speaker Change: We expected the first half of fiscal 'twenty six to be lower than the second half of the year the cash flow as a result of the buildings claims protocol.
Speaker Change: Approximately $10 million a quarter.
Speaker Change: 40 million for the full fiscal year.
John Giamatteo: Moving now to our Secure Communications Division. This was a strong quarter for the division, beating the top end of our guidance range with quarterly revenue of $59.5 million. Annual recurring revenue or ARR was stable at $209 million. Our dollar-based net retention rate, or DBNRR, also remained relatively flat at 92%. These stable fundamentals position the Secure Communications Division well as a solid source of EBITDA and cash flow for BlackBerry. The stronger than expected revenue number was in large part driven by the strength of our Secchi Smart product. This was another strong quarter for sales to the German government, where we closed some large deals earlier than expected.
Speaker Change: The total company level, we expect revenue to be in the range of $115 million to $125 million.
Closing a number of one time factors that will drop off as we get further.
Speaker Change: Yeah.
Speaker Change: Adjusted EBITDA to be between eight and 14.
Speaker Change: Due primarily to tax payments, who wins during the quarter, which related to a number of prior year's countries outside of North America, we expect another quarter of cash usage will be sequentially lower.
Speaker Change: Given the increased uncertainty.
Speaker Change: Secure communications revenue and EBITDA.
Speaker Change: We are raising guidance for the total company as well.
Speaker Change: For the full fiscal year 2026, we now expect total company revenue to be between 590.
Speaker Change: Expect operating cash usage for Q2 in the range of $5 million to $15 million.
Speaker Change: But that was before we still expect Blackberry to be operating cash flow positive for the full fiscal year generating approximately $35 million, which is in addition to the second tranche of cash from Arctic more relating to the sale of sign ups.
Speaker Change: 538 million.
Speaker Change: And adjusted EBITDA to be in the range of 70 to 80.
Speaker Change: $87 million.
Speaker Change: For non-GAAP EPS, we expect it to be between breakeven.
Speaker Change: And 1% in the second quarter.
Speaker Change: And to remain between.
Speaker Change: For the full fiscal year.
Joe: With that let me now turn the call back to Joe.
Speaker Change: As mentioned during the Q4 earnings announcement.
Joe: Thanks for the summary, Tim.
John Giamatteo: In addition to the core German market, the pipeline of potential deals with customers around the world continues to grow. especially where we're seeing significantly increased budgets, particularly in defense. Governments are increasingly evaluating the tools they use in the wake of vulnerability seen and using consumer focused platforms for critical communication. While sales cycles in governments are typically long, we are optimistic about our ability to close additional deals for SecuSMART this fiscal year.
Speaker Change: We expected the first half of fiscal 'twenty six to be lower than the second half of the year the cash flow as a result of the billings and payments spread at all.
Speaker Change: And before we move to Q&A, let me quickly summarize.
Joe: Q1 was a good quarter for Blackberry.
Joe: With total company revenue adjusted EBITDA <unk>.
Speaker Change: There's a number of one time factors.
Speaker Change: It will drop off as we get further.
Joe: P S and cash usage, beating guidance.
Speaker Change: Yes.
Speaker Change: Due primarily to tax payments during the quarter, which relates to a number of prior years to countries outside of North America.
Joe: <unk> delivered a better than expected quarter, despite the challenging landscape in the automotive industry.
Speaker Change: We expect another quarter cash usage will be sequentially lower.
Joe: Our solid strategy to both help our customers execute on their software development goals.
Speaker Change: We expect an operating cash usage for Q2 and range of $5 million to $15 million.
Joe: And to diversify into non automotive verticals continues to show positive signs of traction.
Speaker Change: As before we still expect Blackberry to be operating cash flow positive for the full fiscal year generating approximately $35 million.
John Giamatteo: During Q1, Ad Hoc earned FedRAMP High Authorization, the highest level of attainment for safeguarding mission critical sensitive data within the U.S. federal government. As the first critical event management platform to achieve FedRAMP high, this further strengthens our moat and further expands our addressable margin. During the quarter, we secured wins for Ad Hoc with several U.S. federal organizations, including the U.S. Marine Corps, U.S. Air Force, Senate, FEMA, the White House Communications Agency, as well as other organizations in Germany and Canada.
Joe: Secure communications performed better than expected from both the top and bottom line perspective in the quarter and we're raising our guidance for the full year.
Speaker Change: Which is in addition to the second tranche of cash from Arctic more related to the sale of startup.
Joe: With both of these divisions performing well, we believe Blackberry is in a strong position to continue to generate profit and cash over the long term.
Joe: With that let me now turn the call back to Joe.
Joe: Thanks for the summary, Tim.
Speaker Change: And before we move to Q&A, let me quickly summarize.
Joe: With this solid foundation, we started to execute on repurchasing shares and have significant runway should it be appropriate to continue buying more.
Joe: Q1 was a good quarter for Blackberry.
Joe: With total company revenue.
Joe: Adjusted EBITDA E.
Joe: EPS and cash usage, beating guidance.
Joe: So, let's now move to Q&A operator could you. Please open up the lines.
Joe: <unk> delivered a better than expected quarter, despite the challenging landscape in the automotive industry.
Joe: Thank you we will now begin the question answer session to ask a question. Please press star one on your telephone keypad. Please make sure. Your line is on mute and again that is star one.
John Giamatteo: Moving on to our Unified Endpoint Management product, BlackBerry UEM. UEM continues to perform as expected with some ongoing churn with customers moving to a cloud-based architecture partially offset by a deepening of our on-premise mode for those customers who particularly value data sovereignty. One of the legacy players in this market has signaled the end of life for their on-premise solution.
Joe: As our solid strategy to both help our customers execute on their software development goals and to diversify into non automotive vehicles.
Joe: For just a moment to allow everyone an opportunity to signal for questions. We request that you limit yourself to one question and one follow up.
Joe: <unk> continues to show positive signs of traction.
Joe: Secure communications performed better than expected.
Joe: From both a top and bottom line perspective in the quarter.
Joe: And we're raising our guidance for the full year.
Todd Copeland: And our first question comes from the line of Todd Copeland with CIBC capital markets. Please proceed with your question.
Joe: With both of these divisions performing well, we believe Blackberry is in a strong position to continue to generate profit and cash over the long term.
John Giamatteo: In contrast, we continue to make targeted investments. This quarter we secure deals for UEM with a broad spectrum of customers, including the U.S. Special Operations Command, U.S. Air Force, the U.K. Sellafield Nuclear Power Establishment and National Grid, the Qatar National Bank, Leading U.S. Bank Oppenheimer and the Netherlands Government Shared Services. These data points increase our confidence in both defending and expanding our UEM on-premise customer base.
Joe: Alright.
Joe: I'm doing I'm doing great.
Joe: <unk>.
Joe: So I want to do.
Joe: Ask a question on Q&A and the macro environment.
Joe: With this solid foundation, we started to execute on repurchasing shares and have significant runway should it be appropriate to continue buying more.
Joe: You talked about how you hadn't seen changes to production schedules.
Joe: Anticipating that that's going to happen.
Joe: So, let's now move to Q&A.
Joe: In this current quarter.
Speaker Change: Operator could you please open up the lines.
Joe: Is that.
Joe: Assumption already being realized in the production schedules, you're seeing or you're just building in that downside protection into the guide.
Speaker Change: Thank you we will now begin the question answer session to ask a question. Please press star one on your telephone keypad. Please make sure. Your line is on mute again that is star one.
Speaker Change: Yeah, So great question Todd.
Joe: Ultimately the Q2, our fiscal Q2 royalty revenue is a function of production.
Speaker Change: As for just a moment to allow everyone an opportunity to signal for questions. We request that you limit yourself to one question and one follow up.
John Giamatteo: Touching briefly on IP licensing, this was a solid quarter where revenue from pre-existing licensing deals drove the quarterly result of $4.7 million. We understand that Maliki, the party that purchased our non-core patents in 2024, is pursuing a number of potential licensing opportunities. Should they be successful, BlackBerry will participate in the profit they generate. While we do not expect incremental revenue this current year, it could provide upside in fiscal year 27 and fiscal year 28.
Joe: In Q1, so we don't get the final production numbers bond model, which obviously impacts.
Speaker Change: Okay.
Speaker Change: And our first question comes from the line of Todd Copeland with CIBC capital markets. Please proceed with your question.
Joe: How much rotate we're going to get until.
Joe: Into Q2, so we probably stay in a reasonable amount of risk there in the guidance that we've given a 55 to 60 to allow for some potential disruption that we haven't yet fully seen in those numbers.
Speaker Change: Yes.
Speaker Change: I am doing great.
Speaker Change: So I want to do.
Speaker Change: Ask a question on Q&A and the macro environment.
Speaker Change: You talked about how you hadn't seen changes to production schedules.
Joe: Yeah, great and.
Joe: Is there enough clarity in the market at this point.
Speaker Change: Anticipating that's going to happen.
Joe: To give you more confidence for the rest of the year are you still concerned beyond this quarter about possible.
Tim Foote: With that, let me now turn the call over to Tim, who will provide further details on our finances. Thank you John and good afternoon everyone. As John mentioned, revenue for the total company in the quarter exceeded the top end of guidance at $121.7 million.
Speaker Change: In this current quarter.
Speaker Change: Is that.
Speaker Change: Assumption already being realized in the production schedules, you're seeing or you're just building in that downside protection into the guide.
Joe: Production disruptions.
Joe: I mean, it's very it's a very fluid situation I think.
Todd: Yeah. So good question Todd.
Speaker Change: Joe mentioned that some of our customers have actually stepped down my guidance. So.
Todd: Ultimately the key to our fiscal Q2 royalty revenue is a function of production that happens in Q1. So we don't get the final production numbers.
Tim Foote: On the cost side, this was a quarter of puts and takes. We saw OPEX headwinds from FX due to a weakening US dollar. A significant portion of our costs are denominated in other currencies, especially the Canadian dollar and euro. However, we also had some items go our way, including approximately $4.5 million of grant funding as a result of our newly reinvigorated partnership with the Canadian Government's Strategic Innovation Fund. The fund is to support the development of cutting-edge technology in Canada and it helped offset some of our incremental R&D investment in QNX during the quarter. Total company adjusted gross margin expanded by 1% year-over-year to 75%, and total company adjusted EBITDA beat expectations at $16.4 million.
Joe: The fact that we've still got AGA themselves shows that we do have a certain level of visibility but things.
Joe: Things can change it's very fluid.
Joe: I think the prices in a reasonable amount of risk and when we looked at the who knows what's going to happen.
Todd: <unk> model, which obviously impacts.
Todd: How much real estate, we're going to get until.
Todd: Into Q2, so we priced in a reasonable amount of risk there.
Joe: Well, just like everyone else, where we can have to see how things pan out, but we feel pretty confident that we're not entirely.
Speaker Change: The guidance that we've given a 55% to 60 to allow for some potential disruption that we haven't yet fully seen in those numbers.
Joe: Relying on royalties, we pay off all the streams as well.
Joe: Professional services and also the development stage.
Speaker Change: Okay and.
Joe: So pretty good where we're at.
Speaker Change: Is there enough clarity in the market point.
Speaker Change: Thank you and our next question comes from the line of Paul Treiber with RBC capital markets. Please proceed with your question.
Speaker Change: To give you more confidence for the rest of the year are you still concerned beyond this quarter about a possible.
Speaker Change: <unk> described.
Speaker Change: Hi, Nicole.
Speaker Change: I mean, it's a fluid situation.
Speaker Change: Duration.
Joe: We lost Paul.
Speaker Change: Joe mentioned that some of our customers have actually stood down my guidance. So.
Joe: Australia, one is up for questioning.
Joe: Yeah.
Tim Foote: Overall, the hard work the team has done over the past year to implement tight cost controls is really showing benefits. Adjusted net income for Q1 was $12.3 million, and BlackBerry achieved positive quarterly gapped net income for the first time in over three years at $1.9 million. Adjusted EPS, also beat expectations at 2 cents. Given extra revenue, beat the top end of the guidance range at $57.5 million. QNX Gross Margins were slightly down at 81% primarily as a result of the effects of unfavourable exchange rates. Justin Ebert-Dahl for QNX in the quarter exceeded the top end of guidance at $12.7 million.
Speaker Change: We've still got all got themselves shows that we do have a certain level of visibility.
Joe: Oh.
Joe: Okay.
Joe: You might have lost program.
Joe: No worries.
Speaker Change: Things can change it's very fluid.
Speaker Change: Our next question comes from the line of Luke junk with Baird. Please proceed with your question.
Speaker Change: Thank you price in a reasonable amount of risk.
Speaker Change: And when we looked at the year, who knows what's going to happen.
Luke Junk: Good afternoon, and thanks for taking my questions I guess, John I wanted to start with the comments you made on STP eight that Oh, the strong auto non auto next in the pipeline and that the overall pipeline grew by I think you said, 55% in the quarter can you just help us size that big numbers in percentage terms, the China understand how.
Speaker Change: Well, just like everyone else where.
Speaker Change: We can also see how things pan out.
Speaker Change: We feel pretty confident.
Speaker Change: And tani relying on royalties.
Speaker Change: The streams as well.
Speaker Change: Professional services and also that's about it.
Speaker Change: States like.
Speaker Change: We feel pretty good where we're at.
Luke Junk: Ariel that is and maybe if you'd be able to square that with the backlog disclosure you've made for kinect. Thank you.
Speaker Change: Thank you and our next question comes from the line of Paul <unk> with RBC capital markets. Please proceed with your question.
Speaker Change: Yeah.
Joe: We are.
Joe: I don't think we've updated the backlog at all.
Joe: From the last.
Paul: Hi, Nicole.
Wayne: Or is that Wayne.
Joe: We're at 865 million.
Joe:
Nicole: We lost Paul.
Joe: Without getting into the granularity.
Tim Foote: Revenue for Secure Communications exceeded the top end of guidance in a quarter of $59.5 million, primarily as a result of strong performance from SecuSmart. This higher-than-expected revenue helped drive sequential and year-over-year gross margin expansion in Q1 to 70%. Leverage in the Secure Communications Model helped the division to exceed expectations for Just Leave It Dark at $9.6 million.
Paul: Mr. Trevor your line of questioning.
Joe: Granularity of the size of the dollar size of STP that all I can tell you. It is you know one of the.
Paul: Yeah.
Paul: Oh.
Paul: Okay.
Joe: You know the hottest products, where we're getting the most interest in the most demand.
Paul: Just hold on.
Paul: In a word.
Speaker Change: Our next question comes from the line of Luke junk with Baird. Please proceed with your question.
Joe: And it's encouraging to see that it's not just.
Joe: In the automotive space with some of the next generation applications for.
Luke: Hi, good afternoon. Thanks for taking my questions I guess, John I wanted to start with the comments you made.
Joe: But also as we turn more of our attention towards towards Jan towards robotics towards industrial automation.
Speaker Change: Steve E eight that Oh, the strong auto non auto next in the pipeline and that the overall pipeline grew by I think you said, 55% in the quarter.
Joe: We're seeing quite a bit of appetite.
Tim Foote: Finally, our licensing division delivered revenue of $4.7 million and adjusted the DARM of $3.8 million, both slightly below expectations due to lower revenue from existing licensing arrangements in the quarter. Adjusted corporate operating costs, excluding amortization, came in at $9.7 million in Q1. In line with guidance.
Luke: Help us size that big numbers in percentage terms, the China understand how material that is and maybe if he.
Joe: For for it so it's hard to share too much granularity within other.
Joe: Other than we're just happy to see that not only is the total pie growing in terms of overall pipeline, but each of the respective pieces of the pie across automotive and the gem space as well.
Luke: You'd be able to square that with the backlog disclosure you've made for key next thank you.
Luke: Yeah.
Luke: We are.
Luke: I don't think we've updated the backlog at all from the last numbers that Wayne.
Joe: Okay got it.
Luke: 865.
Joe: The share buyback that being new here.
Luke: Right.
Luke: Without getting into the.
Joe: I think I'm hearing you, saying that the approach here is going to be more.
Tim Foote: As previously outlined, Q1 is a seasonal low for cash for BlackBerry. The combination of our billings profile and timing of certain annual cash payments means that the first quarter is always the burn quarter. That said, cash used by operations was better than guidance, with the usage of £18 million. This includes approximately $11 million of cash relating to restructuring costs. including 6 million of employee severance and 5 million for lease payments for properties that we have exited. We expect the cash commitments for these leases to reduce as the fiscal year goes on.
Luke: The granularity of the size of the dollar size.
Joe: Ciena stick in that there's not necessarily a strict mandate timing wise around $100 million, but to the extent that the stock can see operating day zooming into that can you just talk about your approach to buybacks.
Luke: SDP that all I can tell you it is one of the.
Speaker Change: Well the hottest products, where we're getting the most interest in the most demand.
Joe: Yeah, It's great question I mean.
Speaker Change: It's encouraging to see that it's not just.
Joe: July two that we're in a position now to be able to do a buyback it shows the strength of our.
Speaker Change: In the automotive space switch some of the next generation applications for.
Joe: Our balance sheet and the.
Speaker Change: But also as we turn more of our attention towards.
Joe: Going forward, so with great I'm feeling good about that they ultimately as good stewards of capital, we'll we'll consider a number of different factors like cash flow in the quarter.
Speaker Change: Towards Jan toy robotics towards industrial automation.
Speaker Change: We're seeing quite a bit of appetite.
Speaker Change: For for it so hard to share too much granularity with it.
Joe: <unk> share price.
Speaker Change: Other than we're just happy to see that not only is the total pie growing in terms of overall pipeline, but each of the respective pieces of the pie across.
Joe: Other alternative uses of capital that we might have available that type of thing.
Tim Foote: In addition to cash used by operations, we return 10 million to shareholders as part of the share buyback program. Therefore, total cash and investments decreased by $28 million during the quarter to $382 million, which remains almost $100 million better than this time last year, when the number was $283 million.
Joe: It's not going to be.
Joe: But linear thing I would say it would just be whatever we think makes the best sense for shareholder value.
Speaker Change: Automotive and the German space as well.
Speaker Change: Okay got it.
Speaker Change: Sure.
Joe: Yeah.
Speaker Change: Being here.
Speaker Change: And.
Speaker Change: I think I'm hearing you, saying that the approach here is going to be more.
Joe: Okay.
Speaker Change: And our next question comes from the line of trip Chowdhry with Global Equities Research. Please proceed with your question.
Speaker Change: Our Tunis tick and then theres not necessarily a strict mandate timing wise in round one entertainment extensive stacked against you opportunities new meaning to that can you just talk about your approach to buybacks.
Speaker Change: Thanks, Congratulations on very good execution.
Tim Foote: As John mentioned, we received approval for a shared buyback programme during the quarter. The program allows for the repurchase of up to $100 million of shares for approximately 4.7% of the number outstanding at the time of approval. I'm pleased to report that we took solid first steps in this program and repurchased approximately $10 million or 2.6 million shares at an average price per share of $3.89 before the quiet period commenced. These shares have been subsequently cancelled. These actions illustrate our belief that BlackBerry's shares are undervalued and that we have a strong plan to continue to generate cash on an annual basis.
Speaker Change: Good question here first I will ask about your veins in the U.
Speaker Change: Yeah, It's great question I mean.
Speaker Change: <unk> two that were in a position now to be I would say to do a buyback it shows the strength of our.
Speaker Change: U S. R. The federal defense spending I was wondering what kind of trends are you seeing and what specific.
Speaker Change: Our balance sheet.
Speaker Change: Going forward would be great.
Speaker Change: Feelings about that.
Speaker Change: Product from Blackberry are having traction.
Speaker Change: Ultimately.
Speaker Change: As good stewards of capital.
Joe: In the defense spend.
Speaker Change: A number of different factors, but cash flow in the quarter.
Joe: And the second question I have is regarding a very solid execution and a pipeline and Q&A.
Speaker Change: <unk> share price.
Speaker Change: Other alternative uses of capital that we might have available that type of thing.
Speaker Change: Are there any specific categories of automotive, where you're seeing more strength versus the rest of for example are easy it's still having more traction or is it hybrid. So is that I see any color on that will also be I. Appreciate it. Thank you so much.
Speaker Change: And it's not going to be.
Speaker Change: The linear thing I would say it was just big whatever we think makes best sense for shareholder value.
Speaker Change: Yeah.
Speaker Change: Yeah.
Speaker Change: Thanks Tripp. Thanks, Thanks for the thoughts in and the questions on the the.
Speaker Change: Okay. Thank you.
Tim Foote: While we are not obliged to repurchase shares, the programme will continue to provide capital allocation optionality as we continue through the rest of the year, allowing for further repurchases if the conditions are favourable.
Speaker Change: And our next question comes from the line of trip Chowdhry with Global equity Research. Please proceed with your question.
Speaker Change: The secure comm side of it.
Speaker Change: It really has been an interesting.
Speaker Change: Thank the communications on very good execution.
Speaker Change: Four or five months of the first year with a lot of geopolitical dynamics around the world.
Speaker Change: My question here first I have a lot about your.
Speaker Change: Then in the U.
Tim Foote: Turning now to Financial Outlook for the second fiscal quarter and the full fiscal year. Overall, we're not getting carried away with what was a better than expected first quarter. While we are, of course, very pleased to have beaten expectations almost across the board, we don't expect the remainder of the year to look very different to how it did 90 days ago. We are taking a prudent position for QNX and Q2, given that any slowdown in production volumes in the first calendar quarter, as a result of recent tariff changes, are likely to impact Q2 royalty representation.
Speaker Change: Secure communications.
Speaker Change: Are the federal defense spending I was wondering what kind of trends are you seeing and what type of thing.
Speaker Change: And having mission critical capabilities, we're finding more interest and more use cases.
Speaker Change: Product from Blackberry are having traction and the spend.
Speaker Change: And then we had this time last year.
Speaker Change: A lot of it we're seeing governments not only in the U S. But in other markets around the world looking at data sovereignty, becoming more of a concern for them.
Speaker Change: Brent.
Speaker Change: And thank you a question I have is.
Speaker Change: They are very solid execution then.
Speaker Change: Pipeline and Q&A are there any specific categories.
Speaker Change: Turning while many I think governments in the past have been embracing the cloud and and more utilizing the crowd more more significantly we're seeing a little bit of a.
Speaker Change: Where you are seeing more traffic.
Speaker Change: The rest for example are easy it's still having more traction or is it hybrid so is there I.
Speaker Change: Any color on that will also be appreciate it. Thank you so much.
Speaker Change: Kind of pull back from that on on premise solutions and how they are protecting their data and the privacy of of all of their communications across their organization. So.
Tim Foote: We're also allowing for elongated buying decisions for new design wins, especially newer products like QNX Cabin. As a result, we expect revenue for QNX and Q2 to be in the range of $55 million to $60 million and for Adjusted EBITDA to be in the range of $10 million to $13 million. Despite the uncertainty in the market, we continue to hold our full-year revenue guidance range at $250 million to $270 million and adjusted EBITDA between $55 million and $60 million.
Speaker Change: Thanks, Jeff Thanks, Thanks for the thoughts and the questions.
Speaker Change: On the the.
Speaker Change: <unk> certainly seen the pipeline growing with these types of on premise data sovereignty folks are focused on.
Speaker Change: The secure comm side of it.
Speaker Change: It really has been an interesting.
Speaker Change: Four five months of the first year with <unk>.
Speaker Change: Mission critical communications is it's encouraging to see the level of interest in how our product portfolio really is that is a hand in glove fit for some of these new demands.
Speaker Change: T O political dynamics around the world.
Speaker Change: Secure communications.
Speaker Change: And having mission critical capabilities.
Speaker Change: We're finding more interest and more use cases.
Speaker Change: I'll turn it over to Tim maybe to talk a little bit about the.
Speaker Change: And and then we had this time last year.
Speaker Change: The the two and X momentum sure Yeah, no great question trip Ultra.
Speaker Change: A lot of it we're seeing governments not only in the U S. But in other markets around the world looking at data sovereignty, becoming.
Speaker Change: Ultimately, we are seeing demand across the board, but ultimately Cuban ex drives where we got high performance compute and the vehicles, but typically tends to be towards the top end of the range.
Tim Foote: For secure communications, we are optimistic around the pipeline of opportunities we see for the division. We expect revenue for Q2 to be in the range of $54 to $59 million and for adjusted EBITDA to be between $3 and $6 million. We performed better than expected in Q1, primarily due to closing some large SecuSmart deals earlier than expected. We see those deals being replaced in later quarters by an increased pipeline of opportunities. Therefore, we are raising our four-year revenue guidance by $4 million, such that the range is now $234 million to $244 million, and for Adjustable EBITDA to be between $37 million and $47 million, or $16 million to $19 million per second.
Speaker Change: <unk> for them.
Speaker Change: Turning while many I think I mentioned.
Speaker Change: In the past have been embracing cloud and.
Speaker Change: The higher kind of.
Speaker Change: Utilizing the crab more more significantly we're.
Speaker Change: Trends.
Speaker Change: But EV first designs, we tend to be fairly agnostic to that.
Speaker Change: We're seeing a little.
Paul: Hello, Paul.
Speaker Change: Premise solutions.
Speaker Change: But one of the really interesting things that John was talking about is autonomous drive all the state has a fair amount of buzz around that right now.
Speaker Change: And how they are protecting their data in a privacy.
Speaker Change: For all of their communications across our organization.
Speaker Change: I'm sure you've seen them.
Speaker Change: <unk>. This is great for kubernetes, because safety critical use case.
Speaker Change: Following with these types of on premise data sovereignty for August.
Speaker Change: Very high compute.
Speaker Change: Mission critical communications.
Speaker Change: It's perfect signed readymade for Q&A.
Speaker Change: It is encouraging.
Speaker Change: So we've seen further advances in that.
Speaker Change: And how our product portfolio really is at.
Speaker Change: We're hoping to see some of the increasing demand as well, but generally speaking.
Speaker Change: The hand in glove fit for some of these new demands.
Speaker Change: It's across the board the trends the secular tailwind for the business multiyear secular tailwind and we feel pretty comfortable about despite any near term noise in volatile, let's say that that may come into market.
Speaker Change: I'll turn it to Ken maybe to talk a little bit about the.
Tim Foote: For licensing, we reiterate our guidance for revenue to be approximately £6 million and adjust to leave it down to be approximately £5 million so forth. The full fiscal year, we're holding guidance for £24 million of revenue, and just leave it down for approximately £20 million. We continue to expect a just and corporate op-ed. excluding amortisation to be approximately £10 million a quarter or £40 million for the full fiscal year.
Speaker Change: Yeah.
Speaker Change: This momentum sure Yeah, no great question trip.
Speaker Change: I'll tell you, we're seeing demand across the board, but ultimately Kevin ex.
Speaker Change: Thank you so much consolation thinking.
Speaker Change: Thrives, where we've got high performance compute and the vehicles that typically tends to be towards the top end of the range.
Speaker Change: Thanks drew.
Speaker Change: Thank you and our next question comes from the line of Paul Treiber with RBC capital markets. Please proceed with your question.
Speaker Change: A higher kind of.
Tristan: Hi, Tristan.
Tristan: But EV buses ice pre tend to be fairly accurate.
Paul Treiber: Thanks, so much.
Speaker Change: Can you hear me now yeah. We got you May go ahead.
Speaker Change: That but one of the things that John was talking about is autonomous drive overstated.
Speaker Change: Yes, great just a question on the U S. Federal government. The did you see any churn related to Joe jar or any of that that reduced procurement decisions there.
Tim Foote: At total company level, we expect revenue for Q2 to be in the range of £115 million to £125 million. and Joss Lieberthal to be between 8 and 14. Given the increased guidance for both Secure Communications Revenue and Adjusted EGITDA, we are raising guidance for the total company as well.
Tristan: Paramount bumps around that right now.
Tristan: <unk>, great for Kevin and I ask because safety critical use case.
Speaker Change: Paul we when we were on high alert on that as you can imagine since such a significant part of our business does come from the U S government.
Tristan: Very high compute.
Tristan: It's perfect storm readymade for Q&A.
Tristan: We've seen further advances in that.
Speaker Change: But we really you.
Speaker Change: You know I didn't see any any kind of material impact.
Tristan: We're hoping to see increased demand as well generally speaking.
Tim Foote: For the Fall Fiscal Year 2026, we now expect total company revenue to be between $508 and $538 million and adjusted EBITDA to be in the range of $72 to $87 million. For non-GAAP EPS, we expect it to be between break-even and 1 cent in the second quarter and to remain between 8 and 10 cents for the full fiscal year. As mentioned during the Q4 earnings announcement, we expect the first half of Fiscal 26 to be lower than the second half of the year to cash flow as a result of the Billings and Payments Profile, including a number of one-time factors that will drop off as we get further into the year.
Speaker Change: From a dose.
Tristan: It's across the board the trends the secular tailwind for the business multi years like little wins, and we feel pretty confident about despite any near term noise and volatility.
Speaker Change: As we work through a lot of the different opportunities and a lot of the different renewals I think one.
Speaker Change: A common theme.
Speaker Change: Seem to come back and forth every time, we engage with them is that mission critical communications.
Tristan: That may come into market.
Tristan: Thank you so much.
Tristan: Thanks Tripp.
Speaker Change: It didn't seem to be at the top of their list of things to slash and burn off you know.
Tristan: Thank you and our next question comes from the line of Paul Treiber with RBC capital markets. Please proceed.
Speaker Change: So.
Speaker Change: It was encouraging to see that I think that's one of the reasons why our TVN IRR or a or things like that held up pretty nicely in the quarter as we really didn't find.
Paul Treiber: Great. Thanks, so much.
Tristan: We can hear me now.
Tristan: Yes, great question on the U S Federal government.
Speaker Change: And any kind of meaningful impact from adults perspective.
Tristan: Do you see any.
Tristan: You go to any of that have reduced the instrument placement there.
Speaker Change: That's good to hear and a second question just on Q and accident and the growth that youre seeing in SDP eight.
Tristan: Yes.
Tim Foote: Due primarily to tax payments falling during the quarter, which relate to a number of prior years for countries outside of North America, we expect another quarter of cash usage, albeit sequentially lower. We expect an operating cash usage for Q2 in the range of 5 to 15 million. But, as before, we still expect BlackBerry to be operating cash flow positive for the full fiscal year, generating approximately $35 million, which is in addition to the second tranche of cash from Arctic Wolf relating to the sale of Sinai.
Tristan: We were on high alert on that as you can imagine since such a significant.
Speaker Change: Pipeline there is that on the automotive side is that additive to the existing pipeline.
Speaker Change: As it does in the U S government.
Speaker Change: But we usually are.
Speaker Change: For Q&A. So are you seeing some transition from the <unk>.
Speaker Change: I didn't see any kind of material impact.
Speaker Change: Prior generations in queue next to STP eight.
Speaker Change: From of Deutsche Bank.
Tristan: As we work through a lot of the different opportunities and a lot of the different renewals I think one kind of common theme.
Speaker Change: Yeah, I mean ultimately.
Speaker Change: You want to migrate over to SEPA, because it's a future proof platform.
Tristan: To come back in for every time, we we engage with them.
Speaker Change: So it's.
Speaker Change: An uplift as you can imagine its high performance.
Tristan: Is that critical communications.
Speaker Change: Not bad for us So I'd say, we're still in the early innings.
Tristan: Let's see it to be at the top of their loss, thanks to slash and burn off.
Speaker Change: Some new products, we are pleasantly surprised by the amount of traction we've already had but you know in this market things tend to tend to move relatively slowly because they're very long life cycle type projects.
Tristan: So.
Tristan: It was encouraging to see that I think that's.
John Giamatteo: With that, let me now turn the call back to John. Thanks for the summary, Tim.
Tristan: One of the reasons why our <unk>.
Tristan: The DNR are things like that held up pretty nicely in the quarter as well.
John Giamatteo: And before we move to Q&A, let me quickly summarize. Q1 was a good quarter for BlackBerry. with total company revenue, adjusted EBITDA, EPS, and cash usage feeding guidance. QNX delivered a better than expected quarter despite the challenging landscape in the automotive industry as our solid strategy to both help our customers execute on their software development goals and to diversify into non-automotive verticals continues to show positive signs of traction. Secure communications perform better than expected from both a top and bottom line perspective in the quarter, and we're raising our guidance for the full year. With both these divisions performing well, we believe BlackBerry is in a strong position to continue to generate profit and cash over the long term.
Tristan: We really didn't find out then.
Speaker Change: So we're pleased with what we've seen so far.
Tristan: And then any kind of meaningful impact from Adobe prospectus.
Speaker Change: And it is a better better ISP than in the previous question.
Speaker Change: That's good to hear and a second question just on Q and accident and the growth figures.
Speaker Change: Okay.
Speaker Change: Yeah.
Speaker Change: Thank you.
Tristan: S T E.
Tristan: Okay.
Speaker Change: Next question comes from the line of Kings Crane with Canaccord. Please proceed with your question.
Tristan: Pipeline there is that on the automotive side is that additive to the existing pipeline.
Kings Crane: Hi, Thanks, I wanted to echo.
Tristan: For Q&A. So are you seeing some transition from the <unk>.
Speaker Change: Hi, Tim Hi, John How's it going I want to Echo my congrats on a really strong Q1 I just wanted to ask one thematic wanted to start out I'm just curious how you're thinking about the balance between more tightly integrated systems versus more open systems and the software defined vehicle space right now maybe you could compare.
Tristan: Prior generations extra extra S P.
Tristan: Eight.
Tristan: Yeah.
Tristan: Okay.
Tristan: Okay.
Tristan: Because it's a future proof.
Tristan: Okay.
Tristan: So it's an.
Tristan: And uplift as you could imagine its high performance.
Speaker Change: Youre doing with Vectra and T T tech with them with.
Tristan: But for us So I'd say, we're still in the early in <unk>.
Speaker Change: With <unk>. Thanks.
Tristan: Some new products replace something surprised by the amount of traction.
Tim: I'll start and Tim can chip in.
Tristan: But you know in this market things tend to.
Tim: Yeah.
Speaker Change: Thank God Kings asset.
Tristan: And the mix.
Tristan: Relatively slow because were very long life cycle type projects.
Speaker Change: From a.
Speaker Change: Q1, ex perspective kind of what we announced at CES is us.
John Giamatteo: With this solid foundation, we started to execute on repurchasing shares and have significant runway should it be appropriate to continue buying more.
Tristan: So we've taken what we see so far.
Speaker Change: Because we have such a pivotal role in the overall operating system for the software defined vehicle us expanding our roll into middleware into integration into service to help them handle the plumbing.
Tristan: And it is a better a better rate paid and then the pre discretion.
Unknown Executive: So let's now move to Q&A. Operator, could you please open up the lines? Thank you.
Tristan: Hi.
Tristan: Thank you.
Speaker Change: Next question comes from the line of Kings Crane with Canaccord. Please proceed with your question.
Unknown Executive: We will now begin the question and answer session. To ask a question, please press star 1 on your telephone keypad. Please make sure your line is unmuted. Again, that is star 1. We will pause for just a moment to allow everyone an opportunity to signal for questions.
Speaker Change: And.
Speaker Change: I wanted to echo.
Speaker Change: <unk>, who that's interacting what applications inevitable you're interacting with.
Speaker Change: Hi, Tom Hi, How's it going I want to Echo my congrats on a really strong Q1 I just wanted to ask one thematic I wanted to start out I'm just curious how you're thinking about the balance between more tightly integrated systems versus more open systems and the software to find Nichols space right now compare what youre doing.
Speaker Change: That's something that we just think it's a natural place for us to <unk>.
Speaker Change: Play in and for us to add value in terms of helping our customers from a time to market perspective. So.
Unknown Executive: We request that you limit yourself to one question and one follow-up.
Speaker Change: That's that's that's one aspect of it I think Q&A ex everywhere is a is another initiative that we.
Speaker Change: Vectra and Chi Chi Tak with.
Todd Coupland: And our first question comes from the line of Todd Coupland with CIBC Capital Markets. Please proceed with the call. I'm doing, I'm doing great.
Speaker Change: With that thanks.
Speaker Change: Thanks.
Speaker Change: We think really expands our our ecosystem and expands our partnerships with other players having them embrace our technology design around our technology.
Speaker Change: I'll start and Tim can chip in.
Speaker Change: Yeah, I I think I have said.
Speaker Change: From a.
John Giamatteo: So I wanted to ask a question on QNX and the macro environment. You talked about how you hadn't seen changes to production schedules, but you're anticipating that that's going to happen in this current quarter. Is that assumption already being realized in the production schedules you're seeing, or are you just building in that downside protection into the guidelines? Yeah, so great question, Todd. Ultimately, the Q2 or fiscal Q2 royalty revenue is a function of production that happens in Q1. So we don't get the final production numbers by model, which obviously impacts how much royalty we're going to get until into Q2.
Speaker Change: <unk> X perspective.
Speaker Change: Both within the automotive space and outside of the automotive strike when a gem perspective, we think is another tenant.
Speaker Change: Kind of what we announced at CES.
Speaker Change: Awesome.
Speaker Change: And because it's such a pivotal role in the overall operating system the software defined vehicle.
Speaker Change: And a part of our vision of really making <unk> available more broadly across all the markets that we serve so.
Speaker Change: US expanding our roll into middleware integration into <unk>.
Speaker Change: Kind of feel like it's all coming together.
Speaker Change: To help them handle the plumbing.
Speaker Change: The operating system moving up the stack into middleware.
Speaker Change: And.
Speaker Change: Regardless, that's interacting what application inevitable you're interacting with.
Speaker Change: Creating an ecosystem of technology partners and as part of a more comprehensive approach to the markets that we serve.
Speaker Change: That's something that we just think it's a natural place for us.
Speaker Change: To play in and for us to add value in terms of helping our customers most of them are tied to market perspective.
Speaker Change: Right Yep makes perfect sense, and I wanted to circle back as well too.
Speaker Change: No.
Speaker Change: That's that's that's one aspect of it I think Q&A ex everywhere is a is another initiative that we.
Speaker Change: The S&P HIV pipeline jumped 43%, that's really encouraging I guess like how would you characterize the quality and maturity of of that Jim pipeline versus automotive I would say that just because you know I know you're moving more to make more seriousness Newport Beach heads in those markets. So it's great that it's already at 40.
Speaker Change: We think really expands our our ecosystem and expand our partnerships with other players.
Tim Foote: So we priced in a reasonable amount of risk there, in the guidance that we've given that 55 to 60, to allow for some potential disruption that we haven't yet fully seen in those numbers.
Speaker Change: Having them.
Speaker Change: So our technology design around our technology.
Speaker Change: 10%.
Speaker Change: Both within the automotive space and outside the automotive space from a general perspective, we.
Speaker Change: Oh, yeah, and some of it to see the whole.
Speaker Change: Whole pipeline grow 55% that makes us that makes us feel good.
Speaker Change: And another just.
Tim Foote: Is there enough clarity in the market at this point to give you more confidence for the rest of the year? Are you still concerned beyond this quarter about possible production? I mean, it's a very fluid situation. I think John mentioned that some of our customers have actually stood down their guidance. So the fact that we've still got our guidance up shows that we do have a certain level of visibility. But you know, things can change. It's very fluid. I think we priced in a reasonable amount of risk. And when we look at the year, who knows what's going to happen, Todd, or just like you and everyone else, we're going to have to see how things pan out.
Speaker Change: Talent part of our vision of a really making <unk> available more broadly across all the markets that we serve so.
Speaker Change: Naturally we have got a deeper presence in.
Speaker Change: In the auto Oems and what their designs and and the the gym space is a little more.
Speaker Change: Kind of feel like it's all coming together.
Speaker Change: The operating system.
Speaker Change: Stack into nowhere.
Speaker Change: Creating an ecosystem of technology partners and he is is as part of a more comprehensive approach to the markets that we serve.
Speaker Change: I don't want to say fluid, but it's certainly it's a newer pipeline. These are newer qualified opportunities.
Speaker Change: Ed.
Speaker Change: It's actually been very encouraging to see.
Speaker Change: Right yes.
Speaker Change: Some of these mission critical Jim kind of applications wanting to lean into the performance characteristics of eight Dato, we actually feel that helps qualify the pipeline even further so both angles from an auto perspective, and the gym perspective.
Speaker Change: Makes perfect sense, and I wanted to circle back as well too.
Speaker Change: The S U P H I O pipeline jumped 43%.
Speaker Change: Really encouraging I guess like how would you characterize it.
Speaker Change: The quality and maturity of that pipeline versus automotive I would say that just because you know I know you're moving more and.
Tim Foote: But we feel pretty confident that we're not entirely reliant on royalties, we do have other streams as well, you know, the professional services and also development seats. So we feel pretty good where we're at. Thank you.
Speaker Change: We're really seeing good traction on all of it.
Speaker Change: It's more seriousness if our beachhead.
Speaker Change: It was market so it's great to start at 14%.
Speaker Change: James probably got a little more.
Speaker Change: Even more ways to go in terms of developing our pipeline closing that pipeline converting into revenue, but the fact that we're seeing that much appetite that much demand. This early as we really doubled down on our go to market initiatives and Jim is certainly an encouraging sign.
Speaker Change: Oh, okay.
Speaker Change: And it does seem like.
Speaker Change: 55%.
Speaker Change: That makes sense.
Speaker Change: That's it.
Paul Treiber: And our next question comes from the line of Paul Treiber with RBC Capital Markets.
Speaker Change: Natural.
Speaker Change: Okay.
Speaker Change: Our president.
Speaker Change: And auto Oems.
Speaker Change:
Speaker Change:
Speaker Change: Okay.
Speaker Change: And the gym space.
Speaker Change: Thank you.
Unknown Executive: archival, We lost Paul. Mr. Treiber, your line is up for questioning. You may have lost all that. No worries.
Speaker Change: Mark.
With that there are no further questions at this time I'd like to turn the call back over to John <unk> CEO of Blackberry for closing remarks.
Speaker Change: Oh.
Speaker Change: It's a newer pipeline these are newer qualified opportunities.
Speaker Change: Perfect. Thanks Julien.
Speaker Change: Okay.
Speaker Change: It's actually been very encouraging to see.
Speaker Change: And just before we wrap up a quick reminder to everyone for that we're gonna be holding our annual meeting.
Speaker Change: Some of these mission critical Jim kind of applications.
The meeting of shareholders Tomorrow at 10, a M eastern.
Speaker Change: Into the performance characteristics of it.
Unknown Executive: The next question comes from the line of Luke Junk with Baird. Good afternoon. Thanks for taking the questions. I guess, John, I want to start with the comments you made on SDP 8.0, the strong non-automix in the pipeline, and that the overall pipeline grew by, I think you said, 55% in the quarter. Can you just help us size that, you know, big numbers and percentage terms, but trying to understand how material that is, and maybe if you'd be able to square that with the backlog disclosures that you've made for QNIC. Yeah, um, we, I don't think we've updated the backlog at all from the last, you know, numbers that we were at 865, you know, million.
Speaker Change: And details for how to join the virtual event can be found on Blackberry Dot com website.
Speaker Change: Thank God.
Speaker Change: We actually feel that helps qualify even further so both angles from an auto perspective and the channel.
Speaker Change: So thank you all for joining the call today and look forward to seeing you next time.
Speaker Change: Yeah.
Speaker Change: Bye for now.
Speaker Change: We're really seeing good traction on all of them.
Thank you.
This does conclude today's call. We thank you for your participation you may disconnect your lines at this time.
Speaker Change: James probably more.
Speaker Change: If one or more way to go in terms of developing upon closing Verde.
Speaker Change: Hum.
Speaker Change: But the fact that we're seeing so much appetite that much.
Speaker Change: Man, it's early as we really doubled down on our go to market initiatives and Jim is certainly an encouraging sign.
Speaker Change: Thank you.
John: With that there are no further questions at this time I'd like to turn the call back over to John <unk> CEO of Blackberry for closing remarks.
Luke Junk: Without getting into the granularity of the size of the dollar size of SDPA.0, I could tell you it is, you know, one of the you know, the hottest products where we're getting the most interest in the most demand. And it's encouraging to see that it's not just in the automotive space with some of the you know, next generation applications for but also as we turn more of our attention towards towards GEM, towards robotics, towards industrial automation. We're seeing quite a bit of appetite for it. So it's hard to share too much granularity with it, other than we're just happy to see that not only is the total pie growing in terms of overall pipeline, but each of the respective pieces of the pie across automotive and the GEM space as well.
Speaker Change: Perfect. Thanks Julien.
Speaker Change:
Speaker Change: Before we wrap up a quick reminder to everyone for us we're gonna be holding our annual meeting.
Speaker Change: Shareholders Tomorrow at <unk> a M eastern.
Speaker Change: And details for having joined the virtual event can be found on Blackberry Dot com website.
Speaker Change: So thank you all for joining the call today.
Speaker Change: And look forward to seeing you next time.
Speaker Change: Bye for now.
Speaker Change: Thank you.
Speaker Change: This does conclude today's call. We thank you for your participation you may disconnect your lines at this time.
Speaker Change: Yeah.
Speaker Change: Yes.
Speaker Change: Yeah.
Speaker Change: [music].
John Giamatteo: Okay, got it.
John Giamatteo: And then on the sheer buyback, that being new here, I think I'm hearing you saying that the approach here is going to be more opportunistic and that there's not necessarily a strict mandate timing-wise around the $100 million, but to the extent that the stock gives you opportunities, you'll lean into that. Can you just talk about your approach to buyback? Yeah, it's a great question. I mean, we're delighted that we're in a position now to be able to do a buyback. It shows the strength of our balance sheet and the plan going forward. So we're great, feeling good about that.
John Giamatteo: But ultimately, as good stewards of capital, we'll consider a number of different factors, like cash flow in the quarter, share price, you know, other alternative uses of capital that we might have available, that type of thing. So, you know, it's not going to be a linear thing, I would say, it would just be whatever we think makes the best sense for shareholder value. Okay, thank you.
Trip Chowdhry: And our next question comes from the line of Trip Chowdhry. Thank you. Congratulations on very good execution. Two questions here. First, I will ask about your wins in the U.S. or the federal defense spending. I was wondering what kind of trends are you seeing and what specific products from BlackBerry are having traction in the defense spend?
John Giamatteo: And the second question I have is regarding a very solid execution and pipeline in QNX. Are there any specific categories of automotive where you are seeing more strength versus the rest? For example, are EVs still having more traction or is it hybrids or is it ICE? Any color on that will also be appreciated. Thank you so much. Thanks, Trip. Thanks for the thoughts and the questions. On the SecureComm side of it, it really has been an interesting, you know, four or five months of the first year with a lot of geopolitical dynamics around the world.
John Giamatteo: You know, secure communications and having mission-critical capabilities. We're finding, you know, more interest and more use cases than we had, say, this time last year. A lot of it we're seeing governments, not only in the U.S., but in other markets around the world, looking at data sovereignty becoming more of a concern for them, turning while many, I think, governments in the past have been embracing the cloud and utilizing the cloud more significantly. We're seeing a little bit of kind of pullback from that on on-premise solutions and how they're protecting the data and the privacy of all their communications across their organizations.
Tim Foote: So, certainly seeing the pipeline growing with these types of on-premise data sovereignty-focused, mission-critical communications is encouraging to see the level of interest and how our product portfolio really is a hand-in-glove fit for some of these new demands.
Tim Foote: I'll turn it over to Tim maybe to talk a little bit about the the QNX momentum. Sure, yeah, no great question Trip. Ultimately, we're seeing demand across the board, but ultimately QNX thrives where we've got high performance computes in the vehicles that typically tends to be towards the top end of the range, the higher kind of higher trims. But EV versus ICE, we tend to be fairly agnostic to that. But one of the really interesting things that John was talking about is autonomous drive. Obviously, there's a fair amount of buzz around that right now. QNX, this is great for QNX because safety critical use case, very high compute is perfect.
Trip Chowdhry: So I'm ready made for QNX. So as we see further advances in that, we're hoping to see some increased demand as well. But generally speaking, it's across the board. The trends, the secular tailwinds for the business, multi-year secular tailwinds, we feel pretty confident about despite any near term noise and volatility that may come in the market. Thank you so much. Congratulations again. Thanks, Trip.
Paul Treiber: Thank you and our next question comes from the line of Paul Treiber with RBC Did you see any churn related to DOJ or any of the reduced procurement decisions there? You know, Paul, we were on high alert on that, as you can imagine, since such a significant part of our business does come from the U.S. government. But we really, you know, didn't see any kind of material impact from a DOJ. As we worked through a lot of the different opportunities and a lot of the different renewals, I think one kind of common theme seemed to come back and forth every time we engage with them is that mission critical communications didn't seem to be at the top of their list of things to slash and burn on, you know.
John Giamatteo: So it was encouraging to see that. I think that's one of the reasons why our, you know, DBNRR, our ARR, things like that held up pretty nicely in the quarter as we really didn't find any kind of meaningful impact from a DOJ perspective.
Unknown Executive: That's good to hear.
Tim Foote: A second question just on QNX in the in the growth that you're seeing in SDP 8, the pipeline there, is that on the automotive side, is that additive to the existing pipeline for QNX? Or are you seeing some transition from the prior generations of QNX to SDP 8? Yeah, I mean, ultimately, we want everyone to migrate over to STPA because it's a future-proof platform. And also, it's got an uplift, as you can imagine, it's high performance. So there's an uplift for us. So I'd say we're still in the early innings. It's a new product. We're pleasantly surprised by the amount of traction we've already had.
Tim Foote: But you know, in this market, things tend to move relatively slow because they're very long life cycle type projects. So we're pleased with what we've seen so far. And it is a better ASP than the previous version.
Kingsley Crane: Thank you, and our next question comes from the line of Kingsley Crane with Hi, I want to thank everyone. Hi, Tim. Hi, John. How's it going? I want to echo my congrats on a really strong Q1. I just want to ask one thematic one to start out.
John Giamatteo: Just curious how you're thinking about the balance between more tightly integrated systems versus more open systems in the software defined vehicle space right now. Maybe you could compare what you're doing with Vector and TT Tech with some with ETS4. Thanks.
John Giamatteo: I'll start and Tim you trip in. Yeah, I think, as from a, you know, Q and X perspective, kind of, you know, what we announced at CES is us, Because we have such a pivotal role in the overall operating system for this software-defined vehicle, us expanding our role into middleware, into integration, to help them handle the plumbing and regardless of who that's interacting, what applications inevitably you're interacting with, that's something that we just think it's a natural place for us to to play in and for us to add value in terms of helping our customers from a time-to-market perspective.
John Giamatteo: So, you know, that's one aspect of it. I think QNX Everywhere is another initiative that we think really, you know, expands our ecosystem and expands our partnerships with other players. Having them embrace our technology, design around our technology, both within the automotive space and outside of the automotive space from a gem perspective, we think is another just kind of part of our vision of really making QNX available more broadly across all the markets that we serve. So, kind of feel like it's all coming together, you know, the operating system, moving up the stack into middleware, creating an ecosystem of technology partners is part of a more comprehensive approach to the markets that we serve.
Unknown Executive: Right, yep. Makes perfect sense.
John Giamatteo: And I want to circle back as well to the SCP 8.0 pipeline, you know, gem at 43%. That's, that's really encouraging. I guess, like, you know, how would you characterize the quality and maturity of that gem pipeline versus automotive? I'd say that just because, you know, I know you're moving more to make more serious moves, get more beachheads in those markets. So it's great that it's already at 43%. Right. Yeah, to see the whole pipeline grow 55%, that makes us feel good. Naturally, we've got a deeper presence in the auto OEMs and with their designs and the gem space is a little more, I don't want to say fluid, but it's certainly, it's a newer pipeline.
John Giamatteo: These are newer qualified opportunities. It's actually been very encouraging to see, you know, some of these mission-critical GEM kind of applications wanting to lean into the performance characteristics of 8.0. We actually feel that that helps qualify the pipeline even further. So, both angles from an auto perspective and the GEM perspective, we're really seeing good traction on all of it. GEM's probably got a little more ways to go in terms of, you know, developing that pipeline, closing that pipeline, converting it to revenue. But the fact that we're seeing that much appetite, that much demand this early as we really double down on our go-to-market initiatives in GEM is certainly an encouraging sign.
Unknown Executive: Thank you, and with that there are no further questions at this time.
John Giamatteo: I'd like to turn the call back over to John Giamatteo, CEO of BlackBerry. Terrific. Thanks, Julian.
Unknown Executive: And just as before we wrap up, a quick reminder to everyone for that we're going to be holding our annual meeting of shareholders tomorrow at 10am Eastern, and details for how to join the virtual event can be found on BlackBerry.com website. So thank you all for joining the call today, and look forward to seeing you next time. Bye for now. Thank you for your participation.