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Beyond vehicles, CEO John J. Giamatteo sees a growing pipeline of opportunities for QNX in robotics and physical AI
BlackBerry's share price has surged over the last year, but some analysts question why the market's reaction was 'relatively muted' following the strong Q2 results.
said Thursday that revenue grew 26 per cent year over year in the three months ended Aug. 31 to US$163 million — above analysts' forecasts of US$145 million — on the strength of QNX, a"Our view for some time has been that QNX is really the entire story at BlackBerry," Canaccord Genuity analyst Kingsley Crane said in a note. On a call with analysts, BlackBerry chief executive John J. Giamatteo said QNX's core auto business helped the unit deliver record quarterly revenue of US$80.3 million, up 27 per cent from the same period last year.
Revenue in BlackBerry's secure communications unit, which provides encrypted communications and crisis management tools for governments and other organizations, increased two per cent year-over-year to nearly US$61 million. Licensing revenue came in well above the company's expectations at US$22 million. Chief financial officer Tim Foote noted that licensing transactions can vary between quarters and said licensing revenue is expected to return to a more typical level of US$6 million in the second half of the fiscal year.
"The key takeaway is that headline beat was largely driven by high-margin, non-recurring licensing revenue," TD Cowen analyst John Shao said in a note. "However, even excluding this benefit, the core QNX business still delivered a decent beat relative to expectations. " BlackBerry increased its full-year outlook, which was previously US$594 million to US$621 million. For fiscal 2027, the company now expects to earn between US$616 million to US$636 million.
It took a more conservative view on secure communications and lowered the unit's full-year revenue outlook by $US10 million to US$260 million or US$270 million. Giamatteo said the division has a"substantial footprint" providing services to the U.S. federal government and that the"already dynamic backdrop" in America is being further complicated by recent geopolitical developments, including Canada-U.S. trade tensions.
Giamatteo highlighted a recent deal for Alloy Kore, an automotive operating system co-developed by QNX and Germany's Vector Informatik GmbH, which he called the"largest design win in QNX's history.
" On Sept. 22, the companies announced that Coretura AB, a joint venture between Volvo Group and Daimler Truck, will use Alloy Kore as the software foundation platform for the"For QNX, we believe the business has a highly attractive setup for , with the likelihood of additional Alloy Kore and wins, which could result in a significant increase in backlog," CIBC Capital Markets analyst Todd Coupland said in a note. BlackBerry's share price has surged over the last year, but Shao from TD Cowen said there were questions around why the market's reaction was"relatively muted" following the strong Q2 results.
While BlackBerry raised its full-year guidance, its third-quarter revenue projection of US$143 million to US$154 million is lower than the US$163 million it raked in during Q2. Foote said the company continues to take a"measured approach" to its quarterly outlook. Shao said that while some investors pointed to an implied slowdown in the second half of the year, he believes the updated guidance reflects"management's conservatism rather than a deterioration in underlying fundamentals.
"has likely entered a digestion phase following its 126 per cent YTD rally," Shao said. "Although the combination of strong results and weak share price performance could weigh on sentiment in the near term, it may ultimately help reduce the volatility and speculative trading patterns seen earlier this year. " On Thursday's earnings call, Giamatteo also announced a deal between QNX and Uber Technologies Inc. as the rideshare company expands into robotaxis.
Beyond Uber, he sees a growing pipeline of opportunities for QNX in robotics and physical AI. The AI-adjacent portfolio: Six Canadian stocks that could benefit from the AI buildout QNX's three growth pillars are its core automotive business, Alloy Kore and expansion into adjacent general embedded markets , said Giamatteo. GEM represents about 20 per cent of QNX's revenues, and the CEO said it's a growing area that can materially expand QNX's long-term addressable market.
To punctuate his point, he offered a baseball analogy:"If you think about this as a nine-inning game, I'd say we're really just about at the beginning of the second inning. "
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