Here's a situation that never gets less awkward: you beat earnings expectations, raise your guidance, and your stock still tanks. Welcome to BlackBerry Limited (BB)'s Friday.
The company reported third-quarter revenue of $141.8 million on Thursday, comfortably ahead of the $137.4 million analysts were expecting. Adjusted earnings came in at 5 cents per share, topping the 4-cent consensus. BlackBerry even lifted its fiscal 2026 revenue outlook to a range of $531 million to $541 million, right around where Wall Street had pegged it at $531.94 million.
So what's the problem? Well, investors and analysts quickly figured out that the beat wasn't exactly what it seemed.
The QNX Question
RBC Capital Markets analyst Paul Treiber, who maintained his Sector Perform rating with a $4.50 price target, explained the concern. Sure, BlackBerry beat expectations, but the upside came primarily from one-time revenue in the Secure Communications segment. That's nice, but it's not the growth engine investors care about.
What they really want to see is momentum in QNX, BlackBerry's automotive software business. And that's where things get complicated. QNX revenue did grow 10% year over year, but it missed expectations slightly and slowed down from the previous quarter's growth rate. Fourth-quarter guidance suggests this deceleration will continue, even with easier year-over-year comparisons ahead.
BlackBerry also narrowed its fiscal 2026 QNX revenue outlook, which doesn't exactly scream confidence. Treiber noted that investor visibility into QNX growth has deteriorated, with a meaningful chunk of recent growth coming from Radar technology rather than core underlying demand. That's a distinction that matters when you're trying to assess the sustainability of the business.
The analyst's conclusion? BlackBerry shares look fairly valued relative to their growth prospects, which is analyst-speak for "we're not seeing a compelling reason to get excited here."
BlackBerry shares closed down 11.09% at $3.845 on Friday, proving once again that in the stock market, it's not just about beating numbers—it's about beating them for the right reasons.
