BlackBerry Limited (BB) reported fiscal second-quarter 2027 results Thursday, beating Wall Street expectations and raising its full-year outlook as QNX growth accelerated.

BlackBerry Beats Q2 Expectations

Fiscal second-quarter revenue rose 26% year over year to $163.3 million, beating the $145.63 million estimate. Adjusted EPS of 7 cents beat the 4-cent consensus estimate.

QNX revenue increased 27% to $80.3 million. Secure Communications revenue grew 2% to $60.9 million, while Licensing generated $22.1 million.

Adjusted EBITDA jumped 81% to $47 million. The adjusted EBITDA margin expanded to 29% from 20% a year earlier.

QNX, Alloy Kore Drive Growth

CEO John Giamatteo said QNX delivered record quarterly revenue, supported by development licenses, services and royalties.

BlackBerry secured more design-win value during the first half of fiscal 2027 than in any previous full fiscal year.

Management expects software-defined vehicles and centralized computing to expand QNX's addressable market. CFO Tim Foote said BlackBerry's previously reported $950 million backlog has started converting into royalties as customer programs enter production.

BlackBerry also secured its first Alloy Kore design win with Coretura, the commercial-vehicle software venture between Volvo Group and Daimler Truck.

Management expects the agreement to generate more than $100 million in future royalties, making it QNX's largest design win. Giamatteo said the platform generates about three times as much revenue per installation as a traditional QNX deployment.

Physical AI Expands QNX Opportunity

BlackBerry sees robotics, autonomous vehicles and industrial systems expanding QNX beyond traditional automotive applications.

Uber selected QNX for its next generation of vehicles. Momenta and XHEART also chose QNX OS for Safety for an autonomous-driving platform.

BlackBerry said more than 20 companies are engaging with it around NVIDIA-based platforms. Those projects include humanoid and surgical robots, autonomous tractors and drones.

Management views Physical AI as an early-stage opportunity. However, it expects its NVIDIA partnership, QNX Everywhere and QNX Launchpad initiatives to expand its pipeline.

Raises Fiscal 2027 Outlook

BlackBerry raised its full-year revenue and adjusted EBITDA outlook for the second consecutive quarter, citing strong first-half execution and increased confidence in the business.

The company raised its fiscal 2027 adjusted EPS outlook to 19 cents to 22 cents from 16 cents to 20 cents. Analysts expect 19 cents.

It now expects revenue of $616 million to $636 million, up from its previous outlook of $594 million to $621 million. The midpoint is above the $614.59 million consensus estimate.

For the third quarter, BlackBerry expects revenue of $143 million to $154 million versus a $149.60 million consensus estimate. The company expects adjusted EPS of 4 cents to 5 cents versus a 5-cent estimate.

BlackBerry lowered its Secure Communications outlook, citing uncertainty around the timing of larger government contracts amid geopolitical and Canada-U.S. trade tensions.

Foote said BlackBerry plans to continue investing in QNX while also considering share repurchases and selective acquisitions that could accelerate growth in Physical AI and other embedded markets.

BlackBerry Price Action

BB Price Action: BlackBerry shares were down 4.06% at $8.045 at the time of publication on Thursday, according to market data.