Shares of BlackBerry (NYSE: BB) soared by 23% on Thursday, closing at $10.62, following the company's impressive quarterly results and an increased revenue forecast driven by its embedded software business.
The company has raised its total revenue outlook for the 2027 fiscal year, now projecting year-over-year growth of 8% to 13%.
This upward revision is primarily fueled by the strong performance and promising prospects of its QNX software division, which is central to its automotive and embedded systems strategy.
Once an iconic smartphone brand, BlackBerry is now capitalizing on significant opportunities in the market for general-purpose embedded management platforms. These platforms, which run on the same real-time operating system technology as its QNX software, are increasingly being used to support artificial intelligence systems in industrial machinery and robotics.
Investors are growing more optimistic about the potential of this technology, viewing it as a new growth avenue alongside the company's core automotive software business. This sentiment has contributed to the stock's strong performance this year, with its price nearly tripling.
Despite the rising market demand, Chief Financial Officer Tim Foote cautioned that new product solutions typically take several years to move from development to full-scale production, with revenue ramping up gradually as existing orders are fulfilled.
Chief Executive Officer John Giamatteo expressed confidence in the company's long-term growth prospects, particularly within the software-defined vehicle sector and the broader embedded systems market. He stated that these opportunities are expected to significantly unlock the long-term growth potential of the QNX business.
For the full year, BlackBerry now expects QNX revenue to be in the range of $295 million to $312 million, aligning closely with the analyst consensus estimate of $301.1 million. This adjustment has led to an overall revenue forecast of $594 million to $621 million.
The company's guidance for adjusted earnings per share is between $0.16 and $0.20, compared to the Wall Street consensus of $0.18.
For the quarter ended May 31, the company reported net income of $8.5 million, or $0.01 per share, a significant improvement from a net income of $1.9 million, or approximately $0 per share, in the same period last year.
Adjusted earnings per share for the quarter were $0.04, surpassing analyst expectations of $0.03.
Total quarterly revenue rose 26% year-over-year to $152.9 million, exceeding market expectations of $137.2 million. Revenue from the QNX software segment increased 26% to $72.3 million, while revenue from the cybersecurity and IoT business grew 24% to $73.6 million.
Looking ahead to the upcoming second fiscal quarter, BlackBerry provided a revenue forecast of $137 million to $148 million. This compares to revenue of $129.6 million in the previous quarter, with analysts having anticipated revenue of $139.4 million for the current period.
The company anticipates continued growth in both its QNX software and cybersecurity business segments in the quarters ahead.
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