Blackberry (BB) Q2 2025 earnings summary

Executive summary

• Achieved breakeven for both adjusted EBITDA and non-GAAP EPS ahead of plan, driven by double-digit revenue growth in IoT (12%) and Cybersecurity (10%) and significant cost reductions.

• Total revenue reached $145 million for Q2 FY25, exceeding guidance, with gross margin steady at 66% year-over-year.

• Operating expenses decreased to $99 million, 24% lower year-over-year, reflecting ongoing cost optimization.

• Operating cash usage improved by $43 million year-over-year for the quarter, with free cash flow improving for the fourth consecutive quarter.

• Major product launches included QNX Containers, CylanceMDR Pro, and industry recognition for CylanceENDPOINT.

Financial highlights

• Q2 FY25 revenue: $145 million; non-GAAP gross margin: 66%; GAAP gross margin: 65%.

• IoT revenue: $55 million, up 12% year-over-year; gross margin at 82%.

• Cybersecurity revenue: $87 million, up 10% year-over-year; gross margin at 55%.

• Licensing revenue: $3 million, in line with expectations; gross margin at 67%.

• Recurring software product revenue at 80% of total; Cybersecurity ARR stable at $279 million, DBNRR improved to 88%.

Outlook and guidance

• Q3 FY25 revenue guidance: $146–$154 million; full-year FY25: $591–$616 million.

• IoT Q3 revenue expected at $56–$60 million; full-year guidance raised to $225–$235 million.

• Cybersecurity Q3 revenue expected at $86–$90 million; full-year guidance reiterated at $350–$365 million.

• Adjusted EBITDA for Q3 guided to breakeven to +$10 million; full-year range breakeven to +$10 million.

• Non-GAAP EPS for full year now guided to -$0.05 to -$0.02; positive cash flow and EBITDA expected in Q4.