Blackberry (BB) Q3 2025 earnings summary

Executive summary

• Achieved positive operating and free cash flow for the first time in 12 quarters, ahead of expectations, with all divisions (IoT, cybersecurity, licensing) delivering profitability and exceeding guidance for both revenue and margins.

• Announced a definitive agreement to sell Cylance to Arctic Wolf for $160M in cash and shares, expected to close in Q4 FY25, aligning with strategic direction and strengthening the balance sheet.

• Focused on core IoT and Secure Communications businesses, with strategic capital allocation and improved fundamentals.

Financial highlights

• Total Q3 FY25 revenue reached $162 million, surpassing the upper end of guidance, with recurring software product revenue comprising 80%.

• Gross margin improved to 74% sequentially and year-over-year; IoT gross margin was 85%, Cybersecurity 67%.

• Adjusted EBITDA was $23 million, above guidance; adjusted net income was $12 million; non-GAAP EPS was $0.02.

• Operating and free cash flow were both positive at $3 million, a $34 million year-over-year improvement.

• Total cash, cash equivalents, and investments stood at $266 million.

Outlook and guidance

• Q4 FY25 guidance: total revenue $126–$135 million; IoT revenue $60–$65 million; Secure Comms $62–$66 million; Licensing ~$4 million.

• Adjusted EBITDA for Q4 expected at $10–$20 million; full-year FY25: $60–$70 million.

• Non-GAAP basic EPS for FY25 expected between $(0.02) and breakeven.

• Full-year IoT revenue guidance raised to $230–$235 million.