Dive Brief:
- Blackberry has completed its turnaround and “is now a growth company,” CFO Tim Foote said Tuesday during remarks at the Baird Global Consumer, Technology & Services Conference.
- The Waterloo, Ontario-based company is focused on driving growth, especially in its QNX sector — the division which provides the software platform behind “physical AI,” including robotics, automotives and medical devices, Foote said. The business “sees a lot of runway for growth” in the QNX software, which is still only “just getting started,” Foote said during a Q&A session with John Wall, president of Blackberry’s QNX division and Luke Junk, senior research analyst for Baird.
- “There's a whole plethora of new markets that we're really quite under-penetrated or not even penetrated at all where our product resonates very strongly,” Foote said according to a transcript.
Dive Insight:
Blackberry’s stock has soared 159% this year as it focuses on selling its QNX software, prompting scrutiny by investors and long-term followers of the company on whether fundmentals justify the stock-price surge.
Along with Gamestop and other companies, Blackberry made headlines in 2022 as a popular “meme stock.” Despite slumping profits and cash flow, it traded at overvalued price levels while pivoting from selling a personal device to software, according to reports at the time.
Blackberry has “done a lot of hard work” over the past few years, undergoing a change in management beginning with the appointment of John Giamatteo to the CEO chair in 2023, Foote said.
A 10-year veteran of the personal-device-turned-software company, Foote took Blackberry’s CFO seat in 2024 as part of a series of executive leadership shifts, including chief accounting officer and corporate controller appointments, CFO Dive reported at the time.
Before Blackberry, Foote served in numerous finance roles over the course of 10 years that he worked at mobile tech provider Good Technology, which was acquired by Blackberry in 2015.
Among other moves, the company in 2024 announced plans to sell its cybersecurity business Cylance to Arctic Wolf for $160 million, well below the $1.4 billion it paid to acquire the company in 2018, TechCrunch reported at the time. “We took a lot of cost out of the run rate” with the sale, Foote said.
Since beginning its restructuring plans in 2024 — which included dividing the business into its cybersecurity and “Internet of Things” subsections — Blackberry has changed its focus from value creation and restoring profitability through cost cutting to “looking to get operating leverage from a growing top line,” Foote said.
“We've got a lot of secular tailwinds that are really propelling the QNX business in particular,” Foote said Tuesday, noting “we think those tailwinds are going to run for quite some time.”
The company’s QNX division fell in line with the “Rule of 40” for both its fourth quarter and full fiscal year 2025, according to the earnings results released April 9.
Often considered a key milestone reflecting financial strength for SaaS companies, the “rule” refers to the point in time when the sum of the company’s revenue growth and profit or EBITDA margin either equal or exceed 40%, according to a 2025 post by the Boston Consulting Group.
Quarterly revenues for the QNX segment hit a record $78.7 million, up 20% year-over-year, according to the earnings report.
Blackberry also recorded its eighth consecutive quarter of GAAP net income for the quarter ended Feb. 28 — with net income reaching $24.3 million, compared to $13.7 million in the previous quarter and a net loss of $7.8 million for the prior year period.
