BB · Research
BlackBerry stopped being a takeover story once QNX started paying the bills
QNX went from 28.4% of BlackBerry revenue in fiscal 2024 to 48.8% in fiscal 2026. It earns the most segment EBITDA of the three businesses, and it carries a royalty backlog of about $950M. The open question is no longer what a buyer would pay.
Figures cover the twelve months to Aug 31, 2026 unless noted. EV uses the Oct 27, 2026 close and 587.03M cover-page shares.
Follow-up to our Oct 28 piece on the Q2 quarter [5].
| Scorecard | Read |
|---|---|
| Thesis | QNX now funds BlackBerry, and the value sits in its royalty stream, not in a bid premium |
| What proves it wrong | QNX segment EBITDA stops growing, or the royalty backlog shrinks at the next annual count |
| Next catalyst | Q3 fiscal 2027 results in December 2026, against the raised $315M to $325M QNX outlook |
| Key multiple | EV of $5.54B is 64.31x twelve-month QNX segment adjusted EBITDA of $86.10M (non-GAAP) |
| Mix | QNX 48.8% of fiscal 2026 revenue, was 28.4% in fiscal 2024 |
| Backlog | About $950M at Feb 28, 2026, was about $865M; Coretura added more than $100M after Q2 |
The takeover-target decade
For most of the last thirteen years, the case for owning BlackBerry rested on someone else wanting it. In August 2013 the company opened a review of strategic alternatives.
The only formal offer, a tentative $4.7B take-private from Fairfax Financial, fell apart on financing [7]. In November 2013 the review ended with a $1B placement of 6% convertible debentures instead, and Fairfax took $250M of it [6].
John Chen became interim CEO, and the phone business wound down over the next three years.
The second round came in 2023. Under a review the company called Project Imperium, BlackBerry planned to separate its Internet of Things unit, which included QNX, and list a minority stake while keeping control [8]. The board dropped the listing in December 2023, named John Giamatteo CEO, and set QNX and the security business up as standalone units [8].
The last big step closed on Feb 3, 2025. BlackBerry sold its Cylance endpoint security business to Arctic Wolf for $160.0M of cash, subject to about $42.1M of adjustments, plus 5.5 million Arctic Wolf shares [1].
Each of those episodes priced BlackBerry on what a buyer, a listing or a sale might bring. The filings since then point to something different.
QNX now produces the largest share of revenue and segment profit, so the stock can be judged on what the royalty stream earns.
One governance fact belongs here. On Oct 27, 2026, BlackBerry appointed David Chaikof to its board, raising it from eight to nine directors
The mix flipped
Revenue was $759.1M in fiscal 2024, $534.9M in fiscal 2025 and $549.1M in fiscal 2026, the years ended in February [1]. The fall from 2024 to 2025 is almost all Licensing.
Patent revenue went from $259.9M to $26.3M after BlackBerry sold its non-core patent portfolio to Malikie Innovations in fiscal 2024, and it was $22.2M in fiscal 2026 [1].
Over the same two years QNX rose from $215.4M to $236.0M and then to $268.0M [1]. Secure Communications fell from $283.8M to $272.6M and then to $258.9M.
As a share of revenue, QNX went from 28.4% to 44.1% to 48.8% [1].
The fiscal 2026 QNX gain of $32.0M breaks down into three parts [1]:
royalties up $18.0M
development seat revenue up $9.1M
BlackBerry Radar, the trailer and container tracking product booked inside QNX, up $5.9M
Professional services fell $1.3M. The largest piece is royalties, which are paid per unit shipped, so the growth follows cars and machines already in production.
The shift has continued into fiscal 2027. Six-month QNX revenue to Aug 31, 2026 was $152.6M against $120.6M
What a QNX dollar earns
Revenue mix tells you where the sales are. Segment profit tells you which business pays for the company.
BlackBerry's chief operating decision maker reviews each segment on adjusted EBITDA, a non-GAAP measure that excludes restructuring, stock pay and certain other items [2]. We use it here because it is the only profit line the filings give by segment.
In fiscal 2026, QNX segment adjusted EBITDA was $71.0M on $268.0M of revenue, or 26.49% [1]. Secure Communications earned $56.1M on $258.9M, or 21.67%, and Licensing $21.0M on $22.2M [1].
A year earlier QNX earned $59.1M and Secure Communications $52.3M [1].
The gap widened in the latest six months. QNX segment adjusted EBITDA was $48.3M against $33.2M, Secure Communications $28.2M against $19.3M, and Licensing $26.2M against $9.4M [2].
In Q2 alone QNX earned $29.0M against $20.5M [2].
Two caveats keep the read honest. First, fiscal 2026 QNX profit included Strategic Innovation Fund grant claims, a Canadian government program, and the company says it expects no further benefit from them
The backlog is the asset
The number that sets QNX apart from a normal software line is its royalty backlog. BlackBerry defines it as estimated future revenue from forecast royalties, based on QNX royalty rates and projected volumes over the life of each design [1].
It is calculated once a year, and the company warns that it "may not be indicative of actual future revenue" [1]. Volumes can fall short and contracts can be modified or ended.
With that caveat stated, the backlog was about $950M at Feb 28, 2026, against about $865M a year earlier [1]. That is about 3.54 times fiscal 2026 QNX revenue of $268.0M (derived).
Royalties are only part of QNX revenue, so the ratio overstates how much of total QNX sales it covers. It still shows that a large share of future royalty income is already designed in.
The next annual count will include the largest design win in QNX history. Coretura, the commercial-vehicle software venture of Volvo Group and Daimler Truck, chose QNX for its Alloy Kore platform.
The 10-Q says the win added more than $100 million to the backlog [2][3]. Trucks have long model lives, so royalties from that win would arrive over many years once production starts.
The other designed-in signal is the outlook. In the Q2 filing BlackBerry raised its fiscal 2027 QNX revenue range to $315M to $325M from $295M to $312M
Is it doing much better, and what is it worth without a bidder?
The view we set out to test is that BlackBerry pivoted from hardware to enterprise security and embedded software and is now doing much better. The filings support the first part fully.
There is no device revenue, and the three segments are QNX, Secure Communications and Licensing [1].
They support the second part on profit. Net income was $53.2M in fiscal 2026 against a net loss of $79.0M in fiscal 2025 [1].
Twelve-month operating income is $83.70M [2][5]. Six-month operating cash flow was $33.9M against negative $14.1M a year earlier [2][5].
Cash and investments of $447.1M exceed the $200.0M of 3.00% convertible notes due Feb 15, 2029, the only borrowing [2][5].
The pivot is narrower than the phrase "enterprise security" suggests. Secure Communications shrank in fiscal 2025 and fiscal 2026 before growing 1.67% in Q2, and its net retention was 91% in Q2 against 94% at fiscal year end [1]
Risks
Backlog conversion. The backlog is an estimate based on forecast volumes.
Slower vehicle production, program delays or contract changes would reduce it [1].
Grant benefit. Fiscal 2026 QNX segment EBITDA included Strategic Innovation Fund claims that will not recur [1].
Licensing timing. Licensing swung from $9.4M to $26.2M of six-month segment EBITDA on a new arrangement and can swing back [2].
Secure Communications. Unified endpoint management revenue fell $3.3M in Q2, and net retention is 91% [2][5].
Arctic Wolf shares. They are illiquid, have no public market and may be hard to value or sell [1].
Dilution. The convertible notes can convert into 51.5 million shares [5].
What to watch
The fiscal 2027 royalty backlog count at Feb 28, 2027, which should include the Coretura win [1][2].
QNX segment adjusted EBITDA in Q3 against $29.0M in Q2 [2].
QNX segment R&D, which shows how much of the margin BlackBerry chooses to reinvest [2].
Secure Communications net retention against 91% [2].
Any board or capital allocation change that follows the Oct 27 appointment. We read none into it today [4].
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