Blackberry (BB) Q1 2025 earnings summary

Executive summary

• Achieved another solid quarter with Q1 FY25 revenue of $144 million, driven by both IoT and Cybersecurity divisions exceeding guidance and strong year-over-year growth in IoT revenue.

• Continued progress in separating IoT and Cybersecurity into standalone divisions, driving cost efficiencies and streamlining internal processes.

• Significant cost reduction actions led to $125 million in run rate savings, with non-GAAP OpEx $21 million below baseline.

• Third consecutive quarter of improved free cash usage, with net cash used in operations and adjusted EBITDA both better than expected.

• Recurring software product revenue accounted for approximately 80% of total revenue.

Financial highlights

• Total revenue was $144 million, with IoT revenue at $53 million (+18% YoY), Cybersecurity at $85 million, and Licensing & Other at $6 million.

• Non-GAAP gross margin was 67%; IoT gross margin was 81%, Cybersecurity 59%, and Licensing & Other 67%.

• Adjusted EBITDA was -$7 million; non-GAAP operating loss was $12 million; non-GAAP EPS was -$0.03.

• Free cash usage improved to $16 million sequentially; total cash, cash equivalents, and investments stood at $283 million.

• Non-GAAP OpEx was $109 million, a $4 million sequential decrease and $21 million below baseline.

Outlook and guidance

• Q2 FY25 guidance: total revenue $136–$144 million; IoT $50–$54 million; Cybersecurity $82–$86 million.

• FY25 guidance: total revenue $586–$616 million; IoT $220–$235 million; Cybersecurity $350–$365 million; Licensing & Other ~$4 million per quarter.

• Full-year adjusted EBITDA expected to be break-even to $10 million; non-GAAP EPS between -$0.03 and -$0.07.

• On track to achieve non-GAAP profitability and positive cash flow in Q4 FY25.