11:11 AM EDT, 06/25/2025 (MT Newswires) -- BlackBerry (BB) delivered better-than-expected fiscal Q1 results, driven by strength in its QNX and secure communications segments, but offered a conservative outlook amid ongoing macroeconomic uncertainty, RBC Capital Markets said.

The company posted adjusted EPS of $0.02 in the quarter ended May 31, versus a breakeven consensus, while revenue declined 1% to $121.7 million but came in above the $114 million analyst estimate.

RBC said in a research note Tuesday that the beat was supported by better-than-expected performance from both QNX, which reached $58 million in revenue, and secure communications, which benefited from an early German government contract.

Still, BlackBerry's updated guidance remained cautious, with the company lifting its fiscal 2026 revenue range only slightly to between $508 million and $538 million and reiterating its EPS outlook of $0.08 to $0.10. The brokerage said the outlook assumes continued headwinds in automotive and elongated buying cycles, particularly for QNX.

BlackBerry is deploying capital on share buybacks but reported negative operating cash flow in Q1, according to the note. The firm expects free cash flow to recover in the second half of fiscal 2026.

RBC now expects fiscal 2026 revenue of $530.4 million and adjusted EPS of $0.10, up from prior estimates of $519.3 million and $0.09. For fiscal Q2, it estimates revenue of $125.1 million and EPS of $0.01.

The firm raised its price target on BlackBerry to $4 from $3.75 while maintaining a sector perform rating.

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