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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

________________________

FORM 10-Q


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended August 31, 2025


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 001-38232

______________________________________________________

BlackBerry Limited

(Exact name of registrant as specified in its charter)

Canada

98-0164408

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

2200 University Ave East

Waterloo

Ontario

Canada

N2K 0A7

(Address of Principal Executive Offices)

(Zip Code)

(519) 888-7465

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Shares	BB	New York Stock Exchange
Common Shares	BB	Toronto Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	x	Accelerated filer	☐
Non-accelerated filer	o	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No x

The registrant had 590,361,084 common shares issued and outstanding as of September 22, 2025.


BLACKBERRY LIMITED

TABLE OF CONTENTS
		Page No.
PART I	FINANCIAL INFORMATION
Item 1	Financial Statements
	Consolidated Balance Sheets as of August 31, 2025 (unaudited) and February 28, 2025	5
	Consolidated Statements of Shareholders' Equity - Three and Six Months Ended August 31, 2025 and 2024 (unaudited)	7
	Consolidated Statements of Operations - Three and Six Months Ended August 31, 2025 and 2024 (unaudited)	8
	Consolidated Statements of Comprehensive Income (Loss) - Three and Six Months Ended August 31, 2025 and 2024 (unaudited)	9
	Consolidated Statements of Cash Flows - Six Months Ended August 31, 2025 and 2024 (unaudited)	10
	Notes to the Consolidated Financial Statements	11
Item 2	Management's Discussion and Analysis of Financial Condition and Results of Operations	31
Item 3	Quantitative and Qualitative Disclosures about Market Risk	60
Item 4	Controls and Procedures	61

PART II	OTHER INFORMATION
Item 1	Legal Proceedings	62

Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	62
Item 5	Other Information	62
Item 6	Exhibits	62
Signatures		64

Unless the context otherwise requires, all references to the “Company” and “BlackBerry” include BlackBerry Limited and its subsidiaries.

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

BlackBerry Limited

Incorporated under the Laws of Ontario

(United States dollars, in millions) (unaudited)

Consolidated Balance Sheets


	As at
	August 31, 2025		February 28, 2025
Assets
Current
Cash and cash equivalents (note 3)	$	276.4	$	266.7
Short-term investments (note 3)	14.1		71.1
Accounts receivable, net of allowance of $5.4 and $6.6, respectively (note 4)	125.0		173.7
Other receivables (note 4)	48.7		48.4

Income taxes receivable	2.6		1.6
Other current assets (note 4)	40.4		30.0

	507.2		591.5
Restricted cash and cash equivalents (note 3)	14.2		13.6
Long-term investments (note 3)	58.8		58.9
Other long-term assets (note 4)	51.1		76.5

Operating lease right-of-use assets, net	20.1		22.0
Property, plant and equipment, net (note 4)	12.2		13.4
Intangible assets, net (note 4)	42.0		47.3
Goodwill (note 4)	478.5		472.4


	$	1,184.1	$	1,295.6
Liabilities
Current
Accounts payable	$	4.0	$	31.1
Accrued liabilities (note 4)	83.9		126.2
Income taxes payable (note 5)	13.8		25.5

Deferred revenue, current (note 11)	128.5		161.5

	230.2		344.3
Deferred revenue, non-current (note 11)	6.7		5.6
Operating lease liabilities	25.0		28.7
Other long-term liabilities	1.2		1.8
Long-term notes (note 6)	195.9		195.3



	459.0		575.7
Commitments and contingencies (note 10)
Shareholders’ equity
Capital stock and additional paid-in capital
Preferred shares: authorized unlimited number of non-voting, cumulative, redeemable and retractable	—		—
Common shares: authorized unlimited number of non-voting, redeemable, retractable Class A common shares and unlimited number of voting common shares
Issued and outstanding - 590,361,084 voting common shares (February 28, 2025 - 596,230,655)	2,951.3		2,976.4
Deficit	(2,214.2)		(2,237.3)
Accumulated other comprehensive loss (note 9)	(12.0)		(19.2)
	725.1		719.9
	$	1,184.1	$	1,295.6

See notes to consolidated financial statements.

On behalf of the Board:


John Giamatteo			Lisa Disbrow
Director			Director

BlackBerry Limited

(United States dollars, in millions) (unaudited)

Consolidated Statements of Shareholders’ Equity


	Three Months Ended August 31, 2025
	Capital Stock and Additional Paid-in Capital		Deficit		Accumulated Other Comprehensive Loss		Total
Balance as at May 31, 2025	$	2,970.5	$	(2,232.6)	$	(12.8)	$	725.1
Net income	—		13.3		—		13.3
Other comprehensive income	—		—		0.8		0.8
Stock-based compensation	5.9				—		5.9
Share repurchase	(25.1)		5.1		—		(20.0)




Balance as at August 31, 2025	$	2,951.3	$	(2,214.2)	$	(12.0)	$	725.1


	Three Months Ended August 31, 2024
	Capital Stock and Additional Paid-in Capital		Deficit		Accumulated Other Comprehensive Loss		Total
Balance as at May 31, 2024	2,956.9		(2,199.7)		(14.6)		$	742.6
Net loss	—		(19.7)		—		(19.7)
Other comprehensive income	—		—		2.1		2.1
Stock-based compensation	7.1		—		—		7.1




Balance as at August 31, 2024	$	2,964.0	$	(2,219.4)	$	(12.5)	$	732.1

See notes to consolidated financial statements.

BlackBerry Limited

(United States dollars, in millions) (unaudited)

Consolidated Statements of Shareholders’ Equity


	Six Months Ended August 31, 2025
	Capital Stock and Additional Paid-in Capital		Deficit		Accumulated Other Comprehensive Loss		Total
Balance as at February 28, 2025	$	2,976.4	$	(2,237.3)	$	(19.2)	$	719.9
Net income	—		15.2		—		15.2
Other comprehensive income	—		—		7.2		7.2
Stock-based compensation (note 7)	11.6		—		—		11.6
Share repurchase (note 7)	(37.9)		7.9		—		(30.0)
Shares issued:


Employee share purchase plan (note 7)	1.2		—		—		1.2
Balance as at August 31, 2025	$	2,951.3	$	(2,214.2)	$	(12.0)	$	725.1


	Six Months Ended August 31, 2024
	Capital Stock and Additional Paid-in Capital		Deficit		Accumulated Other Comprehensive Loss		Total
Balance as at February 29, 2024	2,947.7		(2,158.3)		(14.3)		775.1
Net loss	—		(61.1)		—		(61.1)
Other comprehensive income	—		—		1.8		1.8
Stock-based compensation	14.8		—		—		14.8
Shares issued:							—


Employee share purchase plan	1.5		—		—		1.5
Balance as at August 31, 2024	$	2,964.0	$	(2,219.4)	$	(12.5)	$	732.1

See notes to consolidated financial statements.

BlackBerry Limited

(United States dollars, in millions, except per share data) (unaudited)

Consolidated Statements of Operations


	Three Months Ended				Six Months Ended
	August 31, 2025		August 31, 2024		August 31, 2025		August 31, 2024
Revenue (note 11)	$	129.6	$	126.2	$	251.3	$	249.6
Cost of sales	33.0		37.6		64.4		71.0

Gross margin	96.6		88.6		186.9		178.6

Operating expenses
Research and development	25.6		27.1		50.6		57.7
Sales and marketing	24.4		21.3		53.1		45.1
General and administrative	31.5		32.8		62.0		73.1
Amortization	3.1		4.6		7.1		9.3

Impairment of long-lived assets (note 3)	0.5		0.6		0.6		4.1



	85.1		86.4		173.4		189.3
Operating income (loss)	11.5		2.2		13.5		(10.7)
Investment income, net (note 3 and note 6)	1.9		2.7		4.8		6.7
Income (loss) before income taxes	13.4		4.9		18.3		(4.0)
Provision for income taxes (note 5)	0.1		1.4		3.1		9.0
Income (loss) from continuing operations	13.3		3.5		15.2		(13.0)
Loss from discontinued operations, net of tax (note 2)	—		(23.2)		—		(48.1)
Net income (loss)	$	13.3	$	(19.7)	$	15.2	$	(61.1)

Earnings (loss) per share (note 8)
Basic earnings (loss) per share from continuing operations	$	0.02	$	0.01	$	0.03	$	(0.02)

Total basic earnings (loss) per share	$	0.02	$	(0.03)	$	0.03	$	(0.10)

Diluted earnings (loss) per share from continuing operations	$	0.02	$	0.01	$	0.03	$	(0.02)

Total diluted earnings (loss) per share	$	0.02	$	(0.03)	$	0.03	$	(0.10)

See notes to consolidated financial statements.

BlackBerry Limited

(United States dollars, in millions) (unaudited)

Consolidated Statements of Comprehensive Income (Loss)


	Three Months Ended				Six Months Ended
	August 31, 2025		August 31, 2024		August 31, 2025		August 31, 2024
Net income (loss)	$	13.3	$	(19.7)	$	15.2	$	(61.1)
Other comprehensive income

Net change in fair value and amounts reclassified to net income (loss) from derivatives designated as cash flow hedges during the period, net of income taxes of nil for the three and six months ended August 31, 2025 and August 31, 2024 (note 9)	(0.2)		0.8		2.2		0.6

Foreign currency translation adjustment	1.0		1.3		5.0		1.2


Other comprehensive income	0.8		2.1		7.2		1.8
Comprehensive income (loss)	$	14.1	$	(17.6)	$	22.4	$	(59.3)

See notes to consolidated financial statements.

BlackBerry Limited

(United States dollars, in millions) (unaudited)

Consolidated Statements of Cash Flows


	Six Months Ended
	August 31, 2025		August 31, 2024
Cash flows from operating activities


Net income (loss)	$	15.2	$	(61.1)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Amortization	10.3		26.2

Stock-based compensation	11.6		14.8


Impairment of long-lived assets (note 3)	0.6		4.1







Operating leases	(5.7)		(5.5)
Other	(0.3)		(2.8)
Net changes in working capital items
Accounts receivable, net of allowance	48.7		49.0
Other receivables	(0.3)		0.5

Income taxes receivable	(1.0)		—
Other assets	16.0		(7.5)
Accounts payable	(27.1)		(10.0)
Accrued liabilities	(38.5)		(4.9)
Income taxes payable	(11.7)		(0.4)
Deferred revenue	(31.9)		(33.5)
Net cash used in operating activities	(14.1)		(31.1)


Cash flows from investing activities

Proceeds on sale, maturity or distribution from long-term investments	0.1		—
Acquisition of property, plant and equipment	(1.7)		(1.9)
Proceeds on sale of property, plant and equipment	—		0.1
Acquisition of intangible assets	(2.6)		(3.8)


Acquisition of short-term investments	(34.7)		(71.6)

Proceeds on sale or maturity of short-term investments	91.7		93.8


Net cash provided by investing activities	52.8		16.6
Cash flows from financing activities
Issuance of common shares	1.2		1.5


Common shares repurchased	(30.0)		—





Net cash provided by (used in) financing activities	(28.8)		1.5
Effect of foreign exchange gain on cash, cash equivalents, restricted cash, and restricted cash equivalents	0.4		0.2
Net increase (decrease) in cash, cash equivalents, restricted cash, and restricted cash equivalents during the period	10.3		(12.8)
Cash, cash equivalents, restricted cash, and restricted cash equivalents, beginning of period	280.3		200.5
Cash, cash equivalents, restricted cash, and restricted cash equivalents, end of period	$	290.6	$	187.7

See notes to consolidated financial statements.

BlackBerry Limited

Notes to the Consolidated Financial Statements

In millions of United States dollars, except share and per share data, and except as otherwise indicated (unaudited)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND CRITICAL ACCOUNTING ESTIMATES

Basis of Presentation and Preparation

These interim consolidated financial statements have been prepared by management in accordance with United States generally accepted accounting principles (“U.S. GAAP”). They do not include all of the disclosures required by U.S. GAAP for annual financial statements and should be read in conjunction with the audited consolidated financial statements of BlackBerry Limited (the “Company”) for the year ended February 28, 2025 (the “Annual Financial Statements”), which have been prepared in accordance with U.S. GAAP. In the opinion of management, all normal recurring adjustments considered necessary for fair presentation have been included in these interim consolidated financial statements. Operating results for the three and six months ended August 31, 2025 are not necessarily indicative of the results that may be expected for the full year ending February 28, 2026. The consolidated balance sheets at February 28, 2025 were derived from the audited Annual Financial Statements but do not contain all of the footnote disclosures from the Annual Financial Statements.

The preparation of the consolidated financial statements requires management to make estimates and assumptions with respect to the reported amounts of assets, liabilities, revenue and expenses and the disclosure of contingent liabilities. Actual results could differ from these estimates and any such differences may be material to the Company’s consolidated financial statements.

Certain of the comparative figures have been reclassified to conform to the current year’s presentation, including for facilities as discussed below and discontinued operations as discussed in Note 2. In the third quarter of fiscal 2025, the Company reclassified all expenses associated with its facilities within General and administrative expenses, whereas previously these costs were allocated amongst the functional expense areas of the business based on assumptions of usage of those facilities by the functional areas.

The impact of the change on previously issued financial statements was as follows for the three and six months ended August 31, 2024:


	Three Months Ended						Six Months Ended
					Revised						Revised
	August 31, 2024		Impact of change		August 31, 2024		August 31, 2024		Impact of change		August 31, 2024
Cost of sales	$	50.9	$	(1.2)	$	49.7	$	98.7	$	(2.7)	$	96.0
Gross margin	94.9		1.2		96.1		190.7		2.7		193.4
Research and development	37.8		(1.9)		35.9		79.3		(4.2)		75.1
Sales and marketing	33.7		(1.0)		32.7		71.6		(2.1)		69.5
General and administrative	33.1		4.1		37.2		73.0		9.0		82.0

The Company is organized and managed as three reportable operating segments: QNX, Secure Communications, and Licensing, as further discussed in Note 11.

Significant Accounting Policies and Critical Accounting Estimates

There have been no material changes to the Company’s accounting policies or critical accounting estimates from those described in the Annual Financial Statements.

Accounting Standards Adopted During Fiscal 2026

The Company has not adopted any new standards to date during fiscal 2026.

BlackBerry Limited

Notes to the Consolidated Financial Statements

In millions of United States dollars, except share and per share data, and except as otherwise indicated (unaudited)

Accounting Pronouncements Not Yet Adopted

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09 “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” on the topic of income taxes. The standard requires additional disclosure for income taxes. These requirements include: (i) requiring a public entity to disclose specific categories in the rate reconciliation; (ii) disclosure of additional information for reconciling items that meet a quantitative threshold (if the effect of those reconciling items is equal to or greater than 5% of the amount computed by multiplying pretax income or loss by the applicable statutory income tax rate); (iii) annual disclosure of the amount of income taxes paid (net of refunds received) disaggregated by federal (national), state, and foreign taxes; (iv) annual disclosure of the amount of income taxes paid (net of refunds received) disaggregated by individual jurisdictions in which income taxes paid (net of refunds received) is equal to or greater than 5% of total income taxes paid (net of refunds received); (v) annual disclosure of income (or loss) from continuing operations before income tax expense (or benefit) disaggregated between domestic and foreign; and (vi) annual disclosure of income tax expense (or benefit) from continuing operations disaggregated by federal (national), state, and foreign. For public entities, the guidance is effective for annual periods beginning after December 15, 2024. The Company will adopt this guidance in its annual reporting for fiscal 2026 on a prospective basis and is in the process of evaluating the new requirements. The adoption of ASU 2023-09 will expand the Company’s disclosures, however the Company has not yet determined the impact on its consolidated financial statements.

In November 2024, the FASB issued ASU 2024-03 to amend the codification on “Expense Disaggregation Disclosure” (Subtopic 220-40): Income Statement - Reporting Comprehensive Income”. The standard requires additional disclosure on specific expense categories included in the expense captions presented on the statements of operations. The guidance is effective for annual periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. The Company will adopt this guidance in fiscal 2028 and is in process of evaluating the new requirements. As a result, the Company has not yet determined the impact this new ASU will have on its disclosures.

In July 2025, the FASB issued ASU 2025-05 to amend the guidance in “Financial Instruments—Credit Losses” (Topic 326). The update provides targeted improvements and clarifications related to the recognition and measurement of expected credit losses, particularly for off-balance-sheet credit exposures and certain practical expedients. The guidance is effective for fiscal years beginning after December 15, 2026, including interim periods within those fiscal years. The Company will adopt this guidance in fiscal 2028 and does not expect the adoption to have a material impact on its results of operations, financial position and disclosures.

2. DISCONTINUED OPERATIONS

In the third quarter of fiscal 2025, the Company determined that the assets and liabilities constituting its Cylance business, which consisted of the Company’s artificial intelligence (“AI”) and machine learning-based cybersecurity solutions previously acquired on February 21, 2019, met the criteria requiring classification as held for sale as specified in Accounting Standards Codification (“ASC”) 360 Property, Plant and Equipment (“ASC 360”) and met the criteria for presentation as discontinued operations under ASC 205 Presentation of Financial Statements.

On February 3, 2025, the Company completed the sale of its Cylance endpoint security assets and related liabilities to Arctic Wolf Networks, Inc. (“Arctic Wolf”). In connection with the sale, the Company recognized a gain on disposal of discontinued operations before taxes of $10.4 million in the fourth quarter of fiscal 2025.

The financial results of Cylance are presented as “loss from discontinued operations, net of tax” in the Consolidated Statements of Operations and have been removed from the presentation of results from continuing operations. The following table represents the financial results of Cylance for the three and six months ended August 31, 2024:


	Three Months Ended		Six Months Ended
	August 31, 2024			August 31, 2024
Revenue	$	20.3		$	41.2
Cost of sales	12.1			25.0

Gross margin	8.2			16.2

Operating expenses
Research and development	8.8			17.4
Sales and marketing	11.4			24.4
General and administrative	4.4			8.9
Amortization	6.8			13.6


	31.4			64.3
Operating loss	(23.2)			(48.1)
Provision for income taxes	—			—
Loss from discontinued operations, net of tax	$	(23.2)		$	(48.1)

Basic loss per share from discontinued operations	$	(0.04)		$	(0.08)
Diluted loss per share from discontinued operations	$	(0.04)		$	(0.08)

The following table represents the amortization, stock-based compensation (representing the significant non-cash operating item) and acquisition of property, plant and equipment of the discontinued operations for the three and six months ended August 31, 2024:


	Three Months Ended		Six Months Ended
	August 31, 2024			August 31, 2024
Amortization	$	6.8		$	13.6
Stock based compensation	1.8			3.3
Acquisition of property, plant and equipment	—			—

3. FAIR VALUE MEASUREMENTS, CASH, CASH EQUIVALENTS AND INVESTMENTS

Fair Value

The Company defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use in pricing the asset or liability, such as inherent risk, non-performance risk and credit risk. The Company applies the following fair value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value into three levels:

•Level 1 - Unadjusted quoted prices at the measurement date for identical assets or liabilities in active markets.

•Level 2 - Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

•Level 3 - Significant unobservable inputs that are supported by little or no market activity.

The fair value hierarchy also requires the Company to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

BlackBerry Limited

Notes to the Consolidated Financial Statements

In millions of United States dollars, except share and per share data, and except as otherwise indicated (unaudited)

The Company’s cash and cash equivalents, accounts receivable, other receivables, accounts payable and accrued liabilities are carried at amounts that approximate their fair values (Level 2 measurement) due to their short maturities.

Recurring Fair Value Measurements

In determining the fair value of investments held, the Company primarily relies on an independent third-party valuator for the fair valuation of securities. The Company also reviews the inputs used in the valuation process and assesses the pricing of the securities for reasonableness after conducting its own internal collection of quoted prices from brokers. Fair values for all investment categories provided by the independent third-party valuator that are in excess of 0.5% from the fair values determined by the Company are communicated to the independent third-party valuator for consideration of reasonableness. The independent third-party valuator considers the information provided by the Company before determining whether a change in their original pricing is warranted.

When the Company concludes that there is a significant financing component included within a contract with a customer due to timing differences between the fulfillment of certain performance obligations and the receipt of payment for those performance obligations, the Company determines the present value of the future consideration utilizing the discount rate that would be reflected in a separate financing transaction between the customer and the Company at contract inception based upon the credit characteristics of the customer receiving financing in the contract.

Non-Recurring Fair Value Measurements

Upon the occurrence of certain events, the Company re-measures the fair value of non-marketable equity investments for which it utilizes the measurement alternative, and long-lived assets, including property, plant and equipment, operating lease ROU assets, intangible assets and goodwill if an impairment or observable price adjustment is recognized in the current period.

Non-Marketable Equity Investments Measured Using the Measurement Alternative

Non-marketable equity investments measured using the measurement alternative include investments in privately held companies without readily determinable fair values in which the Company does not own a controlling interest or have significant influence. Equity investments in private companies are recorded at fair value on a non-recurring basis. The fair value of non-marketable equity investments are classified within Level 3 when the Company estimates fair value using significant unobservable inputs such as when the investment is remeasured due to impairment or observable price changes in the equity of an investee resulting from an orderly transaction for identical or similar investments of the same issuer.

Impairment of Long-Lived Assets

During the three and six months ended August 31, 2025, the Company recorded a pre-tax and after-tax impairment charge of $0.5 million and $0.6 million, respectively, relating to operating lease right-of-use (“ROU”) assets and property, plant and equipment associated with exiting certain leased facilities and the change in the extent or manner in which certain information technology assets are used (three and six months ended August 31, 2024 - $0.6 million and $4.1 million, respectively). The impairment was determined by comparing the fair value of the impacted long-lived assets to the carrying value of the asset as of the impairment measurement date, as required under ASC 360, using Level 3 inputs. The fair value of the ROU asset was based on the estimated sublease income for certain facilities taking into consideration the estimated time period it will take to obtain a sublessor, the applicable discount rate and the sublease rate, which are considered unobservable inputs. The Company conducts an evaluation of the related liabilities and expenses and revises its assumptions and estimates as appropriate as new or updated information becomes available. The fair value measurement of ROU impaired assets is classified as Level 3 of the fair value hierarchy.

BlackBerry Limited

Notes to the Consolidated Financial Statements

In millions of United States dollars, except share and per share data, and except as otherwise indicated (unaudited)

Cash, Cash Equivalents and Investments

The components of cash, cash equivalents and investments by fair value level as at August 31, 2025 were as follows:


	Cost Basis (1)		Unrealized Gains		Unrealized Losses		Fair Value		Cash and Cash Equivalents		Short-term Investments		Long-term Investments		Restricted Cash and Cash Equivalents
Bank balances	$	152.6	$	—	$	—	$	152.6	$	152.6	$	—	$	—	$	—
Equity investments in private companies	53.9		6.1		(1.2)		58.8		—		—		58.8		—
	206.5		6.1		(1.2)		211.4		152.6		—		58.8		—





Level 2:
Term deposits, and certificates of deposits	29.7		—		—		29.7		20.1		—		—		9.6
Bearer deposit notes	36.8		—		—		36.8		36.8		—		—		—
Commercial paper	61.9		—		—		61.9		43.2		14.1		—		4.6
Non-U.S. promissory notes	20.9		—		—		20.9		20.9		—		—		—


Non-U.S. treasury bills	2.8		—		—		2.8		2.8		—		—		—


	152.1		—		—		152.1		123.8		14.1		—		14.2





	$	358.6	$	6.1	$	(1.2)	$	363.5	$	276.4	$	14.1	$	58.8	$	14.2

______________________________

(1) Cost basis for equity investments in private companies includes the effect of returns of capital and impairment.

BlackBerry Limited

Notes to the Consolidated Financial Statements

In millions of United States dollars, except share and per share data, and except as otherwise indicated (unaudited)

The components of cash, cash equivalents and investments by fair value level as at February 28, 2025 were as follows:


	Cost Basis (1)		Unrealized Gains		Unrealized Losses		Fair Value		Cash and Cash Equivalents		Short-term Investments		Long-term Investments		Restricted Cash and Cash Equivalents
Bank balances	$	223.7	$	—	$	—	$	223.7	$	223.7	$	—	$	—	$	—
Equity investments in private companies	23.3		4.9		—		28.2		—		—		28.2		—
	247.0		4.9		—		251.9		223.7		—		28.2		—
Level 1:
Equity securities	10.0		—		(10.0)		—		—		—		—		—

Level 2:
Term deposits, and certificates of deposits	39.3		—		—		39.3		—		30.1		—		9.2
Bearer deposit notes	10.3		—		—		10.3		7.3		3.0		—		—
Commercial paper	55.5		—		—		55.5		27.8		27.7		—		—
Non-U.S. promissory notes	9.8		—		—		9.8		7.9		1.9		—		—

Non-U.S. government sponsored enterprise notes	9.3		—		—		9.3		—		4.9		—		4.4


Corporate notes/bonds	3.5		—		—		3.5		—		3.5		—		—
	127.7		—		—		127.7		43.0		71.1		—		13.6
Level 3:

Equity investments in private companies	30.7		1.2		(1.2)		30.7		—		—		30.7		—

	$	415.4	$	6.1	$	(11.2)	$	410.3	$	266.7	$	71.1	$	58.9	$	13.6

______________________________

(1) Cost basis for equity investments in private companies includes the effect of returns of capital and impairment.

As at August 31, 2025, the Company had non-marketable equity investments without readily determinable fair value of $58.8 million (February 28, 2025 - $58.9 million) including common shares of Arctic Wolf received as partial consideration for the sale of its Cylance endpoint security assets and liabilities to Arctic Wolf. During the three and six months ended August 31, 2025, the Company did not record any adjustment to the carrying value of non-marketable equity investments without readily determinable fair value resulting from observable price changes in orderly transactions for identical or similar securities which have been included in investment income, net on the Company’s consolidated statements of operations (three and six months ended August 31, 2024 - upward adjustments of nil and $1.2 million, respectively). During the three and six months ended August 31, 2025 and August 31, 2024, the Company did not record any impairment to these investments. As of August 31, 2025, the Company has recorded a cumulative impairment of $3.0 million to the carrying value of certain other non-marketable equity investments without readily determinable fair value (February 28, 2025 - $3.0 million).

There were no realized gains or losses on available-for-sale securities for the three and six months ended August 31, 2025 and August 31, 2024.

The Company has restricted cash and cash equivalents, consisting of cash and securities pledged as collateral to major banking partners in support of the Company’s requirements for letters of credit and a performance bond that the Company was required to post to support a government contract. These letters of credit support certain leasing arrangements entered into in the ordinary course of business and are for terms ranging from one month to six years. The Company is legally restricted from accessing these funds during the term of the leases for which the letters of credit have been issued and during the term of the government contract; however, the Company can continue to invest the funds and receive investment income thereon.

BlackBerry Limited

Notes to the Consolidated Financial Statements

In millions of United States dollars, except share and per share data, and except as otherwise indicated (unaudited)

The following table provides a reconciliation of cash, cash equivalents, restricted cash, and restricted cash equivalents as at August 31, 2025 and February 28, 2025 from the consolidated balance sheets to the consolidated statements of cash flows:


	As at
	August 31, 2025		February 28, 2025
Cash and cash equivalents	$	276.4	$	266.7
Restricted cash and cash equivalents	14.2		13.6
Total cash, cash equivalents, restricted cash, and restricted cash equivalents presented in the consolidated statements of cash flows	$	290.6	$	280.3

The contractual maturities of available-for-sale investments as at August 31, 2025 and February 28, 2025 were as follows:


	As at
	August 31, 2025				February 28, 2025
	Cost Basis		Fair Value		Cost Basis		Fair Value
Due in one year or less	$	152.1	$	152.1	$	127.7	$	127.7


No fixed maturity	—		—		10.0		—
	$	152.1	$	152.1	$	137.7	$	127.7

As at August 31, 2025 and February 28, 2025, the Company had no available-for-sale debt securities with continuous unrealized losses.

4. CONSOLIDATED BALANCE SHEET DETAILS

Accounts Receivable, Net of Allowance

The current estimated credit losses (“CECL”) for accounts receivable as at August 31, 2025 were $5.4 million (February 28, 2025 - $6.6 million).

The Company also has long-term accounts receivable included in Other long-term assets. The CECL for long-term accounts receivable is estimated using the probability of default method and the default exposure due to limited historical information. The exposure to default is represented by the assets’ amortized carrying amount at the reporting date.

The following table sets forth the activity in the Company’s allowance for credit losses:


	Carrying Amount

Beginning balance as of February 29, 2024	$	6.0
Prior period provision for expected credit losses	5.3
Write-offs charged against the allowance	(4.7)
Ending balance of the allowance for credit loss as at February 28, 2025	6.6
Current period recovery for expected credit losses	(0.7)
Write-offs charged against the allowance	(0.5)

Ending balance of the allowance for credit loss as at August 31, 2025	$	5.4

The allowance for credit losses as at August 31, 2025 consists of $0.5 million (February 28, 2025 - $1.1 million) relating to CECL estimated based on days past due and region and $4.9 million (February 28, 2025 - $5.5 million) relating to specific customers that were evaluated separately.

There were two customers that comprised more than 10% of accounts receivable as at August 31, 2025 (February 28, 2025 - two customers comprised more than 10%).

BlackBerry Limited

Notes to the Consolidated Financial Statements

In millions of United States dollars, except share and per share data, and except as otherwise indicated (unaudited)

Other Receivables


	As at
	August 31, 2025		February 28, 2025
Arctic Wolf delayed cash payment (1)	$	38.1	$	38.6

Other	10.6		9.8
	$	48.7	$	48.4

______________________________

(1) As partial consideration for the sale of its Cylance endpoint security assets and liabilities to Arctic Wolf, as described in Note 2, the Company is owed a delayed cash payment one year following the closing.

As at August 31, 2025 and February 28, 2025, other receivables included items such as claims filed by QNX with the Ministry of Innovation, Science and Economic Development Canada relating to its Strategic Innovation Fund (“SIF”), among other items, none of which were greater than 5% of the current assets balance as at balance sheet dates.

Other Current Assets

As at August 31, 2025 and February 28, 2025, other current assets included items such as the current portion of deferred commissions and prepaid expenses, among other items, none of which were greater than 5% of the current assets balance as at the balance sheet dates.

Property, Plant and Equipment, Net

Property, plant and equipment comprised the following:


	As at
	August 31, 2025		February 28, 2025
Cost
BlackBerry operations and other information technology	$	77.8	$	80.6
Leasehold improvements and other	11.5		10.5
Furniture and fixtures	4.6		4.6
Manufacturing, repair and research and development equipment	2.5		2.2
	96.4		97.9
Accumulated amortization and impairment	84.2		84.5
Net book value	$	12.2	$	13.4

BlackBerry Limited

Notes to the Consolidated Financial Statements

In millions of United States dollars, except share and per share data, and except as otherwise indicated (unaudited)

Intangible Assets, Net

Intangible assets comprised the following:


	As at August 31, 2025
	Cost		Accumulated Amortization		Net Book Value
Acquired technology	$	29.8	$	29.8	$	—
Other acquired intangibles	40.4		40.1		0.3
Intellectual property	108.9		67.2		41.7
	$	179.1	$	137.1	$	42.0


	As at February 28, 2025
	Cost		Accumulated Amortization		Net Book Value
Acquired technology	$	29.8	$	29.1	$	0.7
Other acquired intangibles	40.4		38.0		2.4
Intellectual property	110.4		66.2		44.2
	$	180.6	$	133.3	$	47.3

For the six months ended August 31, 2025, amortization expense related to intangible assets amounted to $7.6 million (six months ended August 31, 2024 - $22.0 million).

Total additions to intangible assets for the six months ended August 31, 2025 amounted to $2.6 million (six months ended August 31, 2024 - $3.8 million). During the six months ended August 31, 2025, additions to intangible assets primarily consisted of payments for intellectual property relating to patent maintenance and registration fees.

Based on the carrying value of the identified intangible assets as at August 31, 2025, and assuming no subsequent impairment of the underlying assets, the annual amortization expense for the remainder of fiscal 2026 and each of the five succeeding years is expected to be as follows: fiscal 2026 - $4.2 million; fiscal 2027 - $6.0 million; fiscal 2028 - $5.2 million; fiscal 2029 - $4.1 million; fiscal 2030 - $3.5 million and fiscal 2031 - $2.8 million.

Goodwill

Changes to the carrying amount of goodwill during the six months ended August 31, 2025 were as follows:


	Carrying Amount
Carrying amount as at February 29, 2024	$	474.5

Effect of foreign exchange on non-U.S. dollar denominated goodwill	(2.1)
Carrying amount as at February 28, 2025	472.4


Effect of foreign exchange on non-U.S. dollar denominated goodwill	6.1
Carrying amount as at August 31, 2025	$	478.5

BlackBerry Limited

Notes to the Consolidated Financial Statements

In millions of United States dollars, except share and per share data, and except as otherwise indicated (unaudited)

Other Long-term Assets

As at August 31, 2025 and February 28, 2025, other long-term assets included long-term receivables related to intellectual property sold, long-term receivables relating to minimum royalty commitments from QNX customers, and the long-term portion of deferred commissions, among other items, none of which were greater than 5% of the total assets balance.

Accrued Liabilities

Accrued liabilities is comprised of the following:


	As at
	August 31, 2025		February 28, 2025
Variable incentive accrual	$	16.8	$	31.4


Operating lease liabilities, current	13.1		15.0

Other	54.0		79.8
	$	83.9	$	126.2

Other accrued liabilities include restructuring programs, current portion, accrued vendor liabilities, accrued director fees, and payroll withholding taxes, among other items, none of which were greater than 5% of the current liabilities balance in any of the periods presented.

Restructuring

During fiscal 2025 and fiscal 2024, the Company commenced restructuring programs with the objective of reducing its annual costs and expenses. Other charges and cash costs may occur as programs are implemented or changes are completed.

The following table sets forth the activity in the Company’s restructuring program liabilities:


	Employee Termination Benefits		Facilities Costs		Total



Balance as at February 29, 2024	$	16.8	4.3		21.1
Charges incurred	21.3		4.8		26.1
Cash payments made	(31.0)		(5.8)		(36.8)
Balance as at February 28, 2025	7.1		3.3		10.4
Charges incurred	4.7		1.6		6.3
Cash payments made	(8.8)		(2.7)		(11.5)
Balance as at August 31, 2025	$	3.0	$	2.2	$	5.2

Current portion	$	3.0	$	1.4	$	4.4
Long-term portion	—		0.8		0.8
	$	3.0	$	2.2	$	5.2

The long-term portion of the restructuring liabilities is recorded by measuring the remaining payments at present value using an effective interest rate of 4.8%, and the Company recorded interest expense over time to arrive at the total face value of the remaining payments.

The restructuring charges included employee termination benefits and facilities costs. Total charges incurred for the six months ended August 31, 2025 and August 31, 2024 were $6.3 million and $8.2 million, respectively, recorded within General and administrative on the Consolidated Statements of Operations.

BlackBerry Limited

Notes to the Consolidated Financial Statements

In millions of United States dollars, except share and per share data, and except as otherwise indicated (unaudited)

5. INCOME TAXES

For the six months ended August 31, 2025, the Company’s net effective income tax expense rate was approximately 17% compared to a net effective income tax expense rate of 17% for the six months ended August 31, 2024. The Company’s income tax rate reflects the change in unrecognized income tax benefit, if any, and the fact that the Company has a significant valuation allowance against its deferred income tax assets; in particular, any change in loss carry forwards or research and development credits, amongst other items, is offset by a corresponding adjustment of the valuation allowance. The Company’s net effective income tax rate also reflects the geographic mix of earnings in jurisdictions with different income tax rates.

The Company’s total unrecognized income tax benefits as at August 31, 2025 were $19.6 million (February 28, 2025 - $19.5 million). As at August 31, 2025, $19.2 million of the unrecognized income tax benefits have been netted against deferred income tax assets and $0.4 million has been recorded within income taxes payable on the Company’s consolidated balance sheets.

The Company is subject to ongoing examination by tax authorities in certain jurisdictions in which it operates. The Company regularly assesses the status of these examinations and the potential for adverse outcomes to determine the adequacy of the provision for income taxes as well as the provisions for indirect and other taxes and related penalties and interest. While the final resolution of audits is uncertain, the Company believes the ultimate resolution of these audits will not have a material adverse effect on its consolidated financial position, liquidity or results of operations.

6. LONG-TERM NOTES

On January 29, 2024, the Company issued $200.0 million aggregate principal amount of 3.00% senior convertible unsecured notes (the “Notes”) in an offering to qualified institutional buyers in accordance with Rule 144A under the Securities Act of 1933, as amended.

The Notes are due on February 15, 2029 unless earlier converted, redeemed, or repurchased. Each $1,000 principal amount of the Notes is convertible into 257.5826 common shares of the Company based on the initial conversion rate, for a total of 52 million common shares at a price of $3.88 per share, subject to adjustments. Prior to the close of business on the business day immediately preceding November 15, 2028, the Notes will be convertible only upon satisfaction of certain conditions and during certain periods, and thereafter, at any time until the close of business on the second scheduled trading day immediately preceding February 15, 2029. The Company may satisfy any conversions of the Notes by paying or delivering, as the case may be, cash, its common shares or a combination of cash and its common shares, at the Company’s election (or, in the case of any Notes called for redemption that are converted during the related redemption period, solely its common shares). Covenants associated with the Notes include general corporate maintenance, existence and reporting requirements. The Notes bear interest at a rate of 3.00% per annum, payable semi-annually in arrears on February 15 and August 15 of each year, beginning on August 15, 2024.

The Company had recorded the Notes, including the debt itself and all embedded derivatives, at cost less debt issuance costs of $6.0 million and presents the Notes as a single hybrid financial instrument. No portion of the embedded derivatives required bifurcation from the host debt contract.

The following table summarizes the change in the Notes for the six months ended August 31, 2025:


	Carrying Amount



Balance as at February 28, 2025	$	195.3
Amortization of debt issuance costs	0.6
Balance as at August 31, 2025	$	195.9

The Company’s estimate of the fair value of the Notes as at August 31, 2025 is $249.0 million (February 28, 2025 - $289.5 million).

For the three and six months ended August 31, 2025, the Company recorded interest expense related to the Notes of $1.5 million and $3.0 million, respectively, which has been included in investment income, net on the Company’s consolidated statements of operations (three and six months ended August 31, 2024 - $1.5 million and $3.0 million, respectively).

BlackBerry Limited

Notes to the Consolidated Financial Statements

In millions of United States dollars, except share and per share data, and except as otherwise indicated (unaudited)

7. CAPITAL STOCK

The following details the changes in issued and outstanding common shares for the six months ended August 31, 2025:


	Capital Stock and Additional Paid-in Capital
	Stock Outstanding (000s)	Amount
Common shares outstanding as at February 28, 2025	596,231	$	2,976.4
Exercise of stock options	28	—
Common shares issued for restricted share unit settlements	1,385	—
Stock-based compensation	—	11.6






Common shares issued for employee share purchase plan	312	1.2
Share repurchase	(7,595)	(37.9)
Common shares outstanding as at August 31, 2025	590,361	2,951.3

The Company had 590 million voting common shares outstanding, 17.6 million restricted share units (“RSUs”) and 1.5 million deferred shared units (“DSUs”) outstanding as at September 22, 2025. In addition, 51.5 million common shares are issuable upon conversion in full of the Notes as described in Note 6.

On May 8, 2025, the Company announced that it received acceptance from the Toronto Stock Exchange with respect to a normal course issuer bid (“NCIB”) share buyback program to purchase for cancellation up to 27.9 million common shares of the Company, or approximately 4.7% of the outstanding public float at May 5, 2025. The NCIB share buyback program commenced on May 12, 2025, and will terminate on the earliest of May 11, 2026, such date as the Company may determine, or the date on which the maximum number of common shares that may be purchased under the NCIB share buyback program has been reached. The Company is not obligated to repurchase any common shares under the NCIB share buyback program. During the six months ended August 31, 2025, the Company repurchased 7.6 million common shares, at a cost of $30.0 million. The Company recorded a reduction of $37.9 million to capital stock and the amount paid below the per share paid-in capital of the common shares of $7.9 million was recorded to deficit. All common shares repurchased by the Company pursuant to the NCIB share buyback program have been canceled.

BlackBerry Limited

Notes to the Consolidated Financial Statements

In millions of United States dollars, except share and per share data, and except as otherwise indicated (unaudited)

8. EARNINGS (LOSS) PER SHARE

The following table sets forth the computation of basic and diluted earnings (loss) per share:


	Three Months Ended				Six Months Ended
	August 31, 2025		August 31, 2024		August 31, 2025		August 31, 2024
Net income (loss) from continuing operations for basic and diluted earnings (loss) per share available to common shareholders	$	13.3	$	3.5	$	15.2	$	(13.0)




Net income (loss) for basic and diluted earnings (loss) per share available to common shareholders	$	13.3	$	(19.7)	$	15.2	$	(61.1)




Weighted average number of shares outstanding (000’s) - basic (1)	592,938		590,549		594,624		590,188
Effect of dilutive securities (000’s)
Stock-based compensation (2) (3)	4,431		1,061		4,073		—


Weighted average number of shares and assumed conversions (000’s) diluted	597,369		591,610		598,697		590,188

Earnings (loss) per share - reported
Basic earnings (loss) per share from continuing operations	$	0.02	$	0.01	$	0.03	$	(0.02)
Total earnings (loss) per share	$	0.02	$	(0.03)	$	0.03	$	(0.10)

Diluted earnings (loss) per share from continuing operations	$	0.02	$	0.01	$	0.03	$	(0.02)
Total diluted earnings (loss) per share	$	0.02	$	(0.03)	$	0.03	$	(0.10)

______________________________

(1) The Company has not presented the dilutive effect of the Notes using the if-converted method in the calculation of diluted earnings (loss) per share for the three and six months ended August 31, 2025 and August 31, 2024, as to do so would be antidilutive. See Note 6 for details on the Notes.

(2) The Company has presented the dilutive effect of in-the-money options and RSUs that will be settled upon vesting by the issuance of new common shares in the calculation of diluted earnings per share for the three and six months ended August 31, 2025 and for the three months ended August 31, 2024.

(3) The Company has not presented the dilutive effect of in-the-money options and RSUs that will be settled upon vesting by the issuance of new common shares in the calculation of diluted loss per share for the six months ended August 31, 2024, as to do so would be antidilutive.

BlackBerry Limited

Notes to the Consolidated Financial Statements

In millions of United States dollars, except share and per share data, and except as otherwise indicated (unaudited)

9. ACCUMULATED OTHER COMPREHENSIVE LOSS

The changes in AOCL by component net of tax, for the three and six months ended August 31, 2025 and August 31, 2024 were as follows:


	Three Months Ended				Six Months Ended
	August 31, 2025		August 31, 2024		August 31, 2025		August 31, 2024




Cash Flow Hedges
Balance, beginning of period	$	0.5	$	0.1	$	(1.9)	$	0.3
Other comprehensive income (loss) before reclassification	(0.1)		0.7		1.9		0.5
Amounts reclassified from AOCL into net income (loss)	(0.1)		0.1		0.3		0.1
Accumulated net unrealized gains on derivative instruments designated as cash flow hedges	$	0.3	$	0.9	$	0.3	$	0.9
Foreign Currency Cumulative Translation Adjustment
Balance, beginning of period	$	(12.7)	$	(14.1)	$	(16.7)	$	(14.0)
Other comprehensive income	1.0		1.3		5.0		1.2
Foreign currency cumulative translation adjustment	$	(11.7)	$	(12.8)	$	(11.7)	$	(12.8)





Other Post-Employment Benefit Obligations
Actuarial losses associated with other post-employment benefit obligations	$	(0.6)	$	(0.6)	$	(0.6)	$	(0.6)
Accumulated Other Comprehensive Loss, End of Period	$	(12.0)	$	(12.5)	$	(12.0)	$	(12.5)

10. COMMITMENTS AND CONTINGENCIES

(a)Letters of Credit

The Company had $14.1 million in collateralized outstanding letters of credit in support of certain leasing arrangements entered into in the ordinary course of business as of August 31, 2025. The Company has posted a performance bond as collateral to support a government contract for the term of the agreement. See the discussion of restricted cash in Note 3.

(b)Contingencies

Litigation

The Company is involved in litigation in the normal course of its business, both as a defendant and as a plaintiff. The Company is subject to a variety of claims (including claims related to patent infringement, purported class actions and other claims in the normal course of business) and may be subject to additional claims either directly or through indemnities against claims that it provides to certain of its partners and customers. In particular, the industry in which the Company competes has many participants that own, or claim to own, intellectual property, including participants that have been issued patents and may have filed patent applications or may obtain additional patents and proprietary rights for technologies similar to those used by the Company in its products. The Company has received, and may receive in the future, assertions and claims from third parties that the Company’s products infringe on their patents or other intellectual property rights. Litigation has been, and will likely continue to be, necessary to determine the scope, enforceability and validity of third-party proprietary rights or to establish the Company’s proprietary rights. Regardless of whether claims against the Company have merit, those claims could be time-consuming to evaluate and defend, result in costly litigation, divert management’s attention and resources and subject the Company to significant liabilities.

Management reviews all of the relevant facts for each claim and applies judgment in evaluating the likelihood and, if applicable, the amount of any potential loss. Where a potential loss is considered probable and the amount is reasonably estimable, provisions for loss are made based on management’s assessment of the likely outcome. Where a range of loss can be reasonably estimated with no best estimate in the range, the Company records the minimum amount in the range. The Company does not provide for claims for which the outcome is not probable or claims for which the amount of the

BlackBerry Limited

Notes to the Consolidated Financial Statements

In millions of United States dollars, except share and per share data, and except as otherwise indicated (unaudited)

loss cannot be reasonably estimated. Any settlements or awards under such claims are provided for when reasonably determinable.

As of August 31, 2025, with the exception of the Canadian employment class action settlement discussed below, there are no other material claims for which the Company has assessed the potential loss as both probable to result and reasonably estimable; therefore, no accrual has been made. Further, there are claims outstanding for which the Company has assessed the potential loss as reasonably possible to result; however, an estimate of the amount of loss cannot reasonably be made. There are many reasons that the Company cannot make these assessments, including, among others, one or more of the following: the early stages of a proceeding does not require the claimant to specifically identify the patent claims that have allegedly been infringed or the products that are alleged to infringe; damages sought are unspecified, unsupportable, unexplained or uncertain; discovery has not been started or is incomplete; the facts that are in dispute are highly complex; the difficulty of assessing novel claims; the parties have not engaged in any meaningful settlement discussions; the possibility that other parties may share in any ultimate liability; and the often slow pace of litigation.

The Company has included the following summaries of certain of its legal proceedings though they do not meet the test for accrual described above.

Between October and December 2013, several purported class action lawsuits were filed against the Company and certain of its former officers in various jurisdictions in Canada alleging that certain of the Company’s financial statements contain material misstatements. On July 23, 2014, the plaintiff in the putative Ontario class action (Swisscanto Fondsleitung AG v. BlackBerry Limited, et al.) filed a motion for class certification and for leave to pursue statutory misrepresentation claims. On November 17, 2015, the Ontario Superior Court of Justice issued an order granting the plaintiffs’ motion for leave to file a statutory claim for misrepresentation. On December 2, 2015, the Company filed a notice of motion seeking leave to appeal this ruling. On November 15, 2018, the Court denied the Company’s motion for leave to appeal the order granting the plaintiffs leave to file a statutory claim for misrepresentation. On February 5, 2019, the Court entered an order certifying a class comprised persons (a) who purchased BlackBerry common shares between March 28, 2013, and September 20, 2013, and still held at least some of those shares as of September 20, 2013, and (b) who acquired those shares on a Canadian stock exchange or acquired those shares on any other stock exchange and were a resident of Canada when the shares were acquired. Notice of class certification was published on March 6, 2019. The Company filed its Statement of Defence on April 1, 2019. Discovery is proceeding and the Court has not set a trial date.

Other contingencies

As at August 31, 2025, the Company has recognized $29.0 million (February 28, 2025 - $20.5 million) in funds from claims filed by QNX with the Ministry of Innovation, Science and Economic Development Canada relating to its SIF. A portion of this amount may be repayable in the future under certain circumstances if certain terms and conditions are not met by the Company, which is not probable at this time.

BlackBerry Limited

Notes to the Consolidated Financial Statements

In millions of United States dollars, except share and per share data, and except as otherwise indicated (unaudited)

(c)Litigation Settlements

On March 17, 2017, a putative employment class action was filed against the Company in the Ontario Superior Court of Justice (Parker v. BlackBerry Limited). The Statement of Claim alleges that actions the Company took when certain of its employees decided to accept offers of employment from Ford Motor Company of Canada amounted to a wrongful termination of the employees’ employment with the Company. The claim sought (i) an unspecified quantum of statutory, contractual, or common law termination entitlements; (ii) punitive or breach of duty of good faith damages of CAD$20 million, or such other amount as the Court finds appropriate, (iii) pre- and post- judgment interest, (iv) attorneys’ fees and costs, and (v) such other relief as the Court deems just. The Court granted the plaintiffs’ motion to certify the class action on May 27, 2019. The Company commenced a motion for leave to appeal the certification order on June 11, 2019. The Court denied the motion for leave to appeal on September 17, 2019. The Company filed its Statement of Defence on December 19, 2019. The parties participated in a mediation on November 9, 2022, which did not result in an agreement. The matter had a trial date of June 2, 2025. The parties attended a pre-trial conference on December 4, 2024. At a further pretrial conference on January 24, 2025, the parties reached a settlement in principle for approximately $2.8 million or CAD $4.0 million inclusive of all fees and costs. On February 18, 2025, the parties settled the matter for $2.8 million or CAD $4.0 million inclusive of all fees and costs, subject to Court approval. On March 10, 2025, the Company paid the settlement amount into a trust held by the plaintiffs’ counsel. On July 30, 2025, the Court held a settlement approval hearing and issued an order approving the settlement.

(d)Indemnifications

The Company enters into certain agreements that contain indemnification provisions under which the Company could be subject to costs and damages, including in the event of an infringement claim against the Company or an indemnified third party. Such intellectual property infringement indemnification clauses are generally not subject to any dollar limits and remain in effect for the term of the Company’s agreements. To date, the Company has not encountered material costs as a result of such indemnifications.

The Company has entered into indemnification agreements with its current and former directors and executive officers. Under these agreements, the Company agreed, subject to applicable law, to indemnify its current and former directors and executive officers against all costs, charges and expenses reasonably incurred by such individuals in respect of any civil, criminal or administrative action that could arise by reason of their status as directors or officers. The Company maintains liability insurance coverage for the benefit of the Company, and its current and former directors and executive officers. The Company has not encountered material costs as a result of such indemnifications in the current period.

11. REVENUE AND SEGMENT DISCLOSURES

The Company reports segment information based on the “management” approach. The management approach designates the internal reporting used by the CODM for making decisions and assessing performance as a source of the Company’s reportable operating segments. The CODM, who is the CEO of the Company, makes decisions and assesses the performance of the Company using three operating segments.

The CODM does not evaluate operating segments using discrete asset information. The Company does not specifically allocate assets to operating segments for internal reporting purposes.

BlackBerry Limited

Notes to the Consolidated Financial Statements

In millions of United States dollars, except share and per share data, and except as otherwise indicated (unaudited)

Segment Disclosures

With the sale of the Cylance business in the fourth quarter of fiscal 2025, and the classification of the business as discontinued operations as discussed in Note 2, the Company is organized and managed as three operating segments: QNX, Secure Communications, and Licensing. Prior period comparatives have been recast to reflect this change in reportable operating segments.

The following table shows information by reportable operating segment for the three and six months ended August 31, 2025 and August 31, 2024:


	For the Three Months Ended
	QNX				Secure Communications			Licensing		Segment Totals
	August 31,					August 31,				August 31,				August 31,
	2025		2024			2025		2024		2025		2024		2025		2024
Segment revenue	$	63.1	$	54.7		$	59.9	$	66.5	$	6.6	$	5.0	$	129.6	$	126.2
Segment cost of sales	10.7		9.3			20.2		26.1		1.5		1.6		32.4		37.0
Segment adjusted gross margin (1)	$	52.4	$	45.4		$	39.7	$	40.4	$	5.1	$	3.4	$	97.2	$	89.2






	For the Six Months Ended
	QNX				Secure Communications			Licensing		Segment Totals
	August 31,					August 31,				August 31,				August 31,
	2025		2024			2025		2024		2025		2024		2025		2024
Segment revenue	$	120.6	$	107.9		$	119.4	$	130.7	$	11.3	$	11.0	$	251.3	$	249.6
Segment cost of sales	21.9		18.8			38.3		47.9		3.1		3.0		63.3		69.7
Segment adjusted gross margin (1)	$	98.7	$	89.1		$	81.1	$	82.8	$	8.2	$	8.0	$	188.0	$	179.9

______________________________

(1) A reconciliation of total segment adjusted gross margin to consolidated pre-tax income from continuing operations is set forth below.

QNX consists of BlackBerry® QNX®, BlackBerry® Certicom®, BlackBerry Radar®, and other QNX applications. QNX revenue is generated predominantly through software licenses, commonly bundled with support, maintenance and professional services and through volume-based royalties.

Secure Communications consists of BlackBerry® UEM, BlackBerry® AtHoc® and BlackBerry® SecuSUITE®. The Company’s endpoint management platform includes BlackBerry® UEM, BlackBerry® Dynamics™, and BlackBerry® Workspaces solutions. Secure Communications revenue is generated predominantly through software licenses, commonly bundled with support, maintenance and professional services.

Licensing consists of the Company’s intellectual property arrangements and settlement awards.

BlackBerry Limited

Notes to the Consolidated Financial Statements

In millions of United States dollars, except share and per share data, and except as otherwise indicated (unaudited)

The following table reconciles total segment adjusted gross margin for the three and six months ended August 31, 2025 and August 31, 2024 to the Company’s consolidated totals:


	Three Months Ended				Six Months Ended
	August 31, 2025		August 31, 2024		August 31, 2025		August 31, 2024
Total segment adjusted gross margin	$	97.2	$	89.2	$	188.0	$	179.9
Adjustments (1):
Stock compensation	0.6		0.6		1.1		1.3

Less:
Research & development	25.6		27.1		50.6		57.7
Sales and marketing	24.4		21.3		53.1		45.1
General and administrative	31.5		32.8		62.0		73.1
Amortization	3.1		4.6		7.1		9.3
Impairment of long-lived assets	0.5		0.6		0.6		4.1




Investment income, net	(1.9)		(2.7)		(4.8)		(6.7)
Consolidated income (loss) from continuing operations before income taxes	$	13.4	$	4.9	$	18.3	$	(4.0)

______________________________

(1) The CODM reviews segment adjusted gross margin information on an adjusted basis, which excludes Stock compensation expenses - which is a non-cash expense and is not included in the CODM’s measure of segment adjusted gross margin when evaluating performance and allocating resources to the segment.

Revenue

The Company disaggregates revenue from contracts with customers based on geographical regions, timing of revenue recognition, and the major product and service types, as discussed above in “Segment Disclosures”.

The Company’s revenue, classified by major geographic region in which the Company’s customers are located, was as follows:


	Three Months Ended						Six Months Ended
	August 31, 2025			August 31, 2024			August 31, 2025			August 31, 2024
North America (1)	$	62.3		$	58.2		$	117.1		$	114.4
Europe, Middle East and Africa	39.9			43.6			82.4			87.3
Other regions	27.4			24.4			51.8			47.9

Total	$	129.6		$	126.2		$	251.3		$	249.6

North America (1)	48.1		%	46.1		%	46.6		%	45.8		%
Europe, Middle East and Africa	30.8		%	34.5		%	32.8		%	35.0		%
Other regions	21.1		%	19.4		%	20.6		%	19.2		%
Total	100.0		%	100.0		%	100.0		%	100.0		%

______________________________

(1) North America includes all revenue from Licensing, due to the global applicability of the patent portfolio and licensing arrangements thereof.

BlackBerry Limited

Notes to the Consolidated Financial Statements

In millions of United States dollars, except share and per share data, and except as otherwise indicated (unaudited)

Revenue, classified by timing of recognition, was as follows:


	Three Months Ended				Six Months Ended
	August 31, 2025		August 31, 2024		August 31, 2025		August 31, 2024
Products and services transferred over time	$	60.2	$	61.5	$	118.7	$	120.9
Products and services transferred at a point in time	69.4		64.7		132.6		128.7
Total	$	129.6	$	126.2	$	251.3	$	249.6

Revenue contract balances

The following table sets forth the activity in the Company’s revenue contract balances for the six months ended August 31, 2025:


	Accounts Receivable		Deferred Revenue		Deferred Commissions
Opening balance as at February 28, 2025	$	240.0	$	167.1	$	14.6
Increases due to invoicing of new or existing contracts, associated contract acquisition costs, or other	230.3		202.4		6.6
Decrease due to payment, fulfillment of performance obligations, or other	(303.6)		(234.3)		(8.1)

Decrease, net	(73.3)		(31.9)		(1.5)
Closing balance as at August 31, 2025	$	166.7	$	135.2	$	13.1

Current portion	$	125.0	$	128.5	$	7.4
Long-term portion	41.7		6.7		5.7
	$	166.7	$	135.2	$	13.1

Transaction price allocated to the remaining performance obligations

The table below discloses the aggregate amount of the transaction price allocated to performance obligations that are unsatisfied or partially unsatisfied as at August 31, 2025 and the time frame in which the Company expects to recognize this revenue. The disclosure includes estimates of variable consideration, except when the variable consideration is a sales-based or usage-based royalty promised in exchange for a license of intellectual property.

The disclosure excludes estimates of variable consideration relating to future royalty revenues from the sale of certain non-core patent assets to Malikie Innovations Limited in May 2023, which have been constrained based on the Company’s accounting policies and critical accounting estimates.


	As at August 31, 2025
	Less than 12 Months		12 to 24 Months		Thereafter		Total
Remaining performance obligations	$	128.5	$	3.1	$	3.6	$	135.2

Revenue recognized for performance obligations satisfied in prior periods

For the three and six months ended August 31, 2025, revenue of nil was recognized relating to performance obligations satisfied in a prior period (three and six months ended August 31, 2024 - $2.4 million and $2.4 million, respectively).

Information About Major Customers

There was no customer that comprised more than 10% of the Company’s revenue and one customer that comprised 11% of the Company’s revenue in the three and six months ended August 31, 2025, respectively (three and six months ended August 31, 2024 - one customer that comprised 13% of the Company’s revenue and one customer that comprised 14% of the Company’s revenue, respectively).

BlackBerry Limited

Notes to the Consolidated Financial Statements

In millions of United States dollars, except share and per share data, and except as otherwise indicated (unaudited)

12. CASH FLOW AND ADDITIONAL INFORMATION

(a) Certain consolidated statements of cash flow information related to interest and income taxes paid is summarized as follows:


	Three Months Ended				Six Months Ended
	August 31, 2025		August 31, 2024		August 31, 2025		August 31, 2024
Interest paid during the period	$	1.5	$	1.5	$	3.0	$	3.0
Income taxes paid during the period	16.4		3.1		18.1		9.8
Income tax refunds received during the period	0.2		—		0.2		—

(b) Additional Information

Foreign exchange

The Company is exposed to foreign exchange risk as a result of transactions in currencies other than its functional currency, the U.S. dollar. The majority of the Company’s revenue in the second quarter of fiscal 2026 was transacted in U.S. dollars. Portions of the revenue were denominated in Canadian dollars, euros and British pounds. Other expenses, consisting mainly of salaries and certain other operating costs, were incurred primarily in Canadian dollars, but were also incurred in U.S. dollars, euros and British pounds. At August 31, 2025, approximately 10% of cash and cash equivalents, 25% of accounts receivable and 71% of accounts payable were denominated in foreign currencies (February 28, 2025 – 19%, 29% and 71%, respectively). These foreign currencies primarily include the Canadian dollar, euro and British pound. As part of its risk management strategy, the Company maintains net monetary asset and/or liability balances in foreign currencies and engages in foreign currency hedging activities using derivative financial instruments, including currency forward contracts and currency options. The Company does not use derivative instruments for speculative purposes.

Interest rate risk

Cash and cash equivalents and investments are invested in certain instruments with fixed interest rates of varying maturities. Consequently, the Company is exposed to interest rate risk as a result of holding investments of varying maturities and the significant financing components within certain revenue contracts with customers. The fair value of investments, as well as the investment income derived from the investment portfolio, will fluctuate with changes in prevailing interest rates. The Company also has significant financing components within certain revenue contracts with customers and is exposed to interest rate risk as a result of discounting the future payments from customers with a fixed interest rate. The Company also has outstanding Notes with a fixed interest rate, as described in Note 6. The Company is exposed to interest rate risk as a result of the Notes. The Company does not currently utilize interest rate derivative instruments.

Credit risk

The Company is exposed to market and credit risk on its investment portfolio. The Company is also exposed to credit risk with customers, as described in Note 4. The Company reduces this risk from its investment portfolio by investing in liquid, investment-grade securities and by limiting exposure to any one entity or group of related entities. As at August 31, 2025, no single issuer represented more than 42% of the total cash, cash equivalents and investments (February 28, 2025 - no single issuer represented more than 47% of the total cash, cash equivalents and investments), with the largest such issuer representing bearer deposits, term deposits and cash balances with one of the Company’s banking counterparties.

In addition, as partial consideration for the sale of its Cylance endpoint security assets and liabilities to Arctic Wolf, as described in Note 2, the Company is owed a delayed cash payment one year following the closing. This deferred consideration is included as “Other Receivables” and is approximately $38.1 million as at August 31, 2025. The Company is exposed to risk related to potential non-payment of the deferred cash consideration from Arctic Wolf.

BlackBerry Limited

Notes to the Consolidated Financial Statements

In millions of United States dollars, except share and per share data, and except as otherwise indicated (unaudited)

Liquidity risk

Cash, cash equivalents, and investments were $363.5 million as at August 31, 2025. As partial consideration for the sale of its Cylance endpoint security assets and liabilities to Arctic Wolf, the Company received common shares of Arctic Wolf with an estimated fair value of $24.6 million. The common shares of Arctic Wolf and the Company’s equity investments in private companies are illiquid securities without a public market and, as such, they cannot be readily sold or exchanged for cash. The Company may not be able to sell these shares at desired times or prices, which could negatively impact its financial condition and results of operations.

The Company’s management remains focused on efficiently managing working capital balances and managing the liquidity needs of the business. Based on its current financial projections, the Company believes its financial resources, together with expected future operating cash generating and operating expense reduction activities, should be sufficient to meet funding requirements for current financial commitments and future operating expenditures not yet committed, and should provide the necessary financial capacity for the foreseeable future.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) should be read together with the unaudited interim consolidated financial statements and the accompanying notes (the “Consolidated Financial Statements”) of BlackBerry Limited for the three and six months ended August 31, 2025, included in Part I, Item 1 of this Quarterly Report on Form 10-Q, as well as the Company’s audited consolidated financial statements and accompanying notes and MD&A for the fiscal year ended February 28, 2025 (the “Annual MD&A”) included in the Company’s Annual Report on Form 10-K for the fiscal year ended February 28, 2025 (the “Annual Report”). The Consolidated Financial Statements are presented in U.S. dollars and have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”). All financial information in this MD&A is presented in U.S. dollars, unless otherwise indicated.

Additional information about the Company, which is included in the Company’s Annual Report, can be found on SEDAR+ at www.sedarplus.ca and on the SEC’s website at www.sec.gov.

Cautionary Note Regarding Forward-Looking Statements

This MD&A contains forward-looking statements within the meaning of certain securities laws, including under the U.S. Private Securities Litigation Reform Act of 1995 and applicable Canadian securities laws, including statements relating to:

•the Company’s plans, strategies and objectives, including its intentions to increase and enhance its product and service offerings, benefit from changes in market demand, and patent new innovations;

•the Company’s expectations with respect to its total and segment revenue and adjusted EBITDA, adjusted Corporate operating costs, non-GAAP EPS and operating cash flow in the third quarter of fiscal 2026 and for fiscal 2026 as a whole;

•the Company’s estimates of purchase obligations and other contractual commitments; and

•the Company’s expectations with respect to the sufficiency of its financial resources.

The words “expect”, “anticipate”, “estimate”, “may”, “will”, “should”, “could”, “intend”, “believe”, “target”, “plan” and similar expressions are intended to identify forward-looking statements in this MD&A, including in the sections entitled “Business Overview”, “Business Overview - Products and Services”, “Results of Operations - Three months ended August 31, 2025 compared to the three months ended August 31, 2024 - Revenue - Revenue by Segment”, “Results of Operations - Three months ended August 31, 2025 compared to the three months ended August 31, 2024 - Revenue - Adjusted Gross Margin and Adjusted EBITDA by Segment”, “Results of Operations - Three months ended August 31, 2025 compared to the three months ended August 31, 2024 - Revenue - Operating Expenses - Adjusted Operating Expenses” , “Results of Operations - Three months ended August 31, 2025 compared to the three months ended August 31, 2024 - Net Income (Loss)” and “Financial Condition - Contractual and Other Obligations”. Forward-looking statements are based on estimates and assumptions made by the Company in light of its experience and its perception of historical trends, current conditions and expected future developments, as well as other factors that the Company believes are appropriate in the circumstances, including but not limited to, the Company’s expectations regarding its business, strategy, opportunities and prospects, the launch of new products and services, general economic conditions, competition, and the Company’s expectations regarding its financial performance. Many factors could cause the Company’s actual results, performance or achievements to differ materially from those expressed or implied by the forward-looking statements, including, without limitation, the risk factors discussed in Part I, Item 1A “Risk Factors” in the Annual Report.

All of these factors should be considered carefully, and readers should not place undue reliance on the Company’s forward-looking statements. Any statements that are forward-looking statements are intended to enable the Company’s shareholders to view the anticipated performance and prospects of the Company from management’s perspective at the time such statements are made, and they are subject to the risks that are inherent in all forward-looking statements, as described above, as well as difficulties in forecasting the Company’s financial results and performance for future periods, particularly over longer periods, given changes in technology and the Company’s business strategy, evolving industry standards, intense competition and short product life cycles that characterize the industries in which the Company operates. See the “Strategy” subsection in Part I, Item 1 “Business” of the Annual Report.

The Company has no intention and undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.

Business Overview

Founded in 1984, BlackBerry Limited (the “Company”) is a leading provider of intelligent software and services to enterprises, governments and leading OEMs around the world. Its products enable more than 255 million vehicles and secure 17 of the G20 governments. The Company’s common shares trade under the ticker symbol “BB” on the New York Stock Exchange (“NYSE”) and the Toronto Stock Exchange (“TSX”).

Based in Waterloo, Ontario, the Company has two core divisions, each addressing large and growing market opportunities.

The Company’s QNX division is a leader in embedded software where the Company believes it is the world’s leading automotive foundational software vendor. Its customers include leading automotive OEMs and Tier 1 suppliers that use its products in vehicles, as well as manufacturers in other markets where high-performance, safety-critical foundational embedded software platforms and solutions are important, such as robotics, medical devices, industrial automation solutions and other mission-critical applications (collectively, the general embedded market or “GEM”). QNX is a vendor to the top 10 automotive OEMs, top 7 Tier 1 suppliers, 24 of the 25 top EV OEMs, and 9 of the 10 top medical OEMs.

The Company’s Secure Communications division delivers operational resiliency with a comprehensive, highly secure, and extensively certified product portfolio for mobile fortification, mission-critical communications and critical event management. Secure Communications focuses on the government sector and on strategic industries with vertical-specific use cases, including regulated enterprise markets such as financial services.

Products and Services

The Company has a rich pedigree in innovation and has developed a range of products and services that assist customers in addressing their needs as their industries evolve, which are structured in three divisions: QNX, Secure Communications and Licensing.

QNX

The QNX division consists of the QNX® business (“QNX”), BlackBerry Radar® and BlackBerry® Certicom®.

With 45 years of embedded software expertise and a rich intellectual property portfolio, QNX is an industry leader whose high-performance foundational software enables major automakers and industrial giants alike to unlock transformative applications, drive new revenue streams and launch innovative business models, all without sacrificing safety, security and reliability. QNX is a trusted supplier of operating systems, hypervisors, frameworks and development tools that help reduce hardware dependency while enabling new possibilities in high-performance compute, standards-based virtualization technologies, and cloud enablement.

QNX offers a growing portfolio of safety-certified, secure and reliable platform solutions and is focused on achieving design wins with automotive OEMs, Tier 1 vendors and automotive semiconductor suppliers. These solutions include the QNX® real-time operating system, QNX® Hypervisor for Safety and QNX® Software Development Platform (SDP), as well as other products designed to alleviate the challenges of compliance with ISO 26262, the automotive industry’s functional safety standard. The QNX® pre-certified microkernel operating system is specifically tailored for safety-critical embedded systems and toolchains that are pre-qualified for building these systems. The QNX Hypervisor for Safety protects safety systems from potential impact of malfunction in other systems. These products help drive a faster time to market and also reduce developer friction. In fiscal 2026, QNX’s priorities in the automotive space include promoting increased adoption of its recently-released QNX SDP 8.0 and also working with partners to develop a vehicle platform featuring pre-integrated middleware solutions with a view to capturing a larger share of the automotive software stack and increasing future royalties per vehicle.

QNX is also a preferred supplier of embedded systems for companies in the GEM space. QNX collaborates closely with customers to understand their specific requirements and more quickly and effectively develop solutions to meet their evolving needs. The Company is investing in initiatives to increase the revenue that it derives from GEM opportunities.

BlackBerry Radar is a family of asset monitoring and telematics solutions for the transportation and logistics industry. The BlackBerry Radar solution includes devices and secure cloud-based dashboards for tracking containers, trailers, chassis, flatbeds and heavy machinery, for reporting locations and sensor data, and for enabling custom alerts and fleet management analytics.

BlackBerry Certicom leverages patented elliptic curve cryptography to provide device security, anti-counterfeiting and product authentication solutions to protect vehicles, critical infrastructure and IoT deployments from product counterfeiting, re-manufacturing and unauthorized network access.

The QNX division also provides engineering consulting services, including services to assist OEM customers to bring their products to market on time, as well as services to ensure compliance with relevant functional safety standards.

Secure Communications

The Secure Communications division consists of BlackBerry UEM solutions, BlackBerry® SecuSUITE® and BlackBerry® AtHoc®.

The Company’s endpoint management offerings include BlackBerry® UEM, BlackBerry® Dynamics™, BlackBerry® Workspaces, and BlackBerry Messenger (BBM®) Enterprise. BlackBerry UEM employs a containerized approach to manage and secure devices, third party and custom applications, identity, content and endpoints across all leading operating systems, as well as providing regulatory compliance tools. BlackBerry Dynamics offers a best-in-class development platform and secure container for mobile applications, including the Company’s own enterprise applications such as BlackBerry® Work and BlackBerry® Connect for secure collaboration. BlackBerry Workspaces is a secure Enterprise File Sync and Share (EFSS) solution. BBM Enterprise is an enterprise-grade secure instant messaging solution for messaging, voice and video.

BlackBerry SecuSUITE is a certified, multi-OS voice and data solution with advanced encryption, anti-eavesdropping and continuous authentication capabilities, providing a maximum level of security on conventional mobile devices for governments and businesses.

As a critical event management and crisis communications platform, BlackBerry AtHoc unifies communications during emergencies, providing secure, two-way messaging and incident response tools. The platform, which is FedRAMP High authorized for highly secure government communications, combines secure mass notification capabilities with the ability to coordinate emergency response across multiple public and private organizations.

In fiscal 2026, the Secure Communications division expects to benefit from an increase in government market demand for on-premise solutions that are designed to protect data sovereignty.

The Secure Communications division also provides enterprise consulting services, including platform-agnostic strategies to address mobility-based challenges, providing expert deployment support, end-to-end delivery (from system design to user training), application consulting, and experienced project management.

Licensing

The Licensing division is responsible for the management and monetization of the Company’s global patent portfolio. The patent portfolio continues to provide a competitive advantage in the Company’s core product areas as well as providing leverage in the development of future technologies and licensing programs in both core and adjacent vertical markets. The Company owns rights to an array of patented and patent pending technologies which include, but are not limited to, operating systems, networking infrastructure, acoustics, messaging, enterprise software, automotive subsystems, cybersecurity, cryptography and wireless communications.

Recent Developments

The Company has continued to execute on its strategy in fiscal 2026 and announced the following significant achievements during and subsequent to the most recent quarter:

Products and Innovation:

•QNX launched its foundational, safety-certified QNX® OS for Safety 8 to streamline the development and certification of safety- and security-critical embedded systems; and

•BlackBerry became the first Mobile Device Management (MDM) vendor to achieve BSI certification for BlackBerry UEM deployment with Apple Indigo and Samsung Knox.

Customers and Partners:

•QNX and NVIDIA announced general availability of NVIDIA DRIVE AGX Thor development kit, integrated with QNX OS for Safety 8 to enable developers to accelerate development of next-generation autonomous drive systems; and

•BlackBerry, Global Affairs Canada, and Toronto Metropolitan University’s Rogers Cybersecure Catalyst expanded cybersecurity training in Malaysia.

Environmental, Sustainability and Corporate Governance:

•BlackBerry appointed Barry Mainz to its Board of Directors.

Second Quarter Fiscal 2026 Summary Results of Operations

The following table sets forth certain consolidated statements of operations data for the quarter ended August 31, 2025 compared to the quarter ended August 31, 2024 under U.S. GAAP:


	For the Three Months Ended (in millions, except for share and per share amounts)
	August 31, 2025		August 31, 2024		Change
Revenue	$	129.6	$	126.2	$	3.4
Gross margin	96.6		88.6		8.0
Operating expenses	85.1		86.4		(1.3)
Investment income, net	1.9		2.7		(0.8)
Income before income taxes	13.4		4.9		8.5
Provision for income taxes	0.1		1.4		(1.3)
Income from continuing operations	13.3		3.5		9.8
Loss from discontinued operations (1)	—		(23.2)		23.2
Net income (loss)	$	13.3	$	(19.7)	$	33.0
Earnings (loss) per share - reported








Basic	$	0.02	$	(0.03)
Diluted	$	0.02	$	(0.03)

Weighted-average number of shares outstanding (000’s)
Basic	592,938		590,549
Diluted (2)	597,369		591,610

______________________________

(1)Prior to the third quarter of fiscal 2025, the Company’s Secure Communications segment included the Company’s Cylance® cybersecurity solutions business and was reported as the Cybersecurity segment. As a result of the Cylance sale in the fourth quarter of fiscal 2025, Cylance is no longer reported alongside UEM, SecuSuite and AtHoc as the Cybersecurity segment, and those three businesses are now reported separately from Cylance as the Secure Communications segment. The financial results of Cylance are presented as “loss from discontinued operations, net of tax” in the Consolidated Statements of Operations and have been removed from the presentation of results from continuing operations. Prior period comparatives have been recast to reflect this change.

(2)Diluted earnings (loss) per share on a U.S. GAAP basis for the second quarter of fiscal 2026 and fiscal 2025 does not include the dilutive effect of the Notes (as defined in “Financial Condition - Debt Financing and Other Funding Sources”), as to do so would be anti-dilutive. See Note 8 to the Consolidated Financial Statements for the Company’s calculation of the diluted weighted average number of shares outstanding.

The following tables show information by operating segment for the three and six months ended August 31, 2025 and August 31, 2024. The Company reports segment information in accordance with U.S. GAAP, pursuant to the Financial Standards Accounting Board’s Accounting Standard Codification Topic 280, Segment Reporting, based on the “management” approach. The management approach designates the internal reporting used by the Chief Operating Decision Maker (“CODM”) for making decisions and assessing performance of the Company’s reportable operating segments. The measure of segment profit or loss disclosed by the Company in the Consolidated Financial Statements under the “management” approach in reviewing the results of the Company’s operating segments is segment adjusted gross margin. Additionally, the following tables include the additional measures of segment profit or loss used by the CODM which is segment adjusted EBITDA, a non-GAAP financial measure. See Note 11 to the Consolidated Financial Statements for a description of the Company’s operating segments.


	For the Three Months Ended
	(in millions)
	QNX						Secure Communications						Licensing						Segment Totals
	August 31,				Change		August 31,				Change		August 31,				Change		August 31,				Change
	2025		2024				2025		2024				2025		2024				2025		2024
Segment revenue	$	63.1	$	54.7	$	8.4	$	59.9	$	66.5	$	(6.6)	$	6.6	$	5.0	$	1.6	$	129.6	$	126.2	$	3.4
Segment cost of sales	10.7		9.3		1.4		20.2		26.1		(5.9)		1.5		1.6		(0.1)		32.4		37.0		(4.6)
Segment adjusted gross margin	$	52.4	$	45.4	$	7.0	$	39.7	$	40.4	$	(0.7)	$	5.1	$	3.4	$	1.7	$	97.2	$	89.2	$	8.0
Segment research and development	13.2		14.7		(1.5)		11.1		11.7		(0.6)		—		—		—		24.3		26.4		(2.1)
Segment sales and marketing	10.8		9.8		1.0		12.1		11.1		1.0		—		—		—		22.9		20.9		2.0
Segment general and administrative	8.5		8.4		0.1		7.3		10.5		(3.2)		1.6		1.7		(0.1)		17.4		20.6		(3.2)
Less amortization included in the above	0.6		0.6		—		0.5		0.8		(0.3)		2.1		2.3		(0.2)		3.2		3.7		(0.5)
Segment adjusted EBITDA	$	20.5	$	13.1	$	7.4	$	9.7	$	7.9	$	1.8	$	5.6	$	4.0	$	1.6	$	35.8	$	25.0	$	10.8


	For the Six Months Ended
	(in millions)
	QNX						Secure Communications						Licensing						Segment Totals
	August 31,				Change		August 31,				Change		August 31,				Change		August 31,				Change
	2025		2024				2025		2024				2025		2024				2025		2024
Segment revenue	$	120.6	$	107.9	$	12.7	$	119.4	$	130.7	$	(11.3)	$	11.3	$	11.0	$	0.3	$	251.3	$	249.6	$	1.7
Segment cost of sales	21.9		18.8		3.1		38.3		47.9		(9.6)		3.1		3.0		0.1		63.3		69.7		(6.4)
Segment adjusted gross margin	$	98.7	$	89.1	$	9.6	$	81.1	$	82.8	$	(1.7)	$	8.2	$	8.0	$	0.2	$	188.0	$	179.9	$	8.1
Segment research and development	25.6		31.1		(5.5)		22.4		24.0		(1.6)		—		—		—		48.0		55.1		(7.1)
Segment sales and marketing	24.1		20.5		3.6		25.7		23.3		2.4		—		—		—		49.8		43.8		6.0
Segment general and administrative	17.1		16.6		0.5		14.8		20.1		(5.3)		3.2		3.8		(0.6)		35.1		40.5		(5.4)
Less amortization included in the above	1.3		1.1		0.2		1.1		1.8		(0.7)		4.4		4.5		(0.1)		6.8		7.4		(0.6)
Segment adjusted EBITDA	$	33.2	$	22.0	$	11.2	$	19.3	$	17.2	$	2.1	$	9.4	$	8.7	$	0.7	$	61.9	$	47.9	$	14.0

The following tables reconcile the Company’s segment adjusted gross margin results for the three and six months ended August 31, 2025 to consolidated U.S. GAAP results:


	For the Three Months Ended August 31, 2025
	(in millions)
	QNX		Secure Communications		Licensing		Segment Totals		Reconciling Items		Consolidated U.S. GAAP
Revenue	$	63.1	$	59.9	$	6.6	$	129.6	$	—	$	129.6
Cost of sales	10.7		20.2		1.5		32.4		0.6		33.0
Gross margin (1)	$	52.4	$	39.7	$	5.1	$	97.2	$	(0.6)	$	96.6
Operating expenses									85.1		85.1
Investment income, net									1.9		1.9
Income before income taxes											$	13.4


	For the Six Months Ended August 31, 2025
	(in millions)
	QNX		Secure Communications		Licensing		Segment Totals		Reconciling Items		Consolidated U.S. GAAP
Revenue	$	120.6	$	119.4	$	11.3	$	251.3	$	—	$	251.3
Cost of sales	21.9		38.3		3.1		63.3		1.1		64.4
Gross margin (1)	$	98.7	$	81.1	$	8.2	$	188.0	$	(1.1)	$	186.9
Operating expenses									173.4		173.4
Investment income, net									4.8		4.8
Income before income taxes											$	18.3

______________________________

(1) See “Non-GAAP Financial Measures” for a reconciliation of selected U.S. GAAP-based measures to adjusted measures for the three and six months ended August 31, 2025.

The following tables reconcile the Company’s segment adjusted gross margin results for the three and six months ended August 31, 2024 to consolidated U.S. GAAP results:


	For the Three Months Ended August 31, 2024
	(in millions)
	QNX		Secure Communications		Licensing		Segment Totals		Reconciling Items		Consolidated U.S. GAAP
Revenue	$	54.7	$	66.5	$	5.0	$	126.2	$	—	$	126.2
Cost of sales	9.3		26.1		1.6		37.0		0.6		37.6
Gross margin (1)	$	45.4	$	40.4	$	3.4	$	89.2	$	(0.6)	$	88.6
Operating expenses									86.4		86.4
Investment income, net									2.7		2.7
Income before income taxes											$	4.9


	For the Six Months Ended August 31, 2024
	(in millions)
	QNX		Secure Communications		Licensing		Segment Totals		Reconciling Items		Consolidated U.S. GAAP
Revenue	$	107.9	$	130.7	$	11.0	$	249.6	$	—	$	249.6
Cost of sales	18.8		47.9		3.0		69.7		1.3		71.0
Gross margin (1)	$	89.1	$	82.8	$	8.0	$	179.9	$	(1.3)	$	178.6
Operating expenses									189.3		189.3
Investment income, net									6.7		6.7
Loss before income taxes											$	(4.0)

______________________________

(1) See “Non-GAAP Financial Measures” for a reconciliation of selected U.S. GAAP-based measures to adjusted measures for the three and six months ended August 31, 2024.

The following table reconciles total segment adjusted EBITDA for the three and six months ended August 31, 2025 and August 31, 2024 to the Company’s consolidated totals:


	Three Months Ended				Six Months Ended
	August 31, 2025		August 31, 2024		August 31, 2025		August 31, 2024















Total Segment Adjusted EBITDA	$	35.8	$	25.0	$	61.9	$	47.9
Adjustments (1):
Stock compensation expense	5.9		5.3		11.6		11.5
Restructuring charges	3.4		0.9		6.3		8.2
Less:
Adjusted Corporate operating costs excluding amortization (2)	9.9		9.9		19.6		22.3
Amortization	4.6		6.1		10.3		12.5
Impairment of long-lived assets	0.5		0.6		0.6		4.1




Investment income	(1.9)		(2.7)		(4.8)		(6.7)
Consolidated income (loss) from continuing operations before income taxes	$	13.4	$	4.9	$	18.3	$	(4.0)

______________________________

(1) The CODM reviews segment information on an adjusted EBITDA basis, which excludes certain amounts as described below:

Stock compensation expenses - Equity compensation is a non-cash expense and does not impact the ongoing operating decisions taken by the Company’s management.

Restructuring charges - Restructuring charges relate to employee termination benefits, facilities, streamlining many of the Company’s centralized corporate functions into Secure Communications and QNX specific teams, and other costs pursuant to programs to reduce the Company’s annual expenses amongst R&D, infrastructure and other functions and do not reflect expected future operating expenses, are not indicative of the Company’s core operating performance, and may not be meaningful when comparing the Company’s operating performance against that of prior periods.

(2) See “Non-GAAP Financial Measures” for a reconciliation of adjusted measures for the three and six months ended August 31, 2025 and August 31, 2024.

Financial Highlights

The Company had $363.5 million in cash, cash equivalents and investments as of August 31, 2025 (February 28, 2025 - $410.3 million).

In the second quarter of fiscal 2026, the Company recognized revenue of $129.6 million and net income of $13.3 million, or $0.02 basic and diluted earnings per share, on a U.S. GAAP basis (second quarter of fiscal 2025 - revenue of $126.2 million and net loss of $19.7 million, or $0.03 basic and diluted loss per share).

The Company recognized adjusted net income of $24.2 million, and adjusted earnings of $0.04 per share, on a non-GAAP basis in the second quarter of fiscal 2026 (second quarter of fiscal 2025 - adjusted net loss of $2.6 million, and adjusted loss of $0.00 per share). See “Non-GAAP Financial Measures” below.

Non-GAAP Financial Measures

The Consolidated Financial Statements have been prepared in accordance with U.S. GAAP, and information contained in this MD&A is presented on that basis. On September 25, 2025, the Company announced financial results for the three and six months ended August 31, 2025, which included certain non-GAAP financial measures and non-GAAP ratios, including adjusted gross margin, adjusted gross margin percentage, adjusted operating expense, adjusted Corporate operating costs, adjusted Corporate operating costs excluding amortization, adjusted net income (loss), adjusted earnings (loss) per share, adjusted research and development expense, adjusted sales and marketing expense, adjusted general and administrative expense, adjusted amortization expense, adjusted operating income, adjusted EBITDA, adjusted segment EBITDA, adjusted operating income margin percentage, adjusted EBITDA margin percentage and free cash flow (usage).

In the Company’s internal reports, management evaluates the performance of the Company’s business on a non-GAAP basis by excluding the impact of certain items below from the Company’s U.S. GAAP financial results. The Company believes that these non-GAAP financial measures and non-GAAP ratios provide management, as well as readers of the Company’s financial statements, with a consistent basis for comparison across accounting periods and are useful in helping management and readers understand the Company’s operating results and underlying operational trends. Non-GAAP financial measures and non-GAAP ratios exclude certain amounts as described below:

•Restructuring charges. The Company believes that restructuring charges relating to employee termination benefits, facilities, streamlining many of the Company’s centralized corporate functions into QNX and Secure Communications specific teams, and other costs pursuant to programs to reduce the Company’s annual expenses amongst R&D, infrastructure and other functions do not reflect expected future operating expenses, are not indicative of the Company’s core operating performance, and may not be meaningful when comparing the Company’s operating performance against that of prior periods.

•Stock compensation expenses. Equity compensation is a non-cash expense and does not impact the ongoing operating decisions taken by the Company’s management.

•Amortization of acquired intangible assets. When the Company acquires intangible assets through business combinations, the assets are recorded as part of purchase accounting and contribute to revenue generation. Such acquired intangible assets depreciate over time and the related amortization will recur in future periods until the assets have been fully amortized. This is not indicative of the Company’s core operating performance, and may not be meaningful when comparing the Company’s operating performance against that of prior periods.

•Long-lived asset impairment charge. The Company believes that long-lived asset impairment charges do not reflect expected future operating expenses, are not indicative of the Company’s core operating performance, and may not be meaningful when comparing the Company’s operating performance against that of prior periods.

On a U.S. GAAP basis, the impacts of these items are reflected in the Company’s income statement. However, the Company believes that the provision of supplemental non-GAAP measures allows investors to evaluate the financial performance of the Company’s business using the same evaluation measures that management uses, and is therefore a useful indication of the Company’s performance or expected performance of future operations and facilitates period-to-period comparison of operating performance. As a result, the Company considers it appropriate and reasonable to provide, in addition to U.S. GAAP measures, supplementary non-GAAP financial measures that exclude certain items from the presentation of its financial results.

Reconciliation of non-GAAP based measures with most directly comparable U.S. GAAP based measures for the three months ended August 31, 2025 and August 31, 2024

Readers are cautioned that adjusted gross margin, adjusted gross margin percentage, adjusted operating expense, adjusted Corporate operating costs, adjusted Corporate operating costs excluding amortization, adjusted net income (loss), adjusted earnings (loss) per share, adjusted research and development expense, adjusted sales and marketing expense, adjusted general and administrative expense, adjusted amortization expense, adjusted operating income, adjusted EBITDA, adjusted segment EBITDA, adjusted operating income margin percentage, adjusted EBITDA margin percentage and free cash flow (usage) and similar measures do not have any standardized meaning prescribed by U.S. GAAP and are therefore unlikely to be comparable to similarly titled measures reported by other companies. These non-GAAP financial measures should be considered in the context of the U.S. GAAP results, which are described in this MD&A and presented in the Consolidated Financial Statements.

A reconciliation of the most directly comparable U.S. GAAP financial measures for the three months ended August 31, 2025 and August 31, 2024 to adjusted financial measures is reflected in the table below:


For the Three Months Ended (in millions)	August 31, 2025			August 31, 2024








Gross margin	$	96.6		$	88.6



Stock compensation expense	0.6			0.6
Adjusted gross margin	$	97.2		$	89.2

Gross margin %	74.5		%	70.2		%



Stock compensation expense	0.5		%	0.5		%
Adjusted gross margin %	75.0		%	70.7		%

Reconciliation of U.S. GAAP operating expense for the three months ended August 31, 2025, May 31, 2025 and August 31, 2024 to adjusted operating expense is reflected in the table below:


For the Three Months Ended (in millions)	August 31, 2025		May 31, 2025		August 31, 2024
Operating expense	$	85.1	$	88.3	$	86.4
Restructuring charges	3.4		2.9		0.9
Stock compensation expense	5.3		5.2		4.7


Acquired intangibles amortization	1.1		1.7		1.7

LLA impairment charge	0.5		0.1		0.6


Adjusted operating expense	$	74.8	$	78.4	$	78.5

Reconciliation of U.S. GAAP Corporate operating costs for the three months ended August 31, 2025 and August 31, 2024 to adjusted Corporate operating costs excluding amortization is reflected in the table below:


For the Three Months Ended (in millions)	August 31, 2025		August 31, 2024
Corporate operating costs	$	16.2	$	13.1
Restructuring charges	3.4		0.9
Stock compensation expense	2.1		1.0
LLA impairment charge	0.5		0.6
Adjusted Corporate operating costs	10.2		10.6
Amortization	0.3		0.7
Adjusted Corporate operating costs excluding amortization	$	9.9	$	9.9

Reconciliation of U.S. GAAP net income (loss) and U.S. GAAP basic earnings (loss) per share for the three months ended August 31, 2025 and August 31, 2024 to adjusted net income (loss) and adjusted basic earnings (loss) per share is reflected in the table below:


For the Three Months Ended (in millions, except per share amounts)	August 31, 2025				August 31, 2024
			Basic earnings per share				Basic loss per share
















Net income (loss)	$	13.3	$	0.02	$	(19.7)	$	(0.03)







Restructuring charges	3.4				0.9
Stock compensation expense	5.9				7.1


Acquired intangibles amortization	1.1				8.5


LLA impairment charge	0.5				0.6
Adjusted net income (loss)	$	24.2	$	0.04	$	(2.6)	$	0.00

Reconciliation of U.S. GAAP research and development, sales and marketing, general and administrative, and amortization expense for the three months ended August 31, 2025 and August 31, 2024 to adjusted research and development, sales and marketing, general and administrative, and amortization expense is reflected in the table below:


For the Three Months Ended (in millions)	August 31, 2025		August 31, 2024
Research and development	$	25.6	$	27.1

Stock compensation expense	1.4		1.2
Adjusted research and development expense	$	24.2	$	25.9

Sales and marketing	$	24.4	$	21.3
Stock compensation expense	1.3		0.7
Adjusted sales and marketing expense	$	23.1	$	20.6

General and administrative	$	31.5	$	32.8
Restructuring charges	3.4		0.9

Stock compensation expense	2.6		2.8

Adjusted general and administrative expense	$	25.5	$	29.1

Amortization	$	3.1	$	4.6
Acquired intangibles amortization	1.1		1.7
Adjusted amortization expense	$	2.0	$	2.9

Adjusted operating income, adjusted EBITDA, adjusted operating income margin percentage and adjusted EBITDA margin percentage for the three months ended August 31, 2025 and August 31, 2024 are reflected in the table below. These are non-GAAP financial measures and non-GAAP ratios that do not have any standardized meaning as prescribed by U.S. GAAP and are therefore unlikely to be comparable to similar measures presented by other companies.


For the Three Months Ended (in millions)	August 31, 2025		August 31, 2024

Operating income	$	11.5	$	2.2
Non-GAAP adjustments to operating income

Restructuring charges	3.4		0.9
Stock compensation expense	5.9		5.3


Acquired intangibles amortization	1.1		1.7


LLA impairment charge	0.5		0.6


Total non-GAAP adjustments to operating income	10.9		8.5
Adjusted operating income	22.4		10.7
Amortization	4.6		6.1
Acquired intangibles amortization	(1.1)		(1.7)
Adjusted EBITDA	$	25.9	$	15.1

Revenue	$	129.6	$	126.2
Adjusted operating income margin % (1)	17.3%		8.5%
Adjusted EBITDA margin % (2)	20.0%		12.0%

______________________________

(1) Adjusted operating income margin % is calculated by dividing adjusted operating income by revenue.

(2) Adjusted EBITDA margin % is calculated by dividing adjusted EBITDA by revenue.

Reconciliation of non-GAAP based measures with most directly comparable U.S. GAAP based measures for the six months ended August 31, 2025 and August 31, 2024.

A reconciliation of the most directly comparable U.S. GAAP financial measures for the six months ended August 31, 2025 and August 31, 2024 to adjusted financial measures is reflected in the table below:


For the Six Months Ended (in millions)	August 31, 2025			August 31, 2024




Gross margin	$	186.9		$	178.6



Stock compensation expense	1.1			1.3
Adjusted gross margin	$	188.0		$	179.9

Gross margin %	74.4		%	71.6		%



Stock compensation expense	0.4		%	0.5		%
Adjusted gross margin %	74.8		%	72.1		%

Reconciliation of U.S. GAAP operating expense for the six months ended August 31, 2025 and August 31, 2024 to adjusted operating expense is reflected in the table below:


For the Six Months Ended (in millions)	August 31, 2025		August 31, 2024


















Operating expense	$	173.4	$	189.3
Restructuring charges	6.3		8.2
Stock compensation expense	10.5		10.2


Acquired intangibles amortization	2.8		3.5


LLA impairment charge	0.6		4.1


Adjusted operating expense	$	153.2	$	163.3

Reconciliation of U.S. GAAP Corporate operating costs for the six months ended August 31, 2025 and August 31, 2024 to adjusted Corporate operating costs excluding amortization is reflected in the table below:


For the Six Months Ended (in millions)	August 31, 2025		August 31, 2024
Corporate operating costs	$	31.2	$	38.5
Restructuring charges	6.3		8.2
Stock compensation expense	4.0		2.3
LLA impairment charge	0.6		4.1
Adjusted Corporate operating costs	20.3		23.9
Amortization	0.7		1.6
Adjusted Corporate operating costs excluding amortization	$	19.6	$	22.3

Reconciliation of U.S. GAAP net income (loss) and U.S. GAAP basic earnings (loss) per share for the six months ended August 31, 2025 and August 31, 2024 to the adjusted net income (loss) and adjusted basic earnings (loss) per share is reflected in the table below:

BLACKBERRY Ltd 10-Q