BlackBerry Limited (BB) — Fundamental Analysis
Snapshot & Big Picture
BlackBerry has come a long way from its smartphone roots. Today the company operates as a pure-play cybersecurity and IoT software business, anchored by its QNX embedded operating system and its Cylance AI-driven security platform. The transition has been long and painful — revenue has shrunk materially from its peak — but the most recent fiscal year (ended February 28, 2026) shows genuine signs of stabilization: positive operating margins, a clean balance sheet relative to peers, and improving cash generation. The company is still small by enterprise-software standards, but the structural picture is cleaner than it has been in years.
Latest Quarter Snapshot(Q1 FY2027, period ended May 31, 2026 — most current data available)
The most recent quarter is more current than the annual figures and offers the freshest read on business momentum.
| Metric | Q1 FY2027 (May 31, 2026) |
|---|---|
| Revenue | $152.9M |
| EBITDA | $19.4M |
| Gross Margin | 78.3% |
| Operating Margin | 10.0% |
| Net Margin | 5.6% |
| Current Ratio | 2.20 |
| Debt-to-Equity | 0.26 |
| Capital Expenditures | $2.9M (1.90% of revenue) |
Q1 FY2027 delivered a 78.3% gross margin — the highest in the data set — alongside a clean 10.0% operating margin and a positive net margin of 5.6%. Annualizing the quarter's $152.9M revenue implies a roughly $612M run rate, which would represent modest top-line growth versus the $549.1M full FY2026 figure. Liquidity remains solid with a current ratio above 2.0 and a low debt-to-equity of 0.26.
Profitability
BlackBerry's profitability history has been extremely volatile, largely reflecting large non-cash charges (goodwill write-downs, patent impairments) in certain years and the ongoing cost of its business-model transformation.
| Fiscal Year End | Revenue | Gross Margin | Operating Margin | Net Margin | EBITDA |
|---|---|---|---|---|---|
| Feb 2026 | $549.1M | 76.2% | 8.8% | 9.7% | $66.1M |
| Feb 2025 | $534.9M | 73.8% | 0.1% | -14.8% | $45.5M |
| Feb 2024 | $759.1M | 64.6% | 1.4% | -17.2% | $69.5M |
| Feb 2023 | $526.3M | 69.7% | -39.3% | -139.5% | -$102.1M |
| Feb 2022 | $718.0M | 65.0% | -0.3% | 1.7% | $174.0M |
| Feb 2021 | $893.0M | 72.0% | -124.0% | -123.6% | -$909.0M |
| Feb 2020 | $1,040.0M | 73.4% | -14.3% | -14.6% | $63.0M |
| Feb 2019 | $904.0M | 77.2% | 6.6% | 10.3% | $209.0M |
| Feb 2018 | $932.0M | 71.9% | 30.4% | 43.5% | $460.0M |
The trend is clearly improving. After catastrophic net margin readings in FY2021 (-123.6%) and FY2023 (-139.5%) — both driven by massive non-cash impairment charges — the company has clawed back to a positive 9.7% net margin in FY2026, the best since FY2019. Gross margins have also recovered strongly, rising from a trough of 64.6% in FY2024 to 76.2% in FY2026 and 78.3% in the latest quarter. Operating leverage is beginning to show: as the company sheds legacy costs and focuses its software portfolio, a higher share of each revenue dollar is flowing through to operating income.
Financial Health
BlackBerry carries a relatively modest debt load. The debt-to-equity ratio was not available in filings for FY2018 through FY2022 (reported as null in those periods). Starting in FY2023, the ratio was 0.00, rose slightly to 0.25 in FY2024, and has held around 0.26–0.27 through the latest quarter — a conservative leverage profile for a software company. The current ratio has been volatile: it dipped to a concerning 1.02 in FY2023 but has since recovered to 2.12 in FY2026 and 2.20 in the latest quarter, suggesting BlackBerry is in a comfortable near-term liquidity position.
Capital Expenditures
| Period | CapEx ($) | CapEx / Revenue |
|---|---|---|
| Feb 2026 (Annual) | $3.8M | 0.69% |
| Feb 2025 (Annual) | $3.1M | 0.58% |
| Feb 2024 (Annual) | $7.1M | 0.94% |
| Feb 2023 (Annual) | $7.3M | 1.39% |
| Feb 2022 (Annual) | $8.0M | 1.11% |
| Feb 2021 (Annual) | $8.0M | 0.90% |
| Feb 2020 (Annual) | $12.0M | 1.15% |
| Feb 2019 (Annual) | $17.0M | 1.88% |
| Feb 2018 (Annual) | $15.0M | 1.61% |
| Q1 FY2027 (May 2026) | $2.9M | 1.90% |
Capital expenditure intensity has fallen sharply over the past several years. Annual CapEx peaked at $17M in FY2019 and has trended down to just $3.8M in FY2026 — a roughly 78% reduction. As a percentage of revenue, it has dropped from a high of ~1.9% to under 0.7% on a full-year basis. This is characteristic of a mature software company that does not need heavy physical infrastructure investment. The Q1 FY2027 CapEx-to-revenue of 1.90% looks elevated relative to recent annual figures, but at only $2.9M in absolute terms it is not alarming — quarterly CapEx can be lumpy. The overall low-CapEx profile means BlackBerry can convert a larger share of operating earnings into free cash flow, which is a positive quality signal for a business at this stage of its evolution.
Growth
Revenue growth — or the lack of it — remains the central concern for BlackBerry investors.
| CAGR Window | Start Fiscal Year | End Fiscal Year | Start Revenue | End Revenue | CAGR |
|---|---|---|---|---|---|
| 3-Year | Feb 2023 | Feb 2026 | $526.3M | $549.1M | +1.4% |
| 5-Year | Feb 2021 | Feb 2026 | $893.0M | $549.1M | -9.3% |
| 10-Year | N/A | N/A | N/A | N/A | Not available — SEC filing history in the dataset does not extend back a full 10 years from the most recent fiscal year end. |
The 3-year CAGR of just +1.4% signals that revenue has essentially flatlined since FY2023, while the 5-year CAGR of -9.3% reflects the heavy revenue shrinkage experienced during BlackBerry's multi-year transformation away from hardware and legacy services. The near-term quarterly run-rate suggests a modest acceleration may be underway, but a sustained return to meaningful top-line growth is still the key open question for the thesis.
Plain English Summary
BlackBerry today is a small but increasingly focused cybersecurity and embedded-software company. The good news: margins are recovering, the balance sheet is clean, the business requires very little capital spending, and the latest quarter shows the best gross and operating margins in the data set. The not-so-good news: revenue has been effectively shrinking for five years at a -9.3% annual clip, and while the three-year trend has stabilized near flat (+1.4% CAGR), there is little evidence yet of the kind of top-line re-acceleration that would justify a premium valuation. For investors, BlackBerry is a story of a turnaround that has made real operational progress — costs are under control, cash is not being burned recklessly, and the core software franchises (QNX in automotive/IoT, Cylance in endpoint security) serve durable end markets. The critical next chapter is whether management can translate that operational improvement into genuine revenue growth. Until that evidence arrives consistently, the company sits at an interesting but uncertain inflection point.
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