BlackBerry Limited (BB): Business Model Canvas [Dec-2025 Updated]

You're trying to map out the current business of BlackBerry Limited, and frankly, you need to forget the old phone company; today, it's a focused software play centered on secure embedded systems like QNX and AI-driven cybersecurity. To get a real handle on this transformation, look at the numbers: Cybersecurity subscriptions alone hit $272.6 million in FY25, complementing the $236.0 million from QNX IoT royalties that year, all underpinned by a huge QNX royalty backlog of roughly $865 million as of Q2 FY26. To see precisely how BlackBerry Limited generates this revenue, who their key partners are, and where they are placing their R&D bets for future growth, dive into the full breakdown of their Business Model Canvas below.

BlackBerry Limited (BB) - Canvas Business Model: Key Partnerships

You're looking at how BlackBerry Limited builds value through its network of external players, which is critical given its pivot to software and services. Honestly, the partnerships define the reach of QNX and the success of the Secure Communications offering.

Microsoft Azure for QNX Cloud-Native Development

BlackBerry Limited cemented a key strategic alliance with Microsoft at CES 2025, focusing on the Software-Defined Vehicle (SDV) space. This collaboration makes the QNX Software Development Platform (SDP) 8.0 available natively on Microsoft Azure. This move is about enabling cloud-first development, testing, and virtual validation for automakers.

The integration is set to expand beyond the core SDP to include QNX Hypervisor and QNX Cabin, which is a reference architecture for cloud-based digital cockpits. This is a direct play to accelerate development timelines for next-generation automotive and Internet of Things (IoT) applications.

• QNX SDP 8.0 integration with Microsoft Azure announced at CES 2025.
• The partnership aims to incorporate Microsoft Azure AI early in development cycles.
• The goal is to allow developers to simulate and test software virtually, skipping long waits for physical prototypes.

Automotive OEMs and Tier 1 Suppliers (e.g., AMD, Vector)

The automotive sector remains the bedrock for the QNX business, which is seeing strong momentum based on recent financial disclosures. The installed base continues to grow, showing deep market penetration.

In Q1 of fiscal year 2026, the QNX division reported revenue of $57.5 million, which was an 8% year-over-year increase. This contrasts with the $65.8 million reported for QNX in the fourth quarter of fiscal year 2025. Furthermore, the future pipeline looks solid, as evidenced by the industry-leading royalty backlog reaching approximately $865 million.

BlackBerry Limited is actively expanding its Tier 1 and OEM footprint through specific agreements. For instance, in late June 2025, QNX signed a memorandum of understanding with Vector (and associated with TTTech Auto) to create an open Foundational Vehicle Software Platform. Also, the relationship with AMD was extended to support a wider range of adaptive computing devices used in robotics and embedded systems. A top-10 global OEM has already signed a multi-year commitment for QNX Cabin.

Here's a quick look at the scale and recent activity in the automotive segment:

Managed Security Service Providers (MSSPs) for Channel Sales

BlackBerry Limited relies on its channel partners, particularly MSSPs, to scale its cybersecurity offerings. While specific 2025 revenue contribution from the MSSP channel isn't isolated, the overall Secure Communications unit revenue for the second quarter of fiscal year 2026 stood at $59.5 million. This unit provides intelligent security software to enterprises and governments.

The focus on this channel is driven by market dynamics; industry experts projected the Managed Extended Detection and Response (XDR) services market to grow from $22.45 billion in 2020 to $77.01 billion by 2030. BlackBerry Limited has actively worked to support these partners, for example, by doubling employee headcount in partner management and channel enablement roles in prior years to support this route to market.

McLeod Software for Fleet Visibility via BlackBerry Radar

BlackBerry Radar, the asset tracking software, has a strategic integration with McLeod Software, a Transportation Management System (TMS) provider. This partnership integrates Radar data directly into McLeod's Loadmaster trucking dispatch management system. The goal is to provide actionable, real-time information to improve asset utilization and reduce empty miles for mutual customers in logistics.

The integration introduces notifications for events like trailers becoming loaded, empty, or if doors open in unauthorized locations. This synergy helps operations teams see trailer status and location while booking load assignments, all within the McLeod platform.

Academic Institutions for QNX Developer Talent Pipeline

To ensure a steady stream of skilled engineers for its embedded systems, BlackBerry Limited is fueling developer enablement through initiatives like QNX Everywhere. This involves making QNX more broadly available for non-commercial use, learning, and experimentation.

As part of this ecosystem expansion strategy, QNX partnered with Pi Square Technologies to train software engineers across India. This effort directly addresses the need to build a talent pipeline capable of developing for mission-critical systems.

Finance: review QNX Q2 FY2026 margin vs. Q1 FY2026 by next Tuesday.

BlackBerry Limited (BB) - Canvas Business Model: Key Activities

You're looking at the core engine room of BlackBerry Limited as of late 2025. The key activities are all about execution in two distinct, high-value software markets: automotive safety and enterprise security. Here's the quick math on what they're actively doing to drive value.

Research and development (R&D) for QNX Software-Defined Vehicle (SDV) platforms

The R&D focus here is cementing QNX as the foundational, safety-certified operating system for next-generation vehicles. This activity involves continuous platform enhancement to support the shift to Software-Defined Vehicles (SDVs). BlackBerry Limited announced the release of QNX Hypervisor 8.0 in June 2025, a key development allowing multiple operating systems, including Android Automotive OS, to run concurrently on a single automotive System-on-Chip (SoC).

The IoT division, powered by QNX, showed strong recent performance, with QNX revenue hitting $63.1 million in the quarter ending August 31, 2025. Furthermore, the company continues to build on its legacy, with over 255 million vehicles already powered by QNX technology. The QNX Foundational Vehicle Software Platform, which integrates the ISO-certified Real-Time Operating System with VECTOR Informatik's middleware, won the 2025 Self-Driving Industry Award in the Software Category.

Developing and enhancing AI-driven cybersecurity solutions (Cylance)

This key activity centers on evolving the Cylance portfolio to combat increasingly sophisticated threats, moving toward a subscription-centric model. For the quarter ending August 31, 2025, the Cybersecurity division generated revenue of $59.9 million. The Annual Recurring Revenue (ARR) for the division stood at $285 million as of the quarter ending May 31, 2025. Customer loyalty and expansion are tracked via the Dollar-Based Net Retention Rate (DBNRR), which improved to 93% in the most recent reported quarter.

The effectiveness of the AI-driven solutions is visible in threat mitigation statistics. For the three-month period from July to September 2024, BlackBerry Limited's security technology thwarted nearly two million cyberattacks targeting its global customer base. This included blocking nearly 600,000 attacks on critical infrastructure sectors during that same period.

• Thwarted cyberattacks (July-Sept 2024): Nearly 2,000,000
• Unique malicious hashes blocked daily (July-Sept 2024): Over 3,000
• Cybersecurity Gross Margin (Q1 FY2026): 59%

Operational separation and streamlining of IoT and Cybersecurity divisions

BlackBerry Limited has been actively engaged in restructuring to create two independently operated entities to better unlock stakeholder value. The original plan targeted a subsidiary Initial Public Offering (IPO) for the IoT business in the first half of 2024. While the IPO target has passed, the activity remains focused on achieving operational independence and distinct capital allocation policies for both the IoT and Cybersecurity units.

The overall company financial performance reflects the streamlining efforts, with total company adjusted EBITDA growing a very strong 72% year-over-year to $25.9 million for the quarter ending August 31, 2025. The company also achieved a positive GAAP net income of $13.3 million in that same quarter, marking a significant turnaround.

Securing major design wins with global auto OEMs for QNX

Securing design wins is the lifeblood of future QNX royalty revenue. This activity involves embedding QNX into new vehicle platforms, particularly for Advanced Driver-Assistance Systems (ADAS) and cockpit domain controllers. BlackBerry Limited reported securing 100+ design wins over the last 18 months (as of April 2025). A specific recent win detailed was a 'mid-8-figure design win in the Chinese market' with a leading global Tier 1 supplier for ADAS applications.

The strength of this pipeline is quantified by the royalty backlog, which stands at approximately $865 million, representing future revenue from embedded software licenses. The company has also locked in a "top-10 global OEM" to a multi-year commitment for its QNX Cabin digital cockpit development environment.

Finance: review the Q3 FY26 guidance against the Q2 performance by next Tuesday.

BlackBerry Limited (BB) - Canvas Business Model: Key Resources

You're looking at the core assets that power BlackBerry Limited right now. These aren't just line items on a balance sheet; they are the engines driving the business, especially as the company focuses on separating its IoT and Cybersecurity units.

QNX real-time operating system (RTOS) and hypervisor technology

The QNX platform is definitely a cornerstone. It's the real-time operating system and hypervisor technology that secures critical functions in vehicles and other embedded systems. This technology is foundational, supporting modern architectures like ARMv9 and RISC-V. For instance, the next-generation QNX Software Development Platform (SDP) 8.0 is key, and it includes the QNX Hypervisor 8.0, which lets different operating systems run securely on one chip.

Here's how the QNX unit performed recently, showing the value of this resource:

The QNX technology is embedded in over 255 million vehicles globally, and BlackBerry works with all top 10 global automakers. That deep integration is a massive barrier to entry for competitors.

Embedded software experts and engineering talent

You can't have that level of embedded software-especially safety-certified RTOS-without top-tier engineering talent. This human capital is the resource that develops, maintains, and evolves QNX and the hypervisor. The focus on advanced areas like the QNX General Embedded Development Platform and securing design wins in China points directly to the specialized skill set within the engineering teams.

The company's ability to secure design wins and maintain high gross margins, like the 83% seen in QNX in Q2 FY26, is a direct reflection of the quality of this engineering talent. It's the expertise that allows them to command premium pricing for safety-critical software.

Cybersecurity Annual Recurring Revenue (ARR) of $285 million (Q1 FY25)

The subscription base for the Cybersecurity segment is a critical recurring revenue asset. As of the first quarter of fiscal year 2025, the Annual Recurring Revenue (ARR) stood at $285 million. This figure shows the scale of the committed, predictable revenue stream from their security offerings, which include CylanceMDR.

To give you the latest picture, the Secure Communications ARR was reported at $213 million in Q2 FY26, alongside a Dollar-Based Net Retention Rate (DBNRR) of 93% for that quarter, which suggests strong customer retention and expansion within the existing base.

QNX royalty backlog of approximately $865 million (as of Q2 FY26)

The royalty backlog represents future, contracted revenue that hasn't hit the income statement yet. This is a forward-looking indicator of health. The QNX royalty backlog was reported at approximately $865 million as of the period referencing Q2 FY26. This number is important because it shows the future revenue pipeline is being built faster than the current revenue is being recognized.

This backlog growth signals sustained design win momentum, which is the lifeblood of the QNX business model. It's the deferred value of future production vehicles and embedded systems shipping with QNX inside. For context, the total company cash, cash equivalents, and investments stood at $363.5 million at the end of Q2 FY26, providing a solid financial cushion to manage and invest in these key resources.

BlackBerry Limited (BB) - Canvas Business Model: Value Propositions

You're looking at the core value BlackBerry Limited (BB) is delivering across its focused business units as of late 2025. The numbers show a clear pivot toward high-margin, mission-critical software, especially in automotive.

Safety-certified, mission-critical software for embedded systems (QNX)

The QNX division, rebranded from IoT, is the foundation for safety-critical systems. Its value is rooted in its certification and massive installed base, which translates directly into a strong, predictable revenue stream via royalties.

• Vehicle adoption footprint by 2025: 255+ million vehicles.
• QNX Royalty Backlog: Approximately $865M.
• Safety Certification standard: Certified to ISO 26262 ASIL D.
• Software Development Platform (SDP) 8.0 adoption: Used by 24 of 25 top EV OEMs.

Here's the quick math on the financial performance driving this value proposition:

What this estimate hides is the compounding effect of that $865M royalty backlog, which signals future revenue recognition.

AI-driven endpoint security and threat detection (Cylance AI)

While BlackBerry Limited completed the sale of its Cylance endpoint security assets to Arctic Wolf, the value proposition continues through a reseller agreement, particularly for government customers. Arctic Wolf now incorporates the advanced, AI-based endpoint protection into its open-XDR platform.

• Sale proceeds from the first tranche to Arctic Wolf: Approximately $80M.
• BlackBerry Limited acts as a reseller of the technology to its large government customers.

Operational resiliency and secure communications for governments/enterprises

This segment provides government-grade protection for data and operations, evidenced by high-profile deployments for major diplomatic events. The focus is on end-to-end encrypted voice and secure messaging.

The Secure Communications division posted strong full-year results for Fiscal Year 2025:

Specific deployments highlight the value in operational resiliency:

• Malaysia deployed BlackBerry AtHoc and SecuSUITE for the 47th ASEAN Summit in October 2025.
• 150 liaison officers (LOs) were equipped with AtHoc and SecuSUITE for the 47th ASEAN Summit.
• SecuSUITE for iOS achieved certification from the German BSI.

Cloud-based development tools like QNX Cabin for faster time-to-market

QNX Cabin is the cloud-based framework designed to speed up the development of digital cockpits, addressing the complexity of mixed-criticality environments by allowing virtualization before hardware implementation. This directly impacts the OEM's speed and cost structure.

• QNX Cabin has multi-year deal wins from the top-10 global auto OEMs.
• A major APAC-based OEM adopted QNX Cabin for next-generation digital cockpit development.
• SDP 8.0, which supports these cloud-native tools, is projected to drive $40+ million in annualized revenue by 2026.

Finance: draft 13-week cash view by Friday.

BlackBerry Limited (BB) - Canvas Business Model: Customer Relationships

You're looking at how BlackBerry Limited (BB) locks in its key customers, which is a mix of deep, embedded relationships in automotive and recurring software contracts in cybersecurity. It's about long-term commitment, not quick transactions.

High-touch, long-term strategic engagement with major automotive OEMs is the bedrock of the IoT segment. This involves embedding QNX technology deep within vehicle architectures, creating high switching costs for the Original Equipment Manufacturers (OEMs). This relationship is evidenced by the sheer scale of deployment.

The QNX technology foundation is now deployed in more than 255 million vehicles on the road today. This long-term engagement is continually refreshed with new design wins; for example, in Q2 FY25, BlackBerry secured design wins with leading OEMs in Japan to power Advanced Driver Assistance Systems (ADAS) functionality. Furthermore, a top Chinese automaker selected QNX Sound for its next-generation luxury Electric Vehicle (EV) lineup, scheduled for deployment in 2026.

The Cybersecurity business relies on a subscription-based model, which drives predictable revenue streams. The health of this recurring revenue base is measured by retention metrics.

The Dollar-Based Net Retention Rate (DBNRR) for Cybersecurity was reported at 87% in Q1 FY25. This metric, which tracks the revenue retained from existing customers after accounting for upsells, downsells, and churn, is a critical indicator of customer satisfaction and expansion within the installed base. For context, the Cybersecurity division generated $85 million in revenue in Q1 FY25, with a gross margin of 59%. The total company revenue for Q1 FY25 was $144 million.

Dedicated professional services and support for embedded systems is essential for maintaining the integrity and security of the QNX deployments. This support ensures that complex, safety-critical systems remain operational and compliant throughout the vehicle lifecycle. The QNX business unit generated revenues of $62 million in Q3 FY25.

To secure the next generation of engineers and maintain ecosystem relevance, BlackBerry Limited is cultivating a QNX developer community through academic programs. This is executed via the QNX Everywhere initiative, which offers free access to the QNX Software Development Platform (SDP) 8.0 for non-commercial use. This effort includes strategic partnerships with universities across Canada, the U.S., South Korea, Europe, and India, using a 'one-to-many' model for academic institutions. Specifically, a multi-year plan with Pi Square Technologies in India aims to train thousands of engineers through partnerships with hundreds of engineering institutions.

Here are the key quantitative data points defining these customer relationships:

The company is actively engaging developer communities on platforms like GitLab, GitHub, Reddit, and Stack Overflow through dedicated developer relations specialists.

Key customer relationship touchpoints include:

• High-touch engagement with major automotive OEMs for ADAS and core OS integration.
• Securing new design wins with leading Japanese OEMs for ADAS functionality in Q2 FY25.
• Subscription renewals and upsells with government agencies, including the US Immigration and Customs Enforcement and the US Army Corps of Engineers in Q2 FY25.
• Free access to QNX Software Development Platform (SDP) 8.0 for non-commercial use.

Finance: draft 13-week cash view by Friday.

BlackBerry Limited (BB) - Canvas Business Model: Channels

You're looking at how BlackBerry Limited actually gets its software and services into the hands of customers, which is a mix of direct selling to the biggest players and relying on a wide network of partners to scale. It's a classic enterprise software channel strategy, but with a heavy focus on security and embedded systems.

Direct sales force to large enterprise and government accounts

BlackBerry Limited directs its specialized sales force toward securing major, high-value contracts within large enterprise and public sector organizations. This is where the Secure Communications segment, which provides intelligent security software, gets its footing. For the full fiscal year ending February 28, 2025, the Secure Communications revenue landed at $272.6 million. The company explicitly gathers telemetry and statistics on critical infrastructure customers across the 16 industry sectors defined by the Cybersecurity and Infrastructure Security Agency (CISA), which includes government, defense, energy, and finance. To give you a sense of the recent performance, the Q4 FY2025 revenue for this segment was $67.3 million. The focus here is on deep, direct relationships to deploy solutions like SecuSUITE for iOS, which achieved certification from the German BSI.

Global network of technology partners and system integrators

The scale of BlackBerry Limited's reach is heavily amplified by its global network of technology partners and system integrators. These partners are crucial for embedding BlackBerry's technology, especially QNX, into complex systems and for delivering cybersecurity services. The ecosystem map shows significant relationships with major players. For instance, Cognizant is listed with 370 Partners, Rapid7 with 341 Partners, and Tata Consultancy Services with 318 Partners in the ecosystem. This network allows BlackBerry Limited to reach verticals where a direct sales presence would be too costly or inefficient. The company empowers these partners through its Partner Program, which is designed for flexibility, whether partners choose to resell, embed, or build services around BlackBerry's offerings.

Here's a snapshot of some of the key partners BlackBerry Limited engages with:

• Technology partner Cognizant: 370 Partners listed.
• Channel partner Verizon: 317 Partners listed.
• Technology partner KPMG: 185 Partners listed.
• BlackBerry QNX platform is used in over 235 million vehicles worldwide.
• The company has expanded its automotive reach through partnerships with Vector, TTTech Auto, and Intel.

Cloud marketplaces for software distribution (e.g., Microsoft Azure)

Distributing software through major cloud marketplaces is a modern necessity for scale, and BlackBerry Limited has made concrete moves here. You should know they announced a collaboration with Microsoft to make the QNX Software Development Platform 8.0 available directly in the Microsoft Azure cloud environment. This is a clear channel play to reach developers and automotive/IoT system builders who prefer cloud-based development workflows. While specific revenue attributed only to Azure Marketplace isn't public, the strategic importance is clear: it simplifies the procurement and deployment path for their core embedded software. The company also notes that Cylance AI-based security solutions are available through the AWS marketplace.

Managed Security Service Providers (MSSPs) for SMB market reach

To effectively penetrate the Small and Medium-sized Business (SMB) market, which often lacks in-house security expertise, BlackBerry Limited relies on MSSPs. This is a critical route to market, as you simply can't reach the mid-market and SMB customers without strong channel partnerships. BlackBerry Limited has actively encouraged this channel by introducing seller compensation on MSSP deals to align the field. The market context supports this focus; the global managed security services market is projected to reach $67 billion by 2025, and IT managed services revenue in the channel is expected to hit $595 billion globally in 2025, growing about 13% year-on-year. The MSSP channel allows BlackBerry Limited to scale its security offerings where customers prioritize resilience over building out internal teams.

Here's a summary of key financial and channel metrics relevant to the Secure Communications business, which heavily utilizes these channels:

The Secure Communications Annual Recurring Revenue (ARR) was $285 million in Q1 FY2025, showing a 2% sequential increase. Still, the Q1 FY2026 forecast for the segment revenue was lower, between $50 million and $54 million. Finance: draft Q3 FY2026 channel contribution analysis by end of January 2026.

BlackBerry Limited (BB) - Canvas Business Model: Customer Segments

You're looking at the core customer base for BlackBerry Limited as of late 2025, which is heavily concentrated in high-stakes, safety-critical, and security-sensitive industries. The company's strategy clearly pivots on embedding its foundational software, QNX, into the next generation of connected and autonomous systems.

Global Automotive Original Equipment Manufacturers (OEMs)

This segment is the engine room for BlackBerry Limited's IoT business, driven by QNX and the emerging BlackBerry IVY platform. You see the traction here in the recurring royalty revenue and the sheer volume of vehicles already deployed.

For the full fiscal year ending February 28, 2025, QNX revenue hit $236.0 million, marking a 10% year-over-year growth. The underlying commitment from this segment is reflected in the QNX royalty backlog, which stood at approximately $865 million as of that time. To date, over 255 million vehicles run on QNX technology.

BlackBerry Limited is positioning for the software-defined vehicle (SDV) wave, with 2025-2026 cited as the likely timeframe for BlackBerry IVY to gain serious production traction. Specific wins are starting to materialize:

• Foxconn selected BlackBerry IVY to power its EVs, with production starting in 2025.
• A 'mid-8-figure design win' was secured in the Chinese market for ADAS applications in Q2 FY2026.
• BlackBerry Limited secured a design win for QNX Sound with a leading Chinese automaker for their 2026 luxury EV models.

The value proposition here is tangible cost reduction for the OEMs. For instance, the QNX Sound platform can reduce hardware costs by $21 per mass-market vehicle and $98 per premium model.

Highly regulated sectors: Government, Finance, Healthcare, and Critical Infrastructure

BlackBerry Limited serves these sectors primarily through its Secure Communications division, which includes solutions like SecuSUITE and AtHoc. The focus is on secure, reliable communication and endpoint management for sensitive operations.

For the full fiscal year ending February 28, 2025, Secure Communications revenue reached $272.6 million. The division's Annual Recurring Revenue (ARR) was $208 million, a 3% increase year-over-year in Q4 FY2025. The Dollar-Based Net Revenue Retention (DBNRR) for the segment was 93% in Q4 FY2025.

You can see direct engagement with government entities:

• A five-year hosted secure voice services contract was signed with a German government agency.
• A large renewal with the U.S. State Department for critical events management was completed.

The company maintains a dedicated presence, having launched BlackBerry Government Solutions to focus on FedRAMP-compliant cloud offerings. Furthermore, BlackBerry Limited continues to act as a reseller of the former Cylance endpoint portfolio to its large government clients.

Industrial IoT (IIoT) and embedded systems developers (e.g., medical, rail, aerospace)

This segment largely overlaps with the QNX customer base, as the same real-time operating system (RTOS) is used across these verticals for its safety and security certifications. The QNX Hypervisor 8.0, announced in June 2025, is key here, allowing multiple operating systems to run on one System on Chip (SoC).

The QNX gross margin for the full fiscal year 2025 was 84%, and its Adjusted EBITDA was $59.1 million, representing a 76% year-over-year increase.

Transportation and logistics companies (for asset tracking via BlackBerry Radar)

While BlackBerry Limited continues to offer asset tracking solutions, specific, publicly reported financial or statistical data points for the BlackBerry Radar business unit were not available in the latest fiscal year reports reviewed. The company's stated focus in its reporting is on the QNX and Secure Communications segments.

Finance: draft 13-week cash view by Friday.

BlackBerry Limited (BB) - Canvas Business Model: Cost Structure

You're looking at the cost side of BlackBerry Limited's business model as of late 2025, focusing on where the cash is going to support the QNX and Cybersecurity engines. The story here is one of aggressive cost discipline meeting necessary investment for innovation.

Significant investment in R&D for QNX and Cybersecurity product defintely innovation

BlackBerry Limited continues to pour resources into Research & Development (R&D) to keep the QNX operating system competitive in the embedded space and to advance the Cybersecurity portfolio. For the full fiscal year 2025 (ending February 2025), R&D expenses were reported at $157.4 million. This marked an 8.8% decrease from the prior fiscal year, showing a trend of managing R&D spend even while pushing innovation. To put this in perspective against recent history, the average R&D expense over the five fiscal years ending in 2025 was $212.9 million. The company is clearly focused on making R&D dollars work harder, especially given the strong performance of QNX royalty revenue mentioned in Q2 FY25 results.

The cost structure reflects a commitment to core technology, which means R&D remains a substantial line item, even with recent reductions.

• R&D Expenses for FY2025 (ending Feb 2025): $157.4 million.
• 5-Year Average R&D Expense (FY2021-FY2025): $212.9 million.
• R&D Expense decrease in FY2025: 8.8%.

Operating expenses rationalization, with Q2 FY25 expenses 24% lower year-over-year

A major theme in the cost structure has been the drive to streamline operations, which is clearly paying off. For the second quarter of fiscal year 2025, the company achieved a significant reduction in overhead. Specifically, operating expenses for that quarter were 24% lower than the baseline for the prior year. Looking at the absolute numbers for the quarter ending August 31, 2024 (Q2 FY25), the reported total Operating Expenses were $118.10 million. Analysts noted that adjusted operating expenses for that same period came in at $99 million, down from $114 million a year earlier. This rationalization helped the company reach breakeven adjusted EBITDA for the quarter.

Here's a look at how the cost control translated into bottom-line metrics for Q2 FY25 (ending August 31, 2024):

High cost of sales for software licensing and royalty agreements

While the direct cost of sales related to software licensing and royalty agreements isn't broken out as a separate line item in the same way as operating expenses, the revenue generated gives context to the underlying cost structure. The Licensing and Other segment saw revenue of $3 million in Q2 FY25 (ending August 31, 2024). However, this figure can fluctuate; for the fourth quarter of fiscal year 2025 (ending February 29, 2025), Licensing revenue was $8.6 million. The QNX business, which drives royalty revenue, is a high-margin component, but the associated development and maintenance costs feed into the R&D and operating expense base. The company is focused on growing the high-margin IoT revenue, which saw a gross margin of 82% in Q2 FY25.

Sales and marketing expenses to drive Cybersecurity ARR growth

Driving growth in the Cybersecurity division requires investment in Sales and Marketing (S&M). While specific S&M expense figures for FY25 are not explicitly detailed in the provided snippets, the focus is on the outcome: Annual Recurring Revenue (ARR). For Q2 FY25 (ending August 31, 2024), Cybersecurity ARR was flat year-over-year at $279 million. This followed a sequential increase in the prior quarter (Q1 FY25) to $285 million. By Q3 FY25 (results announced December 2024), ARR had ticked up to $281 million year-over-year. The Dollar-Based Net Retention Rate (DBNRR) for Cybersecurity was 88% in Q2 FY25, a 7 percentage point improvement year-over-year, suggesting that S&M efforts are successfully expanding existing customer relationships, even if headline ARR growth was flat in that specific quarter.

Finance: draft 13-week cash view by Friday.

BlackBerry Limited (BB) - Canvas Business Model: Revenue Streams

You're looking at the core ways BlackBerry Limited generates cash as of late 2025, which is heavily weighted toward recurring software revenue across its two main operating segments.

For the full fiscal year 2025 (ending February 28, 2025), BlackBerry Limited reported total company revenue of $534.9 million. The total company adjusted gross margin and GAAP gross margin for the same period was 74%.

The revenue streams are primarily categorized by the two major business units, which encompass the subscription, royalty, and services components you are tracking.

The breakdown of the primary revenue streams for BlackBerry Limited in FY25 is detailed below:

The revenue from the two core segments includes associated professional services and support contracts, though the exact standalone dollar amount for these services for the full year is embedded within the segment totals.

The composition of revenue generation within the segments includes:

• IoT software royalties and licensing fees from QNX, totaling $236.0 million in FY25.
• Cybersecurity subscription revenue, totaling $272.6 million in FY25.
• Licensing and other revenue, totaling $26.3 million in FY25.
• Professional services and support contracts for both divisions, which contribute to the segment totals above.

For the IoT division, the $236.0 million QNX revenue is driven by embedded software licenses, particularly in automotive systems, and includes development seat revenue and associated professional services. For the Cybersecurity division, the $272.6 million revenue is heavily weighted toward subscription-based offerings, which naturally include ongoing support contracts for their security solutions.

Finance: draft 13-week cash view by Friday.