After BlackBerry (BB) sold its Cylance business which used AI to provide IT security, the company has two main businesses: QNX and Secure Communications. Highly secure software that’s mainly used in automobiles, QNX is growing rapidly.
Meanwhile, Secure Communications, utilizing BlackBerry’s legacy security technologies, protects data and communications. Among the unit’s largest clients are governments, including many agencies in Washington, and large financial institutions.
Why Wall Street Has Recently Become Excited About BlackBerry Stock
In recent months, large investors have become excited about relatively small companies that are growing rapidly, are associated with rapidly proliferating trends, and have recently become profitable. A good, well-known example is Palantir (PLTR), whose revenue has been expanding quickly, became profitable at the end of 2022 , and whose AI business has been expanding by leaps and bounds in recent years. Between the beginning of 2023 and Feb 13, 2025, the value of Palantir’s shares soared nearly 18.5 times.
Similarly, BlackBerry’s QNX business is growing quickly as the amount of software in vehicles expands and more businesses outside of the automobile sector adopt the QNX operating system. And the Cylance deal made BlackBerry profitable.
Regarding the latter point, Cylance was generating negative earnings before interest, taxes, depreciation, and amortization (EBITDA) of about $50 million annually, while the remainder of the firm was posting positive EBITDA of $50 million. So in the wake of the deal, BB is likely being looked at as a profitable company by the Street. Indeed, in its quarter that ended in November, its earnings from continuing operations came in at $12 million.
QNX Is Expanding Rapidly
The company’s QNX unit includes its QNX operating system and related software. The unit’s backlog has been growing at a compound annual growth rate of about 33% “over the last couple of years,” CFO Tim Foote said at a recent conference. Foote indicated that these increases should start boosting the company’s profits a great deal in “two to three years.”
But in the company’s quarter that ended in November, the QNX unit’s revenue climbed 13% versus the previous quarter to $62 million, while its EBITDA, excluding some items, jumped 38% sequentially to $18 million.
In January, BlackBerry announced that it would begin offering a platform for vehicles that will integrate much of the disparate computer hardware and software within vehicles while doing much of the work needed to launch and maintain these systems. According to QNX COO John Wall, this innovation will enable the company to obtain meaningfully higher average revenue from each of its customers. Additionally, BlackBerry may look to charge subscription fees for various services, including security-related enhancements, that can be added to vehicles’ computer systems through over-the-air updates.
Meanwhile, QNX is also looking to expand the amount of revenue that it obtains from sectors outside of the automotive space.
“We see a lot of opportunity especially with some of the bigger players in the industrial automation market,” Wall said, adding that robotics is “a very interesting market” for QNX.
More Countries Are Adding BlackBerry’s Security Offerings
Among the company’s Secure Communications offerings are critical events management platform AtHoc which is used by multiple federal agencies and is the leading such product in the federal government, according to Foote. BlackBerry also offers SecuSmart, an encrypted voice offering which is used “by military, government agencies, secret service,” Foote reported, . Finally, the company’s Unified Endpoint Management (UEM) offering manages the data that goes to individual smartphones.
Encouragingly for BlackBerry and BB stock, the company in November 2023 announced ” a long-term software and services agreement to strengthen Malaysia’s cybersecurity posture.” As part of the deal, the Asian country agreed to purchase SecuSmart, AtHoc, and the UEM offering. What’s more, Foote recently disclosed that an Eastern European company had agreed to start utilizing SecuSmart. So by convincing additional countries to adopt its security offerings, BlackBerry can significantly grow its Secure Communications business, which is already profitable.
The Future Could Be Bright for BlackBerry Stock
Given BlackBerry’s recent move into profitability, the strong growth outlook of its QNX unit, and the potential gains of its Secure Communications business, BlackBerry’s stock, which surged nearly 150% in the three months that ended on February 13, could have much more room to run.
*This article is intended to be informational only; it is not financial advice.
