What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-12-19 compared with 2025-09-25 · 304 added, 334 removed, 558 unchanged (53% of the section changed)

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 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 nine months ended November 30, 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.

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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 plans, strategies and objectives, including its intentions to increase and enhance its product and service offerings, 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 fourth quarter of fiscal 2026 and for fiscal 2026 as a whole;

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

• 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.

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 November 30, 2025 compared to the three months ended November 30, 2024 - Revenue - Revenue by Segment”, “Results of Operations - Three months ended November 30, 2025 compared to the three months ended November 30, 2024 - Revenue - Adjusted Gross Margin and Adjusted EBITDA by Segment”, “Results of Operations - Three months ended November 30, 2025 compared to the three months ended November 30, 2024 - Revenue - Operating Expenses - Adjusted Operating Expenses” , “Results of Operations - Three months ended November 30, 2025 compared to the three months ended November 30, 2024 - Net Income (Loss)” and “Financial Condition - Contractual and Other Obligations”.

F orward-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.

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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.

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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;

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

• QNX announced that more than 275 million vehicles on the road are being powered by QNX’s embedded technology;

• BlackBerry announced the expansion of BlackBerry® SecuSUITE® to Windows devices, extending sovereign-grade protection across the digital workplace.

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;

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

Environmental, Sustainability and Corporat e 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.

• QNX announced that a leading Chinese automaker selected QNX® Sound for their luxury EV lineup ;

• BlackBerry and Universiti Kebangsaan Malaysia announced a strategic partnership to advance Malaysia's future cyber-defenders and embedded software talent;

• Malaysia expanded the deployment of BlackBerry Secure Communications software for the 46th and 47th ASEAN Summits.

Environmental, Sustainability and Corporate Governance:

• BlackBerry appointed John Wall as President of QNX Division.

Third Quarter Fiscal 2026 Summary Results of Operations

The following table sets forth certain consolidated statements of operations data for the quarter ended November 30, 2025 compared to the quarter ended November 30, 2024 under U.S.

For the Three Months Ended

(in millions, except for share and per share amounts)

August 31, 2025 August 31, 2024 Change

November 30, 2025 November 30, 2024 Change

Revenue $ 141.8 $ 143.6 $ (1.8)

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Operating expenses 98.0 92.7 5.3

Investment income, net 1.9 2.7 (0.8)

Investment income (loss), net 2.9 (0.6) 3.5

Income before income taxes 14.8 18.9 (4.1)

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(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.

GAAP basis for the third 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 following tables show information by operating segments for the three and nine months ended November 30, 2025 and November 30, 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.

GAAP, pursuant to the Financial Accounting Standards 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.

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, which excludes amounts related to investment income, taxes, amortization, restructuring charges, stock compensation expenses and long-lived asset impairment.

See Note 11 to the Consolidated Financial Statements for a description of the Company’s operating segments.

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(in millions)

QNX Secure Communications Licensing Segment Totals

August 31, Change August 31, Change August 31, Change August 31, Change

QNX Secure Communications Licensing

November 30, Change November 30, Change November 30, Change

2025 2024 2025 2024 2025 2024

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Segment adjusted EBITDA (1)

For the Six Months Ended

$ 16.4 $ 17.9 $ (1.5) $ 17.3 $ 22.5 $ (5.2) $ 5.3 $ 5.7 $ (0.4)

For the Nine Months Ended

(in millions)

QNX Secure Communications Licensing Segment Totals

August 31, Change August 31, Change August 31, Change August 31, Change

QNX Secure Communications Licensing

November 30, Change November 30, Change November 30, Change

2025 2024 2025 2024 2025 2024

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Segment adjusted EBITDA (1)

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.

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)

$ 49.6 $ 39.9 $ 9.7 $ 36.6 $ 39.7 $ (3.1) $ 14.7 $ 14.4 $ 0.3

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.

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)

______________________________

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.

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.

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

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.

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

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.

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

Long-lived asset impairment charge - 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.

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).

The Company h ad $377.5 million in cash, cash equivalents and investments as of November 30, 2025 (February 28, 2025 - $410.3 million).

In the third quarter of fiscal 2026, the Company recognized revenue of $141.8 million and net income of $13.7 million, or $0.02 basic and diluted earnings per share, on a U.S.

GAAP basis (third quarter of fiscal 2025 - revenue of $143.6 million and net loss of $10.5 million, or $0.02 basic and diluted loss per share).

The Company recognized adjusted net income of $26.8 million, and adjusted earnings of $0.05 per share, on a non-GAAP basis in the third quarter of fiscal 2026 (third quarter of fiscal 2025 - adjusted net income of $11.7 million, and adjusted earnings of $0.02 per share).

See “Non-GAAP Financial Measures” below.

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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).

On December 18, 2025, the Company announced financial results for the three and nine months ended November 30, 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, segment adjusted 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.

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• 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.

The Company believes that restructuring charges relating to employee termination benefits, exiting 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 .

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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 based measures for the three months ended November 30, 2025 and November 30, 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, segment adjusted 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.

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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

GAAP financial measures for the three months ended November 30, 2025 and November 30, 2024 to adjusted financial measures is reflected in the table below:

For the Three Months Ended (in millions) November 30, 2025 November 30, 2024

Gross margin $ 109.9 $ 112.2

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Reconciliation of U.S.

GAAP operating expense for the thr ee 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

GAAP operating expense for the thr ee months ended November 30, 2025, August 31, 2025 and November 30, 2024 to adjusted operating expense is reflected in the table below:

For the Three Months Ended (in millions) November 30, 2025 August 31, 2025 November 30, 2024

Operating expense $ 98.0 $ 85.1 $ 92.7

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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

GAAP Corporate operating costs for the three months ended November 30, 2025 and November 30, 2024 to adjusted Corporate operating costs excluding amortization is reflected in the table below:

For the Three Months Ended (in millions) November 30, 2025 November 30, 2024

Corporate operating costs

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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

GAAP basic earnings (loss) per share for the three months ended November 30, 2025 and November 30, 2024 to adjusted net income and adjusted basic earnings per share is reflected in the table below:

For the Three Months Ended (in millions, except per share amounts) November 30, 2025 November 30, 2024

Basic earnings

per share Basic loss

per share Basic earnings (loss)

Net income (loss) $ 13.7 $ 0.02 $ (10.5) $ (0.02)

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LLA impairment charge 0.6 0.6

Adjusted net income (loss) $ 24.2 $ 0.04 $ (2.6) $ 0.00

Adjusted net income $ 26.8 $ 0.05 $ 11.7 $ 0.02

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

GAAP research and development, sales and marketing, general and administrative, and amortization expense for the three months ended November 30, 2025 and November 30, 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) November 30, 2025 November 30, 2024

Research and development $ 29.6 $ 27.9

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Adjusted amortization expense $ 2.1 $ 2.6

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.

Adjusted operating income, adjusted EBITDA, adjusted operating income margin percentage and adjusted EBITDA margin percentage for the three months ended November 30, 2025 and November 30, 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

For the Three Months Ended (in millions) November 30, 2025 November 30, 2024

Operating income $ 11.9 $ 19.5

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

The CODM also uses the segment metric of segment adjusted EBITDA, which is a non-GAAP measure including segment expenses that exclude amounts related to investment income, taxes, amortization, stock compensation expenses, long-lived asset impairment and restructuring charges.

The following table reconciles the U.S.

GAAP measures of segment adjusted gross margin to segment adjusted EBITDA for the three months ended November 30, 2025 and November 30, 2024.

For the Three Months Ended

(in millions)

QNX Secure Communications Licensing

November 30, November 30, November 30,

2025 2024 2025 2024 2025 2024

Segment adjusted gross margin $ 57.4 $ 53.4 $ 48.4 $ 54.3 $ 4.6 $ 5.2

Segment research and development 16.9 15.7 11.4 11.1 — —

Segment sales and marketing 15.2 11.6 12.4 11.1 — —

Segment general and administrative 9.6 8.8 7.9 10.4 1.5 1.8

Less amortization included in the above 0.7 0.6 0.6 0.8 2.2 2.3

Segment adjusted EBITDA $ 16.4 $ 17.9 $ 17.3 $ 22.5 $ 5.3 $ 5.7

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.

GAAP based measures for the nine months ended November 30, 2025 and November 30, 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

GAAP financial measures for the nine months ended November 30, 2025 and November 30, 2024 to adjusted financial measures is reflected in the table below:

For the Nine Months Ended (in millions) November 30, 2025 November 30, 2024

Gross margin $ 296.8 $ 290.8

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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

GAAP operating expense for the nine months ended November 30, 2025 and November 30, 2024 to adjusted operating expense is reflected in the table below:

For the Nine Months Ended (in millions) November 30, 2025 November 30, 2024

Operating expense $ 271.4 $ 282.0

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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

GAAP Corporate operating costs for the nine months ended November 30, 2025 and November 30, 2024 to adjusted Corporate operating costs excluding amortization is reflected in the table below:

For the Nine Months Ended (in millions) November 30, 2025 November 30, 2024

Corporate operating costs

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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:

For the Six Months Ended (in millions, except per share amounts) August 31, 2025 August 31, 2024

GAAP basic earnings (loss) per share for the nine months ended November 30, 2025 and November 30, 2024 to the adjusted net income (loss) and adjusted basic earnings (loss) per share is reflected in the table below:

For the Nine Months Ended (in millions, except per share amounts) November 30, 2025 November 30, 2024

Basic earnings per share Basic loss per share

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Reconciliation of U.S.

GAAP research and development, sales and marketing, general and administrative, and amortization expense for the six 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 Six Months Ended (in millions) August 31, 2025 August 31, 2024

GAAP research and development, sales and marketing, general and administrative, and amortization expense for the nine months ended November 30, 2025 and November 30, 2024 to adjusted research and development, sales and marketing, general and administrative, and amortization expense is reflected in the table below:

For the Nine Months Ended (in millions) November 30, 2025 November 30, 2024

Research and development $ 80.2 $ 85.6

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Adjusted amortization expense $ 6.4 $ 8.4

Adjusted operating income, adjusted EBITDA, adjusted operating income margin percentage and adjusted EBITDA margin percentage for the six 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.

Adjusted operating income, adjusted EBITDA, adjusted operating income margin percentage and adjusted EBITDA margin percentage for the nine months ended November 30, 2025 and November 30, 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 Six Months Ended (in millions) August 31, 2025 August 31, 2024

Operating income (loss) $ 13.5 $ (10.7)

Non-GAAP adjustments to operating income (loss)

For the Nine Months Ended (in millions) November 30, 2025 November 30, 2024

Operating income $ 25.4 $ 8.8

Non-GAAP adjustments to operating income

Restructuring charges 12.4 14.7

13 unchanged sentences

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

The following table reconciles the U.S.

GAAP measures of segment adjusted gross margin to segment adjusted EBITDA for the nine months ended November 30, 2025 and November 30, 2024.

For the Nine Months Ended

(in millions)

QNX Secure Communications Licensing

November 30, November 30, November 30,

2025 2024 2025 2024 2025 2024

Segment adjusted gross margin $ 156.1 $ 142.5 $ 129.5 $ 137.1 $ 12.8 $ 13.2

Segment research and development 42.5 46.8 33.8 35.1 — —

Segment sales and marketing 39.3 32.1 38.1 34.4 — —

Segment general and administrative 26.7 25.4 22.7 30.5 4.7 5.6

Less amortization included in the above 2.0 1.7 1.7 2.6 6.6 6.8

Segment adjusted EBITDA $ 49.6 $ 39.9 $ 36.6 $ 39.7 $ 14.7 $ 14.4

The Company uses free cash flow (usage) when assessing its sources of liquidity, capital resources, and quality of earnings.

The Company believes that free cash flow (usage) is helpful in understanding the Company’s capital requirements and provides an additional means to reflect the cash flow trends in the Company’s business.

The Company believes that free cash flow (usage) is helpful in understanding the Company’s capital requirements and provides an additional means to reflect the cash flow (usage) trends in the Company’s business.

Reconciliation of U.S.

GAAP net cash used in operating activities for the six months ended August 31, 2025 and August 31, 2024 to free cash flow (usage) is reflected in the table below:

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

GAAP net cash used in operating activities for the three and nine months ended November 30, 2025 and November 30, 2024 to free cash flow (usage) is reflected in the table below:

For the Three Months Ended (in millions) November 30, 2025 November 30, 2024

Net cash provided by operating activities $ 17.9 $ 5.8

Acquisition of property, plant and equipment (0.9) (0.8)

Free cash flow $ 17.0 $ 5.0

For the Nine Months Ended November 30, 2025 November 30, 2024

Net cash provided by (used in) operating activities $ 4.2 $ (25.1)

3 unchanged sentences

Readers are cautioned that Secure Communications annual recurring revenue (“ARR”) and Secure Communications dollar-based net retention rate (“DBNRR”) do not have any standardized meaning and are unlikely to be comparable to similarly titled measures reported by other companies.

Comparative breakdowns of certain key metrics for the three months ended or as at August 31, 2025 and August 31, 2024 are set forth below.

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

Comparative breakdowns of certain key metrics for the three months ended or as at November 30, 2025 and November 30, 2024 are set forth below.

For the Three Months Ended (in millions) November 30, 2025 November 30, 2024 Change

Secure Communications Annual Recurring Revenue

5 unchanged sentences

The Company uses ARR as an indicator of business momentum for the Secure Communications business.

Secure Communications ARR was approximately $213 million as at August 31, 2025 and increased compared to $209 million as at May 31, 2025 and $209 million as at August 31, 2024.

Secure Communications ARR was approximately $216 million as at November 30, 2025 and increased compared to $213 million as at August 31, 2025 and $215 million as at November 30, 2024.

Secure Communications Dollar-Based Net Retention Rate

The Company calculates the Secure Communications DBNRR as of period end by first calculating th e Secure Communications ARR from the customer base as at 12 months prior to the current period end (“Prior Period ARR”).

The Company calculates the Secure Communications DBNRR as of period end by first calculating the Secure Communications ARR from the customer base as at 12 months prior to the current period end (“Prior Period ARR”).

The Company then calculates the Secure Communications ARR for the same cohort of customers as at the current period end (“Current Period ARR”).

The Company then divides the Current Period ARR by the Prior Period ARR to calculate the DBNRR.

Secure Communications DBNRR was 93% as at August 31, 2025 and increased compared to 92% as at May 31, 2025 and was consistent with 93% as at August 31, 2024.

Results of Operations - Three months ended August 31, 2025 compared to the three months ended August 31, 2024

Secure Communications DBNRR was 92% as at November 30, 2025 and decreased compared to 93% as at August 31, 2025 and 95% as at November 30, 2024.

Results of Operations - Three months ended November 30, 2025 compared to the three months ended November 30, 2024

Revenue by Segment

2 unchanged sentences

(in millions)

August 31, 2025 August 31, 2024 Change

November 30, 2025 November 30, 2024 Change

Revenue by Segment

8 unchanged sentences

100.0 % 100.0 %

The increase in QNX revenue of $8.4 million was primarily due to an increase of $3.6 million in royalty revenue, an increase of $2.7 million in BlackBerry Radar revenue and an increase of $2.6 million in development seat revenue, partially offset by a decrease of $0.4 million in professional services.

The Company previously stated that it expected QNX revenue to be in the range of $55 million to $60 million in the second quarter of fiscal 2026.

QNX revenue in the second quarter of fiscal 2026 was $63.1 million due to better-than-expected royalty revenue.

The Company expects QNX revenue to be in the range of $66 million to $70 million in the third quarter of fiscal 2026.

The increase in QNX revenue of $6.4 million was primarily due to an increase of $2.7 million in royalty revenue, an increase of $1.9 million in BlackBerry Radar revenue, an increase of $0.8 million in development seat revenue and an i ncrease of $0.6 million in professional services.

The Company previously stated that it expected QNX revenue to be in the range of $66 million to $70 million in the third quarter of fiscal 2026.

QNX revenue in the third quarter of fiscal 2026 was $68.7 million.

The Company expects QNX revenue to be in the range of $71 million to $77 million in the fourth quarter of fiscal 2026.

The Company previously stated that it expected QNX revenue to be in the range of $256 million to $270 million in fiscal 2026 as a whole.

The Company now expects QNX revenue to be in the range of $256 million to $270 million in fiscal 2026 as a whole due to stronger than expected performance in the first half of fiscal 2026.

The Company now expects QNX revenue to be in the range of $260 million to $266 million in fiscal 2026 as a whole.

Secure Communications

The decrease in Secure Communications revenue of $6.6 million was primarily due to a decrease of $5.6 million in Secusmart product revenue, a decrease of $1.0 million in BlackBerry UEM product revenue and a decrease of $0.5 million in BlackBerry AtHoc, partially offset by an increase of $0.5 million in professional services.

The Company previously stated that it expected Secure Communications revenue to be in the range of $54 million to $59 million in the second quarter of fiscal 2026.

Secure Communications revenue in the second quarter of fiscal 2026 was $59.9 million.

The Company expects Secure Communications revenue to be in the range of $60 million to $64 million in the third quarter of fiscal 2026.

The decrease in Secure Communications revenue of $7.6 million was primarily due to a decrease of $11.9 million in Secusmart product revenue, partially offset by an increase of $1.6 million in BlackBerry AtHoc product revenue and an increase of $1.2 million in professional services.

The Company previously stated that it expected Secure Communications revenue to be in the range of $60 million to $64 million in the third quarter of fiscal 2026.

Secure Communications revenue in the third quarter of fiscal 2026 was $67.0 million due to better than expected renewals in UEM.

The Company expects Secure Communications revenue to be in the range of $61 million to $65 million in the fourth quarter of fiscal 2026.

The Company previously stated that it expected Secure Communications revenue to be in the range of $239 million to $247 million in fiscal 2026 as a whole.

The Company now expects Secure Communications revenue to be in the range of $239 million to $247 million in fiscal 2026 as a whole due to stronger than expected performance in the first half of fiscal 2026.

The increase in Licensing revenue of $1.6 million was primarily due to an increase in revenue from the Company’s intellectual property licensing arrangements.

The Company now expects Secure Communications revenue to be in the range of $247 million to $251 million in fiscal 2026 as a whole primarily due to stronger than expected performance in the first nine months of fiscal 2026.

The decrease in Licensing revenue of $0.6 million w as primarily due to a decrease in revenue from the Company’s intellectual property licensing arrangements.

The Company previously stated that it expected Licensing revenue to be approximately $6 million in each of the four quarters of fiscal 2026.

Licensing revenue in the second quarter of fiscal 2026 was $6.6 million due to the reason stated above.

The Company continues to expect Licensing revenue to be approximately $6 million in each of the third quarter and fourth quarter of fiscal 2026.

Licensing revenue in the third quarter of fiscal 2026 was $6.1 million.

The Company continues to expect Licensing revenue to be approximately $6 million in the fourth quarter of fiscal 2026.

Total BlackBerry Revenue

The Company previously stated that it expected total BlackBerry revenue to be approximately $115 million to $125 million in the second quarter of fiscal 2026.

Total BlackBerry revenue was $129.6 million in the second quarter of fiscal 2026, better than expected due to the reasons noted above in “Revenue by Segment”.

The Company expects total BlackBerry revenue to be in the range of $132 million to $140 million in the third quarter of fiscal 2026.

The Company previously stated that it expected total BlackBerry revenue to be approximately $132 million to $140 million in the third quarter of fiscal 2026.

Total BlackBerry revenue was $141.8 million in the third quarter of fiscal 2026, better than expected due to the reasons noted above in “Revenue by Segment”.

The Company expects total BlackBerry revenue to be in the range of $138 million to $148 million in the fourth quarter of fiscal 2026.

The Company previously stated that it expected total BlackBerry revenue to be in the range of $519 million to $541 million in fiscal 2026 as a whole.

The Company now expects total BlackBerry revenue to be in the range of $519 million to $541 million in fiscal 2026 as a whole due to stronger than expected performance in the first half of fiscal 2026.

The Company now expects total BlackBerry revenue to be in the range of $531 million to $541 million in fiscal 2026 as a whole primarily due to stronger than expected performance in the third quarter of fiscal 2026.

Revenue by Geography

2 unchanged sentences

(in millions)

August 31, 2025 August 31, 2024 Change

November 30, 2025 November 30, 2024 Change

Revenue by Geography

9 unchanged sentences

North America Revenue

The increase in North America revenue of $4.1 million was primarily due to an increase of $2.7 million in QNX development seat revenue, an increase of $2.7 million in BlackBerry Radar revenue and an increase of $1.7 million in Licensing revenue, partially offset by a decrease of $2.4 million in QNX royalty revenue and a decrease of $1.1 million in BlackBerry UEM product revenue.

The increase in North America revenue of $2.0 million was primarily due to an increase of $1.9 million in BlackBerry Radar revenue, an increase of $1.8 million in QNX royalty revenue and an increase of $1.7 million in BlackBerry AtHoc product revenue, partially offset by a decrease of $4.6 million in BlackBerry UEM product revenue.

Europe, Middle East and Africa Revenue

The decrease in Europe, Middle East and Africa revenue of $3.7 million was primarily due to a decrease of $5.3 million relating to Secusmart product revenue and a decrease of $0.3 million in professional services revenue, partially offset by an increase of $1.6 million in QNX development seat revenue.

The decrease in Europe, Middle East and Africa revenue of $2.8 million was primarily due to a decrease of $11.5 million relating to Secusmart product revenue, partially offset by an increase of $6.0 million in BlackBerry UEM product revenue, an increase of $1.4 million in QNX development seat revenue and an increase of $1.3 million in QNX royalty revenue.

Other Regions Revenue

The increase in Other regions revenue of $3.0 million was primarily due to an increase of $5.9 million in QNX royalty revenue, partially offset by a decrease of $1.7 million in QNX development seat revenue and a decrease of $0.4 million in professional services revenue.

The decrease in Other regions revenue of $1.0 million was primarily due to a decrease of $0.9 million in QNX development seat revenue.

Consolidated Gross Margin

Consolidated gross margin increased by $8.0 million to $96.6 million in the second quarter of fiscal 2026 (second quarter of fiscal 2025 - $88.6 million).

The increase was primarily due to an increase in revenue from QNX due to the reasons discussed above in “Revenue by Segment”, partially offset by a decrease in revenue from BlackBerry UEM , as the cost of sales for most software and services products does not significantly fluctuate based on business volume.

Consolidated gross margin decreased by $2.3 million to $109.9 million in the third quarter of fiscal 2026 (third quarter of fiscal 2025 - $112.2 million).

The decrease was primarily due to a decrease in revenue from Secusmart due to the reasons discussed above in “Revenue by Segment”, partially offset by an increase in revenue from QNX, as the cost of sales for most software and services products does not significantly fluctuate based on business volume.

Consolidated Gross Margin Percentage

Consolidated gross margin percentage increased by 4.3% to 74.5% in the second quarter of fiscal 2026 ((second quarter of fiscal 2025 -70.2%).

The increase was primarily due to a change in mix, specifically a higher relative gross margin contribution from Secusmart and QNX.

Consolidated gross margin percentage decreased by 0.6% to 77.5% in the third quarter of fiscal 2026 (third quarter of fiscal 2025 -78.1%).

The decrease was primarily due to a change in mix, specifically a lower relative gross margin contribution from Secusmart, partially offset by a higher relative gross margin contribution from QNX.

Adjusted Gross Margin and Adjusted EBITDA by Segment

See “Second Quarter Fiscal 2026 Summary Results of Operations” for information about the Company’s operating segments and the basis of operating segment results.

See “Third Quarter Fiscal 2026 Summary Results of Operations” for information about the Company’s operating segments and the basis of operating segment results.

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

QNX Secure Communications Licensing

November 30, Change November 30, Change November 30, Change

2025 2024 2025 2024 2025 2024

8 unchanged sentences

Segment adjusted EBITDA $ 16.4 $ 17.9 $ (1.5) $ 17.3 $ 22.5 $ (5.2) $ 5.3 $ 5.7 $ (0.4)

The increase in QNX adjusted gross margin of $7.0 million was primarily due to the reasons discussed above in “Revenue by Segment”, partially offset by an increase in cost of sales related to Radar hardware devices.

QNX adjusted gross margin percentage of 83% in the first three months of fiscal 2026 was consistent with the first three months of fiscal 2025.

The increase in QNX adjusted EBITDA of $7.4 million was primarily due to the reasons discussed above in “Revenue by Segment” and a benefit from claims filed by QNX with the Ministry of Innovation, Science and Economic Development Canada relating to its Strategic Innovation Fund (“SIF”), partially offset by an increase in cost of sales related to Radar hardware devices and an increase in salaries and benefits expense.

The Company previously stated that it expected QNX adjusted EBITDA to be in the range of $10 million to $13 million in the second quarter of fiscal 2026.

QNX adjusted EBITDA was $20.5 million in the second quarter of fiscal 2026 due to the reasons discussed above in “Revenue by Segment” and from SIF claims filed.

The Company expects QNX adjusted EBITDA to be in the range of $13 million to $17 million in the third quarter of fiscal 2026.

The increase in QNX adjusted gross margin of $4.0 million was primarily due to the reasons discussed above in “Revenue by Segment”, partially offset by an increase in cost of sales related to BlackBerry Radar hardware devices.

The decrease in QNX adjusted gross margin percentage of 2% was primarily due to a change in mix, specifically an increased gross margin contribution from BlackBerry Radar which has a lower relative gross margin percentage.

The decrease in QNX adjusted EBITDA of $1.5 million was primarily due an increase in consulting costs and salaries and benefits expense, partially offset by an increase in QNX revenue due to the reasons discussed above in “Revenue by Segment”.

The Company previously stated that it expected QNX adjusted EBITDA to be in the range of $13 million to $17 million in the third quarter of fiscal 2026.

QNX adjusted EBITDA was $16.4 million in the third quarter of fiscal 2026.

The Company expects QNX adjusted EBITDA to be in the range of $17 million to $23 million in the fourth quarter of fiscal 2026.

The Company previously stated that it expected QNX adjusted EBITDA to be in the range of $64 million to $73 million in fiscal 2026 as a whole.

The Company now expects QNX adjusted EBITDA to be in the range of $64 million to $73 million in fiscal 2026 as a whole due to stronger than expected performance in the first half of fiscal 2026.

The Company now expects QNX adjusted EBITDA to be in the range of $67 million to $73 million in fiscal 2026 as a whole.

Secure Communications

The decrease in Secure Communications adjusted gross margin of $5.9 million was primarily due to the reasons discussed above in “Revenue by Segment”.

The increase in Secure Communications adjusted gross margin percentage of 6% was primarily due to a change in mix, specifically an increased gross margin contribution from Secusmart software licenses.

The increase in Secure Communications adjusted EBITDA of $1.8 million was primarily due to a decrease in salaries and benefits expense and a benefit relating to the recovery in expected credit loss provision, partially offset by a decrease in revenue due to the reasons discussed above in “Revenue by Segment”.

The Company previously stated that it expected Secure Communications adjusted EBITDA to be in the range of $3 million to $6 million in the second quarter of fiscal 2026.

Secure Communications adjusted EBITDA was $9.7 million in the second quarter of fiscal 2026 due to the reasons discussed above in “Revenue by Segment” and an increase in gross margin percentage due the the reasons discussed above.

The Company expects Secure Communications adjusted EBITDA to be in the range of $12 million to $16 million in the third quarter of fiscal 2026.

The decrease in Secure Communications adjusted gross margin percentage of 1% was primarily due to a change in mix, specifically a decrease in gross margin contribution from Secusmart product.

The decrease in Secure Communications adjusted EBITDA of $5.2 million was primarily due to a decrease in revenue due to the reasons discussed above in “Revenue by Segment”, partially offset by a decrease in salaries and benefits expense.

The Company previously stated that it expected Secure Communications adjusted EBITDA to be in the range of $12 million to $16 million in the third quarter of fiscal 2026.

Secure Communications adjusted EBITDA was $17.3 million in the third quarter of fiscal 2026 due to better than expected renewals in UEM.

The Company expects Secure Communications adjusted EBITDA to be in the range of $11 million to $15 million in the fourth quarter of fiscal 2026.

The Company previously stated that it expected Secure Communications adjusted EBITDA to be in the range of $38 million to $48 million in fiscal 2026 as a whole.

The Company now expects Secure Communications adjusted EBITDA to be in the range of $38 million to $48 million in fiscal 2026 as a whole due to stronger than expected performance in the first half of fiscal 2026.

The increase in Licensing adjusted gross margin of $1.7 million was primarily due to the reasons discussed above in “Revenue by Segment”.

The increase in Licensing adjusted gross margin percentage of 9% was due to the same reasons discussed above.

The increase in Licensing adjusted EBITDA of $1.6 million was primarily due to the reasons discussed above in “Revenue by Segment”.

The Company previously stated that it expected Licensing adjusted EBITDA to be approximately $20 million in fiscal 2026 and to be approximately $5 million in each of the four quarters of fiscal 2026.

Licensing adjusted EBITDA was $5.6 million in the second quarter of fiscal 2026.

The Company continues to expect Licensing adjusted EBITDA to be approximately $5 million in each of the third quarter and fourth quarter of fiscal 2026.

The Company now expects Secure Communications adjusted EBITDA to be in the range of $47 million to $51 million in fiscal 2026 as a whole primarily due to a change in revenue mix.

The decrease in Licensing adjusted gross margin of $0.6 million was primarily due to the reasons discussed above in “Revenue by Segment”.

The decrease in Licensing adjusted gross margin percentage of 2% was due to the same reasons discussed above.

The decrease in Licensing adjusted EBITDA of $0.4 million was primarily due to the reasons discussed above in “Revenue by Segment”.

The Company previously stated that it expected Licensing adjusted EBITDA to be approximately $5 million in each of the four quarters of fiscal 2026.

Licensing adjusted EBITDA was $5.3 million in the third quarter of fiscal 2026.

The Company continues to expect Licensing adjusted EBITDA to be approximately $5 million in the fourth quarter of fiscal 2026.

Operating Expenses

The table below presents a comparison of research and development, sales and marketing, general and administrative, and amortization expenses for the quarter ended August 31, 2025, compared to the quarter ended May 31, 2025 and the quarter ended August 31, 2024.

The Company believes it is meaningful to provide a sequential comparison between the second quarter of fiscal 2026 and the first quarter of fiscal 2026.

The table below presents a comparison of research and development, sales and marketing, general and administrative, and amortization expenses for the quarter ended November 30, 2025, compared to the quarter ended August 31, 2025 and the quarter ended November 30, 2024.

The Company believes it is meaningful to provide a sequential comparison between the third quarter of fiscal 2026 and the second quarter of fiscal 2026.

For the Three Months Ended

(in millions)

August 31, 2025 May 31, 2025 August 31, 2024

November 30, 2025 August 31, 2025 November 30, 2024

Revenue $ 141.8 $ 129.6 $ 143.6

14 unchanged sentences

See “Non-GAAP Financial Measures” for a reconciliation of selected U.S.

GAAP-based measures to adjusted measures for the three months ended August 31, 2025, May 31, 2025 and August 31, 2024.

GAAP-based measures to adjusted measures for the three months ended November 30, 2025, August 31, 2025 and November 30, 2024.

GAAP Operating Expenses

Operating expenses decreased by $3.2 million sequentially, or 3.6%, in the second quarter of fiscal 2026, compared to the first quarter of fiscal 2026 primarily due to a decrease of $3.9 million in salaries and benefits expense, a decrease of $1.8 million in sales incentive plan costs, a decrease of $1.3 million in marketing expense and a decrease of $0.9 million in amortization costs, partially offset by an increase of $1.5 million in the Company’s deferred share unit costs, an increase of $1.4 million in variable incentive plan costs, a decrease in benefit of $0.9 million relating to costs recovered under a transition service agreement related to the Company’s sale of Cylance in the fourth quarter of fiscal 2025 and an increase of $0.7 million in consulting costs.

Operating expenses decreased by $1.3 million year-over-year, or 1.5%, in the second quarter of fiscal 2026, compared to the second quarter of fiscal 2025 primarily due to an increase in benefits of $3.8 million from SIF claims filed, a decrease of $1.6 million in infrastructure costs and a decrease of $1.5 million in amortization costs, partially offset by an increase of $2.5 million in restructuring costs, an increase of $1.0 million in salaries and benefits expense, an increase of $0.8 million in stock compensation expense and an increase of $0.6 million in the Company’s deferred share unit costs.

Operating expenses increased by $12.9 million sequentially, or 15.2%, in the third quarter of fiscal 2026, compared to the second quarter of fiscal 2026 primarily due to a benefit of $3.8 million from SIF claims filed in the second quarter of fiscal 2026 which did not recur, an increase of $2.7 million in restructuring cost, an increase of $1.6 million in marketing expense, an increase of $1.3 million in sales incentive plan costs, an increase of $1.1 million in salaries and benefits expense and an increase of $0.8 million in variable incentive plan costs.

Operating expenses increased by $5.3 million year-over-year, or 5.7%, in the third quarter of fiscal 2026, compared to the third quarter of fiscal 2025 primarily due to an increase of $2.2 million in salaries and benefits expense, an increase of $1.9 million in variable incentive plan costs, an increase of $1.3 million in stock compensation expense and an increase of $1.0 million in consulting costs, partially offset by a decrease of $2.0 million in amortization costs.

Adjusted Operating Expenses

Adjusted operating expenses decreased by $3.6 million sequentially, or 4.6%, to $74.8 million in the second quarter of fiscal 2026 compared to $78.4 million in the first quarter of fiscal 2026.

The decrease was primarily due to a decrease of $3.9 million in salaries and benefits expense, a decrease of $1.8 million in sales incentive plan costs and a decrease of $1.3 million in marketing expense, partially offset by an increase of $1.5 million in the Company’s deferred share unit costs, an increase of $1.4 million in variable incentive plan costs, a decrease in benefit of $0.9 million relating to costs recovered under a transition service agreement related to the Company’s sale of Cylance in the fourth quarter of fiscal 2025 and an increase of $0.7 million in consulting costs.

Adjusted operating expenses decreased by $3.7 million year-over-year, or 4.7%, to $74.8 million in the second quarter of fiscal 2026, compared to $78.5 million in the second quarter of fiscal 2025.

The decrease was primarily due to an increase in benefits of $3.8 million from SIF claims filed, a decrease of $1.6 million in infrastructure costs and a decrease of $0.9 million in

amortization costs, partially offset by an increase of $1.0 million in salaries and benefits expense and an increase of $0.6 million in the Company’s deferred share unit costs.

Adjusted operating expenses increased by $10.6 million sequentially, or 14.2%, to $85.4 million in the third quarter of fiscal 2026 compared to $74.8 million in the second quarter of fiscal 2026.

The increase was primarily due to a benefit of $3.8 million from SIF claims filed in the second quarter of fiscal 2026 which did not recur, an increase of $1.6 million in marketing expense, an increase of $1.3 million in sales incentive plan costs, an increase of $1.1 million in salaries and benefits expense and an increase of $0.8 million in variable incentive plan costs.

Adjusted operating expenses increased by $5.7 million year-over-year, or 7.2%, to $85.4 million in the third quarter of fiscal 2026, compared to $79.7 million in the third quarter of fiscal 2025.

The increase was primarily due to an increase of $2.2 million in salaries and benefits expense, an increase of $1.9 million in variable incentive plan costs and an increase of $0.9 million in consulting costs.

Adjusted Corporate operating costs is defined as the portion of the Company’s total adjusted operating costs that is not attributable to any of the three operating segments.

The Company previously stated that it expected adjusted Corporate operating costs excluding amortization to be approximately $10 million in the second quarter of fiscal 2026.

Adjusted Corporate operating costs excluding amortization were $9.9 million in the second quarter of fiscal 2026.

The Company continues to expect adjusted Corporate operating costs excluding amortization to be approximately $10 million in each of the third quarter and fourth quarter of fiscal 2026.

The Company previously stated that it expected adjusted Corporate operating costs excluding amortization to be approximately $10 million in the third quarter of fiscal 2026.

Adjusted Corporate operating costs excluding amortization were $10.3 million in the third quarter of fiscal 2026.

The Company continues to expect adjusted Corporate operating costs excluding amortization to be approximately $10 million in the fourth quarter of fiscal 2026.

Research and Development Expenses

Research and development expenses consist primarily of salaries and benefits costs for technical personnel, new product development costs, travel expenses, office and building costs, infrastructure costs and other employee costs.

Research and development expenses decreased by $1.5 million, or 5.5%, in the second quarter of fiscal 2026 compared to the second quarter of fiscal 2025 primarily due to an increase in benefits of $3.8 million from SIF claims filed, partially offset by an increase of $1.1 million in salaries and benefits expense and an increase of $0.3 million in variable incentive plan costs.

Adjusted research and development expenses decreased by $1.7 million, or 6.6%, to $24.2 million in the second quarter of fiscal 2026 compared to $25.9 million the second quarter of fiscal 2025, primarily due to the same reasons described above on a U.S.

Research and development expenses increased by $1.7 million, or 6.1%, in the third quarter of fiscal 2026 compared to the third quarter of fiscal 2025 primarily due to an increase of $0.8 million in variable incentive plan costs and an increase of $0.6 million in consulting costs.

Adjusted research and development expenses increased by $1.4 million, or 5.2%, to $28.2 million in the third quarter of fiscal 2026 compared to $26.8 million the third quarter of fiscal 2025, primarily due to the same reasons described above on a U.S.

Sales and Marketing Expenses

Sales and marketing expenses consist primarily of marketing, advertising and promotion, salaries and benefits, information technology costs and travel expenses.

Sales and marketing expenses increased by $3.1 million, or 14.6%, in the second quarter of fiscal 2026 compared to the second quarter of fiscal 2025, primarily due to an increase of $1.5 million in salaries and benefits expense, an increase of $0.7 million in stock compensation expense and an increase of $0.2 million in marketing expense.

Adjusted sales and marketing expenses increased by $2.5 million, or 12.1%, to $23.1 million in the second quarter of fiscal 2026 compared to $20.6 million in the second quarter of fiscal 2025.

The increase was primarily due to an increase of $1.5 million in salaries and benefits expense and an increase of $0.2 million in marketing expense.

Sales and marketing expenses increased by $5.9 million, or 25.2%, in the third quarter of fiscal 2026 compared to the third quarter of fiscal 2025, primarily due to an increase of $2.3 million in salaries and benefits expense, an increase of $0.8 million in marketing expense, an increase of $0.8 million in variable incentive plan costs and an increase of $0.6 million in stock compensation expense.

Adjusted sales and marketing expenses increased by $5.3 million, or 23.2%, to $28.1 million in the third quarter of fiscal 2026 compared to $22.8 million in the third quarter of fiscal 2025.

The increase was primarily due to an increase of $2.3 million in salaries and benefits expense, an increase of $0.8 million in marketing expense and an increase of $0.8 million in variable incentive plan costs.

General and Administrative Expenses

General and administrative expenses consist primarily of salaries and benefits, external advisory fees, information technology costs, office and related staffing infrastructure costs.

General and administrative expenses decreased by $1.3 million, or 4.0%, in the second quarter of fiscal 2026 compared to the second quarter of fiscal 2025.

The decrease was primarily due to a decrease of $1.6 million in salaries and benefits expense, a decrease of $1.5 million in infrastructure costs and a decrease of $1.4 million in facilities cost, partially offset by an increase of $2.5 million in restructuring costs and an increase of $0.6 million in the Company’s deferred share unit costs.

Adjusted general and administrative expenses decreased by $3.6 million, or 12.4%, to $25.5 million in the second quarter of fiscal 2026 compared to $29.1 million in the second quarter of fiscal 2025.

The decrease was primarily due to a decrease of $1.6 million in salaries and benefits expense, a decrease of $1.5 million in infrastructure costs and a decrease of $1.4 million in facilities cost, partially offset by an increase of $0.6 million in the Company’s deferred share unit costs.

General and administrative expenses decreased by $0.3 million, or 0.8%, in the third quarter of fiscal 2026 compared to the third quarter of fiscal 2025.

The decrease was primarily due to a decrease of $0.8 million in infrastructure costs and a decrease of $0.6 million in facilities cost, pa rtially offset by an increase of $0.6 million in stock compensation expense.

Adjusted general and administrative expenses decreased by $0.5 million, or 1.8%, to $27 million in the third quarter of fiscal 2026 compared to $27.5 million in the third quarter of fiscal 2025.

The decrease was primarily due to a decrease of $0.8 million in infrastructure costs and a decrease of $0.6 million in facilities cost, partially offset by an increase of $0.3 million in variable incentive plan costs.

Amortization Expense

The table below presents a comparison of amortization expense relating to property, plant and equipment and intangible assets recorded as amortization or cost of sales for the quarter ended August 31, 2025 compared to the quarter ended August 31, 2024.

The table below presents a comparison of amortization expense relating to property, plant and equipment and intangible assets recorded as amortization or cost of sales for the quarter ended November 30, 2025 compared to the quarter ended November 30, 2024.

Intangible assets are comprised of patents, licenses and acquired technology.

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Included in Operating Expense

August 31, 2025 August 31, 2024 Change

November 30, 2025 November 30, 2024 Change

Property, plant and equipment $ 1.3 $ 1.8 $ (0.5)

2 unchanged sentences

Included in Cost of Sales

August 31, 2025 August 31, 2024 Change

November 30, 2025 November 30, 2024 Change

Property, plant and equipment $ 0.1 $ 0.1 $ —

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The decrease in amortization expense included in operating expense of $2.0 million was primarily due to the lower cost base of assets.

Adjusted amortization expense decreased by $0.9 million to $2.0 million in the second quarter of fiscal 2026 compared to $2.9 million in the second quarter of fiscal 2025 primarily due to the lower cost base of assets.

Adjusted amortization expense decreased by $0.5 million to $2.1 million in the third quarter of fiscal 2026 compared to $2.6 million in the third quarter of fiscal 2025 primarily due to the lower cost base of assets.

Amortization included in Cost of Sales

Amortization expense relating to certain intangible assets employed in the Company’s licensing operations was $1.5 million in the second quarter of fiscal 2026 and was consistent with the second quarter of fiscal 2025.

Amortization expense relating to certain intangible assets employed in the Company’s licensing operations was $1.6 million in the third quarter of fiscal 2026 and was consistent with the third quarter of fiscal 2025.

Investment Income, Net

Investment income, net, which includes the interest expense from the Notes (as defined below), was $1.9 million in the second quarter of fiscal 2026 and decreased by $0.8 million from investment income, net of $2.7 million in the second quarter of fiscal 2025.

The decrease was primarily due to interest income on a delayed tax refund in the second quarter of fiscal 2025 which did not recur, partially offset by a higher return on cash and investments due to the higher cash and investment balance.

For the second quarter of fiscal 2026, the Company’s net effective income tax expense rate was approximately 1% (second quarter of fiscal 2025 - net effective income tax expense rate of approximately 8%).

Investment income, net, which includes the interest expense from the Notes (as defined in “Financial Condition - Debt Financing and Other Funding Sources”), was $2.9 million in the third quarter of fiscal 2026 and increased by $3.5 million from investment loss, net of $0.6 million in the third quarter of fiscal 2025.

The increase was primarily due to unrealized losses recognized from observable price changes on non-marketable equity investments without readily determinable fair value in the third quarter of fiscal 2025 which did not recur and a higher return on cash and investments in the third quarter of fiscal 2026 due to the higher cash and investments balance.

For the third quarter of fiscal 2026, the Company’s net effective income tax expense rate was approximately 7% (third quarter of fiscal 2025 - net effective income tax expense rate of approximately 169%).

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Net Income (Loss)

The Company’s net income for the second quarter of fiscal 2026 was $13.3 million, or $0.02 basic and diluted earnings per share on a U.S.

GAAP basis (second quarter of fiscal 2025 - net loss $19.7 million, or $0.03 basic and diluted loss per share).

The period over period change of $33.0 million was primarily due to a loss from discontinued operations in the second quarter of fiscal 2025 which did not recur, an increase in gross margin percentage, as described above in “Consolidated Gross Margin Percentage ” , an increase in revenue, as described above in “Revenue by Segment” and a decrease in operating expenses, as described above in “Operating Expenses”.

Adjusted net income was $24.2 million in the second quarter of fiscal 2026, or $0.04 adjusted basic earnings per share (second quarter of fiscal 2025 - adjusted net loss of $2.6 million, or 0.00 adjusted basic loss per share).

The Company’s net income for the third quarter of fiscal 2026 was $13.7 million, or $0.02 basic and diluted earnings per share on a U.S.

GAAP basis (third quarter of fiscal 2025 - net loss $10.5 million, or $0.02 basic and diluted loss per share).

The period over period change of $24.2 million was primarily due to a loss from discontinued operations in the third quarter of fiscal 2025 which did not recur, partially offset by an increase in operating expenses, as described above in “Operating Expenses”, a decrease in revenue, as described above in “Revenue by Segment” and a decrease in gross margin percentage, as described above in “ Consolidated Gross Margin Percentage ”.

Adjusted net income was $26.8 million in the third quarter of fiscal 2026, or $0.05 adjusted basic earnings per share (third quarter of fiscal 2025 - adjusted net income of $11.7 million, or 0.02 adjusted basic loss per share).

The increase in adjusted net income of $15.1 million was primarily due to the same reasons described above on a U.S.

The Company previously stated that it expected adjusted EBITDA to be in the range of $8 to $14 million in the second quarter of fiscal 2026 .

Adjusted EBITDA was $25.9 million in the second quarter of fiscal 2026 due to QNX and Secure Communications exceeding the top end of their expected adjusted EBITDA ranges as discussed above in “Adjusted Gross Margin and Adjusted EBITDA by Segment”.

The Company previously stated that it expected non-GAAP EPS to be in the range of breakeven to $0.01 in the second quarter of fiscal 2026.

Non-GAAP EPS was $0.04 in the second quarter of fiscal 2026 primarily due to QNX and Secure Communications exceeding the top end of their expected adjusted EBITDA ranges as discussed above in “Adjusted Gross Margin and Adjusted EBITDA by Segment”.

The Company previously stated that it expected operating cash usage to be in the range of $5 million to $15 million in the second quarter of fiscal 2 026.

Operating cash flow was $3.4 million in the second quarter of fiscal 2026 due to better than expected conversion of profit into cash.

The Company expects adjusted EBITDA to be in the range of $20 million to $28 million in the third quarter of fiscal 2026.

The Company previously stated that it expected adjusted EBITDA to be in the range of $20 to $28 million in the third quarter of fiscal 2026.

Adjusted EBITDA was $28.7 million in the third quarter of fiscal 2026.

The Company previously stated that it expected non-GAAP EPS to be in the range of $0.02 per share to $0.04 per share in the third quarter of fiscal 2026.

Non-GAAP EPS was $0.05 in the third quarter of fiscal 2026 primarily due to Secure Communications exceeding the top end of their expected adjusted EBITDA range as discussed above in “Adjusted Gross Margin and Adjusted EBITDA by Segment”.

The Company previously stated that it expected operating cash flow to be in the range of $10 million to $20 million in the third quarter of fiscal 2026.

Operating cash flow was $17.9 million in the third quarter of fiscal 2026.

The Company expects adjusted EBITDA to be in the range of $22 million to $32 million in the fourth quarter of fiscal 2026.

The Company previously stated that it expected adjusted EBITDA to be in the range of $82 million to $101 million in fiscal 2026 as a whole.

The Company now expects adjusted EBITDA to be in the range of $82 million to $101 million in fiscal 2026 as a whole due to stronger than expected performance in the first half of fiscal 2026, as described above in “Adjusted Gross Margin and Adjusted EBITDA by Segment”.

The Company expects non-GAAP EPS to be in the range of $0.02 per share to $0.04 per share in the third quarter of fiscal 2026.

The Company now expects adjusted EBITDA to be in the range of $94 million to $104 million in fiscal 2026 as a whole due to the reasons discussed above in “Adjusted Gross Margin and Adjusted EBITDA by Segment”.

The Company expects non-GAAP EPS to be in the range of $0.03 per share to $0.05 per share in the fourth quarter of fiscal 2026.

The Company previously stated that it expected non-GAAP EPS to be in the range of $0.11 per share to $0.15 per share in fiscal 2026 as a whole.

The Company now expects non-GAAP EPS to be in the range of $0.11 per share to $0.15 per share in fiscal 2026 as a whole due to stronger than expected performance in the first half of fiscal 2026.

The Company expects operating cash flow to be in the range of $10 million to $20 million in the third quarter of fiscal 2026.

The Company previously stated that it expected operating cash flow to be approximately $35 million for fiscal 2026 as a whole.

The Company now expects operating cash flow to be in the range of $35 million to $40 million for fiscal 2026 as a whole due to stronger than expected operating cash flow in the first half of fiscal 2026.

The Company does not provide a reconciliation of expected adjusted EBITDA and expected non-GAAP basic EPS for the third quarter of fiscal year 2026, and for fiscal 2026 as a whole, to the most directly comparable expected GAAP measures because it is unable to predict with reasonable certainty, among other things, restructuring charges and impairment charges and, accordingly, a reconciliation is not available without unreasonable effort.

The Company now expects non-GAAP EPS to be in the range of $0.14 per share to $0.16 per share in fiscal 2026 as a whole due to the reasons discussed above in “Adjusted Gross Margin and Adjusted EBITDA by Segment” and a reduction in expected tax expense for fiscal 2026.

The Company expects operating cash flow to be in the range of $40 million to $45 million in the fourth quarter of fiscal 2026.

The Company previously stated that it expected operating cash flow to be in the range of $35 million to $40 million for fiscal 2026 as a whole.

The Company now expects operating cash flow to be in the range of $43 million to $48 million for fiscal 2026 as a whole due to stronger than expected performance in the first nine months of fiscal 2026.

The Company does not provide a reconciliation of expected adjusted EBITDA and expected non-GAAP basic EPS for the fourth quarter of fiscal year 2026, and for fiscal 2026 as a whole, to the most directly comparable expected GAAP measures because it is unable to predict with reasonable certainty, among other things, restructuring charges and impairment charges and, accordingly, a reconciliation is not available without unreasonable effort.

These items are uncertain, depend on various factors, and could have a material impact on GAAP reported results for the guidance period.

The weighted average number of shares outstanding was 592.9 million common shares for basic earnings per share and 597.4 million common shares for diluted earnings per share for the second quarter of fiscal 2026 (second quarter of fiscal 2025 - 590.5 million common shares for basic and 591.6 million common shares for diluted loss per share).

The weighted average number of shares outstanding includes the cumulative effects of share repurchases pursuant to the NCIB (as defined below) share buyback program during the quarter ended August 31, 2025.

Results of Operations - Six months ended August 31, 2025 compared to the six months ended August 31, 2024

The following section sets forth certain consolidated statements of operations data for the six months ended August 31, 2025 and August 31, 2024:

For the Six Months Ended

The weighted average number of shares outstanding was 590.9 million common shares for basic earnings per share and 596.3 million common shares for diluted earnings per share for the third quarter of fiscal 2026 (third quarter of fiscal 2025 - 591.2 million common shares for basic and 593.5 million common shares for diluted loss per share).

Results of Operations - Nine months ended November 30, 2025 compared to the nine months ended November 30, 2024

The following section sets forth certain consolidated statements of operations data for the nine months ended November 30, 2025 and November 30, 2024:

For the Nine Months Ended

(in millions, except for share and per share amounts)

August 31, 2025 August 31, 2024 Change

November 30, 2025 November 30, 2024 Change

Revenue $ 393.1 $ 393.2 $ (0.1)

2 unchanged sentences

Investment income, net 7.7 6.1 1.6

Income (loss) before income taxes 18.3 (4.0) 22.3

Income before income taxes 33.1 14.9 18.2

Provision for income taxes 4.2 15.6 (11.4)

10 unchanged sentences

(1) Diluted earnings per share on a U.S.

GAAP basis for the first six months of fiscal 2026 does not include the dilutive effect of the Notes as to do so would be anti-dilutive.

GAAP basis for the first nine months of fiscal 2026 and 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.

Diluted loss per share on a U.S.

GAAP basis for the first six months of fiscal 2025 does not include the dilutive effect of stock-based compensation as to do so would be anti-dilutive.

GAAP basis for the first nine months of fiscal 2025 does not include the dilutive effect of stock-based compensation 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.

1 unchanged sentence

Comparative breakdowns of revenue by segment are set forth below.

For the Six Months Ended

For the Nine Months Ended

(in millions)

August 31, 2025 August 31, 2024 Change

November 30, 2025 November 30, 2024 Change

Revenue by Segment

8 unchanged sentences

100.0 % 100.0 %

The increase in QNX revenue of $12.7 million was primarily due to an increase of $6.0 million in development seat revenue, an increase of $5.4 million in royalty revenue and an increase of $3.8 million in BlackBerry Radar revenue, partially offset by a decrease of $2.4 million in professional services revenue .

The increase in QNX revenue of $19.1 million was primarily due to an increase of $8.1 million in royalty revenue, an increase of $6.8 million in development seat revenue and an increase of $5.8 million in BlackBerry Radar revenue, partially offset by a decrease of $1.8 million in professional services revenue .

Secure Communications

The decrease in Secure Communications revenue of $11.3 million primarily due to a decrease of $8.5 million in Secusmart product revenue and a decrease of $3.7 million in BlackBerry UEM license revenue, partially offset by an increase of $1.3 million in professional services revenue.

The increase in Licensing revenue of $0.3 million was primarily due to an increase in revenue from the Company’s intellectual property licensing arrangements.

The decrease in Secure Communications revenue of $18.9 million primarily due to a decrease of $20.4 million in Secusmart product revenue and a decrease of $2.6 million in BlackBerry UEM license revenue, partially offset by an increase of $2.7 million in professional services revenue and an increase of $1.4 million in BlackBerry AtHoc product revenue.

The decrease in Licensing revenue of $0.3 million was primarily due to a decrease in revenue from the Company’s intellectual property licensing arrangements.

GAAP Revenue by Geography

1 unchanged sentence

GAAP basis are set forth in the following table:

For the Six Months Ended

For the Nine Months Ended

(in millions)

August 31, 2025 August 31, 2024 Change

November 30, 2025 November 30, 2024 Change

Revenue by Geography

9 unchanged sentences

North America Revenue

The increase in North America revenue of $2.7 million was primarily due to an increase of $5.6 million in BlackBerry QNX development seat revenue and an increase of $3.7 million in BlackBerry Radar revenue, partially offset by a decrease of $4.7 million in BlackBerry QNX royalty revenue and a decrease of $2.6 million in BlackBerry UEM revenue.

The increase in North America revenue of $4.7 million was primarily due to an increase of $5.9 million in BlackBerry QNX development seat revenue and an increase of $5.7 million in BlackBerry Radar revenue, partially offset by a decrease of $4.4 million in BlackBerry UEM revenue and a decrease of $2.9 million in BlackBerry QNX royalty revenue.

Europe, Middle East and Africa Revenue

The decrease in Europe, Middle East and Africa revenue of $4.9 million was primarily due to a decrease of $8.6 million relating to product revenue in Secusmart, partially offset by an increase of $2.3 million BlackBerry QNX development seat revenue and an increase of $2.2 million in BlackBerry QNX royalty revenue.

The decrease in Europe, Middle East and Africa revenue of $7.7 million was primarily due to a decrease of $20.1 million relating to product revenue in Secusmart, partially offset by an increase of $5.6 million in BlackBerry UEM revenue, an increase of $3.7 million BlackBerry QNX development seat revenue and an increase of $3.5 million in BlackBerry QNX royalty revenue.

Other Regions Revenue

The increase in other regions of $3.9 million was primarily due to an increase of $7.8 million relating to BlackBerry QNX royalty revenue, partially offset by a decrease of $1.9 million in BlackBerry QNX development seat revenue, a decrease of $0.7 million in professional services revenue and a decrease of $0.6 million in BlackBerry UEM revenue.

The increase in other regions of $2.9 million was primarily due to an increase of $7.2 million relating to BlackBerry QNX royalty revenue, partially offset by a decrease of $2.8 million in BlackBerry QNX development seat revenue and a decrease of $0.7 million in BlackBerry UEM revenue.

Consolidated Gross Margin

Consolidated gross margin increased by $8.3 million to approximately $186.9 million in the first six months of fiscal 2026 (first six months of fiscal 2025 - $178.6 million).

The increase was primarily due to an increase in revenue from QNX due to the reasons discussed above in “Revenue by Segment”, partially offset by a decrease in revenue from BlackBerry UEM revenue, as the cost of sales for most software and services products does not significantly fluctuate based on business volume.

Consolidated gross margin increased by $6 million to approximately $296.8 million in the first nine months of fiscal 2026 (first nine months of fiscal 2025 - $290.8 million).

The increase was primarily due to an increase in revenue from QNX due to the reasons discussed above in “Revenue by Segment”, partially offset by a decrease in revenue from BlackBerry UEM and Secusmart product revenue, as the cost of sales for most software and services products does not significantly fluctuate based on business volume.

Consolidated Gross Margin Percentage

Consolidated gross margin percentage increased by 2.8%, to approximately 74.4% of consolidated revenue in the first six months of fiscal 2026 (first six months of fiscal 2025 - 71.6%).

Consolidated gross margin percentage increased by 1.5%, to approximately 75.5% of consolidated revenue in the first nine months of fiscal 2026 (first nine months of fiscal 2025 - 74.0%).

The increase was primarily due to a change in mix, specifically a higher relative gross margin contribution from Secusmart and QNX.

Adjusted Gross Margin and Adjusted EBITDA by Segment

See “Business Overview” and “Second Quarter Fiscal 2026 Summary Results of Operations” for information about the Company’s operating segments and the basis of operating segment results.

For the Six Months Ended

See “Business Overview” and “Third Quarter Fiscal 2026 Summary Results of Operations” for information about the Company’s operating segments and the basis of operating segment results.

For the Nine Months Ended

(in millions)

QNX Secure Communications Licensing Segment Totals

August 31, Change August 31, Change August 31, Change August 31, Change

QNX Secure Communications Licensing

November 30, Change November 30, Change November 30, Change

2025 2024 2025 2024 2025 2024

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Segment adjusted EBITDA $ 49.6 $ 39.9 $ 9.7 $ 36.6 $ 39.7 $ (3.1) $ 14.7 $ 14.4 $ 0.3

The increase in QNX adjusted gross margin of $9.6 million was primarily due to the reasons discussed above in “Revenue by Segment”, partially offset by an increase in cost of sales related to Radar hardware devices.

The decrease in QNX adjusted gross margin percentage of 1% was primarily due to the same reasons discussed above.

The increase in QNX adjusted EBITDA of $11.2 million was primarily due to the reasons discussed above in “Revenue by Segment” and a benefit from SIF claims, partially offset by an increase in costs of sales related to Radar hardware devices and an increase in salaries and benefits expense .

The Company does not expect to receive additional benefits from SIF claims in the second half of fiscal 2026.

The increase in QNX adjusted gross margin of $13.6 million was primarily due to the reasons discussed above in “Revenue by Segment”, partially offset by an increase in cost of sales related to BlackBerry Radar hardware devices.

The increase in QNX adjusted EBITDA of $9.7 million was primarily due to the reasons discussed above in “Revenue by Segment” and a benefit from SIF claims, partially offset by an increase in costs of sales related to BlackBerry Radar hardware devices and an increase in salaries and benefits expense.

The Company does not expect to receive any further benefits from SIF claims.

Secure Communications

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The increase in Secure Communications adjusted gross margin percentage of 2% was primarily due to a change in mix, specifically an increased gross margin contribution from Secusmart software licenses.

The increase of Secure Communications adjusted EBITDA of $2.1 million was primarily due to a decrease in salaries and benefits expense, partially offset by a decrease in revenue due to the reasons discussed above in “Revenue by Segment”.

The increase in Licensing adjusted gross margin of $0.2 million was primarily due to the reasons discussed above in “Revenue by Segment”.

Licensing adjusted gross margin percentage of 73% in the first six months of fiscal 2026 was consistent with the first six months of fiscal 2025.

The increase in Licensing adjusted EBITDA of $0.7 million was primarily due to the same reason discussed above, partially offset by a decrease in legal expense.

The decrease of Secure Communications adjusted EBITDA of $3.1 million was primarily due to a decrease in revenue due to the reasons discussed above in “Revenue by Segment”, partially offset by a decrease in salaries and benefits expense.

The decrease in Licensing adjusted gross margin of $0.4 million was primarily due to the reasons discussed above in “Revenue by Segment”.

The decrease in Licensing adjusted gross margin percentage of 1% was due to the same reasons discussed above.

The increase in Licensing adjusted EBITDA of $0.3 million was primarily due to a decrease in legal expense and patent abandonments.

Operating Expenses

The table below presents a comparison of research and development, selling, marketing and administration, and amortization expense for the six months ended August 31, 2025, compared to the six months ended August 31, 2024.

For the Six Months Ended

The table below presents a comparison of research and development, selling, marketing and administration, and amortization expense for the nine months ended November 30, 2025, compared to the nine months ended November 30, 2024.

For the Nine Months Ended

(in millions)

August 31, 2025 August 31, 2024 Change

November 30, 2025 November 30, 2024 Change

Revenue $ 393.1 $ 393.2 $ (0.1)

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See “Non-GAAP Financial Measures” for a reconciliation of selected U.S.

GAAP-based measures to adjusted measures for the six months ended August 31, 2025 and August 31, 2024.

GAAP-based measures to adjusted measures for the nine months ended November 30, 2025 and November 30, 2024.

GAAP Operating Expenses

Operating expenses decreased by $15.9 million, or 8.4%, in the first six months of fiscal 2026, compared to the first six months of fiscal 2025.

The decrease was primarily due to an increase in benefits of $8.3 million from SIF claims filed, a decrease of $3.5 million in impairment of long-lived asset impairment, a decrease of $2.2 million in amortization expense, a decrease of $2.2 million in infrastructure costs and a decrease of $1.9 million in restructuring cost, partially offset by an increase of $0.9 million in sales incentive plan cost and an increase of $0.8 million in stock compensation expense.

Operating expenses decreased by $10.6 million, or 3.8%, in the first nine months of fiscal 2026, compared to the first nine months of fiscal 2025.

The decrease was primarily due to an increase in benefits of $8.3 million from SIF claims filed, a decrease of $4.2 million in amortization expense, a decrease of $3.5 million in impairment of long-lived asset impairment, a decrease of $2.6 million in infrastructure costs and a decrease of $2.3 million in restructuring costs, partially offset by an increase of $3.3 million in salaries and benefits expense, an increase of $2.1 million in consulting costs, an increase of $1.9 million in variable incentive plan costs and an increase of $1.7 million in stock compensation expense.

Adjusted Operating Expenses

Adjusted operating expenses decreased by $10.1 million, or 6.2%, to $153.2 million in the first six months of fiscal 2026, compared to $163.3 million the first six months of 2025.

The decrease was primarily due to an increase in benefits of $8.3 million from SIF claims filed and a decrease of $2.2 million in infrastructure costs, partially offset by an increase of $0.9 million in sales incentive plan cost.

Adjusted operating expenses decreased by $4.4 million, or 1.8%, to $238.6 million in the first nine months of fiscal 2026, compared to $243 million the first nine months of 2025.

The decrease was primarily due to an increase in benefits of $8.3 million from SIF claims filed and a decrease of $2.6 million in infrastructure costs, partially offset by an increase of $3.3 million in salaries and benefits expense, an increase of $2.1 million in consulting costs and an increase of $1.9 million in variable incentive plan costs.

Research and Development Expenses

Research and development expenses consist primarily of salaries and benefits for technical personnel, new product development costs, travel, office and building costs, infrastructure costs and other employee costs.

Research and development expenses decreased by $7.1 million, or 12.3%, in the first six months of fiscal 2026, compared to the first six months of fiscal 2025.

The decrease was primarily due to an increase in benefits of $8.3 million from SIF claims filed, partially offset by an increase of $0.4 million in salaries and benefits expense.

Adjusted research and development expenses decreased by $6.8 million, or 12.4%, to $47.9 million in the first six months of fiscal 2026, compared to $54.7 million in the first six months of fiscal 2025.

Research and development expenses decreased by $5.4 million, or 6.3%, in the first nine months of fiscal 2026, compared to the first nine months of fiscal 2025.

The decrease was primarily due to an increase in benefits of $8.3 million from SIF claims filed, partially offset by an increase of $1.8 million in consulting costs.

Adjusted research and development expenses decreased by $5.4 million, or 6.6%, to $76.1 million in the first nine months of fiscal 2026, compared to $81.5 million in the first nine months of fiscal 2025.

The decrease was primarily due to the same reasons described above on a U.S.

1 unchanged sentence

Sales and marketing expenses consist primarily of marketing, advertising and promotion, salaries and benefits, information technology costs and travel expenses.

Sales and marketing expenses increased by $8.0 million, or 17.7%, in the first six months of fiscal 2026 compared to the first six months of fiscal 2025.

The increase was primarily due to an increase of $4.0 million in salaries and benefits cost, an increase of $1.2 million in stock compensation expense, an increase of $1.0 million in sales incentive plan cost, an increase of $0.6 million in variable incentive plan cost and an increase of $0.6 million in marketing cost.

Adjusted sales and marketing expenses increased by $6.8 million, or 15.6%, to $50 million in the first six months of fiscal 2026 compared to $43.6 million in the first six months of fiscal 2025.

The increase was primarily due to an increase of $4.0 million in salaries and benefits expense, an increase of $1.0 million in sales incentive plan cost, an increase of $0.6 million in variable incentive plan cost and an increase of $0.6 million in marketing cost.

Sales and marketing expenses increased by $13.9 million, or 20.3%, in the first nine months of fiscal 2026 compared to the first nine months of fiscal 2025.

The increase was primarily due to an increase of $6.3 million in salaries and benefits costs, an increase of $1.8 million in stock compensation expense, an increase of $1.4 million in sales incentive plan cost, an increase of $1.4 million in variable incentive plan costs and an increase of $1.2 million in marketing costs.

Adjusted sales and marketing expenses increased by $12.1 million, or 18.2%, to $79 million in the first nine months of fiscal 2026 compared to $66.4 million in the first nine months of fiscal 2025.

The increase was primarily due to an increase of $6.3 million in salaries and benefits expense, an increase of $1.4 million in sales incentive plan costs, an increase of $1.4 million in variable incentive plan costs and an increase of $1.2 million in marketing costs.

General and Administrative Expenses

General and administration expenses consist primarily of salaries and benefits, external advisory fees, information technology costs, office and related staffing infrastructure costs.

General and administrative expenses decreased by $11.1 million, or 15.2%, in the first six months of fiscal 2026 compared to the first six months of fiscal 2025.

The decrease was primarily due to a decrease of $3.3 million in salaries and benefits expense, a decrease of $2.6 million in facilities cost, a decrease of $2.2 million in infrastructure costs, a decrease of $1.9 million in restructuring cost and a benefit of $1.1 million relating to costs recovered under a transition service agreement related to the Company’s sale of Cylance in the fourth quarter of fiscal 2025.

Adjusted general and administrative expenses decreased by $8.6 million, or 14.5%, to $50.6 million in the first six months of fiscal 2026 compared to $59.2 million in the first six months of fiscal 2025.

The decrease was primarily due to a decrease of $3.3 million in salaries and benefits expense, a decrease of $2.6 million in facilities cost, a decrease of $2.2 million in infrastructure costs and a benefit of $1.1 million relating to costs recovered under a transition service agreement related to the Company’s sale of Cylance in the fourth quarter of fiscal 2025.

General and administrative expenses decreased by $11.4 million, or 10.4%, in the first nine months of fiscal 2026 compared to the first nine months of fiscal 2025.

The decrease was primarily due to a decrease of $3.6 million in salaries and benefits expense, a decrease of $3.0 million in infrastructure costs, a decrease of $2.9 million in facilities costs and a decrease of $2.3 million in restructuring costs.

Adjusted general and administrative expenses decreased by $9.1 million, or 10.5%, to $77.6 million in the first nine months of fiscal 2026 compared to $86.7 million in the first nine months of fiscal 2025.

The decrease was primarily due to a decrease of $3.6 million in salaries and benefits expense, a decrease of $3.0 million in infrastructure costs and a decrease of $2.9 million in facilities cost.

Amortization Expense

The table below presents a comparison of amortization expense relating to property, plant and equipment and intangible assets recorded as amortization or cost of sales for the six months ended August 31, 2025 compared to the six months ended August 31, 2024.

The table below presents a comparison of amortization expense relating to property, plant and equipment and intangible assets recorded as amortization or costs of sales for the nine months ended November 30, 2025 compared to the nine months ended November 30, 2024.

Intangible assets are comprised of patents, licenses and acquired technology.

For the Six Months Ended

For the Nine Months Ended

(in millions)

Included in Operating Expense

August 31, 2025 August 31, 2024 Change

November 30, 2025 November 30, 2024 Change

Property, plant and equipment $ 3.9 $ 5.7 $ (1.8)

2 unchanged sentences

Included in Cost of Sales

August 31, 2025 August 31, 2024 Change

November 30, 2025 November 30, 2024 Change

Property, plant and equipment $ 0.2 $ 0.4 $ (0.2)

3 unchanged sentences

The decrease in amortization expense included in operating expense of $4.2 million was primarily due to the lower cost base of assets.

Adjusted amortization expense decreased by $1.5 million to $4.3 million in the first six months of fiscal 2026 compared to $5.8 million in the first six months of fiscal 2025 due to the same reasons described above.

Adjusted amortization expense decreased by $2.0 million to $6.4 million in the first nine months of fiscal 2026 compared to $8.4 million in the first nine months of fiscal 2025 due to the same reasons described above.

Amortization included in Cost of Sales

Amortization expense relating to certain property, plant and equipment and certain intangible assets employed in the Company’s service operations decreased by $0.1 million in the first six months of fiscal 2026 compared to the first six months of fiscal 2025 due to a lower cost base of assets.

Amortization expense relating to certain property, plant and equipment and certain intangible assets employed in the Company’s service operations decreased by $0.1 million in the first nine months of fiscal 2026 compared to the first nine months of fiscal 2025 due to a lower cost base of assets.

Investment Income, Net

Investment income, net, which includes the interest expense from the Notes, was $4.8 million in the first six months of fiscal 2026 and decreased by $1.9 million from $6.7 million in the first six months of fiscal 2025.

The decrease was primarily due to unrealized gains recognized from observable price changes on non-marketable equity investments without readily determinable fair value in the first six months of fiscal 2025 which did not recur, interest income on a delayed tax refund in the first six months of fiscal 2025 which did not recur, partially offset by a higher return on cash and investments due to the higher cash and investment balance.

For the first six months of fiscal 2026, the Company’s net effective income tax expense rate was approximately 17% (first six months of fiscal 2025 - net effective income tax expense rate of approximately 17%).

Investment income, net, which includes the interest expense from the Notes (as defined in “Financial Condition - Debt Financing and Other Funding Sources”), was $7.7 million in the first nine months of fiscal 2026 and increased by $1.6 million from $6.1 million in the first nine months of fiscal 2025.

The increase was primarily due to net unrealized losses recognized from observable price changes on non-marketable equity investments without readily determinable fair value in the first nine months of fiscal 2025 which did not recur and a higher return on cash and investments due to the higher cash and investments balance, partially offset by interest income on a delayed tax refund in the first nine months of fiscal 2025 which did not recur.

For the first nine months of fiscal 2026, the Company’s net effective income tax expense rate was approximately 13% (first nine months of fiscal 2025 - net effective income tax expense rate of approximately 28%).

The Company’s net effective income tax rate reflects the change in unrecognized income tax benefits, if any, and the fact that the Company has a significant valuation allowance against its deferred tax assets, and in particular, the change in loss carry forwards, research and development credits, amongst other items, was offset by a corresponding adjustment of the valuation allowance.

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Net Income (loss)

The Company’s net income for the first six months of fiscal 2026 was $15.2 million, or $0.03 basic and diluted earnings per share on a U.S.

GAAP basis (first six months of fiscal 2025 - net loss $61.1 million, or $0.10 basic and diluted loss per share).

The increase in net income of $76.3 million was primarily due to a loss from discontinued operations in the first six months of fiscal 2025 which did not recur, a decrease in operating expenses, as described above in “Operating Expenses”, an increase in gross margin percentage, as described above in “Consolidated Gross Margin Percentage” and an increase in revenue as described above in “Revenue by Segment”.

Adjusted net income was $36.5 million in the first six months of fiscal 2026 or $0.06 adjusted basic earnings per share (first six months of fiscal 2025 - adjusted net loss of $16.9 million, or $0.03 adjusted basic loss per share).

The increase in adjusted net income of $53.4 million was primarily due to the same reasons described above on a U.S.

The weighted average number of shares outstanding was 595 million for basic earnings per share and 599 million for basis diluted earnings per share for the first six months of August 31, 2025.

The weighted average number of shares outstanding was 590 million for basic and diluted loss per share for the first six months of August 31, 2024.

The Company’s net income for the first nine months of fiscal 2026 was $28.9 million, or $0.05 basic and diluted earnings per share on a U.S.

GAAP basis (first nine months of fiscal 2025 - net loss $71.6 million, or $0.12 ba sic and diluted loss per share).

The period over period change of $100.5 million was primarily due to a loss from discontinued operations in the first nine months of fiscal 2025 which did not recur, a decrease in operating expenses, as described above in “Operating Expenses” and an increase in gross margin percentage, as described above in “Consolidated Gross Margin Percentage”.

Adjusted net income was $63.3 million in the first nine months of fiscal 2026 or $0.11 adjusted basic earnings per share (first nine months of fiscal 2025 - adjusted net loss of $5.2 million, or $0.01 adjusted basic loss per share).

The increase in adjusted net income of $68.5 million was primarily due to the same reasons describe d above on a U.S.

The weighted average number of shares outstanding was 593.4 million for basic earnings per share and 598.1 million for basis diluted earnings per share for the first nine months of November 30, 2025.

The weighted average number of shares outstanding was 590.5 million for basic and diluted loss per share for the first nine months of November 30, 2024.

Common Shares Outstanding

On September 22, 2025, there were 590 million voting common shares, 17.6 million restricted share units and 1.5 million deferred share units outstanding.

In addition, 51.5 million common shares are issuable upon conversion in full of the Notes as described in Note 6 to the Consolidated Financial Statements.

On December 16, 2025, there were 590 million voting common shares, 16.8 million restricted share units and 1.6 million deferred share units outstanding.

In addition, 51.5 million common shares are issuable upon conversion in full of the Notes (as defined in “Financial Condition - Debt Financing and Other Funding Sources”), as described in Note 6 to the Consolidated Financial Statements.

The Company has not paid any cash dividends during the last three fiscal years.

1 unchanged sentence

Liquidity and Capital Resources

Cash, cash equivalents, and investments decreased by $46.8 million to $363.5 million as at August 31, 2025 from $410.3 million as at February 28, 2025, primarily due to changes in working capital.

Cash, cash equivalents, and investments decreased by $32.8 million to $377.5 million as at November 30, 2025 from $410.3 million as at February 28, 2025, primarily due to repurchases of common shares of $34.0 million pursuant to the NCIB share buyback program.

A comparative summary of cash, cash equivalents, and investments is set out below:

(in millions)

August 31, 2025 February 28, 2025 Change

November 30, 2025 February 28, 2025 Change

Cash and cash equivalents $ 270.3 $ 266.7 $ 3.6

5 unchanged sentences

______________________________

(1) Includes equity investments in private companies, including common shares of Arctic Wolf that were received as partial consideration for the sale of its Cylance endpoint security assets and liabilities to Arctic Wolf.

Equity investments in private companies are considered illiquid securities without a public market and, as such, they cannot be readily sold or exchanged for cash.

(1) Includes investments in privately-held companies, including common shares of Arctic Wolf that were received as partial consideration for the sale of its Cylance endpoint security assets and liabilities to Arctic Wolf.

Investments in privately-held companies are considered illiquid securities without a public market and, as such, they cannot be readily sold or exchanged for cash.

The table below summarizes the current assets, current liabilities, and working capital of the Company:

(in millions)

August 31, 2025 February 28, 2025 Change

November 30, 2025 February 28, 2025 Change

Current assets $ 543.2 $ 591.5 $ (48.3)

2 unchanged sentences

Current Assets

The decrease in current assets of $84.3 million at the end of the second quarter of fiscal 2026 from the end of the fourth quarter of fiscal 2025 was primarily due to a decrease of $57.0 million in short term investments, a decrease of $48.7 million in accounts receivable, net of allowance, partially offset by an increase of $10.4 million in other current assets, an increase of $9.7 million in cash and cash equivalents, an increase of $1.0 million in income taxes receivable and an increase of $0.3 million in other receivables.

At August 31, 2025, accounts receivable, net of allowance was $125 million, a decrease of $48.7 million from February 28, 2025.

The decrease was prim arily due to the collection of a significant receivable from the Government of Malaysia and a decrease in days sales outstanding to 90 days at the end of t he second quarter of fiscal 2026 from 102 days at the end of the fourth quarter of fiscal 2025, partially offset by a reclassification of a licensing receivable from long-term receivable to accounts receivable.

At August 31, 2025, other current assets were $40.4 million, an increase of $10.4 million from February 28, 2025.

The increase was primarily due to an increase of $5.8 million in prepaid professional services and an increase of $2.0 million in prepaid software.

At August 31, 2025, income taxes receivable were $2.6 million, an increase of $1 million from February 28, 2025.

The decrease in current assets of $48.3 million at the end of the third quarter of fiscal 2026 from the end of the fourth quarter of fiscal 2025 was primarily due to a decrease of $37.2 million in short term investments and a decrease of $24.2 million in accounts receivable, net of allowance, partially offset by an increase of $8.4 million in other current assets, an increase of $3.6 million in cash and cash equivalents, an increase of $0.8 million in income taxes receivable and an increase of $0.3 million in other receivables.

At November 30, 2025, accounts receivable, net of allowance was $149.5 million, a decrease of $24.2 million from February 28, 2025.

The decrease was prim arily due to the collection of a significant receivable from the Government of Malaysia and a decrease in days sales outstanding to 88 days at the end of t he third quarter of fiscal 2026 from 102 days at the end of the fourth quarter of fiscal 2025, partially offset by reclassification of a licensing receivable from long-term receivable to accounts receivable.

At November 30, 2025, other current assets were $38.4 million, an increase of $8.4 million from February 28, 2025.

The increase was primarily due to an increase of $4.3 million in prepaid professional services and an increase of $2.0 million in inventory.

At November 30, 2025, income taxes receivable were $2.4 million, an increase of $0.8 million from February 28, 2025.

The increase was primarily due to tax installments and prepayments required in certain taxable jurisdictions.

At August 31, 2025, other receivables were $48.7 million, an increase of $0.3 million from February 28, 2025.

At November 30, 2025, other receivables were $48.7 million, an increase of $0.3 million from February 28, 2025.

The increase was primarily due to an increase of $1.5 million in SIF claims, partially offset by a decrease of $0.4 million in sublease receivable.

Current Liabilities

The decrease in current liabilities of $114.1 million at the end of the second quarter of 2026 from the end of the fourth quarter of fiscal 2025 was primarily due to a decrease of $42.3 million in accrued liabilities, a decrease of $33 million in deferred revenue, current, a decrease of $27.1 million in accounts payable and a decrease of $11.7 million in income taxes payable.

Accrued liabilities were $83.9 million at the end of the second quarter of 2026, reflecting a decrease of $42.3 million compared to February 28, 2025, which was primarily due to a decrease of $14.6 million in variable incentive plan accrual, a decrease of $4.8 million in restructuring cost accrual, a decrease of $4.2 million in litigation accruals, a decrease of $3.8 million in operating lease lia bility, current, a decrease of $2.0 million in deferred share unit liability, a decrease of $1.7 million in professional services accrual, a decrease of $1.6 million related to a lease termination fee accrual, a decrease of $1.4 million in inventory accrual and a decrease of $1.0 million in HST accruals related to the Company’s sale of Cylance in the fourth quarter of fiscal 2025.

Deferred revenue, current was $128.5 million, which reflects a decrease of $33.0 million compared to February 28, 2025 that was attributable to a decrease of $28.5 million in deferred revenue, current related to BlackBerry UEM, a decrease of $4.0 million in deferred revenue, current related to QNX and a decrease of $2.8 million in deferred revenue, current related to BlackBerry AtHoc.

The decrease in current liabilities of $91.0 million at the end of the third quarter of 2026 from the end of the fourth quarter of fiscal 2025 was primarily due to a decrease of $40.2 million in deferred revenue, current, a decrease of $20.1 million in accrued liabilities, a decrease of $17.7 million in accounts payable and a decrease of $13.0 million in income taxes payable.

Deferred revenue, current was $121.3 million, which reflects a decrease of $40.2 million compared to February 28, 2025 that was attributable to a decrease of $28.5 million in deferred revenue, current related to BlackBerry UEM, a decrease of $8.1 million in deferred revenue, current related to QNX and a decrease of $3.5 million in deferred revenue, current related to BlackBerry AtHoc product revenue.

Accrued liabilities were $106.1 million at the end of the third quarter of 2026, reflecting a decrease of $20.1 million compared to February 28, 2025, which was primarily due to a decrease of $5.4 million in variable incentive plan accrual, a decrease of $4.2 million in litigation accruals, a decrease of $4.0 million in operating lease lia bility, current, a decrease of $2.0 million in restructuring cost accrual, a decrease of $1.7 million in professional services accrual, a decrease of $1.6 million related to a lease termination fee accrual and a decrease of $1.5 million in legal cost accrual.

Accounts payable were $13.4 million, reflecting a decrease of $17.7 million from February 28, 2025, which was primarily due to the timing of payments.

Income taxes payable were $12.5 million, reflecting a decrease of $13.0 million from February 28, 2025, which was primarily due to changes in the quarterly tax provision and tax payments.

Cash flows for the six months ended August 31, 2025 compared to the six months ended August 31, 2024 were as follows:

For the Six Months Ended

Cash flows for the nine months ended November 30, 2025 compared to the nine months ended November 30, 2024 were as follows:

For the Nine Months Ended

(in millions)

August 31, 2025 August 31, 2024 Change

November 30, 2025 November 30, 2024 Change

Net cash flows provided by (used in):

2 unchanged sentences

Financing activities (31.5) 3.1 (34.6)

Effect of foreign exchange loss on cash and cash equivalents 0.4 0.2 0.2

Effect of foreign exchange gain (loss) on cash and cash equivalents 0.5 (0.4) 0.9

Net increase (decrease) in cash and cash equivalents $ 4.0 $ (0.3) $ 4.3

Operating Activities

The decrease in net cash flows used in operating activities of $17 million primarily reflects the changes in working capital.

The increase in net cash flows provided by operating activities of $29.3 million primarily reflects the changes in working capital.

Investing Activities

During the six months ended August 31, 2025, cash flows provided by investing activities were $52.8 million and included cash provided by transactions involving the acquisition of short-term and long-term investments, net of the proceeds on sale or maturity in the amount of $57.1 million, offset by cash used in the acquisition of intangible assets of $2.6 million and the acquisition of property, plant and equipment of $1.7 million .

For the same period in the prior fiscal year, cash flows provided by investing activities were $16.6 million an d included cash used in transactions involving the acquisitions of short-term and long-term investments, net of the proceeds on sale or maturity in the amount of $22.2 million, offset by cash used i n the acquisition of intangible assets of $3.8 million, the acquisition of property, plant and equipment $1.9 million, and the proceeds on sale of property, plant and equipment of $0.1 million.

During the nine months ended November 30, 2025, cash flows provided by investing activities were $30.8 million and included cash provided by proceeds on sale or maturity of short-term and long-term investments transactions, net of acquisitions, in the amount of $37.4 million, offset by cash used in the acquisition of intangible assets of $4.0 million and the acquisition of property, plant and equipment of $2.6 million .

For the same period in the prior fiscal year, cash flows provided by investing activities were $22.1 million an d included cash provided by p roceeds on sale or maturity of short-term and long-term investments transactions, net of acquisitions, in the amount of $30.4 million, offset by cash used i n the acquisition of intangible assets of $5.7 million, the acquisition of property, plant and equipment $2.7 million, and the proceeds on sale of property, plant and equipment of $0.1 million.

Financing Activities

The increase in cash flows used in financing activities was $30.3 million for the first six months of fiscal 2026 primarily due to a repurchase of common shares of $30.0 million pursuant to the NCIB share buyback program and a decrease of $0.3 million in common shares issued upon the exercise of stock options and under the employee share purchase plan.

On May 8, 2025, the Company announced that it received acceptance from the Toronto Stock Exchange with respect to a normal course issuer bid share buyback program to purchase for cancellation up to 27,855,153 common shares of the Company, or approximately 4.7% of the outstanding public float at May 5, 2025.

During the nine months ended November 30, 2025, cash used in financing activities was $31.5 million, primarily due to repurchases of common shares of $34.0 million pursuant to the NCIB share buyback program, offset by $2.5 million in common shares issued upon the exercise of stock options and under the employee share purchase plan.

On May 8, 2025, the Company announced that it received acceptance from the Toronto Stock Exchange with respect to a normal cours e issuer bid (“NCIB”) share buyback program to purch ase for cancellation up to 27,855,153 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.

During the nine months ended November 30, 2025, the Company repurchased 8.6 million common shares at a cost of $34.0 million.

Debt Financing and Other Funding Sources

2 unchanged sentences

See Note 3 to the Consolidated Financial Statements for further information concerning the Company’s restricted cash.

Cash, cash equivalents, and investments were $363.5 million as at August 31, 2025.

Cash, cash equivalents, and investments were $377.5 million as at November 30, 2025.

The Company’s management remains focused on maintaining appropriate cash balances, efficiently managing working capital balances and managing the liquidity needs of the business.

1 unchanged sentence

Contractual and Other Obligations

The following table sets out aggregate information about the Company’s contractual and other obligations and the periods in which payments are due as at August 31, 2025:

The following table sets out aggregate information about the Company’s contractual and other obligations and the periods in which payments are due as at November 30, 2025:

(in millions)

5 unchanged sentences

Total $ 318.4 $ 80.4 $ 238.0

Total contractual and other obligations as at August 31, 2025 increased by $0.5 million as compared to the February 28, 2025 balance of $312.8 million, which was attributable to an increase in purchase obligations and commitments, partially offset by a decrease in operating lease obligations.

Total contractual and other obligations as at November 30, 2025 increased by $5.6 million as compared to the February 28, 2025 balance of $312.8 million, which was attributable to an increase in purchase obligations and commitments, partially offset by a decrease in operating lease obligations.

The Company does not have any material off-balance sheet arrangements.

2 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis