What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-06-25 compared with 2025-12-19 · 250 added, 540 removed, 322 unchanged (71% 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 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 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 months ended May 31, 2026, 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, 2026 (the “Annual MD&A”) included in the Company’s Annual Report on Form 10-K for the fiscal year ended February 28, 2026 (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, 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 plans, strategies and objectives, including its expectations regarding the Alloy Kore™ vehicle software platform;

• the Company’s expectations with respect to its total and segment revenue and adjusted EBITDA, non-GAAP EPS and operating cash flow in the second quarter of fiscal 2027 and for fiscal 2027 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 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.

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 May 31, 2026 compared to the three months ended May 31, 2025 - Revenue - Revenue by Segment”, “Results of Operations - Three months ended May 31, 2026 compared to the three months ended May 31, 2025 - Revenue - Adjusted Gross Margin and Adjusted EBITDA by Segment”, “Results of Operations - Three months ended May 31, 2026 compared to the three months ended May 31, 2025 - Net Income” 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 Com pany 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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Business Overview

Founded in 1984, BlackBerry Limited (the “Company”) is a leading provider of intelligent software and services to enterprises, governments and leading OEMs around the world.

Its products enable more than 275 million vehicles and secure 17 of the G20 governments.

Founded in 1984, the Company equips leading automakers, governments and regulated industries with secure, reliable software that drives productivity, resilience and mission-critical performance.

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

The Company’s QNX division develops safe, reliable software for embedded systems across technology-driven industries, including automotive, medical devices, robotics, and industrial automation.

The world’s leading automotive OEMs and Tier 1 suppliers rely on QNX® technology, which enables more than 275 million vehicles.

The Company’s Secure Communications division delivers operational resiliency with a government-grade portfolio of secure, certified solutions for mobile fortification, critical communications and crisis management.

The Company was incorporated under the Business Corporations Act (Ontario) and has amalgamated with several of its wholly-owned subsidiaries, the last occurring through the filing of articles of amalgamation on November 4, 2013.

The Company’s common shares trade under the ticker symbol “BB” on the New York Stock Exchange (“NYSE”) and the Toronto Stock Exchange (“TSX”).

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

The Company’s QNX division is a leader in embedded software where the Company believes it is the world’s leading automotive foundational software vendor.

Its customers include leading automotive OEMs and Tier 1 suppliers that use its products in vehicles, as well as manufacturers in other markets where high-performance, safety-critical foundational embedded software platforms and solutions are important, such as robotics, medical devices, industrial automation solutions and other mission-critical applications (collectively, the general embedded market or “GEM”).

QNX is a vendor to the top 10 automotive OEMs, top 7 Tier 1 suppliers, 24 of the 25 top EV OEMs, and 9 of the 10 top medical OEMs.

The Company’s Secure Communications division delivers operational resiliency with a comprehensive, highly secure, and extensively certified product portfolio for mobile fortification, mission-critical communications and critical event management.

Secure Communications focuses on the government sector and on strategic industries with vertical-specific use cases, including regulated enterprise markets such as financial services.

Products and Services

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QNX, Secure Communications and Licensing.

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

The QNX division consists of QNX®, BlackBerry Radar® and BlackBerry® Certicom®.

With 45 years of embedded software expertise and a rich intellectual property portfolio, QNX is an industry leader whose high-performance foundational software enables major automakers and industrial giants alike to unlock transformative applications, drive new revenue streams and launch innovative business models, all without sacrificing safety, security and reliability.

QNX is a trusted supplier of operating systems, hypervisors, frameworks and development tools that help reduce hardware dependency while enabling new possibilities in high-performance compute, standards-based virtualization technologies, and cloud enablement.

QNX is a trusted supplier of operating systems, hypervisors, middleware and development tools that help reduce hardware dependency while enabling new possibilities in high-performance computing, standards-based virtualization technologies, and cloud enablement.

QNX offers a growing portfolio of safety-certified, secure and reliable platform solutions and is focused on achieving design wins with automotive OEMs, Tier 1 vendors and automotive semiconductor suppliers.

These solutions include the QNX® real-time operating system, QNX® Hypervisor for Safety and QNX® Software Development Platform (SDP), as well as other products designed to alleviate the challenges of compliance with ISO 26262, the automotive industry’s functional safety standard.

These solutions include the BlackBerry QNX real-time operating system (RTOS), QNX® Hypervisor for Safety and QNX® Software Development Platform (SDP), as well as other products designed to alleviate the challenges of compliance with ISO 26262, the automotive industry’s functional safety standard.

The QNX pre-certified microkernel operating system is specifically tailored for safety-critical embedded systems and toolchains that are pre-qualified for building these systems.

The QNX Hypervisor for Safety protects safety systems from potential impact of malfunction in other systems.

These products help drive a faster time to market and also reduce developer friction.

In fiscal 2026, QNX ’s priorities in the automotive space include promoting increased adoption of its recently-released QNX SDP 8.0 and also working with partners to develop a vehicle platform featuring pre-integrated middleware solutions with a view to capturing a larger share of the automotive software stack and increasing future royalties per vehicle.

QNX is also a preferred supplier of embedded systems for companies in the GEM space.

The QNX Hypervisor for Safety prevents safety systems from potential impact of malfunction in other systems.

These products help to reduce time to market and developer friction.

QNX and Vector Informatik GmbH recently introduced Alloy Kore, a foundational vehicle software platform designed to simplify and accelerate the development of software-defined vehicles.

Alloy Kore integrates QNX’s safety-certified RTOS and virtualization capabilities and Vector’s safe middleware modules to deliver a lightweight, scalable foundation for deploying applications across vehicle domains.

The Company believes that Alloy Kore has the potential to expand average selling prices by multiples on a per-vehicle basis and drive meaningful backlog growth.

QNX is also a preferred supplier of embedded systems for companies building medical devices, robotics, physical AI solutions, rail systems, industrial automation solutions, aerospace and defence systems, and other mission-critical applications.

QNX solutions offer the performance, determinism, and trust necessary to enable physical AI systems, being autonomous systems that engage with and act in the real world, powering them to run safely, predictably and at scale.

QNX collaborates closely with customers to understand their specific requirements and more quickly and effectively develop solutions to meet their evolving needs.

The Company is investing in initiatives to increase the revenue that it derives from GEM opportunities.

BlackBerry Radar is a family of asset monitoring and telematics solutions for the transportation and logistics industry.

The BlackBerry Radar solution includes devices and secure cloud-based dashboards for tracking containers, trailers, chassis, flatbeds and heavy machinery, for reporting locations and sensor data, and for enabling custom alerts and fleet management analytics.

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

BlackBerry Certicom leverages patented elliptic curve cryptography to provide device security, anti-counterfeiting and product authentication solutions to deliver end-to-end security with managed public key infrastructure, code signing, and other applied cryptography and key management solutions.

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

Secure Communications

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

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

BlackBerry SecuSUITE is a certified, multi-OS voice, messaging and file-sharing solution with advanced encryption, anti-eavesdropping and continuous authentication capabilities, providing a maximum level of security on conventional mobile devices for classified and restricted government use.

The Company’s endpoint management offerings include BlackBerry UEM, BlackBerry® Dynamics™, BlackBerry® Workspaces, and BlackBerry Messenger (BBM®) Enterprise.

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BBM Enterprise is an enterprise-grade secure instant messaging solution for messaging, voice and video.

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

As a critical event management and crisis communications platform, BlackBerry AtHoc unifies communications during emergencies, providing secure, two-way messaging and incident response tools.

The platform, which is FedRAMP High authorized for highly secure government communications, combines secure mass notification capabilities with the ability to coordinate emergency response across multiple public and private organizations.

BlackBerry AtHoc is a secure, networked crisis communications platform that enables people, devices and organizations to exchange information in real time during business continuity and emergency operations, promoting public safety and protecting critical infrastructure.

The platform securely connects with a diverse set of endpoints to distribute mass notifications, improve personnel accountability and facilitate the bidirectional collection and sharing of data within and between organizations.

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.

The Licensing division is responsible for the management and monetization of the Company’s global patent portfolio.

The patent portfolio continues to provide a competitive advantage in the Company’s core product areas as well as providing leverage in the development of future technologies and licensing programs in both core and adjacent vertical markets.

The Company owns rights to an array of patented and patent pending technologies which include, but are not limited to, operating systems, networking infrastructure, acoustics, messaging, enterprise software, automotive subsystems, cybersecurity, cryptography and wireless communications.

The portfolio provides a competitive advantage in the Company’s core product areas and generates revenue through patent licensing, sales and enforcement activities.

Recent Developments

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

Products and Innovation:

• QNX 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 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.

The Company has continued to execute on its strategy in fiscal 2027 and announced the following significant achievements during the most recent quarter:

• The integration of QNX® OS for Safety 8.0 with NVIDIA IGX Thor and the NVIDIA Halos Safety Stack;

• The selection of QNX SDP 8.0 and QNX Hypervisor for Safety 8.0 by Leapmotor for its forthcoming premium electric SUV, the D19;

• A collaboration between QNX and TKMS in support of Canada’s patrol submarine program, including the adoption by TKMS of QNX’s trusted foundational software across its next‑generation naval platforms;

• The release of QNX Hypervisor 8.0 for Safety, the next-generation, safety-certified embedded virtualization platform from QNX;

• Expanded support for AMD Ryzen Embedded x86 processors on QNX SDP 8.0;

• The renewal and expansion of the Company’s multi-year agreement with the Government of Canada, including a significant increase in the deployment of BlackBerry SecuSUITE;

• Announced the achievement of FedRAMP Class D (High) re-certification for BlackBerry AtHoc;

• The renewal of the Company’s normal course issuer bid share buyback program for up to 26.8 million common shares.

First Quarter Fiscal 2027 Summary Results of Operations

The following table sets forth certain consolidated statements of operations data for the quarter ended May 31, 2026 compared to the quarter ended May 31, 2025 under U.S.

For the Three Months Ended

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

November 30, 2025 November 30, 2024 Change

May 31, 2026 May 31, 2025 Change

Revenue $ 152.9 $ 121.7 $ 31.2

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Operating expenses 104.4 88.3 16.1

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

Investment income, net 1.1 2.9 (1.8)

Income before income taxes 16.4 4.9 11.5

Provision for income taxes 7.9 3.0 4.9

Income from continuing operations 13.7 12.3 1.4

Loss from discontinued operations (1)

— (22.8) 22.8

Net income (loss) $ 13.7 $ (10.5) $ 24.2

Earnings (loss) per share - reported

Net income $ 8.5 $ 1.9 $ 6.6

Earnings per share - reported

Basic $ 0.01 $ 0.00

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______________________________

(1) Prior to the third quarter of fiscal 2025, the Company’s Secure Communications segment included the Company’s Cylance® cybersecurity solutions business and was reported as the Cybersecurity segment.

As a result of the Cylance sale in the fourth quarter of fiscal 2025, Cylance is no longer reported alongside UEM, SecuSuite and AtHoc as the Cybersecurity segment, and those three businesses are now reported separately from Cylance as the Secure Communications segment.

The financial results of Cylance are presented as “loss from discontinued operations, net of tax” in the Consolidated Statements of Operations and have been removed from the presentation of results from continuing operations.

Prior period comparatives have been recast to reflect this change.

(2) Diluted earnings (loss) per share on a U.S.

GAAP basis for the 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.

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

GAAP basis for the first quarter of fiscal 2027 and fiscal 2026 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 earnings per share on a U.S.

GAAP basis for the first quarter of fiscal 2027 and fiscal 2026 includes the dilutive effect of stock-based compensation.

See Note 7 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 segments for the three and nine months ended November 30, 2025 and November 30, 2024.

The following table shows information by operating segments for the three months ended May 31, 2026 and May 31, 2025.

The Company reports segment information in accordance with U.S.

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

For the three months ended May 31, 2026, the Company presented segment adjusted EBITDA results excluding amortization in segment research and development, segment sales and marketing and segment general and administrative to align to the operating expense presentation on the Consolidated Statement of Operations.

For purposes of comparability, the Company’s segment adjusted EBITDA for the three months ended May 31, 2025 has been updated to conform to the current year’s presentation.

See Note 10 to the Consolidated Financial Statements for a description of the Company’s operating segments.

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QNX Secure Communications Licensing

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

2025 2024 2025 2024 2025 2024

Segment revenue $ 68.7 $ 62.3 $ 6.4 $ 67.0 $ 74.6 $ (7.6) $ 6.1 $ 6.7 $ (0.6)

Segment cost of sales 11.3 8.9 2.4 18.6 20.3 (1.7) 1.5 1.5 —

Segment adjusted gross margin $ 57.4 $ 53.4 $ 4.0 $ 48.4 $ 54.3 $ (5.9) $ 4.6 $ 5.2 $ (0.6)

Segment research and development 16.9 15.7 1.2 11.4 11.1 0.3 — — —

Segment sales and marketing 15.2 11.6 3.6 12.4 11.1 1.3 — — —

Segment general and administrative 9.6 8.8 0.8 7.9 10.4 (2.5) 1.5 1.8 (0.3)

Less amortization included in the above 0.7 0.6 0.1 0.6 0.8 (0.2) 2.2 2.3 (0.1)

Segment adjusted EBITDA (1)

$ 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

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

May 31, Change May 31, Change May 31, Change

2026 2025 2026 2025 2026 2025

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Segment general and administrative 8.1 8.1 — 7.8 7.1 0.7 0.8 0.9 (0.1)

Less amortization included in the above 2.0 1.7 0.3 1.7 2.6 (0.9) 6.6 6.8 (0.2)

Less amortization included in segment cost of sales — — — 0.1 0.1 — 1.5 1.6 (0.1)

Segment adjusted EBITDA (1)

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(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.

Restructuring charges - Restructuring charges relate 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 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.

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

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Financial Highlights

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).

The Company h ad approximately $422.9 million in cash, cash equivalents and investments as of May 31, 2026 (February 28, 2026 - $432.4 million).

In the first quarter of fiscal 2027, the Company recognized revenue of $152.9 million and net income of $8.5 million, or $0.01 basic and diluted earnings per share, on a U.S.

GAAP basis (first quarter of fiscal 2026 - revenue of $121.7 million and net income of $1.9 million, or $0.00 basic and diluted earnings per share).

The Company recognized adjusted net income of $25.4 million , and adjusted basic earnings of $0.04 per share, on a non-GAAP basis in the first quarter of fiscal 2027 (first quarter of fiscal 2026 - adjusted net income of $10.8 million and adjusted basic 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 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).

On June 25, 2026, the Company announced financial results for the three months ended May 31, 2026, which included certain non-GAAP financial measures and non-GAAP ratios, including adjusted gross margin, adjusted gross margin percentage, adjusted operating expenses, adjusted net income, adjusted earnings 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 (usag e).

These non-GAAP financial measures and non-GAAP ratios 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.

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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The Company believes that these non-GAAP financial measures and non-GAAP ratios provide management, as well as readers of the Company’s financial statements, with a consistent basis for comparison across accounting periods and are useful in helping management and readers understand the Company’s operating results and underlying operational trends.

Beginning with the fiscal quarter ended May 31, 2026, the Company has included deferred share units revaluation adjustment as a non-GAAP adjustment and has applied this adjustment to comparative period.

Non-GAAP financial measures and non-GAAP ratios exclude certain amounts as described below:

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• Long-lived asset impairment charge.

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

The Company believes that long-lived asset impairment charges (“LLA impairment charge”) 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.

• Deferred share units revaluation adjustment .

The Company measures its deferred share units (“DSUs”) at fair value as liability-classified awards in accordance with U.S.

Each period, the fair value of the DSUs is remeasured and the resulting gain and loss from the change in fair value of these liability-classified awards are recognized in income.

The amount varies each period depending on changes in the Company’s share price, which is influenced by market factors in addition to Company performance.

This is not indicative of the Company’s core operating performance and may not be meaningful when comparing the Company’s operating performance against that of prior periods.

GAAP basis, the impacts of these items are reflected in the Company’s income statement.

However, the Company believes that the provision of supplemental non-GAAP measures allows investors to evaluate the financial performance of the Company’s business using the same evaluation measures that management uses, and is therefore a useful indication of the Company’s performance or expected performance of future operations and facilitates period-to-period comparison of operating performance.

However, the Company believes that the provision of supplemental non-GAAP measures allows investors to evaluate the financial performance of the

Company’s business using the same evaluation measures that management uses, and is therefore a useful indication of the Company’s performance or expected performance of future operations and facilitates period-to-period comparison of operating performance.

As a result, the Company considers it appropriate and reasonable to provide, in addition to U.S.

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Reconciliation of non-GAAP based measures with most directly comparable 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 based measures for the three months ended May 31, 2026 and May 31, 2025

Readers are cautioned that adjusted gross margin, adjusted gross margin percentage, adjusted operating expenses, adjusted net income, adjusted earnings 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 (usag e) 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 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

GAAP gross margin and gross margin percentage for the three months ended May 31, 2026 and May 31, 2025 to both adjuste d gross margin and adjusted gross margin percentage are reflected in the table below:

For the Three Months Ended (in millions) May 31, 2026 May 31, 2025

Gross margin $ 119.7 $ 90.3

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Reconciliation of U.S.

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

GAAP operating expenses for the thr ee months ended May 31, 2026 and May 31, 2025 to adjusted operating expenses is reflected in the table below:

For the Three Months Ended (in millions) May 31, 2026 May 31, 2025

Operating expenses $ 104.4 $ 88.3

Restructuring charges 0.3 2.9

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LLA impairment charge 0.1 0.1

Adjusted operating expense $ 85.4 $ 74.8 $ 79.7

Reconciliation of U.S.

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

$ 19.3 $ 16.8

Restructuring charges 6.1 6.4

Stock compensation expense 2.1 0.7

LLA impairment charge 0.6 0.5

Adjusted Corporate operating costs 10.5 9.2

Amortization 0.2 0.6

Adjusted Corporate operating costs excluding amortization $ 10.3 $ 8.6

Deferred share units revaluation adjustment 10.0 (1.5)

Adjusted operating expenses $ 88.0 $ 79.9

Reconciliation of U.S.

GAAP net income (loss) and U.S.

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

GAAP net income and U.S.

GAAP basic earnings per share for the three months ended May 31, 2026 and May 31, 2025 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) May 31, 2026 May 31, 2025

Basic earnings

per share Basic earnings (loss)

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

per share Basic earnings per share

Net income $ 8.5 $ 0.01 $ 1.9 $ 0.00

Restructuring charges 0.3 2.9

2 unchanged sentences

LLA impairment charge 0.1 0.1

Deferred share units revaluation adjustment 10.0 (1.5)

Adjusted net income $ 25.4 $ 0.04 $ 10.8 $ 0.02

Reconciliation of U.S.

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

GAAP research and development, sales and marketing, general and administrative, and amortization expense for the three months ended May 31, 2026 and May 31, 2025 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) May 31, 2026 May 31, 2025

Research and development $ 33.0 $ 25.0

7 unchanged sentences

Stock compensation expense 3.4 2.5

Deferred share units revaluation adjustment 10.0 (1.5)

Adjusted general and administrative expense $ 25.6 $ 26.6

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Adjusted amortization expense $ 2.5 $ 2.3

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) November 30, 2025 November 30, 2024

Operating income $ 11.9 $ 19.5

Non-GAAP adjustments to operating income

Restructuring charges 6.1 6.5

Stock compensation expense 6.1 4.8

Acquired intangibles amortization 0.3 1.8

LLA impairment charge 0.6 0.6

Total non-GAAP adjustments to operating income 13.1 13.7

Adjusted operating income 25.0 33.2

Amortization 4.0 6.1

Acquired intangibles amortization (0.3) (1.8)

Adjusted EBITDA $ 28.7 $ 37.5

Revenue $ 141.8 $ 143.6

Adjusted operating income margin % (1)

Adjusted EBITDA margin % (2)

______________________________

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

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

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 nine months ended November 30, 2025 and November 30, 2024.

A reconciliation of the most directly comparable U.S.

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

Stock compensation expense 1.6 2.0

Adjusted gross margin $ 298.4 $ 292.8

Gross margin % 75.5 % 74.0 %

Stock compensation expense 0.4 % 0.5 %

Adjusted gross margin % 75.9 % 74.5 %

Reconciliation of U.S.

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

Restructuring charges 12.4 14.7

Stock compensation expense 16.1 14.3

Acquired intangibles amortization 3.1 5.3

LLA impairment charge 1.2 4.7

Adjusted operating expense $ 238.6 $ 243.0

Reconciliation of U.S.

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

$ 50.5 $ 55.4

Restructuring charges 12.4 14.7

Stock compensation expense 6.1 3.0

LLA impairment charge 1.2 4.6

Adjusted Corporate operating costs 30.8 33.1

Amortization 0.9 2.2

Adjusted Corporate operating costs excluding amortization $ 29.9 $ 30.9

Reconciliation of U.S.

GAAP net income (loss) and U.S.

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

Net income (loss) $ 28.9 $ 0.05 $ (71.6) $ (0.12)

Restructuring charges 12.4 14.7

Stock compensation expense 17.7 21.3

Acquired intangibles amortization 3.1 25.7

LLA impairment charge 1.2 4.7

Adjusted net income (loss) $ 63.3 $ 0.11 $ (5.2) $ (0.01)

Reconciliation of U.S.

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

Stock compensation expense 4.1 4.1

Adjusted research and development expense $ 76.1 $ 81.5

Sales and marketing $ 82.4 $ 68.5

Stock compensation expense 3.9 2.1

Adjusted sales and marketing expense $ 78.5 $ 66.4

General and administrative $ 98.1 $ 109.5

Restructuring charges 12.4 14.7

Stock compensation expense 8.1 8.1

Adjusted general and administrative expense $ 77.6 $ 86.7

Amortization $ 9.5 $ 13.7

Acquired intangibles amortization 3.1 5.3

Adjusted amortization expense $ 6.4 $ 8.4

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

GAAP operating income to adjusted operating income, adjusted EBITDA, adjusted operating income margin percentage and adjusted EBITDA margin percentage for the three months ended May 31, 2026 and May 31, 2025 is reflected in the table below.

For the Three Months Ended (in millions) May 31, 2026 May 31, 2025

Operating income $ 15.3 $ 2.0

4 unchanged sentences

LLA impairment charge 0.1 0.1

Deferred share units revaluation adjustment 10.0 (1.5)

Total non-GAAP adjustments to operating income 16.9 8.9

9 unchanged sentences

(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, restructuring charges, stock compensation expenses and long-lived ass et impairment.

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

GAAP measures of segment profit or loss disclosed by the Company in the Consolidated Financial Statements from segment adjusted gross margin to segment adjusted EBITDA for the three months ended May 31, 2026 and May 31, 2025.

For the Three Months Ended

(in millions)

QNX Secure Communications Licensing

November 30, November 30, November 30,

May 31, May 31, May 31,

2026 2025 2026 2025 2026 2025

3 unchanged sentences

Segment general and administrative 8.1 8.1 7.8 7.1 0.8 0.9

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

Less amortization included in segment cost of sales — — 0.1 0.1 1.5 1.6

Segment adjusted EBITDA $ 19.3 $ 12.7 $ 20.2 $ 9.6 $ 6.2 $ 3.8

Free cash flow (usage)

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

1 unchanged sentence

Reconciliation of U.S.

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

GAAP n et cash provided by (used in) operating activities for the three months ended May 31, 2026 and May 31, 2025 to free cash flow (usage) is reflected in the table b elow:

For the Three Months Ended (in millions) May 31, 2026 May 31, 2025

Net cash provided by (used in) operating activities $ 4.6 $ (18.0)

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 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

Comparative breakdowns of certain key metrics for the three months ended or as at May 31, 2026 and May 31, 2025 are set forth below.

For the Three Months Ended (in millions) May 31, 2026 May 31, 2025 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 $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 ARR was approximately $220 million as at May 31, 2026 and increased compared to $218 million as at February 28, 2026 and $209 million as at May 31, 2025.

Secure Communications Dollar-Based Net Retention Rate

2 unchanged sentences

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

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

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

Secure Communications DBNRR was 92% as at May 31, 2026 and decreased compared to 94% as at February 28, 2026 and was consistent with 92% as at May 31, 2025.

Results of Operations - Three months ended May 31, 2026 compared to the three months ended May 31, 2025

Revenue by Segment

2 unchanged sentences

(in millions)

November 30, 2025 November 30, 2024 Change

May 31, 2026 May 31, 2025 Change

Revenue by Segment

8 unchanged sentences

100.0 % 100.0 %

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 increase in QNX revenue of $14.8 million was primarily due to an increase of $7.5 million in development license revenue, an increase of $4.2 million in royalty revenue, an increase of $1.5 million in BlackBerry Radar revenue and an increase of $1.2 million in professional services revenue.

The Company previously stated that it expected QNX revenue to be in the range of $60 million to $64 million in the first quarter of fiscal 2027.

QNX revenue in the first quarter of fiscal 2027 was $72.3 million due to stronger than expected royalty revenue.

The Company expects QNX revenue to be in the range of $70 million to $75 million in the second quarter of fiscal 2027.

The Company previously stated that it expected QNX revenue to be in the range of $290 million to $307 million in fiscal 2027 as a whole.

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

The Company now expects QNX revenue to be in the range of $295 million to $312 million in fiscal 2027 as a whole due to stronger than expected QNX revenue in the first quarter of fiscal 2027.

Secure Communications

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 $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 increase in Secure Communications revenue of $14.1 million was primarily due to an increase of $15.3 million in BlackBerry SecuSUITE product revenue, partially offset by a $0.8 million decrease in BlackBerry UEM product revenue.

The Company previously stated that it expected Secure Communications revenue to be in the range of $66 million to $70 million in the first quarter of fiscal 2027.

Secure Communications revenue in the first quarter of fiscal 2027 was $73.6 million due to stronger than expected BlackBerry SecuSUITE product revenue.

The Company expects Secure Communications revenue to be in the range of $57 million to $63 million in the second quarter of fiscal 2027.

The increase in Licensing revenue of $2.3 million w as primarily due to an increase 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 2027.

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.

Licensing revenue in the first quarter of fiscal 2027 was $7 million.

The Company now expects Licensing revenue to be approximately $10 million in the second quarter of fiscal 2027 due to improvement in the pipeline of direct licensing opportunities.

The Company previously stated that it expected Licensing revenue to be approximately $24 million for fiscal 2027 as a whole.

The Company now expects licensing revenue to be approximately $29 million for fiscal 2027 as a whole due to the reason noted above regarding the second quarter of fiscal 2027.

Total BlackBerry Revenue

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 approximately $132 million to $140 million in the first quarter of fiscal 2027.

Total BlackBerry revenue was $152.9 million in the first quarter of fiscal 2027, 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 $137 million to $148 million in the second quarter of fiscal 2027.

The Company previously stated that it expected total BlackBerry revenue to be in the range of $584 million to $611 million in fiscal 2027 as a whole.

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

Comparative breakdowns of the geographic regions are set forth in the following table:

The Company now expects total BlackBerry revenue to be in the range of $594 million to $621 million in fiscal 2027 as a whole due to stronger than expected QNX revenue in the first quarter of fiscal 2027 and the stronger than expected Licensing revenue for fiscal 2027 as a whole.

GAAP Revenue by Geography

Comparative breakdowns of the geographic regions on a U.S.

GAAP basis are set forth in the following table:

For the Three Months Ended

(in millions)

November 30, 2025 November 30, 2024 Change

May 31, 2026 May 31, 2025 Change

Revenue by Geography

9 unchanged sentences

North America 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.

The increase in North America revenue of $19.0 million was primarily due to an increase of $17.6 million in BlackBerry SecuSUITE product revenue, an increase of $2.3 million in Licensing revenue and an increase of $1.7 million in BlackBerry Radar revenue, partially offset by a decrease of $2.8 million in BlackBerry UEM product revenue and a decrease of $0.5 million in QNX development license revenue.

Europe, Middle East and Africa 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.

The increase in Europe, Middle East and Africa revenue of $2.0 million was primarily due to an increase of $1.8 million in BlackBerry UEM product revenue, an increase of $0.7 million in QNX development license revenue and an increase of $0.3 million in professional services revenue, partially offset by a decrease of $1.2 million relating to BlackBerry SecuSUITE product revenue.

Other Regions 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.

The increase in Other regions revenue of $10.2 million was primarily due to an increase of $7.3 million in QNX development license revenue and an increase of $3.7 million in QNX royalty revenue, partially offset by a decrease of $0.5 million in professional services revenue.

Consolidated Gross Margin

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 increased by $29.4 million to approximately $119.7 million in the first quarter of fiscal 2027 (first quarter of fiscal 2026 - $90.3 million).

The increase was primarily due to an increase in revenue from QNX and BlackBerry SecuSUITE software licenses due to the reasons discussed above in “Revenue by Segment”.

Consolidated Gross Margin Percentage

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.

Consolidated gross margin percentage increased by 4.1% to approximately 78.3% of consolidated revenue in the first quarter of fiscal 2027 (first quarter of fiscal 2026 -74.2%).

The increase was primarily due to a change in mix, specifically a higher relative gross margin contributions from QNX and BlackBerry SecuSUITE software licenses.

Adjusted Gross Margin and Adjusted EBITDA by Segment

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

See “First Quarter Fiscal 2027 Summary Results of Operations” for information about the Company’s operating segments and the basis of operating segment results.

For the Three Months Ended

1 unchanged sentence

QNX Secure Communications Licensing

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

May 31, Change May 31, Change May 31, Change

2026 2025 2026 2025 2026 2025

6 unchanged sentences

Segment general and administrative 8.1 8.1 — 7.8 7.1 0.7 0.8 0.9 (0.1)

Less amortization included in the above 0.7 0.6 0.1 0.6 0.8 (0.2) 2.2 2.3 (0.1)

Less amortization included in segment cost of sales — — — 0.1 0.1 — 1.5 1.6 (0.1)

Segment adjusted EBITDA $ 19.3 $ 12.7 $ 6.6 $ 20.2 $ 9.6 $ 10.6 $ 6.2 $ 3.8 $ 2.4

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 $67 million to $73 million in fiscal 2026 as a whole.

The increase in QNX segment adjusted gross margin of $15.6 million was primarily due to the reasons discussed above in “Revenue by Segment”.

The increase in QNX segment adjusted gross margin percentage of 5% was primarily due to a change in mix, specifically an increased gross margin contribution from development license revenue .

The increase in QNX segment adjusted EBITDA of $6.6 million was primarily due to the reasons discussed above in “Revenue by Segment”, partially offset by a decrease in benefits from claims filed by QNX with the Ministry of Innovation, Science and Economic Development Canada relating to its Strategic Innovation Fund (“SIF”) filed in the first quarter of fiscal 2026 which did not recur and an increase in salaries and benefits expense.

The Company previously stated that it expected QNX segment adjusted EBITDA to be in the range of $4 million to $8 million in the first quarter of fiscal 2027.

QNX segment adjusted EBITDA was $19.3 million in the first quarter of fiscal 2027 due to revenue exceeding previously provided guidance for the reasons described above in “Revenue by Segment”.

The Company expects QNX segment adjusted EBITDA to be in the range of $16 million to $21 million in the second quarter of fiscal 2027.

The Company previously stated that it expected QNX segment adjusted EBITDA to be in the range of $69 million to $81 million in fiscal 2027 as a whole.

The Company now expects QNX segment adjusted EBITDA to be in the range of $74 million to $86 million in fiscal 2027 as a whole due to stronger than expected QNX revenue in the first quarter of fiscal 2027.

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 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 $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.

The increase in Secure Communications segment adjusted gross margin of $11.4 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 SecuSUITE hardware devices.

The increase in Secure Communications segment adjusted gross margin percentage of 2% was primarily due to a change in mix, specifically an increase in gross margin contribution from BlackBerry SecuSUITE software licenses, partially offset by a decrease in gross margin contribution from BlackBerry AtHoc.

The increase in Secure Communications segment adjusted EBITDA of $10.6 million was primarily due to an increase in revenue due to the reasons discussed above in “Revenue by Segment” and a decrease in salaries and benefits expense, partially offset by an increase in provision for expected credit losses.

The Company previously stated that it expected Secure Communications segment adjusted EBITDA to be in the range of $14 million to $18 million in the first quarter of fiscal 2027.

Secure Communications segment adjusted EBITDA was $20.2 million in the first quarter of fiscal 2027 due to revenue exceeding previously provided guidance for the reasons described above in “Revenue by Segment”.

The Company expects Secure Communications segment adjusted EBITDA to be in the range of $5 million to $10 million in the second quarter of fiscal 2027.

The increase in Licensing segment adjusted gross margin of $2.4 million was primarily due to the reasons discussed above in “Revenue by Segment”.

The increase in Licensing segment adjusted gross margin percentage of 13% was due to the same reasons discussed above.

The increase in Licensing segment adjusted EBITDA of $2.4 million was primarily due to the reasons discussed above in “Revenue by Segment”.

The Company previously stated that it expected Licensing segment adjusted EBITDA to be approximately $5 million in each of the four quarters of fiscal 2027.

Licensing segment adjusted EBITDA was $6.2 million in the first quarter of fiscal 2027.

The Company now expects the Licensing segment adjusted EBITDA to be approximately $9 million in the second quarter of fiscal 2027 for the reason described above in “Revenue by Segment”.

The Company previously stated that it expected Licensing segment adjusted EBITDA to be approximately $20 million for fiscal 2027 as a whole.

The Company now expects Licensing segment adjusted EBITDA to be approximately $25 million for fiscal 2027 as a whole for the reason described above in “Revenue by Segment”.

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 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.

The table below presents a comparison of research and development, sales and marketing, general and administrative, and amortization expenses for the quarter ended May 31, 2026, compared to the quarter ended May 31, 2025.

For the Three Months Ended

(in millions)

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

May 31, 2026 May 31, 2025 Change

Revenue $ 152.9 $ 121.7 $ 31.2

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

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

GAAP-based measures to adjusted measures for the three months ended May 31, 2026 and May 31, 2025.

GAAP Operating Expenses

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.

Operating expenses increased by $16.1 million y ear-over-year, or 18.2%, in the first quarter of fiscal 2027, compared to the first quarter of fiscal 2026 primarily due to an increase of $11.5 million in deferred share unit cost s, a benefit of $4.5 million from SIF claims filed in the first quarter of fiscal 2026 which did not recur, an increase of $1.6 million in legal costs and an increase of $1.4 million in variable incentive plan costs, partially offset by a decrease of $2.6 million in restructuring costs and a d ecrease of $1.5 million in amortization expense.

Adjusted Operating Expenses

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 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.

Adjusted operating expenses increased by $8.1 million year-over-year, or 10.1%, to $88.0 million in the first quarter of fiscal 2027, compared to $79.9 million in the first quarter of fiscal 2026.

The increase was primarily due to a benefit of $4.5 million from SIF claims filed in the first quarter of fiscal 2026 which did n ot recur, an increase of $1.6 million in legal costs and an increase of $1.4 million in variable incentive plan costs.

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 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.

Research and development expenses increased by $8.0 million, or 32.0%, in the first quarter of fiscal 2027 compared to the first quarter of fiscal 2026 primarily due to a benefit of $4.5 million from SIF claims filed in the first quarter of fiscal 2026 which did n ot recur, an increase of $1.6 million in salaries and benefits expense, an increase of $0.9 million in variable incentive plan costs and an increase of $0.4 million in infrastructure costs.

Adjusted research and development expenses increased by $7.8 million, or 32.9%, to $31.5 million in the first quarter of fiscal 2027 compared to $23.7 million in the first quarter of fiscal 2026, 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 $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.

Sales and marketing expenses increased by $0.8 million, or 2.8%, in the first quarter of fiscal 2027 compared to the first quarter of fiscal 2026, primarily due to an increase of $0.3 million in consulting costs, an increase of $0.2 million in sales incentive plan costs and an increase of $0.2 million in salaries and benefits expense , partially offset by a decrease of $0.3 million in stock compensation expense .

Adjusted sales and marketing expenses increased by $1.1 million, or 4.0%, to $28.4 million in the first quarter of fiscal 2027 compared to $27.3 million in the first quarter of fiscal 2026, primarily due to an increase of $0.3 million in consulting costs, an increase of $0.2 million in sales incentive plan costs and an increase of $0.2 million in salaries and benefits expense.

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 $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.

General and administrative expenses increased by $8.8 million, or 28.9%, in the first quarter of fiscal 2027 compared to the first quarter of fiscal 2026.

The increase was primarily due to an increase of $11.5 million in deferred share unit costs and an increase of $1.7 million in legal expenses, partially offset by a decrease of $2.6 million in restructuring costs, a decrease of $2.6 million in salaries and benefits expense.

Adjusted general and administrative expenses decreased b y $1.0 million, or 3.8%, to $25.6 million in the first quarter of fiscal 2027 compared to $26.6 million in the first quarter of fiscal 2026.

The decrease was primarily due to a decrease of $2.6 million in salaries and benefits expense, partially offset by an increase of $1.7 million in legal expense.

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 November 30, 2025 compared to the quarter ended November 30, 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 May 31, 2026 compared to the quarter ended May 31, 2025.

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

2 unchanged sentences

Included in Operating Expense

November 30, 2025 November 30, 2024 Change

May 31, 2026 May 31, 2025 Change

Property, plant and equipment $ 1.8 $ 1.4 $ 0.4

2 unchanged sentences

Included in Cost of Sales

November 30, 2025 November 30, 2024 Change

May 31, 2026 May 31, 2025 Change

Property, plant and equipment $ 0.1 $ 0.1 $ —

3 unchanged sentences

The decrease in amortization expense included in operating expense of $1.5 million was 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.

Adjusted amortization expense increased by $0.2 million to $2.5 million in the first quarter of fiscal 2027 compared to $2.3 million in the first quarter of fiscal 2026.

Amortization included in Cost of Sales

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.

The decrease in amortization expense relating to certain intangible assets employed in the Company’s licensing operations was $0.1 million in the first quarter of fiscal 2027 primarily due to the lower cost base of assets.

Investment Income, Net

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%).

Investment income, net, which includes the interest expense from the Notes (as defined in “Financial Condition - Debt Financing and Other Funding Sources”), was $1.1 million in the first quarter of fiscal 2027 and decreased by $1.8 million from

investment income, net of $2.9 million in the first quarter of fiscal 2026.

The decrease in investment income, net is primarily due to a decrease in interest income on significant financing components within certain revenue contracts with customers, an impairment on non-marketable equity investments without readily determinable fair value and lower return on cash and investments.

For the first quarter of fiscal 2027, the Company’s net effective income tax expense rate was approximately 48% (first quarter of fiscal 2026 - net effective income tax expense rate of approximately 61%).

in particular, any change in loss carry forwards or research and development credits, amongst other items, was offset by a corresponding adjustment of the valuation allowance.

A future release of the valuation allowance would result in a material non-cash income tax benefit in the consolidated statement of operations and the recognition of deferred tax assets in the consolidated balance sheets.

The Company’s net effective income tax rate also reflects the geographic mix of earnings in jurisdictions with different income tax rates.

Net Income (Loss)

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 Company’s net income for the first quarter of fiscal 2027 was $8.5 million, or $0.01 basic and diluted earnings per share on a U.S.

GAAP basis (first quarter of fiscal 2026 - net income of $1.9 million, or $0.00 basic and diluted earning per share).

The period over period change of $6.6 million was primarily due to an increase in revenue, as described above in “Revenue by Segment” and an increase in gross margin percentage, as described above in “ Consolidated Gross Margin Percentage ”, partially offset by an increase in operating expenses, as described above in “Operating Expenses”.

Adjusted net income was $25.4 million in the first quarter of fiscal 2027, or $0.04 adjusted basic earnings per share ( first quarter of fiscal 2026 - adjusted net income of $10.8 million, or $0.02 adjusted basic earnings per share).

The increase in adjusted net income of $14.6 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 $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 $14 million to $22 million in the first quarter of fiscal 2027.

Adjusted EBITDA was $36.3 million in the first quarter of fiscal 2027 primarily due to QNX and Secure Communication 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 non-GAAP EPS to be in the range of $0.02 to $0.03 in the first quarter of fiscal 2027.

Non-GAAP EPS was $0.04 in the first quarter of fiscal 2027 primarily due to QNX exceeding the top end of its 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 breakeven to $10 million in the first quarter of fiscal 2027.

Operating cash flow was $4.6 million in the first quarter of fiscal 2027.

The Company expects adjusted EBITDA to be in the range of $20 million to $30 million in the second quarter of fiscal 2027.

The Company previously stated that it expected adjusted EBITDA to be in the range of $110 million to $130 million in fiscal 2027 as a whole.

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 $0.14 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.

The Company now expects adjusted EBITDA to be in the range of $119 million to $139 million in fiscal 2027 as a whole due to QNX exceeding the top end of its expected adjusted EBITDA range and the stronger than expected Licensing segment adjusted EBITDA, each as 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 $0.04 per share in the second quarter of fiscal 2027.

The Company previously stated that it expected non-GAAP EPS to be in the range of $0.15 to $0.19 in fiscal 2027 as a whole.

The Company now expects non-GAAP EPS to be in the range of $0.16 to $0.20 in fiscal 2027 as a whole for the reasons discussed above regarding adjusted EBITDA.

The Company expects operating cash flow to be in the range of breakeven to $10 million in the second quarter of fiscal 2027.

The Company does not provide a reconciliation of expected adjusted EBITDA and expected non-GAAP basic EPS for the second quarter of fiscal year 2027, an d for fiscal 2027 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, impairment charges and DSU revaluation adjustment 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 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).

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 November 30, 2025.

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)

November 30, 2025 November 30, 2024 Change

Revenue $ 393.1 $ 393.2 $ (0.1)

Gross margin 296.8 290.8 6.0

Operating expenses 271.4 282.0 (10.6)

Investment income, net 7.7 6.1 1.6

Income before income taxes 33.1 14.9 18.2

Provision for income taxes 4.2 15.6 (11.4)

Income (loss) from continuing operations 28.9 (0.7) 29.6

Loss from discontinued operations — (70.9) 70.9

Net income (loss) $ 28.9 $ (71.6) $ 100.5

Earnings (loss) per share - reported

Basic $ 0.05 $ (0.12) $ 0.17

Diluted $ 0.05 $ (0.12) $ 0.17

Weighted-average number of shares outstanding (000’s)

Basic 593,386 590,537

598,054 590,537

______________________________

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

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 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.

Revenue by Segment

Comparative breakdowns of revenue by segment are set forth below.

For the Nine Months Ended

(in millions)

November 30, 2025 November 30, 2024 Change

Revenue by Segment

QNX $ 189.3 $ 170.2 $ 19.1

Secure Communications 186.4 205.3 (18.9)

Licensing 17.4 17.7 (0.3)

$ 393.1 $ 393.2 $ (0.1)

% Revenue by Segment

QNX 48.2 % 43.3 %

Secure Communications 47.4 % 52.2 %

Licensing 4.4 % 4.5 %

100.0 % 100.0 %

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 $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

Comparative breakdowns of the geographic regions on a U.S.

GAAP basis are set forth in the following table:

For the Nine Months Ended

(in millions)

November 30, 2025 November 30, 2024 Change

Revenue by Geography

North America $ 181.6 $ 176.9 $ 4.7

Europe, Middle East and Africa 133.1 140.8 (7.7)

Other regions 78.4 75.5 2.9

$ 393.1 $ 393.2 $ (0.1)

% Revenue by Geography

North America 46.2 % 45.0 %

Europe, Middle East and Africa 33.9 % 35.8 %

Other regions 19.9 % 19.2 %

100.0 % 100.0 %

North America 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 $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 $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 $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 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 “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

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

2025 2024 2025 2024 2025 2024

Segment revenue $ 189.3 $ 170.2 $ 19.1 $ 186.4 $ 205.3 $ (18.9) $ 17.4 $ 17.7 $ (0.3)

Segment cost of sales 33.2 27.7 5.5 56.9 68.2 (11.3) 4.6 4.5 0.1

Segment adjusted gross margin $ 156.1 $ 142.5 $ 13.6 $ 129.5 $ 137.1 $ (7.6) $ 12.8 $ 13.2 $ (0.4)

Segment adjusted gross margin % 82 % 84 % (2 %) 69 % 67 % 2 % 74 % 75 % (1 %)

Segment research and development 42.5 46.8 (4.3) 33.8 35.1 (1.3) — — —

Segment sales and marketing 39.3 32.1 7.2 38.1 34.4 3.7 — — —

Segment general and administrative 26.7 25.4 1.3 22.7 30.5 (7.8) 4.7 5.6 (0.9)

Less amortization included in the above 2.0 1.7 0.3 1.7 2.6 (0.9) 6.6 6.8 (0.2)

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 $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

The decrease of Secure Communications adjusted gross margin of $7.6 million was primarily due to the reasons discussed above in “Revenue by Segment”.

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 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 nine months ended November 30, 2025, compared to the nine months ended November 30, 2024.

For the Nine Months Ended

(in millions)

November 30, 2025 November 30, 2024 Change

Revenue $ 393.1 $ 393.2 $ (0.1)

Operating expenses

Research and development 80.2 85.6 (5.4)

Sales and marketing 82.4 68.5 13.9

General and administrative 98.1 109.5 (11.4)

Amortization 9.5 13.7 (4.2)

Impairment of long-lived assets 1.2 4.7 (3.5)

Total $ 271.4 $ 282.0 $ (10.6)

Operating Expense as % of Revenue

Research and development 20.4 % 21.8 %

Sales and marketing 21.0 % 17.4 %

General and administrative 25.0 % 27.8 %

Amortization 2.4 % 3.5 %

Impairment of long-lived assets 0.3 % 1.2 %

Total 69.0 % 71.7 %

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

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 $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 $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 $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.

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 $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 $11.4 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 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 Nine Months Ended

(in millions)

Included in Operating Expense

November 30, 2025 November 30, 2024 Change

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

Intangible assets 5.6 8.0 (2.4)

Total $ 9.5 $ 13.7 $ (4.2)

Included in Cost of Sales

November 30, 2025 November 30, 2024 Change

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

Intangible assets 4.6 4.5 0.1

Total $ 4.8 $ 4.9 $ (0.1)

Amortization included in Operating Expense

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 $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 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 (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.

The Company’s net effective income tax rate also reflects the geographic mix of earnings in jurisdictions with different income tax rates.

Net Income (loss)

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 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.

The weighted average number of shares outstanding was 586.7 million common shares for basic earnings per share and 593.2 million common shares for diluted earnings per share for the first quarter of fiscal 2027 (first quarter of fiscal 2026 - 596.3 million common shares for basic earnings per share and 600.8 million common shares for diluted earnings per share).

The weighted average number of shares outstanding includes the cumulative effects of share repurchases pursuant to the NCIB share buyback program during the quarter ended May 31, 2026.

Financial Condition

Liquidity and Capital Resources

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.

Cash, cash equivalents, and investments decreased by $9.5 million to $422.9 million as at May 31, 2026 from $432.4 million as at February 28, 2026, primarily due to repurchases of common shares of $10.0 million pursuant to the 2025 NCIB share buyback program.

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

(in millions)

November 30, 2025 February 28, 2025 Change

May 31, 2026 February 28, 2026 Change

Cash and cash equivalents $ 256.8 $ 274.7 $ (17.9)

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______________________________

(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.

(1) Includes investments in privately-held companies, including common shares of Arctic Wolf Networks, Inc.

(“Arctic Wolf”) that were received as partial consideration for the sale of its Cylance endpoint security assets and liabilities to Arctic Wolf in the fourth quarter of fiscal 2025.

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.

1 unchanged sentence

(in millions)

November 30, 2025 February 28, 2025 Change

May 31, 2026 February 28, 2026 Change

Current assets $ 560.4 $ 568.2 $ (7.8)

2 unchanged sentences

Current Assets

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 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.

The decrease in current assets of $7.8 million at the end of the first quarter of fiscal 2027 from the end of the fourth quarter of fiscal 2026 was primarily due to a decrease of $17.9 million in cash and cash equivalents, a decrease of $2.0 million in other receivables, a decrease of $1.3 million in other current assets, and a decrease of $0.1 million in income taxes receivable, partially offset by an increase of $8.9 million in short term investments and an increase of $4.6 million in accounts receivable, net of allowance.

At May 31, 2026, other receivables were $5.5 million, a decrease of $2.0 million from February 28, 2026.

The decrease was primarily due to a decrease of $1.9 million in sales taxes receivable.

At May 31, 2026, other current assets were $40.9 million, a decrease of $1.3 million from February 28, 2026.

The decrease was primarily due to a decrease of $1.6 million in prepaid insurance, a decrease of $1.2 million in prepaid professional services, a decrease of $1.2 million in deferred commissions, a decrease of $1.0 in prepaid rent and a decrease of $0.9 million in prepaid sales conference, partially offset by an increase of $3.4 million in inventory and an increase of $1.9 million in prepaid software.

At May 31, 2026, income taxes receivable were $2.5 million, a decrease of $0.1 million from February 28, 2026.

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

At May 31, 2026, accounts receivable, net of allowance was $160.6 million, an increase of $4.6 million from February 28, 2026.

The increase was prim arily due to an increase in days sales outstanding to 95 days at the end of t he first quarter of fiscal 2027 from 88 days at the end of the fourth quarter of fiscal 2026.

Current Liabilities

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

For the Nine Months Ended

The decrease in current liabilities of $13.0 million at the end of the first quarter of 2027 from the end of the fourth quarter of fiscal 2026 was primarily due to a decrease of $17.0 million in deferred revenue, current, a decrease of $12.7 million in accrued liabilities, partially offset by an increase of $10.8 million in accounts payable and an increase of $5.9 million in income taxes payable.

Deferred revenue, current was $121.5 million, which reflects a decrease of $17.0 million compared to February 28, 2026 that was attributable to a decrease of $7.3 million in deferred revenue, current related to BlackBerry UEM, a decrease of $7.2 million in deferred revenue, current related to BlackBerry AtHoc product revenue and a decrease of $2.2 million in deferred revenue, current related to QNX.

Accrued liabilities were $99.0 million at the end of the first quarter of 2027, reflecting a decrease of $12.7 million compared to February 28, 2026, w hich was primarily due to a decrease of $27.7 million in variable incentive plan accrual and a decrease of $2.8 million in restructuring cost accruals, partially offset by an increase of $10.6 million in deferred share unit liability, an increase of $2.8 million in payroll accruals a nd an increase of $2.5 million in operating lease liability, current.

Accounts payable were $16.3 million, reflecting an increase of $10.8 million from February 28, 2026, which was primarily due to the timing of payments.

Income taxes payable were $18.3 million, reflecting an increase of $5.9 million from February 28, 2026, which was primarily due to changes in the quarterly tax provision and tax payments.

Cash flows for the three months ended May 31, 2026 compared to the three months ended May 31, 2025 were as follows:

For the Three Months Ended

(in millions)

November 30, 2025 November 30, 2024 Change

May 31, 2026 May 31, 2025 Change

Net cash flows provided by (used in):

7 unchanged sentences

Investing Activities

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.

During the three months ended May 31, 2026, cash flows used in investing activities were $13.5 million and included cash used in acquisition of short-term investments, net of the proceeds on sale or maturity of short-term investments transactions, in the amount of $9.0 million, acquisition of property, plant and equipment of $2.9 million and the acquisition of intangible assets of $1.6 million.

For the same period in the prior fiscal year, cash flows provided by investing activities were $38.5 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 $40.6 million , offset by cash used i n the acquisition of intangible assets of $1.2 million, the acquisition of property, plant and equipment $0.9 million.

Financing Activities

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

During the three months ended May 31, 2026, cash used in financing activities was $8.7 million, primarily due to repurchases of common shares of $10.0 million pursuant to the 2025 NCIB share buyback program , offset by $1.3 million in common shares issued upon the exercise of stock options and under the employee share purchase plan.

During the three months ended May 31, 2026, the Company repurchased 2.6 million common shares at a cost of $10.0 million.

See Note 6 to the Consolidated Financial Statements for further information on the Company’s 2025 NCIB share buyback program.

Debt Financing and Other Funding Sources

See Note 5 to the Consolidated Financial Statements for a description of the Company’s $200 million aggregate principal amount of 3.00% senior convertible unsecured notes issued in January 2024 (the “Notes”).

During the second calendar quarter of 2026, the conditions permitting holders of the Notes to convert their Notes were satisfied, as, for at least 20 trading days (whether or not consecutive) within the 30 consecutive trading-day period ending on the last trading day of the immediately preceding quarter, the last reported sale price of the Company’s common shares was greater than or equal to 130% of the applicable conversion price on each such trading day.

Accordingly, the Notes are eligible for conversion, at the option of the holders, from July 1, 2026 through September 30, 2026.

Upon receipt of a conversion request, the Company will settle its

conversion obligation, at its election, in cash, common shares, or a combination of cash and common shares, in accordance with the terms and conditions set forth in the indenture.

The Company has $14.2 million in collateralized outstanding letters of credit in support of certain leasing arrangements entered into in the ordinary course of business.

See Note 2 to the Consolidated Financial Statements for further information concerning the Company’s restricted cash.

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

Cash, cash equivalents, and investments were $422.9 million as at May 31, 2026.

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 November 30, 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 May 31, 2026:

(in millions)

5 unchanged sentences

Total $ 324.7 $ 81.1 $ 243.6

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.

Total contractual and other obligations as at May 31, 2026 increased by $7.6 million as compared to the February 28, 2026 balance of $317.1 million, which was attributable to an increase in operating lease obligations, partially offset by a decrease in purchase obligations and commitments.

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

Accounting Policies and Critical Accounting Estimates

There have been no changes to the Company’s accounting policies or critical accounting estimates from those described under “Accounting Policies and Critical Accounting Estimates” in the Annual MD&A.

Valuation Allowance Against Deferred Tax Assets

The Company regularly assesses the need for a valuation allowance against its deferred tax assets.

A valuation allowance is required for deferred tax assets if it is more likely than not that all or some portion of the asset will not be realized.

All available evidence, both positive and negative, that may affect the realization of deferred tax assets must be identified and considered in determining the appropriate amount of the valuation allowance.

The Company has recently generated cumulative pre-tax income in certain jurisdictions and continues to evaluate whether sufficient positive evidence exists to support the realization of its deferred tax assets.

This evaluation is performed on a jurisdiction-by-jurisdiction basis, and the conclusions reached may vary based on the sustainability of earnings in each jurisdiction.

Based on recent operating results and current forecasts, it is reasonably possible that the Company’s assessment of the realizability of its deferred tax assets may change in a future period, including within the current fiscal year, as additional positive evidence becomes available in relation to the realizability of deferred tax assets.

Such a change could result in the release of a significant portion of the Company’s valuation allowance, which could have a material impact on income tax expense in the period of release.

Additionally, for interim periods, the estimated annual effective tax rate should include the valuation allowance for current year changes in temporary differences and losses or income arising during the year.

For interim periods, the Company needs to consider the valuation allowance that it expects to recognize at the end of the fiscal year as part of the estimated annual effective tax rate.

During interim quarters, the Company uses estimates including pre-tax results and ending position of temporary differences as at the end of the fiscal year to estimate the valuation allowance that it expects to recognize at the end of the fiscal year.

This accounting treatment has no effect on the Company’s actual ability to utilize deferred tax assets to reduce future cash tax payments.

Different judgments could yield different results.

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