BlackBerry's latest financial report is out, and tonight it has surged to become the most handsome player in the market. Let's talk in detail. 1. Overall financial performance 1) The total revenue of 1QFY2027 was $152.9 million (+26% YoY, up from $121.7 million). Significantly exceeding market expectations. EPS 0.04 USD (year-on-year increase from 0.02 USD; exceeding expectations). 2) Operating cash flow of $4.6 million is the first positive Q1 quarter in 9 years. The significant increase in revenue, significant improvement in profitability, and positive cash flow indicate a successful transformation. 2. Performance of each business segment 1) QNX (Core Growth Engine) generated revenue of $72.3 million (+26% YoY, from $57.5 million). Record breaking growth is mainly driven by software defined vehicles (SDVs) and embedded systems. Both development seats and royalties contribute. cooperative partner: Including automotive OEMs such as Mercedes Benz, BMW, Leapmotor (D19 SUV), etc; Collaborating with NVIDIA to promote security critical edge AI (robotics, medical, industrial systems); Launching QNX OS for Safety 8.0; TKMS is used for Canadian submarine projects, etc. 2) Secure Communications revenue: $73.6 million (+24% YoY, from $59.5 million). Highlight: Driven by the demand for digital sovereignty solutions and increased defense budgets. FedRAMP Class D re authentication (AtHoc crisis communication); Cooperate with The IP Company for naval/military communications, etc. 3) Licensing: Revenue: $7 million (an increase of $2.3 million year-on-year, from $4.7 million). Small but high profit sectors, mainly patent licensing, etc. Summary of various businesses: QNX and Secure Communications contribute the vast majority of revenue and growth, both with high growth and high profit margins, while Licensing provides an additional profit buffer. The overall expansion of gross profit margin and EBITDA profit margin indicates an improvement in operational leverage and pricing ability. 3. Backlog and visibility 1) The QNX Royalty Backlog (royalty backlog orders) has a backlog of approximately $950 million. The Q1 FY2027 financial report has not been separately updated, but the company emphasizes that it "continues to add far more than P&L confirmed amounts" and provides visibility into long-term growth over multiple years. This is BlackBerry's most critical leading indicator, representing future royalty revenue that has been signed but not yet confirmed. 2) Secure Communications ARR: $220 million (continued growth, DBNRR 92% shows high customer retention). Overall visibility: Backlogged orders+recycling ARR provide a powerful future revenue pipeline. The QNX backlog growth far exceeds the confirmed revenue, indicating design wins and strong pipeline. The automotive SDV adopts acceleration+non automotive embedded expansion to further support long-term growth. Backlogged orders are one of the core supports for BlackBerry's valuation 4. Future outlook, strategy, and guidance FY2027 full year guidance (ending on February 28, 2027): 594-621 million US dollars (an increase of approximately 8-13% compared to FY2026's 549.1 million US dollars). Adjusted basic EPS: 0.16-0.20 USD (excluding potential future repurchase impact). How to read this financial report: 1) BlackBerry has fully transformed into a software and network security company, with its core businesses being QNX (real-time operating system, primarily used for automotive software defined vehicle SDVs and embedded systems) and Secure Communications (secure communication, including government/defense grade security solutions). Expanding from traditional automobiles to fields such as physical AI, robotics, industrial automation, and healthcare, diversification reduces reliance on a single automotive cycle. 2) The financial report shows that the company continues its strong momentum, with revenue, profitability, and cash flow all exceeding expectations. The gross profit margin continues to expand, and both QNX and Secure Communications have reached the "Rule of 40" (revenue year-on-year growth%+adjusted EBITDA profit margin% ≥ 40) 3) Strategic focus (commented by CEO John J. Giamatteo): QNX: Consolidate the leadership position of automotive SDV (multi-year opportunities such as Alloy Kore platform) and accelerate expansion into general embedded markets (physical AI, robotics, industrial, medical). NVIDIA and other partners strengthen edge AI positioning. Secure Communications: Seize the increase in defense budget and the demand for digital sovereignty to expand government/critical infrastructure businesses. The foundation is stronger than ever before, and QNX's potential in vehicles and embedded systems is enhanced. The company has shifted from a transition period to a growth period, and both core businesses have achieved "Rule of 40" business sustainability. Strategic expansion into AI/embedded and high-value areas of national defense. Overall, BlackBerry's Q1 FY2027 financial report was very impressive: revenue exceeded expectations, profits strengthened, cash flow improved, gross profit margin expanded, and both core businesses achieved high-quality growth. The transformation has achieved significant results, transforming from a former mobile phone giant to a high margin software/network security company. Last weekend, we also talked about how BlackBerry is emerging from the pains of transformation and entering a more stable growth phase. My overall personal judgment of BlackBerry has not changed since early May The previous deep collaboration with Nvidia has further opened up the huge market for Physical AI for BlackBerry. It strengthens BB's transformation from a "mobile phone company" to a "security software company," with the goal of making QNX the "invisible security foundation" in AI driven robots/industrial/medical devices