Can Momentum in QNX Unit Fuel BlackBerry's Top-Line Growth?

BlackBerry Limited's BB QNX business, formed by rebranding its IoT unit, is benefiting from strength in the automotive segment, particularly strong demand for its solutions across the advanced driver assistance systems market and digital cockpit domain. Continued design win momentum is anticipated to further strengthen the QNX royalty backlog.
The increasing adoption of the next-generation version of the QNX operating system, Software Development Platform (SDP) 8.0 (across aerospace, medical equipment, rail and defence verticals), as well as the release of the QNX General Embedded Development Platform, are aiding it. It supports modern platforms (ARMv9, RISC-V, multicore CPUs) and development tools and includes QNX Hypervisor 2.2 for mixed-criticality virtualization.
Recently, BlackBerry's QNX announced that its SDP 8.0 will serve as the base OS for the Eclipse Foundation's Safe Open Vehicle Core (S-CORE) Project, supporting faster, cost-effective development of Software Defined Vehicles and marking a key step toward a common, safety-critical automotive platform. In May 2025, BlackBerry's QNX unit launched QNX Hypervisor 8.0, a virtualization tool built on SDP 8.0 to simplify complex embedded software development. It enables multiple OSes—like Android, Linux and QNX—to run securely on a single SoC via a microkernel architecture, offering virtualized memory, CPUs, devices and system isolation.
Growing momentum in QNX Cabin with multi-year deal wins from the top 10 global auto OEMs further cushions its prospects. Despite delays in automotive software development, QNX's royalty backlog grew year over year to about $865 million. This shows that QNX is adding future royalty revenue faster than it is being recognized, which BlackBerry sees as a strong sign of the business's long-term health.
QNX is a leading brand in the automotive sector, and BlackBerry is increasingly leveraging its strength as a key driver for top-line growth for fiscal 2026 and beyond. For the QNX business, revenues are expected to be in the range of $51-$55 million in the first quarter of fiscal 2026.
However, the company anticipates a sequential fall in the revenues from the QNX business, which totaled $65.8 million during the fourth quarter of fiscal 2025. Volatility in the automotive sector remains concerning. Management, on the last earnings call, highlighted that due to recent tariff changes, especially on automotive goods, BlackBerry is currently unsure how this will affect its business. While it does not expect a direct impact on products and services, there may be indirect effects on its customers, such as supply chain disruptions and changes in demand.
Alphabet Inc.'s GOOG Android Automotive OS (AAOS), launched in 2017, is a full-stack OS running directly on vehicle hardware, with services like Google Maps, Assistant and Play Store. It powers vehicles from Volvo, GM, Ford, Renault-Nissan, Stellantis, BMW and others. BMW adopted AAOS for OS8, and Ford plans to shift over half its fleet to it. According to S&P Global's report, AAOS will reach approximately 18% market share by 2027, while QNX falls to around 5%. Though AAOS lacks real-time and safety certifications, it excels in infotainment and app integration, often requiring a separate RTOS for critical systems.
Wind River, owned by Aptiv PLC APTV, offers VxWorks (a real-time OS), Wind River Linux and Wind River Studio (cloud-based development/IoT platform). VxWorks is a mature RTOS certified for ISO 26262 ASIL-D, widely used in avionics and some automotive domains (particularly ADAS and autonomous platforms). Wind River has collaborated with Elektrobit to demo a software-defined vehicle controller. It's among the few RTOSes supporting OCI containers for edge deployments. While its automotive market share is smaller than BlackBerry QNX's, it's widely deployed in mission-critical systems. Wind River partners with AWS, NXP, Intel and Tier-1 suppliers, focusing on software-defined vehicles and IoT. Recent efforts include deeper integration with Elektrobit and AWS to advance autonomous vehicle development and edge-to-cloud solutions.
Shares of BB have gained 87.8% in the past year compared with the Zacks Internet – Software industry's growth of 37.3%.
Image Source: Zacks Investment Research
From a valuation standpoint, BB trades at a forward price-to-sales of 4.79X, lower than the industry's average of 5.67X.
Image Source: Zacks Investment Research
BB currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
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This article originally published on Zacks Investment Research (zacks.com).
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