Blackberry (BB)

Consolidated Balance Sheets as of August 31, 2026 (unaudited) and February 28, 20265 Consolidated Statements of Shareholders' Equity - Three and Six Months Ended August 31, 2026 and 2025 (unaudited)7 Consolidated Statements of Operations - Three and Six Months Ended August 31, 2026 and 2025 (unaudited)8 Consolidated Statements of Comprehensive Income (Loss) - Three and Six Months Ended August 31, 2026 and 2025 (unaudited)9 Consolidated Statements of Cash Flows - Six Months Ended August 31, 2026 and 2025 (unaudited)10 Notes to the Consolidated Financial Statements11 Item 2Management's Discussion and Analysis of Financial Condition and Results of Operations30 Item 3Quantitative and Qualitative Disclosures about Market Risk59 Item 4Controls and Procedures60 PART IIOTHER INFORMATION Item 1Legal Proceedings60 Unregistered Sales of Equity Securities and Use of Proceeds60 Item 5Other Information60 Item 6Exhibits60 Signatures62 3 Unless the context otherwise requires, all references to the Company and BlackBerry include BlackBerry Limited and its subsidiaries. PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS 4 BlackBerry Limited Incorporated under the Laws of Ontario (United States dollars, in millions) (unaudited) Consolidated Balance Sheets As at August 31, 2026February 28, 2026 Assets Current Cash and cash equivalents (note 2)$266.2 $274.7 Short-term investments (note 2)111.3 85.2 Accounts receivable, net of allowance of $1.3 and $1.0, respectively (note 3) 141.0 156.0 Other receivables (note 3)4.5 7.5 2.4 2.6 Other current assets (note 3)36.5 42.2 568.2 Restricted cash equivalents (note 2)14.1 14.2 Long-term investments (note 2)55.5 58.3 Other long-term assets (note 3)73.8 56.3 22.6 16.7 Property, plant and equipment, net (note 3)12.2 12.3 Intangible assets, net (note 3)44.9 40.1 Goodwill (note 3)478.0 479.1 1,263.0 $1,245.2 Liabilities Current Accounts payable $8.6 $5.5 Accrued liabilities (note 3)101.5 111.7 Income taxes payable (note 4)9.8 12.4 116.6 138.5 268.1 Deferred revenue, non-current (note 10)11.8 14.1 Operating lease liabilities23.9 18.8 Other long-term liabilities2.1 1.7 Long-term notes (note 5)197.1 196.5 499.2 Commitments and contingencies (note 9) Shareholders equity Capital stock and additional paid-in capital Preferred shares: authorized unlimited number of non-voting, cumulative, redeemable and retractable Common shares: authorized unlimited number of non-voting, redeemable, retractable Class A common shares and unlimited number of voting common shares Issued and outstanding - 587,032,279 voting common shares (February 28, 2026 - 587,431,120) 2,926.8 2,924.4 Deficit(2,121.9)(2,167.2) Accumulated other comprehensive loss (note 8)(13.3)(11.2) 791.6 746.0 $1,263.0 $1,245.2 See notes to consolidated financial statements. On behalf of the Board: John GiamatteoLisa Disbrow DirectorDirector 5 BlackBerry Limited (United States dollars, in millions) (unaudited) Consolidated Statements of Shareholders Equity Three Months Ended August 31, 2026 Capital Stock and Additional Paid-in CapitalDeficitAccumulated Other Comprehensive LossTotal Balance as at May 31, 2026$2,919.3 $(2,155.8)$(12.8)$750.7 Net income 33.9 33.9 Other comprehensive loss (0.5)(0.5) Stock-based compensation7.5 7.5 $2,926.8 $(2,121.9)$(13.3)$791.6 Three Months Ended August 31, 2025 Capital Stock and Additional Paid-in CapitalDeficitAccumulated Other Comprehensive LossTotal Balance as at May 31, 2025$2,970.5 $(2,232.6)$(12.8)$725.1 Net income 13.3 13.3 Other comprehensive income 0.8 0.8 Stock-based compensation5.9 5.9 Share repurchase(25.1)5.1 (20.0) $2,951.3 $(2,214.2)$(12.0)$725.1 See notes to consolidated financial statements. 6 BlackBerry Limited (United States dollars, in millions) (unaudited) Consolidated Statements of Shareholders Equity Six Months Ended August 31, 2026 Capital Stock and Additional Paid-in CapitalDeficitAccumulated Other Comprehensive LossTotal Balance as at February 28, 2026$2,924.4 $(2,167.2)$(11.2)$746.0 Net income 42.4 42.4 Other comprehensive loss (2.1)(2.1) Stock-based compensation (note 6)14.0 14.0 Share repurchase (note 6)(12.9)2.9 (10.0) Shares issued: 1.3 1.3 Balance as at August 31, 2026$2,926.8 $(2,121.9)$(13.3)$791.6 Six Months Ended August 31, 2025 Capital Stock and Additional Paid-in CapitalDeficitAccumulated Other Comprehensive LossTotal Balance as at February 28, 2025$2,976.4 $(2,237.3)$(19.2)$719.9 Net income 15.2 15.2 Other comprehensive income 7.2 7.2 Stock-based compensation 11.6 11.6 Share repurchase(37.9)7.9 (30.0) Shares issued: 1.2 1.2 Balance as at August 31, 2025$2,951.3 $(2,214.2)$(12.0)$725.1 See notes to consolidated financial statements. 7 BlackBerry Limited (United States dollars, in millions, except per share data) (unaudited) Consolidated Statements of Operations Three Months EndedSix Months Ended August 31, 2026August 31, 2025August 31, 2026August 31, 2025 Revenue (note 10)$163.3 $129.6 $316.2 $251.3 Cost of sales36.2 33.0 69.4 64.4 127.1 96.6 246.8 186.9 Operating expenses Research and development33.2 25.6 66.2 50.6 Sales and marketing25.3 24.4 54.8 53.1 General and administrative31.8 31.5 71.1 62.0 Amortization2.5 3.1 5.0 7.1 0.7 0.5 0.8 0.6 85.1 197.9 173.4 Operating income33.6 11.5 48.9 13.5 Investment income, net (note 2 and note 5)1.6 1.9 2.7 4.8 Income before income tax35.2 13.4 51.6 18.3 Provision for income taxes (note 4)1.3 0.1 9.2 3.1 $33.9 $13.3 $42.4 $15.2 Basic$0.06 $0.02 $0.07 $0.03 $0.05 $0.02 $0.07 $0.03 Six Months Ended August 31, 2026August 31, 2025August 31, 2026August 31, 2025 Net income$33.9 $13.3 $42.4 $15.2 Other comprehensive income (loss) Net change in unrealized losses on available-for-sale debt securities (note 8) (0.1) Net change in fair value and amounts reclassified to net income from derivative instruments designated as cash flow hedges during the period, net of income taxes of nil for the three and six months ended August 31, 2026 and August 31, 2025 (note 8)0.1 (0.2)(0.4)2.2 (0.6)1.0 (1.6)5.0 (0.5)0.8 (2.1)7.2 Comprehensive income$33.4 $14.1 $40.3 $22.4 See notes to consolidated financial statements. 9 BlackBerry Limited (United States dollars, in millions) (unaudited) Consolidated Statements of Cash Flows Six Months Ended August 31, 2026August 31, 2025 Cash flows from operating activities $42.4 $15.2 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Amortization8.2 10.3 14.0 11.6 0.8 0.6 (6.7) (0.8)(5.7) Other2.4 (0.3) Net changes in working capital items Accounts receivable, net of allowance15.0 48.7 Other receivables5.3 (0.3) 0.2 (1.0) Other assets(13.1)16.0 Accounts payable3.8 (27.1) Accrued liabilities(10.8)(38.5) Income taxes payable(2.6)(11.7) Deferred revenue(24.2)(31.9) Net cash provided by (used in) operating activities33.9 (14.1) 0.1 Acquisition of property, plant and equipment(4.1)(1.7) (3.0)(2.6) (174.9)(34.7) 148.8 91.7 (33.2)52.8 Cash flows from financing activities Issuance of common shares (note 6)1.3 1.2 (10.0)(30.0) (8.7)(28.8) Effect of foreign exchange gain (loss) on cash, cash equivalents, and restricted cash equivalents(0.6)0.4 Net increase (decrease) in cash, cash equivalents, and restricted cash equivalents during the period(8.6)10.3 Cash, cash equivalents, and restricted cash equivalents, beginning of period288.9 280.3 Cash, cash equivalents, and restricted cash equivalents, end of period$280.3 $290.6 See notes to consolidated financial statements. 10 BlackBerry Limited Notes to the Consolidated Financial Statements In millions of United States dollars, except share and per share data, and except as otherwise indicated (unaudited) 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND CRITICAL ACCOUNTING ESTIMATES Basis of Presentation and Preparation These interim consolidated financial statements have been prepared by management in accordance with United States generally accepted accounting principles ( U.S. GAAP ). They do not include all the disclosures required by U.S. GAAP for annual financial statements and should be read in conjunction with the audited consolidated financial statements of BlackBerry Limited (the Company ) for the year ended February 28, 2026 (the Annual Financial Statements ), which have been prepared in accordance with U.S. GAAP. In the opinion of management, all normal recurring adjustments considered necessary for fair presentation have been included in these interim consolidated financial statements. Operating results for the three and six months ended August 31, 2026 are not necessarily indicative of the results that may be expected for the full year ending February 28, 2027. The consolidated balance sheets as at February 28, 2026 were derived from the audited Annual Financial Statements but do not contain all of the footnote disclosures from the Annual Financial Statements. The preparation of the consolidated financial statements requires management to make estimates and assumptions with respect to the reported amounts of assets, liabilities, revenue and expenses and the disclosure of contingent liabilities. Actual results could differ from these estimates and any such differences may be material to the Company s consolidated financial statements. Certain of the comparative figures have been reclassified to conform to the current year s presentation. The Company is organized and managed as three reportable operating segments: QNX, Secure Communications, and Licensing, as further discussed in Note 10. Significant Accounting Policies and Critical Accounting Estimates There have been no material changes to the Company s accounting policies or critical accounting estimates from those described in the Annual Financial Statements, with the exception of the below updates: Revenue recognition Non-cash consideration received is measured at fair value at contract inception. The estimated fair value is determined utilizing multiple valuation techniques, principally a discounted cash flow model and a market-based approach. Key inputs and assumptions include forecasted cash flows over a projection period and a discount rate applied to those cash 11 BlackBerry Limited Notes to the Consolidated Financial Statements In millions of United States dollars, except share and per share data, and except as otherwise indicated (unaudited) flows and the market-based approach relies on valuation multiples and quoted prices derived from comparable transactions. Significant judgments in revenue recognition Judgment is required to determine the fair value of non-cash consideration at contract inception. The Company engages an independent third-party valuation specialist to assist in this determination of the fair value of non-cash consideration. Accounting Standards Adopted During Fiscal 2027 In July 2025, the FASB issued ASU 2025-05 to amend the guidance in Financial Instruments Credit Losses (Topic 326). The amendment provides guidance for entities that elect to apply the practical expedient when estimating expected credit losses on current accounts receivable and current contract assets arising from transactions under Topic 606, including those assets acquired in a transaction accounted for under Topic 805, business combinations. Under the practical expedient, entities assume that current conditions as of the balance sheet date do not change for the remaining life of the asset. ASU 2025-05 is effective for fiscal years beginning after December 15, 2025, including interim periods within those fiscal years. The Company adopted ASU 2025-05 in the first quarter of fiscal 2027 and has elected to apply the practical expedient prospectively. The adoption of this guidance did not have, and is not expected to have, a material impact on the Company s consolidated financial statements. Accounting Pronouncements Not Yet Adopted In November 2024, the FASB issued ASU 2024-03 to amend the codification on Expense Disaggregation Disclosure (Subtopic 220-40): Income Statement - Reporting Comprehensive Income . The standard requires additional disclosure on specific expense categories included in the expense captions presented on the statements of operations. The guidance is effective for annual periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. The Company will adopt this guidance in fiscal 2028 and is in process of evaluating the new requirements. The Company expects the adoption of this guidance to result in additional disaggregation and disclosure of certain expenses within the existing expense captions in the consolidated statements of operations and does not expect any impact on its results of operations or consolidated financial position. In November 2025, the FASB issued ASU 2025-09 to amend the guidance in Derivatives and Hedging (Topic 815). The update provides targeted improvements intended to enhance the application of hedge accounting, including expanded eligibility of forecasted transactions, additional flexibility in measuring hedge effectiveness, and clarifications related to hedging non-financial items. The guidance is effective for fiscal years beginning after December 15, 2026, including interim periods within those fiscal years. The Company will adopt this guidance in fiscal 2028 and does not expect the guidance to have a material impact on its results of operations, financial position and disclosures. In December 2025, the FASB issued ASU 2025-10 to amend the guidance in Government Grants (Topic 832). The update provides recognition, measurement, presentation, and disclosure requirements for government grants, including guidance for grants related to an asset and grants related to income. The amendments introduce two permitted approaches for asset-related grants: a deferred income approach or a cost accumulation approach. The guidance is effective for fiscal years beginning after December 15, 2028, including interim periods within those fiscal years. The Company will adopt this guidance in fiscal 2030 and has not yet determined the impact on its results of operations, financial position and disclosures. 2. FAIR VALUE MEASUREMENTS, CASH, CASH EQUIVALENTS AND INVESTMENTS Fair Value The Company defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use in pricing the asset or liability, such as inherent risk, non-performance risk and credit risk. The Company applies the following fair value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value into three levels: Level 1 - Unadjusted quoted prices at the measurement date for identical assets or liabilities in active markets. 12 BlackBerry Limited Notes to the Consolidated Financial Statements In millions of United States dollars, except share and per share data, and except as otherwise indicated (unaudited) Level 2 - Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. Level 3 - Significant unobservable inputs that are supported by little or no market activity. The fair value hierarchy also requires the Company to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The Company s cash and cash equivalents, accounts receivable, other receivables, accounts payable and accrued liabilities are carried at amounts that approximate their fair values (Level 2 measurement) due to their short maturities. Recurring Fair Value Measurements In determining the fair value of investments, the Company primarily relies on an independent third-party valuator for the fair valuation of securities. The Company also reviews the inputs used in the valuation process and assesses the pricing of the securities for reasonableness after conducting its own internal collection of quoted prices from brokers. Fair values for all investment categories provided by the independent third-party valuator that are in excess of 0.5% from the fair values determined by the Company are communicated to the independent third-party valuator for consideration of reasonableness. The independent third-party valuator considers the information provided by the Company before determining whether a change in their original pricing is warranted. When the Company concludes that there is a significant financing component included within a contract with a customer due to timing differences between the fulfillment of certain performance obligations and the receipt of payment for those performance obligations, the Company determines the present value of the future consideration utilizing the discount rate that would be reflected in a separate financing transaction between the customer and the Company at contract inception based upon the credit characteristics of the customer receiving financing in the contract. Non-Recurring Fair Value Measurements Upon the occurrence of certain events, the Company re-measures the fair value of non-marketable equity investments for which it utilizes the measurement alternative, and long-lived assets, including property, plant and equipment, operating lease ROU assets, intangible assets and goodwill if an impairment or observable price adjustment is recognized in the current period. Non-Marketable Equity Investments Measured Using the Measurement Alternative Non-marketable equity investments measured using the measurement alternative include investments in privately-held companies without readily determinable fair values in which the Company does not own a controlling interest or have significant influence. Investments in privately-held companies are recorded at fair value on a non-recurring basis. The fair values of non-marketable equity investments are classified as Level 3 when the Company estimates fair value using significant unobservable inputs, such as when the investment is remeasured due to impairment or observable price changes in the equity of an investee resulting from an orderly transaction for identical or similar investments of the same issuer. Impairment of Long-Lived Assets During the three and six months ended August 31, 2026, the Company recorded a pre-tax and after-tax impairment charge of $0.7 million and $0.8 million, respectively, relating to operating lease right-of-use ( ROU ) assets and property, plant and equipment associated with exiting certain leased facilities (three and six months ended August 31, 2025 - $0.5 million and $0.6 million, respectively). The impairment was determined by comparing the fair value of the impacted long-lived assets to the carrying value of the asset as of the impairment measurement date, as required under ASC Topic 360, Property, Plant, and Equipment, using Level 3 inputs. The fair value of the ROU asset was based on the estimated sublease income for certain facilities taking into consideration the estimated time period it will take to obtain a sublessor, the applicable discount rate and the sublease rate, which are considered unobservable inputs. The Company conducts an evaluation of the related liabilities and expenses and revises its assumptions and estimates as appropriate as new or updated information becomes available. The fair value measurement of ROU impaired assets is classified as Level 3 of the fair value hierarchy. 13 BlackBerry Limited Notes to the Consolidated Financial Statements In millions of United States dollars, except share and per share data, and except as otherwise indicated (unaudited) Cash, Cash Equivalents and Investments The components of cash, cash equivalents, restricted cash equivalents and investments by fair value level and balance sheet classification as at August 31, 2026 were as follows: Unrealized GainsUnrealized LossesCash and Cash EquivalentsShort-term InvestmentsLong-term InvestmentsRestricted Cash Equivalents$111.8 $ $ 111.8 $111.8 $ $ $ 48.8 6.7 55.5 6.7 111.8 55.5 59.6 30.1 20.0 9.5 18.4 18.4 147.1 (0.1)72.4 70.0 4.6 44.1 33.5 10.6 10.7 10.7 (0.1)154.4 111.3 14.1 440.5 $6.7 $(0.1)447.1 $266.2 $111.3 $55.5 $14.1 Unrealized GainsUnrealized LossesCash and Cash EquivalentsShort-term InvestmentsLong-term InvestmentsRestricted Cash Equivalents$168.6 $ $ 168.6 $168.6 $ $ $ 51.5 2.4 (1.2) 52.7 2.4 (1.2)168.6 52.7 49.7 20.1 20.0 9.6 24.9 11.0 13.9 93.2 37.3 51.3 4.6 24.4 24.4 13.3 13.3 106.1 85.2 14.2 1.3 4.3 5.6 426.9 $6.7 $(1.2)432.4 $274.7 $85.2 $58.3 $14.2 August 31, 2026February 28, 2026 Cash and cash equivalents$266.2 $274.7 Restricted cash equivalents14.1 14.2 Total cash, cash equivalents and restricted cash equivalents presented in the consolidated statements of cash flows$280.3 $288.9 The contractual maturities of available-for-sale investments as at August 31, 2026 and February 28, 2026 were as follows: Fair ValueFair Value$279.9 $279.8 205.5 $205.5 $6.6 (2.4)(0.8)3.4 0.2 (0.1)$3.5 August 31, 2026February 28, 2026 Cost BlackBerry operations and other information technology$79.1 $78.0 Leasehold improvements and other13.2 12.9 Furniture and fixtures4.4 4.8 Research and development equipment2.7 2.5 99.4 98.2 Accumulated amortization and impairment87.2 85.9 Net book value$12.2 $12.3 Intangible Assets, Net Intangible assets comprised the following: As at August 31, 2026 CostAccumulated Amortization and ImpairmentNet Book Value Acquired technology$29.8 $29.8 $ Other acquired intangibles40.4 40.4 Intellectual property112.1 67.2 44.9 $182.3 $137.4 $44.9 As at February 28, 2026 CostAccumulated Amortization and ImpairmentNet Book Value Acquired technology$29.8 $29.8 $ Other acquired intangibles40.4 40.4 Intellectual property105.3 65.2 40.1 $175.5 $135.4 $40.1 For the six months ended August 31, 2026, amortization expense related to intangible assets amounted to $4.6 million (six months ended August 31, 2025 - $7.6 million). For the six months ended August 31, 2026, the Company held acquired technology and other acquired intangibles that were fully amortized but still in use. Total additions to intangible assets for the six months ended August 31, 2026 amounted to $9.5 million (six months ended August 31, 2025 - $2.6 million). During the six months ended August 31, 2026, additions to intangible assets primarily consisted of patents received as non-cash consideration under a contract with a customer and payments for intellectual property relating to patent maintenance and registration fees. 17 BlackBerry Limited Notes to the Consolidated Financial Statements In millions of United States dollars, except share and per share data, and except as otherwise indicated (unaudited) Based on the carrying value of the identified intangible assets as at August 31, 2026, and assuming no subsequent impairment of the underlying assets, the annual amortization expense for the remainder of fiscal 2027 and each of the five succeeding years is expected to be as follows: fiscal 2027 - $4.7 million; fiscal 2028 - $7.8 million; fiscal 2029 - $6.1 million; fiscal 2030 - $5.3 million; fiscal 2031 - $4.5 million and fiscal 2032 - $3.7 million. Goodwill Changes to the carrying amount of goodwill during the six months ended August 31, 2026 and fiscal year ended February 28, 2026 were as follows: Carrying Amount Carrying amount as at February 28, 2025$472.4 6.7 Carrying amount as at February 28, 2026479.1 (1.1) Carrying amount as at August 31, 2026$478.0 Other Long-term Assets As at August 31, 2026 and February 28, 2026, other long-term assets included long-term receivables related to intellectual property sold, Secure Communication contracts and minimum royalty commitments from QNX customers and the long-term portion of deferred commissions, among other items, none of which were greater than 5% of the total assets balance. Accrued Liabilities Accrued liabilities is comprised of the following: As at August 31, 2026February 28, 2026 Variable incentive accrual$20.3 $36.5 Deferred share unit liability (1) 15.6 6.0 12.3 9.7 Other53.3 59.5 $101.5 $111.7 ______________________________ (1) The Company has a Deferred Share Unit Plan under which each independent director is credited with Deferred Share Units ( DSUs ) in satisfaction of all or a portion of the cash fees otherwise payable to them for serving as a director of the Company. DSUs are accounted for as liability-classified awards and are awarded on a quarterly basis. These awards are measured at their fair value on the date of issuance and remeasured at each reporting period until settlement. Other accrued liabilities include the accrued current portion of the operating lease liability, the current portion of the restructuring programs, accrued vendor liabilities, and payroll withholding taxes, among other items, none of which were greater than 5% of the current liabilities balance in any of the periods presented. Restructuring During fiscal 2025 and fiscal 2024, the Company commenced restructuring programs with the objective of reducing its annual costs and expenses. Other charges and cash costs may occur as programs are implemented or changes are completed. 18 BlackBerry Limited Notes to the Consolidated Financial Statements In millions of United States dollars, except share and per share data, and except as otherwise indicated (unaudited) The following table sets forth the activity in the Company s restructuring program liabilities: Facilities and Other Charges $7.1 3.3 Charges incurred11.9 3.8 Cash payments made(12.7)(5.1) Balance as at February 28, 20266.3 2.0 Charges incurred2.8 0.2 Cash payments made(6.9)(0.3) Balance as at August 31, 2026 $2.2 $1.9 4.1 $2.2 $0.2 2.4 Long-term portion 1.7 $2.2 $1.9 4.1 The long-term portion of the restructuring liabilities is recorded by measuring the remaining payments at present value using an effective interest rate of 6.0%, and the Company recorded interest expense over time to arrive at the total face value of the remaining payments. The restructuring charges included employee termination benefits, facilities and other charges primarily associated with system transformation to streamline corporate functions into QNX and Secure Communications. Total charges incurred for the three and six months ended August 31, 2026 were $2.7 million and $3.0 million, respectively, recorded within General and administrative on the Consolidated Statements of Operations (three and six months ended August 31, 2025 - $3.4 million and $6.3 million). 19 BlackBerry Limited Notes to the Consolidated Financial Statements In millions of United States dollars, except share and per share data, and except as otherwise indicated (unaudited) 4. INCOME TAXES For the six months ended August 31, 2026, the Company s net effective income tax expense rate was approximately 18% compared to a net effective income tax expense rate of 17% for the six months ended August 31, 2025. The Company s income tax rate reflects the change in unrecognized income tax benefit, if any, and the fact that the Company has a significant valuation allowance against its deferred income tax assets; in particular, any change in loss carry forwards or research and development credits, amongst other items, is 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. The Company records a valuation allowance to reduce deferred income tax assets to the amount that is more likely than not to be realized. The Company assesses the need for a valuation allowance on its deferred tax assets each reporting period. In assessing the realizability of deferred tax assets, the Company considers both positive and negative evidence, to determine whether, based upon the weight of that evidence, it is more likely than not that the Company s deferred tax assets will not be realized and a valuation allowance is required. This assessment involves significant judgment, particularly with respect to the relative impact of such evidence. 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 profits 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 of $1,512.8 million in Canada and the United States, which could have a material impact on income tax expense in the period of release. The Company s total unrecognized income tax benefits as at August 31, 2026 were $19.8 million (February 28, 2026 - $19.7 million). As at August 31, 2026, $19.7 million of the unrecognized income tax benefits have been netted against deferred income tax assets and $0.1 million has been recorded within income taxes payable on the Company s consolidated balance sheets. The Company is subject to ongoing examination by tax authorities in certain jurisdictions in which it operates. The Company regularly assesses the status of these examinations and the potential for adverse outcomes to determine the adequacy of the provision for income taxes as well as the provisions for indirect and other taxes and related penalties and interest. While the final resolution of audits is uncertain, the Company believes the ultimate resolution of these audits will not have a material adverse effect on its consolidated financial position, liquidity or results of operations. 5. LONG-TERM NOTES On January 29, 2024, the Company issued $200.0 million aggregate principal amount of 3.00% senior convertible unsecured notes (the Notes ) in an offering to qualified institutional buyers in accordance with Rule 144A under the Securities Act of 1933, as amended. The Notes are due on February 15, 2029 unless earlier converted, redeemed, or repurchased. Each $1,000 principal amount of the Notes is convertible into 257.5826 common shares of the Company based on the initial conversion rate, for a total of 51.5 million common shares at a price of $3.88 per share, subject to adjustments. Covenants associated with the Notes include general corporate maintenance, existence and reporting requirements. The Notes bear interest at a rate of 3.00% per annum, payable semi-annually in arrears on February 15 and August 15 of each year, beginning on August 15, 2024. Prior to the close of business on the business day immediately preceding November 15, 2028, the Notes will be convertible only upon satisfaction of specified conditions, including the trading price of the Company s common shares. The trading price condition is met during any calendar quarter commencing after March 31, 2024, if 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 calendar 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. Satisfaction of the condition, allows the holders to convert their Notes in the subsequent calendar quarter. On and after November 15, 2028, the Notes may be converted at any time until the close of business on the second scheduled trading day immediately preceding February 15, 2029, regardless of the foregoing conditions. The Company may satisfy any conversions of the Notes by paying or 20 BlackBerry Limited Notes to the Consolidated Financial Statements In millions of United States dollars, except share and per share data, and except as otherwise indicated (unaudited) delivering, as the case may be, cash, its common shares or a combination of cash and its common shares, at the Company s election (or, in the case of any Notes called for redemption that are converted during the related redemption period, solely its common shares). The closing price of the Company s common shares exceeded 130% of the conversion price for at least 20 trading days within a period of 30 consecutive trading days ending on June 30, 2026, permitting holders to convert their Notes for a period beginning July 1, 2026 and ending September 30, 2026. No holders converted their Notes during the three months ended August 31, 2026. Subsequent to the end of the quarter the contingent condition was again satisfied on September 16, 2026. Accordingly, the Notes will continue to be eligible for conversion, at the option of the holders, from October 1, 2026 through December 31, 2026. The Company recorded the Notes, including the debt itself and all embedded derivatives, at cost less debt issuance costs of $6.0 million and presents the Notes as a single hybrid financial instrument. Debt issuance costs related to the Notes have been recorded as a direct deduction from the face amount of the Notes and are amortized using the effective interest method. No portion of the embedded derivatives required bifurcation from the host debt contract. The following table summarizes the change in the Notes for the six months ended August 31, 2026: $196.5 0.6 $197.1 Stock Outstanding (000s)Amount Common shares outstanding as at February 28, 2026587,431 $2,924.4 1,788 Stock-based compensation 14.0 400 1.3 Share repurchase(2,587)(12.9) Common shares outstanding as at August 31, 2026587,032 $2,926.8 The Company had 587 million voting common shares outstanding, 18.9 million restricted share units ( RSUs ) and 1.9 million deferred share units ( DSUs ) outstanding as at September 21, 2026. In addition, 51.5 million common shares are issuable upon conversion in full of the Notes as described in Note 5. On May 8, 2025, the Company received acceptance from the Toronto Stock Exchange ( TSX ) with respect to a normal course issuer bid ( 2025 NCIB ) share buyback program to purchase for cancellation up to 27.9 million common shares of the Company, or approximately 4.7% of the outstanding public float as of May 5, 2025. The 2025 NCIB share buyback program commenced on May 12, 2025, and expired on May 11, 2026. On May 8, 2026, the Company received acceptance from the TSX for the renewal of its normal course issuer bid ( 2026 NCIB ) share buyback program. The 2026 NCIB share buyback program allows for the repurchase of up to 26.8 million of the Company s common shares, representing approximately 4.58% of the outstanding public float as of April 30, 2026. The 2026 NCIB share buyback program commenced on May 12, 2026, and will expire on May 11, 2027, such date as the Company may determine, or the date on which the maximum number of common shares that may be purchased under the 21 BlackBerry Limited Notes to the Consolidated Financial Statements In millions of United States dollars, except share and per share data, and except as otherwise indicated (unaudited) 2026 NCIB share buyback program has been reached. The Company is not obligated to repurchase any common shares under the 2026 NCIB share buyback program. During the six months ended August 31, 2026, the Company repurchased 2.6 million common shares, at a cost of $10.0 million. All shares were repurchased under the 2025 NCIB share buyback program. The Company recorded a reduction of $12.9 million to capital stock and the amount paid below the per share paid-in capital of the common shares of $2.9 million was recorded to deficit. All common shares repurchased by the Company pursuant to the 2025 NCIB share buyback program have been canceled. 7. EARNINGS PER SHARE The following table sets forth the computation of basic and diluted earnings per share: Three Months EndedSix Months Ended August 31, 2026August 31, 2025August 31, 2026August 31, 2025 Net income for basic and diluted earnings per share available to common shareholders$33.9 $13.3 $42.4 $15.2 1.8 3.6 $ Adjusted income for diluted earnings per share available to common shareholders$35.7 $13.3 $46.0 $15.2 Weighted average number of shares outstanding (000 s) - basic586,627 592,938 586,684 594,624 Effect of dilutive securities (000 s) Stock-based compensation (1) 11,482 4,431 9,311 4,073 51,546 51,546 Weighted average number of shares and assumed conversions (000 s) diluted649,655 597,369 647,541 598,697 Earnings per share - reported Basic$0.06 $0.02 $0.07 $0.03 $0.05 $0.02 $0.07 $0.03 Six Months Ended August 31, 2026August 31, 2025August 31, 2026August 31, 2025 Available-for-Sale Debt Securities Balance, beginning of period$(0.1)$ $ $ Other comprehensive loss before reclassification (0.1) Accumulated net unrealized loss on available-for-sale debt securities$(0.1)$ $(0.1)$ Cash Flow Hedges Balance, beginning of period$(0.2)$0.5 $0.3 $(1.9) Other comprehensive income (loss) before reclassification(0.3)(0.1)(0.8)1.9 Amounts reclassified from AOCL into net income0.4 (0.1)0.4 0.3 Accumulated net unrealized income (loss) on derivative instruments designated as cash flow hedges$(0.1)$0.3 $(0.1)$0.3 Foreign Currency Cumulative Translation Adjustment Balance, beginning of period$(11.9)$(12.7)$(10.9)$(16.7) Other comprehensive income (loss)(0.6)1.0 (1.6)5.0 Foreign currency cumulative translation adjustment$(12.5)$(11.7)$(12.5)$(11.7) Actuarial losses associated with other post-employment benefit obligations$(0.6)$(0.6)$(0.6)$(0.6) Accumulated Other Comprehensive Loss, End of Period$(13.3)$(12.0)$(13.3)$(12.0) 9. COMMITMENTS AND CONTINGENCIES (a)Letters of Credit The Company had $14.1 million in collateralized outstanding letters of credit in support of certain leasing arrangements entered into in the ordinary course of business as of August 31, 2026. The Company has posted a performance bond as collateral to support a government contract for the term of the agreement. See the discussion of restricted cash equivalents in Note 2. (b)Contingencies Litigation The Company is involved in litigation in the normal course of its business, both as a defendant and as a plaintiff. The Company is subject to a variety of claims (including claims related to patent infringement, purported class actions and other claims in the normal course of business) and may be subject to additional claims either directly or through indemnities against claims that it provides to certain of its partners and customers. In particular, the industry in which the Company competes has many participants that own, or claim to own, intellectual property, including participants that have been issued patents and may have filed patent applications or may obtain additional patents and proprietary rights for technologies similar to those used by the Company in its products. The Company has received, and may receive in the future, assertions and claims from third parties that the Company s products infringe on their patents or other intellectual property rights. Litigation has been, and will likely continue to be, necessary to determine the scope, enforceability and validity of third-party proprietary rights or to establish the Company s proprietary rights. Regardless of whether claims 23 BlackBerry Limited Notes to the Consolidated Financial Statements In millions of United States dollars, except share and per share data, and except as otherwise indicated (unaudited) against the Company have merit, those claims could be time-consuming to evaluate and defend, result in costly litigation, divert management s attention and resources and subject the Company to significant liabilities. Management reviews all of the relevant facts for each claim and applies judgment in evaluating the likelihood and, if applicable, the amount of any potential loss. Where a potential loss is considered probable and the amount is reasonably estimable, provisions for loss are made based on management s assessment of the likely outcome. Where a range of loss can be reasonably estimated with no best estimate in the range, the Company records the minimum amount in the range. The Company does not provide for claims for which the outcome is not probable or claims for which the amount of the loss cannot be reasonably estimated. Any settlements or awards under such claims are provided for when reasonably determinable. As of August 31, 2026, there are no material claims for which the Company has assessed the potential loss as both probable to result and reasonably estimable; therefore, no accrual has been made. Further, there are claims outstanding for which the Company has assessed the potential loss as reasonably possible to result; however, an estimate of the amount of loss cannot reasonably be made. There are many reasons that the Company cannot make these assessments, including, among others, one or more of the following: the early stages of a proceeding does not require the claimant to specifically identify the patent claims that have allegedly been infringed or the products that are alleged to infringe; damages sought are unspecified, unsupportable, unexplained or uncertain; discovery has not been started or is incomplete; the facts that are in dispute are highly complex; the difficulty of assessing novel claims; the parties have not engaged in any meaningful settlement discussions; the possibility that other parties may share in any ultimate liability; and the often slow pace of litigation. The Company has included the following summaries of certain of its legal proceedings though they do not meet the test for accrual described above. Between October and December 2013, several purported class action lawsuits were filed against the Company and certain of its former officers in various jurisdictions in Canada alleging that certain of the Company s financial statements contain material misstatements. On July 23, 2014, the plaintiff in the putative Ontario class action (Swisscanto Fondsleitung AG v. BlackBerry Limited, et al.) filed a motion for class certification and for leave to pursue statutory misrepresentation claims. On November 17, 2015, the Ontario Superior Court of Justice issued an order granting the plaintiffs motion for leave to file a statutory claim for misrepresentation. On December 2, 2015, the Company filed a notice of motion seeking leave to appeal this ruling. On November 15, 2018, the Court denied the Company s motion for leave to appeal the order granting the plaintiffs leave to file a statutory claim for misrepresentation. On February 5, 2019, the Court entered an order certifying a class comprised persons (a) who purchased BlackBerry common shares between March 28, 2013, and September 20, 2013, and still held at least some of those shares as of September 20, 2013, and (b) who acquired those shares on a Canadian stock exchange or acquired those shares on any other stock exchange and were a resident of Canada when the shares were acquired. Notice of class certification was published on March 6, 2019. The Company filed its Statement of Defence on April 1, 2019. A mediation took place on April 21 and 22, 2026, during which no settlement was reached. A pretrial conference was held on September 16, 2026. Trial is set for January 11, 2027. Other contingencies As at August 31, 2026, the Company has recognized $28.6 million (February 28, 2026 - $28.6 million) in funds from claims filed by QNX with the Ministry of Innovation, Science and Economic Development Canada relating to its SIF. A portion of this amount may be repayable in the future under certain circumstances if certain terms and conditions are not met by the Company, which is not probable at this time. (c)Indemnifications The Company enters into certain agreements that contain indemnification provisions under which the Company could be subject to costs and damages, including in the event of an infringement claim against the Company or an indemnified third party. Such intellectual property infringement indemnification clauses are generally not subject to any dollar limits and remain in effect for the term of the Company s agreements. To date, the Company has not encountered material costs as a result of such indemnifications. The Company has entered into indemnification agreements with its current and former directors and executive officers. Under these agreements, the Company agreed, subject to applicable law, to indemnify its current and former directors and executive officers against all costs, charges and expenses reasonably incurred by such individuals in respect of any civil, criminal or administrative action that could arise by reason of their status as directors or officers. The Company maintains liability insurance coverage for the benefit of the Company, and its current and former directors and executive officers. The Company has not encountered material costs as a result of such indemnifications in the current period. 24 BlackBerry Limited Notes to the Consolidated Financial Statements In millions of United States dollars, except share and per share data, and except as otherwise indicated (unaudited) 10. REVENUE AND SEGMENT DISCLOSURES The Company reports segment information based on the management approach. The management approach designates the internal reporting used by the CODM for making decisions and assessing performance as a source of the Company s reportable operating segments. The CODM, who is the CEO of the Company, makes decisions and assesses the performance of the Company using three operating segments. The CODM does not evaluate operating segments using discrete asset information. The Company does not specifically allocate assets to operating segments for internal reporting purposes. Segment Disclosures The Company is organized and managed as three operating segments: QNX, Secure Communications, and Licensing. The following tables show information by reportable operating segment for the three and six months ended August 31, 2026 and August 31, 2025: QNXSecure CommunicationsLicensingSegment Totals2025202520252025$80.3 $63.1 60.9 $59.9 22.1 $6.6 163.3 $129.6 10.6 10.7 20.2 1.5 $69.7 $52.4 37.4 $39.7 20.6 $5.1 127.7 $97.2 QNXSecure CommunicationsLicensingSegment Totals2025202520252025$152.6 $120.6 134.5 $119.4 29.1 $11.3 316.2 $251.3 21.0 21.9 38.3 3.1 $131.6 $98.7 90.2 $81.1 26.1 $8.2 247.9 $188.0 Six Months Ended August 31, 2026August 31, 2025August 31, 2026August 31, 2025 Total segment adjusted gross margin$127.7 $97.2 $247.9 $188.0 Adjustments (1): Less: Stock compensation0.6 0.6 1.1 1.1 Research & development33.2 25.6 66.2 50.6 Sales and marketing25.3 24.4 54.8 53.1 General and administrative31.8 31.5 71.1 62.0 Amortization2.5 3.1 5.0 7.1 Impairment of long-lived assets0.7 0.5 0.8 0.6 Investment income, net1.6 1.9 2.7 4.8 Consolidated income before income tax$35.2 $13.4 $51.6 $18.3 Six Months Ended August 31, 2026August 31, 2025August 31, 2026August 31, 2025 North America (1) $72.6 $62.3 $146.4 $117.1 Europe, Middle East and Africa58.3 39.9 102.8 82.4 Other regions32.4 27.4 67.0 51.8 $163.3 $129.6 $316.2 $251.3 North America (1) 44.5 %48.1 %46.3 %46.6 % Europe, Middle East and Africa35.7 %30.8 %32.5 %32.8 % Other regions19.8 %21.1 %21.2 %20.6 % Total 100.0 %100.0 %100.0 %100.0 % ______________________________ (1) North America includes all revenue from Licensing, due to the global applicability of the patent portfolio and licensing arrangements thereof. 26 BlackBerry Limited Notes to the Consolidated Financial Statements In millions of United States dollars, except share and per share data, and except as otherwise indicated (unaudited) Revenue, classified by timing of recognition, was as follows: Three Months Ended Six Months Ended August 31, 2026August 31, 2025August 31, 2026August 31, 2025 Products and services transferred over time$59.2 $60.2 $115.8 $118.7 Products and services transferred at a point in time104.1 69.4 200.4 132.6 Total$163.3 $129.6 $316.2 $251.3 Revenue contract balances The following table sets forth the activity in the Company s revenue contract balances for the six months ended August 31, 2026: Accounts ReceivableDeferred RevenueDeferred Commissions Opening balance as at February 28, 2026$202.6 $152.6 $14.3 Increases due to invoicing of new or existing contracts, associated contract acquisition costs, or other282.8 260.3 7.6 Decrease due to payment, fulfillment of performance obligations, or other(276.9)(284.5)(9.1) 5.9 (24.2)(1.5) Closing balance as at August 31, 2026$208.5 $128.4 $12.8 Current portion$141.0 $116.6 $6.6 Long-term portion67.5 11.8 6.2 $208.5 $128.4 $12.8 Transaction price allocated to the remaining performance obligations The table below discloses the aggregate amount of the transaction price allocated to performance obligations that are unsatisfied or partially unsatisfied as at August 31, 2026 and the time frame in which the Company expects to recognize this revenue. The disclosure includes estimates of variable consideration, except when the variable consideration is a sales-based or usage-based royalty promised in exchange for a license of intellectual property. The disclosure excludes estimates of variable consideration relating to future royalty revenues from the sale of certain non-core patent assets to Malikie Innovations Limited in May 2023, which have been constrained based on the Company s accounting policies and critical accounting estimates. As at August 31, 2026 Less than 12 Months12 to 24 MonthsThereafterTotal Remaining performance obligations$116.6 $3.4 $8.4 $128.4 Revenue recognized for performance obligations satisfied in prior periods For the three and six months ended August 31, 2026, revenue of $2.3 million and $2.8 million, respectively, was recognized relating to performance obligations satisfied in a prior period (three and six months ended August 31, 2025 - nil). Information About Major Customers There were two customers that each comprised 10% of the Company s revenue during the three months ended August 31, 2026. There were no customers that comprised more than 10% of the Company s revenue during the six months ended August 31, 2026. (three and six months ended August 31, 2025 - no customer that comprised more than 10% of the Company s revenue and one customer that comprised 11% of the Company s revenue). 27 BlackBerry Limited Notes to the Consolidated Financial Statements In millions of United States dollars, except share and per share data, and except as otherwise indicated (unaudited) 11. CASH FLOW AND ADDITIONAL INFORMATION (a) The following table sets forth the supplemental cash flow information for the three and six months ended August 31, 2026 and August 31, 2025: Three Months EndedSix Months Ended August 31, 2026August 31, 2025August 31, 2026August 31, 2025 Interest paid during the period$1.5 $1.5 $3.0 $3.0 Income taxes paid during the period14.0 16.4 15.7 18.1 Income tax refunds received during the period4.5 0.2 4.7 0.2 Property, plant and equipment included in accounts payable and accrued liabilities0.2 0.4 Intangibles included in accounts payable and accrued liabilities0.5 0.5 Sale of long-term investment included in other receivables2.3 2.3 (b) Additional Information Foreign exchange The Company is exposed to foreign exchange risk as a result of transactions in currencies other than its functional currency, the U.S. dollar. The majority of the Company s revenue in the second quarter of fiscal 2027 was transacted in U.S. dollars. Portions of the revenue were denominated in Canadian dollars, euros and British pounds. Other expenses, consisting mainly of salaries and certain other operating costs, were incurred primarily in Canadian dollars, but were also incurred in U.S. dollars, euros and British pounds. At August 31, 2026, approximately 10% of cash and cash equivalents, 44% of accounts receivable and 71% of accounts payable were denominated in foreign currencies (February 28, 2026 15%, 22% and 46%, respectively). These foreign currencies primarily include the Canadian dollar, euro and British pound. As part of its risk management strategy, the Company maintains net monetary asset and/or liability balances in foreign currencies and engages in foreign currency hedging activities using derivative financial instruments, including currency forward contracts and currency options. The Company does not use derivative instruments for speculative purposes. Interest rate risk Cash and cash equivalents and investments are invested in certain instruments with fixed interest rates of varying maturities. Consequently, the Company is exposed to interest rate risk as a result of holding investments of varying maturities and the significant financing components within certain revenue contracts with customers. The fair value of investments, as well as the investment income derived from the investment portfolio, will fluctuate with changes in prevailing interest rates. The Company also has significant financing components within certain revenue contracts with customers and is exposed to interest rate risk as a result of discounting the future payments from customers with a fixed interest rate. The Company also has outstanding Notes with a fixed interest rate, as described in Note 5. The Company is exposed to interest rate risk as a result of the Notes. The Company does not currently utilize interest rate derivative instruments. Credit risk The Company is exposed to market and credit risk on its investment portfolio. The Company is also exposed to credit risk with customers, as described in Note 3. The Company reduces this risk from its investment portfolio by investing in liquid, investment-grade securities and by limiting exposure to any one entity or group of related entities. As at August 31, 2026, no single issuer represented more than 19% of the total cash, cash equivalents and investments (February 28, 2026 - no single issuer represented more than 34% of the total cash, cash equivalents and investments), with the largest such issuer representing bearer deposits, term deposits and cash balances with one of the Company s banking counterparties. 28 BlackBerry Limited Notes to the Consolidated Financial Statements In millions of United States dollars, except share and per share data, and except as otherwise indicated (unaudited) Liquidity risk Cash, cash equivalents, and investments were $447.1 million as at August 31, 2026. The Company holds certain equity investments in privately-held companies that are illiquid securities without a public market and, as such, they cannot be readily sold or exchanged for cash. The Company may not be able to sell these shares at desired times or prices, which could negatively impact its financial condition and results of operations. The Company s management remains focused on efficiently managing working capital balances and managing the liquidity needs of the business. Based on its current financial projections, the Company believes its financial resources, together with expected future operating cash generating activities, are sufficient to meet funding requirements for current financial commitments and future operating expenditures not yet committed, and should provide the necessary financial capacity for the foreseeable future. Equity Investments Risk The Company holds non-marketable equity investments in privately-held companies in which the Company does not own a controlling interest or have significant influence. The Company's equity investments in privately-held companies are subject to a wide variety of market-related risks that could substantially reduce or increase the fair value of its holdings. The Company's equity investments in privately-held companies are recorded using the measurement alternative and are assessed each reporting period for observable price changes and impairments, which may involve estimates and judgments given the lack of readily available market data. Certain equity investments in privately-held companies are in the early stages of development and are inherently risky due to their lack of operational history. The Company has a high concentration of risk associated with a small number of non-marketable equity investments that are impacted by fluctuations in their fair values or by observable changes or impairments. 29 ITEM 2. MANAGEMENT S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following Management s Discussion and Analysis of Financial Condition and Results of Operations ( MD&A ) should be read together with the unaudited interim consolidated financial statements and the accompanying notes (the Consolidated Financial Statements ) of BlackBerry Limited for the three and six months ended August 31, 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. dollars and have been prepared in accordance with United States generally accepted accounting principles ( U.S. GAAP ). All financial information in this MD&A is presented in U.S. dollars, unless otherwise indicated. Additional information about the Company, which is included in the Company s Annual Report, can be found on SEDAR+ at www.sedarplus.ca and on the SEC s website at www.sec.gov. Cautionary Note Regarding Forward-Looking Statements This MD&A contains forward-looking statements within the meaning of certain securities laws, including under the U.S. 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 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 third quarter of fiscal 2027 and for fiscal 2027 as a whole; the Company s estimates of purchase obligations and other contractual commitments; and the Company s expectations with respect to the sufficiency of its financial resources. The words expect , anticipate , estimate , may , will , should , could , intend , believe , target , plan and similar expressions are intended to identify forward-looking statements in this MD&A, including in the sections entitled Business Overview , Business Overview - Products and Services , Results of Operations - Three months ended August 31, 2026 compared to the three months ended August 31, 2025 - Revenue - Revenue by Segment , Results of Operations - Three months ended August 31, 2026 compared to the three months ended August 31, 2025 - Revenue - Adjusted Gross Margin and Adjusted EBITDA by Segment , Results of Operations - Three months ended August 31, 2026 compared to the three months ended August 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 Company believes are appropriate in the circumstances, including but not limited to, the Company s expectations regarding its business, strategy, opportunities and prospects, the launch of new products and services, general economic conditions, competition, and the Company s expectations regarding its financial performance. Many factors could cause the Company s actual results, performance or achievements to differ materially from those expressed or implied by the forward-looking statements, including, without limitation, the risk factors discussed in Part I, Item 1A Risk Factors in the Annual Report. All of these factors should be considered carefully, and readers should not place undue reliance on the Company s forward-looking statements. Any statements that are forward-looking statements are intended to enable the Company s shareholders to view the anticipated performance and prospects of the Company from management s perspective at the time such statements are made, and they are subject to the risks that are inherent in all forward-looking statements, as described above, as well as difficulties in forecasting the Company s financial results and performance for future periods, particularly over longer periods, given changes in technology and the Company s business strategy, evolving industry standards, intense competition and short product life cycles that characterize the industries in which the Company operates. See the Strategy subsection in Part I, Item 1 Business of the Annual Report. The Company has no intention and undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law. 30 Business Overview 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 ). Products and Services The Company has a rich pedigree in innovation and has developed a range of products and services that assist customers in addressing their needs as their industries evolve, which are structured in three divisions: QNX, Secure Communications and Licensing. QNX 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, 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 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 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. Subsequent to the end of the quarter, the Company announced an Alloy Kore design win with Coretura, the commercial vehicle software joint venture between Volvo Group and Daimler Truck. The design win is the largest in QNX history and added more than $100 million to the QNX royalty backlog. 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. 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. 31 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 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. BlackBerry UEM employs a containerized approach to manage and secure devices, third party and custom applications, identity, content and endpoints across all leading operating systems, as well as providing regulatory compliance tools. BlackBerry Dynamics offers a best-in-class development platform and secure container for mobile applications, including the Company s own enterprise applications such as BlackBerry Work and BlackBerry Connect for secure collaboration. BlackBerry Workspaces is a secure Enterprise File Sync and Share (EFSS) solution. BBM Enterprise is an enterprise-grade secure instant messaging solution for messaging, voice and video. 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. Licensing The Licensing division is responsible for the management and monetization of the Company s global patent portfolio. 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 2027 and announced the following significant achievements during the most recent quarter: QNX and Vector Informatik secured the first Alloy Kore design win, the largest design win in QNX history, with Coretura, the commercial vehicle software joint venture between Volvo Group and Daimler Truck, adding more than $100 million to the QNX royalty backlog; Announced that Momenta and XHEART selected QNX OS for Safety, built on SDP 8.0, as the foundation for a production-ready Physical AI-defined autonomous-driving platform certified to ISO 26262 ASIL D; QNX added support for the Hailo-8 AI Accelerator on SDP 8.0, expanding its Physical AI ecosystem; benchmark testing demonstrated up to 14x greater performance consistency than the real-time Linux environment tested; BlackBerry SecuSUITE renewed its NIAP Common Criteria certification, reinforcing its sovereign-grade security credentials and position in government and mission-critical communications; and BlackBerry AtHoc added Microsoft Teams and Entra ID integrations, strengthening mission-critical response and operational resilience for enterprise and government customers. 32 Second Quarter Fiscal 2027 Summary Results of Operations The following table sets forth certain consolidated statements of operations data for the quarter ended August 31, 2026 compared to the quarter ended August 31, 2025 under U.S. GAAP: For the Three Months Ended (in millions, except for share and per share amounts) August 31, 2026August 31, 2025Change Revenue $163.3 $129.6 $33.7 Gross margin127.1 96.6 30.5 Operating expenses93.5 85.1 8.4 Investment income, net1.6 1.9 (0.3) Income before income taxes35.2 13.4 21.8 Provision for income taxes1.3 0.1 1.2 $33.9 $13.3 $20.6 Earnings per share - reported $0.06 $0.02 Diluted$0.05 $0.02 Weighted-average number of shares outstanding (000 s) Basic586,627 592,938 Diluted (1) 649,655 597,369 (in millions) QNXSecure CommunicationsLicensingChangeAugust 31,ChangeAugust 31,Change20252026202520262025$80.3 $63.1 $17.2 $60.9 $59.9 $1.0 $22.1 $6.6 $15.5 10.6 10.7 (0.1)23.5 20.2 3.3 1.5 1.5 $69.7 $52.4 $17.3 $37.4 $39.7 $(2.3)$20.6 $5.1 $15.5 19.6 13.0 6.6 11.8 11.0 0.8 12.4 10.7 1.7 11.1 12.1 (1.0) 8.7 8.2 0.5 6.6 6.9 (0.3)2.1 0.9 1.2 0.1 0.1 1.5 1.4 0.1 $29.0 $20.5 $8.5 $8.0 $9.7 $(1.7)$20.0 $5.6 $14.4 QNXSecure CommunicationsLicensingChangeAugust 31,ChangeAugust 31,Change20252026202520262025$152.6$120.6$32.0$134.5$119.4$15.1$29.1$11.3$17.821.021.9(0.9)44.338.36.03.03.1(0.1)$131.6$98.7$32.9$90.2$81.1$9.1$26.1$8.2$17.938.525.313.224.422.22.2 28.023.94.123.425.7(2.3) 16.816.30.514.414.00.42.91.81.1 0.20.10.13.03.0 $48.3$33.2$15.1$28.2$19.3$8.9$26.2$9.4$16.8August 31, 2026August 31, 2025 $127.1 $96.6 0.6 0.6 Adjusted gross margin$127.7 $97.2 Gross margin % 77.8 %74.5 % 0.4 %0.5 % Adjusted gross margin % 78.2 %75.0 % Reconciliation of U.S. GAAP operating expenses for the three months ended August 31, 2026 and August 31, 2025 to adjusted operating expenses is reflected in the table below: August 31, 2026 Operating expenses$93.5 85.1 Restructuring charges2.7 Stock compensation expenses6.9 0.7 Deferred share units revaluation adjustment(1.6) $84.8 74.8 36 Reconciliation of U.S. GAAP net income and U.S. GAAP basic earnings per share for the three months ended August 31, 2026 and August 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)August 31, 2026August 31, 2025 Basic earnings per shareBasic earnings per share Net income$33.9 $0.06 $13.3 $0.02 2.7 3.4 Stock compensation expenses7.5 5.9 1.1 0.7 0.5 Deferred share units revaluation adjustment(1.6) $43.2 $0.07 $24.2 $0.04 August 31, 2026August 31, 2025$33.2 $25.6 1.6 1.4 $31.6 $24.2 $25.3 $24.4 1.4 1.3 $23.9 $23.1 $31.8 $31.5 2.7 3.4 3.9 2.6 (1.6) $26.8 $25.5 $2.5 $3.1 1.1 $2.5 $2.0 August 31, 2026August 31, 2025 $33.6 $11.5 Non-GAAP adjustments to operating income 2.7 3.4 Stock compensation expenses7.5 5.9 1.1 0.7 0.5 (1.6) Total non-GAAP adjustments to operating income9.3 10.9 Adjusted operating income42.9 22.4 Amortization4.1 4.6 Acquired intangibles amortization (1.1) Adjusted EBITDA$47.0 $25.9 Revenue$163.3 $129.6 Adjusted operating income margin % (1) 26%17% Adjusted EBITDA margin % (2) 29%20% (in millions) QNXSecure CommunicationsLicensing202520252025$69.7 $52.4 37.4 $39.7 20.6 $5.1 19.6 13.0 11.0 12.4 10.7 12.1 8.7 8.2 6.9 0.9 1.4 $29.0 $20.5 8.0 $9.7 20.0 $5.6 August 31, 2026August 31, 2025 $246.8 $186.9 1.1 1.1 Adjusted gross margin$247.9 $188.0 Gross margin % 78.1 %74.4 % 0.3 %0.4 % Adjusted gross margin % 78.4 %74.8 % August 31, 2026August 31, 2025 $197.9 $173.4 Restructuring charges 3.0 6.3 Stock compensation expenses12.9 10.5 2.8 0.8 0.6 Deferred share units revaluation adjustment8.4 (1.5) $172.8 $154.7 Reconciliation of U.S. GAAP net income and U.S. GAAP basic earnings per share for the six months ended August 31, 2026 and August 31, 2025 to adjusted net income and adjusted basic earnings per share is reflected in the table below: For the Six Months Ended (in millions, except per share amounts)August 31, 2026August 31, 2025 Basic earnings per shareBasic earnings per share Net income$42.4 $0.07 $15.2 $0.03 3.0 6.3 Stock compensation expenses14.0 11.6 2.8 0.8 0.6 Deferred share units revaluation adjustment8.4 (1.5) $68.6 $0.12 $35.0 $0.06 August 31, 2026August 31, 2025 Research and development$66.2 $50.6 3.1 2.7 Adjusted research and development expense$63.1 $47.9 Sales and marketing$54.8 $53.1 Stock compensation expenses2.5 2.7 Adjusted sales and marketing expense$52.3 $50.4 General and administrative$71.1 $62.0 Restructuring charges3.0 6.3 7.3 5.1 Deferred share units revaluation adjustment8.4 (1.5) $52.4 $52.1 Amortization$5.0 $7.1 Acquired intangibles amortization 2.8 Adjusted amortization expense$5.0 $4.3 Reconciliation of U.S. GAAP operating income to adjusted operating income, adjusted EBITDA, adjusted operating income margin percentage and adjusted EBITDA margin percentage for the six months ended August 31, 2026 and August 31, 2025 are reflected in the table below. For the Six Months Ended (in millions)August 31, 2026August 31, 2025 Operating income$48.9 $13.5 Non-GAAP adjustments to operating income 3.0 6.3 Stock compensation expense14.0 11.6 2.8 0.8 0.6 Deferred share units revaluation adjustment8.4 (1.5) 26.2 19.8 Adjusted operating income75.1 33.3 Amortization8.2 10.3 Acquired intangibles amortization (2.8) Adjusted EBITDA$83.3 $40.8 Revenue$316.2 $251.3 Adjusted operating income margin % (1) 24%13% Adjusted EBITDA margin % (2) 26%16% ______________________________ (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. 40 The CODM also uses 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 asset impairment. The following table reconciles the U.S. 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 six months ended August 31, 2026 and August 31, 2025. QNXSecure CommunicationsLicensing202520252025$131.6$98.790.2$81.126.1$8.238.525.322.2 28.023.925.7 16.816.314.01.8 0.13.0$48.3$33.228.2$19.326.2$9.4August 31, 2026August 31, 2025 Net cash provided by operating activities$29.3 $3.4 Acquisition of property, plant and equipment(1.2)(0.8) Free cash flow$28.1 $2.6 August 31, 2026August 31, 2025 Net cash provided by (used in) operating activities$33.9 $(14.1) Acquisition of property, plant and equipment(4.1)(1.7) Free cash flow (usage)$29.8 $(15.8) Key Metrics The Company regularly monitors a number of financial and operating metrics, including the following key metrics, in order to measure the Company s current performance and estimated future performance. Readers are cautioned that Secure Communications annual recurring revenue ( ARR ) and Secure Communications dollar-based net retention rate ( DBNRR ) do not have any standardized meaning and are unlikely to be comparable to similarly titled measures reported by other companies. Comparative breakdowns of certain key metrics for the three months ended or as at August 31, 2026 and August 31, 2025 are set forth below. For the Three Months Ended (in millions)August 31, 2026August 31, 2025Change $221 $213 $8 91 %93 %(2%) August 31, 2026August 31, 2025Change$80.3 $63.1 $17.2 60.9 59.9 1.0 22.1 6.6 15.5 163.3 $129.6 $33.7 49.2 %48.7 %37.3 %46.2 %13.5 %5.1 %%100.0 % August 31, 2026August 31, 2025Change Revenue by Geography$72.6 $62.3 $10.3 58.3 39.9 18.4 32.4 27.4 5.0 163.3 $129.6 $33.7 44.5 %48.1 %35.7 %30.8 %19.8 %21.1 %%100.0 % QNXSecure CommunicationsLicensingChangeAugust 31,ChangeAugust 31,Change20252026202520262025$80.3$63.1$17.2$60.9$59.9$1.0$22.1$6.6$15.510.610.7(0.1)23.520.23.31.51.5 $69.7$52.4$17.3$37.4$39.7$(2.3)$20.6$5.1$15.587 %83 %4%61 %66 %(5)%93 %77 %16%19.613.06.611.811.00.8 12.410.71.711.112.1(1.0) 8.78.20.56.66.9(0.3)2.10.91.2 0.1 0.11.51.40.1$29.0$20.5$8.5$8.0$9.7$(1.7)$20.0$5.6$14.4 August 31, 2026Change Revenue$163.3 129.6 $33.7 Operating expenses33.2 7.6 Sales and marketing25.3 0.9 General and administrative31.8 0.3 Amortization2.5 (0.6) Impairment of long-lived assets0.7 0.2 $93.5 85.1 $8.4 20.3%% Sales and marketing15.5%% General and administrative19.5%% Amortization1.5%% Impairment of long-lived assets0.4%% 57.3 %% See Non-GAAP Financial Measures for a reconciliation of selected U.S. GAAP-based measures to adjusted measures for the three months ended August 31, 2026 and August 31, 2025. U.S. GAAP Operating Expenses Operating expenses increased by $8.4 million year-over-year, or 9.9%, in the second quarter of fiscal 2027, compared to the second quarter of fiscal 2026 primarily due to the absence of $3.8 million of SIF claim benefits recognized in the prior-year period, an increase of $2.6 million in variable incentive plan costs, an increase of $2.3 million in legal costs and an increase of $1.7 million in salaries and benefits costs, partially offset by a decrease of $1.3 million in deferred share unit costs and a decrease of $0.8 million in consulting costs. Adjusted Operating Expenses Adjusted operating expenses increased by $10.0 million year-over-year, or 13.4%, to $84.8 million in the second quarter of fiscal 2027, compared to $74.8 million in the second quarter of fiscal 2026. The increase was primarily due to the absence of $3.8 million of SIF claim benefits recognized in the prior-year period, an increase of $2.6 million in variable incentive plan costs, an increase of $2.4 million in legal costs and an increase of $1.7 million in salaries and benefits costs, partially offset by a decrease of $0.8 million in consulting 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 $7.6 million, or 29.7%, in the second quarter of fiscal 2027 compared to the second quarter of fiscal 2026 primarily due to the absence of $3.8 million of SIF claim benefits recognized in the prior-year period, an increase of $1.7 million in salaries and benefits costs and an increase of $1.5 million in variable incentive plan costs. Adjusted research and development expenses increased by $7.4 million, or 30.6%, to $31.6 million in the second quarter of fiscal 2027 compared to $24.2 million in the second quarter of fiscal 2026, primarily due to the same reasons described above on a U.S. GAAP basis. 46 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 $0.9 million, or 3.7%, in the second quarter of fiscal 2027 compared to the second quarter of fiscal 2026, primarily due to an increase of $0.8 million in salaries and benefits costs and an increase of $0.4 million in marketing costs, partially offset by a decrease of $0.5 million in consulting costs. Adjusted sales and marketing expenses increased by $0.8 million, or 3.5%, to $23.9 million in the second quarter of fiscal 2027 compared to $23.1 million in the second quarter of fiscal 2026, primarily due to the same reasons described above on a U.S. GAAP basis. 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 increased by $0.3 million, or 1.0%, in the second quarter of fiscal 2027 compared to the second quarter of fiscal 2026. The increase was primarily due to an increase of $2.4 million in legal costs, an increase of $1.2 million in stock compensation expenses and an increase of $0.8 million in variable incentive plan costs, partially offset by a decrease of $1.3 million in deferred share unit costs, a decrease of $0.9 million in salaries and benefits costs, a decrease of $0.7 million in restructuring costs and a decrease of $0.6 million in infrastructure costs. Adjusted general and administrative expenses increased by $1.3 million, or 5.1%, to $26.8 million in the second quarter of fiscal 2027 compared to $25.5 million in the second quarter of fiscal 2026. The increase was primarily due to an increase of $2.4 million in legal costs and an increase of $0.8 million in variable incentive plan costs, partially offset by a decrease of $0.9 million in salaries and benefits costs and a decrease of $0.6 million in infrastructure costs. Amortization Expense The table below presents a comparison of amortization expense relating to property, plant and equipment and intangible assets recorded as amortization or cost of sales for the quarter ended August 31, 2026 compared to the quarter ended August 31, 2025. Intangible assets are comprised of patents, licenses and acquired technology. For the Three Months Ended (in millions) Included in Operating Expenses August 31, 2026August 31, 2025Change Property, plant and equipment$1.6 $1.2 $0.4 Intangible assets0.9 1.9 (1.0) Total$2.5 $3.1 $(0.6) Included in Cost of Sales August 31, 2026August 31, 2025Change Property, plant and equipment$0.1 $ $0.1 Intangible assets1.5 1.5 Total$1.6 $1.5 $0.1 Amortization included in Operating Expenses The decrease in amortization expense included in operating expenses of $0.6 million was primarily due to the lower cost base of assets. Adjusted amortization expense increased by $0.5 million to $2.5 million in the second quarter of fiscal 2027 compared to $2.0 million in the second quarter of fiscal 2026. Amortization included in Cost of Sales The increase in amortization expense relating to certain property, plant and equipment and certain intangible assets in the Company s licensing operations was $0.1 million in the second quarter of fiscal 2027. 47 Investment Income, Net Investment income, net, which includes the interest expense from the Notes, was $1.6 million in the second quarter of fiscal 2027 and decreased by $0.3 million from investment income, net of $1.9 million in the second quarter of fiscal 2026. The decrease in investment income, net is primarily due to a lower return on cash and investments. Income Taxes For the second quarter of fiscal 2027, the Company s net effective income tax expense rate was approximately 4% (second quarter of fiscal 2026 - net effective income tax expense rate of approximately 1%). 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; 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 a significant portion of the Company s valuation allowance of $1,512.8 million would result in the recognition of deferred tax assets in the consolidated balance sheets and a material non-cash income tax benefit, which could materially impact income tax expense in the period of release. The Company s net effective income tax rate also reflects the geographic mix of earnings in jurisdictions with different income tax rates. Net Income The Company s net income for the second quarter of fiscal 2027 was $33.9 million, or $0.06 basic earnings per share and $0.05 diluted earnings per share on a U.S. GAAP basis (second quarter of fiscal 2026 - net income of $13.3 million, or $0.02 basic and diluted earnings per share). The period over period change of $20.6 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 $43.2 million in the second quarter of fiscal 2027, or $0.07 adjusted basic earnings per share (second quarter of fiscal 2026 - adjusted net income of $24.2 million, or $0.04 adjusted basic earnings per share). The increase in adjusted net income of $19.0 million was primarily due to the same reasons described above on a U.S. GAAP basis. The Company previously stated that it expected adjusted EBITDA to be in the range of $20 million to $30 million in the second quarter of fiscal 2027. Adjusted EBITDA was $47.0 million in the second quarter of fiscal 2027 primarily due to QNX and Licensing 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 $0.03 to $0.04 in the second quarter of fiscal 2027. Non-GAAP EPS was $0.07 in the second quarter of fiscal 2027 primarily due to QNX and Licensing 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 breakeven to $10 million in the second quarter of fiscal 2027. Operating cash flow was $29.3 million in the second quarter of fiscal 2027 due to better-than-expected Licensing revenue as described above in Revenue by Segment and the resolution of certain income tax filings. The Company expects adjusted EBITDA to be in the range of $28 million to $37 million in the third quarter of fiscal 2027. The Company previously stated that it expected adjusted EBITDA to be in the range of $119 million to $139 million in fiscal 2027 as a whole. The Company now expects adjusted EBITDA to be in the range of $141 million to $158 million in fiscal 2027 as a whole due to the reasons discussed above in Revenue by Segment . The Company expects non-GAAP EPS to be in the range of $0.04 per share to $0.05 per share in the third quarter of fiscal 2027. The Company previously stated that it expected non-GAAP EPS to be in the range of $0.16 to $0.20 in fiscal 2027 as a whole. The Company now expects non-GAAP EPS to be in the range of $0.19 to $0.22 in fiscal 2027 as a whole for the reasons discussed above in Adjusted Gross Margin and Adjusted EBITDA by Segment . The Company expects operating cash flow to be in the range of $20 million to $30 million in the third quarter of fiscal 2027. The Company previously stated that it expected operating cash flow to be approximately $100 million in fiscal 2027 as a whole. The Company now expects operating cash flow to be approximately $115 million in fiscal 2027 as a whole primarily due to stronger than expected revenue recognized in the first half of fiscal 2027. The Company does not provide a reconciliation of expected adjusted EBITDA and expected non-GAAP basic EPS for the third quarter of fiscal year 2027, and 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 48 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 586.6 million common shares for basic earnings per share and 649.7 million common shares for diluted earnings per share for the second quarter of fiscal 2027 (second quarter of fiscal 2026 - 592.9 million common shares for basic earnings per share and 597.4 million common shares for diluted earnings per share). Results of Operations - Six months ended August 31, 2026 compared to the six months ended August 31, 2025 The following section sets forth certain consolidated statements of operations data for the six months ended August 31, 2026 and August 31, 2025: (in millions, except for share and per share amounts) August 31, 2026August 31, 2025Change Revenue $316.2 251.3 64.9 Gross margin 246.8 Operating expenses 197.9 Investment income, net 2.7 Income before income taxes51.6 Provision for income taxes9.2 $42.4 15.2 27.2 Earnings per share - reported$0.07 0.03 0.04 Diluted $0.07 0.03 0.04 586,684 647,541 (in millions)August 31, 2025Change$152.6 $120.6 $32.0 134.5 119.4 15.1 29.1 11.3 17.8 316.2 $251.3 $64.9 48.3 %48.0 %42.5 %47.5 %9.2 %4.5 %%100.0 % (in millions)August 31, 2025Change$146.4 $117.1 $29.3 102.8 82.4 20.4 67.0 51.8 15.2 316.2 $251.3 $64.9 46.3 %46.6 %32.5 %32.8 %21.2 %20.6 %%100.0 % QNXSecure CommunicationsLicensingChangeAugust 31,ChangeAugust 31,Change20252026202520262025$152.6$120.6$32.0$134.5$119.4$15.1$29.1$11.3$17.821.021.9(0.9)44.338.36.03.03.1(0.1)$131.6$98.7$32.9$90.2$81.1$9.1$26.1$8.2$17.986%82%4%67%68%(1%)90%73%17%38.525.313.224.422.22.2 28.023.94.123.425.7(2.3) 16.816.30.514.414.00.42.91.81.1 0.20.10.13.03.0 $48.3$33.2$15.1$28.2$19.3$8.9$26.2$9.4$16.8 (in millions) August 31, 2026 Revenue$316.2 251.3 64.9 Operating expenses66.2 Sales and marketing54.8 General and administrative71.1 Amortization5.0 0.8 $197.9 173.4 24.5 20.9 %%17.3 %%22.5 %%1.6 %%0.3 %%62.6 %% (in millions) Included in Operating Expenses August 31, 2026August 31, 2025Change Property, plant and equipment$3.4 $2.6 $0.8 Intangible assets1.6 4.5 (2.9) Total$5.0 $7.1 $(2.1) Included in Cost of Sales August 31, 2026August 31, 2025Change Property, plant and equipment$0.2 $0.1 $0.1 Intangible assets3.0 3.1 (0.1) Total$3.2 $3.2 $ August 31, 2026February 28, 2026Change Cash and cash equivalents$266.2 $274.7 $(8.5) Restricted cash equivalents14.1 14.2 (0.1) Short-term investments111.3 85.2 26.1 Long-term investments (1) 55.5 58.3 (2.8) Cash, cash equivalents, and investments$447.1 $432.4 $14.7 ______________________________ (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. The table below summarizes the current assets, current liabilities, and working capital of the Company: As at (in millions) August 31, 2026February 28, 2026Change Current assets$561.9 $568.2 $(6.3) Current liabilities236.5 268.1 (31.6) Working capital$325.4 $300.1 $25.3 Current Assets The decrease in current assets of $6.3 million at the end of the second quarter of fiscal 2027 from the end of the fourth quarter of fiscal 2026 was primarily due to a decrease of $15.0 million in accounts receivable, net of allowance, a decrease of $8.5 million in cash and cash equivalents, a decrease of $5.7 million in other current assets, a decrease of $3.0 million in other receivables and a decrease of $0.2 million in income taxes receivable, partially offset by an increase of $26.1 million in short term investments. At August 31, 2026, accounts receivable, net of allowance was $141.0 million, a decrease of $15.0 million from February 28, 2026. The decrease was primarily due to a decrease in days sales outstanding to 84 days at the end of the second quarter of fiscal 2027 from 88 days at the end of the fourth quarter of fiscal 2026, partially offset by higher revenue recognized over the three months ended August 31, 2026 compared to the three months ended February 28, 2026. At August 31, 2026, other current assets were $36.5 million, a decrease of $5.7 million from February 28, 2026. The decrease was primarily due to a decrease of $2.5 million in prepaid inventory, a decrease of $2.3 million in prepaid professional services, a decrease of $1.6 million in deferred commissions and a decrease of $1.2 million in prepaid rent, partially offset by an increase of $3.3 million in prepaid software. At August 31, 2026, other receivables were $4.5 million, a decrease of $3.0 million from February 28, 2026. The decrease was primarily due to the absence of $3.7 million of SIF claim benefits recognized in the prior-year period and a decrease of $1.8 million in indirect taxes receivable, partially offset by an increase of $2.3 million in proceeds receivable from the sale of a long-term investment. At August 31, 2026, income taxes receivable were $2.4 million, a decrease of $0.2 million from February 28, 2026. The decrease was primarily due to tax refunds and changes in the quarterly tax provisions. Current Liabilities The decrease in current liabilities of $31.6 million at the end of the second quarter of 2027 from the end of the fourth quarter of fiscal 2026 was primarily due to a decrease of $21.9 million in deferred revenue, current, a decrease of $10.2 million in accrued liabilities and a decrease of $2.6 million in income taxes payable, partially offset by an increase of $3.1 million in accounts payable. Deferred revenue, current was $116.6 million, which reflects a decrease of $21.9 million compared to February 28, 2026 that was attributable to a decrease of $9.5 million in deferred revenue, current related to BlackBerry UEM, a decrease of $8.5 million in deferred revenue, current related to BlackBerry AtHoc product revenue and a decrease of $5.2 million in deferred revenue, current related to QNX. 56 Accrued liabilities were $101.5 million at the end of the second quarter of 2027, reflecting a decrease of $10.2 million compared to February 28, 2026, which was primarily due to a decrease of $16.1 million in variable incentive plan accrual, a decrease of $4.2 million in restructuring cost accruals and a decrease of $3.3 million in sales incentive plan accrual, partially offset by an increase of $9.6 million in deferred share unit liability, an increase of $2.6 million in indirect taxes accruals and an increase of $1.2 million in audit fees accruals. Income taxes payable were $9.8 million, reflecting a decrease of $2.6 million from February 28, 2026, which was primarily due to changes in the quarterly tax provision and tax payments. Accounts payable were $8.6 million, reflecting an increase of $3.1 million from February 28, 2026, which was primarily due to the timing of payments. Cash flows for the six months ended August 31, 2026 compared to the six months ended August 31, 2025 were as follows: For the Six Months Ended (in millions) August 31, 2026August 31, 2025Change Net cash flows provided by (used in): Operating activities$33.9 $(14.1)$48.0 Investing activities(33.2)52.8 (86.0) Financing activities(8.7)(28.8)20.1 Effect of foreign exchange gain (loss) on cash and cash equivalents(0.6)0.4 (1.0) Net increase (decrease) in cash, cash equivalents, and restricted cash equivalents$(8.6)$10.3 $(18.9) Operating Activities The increase in net cash flows provided by operating activities of $48.0 million primarily reflects higher net income and the changes in working capital. Investing Activities During the six months ended August 31, 2026, cash flows used in investing activities were $33.2 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 $26.1 million, acquisition of property, plant and equipment of $4.1 million and the acquisition of intangible assets of $3.0 million. For the same period in the prior fiscal year, cash flows provided by investing activities were $52.8 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 $57.1 million, offset by cash used in the acquisition of intangible assets of $2.6 million and the acquisition of property, plant and equipment $1.7 million. Financing Activities During the six months ended August 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 under the employee share purchase plan. During the six months ended August 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 ). The closing price of the Company s common shares exceeded 130% of the conversion price for at least 20 trading days within a period of 30 consecutive trading days ending on June 30, 2026, permitting holders to convert their Notes for a period beginning July 1, 2026 and ending September 30, 2026. No holders converted their Notes during the three months ended August 31, 2026. Subsequent to the end of the quarter the contingent condition was again satisfied on September 16, 2026. Accordingly, the Notes will continue to be eligible for conversion, at the option of the holders, from October 1, 2026 through December 31, 2026. Upon receipt of a 57 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 $14.1 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 equivalents. Cash, cash equivalents, and investments were $447.1 million as at August 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. Based on its current financial projections, the Company believes its financial resources, together with expected future operating cash generating and operating expense reduction activities, are sufficient to meet funding requirements for current financial commitments and future operating expenditures not yet committed, and should provide the necessary financial capacity for the foreseeable future. Contractual and Other Obligations The following table sets out aggregate information about the Company s contractual and other obligations and the periods in which payments are due as at August 31, 2026: TotalShort-term (next 12 months)Long-term (>12 months)$38.9 $6.6 $32.3 55.1 55.1 215.0 6.0 209.0 $309.0 $67.7 $241.3 Total Number of Shares PurchasedAverage Price Paid per ShareTotal Number of Shares Purchased as Part of Publicly Announced Plans or ProgramsMaximum Number of Shares That May Yet Be Purchased Under the Plans or Programs (1) June 1, 2026 - June 30, 20260N/A026,785,714 July 1, 2026 - July 31, 20260N/A026,785,714 August 1, 2026 - August 31, 20260N/A026,785,714 Description of Exhibit 31.1*Certification of Chief Executive Officer pursuant to Securities Exchange Act of 1934 Rule 13a-14(a) 31.2*Certification of Chief Financial Officer pursuant to Securities Exchange Act of 1934 Rule 13a-14(a) 32.1 Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 60 32.2 Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 XBRL Instance Document the document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document 101*Inline XBRL Taxonomy Extension Schema Document 101*Inline XBRL Taxonomy Extension Calculation Linkbase Document 101*Inline XBRL Taxonomy Extension Definition Linkbase Document 101*Inline XBRL Taxonomy Extension Label Linkbase Document 101*Inline XBRL Taxonomy Extension Presentation Linkbase Document 104*Cover Page Interactive Data File formatted as Inline XBRL and contained in Exhibit 101 ______________________________ * Filed herewith Furnished (and not filed) herewith pursuant to Item 601(b)(32)(ii) of the SEC s Regulation S-K 61 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereto duly authorized. BLACKBERRY LIMITED Date: September 24, 2026By:/s/ John Giamatteo Name:John Giamatteo Title:Chief Executive Officer By:/s/ Tim Foote Name:Tim Foote Title:Chief Financial Officer 62