QNX royalty backlog tops $1.2 billion as vehicle platforms gain traction
Key Facts
BlackBerry said on October 20 that the royalty backlog at its QNX software unit exceeded $1.2 billion as adoption of its vehicle software platforms expanded. The company said in a statement that the backlog reached a record high for the unit. The reported balance at the end of the previous fiscal year was about $950 million. Since then, the unit has added more than $250 million in estimated future royalties. That represents growth of more than 26% from the end of the previous fiscal year, according to the company's statement.
The company defines this backlog as "estimated future revenue from expected variable royalties," rather than revenue already earned. It calculates the value using royalty rates agreed with customers. The calculation also incorporates expected usage volumes over the life of the design using the unit's software. Ultimate revenue realization depends on customers' actual production volumes, which may differ from the estimates used to calculate the balance. Revenue may also be affected by amendments to or termination of customer contracts, so the backlog does not guarantee collection of the estimated amounts.
BlackBerry attributed the backlog's growth to adoption of its "SDP 8.0" development platform and the first design win for its "Alloy Kore" platform. The Coretura win alone added more than $100 million to the backlog, according to the company's quarterly report filed with the U.S. Securities and Exchange Commission. The company described the agreement as the largest design win in the unit's history. Coretura is a joint venture between Volvo Group and Daimler Truck. QNX developed the platform with Vector to provide a production-ready software foundation for modern vehicle architectures, according to the product's official website. The platform aims to reduce automakers' need to reassemble and integrate the underlying software layer for each vehicle program.
In terms of recognized revenue, QNX reported $80.3 million in its latest reported quarter, according to BlackBerry's earnings release filed with the U.S. regulator. The unit's revenue rose 27% from the same period a year earlier. It reached a quarterly record, exceeding the company's guidance range of $70 million to $75 million for the quarter. BlackBerry attributed the outperformance to stronger-than-expected royalty revenue. Its quarterly report showed that a $10.4 million year-over-year increase in royalty revenue contributed to the unit's revenue growth.
QNX's adjusted gross margin reached 87% in the latest reported quarter, according to the earnings release. The unit generated adjusted earnings before interest, taxes, depreciation and amortization of $29.0 million. That represented a margin of 36% of its revenue for the quarter. BlackBerry as a whole reported total revenue of $163.3 million for the same period. The company's revenue rose 26% year over year, alongside the record performance at its vehicle software unit.
BlackBerry expects QNX revenue of $82 million to $88 million in the next quarter, according to its earnings release. For the current fiscal year, the company is targeting revenue of $315 million to $325 million for the unit. Its previous annual forecast ranged from $295 million to $312 million, according to the quarterly report. The company said it raised the guidance following a strong first half of the fiscal year. BlackBerry lists December 17, 2026, as the tentative planning date for its next earnings release, according to its investor relations website.