Shaker Cherukuri

$BB — My Investor Take: BlackBerry’s QNX Could Be Becoming Its Most Valuable Growth Engine For me, the most important part of BlackBerry’s latest announcement is not the 6.7% stock jump. It is that QNX’s royalty backlog has surpassed $1.2 billion, up more than $250 million, or 26%, from approximately $950 million at the end of fiscal 2026. That tells me demand for its embedded software is expanding, and BlackBerry is securing opportunities that could generate royalties for years. The biggest catalyst is QNX’s first design win for Alloy Kore, its foundational automotive operating system. The deal carries more than $100 million in estimated future royalties and is QNX’s largest design win in its history. The opportunity is bigger than one contract: as automakers consolidate vehicle functions onto powerful centralized computers, QNX could supply more software within each vehicle and potentially earn more royalties per program. Here’s the growth engine I’m watching: automaker design wins → vehicle production → software integration → royalty revenue → higher software content per vehicle → stronger cash generation. QNX is also expanding beyond automotive into robotics, industrial automation and medical devices, where reliability, safety and security are essential. These markets could give BlackBerry additional growth opportunities as intelligent systems become more widespread. One detail I find particularly important: management says roughly two-thirds of the $1.2 billion backlog comes from legacy design wins already progressing toward production, while the remaining third comes from newer technologies and Alloy Kore. The newer opportunities may take two to three years to convert into revenue. This gives QNX a combination of an established royalty pipeline and longer-term growth potential. But I would not treat the entire backlog as guaranteed revenue. Actual royalties depend on vehicle production volumes, customer forecasts and contracts remaining in place. I also want to see how quickly new design wins translate into revenue, margins and free cash flow. BlackBerry’s decision to retain QNX within the broader company means investors are still buying a combined business rather than a pure-play automotive software company. My takeaway: I see QNX as a potentially underappreciated asset inside $BB. If software-defined vehicles continue gaining traction and QNX expands its role in automotive computing, the royalty model could become an increasingly important source of long-term value. The next step is proving that record backlog growth can translate into sustained financial growth. The key question: Can QNX turn its $1.2 billion royalty backlog into accelerating revenue and cash flow—and establish BlackBerry as a broader embedded-software growth story?