Is BlackBerry (BB) Stock a Buy for Long-Term Growth in 2025?

In the ever-evolving tech landscape of 2025, BlackBerry (BB) has transformed from a legacy smartphone brand into a software and services company with a focus on embedded systems, cybersecurity, and the Internet of Things (IoT). The company's strategic pivot toward its QNX and SecuSmart segments has sparked renewed investor interest, but whether these divisions can justify the stock's current valuation remains a critical question. Let's dissect the potential of these segments and assess if BB is a compelling long-term buy.

Strategic Shift: From Handsets to Software Dominance

BlackBerry's rebranding as a software-centric company has been nothing short of dramatic. The QNX segment, originally part of its IoT division, now operates as a standalone business, driving growth in automotive and industrial embedded systems. In fiscal 2025, QNX revenue rose 10% year-over-year to $250 million, accounting for 44% of the company's total revenue. This segment is underpinned by its QNX Neutrino Real-Time Operating System (RTOS), a cornerstone in automotive infotainment, autonomous driving, and industrial automation.

Meanwhile, the SecuSmart segment—part of the broader Secure Communications division—has faced headwinds, including a 4% year-over-year revenue decline in 2025. This was partly due to the sale of Cylance's endpoint security assets to Arctic Wolf in early 2025, a move that streamlined operations but temporarily dented revenue. However, SecuSmart's focus on secure communications for government agencies and emergency services has shown resilience, with a 7% year-over-year improvement in its Dollar-Based Net Retention Rate (DBNRR) to 88%.

QNX: A High-Stakes Bet on Embedded Systems

QNX's growth is anchored in its dominance in the automotive sector. As software-defined vehicles (SDVs) become the norm, QNX's role as a foundational OS is critical. The segment's royalty backlog of $865 million as of 2025 highlights strong future revenue visibility, while innovations like QNX SDP 8.0 and Hypervisor 8.0 position it to capture emerging markets in robotics and medical devices.

The segment's expansion beyond automotive is particularly noteworthy. In 2025, 43% of QNX's SDP 8.0 pipeline came from non-automotive industries, including robotics and industrial automation. This diversification reduces reliance on a single sector and taps into the $405 billion global cybersecurity market projected to 2030.

However, challenges loom. The automotive sector faces supply chain volatility and regulatory shifts, such as new tariffs in 2025. QNX's ability to maintain its design-win momentum and adapt to these disruptions will be pivotal. Analysts project 10–14% growth for QNX in fiscal 2026, but execution risks remain.

SecuSmart: Niche Strength in a Competitive Market

SecuSmart's niche in secure communications for government and emergency services offers a unique value proposition. With 92% net retention and contracts with U.S. federal agencies like FEMA and the White House Communications Agency, the segment is well-positioned to benefit from rising cybersecurity demands. Its FedRAMP High certification—a first for a private cybersecurity firm—further opens doors to federal contracts.

Yet, the segment's reliance on a single customer base (government agencies) and the lingering impact of the Cylance divestiture create uncertainty. While management expects a 10–14% revenue decline in 2026, the long-term potential for SecuSmart to expand into enterprise markets and leverage AI-driven tools like CylanceMDR™ Pro could offset these challenges.

Valuation Multiples: A Double-Edged Sword

BlackBerry's stock trades at an enterprise value of $2.2 billion, or four times its current year's sales, and 27 times forward adjusted EBITDA. These multiples are lofty by historical standards and even outpace many of its peers in the cybersecurity and embedded systems sectors. For instance, automotive tech peers trade at an average of 5.7x EV/Sales, while cybersecurity firms typically command 18–22x EBITDA multiples.

The key question is whether QNX and SecuSmart can sustain growth to justify these valuations. QNX's 10% revenue growth in 2025 and its projected 10–14% expansion in 2026 suggest a strong trajectory, but the segment's margins and scalability will need to improve to support a premium multiple. For SecuSmart, the path to profitability is less clear, given its current revenue decline and competition from giants like CrowdStrike and Palo Alto Networks.

Risk vs. Reward: A Balanced Outlook

BlackBerry's transformation is undeniably ambitious, but it's not without risks. The company's reliance on two high-growth segments exposes it to sector-specific downturns. Additionally, its high valuation multiples leave little room for error. If QNX misses growth targets or SecuSmart fails to recover, the stock could face significant downward pressure.

However, the macroeconomic tailwinds are favorable. The global push for secure embedded systems in vehicles, IoT, and critical infrastructure creates a durable demand for QNX. Meanwhile, the $405 billion cybersecurity market by 2030 offers a vast runway for SecuSmart's expansion.

Investment Thesis: A Buy for the Patient Investor

For long-term investors with a 5–7 year horizon, BB could be a compelling buy. The company's strategic focus on high-growth sectors, strong R&D investment, and recurring revenue models in both QNX and SecuSmart align with secular trends. While the current valuation is elevated, the potential for these segments to scale and achieve profitability over time could justify the multiples.

That said, investors should monitor key metrics:
- QNX's royalty backlog and design-win pipeline to gauge long-term revenue visibility.
- SecuSmart's customer acquisition costs and gross margins to assess its path to profitability.
- Operating expenses and net income trends to ensure the company maintains fiscal discipline.

In a market where patience and a long-term perspective are rewarded, BlackBerry's pivot to software and cybersecurity could deliver outsized returns for those willing to navigate the near-term volatility.

Final Verdict: If you're comfortable with a high-risk, high-reward bet and believe in the secular growth of embedded systems and cybersecurity, BB could be a strategic addition to your portfolio. However, for more conservative investors, a cautious approach with a small position is advisable until the company proves its growth narrative.