Security software stocks face a fresh profit test

• BlackBerry reported Q1 FY2027 revenue of $152.9 million, up 26% year over year, with adjusted EBITDA of $36.3 million and GAAP operating income of $15.3 million.
• The comparison group shows a wide revenue gap, from Cerence’s $64.2 million quarterly revenue to Palo Alto Networks’ $3 billion quarterly revenue.
• The main sector test is whether AI security, connected-vehicle software, and government communications can keep growing while margins stay under control.

BlackBerry (NYSE:BB)

BlackBerry (NYSE:BB) is no longer mainly a phone company. Its current business is built around QNX software and Secure Communications.

In Q1 FY2027, BlackBerry reported revenue of $152.9 million, up 26% year over year. Adjusted EBITDA rose to $36.3 million, while GAAP operating income reached $15.3 million.

QNX revenue rose 26% to $72.3 million. 

Secure Communications revenue rose 24% to $73.6 million. 

The company also ended the quarter with $422.9 million in cash and investments.

BlackBerry said it expects FY2027 revenue of $594 million to $621 million.

It also projects adjusted EBITDA of $119 million to $139 million and operating cash flow of about $100 million.

CrowdStrike Holdings (NASDAQ:CRWD)

CrowdStrike Holdings (NASDAQ:CRWD) is a major endpoint and cloud security company. 

It competes for enterprise security budgets through its Falcon platform.

In Q1 FY2027, CrowdStrike reported revenue of $1.39 billion, up 26% year over year. 

Annual recurring revenue reached $5.51 billion.

The company reported GAAP net income of $27.8 million, compared with a loss a year earlier. 

It also generated $590.9 million in operating cash flow.

CrowdStrike said it expects FY2027 revenue of $5.9147 billion to $5.9587 billion. 

It also announced a four-for-one stock split for shareholders of record on June 25, 2026.

Palo Alto Networks (NASDAQ:PANW)

Palo Alto Networks (NASDAQ:PANW) is one of the largest cybersecurity platform companies in this group. 

It sells network security, cloud security, and security operations tools.

In fiscal Q3 2026, Palo Alto Networks reported revenue of $3 billion, up 31% year over year. 

Next-Generation Security ARR reached $8.1 billion.

The company reported a GAAP operating loss of $183 million. 

On a non-GAAP basis, operating income reached $814 million.

Palo Alto Networks said it expects FY2026 revenue of $11.415 billion to $11.425 billion.

Its results included $388 million from CyberArk and Chronosphere.

SentinelOne (NYSE:S)

SentinelOne (NYSE:S) is an AI-focused cybersecurity company. 

Its platform covers endpoint, cloud, data, and security operations.

In Q1 FY2027, SentinelOne reported revenue of $277 million, up 21% year over year. 

Annualized recurring revenue rose 23% to $1.163 billion.

The company reported a GAAP operating margin of negative 29%. 

Its non-GAAP operating margin improved to 4%.

SentinelOne said it expects FY2027 revenue of $1.195 billion to $1.205 billion. 

It also raised its non-GAAP operating income outlook to $115 million to $125 million.

Cerence (NASDAQ:CRNC)

Cerence (NASDAQ:CRNC) is the closest connected-vehicle software comparison in this group. 

Its software is used in automotive voice, AI, and in-car user experience systems.

In Q2 FY2026, Cerence reported revenue of $64.2 million and adjusted EBITDA of $7.2 million. 

It also reported $14.1 million in operating cash flow.

The company said its technology was present in 50% of worldwide auto production on a trailing 12-month basis. 

Connected cars shipped rose 12% over the same comparison period.

Cerence said it expects FY2026 revenue of $305 million to $320 million. 

It also projects adjusted EBITDA of $60 million to $70 million.

The bottom line

BlackBerry’s latest report puts it in a different conversation from its smartphone past.

 The company now sits between cybersecurity, secure communications, and connected-device software.

The five stocks show the same broad tension. 

Demand for AI security and connected systems is rising, but investors are still watching cash flow, margins, and execution. 

Larger names like Palo Alto Networks and CrowdStrike have scale. 

Smaller names like BlackBerry, SentinelOne, and Cerence still need to prove that growth can keep translating into durable profits.