BlackBerry Ltd (BB) stock surged 5.7% in the pre-market session on Friday, outperforming the broader market. The cybersecurity software company's rally came after it reported better-than-expected earnings for the fiscal third quarter and received an analyst upgrade.

BlackBerry delivered fiscal Q3 adjusted earnings per share of $0.02, surpassing the consensus estimate of a $0.01 loss. Revenue for the quarter climbed to $162 million, also exceeding the expected $146.68 million. The company's key Internet of Things (IoT) segment posted a 13% year-over-year increase in revenue to $62 million.

The company's free cash flow improved significantly to $3 million from negative $33 million in the year-ago period, reflecting its efforts to enhance profitability. However, BlackBerry reduced its fiscal year 2025 guidance, projecting EPS between negative $0.02 and breakeven, compared to the consensus estimate of negative $0.01. Annual revenue is now expected to range from $517 million to $526 million, well below the $590 million analyst forecast.