The company continued to produce losses for the quarter with GAAP earnings-per-share coming in a 9 cents, and investors will be disappointed that Blackberry has not been able to turn a profit despite relatively healthy margins.
But the private sector continues to prefer competitors leaving Blackberry in a tight bind. Cybersecurity meanwhile continues to struggle even though the company’s systems are increasingly preferred by governments to protect their network. The good news is that as the IoT division becomes a larger percentage of revenue the company’s gross margins are likely to head much higher to around 70%, which would push the company towards profitability, something that investors will look for before they start to dip their toes in the stock again. QNX is now also embedded in 7 out of the 10 largest OEMs in China, and the company remains hopeful that IoT can be the backbone of Blackberry’s revenue in the future.
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Management has guided that IoT revenue for the fiscal year 2023 will come in at around $200-$210 million and that the future looks bright with an increasing number of car makers adopting the main IoT software program QNX, including the likes of Volkswagen. Blackberry IoT Flourishes but Cyber Security Continues to Struggle Issues from the previous quarter remain but the overall results were better and some green shoots have begun to show for the security and IoT company. The company’s management has reiterated that it will increasingly focus on the IoT segment moving forward, which is surprising because not long ago Blackberry always featured among the most preferred cyber security companies, but is now increasingly being overlooked for companies such as Crowdstrike (Nasdaq: CRWD). We’re executing on our plan and we’re seeing the decisions made in recent quarters starting to pay off, with Cybersecurity ARR expected to resume growth early next fiscal year.”īlackberry (NYSE: BB), continues to struggle with its SaaS and cybersecurity business, meanwhile, on the other hand, the IoT division continues to grow relatively rapidly making up for declines in revenue elsewhere. “In our Cybersecurity business, we delivered double-digit sequential billings growth, including securing significant business in both government and financial services, as well as in the middle market. IVY remains firmly on track, with the latest product release in August, proof of concept trials progressing well, and the IVY fund continuing to invest in exciting ecosystem partners. A major design win in the quarter was with Volkswagen, who chose QNX for their new VW.OS, to be deployed across all Volkswagen Group brands. “Our IoT business continues to gain market share, and design-phase revenue remained at near-record levels. “This was a solid second quarter for BlackBerry, where we delivered both revenue in line with, and EPS ahead of, expectations,” said John Chen, Executive Chairman & CEO, BlackBerry. IoT revenue increased by 28% YoY coming in at $51 million, and cybersecurity revenue declined by 8% to $111 million.Total revenue came in at $168 million, with gross margins coming in at 63%.Blackberry fell below $5 per share retreating by almost 2% during trading hours as issues that have plagued the security company continued.
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