2 min read

BlackBerry’s software and services division posts record revenue, but shares still down

BlackBerry CEO John Chen

After putting a positive spin on missed expectations in its last quarter, BlackBerry Ltd. is once again framing its latest results as evidence of being back on track.

On Thursday the Waterloo, Ont.-based enterprise software maker and smartphone icon was quicker to report second-quarter revenues of $238 million (all figures USD), including $91 million in software and services, and net income of $19 million, or four cents per share, rather than its “fully diluted GAAP [generally accepted accounting principles] EPS [earnings per share],” which was a loss of seven cents per share.

That said, there was much for BlackBerry to celebrate: 79 per cent of its of its software and services revenue was recurring, and it fielded approximately 3300 enterprise customer orders during the period ending Aug. 31, 2017, boding well for the company’s future, CEO John Chen told shareholders.

Nor were software and services the company’s only source of revenue: BlackBerry’s technology solutions division brought in $38 million, handheld devices $16 million, system access fees $38 million, and licensing fees $56 million. The company’s quarterly operating income, meanwhile, was $22 million, versus a net income of $19 million.

“I am pleased with our strong execution in Q2,” Chen said in a Sept. 28 statement. “We achieved historical highs in total software and services revenue and gross margin, as well as the highest non-GAAP operating margin in over five years, reflecting our complete transformation to a software company.”

Chen also emphasized the company’s growing reputation as a market leader in the security sector, noting that for a second consecutive year BlackBerry received the highest possible scores in all six use cases in the Gartner Critical Capabilities for High-Security Mobility Management report, and its expanded sales channels for its Radar IOT solution.

The company’s enterprise billings, driven by its Unified Endpoint Management platform, also grew by 19 per cent year over year, Chen noted.

“Based on our progress thus far in [fiscal year 2018], we are on track to achieve software and services revenue growth in the range of 10 per cent to 15 per cent and profitability for the full year,” he said.