BlackBerry Limited (NYSE:BB) posted strong first-quarter fiscal 2024 (ending June 28) performance, with top-line revenue increasing year over year. Furthermore, accretive design wins and alliances with large players bode well for the Canadian firm.

The company reported adjusted earnings per share (EPS) of 6 cents, compared to a non-GAAP loss of 5 cents in the prior-year quarter. The consensus estimate was for a loss of 5 cents per share.

Total quarterly revenues were $373 million, up from $168 million in the previous quarter. The company’s revenue above the Consensus Estimate of $159.4 million.

Key Details

The Cybersecurity company generated $93 million in revenue, a 17.7% decrease year on year. The company’s Cybersecurity business was harmed by macroeconomic weakness. Revenue was hurt primarily by longer sales cycles and more contract reviews and approvals compared to the prior quarter.

Revenues from the Internet of Things (IoT) business reached $45 million, an 11.8% decrease year on year. The drop was caused by temporary delays as a number of clients revised their development plans in order to leverage on the software-defined vehicle trend.

Licensing and Other generated $235 million, an increase of $4 million from the previous year. The increase was triggered by the sale of most of its non-core patents and patent applications to Key Patent Innovations Limited for $218 million. Revenue from software and services fell 15.9% year on year to $138 million.

The company’s QNX platform was responsible for seven new design wins in the Auto market and seven in the General Embedded Market.

BB announced a new integration between its CylanceGUARD Managed Detection and Response and BlackBerry AtHoc-powered Critical Event Management system.

Furthermore, according to TechInsights, BlackBerry QNX software is currently installed in over 235 million automobiles worldwide. This represents a 20 million car integration increase year over year.

Additional Information

Gross profit climbed 72.1% year on year to $179 million. The gross margin fell from 61.9% to 48%. When the impact of the patent sale is removed, the non-GAAP gross margin climbed 22% year over year.

Non-GAAP operating expenses totaled $145 million. Adjusted operating income was $35 million, compared to a loss of $27 million the previous year.

The adjusted EBITDA income was $41 million, compared to a loss of $21 million in the previous quarter.

Cash Flow and Liquidity

BlackBerry earned $99 million in net cash from operational activities in the fiscal year that ended June 28, 2023, compared to $42 million in the prior-year period.

BlackBerry has $358 million in cash and cash equivalents as of June 28, 2023.

Outlook

The company has reaffirmed its long-term financial goals. For fiscal 2024, management anticipates overall revenues in the $665-$700 million range.

Revenues for the IoT business (excluding IVY) are expected to be in the $240-$250 million range in fiscal 2024. Revenues for the Cybersecurity business are expected to be in the $425-$450 range in fiscal 2024.

Featured Image: Unsplash © Randy Lu

Please See Disclaimer