By Agency Staff
Bengaluru — BlackBerry on Thursday forecast first-quarter revenue above estimates as the Canadian software company’s turnaround gains traction on the back of strong demand across its cybersecurity and embedded software divisions.
The company, once a dominant force in smartphones, has over recent years pivoted to software for connected devices and autonomous vehicles. It said it has completed its turnaround plan and emerged with a stronger balance sheet.
Momentum continued in its QNX division, which provides secure, real-time operating systems used in mission-critical embedded systems, most notably in vehicles.
Revenue at QNX rose 20% to $78.7m, while the royalty backlog increased to about $950m.
CEO John Giamatteo said the unit’s deep integration into safety-critical systems shields it from broader technology disruption.
Eyeing buybacks
“Our business is much more immune to ‘SaaSmageddon’ because these are highly regulated, complex, mission-critical solutions,” Giamatteo said. “That strengthens our position versus any kind of generic AI product that might come to market.”
BlackBerry’s secure communications business, which generates about 75% of its revenue from government customers, posted an 8% increase in revenue to $72.5m during the quarter.
Giamatteo said the improved financial position gives BlackBerry greater strategic flexibility.
“I think you’ll see us in a position to make some moves, from M&A tuck-ins to help accelerate growth on the QNX side of the business, and then maybe, opportunistically, looking at buybacks,” he said.
The company sees first-quarter revenue at $132m-$140m, compared with analysts’ estimates of $129.9m, according to data compiled by LSEG.
For the fourth quarter the company posted revenue of $156m, above analysts’ estimates of $144.4m.
The company reported an adjusted gross margin of 78.2%, helped by cost discipline.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.