- BlackBerry (TSX:BB) stock rose more than 5 per cent this week after beating expectations with its Q1 2024 financial report
- Despite a year-over-year decline of 61 per cent, BlackBerry reported a Q1 revenue of US $144 million, surpassing analyst estimates by nearly US$10 million
- BlackBerry’s efforts to divide up its business have produced millions in savings, specifically splitting its cybersecurity business from its internet of things division
- BlackBerry Ltd. stock opened trading at C$3.32
BlackBerry (TSX:BB) stock rose more than 5 per cent this week after beating expectations with its Q1 2024 financial report.
Q1 2024 at a glance
Despite a year-over-year decline of 61 per cent, the Waterloo, Ontario-based tech firm reported a Q1 revenue of US $144 million, surpassing analyst estimates by nearly US$10 million.
BlackBerry’s efforts to divide up its business have produced millions in savings, specifically splitting its cybersecurity business from its internet of things (IoT) division.
“The company is making significant progress towards operational independence for our IoT and cybersecurity businesses, as well as towards profitability. We exceeded our outlook range for both adjusted EBITDA and non-GAAP earnings per share this quarter and achieved a third consecutive sequential improvement in free cash usage. BlackBerry remains on track to be both profitable on a non-GAAP basis and generating positive cashflow in Q4,” BlackBerry’s CEO, John J. Giamatteo, explained in a news release. “Both our IoT and cybersecurity businesses beat revenue expectations. QNX recorded solid royalty revenue while our cybersecurity division delivered a second consecutive quarter of annual recurring revenue growth, as well as further enhancing dollar-based net retention.”
The company noted that IoT revenue grew 18 per cent year-over-year and exceeded previously provided guidance at US$53 million and cybersecurity revenue exceeded earlier guidance at US$85 million.
The cybersecurity issue
This comes as BlackBerry’s threat intelligence and research team reported that it stopped more than 3 million cyberattacks in Q1 2024 and expects that cybercriminals will persist in meticulously targeting their victims.
BlackBerry recently released its new and expanded CylanceMDR, a managed detection and response tool backed by the company’s Cylance AI platform, the cybersecurity industry’s longest-running predictive platform on the market.
The Bank of Canada stated its own concerns about the state of our country’s cybersecurity infrastructure. In its 2023 financial system review, it stated that it is also keeping a close eye on other vulnerabilities and risks, including a “[M]ajor cyber attack or operational incident that would threaten overall financial stability.”
From the report: “A successful cyber attack in one part of the financial system could quickly spread to other parts and threaten overall financial stability. In particular, ransomware attacks – where criminals demand payment for a victim’s data – on critical or widely used third-party service providers remain a source of concern. A severe incident could disrupt the delivery of financial services, lead to significant losses for compromised financial institutions and weaken public confidence in the financial system.”
Outlook
BlackBerry provided guidance (in US dollars) for Q2 2024 (ending August 31) and the full fiscal year 2025 (ending Feb. 28):
|
|
Q2 FY25 |
Full fiscal year FY25 |
|
Total BlackBerry revenue: |
$136 million – $144 million |
$586 million – $616 million |
|
IoT revenue: |
$50 million – $54 million |
$220 million – $235 million |
|
Cybersecurity revenue: |
$82 million – $86 million |
$350 million – $365 million |
|
Licensing & Other revenue: |
Approximately $4 million |
Approximately $16 million |
|
Adjusted EBITDA: |
($5) million – ($15) million |
Breakeven – +$10 million |
|
Non-GAAP basic EPS: |
($0.02) – ($0.04) |
($0.03) – ($0.07) |
About BlackBerry Ltd.
BlackBerry offers intelligent security software and services to enterprises and governments worldwide. The company leverages AI and machine learning to deliver cybersecurity, safety and data privacy solutions.
BlackBerry Ltd. stock (TSX:BB) opened 0.30 per cent higher, trading at C$3.32. The stock has given back nearly 50 per cent year-over-year, and 66 per cent since 2019.
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(Top image: BlackBerry)
