Yahoo Finance BlackBerry (BB) Incurs Loss in Q4, Revenues Decline Y/Y
BlackBerry Limited BB reported tepid fourth-quarter fiscal 2023 (ended Feb 28) results, with the top line contracting year over year. Nonetheless, accretive design wins and partnerships with major players bode well for the Canada-based company. The sustained demand for IoT products is a significant tailwind.
The company reported an adjusted loss per share of 2 cents against the prior-year quarter’s non-GAAP earnings of 1 cent. The Zacks Consensus Estimate was pegged at a loss of 7 cents per share. Quarterly total revenues declined 18.4% year over year to $151 million and missed the Zacks Consensus Estimate by 12.3%.
For fiscal 2023, the company reported an adjusted loss per share of 18 cents against the prior fiscal's non-GAAP loss of 10 cents. Total revenues declined 8.6% year over year to $656 million.
BlackBerry Limited Price, Consensus and EPS Surprise
BlackBerry Limited price-consensus-eps-surprise-chart | BlackBerry Limited Quote
Quarter in Details
Revenues from Cybersecurity totaled $88 million, down 27.9% year over year. The company’s Cybersecurity business was affected by weakness in macro environment. Revenues were impacted primarily due to certain large government deals shifting to fiscal 2024. The company has witnessed an elongation in deal cycles in the government vertical, like additional deal reviews and approvals.
Revenues from Internet of Things (IoT) totaled $53 million, up 1.9% year over year. Licensing and Other contributed $10 million, down from $11 million a year ago.
Software and Services revenues declined 19% year over year to $141 million.
BlackBerry highlighted that its IoT business segment achieved a record for QNX design wins, with royalty backlog reaching $640 million. The company’s QNX platform secured 36 new design wins with six in Auto and 30 in the General Embedded Market.
BB also announced that Dongfeng Motor selected PATEO digital cockpit for the next-generation VOYAH Model, marking the first BlackBerry IVY design win.
In addition, BlackBerry rolled out QNX Accelerate, which has made both the QNX Neutrino real time operating system and QNX OS for Safety available in the cloud and through AWS Marketplace. This will aid developers to build QNX in a virtual environment throughout the AWS ecosystem, eliminating the need for physical hardware.
Recently, BlackBerry announced that it will sell most of its non-core patents and patent applications to Malikie Innovations, a subsidiary of Key Patent Innovations Limited. The agreement will involve a combination of cash at closing and potential future royalties totaling up to $900 million. The transaction is a significant move for BlackBerry, as it will strengthen the company's balance sheet, simplify its business and enable it to focus on its core IoT and Cybersecurity businesses.
Other Details
Gross profit decreased 19.4% from the year-ago quarter to $100 million. Gross margin declined to 66.2% from 67%.
Total non-GAAP operating expenses were $118 million. Adjusted operating loss was $17 million against the adjusted operating income of $8 million a year ago. This was mainly due to a $476 million non-cash, goodwill and long-lived asset impairment charge.
Adjusted EBITDA loss came in at $12 million against the adjusted EBITDA income of $20 million reported in the year-ago quarter.
Cash Flow & Liquidity
For the year ended Feb 28, BlackBerry used $263 million of net cash in operating activities compared with $28 million in the prior-year period.
As of Feb 28, 2023, BlackBerry had $295 million in cash and cash equivalents.
Outlook
For fiscal 2024, BlackBerry expects Cybersecurity revenues in the range of $425-$450 million. Cyber business billings growth is expected within 7-20% due to increased uptake of security products. For Q1, Cybersecurity revenues are expected to increase sequentially and be in the range of $100-$110 million.
Zacks Rank & Stocks to Consider
BlackBerry currently has a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader technology space are Arista Networks ANET, Perion Network PERI and Pegasystems PEGA, each presently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Arista Networks’ 2023 earnings is pegged at $5.79 per share, rising 10.9% in the past 60 days. The long-term earnings growth rate is anticipated to be 14.2%.
Arista Networks’ earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 14.2%. Shares of ANET have increased 16.4% in the past year.
The Zacks Consensus Estimate for Perion’s 2023 earnings is pegged at $2.69 per share, rising 16% in the past 60 days. The long-term earnings growth rate is anticipated to be 25%.
Perion’s earnings beat the Zacks Consensus Estimate in all the last four quarters, the average being 31.7%. Shares of PERI have increased 67.6% in the past year.
The Zacks Consensus Estimate for Pegasystems’ 2023 earnings is pegged at $1.35 per share, rising 66.7% in the past 60 days.
Pegasystems’ earnings beat the Zacks Consensus Estimate in two of the trailing four quarters, the average surprise being 11.2%. Shares of the company have declined 42.8% in the past year.
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