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BlackBerry (BB) Q2 Loss Meets Estimates, Shares Up on Solid Demand

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BlackBerry Limited BB reported tepid second-quarter fiscal 2022 (ended Aug 31, 2021) results with year-over-year top-line contraction. However, its shares rallied in the extended trading session as a result of solid demand for cybersecurity and IoT software products. Accretive design wins bode well for the Canada-based company.

Net Loss

On a GAAP basis, quarterly net loss was $144 million or a loss of 25 cents per share compared with a net loss of $23 million or a loss of 4 cents per share in the prior-year quarter. The year-over-year wider loss was primarily due to top-line contraction and higher operating loss.

Non-GAAP net loss was $33 million or a loss of 6 cents per share against net income of $58 million or 10 cents per share in the year-ago quarter. Adjusted loss per share matched the Zacks Consensus Estimate.

BlackBerry Limited Price, Consensus and EPS Surprise

BlackBerry Limited Price, Consensus and EPS Surprise
BlackBerry Limited Price, Consensus and EPS Surprise

BlackBerry Limited price-consensus-eps-surprise-chart | BlackBerry Limited Quote

Revenues

Quarterly total revenues plunged 32.4% year over year to $175 million. While revenues from Cyber Security aggregated $120 million, the same from IoT totaled $40 million. Licensing and Other contributed $15 million.

In the IoT business unit, the company is witnessing significant progress despite headwinds related to the global chip shortage. An uptick in demand for QNX products and a robust pipeline of design wins, fueled by accretive partnerships, demonstrates BlackBerry’s industry leadership position and secular trends.

In Cyber Security, the company delivered solid sequential billings and revenue growth. It received strong third-party validation of the effectiveness of AI-driven, prevention-first suite of products, thereby reflecting innovative product launches.

Other Details

Gross profit declined to $112 million from $199 million in the year-ago quarter. Total operating expenses increased to $253 million from $221 million. This was primarily due to higher fair value adjustment on the convertible debentures. Operating loss was $141 million compared with a loss of $22 million a year ago.

Cash Flow & Liquidity

In the first six months of fiscal 2022, BlackBerry utilized $18 million of net cash in operating activities. As of Aug 31, 2021, the company had $291 million in cash and cash equivalents with $782 million of long-term debentures.

Outlook Reiterated

For fiscal 2022, BlackBerry expects the Cyber Security business’ revenues to be at the lower end of the $495 million to $515 million range. IoT revenues are estimated between $180 million and $200 million. Licensing revenues are anticipated to be about $10 million a quarter for the next two quarters.

Zacks Rank & Stocks to Consider

BlackBerry currently has a Zacks Rank #3 (Hold).

Some better-ranked stocks in the industry are MicroStrategy Incorporated MSTR, Aspen Technology, Inc. AZPN, and Cadence Design Systems, Inc. CDNS. While MicroStrategy sports a Zacks Rank #1 (Strong Buy), Aspen Technology and Cadence Design Systems carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

MicroStrategy delivered a trailing four-quarter earnings surprise of 2,032.1%, on average.

Aspen Technology delivered a trailing four-quarter earnings surprise of 19.9%, on average.

Cadence Design Systems delivered a trailing four-quarter earnings surprise of 13.1%, on average.


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BlackBerry Limited (BB) : Free Stock Analysis Report

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