BlackBerry Q2 2022 revenue beats expectations

BlackBerry has reported financial results for the three months ended August 31, 2021. Revenues fell 34% to $175 million, nearly $11 million better than consensus expectations.

The company says it lost 25 cents per share in the three months ended Aug. 31, compared with a loss of four cents per share or US$23 million a year earlier. The loss includes 12 cents per share for a non-cash accounting adjustment to the fair value of the convertible debentures as a result of market and trading conditions.

Excluding one-time items, it swung to an adjusted loss of US$33 million or six cents per share, versus an adjusted profit of $58 million or 10 cents per share in the second quarter of its fiscal 2021. BlackBerry was expected to report an adjusted loss of seven cents per share and a net loss of 13 cents per share on US$163.5 million of revenues.

“Revenue for all businesses beat expectations this quarter. The Cyber Security business unit delivered robust sequential billings and revenue growth and the IoT business unit performed well in the face of global chip shortage pressures,” said John Chen, Executive Chairman & CEO, BlackBerry.

BlackBerry Second Quarter Fiscal 2022 Financial Highlights

Total company revenue for the second quarter of fiscal 2022 was $175 million.
Total company non-GAAP gross margin was 65% and GAAP gross margin was 64%.
IoT revenue for the second quarter of fiscal 2022 was $40 million, with gross margin of 83% and ARR of $89 million.
Cyber Security revenue for the second quarter of fiscal 2022 was $120 million, with gross margin of 59% and ARR of $364 million.
Licensing and Other revenue for the second quarter of fiscal 2022 was $15 million as negotiations for the sale of a portion of the patent portfolio continue. Gross margin was 60%.
Non-GAAP operating loss was $30 million. GAAP operating loss was $141 million, primarily due to a non-cash accounting adjustment to the fair value of the convertible debentures, resulting from market and trading conditions, of $67 million.
Non-GAAP loss per share was $0.06 (basic and diluted). GAAP loss per share was $0.25 (basic and diluted).
Total cash, cash equivalents, short-term and long-term investments were $772 million.
Net cash generated from operating activities was $12 million.

Business Highlights & Strategic Announcements

BlackBerry has design wins with 24 of the world’s leading 25 Electric Vehicle (EV) automakers. This has increased from 23 of the top 25 last quarter following an EV win with Daimler.
BlackBerry IVY to deliver highly secure vehicle-based payments, leveraging direct access to vehicle sensor data and edge processing to create a “digital fingerprint”. Delivered through a partnership with Car IQ.
Nobo Technologies selects BlackBerry QNX Neutrino as foundation for new Digital Cockpit Controller for Great Wall Motors’ Haval G6S SUV. Great Wall Motors is China’s largest producer of SUV vehicles.
sTraffic, Korea’s leading solution developer for transportation infrastructure systems, selects QNX OS for Safety as the foundation for their train traffic management system that includes unmanned train operations.
BlackBerry launches BlackBerry Jarvis 2.0 composition analysis tool. Delivered as a more user-friendly SaaS offering, Jarvis 2.0 empowers OEMs to validate and ensure the quality of their multi-tiered software bill of materials.
BlackBerry awarded highest AAA rating by SE Labs in breach test of BlackBerry Protect (EPP) and BlackBerry Optics (EDR). The breach test adopted a range of real-world hacker tactics and BlackBerry’s AI-driven products delivered complete prevention and detection with zero false positives.
BlackBerry UEM integrates with Microsoft 365, delivering BlackBerry’s industry-leading security to Microsoft’s productivity products.
BlackBerry AtHoc critical event management platform used as foundation for autonomous flood risk and clean water monitoring solution.
BlackBerry updates SecuSUITE capabilities to protect group phone calls and messages for governments and businesses from high risk eavesdropping.

Chen added:

“We are already seeing benefits from establishing the two key business units and are delighted to appoint John Giamatteo as President of Cyber Security. Giamatteo, who was previously President and Chief Revenue Officer at McAfee, adds leading industry expertise.
In IoT, design activity for our QNX products remains very strong, demonstrating both our industry leadership position and secular trends, such as ECU consolidation. In Cyber Security we received strong third-party validation of the effectiveness of our AI-driven, prevention-first suite of products, illustrating progress made with recent product launches.”