BlackBerry Up 1.4% Since Last Earnings Report: Can It Continue?

It has been about a month since the last earnings report for BlackBerry BB. Shares have added about 1.4% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is BlackBerry due for a pullback? Before we dive into how investors and analysts have reacted as of late, let’s take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

BlackBerry Q4 Earnings Beat Estimates

BlackBerry reported fourth-quarter fiscal 2024 (ended Feb 29) adjusted earnings per share EPS of 3 cents. In the year-ago quarter, it incurred a non-GAAP loss of 2 cents. The Zacks Consensus Estimate was pegged at a loss of 3 cents.

Quarterly total revenues were $173 million compared with the prior-quarter revenues of $151 million. Revenues benefited from solid demand for its solution across the advanced driver assistance systems market.

The company expects fiscal first-quarter total revenues in the range of $130-$138 million. For the Cybersecurity business, revenues are estimated to be in the range of $78-$82 million for the fiscal first quarter. The company expects revenues to be affected due to the ongoing budget constraints by some of its leading government customers.

For IoT business, revenues are now projected to be in the band of $48-$52 million. The company’s revenues are likely to be affected by material delays in software-defined vehicle programs. Licensing & Other revenues are expected to be approximately $4 million.

The company expects fiscal 2025 total revenues in the range of $586-$616 million. For the Cybersecurity business, revenues are estimated to be in the range of $350-$365 million. For the IoT business, revenues are now projected to be in the band of $220-$235 million. Licensing & Other revenues are expected to be approximately $16 million.

Quarter in Details

Revenues from the Cybersecurity business totaled $92 million, up 5% year over year. Revenues were driven by solid momentum in the Spark product group, which includes Cylance and UEM.

Revenues from the IoT business totaled $66 million, up 25% year over year. The uptick was caused by solid demand for the company’s solution in the automotive market and robust QNX development seat revenue.

Licensing and Other contributed $15 million, up from $10 million a year ago.

Other Details

Gross profit increased 29% from the year-ago quarter to $129 million. Gross margin improved to 74.6% from 66.2% reported in the prior-year quarter.

However, non-GAAP gross margin increased 800 basis points to 75% on a year-over-year basis.

Total non-GAAP operating expenses were $113 million, down 4.2%. Adjusted operating income was $16 million against an adjusted operating loss of $17 million a year ago.

Adjusted EBITDA came in at $21 million against an adjusted EBITDA loss of $12 million reported in the year-ago quarter.

Cash Flow & Liquidity

For the quarter that ended on Feb 29, 2024, BlackBerry used $15 million of net cash in operating activities compared with $7 million a year ago.

As of Feb 29, 2024, BlackBerry had $175 million in cash and cash equivalents.

How Have Estimates Been Moving Since Then?

Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.

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