shares of blackberry corporation The stock experienced a significant rally in after-hours trading on Wednesday, rising more than 6%.
The jump came after the company posted adjusted profit in its most recent quarter that exceeded investors' expectations. This strong result was driven by strong sales growth in BlackBerry's Cybersecurity and Internet of Things (IoT) divisions.
Record quarter for IoT
The fiscal fourth quarter was a milestone for BlackBerry, with the company's IoT division experiencing its “strongest quarter ever,” according to CEO John J. Giamatteo. This achievement confirms BlackBerry's success in shifting its focus from hardware to the rapidly growing IoT and cybersecurity markets.
While the IoT sector has been in the spotlight, BlackBerry's cybersecurity sector has also seen notable developments. Giamatteo highlighted the sector's “small but significant progress” and indicated its steady trajectory towards strengthening its position in the cybersecurity field.
Towards profitability and cash burn reduction
Amid these advances, BlackBerry is working hard to separate divisions and steer toward increased profitability. The significant reduction in operating cash burn (more than half compared to the fiscal third quarter) demonstrates the company's effective management and strategic planning.
financial highlights
During the quarter, BlackBerry reported a loss of $56 million, or 10 cents per share. This represents a notable improvement compared to his loss of $495 million, or 85 cents per share, in the year-ago period.
On an adjusted basis, excluding one-time items, the company earned 3 cents per share. That beat the FactSet analyst consensus, which had expected an adjusted loss of 4 cents per share.
Overall revenue was $173 million, up from $151 million in the year-ago period. Analysts polled by FactSet had expected sales of $150 million.
Breaking down the revenue further, it looks like this:
- Internet of Things: $66 million (up 25% year over year)
- Cybersecurity: $92 million (5% increase YoY)
For the future
Despite its accomplishments, BlackBerry remains cautious about its outlook. The company expects first-quarter revenue to be between $130 million and $138 million, and a loss per share of 4 cents to 6 cents. This guidance is somewhat conservative compared to FactSet's expectation that he would post an adjusted loss of 3 cents per share on revenue of $148 million.
BlackBerry expects adjusted loss per share in the range of 3 cents to 7 cents for fiscal 2025 on revenue of $586 million to $616 million. This estimate is slightly below the FactSet consensus, which expected an adjusted loss of 6 cents per share on revenue of $624 million.
market performance
BlackBerry's recent surge is in sharp contrast to its roughly 38% decline over the past 12 months. This performance diverges from the S&P 500's roughly 26% gain over the same period and reflects the volatile nature of technology investing and the challenges of shifting business models. However, the latest earnings report could mark a turning point for his BlackBerry as it continues to evolve and take advantage of opportunities in the IoT and cybersecurity space.
blackberry report
- Record performance: BlackBerry's IoT division achieved record quarterly revenue of $66 million, up 25% year-over-year. The fiscal year also set a new record for growth in outstanding QNX royalties, increasing 27% to approximately $815 million.
- Cybersecurity Growth: Cybersecurity reported revenue of $92 million, up 5% year-over-year, and annual recurring revenue (ARR) continued to grow 3% to $280 million.
- Gross Margin: Companywide non-GAAP and GAAP gross margin increased to 75%. IoT gross margins remained strong at 85%, and cybersecurity gross margins were 65%.
- Profitability and Loss: Fourth quarter non-GAAP operating income was $16 million and GAAP operating loss was $56 million. Non-GAAP basic earnings per share were $0.03 and GAAP basic loss per share was $0.10.
- Annual Financials: Companywide revenues for the year were $853 million, non-GAAP operating income was $36 million, and GAAP operating loss was $125 million. Non-GAAP basic earnings per share amounted to $0.05 and GAAP basic loss per share was $0.22.
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