Canadian company BlackBerry on Tuesday gave its fiscal year profit forecast a boost after delivering better-than-expected results in its third quarter.
CEO John Chen noted the company – which is in the middle of a hard pivot to focus on software and security rather than hardware – “achieved significant milestones” in the period, with what he said was “the highest gross margin in the company’s history” and continued efforts to transform the company into a software business.
“BlackBerry is now a software company and the market leader in mobile security,” Chen said. ““As the number of mobile-connected devices continues to proliferate, we expect growing demand in our areas of strength, including security and embedded software. The recent agreements with Ford and TCL are positive proof points on our value proposition in these emerging growth areas. We have a pipeline of opportunities to continue our momentum.”
During the third quarter, BlackBerry reported a net loss of $117 million on $289 million in revenue, compared to a net loss of $89 million on $548 million in revenue the year prior. The company’s gross margin was a record 67 percent – which jumped to 70 percent on a non-GAAP basis. Non-GAAP earnings per share were two cents, while GAAP earnings per share stood at a loss of 22 cents. A Thomson Reuters poll of analysts had predicted a loss of one cent per share.
The company said on a non-GAAP basis, nearly 55 percent of its revenue came from software and services, while 23 percent came from mobility solutions (including devices), and 22 percent came from service access fees.
Chen said the company is on track to deliver 30 percent growth in the company’s total software and services revenues for the full fiscal year, and noted BlackBerry now expects to achieve an adjusted per share profit for the full year, up from a prior range of breakeven to a five cent loss.
“This is the third consecutive quarter we have increased our EPS outlook, reflecting the traction we are achieving in our shift to a software business model,” Chen observed. “We also anticipate breakeven non-GAAP EPS and approximately breakeven free cash flow in Q4.”