BlackBerry Rises on Record Software Quarter, M&A Plans
(Bloomberg) -- BlackBerry Ltd. set a record quarter for software revenue, further cementing recent success the company has had in winning corporations over to its new non-phone offerings.
Revenue was $239 million, beating the average estimate of $215.5 million and overshooting even the most optimistic analyst prediction. Software revenue was $218 million and 70 percent of that was recurring, as opposed to one-time licensing payments.
BlackBerry shares were up 2.4 percent to $12.70 at 10:02 a.m. in New York.
Chief Executive Officer John Chen has worked to establish the company as a serious security software provider in a range of different product lines, such as systems to manage an entire company’s stable of mobile phones, or to let cars securely update their entertainment systems. Much of that was accomplished through buying smaller software firms, such as secure file sharing company WatchDox, and integrating them into BlackBerry’s product line.
Now, he’s looking for more sizeable acquisitions to ramp up revenue even more.
“The smaller deals were necessary in the last number of years to complete my product offering,” Chen said in an interview Wednesday. “I am focusing on bigger ones.”
The company has also gone after larger targets in its efforts to get other tech firms to pay licensing fees for using old BlackBerry patents. It sued Facebook earlier this month, alleging the social-media giant uses ideas invented by BlackBerry for its messaging apps.
“We have been working with them for a number of years and it didn’t get anywhere,” Chen said about Facebook. The CEO doesn’t have a high-risk tolerance for rolling the dice on lawsuits that could backfire, but the Facebook case is clear-cut, he said. “This is my last resort, not my first move.”
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