BlackBerry Jumps After Licensing Fuels Quarterly Revenue Gains

(Bloomberg) -- BlackBerry Ltd. jumped the most in six months after fourth-quarter results surpassed analysts’ estimates, boosted by strong gains in licensing revenue.

The former phone maker reported sales of $99 million from its segment that distributes licenses for its existing patents to other businesses. That was a 71 percent increase over the previous year and helped boost total revenue 8 percent on an adjusted basis to $257 million. Shares surged as much as 16 percent to $10.27.

Key Insights

• Software and services revenue, a key growth metric, hit a record $248 million on an adjusted basis, according to a statement Friday. That’s up 14 percent from a year earlier.
• Under Chief Executive Officer John Chen, BlackBerry left its phone-making days behind, pegging its new identity to security software. The company offers a range of different product lines, such as systems to manage an entire stable of mobile phones, or to let cars securely update their entertainment systems.
• The Waterloo, Ontario-based company expects revenue to grow between 23 percent and 27 percent in fiscal year 2020, driven by a double-digit increase in billings, Chen said on the earnings call.
  • BlackBerry’s BTS segment, which includes its autonomous vehicle technology, is set to grow faster than the company’s content management software business, according to Chen.
  • "Everybody’s interested in creating connected vehicles or autonomous vehicles or self-driving vehicles -- and it’s not only cars. It parallels efforts going on in trucks and planes and drones," he said in an interview. So while content management is a more stable market, with "the autonomous side of the equation, the market is just taking off."

Know More

• BlackBerry closed its $1.4 billion purchase of cybersecurity company Cylance Inc. in the quarter. Chen expects that the acquisition will begin adding to the bottom line after the next 12 months.
• The company recently secured $30 million from the Canadian government to put toward autonomous car research. BlackBerry has plans to hire 800 people for the project.
• Read the statement here.

To contact the reporter on this story: Krista Gmelich in New York at kgmelich1@bloomberg.net

To contact the editors responsible for this story: Jillian Ward at jward56@bloomberg.net, Molly Schuetz, Lisa Wolfson

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