BlackBerry Limited’s (BB.T) earnings are no April Fools’ Day joke

Revenue Crawl

$4.727B Market Capitalization

BlackBerry Limited (BB.T) announced today its financial results for the three months and fiscal year ended February 28, 2022. If you have been following BlackBerry, then you are likely already aware of the Company’s subpar Q4 Fiscal 2022 financial results. While I will still briefly cover BlackBerry’s results, let’s talk about what this means for the Company.

“The IoT business recorded its first $50m-plus revenue quarter since the start of the pandemic. In addition to overcoming a number of industry-wide challenges, such as supply chain constraints and the war in Ukraine, the QNX business set another record for quarterly design-related revenue, demonstrating both strong fundamentals and momentum for the business,” said John Chen, Executive Chairman & CEO, BlackBerry.

For starters, why is BlackBerry’s stock down more than 10%? Well, put bluntly, the Company’s Q4 2022 revenue missed analysts’ estimates. To be more specific, BlackBerry’s reported revenue of $185 million for the period, approximately $2 million short of analysts’ estimated $187 million. Furthermore, the Company’s cybersecurity revenue in the quarter experienced no growth compared to the year prior.

Having covered BlackBerry for quite some time, I am a little surprised the Company’s cybersecurity growth, or lack thereof, wasn’t greater. In retrospect, the most substantial piece of news I covered for BlackBerry in 2021 was related to the Company’s multi-year agreement with BMW Group. Following the news, BlackBerry’s share price climbed from a previous close of $11.06 on December 14, 2021, to a high of $11.69 on December 15, 2022, following the news.

Nothing too crazy, however, BlackBerry’s shares began falling shortly after. Why? Likely for the same reason the Company’s stock is tanking now. Shortly after BlackBerry announced its multi-year agreement with BMW Group, the Company announced its Q3 2022 financial results. In addition to quarterly revenues declining 15.6% year-over-year (YOY), BlackBerry announced a disappointing projection for Q4 cybersecurity revenue.

The Company estimated that its Q4 cybersecurity revenue would be $135 million at the top end, which is around 11% higher than Q4 Fiscal 2021. Compared to an analyst estimate of $143 million, that is quite a glaring difference. With this in mind, BlackBerry’s latest financial results aren’t the most impressive…again. However, I would like to believe that my faith in BlackBerry is not misplaced.

In addition to receiving the Frost & Sullivan 2021 Technology Innovation Leadership Award, BlackBerry’s Blackberry QNX is embedded in over 195 million vehicles, demonstrating an increase of more than 20 million in 2021 compared to the year prior. Furthermore, in 2022, BlackBerry has secured 13 channel partners in the Asia-Pacific (APAC) region and has implemented its BlackBerry Radar into an entire fleet of trailers and commercial vehicles via the ISAAC Open Platform.

“The key components are in place, and we expect continued billings momentum this year. Following the demonstration of our BlackBerry IVY edge-to-cloud data platform on auto-grade hardware at CES, we have secured a number of Proof-of-Concept trials,” continued John Chen.

BlackBerry’s total cash and cash equivalents were $770 million, with a total net cash position of $405 million. As previously mentioned, the Company’s revenue for the period was $185 million compared to analysts’ estimates of $187 million. However, BlackBerry has achieved several milestones, including a record number of new design wins in a quarter for BlackBerry QNX. Moreover, the Company announced the first BlackBerry IVY proof-of-concept trial with PATEO to integrate IVY into a digital cockpit.

Personally, I would like to believe that BlackBerry’s 2022 milestones, all of which took place prior to the Company’s latest Q4 results, will be reflected in the future. If we are lucky, maybe we will see some cybersecurity revenue growth? Whether I am driven by the nostalgia of owning a BlackBerry Pearl or genuinely hopeful for the Company, I still think BlackBerry is a company in the cybersecurity and IoT market worth keeping an eye on.

BlackBerry’s share price opened at $8.64 today, down from a previous close of $9.27. The Company’s shares were down -10.57% and were trading at $8.29 as of 11:04 PM EST.