IoT and enterprise software-solutions provider BlackBerry Limited (BB) reported adjusted revenue and earnings that beat analyst estimates for the first quarter of its fiscal 2019. GAAP revenue came in at $213 million, down 9.3%, while adjusted revenue was at $217 million, down 11% year-over-year, topping analyst estimates. The company’s total software and services revenue – which has been growing consistently as a percentage of revenue each quarter and contributed to about 88% of BlackBerry’s total revenue in the quarter – posted a robust growth of 18% year-over-year on a reported basis. However, on a standalone basis, Enterprise software and services revenue declined 14%.
On the profit front, the company’s reported a wider GAAP net loss of $60 million or $0.11 per share, up from the year-ago loss of $10 million. Excluding items, earnings came in at $0.03 per share, beating consensus estimates, driven by growth in software and services. The company added that about 86% of first quarter software and services revenue (excluding IP licensing and professional services) was recurring, up from about 70% in the previous sequential quarter.
“We are off to a solid start in fiscal 2019, with 14% year-over-year growth in total software and services revenue driven by strong double-digit billings and an increase in recurring revenue. I am pleased that BlackBerry QNX software is now embedded in over 120 million automobiles worldwide, doubling the install base in the last three years,” said John Chen, CEO.
The Waterloo, Ontario-based software maker has been focusing on making software based on its QNX platform for the upcoming driver-less cars that the industry boasts to be the future of automobiles. This transition from hardware to software platform has been bearing fruit for the company, though at a slower pace, and has been seeing consistent growth in its high growth software and services revenue through the quarters.
Also, the company has won several enterprise orders over the last quarter, including a deal from the U.S. Air Force. BlackBerry’s shift towards a subscription-based model has ensured the company some stability in revenue, as about 70% of software revenues excluding IP and professional services at present are recurring in nature.
For fiscal 2019, BlackBerry expects total company software and services billings growth in the double-digits. On a per-share basis, earnings is expected to be positive, while total software and services revenue growth is expected between 8% to 10% year-over-year.