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.
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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.
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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.
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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.