BlackBerry highlighted the positives from its software and services business in the most recent quarter, although its numbers were far from impressive.
On a group level, BlackBerry reported a loss of $670 million for the period to 31 May, compared with a prior-year profit of $68 million, on revenue of $400 million, down from $658 million.
It cited factors including an impairment charge of more than $550 million, inventory writedown of $41 million, restructuring charges of $23 million, and other costs, during the period.
With the shift to a new reporting structure, the company needed to perform an assessment of its various business lines, leading to significant writedowns related primarily to its hardware business.
But this has enabled the company to transform its cost structure to more accurately reflect its significantly reduced size – it recognised revenue on “over 500,000” devices in the quarter.
On a non-GAAP basis (essentially excluding these charges), the company claimed a net loss of $1 million on revenue of $424 million.
During the quarter, $166 million of revenue came from its Software & Services unit, with $152 million from its Mobility Solutions unit (which includes BlackBerry smartphones and device software licensing) and $106 million from service access fees.
Around 74 per cent of first quarter software revenue was recurring.
“Excluding IP licensing, we have more than doubled our software revenue on a year-over-year basis for the second consecutive quarter, driven by our EMM, secure messaging and QNX embedded software business,” John Chen, CEO, said.
In Mobility Solutions, “we made good progress in reducing the loss of the device business, I know this is the major concern for a lot of people”. Chen reiterated that the aim is to “achieve operating profitability in the short term”.
Noting that the company’s device revenue was below expectations, citing weakness in the high-end device market, he declined to be drawn on product plans, promising an update “in the July timeframe”. The executive has previously indicated two devices will be released before the end of the year, targeting the mid-tier.
But in addition to device hardware, he also mooted the potential to license various BlackBerry technologies, such as its Hub communications management software, and antenna and power management technology.