BlackBerry talks up software gains, but hardware still drags - Mobile World Live

BlackBerry talks up software gains, but hardware still drags

02 APR 2016

BlackBerry again claimed improvements in its core software and services business, with John Chen, its CEO, stating that “we have clearly gained traction and market share in enterprise software”.

“Overall, BlackBerry’s Q4 performance was solid as we made progress on the key elements of our strategy, which are to grow software faster than the mobility software market, achieve device profitability and generate positive free cash flow,” he continued.

Chen noted that the company has a number of “growth engines”, including core enterprise mobility management products, secure messaging and content management applications, QNX embedded software for IoT (and particularly automotive), cybersecurity consulting, and intellectual property licensing.

But BlackBerry’s device hardware business continues to weigh. Chen said that volumes came in below expectations, although he also said there had been “significant progress on margin improvement”, with a target for profitability at some point this year.

“The softness at the high-end of the smartphone market is certainly a headwind, but the main issue that we need to address is distribution,” Chen said. While it’s Android-powered Priv is now available in 34 markets, up from four in the prior quarter, “unfortunately, contract negotiations took longer than planned with several major carriers, including Verizon”.

On its conference call, the company said that it recognised revenue on “roughly 600,000” units during the quarter, declining quarter-on-quarter.

Net loss
On a group level, the company reported a net loss of $238 million in the quarter to 29 February, compared with a prior-year profit of $28 million, on revenue of $464 million, down from $660 million. It said the bottom line was hit by a number of issues include a $192 million pre-tax charge related to restructuring and acquisition costs.

Software and services revenue (non-GAAP) of $153 million was up 106 per cent year-on-year.

For the full year, net loss was $208 million, compared with $304 million in the prior twelve months, on revenue of $2.16 billion, down from $3.34 billion.

Software and services revenue of $527 million was ahead of the company’s $500 million target for the year.

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Steve Costello

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