BlackBerry's Q2 tops expectations as software shows traction

The company's software business is doing well as BlackBerry saw 3,300 enterprise orders in the quarter.

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BlackBerry's second quarter results handily topped expectations as the company's pivot to software and services appears to be accelerating.

The company, which provides enterprise mobility and security software, reported fiscal second quarter non-GAAP earnings of $29 million, or 5 cents a share, on revenue of $238 million. On a GAAP basis, BlackBerry reported a loss of 7 cents a share.

Wall Street was expecting break even non-GAAP earnings on revenue of $219 million.

CEO John Chen said BlackBerry hit record highs in total software and services revenue and grew billings. BlackBerry's primary software business is its enterprise mobility management tools, but it is expanding in automotive and Internet of Things (IoT). The company had 3,300 enterprise orders in the quarter.

BlackBerry recently expanded its sale channel for it Radar IoT suite and Delphi chose its QNX software for its autonomous driving efforts.

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In addition, BlackBerry has also signed its first BlackBerry Secure licensing deal with Yangzhou NewTelecom Science and Technology Company Ltd., a design firm that develops and manufactures smartphones and IoT devices. The company also has licensing deals with BB Merah Putih, Optemius, and TCL, which makes BlackBerry branded handsets.

For good measure, BlackBerry also announced that Titanium Transportation Group will deploy the company's Radar-L fleet tracking system across its flatbeds. Titanium first started using the Radar system in December 2016 with the Radar-M.

On a conference call with analysts, Chen said that the enterprise software business "has been focused on billings growth." However, businesses such as QNX and products like Radar are more about design wins. As for handsets, BlackBerry is starting to see licensing revenue growth as partners like TCL start selling more smartphones.

"We again delivered strong software billings growth, we secured important design wins in auto, we invested in our sales channel for Radar, our licensing pipeline is growing, and we were recognized again as the leader in mobile security. All of these accomplishments positioned us well for future growth," Chen said.

As for the outlook, BlackBerry projected non-GAAP revenue of $920 million to $950 million for fiscal 2018 with software and services growth between 10 percent to 15 percent. BlackBerry also expects to be profitable for the year on a non-GAAP basis.

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