Mobile pioneer BlackBerry this afternoon reported fiscal Q2 revenue and profit that both topped Wall Street's expectations, and reiterated its revenue outllook for the year.
The company's CEO and chairman, John Chen, confirmed rumors the company has reached a sale price for a portion of its patent portfolio with an unnamed acquirer, while declining to disclose the price or the identity of the acquirer.
The company announced it appointed former McAfee chief revenue officer John Joseph Giamatteo as head of its cybersecurity products division.
BlackBerry also said its chief operating officer, Tom Eacobacci, will leave the company next month. Eacobacci "has decided to pursue other opportunities," the company said.
"BlackBerry thanks Tom for his hard work and contributions in his time at the Company," the company said.
The report sent BlackBerry shares up 10% in late trading.
Chen remarked that "Revenue for all businesses beat expectations this quarter," adding that "the Cyber Security business unit delivered robust sequential billings and revenue growth and the IoT business unit performed well in the face of global chip shortage pressures."
Said Chen, "We are already seeing benefits from establishing the two key business units and are delighted to appoint John Giamatteo as President of Cyber Security.
Chen said that demand for the company's QNX software "remains very strong, demonstrating both our industry leadership position and secular trends, such as ECU consolidation."
"In Cyber Security we received strong third-party validation of the effectiveness of our AI-driven, prevention-first suite of products, illustrating progress made with recent product launches," said Chen.
Revenue in the three months ended in August rose to $175 million, yielding a net loss of 6 cents a share, excluding some costs.
Analysts had been modeling $161.9 million and a net loss of 8 cents per share.
BlackBerry's revenue from the "Internet of Things" came in at $40 million. Annualized recurring revenue totaled $89 million.
During the company's conference call with analysts Wednesday evening, Chen said that the company's forecast for this year's revenue is still in place. In March, the company forecast total software and services revenue of $675 millon to $715 million. In addition, the company had indicated its full-year licensing revenue will likely be $100 milion.
BlackBerry is in the process of selling a portion of its patents collection, which has caused its outlook for licensing revenue to be uncertain this year.
"We are comfortable with the current IoT revenue consensus, meaning the full year revenue outlook remains unchanged.
Asked about the patent sale on the call, Chen confirmed speculation BlackBerry has reached an agreemnt on a sale price, while declining to respond to a question about the parties involved.
"I can't comment on ongoing negotiations because it doesn't help me whatsoever," said Chen. "I would to say to you that we have settled on the price, and that I would agree I would confirm, everything else I can't really comment on."
BlackBerry said its market for QNX software continues to face the challenge of auto sales being held back by a lack of semiconductors.
"As mentioned despite of the supply chain issue, QNX continues to win its new designs at a very solid pace," said Chen.
Chen said the supply chain challenges are "mixed" across customers,
As we look ahead to the rest of the year we continue to see the headwinds of vehicle production. The problem has shifted from supplies of wafers to more of a back end assembly and testing issues largely due to the spike in COVID cases in Asia as well as some of the accidents going on in Asia [...] Feedback from OEM about the impact on production volumes in the second half is somewhat mixed and constantly evolving. For example, Daimler recently indicated they are expecting a lessening impact by Q4, while Volkswagen on the other hand see challenges persisting into 2023.
In terms of outlook. we continue to see the past quarter as the low point, but significant headwinds are expected to continue into Q3, and Q4 and perhaps even beyond that, albeit with a sequentially decreasing impact. The impact of the chip shortage on QNX royalty revenue is expected to be buffer somewhat by ongoing strength in design activities.