BlackBerry Q1 beats estimates as Cylance business rings up $51 million in revenue
BlackBerry reported its fiscal first quarter financial results on Wednesday and provided a business update as it ingests Cylance. The enterprise mobility and security software provider reported Q1 net loss of $35 million, or 9 cents per share. Non-GAAP earnings were penny per share on revenue of $267 million. Wall Street was expecting non-GAAP earnings of 0 cents per share on revenue of $264.5 million.
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This is the first quarterly report since BlackBerry reorganized into three business units: IoT, BlackBerry Cylance, and Licensing. Revenue from its IoT business came to $137 million and licensing revenue was $72 million. Revenue from Cylance, the AI-powered security firm BlackBerry acquired for $1.4 billion back in November, was $51 million.
BlackBerry CEO John Chen noted on the earnings conference call that the company's integration with Cylance is ahead of schedule, with back-office, personnel, sales and R&D teams almost completely merged.
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"We expect [the Cylance integration] to be done within this fiscal year," Chen said. "It will be done meaning to be released as a product, so that's reasonably record time. The next team that has launched is to look into putting Cylance AI technology on to the automotive platform, on the QNX. That's going on very well, too. So I think, on the technological side, it's very, very positive. The sales, we're starting slow. Cylance is more on PC and routers and servers in fixed plan assets. So it's important that we align our product road map to cover end-to-end from mobile all the way to server and routers. And when we do that ... then I think there will be a lot more synergy kicked in on the sales side -- on the revenue side."
Meantime, Chen also touted customer momentum for BlackBerry Radar, its asset monitoring service. "In the quarter, we added 20 new customer, 2-0, 20 new customers, including one of the top 3 US retailers specializing in home improvement," Chen said.
Under its automotive business, Chen also referenced an expanded partnership between BlackBerry and LG Electronics focused on selling connected and autonomous vehicle technology to automotive OEMs and suppliers.
In terms of outlook, BlackBerry expects second quarter non-GAAP revenue growth of between 23% and 27%. Here's the revenue breakdown:
- IoT year-over-year non-GAAP revenue growth of between 12% to 16%;
- BlackBerry Cylance year-over-year non-GAAP revenue growth of between 25% to 30%;
- Licensing year-over-year non-GAAP revenue decline of 5%; and
- Non-GAAP service access fees to be between $10 and $20 million of revenue in FY20.