BlackBerry Q3 gets boost from government contract momentum

BlackBerry's Q3 highlights how the company's shift to the Internet of things and enterprise software is paying off.

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BlackBerry

BlackBerry CEO John Chen said that the company's QNX automotive wins, BlackBerry Radar asset tracking system and government contracts led to better-than-expected third quarter results.

The company reported a third quarter net loss of a penny a share on revenue of $226 million, up from $210 million a year ago. Non-GAAP earnings were 5 cents a share. Wall Street was looking non-GAAP third quarter earnings of 2 cents a share on revenue of $210 million.

Chen said the quarter was solid. BlackBerry reaffirmed its outlook for total software and services billings growth in the double digits with revenue growth of 8 percent to 10 percent from a year ago.

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North America represents 66.8 percent of BlackBerry's revenue and enterprise software, technology solutions and licensing account for most of sales.

On a conference call with analysts, Chen said government wins are boosting results.

Some of our notable wins include a Defense Intelligence Agency, the Federal Emergency Management Agency, FEMA, the IRS, the Internal Revenue Services, that Transportation Security Administration, the TSA; The U.S. Air Force as well as U.S. Marine Corps. Our authority to operate has increased from six U.S. government agencies last quarter to eight agency this quarter, including the U.S. Agency for International Development as well as the Department of Energy in The United States. Our BlackBerry FedRAMP cloud user base increased by 20% from last quarter to approximately 1.2 million users. 

Additionally, we saw increased demand for subscription to the UEM content suite from existing customer. The content suite provides customer with our highest level security and includes secured document collaboration, which is Blackberry workspace and the digital rights management.

The government wins give BlackBerry some momentum as it grows its enterprise of things business. On that front, Chen noted the following:

  • BlackBerry Radar, the company's asset tracking business added 9 new customers in the quarter.
  • BlackBerry Technology Solutions, which includes the company's embedded software business, saw revenue growth of 23 percent in the third quarter. QNX continued to gain auto wins and BlackBerry is branding out with design wins beyond infotainment consoles.
  • The Cylance purchase is being approved faster than expected and BlackBerry has already received HSR antitrust clearance.
  • Microsoft is competing well in the device management space, but BlackBerry is playing in regulated industries. Microsoft is an aggressive competitor in lower end and mid-range deals.
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BlackBerry

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