BlackBerry Q4 tops estimates on strong IP and licensing revenue
BlackBerry delivered better-than-expected fourth quarter earnings on Friday, pointing to growth in IP and licensing revenue. The company's shares were up nearly 14 percent in early trading. The enterprise mobility and security software provider reported Q4 non-GAAP earnings of 11 cents a share on revenue of $255 million. On a GAAP basis, BlackBerry reported reported income of 8 cents a share.
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Wall Street was expecting non-GAAP earnings of 6 cents per share on revenue of $241.1 million.
The Waterloo, Ontario-based company said total software and services revenue was $248 million. Enterprise software and services sales came to $92 million, down 15 percent from a year ago, while intellectual property and licensing revenue was up 71 percent $99 million. Handheld device revenue was zero, compared to $2 million a year ago.
Meantime, revenue from BlackBerry's Technology Solution came to $55 million driven by growth in the automotive vertical. The company's gross margin rose to 82 percent. BlackBerry said the total ending cash and investments after the closing of the Cylance acquisition came to $1 billion.
BlackBerry CEO John Chen noted on the company's earnings conference call that BlackBerry will reorganize into three business units for fiscal 2020. The BlackBerry IoT business will be led by COO Brian Palmer; Stuart McClure, co-founder and CEO of Cylance, will lead the BlackBerry Cylance business; and Steve Capelli will lead licensing in conjunction with the CFO role.
"For BlackBerry IoT, our goal is to drive profitable revenue growth, increase our market share in the industry vertical that we have been strong in and expand -- starting to expand the vertical that we have been underrated," Chen said. "For BlackBerry Cylance, our goal is to increase market share growth, while improving its profitability and reducing the cash burn. For licensing, we look to close opportunity that result in a higher amount of recurring revenue."
"We are investing for growth, including expanding our channel reach and our innovation," Chen added. "We have begun to integrate AI and machine learning capabilities on to both our UEM product as well as QNX product line, and we anticipate that at least at the beginning of the releases in 12 months probably started with UEM first. We're also investing to development of the Spark for our internal growth."
In terms of outlook, BlackBerry expects total revenue to grow 23 to 27 percent year-over-year.