BlackBerry (BB) Q2 Loss Wider Than Expected, Revenues Fall Y/Y
BlackBerry Limited BB reported second-quarter fiscal 2024 (ended Aug 31) adjusted loss per share of 4 cents. In the prior-year quarter it incurred non-GAAP loss of 5 cents. The Zacks Consensus Estimate was pegged at a loss of 2 cents.
Quarterly total revenues were $132 million compared with the prior-quarter’s revenues of $168 million. The company’s revenues came in line with the Zacks Consensus Estimate.
Quarter in Details
Revenues from the Cybersecurity business totaled $79 million, down 28.8% year over year. Revenues were impacted primarily due to elongated sale cycles especially in the government sector.
BlackBerry Limited Price, Consensus and EPS Surprise
BlackBerry Limited price-consensus-eps-surprise-chart | BlackBerry Limited Quote
Revenues from the Internet of Things business (IoT) totaled $49 million, down 3.9% year over year.
Licensing and Other contributed $4 million, down from $6 million a year ago.
The company’s QNX platform secured 20 new design wins in Auto and seven in the General Embedded Market.
Recently, BlackBerry announced that it has teamed up with Mitsubishi Electric to enhance road safety with their latest automotive in-cabin system, Mitsubishi Electric FLEXConnect, which will be powered by BlackBerry IVY.
BB announced a major update to its Cylance AI engine, to improve protection from zero-day threats.
Other Details
Gross profit declined 19.8% from the year-ago quarter to $85 million. Gross margin improved to 64.4% from 63.1% reported in the prior-year quarter. However, non-GAAP gross margin increased 100 basis points to 65% on a year-over-year basis.
Total non-GAAP operating expenses were $114 million, down 11.6%. Adjusted operating loss was $28 million compared with $22 million a year ago.
Adjusted EBITDA loss came in at $22 million compared with $16 million reported in the year-ago quarter.
Cash Flow & Liquidity
For the six months ended Aug 31, 2023, BlackBerry generated $43 million of net cash in operating activities against $66 million of cash used in the comparable period in fiscal 2023.
As of Aug 31, 2023, BlackBerry had $415 million in cash and cash equivalents.
Outlook
The company has reiterated its revenue outlook for the Cybersecurity segment. For Cybersecurity business, revenues are estimated in the range of $425-$450 million for fiscal 2024.
For IoT business (excluding IVY), revenues are now projected in the $225-$240 million band for fiscal 2024.
Zacks Rank & Stocks to Consider
At present, BlackBerry carries a Zacks Rank #3 (Hold)
Some other top-ranked stocks in the broader technology space are Asure Software ASUR, Aspen Technology AZPN and Badger Meter BMI. Asure Software presently sports a Zacks Rank #1 (Strong Buy), whereas Badger Meter and Aspen Technology carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Asure Software’s 2023 EPS has increased 35% in the past 60 days to 54 cents.
Asure Software’s earnings beat the Zacks Consensus Estimate in all the last four quarters, the average surprise being 676.4%. Shares of ASUR have surged 65.9% in the past year.
The Zacks Consensus Estimate for Aspen Technology’s fiscal 2024 EPS has gained 6.8% in the past 60 days to $6.58.
Aspen Technology’s long-term earnings growth rate is 17.1%. Shares of AZPN have declined 13.9% in the past year.The Zacks Consensus Estimate for
Badger Meter’s 2023 EPS has improved 1.4% in the past 60 days to $2.86.
Badger Meter’s earnings outpaced the Zacks Consensus Estimate in all the last four quarters, the average surprise being 6.7%. Shares of BMI have jumped 68.3% in the past year.
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