BlackBerry Shows Some Growth
It's well on its way to becoming an enterprise software company.
BlackBerry (BB) reported better-than-expected results for its fiscal 2020 third quarter, with strength in nearly all product categories in software and services. The acquisition of Cylance along with the company’s revamping of its salesforce may be paying dividends, as BlackBerry posted sequential revenue growth across the board for the first time in the last three quarters. While such early indications of revenue growth improvement pushed the stock up after the earnings report, we continue to view BlackBerry as undervalued.
Revenue increased 18% year over year to $267 million in the quarter, mainly due to the Cylance acquisition and QNX gaining traction in additional markets. Excluding Cylance, BlackBerry’s total revenue was up 0.4% from last year, an improvement from the 1% and 0.5% declines in the first and second quarters, respectively. Revenue from Internet of Things enterprise software declined from last year but increased sequentially, which we view as encouraging. Given the company’s focus last quarter on improving its sales team via more internal training and possibly synergies across different products, we continue to expect the sales cycle to shorten and account wins to increase. Some wins during the quarter include Swiss bank Julius Baer, Canada’s Department of National Defence, and other federal agencies in Germany, Panama, Poland, Romania, Saudi Arabia, and the United States.
Ali Mogharabi does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.