Good News for Blackberry's Transition

For the quarter, non-GAAP revenues for BlackBerry’s three segments--software and service, mobility solutions, and SAF--came in at $166 million, $82 million, and $49 million, respectively. While management guided for some deceleration in growth of revenue within the software and services segment, the firm continues to see opportunities for further growth in the long run. With a higher percentage of software revenue recurring (about 80%), the segment’s non-GAAP operating margin of 26% was 120 basis points higher than the prior quarter.

As expected, revenue in the mobility solutions and SAF segments declined 71% and 66% over the prior year, respectively. Due to continuing cost-cutting efforts within both segments, they generated positive non-GAAP operating income during the quarter. As a reminder, BlackBerry will discontinue its hardware business by the second half of fiscal 2018.

Morningstar Premium Members gain exclusive access to our full analyst reports, including fair value estimates, bull and bear breakdowns, and risk analyses. Not a Premium Member? Get this and other reports immediately when you try Morningstar Premium free for 14 days.