Skip to main content
Open this photo in gallery:

BlackBerry Ltd. says it expects its cybersecurity division to generate US$425-million to US$450-million in revenue this year, delivering growth of up to 7.7 per cent over last year.Andrew Ryan/The Canadian Press

BlackBerry Ltd. BB-T issued a muted first-quarter financial forecast Thursday but promised stronger growth for the balance of its fiscal year.

The Waterloo, Ont., technology company said it expected its largest division, which sells cybersecurity and device management software, to generate US$100-million to US$110-million in its first quarter that began March 1, down from US$113-million in the same period a year earlier.

The company said its other operating division, which sells “internet of things” software primarily to provide connectivity to automobiles, should generate US$50-million to US$53-million in revenue in the first quarter, compared to US$51-million in the same period a year earlier.

But executive chairman and chief executive officer John Chen said he expected relatively stronger results for the balance of the year. He forecast revenue growth of between 17 per cent and 21 per cent – amounting to US$240-million to US$250-million this fiscal year – in the connected-car business as automakers continue to contend with supply chain issues and economic uncertainty that have kept production below prepandemic levels. The cybersecurity division, meanwhile, should generate US$425-million to US$450-million in revenue this year, delivering growth of up to 7.7 per cent over last year.

“We see the growth largely weighted to the second half,” Mr. Chen said on a conference call with analysts.

BlackBerry also reported financial results Thursday for its fiscal year ended Feb. 28, confirming figures it had preannounced earlier this month. The company generated fourth-quarter revenue of US$151-million, US$53-million of that from its connected-car business, US$88-million from cybersecurity, and US$10-million from its patent licensing business.

The company booked a net loss of US$495-million, or 85 US cents a share in the quarter, largely the result of US$486-million in writedowns to its goodwill and long-lived assets. Cash and cash equivalents and short-term investments dwindled to US$426-million at the end of its fiscal year, compared to US$712-million a year earlier.

The financial results were lower than analysts had previously anticipated, dragged down by a steeper-than-expected decline of 28 per cent in its cybersecurity revenue compared to the same period a year earlier. BlackBerry blamed delays in securing some large government cybersecurity deals for the shortfall.

Mr. Chen is into his 10th year as CEO, a period marked by two phases: He was successful in transitioning the company completely out of the smartphone business and cutting costs while securing its future as a continuing company. But BlackBerry’s share price has languished for years – with the exception of a brief spike when it became a “meme stock” – as the company has failed to excite investors with its hodgepodge of businesses.

The company is a leading provider of in-car software to connect vehicles to the internet, thanks to its QNX division, picked up in a 2010 acquisition. The division is expected to deliver 20-per-cent annual growth for several years and is in 215-million-plus cars, used by all 10 of the world’s largest automakers.

But its foray into cybersecurity has been underwhelming after the company’s US$1.4-billion purchase of a fast-growing startup called Cylance four years ago delivered far less growth than expected. Mr. Chen said Cylance will focus its efforts on expanding its offerings for small and medium-sized customers. “The market is big, but the competition is fierce, too” in that part of the market, he said.

BlackBerry also had a side business extracting revenue from other companies for alleged use of its sprawling patent portfolio. But after a failed attempt last year to sell the bulk of its intellectual property, BlackBerry last week said it had reached a second deal to sell 32,000 patents related to its legacy smartphone business in a complex deal that could be worth up to US$900-million over time, starting with an upfront payment of US$170-million in cash from a Dublin-based paper company called Key Patent Innovations.

That was a lucrative pursuit for BlackBerry before it decided two years ago to sell its patents, generating US$886-million in high-margin revenue over the three year period ended Feb. 28, 2021. Revenue fell off dramatically in the past two years as the company tried to sell its IP.

Mr. Chen said the company would use proceeds from the patent sale to help fully repay US$365-million in debentures coming due this fall. He said BlackBerry would continue to look at ways to squeeze more revenue from its remaining patents, including selling some. Chief financial officer Steve Rai said BlackBerry would focus this year on “driving toward both profitable growth and being cash flow positive.”

Your Globe

Build your personal news feed

Follow the author of this article:

Follow topics related to this article:

Check Following for new articles