BlackBerry Ltd.’s quarterly software-and-services revenues are gradually returning to prepandemic levels as the company doubles down on its efforts to be a key component of the growing market for processing data in sensor-filled cars.
In early December, BlackBerry struck a deal to partner with Amazon.com Inc.’s cloud-services division to co-develop IVY (the Intelligent Vehicle Data Platform), which could help automakers read and process data from vehicle sensors to find ways to improve the driving experience.
If successful, the software could become a significant new revenue stream by building upon BlackBerry’s QNX connected-car operating system. Between the IVY announcement on Dec. 1 and Thursday’s market close, BlackBerry shares jumped nearly 40 per cent.
Chief executive officer John Chen told analysts on a conference call Thursday evening that the market opportunity for IVY could be “very large,” with the potential to become a platform for a full ecosystem of in-car apps and services. BlackBerry would maintain all of IVY’s customer relationships, he said, but Amazon would share in revenues. “This type of agreement is rare,” he said.
He added that he expects BlackBerry IVY to begin appearing in 2023 vehicle models.
The company’s total revenue fell 18 per cent year-over-year to US$218-million in the quarter that ended in November, it said Thursday. Its loss more than tripled to US$130-million, or 23 US cents a share, driven in part by fair-value adjustments to long-term debt.
But the company touted the fact that its software-and-services revenue, which includes both its cybersecurity and connected-car operating-system business lines, rose for the second quarter in a row after falling in its first quarter of the pandemic. The division brought in US$162-million last quarter, and US$151-million the quarter prior.
The company also reported an adjusted, non-Generally Accepted Accounting Principles profit of 2 US cents a share, beating analyst consensus of 1 US cent. Investors nudged its New York-listed shares up 0.48 per cent to US$8.30 in after-market trading early Thursday evening.
Under Mr. Chen, BlackBerry has shifted from making its namesake smartphones to effectively becoming a data-security company for large organizations, with an additional focus on operating systems for connected cars and industrial clients.
But BlackBerry has spent the past few months working on deals that could reshape the company even more, including the Amazon partnership.
In November, both The Globe and Mail and IAM, an intellectual-property trade journal, also reported that the company – Canada’s largest patent holder – was looking to sell most of its 38,000 patents, estimated to be worth more than US$450-million.
Your time is valuable. Have the Top Business Headlines newsletter conveniently delivered to your inbox in the morning or evening. Sign up today.