BlackBerry reports profit on demand for cybersecurity services

Canada’s BlackBerry reported a surprise profit for the fourth quarter on Wednesday, helped by higher demand for its cybersecurity services amid growing online crimes and high-profile hacks.

US-listed shares of the company rose 6.4 per cent after the bell.

The company reported an adjusted net profit of 3 cents per share for the quarter ended February 29, compared with analysts’ average estimate of a loss of 3 cents, according to LSEG data.

The Waterloo-based company’s quarterly revenue stood at $173m, beating analysts’ average estimate of $154.78m.

Revenue in the cybersecurity unit, which provides intelligent security software to enterprises and governments, rose 5 per cent year-on-year to $92m, while revenue from its internet of things (IoT) business jumped 25 per cent to $66m.

“We are making good progress with efforts to both separate the divisions and drive towards profitability, and operating cash usage more than halved sequentially this quarter,” CEO John Giamatteo said in a statement.

The company said in February it had reduced 200 jobs and exited some offices, and was targeting a $100m increase in annual profit.

In a conversation with Gulf Business earlier this year, BlackBerry’s EMEA VP Hans-Peter Bauer, spoke about the evolution the tech company has undertaken to stay relevant in the post-device driven business model.

Bauer said, “Recognising the need to innovate while catering to evolving consumer preferences, BlackBerry embarked on a transformative journey. We transitioned from being a hardware-centric company to focusing more on software solutions. By doing so, we expanded our reach beyond our own handsets, making our services available on various platforms such as Android and iOS.”

In December, the company scrapped its initial public offering (IPO) plans for its IoT business, but still expects to split the IoT and cybersecurity businesses into fully standalone divisions.

BlackBerry expects first-quarter revenue in the range of $130m to $138m, below analysts’ estimate of $151.12m.

BlackBerry expects full-year 2025 revenue in the range of $586m to $616m and adjusted loss per share of 3 cents to 7 cents.

BlackBerry’s evolution

He added, “While we bid farewell to manufacturing handsets, we preserved the core tenets of BlackBerry—security, reliability, and ease of use. Our customers could now enjoy the same level of service on a wider range of devices, including iPads, ensuring a more universal appeal.”

“Furthermore, recognising the diverse needs of our clientele, particularly in regions like the Middle East, we introduced solutions that allowed for on-premise server deployment. This addressed concerns regarding data sovereignty and regulatory compliance, offering customers greater control over their data while still benefiting from our robust security and reliability.”

“In essence, our evolution from hardware to software allowed us to adapt to changing market dynamics while staying true to our core values.”

Key highlights

• Transformation journey: BlackBerry evolved from a hardware-centric company to focus on software solutions, preserving core values of security and reliability while adapting to changing market dynamics.
• Cybersecurity evolution: Integration of AI transformed cybersecurity from reactive to proactive, with BlackBerry’s AI-driven solutions staying ahead of emerging threats.
• Impact on growth: BlackBerry’s cybersecurity focus led to stable growth, particularly in IoT sectors like automotive and healthcare, with partnerships driving innovation and solid double-digit growth rates in regions like Asia.
• Addressing challenges: BlackBerry advocates a multi-faceted approach to cybersecurity, emphasizing education, collaboration, and leveraging advanced technologies like AI to protect smaller businesses against cyber threats.