BlackBerry Posts Profit and Expects More to Come

BlackBerry Posts Profit and Expects More to Come

After three years of acquisitions, layoffs and trying to convince customers it could do more than build smartphones, the BlackBerry’s software revenue and profit margins are growing in the way CEO John Chen wants them to, according to Bloomberg.

The Canadian company surpassed its target of $640 million in software revenue for fiscal 2017, achieving Chen’s goal of increasing sales from that division by 30 percent in the year. It posted profit of 4 cents a share, beating out the highest estimate from analysts, and said it would be profitable for its entire fiscal 2018, which began this month. Gross margins were around 60 percent, moving toward Chen’s goal of hitting 80 percent a year from now, the company said in a statement.

BlackBerry shed the burden of its ever-shrinking phone business by officially outsourcing all device design, production and sales to other companies last year. The firm has also been moving into software for self-driving automobiles and has a formal partnership with Ford involving in-car connectivity.

Now the challenge is selling BlackBerry’s suite of security-focused software products, which range from tools that help companies track their employees’ mobile devices, to computer operating systems for guided missiles.

In the fiscal fourth quarter, revenue was $297 million, beating the average estimate of $289 million. Software revenue was $182 million, 80 percent of which was recurring and not due to one-time licensing deals. Its cash balance increased, a key milestone after months of burning money, to $1.7 billion.