BlackBerry has outstanding second quarter earnings report led by licensing and software

Sure, BlackBerry no longer manufacturers smartphones, but its licensing and software divisions are running on all cylinders. In fact, it makes you wonder why BlackBerry didn't give up manufacturing smartphones earlier. With the current set up, the guys in Waterloo have a good thing going. A company like TCL licenses BlackBerry's version of Android and pays the company for use of the iconic BlackBerry name and logo. BlackBerry sits back and deposits the checks.

Topping Wall Street expectations, BlackBerry reported a record $196 million in services and software revenue for its fiscal second quarter, which ended on August 31st. The average consensus of two analysts for the period amounted to $175 million. The revenue was up 26% year-over-year. Licensing fees soared from $15 million to $56 million over the last year. Two manufacturers are currently paying BlackBerry for the use of its software and name on BlackBerry Mobile branded handsets.

China's TCL is responsible for the surprise hit of the summer, the BlackBerry KEYone. With an outstanding physical keyboard and long battery life, distribution of the phone is widening. More sales of the device should mean more licensing revenue for BlackBerry. Indonesia’s BB Merah Putih is producing the BlackBerry Aurora, which is a touch only model available exclusively in Indonesia.

In a conference call held after the earnings announcement, BlackBerry CEO John Chen said that licensing and revenue will both eventually chip in 50%-50% of quarterly gross. And while a software deal signed with automaker Ford last year is starting to bear fruit in the form of revenue, the executive said today that a similar deal is expected to be signed this year with another automaker. Chen said that the company could make $5 to $25 per car loaded with its self-driving software. That compares to the $1.50 to $5 a car BlackBerry receives for providing cars with an infotainment system.

For the quarter, BlackBerry reported a profit of 5 cents a share. For the full year, BlackBerry expects to receive $920 million to $950 million in revenue versus Wall Street forecasts of $924.2 million. BlackBerry says that it will grow its software revenue by 10% to 15% this year, meeting internal targets.


Investors love the report. BlackBerry's shares are up 57 cents to $11.04. It might not sound like a lot, but it is a 5.4% gain on the day.

source: Reuters

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13 Comments

1. Frogger

Posts: 49; Member since: Jan 16, 2017

Good for them, they went through rough time, I'm still wishing the passport smartphone did better in the market. It looked gorgeous. especially the silver version.

3. Plasticsh1t

Posts: 3106; Member since: Sep 01, 2014

They got John Chen. He's a genius business man. I wish HTC got a CEO like him to turn the company around.

2. Sammy_DEVIL737

Posts: 1529; Member since: Nov 28, 2016

Sweet :)

4. meanestgenius

Posts: 22043; Member since: May 28, 2014

Awesome news! BlackBerry has once again shown why their pivot to a software driven company was the right thing to do, thus proving that a company can successfully remake itself with time and the right leadership. Congrats on a good quarter, BlackBerry.

5. domfonusr

Posts: 1085; Member since: Jan 17, 2014

A cautious early congratulations to BlackBerry! Granted, this is an early result of the strategy they are employing, and it has yet to be seen if the trend will continue into other quarters (though it is likely to continue if the reports can be believed), but things are finally beginning to look better in Waterloo.

6. EC112987

Posts: 1215; Member since: Nov 10, 2014

Money is money!!!!!

7. you_sukk_it

Posts: 219; Member since: Apr 11, 2017

imo the congrats is temporary. well see though if they can continue. the phones are always half assed. like asus. its good in some things but not solid performance for all the specs. some things arent included as well. I hope they do ok, my intuition says otherwise. once youre down you wont rise back to great success. nokia is as well. unfortunately.

8. meanestgenius

Posts: 22043; Member since: May 28, 2014

Smartphones like the Passport and the KEYone are definitely not half@$$. Don’t know where you’re getting that from. Both perform extremely well, as does the Z30, Classic, BBOS7 devices, the DTEK line, and others. The PRIV is hit or miss. Nokia smartphones have always been, and still are, great performers, from their Symbian smartphones to their Windows smartphones, and now, to their latest Android smartphones. Even Nokia feature phones perform well. BlackBerry is having some pretty good success as a software and services company, and this ER is proof of that. And Nokia is having success outside of smartphones with its network equipment and solutions, as well as other innovations that they are working on. Not saying that either will be as prominent as they were back in their heyday, that remains to be seen. But both are successful now, nonetheless.

9. Crispin_Gatieza

Posts: 3137; Member since: Jan 23, 2014

In one single article Phone Arena has blown away very BlackBerry troll past and present. It starts by saying BlackBerry no longer makes hardware and then proceeds to call the KEYone the surprise hit of the year. I don't know if they can sustain this level of success but it sure is encouraging.

10. Alan01

Posts: 615; Member since: Mar 21, 2012

What is the point of your comment? BlackBerry no longer makes hardware AND the KEYone is (IMHO) the surprise hit of the year. As the article points out, TCL is responsible for production of KEYone. Alan

11. meanestgenius

Posts: 22043; Member since: May 28, 2014

Alan, I think you’re misunderstanding what Crispin is saying. He’s not taking a shot at you or phonearena. He’s giving you props for your article because you have posted facts (BlackBerry no longer making hardware and the KEYone being a surprise hit) that certain trolls have been in denial about for a while now.

13. Crispin_Gatieza

Posts: 3137; Member since: Jan 23, 2014

As meanestgenius pointed out, PA has put in print some of the biggest negative talking points trolls love to harp on and laid them to rest. Thank you.

12. RELAXyougeeks

Posts: 24; Member since: Apr 07, 2015

BlackBerry is now officially the Sega of the mobile phone industry.

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