Earnings Review and Free Research Report: BlackBerry Reported Better than Expected Revenue and Earnings

LONDON, UK / ACCESSWIRE / October 10, 2017 / Pro-Trader Daily has just published a free post-earnings coverage on BlackBerry Ltd (NASDAQ: BBRY), which can be viewed by registering at http://protraderdaily.com/optin/?symbol=BBRY, following the Company's release of its financial results on September 28, 2017, for the second quarter fiscal 2018. The mobile security software Company achieved historical highs in total software and services revenue and gross margin, as well as the highest non-GAAP operating margin in over five years. Our daily stock reports are accessible for free and with those to look forward today you also will be signing up for a complimentary member's account at:

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Earnings Reviewed

For the three months ended August 31, 2017, BlackBerry reported GAAP revenue of $238 million compared to revenue of $334 million for Q2 FY17. The Company's non-GAAP revenue for the reported quarter was $249 million. BlackBerry's revenue beat analysts' estimates of $222 million.

During Q2 FY18, BlackBerry reported GAAP gross margin of 73.5% compared to gross margin of 29.3% in Q2 FY17. The Company's non-GAAP gross margin for the reported quarter was a record at 76.3%. BlackBerry posted GAAP operating margin of 12% and non-GAAP operating margin of 9% in Q2 FY18.

For Q2 FY18, BlackBerry reported GAAP net income of 19 million, while fully diluted GAAP EPS was a loss of ($0.07), which assumed conversion of the convertible debentures based on the "if-converted" method. The Company's GAAP net income for the reported quarter included $24 million in amortization of acquired intangibles, $29 million in restructuring charges, a benefit of $70 million of fair value adjustment related to the debentures, and other amounts. BlackBerry had reported GAAP loss of $372 million, or $0.71 per share, in Q2 FY17. On non-GAAP basis, the Company posted net income of $26 million, or $0.05 per share, beating market expectations for a break-even quarter.

Segment Results

During Q2 FY18, BlackBerry posted record software and services revenue of $196 million, representing 79% of total revenue - the largest contributor for this segment was Enterprise Software & Services at 52%; and BlackBerry Technology Solutions accounted for 19% and 29% which came from licensing IP and other. Approximately 79% of Q2 FY18 software and services revenue (excluding IP licensing and professional services) was recurring. The Company added four new FedRAMP customers and had over 300,000 licensed users on its FedRAMP authorized cloud service as of the end of Q2 FY18, an increase of 162% on a q-o-q basis.

The Company's Handset device revenue was $16 million in Q2 FY18, representing 6% of revenue in the reported compared to $105 million in the year-ago same period. BlackBerry's total staff revenue for Q2 FY18 was $37 million, down 2% on a q-o-q basis and representing 15% of overall revenue. The sequential design in staff was lower in prior quarters due to an increase in collections of approximately $9 million related to overdue balances for cash basis customers.

Cash Matters

BlackBerry's total cash, cash equivalents, short-term and long-term investments were approximately $2.5 billion as of August 31, 2017. This reflects breakeven free cash flow, which includes cash flow from operations of $3 million, net of capital expenditures of $3 million. The Company also used $17 million to repurchase 1.9 million shares of common stock in the reported quarter.

Excluding $605 million in the face value of BlackBerry's debt, the net cash balance at the end of the quarter was approximately $1.9 billion. There were no purchase orders with contract manufacturers at the end of Q2 FY1, or at the end of Q1 FY18, down from $71 million a year ago.

Outlook

For FY18, BlackBerry is forecasting total revenue in the range of $920 million to $950 million versus the current analysts' consensus of $919 million. In the software and services business, the Company continues to anticipate growth in the range of 10% to 15% and expects positive non-GAAP EPS for the full year. BlackBerry is estimating positive free cash flow for FY18, before taking into account the net impact of the benefit of the Qualcomm's arbitration award and costs related to restructuring and transition from the hardware business.

Stock Performance

At the closing bell, on Monday, October 09, 2017, BlackBerry's stock climbed 1.81%, ending the trading session at $11.27. A total volume of 6.47 million shares have exchanged hands, which was higher than the 3-month average volume of 5.71 million shares. The Company's stock price soared 13.38% in the last three months, 46.17% in the past six months, and 43.38% in the previous twelve months. Moreover, the stock skyrocketed 63.57% since the start of the year. The stock is trading at a PE ratio of 11.81 and currently has a market cap of $6.01 billion.

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SOURCE: Pro-Trader Daily