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Blackberry (TSE:BB)
:BB
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BlackBerry
(NYSE:BB)
50Neutral
Positive Factors
Earnings Performance
BlackBerry reported Q3/F25 results slightly ahead of expectations, driven by solid performances in both Cybersecurity and IoT.
Strategic Partnerships
Partnerships with major companies like Microsoft and commitments from leading silicon partners such as Nvidia, Qualcomm, and NXP reinforce QNX's long-term growth potential.
Negative Factors
Macro Economic Challenges
There are near-term macro challenges impacting the IoT division, requiring more proof in execution before a more constructive view on shares is formed.
BlackBerry (BB) vs. S&P 500 (SPY)
Market Cap
C$3.73B
Dividend YieldN/A
Average Volume (3M)3.37M
Price to Earnings (P/E)―
Beta (1Y)1.32
Revenue Growth-26.72%
EPS Growth77.64%
CountryCA
Employees2,647
SectorTechnology
Sector Strength54
IndustrySoftware
Share Statistics
EPS (TTM)-0.29
Shares Outstanding591,583,200
10 Day Avg. Volume2,514,929
30 Day Avg. Volume3,372,810
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)4.27
Price to Cash Flow (P/CF)215.20
P/FCF Ratio645.60
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$5.69Price Target Upside-9.72% Downside
Rating ConsensusHold
Number of Analyst Covering4
BlackBerry Business Overview & Revenue Model
Company DescriptionBlackBerry Ltd. engages in the provision of enterprise software and services, which focuses on securing and managing Internet of Things endpoints. It offers a platform comprised of communication and collaboration software and safety-certified embedded solutions. The company was founded by Michael Lazaridis, James Laurence Balsillie, and Douglas E. Fregin on March 7, 1984 and is headquartered in Waterloo, Canada.
How the Company Makes MoneyBlackBerry Limited makes money primarily through its software and services division, focusing on cybersecurity solutions and IoT applications. The company generates revenue by licensing its software platforms, such as BlackBerry Spark, which provides endpoint security and management services to businesses and government organizations. Additionally, BlackBerry earns income from its QNX operating system, which is widely used in automotive infotainment systems, and other embedded systems across various industries. BlackBerry also benefits from strategic partnerships with technology and automotive companies, which enhance its market reach and product offerings. The company's earnings are further supported by recurring subscription fees for its software services and royalties from licensing agreements.
BlackBerry Financial Statement Overview
Summary
BlackBerry is facing significant financial challenges with declining revenue, negative profitability, and cash flow issues. Despite maintaining a reasonable cash position, the weakening balance sheet and poor cash flow positions emphasize the need for strategic improvements.Income Statement
BlackBerry's income statement indicates declining revenue with a significant drop in revenue from the previous annual report. The TTM data shows a further decrease. The company has struggled with profitability, displaying negative EBIT and Net Income margins. Despite a slight improvement in EBITDA, overall profitability remains weak, reflecting ongoing financial challenges.45
Neutral
Balance Sheet
The balance sheet shows a moderate debt-to-equity ratio, indicating manageable leverage levels. However, the declining stockholders' equity and total assets point to a reduction in the company's financial stability over time. The equity ratio has decreased, suggesting a weakening balance sheet. Despite this, BlackBerry maintains a reasonable cash position relative to its liabilities.55
Neutral
Cash Flow
Cash flow analysis reveals negative operating and free cash flows, highlighting liquidity challenges. The operating cash flow to net income ratio is poor, indicating inefficiencies in converting earnings into cash. The lack of free cash flow growth reflects cash constraints, further emphasizing the need for operational improvements to enhance liquidity.40
Negative
| Breakdown | |||||
| TTM | Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 | Mar 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 605.00M | 853.00M | 656.00M | 718.00M | 893.00M | 1.04B | Gross Profit |
| 431.00M | 520.00M | 419.00M | 467.00M | 643.00M | 763.00M | EBIT |
| -97.00M | -125.00M | -725.00M | -2.00M | -1.11B | -149.00M | EBITDA |
| 2.00M | -13.00M | -112.00M | -38.00M | 102.00M | 29.00M | Net Income Common Stockholders |
| -128.00M | -130.00M | -734.00M | 12.00M | -1.10B | -152.00M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 220.00M | 237.00M | 426.00M | 712.00M | 739.00M | 909.00M | Total Assets |
| 1.31B | 1.40B | 1.68B | 2.57B | 2.82B | 3.89B | Total Debt |
| 224.00M | 252.00M | 419.00M | 573.00M | 810.00M | 726.00M | Net Debt |
| 35.00M | 77.00M | 124.00M | 195.00M | 596.00M | 349.00M | Total Liabilities |
| 584.00M | 619.00M | 822.00M | 1.01B | 1.31B | 1.36B | Stockholders Equity |
| 725.00M | 776.00M | 857.00M | 1.56B | 1.50B | 2.53B |
| Cash Flow | Free Cash Flow | ||||
| -53.00M | -24.00M | -304.00M | -67.00M | 38.00M | -18.00M | Operating Cash Flow |
| -40.00M | -3.00M | -263.00M | -28.00M | 82.00M | 26.00M | Investing Cash Flow |
| -44.00M | 46.00M | 176.00M | 207.00M | -65.00M | -188.00M | Financing Cash Flow |
| 49.00M | -165.00M | 6.00M | 10.00M | -227.00M | 7.00M |
BlackBerry Technical Analysis
Negative
6.30
Price Trends
6.60
Negative
5.20
Positive
4.26
Positive
Market Momentum
-0.17
Positive
41.90
Neutral
25.11
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:BB, the sentiment is Negative. The current price of 6.3 is below the 20-day moving average (MA) of 7.07, below the 50-day MA of 6.60, and above the 200-day MA of 4.26, indicating a neutral trend. The MACD of -0.17 indicates Positive momentum. The RSI at 41.90 is Neutral, neither overbought nor oversold. The STOCH value of 25.11 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:BB.
BlackBerry Risk Analysis
BlackBerry disclosed 29 risk factors in its most recent earnings report. BlackBerry reported the most risks in the “Tech & Innovation” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
BlackBerry Peers Comparison
Overall Rating
UnderperformOutperform
Sector (58)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | C$3.41B | 42.26 | 7.09% | ― | 33.74% | 61.09% | |
76 Outperform | $1.40B | 16.55 | 14.76% | 4.20% | 8.11% | 15.83% | |
70 Outperform | $179.77B | 60.56 | 19.58% | ― | 27.85% | 1400.97% | |
69 Neutral | $9.59B | 10.75 | 16.00% | 4.04% | -3.59% | 432.46% | |
63 Neutral | C$100.08B | 99.93 | 30.90% | 0.12% | 21.56% | 31.90% | |
58 Neutral | $21.67B | 10.04 | -18.58% | 2.39% | 5.01% | -23.17% | |
50 Neutral | C$3.73B | ― | -13.55% | ― | -26.72% | 77.64% |
* Technology Sector Average
Performance Comparison
TSE:BB
BlackBerry
6.16
2.01
48.43%
TSE:ENGH
Enghouse Systems
25.78
-5.38
-17.26%
TSE:SHOP
Shopify
130.72
24.65
23.24%
TSE:OTEX
Open Text
36.25
-14.36
-28.37%
TSE:CSU
Constellation Software
4,628.59
882.96
23.57%
TSE:MDA
MDA Ltd
27.24
12.66
86.83%
BlackBerry Earnings Call Summary
Earnings Call Date: Dec 19, 2024 | % Change Since: 47.20% | Next Earnings Date: Apr 2, 2025
Earnings Call Sentiment Positive
The earnings call reflects a positive sentiment with BlackBerry's strong financial turnaround, impressive growth in both the IoT and Cybersecurity divisions, and strategic moves such as the sale of Cylance. However, challenges remain in the automotive market and licensing revenue fluctuations.Highlights
Strong IoT Division Performance
IoT division delivered revenue of $62 million, a 13% year-over-year and sequential growth. The division also achieved an 85% gross margin and $18 million of EBITDA, representing 38% sequential growth.
Cybersecurity Division Growth
Cybersecurity division, including both Secure Communications and Cylance, delivered revenue of $93 million with a 7% sequential growth. The division achieved $8 million of EBITDA, a $14 million sequential improvement.
Positive Financial Turnaround
BlackBerry achieved positive EBITDA of $23 million and non-GAAP EPS of $0.02, along with positive operating and free cash flow of $3 million, marking the first positive cash flow in 12 quarters.
Strategic Sale of Cylance
BlackBerry signed a definitive agreement with Arctic Wolf for the sale of Cylance, which is expected to strengthen the balance sheet and improve profitability.
Secure Communications Division Achievements
Secure Communications division showed strong performance with an 8% year-over-year increase in ARR to $215 million and a dollar-based net retention rate of 95%.
Lowlights
Challenging Automotive Market
Despite IoT's success, the automotive space remains a difficult backdrop, affecting design program activations at OEMs.
Licensing Revenue Decline
Licensing division revenue is expected to decrease in Q4, with projected revenue of $4 million, down from $7 million in Q3.
Mixed Revenue Contributions
QNX's revenue mix shifts quarter-to-quarter, causing fluctuations in development seat licenses and challenges in maintaining consistent revenue growth.
Company Guidance
During the BlackBerry Q3 2025 earnings call, the company provided a comprehensive overview of its financial performance and future guidance. BlackBerry reported revenue of $162 million, surpassing the upper end of its guidance range, with a gross margin improvement to 74%. The IoT division achieved revenue of $62 million, marking 13% year-over-year growth, driven by strong performance in automotive royalties and development seat licenses. The Cybersecurity division, including Cylance, reported $93 million in revenue, reflecting 7% sequential growth, while the Secure Communications division alone achieved 10% growth. The company also reported positive EBITDA of $23 million and non-GAAP EPS of $0.02. Looking ahead to Q4, BlackBerry anticipates Secure Communications revenue between $62 million and $66 million, with EBITDA between $4 million and $6 million. IoT revenue is expected to range from $60 million to $65 million, and Licensing revenue is projected at approximately $4 million, contributing to a total company adjusted EBITDA forecast of $10 million to $20 million.BlackBerry Corporate Events
M&A TransactionsBusiness Operations and Strategy
Arctic Wolf Acquires BlackBerry’s Cylance Security Assets
Positive
Feb 3, 2025
Arctic Wolf and BlackBerry Limited have announced the successful acquisition of BlackBerry’s Cylance endpoint security assets by Arctic Wolf, following a definitive agreement reached in December 2024. This acquisition allows Arctic Wolf to integrate Cylance’s advanced AI-driven capabilities into its Aurora Platform, enhancing its Aurora Endpoint Security offerings. This strategic move is expected to improve threat detection and prevention, reduce alert fatigue, and strengthen defenses, positioning Arctic Wolf as a leader in commercial security operations.
BlackBerry Surpasses Revenue Expectations with Strategic Shift
Dec 19, 2024
BlackBerry has exceeded revenue expectations for its Cybersecurity and IoT divisions, achieving stronger profitability and a return to positive cash flow earlier than anticipated. The company’s third-quarter results highlight a strategic shift towards enhanced efficiency and cost management, with the anticipated sale of Cylance to Arctic Wolf set to further boost profitability.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.