Mobile AppsMobility

BlackBerry Service And Software Revenues Rise But Results Miss Expectations

Steve McCaskill is editor of TechWeekEurope and ChannelBiz. He joined as a reporter in 2011 and covers all areas of IT, with a particular interest in telecommunications, mobile and networking, along with sports technology.

Google + Linkedin Subscribe to our newsletter Write a comment

BlackBerry doubles software and service revenues but gives no hardware figures as recovery continues

BlackBerry said sales of software and services more than doubled over its most recent quarter and financial year, but total revenues were less than expected as the company continues to move away from the hardware that made the Canadian manufacturer a household name.

The company boasted software and service revenues of $153 million (£107.9m) during Q4, a 106 percent year-on-year increase, and financial year sales of $527 million (£371.7m) – a 113 percent rise. Software and services now accounts for a third of revenue, while service access fees generate 29 percent.

It claimed to have won 3,900 new enterprise customers during the quarter and 70 percent of its software and services revenue was “recurring”. It expects the unit’s revenues to grow by 30 percent over the next 12 months.

BlackBerry software

blackberry privBut despite these gains, BlackBerry reported quarterly revenues of $464 million (£327.3m), down from $660 million (£465.5m) year on year, and financial year revenues of $2.16 billion (£1.52bn), a fall from $3.34 billion (£2.36bn).

Q4 losses reached $238 million (£167.9m), whereas a year ago it posted a surprise profit of $28 million (£19.8m). However yearly losses narrowed from $304 million (£214.4m) to $208 million (£146.8m).

Hardware and ‘other’ still contributes 39 percent of BlackBerry’s income, but the company did not give any specific hardware sales figures.

BlackBerry is still committed to the hardware market, focusing on devices that appeal to its core fanbase and its first ever Android-powered handset, the BlackBerry Priv, but its market share has continued to fall in face of intense competition from Apple and Android-based rivals.

Hardware?

CEO John Chen’s recovery strategy has focused on providing services like mobile device management, instant messaging and security to businesses, and in recent months, it has made major acquisitions in the form of Good Technology and UK-based firm Encription.

Chen said he was happy with the growth in the unit, despite less than expected total revenues.

“Overall, BlackBerry’s Q4 performance was solid as we made progress on the key elements of our strategy, which are to grow software faster than the mobility software market, achieve device profitability and generate positive free cash flow,” he said.

“We have clearly gained traction and market share in enterprise software. We more than doubled our software and licensing revenue in Q4 and exceeded our target of $500 million for the full year. Looking to FY 2017, our strategy is on track and our growth engines are in place to continue to generate above market growth in software and achieve our profitability objectives.”

A recent TechWeekEurope poll found readers still see a future for BlackBerry in smartphones despite being usurped as the market leader a few years ago.

Think you’re a BlackBerry expert? Take our quiz!