BlackBerry’s Automotive Technology Bets Continue To Gain Traction, Driving Q3 Results
BlackBerry (NYSE:BB) published its Q3 2018 results on December 20, beating market estimates on revenue and earnings, as the company’s technology solutions business expanded. While revenues grew by about 8% year-over-year to $226 million, adjusted earnings came in at about $0.05 per share. Below, we take a brief look at some of the key takeaways from the company’s earnings report.
Our interactive dashboard analysis on BlackBerry’s potential non-infotainment automotive revenues in 2020 details our forecasts for the company’s automotive revenues moving forward, particularly non-infotainment revenues, which we believe will be a key long-term value driver. We detail this further below.
BlackBerry’s Enterprise Business Sees Significant Government Wins
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BlackBerry’s bread-and-butter enterprise software and services business saw adjusted revenues decline by 7.5% year-over-year to $98 million due to the implementation of the ASC 606 accounting standards. However, the company fared well on the business development front, adding a significant number of government contracts from agencies including the IRS, the TSA and the U.S. Marine Corps. The company noted that its BlackBerry FedRAMP cloud user base rose by 20% from last quarter to about 1.2 million.
Automotive Business Continues To Expand Beyond Infotainment
Revenue from BlackBerry’s technology solutions segment grew by 23.3% year-over-year to $53 million, driven primarily by QNX embedded software. The company noted that software development license, services and royalty revenue from QNX all grew by double-digit percentages year-over-year. QNX continued to make meaningful progress in the automotive space, scoring four design wins in non-infotainment categories such as advanced driver-assistance systems, instrument cluster, and domain controllers. As BlackBerry increases its mix of non-infotainment licensing, it could bolster revenues, as it previously indicated that it could garner between $5 to $25 per vehicle from auto technologies, versus just between $1.50 to $5 per vehicle for infotainment.
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