BlackBerry Reports Preliminary Q4 and Fiscal Year 2023 Results: IoT Unit Grows, Cybersecurity Unit Slips

TL;DR:

BlackBerry has provided a preliminary business update and financial results for Q4 and full fiscal year 2023. The company is expecting total revenue of approximately $151 million for Q4, with IoT revenue at $53 million and Cybersecurity revenue at $88 million. For the full fiscal year, BlackBerry expects revenue of approximately $656 million, with IoT revenue at $206 million and Cybersecurity revenue at $418 million. The lower-than-expected revenue in the Cybersecurity unit is primarily due to some large government deals slipping into fiscal year 2024. BlackBerry’s management will discuss its financial results and fiscal year 2024 outlook at the March 30 earnings call.

BlackBerry Limited, a multinational company that provides security software and services, has released selected preliminary financial results for the fourth quarter and full fiscal year 2023. The company estimates its total revenue for fiscal year 2023 to be approximately $656 million, which includes $206 million in revenue from the Internet of Things (IoT) business unit, representing 16% year-over-year growth in line with the previously provided outlook. The cybersecurity business unit revenue is expected to be approximately $418 million, lower than the previously provided outlook, primarily due to large government deals slipping into fiscal year 2024. Meanwhile, the licensing and other business unit revenue is expected to be approximately $32 million.

The company’s management will discuss its financial results and fiscal year 2024 outlook at the earnings call scheduled for March 30th. In a statement, John Chen, Executive Chairman & CEO of BlackBerry, acknowledged the macro challenges that affected the cybersecurity business unit this quarter, with elongated sales cycles in the government causing some large deals to slip into later quarters. However, Chen also noted that the IoT business unit closed the year strongly, and the company expects to deliver year-over-year revenue growth of approximately 16%, in line with the previously provided outlook.

BlackBerry’s preliminary fourth-quarter fiscal 2023 financial results estimate the company’s total revenue to be approximately $151 million, with IoT revenue expected to be approximately $53 million and cybersecurity revenue expected to be approximately $88 million. Cybersecurity billings are expected to increase sequentially for the third quarter in a row to approximately $107 million. Licensing and other revenue are expected to be approximately $10 million.

The preliminary financial results for the fourth quarter and full year ended February 28, 2023, are unaudited estimates and are based on information available to management as of the date of the release. They are subject to potential further material changes upon completion of the company’s standard year-end closing procedures. BlackBerry’s actual financial results for the three months and year ended February 28, 2023, have not yet been finalized and remain subject to the completion of management’s final review and the audit of the company’s annual financial statements.

It is worth noting that BlackBerry’s results are expected to include a material non-cash, one-time goodwill impairment charge for the Spark reporting unit. The amount is currently being determined, but it is expected to be up to $440 million. This assessment is required in accordance with accounting rules and is primarily driven by the broad-based stock market decline this past calendar year and the corresponding impact on the company’s market capitalization at the test date.

In conclusion, BlackBerry’s preliminary financial results indicate that the company has experienced challenges in its cybersecurity business unit due to the elongated sales cycle in the government. However, the IoT business unit has shown strong growth, and the company is optimistic about its year-over-year revenue growth. Investors and analysts are eagerly waiting for the earnings call on March 30th to hear more about the company’s financial results and its outlook for the fiscal year 2024.

• Preliminary fiscal year 2023 revenue for BlackBerry is estimated to be approximately $656 million
• IoT business unit revenue expected to be approximately $206 million, representing 16% year over year growth and in line with outlook previously provided
• Cybersecurity business unit revenue expected to be approximately $418 million, lower than the outlook previously provided, primarily due to certain large government deals slipping into fiscal year 2024
• Licensing and Other business unit revenue expected to be approximately $32 million
  Management to discuss financial results and fiscal year 2024 outlook at the March 30th earnings call

Preliminary Fourth Quarter Fiscal 2023 Financial Results:

• Total company revenue expected to be approximately $151 million.
• IoT revenue expected to be approximately $53 million.
• Cybersecurity revenue expected to be approximately $88 million.
• Cybersecurity billings expected to increase sequentially for third quarter in a row to approximately $107 million.
• Licensing and Other revenue expected to be approximately $10 million.
• BlackBerry’s results are expected to include a material non-cash, one-time goodwill impairment charge for the Spark reporting unit.  The amount is currently being determined but is expected to be up to $440 million. This assessment is required in accordance with accounting rules and is primarily driven by the broad-based stock market decline this past calendar year and corresponding impact on our market capitalization at the test date.

Preliminary Fiscal Year 2023 Financial Results:

• Total company revenue expected to be approximately $656 million.
• IoT revenue expected to be approximately $206 million.
• Cybersecurity revenue expected to be approximately $418 million.
• Cybersecurity billings expected to be approximately $401 million.
• Licensing and Other revenue expected to be approximately $32 million.