Blackberry Posts Surprise Quarterly Profit On Resilient Cybersecurity Demand
21 December 2023
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Canadian technology firm BlackBerry (BB.TO) surprised analysts by revealing a profitable quarter on Wednesday, fueled by sustained demand for cybersecurity services amid the escalating threat landscape in the online domain. Despite a general decline in IT spending over the past year, investment in cybersecurity has remained resilient as businesses and governments intensify efforts to fortify their systems against increasing cyber threats.
In recent months, major players in the casino industry, including MGM Resorts International (MGM.N) and Caesars Entertainment (CZR.O), grappled with significant data breaches. This surge in cyber incidents has prompted businesses to prioritize and invest in robust cybersecurity measures.
Earlier this month, BlackBerry abandoned its initial public offering plans for its Internet of Things (IoT) business. However, the company still intends to create distinct standalone divisions for its IoT and Cybersecurity businesses.
CEO John Giamatteo stated, “Work is underway to fully separate and rightsize our businesses significantly, with expectations to further reduce operating cashflow usage in Q4.”
BlackBerry is also set to streamline its corporate structure, allowing each business unit to operate independently and achieve profitability with positive cash flow. The company anticipates fourth-quarter revenue to fall within the range of $150 million to $159 million.
The Waterloo-based company reported an adjusted net profit of 1 cent per share in the quarter ending Nov. 30, a notable improvement from the 5 cents per share loss reported in the same period the previous year. Third-quarter revenue increased to $175 million from $169 million, surpassing the average analyst expectation of $173.5 million according to LSEG data.
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