December 20, 2024
BlackBerry Limited BB reported the third quarter of fiscal 2025 non-GAAP earnings per share (EPS) of 2 cents. The figure was better than the company’s estimate of a loss of 1 cent to EPS of 1 cent. In the year-ago quarter, it reported a non-GAAP EPS of 1 cent. The Zacks Consensus Estimate was pegged at a loss of 2 cents per share. Cost discipline aided the bottom-line performance.
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Quarterly revenues (including Cylance business, reclassified as held for sale as of Nov. 30, 2024) of $162 million declined 7.4% year over year.
A few days back, BB announced an agreement to sell its Cylance endpoint security assets to Arctic Wolf. Per the terms of the deal, following purchase price adjustments, BB will receive almost $80 million in cash at settlement and another $40 million a year after settlement. Arctic Wolf will also issue around 5.5 million common shares to BB as part of the deal. This acquisition, expected to close in the fourth quarter of fiscal 2025, is subject to customary regulatory approvals and conditions. Revenues excluding Cylance was $143 million, down 5.9% year over year.
BlackBerry Limited price-consensus-eps-surprise-chart | BlackBerry Limited Quote
The company expected revenues to be in the range of $146-$154 million.
Owing to Cylance sale, BB announced that it is “standing down” all previously provided guidance, related to cybersecurity and the overall guidance for the company. BB is now providing guidance only for the new Secure Communications division. The company will provide revised guidance for fiscal 2026 for both Secure Communications division and total revenues during its fourth quarter of fiscal 2025 earnings.
For fiscal 2025, revenues (from continuing operations) are now expected to be in the band of $517-$526 million. For the Secure Communications division, revenues are projected to be in the range of $267-$271 million.
Revenues are now estimated to be in the band of $230-$235 million for the IoT business. Earlier, revenues from this segment were expected to be in the band of $225-$235 million. Licensing & Other revenues are expected to be $20 million compared with $16 million estimated earlier. Non-GAAP loss per share (includes continued and discontinued operations) is now expected to be between breakeven and a loss of 2 cents.
Following the announcement, the company’s shares are up 1.7% in the today’s pre-market trading. The stock has lost 16.8% in the past year against the sub-industry’s growth of 18.3%.
Revenues from the Cybersecurity business (from continuing and discontinued operations) totaled $93 million, down 18.4% year over year but exceeded the company’s guidance of $86-$90 million. The year-over-year decline was due to tough comparisons owing to securing a huge deal with the government of Malaysia last year.
Secure Communication revenues was $74 million, down from $91 million in the prior year quarter. Revenues from Cylance was $19 million. Revenues were driven by strength in the SecuSmart, UEM endpoint management and AtHoc critical events management solutions.
Cybersecurity ARR including Cylance was up 3% year over year to $281 million. Excluding Cylance, Cybersecurity ARR was up 8% year over year to $215 million.
Revenues from the IoT business totaled $62 million, which was up 13% year over year and surpassed the company’s guidance of $56-$60 million. This uptick was attributed to strong revenues from royalties and development seat licenses. The increasing adoption of the next-generation version of the QNX operating system, SDP 8.0 in the Auto and General Embedded market is a positive factor. BB highlighted that more than 10 leading silicon vendors have already committed to supporting SDP 8.0.
Licensing and Other contributed $7 million, which was up from $6 million a year ago. BB anticipated the segment to deliver revenues of approximately $4 million in the fiscal third quarter.
Adjusted gross margin (from continuing and discontinued operations) was 74.1%, down from 74.3% on a year-over-year basis.
Adjusted operating expenses were $79 million, which was down 10%.
Adjusted EBITDA (from continuing and discontinued operations) was $23 million, up from $18 million in the year-ago quarter. The company had expected adjusted EBITDA to be $0-$10 million.
For the quarter that ended on Nov. 30, 2024, BlackBerry generated $3 million of net cash from operating activities, an improvement of $34 million from the prior-year quarter.
As of Nov. 30, 2024, BlackBerry had $266 million in cash, cash equivalents, short and long-term investments.
The company expects fiscal fourth-quarter revenues to be in the $126-$135 million range. For the Secure Communications unit, revenues are estimated to be in the band of $62-$66 million.
For the IoT business, revenues are expected to be in the range of $60-$65 million for the fiscal fourth quarter. Licensing & Other revenues are expected to be $4 million.
At present, BlackBerry carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.
NetApp, Inc.
NTAP reported second-quarter fiscal 2025 non-GAAP earnings of $1.87 per share, which beat the Zacks Consensus Estimate by 4.5% and jumped 18.4% year over year. Revenues of $1.66 billion increased 6% year over year and came within the guided range of $1.565-$1.715 billion. This upside resulted from strong sales across Hybrid Cloud and Public Cloud segments, notably growth of about 19% in all-flash storage and strong growth in first-party and marketplace cloud storage services revenues. Also, the top line beat the consensus mark by 0.8%.
Ciena Corporation
CIEN reported fourth-quarter fiscal 2024 (ended Nov. 2) results, wherein adjusted EPS of 54 cents missed the Zacks Consensus Estimate of 66 cents. Also, the bottom line declined 28% year over year. Quarterly total revenues dipped 0.5% year over year to $1,124.1 million. The top line, however, surpassed the Zacks Consensus Estimate of $1,105 million, driven by robust demand for its solutions in cloud and artificial intelligence (AI)-driven markets. As the demand for bandwidth accelerates, driven by cloud and AI, Ciena is uniquely positioned to unlock opportunities for growth and profitability.
Pure Storage
PSTG reported third-quarter fiscal 2025 non-GAAP EPS of 50 cents, which beat the Zacks Consensus Estimate by 16.3%. The company reported non-GAAP EPS of 50 cents in the prior-year quarter. Quarterly revenues jumped 9% from the year-ago quarter to $831.1 million, beating the Zacks Consensus Estimate by 2%. The top line outperformed management’s guidance owing to higher demand for FlashArray//E, Flashblade//E and FlashArray//C solutions that empower users to transition their cost-sensitive workloads to all-flash storage. Strong growth in renewals of Evergreen subscriptions further fueled the expansion.
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