Cybersecurity company BlackBerry has its sights on boosting revenue and underlying earnings in the coming years as it refocuses its spending on growth areas, such as embedding its QNX operating systems in vehicles.
The Canadian company on Wednesday told investors its immediate priority was streamlining investments in its Cylance cybersecurity unit and focusing on opportunities for growth, mainly QNX. Further out, BlackBerry said it would consider "tuck-in" acquisitions to accelerate QNX growth and to expand in adjacent markets.
BlackBerry's shares gained 4.42% on Wednesday.
The company projected adjusted earnings before earnings before interest, taxes, depreciation and amortization would be between breakeven and $10 million in the current fiscal year, which runs through February.
IP sale proceeds pushed BlackBerry to adjusted Ebitda of $57 million in the last fiscal year, from a loss of $71 million the year before. The company in 2023 sold most of its non-core patents and patent applications for about $170 million in cash.
BlackBerry said it expects adjusted Ebitda to be between $50 million and $65 million in fiscal 2026, and then to grow to a range of $80 million to $95 million by fiscal 2027. Between fiscal 2025 and fiscal 2027 it anticipates compound annual revenue growth of about 5%, rising to between $655 million and $685 million by the end of the period from $591 million to $616 million in the current year.
The company, which is working toward separating its Internet-of-Things and cybersecurity businesses, has been working to repair its balance sheet. It reduced gross debt by $165 million in January, to $200 million, and has forecast a return to positive operating cash flows by the end of the current fiscal year.
Chief Executive John Giamatteo said the company has made good progress since last December in terms of how it has positioned its IoT and cybersecurity divisions to focus on their market opportunities, as well as the change of the company's profit trajectory. Earlier this week, BlackBerry said QNX, which it bought in 2010, was estimated to be embedded in more than 255 million vehicles worldwide.
Progress has been made in both separating and streamlining its IoT and Cyber divisions, the company said, and QNX and the IoT arms were expected to deliver profitable growth.
Comments