To The Moon

Title: BlackBerry (BB) Q1 2024 Earnings Call Transcript

Stock: BlackBerry(BB)

Bullish Points:

1. Gross margin remains strong at 80% for IoT business unit.

2. QNX is now embedded in over 235 million vehicles, a year-on-year net increase of 20 million, or 9%.

3. QNX had seven design wins in auto and seven in general embedded market verticals.

4. IVY general availability version released, allowing for wider range of proof-of-concept trials.

5. Cybersecurity unit revenue for the quarter was $93 million, representing 6% sequential growth.

6. Total contract value billings of $122 million, significantly higher than revenue for the second consecutive quarter.

7. Gross margin for cybersecurity unit improved to 60%, which is 700 basis points higher than the prior year.

8. Deal registration and new logos in North America increased significantly both sequentially and year over year.

9. CylanceENDPOINT had a market leading 98.9% detection rate and used the lowest amount of CPU capacity.

10. Closed deal with key patent innovations for the sale of noncore portion of the patent portfolio, with an initial $170 million cash payment received.

Bearish Points:

1. IoT business unit revenue came in lower than expected due to delayed programs and macro environment impacting regional production volumes.

2. Elongated sales cycles in cybersecurity unit causing delays in converting growing pipelines into revenue.

3. Temporary delays to the start of new programs in IoT as customers review their software-defined vehicle plans.

4. Do not expect any meaningful additional revenue from the patent sale to be recognized this fiscal year.

5. Revenue expected to be approximately $5 million per quarter for the remainder of this fiscal year.

6. Short-term caution due to uncertain environment.

7. Waiting for OEMs to release development schedules.

8. Uncertainty around contract extension and Imperium project.

9. Complex process of separating income statement, balance sheet, and tax side of the equation.

10. Expectation of end of summer for initial findings.

Summary:

BlackBerry's Q1 2024 earnings call highlighted several positive developments, such as strong gross margins, growth in the cybersecurity unit, and successful design wins in the auto and embedded market verticals. However, there were also concerns about lower-than-expected IoT business unit revenue, delays in new programs, and uncertainty in the macro environment. The company remains confident in its pipeline and deal prospects, but investors should be aware of the potential risks and challenges ahead.