BB's Q4 Earnings Top, Sales Fall Y/Y, Stock Tanks on Weak Outlook

BlackBerry Limited BB reported fourth quarter of fiscal 2025 non-GAAP earnings per share (EPS) of 3 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 3 cents. The Zacks Consensus Estimate was pegged at 2 cents per share.Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.Quarterly total revenues were $141.7 million compared with the prior-quarter revenues of $152.9 million. Although the top line beat management’s guidance ($126-$135 million), the year-over-year contraction resulted from soft sales across all its revenue segments.Management projects volatility in the automotive sector to weigh on its 2026 guidance. Supply-chain challenges and macroeconomic uncertainty are added woes. BB anticipates that the potential impact of DOGE and other parts of the administration in the United States and changes in governments in Canada, Germany and other regions could affect Secure Communications' revenues.BlackBerry Limited Price, Consensus and EPS Surprise BlackBerry Limited price-consensus-eps-surprise-chart | BlackBerry Limited QuoteTotal revenues for fiscal 2026 are expected to be between $504 million and $534 million. For the Secure Communications division, revenues are anticipated to be between $250 million and $270 million. Revenues are estimated to be in the band of $230-$235 million for the QNX business. Licensing & Other revenues are expected to be around $24 million. Non-GAAP loss per share (includes continued and discontinued operations) is expected to be between 8 cents and 10 cents.Following weaker-than-anticipated revenue guidance, BB’s shares tumbled 9.12% and closed at $3.39 yesterday. Shares also sank 6.2% in today’s pre-market trading. The stock has gained 20.7% in the past year compared with the Zacks Internet-Software industry’s growth of 10.7%.Image Source: Zacks Investment ResearchBB’s Fiscal Q4 in DetailsRevenues from the QNX business totaled $65.8 million, marginally down from $65.9 million in the prior year quarter. Revenues exceeded the company’s guidance of $60-$65 million. During the quarter, the company continued its design win momentum in the core digital cockpit and ADAS. Strong multi-year secular trends are likely to shape QNX’s performance.Secure Communication revenues were $67.3 million, down from $71.6 million in the prior year quarter, owing to tougher year-over-year comparison. The figure, however, exceeded expectations ($62-$66 million), driven by strong AtHoc revenues and renewals in core GermanMarket. Healthy momentum in UEM stemmed from rising deal wins from government agencies, top banks and law firms.Secure Communications ARR rose 3% year over year to $208 million. Licensing revenues surpassed guidance of $4 million, reaching $8.6 million, powered by stronger-than-anticipated sales from pre-existing arrangements.BB’s Margin PerformanceAdjusted gross margin was 73.5%, down from 79.9% in the year-ago period.Adjusted operating expenses were $87.4 million, down 2.2%.Adjusted EBITDA was $21.1 million, down from $38.2 million in the year-ago quarter. The company expected adjusted EBITDA to be $10-$20 million.BB’s Cash Flow & LiquidityFor the quarter that ended on Feb. 28, 2025, BlackBerry generated $42 million of net cash from operating activities, an improvement of $57 million from the prior-year quarter.As of Feb. 28, 2025, BlackBerry had $410 million in cash, cash equivalents, short and long-term investments, up from $266 million as of Nov. 30, 2024. This upside was driven by higher operating cash flow coupled with $80 million received from the initial cash payment from the sale of Cylance to Arctic Wolf.BB’s Fiscal Q1 GuidanceThe company expects fiscal first-quarter 2026 revenues to be in the $107-$115 million range. For the Secure Communications unit, revenues are estimated to be in the band of $50-$54 million.For the QNX business, revenues are expected to be in the range of $51-$55 million for the fiscal first quarter. Licensing & Other revenues are expected to be roughly $6 million.Non-GAAP EPS is expected to range between a loss of 1 cent and breakeven.BB’s Zacks RankAt present, BlackBerry carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Recent Performance of Other Companies in the Tech SpaceCiena Corporation CIEN reported first-quarter fiscal 2025 (ended Feb. 1) adjusted EPS of 64 cents, which surpassed the Zacks Consensus Estimate of 39 cents. However, the bottom line declined 3% year over year.Shares of CIEN have soared 24.2% in the past year.Descartes Systems DSGX reported fourth-quarter fiscal 2025 non-GAAP EPS of 43 cents, which met the Zacks Consensus Estimate. The bottom line expanded 16% year over year and 2% sequentially.Shares of DSGX have gained 3.9% in the past year. Pure Storage PSTG reported fourth-quarter fiscal 2025 non-GAAP EPS of 45 cents, which beat the Zacks Consensus Estimate by 7.1%. The company had reported non-GAAP EPS of 50 cents in the prior year quarter.Shares of PSTG have declined 7.1% in the past year.Zacks' Research Chief Names "Stock Most Likely to Double"Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.This top pick is among the most innovative financial firms. With a fast-growing customer base (already 50+ million) and a diverse set of cutting edge solutions, this stock is poised for big gains. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Ciena Corporation (CIEN): Free Stock Analysis Report The Descartes Systems Group Inc. (DSGX): Free Stock Analysis Report Pure Storage, Inc. (PSTG): Free Stock Analysis Report BlackBerry Limited (BB): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks