In a surprising turn of events, BlackBerry amused analysts with a profit in the fourth quarter of 2024, despite exiting phone manufacturing in 2022. This positive result was driven by a surge in demand for their cybersecurity services, fueled by the rise of cybercrime and high-profile data breaches. The company’s U.S.-listed shares jumped over 6% after the news.
The Canadian firm reported an adjusted net profit of 3 cents per share, exceeding analyst expectations of a 3-cent loss. Their quarterly revenue of $173 million also surpassed analyst estimates of $154.78 million. Both the cybersecurity and internet of things (IoT) divisions experienced growth. Cybersecurity revenue, which includes sales of intelligent security software to enterprises and governments, increased 5% year-over-year to $92 million. Revenue from the IoT business, which provides connected device solutions, saw a more significant 25% jump to $66 million.
While BlackBerry is making progress towards profitability, CEO John Giamatteo acknowledged ongoing efforts to separate the cybersecurity and IoT divisions. The company also achieved a significant reduction in operating cash usage compared to the previous quarter. BlackBerry previously announced a workforce reduction of 200 employees and the closure of certain offices in February 2024. Additionally, they aimed to increase annual profit by $100 million.
The company had to scrap its initial public offering (IPO) plans for the IoT business in December 2023. However, they remain committed to separating the cybersecurity and IoT divisions into independent entities. BlackBerry’s first-quarter revenue forecast for 2025 is between $130 million and $138 million, falling short of analyst estimates of $151.12 million. They also expect an adjusted loss per share of 3 to 7 cents for the full year 2025.
Blackberry in the news
Despite the boom in cybersecurity, a former employee by the name of Jane Doe, filed a lawsuit against chief executive of Blackberry Ltd. John Giamatteo for allegedly sexually harassing her and then retaliating against her after she reported the behaviour. She also alleged that members of the firm’s leadership ranks were aware of her complaints when Giamatteo was named chief executive in December.
Although no charges have been laid and the allegations have not been proven in court. An answer to the complaint has not been filed. In response to the allegation, the Waterloo- based firm said “BlackBerry and Mr. Giamatteo believe that these allegations are without merit and intend to vigorously defend against them, and BlackBerry is committed to maintaining a respectful and productive work environment free from discrimination and harassment. To this end, we do not tolerate, condone, or ignore workplace discrimination or harassment or any unlawful behaviour. We conducted an extensive investigation, which found no evidence of wrongdoing or violations of the company code of conduct, and we are confident that the robustness of our process and its findings will be made evident in court.” BlackBerry said in a statement.
