Why Is BlackBerry (BB) Down 1.6% Since Last Earnings Report?

Core Viewpoint - BlackBerry's recent earnings report shows a mixed performance, with a narrower loss per share than expected, but a significant decline in revenue compared to the previous year. The company is navigating challenges in its Cybersecurity and IoT segments while maintaining a cautious outlook for the upcoming quarters [2][3][4]. Financial Performance - BlackBerry reported an adjusted loss per share of 3 cents for Q1 fiscal 2025, better than the expected loss of 4-6 cents and the prior year's earnings of 6 cents per share [2]. - Quarterly revenues were $144 million, down from $373 million year-over-year, but above the company's guidance of $130-$138 million [2]. - The Cybersecurity business generated $85 million in revenue, an 8.6% decline year-over-year, but exceeded guidance [4]. - IoT business revenues totaled $53 million, an 18% increase year-over-year, surpassing the projected range [4]. Revenue Breakdown - Software product revenues accounted for 85% of total revenues, while professional services contributed 15% [2]. - For the upcoming quarter, Cybersecurity revenues are expected to be between $82-$86 million, and IoT revenues are projected at $50-$54 million [3]. Gross Profit and Margins - Gross profit decreased by 46.4% year-over-year to $96 million, but gross margin improved to 66.7% from 48% in the prior-year quarter [6]. - Non-GAAP gross margin was reported at 67.4%, up from 48.3% year-over-year [6]. Operating Expenses and Cash Flow - Total non-GAAP operating expenses were $109 million, down 24.8%, with an adjusted operating loss of $12 million compared to an income of $35 million a year ago [7]. - The company used $15 million of net cash in operating activities for the quarter, a significant decrease from $99 million generated in the prior-year quarter [8]. Future Outlook - BlackBerry maintains its fiscal 2025 revenue projection in the range of $586-$616 million, with Cybersecurity revenues estimated at $350-$365 million and IoT revenues at $220-$235 million [3]. - The company has a Zacks Rank 3 (Hold), indicating an expectation of an in-line return from the stock in the coming months [10].