BlackBerry IoT Unit Sees Increase in Automotive Demand Amid Fall in Cybersecurity Revenue

Canada's BlackBerry on Tuesday reported a fall in cybersecurity revenue for the second quarter, as customers reined in spending due to an uncertain macroeconomic environment, sending its shares down about 3 percent in extended trading.

The company has also been facing tough competition from Microsoft, Citrix Systems, and International Business Machines in the security software segment, with revenue in the unit falling 7.5 percent to $111 million (roughly Rs. 900 crore) from a year ago.

The company said in an earnings call that cybersecurity segment revenue in the third quarter is expected to be flat year-on-year.

However, revenue at the company's Internet of things (IoT) unit, which includes the QNX software for automotive customers, rose about 28 percent to $51 million (roughly Rs. 420 crore) as it signed up more customers.

BlackBerry's QNX software is now embedded in over 215 million vehicles worldwide, helped by surging demand for electric vehicles and connected-car technologies. The company recently added global carmakers such as Ford Motor, General Motors, Hyundai Motor, to its already strong client list of BMW, Honda Motor , Mercedes-Benz and Toyota Motor.

BlackBerry in June said that a deal to sell its patents primarily related to mobile devices, messaging and wireless networking for $600 million (roughly Rs. 4,900 crore) to a special purpose vehicle has been delayed.

Total revenue fell 4 percent to $168 million (roughly Rs. 1,375 crore) for the quarter ended August 31, compared with a consensus estimate of $166.7 million (roughly Rs. 1,365 crore), according to IBES data from Refinitiv.

Excluding items, the company posted a loss of 5 cents per share, narrower than analysts' expectations of loss of 7 cents.

© Thomson Reuters 2022