BlackBerry Ltd (NASDAQ:BBRY) has been in a constant struggle to make financial ends meet. The firm has a $500 million revenue target from its software.
What’s more important is how the firm plans to achieve that target. Investors are baffled about how the company will achieve the objective after it revealed its first-quarter report on Tuesday. The report indicated that Blackberry had failed to satisfy all the estimates made by Wall Street except for the software category.
The software division registered $37 million in quarterly revenue compared to the $83 million expected by the analysts. The results are an indicator that the software department is becoming more stable and profitable. The positive news resulted in an 8% rise in the company’s stock before Tuesday’s opening. Blackberry has been working on paying more attention to its software aspect rather than leaning too much towards hardware.
BlackBerry Ltd (NASDAQ:BBRY)’s quarterly report also indicated that the firm’s total revenue dropped by 32% to $658 million. This is in comparison to the firm’s performance in the corresponding quarterly period in the previous year, where it collected $966 million. The value also was also lower than the projected revenue of $966 million.
The company’s software revenue also received a boost from signed patent-licensing deals with Tech giant, Cisco Systems. Partnerships with and another undisclosed firm also played a role. Blackberry did not reveal the details because of a confidentiality agreement. According to Desmond Lau, an analyst at Veritas Investment Research, licensing revenue is usually unpredictable because it is not frequent.
BlackBerry Ltd (NASDAQ:BBRY)’s Chief Executive, John Chen announced that software revenue accounted for 30% on an annual basis though the percentage of recurring software revenue is not a certainty. The company has been putting in a hard fight to keep up with the ever-growing competition. A few months ago, the company announced that it was eying profits after experiencing losses over consecutive years. Blackberry might result to acquisitions in the future as a move to boost performance.