BlackBerry's Rising Revenue Hides Real Challenges
The cybersecurity company BlackBerry (NYSE: BB) posted a strong revenue growth during its fiscal second-quarter results. But without the contribution from its recent acquisition, the endpoint security company Cylance, BlackBerry's revenue would have declined. And management's expectations for Cylance may not match up with reality.
BlackBerry reported non-GAAP revenue of $261 million during its second-quarter results, up 22% year over year. But this apparently solid growth is due to the extra revenue from its Cylance purchase at the end of February. Without it, revenue would have dropped to $210 million compared to $214 million the year before.
The decline in the company's Internet of Things (IoT) business -- which includes software and services that secure endpoints -- from $141 million to $134 million explains this underperformance. The company's Enterprise Software and Services (ESS) business -- a part of its IoT business -- caused these disappointing results. The company's financial statements don't detail ESS's performance. But the last company's earnings call revealed the ESS business was down in the mid-teens. And John Chen, BlackBerry's CEO, said that ESS's decline sprang from the company's efforts to reorganize its salesforce.
Source Fool.com
