BlackBerry Q2 Revenue Falls, Still Seeks Profitability by 2016

By Todd R. Weiss  |  Posted 2014-09-26 Print this article Print

BlackBerry's CEO John Chen remains positive about the company's outlook, citing completed restructuring and retargeted product markets to again attract enterprise users.

BlackBerry continues its journey from enterprise smartphone leader some six years ago to finding a new enterprise niche in 2014 as it reported that its revenue dropped to $916 million in the second quarter of fiscal 2015, down from $966 million in the first quarter.

The company also posted a GAAP net loss of $207 million for the second quarter, which ended Aug. 30, compared with a $965 million loss in the same quarter of 2013, according to a financial statement released by BlackBerry on Sept. 26. Those figures compare to a modest net profit of $23 million earned in the first fiscal quarter of 2015, which ended May 31.

The company said that its revenue for Q2 was split 46 percent from hardware sales, 46 percent from services, and 8 percent from software and other revenue. BlackBerry said it sold about 2.4 million BlackBerry smartphones to customers in the quarter.

"We delivered a solid quarter against our key operational metrics, and we are confident that we will achieve breakeven cash flow by the end of [fiscal year 2015]," John Chen, the company's chairman and CEO, said in a statement. "Our workforce restructuring is now complete, and we are focusing on revenue growth with judicious investments to further our leadership position in enterprise mobility and security, driving us towards non-GAAP profitability during FY16."

The lower Q2 revenue figure, however, came despite a $30 million revenue gain in North America, where $297 million was booked, up from $276 million in the first quarter, according to BlackBerry. Revenue in the Europe, Middle East and Africa market dropped to $368 million in Q2, down from $414 million in Q1. Revenue in Latin America dropped to $111 million, down from $125 million in Q1, while in the Asia Pacific market revenue dropped to $140 million, down from $151 million in Q1.

The company said it had 91 million monthly active BlackBerry Messenger (BBM) users in Q2, up from 85 million in Q1.

The BlackBerry of a year ago was an entirely different company, a larger, less laser-focused enterprise run by a different executive team, according to an earlier eWEEK report. Chen has trimmed his staff, sold off real estate and arranged partnerships—such as the deal announced June 18 with Amazon—to prevent his team's energies from being spread out or diluted.

The company just launched its latest new $599 BlackBerry Passport smartphone for enterprise users on Sept. 24.

Earlier in September, BlackBerry acquired Movirtu, a U.K. startup whose specialized software enables a smartphone to have more than one phone number. By effectively dividing a smartphone into what amounts to multiple devices, Movirtu enables companies to avoid paying costs incurred by employees who use corporate devices for personal use, according to an earlier eWEEK report. The software enables split billing along with the use of personal and corporate profiles. With this new functionality, BlackBerry will be able to provide iOS, Android and BlackBerry device users with a fair and accurate way to split phone and data service bills between employers and their staff people and contractors.


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