BlackBerry Showcasing its product lines may cause some Companies to Fail

Tired of seeing its shares slowly decline over the past 12 months, and after reporting a loss for the past fiscal year, BlackBerry said Monday that its board is reviewing the cybersecurity firm’s business portfolio.

One alternative: Separate one or more of the BlackBerry business, the company said in a press release.

That could mean spinning off or selling its QNX Neutrino operating system for embedded systems and/or its Ivy OS for the automotive sector from its enterprise security products.

The company is already split into two segments: Cyber Security, which includes the Cylance line of enterprise products and BlackBerry Spark UEM (Unified Endpoint Management); and IoT, which includes QNX, Ivy, and other products.

“While the Internet of Things is expected to grow, declines in cybersecurity, licensing and other business units will result in an overall decline in BlackBerry revenue,” one financial analyst noted in March. He added, “The market believes that BlackBerry’s strategic investments will enable it to achieve strong profit growth in the future, and to overcome the short-term challenges it faces.”

There is no deadline for completing a product review.

The announcement comes a month after Waterloo, Ontario-headquartered BlackBerry announced its 2023 financial results for the year ending February 28th. The company lost $756 million on revenue of $656 million for 12 months, a decrease of eight percent from the previous year. This represents a GAAP loss per share of $1.27 per share compared to the prior year.

Its stock has moved from a high of just over C$9.00 on the Toronto Stock Exchange to C$5.26 today.

The announcement also comes after BlackBerry sold non-core patents and patent applications to Malikie Innovations for a combination of cash at closing and potential future royalties that could be worth up to $900 million.

Last week, at the RSA 2023 conference, BlackBerry announced an overhaul of its Cylance line.

“BlackBerry is executing a solid, well-resourced plan to deliver growth in revenue and ARR (annual recurring revenue), as well as significant improvements in non-GAAP earnings per share and cash flow this fiscal year,” said CEO John Chen.

“Although we expect the realization of this plan to bring significant benefits to shareholders, we do not believe that this is fully reflected in the current market valuation of the company. Accordingly, the Board of Directors and management believe that the time is right to start a comprehensive review of the company’s portfolio.

The review aims to identify and evaluate opportunities to further enhance shareholder value. While we conduct this review, we remain fully focused on delivering our plan and remain committed to our customers, partners and employees.”

BlackBerry says more than 55 of the world’s OEMs are customers. Auto manufacturers Audi, BMW, Ford, General Motors, Toyota and Volkswagen are also customers. The company said at the Consumer Electronics Show in January that it was working to add Cylance endpoint protection capabilities to vehicles.

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