BlackBerry warns of economic impact on cybersecurity business
7:51 pm Tuesday, December 20th, 2022
(Reuters) -BlackBerry Ltd said on Tuesday the sales cycles for its cybersecurity software have become longer and it expects the current macroeconomic environment to pose more challenges in the near term.
The Canadian technology company said revenue from the cybersecurity business would remain flat in the first half of 2023, but grow in the latter half of the year.
Cybersecurity businesses have not been as affected by economic swings compared to other software sectors that are grappling with clients’ lower spending budgets amid rising costs.
BlackBerry Chief Executive John Chen said the cybersecurity business was regaining momentum and there’s evidence that investments will drive progress towards growth next year.
Revenue from the segment in the third quarter fell about 17% to $106 million.
U.S.-listed shares of the company fell marginally in extended trading. They have fallen about 56% so far this year.
Growth in the electric vehicles industry and adoption of connected-car and other safety technologies boosted sales of BlackBerry’s automotive and embedded technology products.
Sales in the Internet of things (IoT) unit, which includes BlackBerry’s QNX automotive software product, rose about 19% to $51 million in the reported quarter.
The company expects the segment to grow between 15% and 18% this year.
The company said it was seeing some tightening in the North America and European automotive markets, but China and India markets for its QNX automotive software were strong.
BlackBerry reported a net loss of $4 million in the three-month period ended Nov. 30, compared with an income of $74 million a year earlier.
Revenue fell 8.2% to $169 million from $184 million. Analysts on average had expected revenue of $168.7 million, according to IBES data from Refinitiv.
(Reporting by Akash Sriram in Bengaluru; Editing by Shinjini Ganguli)
