On 31 March 2017, BlackBerry released its Q4FY2017 results which completed the books on FY2017 as a whole. Now with the complete picture, it is time yet again to have a complete look at BlackBerry’s performance over the year in the key financial areas. However, as always:
Please note the following disclaimers: firstly, I am not a financial expert. I have an interest in the subject and therefore have looked into it but do not base any financial decisions from this article. Be sure to consult a certified expert before doing anything relative to financial options. Next, I am a shareholder and therefore am quite interested in how the company is conducting its business. Finally, all information in this article is taken from the company’s financial reports on their website. There is no insider information at work here and anyone can make the same analysis as I have done.
It’s probably safe to say that everyone – including myself – are tired of hearing me rant about BlackBerry’s driving revenues. Well, take a look at the chart for the complete picture.
The company was able to generate $1.374 billion in revenue throughout the year. However, this is a far cry from the $2.193 billion from the previous year, a change of $0.819 billion or -37%. From the first quarter to the last the change was -$127 million or -30%.
Net income is one of the most important metrics for me and any business. It shows if the company is making money or not. FY2016 was a horrible year for BlackBerry’s net income, in fact, there was no income but a loss of $102 million. The following chart shows how BlackBerry fared this year:
FY2017 saw a turnaround with a total of $55 million for a delta of $157 million or 154% increase. It is absolutely a step in the right direction and what the analysts need to see to change their minds.
Earnings Per Share (EPS)
EPS and Net Income are linked metrics in the large picture. The EPS is a key metric which many analysts look at to determine if the company is moving in the right direction or not.
For half of the year, BlackBerry’s EPS were flat with a general rise in the latter half of the year. Whilst, they are far from “great” EPS, they are better than the previous year’s but still holds much room for improvement.
The company’s ability to hold onto cash is a source of comfort for all those looking at it closely. BlackBerry has seen a very slight dip in this metric but it was a calculated move through its acquisitions and debt payments.
The overall change in cash holdings from the beginning of the year to end year was $0.8 billion or -32%. While the percentage drop can be immediately concerning to some it is not for me. BlackBerry is in a strong cash position and the increase from Q3 to Q4 solidifies that statement.
The Bottom Line
So was it great? Nope, not at all.... However, BlackBerry is beginning to show that it is turning the ship around and starting to show results. The overall drop in revenue yet increase in net income and EPS shows that BlackBerry has sorted out its expenses and are increasing its profit margins. Previously, I have talked about BlackBerry’s revenue requirement and that we all need a new perspective of how much revenue does BlackBerry actually need to stay afloat. It appears that approximately $300 million per quarter may be just it. Q1FY2018 will definitely test this theory but based on Q3 and Q4 results this is definitely plausible.
Next, there’s the hardware issue. Well as you can see I have not reported on hardware sales numbers. Frankly, that is because BlackBerry has stopped reporting them. So with hardware out of the picture for BlackBerry, I am going to follow their lead and will report on their software segment in the future.
Overall, I think BlackBerry is on the right track but there is still much more hard work to do. FY2017 was definitely a solid improvement over the previous year and hopefully, FY2018 will be a solid improvement yet again.