All eyes on revenue future of BlackBerry

Software hits or misses? Q1 reports will tell

It powers in-car entertainment systems, tracks trailers in the trucking industry, alerts organizations in emergency situations and monitors a growing number of corporate devices.

But BlackBerry Ltd. investors can expect to get a peek at exactly which of these business streams are hits — or misses — this week when the Waterloo, Ont. company holds its annual general meeting and reports its financial results for the first quarter of its fiscal year.

It has previously lumped all software into one category and reported it alongside separate revenue streams for service access fees and mobile products. But CEO John Chen said in March he would reorganize reporting to better reflect which areas of business are growing, especially considering the dwindling contributions from the latter two categories.

Investors are focusing on BlackBerry’s new software revenue streams, which it expects will climb between 13 and 15 per cent in fiscal 2018. But the new opportunities are “difficult to value at the moment,” RBC Capital Markets analyst Paul Treiber wrote in April. The new structure is expected to provide more clarity after a comeback for the company, which moved into software after its smartphone business collapsed.

Its stock has surged about 60 per cent since it reported its fiscal year-end results in March, with the first jump coming after its results beat analysts’ expectations.

The next happened in April when it settled a dispute with Qualcomm over a refund for royalty payments for smartphone chips. BlackBerry received a total US$940 million after binding arbitration, a cash influx that prompted analyst upgrades and speculation that BlackBerry would use the money for acquisitions to bolster its software products.

The third spike came in May when a longtime BlackBerry analyst predicted the stock could quadruple by 2020 due to its automotive software offerings for consumer vehicles and the trucking industry.

Next, its price jumped when Ford Motor Co. announced improvements to its in-car infotainment system, which is based on BlackBerry QNX software. This software is used in more than 60 million vehicles worldwide, according to BlackBerry.

This culminated in a fifth spike at the beginning of June after Citron Research released a report that called BlackBerry was a likely acquisition target and predicted its shares would jump to US$20 on the Nasdaq within two years. It called the QNX software a “potential game changer in autonomous driving.”

BlackBerry is to hold its annual general meeting on Wednesday and report its results for the three months ending May 31 on Friday.