BlackBerry Limited BB recently held its Investor Day 2024 event where it showcased the company’s roadmap for growth and profitability over the coming years. The event emphasized BlackBerry's focus on two major business divisions – the Internet of Things (IoT) and Cybersecurity.

BlackBerry laid out its ambitious plan to return to profitability in fiscal 2025, with revenue growth forecasted for both IoT and Cybersecurity segments. BlackBerry aims to generate revenues between $591 million and $616 million for fiscal 2025 and $655-$685 million by fiscal 2027. 

BB expects to return to profitability in fiscal 2025 with earnings before interest, taxes, depreciation, and amortization (EBITDA) projection between breakeven and $10 million. Fiscal 2026 adjusted EBITDA is projected to be in the $50-$65 million band and for fiscal 2027 the metric is expected in the range of $80-$95 million.

Investors responded positively to the announcements, and the company’s stock jumped 4.4%, with the session closing at $2.6 on Oct. 16.

Growth in BB’s IoT Unit & Cybersecurity Breakthroughs

The IoT segment, driven by BlackBerry’s flagship QNX platform, is expected to contribute favorably to growth and expansion. The division is expected to experience double-digit revenue growth, contributing significantly to BlackBerry’s financial recovery. The IoT division is likely to generate $225-$235 million in revenues for fiscal 2025 compared with $215 million in the previous year. By fiscal 2027, revenues from this segment are anticipated in the range of $295-$305 million.

Further, BB expects the IoT Core Serviceable Addressable Market to witness a compound annual growth rate (CAGR) of 8-12% from 2024-2026, reaching $2.1 billion by 2026. 

BlackBerry’s Cybersecurity business, which includes its Cylance AI-powered solutions, continues to focus on protecting organizations from emerging digital threats. However, high levels of investment burdens amid a competitive cybersecurity landscape are forcing BB to review alternative options for Cylance to maximize profitability, streamline operations and foster long-term growth. BB is undertaking quick actions to optimize investments in Cylance and prudently allocate capital for growth in Secure Comms and IoT.

BlackBerry Limited Price and Consensus

BlackBerry Limited price-consensus-chart | BlackBerry Limited Quote

To streamline operations and focus on core growth areas, BlackBerry is working toward the separation of its IoT and Cybersecurity divisions into standalone units. This capital management strategy is intended to unlock greater value for shareholders by allowing each business to focus on independent growth strategies.

BlackBerry's Investor Day 2024 underscores its commitment to innovation and financial discipline, positioning the company as a key player in both the IoT and cybersecurity markets. With a target toward profitability and a focus on leveraging its core strengths, BlackBerry is determined to solidify its foothold in the highly competitive software space.

Waterloo, Canada-based BlackBerry provides intelligent security software and services to enterprises and governments around the world. The company uses machine learning and artificial intelligence to provide cutting-edge solutions for cybersecurity, safety and data privacy. 

In the last reported quarter, BB’s revenues soared 9.9% year over year to $145 million, exceeding the company’s guidance of $136-$144 million. The expansion resulted from solid demand trends across the IoT and Cybersecurity businesses. For the Cybersecurity business, revenues are expected to be in the range of $350-$365 million.

BB’s Zacks Rank & Stock Price Performance

BB currently sports a Zacks Rank #1 (Strong Buy). Shares of the company have lost 26.8% in the past year against the sub-industry's growth of 27.4%.

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Other Stocks to Consider

Some other top-ranked stocks from the broader technology space are Workday Inc. WDAY, Cirrus Logic, Inc. CRUS, and SS&C Technologies Holdings, Inc. SSNC. WDAY presently sports a Zacks Rank #1, whereas SSNC & CRUS carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

WDAY is a leading provider of enterprise-level software solutions for financial management and human resource domains. The company’s cloud-based platform combines finance and HR in a single system, making it easier for organizations to provide analytical insights and decision support. In the last reported quarter, it delivered an earnings surprise of 7.36%.

SS&C Technologies Holdings delivered an earnings surprise of 3.1%, on average, in the trailing four quarters. In the last reported quarter, SSNC pulled off an earnings surprise of 4.9%. The Zacks Consensus Estimate for its earnings is pegged at $5.18.

Cirrus Logic’s performance is driven by increasing shipments in the smartphone market. Steady momentum in the laptop market and standout next-generation flagship smartphone design cushion the top line. CRUS delivered an earnings surprise of 56.6%, on average, in the trailing four quarters.

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