Canada’s BlackBerry on Tuesday cut the top end of its current fiscal-year revenue forecast and posted lower-than-expected quarterly revenue, hit by weak demand for its software amid increasing competition.
U.S.-listed shares of the company fell nearly 12% before the bell.
Once known for its phones, BlackBerry has pivoted to selling software such as those used in mobiles and by automakers, hoping to find a more stable source of revenue.
Adjusted revenue from BlackBerry’s Internet of Things business, which includes the enterprise software and technology solutions units, fell 5% to $134 million, missing estimates for the second straight quarter. Analysts on average had expected revenue of $150 million from the business.
Raymond James analysts estimated a revenue fall of 15% to 17% in the enterprise software segment.
The company said it now expects current-year revenue to rise between 23% and 25%, compared to its earlier forecast of 23% to 27%.
Waterloo, Ontario-based BlackBerry posted a net loss of $44 million in the second quarter ended Aug. 31, compared with a profit of $43 million a year earlier, as it invested heavily to integrate recently acquired Cylance.
In February, the company bought California-based cybersecurity firm Cylance, whose software uses machine learning to preempt security breaches.
BlackBerry’s operating expenses rose nearly 80% to $219 million in the quarter.
On a per-share adjusted basis, the company broke even, in line with analysts’ expectations. However, the company said it expects to be profitable in the current fiscal year.
Adjusted revenue rose about 22% to $261 million, missing estimates of $266 million, according to IBES data from Refinitiv.