BlackBerry Ltd (BBRY) Still Expects To Be Cash Flow Break-even by end of FY 2015


Blackberry (NASDAQ:BBRY) (TSE:BB)  held an Investor Session Today in San Francisco where analysts heard from CEO John Chen. Chen reviewed the status of the company with analysts and investors.

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Company around Halfway through 8 quarter turnaround

While he was unwilling to pin an exact percentage, John Chen stated that they are nearly halfway through their eight-quarter turnaround and while they believe near term revenue is challenged, it is nearing a bottom.  The company projects that revenue will be $1.85B in the Fiscal Year 2015 which began on March 1st this year, but will decline to $1.4B in FY 2016.

Revenue declining due to falling Service Access Fees

The main source of decline comes from Service Access Fees which the company hopes to offset with growth in Software & BBM. The company noted there is intense competition in the MDM business and that revenues will have to come primarily from value added services, and support.

Cash Flow Breakeven by end of FY 2015

The company attends to be Cash Flow break-even by the end of FY 2015 and to show non-GAAP profitability by FY16. Devices, Software, and managing spending will be the key elements of achieving the break-even cash flow despite the challenges to revenue.

Software Revenue of $250M expected in FY15, and $500M in FY16

The company plans to double software revenue every fiscal year and to pull many levers to expand Blackberry’s addressable market supporting all mobile platforms, and moving to subscription license contracts with a larger monthly ASP and building in support contracts.

BBM Revenue of $100M by FY16

The company’s plan for revenue in BBM has been executed through adding features like Channels for brands or companies, BBM Shop, and even Payments including BBM Money. They will continue to add features which can drive revenue and do things to monetize the 91 million users. Chen did not mention any specific data but stated that the users had a very long engagement time.

In the Enterprise, The company is rolling out a variety of subscription programs including BBM Meetings, BBM Protected, and various bundles to add Value Added Services and increase penetration and Average Revenue Per User with BBM.

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