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Why BlackBerry Is so Optimistic about Software and Services

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Software and Services revenues rose 25% in fiscal 2017

Tech (QQQ) firm BlackBerry (BBRY) has three primary business segments: Software and Services, Mobility Solutions, and Service Access Fees. In fiscal 2017, BlackBerry’s revenue fell 39.4% YoY (year-over-year) to $1.3 billion, down from ~$2.2 billion in fiscal 2016.

By comparison, BlackBerry’s revenue from its Software and Services business rose 25% YoY in fiscal 2017 to $622 million from $497 million in fiscal 2016.

Revenue from BlackBerry’s Software segment rose 3.6% YoY in fiscal 1Q17, 89% YoY in fiscal 2Q17, 3.2% in fiscal 3Q17, and 39% YoY in fiscal 4Q17.

During BlackBerry’s fiscal 4Q17 earnings call, CEO (chief executive officer) John Chen stated: “A stellar growth in software and services exceed the decline in SAF and almost nearly offset the decline in hardware and SAF combined.”

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The fruits of optimism

BlackBerry is optimistic about revenue growth in the software and services space, driven by the strong performance in the company’s Enterprise Mobility, QNX, and Price Management Software segments.

In October 2016, BlackBerry announced that it had signed an agreement with automobile manufacturer Ford Motor (F) to expand the use of its QNX software. Blackberry is investing in several growth segments, including enterprise software, IoT (Internet of Things), and connected cars. Notably, BlackBerry’s QNX software is already being used in over 60 million vehicles.

Continue to the next part for a recap of what BlackBerry pulled off in 4Q17.

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