What Led to BlackBerry Ltd (NYSE: BB) Stock Crash?

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BlackBerry Ltd (NYSE: BB) stock lost over 13.3% on December 18th, 2020 (as of 11:57 am GMT-5; Source: Google finance) as the company missed the analysts’ estimates for third-quarter revenue driven by poor demand for its cybersecurity products and QNX car software. Surging COVID-19 cases in the Unites States have slowed the pace of auto sales in BlackBerry’s biggest market, which reduced the demand for the firm’s QNX software, that is used by automakers including Volkswagen, BMW and Ford Motor. In the previous quarter, when U.S. auto sales was recovering from pandemic lows hit in April, BlackBerry had said demand for QNX was expected to normalize by early next year.

BlackBerry Ltd, NASDAQ:BBRY

BB had reported 18 percent fall in the adjusted revenue to $218 million in the third quarter of FY 20, missing the analysts’ estimates for revenue of $219.7 million according to IBES data from Refinitiv. Net loss has risen to $130 million, or 23 cents per share, in the third quarter ended Nov. 30 from $32 million, or 7 cents per share, a year earlier, owing to fair-value adjustments to long-term debt.

Moreover, the company’s Software and Services non-GAAP revenue for the third quarter of fiscal 2021 was $168 million. The company delivered Non-GAAP gross margin was 70% and Non-GAAP operating earnings were $14 million. Total cash, cash equivalents, short-term and long-term investments were $757 million at the end of the quarter. The company generated net cash from operating activities of $29 million.

Meanwhile, the company and AWS during the quarter had joined forces to accelerate innovation with new intelligent vehicle data platform, BlackBerry IVY. BlackBerry QNX has design wins with 19 of the top 25 Electric Vehicle OEMs, who together have 61% of EV market. BlackBerry had unveiled industry’s first Unified Endpoint Security (UES) solution for AI-powered Cybersecurity, BlackBerry Cyber Suite. Cyber Suite will Integrate with all leading UEMs, including Microsoft Intune. The company had launched industry’s first user behavior AI technology for Cybersecurity, BlackBerry Persona. BlackBerry during the third quarter had launched new AI-powered Mobile Threat Defense (MTD) solution to protect against mobile malware and phishing attacks, BlackBerry Protect Mobile. In addition, the company uncovered massive hack-for-hire group, BAHAMUT, targeting governments, businesses, human rights groups and influential individuals. The company had launched QNX OS for Safety 2.2, a new release of the trusted, safety-certified operating system certified by the independent auditors at TÜV Rheinland to IEC 61508 SIL3 (Industrial), ISO 26262 ASIL D (Automotive), and IEC 62304 Class C (Medical devices) functional safety standards.

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