BlackBerry (BB) Concludes Patent Sale, Receives $170M Cash

BlackBerry BB recently concluded the sale of most of its non-core patents and patent applications to Malikie Innovations, a subsidiary of Key Patent Innovations Limited. Per the agreement, BlackBerry received $170 million in cash on closing and will recieve an additional $30 million in cash by the third anniversary of closing of the transaction. Also, BlackBerry will receive annual cash royalties from the profits generated from the sold patents.

The patent sale agreement involved nearly 32,000 non-core patents and applications related to mobile devices, messaging and wireless networking. However, it excluded patents (including 2K essential patents related to mobile devices) and applications necessary to support the company’s current core business operations and all existing revenue-generating agreements.

Patent sale transaction is expected to strengthen BlackBerry’s balance sheet, simplify its business and enable it to focus on its core Internet of Things (IoT) and Cybersecurity businesses.

BlackBerry Limited Price and Consensus

BlackBerry Limited Price and Consensus

BlackBerry Limited price-consensus-chart | BlackBerry Limited Quote

Blackberry provides intelligent security software and services to enterprises and governments around the world. It offers devices and software platforms for managing security, mobility and communications among hardware, programs, mobile apps and the IoT.

BB’s performance is being driven by continued momentum in the IoT business segment, which secured six new design wins in Auto and 30 in the General Embedded Market in the last reported quarter.

However, softness in the Cybersecurity business segment owing to certain large government deals shifting to fiscal 2024 coupled with elongation in deal cycles in the government vertical weighed on the last reported quarter’s revenues. The ongoing supply-chain woes and macroeconomic volatility are major concerns.

For fiscal 2024, BlackBerry expects Cybersecurity revenues in the range of $425-$450 million. Cyber business billings growth is expected to be between 7% and 20% due to increased uptake of security products. For first-quarter fiscal 2024, Cybersecurity revenues are expected to increase sequentially and in the range of $100-$110 million.

BlackBerry currently has a Zacks Rank #3 (Hold). Shares of BB have lost 11.9% in the past year compared with the sub-industry’s growth of 18%.

Stocks to Consider

Some better-ranked stocks in the broader technology space are Badger Meter BMI, Simulations Plus SLP and Blackbaud BLKB. BLKB sports a Zacks Rank #1 (Strong Buy) whereas BMI and SLP currently carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Badger Meter’s 2023 earnings has increased 4.7% in the past 60 days to $2.69 per share. BMI’s earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 5.3%. Shares of BMI have surged 77.6% in the past year.

The Zacks Consensus Estimate for Simulations Plus fiscal 2023 earnings has improved by 1 cent in the past 60 days to 66 cents per share. Shares of SLP have lost 7.3% in the past year.

The Zacks Consensus Estimate for Blackbaud’s 2023 earnings is pegged at $3.68 per share, up 7.3% in the past 60 days. The long-term earnings growth rate is anticipated to be 10.4%.

Blackbaud’s earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 10.4%. Shares of BLKB have increased 23.3% in the past year.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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