BlackBerry to Showcase QNX Design Wins at CES, ‘With Any Luck’: CEO

BlackBerry is still chasing a deal to sell the portion of its patent portfolio involving mobile devices, messaging and wireless networking and other “noncore” businesses, said CEO John Chen on an investor call Tuesday with analysts for fiscal Q3 ended Nov. 30. BlackBerry failed in the quarter to seal a definitive agreement with a potential buyer, as Chen predicted it would on a Sept. 22 call (see 2109230002).

The “process” to sell the portion of the portfolio involving businesses in which BlackBerry is no longer actively involved “is taking much longer than we had hoped,” said Chen. “Trust me, I share the frustration about the timeline.” Talks with the potential buyer “are very close to a conclusion, and we are literally down to the last few important items now,” he said. “Both parties are working hard to get this finished, and we expect to reach a definitive agreement very soon.”

BlackBerry’s Q3 licensing revenue was $13 million and gross margin was 54%, said Chen. “This beats expectations for the quarter.” If the sale reaches a definitive agreement in January, “we will suspend monetization activity and therefore expect Q4 revenue to be close to zero,” he said. If not, “then we’ll continue to expect revenue to be around the $10 million mark for the quarter,” he said.

Auto industry supply chain issues will remain “a meaningful headwind to vehicle production volumes” into 2022, said Chen. But BlackBerry sees the negative impact “gradually lessening” on the QNX embedded components it supplies automakers, including “an improvement” in the business sequentially in fiscal Q4 ending late February, compared with Q3, he said.

BlackBerry’s QNX business registered a total of 11 new “auto design wins” in the quarter, said Chen: “With any luck, we’ll also be able to share details of further significant auto design wins with you all at the CES in January.”