BlackBerry forecasts revenue to increase 54% by 2026, to between $880 million and $960 million

Steinertiene Eleonora -

BlackBerry forecasts revenue to increase 54% by 2026, to between $880 million and $960 million

On May 17, BlackBerry Ltd predicted a 54 percent rise in 2026 sales over the current year on the back of its cybersecurity growth

The former smartphone producer, which now specializes in security software and Internet of Things (IoT) security services, expects $880 million to $960 million in revenue in 2026. 

Cybersecurity accounts for 60% of BlackBerry's revenue, with IoT accounting for 35%. BlackBerry also stated that the cybersecurity unit's gross margin is expected to jump by 400 to 600 basis points by fiscal 2026. This positive outlook boosted BlackBerry stock's 5.87% increase on May 18, making it one of the top gainers on the TSX. 

Despite recent revenue drops, particularly in the core cybersecurity market, BlackBerry's management remains enthusiastic about the IoT segment's future prospects. According to Refinitiv data, the Waterloo, Ontario-based business also reaffirmed its current fiscal 2024 revenue target of $665 million to $700 million, which is a little below analyst estimate of $701 million. Its IoT segment is predicted to expand by 20%.

BlackBerry's share value has dropped 51% in the last five years. The company has long battled with its shift away from the production of mobile phones. However, BlackBerry shares are up 60% this year, with a remarkable 30% rise in May alone. The stock has risen in response to the company's recent revelation that it is considering reorganizing its portfolio business investment to increase shareholder value.

BlackBerry indicated in December of last year that revenue from its cybersecurity division would be stagnant in the first half of 2023 but will rise in the second half. The company's concentration on these two segments is part of its continuous shift from a smartphone manufacturer to a provider of services and software.