Security software and services specialist BlackBerry (NYSE:BB) saw its stock climb 20.6% in September, according to data provided by S&P Global Market Intelligence. The rise is likely almost entirely due to the company's better-than-expected results for its fiscal 2018 second quarter.
On Sept. 28, the company reported a surprising adjusted profit of $0.05 on total revenue of $249 million. But the bigger news was the company's record software and services revenue.
For its fiscal second quarter, BlackBerry said it achieved record software and services revenue of $196 million on a non-GAAP basis and $185 million on a GAAP basis. This represented 26% and 34% year-over-year growth, respectively. The record revenue for BlackBerry's software and services segment is a testament to the company's transformation into a software company.
As its higher-margin software and securities segment took hold, BlackBerry's earnings were helped by a record gross margin of 76% on a non-GAAP basis and 74% on a GAAP basis.
The stock soared about 15% after the report and continued climbing the following day.
Looking ahead, BlackBerry CEO John Chen believes the company is well positioned for further growth after it has made "significant progress" on its key initiatives. He explained:
Our enterprise billings grew 19 percent year over year driven by our Unified Endpoint Management platform. We secured important design wins in our automotive business, and we expanded our sales channels for our Radar IOT solution. In our licensing businesses, we have a growing pipeline of opportunities with our BlackBerry Secure software and our IP portfolio.