BlackBerry's (NYSE:BB) John Chen is the ultimate contrarian CEO. Decades ago, Chen took on the role of leading enterprise software company Sybase during a time of slowing sales and accounting scandals. Despite one analyst firm pegging Sybase's chance of failure at 70%, Chen righted the ship and went on to sell the company to SAP 13 years later at a 1,500% jump in value.

With that resume, it was logical Chen would be considered a good fit for BlackBerry. He took over there in 2013 and the stock rallied in his first year. At the time, Chen was less sanguine than the overall market, initially comparing BlackBerry to an ailing patient.

Now Chen is considerably more bullish, saying in a March 2018 interview with CNBC that the turnaround is done. Yet it's BlackBerry's investors who have moderated their outlook: Shares are essentially flat since November 2014, after the initial-year rally with Chen at the helm.

The inside of an autonomous vehicle.

BlackBerry's business segment that includes self-driving cars has posted 30% growth recently. Image source: Getty Images.

Investors take a wait-and-see approach

You can't blame investors for being impatient as the company continues to struggle to post annual revenue growth. BlackBerry's revenue has dropped 92% in five years, falling from $11 billion to $932 million in the last-reported year.

It was always Chen's intent to transition the firm from lower-margin hardware to higher-margin software, but it appears not to be happening as fast as investors were hoping. Last year, the company reported positive operating income. But this was on the back of a favorable arbitration ruling involving Qualcomm, more than operations.

Where's the growth?

Ironically, as investors are starting to doubt Chen, it's possible there are fundamental tailwinds that could prove the CEO's optimism right. BlackBerry's strong performance in security and software had been overshadowed during Chen's leadership, offset by consistent losses in the legacy mobile phone business.

For example, in the first earnings report with Chen at the helm, BlackBerry reported $476 million in hardware revenue and $632 million in hardware service access fees; in the recent quarter, those figures were $8 million and $16 million, respectively. Moving forward, BlackBerry's top-line growth will no longer be heavily offset by declines in these two legacy businesses, which will make it easier for the company to grow its top line. 

Although BlackBerry recently reported another quarter of revenue declines, if you exclude the legacy mobile business (indicated in bold in this chart), the company is growing at an 18% clip. 

Division Quarter ended May 31, 2018 Quarter ended May 31, 2017 Growth (Loss) YoY
Enterprise software and services  $79.0  $92.0 (14.1%)
BB technology solutions  $47.0  $36.0 30.6%
Licensing IP and other  $63.0  $32.0 96.9%
Handheld devices  $8.0  $37.0 (78.4%)
SAF (service access fees)
 $16.0  $38.0 (57.9%)
Total  $213.0  $235.0 (9.4%)
Ex-Handheld/SAF  $189.0  $160.0 18.1%

Revenue figures in millions. Source: BlackBerry. YoY = year over year.

What's Chen so excited about?

Chen's vision was to turn the company into a software and services company with an emphasis on enterprise security and autonomous/connected cars. The BlackBerry technology solutions group, which includes revenue attributable to the QNX infotainment and autonomous vehicle software, is growing at a 30% clip with major design wins announced in the quarter, particularly from China-based car manufacturers.

Although BlackBerry is essentially out of the hardware business, it's still well situated to profit from the growth of handsets. Chen decided to license BlackBerry's security technology, patents, and intellectual property to third-party manufacturers for higher-margin licensing revenue. Last year the company signed a deal with Chinese company NTD, and during the quarter the company signed a deal with Switzerland-based manufacturer Punkt. The division led BlackBerry with nearly 100% year-on-year growth.

As an executive, Chen's always been a contrarian and mostly successful. While this turnaround has taken longer than many investors initially anticipated, it appears the company is better situated now than at any other time under Chen's leadership.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.