BlackBerry Ltd. plunged the most in a year after investors focused on weak growth in software revenues that the company’s head said was due to a change in accounting standards.
Shares in the Waterloo, Ontario-based company fell as much as 9.8 percent to $10.55 at 10:18 a.m. in New York, the most intraday since June 23, 2017. Software revenue, the company’s most important growth metric, was $83 million, 18 percent lower than the same time last year, according to a statement Friday. Analysts at RBC Capital Markets had estimated it would be $106 million, according to a note to clients.
CEO John Chen said the gulf between expectation and reality was because of a change to the company’s accounting standards. He said the company would still hit previously set revenue forecasts, including double-digit software revenue growth through this fiscal year, which ends in March 2019.
“The shift to subscriptions from perpetual licenses in BlackBerry’s core enterprise-software business, almost a third of sales, is the major reason its fiscal 1Q19 adjusted revenue was down 11.1 percent,” John Butler, a senior analyst with Bloomberg Intelligence, said in a note.
The company is on track to transition almost all of its software revenue to subscriptions from the older style licenses, Chen said in an interview.