BlackBerry Ltd.’s BB-T restructuring era is done and the Canadian technology stalwart is entering a period of growth, its chief executive officer said, as the company reported stronger-than-expected fiscal fourth quarter earnings Thursday and laid out a rosier outlook than analysts had anticipated for this year.

The Waterloo, Ont.-based company said revenue for the quarter ended Feb. 28 was US$156-million, up 10 per cent year-over-year. That exceeded analyst consensus expectations by US$10-million and the company’s prior guidance.

Operating earnings for the quarter increased by 71 per cent over last year’s fourth quarter, coming in at US$36.1-million, well above consensus analyst expectations of US$29-million. Adjusted earnings of 5 US cents per share was a penny ahead of expectations.

It was the third time in the past four quarters BlackBerry had posted a net profit, after not doing so for three years.

BlackBerry stock was up 10 per cent in premarket trading on the New York Stock Exchange.

“It’s been a long journey over the last couple of years as we embarked on the whole transformation of BlackBerry,” said CEO John Giamatteo in an interview. “The turnaround is complete. It’s no longer cost cutting and efficiencies and reducing head count and consolidating offices. We’re back to being a growth company.”

The Canadian technology stalwart and one-time smartphone leader has been on a roll under Mr. Giamatteo, who became BlackBerry’s CEO in late 2023 after serving as the head of its cybersecurity division under predecessor John Chen. On the Dallas-based CEO’s watch, BlackBerry has slashed costs, sold a money-sucking cybersecurity unit, achieved positive operating cash flows and refocused the company on its car software business, QNX.

John Wall takes the wheel at BlackBerry’s QNX car software unit

The QNX unit is a dominant supplier of embedded systems used to manage “software defined vehicles,” a market that is expected to grow as more new cars roll off the line with autonomous and driver-assistance functionality such as lane keeping. It is expected to deliver brisk growth for BlackBerry in the years ahead, and it is seeking new markets for QNX’s embedded software in such areas as robotics, industrial automation and medical devices and equipment.

QNX revenues increased by 20 per cent, to US$78.7-million, in the quarter, and it generated an operating profit margin of 27 per cent. Software makers that deliver a combined revenue growth rate plus operating margin of 40 are considered top performers by achieving the so-called “rule of 40.” By that measure, QNX was at 47 in the fourth quarter, and 40 for the year. BlackBerry said its backlog of QNX royalties, booked when manufacturers roll out products with the software, stood at US$950-million at year-end, up 9.8 per cent year-over-year.

BlackBerry’s results were also driven by stronger-than-expected performance in its secure communications division, which had been generating solid operating earnings while revenues declined in recent quarters. Revenue for the unit came in at US$72.5-million for the quarter, up 8 per cent year-over-year. BlackBerry forecast four months ago that they would instead decline as much as 10 per cent.

Mr. Giamatteo said growth in secure communications, which sells such products as secure messaging service SecuSUITE and AtHoc, a crisis management communications platform for government agents, was driven by geopolitical factors, notably increased concerns over digital sovereignty. “We’re seeing a lot of customers around the world say, ‘You know what, I’m not going to rush to throw everything’” onto cloud computing infrastructure managed by American cloud giants including Microsoft MSFT-Q, Amazon AMZN-Q and Google GOOGL-Q, he said.

Instead, they’re favoring keeping their data on their own servers, and some customers, including one in Europe, have even reversed plans to leave BlackBerry to sign up with American cloud providers. Some have recommitted to long-term contracts with BlackBerry. Mr. Giamatteo said the company has experienced a 47-per-cent increase in multiyear contracts for its unified endpoint management (UEM) cybersecurity offering in the past year. The Canadian government also extended and expanded its secure communications partnership with BlackBerry last month.

That growth is expected to continue, with BlackBerry forecasting secure communications revenue will increase by 4 cent to 8 per cent this fiscal year, while generating operating earnings of US$57-million to US$65-million, up from 56.1 per cent last year. QNX is forecast to grow revenue by as much as 14.6 per cent

Overall, BlackBerry said it expects to book revenue of US$584-million to US$611-million in the current fiscal year, up from US$549-million last year. BlackBerry also expects to generate US$110-million to US$130-million in adjusted operating earnings, up from US$107.1-million last year, and to double operating cash flow, to US$100-million.

Some analysts expect BlackBerry will ultimately sell the slower-growing secure communications unit, which drags on the stock’s valuation, and focus on QNX. Mr. Giamatteo said he’s in no rush to sell, but added, “I think now it’s probably more attractive for people to come look at it. If there’s a compelling offer, absolutely, we’re compelled to look at that.”