BlackBerry Ltd (NASDAQ:BBRY) released its first quarter earnings report before opening bell, breaking even on an adjusted basis with $400 million in revenue. Analysts had been expecting losses of 9 cents per share and $470.94 million in revenue. Despite the revenue miss, BlackBerry shares rose in premarket trading as management guided for losses to be not as bad as expected.

BlackBerry Ltd Actually Rises After Earnings

BlackBerry software revenue hits new record

The company reported that 39% of the non-GAAP revenue in the quarter was from software services, 25% was for service access fees and 36% was for mobility.

BlackBerry said non-GAAP software and services revenue reached $166 million, while the non-GAAP gross margin was 53%. Adjusted EBITDA was positive for the tenth quarter in a row, while GAAP net losses were $1.28 per share or $670 million, including a $501 million non-cash long lived impairment charge, a $57 million goodwill impairment charge, $41 million inventory write-down and $28 million charge for amortization of acquired intangibles. Other charges included in the GAAP result include stock-based compensation, purchase accounting deferred revenue write-downs, restructuring charges, acquisition costs, and a non-cash credit.

BlackBerry had $2.5 billion in cash, equivalents and investments as of the end of May, including $65 million in free cash use and -$61 million in cash flow from operations. The company said the inventory impairment negatively impacted cash flow and that it would have been positive without that impairment. The company had about 3,300 enterprise customer wins during the first quarter and said that 74% of the software revenue from the quarter was recurring.

One thing that was noticeably missing from this morning’s earnings report was any mention of how many handsets the company sold during the first quarter. Other than that inventory write-down, the press release doesn’t say how many handsets were sold. It will be interesting to see what management has to say about this on the earnings call. Analysts have been calling for BlackBerry to dump the handset business for quite some time, so we might hear news on this front today.

BlackBerry guides for another loss

BlackBerry Executive Chairman and CEO John Chen said in a statement this morning that they expect to record a 30% increase in software and services revenue for the full year and non-GAAP losses of 15 cents per share. Wall Street is currently projecting adjusted losses of 33 cents per share, he added. BlackBerry also aims to become cash flow positive for the full year.

BlackBerry shares initially popped by more than 5% in premarket trading after this morning’s report. As of this writing, the stock is up 2.67% at $6.92