BlackBerry Ltd. is lastly beginning to seem like an actual software program firm.

After three years of acquisitions, layoffs and making an attempt to persuade clients it may do greater than construct smartphones, the Canadian firm’s software program income and revenue margins are rising in the way in which Chief Govt Officer John Chen desires them to. The inventory too: It rose probably the most in 15 months.

BlackBerry surpassed its goal of $640 million (roughly Rs. 4,149 crores) in software program income for fiscal 2017, reaching Chen’s objective of accelerating gross sales from that division by 30 % within the yr. It posted revenue of 4 cents a share, beating out the best estimate from analysts, and stated it might be worthwhile for its total fiscal 2018, which started this month. Gross margins have been round 60 %, the corporate stated in an announcement Friday. BlackBerry expects to attain margins of 70 % for fiscal 2018, Chief Monetary Officer Steve Capelli stated on a name with analysts.

BlackBerry surged as a lot as 16 % to $8.08. It was the most important intraday acquire since December 2015. The inventory was buying and selling at $7.83 at 1:18pm in New York.

BlackBerry shed the burden of its ever-shrinking cellphone enterprise by officially outsourcing all machine design, manufacturing and gross sales to different corporations final yr – permitting it to chop again additional on prices. The agency has additionally been developing software program for self-driving vehicles and has a formal partnership with Ford Motor Co. involving in-car connectivity. Earlier this week, Ford agreed to rent 400 of BlackBerry’s cell tech specialists to work on linked automobiles.

Now the problem is promoting BlackBerry’s suite of security-focused software program merchandise, which vary from instruments that assist corporations monitor their workers’ cell gadgets to laptop working programs for guided missiles. The gross sales group Chen inherited three years in the past was fully geared in the direction of promoting telephones to wi-fi carriers like AT&T Inc.

“That was it. I actually did not have a salesforce,” Chen stated. Now it is way more numerous and counts greater than 1,000 of the corporate’s 4,000 workers.

BlackBerry sees 13 % to fifteen % development this fiscal yr in software program and providers, on the higher finish of the market price, he stated.

That enlargement will come from “a mixture of some present and current merchandise which we’re happy with and a few new stuff coming on-line,” he stated. “Not all the pieces will work, however I feel we’ll get sufficient iron within the hearth, and the mixture makes us really feel snug we’ll develop at these numbers.” BlackBerry will begin licensing its know-how and model to extra corporations, Chen stated. BlackBerry-branded medical gadgets and tablets may present up quickly.

BlackBerry can be getting again into the acquisition sport, Chen stated. Shopping for safety software program instruments like file-sharing or emergency notifications was how Chen ramped up income development within the first place. Now he is wanting on the automotive and cybersecurity areas, he stated. The corporate has $1.7 billion in money, and does not plan to to make use of any of it for buybacks or dividends, Chen stated.

Within the fiscal fourth quarter, income was $297 million, beating the typical estimate of $289 million. Software program income was $182 million, 80 % of which was recurring and never attributable to one-time licensing offers. BlackBerry’s money steadiness elevated, a key milestone after months of burning cash, to $1.7 billion. The corporate additionally employed about 1,000 individuals final yr even whereas decreasing bills, Chen stated.

“They’ve taken a whole lot of prices out of the enterprise and are reinvesting these proceeds again in software program, which is sweet to see,” Bloomberg Intelligence analyst Matthew Kanterman stated. “Now that they are going to maintain investing in new merchandise, they’re going to be capable of keep forward, be capable of forestall the most recent threats, and in the end within the longer-term, maintain even quicker development.”

The battle is not over, and never each future quarter will likely be as optimistic as this one, Chen stated. Nonetheless, the corporate has come a good distance.

“I do not know what number of corporations are in a position to change dramatically from {hardware} to software program,” he stated. “Seeds planted are bearing fruit.”

© 2017 Bloomberg L.P.