Despite some weakness in its “internet of things” business, BlackBerry Ltd. managed to beat both revenue and profit expectations with its third-quarter earnings report this morning, sending shares up more than 11%.

Waterloo, Canada-based BlackBerry has over the last few years transformed from a phone maker to a provider of enterprise software. The company offers a range of cybersecurity products along with the QNX operating system for embedded electronics.

BlackBerry increased adjusted revenues by 23%, to $280 million, in the third quarter ended Nov. 30, sailing past the average Refinitiv analyst estimate of  $276 million. The company incurred a $32 million loss in the process.

That figure represents a significant drop from the $59 million profit BlackBerry reported 12 months ago, but it comes with a big silver lining. Viewed on a per share basis with onetime items excluded, the loss turns into a profit of 3 cents per share, 2 cents more than what Wall Street had anticipated.

All the credit for BlackBerry’s momentum in the third quarter goes to its patent licensing business and its Cylance subsidiary. Licensing revenue rose to $77 million while Cylance, while sells a security platform that uses artificial intelligence to detect threats on devices, grew sales to $40 million from $1 million a year ago.

BlackBerry’s core IoT business fared less well. The group, which includes all the company’s enterprise software and services units save for Cylance, logged sales of $145 million, a 3% decline from last year. BlackBerry Chief Executive Officer John Chen (pictured) blamed the results on changes in the group’s sales department that he said will be felt for two more quarters.

Chen sounded a decidedly more positive note about the QNX unit within the IoT business. In June, BlackBerry revealed that the QNX operating system runs inside over 150 million vehicles worldwide, 30 million more than when the company first started reporting installation figures last year. Chen said in the earnings conference call that he expects use of QNX among industrial companies to grow even faster than auto industry adoption and added he anticipates this segment to eventually become the unit’s biggest revenue source. 

“I am pleased with our progress,” Chen said in a statement. “Our pipeline is growing as we deliver against our product roadmap and execute on our go-to-market expansion.”

Photo: BlackBerry/Facebook