BlackBerry’s (NYSE:BB) headline fiscal first-quarter results did not look very impressive, the earnings were actually fairly solid. More importantly for the long-term outlook of BB stock, the company continues to make excellent progress on a few important fronts.

Specifically, its QNX business continues to thrive, its Ivy initiative still looks poised to be a big success, and I believe that the amount of money that BlackBerry will receive in exchange for many of its patents could exceed Wall Street’s average outlook.

On the IT security front, BlackBerry’s new products, strong, battle-tested technology, and large contingent of incoming sales professionals should greatly boost the results of BB stock by its fiscal fourth quarter.

The Q1 Earnings Were Fairly Solid

It’s true that, as so many news stories and columns have pointed out, BlackBerry’s Q1 revenue fell 15% from the previous year.

But several temporary issues likely caused this decline. Specifically, the company’s IT security business faced a difficult comparison with Q1 2020, when the onset of the pandemic caused many businesses to look to provide security for their remote workers.

Additionally, hurting BlackBerry’s QNX business, chip shortages lowered automobile production last quarter, and the company’s intellectual property revenue was reduced in Q1 because of ongoing talks over the sale of many of its patents. I have little doubt that, if not for all of these issues, the company’s top line would have risen meaningfully in Q1 versus the same period a year earlier.

Meanwhile, BlackBerry’s bottom line was lowered by a seasonal issue: the company pays out its annual bonuses in Q1. And of course, all of the factors that negatively impacted BlackBerry’s top line likely reduced its profits as well. Despite all of these issues, the company’s operations lost only $33 million of cash in the quarter. In all likelihood, that number would have been positive if not for all the temporary issues.

Blackberry’s EBITDA, excluding certain items, came in at a loss of $6 million. This number would almost undoubtedly have been positive if not for the temporary issues.

So in general and in the big picture, I believe that BlackBerry’s business remains slightly profitable. (In Q4, the company’s net cash from operating activities came in at $$51 million, while the same number for fiscal 2021 was $82 million. For FY21, its earnings per share, excluding certain items, was 18 cents, despite the negative impact of the pandemic )

The QNX Business Is Thriving and Ivy Is Progressing Well

Despite the chip shortage, the backlog of QNX’s royalty revenue rose 9% from the previous year (the comparison, however, was eased by the onset of the pandemic in Q1 2020). More impressively, the revenue of its internet of things unit, which is currently dominated by QNX, soared 48% from the previous year, and the division’s gross margin was 84%.

Going forward, QNX should benefit from a number of strong trends, including the confidence of auto manufacturers, strong “design activities,” increased software content and the company’s strength when it comes to providing “safety critical system{s}” for vehicles, CEO John Chen said on the company’s Q1 earnings conference call.

Turning to Ivy, the auto app store that BlackBerry is developing with Amazon (NASDAQ:AMZN) and other partners, Chen noted that his company is continuing to work closely with Amazon and said he continues to expect an early version of the product to be released in October 2021. He added that the versions of Ivy should start to be distributed in February 2022.

Impressively, Chen said that nearly all of the major automakers that incorporate QNX in their vehicles are now involved in the project. A third-party research firm recently estimated that QNX is installed in 195 million vehicles globally.

Moreover, Berkshire Hathaway’s (NYSE:BRK.A, NYSE:BRK.B), Geico Insurance, Telus (NYSE:TU), a large Canadian telecom company, and a mapmaker, Here Maps, are also working on the app store.

Finally, more than 200 start-ups have applied for grants from BlackBerry’s Ivy Innovation Fund, and Blackberry announced that it would invest in a start-up that seek to “manage… battery operation using artificial intelligence,” Chen reported.

Positive Changes in the IT Security Business and the Patent Deal

Although the IT security unit (which BlackBerry calls cybersecurity) did face a difficult comparison, I am a bit concerned by the 10% drop from last year in the unit’s top line.

However, due to the division’s strong products, along with positive steps that Chen is taking, I remain very confident in the unit’s longer-term outlook.

According to Chen, BlackBerry’s AI-based anti-virus system, Protect, successfully prevented “the DarkSide ransomware, believed to have been the cause of the Colonial Pipeline cyber incidents” from causing any damage.

“We do have the most mature AI engine in the space and the ability to block ransomware years ahead of time without the need for update net connectivity,” said Chen, adding that Protect also blocked “other high-profile threats, such as the Conti ransomware, Mobillion REvil and others.”

In Q1, BlackBerry launched BlackBerry Gateway “a zero trust network access product that uses…Cylance AI to continuously authenticate network activity,” effectively protecting remote and mobile devices from cyberattacks.

Another new product launched last quarter was Optics 3.0, an “AI-driven engine {that} remains at both the edge and in the cloud, allowing new real-time responses, both offline and online.” The CEO mentioned that Optics 3.0 “continues to be a differentiator for” BlackBerry.

Among the impressive customers for the cybersecurity unit were Mitsubishi (OTCMKTS:MSBHF), the Canadian government, and several divisions of the U.S. government, including the State department, the Department of Treasury and the Defense department.

Also encouragingly, Chen said that the cybersecurity’s pipeline was increasing.

In Q1, BlackBerry meaningfully increased its recruiting of sales professionals. It expects its sales headcount to be 28% higher at the end of Q2 than at the beginning of the fiscal year.

Chen indicated that he expects the new sales professionals to boost the company’s billings this year and its sales next year. Given the strength of the company’s products and the strong demand for cyber security systems, I expect that scenario to materialize.

The Patent Deal Seems Imminent

As I noted in my May 6 column on BB stock, I believe that Facebook (NASDAQ:FB) is ready to buy many of BlackBerry’s patents because the social media giant looked poised to lose a court battle with BlackBerry.

“Needless to say, Facebook has a ton of money, and its legal setback gives it incentive to make a deal with BlackBerry. I expect BlackBerry to get at least $1 billion from the deal,” I wrote in the article.

RBC Capital recently suggested that BlackBerry could obtain around $1 billion from the deal, but I think that the total could easily reach $2 billion to $3 billion.

Encouragingly, Chen said that BlackBerry is still “optimistic about a successful conclusion to the negotiation of the patent portfolio itself” and stated that his company and the other party “have started negotiating the definitive agreement.”

The Bottom Line on BB Stock

Given BlackBerry’s many strong, positive catalysts, including its partnership with Amazon, its strong IT security products, and its upcoming patent deal, along with the company’s reasonable trailing price-sales ratio of 7.8 and its relatively strong bottom line, I remain very upbeat on BB stock.

On the date of publication, Larry Ramer held a long position in BlackBerry. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.