BlackBerry Ltd (NYSE: BB) is slated to release its next earnings report on Wednesday before opening bell. Consensus for the BlackBerry Q3 F2018 earnings release stands at breakeven on about $217 million in revenue.

BlackBerry Q3 F2018 earnings: what to expect

In a note on Monday, Macquarie analyst Gus Papageorgiou said he expects the BlackBerry Q3 F2018 earnings report to reveal a breakeven quarter with $220.1 million in revenue. He slashed his estimate for software access fee revenues to bring it in line with management’s guidance, which results in negative impacts of $13 million in revenue for fiscal 2018 and 2 cents per share in earnings.

He doesn’t expect a “break-out quarter,” but he does look for software revenue to grow 20% on a year-over-year basis as total revenues shrink 27% as the transition phase toward primary software continues. He also expects gross profits to continue to be strong at around 74%. That’s a slight decline from the second quarter, which received a significant boost from intellectual property licensing. He also expects the company’s balance sheet to remain strong.

Looking forward to Q4

The Macquarie analyst does look for the IP-related Nokia charge—amounting to $137 million on a GAAP basis—to be recorded in the BlackBerry Q3 F2018 earnings report, although he doesn’t believe the cash payment will be made until the fourth quarter. The Canadian firm lost a dispute with Nokia over a $137 million contract, but even after the payment is made, he projects the firm’s cash balance to remain around $1.7 million.

For the fourth quarter, Papageorgiou is currently projecting a breakeven result on $223.6 million in revenue. He explained that although overall revenue will likely decline by about 25%, software revenue should climb 24% in the fourth quarter. He also expects to start seeing contributions from RADAR during the fourth quarter as Enterprise software revenues start growing.