(Adds details about IoT business, analyst comments; updates shares)
June 26 (Reuters) - Canada's BlackBerry Ltd on Wednesday reported lower-than-expected sales for its biggest business, hurt by weak demand for its security software from firms and government agencies, sending its shares down as much as 10%.
Waterloo, Ontario-based BlackBerry, once known for its phones, has pivoted to selling software such as those used in mobiles and by automakers, hoping to find a more stable source of revenue. The company also supplies technology to companies developing driverless cars.
But revenue from its Internet of Things business, which houses its enterprise software and technology solutions, rose only 5% to $137 million, coming in below estimates of $151.4 million, according to IBES data from Refinitiv.
"IoT appeared to have underperformed. Given (technology solutions) revenue stream is typically stable and growing, any shortfall would have been from enterprise software," Raymond James analyst Steven Li said.
Overall adjusted revenue rose 23% to $267 million in the first quarter, benefiting from the company's recent $1.4 billion bet on cybersecurity firm Cylance.
"Excluding Cylance, revenue was down slightly," Li said.
BlackBerry in February completed its acquisition of California-based Cylance, whose software uses machine learning to preempt security breaches.
In the quarter, adjusted revenue from Cylance was $51 million, above the average analyst estimate of $48.8 million.
The company's net loss narrowed to $35 million, or 9 cents per share, in the quarter ended May 31, from $60 million, or 11 cents per share, a year earlier.
Excluding one-time items, the company earned 1 cent per share, in line with analysts' estimates.
BlackBerry's shares were last down 8.6% at C$9.95. (Reporting by Debroop Roy in Bengaluru; Editing by Maju Samuel and Sweta Singh)