In a lot of ways, BlackBerry's (BBRY) May quarter earnings report suggests trends that have loomed large during CEO John Chen's reign remain firmly in place.

Sales missed expectations and continue falling sharply as free-falling smartphone and infrastructure service fee revenue more than offset growing enterprise software/services revenue, but major job cuts and other cost-reduction efforts allowed earnings to once more beat estimates.

Those cost cuts also led BlackBerry to guide for fiscal 2017, which ends in February, EPS of -$0.15, better than a consensus estimate of -$0.33.

The company still expects enterprise software/services revenue to rise 30% in fiscal 2017, but, for obvious reasons, isn't providing full-year smartphone and service fee sales outlooks.

Thanks to both internal investments and the acquisitions of enterprise mobility management software firm Good Technology and emergency messaging platform AtHoc, software and services made up 39% of revenue. That's up from 32% in the February quarter, with sales rising about 6% sequentially in spite of seasonal weakness. About 3,300 enterprise customer wins were recorded compared to more than 3,600 in the seasonally stronger February quarter.

On the other hand, service fees fell to 25% of revenue from 29%, thanks to the rapid decline of BlackBerry's hardware user base. And "mobility solutions" (smartphones and other revenue streams) fell to 36% of revenue from 39%, service fee and mobility solutions revenue respectively declined 25% and 20% sequentially, and BlackBerry expects service fee revenue to drop another 20% in the August quarter.

Only 500,000 phones were sold in the May quarter, down from 600,000 in the February quarter and 700,000 in the November quarter. Moreover, BlackBerry's hardware average selling price fell by $25 sequentially to $290.

Those figures, along with a $41 million inventory write-down BlackBerry took, are bound to raise fresh questions about whether BlackBerry can hit a goal of making its phone business profitable by September. Chen reiterates BlackBerry, which plans to launch two Android phones this year, will make a decision by September on the phone unit's future.

Driving BlackBerry's earnings beat: Job cuts led R&D spending to drop 36% annually to $89 million, and sales, marketing, and administrative spending 25% to $129 million. And both cost cuts and a mix shift away from hardware led adjusted gross margin to rise to 53.3% from the February quarter's 48.7%. Thanks partly to the inventory write-down, free cash flow was -$65 million, but BlackBerry still expects positive fiscal 2017 free cash flow. The company still has $1.3 billion in net cash on its balance sheet.

With markets already expecting sales to remain pressured for the foreseeable future -- going into earnings, revenue was expected to drop 17% in fiscal 2017, and 8% in fiscal 2018 -- BlackBerry is getting a pass for its top-line weakness, and a thumbs-up for its cost-cutting efforts. The stock rose 3.9% to $7 on Thursday.

But there's a limit to how much BlackBerry can prop up its bottom line with job cuts, especially if the company wants to remain competitive in an enterprise mobility management software market featuring Microsoft (MSFT - Get Report) , SAP (SAP - Get Report) , VMware (VMW - Get Report) , and many others. And though it's conceivable BlackBerry can eventually carve out a profitable smartphones niche selling secure, enterprise-friendly Android devices, it increasingly looks as if doing so will require pushing back the company's September profitability target.

For now, a healthy balance sheet and stabilized cash flows give BlackBerry more time to pursue its turnaround strategy. But the clock is very much ticking: Unless enterprise software sales ramp and/or the hardware business stages a surprise rebound, cash flows won't remain positive forever as high-margin service fee revenue continues plunging.