On the good side, BlackBerry also confirmed recent rumours that it's working on an Android flagship phone, and claims it hopes to achieve 'sustainable' profitability in the coming months.
However BlackBerry has a larger loss than some had expected - around 13 cents per share on revenue of $490m, compared with the 9 cent per share loss on $600m revenue which was thought to be reasonable.
Revenues in its software division grew by almost 20 per cent, those from its hardware sales more than halved to $201m.
Only 800,000 BlackBerry smartphones were purchased by consumers and businesses last quarter. Even Microsoft managed to sell 8.4 million of its Lumia handsets.
As part of its Q2 FY2016 report, the company said that it intends to "launch a flagship handheld device that will run on the Android operating system with BlackBerry security".
BlackBerry isn't approaching the platform completely blind; in addition to supporting Android apps on BB10, in recent months, it has also been working closely with companies such as Google, Samsung and IBM to beef up security on the Android OS.
It will be called Priv which is a nick-name for toilet so we don't hold out much hope. It will run on the Android operating system.
According to Blackberry it will "Bring together the best of BlackBerry security and productivity with the expansive mobile application ecosystem available on the Android platform. In combination with BlackBerry's efforts to support Android for Work on the BES12 platform, the new device will offer best in class security for enterprise customers."
BlackBerry expects the device to be available late in the calendar year in major markets in-store and online, and will release further details in the coming weeks. While the new device will provide a choice in OS to new and existing customers, the company remains committed to the BlackBerry 10 operating system, which enables industry-leading security and productivity benefits.
With its first Android device now confirmed to be on the way, BlackBerry 10's is likely to be toast.