- Delivers sequential and year-over-year revenue growth in
both IoT and Cybersecurity
- Non-GAAP earnings per share beats
expectations
- Significantly improves operating cash usage
sequentially
Third Quarter Fiscal 2024:
- Total company revenue of $175
million.
- IoT revenue of $55
million.
- Cybersecurity revenue of $114
million.
- Licensing & Other revenue of $6
million.
- Non-GAAP basic earnings per share of $0.01 and GAAP basic loss per share of
$0.04.
WATERLOO, ON, Dec. 20,
2023 /PRNewswire/ -- BlackBerry Limited (NYSE: BB;
TSX: BB) today reported financial results for the three months
ended November 30, 2023 (all figures
in U.S. dollars and U.S. GAAP, except where otherwise
indicated).
"This was a good quarter for BlackBerry. Our IoT business
delivered solid revenue growth and continued its impressive design
win momentum. We showed particular strength in Automotive,
especially in ADAS where we continue to expand our market
position," said John J. Giamatteo,
CEO, BlackBerry. "We also saw a strong quarter for the
Cybersecurity business, securing large strategic deals with leading
government agencies that helped drive strong sequential revenue
growth and margin expansion. Work has commenced to fully separate
and significantly rightsize our businesses, and we expect to
further reduce operating cashflow usage in Q4."
Third Quarter Fiscal 2024 Financial Highlights
- Total company revenue was $175
million.
- Total company non-GAAP and GAAP gross margin increased to
73%.
- IoT revenue was $55 million, a
12% sequential and 8% year-over-year increase; IoT gross margin was
84%.
- Cybersecurity revenue was $114
million, a 44% sequential and 8% year-over-year increase;
Cyber gross margin improved by 14 percentage points sequentially to
68%.
- Cybersecurity ARR was $273
million.
- Cybersecurity billings were $109
million.
- Licensing and Other revenue was $6
million.
- Non-GAAP operating profit was $13
million and GAAP operating loss was $11 million.
- Total cash, cash equivalents, short-term and long-term
investments was $271 million.
Business Highlights & Strategic Announcements
- BlackBerry appoints cybersecurity industry veteran, and
President of BlackBerry's Cybersecurity division, John Giamatteo as CEO
- Process underway to establish fully standalone IoT and
Cybersecurity divisions, separating centralized functions and
right-sizing cost structures to increase options for maximizing
shareholder value
- BlackBerry announces partial extension of convertible
debentures, fully repaying $365
million of the 2020 debentures and issuing $150 million of short-term debentures on
substantially identical terms
- BlackBerry secures significant, multi-year deal to provide full
suite of cybersecurity solutions to the Government of Malaysia
- United States Department of Homeland Security awards new PENS
contract to BlackBerry, utilizing BlackBerry® AtHoc® critical event
management (CEM) solution
- BlackBerry launches Generative AI-powered cybersecurity
assistant to increase efficiency and reduce fatigue for CISO
teams
- BlackBerry announces enhancements to BlackBerry SecuSUITE® for
Government, including encrypted video and group audio calls
Outlook
BlackBerry is providing the following guidance for the fourth
quarter of fiscal 2024 (ending February 29,
2024).
Total BlackBerry
revenue:
|
$150 - $159
million
|
IoT revenue:
|
$62 - $66
million
|
Cyber
revenue:
|
$83 - $88
million
|
Licensing & Other
revenue:
|
Approximately $5
million
|
Use of Non-GAAP Financial Measures
The tables at the end of this press release include a
reconciliation of the non-GAAP financial measures and non-GAAP
financial ratios used by the company to comparable U.S. GAAP
measures and an explanation of why the company uses them.
Conference Call and Webcast
A conference call and live webcast will be held today beginning
at 5:30 p.m. ET, which can be
accessed using the following link (here) or through the Company's
investor webpage (BlackBerry.com/Investors) or by dialing toll free
+1 (877) 883-0383 and entering Elite Entry Number 7908097.
A replay of the conference call will be available at
approximately 8:30 p.m. ET on
December 20, 2023, using the same
webcast link (here) or by dialing Canada toll free +1 (855) 669-9658 or US toll
free +1 (877) 344-7529 and entering Replay Access Code 1117356.
About BlackBerry
BlackBerry (NYSE: BB; TSX: BB) provides intelligent security
software and services to enterprises and governments around the
world. The company secures more than 500M endpoints including more than 235M vehicles. Based in Waterloo, Ontario, the company leverages AI
and machine learning to deliver innovative solutions in the areas
of cybersecurity, safety and data privacy, and is a leader in the
areas of endpoint security, endpoint management, encryption, and
embedded systems. BlackBerry's vision is clear - to secure a
connected future you can trust.
BlackBerry. Intelligent Security. Everywhere.
For
more information, visit BlackBerry.com and follow
@BlackBerry.
Investor Contact:
BlackBerry Investor Relations
+1 (519) 888-7465
investorrelations@blackberry.com
Media Contact:
BlackBerry Media Relations
+1 (519) 597-7273
mediarelations@blackberry.com
This news release contains forward-looking statements within the
meaning of certain securities laws, including under the U.S.
Private Securities Litigation Reform Act of 1995 and applicable
Canadian securities laws, including statements regarding
BlackBerry's plans, strategies and objectives including its
expectations with respect to increasing and enhancing its product
and service offerings.
The words "expect", "anticipate", "estimate", "may", "will",
"should", "could", "intend", "believe", "target", "plan" and
similar expressions are intended to identify these forward-looking
statements. Forward-looking statements are based on estimates and
assumptions made by BlackBerry in light of its experience and its
perception of historical trends, current conditions and expected
future developments, as well as other factors that BlackBerry
believes are appropriate in the circumstances, including but not
limited to, BlackBerry's expectations regarding its business,
strategy, opportunities and prospects, the launch of new products
and services, general economic conditions, competition,
BlackBerry's expectations regarding its financial performance, and
BlackBerry's expectations regarding its ability to repay at
maturity, or possibly refinance, its debentures. Many factors
could cause BlackBerry's actual results, performance or
achievements to differ materially from those expressed or implied
by the forward-looking statements, including, without limitation,
risks related to the following factors: BlackBerry's proposed
business unit separation, including risk that it may disrupt
BlackBerry's operations or adversely impact its relationships with
business partners and customers and its ability to attract and
retain key employees, and risk that BlackBerry may not be able to
complete the separation successfully and in a timely manner, or at
all; BlackBerry's ability to enhance, develop, introduce or
monetize products and services for the enterprise market in a
timely manner with competitive pricing, features and performance;
BlackBerry's ability to maintain or expand its customer base for
its software and services offerings to grow revenue or achieve
sustained profitability; the intense competition faced by
BlackBerry; the occurrence or perception of a breach of
BlackBerry's network cybersecurity measures, or an inappropriate
disclosure of confidential or personal information; the failure or
perceived failure of BlackBerry's solutions to detect or prevent
security vulnerabilities; BlackBerry's continuing ability to
attract new personnel, retain existing key personnel and manage its
potential CEO succession and staffing effectively; litigation
against BlackBerry; BlackBerry's dependence on its relationships
with resellers and channel partners; acquisitions, divestitures and
other business initiatives; the impact of the COVID-19 pandemic;
network disruptions or other business interruptions; BlackBerry's
ability to foster an ecosystem of third-party application
developers; BlackBerry's products and services being dependent upon
interoperability with rapidly changing systems provided by third
parties; BlackBerry's ability to obtain rights to use third-party
software and its use of open source software; failure to protect
BlackBerry's intellectual property and to earn expected revenues
from intellectual property rights; BlackBerry being found to have
infringed on the intellectual property rights of others; the
substantial asset risk faced by BlackBerry, including the potential
for charges related to its long-lived assets and goodwill;
BlackBerry's indebtedness; tax provision changes, the adoption of
new tax legislation or exposure to additional tax liabilities; the
use and management of user data and personal information;
government regulations applicable to BlackBerry's products and
services, including products containing encryption capabilities;
environmental, social and governance expectations and standards;
the failure of BlackBerry's suppliers, subcontractors, channel
partners and representatives to use acceptable ethical business
practices or comply with applicable laws; regulations regarding
health and safety, hazardous materials usage and conflict minerals;
foreign operations, including fluctuations in foreign currencies;
adverse economic, geopolitical and environmental conditions; the
fluctuation of BlackBerry's quarterly revenue and operating
results; the volatility of the market price of BlackBerry's common
shares; and rising inflation.
These risk factors and others relating to BlackBerry are
discussed in greater detail in BlackBerry's Annual Report on
Form 10-K and the "Cautionary Note Regarding
Forward-Looking Statements" section of BlackBerry's MD&A
(copies of which filings may be obtained at www.sedarplus.ca or
www.sec.gov). All of these factors should be considered carefully,
and readers should not place undue reliance on BlackBerry's
forward-looking statements. Any statements that are forward-looking
statements are intended to enable BlackBerry's shareholders to view
the anticipated performance and prospects of BlackBerry from
management's perspective at the time such statements are made, and
they are subject to the risks that are inherent in all
forward-looking statements, as described above, as well as
difficulties in forecasting BlackBerry's financial results and
performance for future periods, particularly over longer periods,
given changes in technology and BlackBerry's business strategy,
evolving industry standards, intense competition and short product
life cycles that characterize the industries in which BlackBerry
operates. Any forward-looking statements are made only as of today
and the company has no intention and undertakes no obligation to
update or revise any of them, except as required by law.
BlackBerry
Limited
Incorporated under the
Laws of Ontario
(United States dollars,
in millions except share and per share amounts)
(unaudited)
|
|
Consolidated
Statements of Operations
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
November 30,
2023
|
|
August 31,
2023
|
|
November 30,
2022
|
|
November 30,
2023
|
|
November 30,
2022
|
Revenue
|
$
175
|
|
$
132
|
|
$
169
|
|
$
680
|
|
$
505
|
Cost of
sales
|
48
|
|
47
|
|
60
|
|
289
|
|
186
|
Gross
margin
|
127
|
|
85
|
|
109
|
|
391
|
|
319
|
Gross margin
%
|
72.6 %
|
|
64.4 %
|
|
64.5 %
|
|
57.5 %
|
|
63.2 %
|
Operating
expenses
|
|
|
|
|
|
|
|
|
|
Research and
development
|
42
|
|
50
|
|
52
|
|
146
|
|
159
|
Selling, marketing and
administration
|
85
|
|
73
|
|
89
|
|
258
|
|
257
|
Amortization
|
13
|
|
14
|
|
26
|
|
42
|
|
78
|
Impairment of
long-lived assets
|
11
|
|
1
|
|
—
|
|
11
|
|
4
|
Gain on sale of
property, plant and equipment, net
|
—
|
|
—
|
|
—
|
|
—
|
|
(6)
|
Debentures fair value
adjustment
|
(13)
|
|
(6)
|
|
(56)
|
|
3
|
|
(112)
|
Litigation
settlement
|
—
|
|
—
|
|
—
|
|
—
|
|
165
|
|
138
|
|
132
|
|
111
|
|
460
|
|
545
|
Operating
loss
|
(11)
|
|
(47)
|
|
(2)
|
|
(69)
|
|
(226)
|
Investment income
(loss), net
|
5
|
|
7
|
|
2
|
|
15
|
|
(1)
|
Loss before income
taxes
|
(6)
|
|
(40)
|
|
—
|
|
(54)
|
|
(227)
|
Provision for income
taxes
|
15
|
|
2
|
|
4
|
|
20
|
|
12
|
Net
loss
|
$
(21)
|
|
$
(42)
|
|
$
(4)
|
|
$
(74)
|
|
$
(239)
|
Loss per
share
|
|
|
|
|
|
|
|
|
|
Basic
|
$
(0.04)
|
|
$
(0.07)
|
|
$
(0.01)
|
|
$
(0.13)
|
|
$
(0.41)
|
Diluted
|
$
(0.05)
|
|
$
(0.07)
|
|
$
(0.09)
|
|
$
(0.13)
|
|
$
(0.54)
|
|
|
|
|
|
|
|
|
|
|
Weighted-average number
of common shares outstanding (000s)
|
|
|
|
|
|
|
|
|
|
Basic
|
584,331
|
|
583,524
|
|
578,948
|
|
583,559
|
|
577,718
|
Diluted
|
638,470
|
|
583,524
|
|
639,781
|
|
583,559
|
|
638,551
|
Total common shares
outstanding (000s)
|
585,340
|
|
583,684
|
|
580,346
|
|
585,340
|
|
580,346
|
BlackBerry
Limited
Incorporated under the
Laws of Ontario
(United States dollars,
in millions) (unaudited)
|
|
Consolidated Balance
Sheets
|
|
|
|
As at
|
|
|
November 30,
2023
|
|
February 28,
2023
|
Assets
|
|
|
|
|
Current
|
|
|
|
|
Cash and cash
equivalents
|
|
$
210
|
|
$
295
|
Short-term
investments
|
|
—
|
|
131
|
Accounts receivable,
net of allowance of $6 and $1, respectively
|
|
183
|
|
120
|
Other
receivables
|
|
8
|
|
12
|
Income taxes
receivable
|
|
5
|
|
3
|
Other current
assets
|
|
44
|
|
182
|
|
|
450
|
|
743
|
Restricted cash and
cash equivalents
|
|
25
|
|
27
|
Long-term
investments
|
|
36
|
|
34
|
Other long-term
assets
|
|
66
|
|
8
|
Operating lease
right-of-use assets, net
|
|
41
|
|
44
|
Property, plant and
equipment, net
|
|
22
|
|
25
|
Intangible assets,
net
|
|
163
|
|
203
|
Goodwill
|
|
597
|
|
595
|
|
|
$
1,400
|
|
$
1,679
|
Liabilities
|
|
|
|
|
Current
|
|
|
|
|
Accounts
payable
|
|
$
17
|
|
$
24
|
Accrued
liabilities
|
|
125
|
|
143
|
Income taxes
payable
|
|
33
|
|
20
|
Debentures
|
|
150
|
|
367
|
Deferred revenue,
current
|
|
183
|
|
175
|
|
|
508
|
|
729
|
Deferred revenue,
non-current
|
|
19
|
|
40
|
Operating lease
liabilities
|
|
47
|
|
52
|
Other long-term
liabilities
|
|
1
|
|
1
|
|
|
575
|
|
822
|
Shareholders'
equity
|
|
|
|
|
Capital stock and
additional paid-in capital
|
|
2,941
|
|
2,909
|
Deficit
|
|
(2,102)
|
|
(2,028)
|
Accumulated other
comprehensive loss
|
|
(14)
|
|
(24)
|
|
|
825
|
|
857
|
|
|
$
1,400
|
|
$
1,679
|
BlackBerry
Limited
Incorporated under the
Laws of Ontario
(United States dollars,
in millions) (unaudited)
Consolidated
Statements of Cash Flows
|
|
|
Nine Months
Ended
|
|
November 30,
2023
|
|
November 30,
2022
|
Cash flows from
operating activities
|
|
|
|
Net loss
|
$
(74)
|
|
$
(239)
|
Adjustments to
reconcile net loss to net cash provided by (used in) operating
activities:
|
|
|
|
Amortization
|
46
|
|
85
|
Stock-based
compensation
|
28
|
|
23
|
Impairment of
long-lived assets
|
11
|
|
4
|
Intellectual property
disposed of by sale
|
147
|
|
—
|
Gain on sale of
property, plant and equipment, net
|
—
|
|
(6)
|
Debentures fair value
adjustment
|
3
|
|
(112)
|
Operating
leases
|
(7)
|
|
(12)
|
Other
|
—
|
|
7
|
Net changes in working
capital items
|
|
|
|
Accounts receivable,
net of allowance
|
(63)
|
|
7
|
Other
receivables
|
4
|
|
16
|
Income taxes
receivable
|
(2)
|
|
4
|
Other
assets
|
(58)
|
|
(2)
|
Accounts
payable
|
(7)
|
|
(1)
|
Accrued
liabilities
|
(16)
|
|
(2)
|
Income taxes
payable
|
13
|
|
10
|
Deferred
revenue
|
(13)
|
|
(35)
|
Net cash provided by
(used in) operating activities
|
12
|
|
(253)
|
Cash flows from
investing activities
|
|
|
|
Acquisition of
long-term investments
|
(2)
|
|
(2)
|
Acquisition of
property, plant and equipment
|
(5)
|
|
(5)
|
Proceeds on sale of
property, plant and equipment
|
—
|
|
17
|
Acquisition of
intangible assets
|
(12)
|
|
(24)
|
Acquisition of
short-term investments
|
(92)
|
|
(393)
|
Proceeds on sale or
maturity of short-term investments
|
223
|
|
533
|
Net cash provided by
investing activities
|
112
|
|
126
|
Cash flows from
financing activities
|
|
|
|
Issuance of common
shares
|
4
|
|
6
|
Maturity of 2020
Debentures
|
(365)
|
|
—
|
Issuance of Extension
Debentures
|
150
|
|
—
|
Net cash provided by
(used in) financing activities
|
(211)
|
|
6
|
Effect of foreign
exchange loss on cash, cash equivalents, restricted cash, and
restricted cash equivalents
|
—
|
|
(3)
|
Net decrease in
cash, cash equivalents, restricted cash, and restricted cash
equivalents during the period
|
(87)
|
|
(124)
|
Cash, cash
equivalents, restricted cash, and restricted cash equivalents,
beginning of period
|
322
|
|
406
|
Cash, cash
equivalents, restricted cash, and restricted cash equivalents, end
of period
|
$
235
|
|
$
282
|
|
|
As at
|
November 30,
2023
|
|
February 28,
2023
|
Cash and cash
equivalents
|
$
210
|
|
$
295
|
Restricted cash and
cash equivalents
|
25
|
|
27
|
Short-term
investments
|
—
|
|
131
|
Long-term
investments
|
36
|
|
34
|
|
$
271
|
|
$
487
|
Reconciliations of the Company's Segment Results to the
Consolidated Results
The following tables show information by operating segment for
the three months ended November 30,
2023 and November 30,
2022. The Company reports segment information in accordance
with U.S. GAAP Accounting Standards Codification Section 280 based
on the "management" approach. The management approach designates
the internal reporting used by the Chief Operating Decision Maker
for making decisions and assessing performance of the Company's
reportable operating segments.
|
For the Three Months
Ended
(in millions)
(unaudited)
|
|
Cybersecurity
|
|
IoT
|
|
Licensing and
Other
|
|
Segment
Totals
|
|
November 30,
|
|
November 30,
|
|
November 30,
|
|
November 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Segment
revenue
|
$
114
|
|
$
106
|
|
$
55
|
|
$
51
|
|
$
6
|
|
$
12
|
|
$
175
|
|
$
169
|
Segment cost of
sales
|
37
|
|
46
|
|
9
|
|
10
|
|
1
|
|
4
|
|
47
|
|
60
|
Segment gross
margin
|
$
77
|
|
$
60
|
|
$
46
|
|
$
41
|
|
$
5
|
|
$
8
|
|
$
128
|
|
$
109
|
Segment gross margin
%
|
68 %
|
|
57 %
|
|
84 %
|
|
80 %
|
|
83 %
|
|
67 %
|
|
73 %
|
|
64 %
|
The following table reconciles the Company's segment results for
the three months ended November 30,
2023 to consolidated U.S. GAAP results:
|
For the Three Months
Ended November 30, 2023
|
|
(in millions)
(unaudited)
|
|
Cybersecurity
|
|
IoT
|
Licensing
and
Other
|
Segment
Totals
|
|
Reconciling
Items
|
|
Consolidated
U.S.
GAAP
|
Revenue
|
$
114
|
|
$
55
|
|
$
6
|
|
$
175
|
|
$
—
|
|
$
175
|
Cost of
sales
|
37
|
|
9
|
|
1
|
|
47
|
|
1
|
|
48
|
Gross margin
(1)
|
$
77
|
|
$
46
|
|
$
5
|
|
$
128
|
|
$
(1)
|
|
$
127
|
Operating
expenses
|
|
|
|
|
|
|
|
|
138
|
|
138
|
Investment income,
net
|
|
|
|
|
|
|
|
|
(5)
|
|
(5)
|
Loss before income
taxes
|
|
|
|
|
|
|
|
|
|
|
$
(6)
|
______________________________
(1)
|
See "Reconciliation of
Non-GAAP Measures with the Nearest Comparable U.S. GAAP Measures"
for a reconciliation of selected U.S. GAAP-based measures to
adjusted measures for the three months ended November 30,
2023.
|
The following tables reconcile the Company's segment results for
the three months ended November 30,
2022 to consolidated U.S. GAAP results:
|
For the Three Months
Ended November 30, 2022
|
|
(in millions)
(unaudited)
|
|
Cybersecurity
|
|
IoT
|
Licensing
and
Other
|
Segment
Totals
|
|
Reconciling
Items
|
|
Consolidated
U.S.
GAAP
|
Revenue
|
$
106
|
|
$
51
|
|
$
12
|
|
$
169
|
|
$
—
|
|
$
169
|
Cost of
sales
|
46
|
|
10
|
|
4
|
|
60
|
|
—
|
|
60
|
Gross margin
(1)
|
$
60
|
|
$
41
|
|
$
8
|
|
$
109
|
|
$
—
|
|
$
109
|
Operating
expenses
|
|
|
|
|
|
|
|
|
111
|
|
111
|
Investment income,
net
|
|
|
|
|
|
|
|
|
(2)
|
|
(2)
|
Loss before income
taxes
|
|
|
|
|
|
|
|
|
|
|
$
—
|
______________________________
(1)
|
See "Reconciliation of
Non-GAAP Measures with the Nearest Comparable U.S. GAAP Measures"
for a reconciliation of selected U.S. GAAP-based measures to
adjusted measures for the three months ended November 30,
2022.
|
Reconciliation of Non-GAAP Measures with the Nearest
Comparable U.S. GAAP Measures
In the Company's internal reports, management evaluates the
performance of the Company's business on a non-GAAP basis by
excluding the impact of certain items below from the Company's U.S.
GAAP financial results. The Company believes that these non-GAAP
financial measures and non-GAAP ratios provide management, as well
as readers of the Company's financial statements, with a consistent
basis for comparison across accounting periods and is useful in
helping management and readers understand the Company's operating
results and underlying operational trends.
Readers are cautioned that adjusted gross margin, adjusted gross
margin percentage, adjusted operating expense, adjusted net income
(loss), adjusted income (loss) per share, adjusted research and
development expense, adjusted selling, marketing and administrative
expense, adjusted amortization expense, adjusted operating income
(loss), adjusted EBITDA, adjusted operating income (loss) margin
percentage, adjusted EBITDA margin percentage and free cash flow
(usage) and similar measures do not have any standardized meaning
prescribed by U.S. GAAP and are therefore unlikely to be comparable
to similarly titled measures reported by other companies. These
non-GAAP financial measures should be considered in the context of
the U.S. GAAP results, which are described in this MD&A and
presented in the Consolidated Financial Statements.
Reconciliation of non-GAAP based measures with most
directly comparable U.S. GAAP based measures for the three months
ended November 30, 2023 and
November 30, 2022
A reconciliation of the most directly comparable U.S. GAAP
financial measures for the three months ended November 30, 2023 and November 30, 2022 to adjusted financial measures
is reflected in the table below:
For the Three Months
Ended (in millions)
|
|
November 30,
2023
|
|
November 30,
2022
|
Gross
margin
|
|
$
127
|
|
$
109
|
Stock compensation
expense
|
|
1
|
|
—
|
Adjusted gross
margin
|
|
$
128
|
|
$
109
|
|
|
|
|
|
Gross margin
%
|
|
72.6 %
|
|
64.5 %
|
Stock compensation
expense
|
|
0.5 %
|
|
— %
|
Adjusted gross
margin %
|
|
73.1 %
|
|
64.5 %
|
Reconciliation of U.S. GAAP operating expense for the three
months ended November 30, 2023 and
November 30, 2022 to adjusted
operating expense is reflected in the table below:
For the Three Months
Ended (in millions)
|
|
November 30,
2023
|
|
November 30,
2022
|
Operating
expense
|
|
$
138
|
|
$
111
|
Restructuring
charges
|
|
9
|
|
—
|
Stock compensation
expense
|
|
7
|
|
8
|
Debentures fair value
adjustment
|
|
(13)
|
|
(56)
|
Acquired intangibles
amortization
|
|
9
|
|
22
|
LLA impairment
charge
|
|
11
|
|
—
|
Adjusted operating
expense
|
|
$
115
|
|
$
137
|
Reconciliation of U.S. GAAP net loss and U.S. GAAP basic loss
per share for the three months ended November 30, 2023 and November 30, 2022 to adjusted net income (loss)
and adjusted basic earnings (loss) per share is reflected in the
table below:
For the Three Months
Ended (in millions, except per share amounts)
|
|
November 30,
2023
|
|
November 30,
2022
|
|
|
|
|
Basic
earnings
(loss)
per
share
|
|
|
|
Basic
loss
per
share
|
Net
loss
|
|
$
(21)
|
|
$(0.04)
|
|
$
(4)
|
|
$(0.01)
|
Restructuring
charges
|
|
9
|
|
|
|
—
|
|
|
Stock compensation
expense
|
|
8
|
|
|
|
8
|
|
|
Debentures fair value
adjustment
|
|
(13)
|
|
|
|
(56)
|
|
|
Acquired intangibles
amortization
|
|
9
|
|
|
|
22
|
|
|
LLA impairment
charge
|
|
11
|
|
|
|
—
|
|
|
Adjusted income
(loss)
|
|
$
3
|
|
$0.01
|
|
$
(30)
|
|
$(0.05)
|
Reconciliation of U.S. GAAP research and development, selling,
marketing and administration, and amortization expense for the
three months ended November 30, 2023
and November 30, 2022 to adjusted
research and development, selling, marketing and administration,
and amortization expense is reflected in the table below:
For the Three Months
Ended (in millions)
|
|
November 30,
2023
|
|
November 30,
2022
|
Research and
development
|
|
$
42
|
|
$
52
|
Stock compensation
expense
|
|
2
|
|
2
|
Adjusted research
and development
|
|
$
40
|
|
$
50
|
|
|
|
|
|
Selling, marketing
and administration
|
|
$
85
|
|
$
89
|
Restructuring
charges
|
|
9
|
|
—
|
Stock compensation
expense
|
|
5
|
|
6
|
Adjusted selling,
marketing and administration
|
|
$
71
|
|
$
83
|
|
|
|
|
|
Amortization
|
|
$
13
|
|
$
26
|
Acquired intangibles
amortization
|
|
9
|
|
22
|
Adjusted
amortization
|
|
$
4
|
|
$
4
|
Adjusted operating income (loss), adjusted EBITDA, adjusted
operating income (loss) margin percentage and adjusted EBITDA
margin percentage for the three months ended November 30, 2023 and November 30, 2022 are reflected in the table
below.
For the Three Months
Ended (in millions)
|
|
November 30,
2023
|
|
November 30,
2022
|
Operating
loss
|
|
$
(11)
|
|
$
(2)
|
Non-GAAP adjustments to
operating loss
|
|
|
|
|
Restructuring
charges
|
|
9
|
|
—
|
Stock compensation
expense
|
|
8
|
|
8
|
Debentures fair value
adjustment
|
|
(13)
|
|
(56)
|
Acquired intangibles
amortization
|
|
9
|
|
22
|
LLA impairment
charge
|
|
11
|
|
—
|
Total non-GAAP
adjustments to operating loss
|
|
24
|
|
(26)
|
Adjusted operating
income (loss)
|
|
13
|
|
(28)
|
Amortization
|
|
14
|
|
28
|
Acquired intangibles
amortization
|
|
(9)
|
|
(22)
|
Adjusted
EBITDA
|
|
$
18
|
|
$
(22)
|
|
|
|
|
|
Revenue
|
|
$
175
|
|
$
169
|
Adjusted operating
income (loss) margin % (1)
|
|
7 %
|
|
(17 %)
|
Adjusted EBITDA
margin % (2)
|
|
10 %
|
|
(13 %)
|
______________________________
(1)
|
Adjusted operating
income (loss) margin % is calculated by dividing adjusted operating
income (loss) by revenue.
|
(2)
|
Adjusted EBITDA margin
% is calculated by dividing adjusted EBITDA by revenue.
|
Reconciliation of non-GAAP based measures with most
directly comparable U.S. GAAP based measures for the nine months
ended November 30, 2023 and
November 30, 2022
A reconciliation of the most directly comparable U.S. GAAP
financial measures for the nine months ended November 30, 2023 and November 30, 2022 to adjusted financial measures
is reflected in the table below:
For the Nine Months
Ended (in millions)
|
|
November 30,
2023
|
|
November 30,
2022
|
Gross
margin
|
|
$
391
|
|
$
319
|
Stock compensation
expense
|
|
3
|
|
2
|
Adjusted gross
margin
|
|
$
394
|
|
$
321
|
|
|
|
|
|
Gross margin
%
|
|
57.5 %
|
|
63.2 %
|
Stock compensation
expense
|
|
0.4 %
|
|
0.4 %
|
Adjusted gross
margin %
|
|
57.9 %
|
|
63.6 %
|
Reconciliation of U.S. GAAP operating expense for the nine
months ended November 30, 2023 and
November 30, 2022 to adjusted
operating expense is reflected in the table below:
For the Nine Months
Ended (in millions)
|
|
November 30,
2023
|
|
November 30,
2022
|
Operating
expense
|
|
$
460
|
|
$
545
|
Restructuring
charges
|
|
17
|
|
4
|
Stock compensation
expense
|
|
25
|
|
19
|
Debentures fair value
adjustment
|
|
3
|
|
(112)
|
Acquired intangibles
amortization
|
|
29
|
|
67
|
LLA impairment
charge
|
|
11
|
|
4
|
Litigation
settlement
|
|
—
|
|
165
|
Adjusted operating
expense
|
|
$
375
|
|
$
398
|
Reconciliation of U.S. GAAP net loss and U.S. GAAP basic loss
per share for the nine months ended November
30, 2023 and November 30, 2022
to adjusted net income (loss) and adjusted basic earnings (loss)
per share is reflected in the table below:
For the Nine Months
Ended (in millions, except per share amounts)
|
|
November 30,
2023
|
|
November 30,
2022
|
|
|
|
|
Basic
earnings
(loss)
per
share
|
|
|
|
Basic
loss
per
share
|
Net
loss
|
|
$
(74)
|
|
$(0.13)
|
|
$
(239)
|
|
$(0.41)
|
Restructuring
charges
|
|
17
|
|
|
|
4
|
|
|
Stock compensation
expense
|
|
28
|
|
|
|
21
|
|
|
Debentures fair value
adjustment
|
|
3
|
|
|
|
(112)
|
|
|
Acquired intangibles
amortization
|
|
29
|
|
|
|
67
|
|
|
LLA impairment
charge
|
|
11
|
|
|
|
4
|
|
|
Litigation
settlement
|
|
—
|
|
|
|
165
|
|
|
Adjusted net income
(loss)
|
|
$
14
|
|
$0.02
|
|
$
(90)
|
|
$(0.16)
|
Reconciliation of U.S. GAAP research and development, selling,
marketing and administration, and amortization expense for the nine
months ended November 30, 2023 and
November 30, 2022 to adjusted
research and development, selling, marketing and administration,
and amortization expense is reflected in the table below:
For the Nine Months
Ended (in millions)
|
|
November 30,
2023
|
|
November 30,
2022
|
Research and
development
|
|
$
146
|
|
$
159
|
Stock compensation
expense
|
|
6
|
|
6
|
Adjusted research
and development
|
|
$
140
|
|
$
153
|
|
|
|
|
|
Selling, marketing
and administration
|
|
$
258
|
|
$
257
|
Restructuring
charges
|
|
17
|
|
4
|
Stock compensation
expense
|
|
19
|
|
13
|
Adjusted selling,
marketing and administration
|
|
$
222
|
|
$
240
|
|
|
|
|
|
Amortization
|
|
$
42
|
|
$
78
|
Acquired intangibles
amortization
|
|
29
|
|
67
|
Adjusted
amortization
|
|
$
13
|
|
$
11
|
Adjusted operating income (loss), adjusted EBITDA, adjusted
operating income (loss) margin percentage and adjusted EBITDA
margin percentage for the nine months ended November 30, 2023 and November 30, 2022 are reflected in the table
below.
For the Nine Months
Ended (in millions)
|
|
November 30,
2023
|
|
November 30,
2022
|
Operating
loss
|
|
$
(69)
|
|
$
(226)
|
Non-GAAP adjustments to
operating loss
|
|
|
|
|
Restructuring
charges
|
|
17
|
|
4
|
Stock compensation
expense
|
|
28
|
|
21
|
Debentures fair value
adjustment
|
|
3
|
|
(112)
|
Acquired intangibles
amortization
|
|
29
|
|
67
|
LLA impairment
charge
|
|
11
|
|
4
|
Litigation
settlement
|
|
—
|
|
165
|
Total non-GAAP
adjustments to operating loss
|
|
88
|
|
149
|
Adjusted operating
income (loss)
|
|
19
|
|
(77)
|
Amortization
|
|
46
|
|
85
|
Acquired intangibles
amortization
|
|
(29)
|
|
(67)
|
Adjusted
EBITDA
|
|
$
36
|
|
$
(59)
|
|
|
|
|
|
Revenue
|
|
$
680
|
|
$
505
|
Adjusted operating
income (loss) margin % (1)
|
|
3 %
|
|
(15 %)
|
Adjusted EBITDA
margin % (2)
|
|
5 %
|
|
(12 %)
|
______________________________
(1)
|
Adjusted operating
income (loss) margin % is calculated by dividing adjusted operating
income (loss) by revenue.
|
(2)
|
Adjusted EBITDA margin
% is calculated by dividing adjusted EBITDA by revenue.
|
The Company uses free cash flow (usage) when assessing its
sources of liquidity, capital resources, and quality of earnings.
The Company believes that free cash flow (usage) is helpful in
understanding the Company's capital requirements and provides an
additional means to reflect the cash flow trends in the Company's
business.
Reconciliation of U.S. GAAP net cash used in operating
activities for the three months ended November 30, 2023 and November 30, 2022 to free cash flow (usage) is
reflected in the table below:
For the Three Months
Ended (in millions)
|
|
November 30,
2023
|
|
November 30,
2022
|
Net cash used in
operating activities
|
|
$
(31)
|
|
$
(185)
|
Acquisition of
property, plant and equipment
|
|
(2)
|
|
(1)
|
Free cash flow
(usage)
|
|
$
(33)
|
|
$
(186)
|
Key Metrics
The Company regularly monitors a number of financial and
operating metrics, including the following key metrics, in order to
measure the Company's current performance and estimated future
performance. Readers are cautioned that annual recurring revenue
("ARR"), dollar-based net retention rate ("DBNRR"), Cybersecurity
total contract value ("TCV") billings, and recurring revenue
percentage do not have any standardized meaning and are unlikely to
be comparable to similarly titled measures reported by other
companies.
For the Three Months
Ended (in millions)
|
|
November 30,
2023
|
Cybersecurity Annual
Recurring Revenue
|
|
$
273
|
Cybersecurity
Dollar-Based Net Retention Rate
|
|
82 %
|
Cybersecurity Total
Contract Value Billings
|
|
$
109
|
Recurring Software
Product Revenue
|
|
~ 70%
|
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SOURCE BlackBerry Limited