BlackBerry Reports First Quarter Fiscal Year 2025 Results
- Exceeds quarterly revenue guidance for both IoT and Cybersecurity divisions
- IoT achieves 18% year over year revenue growth in the quarter
- Delivers sequential improvement in key Cybersecurity ARR and DBNRR metrics
- Exceeds guidance for adjusted EBITDA and non-GAAP earnings per share
- Makes significant progress in operational separation of IoT and Cybersecurity businesses
"
First Quarter Fiscal 2025 Financial Highlights
- Total company revenue was
$144 million . - Total company non-GAAP and GAAP gross margin was 67%.
- IoT revenue grew 18% year-over-year and exceeded previously-provided guidance at
$53 million ; IoT gross margin was 81%. - Cybersecurity exceeded previously-provided guidance at
$85 million ; Cybersecurity gross margin was 59%. - Cybersecurity ARR increased by 2% sequentially to
$285 million ; DBNRR increased sequentially for third consecutive quarter to 87%. - Licensing and Other revenue was
$6 million . - Non-GAAP operating loss was
$12 million and GAAP operating loss was$39 million . - Non-GAAP basic loss per share beat the previously-provided guidance at
$0.03 and GAAP basic loss per share was$0.07 . - Adjusted EBITDA was negative
$7 million . - Total cash, cash equivalents, short-term and long-term investments was
$283 million ; Operating cash usage was sequentially flat at$15 million , while free cash usage decreased sequentially for the third consecutive quarter to$16 million .
Business Highlights & Strategic Announcements
- ETAS and
BlackBerry QNX® forge partnership to jointly sell and market software solutions to provide the safe and secure foundation for the Software-Defined Vehicle (SDV). -
BlackBerry announces collaboration with AMD to advance foundational precision and control for robotics industry by enabling new levels of low latency and jitter, and repeatable determinism. -
BlackBerry launches CylanceMDR™, an expert driven and AI-powered Managed Detection and Response (MDR) solution, including an innovative "On-Demand" solution. -
BlackBerry introduces Cylance Assistant, a generative AI cybersecurity advisor that will help organizations speed up decision-making and stop more threats faster with fewer resources. - BlackBerry® UEM places in upper-right quadrant as a 2024 Gartner® Peer Insights™ Customers' Choice for Unified Endpoint Management tools for second year running.
- Independent test lab,
The Tolly Group , identifiesBlackBerry CylanceENDPOINT™ as detecting up to 25 percent more threats and with up to eight times less system impact than competitors. -
BlackBerry nominatesLori O'Neill , an experienced corporate director and financial expert, for election to its Board of Directors.
Outlook
|
Q2 FY25 |
Full fiscal year FY25 |
Total |
|
|
IoT revenue: |
|
|
Cybersecurity revenue: |
|
|
Licensing & Other revenue: |
Approximately |
Approximately |
Adjusted EBITDA: |
( |
Breakeven – |
Non-GAAP basic EPS: |
( |
( |
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
Conference Call and Webcast
A conference call and live webcast will be held today beginning at
A replay of the conference call will be available at approximately
About
For more information, visit BlackBerry.com and follow @BlackBerry.
Investor Contact:
+1 (519) 888-7465
investorrelations@blackberry.com
Media Contact:
+1 (519) 597-7273
mediarelations@blackberry.com
This news release contains forward-looking statements within the meaning of certain securities laws, including under the
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
These risk factors and others relating to
Incorporated under the Laws of
( |
|||||
|
|||||
Consolidated Statements of Operations |
|||||
|
|||||
|
Three Months Ended |
||||
|
|
|
|
|
|
Revenue |
$ 144 |
|
$ 173 |
|
$ 373 |
Cost of sales |
48 |
|
44 |
|
194 |
Gross margin |
96 |
|
129 |
|
179 |
Gross margin % |
66.7 % |
|
74.6 % |
|
48.0 % |
Operating expenses |
|
|
|
|
|
Research and development |
42 |
|
40 |
|
54 |
Sales and marketing |
38 |
|
41 |
|
45 |
General and administrative |
40 |
|
53 |
|
54 |
Amortization |
12 |
|
12 |
|
15 |
Impairment of goodwill |
— |
|
35 |
|
— |
Impairment of long-lived assets |
3 |
|
4 |
|
— |
Debentures fair value adjustment |
— |
|
— |
|
22 |
|
135 |
|
185 |
|
190 |
Operating loss |
(39) |
|
(56) |
|
(11) |
Investment income, net |
5 |
|
4 |
|
3 |
Loss before income taxes |
(34) |
|
(52) |
|
(8) |
Provision for income taxes |
8 |
|
4 |
|
3 |
Net loss |
$ (42) |
|
$ (56) |
|
$ (11) |
Loss per share |
|
|
|
|
|
Basic |
$ (0.07) |
|
$ (0.10) |
|
$ (0.02) |
Diluted |
$ (0.07) |
|
$ (0.10) |
|
$ (0.02) |
|
|
|
|
|
|
Weighted-average number of common shares outstanding (000s) |
|
|
|
|
|
Basic |
589,821 |
|
587,523 |
|
582,812 |
Diluted |
589,821 |
|
587,523 |
|
582,812 |
Total common shares outstanding (000s) |
590,171 |
|
589,233 |
|
583,237 |
Incorporated under the Laws of
( |
||||
|
||||
Consolidated Balance Sheets |
||||
|
||||
|
|
As at |
||
|
|
|
|
|
Assets |
|
|
|
|
Current |
|
|
|
|
Cash and cash equivalents |
|
$ 143 |
|
$ 175 |
Short-term investments |
|
86 |
|
62 |
Accounts receivable, net of allowance of |
|
148 |
|
199 |
Other receivables |
|
21 |
|
21 |
Income taxes receivable |
|
3 |
|
4 |
Other current assets |
|
57 |
|
47 |
|
|
458 |
|
508 |
Restricted cash and cash equivalents |
|
17 |
|
25 |
Long-term investments |
|
37 |
|
36 |
Other long-term assets |
|
59 |
|
57 |
Operating lease right-of-use assets, net |
|
27 |
|
32 |
Property, plant and equipment, net |
|
19 |
|
21 |
Intangible assets, net |
|
145 |
|
154 |
|
|
561 |
|
562 |
|
|
$ 1,323 |
|
$ 1,395 |
Liabilities |
|
|
|
|
Current |
|
|
|
|
Accounts payable |
|
$ 6 |
|
$ 17 |
Accrued liabilities |
|
112 |
|
117 |
Income taxes payable |
|
29 |
|
28 |
Deferred revenue, current |
|
174 |
|
194 |
|
|
321 |
|
356 |
Deferred revenue, non-current |
|
32 |
|
28 |
Operating lease liabilities |
|
33 |
|
38 |
Other long-term liabilities |
|
1 |
|
3 |
Long-term notes |
|
194 |
|
194 |
|
|
581 |
|
619 |
Shareholders' equity |
|
|
|
|
Capital stock and additional paid-in capital |
|
2,957 |
|
2,948 |
Deficit |
|
(2,200) |
|
(2,158) |
Accumulated other comprehensive loss |
|
(15) |
|
(14) |
|
|
742 |
|
776 |
|
|
$ 1,323 |
|
$ 1,395 |
Incorporated under the Laws of
( |
|||
|
|||
Consolidated Statements of Cash Flows |
|||
|
|||
|
Three Months Ended |
||
|
|
|
|
Cash flows from operating activities |
|
|
|
Net loss |
$ (42) |
|
$ (11) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: |
|
|
|
Amortization |
13 |
|
16 |
Stock-based compensation |
8 |
|
9 |
Impairment of long-lived assets |
3 |
|
— |
Intellectual property disposed of by sale |
— |
|
147 |
Debentures fair value adjustment |
— |
|
22 |
Operating leases |
(2) |
|
(1) |
Other |
(3) |
|
— |
Net changes in working capital items |
|
|
|
Accounts receivable, net of allowance |
51 |
|
3 |
Other receivables |
— |
|
4 |
Income taxes receivable |
1 |
|
— |
Other assets |
(13) |
|
(62) |
Accounts payable |
(11) |
|
(3) |
Accrued liabilities |
(5) |
|
(14) |
Income taxes payable |
1 |
|
1 |
Deferred revenue |
(16) |
|
(12) |
Net cash provided by (used in) operating activities |
(15) |
|
99 |
Cash flows from investing activities |
|
|
|
Acquisition of long-term investments |
— |
|
(1) |
Acquisition of property, plant and equipment |
(1) |
|
(2) |
Acquisition of intangible assets |
(1) |
|
(8) |
Acquisition of short-term investments |
(49) |
|
(66) |
Proceeds on sale or maturity of short-term investments |
25 |
|
39 |
Net cash used in investing activities |
(26) |
|
(38) |
Cash flows from financing activities |
|
|
|
Issuance of common shares |
1 |
|
2 |
Net cash provided by financing activities |
1 |
|
2 |
Net increase (decrease) in cash, cash equivalents, restricted cash, and restricted cash equivalents during the period |
(40) |
|
63 |
Cash, cash equivalents, restricted cash, and restricted cash equivalents, beginning of period |
200 |
|
322 |
Cash, cash equivalents, restricted cash, and restricted cash equivalents, end of period |
$ 160 |
|
$ 385 |
|
|||
As at |
|
|
|
Cash and cash equivalents |
$ 143 |
|
$ 175 |
Restricted cash and cash equivalents |
17 |
|
25 |
Short-term investments |
86 |
|
62 |
Long-term investments |
37 |
|
36 |
|
$ 283 |
|
$ 298 |
Reconciliations of the Company's Segment Results to the Consolidated Results
The following tables show information by operating segment for the three months ended
|
For the Three Months Ended (in millions) (unaudited) |
||||||||||||||
|
Cybersecurity |
|
IoT |
|
Licensing and Other |
|
Segment Totals |
||||||||
|
|
|
|
|
|
|
|
||||||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|
2024 |
|
2023 |
Segment revenue |
$ 85 |
|
$ 93 |
|
$ 53 |
|
$ 45 |
|
$ 6 |
|
$ 235 |
|
$ 144 |
|
$ 373 |
Segment cost of sales |
35 |
|
37 |
|
10 |
|
9 |
|
2 |
|
147 |
|
47 |
|
193 |
Segment gross margin |
$ 50 |
|
$ 56 |
|
$ 43 |
|
$ 36 |
|
$ 4 |
|
$ 88 |
|
$ 97 |
|
$ 180 |
Segment gross margin % |
59 % |
|
60 % |
|
81 % |
|
80 % |
|
67 % |
|
37 % |
|
67 % |
|
48 % |
The following table reconciles the Company's segment results for the three months ended
|
For the Three Months Ended |
||||||||||
|
(in millions) (unaudited) |
||||||||||
|
Cybersecurity |
|
IoT |
Licensing and Other |
Segment Totals |
|
Reconciling Items |
|
Consolidated |
||
Revenue |
$ 85 |
|
$ 53 |
|
$ 6 |
|
$ 144 |
|
$ — |
|
$ 144 |
Cost of sales |
35 |
|
10 |
|
2 |
|
47 |
|
1 |
|
48 |
Gross margin (1) |
$ 50 |
|
$ 43 |
|
$ 4 |
|
$ 97 |
|
$ (1) |
|
$ 96 |
Operating expenses |
|
|
|
|
|
|
|
|
135 |
|
135 |
Investment income, net |
|
|
|
|
|
|
|
|
5 |
|
5 |
Loss before income taxes |
|
|
|
|
|
|
|
|
|
|
$ (34) |
______________________________
(1) See "Non-GAAP Financial Measures" for a reconciliation of selected |
The following table reconciles the Company's segment results for the three months ended
|
For the Three Months Ended |
||||||||||
|
(in millions) (unaudited) |
||||||||||
|
Cybersecurity |
|
IoT |
Licensing and Other |
Segment Totals |
|
Reconciling Items |
|
Consolidated |
||
Revenue |
$ 93 |
|
$ 45 |
|
$ 235 |
|
$ 373 |
|
$ — |
|
$ 373 |
Cost of sales |
37 |
|
9 |
|
147 |
|
193 |
|
1 |
|
194 |
Gross margin (1) |
$ 56 |
|
$ 36 |
|
$ 88 |
|
$ 180 |
|
$ (1) |
|
$ 179 |
Operating expenses |
|
|
|
|
|
|
|
|
190 |
|
190 |
Investment income, net |
|
|
|
|
|
|
|
|
3 |
|
3 |
Loss before income taxes |
|
|
|
|
|
|
|
|
|
|
$ (8) |
______________________________
(1) See "Non-GAAP Financial Measures" for a reconciliation of selected |
Reconciliation of Non-GAAP Measures with the Nearest Comparable
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
Readers are cautioned that adjusted gross margin, adjusted gross margin percentage, adjusted operating expense, adjusted net income (loss), adjusted earnings (loss) per share, adjusted research and development expense, adjusted sales and marketing expense, adjusted general 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
Reconciliation of non-GAAP based measures with most directly comparable
A reconciliation of the most directly comparable
For the Three Months Ended (in millions) |
|
|
|
|
Gross margin |
|
$ 96 |
|
$ 179 |
Stock compensation expense |
|
1 |
|
1 |
Adjusted gross margin |
|
$ 97 |
|
$ 180 |
|
|
|
|
|
Gross margin % |
|
66.7 % |
|
48.0 % |
Stock compensation expense |
|
0.7 % |
|
0.3 % |
Adjusted gross margin % |
|
67.4 % |
|
48.3 % |
Reconciliation of
For the Three Months Ended (in millions) |
|
|
|
|
Operating expense |
|
$ 135 |
|
$ 190 |
Restructuring charges |
|
8 |
|
5 |
Stock compensation expense |
|
7 |
|
8 |
Debentures fair value adjustment |
|
— |
|
22 |
Acquired intangibles amortization |
|
8 |
|
10 |
LLA impairment charge |
|
3 |
|
— |
Adjusted operating expense |
|
$ 109 |
|
$ 145 |
Reconciliation of
For the Three Months Ended (in millions, except per share amounts) |
|
|
|
|
||||
|
|
|
|
Basic loss per share |
|
|
|
Basic earnings (loss) per share |
Net loss |
|
$ (42) |
|
|
|
$ (11) |
|
|
Restructuring charges |
|
8 |
|
|
|
5 |
|
|
Stock compensation expense |
|
8 |
|
|
|
9 |
|
|
Debentures fair value adjustment |
|
— |
|
|
|
22 |
|
|
Acquired intangibles amortization |
|
8 |
|
|
|
10 |
|
|
LLA impairment charge |
|
3 |
|
|
|
— |
|
|
Adjusted net income (loss) |
|
$ (15) |
|
|
|
$ 35 |
|
|
Reconciliation of
For the Three Months Ended (in millions) |
|
|
|
|
Research and development |
|
$ 42 |
|
$ 54 |
Stock compensation expense |
|
2 |
|
2 |
Adjusted research and development expense |
|
$ 40 |
|
$ 52 |
|
|
|
|
|
Sales and marketing |
|
$ 38 |
|
$ 45 |
Stock compensation expense |
|
2 |
|
1 |
Adjusted sales and marketing expense |
|
$ 36 |
|
$ 44 |
|
|
|
|
|
General and administrative |
|
$ 40 |
|
$ 54 |
Restructuring charges |
|
8 |
|
5 |
Stock compensation expense |
|
3 |
|
5 |
Adjusted general and administrative expense |
|
$ 29 |
|
$ 44 |
|
|
|
|
|
Amortization |
|
$ 12 |
|
$ 15 |
Acquired intangibles amortization |
|
8 |
|
10 |
Adjusted amortization expense |
|
$ 4 |
|
$ 5 |
Adjusted operating income (loss), adjusted EBITDA, adjusted operating income (loss) margin percentage and adjusted EBITDA margin percentage for the three months ended
For the Three Months Ended (in millions) |
|
|
|
|
Operating loss |
|
$ (39) |
|
$ (11) |
Non-GAAP adjustments to operating loss |
|
|
|
|
Restructuring charges |
|
8 |
|
5 |
Stock compensation expense |
|
8 |
|
9 |
Debentures fair value adjustment |
|
— |
|
22 |
Acquired intangibles amortization |
|
8 |
|
10 |
LLA impairment charge |
|
3 |
|
— |
Total non-GAAP adjustments to operating loss |
|
$ 27 |
|
46 |
Adjusted operating income (loss) |
|
(12) |
|
35 |
Amortization |
|
13 |
|
16 |
Acquired intangibles amortization |
|
(8) |
|
(10) |
Adjusted EBITDA |
|
$ (7) |
|
$ 41 |
|
|
|
|
|
Revenue |
|
$ 144 |
|
$ 373 |
Adjusted operating income (loss) margin % (1) |
|
(8 %) |
|
9 % |
Adjusted EBITDA margin % (2) |
|
(5 %) |
|
11 % |
______________________________
(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
For the Three Months Ended (in millions) |
|
|
|
|
Net cash provided by (used in) operating activities |
|
$ (15) |
|
$ 99 |
Acquisition of property, plant and equipment |
|
(1) |
|
(2) |
Free cash flow (usage) |
|
$ (16) |
|
$ 97 |
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"), 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) |
|
|
Cybersecurity Annual Recurring Revenue |
|
$ 285 |
Cybersecurity Dollar-Based Net Retention Rate |
|
87 % |
Recurring Software Product Revenue Percentage |
|
~80 % |
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