WATERLOO, ON, Dec. 21, 2021 /CNW/ -- BlackBerry Limited
(NYSE: BB; TSX: BB) today reported financial results for the three
months ended November 30, 2021 (all
figures in U.S. dollars and U.S. GAAP, except where otherwise
indicated).
"This quarter BlackBerry delivered solid sequential billings
and revenue growth for both the IoT and Cybersecurity businesses,
beating expectations for the second consecutive quarter. We
also beat expectations on earnings, despite the ongoing investment
to drive future top line growth," said John
Chen, Executive Chairman & CEO, BlackBerry. "In IoT our
QNX business achieved a quarterly record for design-related
revenues, performing stronger than expected despite ongoing
industry supply chain headwinds. On the Cybersecurity front
we saw further traction for our recent unified endpoint security
product launches with additional head-to-head wins against other
next-gen players. I am excited about how the current organization
is executing to take advantage of the market
opportunities."
Third Quarter Fiscal 2022 Financial Highlights
- Total company revenue for the third quarter of fiscal 2022 was
$184 million.
- Total company non-GAAP and GAAP gross margin was 64%.
- IoT revenue for the third quarter of fiscal 2022 was
$43 million, with gross margin of 81%
and ARR of $91 million.
- Cybersecurity revenue for the third quarter of fiscal 2022 was
$128 million, with gross margin of
59% and ARR of $358 million.
- Licensing and Other revenue for the third quarter of fiscal
2022 was $13 million, beating
expectations. Gross margin was 54%.
- Non-GAAP operating loss was $24
million. GAAP operating profit was $51 million.
- Non-GAAP breakeven earnings per share (basic and
diluted). Basic GAAP profit per share was $0.13 and diluted GAAP loss per share was
$0.05.
- Total cash, cash equivalents, short-term and long-term
investments were $772 million.
- Total net cash position was $407
million.
- Net cash used by operating activities was $19 million.
Business Highlights & Strategic Announcements
IoT:
- BMW Group enters multi-year agreement to use BlackBerry QNX®
technology to develop SAE Level 2/2+ driving automation functions
in multiple makes and models across the BMW group.
- Google and Qualcomm join forces with BlackBerry QNX to reduce
developer friction and time to market when virtualizing Android
Automotive OS alongside safety critical applications on the QNX®
Hypervisor.
- Mahindra and Mahindra, the third largest automaker in
India, selects the QNX Real Time
Operating System (RTOS) and Hypervisor to power the cockpit domain
controller for their next-generation SUV.
- BlackBerry IVY™ early access version is released in
October 2021, in line with product
roadmap.
- Zuora, a leading provider of software that enables companies to
harness subscription revenue from online applications, joins the
BlackBerry IVY advisory council.
Cybersecurity:
- Exabeam, the leading next-gen SIEM provider, partners with
BlackBerry to greatly expand access to telemetry data from 100's of
network devices as part of its enhanced BlackBerry® Guard managed
extended detection and response (XDR) service.
- Okta and BlackBerry announce a comprehensive partnership to
deliver both seamless identity and access capabilities while using
BlackBerry UEM® endpoint management, as well as integrating Okta's
telemetry data into BlackBerry's XDR platform.
- Mimecast, Stellar Cyber and XM Cyber, also join the expanding
BlackBerry XDR ecosystem.
- BlackBerry Guard 2.0 managed services offering (MDR) expands to
provide customers with 24/7 management of BlackBerry® Protect
Mobile, BlackBerry® Gateway and BlackBerry® Persona.
- BlackBerry's leading prevention-first cybersecurity technology
prevents high-profile malware and ransomware including DanaBot,
Raccoon Infostealer, SquirrelWaffle, Jennlog Loader, and more.
- SE Labs, a leader in independent cybersecurity research, ranks
BlackBerry as the best new endpoint security offering of 2021.
Outlook
BlackBerry will provide fourth fiscal quarter 2022 outlook in
connection with the quarterly earnings announcement on its earnings
conference call. The earnings call transcript will be made
available on our website and on SEDAR.
Use of Non-GAAP Financial Measures
The tables at the
end of this press release include a reconciliation of the non-GAAP
financial measures 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 by dialing +1
(877) 682-6267 or by logging on at BlackBerry.com/Investors.
A replay of the conference call will also be available at
approximately 8:30 p.m. ET by dialing
+1 (800) 585-8367 and entering Conference ID #2154299 and at the
link above.
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
195M 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
investor_relations@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, the ongoing COVID-19
pandemic, competition, and BlackBerry's expectations regarding its
financial performance. 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 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; the impact of the COVID-19 pandemic;
BlackBerry's continuing ability to attract new personnel, retain
existing key personnel and manage its staffing effectively;
BlackBerry's dependence on its relationships with resellers and
channel partners; litigation against BlackBerry; 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;
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;
acquisitions, divestitures and other business initiatives; foreign
operations, including fluctuations in foreign currencies; the
fluctuation of BlackBerry's quarterly revenue and operating
results; the volatility of the market price of BlackBerry's common
shares; adverse economic, geopolitical and environmental
conditions.
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.sedar.com 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. BlackBerry has no intention and undertakes no obligation
to update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise, except as
required by applicable 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,
2021
|
|
August 31,
2021
|
|
November 30,
2020
|
|
November
30,
2021
|
|
November 30,
2020
|
Revenue
|
$
|
184
|
|
|
$
|
175
|
|
|
$
|
218
|
|
|
$
|
533
|
|
|
$
|
683
|
|
Cost of
sales
|
67
|
|
|
63
|
|
|
69
|
|
|
190
|
|
|
192
|
|
Gross
margin
|
117
|
|
|
112
|
|
|
149
|
|
|
343
|
|
|
491
|
|
Gross margin
%
|
63.6
|
%
|
|
64.0
|
%
|
|
68.3
|
%
|
|
64.4
|
%
|
|
71.9
|
%
|
Operating
expenses
|
|
|
|
|
|
|
|
|
|
Research and
development
|
57
|
|
|
58
|
|
|
53
|
|
|
172
|
|
|
167
|
|
Selling, marketing and
administration
|
77
|
|
|
83
|
|
|
83
|
|
|
233
|
|
|
252
|
|
Amortization
|
42
|
|
|
45
|
|
|
45
|
|
|
133
|
|
|
137
|
|
Impairment of
goodwill
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
594
|
|
Impairment of
long-lived assets
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
21
|
|
Debentures fair value
adjustment
|
(110)
|
|
|
67
|
|
|
95
|
|
|
(47)
|
|
|
114
|
|
|
66
|
|
|
253
|
|
|
276
|
|
|
491
|
|
|
1,285
|
|
Operating income
(loss)
|
51
|
|
|
(141)
|
|
|
(127)
|
|
|
(148)
|
|
|
(794)
|
|
Investment income
(loss), net
|
25
|
|
|
(1)
|
|
|
(1)
|
|
|
22
|
|
|
(6)
|
|
Income (loss)
before income taxes
|
76
|
|
|
(142)
|
|
|
(128)
|
|
|
(126)
|
|
|
(800)
|
|
Provision for
(recovery of) income taxes
|
2
|
|
|
2
|
|
|
2
|
|
|
6
|
|
|
(11)
|
|
Net income
(loss)
|
$
|
74
|
|
|
$
|
(144)
|
|
|
$
|
(130)
|
|
|
$
|
(132)
|
|
|
$
|
(789)
|
|
Earnings (loss)
per share
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
0.13
|
|
|
$
|
(0.25)
|
|
|
$
|
(0.23)
|
|
|
$
|
(0.23)
|
|
|
$
|
(1.41)
|
|
Diluted
|
$
|
(0.05)
|
|
|
$
|
(0.25)
|
|
|
$
|
(0.23)
|
|
|
$
|
(0.28)
|
|
|
$
|
(1.41)
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
number of common shares outstanding (000s)
|
|
|
|
|
|
|
|
|
|
Basic
|
571,138
|
|
|
568,082
|
|
|
562,443
|
|
|
568,877
|
|
|
559,732
|
|
Diluted
|
631,971
|
|
|
568,082
|
|
|
562,443
|
|
|
629,710
|
|
|
559,732
|
|
Total common shares
outstanding (000s)
|
573,667
|
|
|
566,995
|
|
|
562,016
|
|
|
573,667
|
|
|
562,016
|
|
BlackBerry
Limited
Incorporated under
the Laws of Ontario
(United States
dollars, in millions) (unaudited)
|
|
Consolidated
Balance Sheets
|
|
|
|
As
at
|
|
|
November 30,
2021
|
|
February 28,
2021
|
Assets
|
|
|
|
|
Current
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
271
|
|
|
$
|
214
|
|
Short-term
investments
|
|
442
|
|
|
525
|
|
Accounts receivable,
net of allowance of $5 and $10, respectively
|
|
138
|
|
|
182
|
|
Other
receivables
|
|
17
|
|
|
25
|
|
Income taxes
receivable
|
|
9
|
|
|
10
|
|
Other current
assets
|
|
52
|
|
|
50
|
|
|
|
929
|
|
|
1,006
|
|
Restricted cash
equivalents and restricted short-term investments
|
|
29
|
|
|
28
|
|
Long-term
investments
|
|
30
|
|
|
37
|
|
Other long-term
assets
|
|
8
|
|
|
16
|
|
Operating lease
right-of-use assets, net
|
|
54
|
|
|
63
|
|
Property, plant
and equipment, net
|
|
42
|
|
|
48
|
|
Goodwill
|
|
845
|
|
|
849
|
|
Intangible assets,
net
|
|
662
|
|
|
771
|
|
|
|
$
|
2,599
|
|
|
$
|
2,818
|
|
Liabilities
|
|
|
|
|
Current
|
|
|
|
|
Accounts
payable
|
|
$
|
26
|
|
|
$
|
20
|
|
Accrued
liabilities
|
|
178
|
|
|
178
|
|
Income taxes
payable
|
|
11
|
|
|
6
|
|
Deferred revenue,
current
|
|
194
|
|
|
225
|
|
|
|
409
|
|
|
429
|
|
Deferred revenue,
non-current
|
|
41
|
|
|
69
|
|
Operating lease
liabilities
|
|
73
|
|
|
90
|
|
Other long-term
liabilities
|
|
4
|
|
|
6
|
|
Long-term
debentures
|
|
673
|
|
|
720
|
|
|
|
1,200
|
|
|
1,314
|
|
Shareholders'
equity
|
|
|
|
|
Capital stock and
additional paid-in capital
|
|
2,857
|
|
|
2,823
|
|
Deficit
|
|
(1,438)
|
|
|
(1,306)
|
|
Accumulated other
comprehensive loss
|
|
(20)
|
|
|
(13)
|
|
|
|
1,399
|
|
|
1,504
|
|
|
|
$
|
2,599
|
|
|
$
|
2,818
|
|
BlackBerry
Limited
Incorporated under
the Laws of Ontario
(United States
dollars, in millions) (unaudited)
|
|
Consolidated
Statements of Cash Flows
|
|
|
Nine Months
Ended
|
|
November 30,
2021
|
|
November 30,
2020
|
Cash flows from
operating activities
|
|
|
|
Net loss
|
$
|
(132)
|
|
|
$
|
(789)
|
|
Adjustments to
reconcile net loss to net cash provided by (used in) operating
activities:
|
|
|
|
Amortization
|
142
|
|
|
149
|
|
Stock-based
compensation
|
25
|
|
|
33
|
|
Gain on sale of
investment
|
(22)
|
|
|
—
|
|
Impairment of
goodwill
|
—
|
|
|
594
|
|
Impairment of
long-lived assets
|
—
|
|
|
21
|
|
Debentures fair value
adjustment
|
(47)
|
|
|
114
|
|
Operating
leases
|
(12)
|
|
|
(4)
|
|
Other
|
(3)
|
|
|
(4)
|
|
Net changes in
working capital items
|
|
|
|
Accounts receivable,
net of allowance
|
44
|
|
|
(1)
|
|
Other
receivables
|
8
|
|
|
(7)
|
|
Income taxes
receivable
|
1
|
|
|
(4)
|
|
Other
assets
|
5
|
|
|
51
|
|
Accounts
payable
|
6
|
|
|
(2)
|
|
Accrued
liabilities
|
2
|
|
|
(27)
|
|
Income taxes
payable
|
5
|
|
|
(13)
|
|
Deferred
revenue
|
(59)
|
|
|
(81)
|
|
Net cash provided
by (used in) operating activities
|
(37)
|
|
|
30
|
|
Cash flows from
investing activities
|
|
|
|
Acquisition of
long-term investments
|
(1)
|
|
|
(1)
|
|
Distribution from
long-term investments
|
35
|
|
|
—
|
|
Acquisition of
property, plant and equipment
|
(6)
|
|
|
(5)
|
|
Acquisition of
intangible assets
|
(22)
|
|
|
(23)
|
|
Acquisition of
short-term investments
|
(695)
|
|
|
(770)
|
|
Proceeds on sale or
maturity of restricted short-term investments
|
24
|
|
|
—
|
|
Proceeds on sale or
maturity of short-term investments
|
776
|
|
|
851
|
|
Net cash provided
by investing activities
|
111
|
|
|
52
|
|
Cash flows from
financing activities
|
|
|
|
Issuance of common
shares
|
9
|
|
|
10
|
|
Payment of finance
lease liability
|
—
|
|
|
(1)
|
|
Repurchase of 3.75%
Debentures
|
—
|
|
|
(610)
|
|
Issuance of 1.75%
Debentures
|
—
|
|
|
365
|
|
Net cash provided
by (used in) financing activities
|
9
|
|
|
(236)
|
|
Effect of foreign
exchange gain (loss) on cash, cash equivalents, restricted cash,
and restricted cash equivalents
|
(1)
|
|
|
1
|
|
Net increase
(decrease) in cash, cash equivalents, restricted cash, and
restricted cash equivalents during the period
|
82
|
|
|
(153)
|
|
Cash, cash
equivalents, restricted cash, and restricted cash equivalents,
beginning of period
|
218
|
|
|
426
|
|
Cash, cash
equivalents, restricted cash, and restricted cash equivalents, end
of period
|
$
|
300
|
|
|
$
|
273
|
|
|
|
As
at
|
November 30,
2021
|
|
February 28,
2021
|
Cash and cash
equivalents
|
$
|
271
|
|
|
$
|
214
|
|
Restricted cash
equivalents and restricted short-term investments
|
29
|
|
|
28
|
|
Short-term
investments
|
442
|
|
|
525
|
|
Long-term
investments
|
30
|
|
|
37
|
|
|
$
|
772
|
|
|
$
|
804
|
|
Reconciliations of the Company's Segment Results to the
Consolidated Results
The following table shows information by operating segment for
the three months ended November 30,
2021 and November 30,
2020. 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,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Segment
revenue
|
$
|
128
|
|
$
|
130
|
|
$
|
43
|
|
$
|
32
|
|
$
|
13
|
|
$
|
56
|
|
$
|
184
|
|
$
|
218
|
Segment cost of
sales
|
52
|
|
53
|
|
8
|
|
6
|
|
6
|
|
9
|
|
66
|
|
68
|
Segment gross
margin
|
$
|
76
|
|
$
|
77
|
|
$
|
35
|
|
$
|
26
|
|
$
|
7
|
|
$
|
47
|
|
$
|
118
|
|
$
|
150
|
Segment gross margin
%
|
59 %
|
|
59 %
|
|
81 %
|
|
81 %
|
|
54 %
|
|
84 %
|
|
64 %
|
|
69 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table reconciles the Company's segment results for
the three months ended November 30,
2021 to consolidated U.S. GAAP results:
|
For the Three Months
Ended November 30, 2021
|
|
(in millions)
(unaudited)
|
|
Cybersecurity
|
|
IoT
|
Licensing and
Other
|
Segment
Totals
|
|
Reconciling
Items
|
|
Consolidated
U.S. GAAP
|
Revenue
|
$
|
128
|
|
$
|
43
|
|
$
|
13
|
|
$
|
184
|
|
|
$
|
—
|
|
|
$
|
184
|
|
Cost of sales
(1)
|
52
|
|
8
|
|
6
|
|
66
|
|
|
1
|
|
|
67
|
|
Gross
margin
|
$
|
76
|
|
$
|
35
|
|
$
|
7
|
|
$
|
118
|
|
|
$
|
(1)
|
|
|
$
|
117
|
|
Operating
expenses
|
|
|
|
|
|
|
|
|
66
|
|
|
66
|
|
Investment income,
net
|
|
|
|
|
|
|
|
|
(25)
|
|
|
(25)
|
|
Income before income
taxes
|
|
|
|
|
|
|
|
|
|
|
$
|
76
|
|
______________________________
(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,
2021.
The following table reconciles the Company's segment results for
the three months ended November 30,
2020 to consolidated U.S. GAAP results:
|
For the Three Months
Ended November 30, 2020
|
|
(in millions)
(unaudited)
|
|
Cybersecurity
|
|
IoT
|
Licensing and
Other
|
Segment
Totals
|
|
Reconciling
Items
|
|
Consolidated
U.S. GAAP
|
Revenue
|
$
|
130
|
|
$
|
32
|
|
$
|
56
|
|
$
|
218
|
|
|
$
|
—
|
|
|
$
|
218
|
|
Cost of sales
(1)
|
53
|
|
6
|
|
9
|
|
68
|
|
|
1
|
|
|
69
|
|
Gross
margin
|
$
|
77
|
|
$
|
26
|
|
$
|
47
|
|
$
|
150
|
|
|
$
|
(1)
|
|
|
$
|
149
|
|
Operating
expenses
|
|
|
|
|
|
|
|
|
276
|
|
|
276
|
|
Investment loss,
net
|
|
|
|
|
|
|
|
|
1
|
|
|
1
|
|
Loss before income
taxes
|
|
|
|
|
|
|
|
|
|
|
$
|
(128)
|
|
______________________________
(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,
2020.
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
measures 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. In the first quarter of fiscal 2022, the
Company discontinued its use of software deferred revenue acquired
and software deferred commission acquired adjustments in its
non-GAAP financial measures due to the quantitative decline in the
adjustments over time. For purposes of comparability, the Company's
non-GAAP financial measures for the three and nine months ended
November 30, 2020 have been updated
to conform to the current year's presentation.
Readers are cautioned that adjusted gross margin, adjusted gross
margin percentage, adjusted operating expense, adjusted operating
income (loss), adjusted EBITDA, adjusted operating income (loss)
margin percentage, adjusted EBITDA margin percentage, adjusted net
income (loss), adjusted income (loss) per share, adjusted research
and development expense, adjusted selling, marketing and
administrative expense and adjusted amortization expense 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.
Reconciliation of non-GAAP based measures with most
directly comparable U.S. GAAP based measures for the three months
ended November 30, 2021 and
November 30, 2020
A reconciliation of the most directly comparable U.S. GAAP
financial measures for the three months ended November 30, 2021 and November 30, 2020 to adjusted financial measures
is reflected in the table below:
For the Three
Months Ended (in millions)
|
|
November 30,
2021
|
|
November 30,
2020
|
Gross
margin
|
|
$
|
117
|
|
|
$
|
149
|
|
Stock compensation
expense
|
|
1
|
|
|
1
|
|
Adjusted gross
margin
|
|
$
|
118
|
|
|
$
|
150
|
|
|
|
|
|
|
Gross margin
%
|
|
63.6
|
%
|
|
68.3
|
%
|
Stock compensation
expense
|
|
0.5
|
%
|
|
0.5
|
%
|
Adjusted gross
margin %
|
|
64.1
|
%
|
|
68.8
|
%
|
Reconciliation of operating expense for the three months ended
November 30, 2021 and November 30, 2020 to adjusted operating expense
is reflected in the table below:
For the Three
Months Ended (in millions)
|
|
November 30,
2021
|
|
November 30,
2020
|
Operating
expense
|
|
$
|
66
|
|
|
$
|
276
|
|
Stock compensation
expense
|
|
5
|
|
|
11
|
|
Debentures fair value
adjustment
|
|
(110)
|
|
|
95
|
|
Acquired intangibles
amortization
|
|
29
|
|
|
32
|
|
Adjusted operating
expense
|
|
$
|
142
|
|
|
$
|
138
|
|
Reconciliation of U.S. GAAP net income (loss) and U.S. GAAP
basic earnings (loss) per share for the three months ended
November 30, 2021 and November 30, 2020 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,
2021
|
|
November 30,
2020
|
|
|
|
|
Basic
earnings
(loss)
per
share
|
|
|
|
Basic
earnings
(loss)
per
share
|
Net income
(loss)
|
|
$
|
74
|
|
|
$0.13
|
|
$
|
(130)
|
|
|
$(0.23)
|
Stock compensation
expense
|
|
6
|
|
|
|
|
12
|
|
|
|
Debentures fair value
adjustment
|
|
(110)
|
|
|
|
|
95
|
|
|
|
Acquired intangibles
amortization
|
|
29
|
|
|
|
|
32
|
|
|
|
Adjusted net
income (loss)
|
|
$
|
(1)
|
|
|
$0.00
|
|
$
|
9
|
|
|
$0.02
|
Reconciliation of U.S. GAAP research and development, selling,
marketing and administration, and amortization expense for the
three months ended November 30, 2021
and November 30, 2020 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,
2021
|
|
November 30,
2020
|
Research and
development
|
|
$
|
57
|
|
|
$
|
53
|
|
Stock compensation
expense
|
|
2
|
|
|
3
|
|
Adjusted research
and development
|
|
$
|
55
|
|
|
$
|
50
|
|
|
|
|
|
|
Selling, marketing
and administration
|
|
$
|
77
|
|
|
$
|
83
|
|
Stock compensation
expense
|
|
3
|
|
|
8
|
|
Adjusted selling,
marketing and administration
|
|
$
|
74
|
|
|
$
|
75
|
|
|
|
|
|
|
Amortization
|
|
$
|
42
|
|
|
$
|
45
|
|
Acquired intangibles
amortization
|
|
29
|
|
|
32
|
|
Adjusted
amortization
|
|
$
|
13
|
|
|
$
|
13
|
|
Adjusted operating income (loss), adjusted EBITDA, adjusted
operating income (loss) margin percentage and adjusted EBITDA
margin percentage for the three months ended November 30, 2021 and November 30, 2020 are reflected in the table
below.
For the Three
Months Ended (in millions)
|
|
November 30,
2021
|
|
November 30,
2020
|
Operating income
(loss)
|
|
$
|
51
|
|
|
$
|
(127)
|
|
Non-GAAP adjustments
to operating income (loss)
|
|
|
|
|
Stock compensation
expense
|
|
6
|
|
|
12
|
|
Debentures fair value
adjustment
|
|
(110)
|
|
|
95
|
|
Acquired intangibles
amortization
|
|
29
|
|
|
32
|
|
Total non-GAAP
adjustments to operating income (loss)
|
|
(75)
|
|
|
139
|
|
Adjusted operating
income (loss)
|
|
(24)
|
|
|
12
|
|
Amortization
|
|
45
|
|
|
49
|
|
Acquired intangibles
amortization
|
|
(29)
|
|
|
(32)
|
|
Adjusted
EBITDA
|
|
$
|
(8)
|
|
|
$
|
29
|
|
|
|
|
|
|
Revenue
|
|
$
|
184
|
|
|
$
|
218
|
|
Adjusted operating
income (loss) margin % (1)
|
|
(13%)
|
|
|
6%
|
|
Adjusted EBITDA
margin % (2)
|
|
(4%)
|
|
|
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, 2021 and
November 30, 2020
A reconciliation of the most directly comparable U.S. GAAP
financial measures for the nine months ended November 30, 2021 and November 30, 2020 to adjusted financial measures
is reflected in the table below:
For the Nine
Months Ended (in millions)
|
|
November 30,
2021
|
|
November 30,
2020
|
Gross
margin
|
|
$
|
343
|
|
|
$
|
491
|
|
Stock compensation
expense
|
|
3
|
|
|
4
|
|
Adjusted gross
margin
|
|
$
|
346
|
|
|
$
|
495
|
|
|
|
|
|
|
Gross margin
%
|
|
64.4
|
%
|
|
71.9
|
%
|
Stock compensation
expense
|
|
0.5
|
%
|
|
0.6
|
%
|
Adjusted gross
margin %
|
|
64.9
|
%
|
|
72.5
|
%
|
|
|
|
|
|
Operating
expense
|
|
$
|
491
|
|
|
$
|
1,285
|
|
Restructuring
charges
|
|
—
|
|
|
2
|
|
Stock compensation
expense
|
|
22
|
|
|
31
|
|
Debentures fair value
adjustment
|
|
(47)
|
|
|
114
|
|
Acquired intangibles
amortization
|
|
93
|
|
|
97
|
|
Goodwill impairment
charge
|
|
—
|
|
|
594
|
|
LLA impairment
charge
|
|
—
|
|
|
21
|
|
Adjusted operating
expense
|
|
$
|
423
|
|
|
$
|
426
|
|
Reconciliation of U.S. GAAP net loss and U.S. GAAP basic loss
per share for the nine months ended November
30, 2021 and November 30, 2020
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,
2021
|
|
November 30,
2020
|
|
|
|
|
Basic loss
per share
|
|
|
|
Basic
earnings
(loss)
per share
|
Net
loss
|
|
$
|
(132)
|
|
|
$(0.23)
|
|
$
|
(789)
|
|
|
$(1.41)
|
Restructuring
charges
|
|
—
|
|
|
|
|
2
|
|
|
|
Stock compensation
expense
|
|
25
|
|
|
|
|
35
|
|
|
|
Debentures fair value
adjustment
|
|
(47)
|
|
|
|
|
114
|
|
|
|
Acquired intangibles
amortization
|
|
93
|
|
|
|
|
97
|
|
|
|
Goodwill impairment
charge
|
|
—
|
|
|
|
|
594
|
|
|
|
LLA impairment
charge
|
|
—
|
|
|
|
|
21
|
|
|
|
Adjusted net
income (loss)
|
|
$
|
(61)
|
|
|
$(0.11)
|
|
$
|
74
|
|
|
$0.13
|
Reconciliation of U.S. GAAP research and development, selling,
marketing and administration, and amortization expense for the nine
months ended November 30, 2021 and
November 30, 2020 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,
2021
|
|
November 30,
2020
|
Research and
development
|
|
$
|
172
|
|
|
$
|
167
|
|
Stock compensation
expense
|
|
6
|
|
|
8
|
|
Adjusted research
and development
|
|
$
|
166
|
|
|
$
|
159
|
|
|
|
|
|
|
Selling, marketing
and administration
|
|
$
|
233
|
|
|
$
|
252
|
|
Restructuring
charges
|
|
—
|
|
|
2
|
|
Stock compensation
expense
|
|
16
|
|
|
23
|
|
Adjusted selling,
marketing and administration
|
|
$
|
217
|
|
|
$
|
227
|
|
|
|
|
|
|
Amortization
|
|
$
|
133
|
|
|
$
|
137
|
|
Acquired intangibles
amortization
|
|
93
|
|
|
97
|
|
Adjusted
amortization
|
|
$
|
40
|
|
|
$
|
40
|
|
Adjusted operating income (loss), adjusted EBITDA, adjusted
operating income (loss) margin percentage and adjusted EBITDA
margin percentage for the nine months ended November 30, 2021 and November 30, 2020 are reflected in the table
below.
For the Nine
Months Ended (in millions)
|
|
November 30,
2021
|
|
November 30,
2020
|
Operating
loss
|
|
$
|
(148)
|
|
|
$
|
(794)
|
|
Non-GAAP adjustments
to operating loss
|
|
|
|
|
Restructuring
charges
|
|
—
|
|
|
2
|
|
Stock compensation
expense
|
|
25
|
|
|
35
|
|
Debentures fair value
adjustment
|
|
(47)
|
|
|
114
|
|
Acquired intangibles
amortization
|
|
93
|
|
|
97
|
|
Goodwill impairment
charge
|
|
—
|
|
|
594
|
|
LLA impairment
charge
|
|
—
|
|
|
21
|
|
Total non-GAAP
adjustments to operating loss
|
|
71
|
|
|
863
|
|
Adjusted operating
income (loss)
|
|
(77)
|
|
|
69
|
|
Amortization
|
|
142
|
|
|
149
|
|
Acquired intangibles
amortization
|
|
(93)
|
|
|
(97)
|
|
Adjusted
EBITDA
|
|
$
|
(28)
|
|
|
$
|
121
|
|
|
|
|
|
|
Revenue
|
|
$
|
533
|
|
|
$
|
683
|
|
Adjusted operating
income (loss) margin % (1)
|
|
(14)
|
%
|
|
10
|
%
|
Adjusted EBITDA
margin % (2)
|
|
(5)
|
%
|
|
18
|
%
|
______________________________
(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
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 estimate 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)
|
|
November 30,
2021
|
Annual Recurring
Revenue
|
|
|
Cybersecurity
|
|
$
|
358
|
|
IoT
|
|
$
|
91
|
|
Dollar-Based Net
Retention Rate
|
|
|
Cybersecurity
|
|
95
|
%
|
Recurring Software
Product Revenue
|
|
~ 80
|
%
|
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SOURCE BlackBerry Limited