Delivers another record quarter for design-related revenue
for IoT, both sequential and year over year billings growth for
Cybersecurity, as well as positive operating cash flow and net
profit
Fourth Quarter Fiscal 2022:
- Total company revenue of $185
million.
- IoT revenue of $52
million.
- Cybersecurity revenue of $122
million.
- Licensing & Other revenue of $11
million.
- Net cash generated from operations of $10 million.
- Non-GAAP basic earnings per share of $0.01, GAAP basic earnings per share of
$0.25 and GAAP diluted loss per share
of $0.03.
Fiscal Year 2022:
- Total company revenue of $718
million.
- Non-GAAP basic loss per share of $0.10, GAAP basic earnings per share of
$0.02 and GAAP diluted loss per share
of $0.31.
WATERLOO, ON, March 31, 2022 /PRNewswire/ -- BlackBerry
Limited (NYSE: BB; TSX: BB) today reported financial results for
the three months and fiscal year ended February 28, 2022 (all figures in U.S. dollars
and U.S. GAAP, except where otherwise indicated).
"We're pleased with the progress that BlackBerry made this
quarter. The IoT business recorded its first $50m-plus revenue quarter since the start of the
pandemic. In addition to overcoming a number of industry-wide
challenges, such as supply chain constraints and the war in
Ukraine, the QNX business set
another record for quarterly design-related revenue, demonstrating
both strong fundamentals and momentum for the business," said
John Chen, Executive Chairman &
CEO, BlackBerry. "We're also excited about the prospects for the
Cybersecurity business given another quarter of billings growth and
further strengthening of the team with industry expertise in both
sales and product development. The key components are in place, and
we expect continued billings momentum this year. Following the
demonstration of our BlackBerry IVY edge-to-cloud data platform on
auto-grade hardware at CES, we have secured a number of
Proof-of-Concept trials."
Fourth Quarter Fiscal 2022 Financial Highlights
- Total company revenue was $185
million.
- Total company non-GAAP gross margin was 68% and GAAP gross
margin was 67%.
- IoT revenue was $52 million, with
gross margin of 85% and ARR of $93
million, an 11% increase year-over-year.
- Cybersecurity revenue was $122
million, with gross margin of 61% and ARR of $347 million.
- Licensing and Other revenue was $11
million, with gross margin of 55%.
- Non-GAAP operating profit was $8
million. GAAP operating profit was $146 million.
- Total cash, cash equivalents, short-term and long-term
investments were $770 million.
- Total net cash position was $405
million.
- Net cash generated from operating activities was $10 million.
Business Highlights & Strategic Announcements
IoT:
- BlackBerry QNX records a record number of new design wins in a
quarter: 17 in Auto and 28 in the General Embedded Market
(GEM).
- BlackBerry announces first BlackBerry IVY™ proof-of-concept, or
POC, trial with PATEO, a leading Chinese tier 1 supplier, and a
Chinese electric vehicle automaker to integrate IVY into a digital
cockpit.
- BlackBerry and Marelli expand collaboration in China with BlackBerry QNX® Neutrino® RTOS and
BlackBerry QNX® Hypervisor selected to power next generation
cockpit technology.
- BlackBerry® QNX® real time operating system selected by
Critical Software as the foundation for a railway protection system
for Portugal's national rail
network.
- BlackBerry® Jarvis® enhanced to include standardized reporting
that enables compliance with the U.S. government's recent Executive
Order relating to the software bill of materials.
Cybersecurity:
- BlackBerry receives maximum AAA rating from SE Labs following
their Enterprise Advanced Security Test that used real-world
hacking tactics against BlackBerry® Protect and BlackBerry®
Optics.
- BlackBerry® SecuSUITE® encrypted communication solution
endorsed for NATO use by the NSAB.
- BlackBerry® AtHoc® is being deployed, in partnership with
TELUS, by all municipalities and the regional police in Niagara,
Canada, displacing a key
competitor's solution.
- BlackBerry releases annual threat report, highlighting a
cybercriminal underground which has been optimized to better target
small local businesses.
Outlook
BlackBerry will provide fiscal year 2023
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 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 by dialing +1 (877) 761-5600
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) 770-2030 and entering Conference ID #1566649 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
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, the ongoing COVID-19
pandemic, the Russia Ukraine conflict, 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; BlackBerry's continuing ability to
attract new personnel, retain existing key personnel and manage its
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.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. 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
|
|
For the Years
Ended
|
|
February 28,
2022
|
|
November 30,
2021
|
|
February 28,
2021
|
|
February 28,
2022
|
|
February 28,
2021
|
Revenue
|
$
185
|
|
$
184
|
|
$
210
|
|
$
718
|
|
$
893
|
Cost of
sales
|
61
|
|
67
|
|
58
|
|
251
|
|
250
|
Gross
margin
|
124
|
|
117
|
|
152
|
|
467
|
|
643
|
Gross margin
%
|
67.0
%
|
|
63.6 %
|
|
72.4 %
|
|
65.0
%
|
|
72.0 %
|
Operating
expenses
|
|
|
|
|
|
|
|
|
|
Research and
development
|
47
|
|
57
|
|
48
|
|
219
|
|
215
|
Selling, marketing and
administration
|
64
|
|
77
|
|
92
|
|
297
|
|
344
|
Amortization
|
32
|
|
42
|
|
45
|
|
165
|
|
182
|
Impairment of
goodwill
|
—
|
|
—
|
|
—
|
|
—
|
|
594
|
Impairment of
long-lived assets
|
—
|
|
—
|
|
22
|
|
—
|
|
43
|
Debentures fair value
adjustment
|
(165)
|
|
(110)
|
|
258
|
|
(212)
|
|
372
|
|
(22)
|
|
66
|
|
465
|
|
469
|
|
1,750
|
Operating income
(loss)
|
146
|
|
51
|
|
(313)
|
|
(2)
|
|
(1,107)
|
Investment income
(loss), net
|
(1)
|
|
25
|
|
—
|
|
21
|
|
(6)
|
Income (loss)
before income taxes
|
145
|
|
76
|
|
(313)
|
|
19
|
|
(1,113)
|
Provision for
(recovery of) income taxes
|
1
|
|
2
|
|
2
|
|
7
|
|
(9)
|
Net income
(loss)
|
$
144
|
|
$
74
|
|
$
(315)
|
|
$
12
|
|
$
(1,104)
|
Earnings (loss)
per share
|
|
|
|
|
|
|
|
|
|
Basic
|
$
0.25
|
|
$
0.13
|
|
$
(0.56)
|
|
$
0.02
|
|
$
(1.97)
|
Diluted
|
$
(0.03)
|
|
$
(0.05)
|
|
$
(0.56)
|
|
$
(0.31)
|
|
$
(1.97)
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
number of common shares outstanding (000s)
|
|
|
|
|
|
|
|
|
|
Basic
|
575,883
|
|
571,138
|
|
566,089
|
|
570,607
|
|
561,305
|
Diluted
|
636,716
|
|
631,971
|
|
566,089
|
|
631,440
|
|
561,305
|
Total common shares
outstanding (000s)
|
576,228
|
|
573,667
|
|
565,505
|
|
576,228
|
|
565,505
|
BlackBerry
Limited
Incorporated under
the Laws of Ontario
(United States
dollars, in millions) (unaudited)
|
Consolidated
Balance Sheets
|
|
|
|
As
at
|
|
|
February 28,
2022
|
|
February 28,
2021
|
Assets
|
|
|
|
|
Current
|
|
|
|
|
Cash and cash
equivalents
|
|
$
378
|
|
$
214
|
Short-term
investments
|
|
334
|
|
525
|
Accounts receivable,
net of allowance of $4 and $10, respectively
|
|
138
|
|
182
|
Other
receivables
|
|
25
|
|
25
|
Income taxes
receivable
|
|
9
|
|
10
|
Other current
assets
|
|
159
|
|
50
|
|
|
1,043
|
|
1,006
|
Restricted cash
equivalents and restricted short-term investments
|
|
28
|
|
28
|
Long-term
investments
|
|
30
|
|
37
|
Other long-term
assets
|
|
9
|
|
16
|
Operating lease
right-of-use assets, net
|
|
50
|
|
63
|
Property, plant
and equipment, net
|
|
41
|
|
48
|
Goodwill
|
|
844
|
|
849
|
Intangible assets,
net
|
|
522
|
|
771
|
|
|
$
2,567
|
|
$
2,818
|
Liabilities
|
|
|
|
|
Current
|
|
|
|
|
Accounts
payable
|
|
$
22
|
|
$
20
|
Accrued
liabilities
|
|
157
|
|
178
|
Income taxes
payable
|
|
11
|
|
6
|
Deferred revenue,
current
|
|
207
|
|
225
|
|
|
397
|
|
429
|
Deferred revenue,
non-current
|
|
37
|
|
69
|
Operating lease
liabilities
|
|
66
|
|
90
|
Other long-term
liabilities
|
|
4
|
|
6
|
Long-term
debentures
|
|
507
|
|
720
|
|
|
1,011
|
|
1,314
|
Shareholders'
equity
|
|
|
|
|
Capital stock and
additional paid-in capital
|
|
2,869
|
|
2,823
|
Deficit
|
|
(1,294)
|
|
(1,306)
|
Accumulated other
comprehensive loss
|
|
(19)
|
|
(13)
|
|
|
1,556
|
|
1,504
|
|
|
$
2,567
|
|
$
2,818
|
BlackBerry
Limited
Incorporated under
the Laws of Ontario
(United States
dollars, in millions) (unaudited)
|
Consolidated
Statements of Cash Flows
|
|
|
For the Years
Ended
|
|
February 28,
2022
|
|
February 28,
2021
|
Cash flows from
operating activities
|
|
|
|
Net income
(loss)
|
$
12
|
|
$
(1,104)
|
Adjustments to
reconcile net income (loss) to net cash provided by (used in)
operating activities:
|
|
|
|
Amortization
|
176
|
|
198
|
Stock-based
compensation
|
36
|
|
44
|
Gain on sale of
investment
|
(22)
|
|
—
|
Impairment of
goodwill
|
—
|
|
594
|
Impairment of
long-lived assets
|
—
|
|
43
|
Debentures fair value
adjustment
|
(212)
|
|
372
|
Operating
leases
|
(16)
|
|
(4)
|
Other
|
(3)
|
|
(5)
|
Net changes in
working capital items
|
|
|
|
Accounts receivable,
net of allowance
|
44
|
|
29
|
Other
receivables
|
—
|
|
(11)
|
Income taxes
receivable
|
1
|
|
(4)
|
Other
assets
|
15
|
|
55
|
Accounts
payable
|
2
|
|
(11)
|
Accrued
liabilities
|
(16)
|
|
(20)
|
Income taxes
payable
|
5
|
|
(15)
|
Deferred
revenue
|
(50)
|
|
(79)
|
Net cash provided
by (used in) operating activities
|
(28)
|
|
82
|
Cash flows from
investing activities
|
|
|
|
Acquisition of
long-term investments
|
(1)
|
|
(5)
|
Proceeds on sale,
maturity or distribution from long-term investments
|
35
|
|
—
|
Acquisition of
property, plant and equipment
|
(8)
|
|
(8)
|
Acquisition of
intangible assets
|
(31)
|
|
(36)
|
Acquisition of
short-term investments
|
(916)
|
|
(1,039)
|
Acquisition of
restricted short-term investments
|
—
|
|
(24)
|
Proceeds on sale or
maturity of restricted short-term investments
|
24
|
|
—
|
Proceeds on sale or
maturity of short-term investments
|
1,104
|
|
1,047
|
Net cash provided
by (used in) investing activities
|
207
|
|
(65)
|
Cash flows from
financing activities
|
|
|
|
Issuance of common
shares
|
10
|
|
19
|
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
|
10
|
|
(227)
|
Effect of foreign
exchange gain (loss) on cash, cash equivalents, restricted cash,
and restricted
cash equivalents
|
(1)
|
|
2
|
Net increase
(decrease) in cash, cash equivalents, restricted cash, and
restricted cash equivalents
during the period
|
188
|
|
(208)
|
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
|
$
406
|
|
$
218
|
|
|
As
at
|
February 28,
2022
|
|
February 28,
2021
|
Cash and cash
equivalents
|
$
378
|
|
$
214
|
Restricted cash
equivalents and restricted short-term investments
|
28
|
|
28
|
Short-term
investments
|
334
|
|
525
|
Long-term
investments
|
30
|
|
37
|
|
$
770
|
|
$
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 February 28,
2022 and February 28,
2021. 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
|
|
February
28,
|
|
February
28,
|
|
February
28,
|
|
February
28,
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Segment
revenue
|
$
122
|
|
$
122
|
|
$
52
|
|
$
38
|
|
$
11
|
|
$
50
|
|
$
185
|
|
$
210
|
Segment cost of
sales
|
47
|
|
46
|
|
8
|
|
5
|
|
5
|
|
6
|
|
60
|
|
57
|
Segment gross
margin
|
$
75
|
|
$
76
|
|
$
44
|
|
$
33
|
|
$
6
|
|
$
44
|
|
$
125
|
|
$
153
|
Segment gross margin
%
|
61 %
|
|
62 %
|
|
85 %
|
|
87 %
|
|
55 %
|
|
88 %
|
|
68 %
|
|
73 %
|
The following table reconciles the Company's segment results for
the three months ended February 28,
2022 to consolidated U.S. GAAP results:
|
For the Three Months
Ended February 28, 2022
|
|
(in millions)
(unaudited)
|
|
Cybersecurity
|
|
IoT
|
Licensing and
Other
|
Segment
Totals
|
|
Reconciling
Items
|
|
Consolidated
U.S. GAAP
|
Revenue
|
$
122
|
|
$
52
|
|
$
11
|
|
$
185
|
|
$
—
|
|
$
185
|
Cost of sales
(1)
|
47
|
|
8
|
|
5
|
|
60
|
|
1
|
|
61
|
Gross
margin
|
$
75
|
|
$
44
|
|
$
6
|
|
$
125
|
|
$
(1)
|
|
$
124
|
Operating
expenses
|
|
|
|
|
|
|
|
|
(22)
|
|
(22)
|
Investment loss,
net
|
|
|
|
|
|
|
|
|
1
|
|
1
|
Income before income
taxes
|
|
|
|
|
|
|
|
|
|
|
$
145
|
______________________________
(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 February 28, 2022.
|
The following table reconciles the Company's segment results for
the three months ended February 28,
2021 to consolidated U.S. GAAP results:
|
For the Three Months
Ended February 28, 2021
|
|
(in millions)
(unaudited)
|
|
Cybersecurity
|
|
IoT
|
Licensing and
Other
|
Segment
Totals
|
|
Reconciling
Items
|
|
Consolidated
U.S. GAAP
|
Revenue
|
$
122
|
|
$
38
|
|
$
50
|
|
$
210
|
|
$
—
|
|
$
210
|
Cost of sales
(1)
|
46
|
|
5
|
|
6
|
|
57
|
|
1
|
|
58
|
Gross
margin
|
$
76
|
|
$
33
|
|
$
44
|
|
$
153
|
|
$
(1)
|
|
$
152
|
Operating
expenses
|
|
|
|
|
|
|
|
|
465
|
|
465
|
Loss before income
taxes
|
|
|
|
|
|
|
|
|
|
|
$
(313)
|
______________________________
(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 February 28, 2021.
|
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. In the first quarter of
fiscal 2022, the Company discontinued its use of software deferred
revenue acquired and software deferred commission expense 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 months ended and year ended February
28, 2021 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 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.
Reconciliation of non-GAAP based measures with most
directly comparable U.S. GAAP based measures for the three months
ended February 28, 2022 and
February 28, 2021
A reconciliation of the most directly comparable U.S. GAAP
financial measures for the three months ended February 28, 2022 and February 28, 2021 to adjusted financial measures
is reflected in the table below:
For the Three
Months Ended (in millions)
|
|
February 28,
2022
|
|
February 28,
2021
|
Gross
margin
|
|
$
124
|
|
$
152
|
Stock compensation
expense
|
|
1
|
|
1
|
Adjusted gross
margin
|
|
$
125
|
|
$
153
|
|
|
|
|
|
Gross margin
%
|
|
67.0 %
|
|
72.4 %
|
Stock compensation
expense
|
|
0.6 %
|
|
0.5 %
|
Adjusted gross
margin %
|
|
67.6 %
|
|
72.9 %
|
Reconciliation of U.S. GAAP operating expense (income) for the
three months ended February 28, 2022
and February 28, 2021 to adjusted
operating expense is reflected in the table below:
For the Three
Months Ended (in millions)
|
|
February 28,
2022
|
|
February 28,
2021
|
Operating expense
(income)
|
|
$
(22)
|
|
$
465
|
Stock compensation
expense
|
|
4
|
|
16
|
Debentures fair value
adjustment
|
|
(165)
|
|
258
|
Acquired intangibles
amortization
|
|
22
|
|
32
|
LLA impairment
charge
|
|
—
|
|
22
|
Adjusted operating
expense
|
|
$
117
|
|
$
137
|
Reconciliation of U.S. GAAP net income (loss) and U.S. GAAP
basic earnings (loss) per share for the three months ended
February 28, 2022 and February 28, 2021 to adjusted net income and
adjusted basic earnings per share is reflected in the table
below:
For the Three
Months Ended (in millions, except per share amounts)
|
|
February 28,
2022
|
|
February 28,
2021
|
|
|
|
|
Basic
earnings
per
share
|
|
|
|
Basic
earnings
(loss)
per
share
|
Net income
(loss)
|
|
$
144
|
|
$0.25
|
|
$
(315)
|
|
$(0.56)
|
Stock compensation
expense
|
|
5
|
|
|
|
17
|
|
|
Debentures fair value
adjustment
|
|
(165)
|
|
|
|
258
|
|
|
Acquired intangibles
amortization
|
|
22
|
|
|
|
32
|
|
|
LLA impairment
charge
|
|
—
|
|
|
|
22
|
|
|
Adjusted net
income
|
|
$
6
|
|
$0.01
|
|
$
14
|
|
$0.02
|
Reconciliation of U.S. GAAP research and development, selling,
marketing and administration, and amortization expense for the
three months ended February 28, 2022
and February 28, 2021 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)
|
|
February 28,
2022
|
|
February 28,
2021
|
Research and
development
|
|
$
47
|
|
$
48
|
Stock compensation
expense
|
|
2
|
|
3
|
Adjusted research
and development
|
|
$
45
|
|
$
45
|
|
|
|
|
|
Selling, marketing
and administration
|
|
$
64
|
|
$
92
|
Stock compensation
expense
|
|
2
|
|
13
|
Adjusted selling,
marketing and administration
|
|
$
62
|
|
$
79
|
|
|
|
|
|
Amortization
|
|
$
32
|
|
$
45
|
Acquired intangibles
amortization
|
|
22
|
|
32
|
Adjusted
amortization
|
|
$
10
|
|
$
13
|
Adjusted operating income, adjusted EBITDA, adjusted operating
income margin percentage and adjusted EBITDA margin percentage for
the three months ended February 28,
2022 and February 28, 2021 are
reflected in the table below. These are non-GAAP financial measures
and non-GAAP ratios that do not have any standardized meaning as
prescribed by U.S. GAAP and are therefore unlikely to be comparable
to similar measures presented by other companies.
For the Three
Months Ended (in millions)
|
|
February 28,
2022
|
|
February 28,
2021
|
Operating income
(loss)
|
|
$
146
|
|
$
(313)
|
Non-GAAP adjustments
to operating income (loss)
|
|
|
|
|
Stock compensation
expense
|
|
5
|
|
17
|
Debentures fair value
adjustment
|
|
(165)
|
|
258
|
Acquired intangibles
amortization
|
|
22
|
|
32
|
LLA impairment
charge
|
|
—
|
|
22
|
Total non-GAAP
adjustments to operating income (loss)
|
|
(138)
|
|
329
|
Adjusted operating
income
|
|
8
|
|
16
|
Amortization
|
|
34
|
|
49
|
Acquired intangibles
amortization
|
|
(22)
|
|
(32)
|
Adjusted
EBITDA
|
|
$
20
|
|
$
33
|
|
|
|
|
|
Revenue
|
|
$
185
|
|
$
210
|
Adjusted operating
income margin % (1)
|
|
4%
|
|
8%
|
Adjusted EBITDA
margin % (2)
|
|
11%
|
|
16%
|
______________________________
(1)
|
Adjusted operating
income margin % is calculated by dividing adjusted operating income
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 years ended
February 28, 2022 and February 28, 2021
A reconciliation of the most directly comparable U.S. GAAP
financial measures for the years ended February 28, 2022 and February 28, 2021 to adjusted financial measures
is reflected in the table below:
For the Fiscal
Years Ended (in millions)
|
|
February 28,
2022
|
|
February 28,
2021
|
Gross
margin
|
|
$
467
|
|
$
643
|
Stock compensation
expense
|
|
4
|
|
5
|
Adjusted gross
margin
|
|
$
471
|
|
$
648
|
|
|
|
|
|
Gross margin
%
|
|
65.0 %
|
|
72.0 %
|
Stock compensation
expense
|
|
0.6 %
|
|
0.6 %
|
Adjusted gross
margin %
|
|
65.6 %
|
|
72.6 %
|
|
|
|
|
|
Operating
expense
|
|
$
469
|
|
$
1,750
|
Restructuring
charges
|
|
—
|
|
2
|
Stock compensation
expense
|
|
26
|
|
47
|
Debentures fair value
adjustment
|
|
(212)
|
|
372
|
Acquired intangibles
amortization
|
|
115
|
|
129
|
Goodwill impairment
charge
|
|
—
|
|
594
|
LLA impairment
charge
|
|
—
|
|
43
|
Adjusted operating
expense
|
|
$
540
|
|
$
563
|
Reconciliation of U.S. GAAP net income (loss) and U.S. GAAP
basic earnings (loss) per share for the years ended February 28, 2022 and February 28, 2021 to adjusted net income (loss)
and adjusted basic earnings (loss) per share is reflected in the
table below:
For the Fiscal
Years Ended (in millions, except per share amounts)
|
|
February 28,
2022
|
|
February 28,
2021
|
|
|
|
|
Basic
earnings
(loss)
per share
|
|
|
|
Basic
earnings
(loss)
per share
|
Net income
(loss)
|
|
$
12
|
|
$0.02
|
|
$
(1,104)
|
|
$(1.97)
|
Restructuring
charges
|
|
—
|
|
|
|
2
|
|
|
Stock compensation
expense
|
|
30
|
|
|
|
52
|
|
|
Debentures fair value
adjustment
|
|
(212)
|
|
|
|
372
|
|
|
Acquired intangibles
amortization
|
|
115
|
|
|
|
129
|
|
|
Goodwill impairment
charge
|
|
—
|
|
|
|
594
|
|
|
LLA impairment
charge
|
|
—
|
|
|
|
43
|
|
|
Adjusted net
income (loss)
|
|
$
(55)
|
|
$(0.10)
|
|
$
88
|
|
$0.16
|
Reconciliation of U.S. GAAP research and development, selling,
marketing and administration, and amortization expense for the
years ended February 28, 2022 and
February 28, 2021 to adjusted
research and development, selling, marketing and administration,
and amortization expense is reflected in the table below:
For the Fiscal
Years Ended (in millions)
|
|
February 28,
2022
|
|
February 28,
2021
|
Research and
development
|
|
$
219
|
|
$
215
|
Stock compensation
expense
|
|
8
|
|
11
|
Adjusted research
and development
|
|
$
211
|
|
$
204
|
|
|
|
|
|
Selling, marketing
and administration
|
|
$
297
|
|
$
344
|
Restructuring
charges
|
|
—
|
|
2
|
Stock compensation
expense
|
|
18
|
|
36
|
Adjusted selling,
marketing and administration
|
|
$
279
|
|
$
306
|
|
|
|
|
|
Amortization
|
|
$
165
|
|
$
182
|
Acquired intangibles
amortization
|
|
115
|
|
129
|
Adjusted
amortization
|
|
$
50
|
|
$
53
|
Adjusted operating income (loss), adjusted EBITDA, adjusted
operating income (loss) margin percentage and adjusted EBITDA
margin percentage for the years ended February 28, 2022 and February 28, 2021 are reflected in the table
below.
For the Fiscal
Years Ended (in millions)
|
|
February 28,
2022
|
|
February 28,
2021
|
Operating
loss
|
|
$
(2)
|
|
$
(1,107)
|
Non-GAAP adjustments
to operating loss
|
|
|
|
|
Restructuring
charges
|
|
—
|
|
2
|
Stock compensation
expense
|
|
30
|
|
52
|
Debentures fair value
adjustment
|
|
(212)
|
|
372
|
Acquired intangibles
amortization
|
|
115
|
|
129
|
Goodwill impairment
charge
|
|
—
|
|
594
|
LLA impairment
charge
|
|
—
|
|
43
|
Total non-GAAP
adjustments to operating loss
|
|
(67)
|
|
1,192
|
Adjusted operating
income (loss)
|
|
(69)
|
|
85
|
Amortization
|
|
176
|
|
198
|
Acquired intangibles
amortization
|
|
(115)
|
|
(129)
|
Adjusted
EBITDA
|
|
$
(8)
|
|
$
154
|
|
|
|
|
|
Revenue
|
|
$
718
|
|
$
893
|
Adjusted operating
income (loss) margin % (1)
|
|
(10%)
|
|
10%
|
Adjusted EBITDA
margin % (2)
|
|
(1%)
|
|
17%
|
______________________________
(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 when assessing its sources of
liquidity, capital resources, and quality of earnings. The Company
believes that free cash flow 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 provided by operating
activities for the three months ended February 28, 2022 and February 28, 2021 to free cash flow is reflected
in the table below:
For the Three
Months Ended (in millions)
|
|
February 28,
2022
|
|
February 28,
2021
|
Net cash provided
by operating activities
|
|
$
10
|
|
$
51
|
Acquisition of
property, plant and equipment
|
|
(2)
|
|
(3)
|
Free cash
flow
|
|
$
8
|
|
$
48
|
Reconciliation of U.S. GAAP net cash provided by (used in)
operating activities for the years ended February 28, 2022 and February 28, 2021 to free cash flow (usage) is
reflected in the table below:
For the Fiscal
Years Ended (in millions)
|
|
February 28,
2022
|
|
February 28,
2021
|
Net cash provided
by (used in) operating activities
|
|
$
(28)
|
|
$
82
|
Acquisition of
property, plant and equipment
|
|
(8)
|
|
(8)
|
Free cash flow
(usage)
|
|
$
(36)
|
|
$
74
|
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)
|
|
February 28,
2022
|
Annual Recurring
Revenue
|
|
|
Cybersecurity
|
|
$
347
|
IoT
|
|
$
93
|
Dollar-Based Net
Retention Rate
|
|
|
Cybersecurity
|
|
91 %
|
Recurring Software
Product Revenue
|
|
~ 80 %
|
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SOURCE BlackBerry Limited