Delivers year-over-year revenue growth for both IoT and
Cybersecurity business units
First Quarter Fiscal 2023:
- Total company revenue of $168
million.
- IoT revenue of $51
million.
- Cybersecurity revenue of $113
million.
- Licensing & Other revenue of $4
million.
- Net cash used by operations of $42
million.
- Non-GAAP basic loss per share of $0.05, GAAP basic loss per share of $0.31, primarily driven by a one-time litigation
settlement of $165 million.
WATERLOO, ON, June 23,
2022 /CNW/ -- BlackBerry Limited (NYSE: BB; TSX:
BB) today reported financial results for the three months ended
May 31, 2022 (all figures in U.S.
dollars and U.S. GAAP, except where otherwise indicated).
"BlackBerry entered fiscal year 2023 with solid momentum, and
this quarter we continued to execute well. At our recent
Analyst Day, we outlined our 3 and 5-year financial goals for the
business. Our performance demonstrates that our operational
plans to achieve those goals are starting to deliver results," said
John Chen, Executive Chairman &
CEO, BlackBerry. "The IoT business maintained its momentum of new
design wins in rapidly growing core Auto domains, including
Advanced Driver Assistance Systems and Digital Cockpits, and
delivered a third consecutive record quarter for pre-production
revenues. The Cybersecurity business demonstrated solid traction in
the market by recording double-digit year-over-year billings
growth. Given its exciting market opportunities, and synergies as
the two markets continue to converge, the Company is
well-positioned to invest and drive growth."
First Quarter Fiscal 2023 Financial Highlights
- Total company revenue was $168
million.
- Total company non-GAAP gross margin was 63% and GAAP gross
margin was 62%.
- IoT revenue was $51 million, a
19% increase year-over-year, with gross margin of 84% and ARR of
$94 million, while royalty revenue
backlog increased by 14% year-over-year to approximately
$560 million.
- Cybersecurity revenue was $113
million, a 6% increase year-over-year, with gross margin of
53% and ARR of $334 million.
- Software and Services revenue in total was $164 million, a 9% increase year-over-year.
- Licensing and Other revenue was $4
million, with gross margin of 50%.
- Non-GAAP operating loss was $27
million. GAAP operating loss was $177 million, mainly driven by a one-time
litigation settlement of $165
million.
- Total cash, cash equivalents, short-term and long-term
investments were $721 million.
- Total net cash position was $356
million.
- Net cash used operating activities was $42 million.
Business Highlights & Strategic Announcements
IoT:
- BICV selects BlackBerry to power an intelligent Digital
Cockpit, featuring augmented reality, artificial intelligence, and
hologram functions for new Renault Jiangling all-electric
sedan
- BlackBerry and BiTECH jointly develop a digital LCD instrument
cluster for Changan's next-generation high-end UNI-V Coupe
- BlackBerry and Magna entered a multi-year agreement to
collaborate on next-generation Advanced Driver Assistance System
(ADAS) solutions for global automakers
- Strategy Analytics, a leading independent research firm, has
determined that BlackBerry® QNX® software is now embedded in over
215 million vehicles, increasing from over 195 million cars last
year
- BlackBerry strengthens QNX® Advanced Virtualization Framework
for Android Automotive OS to simplify and accelerate building IVI
systems on the QNX® Hypervisor
- BlackBerry QNX® OS for Safety 2.2 is to be certified to the
highest level of functional safety for the rail industry and the
QNX® Hypervisor 2.2 is recognized with the highest functional
safety standard for medical device software
Cybersecurity:
- BlackBerry adds zero-day phishing detection and domain
classification to CylanceGATEWAY™, its Zero Trust Network Access
solution that enables VPN replacement by offering secure access
from any device, on any network, to any application
- BlackBerry partners with Midis Group, a leading technology
company, to drive growth in Eastern
Europe, the Middle East,
and Africa
- BlackBerry enhances its Managed Security Service Provider
(MSSP) channel program, including an expansion of the range of
products available, increased partner support and more
comprehensive training
- IDC names BlackBerry® UEM a Leader in Overall UEM in their 2022
Vendor Assessments, highlighting BlackBerry's wide range of
government and industry certifications around security and
compliance
- BlackBerry and Google launch Chrome Enterprise Management with
BlackBerry UEM to support the growing number of devices running
Google Chrome OS and Chrome browser
- BlackBerry and NXP join forces to help companies prepare for,
and prevent, Y2Q post-quantum cyber attacks
Outlook
BlackBerry will discuss its fiscal year 2023 and longer-term
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) 400-4403 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 215M 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, 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
|
|
May 31, 2022
|
|
February 28, 2022
|
|
May 31, 2021
|
Revenue
|
$
168
|
|
$
185
|
|
$
174
|
Cost of sales
|
64
|
|
61
|
|
60
|
Gross margin
|
104
|
|
124
|
|
114
|
Gross margin %
|
61.9 %
|
|
67.0 %
|
|
65.5 %
|
Operating expenses
|
|
|
|
|
|
Research and
development
|
53
|
|
47
|
|
57
|
Selling, marketing and
administration
|
82
|
|
64
|
|
73
|
Amortization
|
27
|
|
32
|
|
46
|
Debentures fair value
adjustment
|
(46)
|
|
(165)
|
|
(4)
|
Litigation
settlement
|
165
|
|
—
|
|
—
|
|
281
|
|
(22)
|
|
172
|
Operating income (loss)
|
(177)
|
|
146
|
|
(58)
|
Investment loss,
net
|
(1)
|
|
(1)
|
|
(2)
|
Income (loss) before income
taxes
|
(178)
|
|
145
|
|
(60)
|
Provision for income taxes
|
3
|
|
1
|
|
2
|
Net income (loss)
|
$
(181)
|
|
$
144
|
|
$
(62)
|
Earnings (loss) per share
|
|
|
|
|
|
Basic
|
$
(0.31)
|
|
$
0.25
|
|
$
(0.11)
|
Diluted
|
$
(0.35)
|
|
$
(0.03)
|
|
$
(0.11)
|
|
|
|
|
|
|
Weighted-average number
of common shares outstanding (000s)
|
|
|
|
|
|
Basic
|
576,877
|
|
575,883
|
|
567,358
|
Diluted
|
637,710
|
|
636,716
|
|
567,358
|
Total common shares
outstanding (000s)
|
577,169
|
|
576,228
|
|
566,248
|
BlackBerry
Limited
Incorporated under the
Laws of Ontario
(United States dollars,
in millions) (unaudited)
|
|
Consolidated Balance
Sheets
|
|
|
As at
|
|
|
May 31, 2022
|
|
February 28, 2022
|
Assets
|
|
|
|
|
Current
|
|
|
|
|
Cash and cash
equivalents
|
|
$
391
|
|
$
378
|
Short-term
investments
|
|
272
|
|
334
|
Accounts receivable,
net of allowance of $4 and $4, respectively
|
|
102
|
|
138
|
Other
receivables
|
|
21
|
|
25
|
Income taxes
receivable
|
|
9
|
|
9
|
Other current
assets
|
|
169
|
|
159
|
|
|
964
|
|
1,043
|
Restricted cash and cash
equivalents
|
|
28
|
|
28
|
Long-term investments
|
|
30
|
|
30
|
Other long-term assets
|
|
8
|
|
9
|
Operating lease right-of-use assets,
net
|
|
46
|
|
50
|
Property, plant and equipment,
net
|
|
38
|
|
41
|
Goodwill
|
|
841
|
|
844
|
Intangible assets, net
|
|
505
|
|
522
|
|
|
$
2,460
|
|
$
2,567
|
Liabilities
|
|
|
|
|
Current
|
|
|
|
|
Accounts
payable
|
|
$
14
|
|
$
22
|
Accrued
liabilities
|
|
304
|
|
157
|
Income taxes
payable
|
|
13
|
|
11
|
Deferred revenue,
current
|
|
190
|
|
207
|
|
|
521
|
|
397
|
Deferred revenue, non-current
|
|
32
|
|
37
|
Operating lease liabilities
|
|
60
|
|
66
|
Other long-term liabilities
|
|
3
|
|
4
|
Long-term debentures
|
|
459
|
|
507
|
|
|
1,075
|
|
1,011
|
Shareholders' equity
|
|
|
|
|
Capital stock and additional paid-in
capital
|
|
2,880
|
|
2,869
|
Deficit
|
|
(1,475)
|
|
(1,294)
|
Accumulated other comprehensive
loss
|
|
(20)
|
|
(19)
|
|
|
1,385
|
|
1,556
|
|
|
$
2,460
|
|
$
2,567
|
BlackBerry
Limited
Incorporated under the
Laws of Ontario
(United States dollars,
in millions) (unaudited)
Consolidated
Statements of Cash Flows
|
|
|
Three Months Ended
|
|
May 31, 2022
|
|
May 31, 2021
|
Cash flows from operating
activities
|
|
|
|
Net loss
|
$
(181)
|
|
$
(62)
|
Adjustments to
reconcile net loss to net cash used in operating
activities:
|
|
|
|
Amortization
|
29
|
|
49
|
Stock-based
compensation
|
8
|
|
7
|
Debentures fair value
adjustment
|
(46)
|
|
(4)
|
Operating
leases
|
(3)
|
|
(3)
|
Other
|
—
|
|
(3)
|
Net changes in working
capital items
|
|
|
|
Accounts receivable,
net of allowance
|
36
|
|
29
|
Other
receivables
|
4
|
|
(1)
|
Other
assets
|
(9)
|
|
(6)
|
Accounts
payable
|
(8)
|
|
2
|
Accrued
liabilities
|
148
|
|
(14)
|
Income taxes
payable
|
2
|
|
2
|
Deferred
revenue
|
(22)
|
|
(29)
|
Net cash used in operating
activities
|
(42)
|
|
(33)
|
Cash flows from investing
activities
|
|
|
|
Acquisition of
property, plant and equipment
|
(1)
|
|
(2)
|
Acquisition of
intangible assets
|
(8)
|
|
(6)
|
Acquisition of
short-term investments
|
(164)
|
|
(209)
|
Proceeds on sale or
maturity of restricted short-term investments
|
—
|
|
24
|
Proceeds on sale or
maturity of short-term investments
|
226
|
|
369
|
Net cash provided by investing
activities
|
53
|
|
176
|
Cash flows from financing
activities
|
|
|
|
Issuance of common
shares
|
3
|
|
4
|
Net cash provided by financing
activities
|
3
|
|
4
|
Effect of foreign exchange gain (loss) on cash, cash
equivalents, restricted cash,
and restricted cash equivalents
|
(1)
|
|
3
|
Net increase in cash, cash equivalents, restricted
cash, and restricted cash
equivalents during the period
|
13
|
|
150
|
Cash, cash equivalents, restricted cash, and
restricted cash equivalents,
beginning of period
|
406
|
|
218
|
Cash, cash equivalents, restricted cash, and
restricted cash equivalents, end of
period
|
$
419
|
|
$
368
|
|
As at
|
May 31, 2022
|
|
February 28, 2022
|
Cash and cash
equivalents
|
$
391
|
|
$
378
|
Restricted cash and
cash equivalents
|
28
|
|
28
|
Short-term
investments
|
272
|
|
334
|
Long-term
investments
|
30
|
|
30
|
|
$
721
|
|
$
770
|
Reconciliations of the Company's Segment Results to the
Consolidated Results
The following table shows information by operating segment for
the three months ended May 31, 2022
and May 31, 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
|
|
May 31,
|
|
May 31,
|
|
May 31,
|
|
May 31,
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Segment
revenue
|
$
113
|
|
$
107
|
|
$
51
|
|
$
43
|
|
$
4
|
|
$
24
|
|
$
168
|
|
$
174
|
Segment cost of
sales
|
53
|
|
46
|
|
8
|
|
7
|
|
2
|
|
6
|
|
63
|
|
59
|
Segment gross
margin
|
$
60
|
|
$
61
|
|
$
43
|
|
$
36
|
|
$
2
|
|
$
18
|
|
$
105
|
|
$
115
|
Segment gross margin
%
|
53 %
|
|
57 %
|
|
84 %
|
|
84 %
|
|
50 %
|
|
75 %
|
|
63 %
|
|
66 %
|
The following table reconciles the Company's segment results for
the three months ended May 31, 2022
to consolidated U.S. GAAP results:
|
For the Three Months
Ended May 31, 2022
|
|
(in millions) (unaudited)
|
|
Cybersecurity
|
|
IoT
|
Licensing
and
Other
|
Segment Totals
|
|
Reconciling
Items
|
|
Consolidated
U.S. GAAP
|
Revenue
|
$
113
|
|
$
51
|
|
$
4
|
|
$
168
|
|
$
—
|
|
$
168
|
Cost of
sales
|
53
|
|
8
|
|
2
|
|
63
|
|
1
|
|
64
|
Gross margin
(1)
|
$
60
|
|
$
43
|
|
$
2
|
|
$
105
|
|
$
(1)
|
|
$
104
|
Operating
expenses
|
|
|
|
|
|
|
|
|
281
|
|
281
|
Investment loss,
net
|
|
|
|
|
|
|
|
|
1
|
|
1
|
Loss before income
taxes
|
|
|
|
|
|
|
|
|
|
|
$
(178)
|
______________________________
(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
May 31, 2022.
|
The following table reconciles the Company's segment results for
the three months ended May 31, 2021
to consolidated U.S. GAAP results:
|
For the Three Months
Ended May 31, 2021
|
|
(in millions) (unaudited)
|
|
Cybersecurity
|
|
IoT
|
Licensing
and
Other
|
Segment Totals
|
|
Reconciling
Items
|
|
Consolidated
U.S. GAAP
|
Revenue
|
$
107
|
|
$
43
|
|
$
24
|
|
$
174
|
|
$
—
|
|
$
174
|
Cost of
sales
|
46
|
|
7
|
|
6
|
|
59
|
|
1
|
|
60
|
Gross margin
(1)
|
$
61
|
|
$
36
|
|
$
18
|
|
$
115
|
|
$
(1)
|
|
$
114
|
Operating
expenses
|
|
|
|
|
|
|
|
|
172
|
|
172
|
Investment loss,
net
|
|
|
|
|
|
|
|
|
2
|
|
2
|
Loss before income
taxes
|
|
|
|
|
|
|
|
|
|
|
$
(60)
|
______________________________
(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
May 31, 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.
Readers are cautioned that adjusted gross margin, adjusted gross
margin percentage, adjusted operating expense, adjusted net loss,
adjusted loss per share, adjusted research and development expense,
adjusted selling, marketing and administrative expense, adjusted
amortization expense, adjusted operating loss, adjusted EBITDA,
adjusted operating loss margin percentage, adjusted EBITDA margin
percentage and free cash 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 May 31, 2022 and May 31, 2021
A reconciliation of the most directly comparable U.S. GAAP
financial measures for the three months ended May 31, 2022 and May 31,
2021 to adjusted financial measures is reflected in the
table below:
For the Three Months Ended (in
millions)
|
|
May 31, 2022
|
|
May 31, 2021
|
Gross margin
|
|
$
104
|
|
$
114
|
Stock compensation
expense
|
|
1
|
|
1
|
Adjusted gross margin
|
|
$
105
|
|
$
115
|
|
|
|
|
|
Gross margin %
|
|
61.9 %
|
|
65.5 %
|
Stock compensation
expense
|
|
0.6 %
|
|
0.6 %
|
Adjusted gross margin %
|
|
62.5 %
|
|
66.1 %
|
Reconciliation of U.S. GAAP operating expense for the three
months ended May 31, 2022 and
May 31, 2021 to adjusted operating
expense is reflected in the table below:
For the Three Months Ended (in
millions)
|
|
May 31, 2022
|
|
May 31, 2021
|
Operating expense
|
|
$
281
|
|
$
172
|
Restructuring
charges
|
|
1
|
|
—
|
Stock compensation
expense
|
|
6
|
|
6
|
Debentures fair value
adjustment
|
|
(46)
|
|
(4)
|
Acquired intangibles
amortization
|
|
23
|
|
32
|
Litigation
settlement
|
|
165
|
|
—
|
Adjusted operating expense
|
|
$
132
|
|
$
138
|
Reconciliation of U.S. GAAP net loss and U.S. GAAP basic loss
per share for the three months ended May 31,
2022 and May 31, 2021 to
adjusted net loss and adjusted basic loss per share is reflected in
the table below:
For the Three Months Ended (in millions, except per
share amounts)
|
|
May 31, 2022
|
|
May 31, 2021
|
|
|
|
|
Basic
loss
per share
|
|
|
|
Basic
loss
per share
|
Net loss
|
|
$
(181)
|
|
$(0.31)
|
|
$
(62)
|
|
$(0.11)
|
Restructuring
charges
|
|
1
|
|
|
|
—
|
|
|
Stock compensation
expense
|
|
7
|
|
|
|
7
|
|
|
Debentures fair value
adjustment
|
|
(46)
|
|
|
|
(4)
|
|
|
Acquired intangibles
amortization
|
|
23
|
|
|
|
32
|
|
|
Litigation
settlement
|
|
165
|
|
|
|
—
|
|
|
Adjusted net loss
|
|
$
(31)
|
|
$(0.05)
|
|
$
(27)
|
|
$(0.05)
|
Reconciliation of U.S. GAAP research and development, selling,
marketing and administration, and amortization expense for the
three months ended May 31, 2022 and
May 31, 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)
|
|
May 31, 2022
|
|
May 31, 2021
|
Research and development
|
|
$
53
|
|
$
57
|
Stock compensation
expense
|
|
2
|
|
2
|
Adjusted research and
development
|
|
$
51
|
|
$
55
|
|
|
|
|
|
Selling, marketing and
administration
|
|
$
82
|
|
$
73
|
Restructuring
charges
|
|
1
|
|
—
|
Stock compensation
expense
|
|
4
|
|
4
|
Adjusted selling, marketing and
administration
|
|
$
77
|
|
$
69
|
|
|
|
|
|
Amortization
|
|
$
27
|
|
$
46
|
Acquired intangibles
amortization
|
|
23
|
|
32
|
Adjusted amortization
|
|
$
4
|
|
$
14
|
Adjusted operating loss, adjusted EBITDA, adjusted operating
loss margin percentage and adjusted EBITDA margin percentage for
the three months ended May 31, 2022
and May 31, 2021 are reflected in the
table below.
For the Three Months Ended (in
millions)
|
|
May 31, 2022
|
|
May 31, 2021
|
Operating loss
|
|
$
(177)
|
|
$
(58)
|
Non-GAAP adjustments to
operating loss
|
|
|
|
|
Restructuring
charges
|
|
1
|
|
—
|
Stock compensation
expense
|
|
7
|
|
7
|
Debentures fair value
adjustment
|
|
(46)
|
|
(4)
|
Acquired intangibles
amortization
|
|
23
|
|
32
|
Litigation
settlement
|
|
165
|
|
—
|
Total non-GAAP
adjustments to operating loss
|
|
150
|
|
35
|
Adjusted operating loss
|
|
(27)
|
|
(23)
|
Amortization
|
|
29
|
|
49
|
Acquired intangibles
amortization
|
|
(23)
|
|
(32)
|
Adjusted EBITDA
|
|
$
(21)
|
|
$
(6)
|
|
|
|
|
|
Revenue
|
|
$
168
|
|
$
174
|
Adjusted operating loss margin %
(1)
|
|
(16 %)
|
|
(13 %)
|
Adjusted EBITDA margin %
(2)
|
|
(13 %)
|
|
(3 %)
|
______________________________
(1) Adjusted
operating loss margin % is calculated by dividing adjusted
operating 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 May
31, 2022 and May 31, 2021 to
free cash usage is reflected in the table below:
For the Three Months Ended (in
millions)
|
|
May 31, 2022
|
|
May 31, 2021
|
Net cash used in operating
activities
|
|
$
(42)
|
|
$
(33)
|
Acquisition of
property, plant and equipment
|
|
(1)
|
|
(2)
|
Free cash usage
|
|
$
(43)
|
|
$
(35)
|
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"), QNX royalty
revenue backlog, 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)
|
|
May 31, 2022
|
Annual Recurring Revenue
|
|
|
Cybersecurity
|
|
$
334
|
IoT
|
|
$
94
|
Dollar-Based Net Retention Rate
|
|
|
Cybersecurity
|
|
88 %
|
QNX Royalty Revenue Backlog
|
|
$
560
|
Cybersecurity Total Contract Value
Billings
|
|
$
89
|
Recurring Software Product
Revenue
|
|
~ 80%
|
|
|
|
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SOURCE BlackBerry Limited