Fiscal Year 2020
- Total company non-GAAP revenue of $1,099 million, or 20% growth year-over-year;
total company GAAP revenue of $1,040
million, or 15% growth year-over-year.
- Total non-GAAP Software and Services revenue of
$1,078 million, or 26% growth
year-over-year; total GAAP Software and Service revenue of
$1,019 million, or 21% growth
year-over-year.
- Fiscal year 2020 total Software and Services billings grew
by a double-digit percentage year-over-year.
- Fiscal year 2020 non-GAAP earnings per basic and diluted
share of $0.13, above the
$0.08 provided in the financial
outlook for fiscal year 2020. Fiscal year 2020 GAAP loss per
basic share of $0.27 and GAAP loss
per diluted share of $0.32.
- Net cash provided by operating activities of $26 million and capital expenditures of
$12 million resulted in free cash
flow generated of $14
million.
Fourth Quarter Fiscal 2020
- Total company non-GAAP revenue of $291 million, or 13% growth year-over-year; total
company GAAP revenue of $282 million,
or 11% growth year-over-year.
- Total non-GAAP Software and Services revenue of
$287 million, or 16% growth
year-over-year; total GAAP Software and Services revenue of
$278 million, or 13% growth
year-over-year; both are record quarterly highs.
- Non-GAAP earnings per basic and diluted share of
$0.09; GAAP loss per basic and
diluted share of $0.07.
- Net cash provided by operating activities of $35 million and capital expenditures of
$3 million, resulted in free cash
flow generated of $32
million.
WATERLOO, Ontario, March 31, 2020 /CNW/ -- BlackBerry Limited (NYSE:
BB; TSX: BB) today reported financial results for the three months
and the twelve months ended February 29,
2020 (all figures in U.S. dollars and U.S. GAAP, except
where otherwise indicated).
Fourth Quarter Fiscal 2020 Results
- Total company non-GAAP revenue for the fourth quarter of fiscal
2020 was $291 million, up 13%
year-over-year. Total company GAAP revenue for the fourth quarter
of fiscal 2020 was $282 million, up
11% year-over-year. Total non-GAAP software and services revenue of
$287 million, up 16% year-over-year.
Total GAAP software and services revenue was $278 million, up 13% year-over-year. Fourth
quarter recurring non-GAAP software and services revenue (excluding
IP licensing and professional services) was over 90%. Non-GAAP
gross margin was 77% and GAAP gross margin was 75%.
- Non-GAAP operating earnings was $51
million. GAAP operating loss was $41
million. Non-GAAP earnings per share was $0.09 (basic and diluted). GAAP net loss per
share was $0.07 (basic and diluted).
GAAP net loss includes $35 million
for acquired intangibles amortization expense, $27 million in goodwill and long-term asset
impairment charges, $17 million in
stock compensation expense, a charge of $5
million related to the fair value adjustment on the
debentures, and other amounts as summarized in the table
below.
- Total cash, cash equivalents, short-term and long-term
investments was $990 million as of
February 29, 2020. Net cash provided
by operating activities of $35
million and capital expenditures of $3 million resulted in free cash flow generated
of $32 million.
"In fiscal 2020, we delivered $1.1
billion in non-GAAP revenue and $0.13 of non-GAAP earnings per share, released
over 30 new products and made strong progress on developing
BlackBerry's zero-trust architecture as part of the Spark
platform. This is essential for the secure IoT market," said
John Chen, Executive Chairman and
CEO, BlackBerry. "We continue to have the right strategy and
the right products to address the market's expanding security
needs. Although we are going through unprecedented times, we
are excited about our future opportunities for long-term
growth."
Outlook
BlackBerry will provide fiscal year 2021 outlook in connection with
the quarterly earnings announcement on its earnings conference
call. The earnings call transcript will be made available on
our website.
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 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 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 p.m.
ET by dialing 1-800-585-8367 and entering Conference ID
#3146558 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 150M cars on the road today. Based in
Waterloo, Ontario, the company
leverages AI and machine learning to deliver innovative solutions
in the areas of cybersecurity, safety and data privacy solutions,
and is a leader in the areas of endpoint security 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
(519) 888-7465
investor_relations@blackberry.com
Media Contact:
BlackBerry Media Relations
(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 the
anticipated benefits of its strategic initiatives and its
intentions to expand and enhance 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; the outbreak of the COVID-19 coronavirus;
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; 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 revenues
from intellectual property rights; litigation against
BlackBerry; the substantial asset risk faced by BlackBerry,
including the potential for charges related to its long-lived
assets and goodwill; BlackBerry's indebtedness; acquisitions,
divestitures and other business initiatives; BlackBerry's
products and services being dependent upon interoperability with
rapidly changing systems provided by third parties; BlackBerry
being found to have infringed on the intellectual property rights
of others; the use and management of user data and personal
information; network disruptions or other business interruptions;
government regulations applicable to BlackBerry's products and
services, including products containing encryption capabilities;
foreign operations, including fluctuations in foreign currencies;
the failure of BlackBerry's suppliers, subcontractors, channel
partners and representatives to use acceptable ethical business
practices or comply with applicable laws; BlackBerry's ability to
generate revenue and profitability through the licensing of
security software and services or the BlackBerry brand to device
manufacturers; BlackBerry's reliance on third parties to
manufacture and repair its hardware products; fostering an
ecosystem of third-party application developers; regulations
regarding health and safety, hazardous materials usage and conflict
minerals, and to product certification risks; tax provision
changes, the adoption of new tax legislation or exposure to
additional tax liabilities; the fluctuation of BlackBerry's
quarterly revenue and operating results; the volatility of the
market price of BlackBerry's common shares; and adverse economic
and geopolitical 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
|
|
|
|
For the Three
Months Ended
|
|
For the Years
Ended
|
|
|
February 29,
2020
|
|
November 30,
2019
|
|
February 28,
2019
|
|
February 29,
2020
|
|
February 28,
2019
|
Revenue
|
|
$
|
282
|
|
|
$
|
267
|
|
|
$
|
255
|
|
|
$
|
1,040
|
|
|
$
|
904
|
|
Cost of
sales
|
|
70
|
|
|
69
|
|
|
49
|
|
|
277
|
|
|
206
|
|
Gross
margin
|
|
212
|
|
|
198
|
|
|
206
|
|
|
763
|
|
|
698
|
|
Gross margin
%
|
|
75.2
|
%
|
|
74.2
|
%
|
|
80.8
|
%
|
|
73.4
|
%
|
|
77.2
|
%
|
Operating
expenses
|
|
|
|
|
|
|
|
|
|
|
Research and
development
|
|
60
|
|
|
66
|
|
|
52
|
|
|
259
|
|
|
219
|
|
Selling, marketing and
administration
|
|
113
|
|
|
132
|
|
|
110
|
|
|
493
|
|
|
409
|
|
Amortization
|
|
48
|
|
|
49
|
|
|
31
|
|
|
194
|
|
|
136
|
|
Impairment of
long-lived assets
|
|
5
|
|
|
—
|
|
|
—
|
|
|
10
|
|
|
—
|
|
Impairment of
goodwill
|
|
22
|
|
|
—
|
|
|
—
|
|
|
22
|
|
|
—
|
|
Debentures fair value
adjustment
|
|
5
|
|
|
(20)
|
|
|
(6)
|
|
|
(66)
|
|
|
(117)
|
|
Arbitration awards and
settlements, net
|
|
—
|
|
|
—
|
|
|
(9)
|
|
|
—
|
|
|
(9)
|
|
|
|
253
|
|
|
227
|
|
|
178
|
|
|
912
|
|
|
638
|
|
Operating income
(loss)
|
|
(41)
|
|
|
(29)
|
|
|
28
|
|
|
(149)
|
|
|
60
|
|
Investment income
(loss), net
|
|
(1)
|
|
|
(1)
|
|
|
4
|
|
|
1
|
|
|
17
|
|
Income (loss)
before income taxes
|
|
(42)
|
|
|
(30)
|
|
|
32
|
|
|
(148)
|
|
|
77
|
|
Provision for
(recovery of) income taxes
|
|
(1)
|
|
|
2
|
|
|
(19)
|
|
|
4
|
|
|
(16)
|
|
Net income
(loss)
|
|
$
|
(41)
|
|
|
$
|
(32)
|
|
|
$
|
51
|
|
|
$
|
(152)
|
|
|
$
|
93
|
|
Earnings (loss)
per share
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
(0.07)
|
|
|
$
|
(0.06)
|
|
|
$
|
0.09
|
|
|
$
|
(0.27)
|
|
|
$
|
0.17
|
|
Diluted
|
|
$
|
(0.07)
|
|
|
$
|
(0.07)
|
|
|
$
|
0.08
|
|
|
$
|
(0.32)
|
|
|
$
|
0.00
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
number of common shares outstanding (000s)
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
556,668
|
|
|
554,585
|
|
|
547,272
|
|
|
553,861
|
|
|
540,477
|
|
Diluted
|
|
556,668
|
|
|
615,085
|
|
|
615,593
|
|
|
614,361
|
|
|
616,467
|
|
Total common shares
outstanding (000s)
|
|
554,199
|
|
|
552,132
|
|
|
547,358
|
|
|
554,199
|
|
|
547,084
|
|
BlackBerry
Limited
|
Incorporated under
the Laws of Ontario
|
(United States
dollars, in millions) (unaudited)
|
|
Consolidated
Balance Sheets
|
|
|
|
As
at
|
|
|
February 29,
2020
|
|
February 28,
2019
|
Assets
|
|
|
|
|
Current
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
377
|
|
|
$
|
548
|
|
Short-term
investments
|
|
532
|
|
|
368
|
|
Accounts receivable,
net
|
|
215
|
|
|
233
|
|
Other
receivables
|
|
14
|
|
|
19
|
|
Income taxes
receivable
|
|
6
|
|
|
9
|
|
Other current
assets
|
|
52
|
|
|
56
|
|
|
|
1,196
|
|
|
1,233
|
|
Restricted cash
and cash equivalents
|
|
49
|
|
|
34
|
|
Long-term
investments
|
|
32
|
|
|
55
|
|
Other long-term
assets
|
|
65
|
|
|
28
|
|
Deferred income
tax assets
|
|
—
|
|
|
2
|
|
Operating lease
right-of-use assets
|
|
124
|
|
|
—
|
|
Property, plant
and equipment, net
|
|
70
|
|
|
85
|
|
Goodwill
|
|
1,437
|
|
|
1,463
|
|
Intangible assets,
net
|
|
915
|
|
|
1,068
|
|
|
|
$
|
3,888
|
|
|
$
|
3,968
|
|
Liabilities
|
|
|
|
|
Current
|
|
|
|
|
Accounts
payable
|
|
$
|
31
|
|
|
$
|
48
|
|
Accrued
liabilities
|
|
202
|
|
|
192
|
|
Income taxes
payable
|
|
18
|
|
|
17
|
|
Debentures
|
|
606
|
|
|
—
|
|
Deferred revenue,
current
|
|
264
|
|
|
253
|
|
|
|
1,121
|
|
|
510
|
|
Deferred revenue,
non-current
|
|
109
|
|
|
136
|
|
Operating lease
liabilities
|
|
120
|
|
|
—
|
|
Other long-term
liabilities
|
|
9
|
|
|
19
|
|
Long-term
debentures
|
|
—
|
|
|
665
|
|
Deferred income
tax liabilities
|
|
—
|
|
|
2
|
|
|
|
1,359
|
|
|
1,332
|
|
Shareholders'
equity
|
|
|
|
|
Capital stock and
additional paid-in capital
|
|
2,760
|
|
|
2,688
|
|
Deficit
|
|
(198)
|
|
|
(32)
|
|
Accumulated other
comprehensive loss
|
|
(33)
|
|
|
(20)
|
|
|
|
2,529
|
|
|
2,636
|
|
|
|
$
|
3,888
|
|
|
$
|
3,968
|
|
BlackBerry
Limited
|
Incorporated under
the Laws of Ontario
|
(United States
dollars, in millions) (unaudited)
|
|
Consolidated
Statements of Cash Flows
|
|
|
For the Years
Ended
|
|
February 29,
2020
|
|
February 28,
2019
|
Cash flows from
operating activities
|
|
|
|
Net income
(loss)
|
$
|
(152)
|
|
|
$
|
93
|
|
Adjustments to
reconcile net income (loss) to net cash provided by operating
activities:
|
|
|
|
Amortization
|
212
|
|
|
149
|
|
Deferred income
taxes
|
—
|
|
|
(25)
|
|
Stock-based
compensation
|
63
|
|
|
67
|
|
Impairment of
goodwill
|
22
|
|
|
—
|
|
Impairment of
long-lived assets
|
10
|
|
|
—
|
|
Non-cash consideration
received from contracts with customers
|
(8)
|
|
|
(46)
|
|
Debentures fair value
adjustment
|
(66)
|
|
|
(117)
|
|
Other long-term
assets
|
(37)
|
|
|
—
|
|
Other long-term
liabilities
|
2
|
|
|
(12)
|
|
Operating
leases
|
(9)
|
|
|
—
|
|
Other
|
10
|
|
|
6
|
|
Net changes in
working capital items
|
|
|
|
Accounts receivable,
net
|
18
|
|
|
(9)
|
|
Other
receivables
|
5
|
|
|
52
|
|
Income taxes
receivable
|
3
|
|
|
17
|
|
Other
assets
|
2
|
|
|
(1)
|
|
Accounts
payable
|
(17)
|
|
|
(15)
|
|
Accrued
liabilities
|
(15)
|
|
|
(21)
|
|
Income taxes
payable
|
1
|
|
|
(2)
|
|
Deferred
revenue
|
(18)
|
|
|
(36)
|
|
Net cash provided
by operating activities
|
26
|
|
|
100
|
|
Cash flows from
investing activities
|
|
|
|
Acquisition of
long-term investments
|
(1)
|
|
|
(2)
|
|
Proceeds on sale or
maturity of long-term investments
|
19
|
|
|
2
|
|
Acquisition of
property, plant and equipment
|
(12)
|
|
|
(17)
|
|
Proceeds on sale of
property, plant and equipment
|
—
|
|
|
1
|
|
Acquisition of
intangible assets
|
(32)
|
|
|
(32)
|
|
Business
acquisitions, net of cash acquired
|
1
|
|
|
(1,402)
|
|
Acquisition of
short-term investments
|
(1,180)
|
|
|
(2,895)
|
|
Proceeds on sale or
maturity of short-term investments
|
1,017
|
|
|
3,970
|
|
Net cash used in
investing activities
|
(188)
|
|
|
(375)
|
|
Cash flows from
financing activities
|
|
|
|
Issuance of common
shares
|
9
|
|
|
5
|
|
Common shares
repurchased
|
—
|
|
|
—
|
|
Payment of finance
lease liability
|
(2)
|
|
|
—
|
|
Net cash provided
by financing activities
|
7
|
|
|
5
|
|
Effect of foreign
exchange loss on cash, cash equivalents, restricted cash, and
restricted cash equivalents
|
(1)
|
|
|
(3)
|
|
Net decrease in
cash, cash equivalents, restricted cash, and restricted cash
equivalents during the year
|
(156)
|
|
|
(273)
|
|
Cash, cash
equivalents, restricted cash, and restricted cash equivalents,
beginning of year
|
582
|
|
|
855
|
|
Cash, cash
equivalents, restricted cash, and restricted cash equivalents, end
of year
|
$
|
426
|
|
|
$
|
582
|
|
|
|
|
|
As
at
|
February 29,
2020
|
|
February 28,
2019
|
Cash and cash
equivalents
|
$
|
377
|
|
|
$
|
548
|
|
Restricted cash and
cash equivalents
|
$
|
49
|
|
|
$
|
34
|
|
Short-term
investments
|
$
|
532
|
|
|
$
|
368
|
|
Long-term
investments
|
$
|
32
|
|
|
$
|
55
|
|
Reconciliations of Non-GAAP Measures with the Nearest
Comparable 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 the items below from the Company's
financial results. The Company believes that excluding the below
items provides readers of the Company's financial statements with a
more consistent basis for comparison across accounting periods and
is more useful in helping readers understand the Company's
operating results and underlying operational trends.
Readers are cautioned that adjusted revenue, adjusted gross
margin (before taxes), adjusted gross margin percentage (before
taxes), adjusted operating expense, adjusted operating income,
adjusted EBITDA, adjusted operating income 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,
adjusted amortization expense and free cash flow 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 GAAP based measures for the three months ended
February 29, 2020 and February 28, 2019
A reconciliation of the most directly comparable U.S. GAAP
financial measures for the three months ended February 29,
2020 and February 28, 2019 to adjusted financial measures is
reflected in the tables below:
For the Three
Months Ended (in millions) (unaudited)
|
|
February 29,
2020
|
|
February 28,
2019
|
Revenue
|
|
$
|
282
|
|
|
$
|
255
|
|
Software deferred
revenue acquired (1)
|
|
9
|
|
|
2
|
|
Adjusted
revenue
|
|
$
|
291
|
|
|
$
|
257
|
|
|
|
|
|
|
Gross margin
(before taxes)
|
|
$
|
212
|
|
|
$
|
206
|
|
Software deferred
revenue acquired (1)
|
|
9
|
|
|
2
|
|
Restructuring
charges
|
|
—
|
|
|
1
|
|
Stock compensation
expense
|
|
2
|
|
|
1
|
|
Adjusted gross
margin (before taxes)
|
|
$
|
223
|
|
|
$
|
210
|
|
|
|
|
|
|
Gross margin %
(before taxes)
|
|
75.2
|
%
|
|
80.8
|
%
|
Software deferred
revenue acquired (1)
|
|
0.7
|
%
|
|
0.1
|
%
|
Restructuring
charges
|
|
—
|
%
|
|
0.4
|
%
|
Stock compensation
expense
|
|
0.7
|
%
|
|
0.4
|
%
|
Adjusted gross
margin % (before taxes)
|
|
76.6
|
%
|
|
81.7
|
%
|
|
|
|
|
|
Operating
expense
|
|
$
|
253
|
|
|
$
|
178
|
|
Restructuring
charges
|
|
1
|
|
|
2
|
|
Stock compensation
expense
|
|
15
|
|
|
13
|
|
Debenture fair value
adjustment
|
|
5
|
|
|
(6)
|
|
Software deferred
commission expense acquired
|
|
(3)
|
|
|
—
|
|
Acquired intangibles
amortization
|
|
35
|
|
|
18
|
|
Business acquisition
and integration costs
|
|
1
|
|
|
8
|
|
Goodwill impairment
charge
|
|
22
|
|
|
—
|
|
LLA impairment
charge
|
|
5
|
|
|
—
|
|
Arbitration awards and
settlements, net
|
|
—
|
|
|
(9)
|
|
Adjusted operating
expense
|
|
$
|
172
|
|
|
$
|
152
|
|
|
|
|
(1) See
Reconciliation of U.S. GAAP IoT and BlackBerry Cylance revenue to
adjusted IoT and BlackBerry Cylance revenue
|
Reconciliation of GAAP net income (loss) and GAAP basic earnings
per share for the three months ended February 29, 2020
and February 28, 2019 to adjusted net income and
adjusted basic earnings per share is reflected in the tables
below:
For the Three
Months Ended (in millions, except per share amounts)
(unaudited)
|
|
February 29,
2020
|
|
February 28,
2019
|
|
|
|
|
Basic
earnings
per share
|
|
|
|
Basic
earnings
per share
|
Net income
(loss)
|
|
$
|
(41)
|
|
|
$(0.07)
|
|
$
|
51
|
|
|
$0.09
|
Software deferred
revenue acquired
|
|
9
|
|
|
|
|
2
|
|
|
|
Restructuring
charges
|
|
1
|
|
|
|
|
3
|
|
|
|
Stock compensation
expense
|
|
17
|
|
|
|
|
14
|
|
|
|
Debenture fair value
adjustment
|
|
5
|
|
|
|
|
(6)
|
|
|
|
Software deferred
commission expense acquired
|
|
(3)
|
|
|
|
|
—
|
|
|
|
Acquired intangibles
amortization
|
|
35
|
|
|
|
|
18
|
|
|
|
Business acquisition
and integration costs
|
|
1
|
|
|
|
|
8
|
|
|
|
Goodwill impairment
charge
|
|
22
|
|
|
|
|
—
|
|
|
|
LLA impairment
charge
|
|
5
|
|
|
|
|
—
|
|
|
|
Arbitration awards and
settlements, net
|
|
—
|
|
|
|
|
(9)
|
|
|
|
Acquisition valuation
allowance
|
|
—
|
|
|
|
|
(21)
|
|
|
|
Adjusted net
income
|
|
$
|
51
|
|
|
$0.09
|
|
$
|
60
|
|
|
$0.11
|
Reconciliation of U.S GAAP IoT, BlackBerry Cylance and software
and service revenue for the three months ended February 29,
2020 and February 28, 2019 to adjusted IoT, BlackBerry Cylance
and software and service revenue is reflected in the tables
below:
For the Three
Months Ended (in millions) (unaudited)
|
|
February 29,
2020
|
|
February 28,
2019
|
IoT
Revenue
|
|
$
|
127
|
|
|
$
|
144
|
|
Software deferred
revenue acquired
|
|
—
|
|
|
1
|
|
Adjusted IoT
revenue
|
|
$
|
127
|
|
|
$
|
145
|
|
|
|
|
|
|
BlackBerry Cylance
Revenue
|
|
$
|
43
|
|
|
$
|
3
|
|
Software deferred
revenue acquired
|
|
9
|
|
|
1
|
|
Adjusted
BlackBerry Cylance Revenue
|
|
$
|
52
|
|
|
$
|
4
|
|
|
|
|
|
|
Software and
Service revenue
|
|
|
|
|
Revenue
|
|
$
|
282
|
|
|
$
|
255
|
|
Less: Other
revenue
|
|
4
|
|
|
9
|
|
Software and
Service revenue
|
|
$
|
278
|
|
|
$
|
246
|
|
Software deferred
revenue acquired
|
|
9
|
|
|
2
|
|
Adjusted Software
and Service revenue
|
|
$
|
287
|
|
|
$
|
248
|
|
Reconciliation of U.S GAAP research and development, selling,
marketing and administration, and amortization expense for the
three months ended February 29, 2020 and February 28,
2019 to adjusted research and development, selling, marketing and
administration, and amortization expense is reflected in the tables
below:
For the Three
Months Ended (in millions) (unaudited)
|
|
February 29,
2020
|
|
February 28,
2019
|
Research and
development
|
|
$
|
60
|
|
|
$
|
52
|
|
Stock compensation
expense
|
|
3
|
|
|
3
|
|
Adjusted research
and development
|
|
$
|
57
|
|
|
$
|
49
|
|
|
|
|
|
|
Selling, marketing
and administration
|
|
$
|
113
|
|
|
$
|
110
|
|
Restructuring
charges
|
|
1
|
|
|
2
|
|
Software deferred
commission expense acquired
|
|
(3)
|
|
|
—
|
|
Stock compensation
expense
|
|
12
|
|
|
10
|
|
Business acquisition
and integration costs
|
|
1
|
|
|
8
|
|
Adjusted selling,
marketing and administration
|
|
$
|
102
|
|
|
$
|
90
|
|
|
|
|
|
|
Amortization
|
|
$
|
48
|
|
|
$
|
31
|
|
Acquired intangibles
amortization
|
|
35
|
|
|
18
|
|
Adjusted
amortization
|
|
$
|
13
|
|
|
$
|
13
|
|
Reconciliation of selected GAAP-based measures to non-GAAP
based measures for the years ended February 29, 2020 and
February 28, 2019
A reconciliation of the most directly comparable U.S. GAAP
financial measures for the years ended February 29, 2020 and
February 28, 2019 to adjusted financial measures is reflected
in the tables below:
For the Fiscal
Years Ended (in millions) (unaudited)
|
|
February 29,
2020
|
|
February 28,
2019
|
Revenue
|
|
$
|
1,040
|
|
|
$
|
904
|
|
Software deferred
revenue acquired (1)
|
|
59
|
|
|
12
|
|
Adjusted
revenue
|
|
$
|
1,099
|
|
|
$
|
916
|
|
|
|
|
|
|
Gross margin
(before taxes)
|
|
$
|
763
|
|
|
$
|
698
|
|
Software deferred
revenue acquired (1)
|
|
59
|
|
|
12
|
|
Restructuring
charges
|
|
5
|
|
|
2
|
|
Stock compensation
expense
|
|
5
|
|
|
4
|
|
Adjusted gross
margin (before taxes)
|
|
$
|
832
|
|
|
$
|
716
|
|
|
|
|
|
|
Gross margin %
(before taxes)
|
|
73.4
|
%
|
|
77.2
|
%
|
Software deferred
revenue acquired (1)
|
|
1.4
|
%
|
|
0.3
|
%
|
Restructuring
charges
|
|
0.5
|
%
|
|
0.2
|
%
|
Stock compensation
expense
|
|
0.4
|
%
|
|
0.5
|
%
|
Adjusted gross
margin % (before taxes)
|
|
75.7
|
%
|
|
78.2
|
%
|
|
|
|
|
|
Operating
expense
|
|
$
|
912
|
|
|
$
|
638
|
|
Restructuring
charges
|
|
5
|
|
|
9
|
|
Stock compensation
expense
|
|
58
|
|
|
64
|
|
Debenture fair value
adjustment
|
|
(66)
|
|
|
(117)
|
|
Software deferred
commission expense acquired
|
|
(16)
|
|
|
—
|
|
Acquired intangibles
amortization
|
|
141
|
|
|
82
|
|
Business acquisition
and integration costs
|
|
4
|
|
|
12
|
|
Goodwill impairment
charge
|
|
22
|
|
|
—
|
|
LLA impairment
charge
|
|
10
|
|
|
—
|
|
Arbitration awards and
settlements, net
|
|
—
|
|
|
(9)
|
|
Adjusted operating
expense
|
|
$
|
754
|
|
|
$
|
597
|
|
|
|
|
(1) See
Reconciliation of U.S GAAP IoT and BlackBerry Cylance revenue to
adjusted IoT and BlackBerry Cylance revenue
|
Reconciliation of GAAP net income (loss) and GAAP basic earnings
per share for the years ended February 29, 2020 and
February 28, 2019 to the adjusted net income and basic
earnings per share is reflected in the tables below:
For the Fiscal
Years Ended (in millions, except per share amounts)
(unaudited)
|
|
February 29,
2020
|
|
February 28,
2019
|
|
|
|
|
Basic
earnings
per share
|
|
|
|
Basic
earnings
per share
|
Net income
(loss)
|
|
$
|
(152)
|
|
|
$
|
(0.27)
|
|
|
$
|
93
|
|
|
$
|
0.17
|
|
Software deferred
revenue acquired
|
|
59
|
|
|
|
|
12
|
|
|
|
Restructuring
charges
|
|
10
|
|
|
|
|
11
|
|
|
|
Stock compensation
expense
|
|
63
|
|
|
|
|
68
|
|
|
|
Debenture fair value
adjustment
|
|
(66)
|
|
|
|
|
(117)
|
|
|
|
Software deferred
commission expense acquired
|
|
(16)
|
|
|
|
|
—
|
|
|
|
Acquired intangibles
amortization
|
|
141
|
|
|
|
|
82
|
|
|
|
Business acquisition
and integration costs
|
|
4
|
|
|
|
|
12
|
|
|
|
Goodwill impairment
charge
|
|
22
|
|
|
|
|
—
|
|
|
|
LLA impairment
charge
|
|
10
|
|
|
|
|
—
|
|
|
|
Arbitration awards and
settlements, net
|
|
—
|
|
|
|
|
(9)
|
|
|
|
Acquisition valuation
allowance
|
|
(1)
|
|
|
|
|
(21)
|
|
|
|
Adjusted net
income
|
|
$
|
74
|
|
|
$0.13
|
|
$
|
131
|
|
|
$0.24
|
Reconciliation of U.S GAAP IoT, BlackBerry Cylance and software
and service revenue for the years ended February 29, 2020 and
February 28, 2019 to adjusted IoT, BlackBerry Cylance and
software and service revenue is reflected in the tables below:
For the Fiscal
Years Ended (in millions) (unaudited)
|
|
February 29,
2020
|
|
February 28,
2019
|
IoT
Revenue
|
|
$
|
540
|
|
|
$
|
554
|
|
Software deferred
revenue acquired
|
|
2
|
|
|
11
|
|
Adjusted IoT
revenue
|
|
$
|
542
|
|
|
$
|
565
|
|
|
|
|
|
|
BlackBerry Cylance
Revenue
|
|
$
|
151
|
|
|
$
|
5
|
|
Software deferred
revenue acquired
|
|
57
|
|
|
1
|
|
Adjusted
BlackBerry Cylance revenue
|
|
$
|
208
|
|
|
$
|
6
|
|
|
|
|
|
|
Software and
Service revenue
|
|
|
|
|
Revenue
|
|
$
|
1,040
|
|
|
$
|
904
|
|
Less: Other
revenue
|
|
21
|
|
|
59
|
|
Software and
Service revenue
|
|
$
|
1,019
|
|
|
$
|
845
|
|
Software deferred
revenue acquired
|
|
59
|
|
|
12
|
|
Adjusted software
and service revenue
|
|
$
|
1,078
|
|
|
$
|
857
|
|
Reconciliation of U.S GAAP research and development, selling,
marketing and administration, and amortization expense for the
years ended February 29, 2020 and February 28, 2019 to
adjusted research and development, selling, marketing and
administration, and amortization expense is reflected in the tables
below:
For the Fiscal
Years Ended (in millions) (unaudited)
|
|
February 29,
2020
|
|
February 28,
2019
|
Research and
development
|
|
$
|
259
|
|
|
$
|
219
|
|
Restructuring
charges
|
|
—
|
|
|
2
|
|
Stock compensation
expense
|
|
13
|
|
|
12
|
|
Adjusted research
and development
|
|
$
|
246
|
|
|
$
|
205
|
|
|
|
|
|
|
Selling, marketing
and administration
|
|
$
|
493
|
|
|
$
|
409
|
|
Restructuring
charges
|
|
5
|
|
|
7
|
|
Software deferred
commission expense acquired
|
|
(16)
|
|
|
—
|
|
Stock compensation
expense
|
|
45
|
|
|
52
|
|
Business acquisition
and integration costs
|
|
4
|
|
|
12
|
|
Adjusted selling,
marketing and administration
|
|
$
|
455
|
|
|
$
|
338
|
|
|
|
|
|
|
Amortization
|
|
$
|
194
|
|
|
$
|
136
|
|
Acquired intangibles
amortization
|
|
141
|
|
|
82
|
|
Adjusted
amortization
|
|
$
|
53
|
|
|
$
|
54
|
|
Adjusted operating income, adjusted EBITDA, adjusted operating
income margin percentage and adjusted EBITDA margin percentage for
the three months ended February 29, 2020 and February 28,
2019 are reflected in the table below. These are non-GAAP financial
measures 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) (unaudited)
|
|
February 29,
2020
|
|
February 28,
2019
|
Operating income
(loss)
|
|
$
|
(41)
|
|
|
$
|
28
|
|
Non-GAAP adjustments
to operating income (loss)
|
|
|
|
|
Software deferred
revenue acquired
|
|
9
|
|
|
2
|
|
Restructuring
charges
|
|
1
|
|
|
3
|
|
Stock compensation
expense
|
|
17
|
|
|
14
|
|
Debenture fair value
adjustment
|
|
5
|
|
|
(6)
|
|
Software deferred
commission expense acquired
|
|
(3)
|
|
|
—
|
|
Acquired intangibles
amortization
|
|
35
|
|
|
18
|
|
Business acquisition
and integration costs
|
|
1
|
|
|
8
|
|
Goodwill impairment
charge
|
|
22
|
|
|
—
|
|
LLA impairment
charge
|
|
5
|
|
|
—
|
|
Arbitration awards and
settlements, net
|
|
—
|
|
|
(9)
|
|
Total non-GAAP
adjustments to operating loss
|
|
92
|
|
|
30
|
|
Adjusted operating
income
|
|
51
|
|
|
58
|
|
Amortization
|
|
52
|
|
|
33
|
|
Acquired intangibles
amortization
|
|
(35)
|
|
|
(18)
|
|
Adjusted
EBITDA
|
|
$
|
68
|
|
|
$
|
73
|
|
|
|
|
|
|
Adjusted revenue
(per above)
|
|
$
|
291
|
|
|
$
|
257
|
|
Adjusted operating
income margin % (1)
|
|
18
|
%
|
|
23
|
%
|
Adjusted EBITDA
margin % (2)
|
|
23
|
%
|
|
28
|
%
|
|
|
|
(1)
Adjusted operating income margin % is calculated by dividing
adjusted operating income by adjusted revenue
|
(2)
Adjusted EBITDA margin % is calculated by dividing adjusted EBITDA
by adjusted revenue
|
Adjusted operating income, adjusted EBITDA, adjusted operating
income margin percentage and adjusted EBITDA margin percentage for
the fiscal years ended February 29, 2020 and February 28,
2019 are reflected in the table below.
For the Fiscal
Years Ended (in millions) (unaudited)
|
|
February 29,
2020
|
|
February 28,
2019
|
Operating income
(loss)
|
|
$
|
(149)
|
|
|
$
|
60
|
|
Non-GAAP adjustments
to operating income (loss)
|
|
|
|
|
Software deferred
revenue acquired
|
|
59
|
|
|
12
|
|
Restructuring
charges
|
|
10
|
|
|
11
|
|
Stock compensation
expense
|
|
63
|
|
|
68
|
|
Debenture fair value
adjustment
|
|
(66)
|
|
|
(117)
|
|
Software deferred
commission expense acquired
|
|
(16)
|
|
|
—
|
|
Acquired intangibles
amortization
|
|
141
|
|
|
82
|
|
Business acquisition
and integration costs
|
|
4
|
|
|
12
|
|
Goodwill impairment
charge
|
|
22
|
|
|
—
|
|
LLA impairment
charge
|
|
10
|
|
|
—
|
|
Arbitration awards and
settlements, net
|
|
—
|
|
|
(9)
|
|
Total non-GAAP
adjustments to operating income
|
|
227
|
|
|
59
|
|
Adjusted operating
income
|
|
78
|
|
|
119
|
|
Amortization
|
|
212
|
|
|
149
|
|
Acquired intangibles
amortization
|
|
(141)
|
|
|
(82)
|
|
Adjusted
EBITDA
|
|
$
|
149
|
|
|
$
|
186
|
|
|
|
|
|
|
Adjusted revenue
(per above)
|
|
$
|
1,099
|
|
|
$
|
916
|
|
Adjusted operating
income margin % (1)
|
|
7
|
%
|
|
13
|
%
|
Adjusted EBITDA
margin % (2)
|
|
14
|
%
|
|
20
|
%
|
|
|
|
(1)
Adjusted operating income margin % is calculated by dividing
adjusted operating income by adjusted revenue
|
(2)
Adjusted EBITDA margin % is calculated by dividing adjusted EBITDA
by adjusted revenue
|
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SOURCE BlackBerry Limited