Revenue exceeds expectations and Company adds deep
cybersecurity industry experience to drive growth
- Total company revenue of $175
million.
- IoT revenue of $40
million.
- Cyber Security revenue of $120
million.
- Licensing & Other revenue of $15
million.
- Positive operating cash flow of $12
million.
- Non-GAAP loss per basic and diluted share of $0.06; GAAP loss per basic and diluted share of
$0.25. A non-cash accounting
adjustment to the fair value of the convertible debentures, as a
result of market and trading conditions, accounts for approximately
$0.12 of GAAP loss per share.
WATERLOO, ON, Sept. 22, 2021
/CNW/ -- BlackBerry Limited (NYSE: BB; TSX: BB) today reported
financial results for the three months ended August 31, 2021 (all figures in U.S. dollars and
U.S. GAAP, except where otherwise indicated).
"Revenue for all businesses beat expectations this
quarter. The Cyber Security business unit delivered robust
sequential billings and revenue growth and the IoT business unit
performed well in the face of global chip shortage pressures," said
John Chen, Executive Chairman &
CEO, BlackBerry. "We are already seeing benefits from establishing
the two key business units and are delighted to appoint
John Giamatteo as President of Cyber
Security. Giamatteo, who was previously President and Chief
Revenue Officer at McAfee, adds leading industry expertise. In IoT,
design activity for our QNX products remains very strong,
demonstrating both our industry leadership position and secular
trends, such as ECU consolidation. In Cyber Security we received
strong third-party validation of the effectiveness of our
AI-driven, prevention-first suite of products, illustrating
progress made with recent product launches."
Second Quarter Fiscal 2022 Financial Highlights
- Total company revenue for the second quarter of fiscal 2022 was
$175 million.
- Total company non-GAAP gross margin was 65% and GAAP gross
margin was 64%.
- IoT revenue for the second quarter of fiscal 2022 was
$40 million, with gross margin of 83%
and ARR of $89 million.
- Cyber Security revenue for the second quarter of fiscal 2022
was $120 million, with gross margin
of 59% and ARR of $364 million.
- Licensing and Other revenue for the second quarter of fiscal
2022 was $15 million as negotiations
for the sale of a portion of the patent portfolio continue. Gross
margin was 60%.
- Non-GAAP operating loss was $30
million. GAAP operating loss was $141
million, primarily due to a non-cash accounting adjustment
to the fair value of the convertible debentures, resulting from
market and trading conditions, of $67
million.
- Non-GAAP loss per share was $0.06
(basic and diluted). GAAP loss per share was $0.25 (basic and diluted).
- Total cash, cash equivalents, short-term and long-term
investments were $772 million.
- Net cash generated from operating activities was $12 million.
Business Highlights & Strategic Announcements
- BlackBerry has design wins with 24 of the world's leading 25
Electric Vehicle (EV) automakers. This has increased from 23 of the
top 25 last quarter following an EV win with Daimler.
- BlackBerry IVY™ to deliver highly secure vehicle-based
payments, leveraging direct access to vehicle sensor data and edge
processing to create a "digital fingerprint". Delivered through a
partnership with Car IQ.
- Nobo Technologies selects BlackBerry QNX® Neutrino® as
foundation for new Digital Cockpit Controller for Great Wall
Motors' Haval G6S SUV. Great Wall Motors is China's largest producer of SUV vehicles.
- sTraffic, Korea's leading solution developer for transportation
infrastructure systems, selects QNX® OS for Safety as the
foundation for their train traffic management system that includes
unmanned train operations.
- BlackBerry launches BlackBerry® Jarvis 2.0® composition
analysis tool. Delivered as a more user-friendly SaaS offering,
Jarvis 2.0 empowers OEMs to validate and ensure the quality of
their multi-tiered software bill of materials.
- BlackBerry awarded highest AAA rating by SE Labs in breach test
of BlackBerry® Protect (EPP) and BlackBerry® Optics (EDR). The
breach test adopted a range of real-world hacker tactics and
BlackBerry's AI-driven products delivered complete prevention and
detection with zero false positives.
- BlackBerry® UEM integrates with Microsoft 365, delivering
BlackBerry's industry-leading security to Microsoft's productivity
products.
- BlackBerry® AtHoc® critical event management platform used as
foundation for autonomous flood risk and clean water monitoring
solution.
- BlackBerry updates SecuSUITE capabilities to protect group
phone calls and messages for governments and businesses from high
risk eavesdropping.
Appointment of New Cyber Security Business Unit
President
BlackBerry has appointed John Giamatteo as President of the Cyber
Security business unit. With this strategic hire the company
adds significant industry experience. Giamatteo will join the
company on October 4th and report to
Executive Chairman and CEO John
Chen. He will be responsible for business unit
strategy, engineering, and go-to-market.
Giamatteo brings to BlackBerry over 30 years of experience with
technology companies. Most recently he served as President and
Chief Revenue Officer of McAfee, where he was responsible for
sales, marketing, and customer success. During his time with
McAfee, he delivered strong double-digit growth across its
Enterprise, SMB and Consumer businesses as well as significant
margin expansion across the portfolio. Prior to that he
served as Chief Operating Officer at AVG Technologies, a leading
provider of Internet and mobile security. Giamatteo also held
leadership positions with Solera Holdings, RealNetworks, Inc. and
Nortel Network Corporation.
"I'm excited to be joining BlackBerry and to be leading the
Cyber Security business unit. Never has the threat of
cyberattacks been higher, nor more in the minds of management,"
said Giamatteo. "BlackBerry's AI-driven, prevention-first
technology is well placed to scale to meet the constantly evolving
cybersecurity needs of companies everywhere. I'm very
positive about the opportunities that we have as a company."
Tom Eacobacci, BlackBerry's
President and COO, has decided to pursue other opportunities and
will leave the Company on October 29th. BlackBerry thanks Tom
for his hard work and contributions in his time at the Company.
Outlook
BlackBerry will provide fiscal year 2022
outlook in connection with the quarterly earnings announcement on
its earnings conference call. The earnings call transcript will be
made available on our website and on SEDAR.
Use of Non-GAAP Financial Measures
The tables at the
end of this press release include a reconciliation of the non-GAAP
financial measures used by the company to comparable U.S. GAAP
measures and an explanation of why the company uses them.
Conference Call and Webcast
A conference call and live
webcast will be held today beginning at 5:30
p.m. ET, which can be accessed by dialing +1 (877) 682-6267
or by logging on at BlackBerry.com/Investors.
A replay of the conference call will also be available at
approximately 8:30 p.m. ET by dialing
+1 (800) 585-8367 and entering Conference ID #6149337 and at the
link above.
About BlackBerry
BlackBerry (NYSE: BB; TSX: BB)
provides intelligent security software and services to enterprises
and governments around the world. The company secures more than
500M endpoints including more than
195M vehicles. Based in
Waterloo, Ontario, the company
leverages AI and machine learning to deliver innovative solutions
in the areas of cybersecurity, safety and data privacy, and is a
leader in the areas of endpoint security, endpoint management,
encryption, and embedded systems. BlackBerry's vision is
clear - to secure a connected future you can trust.
BlackBerry. Intelligent Security. Everywhere.
For more information, visit BlackBerry.com and follow
@BlackBerry.
Investor Contact:
BlackBerry Investor Relations
+1 (519) 888-7465
investor_relations@blackberry.com
Media Contact:
BlackBerry Media Relations
+1 (519) 597-7273
mediarelations@blackberry.com
This news release contains forward-looking statements within the
meaning of certain securities laws, including under the U.S.
Private Securities Litigation Reform Act of 1995 and applicable
Canadian securities laws, including statements regarding
BlackBerry's plans, strategies and objectives including its
expectations with respect to increasing and enhancing its product
and service offerings.
The words "expect", "anticipate", "estimate", "may", "will",
"should", "could", "intend", "believe", "target", "plan" and
similar expressions are intended to identify these forward-looking
statements. Forward-looking statements are based on estimates and
assumptions made by BlackBerry in light of its experience and its
perception of historical trends, current conditions and expected
future developments, as well as other factors that BlackBerry
believes are appropriate in the circumstances, including but not
limited to, BlackBerry's expectations regarding its business,
strategy, opportunities and prospects, the launch of new products
and services, general economic conditions, the ongoing COVID-19
pandemic, competition, and BlackBerry's expectations regarding its
financial performance. Many factors could cause BlackBerry's
actual results, performance or achievements to differ materially
from those expressed or implied by the forward-looking statements,
including, without limitation, risks related to the following
factors: BlackBerry's ability to enhance, develop, introduce or
monetize products and services for the enterprise market in a
timely manner with competitive pricing, features and performance;
BlackBerry's ability to maintain or expand its customer base for
its software and services offerings to grow revenue or achieve
sustained profitability; the intense competition faced by
BlackBerry; the occurrence or perception of a breach of
BlackBerry's network cybersecurity measures, or an inappropriate
disclosure of confidential or personal information; the failure or
perceived failure of BlackBerry's solutions to detect or prevent
security vulnerabilities; the impact of the COVID-19 pandemic;
BlackBerry's continuing ability to attract new personnel, retain
existing key personnel and manage its staffing effectively;
BlackBerry's dependence on its relationships with resellers and
channel partners; litigation against BlackBerry; network
disruptions or other business interruptions; BlackBerry's ability
to foster an ecosystem of third-party application developers;
BlackBerry's products and services being dependent upon
interoperability with rapidly changing systems provided by third
parties; BlackBerry's ability to obtain rights to use third-party
software and its use of open source software; failure to protect
BlackBerry's intellectual property and to earn expected revenues
from intellectual property rights; BlackBerry being found to have
infringed on the intellectual property rights of others; the
substantial asset risk faced by BlackBerry, including the potential
for charges related to its long-lived assets and goodwill;
BlackBerry's indebtedness; tax provision changes, the adoption of
new tax legislation or exposure to additional tax liabilities; the
use and management of user data and personal information;
government regulations applicable to BlackBerry's products and
services, including products containing encryption capabilities;
the failure of BlackBerry's suppliers, subcontractors, channel
partners and representatives to use acceptable ethical business
practices or comply with applicable laws; regulations regarding
health and safety, hazardous materials usage and conflict minerals;
acquisitions, divestitures and other business initiatives; foreign
operations, including fluctuations in foreign currencies; the
fluctuation of BlackBerry's quarterly revenue and operating
results; the volatility of the market price of BlackBerry's common
shares; adverse economic, geopolitical and environmental
conditions.
These risk factors and others relating to BlackBerry are
discussed in greater detail in BlackBerry's Annual Report on
Form 10-K and the "Cautionary Note Regarding
Forward-Looking Statements" section of BlackBerry's MD&A
(copies of which filings may be obtained at www.sedar.com or
www.sec.gov). All of these factors should be considered carefully,
and readers should not place undue reliance on BlackBerry's
forward-looking statements. Any statements that are forward-looking
statements are intended to enable BlackBerry's shareholders to view
the anticipated performance and prospects of BlackBerry from
management's perspective at the time such statements are made, and
they are subject to the risks that are inherent in all
forward-looking statements, as described above, as well as
difficulties in forecasting BlackBerry's financial results and
performance for future periods, particularly over longer periods,
given changes in technology and BlackBerry's business strategy,
evolving industry standards, intense competition and short product
life cycles that characterize the industries in which BlackBerry
operates. BlackBerry has no intention and undertakes no obligation
to update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise, except as
required by applicable law.
BlackBerry
Limited
Incorporated under
the Laws of Ontario
(United States
dollars, in millions except share and per share amounts)
(unaudited)
|
|
Consolidated
Statements of Operations
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
August 31,
2021
|
|
May 31,
2021
|
|
August 31,
2020
|
|
August 31,
2021
|
|
August 31,
2020
|
Revenue
|
$
|
175
|
|
|
$
|
174
|
|
|
$
|
259
|
|
|
$
|
349
|
|
|
$
|
465
|
|
Cost of
sales
|
63
|
|
|
60
|
|
|
60
|
|
|
123
|
|
|
123
|
|
Gross
margin
|
112
|
|
|
114
|
|
|
199
|
|
|
226
|
|
|
342
|
|
Gross margin
%
|
64.0
|
%
|
|
65.5
|
%
|
|
76.8
|
%
|
|
64.8
|
%
|
|
73.5
|
%
|
Operating
expenses
|
|
|
|
|
|
|
|
|
|
Research and
development
|
58
|
|
|
57
|
|
|
57
|
|
|
115
|
|
|
114
|
|
Selling, marketing and
administration
|
83
|
|
|
73
|
|
|
79
|
|
|
156
|
|
|
169
|
|
Amortization
|
45
|
|
|
46
|
|
|
46
|
|
|
91
|
|
|
92
|
|
Impairment of
goodwill
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
594
|
|
Impairment of
long-lived assets
|
—
|
|
|
—
|
|
|
21
|
|
|
—
|
|
|
21
|
|
Debentures fair value
adjustment
|
67
|
|
|
(4)
|
|
|
18
|
|
|
63
|
|
|
19
|
|
|
253
|
|
|
172
|
|
|
221
|
|
|
425
|
|
|
1,009
|
|
Operating
loss
|
(141)
|
|
|
(58)
|
|
|
(22)
|
|
|
(199)
|
|
|
(667)
|
|
Investment loss,
net
|
(1)
|
|
|
(2)
|
|
|
(5)
|
|
|
(3)
|
|
|
(5)
|
|
Loss before income
taxes
|
(142)
|
|
|
(60)
|
|
|
(27)
|
|
|
(202)
|
|
|
(672)
|
|
Provision for
(recovery of) income taxes
|
2
|
|
|
2
|
|
|
(4)
|
|
|
4
|
|
|
(13)
|
|
Net
loss
|
$
|
(144)
|
|
|
$
|
(62)
|
|
|
$
|
(23)
|
|
|
$
|
(206)
|
|
|
$
|
(659)
|
|
Loss per
share
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
(0.25)
|
|
|
$
|
(0.11)
|
|
|
$
|
(0.04)
|
|
|
$
|
(0.36)
|
|
|
$
|
(1.18)
|
|
Diluted
|
$
|
(0.25)
|
|
|
$
|
(0.11)
|
|
|
$
|
(0.04)
|
|
|
$
|
(0.36)
|
|
|
$
|
(1.18)
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
number of common shares
outstanding (000s)
|
|
|
|
|
|
|
|
|
|
Basic
|
568,082
|
|
|
567,358
|
|
|
558,882
|
|
|
567,724
|
|
|
558,365
|
|
Diluted
|
568,082
|
|
|
567,358
|
|
|
558,882
|
|
|
567,724
|
|
|
558,365
|
|
Total common shares
outstanding (000s)
|
566,995
|
|
|
566,248
|
|
|
556,468
|
|
|
566,995
|
|
|
556,468
|
|
BlackBerry
Limited
Incorporated under
the Laws of Ontario
(United States
dollars, in millions) (unaudited)
|
|
Consolidated
Balance Sheets
|
|
|
|
As
at
|
|
|
August 31,
2021
|
|
February 28,
2021
|
Assets
|
|
|
|
|
Current
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
291
|
|
|
$
|
214
|
|
Short-term
investments
|
|
416
|
|
|
525
|
|
Accounts receivable,
net of allowance of $9 and $10, respectively
|
|
121
|
|
|
182
|
|
Other
receivables
|
|
23
|
|
|
25
|
|
Income taxes
receivable
|
|
9
|
|
|
10
|
|
Other current
assets
|
|
50
|
|
|
50
|
|
|
|
910
|
|
|
1,006
|
|
Restricted cash
equivalents and restricted short-term investments
|
|
27
|
|
|
28
|
|
Long-term
investments
|
|
38
|
|
|
37
|
|
Other long-term
assets
|
|
13
|
|
|
16
|
|
Operating lease
right-of-use assets, net
|
|
57
|
|
|
63
|
|
Property, plant
and equipment, net
|
|
44
|
|
|
48
|
|
Goodwill
|
|
848
|
|
|
849
|
|
Intangible assets,
net
|
|
695
|
|
|
771
|
|
|
|
$
|
2,632
|
|
|
$
|
2,818
|
|
Liabilities
|
|
|
|
|
Current
|
|
|
|
|
Accounts
payable
|
|
$
|
22
|
|
|
$
|
20
|
|
Accrued
liabilities
|
|
174
|
|
|
178
|
|
Income taxes
payable
|
|
9
|
|
|
6
|
|
Deferred revenue,
current
|
|
198
|
|
|
225
|
|
|
|
403
|
|
|
429
|
|
Deferred revenue,
non-current
|
|
46
|
|
|
69
|
|
Operating lease
liabilities
|
|
79
|
|
|
90
|
|
Other long-term
liabilities
|
|
4
|
|
|
6
|
|
Long-term
debentures
|
|
782
|
|
|
720
|
|
|
|
1,314
|
|
|
1,314
|
|
Shareholders'
equity
|
|
|
|
|
Capital stock and
additional paid-in capital
|
|
2,845
|
|
|
2,823
|
|
Deficit
|
|
(1,512)
|
|
|
(1,306)
|
|
Accumulated other
comprehensive loss
|
|
(15)
|
|
|
(13)
|
|
|
|
1,318
|
|
|
1,504
|
|
|
|
$
|
2,632
|
|
|
$
|
2,818
|
|
BlackBerry
Limited
Incorporated under
the Laws of Ontario
(United States
dollars, in millions) (unaudited)
|
|
Consolidated
Statements of Cash Flows
|
|
|
Six Months
Ended
|
|
August 31,
2021
|
|
August 31,
2020
|
Cash flows from
operating activities
|
|
|
|
Net loss
|
$
|
(206)
|
|
|
$
|
(659)
|
|
Adjustments to
reconcile net loss to net cash used in operating
activities:
|
|
|
|
Amortization
|
97
|
|
|
100
|
|
Stock-based
compensation
|
17
|
|
|
22
|
|
Impairment of
goodwill
|
—
|
|
|
594
|
|
Impairment of
long-lived assets
|
—
|
|
|
21
|
|
Debentures fair value
adjustment
|
63
|
|
|
19
|
|
Operating
leases
|
(8)
|
|
|
(2)
|
|
Other
|
(2)
|
|
|
(3)
|
|
Net changes in
working capital items
|
|
|
|
Accounts receivable,
net of allowance
|
61
|
|
|
(29)
|
|
Other
receivables
|
2
|
|
|
(11)
|
|
Income taxes
receivable
|
1
|
|
|
(3)
|
|
Other
assets
|
4
|
|
|
43
|
|
Accounts
payable
|
2
|
|
|
(2)
|
|
Accrued
liabilities
|
(2)
|
|
|
(21)
|
|
Income taxes
payable
|
3
|
|
|
(12)
|
|
Deferred
revenue
|
(50)
|
|
|
(57)
|
|
Net cash used in
operating activities
|
(18)
|
|
|
—
|
|
Cash flows from
investing activities
|
|
|
|
Acquisition of
long-term investments
|
(1)
|
|
|
(1)
|
|
Acquisition of
property, plant and equipment
|
(4)
|
|
|
(3)
|
|
Acquisition of
intangible assets
|
(14)
|
|
|
(16)
|
|
Acquisition of
short-term investments
|
(429)
|
|
|
(320)
|
|
Proceeds on sale or
maturity of restricted short-term investments
|
24
|
|
|
—
|
|
Proceeds on sale or
maturity of short-term investments
|
537
|
|
|
794
|
|
Net cash provided
by investing activities
|
113
|
|
|
454
|
|
Cash flows from
financing activities
|
|
|
|
Issuance of common
shares
|
5
|
|
|
6
|
|
Payment of finance
lease liability
|
—
|
|
|
(1)
|
|
Net cash provided
by financing activities
|
5
|
|
|
5
|
|
Effect of foreign
exchange gain on cash, cash equivalents, restricted cash, and
restricted cash
equivalents
|
—
|
|
|
1
|
|
Net increase in
cash, cash equivalents, restricted cash, and restricted cash
equivalents during the
period
|
100
|
|
|
460
|
|
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
|
$
|
318
|
|
|
$
|
886
|
|
|
|
As
at
|
August 31,
2021
|
|
February 28,
2021
|
Cash and cash
equivalents
|
$
|
291
|
|
|
$
|
214
|
|
Restricted cash
equivalents and restricted short-term investments
|
27
|
|
|
28
|
|
Short-term
investments
|
416
|
|
|
525
|
|
Long-term
investments
|
38
|
|
|
37
|
|
|
$
|
772
|
|
|
$
|
804
|
|
Reconciliations of the Company's Segment Results to the
Consolidated Results
The following table shows information by operating segment for
the three months ended August 31,
2021 and August 31, 2020.
The Company reports segment information in accordance with
U.S. GAAP Accounting Standards Codification Section 280 based on
the "management" approach. The management approach designates the
internal reporting used by the Chief Operating Decision Maker for
making decisions and assessing performance of the Company's
reportable operating segments.
|
For the Three Months
Ended
(in millions)
(unaudited)
|
|
Cyber
Security
|
|
IoT
|
|
Licensing and
Other
|
|
Segment
Totals
|
|
August 31,
2021
|
|
August 31,
2020
|
|
August 31,
2021
|
|
August 31,
2020
|
|
August 31,
2021
|
|
August 31,
2020
|
|
August 31,
2021
|
|
August 31,
2020
|
Segment
revenue
|
$
|
120
|
|
|
$
|
120
|
|
|
$
|
40
|
|
|
$
|
31
|
|
|
$
|
15
|
|
|
$
|
108
|
|
|
$
|
175
|
|
|
$
|
259
|
|
Segment cost of
sales
|
49
|
|
|
46
|
|
|
7
|
|
|
6
|
|
|
6
|
|
|
7
|
|
|
62
|
|
|
59
|
|
Segment gross
margin
|
$
|
71
|
|
|
$
|
74
|
|
|
$
|
33
|
|
|
$
|
25
|
|
|
$
|
9
|
|
|
$
|
101
|
|
|
$
|
113
|
|
|
$
|
200
|
|
Segment gross margin
%
|
59
|
%
|
|
62
|
%
|
|
83
|
%
|
|
81
|
%
|
|
60
|
%
|
|
94
|
%
|
|
65
|
%
|
|
77
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table reconciles the Company's segment results for
the three months ended August 31,
2021 to consolidated U.S. GAAP results:
|
For the Three Months
Ended August 31, 2021
|
|
(in millions)
(unaudited)
|
|
Cyber
Security
|
|
IoT
|
Licensing and
Other
|
Segment
Totals
|
|
Reconciling
Items
|
|
Consolidated
U.S. GAAP
|
Revenue
|
$
|
120
|
|
|
$
|
40
|
|
|
$
|
15
|
|
|
$
|
175
|
|
|
$
|
—
|
|
|
$
|
175
|
|
Cost of sales
(1)
|
49
|
|
|
7
|
|
|
6
|
|
|
62
|
|
|
1
|
|
|
63
|
|
Gross
margin
|
$
|
71
|
|
|
$
|
33
|
|
|
$
|
9
|
|
|
$
|
113
|
|
|
$
|
(1)
|
|
|
$
|
112
|
|
Operating
expenses
|
|
|
|
|
|
|
|
|
253
|
|
|
253
|
|
Investment loss,
net
|
|
|
|
|
|
|
|
|
1
|
|
|
1
|
|
Loss before income
taxes
|
|
|
|
|
|
|
|
|
|
|
$
|
(142)
|
|
|
______________________________
|
(1) See
"Reconciliations 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
August 31, 2021.
|
The following table reconciles the Company's segment results for
the three months ended August 31,
2020 to consolidated U.S. GAAP results:
|
For the Three Months
Ended August 31, 2020
|
|
(in millions)
(unaudited)
|
|
Cyber
Security
|
|
IoT
|
Licensing and
Other
|
Segment
Totals
|
|
Reconciling
Items
|
|
Consolidated
U.S. GAAP
|
Revenue
|
$
|
120
|
|
|
$
|
31
|
|
|
$
|
108
|
|
|
$
|
259
|
|
|
$
|
—
|
|
|
$
|
259
|
|
Cost of sales
(1)
|
46
|
|
|
6
|
|
|
7
|
|
|
59
|
|
|
1
|
|
|
60
|
|
Gross
margin
|
$
|
74
|
|
|
$
|
25
|
|
|
$
|
101
|
|
|
$
|
200
|
|
|
$
|
(1)
|
|
|
$
|
199
|
|
Operating
expenses
|
|
|
|
|
|
|
|
|
221
|
|
|
221
|
|
Investment loss,
net
|
|
|
|
|
|
|
|
|
5
|
|
|
5
|
|
Loss before income
taxes
|
|
|
|
|
|
|
|
|
|
|
$
|
(27)
|
|
|
______________________________
|
(1) See
"Reconciliations 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
August 31, 2020.
|
Reconciliations of Non-GAAP Measures with the Nearest
Comparable U.S. GAAP Measures
In the Company's internal reports, management evaluates the
performance of the Company's business on a non-GAAP basis by
excluding the impact of certain items below from the Company's U.S.
GAAP financial results. The Company believes that these non-GAAP
measures provide management, as well as readers of the Company's
financial statements, with a consistent basis for comparison across
accounting periods and is useful in helping management and readers
understand the Company's operating results and underlying
operational trends. In the first quarter of fiscal 2022, the
Company discontinued its use of software deferred revenue acquired
and software deferred commission acquired adjustments in its
non-GAAP financial measures due to the quantitative decline in the
adjustments over time. For purposes of comparability, the Company's
non-GAAP financial measures for the three and six months ended
August 31, 2020 have been updated to
conform to the current year's presentation.
Readers are cautioned that adjusted gross margin, adjusted gross
margin percentage, adjusted operating expense, adjusted operating
income (loss), adjusted EBITDA, adjusted operating income (loss)
margin percentage, adjusted EBITDA margin percentage, adjusted net
income (loss), adjusted income (loss) per share, adjusted research
and development expense, adjusted selling, marketing and
administrative expense and adjusted amortization expense and
similar measures do not have any standardized meaning prescribed by
U.S. GAAP and are therefore unlikely to be comparable to similarly
titled measures reported by other companies. These non-GAAP
financial measures should be considered in the context of the U.S.
GAAP results.
Reconciliation of non-GAAP based measures with most
directly comparable U.S. GAAP based measures for the three months
ended August 31, 2021 and
August 31, 2020
A reconciliation of the most directly comparable U.S. GAAP
financial measures for the three months ended August 31, 2021 and August
31, 2020 to adjusted financial measures is reflected in the
table below:
For the Three
Months Ended (in millions)
|
|
August 31,
2021
|
|
August 31,
2020
|
Gross
margin
|
|
$
|
112
|
|
|
$
|
199
|
|
Stock compensation
expense
|
|
1
|
|
|
1
|
|
Adjusted gross
margin
|
|
$
|
113
|
|
|
$
|
200
|
|
|
|
|
|
|
Gross margin
%
|
|
64.0
|
%
|
|
76.8
|
%
|
Stock compensation
expense
|
|
0.6
|
%
|
|
0.4
|
%
|
Adjusted gross
margin %
|
|
64.6
|
%
|
|
77.2
|
%
|
Reconciliation of operating expense for the three months ended
August 31, 2021 and August 31, 2020 to adjusted operating expense is
reflected in the table below:
For the Three
Months Ended (in millions)
|
|
August 31,
2021
|
|
August 31,
2020
|
Operating
expense
|
|
$
|
253
|
|
|
$
|
221
|
|
Restructuring
charges
|
|
—
|
|
|
1
|
|
Stock compensation
expense
|
|
11
|
|
|
8
|
|
Debentures fair value
adjustment
|
|
67
|
|
|
18
|
|
Acquired intangibles
amortization
|
|
32
|
|
|
32
|
|
LLA impairment
charge
|
|
—
|
|
|
21
|
|
Adjusted operating
expense
|
|
$
|
143
|
|
|
$
|
141
|
|
Reconciliation of U.S. GAAP net loss and U.S. GAAP basic loss
per share for the three months ended August
31, 2021 and August 31, 2020
to adjusted net income (loss) and adjusted basic earnings (loss)
per share is reflected in the table below:
For the Three
Months Ended (in millions, except per share amounts)
|
|
August 31,
2021
|
|
August 31,
2020
|
|
|
|
|
Basic
loss
per share
|
|
|
|
Basic
earnings
(loss) per
share
|
Net
loss
|
|
$
|
(144)
|
|
|
$(0.25)
|
|
$
|
(23)
|
|
|
$(0.04)
|
Restructuring
charges
|
|
—
|
|
|
|
|
1
|
|
|
|
Stock compensation
expense
|
|
12
|
|
|
|
|
9
|
|
|
|
Debentures fair value
adjustment
|
|
67
|
|
|
|
|
18
|
|
|
|
Acquired intangibles
amortization
|
|
32
|
|
|
|
|
32
|
|
|
|
LLA impairment
charge
|
|
—
|
|
|
|
|
21
|
|
|
|
Adjusted net
income (loss)
|
|
$
|
(33)
|
|
|
$(0.06)
|
|
$
|
58
|
|
|
$0.10
|
Reconciliation of U.S. GAAP research and development, selling,
marketing and administration, and amortization expense for the
three months ended August 31, 2021
and August 31, 2020 to adjusted
research and development, selling, marketing and administration,
and amortization expense is reflected in the table below:
For the Three
Months Ended (in millions)
|
|
August 31,
2021
|
|
August 31,
2020
|
Research and
development
|
|
$
|
58
|
|
|
$
|
57
|
|
Stock compensation
expense
|
|
2
|
|
|
2
|
|
Adjusted research
and development
|
|
$
|
56
|
|
|
$
|
55
|
|
|
|
|
|
|
Selling, marketing
and administration
|
|
$
|
83
|
|
|
$
|
79
|
|
Restructuring
charges
|
|
—
|
|
|
1
|
|
Stock compensation
expense
|
|
9
|
|
|
6
|
|
Adjusted selling,
marketing and administration
|
|
$
|
74
|
|
|
$
|
72
|
|
|
|
|
|
|
Amortization
|
|
$
|
45
|
|
|
$
|
46
|
|
Acquired intangibles
amortization
|
|
32
|
|
|
32
|
|
Adjusted
amortization
|
|
$
|
13
|
|
|
$
|
14
|
|
Adjusted operating income (loss), adjusted EBITDA, adjusted
operating income (loss) margin percentage and adjusted EBITDA
margin percentage for the three months ended August 31, 2021 and August
31, 2020 are reflected in the table below.
For the Three
Months Ended (in millions)
|
|
August 31,
2021
|
|
August 31,
2020
|
Operating
loss
|
|
$
|
(141)
|
|
|
$
|
(22)
|
|
Non-GAAP adjustments
to operating loss
|
|
|
|
|
Restructuring
charges
|
|
—
|
|
|
1
|
|
Stock compensation
expense
|
|
12
|
|
|
9
|
|
Debentures fair value
adjustment
|
|
67
|
|
|
18
|
|
Acquired intangibles
amortization
|
|
32
|
|
|
32
|
|
LLA impairment
charge
|
|
—
|
|
|
21
|
|
Total non-GAAP
adjustments to operating loss
|
|
111
|
|
|
81
|
|
Adjusted operating
income (loss)
|
|
(30)
|
|
|
59
|
|
Amortization
|
|
48
|
|
|
50
|
|
Acquired intangibles
amortization
|
|
(32)
|
|
|
(32)
|
|
Adjusted
EBITDA
|
|
$
|
(14)
|
|
|
$
|
77
|
|
|
|
|
|
|
Revenue
|
|
$
|
175
|
|
|
$
|
259
|
|
Adjusted operating
income (loss) margin % (1)
|
|
(17)
|
%
|
|
23
|
%
|
Adjusted EBITDA
margin % (2)
|
|
(8)
|
%
|
|
30
|
%
|
|
______________________________
|
(1)
Adjusted operating income (loss) margin % is calculated by dividing
adjusted operating income (loss) by revenue
|
(2)
Adjusted EBITDA margin % is calculated by dividing adjusted EBITDA
by revenue
|
Reconciliation of non-GAAP based measures with most
directly comparable U.S. GAAP based measures for the six months
ended August 31, 2021 and
August 31, 2020
A reconciliation of the most directly comparable U.S. GAAP
financial measures for the six months ended August 31, 2021 and August
31, 2020 to adjusted financial measures is reflected in the
table below:
For the Six Months
Ended (in millions)
|
|
August 31,
2021
|
|
August 31,
2020
|
Gross
margin
|
|
$
|
226
|
|
|
$
|
342
|
|
Stock compensation
expense
|
|
2
|
|
|
3
|
|
Adjusted gross
margin
|
|
$
|
228
|
|
|
$
|
345
|
|
|
|
|
|
|
Gross margin
%
|
|
64.8
|
%
|
|
73.5
|
%
|
Stock compensation
expense
|
|
0.5
|
%
|
|
0.7
|
%
|
Adjusted gross
margin %
|
|
65.3
|
%
|
|
74.2
|
%
|
|
|
|
|
|
Operating
expense
|
|
$
|
425
|
|
|
$
|
1,009
|
|
Restructuring
charges
|
|
—
|
|
|
2
|
|
Stock compensation
expense
|
|
17
|
|
|
20
|
|
Debentures fair value
adjustment
|
|
63
|
|
|
19
|
|
Acquired intangibles
amortization
|
|
64
|
|
|
65
|
|
Goodwill impairment
charge
|
|
—
|
|
|
594
|
|
LLA impairment
charge
|
|
—
|
|
|
21
|
|
Adjusted operating
expense
|
|
$
|
281
|
|
|
$
|
288
|
|
Reconciliation of U.S. GAAP net loss and U.S. GAAP basic loss
per share for the six months ended August
31, 2021 and August 31, 2020
to adjusted net income (loss) and adjusted basic earnings (loss)
per share is reflected in the table below:
For the Six Months
Ended (in millions, except per share amounts)
|
|
August 31,
2021
|
|
August 31,
2020
|
|
|
|
|
Basic loss
per share
|
|
|
|
Basic
earnings
(loss) per
share
|
Net
loss
|
|
$
|
(206)
|
|
|
$
|
(0.36)
|
|
$
|
(659)
|
|
|
$
|
(1.18)
|
Restructuring
charges
|
|
—
|
|
|
|
|
2
|
|
|
|
Stock compensation
expense
|
|
19
|
|
|
|
|
23
|
|
|
|
Debentures fair value
adjustment
|
|
63
|
|
|
|
|
19
|
|
|
|
Acquired intangibles
amortization
|
|
64
|
|
|
|
|
65
|
|
|
|
Goodwill impairment
charge
|
|
—
|
|
|
|
|
594
|
|
|
|
LLA impairment
charge
|
|
—
|
|
|
|
|
21
|
|
|
|
Adjusted net
income (loss)
|
|
$
|
(60)
|
|
|
$(0.11)
|
|
$
|
65
|
|
|
$0.12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of U.S. GAAP research and development, selling,
marketing and administration, and amortization expense for the six
months ended August 31, 2021 and
August 31, 2020 to adjusted research
and development, selling, marketing and administration, and
amortization expense is reflected in the table below:
For the Six Months
Ended (in millions)
|
|
August 31,
2021
|
|
August 31,
2020
|
Research and
development
|
|
$
|
115
|
|
|
$
|
114
|
|
Stock compensation
expense
|
|
4
|
|
|
5
|
|
Adjusted research
and development
|
|
$
|
111
|
|
|
$
|
109
|
|
|
|
|
|
|
Selling, marketing
and administration
|
|
$
|
156
|
|
|
$
|
169
|
|
Restructuring
charges
|
|
—
|
|
|
2
|
|
Stock compensation
expense
|
|
13
|
|
|
15
|
|
Adjusted selling,
marketing and administration
|
|
$
|
143
|
|
|
$
|
152
|
|
|
|
|
|
|
Amortization
|
|
$
|
91
|
|
|
$
|
92
|
|
Acquired intangibles
amortization
|
|
64
|
|
|
65
|
|
Adjusted
amortization
|
|
$
|
27
|
|
|
$
|
27
|
|
Adjusted operating income (loss), adjusted EBITDA, adjusted
operating income (loss) margin percentage and adjusted EBITDA
margin percentage for the six months ended August 31, 2021 and August
31, 2020 are reflected in the table below.
For the Six Months
Ended (in millions)
|
|
August 31,
2021
|
|
August 31,
2020
|
Operating
loss
|
|
$
|
(199)
|
|
|
$
|
(667)
|
|
Non-GAAP adjustments
to operating loss
|
|
|
|
|
Restructuring
charges
|
|
—
|
|
|
2
|
|
Stock compensation
expense
|
|
19
|
|
|
23
|
|
Debentures fair value
adjustment
|
|
63
|
|
|
19
|
|
Acquired intangibles
amortization
|
|
64
|
|
|
65
|
|
Goodwill impairment
charge
|
|
—
|
|
|
594
|
|
LLA impairment
charge
|
|
—
|
|
|
21
|
|
Total non-GAAP
adjustments to operating loss
|
|
146
|
|
|
724
|
|
Adjusted operating
income (loss)
|
|
(53)
|
|
|
57
|
|
Amortization
|
|
97
|
|
|
100
|
|
Acquired intangibles
amortization
|
|
(64)
|
|
|
(65)
|
|
Adjusted
EBITDA
|
|
$
|
(20)
|
|
|
$
|
92
|
|
|
|
|
|
|
Revenue
|
|
$
|
349
|
|
|
$
|
465
|
|
Adjusted operating
income (loss) margin % (1)
|
|
(15)
|
%
|
|
12
|
%
|
Adjusted EBITDA
margin % (2)
|
|
(6)
|
%
|
|
20
|
%
|
|
______________________________
|
(1)
Adjusted operating income (loss) margin % is calculated by dividing
adjusted operating income (loss) by revenue
|
(2)
Adjusted EBITDA margin % is calculated by dividing adjusted EBITDA
by revenue
|
Key Metrics
The Company regularly monitors a number of financial and
operating metrics, including the following key metrics, in order to
measure the Company's current performance and estimate future
performance. Readers are cautioned that annual recurring revenue
("ARR"), dollar-based net retention rate ("DBNRR"), and recurring
revenue percentage do not have any standardized meaning and are
unlikely to be comparable to similarly titled measures reported by
other companies.
For the Three
Months Ended (in millions)
|
|
August 31,
2021
|
Annual Recurring
Revenue
|
|
|
Cyber
Security
|
|
$
|
364
|
|
IoT
|
|
$
|
89
|
|
Dollar-Based Net
Retention Rate
|
|
|
Cyber
Security
|
|
95
|
%
|
Recurring Software
Product Revenue
|
|
~ 80
|
%
|
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SOURCE BlackBerry Limited