WATERLOO, ON, Sept. 24, 2020 /PRNewswire/ -- BlackBerry
Limited (NYSE: BB; TSX: BB) today reported financial results for
the three months ended August 31,
2020 (all figures in U.S. dollars and U.S. GAAP, except
where otherwise indicated).
"We are pleased to report sequential and year-over-year
revenue growth this quarter, exceeding expectations, despite the
ongoing challenges from COVID-19," said John Chen, Executive Chairman & CEO,
BlackBerry. "Continued demand for our secure, 'Work from Anywhere',
solutions remains a major driver for our BlackBerry Spark business,
which performed well this quarter. Some signs of recovery in
auto production point to sequential revenue growth and a return to
a normal run rate for QNX by early next year. Continued QNX
design wins and significant cybersecurity partnerships position the
business strongly for the future. We are also seeing positive
signs from our focus on the key components of our go-to-market
strategy, including: strong channel partnerships, marketing,
customer success and investing in new talent for our sales
force."
Second Quarter Fiscal 2021 Financial Highlights
- Total company non-GAAP revenue for the second quarter of fiscal
2021 was $266 million. Total company
GAAP revenue for the second quarter of fiscal 2021 was $259 million.
- Recurring non-GAAP software product revenue continues to be
approximately 90%.
- Non-GAAP gross margin was 78% and GAAP gross margin was
77%.
- Non-GAAP operating earnings were $63
million. GAAP operating loss was $22
million.
- Non-GAAP earnings per share was $0.11 (basic and diluted). GAAP net loss per
share was $0.04 (basic and
diluted).
- Total cash, cash equivalents, short-term and long-term
investments were $977 million.
- Net cash generated from operating activities was $31 million.
- Following quarter end successfully redeemed existing
$605 million of convertible
debentures and issued $365 million of
new convertible debentures – reducing level of debt by $240 million and saving $16 million of interest expense on an annualized
basis.
Second Quarter Achievements
- BlackBerry QNX and Desay SV Automotive together developed the
autonomous driving domain controller for Xpeng Motor's new P7
high-performance electric vehicle.
- BlackBerry® QNX® technology to be used by StradVision, in ADAS
and autonomous vehicle systems from South Korean automakers
- Customer wins for new BlackBerry Spark® Suites continue to
build, including the US Air Force, the UK's Ministry of Defence,
the Royal Canadian Mint, Rolls Royce and Lloyds Bank.
- BlackBerry® UEM became the only unified endpoint management
system approved to be included on DoDIN Approved Products List
(APL).
- BlackBerry SecuSUITE® for Government received accreditation
from Government of Canada.
- BlackBerry Secusmart technology now used by 17 governments
around the globe.
- Strong progress in various parts of go-to-market strategy,
including recently announced partnership with TELUS to resell
BlackBerry® AtHoc®, the most secure critical event management
solution, across Canada. Adds to
previous announcements with Bell and Vodafone.
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 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 8:00
a.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
11 a.m. ET by dialing +1 (800)
585-8367 and entering Conference ID #1797999 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
175M 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
+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 as to certain fiscal 2021 non-GAAP financial results,
its intentions to achieve QNX revenue growth and strengthened
business performance, and to increase 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 particularly in light of
COVID-19, 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
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
August 31,
2020
|
|
May 31,
2020
|
|
August 31,
2019
|
|
August 31,
2020
|
|
August 31,
2019
|
Revenue
|
$
|
259
|
|
|
$
|
206
|
|
|
$
|
244
|
|
|
$
|
465
|
|
|
$
|
491
|
|
Cost of
sales
|
60
|
|
|
63
|
|
|
68
|
|
|
123
|
|
|
138
|
|
Gross
margin
|
199
|
|
|
143
|
|
|
176
|
|
|
342
|
|
|
353
|
|
Gross margin
%
|
76.8
|
%
|
|
69.4
|
%
|
|
72.1
|
%
|
|
73.5
|
%
|
|
71.9
|
%
|
Operating
expenses
|
|
|
|
|
|
|
|
|
|
Research and
development
|
57
|
|
|
|
57
|
|
|
62
|
|
|
114
|
|
|
133
|
|
Selling, marketing and
administration
|
79
|
|
|
90
|
|
|
130
|
|
|
169
|
|
|
251
|
|
Amortization
|
46
|
|
|
46
|
|
|
48
|
|
|
92
|
|
|
97
|
|
Impairment of
goodwill
|
—
|
|
|
594
|
|
|
—
|
|
|
594
|
|
|
—
|
|
Impairment of
long-lived assets
|
21
|
|
|
—
|
|
|
2
|
|
|
21
|
|
|
2
|
|
Debentures fair value
adjustment
|
18
|
|
|
1
|
|
|
(23)
|
|
|
19
|
|
|
(51)
|
|
|
221
|
|
|
788
|
|
|
219
|
|
|
1,009
|
|
|
432
|
|
Operating
loss
|
(22)
|
|
|
(645)
|
|
|
(43)
|
|
|
(667)
|
|
|
(79)
|
|
Investment income
(loss), net
|
(5)
|
|
|
—
|
|
|
—
|
|
|
(5)
|
|
|
3
|
|
Loss before income
taxes
|
(27)
|
|
|
(645)
|
|
|
(43)
|
|
|
(672)
|
|
|
(76)
|
|
Provision for
(recovery of) income taxes
|
(4)
|
|
|
(9)
|
|
|
1
|
|
|
(13)
|
|
|
3
|
|
Net
loss
|
$
|
(23)
|
|
|
$
|
(636)
|
|
|
$
|
(44)
|
|
|
$
|
(659)
|
|
|
$
|
(79)
|
|
Loss per
share
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
(0.04)
|
|
|
$
|
(1.14)
|
|
|
$
|
(0.08)
|
|
|
$
|
(1.18)
|
|
|
$
|
(0.14)
|
|
Diluted
|
$
|
(0.04)
|
|
|
$
|
(1.14)
|
|
|
$
|
(0.10)
|
|
|
$
|
(1.18)
|
|
|
$
|
(0.19)
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
number of common shares outstanding (000s)
|
|
|
|
|
|
|
|
|
|
Basic
|
558,882
|
|
|
557,839
|
|
|
552,343
|
|
|
558,365
|
|
|
552,096
|
|
Diluted
|
558,882
|
|
|
557,839
|
|
|
612,843
|
|
|
558,365
|
|
|
612,596
|
|
Total common shares
outstanding (000s)
|
556,468
|
|
|
555,623
|
|
|
548,336
|
|
|
556,468
|
|
|
548,336
|
|
BlackBerry
Limited
Incorporated under
the Laws of Ontario
(United States
dollars, in millions) (unaudited)
|
|
Consolidated
Balance Sheets
|
|
|
|
As
at
|
|
|
August 31,
2020
|
|
February 29,
2020
|
Assets
|
|
|
|
|
Current
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
837
|
|
|
$
|
377
|
|
Short-term
investments
|
|
58
|
|
|
532
|
|
Accounts receivable,
net of allowance of $14 and $9, respectively
|
|
240
|
|
|
215
|
|
Other
receivables
|
|
25
|
|
|
14
|
|
Income taxes
receivable
|
|
9
|
|
|
6
|
|
Other current
assets
|
|
50
|
|
|
52
|
|
|
|
1,219
|
|
|
1,196
|
|
Restricted cash
and cash equivalents
|
|
49
|
|
|
49
|
|
Long-term
investments
|
|
33
|
|
|
32
|
|
Other long-term
assets
|
|
29
|
|
|
65
|
|
Operating lease
right-of-use assets, net
|
|
96
|
|
|
124
|
|
Property, plant
and equipment, net
|
|
56
|
|
|
70
|
|
Goodwill
|
|
848
|
|
|
1,437
|
|
Intangible assets,
net
|
|
841
|
|
|
915
|
|
|
|
$
|
3,171
|
|
|
$
|
3,888
|
|
Liabilities
|
|
|
|
|
Current
|
|
|
|
|
Accounts
payable
|
|
$
|
29
|
|
|
$
|
31
|
|
Accrued
liabilities
|
|
179
|
|
|
202
|
|
Income taxes
payable
|
|
9
|
|
|
18
|
|
Debentures
|
|
610
|
|
|
606
|
|
Deferred revenue,
current
|
|
229
|
|
|
264
|
|
|
|
1,056
|
|
|
1,121
|
|
Deferred revenue,
non-current
|
|
87
|
|
|
109
|
|
Operating lease
liabilities
|
|
106
|
|
|
120
|
|
Other long-term
liabilities
|
|
8
|
|
|
9
|
|
|
|
1,257
|
|
|
1,359
|
|
Shareholders'
equity
|
|
|
|
|
Capital stock and
additional paid-in capital
|
|
2,788
|
|
|
2,760
|
|
Deficit
|
|
(861)
|
|
|
(198)
|
|
Accumulated other
comprehensive loss
|
|
(13)
|
|
|
(33)
|
|
|
|
1,914
|
|
|
2,529
|
|
|
|
$
|
3,171
|
|
|
$
|
3,888
|
|
BlackBerry
Limited
Incorporated under
the Laws of Ontario
(United States
dollars, in millions) (unaudited)
|
|
Consolidated
Statements of Cash Flows
|
|
|
Six Months
Ended
|
|
August 31,
2020
|
|
August 31,
2019
|
Cash flows from
operating activities
|
|
|
|
Net loss
|
$
|
(659)
|
|
|
$
|
(79)
|
|
Adjustments to
reconcile net loss to net cash used in operating
activities:
|
|
|
|
Amortization
|
100
|
|
|
107
|
|
Stock-based
compensation
|
22
|
|
|
31
|
|
Impairment of
goodwill
|
594
|
|
|
—
|
|
Impairment of
long-lived assets
|
21
|
|
|
2
|
|
Non-cash consideration
received from contracts with customers
|
—
|
|
|
(8)
|
|
Debentures fair value
adjustment
|
19
|
|
|
(51)
|
|
Operating
leases
|
(2)
|
|
|
(12)
|
|
Other
|
(3)
|
|
|
5
|
|
Net changes in
working capital items
|
|
|
|
Accounts receivable,
net
|
(29)
|
|
|
11
|
|
Other
receivables
|
(11)
|
|
|
1
|
|
Income taxes
receivable
|
(3)
|
|
|
(1)
|
|
Other
assets
|
43
|
|
|
(10)
|
|
Accounts
payable
|
(2)
|
|
|
(11)
|
|
Accrued
liabilities
|
(21)
|
|
|
(26)
|
|
Income taxes
payable
|
(12)
|
|
|
1
|
|
Deferred
revenue
|
(57)
|
|
|
(7)
|
|
Net cash used in
operating activities
|
—
|
|
|
(47)
|
|
Cash flows from
investing activities
|
|
|
|
Acquisition of
long-term investments
|
(1)
|
|
|
—
|
|
Acquisition of
property, plant and equipment
|
(3)
|
|
|
(6)
|
|
Acquisition of
intangible assets
|
(16)
|
|
|
(16)
|
|
Business
acquisitions, net of cash acquired
|
—
|
|
|
1
|
|
Acquisition of
short-term investments
|
(320)
|
|
|
(553)
|
|
Proceeds on sale or
maturity of short-term investments
|
794
|
|
|
532
|
|
Net cash provided
by (used in) investing activities
|
454
|
|
|
(42)
|
|
Cash flows from
financing activities
|
|
|
|
Issuance of common
shares
|
6
|
|
|
3
|
|
Payment of finance
lease liability
|
(1)
|
|
|
(1)
|
|
Net cash provided
by financing activities
|
5
|
|
|
2
|
|
Effect of foreign
exchange gain (loss) on cash, cash equivalents, restricted cash,
and restricted cash equivalents
|
1
|
|
|
(1)
|
|
Net increase
(decrease) in cash, cash equivalents, restricted cash, and
restricted cash equivalents during the period
|
460
|
|
|
(88)
|
|
Cash, cash
equivalents, restricted cash, and restricted cash equivalents,
beginning of period
|
426
|
|
|
582
|
|
Cash, cash
equivalents, restricted cash, and restricted cash equivalents, end
of period
|
$
|
886
|
|
|
$
|
494
|
|
|
|
As
at
|
August 31,
2020
|
|
February 29,
2020
|
Cash and cash
equivalents
|
$
|
837
|
|
|
$
|
377
|
|
Restricted cash and
cash equivalents
|
$
|
49
|
|
|
$
|
49
|
|
Short-term
investments
|
$
|
58
|
|
|
$
|
532
|
|
Long-term
investments
|
$
|
33
|
|
|
$
|
32
|
|
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 readers of the Company's financial statements with
a consistent basis for comparison across accounting periods and is
useful in helping readers understand the Company's operating
results and underlying operational trends.
Readers are cautioned that adjusted revenue, adjusted gross
margin, adjusted gross margin percentage, 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 U.S. GAAP based measures for the three months
ended August 31, 2020 and
August 31, 2019
A reconciliation of the most directly comparable U.S. GAAP
financial measures for the three months ended August 31, 2020 and August
31, 2019 to adjusted financial measures is reflected in the
tables below:
For the Three
Months Ended (in millions)
|
|
August 31,
2020
|
|
August 31,
2019
|
Revenue
|
|
$
|
259
|
|
|
$
|
244
|
|
Software deferred
revenue acquired (1)
|
|
7
|
|
|
17
|
|
Adjusted
revenue
|
|
$
|
266
|
|
|
$
|
261
|
|
|
|
|
|
|
Gross
margin
|
|
$
|
199
|
|
|
$
|
176
|
|
Software deferred
revenue acquired (1)
|
|
7
|
|
|
17
|
|
Restructuring
charges
|
|
—
|
|
|
1
|
|
Stock compensation
expense
|
|
1
|
|
|
1
|
|
Adjusted gross
margin
|
|
$
|
207
|
|
|
$
|
195
|
|
|
|
|
|
|
Gross margin
%
|
|
76.8
|
%
|
|
72.1
|
%
|
Software deferred
revenue acquired (1)
|
|
0.6
|
%
|
|
1.8
|
%
|
Restructuring
charges
|
|
—
|
%
|
|
0.4
|
%
|
Stock compensation
expense
|
|
0.4
|
%
|
|
0.4
|
%
|
Adjusted gross
margin %
|
|
77.8
|
%
|
|
74.7
|
%
|
|
|
|
|
|
|
|
(1)
|
See
Reconciliation of U.S. GAAP Software and Services revenue to
adjusted Software and Services revenue
|
Reconciliation of operating expense for the three months ended
August 31, 2020 and August 31, 2019 to adjusted operating expense is
reflected in the tables below:
For the Three
Months Ended (in millions)
|
|
August 31,
2020
|
|
August 31,
2019
|
Operating
expense
|
|
$
|
221
|
|
|
$
|
219
|
|
Restructuring
charges
|
|
1
|
|
|
—
|
|
Stock compensation
expense
|
|
8
|
|
|
13
|
|
Debenture fair value
adjustment
|
|
18
|
|
|
(23)
|
|
Software deferred
commission expense acquired
|
|
(3)
|
|
|
(4)
|
|
Acquired intangibles
amortization
|
|
32
|
|
|
36
|
|
Business acquisition
and integration costs
|
|
—
|
|
|
2
|
|
LLA impairment
charge
|
|
21
|
|
|
2
|
|
Adjusted operating
expense
|
|
$
|
144
|
|
|
$
|
193
|
|
Reconciliation of U.S. GAAP net loss and U.S. GAAP basic loss
per share for the three months ended August
31, 2020 and August 31, 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)
|
|
August 31,
2020
|
|
August 31,
2019
|
|
|
|
|
Basic
earnings
(loss) per
share
|
|
|
|
Basic
earnings
(loss) per
share
|
Net
loss
|
|
$
|
(23)
|
|
|
$(0.04)
|
|
$
|
(44)
|
|
|
$(0.08)
|
Software deferred
revenue acquired
|
|
7
|
|
|
|
|
17
|
|
|
|
Restructuring
charges
|
|
1
|
|
|
|
|
1
|
|
|
|
Stock compensation
expense
|
|
9
|
|
|
|
|
14
|
|
|
|
Debenture fair value
adjustment
|
|
18
|
|
|
|
|
(23)
|
|
|
|
Software deferred
commission expense acquired
|
|
(3)
|
|
|
|
|
(4)
|
|
|
|
Acquired intangibles
amortization
|
|
32
|
|
|
|
|
36
|
|
|
|
Business acquisition
and integration costs
|
|
—
|
|
|
|
|
2
|
|
|
|
LLA impairment
charge
|
|
21
|
|
|
|
|
2
|
|
|
|
Adjusted net
income
|
|
$
|
62
|
|
|
$0.11
|
|
$
|
1
|
|
|
$0.00
|
Reconciliation of U.S. GAAP Software and Services revenue for
the three months ended August 31,
2020 and August 31, 2019 to
adjusted Software and Services revenue is reflected in the tables
below:
For the Three
Months Ended (in millions)
|
|
August 31,
2020
|
|
August 31,
2019
|
Software and
Services Revenue
|
|
$
|
151
|
|
|
$
|
168
|
|
Software deferred
revenue acquired
|
|
7
|
|
|
17
|
|
Adjusted Software
and Services revenue
|
|
$
|
158
|
|
|
$
|
185
|
|
Reconciliation of U.S. GAAP research and development, selling,
marketing and administration, and amortization expense for the
three months ended August 31, 2020
and August 31, 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)
|
|
August 31,
2020
|
|
August 31,
2019
|
Research and
development
|
|
$
|
57
|
|
|
$
|
62
|
|
Stock compensation
expense
|
|
2
|
|
|
3
|
|
Adjusted research
and development
|
|
$
|
55
|
|
|
$
|
59
|
|
|
|
|
|
|
Selling, marketing
and administration
|
|
$
|
79
|
|
|
$
|
130
|
|
Restructuring
charges
|
|
1
|
|
|
—
|
|
Software deferred
commission expense acquired
|
|
(3)
|
|
|
(4)
|
|
Stock compensation
expense
|
|
6
|
|
|
10
|
|
Business acquisition
and integration costs
|
|
—
|
|
|
2
|
|
Adjusted selling,
marketing and administration
|
|
$
|
75
|
|
|
$
|
122
|
|
|
|
|
|
|
Amortization
|
|
$
|
46
|
|
|
$
|
48
|
|
Acquired intangibles
amortization
|
|
32
|
|
|
36
|
|
Adjusted
amortization
|
|
$
|
14
|
|
|
$
|
12
|
|
Adjusted operating income, adjusted EBITDA, adjusted operating
income margin percentage and adjusted EBITDA margin percentage for
the three months ended August 31,
2020 and August 31, 2019 are
reflected in the table below.
For the Three
Months Ended (in millions)
|
|
August 31,
2020
|
|
August 31,
2019
|
Operating
loss
|
|
$
|
(22)
|
|
|
$
|
(43)
|
|
Non-GAAP adjustments
to operating loss
|
|
|
|
|
Software deferred
revenue acquired
|
|
7
|
|
|
17
|
|
Restructuring
charges
|
|
1
|
|
|
1
|
|
Stock compensation
expense
|
|
9
|
|
|
14
|
|
Debenture fair value
adjustment
|
|
18
|
|
|
(23)
|
|
Software deferred
commission expense acquired
|
|
(3)
|
|
|
(4)
|
|
Acquired intangibles
amortization
|
|
32
|
|
|
36
|
|
Business acquisition
and integration costs
|
|
—
|
|
|
2
|
|
LLA impairment
charge
|
|
21
|
|
|
2
|
|
Total non-GAAP
adjustments to operating loss
|
|
85
|
|
|
45
|
|
Adjusted operating
income
|
|
63
|
|
|
2
|
|
Amortization
|
|
50
|
|
|
54
|
|
Acquired intangibles
amortization
|
|
(32)
|
|
|
(36)
|
|
Adjusted
EBITDA
|
|
$
|
81
|
|
|
$
|
20
|
|
|
|
|
|
|
Adjusted revenue
(per above)
|
|
$
|
266
|
|
|
$
|
261
|
|
Adjusted operating
income margin % (1)
|
|
24
|
%
|
|
1
|
%
|
Adjusted EBITDA
margin % (2)
|
|
30
|
%
|
|
8
|
%
|
|
|
|
|
|
|
|
(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
|
Reconciliation of non-GAAP based measures with most
directly comparable U.S. GAAP based measures for the six months
ended August 31, 2020 and
August 31, 2019
A reconciliation of the most directly comparable U.S. GAAP
financial measures for six months ended August 31, 2020 and August
31, 2019 to adjusted financial measures is reflected in the
tables below:
For the six months
ended (in millions)
|
|
August 31,
2020
|
|
August 31,
2019
|
Revenue
|
|
$
|
465
|
|
|
$
|
491
|
|
Software deferred
revenue acquired (1)
|
|
15
|
|
|
37
|
|
Adjusted
revenue
|
|
$
|
480
|
|
|
$
|
528
|
|
|
|
|
|
|
Gross
margin
|
|
$
|
342
|
|
|
$
|
353
|
|
Software deferred
revenue acquired (1)
|
|
15
|
|
|
37
|
|
Restructuring
charges
|
|
—
|
|
|
2
|
|
Stock compensation
expense
|
|
3
|
|
|
2
|
|
Adjusted gross
margin
|
|
$
|
360
|
|
|
$
|
394
|
|
|
|
|
|
|
Gross margin
%
|
|
73.5
|
%
|
|
71.9
|
%
|
Software deferred
revenue acquired (1)
|
|
0.9
|
%
|
|
1.9
|
%
|
Restructuring
charges
|
|
—
|
%
|
|
0.4
|
%
|
Stock compensation
expense
|
|
0.6
|
%
|
|
0.4
|
%
|
Adjusted gross
margin %
|
|
75.0
|
%
|
|
74.6
|
%
|
|
|
|
|
|
Operating
expense
|
|
$
|
1,009
|
|
|
$
|
432
|
|
Restructuring
charges
|
|
2
|
|
|
—
|
|
Stock compensation
expense
|
|
20
|
|
|
29
|
|
Debenture fair value
adjustment
|
|
19
|
|
|
(51)
|
|
Software deferred
commission expense acquired
|
|
(6)
|
|
|
(9)
|
|
Acquired intangibles
amortization
|
|
65
|
|
|
71
|
|
Business acquisition
and integration costs
|
|
—
|
|
|
3
|
|
Goodwill impairment
charge
|
|
594
|
|
|
—
|
|
LLA impairment
charge
|
|
21
|
|
|
2
|
|
Adjusted operating
expense
|
|
$
|
294
|
|
|
$
|
387
|
|
|
|
|
|
|
|
|
(1)
|
See Reconciliation of
U.S GAAP Software and Services revenue to adjusted Software and
Service revenue
|
Reconciliation of U.S. GAAP net loss and U.S. GAAP basic loss
per share for the six months ended August
31, 2020 and August 31, 2019
to the adjusted net income and basic earnings per share is
reflected in the tables below:
For the six months
ended (in millions, except per share amounts)
|
|
August 31,
2020
|
|
August 31,
2019
|
|
|
|
|
Basic
earnings
(loss) per
share
|
|
|
|
Basic
earnings
(loss) per
share
|
Net
loss
|
|
$
|
(659)
|
|
|
$
|
(1.18)
|
|
|
$
|
(79)
|
|
|
$
|
(0.14)
|
|
Software deferred
revenue acquired
|
|
15
|
|
|
|
|
37
|
|
|
|
Restructuring
charges
|
|
2
|
|
|
|
|
2
|
|
|
|
Stock compensation
expense
|
|
23
|
|
|
|
|
31
|
|
|
|
Debenture fair value
adjustment
|
|
19
|
|
|
|
|
(51)
|
|
|
|
Software deferred
commission expense acquired
|
|
(6)
|
|
|
|
|
(9)
|
|
|
|
Acquired intangibles
amortization
|
|
65
|
|
|
|
|
71
|
|
|
|
Business acquisition
and integration costs
|
|
—
|
|
|
|
|
3
|
|
|
|
Goodwill impairment
charge
|
|
594
|
|
|
|
|
—
|
|
|
|
LLA impairment
charge
|
|
21
|
|
|
|
|
2
|
|
|
|
Acquisition valuation
allowance
|
|
—
|
|
|
|
|
(1)
|
|
|
|
Adjusted net
income
|
|
$
|
74
|
|
|
$0.13
|
|
$
|
6
|
|
|
$0.01
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of U.S. GAAP Software and Services revenue for
the six months ended August 31, 2020
and August 31, 2019 to adjusted
Software and Services revenue is reflected in the tables below:
For the six months
ended (in millions)
|
|
August 31,
2020
|
|
August 31,
2019
|
Software and
Services Revenue
|
|
$
|
299
|
|
|
$
|
336
|
|
Software deferred
revenue acquired
|
|
15
|
|
|
37
|
|
Adjusted Software
and Services Revenue
|
|
$
|
314
|
|
|
$
|
373
|
|
Reconciliation of U.S. GAAP research and development, selling,
marketing and administration, and amortization expense for the six
months ended August 31, 2020 and
August 31, 2019 to adjusted research
and development, selling, marketing and administration, and
amortization expense is reflected in the tables below:
For the six months
ended (in millions)
|
|
August 31,
2020
|
|
August 31,
2019
|
Research and
development
|
|
$
|
114
|
|
|
$
|
133
|
|
Stock compensation
expense
|
|
5
|
|
|
6
|
|
Adjusted research
and development
|
|
$
|
109
|
|
|
$
|
127
|
|
|
|
|
|
|
Selling, marketing
and administration
|
|
$
|
169
|
|
|
$
|
251
|
|
Restructuring
charges
|
|
2
|
|
|
—
|
|
Software deferred
commission expense acquired
|
|
(6)
|
|
|
(9)
|
|
Stock compensation
expense
|
|
15
|
|
|
23
|
|
Business acquisition
and integration costs
|
|
—
|
|
|
3
|
|
Adjusted selling,
marketing and administration
|
|
$
|
158
|
|
|
$
|
234
|
|
|
|
|
|
|
Amortization
|
|
$
|
92
|
|
|
$
|
97
|
|
Acquired intangibles
amortization
|
|
65
|
|
|
71
|
|
Adjusted
amortization
|
|
$
|
27
|
|
|
$
|
26
|
|
Adjusted operating income, adjusted EBITDA, adjusted operating
income margin percentage and adjusted EBITDA margin percentage for
the six months ended August 31, 2020
and August 31, 2019 are reflected in
the table below.
For the six months
ended (in millions)
|
|
August 31,
2020
|
|
August 31,
2019
|
Operating
loss
|
|
$
|
(667)
|
|
|
$
|
(79)
|
|
Non-GAAP adjustments
to operating loss
|
|
|
|
|
Software deferred
revenue acquired
|
|
15
|
|
|
37
|
|
Restructuring
charges
|
|
2
|
|
|
2
|
|
Stock compensation
expense
|
|
23
|
|
|
31
|
|
Debenture fair value
adjustment
|
|
19
|
|
|
(51)
|
|
Software deferred
commission expense acquired
|
|
(6)
|
|
|
(9)
|
|
Acquired intangibles
amortization
|
|
65
|
|
|
71
|
|
Business acquisition
and integration costs
|
|
—
|
|
|
3
|
|
Goodwill impairment
charge
|
|
594
|
|
|
—
|
|
LLA impairment
charge
|
|
21
|
|
|
2
|
|
Total non-GAAP
adjustments to operating loss
|
|
733
|
|
|
86
|
|
Adjusted operating
income
|
|
66
|
|
|
7
|
|
Amortization
|
|
100
|
|
|
107
|
|
Acquired intangibles
amortization
|
|
(65)
|
|
|
(71)
|
|
Adjusted
EBITDA
|
|
$
|
101
|
|
|
$
|
43
|
|
|
|
|
|
|
Adjusted revenue
(per above)
|
|
$
|
480
|
|
|
$
|
528
|
|
Adjusted operating
income margin % (1)
|
|
14
|
%
|
|
1
|
%
|
Adjusted EBITDA
margin % (2)
|
|
21
|
%
|
|
8
|
%
|
|
|
|
|
|
|
|
(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