BlackBerry Reports Fourth Quarter and Full Fiscal Year 2023 Results

Beats quarterly non-GAAP EPS expectations and sets new record for QNX royalty backlog

Fourth Quarter Fiscal 2023:

  • Total company revenue of $151 million .
  • IoT revenue of $53 million .
  • Cybersecurity revenue of $88 million .
  • Licensing & Other revenue of $10 million .
  • Non-GAAP basic loss per share of $0.02 and GAAP basic loss per share of $0.85 , primarily due to an $0.82 non-cash goodwill and long-lived asset impairment charge.
  • Announced new patent sale transaction with Malikie Innovations Limited, a subsidiary of leading patent monetization company, Key Patent Innovations Limited, for up to $900 million . The transaction is not subject to any financing conditions, and KPI has secured all necessary funding from a leading US-based investment firm.

Fiscal Year 2023:

  • Total company revenue of $656 million .
  • Non-GAAP basic loss per share of $0.18 , GAAP basic loss per share of $1.27 and GAAP diluted loss per share of $1.35 .

BlackBerry Limited (NYSE: BB; TSX: BB) today reported financial results for the three months ended February 28, 2023 (all figures in U.S. dollars and U.S. GAAP, except where otherwise indicated).

BlackBerry Logo Black (PRNewsfoto/Blackberry Limited)

"This fiscal year, BlackBerry's IoT business unit set a new record for QNX design wins, with royalty backlog reaching $640 million . Further, despite near-term macro and supply chain challenges for vehicle production, revenue increased by 16% year over year. This quarter we also announced the first IVY design win with a leading automaker," said John Chen , Executive Chairman & CEO, BlackBerry. "As previously communicated, BlackBerry's Cybersecurity business unit saw the timing of a number of large government deals slip into later quarters, but we are confident that they will close this fiscal year. The team also continued to execute on our strategy, including the launch of our new easy-to-use and cost-effective turnkey solutions, Cylance Endpoint and Cylance Edge. BlackBerry beat expectations for non-GAAP EPS this quarter and maintains a clear focus on driving towards both profitable growth and positive cashflow."

Fourth Quarter Fiscal 2023 Financial Highlights

  • Total company revenue was $151 million .
  • Total company GAAP gross margin was 66% and non-GAAP gross margin was 67%.
  • IoT revenue was $53 million , with gross margin of 81% and QNX royalty backlog of approximately $640 million .
  • Cybersecurity revenue was $88 million , with gross margin of 59% and ARR of $298 million .
  • Cybersecurity billings were $107 million .
  • Software and Services revenue in total was $141 million .
  • Licensing and Other revenue was $10 million , with gross margin of 60%.
  • Non-GAAP operating loss was $17 million . GAAP operating loss was $499 million , primarily due to a $476 million non-cash, goodwill and long-lived asset impairment charge.
  • Total cash, cash equivalents, short-term and long-term investments were $487 million .

Business Highlights & Strategic Announcements

  • BlackBerry announces new patent sale transaction with Malikie Innovations Limited, a subsidiary of leading patent monetization company, Key Patent Innovations Limited ("KPI"), for up to $900 million . There are no financing conditions and KPI has secured necessary funding from a leading US-based investment firm with more than $30 billion in assets under management.
  • BlackBerry announces first BlackBerry IVY™ design win as Dongfeng Motor selects PATEO digital cockpit for the next-generation all-electric VOYAH Model
  • BlackBerry showcases BlackBerry IVY running on three commercially-available automotive platforms at CES 2023 – General availability announced for May 2023
  • BlackBerry launches QNX® Accelerate, making the QNX® Neutrino® real time operating system (RTOS) and QNX® OS for Safety available in the cloud and through AWS Marketplace. This allows developers across the AWS ecosystem to develop on QNX in a virtual environment, without the need for physical hardware
  • Chongqing Yazaki selects QNX Neutrino RTOS to power a digital LCD cluster for the Chinese market, including deployment within next-generation vehicles from Geely Auto and Dongfeng Liuzhou Auto
  • Marelli, a leading Tier 1 global automotive supplier, selects the BlackBerry QNX® Acoustics Management Platform (AMP) as part of its enhanced in-car audio experience within software-defined vehicles
  • BlackBerry recognized as a 2023 Gartner® Peer Insights™ Customers' Choice for Unified Endpoint Management (UEM) tools - the only vendor to be placed in the upper right quadrant
  • BlackBerry SecuSUITE® for Government awarded updated NIAP/Common Criteria and CSfC certification for secure communication, meeting the highest security requirements for the U.S. Federal Government and the broader Five Eyes intelligence alliance
  • BlackBerry is first business in the Americas to gain the OpenChain Security Assurance Specification, a best-in-class validation of the ability to manage software supply chain vulnerabilities

Outlook

BlackBerry will provide fiscal year 2024 outlook in connection with the quarterly earnings announcement on its earnings conference call.

Use of Non-GAAP Financial Measures

The tables at the end of this press release include a reconciliation of the non-GAAP financial measures and non-GAAP financial ratios used by the company to comparable U.S. GAAP measures and an explanation of why the company uses them.

Conference Call and Webcast

A conference call and live webcast will be held today beginning at 5:30 p.m. ET , which can be accessed using the following link ( here ) or through the Company's investor webpage ( BlackBerry.com/Investors ) or by dialing toll free +1 (844) 512-2926 and entering Elite Entry Number 6312676.

A replay of the conference call will be available at approximately 8:30 p.m. ET on March 30, 2023 , using the same webcast link ( here ) or by dialing Canada toll free +1 (855) 669-9658 or US toll free +1 (877) 344-7529 and entering Replay Access Code 2114563.

About BlackBerry

BlackBerry (NYSE: BB; TSX: BB) provides intelligent security software and services to enterprises and governments around the world. The company secures more than 500M endpoints including more than 215M vehicles.  Based in Waterloo, Ontario , the company leverages AI and machine learning to deliver innovative solutions in the areas of cybersecurity, safety and data privacy, and is a leader in the areas of endpoint security, endpoint management, encryption, and embedded systems.  BlackBerry's vision is clear - to secure a connected future you can trust.

BlackBerry. Intelligent Security. Everywhere.
For more information, visit BlackBerry.com and follow @BlackBerry.

Investor Contact:

BlackBerry Investor Relations
+1 (519) 888-7465
investorrelations@blackberry.com

Media Contact:

BlackBerry Media Relations
+1 (519) 597-7273
mediarelations@blackberry.com

This news release contains forward-looking statements within the meaning of certain securities laws, including under the U.S. Private Securities Litigation Reform Act of 1995 and applicable Canadian securities laws, including statements regarding BlackBerry's plans, strategies and objectives including its expectations with respect to increasing and enhancing its product and service offerings.

The words "expect", "anticipate", "estimate", "may", "will", "should", "could", "intend", "believe", "target", "plan" and similar expressions are intended to identify these forward-looking statements. Forward-looking statements are based on estimates and assumptions made by BlackBerry in light of its experience and its perception of historical trends, current conditions and expected future developments, as well as other factors that BlackBerry believes are appropriate in the circumstances, including but not limited to, BlackBerry's expectations regarding its business, strategy, opportunities and prospects, the launch of new products and services, general economic conditions, 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; potential negative effects on the business as a result of actions of activist shareholders; BlackBerry's continuing ability to attract new personnel, retain existing key personnel and manage its staffing effectively; the failure or perceived failure of BlackBerry's solutions to detect or prevent security vulnerabilities; BlackBerry's dependence on its relationships with resellers and channel partners; litigation against BlackBerry; the impact of adverse macroeconomic and geopolitical conditions; 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; failure to protect BlackBerry's intellectual property and to earn expected revenues from intellectual property rights; BlackBerry's ability to obtain rights to use third-party software and its use of open source software; BlackBerry being found to have infringed on the intellectual property rights of others; BlackBerry's indebtedness; the substantial asset risk faced by BlackBerry, including the potential for charges related to its long-lived assets and goodwill; tax provision changes, the adoption of new tax legislation or exposure to additional tax liabilities; the use and management of user data and personal information; government regulations applicable to BlackBerry's products and services, including products containing encryption capabilities; environmental, social and governance expectations and standards; the failure of BlackBerry's suppliers, subcontractors, channel partners and representatives to use acceptable ethical business practices or comply with applicable laws; impacts of acquisitions, divestitures and other business initiatives; foreign operations, including fluctuations in foreign currencies; impacts of environmental events; the fluctuation of BlackBerry's quarterly revenue and operating results; and the volatility of the market price of BlackBerry's common shares.

These risk factors and others relating to BlackBerry are discussed in greater detail in BlackBerry's Annual Report on Form    10-K and the "Cautionary Note Regarding Forward-Looking Statements" section of BlackBerry's MD&A (copies of which filings may be obtained at www.sedar.com or www.sec.gov ). All of these factors should be considered carefully, and readers should not place undue reliance on BlackBerry's forward-looking statements. Any statements that are forward-looking statements are intended to enable BlackBerry's shareholders to view the anticipated performance and prospects of BlackBerry from management's perspective at the time such statements are made, and they are subject to the risks that are inherent in all forward-looking statements, as described above, as well as difficulties in forecasting BlackBerry's financial results and performance for future periods, particularly over longer periods, given changes in technology and BlackBerry's business strategy, evolving industry standards, intense competition and short product life cycles that characterize the industries in which BlackBerry operates. Any forward-looking statements are made only as of today and BlackBerry has no intention and undertakes no obligation to update or revise any of them, 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 Data



Three Months Ended


For the Years Ended


February 28, 2023


November 30, 2022


February 28, 2022


February 28, 2023


February 28, 2022

Revenue

$            151


$              169


$             185


$            656


$             718

Cost of sales

51


60


61


237


251

Gross margin

100


109


124


419


467

Gross margin %

66.2 %


64.5 %


67.0 %


63.9 %


65.0 %

Operating expenses










Research and development

48


52


47


207


219

Selling, marketing and administration

83


89


64


340


297

Amortization

18


26


32


96


165

Impairment of goodwill

245




245


Impairment of long-lived assets

231




235


Gain on sale of property, plant and equipment, net




(6)


Debentures fair value adjustment

(26)


(56)


(165)


(138)


(212)

Litigation settlement




165



599


111


(22)


1,144


469

Operating income (loss)

(499)


(2)


146


(725)


(2)

Investment income (loss), net

6


2


(1)


5


21

Income (loss) before income taxes

(493)



145


(720)


19

Provision for  income taxes

2


4


1


14


7

Net income (loss)

$          (495)


$                (4)


$             144


$          (734)


$              12

Earnings (loss) per share










Basic

$         (0.85)


$           (0.01)


$           0.25


$         (1.27)


$           0.02

Diluted

$         (0.85)


$           (0.09)


$          (0.03)


$         (1.35)


$          (0.31)











Weighted-average number of common shares outstanding (000s)










Basic

581,493


578,948


575,883


578,654


570,607

Diluted

581,493


639,781


636,716


639,487


631,440

Total common shares outstanding (000s)

582,157


580,346


576,228


582,157


576,228

BlackBerry Limited

Incorporated under the Laws of Ontario

(United States dollars, in millions) (unaudited)


Consolidated Balance Sheet Data




As at



February 28, 2023


February 28, 2022

Assets





Current





Cash and cash equivalents


$                           295


$                           378

Short-term investments


131


334

Accounts receivable, net of allowance of $1 and $4, respectively


120


138

Other receivables


12


25

Income taxes receivable


3


9

Other current assets


182


159



743


1,043

Restricted cash and cash equivalents


27


28

Long-term investments


34


30

Other long-term assets


8


9

Operating lease right-of-use assets, net


44


50

Property, plant and equipment, net


25


41

Goodwill


595


844

Intangible assets, net


203


522



$                        1,679


$                        2,567

Liabilities





Current





Accounts payable


$                             24


$                             22

Accrued liabilities


143


157

Income taxes payable


20


11

Debentures


367


Deferred revenue, current


175


207



729


397

Deferred revenue, non-current


40


37

Operating lease liabilities


52


66

Other long-term liabilities


1


4

Long-term debentures



507



822


1,011

Shareholders' equity





Capital stock and additional paid-in capital


2,909


2,869

Deficit


(2,028)


(1,294)

Accumulated other comprehensive loss


(24)


(19)



857


1,556



$                        1,679


$                        2,567

BlackBerry Limited

Incorporated under the Laws of Ontario

(United States dollars, in millions) (unaudited)

Consolidated Statements of Cash Flow Data



For the Years Ended


February 28, 2023


February 28, 2022

Cash flows from operating activities




Net income (loss)

$                          (734)


$                             12

Adjustments to reconcile net income (loss) to net cash used in operating activities:




Amortization

105


176

Stock-based compensation

34


36

Gain on sale of investment


(22)

Impairment of goodwill

245


Impairment of long-lived assets

235


Gain on sale of property, plant and equipment, net

(6)


Debentures fair value adjustment

(138)


(212)

Operating leases

(16)


(16)

Other

5


(3)

Net changes in working capital items




Accounts receivable, net of allowance

18


44

Other receivables

13


Income taxes receivable

6


1

Other assets

(1)


15

Accounts payable

2


2

Accrued liabilities

(11)


(16)

Income taxes payable

9


5

Deferred revenue

(29)


(50)

Net cash used in operating activities

(263)


(28)

Cash flows from investing activities




Acquisition of long-term investments

(3)


(1)

Proceeds on sale, maturity or distribution from long-term investments


35

Acquisition of property, plant and equipment

(7)


(8)

Proceeds on sale of property, plant and equipment

17


Acquisition of intangible assets

(34)


(31)

Acquisition of short-term investments

(514)


(916)

Proceeds on sale or maturity of restricted short-term investments


24

Proceeds on sale or maturity of short-term investments

717


1,104

Net cash provided by investing activities

176


207

Cash flows from financing activities




Issuance of common shares

6


10

Net cash provided by financing activities

6


10

Effect of foreign exchange loss on cash, cash equivalents, restricted cash, and restricted cash
equivalents

(3)


(1)

Net increase (decrease) in cash, cash equivalents, restricted cash, and restricted cash equivalents
during the period

(84)


188

Cash, cash equivalents, restricted cash, and restricted cash equivalents, beginning of period

406


218

Cash, cash equivalents, restricted cash, and restricted cash equivalents, end of period

$                            322


$                            406


As at

February 28, 2023


February 28, 2022

Cash and cash equivalents

$                            295


$                            378

Restricted cash and cash equivalents

27


28

Short-term investments

131


334

Long-term investments

34


30


$                            487


$                            770

Reconciliations of the Company's Segment Results to the Consolidated Results

The following table shows information by operating segment for the three months ended February 28, 2023 and February 28 , 2022.  The Company reports segment information in accordance with U.S. GAAP Accounting Standards Codification Section 280 based on the "management" approach. The management approach designates the internal reporting used by the Chief Operating Decision Maker for making decisions and assessing performance of the Company's reportable operating segments.


For the Three Months Ended

(in millions) (unaudited)


Cybersecurity


IoT


Licensing and Other


Segment Totals


February 28,


February 28,


February 28,


February 28,


2023


2022


2023


2022


2023


2022


2023


2022

Segment revenue

$          88


$        122


$          53


$          52


$          10


$          11


$        151


$        185

Segment cost of sales

36


47


10


8


4


5


50


60

Segment gross margin

$          52


$          75


$          43


$          44


$            6


$            6


$        101


$        125

Segment gross margin %

59 %


61 %


81 %


85 %


60 %


55 %


67 %


68 %

The following table reconciles the Company's segment results for the three months ended February 28, 2023 to consolidated U.S. GAAP results:


For the Three Months Ended February 28, 2023


(in millions) (unaudited)


Cybersecurity


IoT

Licensing and Other

Segment Totals


Reconciling Items


Consolidated U.S. GAAP

Revenue

$                88


$                53


$                10


$               151


$                 —


$               151

Cost of sales

36


10


4


50


1


51

Gross margin (1)

$                52


$                43


$                  6


$               101


$                  (1)


$               100

Operating expenses









599


599

Investment income, net









(6)


(6)

Loss before income taxes











$             (493)

______________________________

(1)

See "Reconciliation of Non-GAAP Measures with the Nearest Comparable U.S. GAAP Measures" for a reconciliation of selected U.S. GAAP-based measures to adjusted measures for the three months ended February 28, 2023.

The following table reconciles the Company's segment results for the three months ended February 28, 2022 to consolidated U.S. GAAP results:


For the Three Months Ended February 28, 2022


(in millions) (unaudited)


Cybersecurity


IoT

Licensing and Other

Segment Totals


Reconciling Items


Consolidated U.S. GAAP

Revenue

$              122


$                52


$                11


$               185


$                 —


$               185

Cost of sales

47


8


5


60


1


61

Gross margin (1)

$                75


$                44


$                  6


$               125


$                  (1)


$               124

Operating expenses









(22)


(22)

Investment loss, net









1


1

Income before income taxes











$               145

______________________________

(1)

See "Reconciliation of Non-GAAP Measures with the Nearest Comparable U.S. GAAP Measures" for a reconciliation of selected U.S. GAAP-based measures to adjusted measures for the three months ended February 28, 2022.

Reconciliation of Non-GAAP Measures with the Nearest Comparable U.S. GAAP Measures

In the Company's internal reports, management evaluates the performance of the Company's business on a non-GAAP basis by excluding the impact of certain items below from the Company's U.S. GAAP financial results. The Company believes that these non-GAAP financial measures and non-GAAP ratios provide management, as well as readers of the Company's financial statements, with a consistent basis for comparison across accounting periods and is useful in helping management and readers understand the Company's operating results and underlying operational trends.

Readers are cautioned that adjusted gross margin, adjusted gross margin percentage, adjusted operating expense, adjusted net income (loss), adjusted income (loss) per share, adjusted research and development expense, adjusted selling, marketing and administrative expense, adjusted amortization expense, adjusted operating income (loss), adjusted EBITDA, adjusted operating income (loss) margin percentage, adjusted EBITDA margin percentage and free cash flow (usage) and similar measures do not have any standardized meaning prescribed by U.S. GAAP and are therefore unlikely to be comparable to similarly titled measures reported by other companies. These non-GAAP financial measures should be considered in the context of the U.S. GAAP results.

Reconciliation of non-GAAP based measures with most directly comparable U.S. GAAP based measures for the three months ended February 28, 2023 and February 28, 2022

A reconciliation of the most directly comparable U.S. GAAP financial measures for the three months ended February 28, 2023 and February 28, 2022 to adjusted financial measures is reflected in the table below:

For the Three Months Ended (in millions)


February 28, 2023


February 28, 2022

Gross margin


$                       100


$                       124

Stock compensation expense


1


1

Adjusted gross margin


$                       101


$                       125






Gross margin %


66.2 %


67.0 %

Stock compensation expense


0.7 %


0.6 %

Adjusted gross margin %


66.9 %


67.6 %

Reconciliation of U.S. GAAP operating expense (income) for the three months ended February 28, 2023 and February 28, 2022 to adjusted operating expense is reflected in the table below:

For the Three Months Ended (in millions)


February 28, 2023


February 28, 2022

Operating expense (income)


$                           599


$                           (22)

Restructuring charges


7


Stock compensation expense


9


4

Debentures fair value adjustment


(26)


(165)

Acquired intangibles amortization


15


22

Goodwill impairment charge


245


LLA impairment charge


231


Adjusted operating expense


$                           118


$                           117

Reconciliation of U.S. GAAP net income (loss) and U.S. GAAP basic earnings (loss) per share for the three months ended February 28, 2023 and February 28, 2022 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)


February 28, 2023


February 28, 2022





Basic loss

per share




Basic
earnings

per share

Net income (loss)


$        (495)


$(0.85)


$          144


$0.25

Restructuring charges


7






Stock compensation expense


10




5



Debentures fair value adjustment


(26)




(165)



Acquired intangibles amortization


15




22



Goodwill impairment charge


245






LLA impairment charge


231






Adjusted net income (loss)


$          (13)


$(0.02)


$              6


$0.01

Reconciliation of U.S. GAAP research and development, selling, marketing and administration, and amortization expense for the three months ended February 28, 2023 and February 28, 2022 to adjusted research and development, selling, marketing and administration, and amortization expense is reflected in the table below:

For the Three Months Ended (in millions)


February 28, 2023


February 28, 2022

Research and development


$                             48


$                             47

Stock compensation expense


3


2

Adjusted research and development


$                             45


$                             45






Selling, marketing and administration


$                             83


$                             64

Restructuring charges


7


Stock compensation expense


6


2

Adjusted selling, marketing and administration


$                             70


$                             62






Amortization


$                             18


$                             32

Acquired intangibles amortization


15


22

Adjusted amortization


$                               3


$                             10

Adjusted operating income (loss), adjusted EBITDA, adjusted operating income (loss) margin percentage and adjusted EBITDA margin percentage for the three months ended February 28, 2023 and February 28, 2022 are reflected in the table below. These are non-GAAP financial measures and non-GAAP ratios that do not have any standardized meaning as prescribed by U.S. GAAP and are therefore unlikely to be comparable to similar measures presented by other companies.

For the Three Months Ended (in millions)


February 28, 2023


February 28, 2022

Operating income (loss)


$                         (499)


$                           146

Non-GAAP adjustments to operating income (loss)





Restructuring charges


7


Stock compensation expense


10


5

Debentures fair value adjustment


(26)


(165)

Acquired intangibles amortization


15


22

Goodwill impairment charge


245


LLA impairment charge


231


Total non-GAAP adjustments to operating income (loss)


482


(138)

Adjusted operating income (loss)


(17)


8

Amortization


20


34

Acquired intangibles amortization


(15)


(22)

Adjusted EBITDA


$                           (12)


$                             20






Revenue


$                          151


$                           185

Adjusted operating income (loss) margin % (1)


(11 %)


4 %

Adjusted EBITDA margin % (2)


(8 %)


11 %

______________________________

(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 years ended February 28, 2023 and February 28, 2022

A reconciliation of the most directly comparable U.S. GAAP financial measures for the years ended February 28, 2023 and February 28, 2022 to adjusted financial measures is reflected in the table below:

For the Fiscal Years Ended (in millions)


February 28, 2023


February 28, 2022

Gross margin


$                       419


$                       467

Stock compensation expense


3


4

Adjusted gross margin


$                       422


$                       471






Gross margin %


63.9 %


65.0 %

Stock compensation expense


0.4 %


0.6 %

Adjusted gross margin %


64.3 %


65.6 %






Operating expense


$                    1,144


$                       469

Restructuring charges


11


Stock compensation expense


28


26

Debentures fair value adjustment


(138)


(212)

Acquired intangibles amortization


82


115

Goodwill impairment charge


245


LLA impairment charge


235


Litigation settlement


165


Adjusted operating expense


$                       516


$                       540

Reconciliation of U.S. GAAP net income (loss) and U.S. GAAP basic earnings (loss) per share for the years ended February 28, 2023 and February 28, 2022 to adjusted net loss and adjusted basic loss per share is reflected in the table below:

For the Fiscal Years Ended (in millions, except per share amounts)


February 28, 2023


February 28, 2022





Basic
loss per
share




Basic
earnings
(loss) per
share

Net income (loss)


$        (734)


$(1.27)


$            12


$0.02

Restructuring charges


11






Stock compensation expense


31




30



Debentures fair value adjustment


(138)




(212)



Acquired intangibles amortization


82




115



Goodwill impairment charge


245






LLA impairment charge


235






Litigation settlement


165






Adjusted net loss


$        (103)


$(0.18)


$          (55)


$(0.10)

Reconciliation of U.S. GAAP research and development, selling, marketing and administration, and amortization expense for the years ended February 28, 2023 and February 28, 2022 to adjusted research and development, selling, marketing and administration, and amortization expense is reflected in the table below:

For the Fiscal Years Ended (in millions)


February 28, 2023


February 28, 2022

Research and development


$                           207


$                           219

Stock compensation expense


9


8

Adjusted research and development


$                           198


$                           211






Selling, marketing and administration


$                           340


$                           297

Restructuring charges


11


Stock compensation expense


19


18

Adjusted selling, marketing and administration


$                           310


$                           279






Amortization


$                             96


$                           165

Acquired intangibles amortization


82


115

Adjusted amortization


$                             14


$                             50

Adjusted operating loss, adjusted EBITDA, adjusted operating loss margin percentage and adjusted EBITDA margin percentage for the years ended February 28, 2023 and February 28, 2022 are reflected in the table below.

For the Fiscal Years Ended (in millions)


February 28, 2023


February 28, 2022

Operating loss


$                     (725)


$                         (2)

Non-GAAP adjustments to operating loss





Restructuring charges


11


Stock compensation expense


31


30

Debentures fair value adjustment


(138)


(212)

Acquired intangibles amortization


82


115

Goodwill impairment charge


245


LLA impairment charge


235


Litigation settlement


165


Total non-GAAP adjustments to operating loss


631


(67)

Adjusted operating loss


(94)


(69)

Amortization


105


176

Acquired intangibles amortization


(82)


(115)

Adjusted EBITDA


$                       (71)


$                         (8)






Revenue


$                      656


$                      718

Adjusted operating loss margin % (1)


(14 %)


(10 %)

Adjusted EBITDA margin % (2)


(11 %)


(1 %)

______________________________

(1)

Adjusted operating loss margin % is calculated by dividing adjusted operating loss by revenue.

(2)

Adjusted EBITDA margin % is calculated by dividing adjusted EBITDA by revenue.

The Company uses free cash flow (usage) when assessing its sources of liquidity, capital resources, and quality of earnings. The Company believes that free cash flow (usage) is helpful in understanding the Company's capital requirements and provides an additional means to reflect the cash flow trends in the Company's business.

Reconciliation of U.S. GAAP net cash provided by (used in) operating activities for the three months ended February 28, 2023 and February 28, 2022 to free cash flow (usage) is reflected in the table below:

For the Three Months Ended (in millions)


February 28, 2023


February 28, 2022

Net cash provided by (used in) operating activities


$                             (7)


$                             10

Acquisition of property, plant and equipment


(2)


(2)

Free cash flow (usage)


$                             (9)


$                               8

Reconciliation of U.S. GAAP net cash used in operating activities for the years ended February 28, 2023 and February 28, 2022 to free cash usage is reflected in the table below:

For the Fiscal Years Ended (in millions)


February 28, 2023


February 28, 2022

Net cash used in operating activities


$                         (263)


$                           (28)

Acquisition of property, plant and equipment


(7)


(8)

Free cash usage


$                         (270)


$                           (36)

For the year ended February 28, 2023 , free cash usage includes $165 million in litigation settlement paid.

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"), Cybersecurity total contract value ("TCV") billings, recurring revenue percentage and QNX royalty backlog do not have any standardized meaning and are unlikely to be comparable to similarly titled measures reported by other companies.

For the Three Months Ended (in millions)


February 28, 2023

Cybersecurity Annual Recurring Revenue


$                       298

Cybersecurity Dollar-Based Net Retention Rate


81 %

Cybersecurity Total Contract Value Billings


$                       107

Recurring Software Product Revenue


~ 90%

QNX Royalty Backlog


$                       640

Cision View original content to download multimedia: https://www.prnewswire.com/news-releases/blackberry-reports-fourth-quarter-and-full-fiscal-year-2023-results-301786466.html

SOURCE BlackBerry Limited

News Provided by PR Newswire via QuoteMedia

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BlackBerry Logo Black (PRNewsfoto/Blackberry Limited)

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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 over 215M vehicles.  Based in Waterloo, Ontario , the company leverages AI and machine learning to deliver innovative solutions in the areas of cybersecurity, safety and data privacy solutions, and is a leader in the areas of endpoint management, endpoint security, 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.

Trademarks, including but not limited to BlackBerry and EMBLEM Design are the trademarks or registered trademarks of BlackBerry Limited, and the exclusive rights to such trademarks are expressly reserved.  All other trademarks are the property of their respective owners.  BlackBerry is not responsible for any third-party products or services.

About Solutions Granted Inc.

Solutions Granted is a Master Managed Security Services Provider (Master MSSP). They offer cybersecurity solutions to North American MSPs and MSSPs and are committed to delivering solutions without requiring minimums, commitments, or long-term contracts. They proudly offer many security layers as well as a 24x7 U.S.-based Security Operations Center (SOC). Over the past several years, Solutions Granted has emerged as a clear leader in the channel, by winning countless awards including the CRN Security 100 list, Top 100 MSSP List, Top Global MSSP List, and BlackBerry MSSP Partner of the Year. Learn more at https://www.SolutionsGranted.com

Media Contacts:

BlackBerry Media Relations

+1 (519) 597-7273

mediarelations@BlackBerry.com

Cision View original content to download multimedia: https://www.prnewswire.com/news-releases/blackberry-extends-partnership-with-leading-managed-security-services-provider-mssp-to-ensure-smbs-are-set-up-for-cyber-success-301803800.html

SOURCE BlackBerry Limited

News Provided by PR Newswire via QuoteMedia

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