Emerging Technology

Sierra Wireless, Inc. (NASDAQ: SWIR) (TSX: SW) (the "Company", "Sierra Wireless", "we", "us", or "our") reported results for its third quarter of 2021. All results are reported in U.S. dollars and are prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP" or "GAAP"), except as otherwise indicated below.

Revenue in the third quarter of 2021 was $82.5 million compared to $113.4 million in the third quarter of 2020. The decrease in revenue was due to the reduction in hardware sales due to manufacturing capacity constraints in Vietnam as a result of COVID-19 related restrictions.

Quarterly revenue for our two business segments was as follows:

(i)

Revenue from IoT Solutions was $53.7 million compared to $79.3 million in the third quarter of 2020. The decrease in revenue was due to the previously discussed manufacturing capacity constraints.

(ii)

Revenue from Enterprise Solutions was $28.8 million compared to $34.0 million in the third quarter of 2020. The decrease was due to the reduction in hardware sales of Enterprise gateways due to the previously discussed manufacturing capacity constraints.

"We continue to experience very strong customer demand, and we had record backlog at the end of the Third Quarter," said Phil Brace, President and CEO of Sierra Wireless. "The manufacturing capacity constraints we experienced in Q3 are improving in the current quarter but we are still facing the industry-wide tight supply for parts and components. I would like to thank our customers, suppliers and employees as we collectively work through the current environment."

Product revenue decreased 43.5% year-over-year to $47.2 million, representing 57.3% of consolidated revenue in the quarter. Connectivity, software, and services revenue increased 18.2% year-over-year to $35.2 million, representing 42.7% of consolidated revenue. Monthly recurring revenue ("MRR" 1 ) was $11.5 million in September, a year-over-year increase of 21.1%.

In accordance with U.S. GAAP, the results of operations of the Automotive Business are reported as discontinued operations in our consolidated statements of operations and comprehensive loss for the three and nine months ended September 30, 2021 and 2020.

Non-U.S. GAAP financial measures referred to in this news release are labeled as a "non-GAAP measure" or are designated as such with an asterisk (*). Please see "Non-GAAP Financial Measures" for explanations of why the Company uses these non-GAAP measures and "Reconciliation of GAAP and Non-GAAP Results by Quarter" for reconciliation to the most comparable U.S. GAAP financial measures.

__________________

1 MRR is defined as the monthly subscription revenue including usage fees from current subscribers. MRR is a key performance metric to measure our performance and growth in our recurring revenue, both to help investors better understand and assess the performance of our business and also because our mix of revenue generated from recurring sources has increased in recent years. MRR does not have any standardized meaning and is therefore unlikely to be comparable to similarly titled measures presented by other companies. MRR should be viewed independently of revenue and deferred revenue and is not intended to be combined with or to replace either of those items. MRR is not a forecast.

Third Quarter 2021 Financial Highlights

  • Gross margin was 29.3% in the third quarter of 2021 compared to 34.8% in the third quarter of 2020. The decrease was primarily impacted by fixed costs spread over lower production volumes due to previously discussed manufacturing capacity constraints, increased component costs, and certain non-recurring COVID-19 costs in Vietnam.
  • IoT Solutions gross margin was 19.9% in the third quarter of 2021 compared to 28.5% in the third quarter of 2020, and Enterprise Solutions gross margin was 46.8% in the third quarter of 2021 compared to 49.6% in the third quarter of 2020.
  • Operating expenses were $61.4 million in the third quarter of 2021 compared to $57.2 million in the third quarter of 2020. The increase was primarily due to an $11.5 million impairment charge related to the intangible assets of Maingate that was acquired in 2015 in Sweden. Excluding this impairment, our operating expenses in the third quarter of 2021 decreased compared to the third quarter of 2020.
  • Net loss from continuing operations was $38.4 million in the third quarter of 2021 compared to $14.5 million in the third quarter of 2020 due to lower revenue, lower gross margin, and impairment expense.
  • Adjusted net loss from continuing operations* was $20.7 million, or loss of $0.56 per share, in the third quarter of 2021 compared to $11.7 million, or loss of $0.32 per share, in the third quarter of 2020.
  • Adjusted EBITDA* loss was $15.0 million in the third quarter of 2021 compared to a loss of $7.1 million in the third quarter of 2020.
  • Long-term debt was $9.9 million as at September 30, 2021 compared to nil as at June 30, 2021.

Cash Position

Cash and cash equivalents and restricted cash at the end of the third quarter of 2021 were $75.5 million compared to $118.5 million at the end of the second quarter of 2021, a decrease of $42.9 million. The decrease in cash was primarily driven by the impact of the previously discussed manufacturing capacity constraints and our continued investment in inventory, partially offset by new financing of $9.9 million from attractive long-term debt.

Financial Guidance

The impact of the COVID-19 pandemic on our global business continues to remain uncertain. While we continue to experience and evaluate the effects on our business, the overall severity and duration of adverse impacts related to COVID-19 on our business, financial condition, cash flows, and operating results for the fourth quarter of 2021 and beyond cannot be reasonably estimated at this time.

Demand for our products remains very strong. While our manufacturing capacity is expected to improve in the fourth quarter and we expect to build and ship more modules and gateways, the ongoing potential impact of COVID-19 and tight supply chain makes for an uncertain operating environment. Given this landscape and potential risks and uncertainties we are providing guidance range for revenue in the fourth quarter of $120 million to $135 million.

This non-GAAP guidance constitutes "forward-looking statements" within the meaning of applicable securities laws and reflects current business indicators and expectations. These statements are based on management's current beliefs and assumptions, which could prove to be significantly incorrect. Forward-looking statements, particularly those that relate to longer periods of time, are subject to substantial known and unknown risks and uncertainties that could cause actual events or results to differ significantly from those expressed or implied by our forward-looking statements, including those described in our regulatory filings. See "Cautionary Note Regarding Forward-Looking Statements" below.

Non-GAAP Financial Measures

Our consolidated financial statements are prepared in accordance with U.S. GAAP on a basis consistent for all periods presented. In addition to results reported in accordance with U.S. GAAP, we use non-GAAP financial measures as supplemental indicators of our operating performance. The term "non-GAAP financial measure" is used to refer to a numerical measure of a company's historical or future financial performance, financial position or cash flows that: (i) excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the most directly comparable measure calculated and presented in accordance with U.S. GAAP in a company's statement of earnings, balance sheet or statement of cash flows; or (ii) includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the most directly comparable measure so calculated and presented.

Our non-GAAP financial measures included in this press release are adjusted net earnings (loss) from continuing operations*, adjusted basic and diluted net earnings (loss) per share from continuing operations*and adjusted EBITDA* (earnings before interest, taxes, depreciation, and amortization).

Adjusted net earnings (loss) from continuing operations* excludes the impact of stock-based compensation expense and related social taxes, phantom RSU expense which represents expenses related to compensation units settled in cash based on the stock price at vesting, restructuring costs, acquisition-related and integration costs, government grants related to COVID-19 relief, CEO retirement/search, impairment, the ransomware incident, COVID-19 factory constraint incremental costs, certain other non-recurring costs or recoveries, acquisition-related amortization, the impact of foreign exchange gains or losses on translation of certain balance sheet accounts, foreign exchange gains or losses on forward contracts, and certain tax adjustments.

Adjusted EBITDA* from continuing operations is defined as net earnings (loss) from continuing operations plus stock-based compensation expense and related social taxes, phantom RSU expense which represents expenses related to compensation units settled in cash based on the stock price at vesting, restructuring costs, acquisition-related and integration costs, government grants related to COVID-19 relief, CEO retirement/search, impairment, the ransomware incident, COVID-19 factory constraint incremental costs, certain other non-recurring costs or recoveries, amortization, interest and other income (expense), foreign exchange gains or losses on translation of certain balance sheet accounts, unrealized foreign exchange gains or losses on forward contracts, and income tax expense (recovery). Adjusted EBITDA is a metric used by investors and analysts for valuation purposes and is an important indicator of our operating performance and our ability to generate liquidity through operating cash flow that will fund future working capital needs and fund future capital expenditures.

We use the above-noted non-GAAP financial measures for planning purposes and to allow us to assess the performance of our business before including the impacts of the items noted above as they affect the comparability of our financial results. These non-GAAP measures are reviewed regularly by management and the Board of Directors as part of the ongoing internal assessment of our operating performance.

We disclose these non-GAAP financial measures as we believe they provide useful information to investors and analysts to assist them in their evaluation of our operating results and to assist in comparisons from one period to another. Readers are cautioned that non-GAAP financial measures do not have any standardized meaning prescribed by U.S. GAAP and therefore may not be comparable to similar measures presented by other companies.

Conference call and webcast details

Sierra Wireless is hosting a conference call to discuss its financial results for the third quarter ended September 30, 2021 on Tuesday November 9, 2021, at 6:00 PM Eastern time (3:00 PM Pacific time).

To participate, dial the following number approximately ten minutes prior to the start of the call:

  • Toll-free (Canada and US): 1-877-201-0168
  • Alternate number: 1-647-788-4901
  • Conference ID: 8888166

Conference call and webcast details are available at the following link:
Sierra Wireless Q3 2021 Conference Call and Webcast

If the above link does not work, copy and paste the following URL into your browser:

https://onlinexperiences.com/Launch/QReg/ShowUUID=E03B257F-D00D-4490-A838-C224F22947FA

The webcast will remain available at the above link for one year following the call.

Cautionary Note Regarding Forward-Looking Statements

This press release contains certain statements and information that are not based on historical facts and constitute forward-looking statements or forward-looking information within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 and Canadian securities laws (collectively, "forward-looking statements") and may include statements and information relating to our fourth quarter fiscal 2021 guidance; our expectations regarding customer demand, our supply chain, manufacturing capacity (including manufacturing shutdowns or slowdowns) and the potential impact of COVID-19 in these areas; our ability to meet customer demand and our financial results; expectations regarding post-COVID-19 recovery; expectations regarding the Company's cost savings initiatives; statements regarding our strategy, plans, goals, objectives, expectations and future operating performance; the Company's liquidity and capital resources; the Company's financial and operating objectives and strategies to achieve them; general economic conditions; estimates of our expenses, future revenues, financial results and capital requirements; our expectations regarding the legal proceedings we are involved in; statements with respect to the Company's estimated working capital; expectations with respect to the adoption of IoT solutions; expectations regarding trends and growth in the IoT market and wireless module market; expectations regarding product and price competition from other wireless device manufacturers and solution providers; our ability to implement effective control procedures; and expectations regarding the launch of fifth generation cellular embedded modules and gateways. Forward-looking statements are provided to help you understand our views of our short and long term plans, expectations, and prospects. We caution you that forward-looking statements may not be appropriate for other purposes. We do not intend to update or revise our forward-looking statements expect as required by applicable securities laws.

Forward-looking statements:

  • Typically include words and phrases about the future such as "outlook", "guidance", "will", "may", "expects", "is expected", "anticipates", "believes", "plans", "projects", "estimates", "assumes", "intends", "strategy", "goals", "objectives", "potential", "possible", or variations thereof.
  • Are not promises or guarantees of future performance. They represent our current views and may change significantly.
  • Are based on a number of material assumptions, including, but not limited to, those listed below, which could prove to be significantly incorrect:
    • new management changes;
    • the scope and duration of the COVID-19 pandemic and its impact on our business;
    • our ability to return to normal operations after the COVID-19 pandemic has subsided globally;
    • expected component supply constraints and manufacturing capacity;
    • logistical constraints impacting our ability to receive supply from our suppliers and deliver product to our customers;
    • customer demand and our ability to continue to sell our products and services in the expected quantities at the expected prices and expected times;
    • our ability to effect and to realize the anticipated benefits of our business transformation and restructuring initiatives, and the timing thereof;
    • our ability to develop, manufacture, and sell new products and services that meet the needs of our customers and gain commercial acceptance;
    • expected macro-economic business conditions;
    • expected cost of sales;
    • our ability to win new business;
    • our ability to integrate acquired businesses and realize expected benefits;
    • our ability to renew or obtain credit facilities when required;
    • expected deployment of next generation networks by wireless network operators;
    • our operations not being adversely disrupted by further ransomware or cyber security attacks;
    • our operations not being adversely disrupted by other developments, operating, cyber security, litigation, or regulatory risks; and
    • expected tax and foreign exchange rates.
  • Are based on our management's current expectations and we caution investors that forward-looking statements, particularly those that relate to longer periods of time, are subject to substantial known and unknown material risks and uncertainties. Many factors could cause our actual results, achievements and developments in our business to differ significantly from those expressed or implied by our forward-looking statements, including without limitation, the following factors. These risk factors and others are discussed in our Annual Information Form which may be found on SEDAR at www.sedar.com and on EDGAR at www.sec.gov and in our other regulatory filings with the Securities and Exchange Commission in the United States and the provincial securities commissions in Canada:
    • prolonged negative impact from COVID-19;
    • our access to capital, if required;
    • competition from new or established competitors or from those with greater resources;
    • our reliance on single source suppliers for certain components used in our products;
    • our dependence on a limited number of third party manufacturers;
    • cyber-attacks or other breaches of our and our vendors' information technology security;
    • natural catastrophes or public health epidemics that could impact customer demand, result in production disruption and impact our ability to meet customer demand or capacity to continue critical operations;
    • the loss of, or significant demand fluctuations from, any of our significant customers;
    • our financial results being subject to fluctuations;
    • our business transformation initiatives may result in disruptions to our business and may not achieve the anticipated benefits;
    • our ability to respond to changing technology, industry standards, and customer requirements;
    • failures of our products or services due to design flaws and errors, component quality issues, manufacturing defects, network service interruptions, cyber-security vulnerabilities or other quality issues;
    • deterioration in macro-economic conditions could adversely affect our operating results and financial conditions;
    • our ability to hire and transition in a timely manner experienced and qualified additional executive officers and key employees as needed to achieve our business objectives;
    • risks related to the transmission, use and disclosure of user data and personal information;
    • disruption of, and demands on, our ongoing business and diversion of management's time and attention in connection with acquisitions or divestitures;
    • risks that our investments and partnerships may fail to realize the expected benefits;
    • risks related to infringement on intellectual property rights of others;
    • our ability to obtain necessary rights to use software or components supplied by third parties;
    • our ability to enforce our intellectual property rights;
    • unanticipated costs associated with litigation or settlements;
    • our dependence on mobile network operators to promote and offer acceptable wireless data services;
    • risks related to contractual disputes with counterparties;
    • risks related to governmental regulation;
    • risks inherent in foreign jurisdictions; and
    • risks related to tariffs or other trade restrictions.

About Sierra Wireless

Sierra Wireless (NASDAQ: SWIR) (TSX: SW) is a leading IoT solutions provider that combines devices, network services, and software to unlock value in the connected economy. Companies globally are adopting 4G, 5G, and LPWA solutions to improve operational efficiency, create better customer experiences, improve their business models, and create new revenue streams. Sierra Wireless works with its customers to develop the right industry-specific solution for their IoT deployments, whether this is an integrated solution to help connect edge devices to the cloud, a software/API service to manage processes with billions of connected assets, or a platform to extract real-time data to improve business decisions. With more than 25 years of cellular IoT experience, Sierra Wireless is the global partner customers trust to deliver them their next IoT solution. For more information, visit www.sierrawireless.com .

"Sierra Wireless" is a registered trademark of Sierra Wireless. Other product or service names mentioned herein may be the trademarks of their respective owners.

SIERRA WIRELESS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(In thousands of U.S. dollars, except where otherwise stated)
(unaudited)

Three months ended September 30,

Nine months ended September 30,

2021

2020

2021

2020

Revenue

IoT Solutions

$

53,657

$

79,345

$

218,544

$

225,356

Enterprise Solutions

28,793

34,026

104,753

102,754

82,450

113,371

323,297

328,110

Cost of sales

IoT Solutions

42,981

56,757

161,357

161,553

Enterprise Solutions

15,320

17,162

53,833

51,172

58,301

73,919

215,190

212,725

Gross margin

24,149

39,452

108,107

115,385

Expenses

Sales and marketing

18,574

20,072

59,818

64,818

Research and development

16,238

17,699

50,652

61,151

Administration

10,410

11,199

37,534

35,111

Restructuring

369

3,089

4,663

3,940

Acquisition-related and integration

(26)

140

255

325

Impairment

11,544

11,544

Amortization

4,294

5,040

13,307

15,755

61,403

57,239

177,773

181,100

Loss from operations

(37,254)

(17,787)

(69,666)

(65,715)

Foreign exchange (loss) gain

(2,601)

3,659

(5,717)

4,269

Other expense

(463)

(988)

(2,352)

(1,463)

Loss before income taxes

(40,318)

(15,116)

(77,735)

(62,909)

Income tax recovery

(1,912)

(633)

(755)

(3,925)

Net loss from continuing operations

$

(38,406)

$

(14,483)

$

(76,980)

$

(58,984)

Net earnings (loss) from discontinued

operations

459

2,456

(778)

8,687

Net loss

$

(37,947)

$

(12,027)

$

(77,758)

$

(50,297)

Other comprehensive income (loss):

Foreign currency translation adjustments, net of taxes of $nil

(960)

2,670

(2,627)

2,122

Comprehensive loss

$

(38,907)

$

(9,357)

$

(80,385)

$

(48,175)

Basic and diluted net earnings (loss) per share (in dollars)

Continuing operations

$

(1.03)

$

(0.40)

$

(2.08)

$

(1.62)

Discontinued operations

0.01

0.07

(0.02)

0.24

$

(1.02)

$

(0.33)

$

(2.10)

$

(1.38)

Weighted average number of shares outstanding

(in thousands)

Basic

37,196

36,417

36,976

36,345

Diluted

37,196

36,417

36,976

36,345

SIERRA WIRELESS, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands of U.S. dollars, except where otherwise stated)
(unaudited)

September 30, 2021

December 31, 2020

Assets

Current assets

Cash and cash equivalents

$

72,346

$

160,560

Restricted cash

3,193

10,864

Accounts receivable

52,457

68,575

Inventories

71,191

32,815

Prepaids and other

26,003

11,933

225,190

284,747

Property and equipment, net

31,945

31,412

Operating lease right-of-use assets

15,849

20,068

Intangible assets, net

57,355

78,081

Goodwill

169,619

175,545

Deferred income taxes

1,072

1,135

Other assets

8,103

10,383

$

509,133

$

601,371

Liabilities

Current liabilities

Accounts payable and accrued liabilities

137,750

162,138

Deferred revenue

10,671

9,862

Current portion of long-term debt

246

148,667

172,000

Long-term obligations

42,534

45,646

Operating lease liabilities

15,457

17,054

Long-term debt

9,662

Deferred income taxes

7,340

10,258

223,660

244,958

Equity

Shareholders' equity

Common stock: no par value; unlimited shares authorized;
issued and outstanding: 37,238,177 shares (December 31, 2020 - 36,619,439 shares)

452,350

441,999

Preferred stock: no par value; unlimited shares authorized;

issued and outstanding: nil shares

Treasury stock: at cost; 8,542 shares (December 31, 2020 – 46,505 shares)

(136)

(542)

Additional paid-in capital

50,557

49,489

Retained deficit

(209,091)

(128,953)

Accumulated other comprehensive loss

(8,207)

(5,580)

285,473

356,413

$

509,133

$

601,371

SIERRA WIRELESS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands of U.S. dollars)
(unaudited)

Three months ended September 30,

Nine months ended September 30,

2021

2020

2021

2020

Cash flows provided by (used in):

Operating activities

Net loss

$

(37,947)

$

(12,027)

$

(77,758)

$

(50,297)

Items not requiring (providing) cash

Amortization

7,208

8,269

21,783

25,292

Stock-based compensation

1,767

5,667

14,004

12,125

Deferred income tax (recovery) expense

(2,378)

153

(2,381)

144

Impairment

11,544

11,544

Unrealized foreign exchange loss (gain)

2,841

(4,278)

7,002

(3,917)

Other

(45)

54

292

(153)

Changes in non-cash working capital

Accounts receivable

22,049

(27,524)

14,853

(1,236)

Inventories

(24,375)

9,330

(38,610)

(2,225)

Prepaids and other

(928)

8,273

(12,012)

2,614

Accounts payable and accrued liabilities

(28,532)

4,589

(23,037)

10,622

Deferred revenue

348

(188)

744

(1,404)

Cash flows used in operating activities

(48,448)

(7,682)

(83,576)

(8,435)

Investing activities

Additions to property and equipment

(3,187)

(2,416)

(11,868)

(12,143)

Additions to intangible assets

(1,139)

(503)

(4,061)

(1,974)

Proceeds from sale of property and equipment

51

28

90

252

Acquisition of M2M Group, net of cash acquired

(18,391)

Acquisition of M2M New Zealand, net of cash acquired

(319)

Cash flows used in investing activities

(4,275)

(2,891)

(16,158)

(32,256)

Financing activities

Issuance of common shares, net of issuance cost

481

883

4,082

883

Purchase of treasury shares for RSU distribution

(111)

(544)

(7,574)

(764)

Taxes paid related to net settlement of equity awards

(565)

(1,057)

(1,191)

Decrease in other long-term obligations

(73)

(47)

(175)

(234)

Proceeds from short-term borrowings

10,000

25,000

Proceeds from long-term debt

9,908

9,383

9,908

9,383

Cash flows provided by financing activities

10,205

19,110

5,184

33,077

Effect of foreign exchange rate changes on cash and cash equivalents

(429)

978

(1,335)

503

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

(42,947)

9,515

(95,885)

(7,111)

Cash, cash equivalents and restricted cash, beginning of period

118,486

62,457

171,424

79,083

Cash, cash equivalents and restricted cash, end of period

$

75,539

$

71,972

$

75,539

$

71,972

SIERRA WIRELESS, INC.
RECONCILIATION OF GAAP AND NON-GAAP RESULTS BY QUARTER

(in thousands of U.S. dollars, except where otherwise stated)

2021

2020

2019

Q3

Q2

Q1

Q4

Q3

Q2

Q1

Q4

Net loss from continuing operations - GAAP

$

(38,406)

$

(10,036)

$

(28,538)

$

(11,167)

$

(14,483)

$

(17,291)

$

(27,210)

$

(15,316)

Stock-based compensation and related social taxes

1,820

3,807

7,928

6,461

5,085

3,256

3,200

1,773

Phantom RSU (recovery) expense

(69)

569

206

691

261

141

74

35

Restructuring

369

1,720

2,574

4,800

3,089

245

606

2,251

Acquisition-related and integration

(26)

72

209

115

140

185

274

COVID-19 government relief

(168)

(1,016)

(2,049)

(954)

(6,298)

CEO retirement/search

42

400

1,655

Impairment

11,544

877

Ransomware incident

271

1,135

533

COVID-19 factory constraint incremental costs

1,135

Other non-recurring costs

349

521

299

330

299

152

87

795

Amortization

7,208

7,267

7,308

7,054

8,030

7,823

7,726

7,849

Interest and other expense, net

192

111

110

564

988

283

192

111

Foreign exchange loss (gain), net of realized gain/loss on hedge contracts

2,693

(821)

4,816

(2,804)

(3,572)

(3,955)

2,836

(1,580)

Income tax (recovery) expense

(1,912)

605

552

(7,984)

(633)

427

(3,719)

(262)

Adjusted EBITDA*

$

(14,958)

$

4,334

$

(4,397)

$

(2,894)

$

(7,094)

$

(8,734)

$

(16,208)

$

(3,193)

Net loss from continuing operations - GAAP

$

(38,406)

$

(10,036)

$

(28,538)

$

(11,167)

$

(14,483)

$

(17,291)

$

(27,210)

$

(15,316)

Stock-based compensation and related social taxes

1,820

3,807

7,928

6,461

5,085

3,256

3,200

1,773

Phantom RSU (recovery) expense

(69)

569

206

691

261

141

74

35

Restructuring

369

1,720

2,574

4,800

3,089

245

606

2,251

Acquisition-related and integration

(26)

72

209

115

140

185

274

COVID-19 government relief

(168)

(1,016)

(2,049)

(954)

(6,298)

CEO retirement/search

42

400

1,655

Impairment

11,544

877

Ransomware incident

271

1,135

533

COVID-19 factory constraint incremental costs

1,135

Other non-recurring costs

349

521

299

330

299

152

87

795

Acquisition-related amortization

2,776

2,890

3,135

3,306

3,555

3,886

3,889

3,593

Foreign exchange loss (gain), net of realized gain/loss on hedge contracts

2,693

(821)

4,816

(2,804)

(3,572)

(3,955)

2,836

(1,580)

Income tax (recovery) expense adjustment

(3,008)

(357)

(393)

(7,784)

200

358

(2,696)

415

Adjusted loss from continuing operations*

$

(20,678)

$

(1,116)

$

(9,625)

$

(7,006)

$

(11,724)

$

(13,023)

$

(19,214)

$

(6,883)

Weighted average number of shares (in thousands) - basic and diluted

37,196

36,992

36,736

36,534

36,417

36,341

36,277

36,222

Basic and diluted adjusted net loss per share from continuing operations (in dollars)*

$

(0.56)

$

(0.03)

$

(0.26)

$

(0.19)

$

(0.32)

$

(0.36)

$

(0.53)

$

(0.19)

SIERRA WIRELESS, INC.
SEGMENTED RESULTS

(In thousands of U.S. dollars, except where otherwise indicated)

2021

2020 (1)

Q3

Q2

Q1

Total

Q4

Q3

Q2

Q1

IoT Solutions (New)

Revenue

$

53,657

$

90,309

$

74,578

$

306,917

$

81,561

$

79,345

$

77,629

$

68,382

Gross margin

$

10,676

$

24,425

$

22,086

$

87,146

$

23,343

$

22,588

$

23,030

$

18,185

Gross margin %

19.9

%

27.0

%

29.6

%

28.4

%

28.6

%

28.5

%

29.7

%

26.6

%

Enterprise Solutions

Revenue

$

28,793

$

42,476

$

33,484

$

141,671

$

38,917

$

34,026

$

34,089

$

34,639

Gross margin

$

13,473

$

21,806

$

15,641

$

71,605

$

20,023

$

16,864

$

17,978

$

16,740

Gross margin %

46.8

%

51.3

%

46.7

%

50.5

%

51.5

%

49.6

%

52.7

%

48.3

%

Total

Revenue

$

82,450

$

132,785

$

108,062

$

448,588

$

120,478

$

113,371

$

111,718

$

103,021

Gross margin

$

24,149

$

46,231

$

37,727

$

158,751

$

43,366

$

39,452

$

41,008

$

34,925

Gross margin %

29.3

%

34.8

%

34.9

%

35.4

%

36.0

%

34.8

%

36.7

%

33.9

%

Revenue by Type:

Product

$

47,207

$

97,595

$

74,389

$

332,544

$

87,856

$

83,560

$

84,820

$

76,308

Connectivity, software, and services (1)

$

35,243

$

35,190

$

33,673

$

116,044

$

32,622

$

29,811

$

26,898

$

26,713

(1) Previously called 'Recurring and other services'

Investor and Media Contact:
David Climie, Investor Relations
dclimie@sierrawireless.com

Investor Contact:
Samuel Cochrane, Chief Financial Officer
investor@sierrawireless.com

News Provided by Business Wire via QuoteMedia

BlackBerry Provides Long-term Financial Targets

BlackBerry Limited (NYSE: BB; TSX: BB) today provided its long-term financial targets in connection with its annual analyst summit event.

BlackBerry Logo Black (PRNewsfoto/Blackberry Limited)

The company released the following guidance:

  • Revenue Targets:

FY22

Actual

FY25

Target

FY27

Target

5-year
CAGR


$M

$M

$M

%

IoT*

178

307

443

20%

Cybersecurity

477

579

770

10%






Total BlackBerry**

655

886

1,213

13%






* Excludes potential revenue from BlackBerry IVY™


** Excludes revenue from Licensing & Other for comparability









The Company is targeting:

  • An average 100+ basis points increase in non-GAAP gross margin per year to FY27.
  • Non-GAAP operating margin of approximately 20% by FY27.
  • Investing approximately 30% of revenue on Research & Development in FY23.
  • To be modestly non-GAAP EPS and cashflow negative in FY23 due to investment plans.
  • To be approaching breakeven non-GAAP EPS and cashflow in FY24.
  • To generate positive non-GAAP EPS and cashflow beginning in FY25.

IoT:

  • IoT Serviceable Addressable Market (SAM) is expected to grow at approximately 8-12% per year from FY23 to FY26.
  • Revenue growth for the IoT business unit is expected to exceed the market growth rate resulting in an increase in market share above the current level of 26% in core automotive domains.
  • Revenue from production-based royalties is expected to grow faster than revenue from the pre-production design phase, increasing the portion of total revenue from royalties.
  • The SAM for BlackBerry IVY is expected to be approximately $800 million in FY25.
  • BlackBerry is targeting its first IVY design wins in FY23.

Cybersecurity:

  • The SAMs for endpoint security and managed cybersecurity services are expected to grow at 15% and 14%, respectively, per year to FY27.
  • Revenue for the Cybersecurity business unit, excluding UEM, is expected to grow with a 5-year CAGR of approximately 16% to FY27.
  • Churn in the UEM customer base is expected to negatively impact revenue and Annual Recurring Revenue (ARR) in FY23, but the impact is expected to become less significant from FY24 onwards.
  • Approximately 20% of the UEM customer base is in non-core verticals, and those customers, representing annual revenue in the region of $40 million , are exhibiting higher than average churn.
  • Approximately 64% of the Cylance customer base currently buys 1 Cylance module, and approximately 27% buy 2 modules. Management is targeting selling additional modules to these customers.

The presentation used during the financial session of the analyst summit, held at 4pm ET today, can be found on the BlackBerry.com/Investors website here .

A replay of the financial session will also be available on the BlackBerry.com/Investors website at approximately 8pm ET today.

This press release refers to certain non-GAAP measures. The company believes that these non-GAAP measures, which may be defined differently by other companies, explain the company's results of operations in a manner that allows for a more complete understanding of the underlying trends in the company's business. However, these measures should not be viewed as a substitute for those determined in accordance with GAAP.  For a reconciliation between the non-GAAP measures used in this presentation and measures determined in accordance with GAAP, and an explanation of why the company uses them, please see the company's annual report on Form 10-K, which is available on the EDGAR, SEDAR and BlackBerry.com websites.

For more information, follow @BlackBerry on Twitter , Facebook or LinkedIn and view the company's corporate video which highlights how BlackBerry addresses today's enterprise security challenges.

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 over 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
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, the Russia Ukraine conflict, competition, and BlackBerry's expectations regarding its financial performance.  Many factors could cause BlackBerry's actual results, performance or achievements to differ materially from those expressed or implied by the forward-looking statements, including, without limitation, risks related to the following factors: BlackBerry's ability to enhance, develop, introduce or monetize products and services for the enterprise market in a timely manner with competitive pricing, features and performance; BlackBerry's ability to maintain or expand its customer base for its software and services offerings to grow revenue or achieve sustained profitability; the intense competition faced by BlackBerry; the occurrence or perception of a breach of BlackBerry's network cybersecurity measures, or an inappropriate disclosure of confidential or personal information; the failure or perceived failure of BlackBerry's solutions to detect or prevent security vulnerabilities; BlackBerry's continuing ability to attract new personnel, retain existing key personnel and manage its staffing effectively; litigation against BlackBerry; BlackBerry's dependence on its relationships with resellers and channel partners; acquisitions, divestitures and other business initiatives; the impact of the COVID-19 pandemic; network disruptions or other business interruptions; BlackBerry's ability to foster an ecosystem of third-party application developers; BlackBerry's products and services being dependent upon interoperability with rapidly changing systems provided by third parties; BlackBerry's ability to obtain rights to use third-party software and its use of open source software; failure to protect BlackBerry's intellectual property and to earn expected revenues from intellectual property rights; BlackBerry being found to have infringed on the intellectual property rights of others;  the substantial asset risk faced by BlackBerry, including the potential for charges related to its long-lived assets and goodwill; BlackBerry's indebtedness; tax provision changes, the adoption of new tax legislation or exposure to additional tax liabilities; the use and management of user data and personal information; government regulations applicable to BlackBerry's products and services, including products containing encryption capabilities; environmental, social and governance expectations and standards; the failure of BlackBerry's suppliers, subcontractors, channel partners and representatives to use acceptable ethical business practices or comply with applicable laws; regulations regarding health and safety, hazardous materials usage and conflict minerals; foreign operations, including fluctuations in foreign currencies; adverse economic, geopolitical and environmental conditions; the fluctuation of BlackBerry's quarterly revenue and operating results; the volatility of the market price of BlackBerry's common shares; and rising inflation.

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

Cision View original content to download multimedia: https://www.prnewswire.com/news-releases/blackberry-provides-long-term-financial-targets-301550606.html

SOURCE BlackBerry Limited

News Provided by PR Newswire via QuoteMedia

Keep reading...Show less

BlackBerry and Magna Collaborate on Next-Generation Advanced Driver Assistance System Solutions for Global Automakers

BlackBerry Limited (NYSE: BB; TSX: BB) and Magna International Inc. (TSX: MG; NYSE: MGA) have entered into a multi-year agreement to collaborate on various integrated Advanced Driver Assistance Systems (ADAS) solutions.

BlackBerry Logo Black (PRNewsfoto/Blackberry Limited)

With OEMs launching vehicles with ever expanded feature sets, the global ADAS market is set for significant growth over the next decade.

As part of the agreement, BlackBerry will provide Magna with QNX software including the QNX Software Development Platform , QNX OS for Safety , QNX Platform for ADAS , as well as professional engineering services for system-level integration, performance optimization, and solution validation.

"Magna's ADAS expertise and unique ability to integrate system solutions into various vehicle applications gives us a competitive advantage," said Sharath Reddy , Senior Vice President Magna Electronics.  "Additionally, collaborating with companies like with BlackBerry helps us with speed to market."

"It's a great pleasure to work with another Canadian company – and global market leader in the automotive market. Our collaboration brings together both company's software and functional safety strengths as part of a platform that is already being delivered to multiple global OEMs," said John Wall , SVP and Co-Head, BlackBerry Technology Solutions. "With software now being a driving force in the automotive industry, delivering compelling solutions that are seamlessly integrated into a vehicle allows OEMs to differentiate themselves.  We are excited to be working with Magna, a fast-moving company on the cutting edge of ADAS, as the technologies undergo rapid adoption and expansion driven by a number of regulatory mandates that are on the horizon."

For more information on how BlackBerry QNX can help with building the safe and secure vehicles of tomorrow, please visit: BlackBerry.QNX.com .

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 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 solutions, 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.

Trademarks, including but not limited to BLACKBERRY, EMBLEM Design and QNX are the trademarks or registered trademarks of BlackBerry Limited, its subsidiaries and/or affiliates, used under license, 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 MAGNA

Magna is more than one of the world's largest suppliers in the automotive space. We are a mobility technology company with a global, entrepreneurial-minded team of 158,000 employees and an organizational structure designed to innovate like a startup. With 60+ years of expertise, and a systems approach to design, engineering and manufacturing that touches nearly every aspect of the vehicle, we are positioned to support advancing mobility in a transforming industry. Our global network includes 343 manufacturing operations and 91 product development, engineering and sales centers spanning 28 countries.

For further information about Magna, please visit www.magna.com or follow us on Twitter @MagnaInt.

Media Contact:

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

Magna Media Relations
Tracy Fuerst , Vice President, Corporate Communications and PR
+1 (248) 761 7004
tracy.fuerst@magna.com

Cision View original content to download multimedia: https://www.prnewswire.com/news-releases/blackberry-and-magna-collaborate-on-next-generation-advanced-driver-assistance-system-solutions-for-global-automakers-301549425.html

SOURCE BlackBerry Limited

News Provided by PR Newswire via QuoteMedia

Keep reading...Show less

AMD and Qualcomm Collaborate to Optimize FastConnect Connectivity Solutions for AMD Ryzen Processors

AMD (NASDAQ: AMD) and Qualcomm Technologies, Inc. a subsidiary of Qualcomm Incorporated (NASDAQ: QCOM), today announced a collaboration to optimize the Qualcomm® FastConnect™ connectivity system for AMD Ryzen™ processor-based computing platforms, starting with AMD Ryzen™ PRO 6000 Series processors and the Qualcomm® FastConnect™ 6900. With the FastConnect 6900 system, the latest AMD Ryzen processor-powered business laptops feature Wi-Fi® 6 and 6E connectivity, including advanced wireless capabilities enabled with Windows 11.

In collaboration with Microsoft, next-generation Windows 11 PCs, such as the Lenovo ThinkPad Z Series and HP EliteBook 805 Series , can harness the full potential of Windows 11 Wi-Fi Dual Station through Qualcomm® 4-Stream Dual Band Simultaneous. Multiple Wi-Fi bands outperform traditional single band connections for improved video conferencing experiences, reduced latency, and enhanced connection robustness. Leveraging the 6 GHz band, next-gen laptop users can take full advantage of its bandwidth and speed improvements without competing with any non-6E devices.

News Provided by GlobeNewswire via QuoteMedia

Keep reading...Show less

Apple Previews Innovative Accessibility Features Combining the Power of Hardware, Software, and Machine Learning

Software features coming later this year offer users with disabilities new tools for navigation, health, communication, and more

Apple® today previewed innovative software features that introduce new ways for users with disabilities to navigate, connect, and get the most out of Apple products. These powerful updates combine the company's latest technologies to deliver unique and customizable tools for users, and build on Apple's long-standing commitment to making products that work for everyone.

News Provided by Business Wire via QuoteMedia

Keep reading...Show less

BlackBerry Helps Drive Railway Improvements with Safety Certification

QNX OS for Safety 2.2 to be certified to industry's highest railway functional safety standard level

Today at the 61 st Annual RSSI C&S Exhibition BlackBerry Limited (NYSE: BB; TSX: BB) announced that its QNX® OS for Safety 2.2 will be certified to the highest Safety Integrity Level (SIL) 4, of the functional safety standard for the railway industry EN 50128 from the European Electrotechnical Committee for Standardization (CENELEC).

News Provided by PR Newswire via QuoteMedia

Keep reading...Show less

IIROC Trade Resumption - SW

Trading resumes in:

Company: Sierra Wireless, Inc.

News Provided by Canada Newswire via QuoteMedia

Keep reading...Show less

Latest Press Releases

Related News

×