BlackBerry : Investor Relations Supplement June 2024

BlackBerry Investor Relations Supplement

GAAP Income Statement	Q1FY23		Q2FY23		Q3FY23	Q4FY23		FY23	Q1FY24	Q2FY24		Q3FY24	Q4FY24		FY24	Q1FY25
(Three Months Ended)
Cybersecurity	$	113	$	111	$	106	$	88	$	418	$	93	$	79	$	114	$	92	$	378	$	85
IoT		51		51		51		53		206		45		49		55		66		215		53
Software and Services		164		162		157		141		624		138		128		169		158		593		138
Licensing and Other		4		6		12		10		32		235		4		6		15		260		6
Revenue		168		168		169		151		656		373		132		175		173		853		144
Cost of Sales		64		62		60		51		237		194		47		48		44		333		48
Gross Margin		104		106		109		100		419		179		85		127		129		520		96
Operating expenses
Research and development		53		54		52		48		207		54		50		42		40		186		42
Sales and marketing		43		42		43		48		176		45		43		42		41		171		38
General and administrative		39		44		46		35		164		54		30		43		53		181		40
Amortization		27		25		26		18		96		15		14		13		12		54		12
Impairment of goodwill		-		-		-		245		245		-		-		-		35		35		-
Impairment of long-lived assets		-		4		-		231		235		-		1		11		4		15		3
Gain on sale of property, plant and equipment, net		-		(6)		-		-		(6)		-		-		-		-		-		-
Debentures fair value adjustment		(46)		(10)		(56)		(26)		(138)		22		(6)		(13)		-		3		-
Litigation settlement		165		-		-		-		165		-		-		-		-		-		-
Total operating expenses		281		153		111		599		1,144		190		132		138		185		645		135
Operating Loss		(177)		(47)		(2)		(499)		(725)		(11)		(47)		(11)		(56)		(125)		(39)
Investment income (loss), net		(1)		(2)		2		6		5		3		7		5		4		19		5
Loss before income taxes		(178)		(49)		-		(493)		(720)		(8)		(40)		(6)		(52)		(106)		(34)
Provision for income taxes		3		5		4		2		14		3		2		15		4		24		8
Net Loss	$	(181)	$	(54)	$	(4)	$	(495)	$	(734)	$	(11)	$	(42)	$	(21)	$	(56)	$	(130)	$	(42)
Loss per share
Basic loss per share	$	(0.31)	$	(0.09)	$	(0.01)	$	(0.85)	$	(1.27)	$	(0.02)	$	(0.07)	$	(0.04)	$	(0.10)	$	(0.22)	$	(0.07)
Diluted loss per share	$	(0.35)	$	(0.10)	$	(0.09)	$	(0.85)	$	(1.35)	$	(0.02)	$	(0.07)	$	(0.05)	$	(0.10)	$	(0.22)	$	(0.07)
Weighted-average number of common shares outstanding (000s)
Basic		576,877		577,314		578,948		581,493		578,654		582,812		583,524		584,331		587,523		584,543		589,821
Diluted		637,710		638,147		639,781		581,493		639,487		582,812		583,524		638,470		587,523		584,543		589,821
Segment Gross Margin (Three Months Ended)	Q1FY23		Q2FY23		Q3FY23	Q4FY23		FY23	Q1FY24	Q2FY24		Q3FY24	Q4FY24		FY24	Q1FY25
Cybersecurity
Segment revenue	$	113	$	111	$	106	$	88	$	418	$	93	$	79	$	114	$	92	$	378	$	85
Segment cost of sales		53		50		46		36		185		37		36		37		32		142		35
Segment gross margin		60		61		60		52		233		56		43		77		60		236		50
Segment gross margin %		53%		55%		57%		59%		56%		60%		54%		68%		65%		62%		59%
IoT
Segment revenue		51		51		51		53	$	206		45		49		55		66	$	215		53
Segment cost of sales		8		9		10		10		37		9		8		9		10		36		10
Segment gross margin		43		42		41		43		169		36		41		46		56		179		43
Segment gross margin %		84%		82%		80%		81%		82%		80%		84%		84%		85%		83%		81%
Licensing and Other
Segment revenue		4		6		12		10	$	32		235		4		6		15	$	260		6
Segment cost of sales		2		2		4		4		12		147		2		1		2		152		2
Segment gross margin		2		4		8		6		20		88		2		5		13		108		4
Segment gross margin %		50%		67%		67%		60%		63%		37%		50%		83%		87%		42%		67%
Total Segment Gross Margin		105		107		109		101		422		180		86		128		129		523		97
Adjustment to cost of sales		(1)		(1)		-		(1)		(3)		(1)		(1)		(1)		-		(3)		(1)
Total Gross Margin	$	104	$	106	$	109	$	100	$	419	$	179	$	85	$	127	$	129	$	520	$	96

BlackBerry Investor Relations Supplement

Key Metrics (Three Months Ended)	Q1FY23		Q2FY23		Q3FY23	Q4FY23			Q1FY24	Q2FY24		Q3FY24	Q4FY24			Q1FY25
Cybersecurity Annual Recurring Revenue	$	334	$	321	$	313	$	298			$	289	$	279	$	273	$	280			$	285
Cybersecurity Dollar-Based Net Retention Rate		88%		85%		84%		81%				81%		81%		82%		85%				87%
QNX Royalty Backlog	$	560						640										815
		Q1FY23		Q2FY23		Q3FY23	Q4FY23		FY23	Q1FY24	Q2FY24		Q3FY24	Q4FY24		FY24	Q1FY25
Net cash provided by (used in) operating activities		(42)		(23)		(185)		(7)		(263)		99		(56)		(31)		(15)		(3)		(15)
Acquisition of property, plant and equipment		(1)		(3)		(1)		(2)		(7)		(2)		(1)		(2)		(2)		(7)		(1)
Free cash flow (usage)	$	(43)	$	(26)	$	(186)	$	(9)	$	(270)	$	97	$	(57)	$	(33)	$	(17)	$	(10)	$	(16)
Non-GAAP Income Statement	Q1FY23		Q2FY23		Q3FY23	Q4FY23		FY23	Q1FY24	Q2FY24		Q3FY24	Q4FY24		FY24	Q1FY25
(Three Months Ended)
Cybersecurity	$	113	$	111	$	106	$	88	$	418	$	93	$	79	$	114	$	92	$	378	$	85
IoT		51		51		51		53		206		45		49		55		66		215		53
Software and Services		164		162		157		141		624		138		128		169		158		593		138
Licensing and Other		4		6		12		10		32		235		4		6		15		260		6
Revenue		168		168		169		151		656		373		132		175		173		853		144
Cost of Sales		63		61		60		50		234		193		46		47		44		330		47
Adjusted Gross Margin		105		107		109		101		422		180		86		128		129		523		97
Operating expenses
Research and development		51		52		50		45		198		52		48		40		38		178		40
Sales and marketing		42		42		41		46		171		44		40		41		40		165		36
General and administrative		35		38		42		24		139		44		22		30		31		128		29
Amortization		4		3		4		3		14		5		4		4		4		16		4
Gain on sale of property, plant and equipment, net		-		(6)		-		-		(6)		-		-		-		-		-		-
Total adjusted operating expenses		132		129		137		118		516		145		114		115		113		487		109
Adjusted Operating Income (Loss)		(27)		(22)		(28)		(17)		(94)		35		(28)		13		16		36		(12)
Investment income (loss), net		(1)		(2)		2		6		5		3		7		5		4		19		5
Adjusted Income (Loss) before income taxes		(28)		(24)		(26)		(11)		(89)		38		(21)		18		20		55		(7)
Provision for income taxes		3		5		4		2		14		3		2		15		4		24		8
Adjusted Net Income (Loss)	$	(31)	$	(29)	$	(30)	$	(13)	$	(103)	$	35	$	(23)	$	3	$	16	$	31	$	(15)
Adjusted EBITDA	$	(21)	$	(16)	$	(22)	$	(12)	$	(71)	$	41	$	(22)	$	18	$	21	$	57	$	(7)
Adjusted earnings (loss) per share
Basic and diluted earnings (loss) per share	$	(0.05)	$	(0.05)	$	(0.05)	$	(0.02)	$	(0.18)	$	0.06	$	(0.04)	$	0.01	$	0.03	$	0.05	$	(0.03)

BlackBerry Investor Relations Supplement

Reconciliation of non-GAAP based measures with most directly comparable U.S. GAAP based measures

Non-GAAP Adjustments (Three Months Ended)	Q1FY23	Q2FY23	Q3FY23	Q4FY23		FY23	Q1FY24	Q2FY24	Q3FY24	Q4FY24		FY24	Q1FY25
Debentures fair value adjustment		(46)		(10)		(56)		(26)		(138)		22		(6)		(13)		-		3		-
Restructuring charges		1		3		-		7		11		5		3		9		20		37		8
Stock compensation expense		7		6		8		10		31		9		11		8		5		33		8
Acquired intangibles amortization		23		22		22		15		82		10		10		9		8		38		8
Impairment of goodwill		-		-		-		245		245		-		-		-		35		35		-
Impairment of long-lived assets		-		4		-		231		235		-		1		11		4		15		3
Litigation settlement		165		-		-		-		165		-		-		-		-		-		-
Total Non-GAAP Adjustments	$	150	$	25	$	(26)	$	482	$	631	$	46	$	19	$	24	$	72	$	161	$	27
Adjusted Gross Margin	Q1FY23	Q2FY23	Q3FY23	Q4FY23		FY23	Q1FY24	Q2FY24	Q3FY24	Q4FY24		FY24	Q1FY25
GAAP revenue	$	168	$	168	$	169	$	151	$	656	$	373	$	132	$	175	$	173	$	853	$	144
Total cost of sales		64		62		60		51		237		194		47		48		44		333		48
Non-GAAP adjustments to cost of sales		(1)		(1)		-		(1)		(3)		(1)		(1)		(1)		-		(3)		(1)
Adjusted Gross Margin	$	105	$	107	$	109	$	101	$	422	$	180	$	86	$	128	$	129	$	523	$	97
Adjusted Gross Margin %
Research and development	Q1FY23	Q2FY23	Q3FY23	Q4FY23		FY23	Q1FY24	Q2FY24	Q3FY24	Q4FY24		FY24	Q1FY25
GAAP research and development expense	$	53	$	54	$	52	$	48	$	207	$	54	$	50	$	42	$	40	$	186	$	42
Stock compensation expense		2		2		2		3		9		2		2		2		2		8		2
Adjusted research and development expense	$	51	$	52	$	50	$	45	$	198	$	52	$	48	$	40	$	38	$	178	$	40
Sales and marketing	Q1FY23	Q2FY23	Q3FY23	Q4FY23		FY23	Q1FY24	Q2FY24	Q3FY24	Q4FY24		FY24	Q1FY25
GAAP sales and marketing	$	43	$	42	$	43	$	48	$	176	$	45	$	43	$	42	$	41	$	171	$	38
Stock compensation expense		1		-		2		2		5		1		3		1		1		6		2
Adjusted sales and marketing expense	$	42	$	42	$	41	$	46	$	171	$	44	$	40	$	41	$	40	$	165	$	36
General and administrative	Q1FY23	Q2FY23	Q3FY23	Q4FY23		FY23	Q1FY24	Q2FY24	Q3FY24	Q4FY24		FY24	Q1FY25
GAAP General and administrative expense	$	39	$	44	$	46	$	35	$	164	$	54	$	30	$	43	$	53	$	181	$	40
Restructuring charges		1		3		-		7		11		5		3		9		20		37		8
Stock compensation expense		3		3		4		4		14		5		5		4		2		16		3
Adjusted general and administrative expense	$	35	$	38	$	42	$	24	$	139	$	44	$	22	$	30	$	31	$	128	$	29
Amortization	Q1FY23	Q2FY23	Q3FY23	Q4FY23		FY23	Q1FY24	Q2FY24	Q3FY24	Q4FY24		FY24	Q1FY25
GAAP amortization expense	$	27	$	25	$	26	$	18	$	96	$	15	$	14	$	13	$	12	$	54	$	12
Acquired intangibles amortization		23		22		22		15		82		10		10		9		8		38		8
Adjusted amortization expense	$	4	$	3	$	4	$	3	$	14	$	5	$	4	$	4	$	4	$	16	$	4
Adjusted EBITDA	Q1FY23	Q2FY23	Q3FY23	Q4FY23		FY23	Q1FY24	Q2FY24	Q3FY24	Q4FY24		FY24	Q1FY25
GAAP operating loss	$	(177)	$	(47)	$	(2)	$	(499)	$	(725)	$	(11)	$	(47)	$	(11)	$	(56)	$	(125)	$	(39)
Non-GAAP adjustments to operating loss		150		25		(26)		482		631		46		19		24		72		161		27
Adjusted operating income (loss)		(27)		(22)		(28)		(17)		(94)		35		(28)		13		16		36		(12)
Amortization		29		28		28		20		105		16		16		14		13		59		13
Acquired intangibles amortization		(23)		(22)		(22)		(15)		(82)		(10)		(10)		(9)		(8)		(38)		(8)
Adjusted EBITDA	$	(21)	$	(16)	$	(22)	$	(12)	$	(71)	$	41	$	(22)	$	18	$	21	$	57	$	(7)
Reconciliation from GAAP Net Loss to Adjusted Net Income (Loss)	Q1FY23	Q2FY23	Q3FY23	Q4FY23		FY23	Q1FY24	Q2FY24	Q3FY24	Q4FY24		FY24	Q1FY25
and Adjusted Earnings (Loss) per Share
GAAP net loss	$	(181)	$	(54)	$	(4)	$	(495)	$	(734)	$	(11)	$	(42)	$	(21)	$	(56)	$	(130)	$	(42)
Total Non-GAAP adjustments (Three months ended, after-tax)		150		25		(26)	$	482		631		46		19		24	$	72		161	$	27
Adjusted Net Income (Loss)	$	(31)	$	(29)	$	(30)	$	(13)	$	(103)	$	35	$	(23)	$	3	$	16	$	31	$	(15)
Adjusted Earnings (Loss) per Share
Shares outstanding for adjusted earnings (loss) per share reconciliation		576,877		577,314		578,948		581,493		578,654		582,812		583,524		584,331		587,523		584,543		589,821

BlackBerry Investor Relations Supplement

Pre-Tax Restructuring Details

Restructuring charges	Q1FY23	Q2FY23	Q3FY23	Q4FY23		FY23	Q1FY24	Q2FY24	Q3FY24	Q4FY24		FY24	Q1FY25
Cost of Sales	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-
General and administration		1		3		-		7		11		5		3		9		20		37		8
Total restructuring charges	$	1	$	3	$	-	$	7	$	11	$	5	$	3	$	9	$	20	$	37	$	8

Amortization of Intangibles and Property, Plant and Equipment Details

		Q1FY23	Q2FY23		Q3FY23	Q4FY23		FY23		Q1FY24	Q2FY24		Q3FY24		Q4FY24		FY24		Q1FY25
Cost of sales amortization
Property, plant and equipment	$	-	$	2	$	-	$	1	$	3	$	-	$	2	$	-	$	-	$	2	$	-
Intangible assets		2		1		2		1		6		1		-		1		1		3		1
Total in cost of sales amortization		2		3		2		2		9		1		2		1		1		5		1
Operating expenses amortization
Property, plant and equipment		4		1		2		2	$	9		3		1		2		2	$	8		2
Intangible assets		23		24		24		16		87		12		13		11		10		46		10
Total in operating expenses amortization		27		25		26		18		96		15		14		13		12		54		12
Total amortization
Property, plant and equipment		4		3		2		3		12		3		3		2		2		10		2
Intangible assets		25		25		26		17		93		13		13		12		11		49		11
Total amortization	$	29	$	28	$	28	$	20	$	105	$	16	$	16	$	14	$	13	$	59	$	13

Adjusted income (loss) before income taxes, adjusted net income (loss), adjusted Gross Margin, adjusted gross margin percentage, adjusted Operating Income (Loss), adjusted Net Income (Loss), adjusted EBITDA, adjusted Earnings (Loss) Per Share, adjusted research and development expense, adjusted sales and marketing expenses, adjusted general and administrative expense, adjusted amortization expense, and free cash flow (usage) do not have standardized meanings prescribed by GAAP and thus are not comparable to similarly titled measures presented by other issuers.

The Company believes that the presentation of these non-GAAP measures and non-GAAP ratios enables the Company and its shareholders to better assess the Company's operating results relative to its operating results in prior periods and improves the comparability of the information presented. This non-GAAP information should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. You are encouraged to review the Company's filings on SEDAR+ and EDGAR. The company makes no commitment to update the information above subsequently.

Key metrics such as Annual Recurring Revenue ("ARR"), Dollar-Based Net Retention Rate ("DBNRR") and QNX Royalty Backlog do not have standardized meanings and are unlikely to be comparable to similarly titled measures reported by other companies. The Company regularly monitors a number of financial and operating metrics, including key metrics, in order to measure the Company's current performance and estimate future performance.