BlackBerry Investor Relations Summary

Transcription

1 BlackBerry Investor Relations Summary Q4 FY 18 BlackBerry Public

2 Safe Harbor Forward-looking statements in this presentation are made pursuant to the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995 and applicable Canadian securities laws. When used herein, words such as "expect", "anticipate", "estimate", "may", "will", "should", could, "intend", "believe", and similar expressions, are intended to identify forward-looking statements. Forward-looking statements are based on estimates and assumptions made by BlackBerry Limited 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. 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 those described in the "Risk Factors" section of BlackBerry's Annual Information Form, which is included in its Annual Report on Form 40-F (copies of which filings may be obtained at or These factors should be considered carefully, and readers should not place undue reliance on BlackBerry's forward-looking statements. BlackBerry has no intention and undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. BlackBerry and related trademarks, names and logos are the property of BlackBerry Limited and are registered and/or used in the U.S. and countries around the world. All other marks are the property of their respective owners. BlackBerry is not responsible for any third-party products or services BlackBerry. All Rights Reserved. 2

3 OUR VISION The enterprise of things OUR MISSION Secure, connect and mobilize the enterprise OUR VALUE PROPOSITION BlackBerry Secure - the most secure and comprehensive way to connect people, devices, processes and systems for the enterprise of things BlackBerry. All Rights Reserved. 3

4 BlackBerry has the Assets to Make this Vision a Reality Core Competence Brand Strength and Customer Base Technological Assets Secure Connectivity Enterprise Mobility In Infotainment Service Externalizatio n End-to-End Stack BlackBerry. All Rights Reserved. 4

5 UEM: Securing the next billion devices in the enterprise ,000 Enterprise Devices under UEM , , , Smartphones and Tablets PCs and Macs Enterprise of Things Sources: 5 BlackBerry internal estimates Gartner, Forecast: Internet of Things Endpoints and Associated Services, Worldwide, 2016 Gartner, Forecast: PCs, Ultramobiles and Mobile Phones, Worldwide, , 4Q16 Update IDC, Worldwide Enterprise Mobility Management Software Forecast, BlackBerry. All Rights Reserved. 5

6 QNX: Foundation for Connect Car Success SECURITY RELIABILITY SAFETY TELEMATICS CLUSTER ACOUSTICS INFOTAINMENT ADAS & ACTIVE SAFETY BlackBerry. All Rights Reserved. 6

7 BlackBerry. All Rights Reserved. 7

8 Our Management Team John Chen Chief Executive Officer & Executive Chair Steve Capelli Chief Financial Officer & Chief Operating Officer Sandeep Chennakeshu President, BlackBerry Technology Solutions Vito Giallorenzo SVP, Corporate Development & Strategic Partnerships Billy Ho EVP, Enterprise Products and VAS Alex Thurber SVP and GM, Mobility Solutions Carl Wiese President, Global Sales Mark Wilson Chief Marketing Officer Nita White-Ivy EVP, Human Resources 8 Steve E. Zipperstein Chief Legal Officer 2018 BlackBerry. All Rights Reserved. 8

9 Financials BlackBerry. All Rights Reserved. 9

10 Software Model Business Benefits Hardware Manufacturing to Enterprise Software De-risk Financial Model Drive Positive Returns Leverage acquisitions Simplify product platform and GTM message Device software licensing model Increased operational efficiency Right-size opex / reduced infrastructure Improved profitability Software revenue growth Efficient balance sheet Investments in growth Positive free cash flow BlackBerry. All Rights Reserved. 10

11 Software Model Financial Benefits Benefits of the Software Pivot FY16 FY17 FY18 Favorable revenue mix Software and Services % of total* Hardware % of total* SAF % of total* Margin expansion Overall gross margin* 46% 62% 75% Reduced capital requirements Debt $1.25B $605M $605M 24% 40% 36% 50% 27% 23% 81% 7% 12% Improved profitability Operating income* EPS* ($117M) ($0.19) $55M $0.06 $78M $ * Non-GAAP 2018 BlackBerry. All Rights Reserved. 11

12 GAAP Income Statement ($M) FY 2016 Q1-17 Q2-17 Q3-17 Q4-17 FY 2017 Q1-18 Q2-18 Q3-18 Q4-18 FY 2018 Enterprise Software and Services BlackBerry Technology Solutions Licensing, IP, & Other Software & Services $ 497 $ 142 $ 138 $ 160 $ 182 $ 622 $ 160 $ 185 $ 190 $ 212 $ 747 Handheld Devices Service Access Fees Total GAAP Revenue 2, , Cost of Sales 1, Inventory Write-down Total Cost of Sales 1, Gross Profit Research and Development Selling, Marketing and Admin Amortization Impairment of Goodwill Impairment of Long-lived Assets Loss on Sale, Disposal and Abandonment of Long-live Assets (1) Debentures Fair Value Adjustment (430) (24) 62 2 (16) (70) 77 (34) 191 Arbitration Award (Charges) (815) (683) Total Operating Expenses 1, ,798 (386) GAAP Operating Income (Loss) (223) (655) (355) (114) (57) (1,181) (258) (17) 283 Investment Income (Loss), Net (59) (15) (16) (4) 8 (27) (17) Income (Loss) before Income Taxes (282) (670) (371) (118) (49) (1,208) (275) (14) 406 Income Taxes (Recovery) (74) - 1 (1) (2) (2) (4) 1 GAAP Net Income (Loss) $ (208) $ (670) $ (372) $ (117) $ (47) $ (1,206) $ 671 $ 19 $ (275) $ (10) $ 405 Earning (Loss) per Share Basic $ (0.40) $ (1.28) $ (0.71) $ (0.22) $ (0.09) $ (2.30) $ 1.26 $ 0.04 $ (0.52) $ (0.02) $ 0.76 Earning (Loss) per Share Diluted $ (0.86) $ (1.28) $ (0.71) $ (0.22) $ (0.10) $ (2.30) $ 1.23 $ (0.07) $ (0.52) $ (0.06) $ 0.74 Weighted-average number of common shares outstanding (000's) Basic 526, , , , , , , , , , ,888 Diluted 651, , , , , , , , , , , BlackBerry. All Rights Reserved. 12

13 Non-GAAP Reconciliation ($M) Non-GAAP Adjustments (Pre-Tax and After-Tax) FY 2016 Q1-17 Q2-17 Q3-17 Q4-17 FY 2017 Q1-18 Q2-18 Q3-18 Q4-18 FY 2018 LLA Impairment Charges Selective Patent Abandonment Goodwill Impairment Charges Inventory Write-down Debentures Fair Value Adjustment (430) (24) 62 2 (16) (70) 77 (34) 191 Write-down of Assets Held for Sale RAP Changes CORE Program Recoveries 11 (2) (2) (2) - (7) Software Deferred Revenue Acquired Stock Compensation Expense Acquired Intangible Amortization Business Acquisition and Integration Costs Arbitration Charges (Awards) (954) (1) (806) Legacy Royalty Adjustments Total Non-GAAP Adjustment (Pre-Tax and After-Tax) $ 106 $ 669 $ 371 $ 126 $ 70 $ 1,236 $ (661) $ 7 $ 291 $ 35 $ (328) GAAP to non-gaap Gross Profit FY 2016 Q1-17 Q2-17 Q3-17 Q4-17 FY 2017 Q1-18 Q2-18 Q3-18 Q4-18 FY 2018 GAAP Revenue $ 2,160 $ 400 $ 334 $ 289 $ 286 $ 1,309 $ 235 $ 238 $ 226 $ 233 $ 932 Software Deferred Revenue Acquired Non-GAAP Revenue 2, , GAAP Cost of Sales 1, Non-GAAP Adjustments to Cost of Sales (45) (48) (103) (5) (11) (167) (4) (4) (3) (5) (16) Non-GAAP Cost of Sales 1, Non-GAAP Gross Profit 1, BlackBerry. All Rights Reserved. 13

14 Non-GAAP Reconciliation ($M) (cont.) Adjusted EBITDA FY 2016 Q1-17 Q2-17 Q3-17 Q4-17 FY 2017 Q1-18 Q2-18 Q3-18 Q4-18 FY 2018 GAAP Operating Income (Loss) $ (223) $ (655) $ (355) $ (114) $ (57) $ (1,181) $ 536 $ 22 $ (258) $ (17) $ 283 Non-GAAP Adjustments to Operating Income ,236 (522) (205) Non-GAAP Operating Income (117) Amortization Acquired Amotization Intangibles (66) (28) (28) (28) (28) (112) (25) (24) (23) (22) (95) Adjusted EBITDA Non-GAAP Net Income Reconciliation FY 2016 Q1-17 Q2-17 Q3-17 Q4-17 FY 2017 Q1-18 Q2-18 Q3-18 Q4-18 FY 2018 GAAP Net Income (Loss) $ (208) $ (670) $ (372) $ (117) $ (47) $ (1,206) $ 671 $ 19 $ (275) $ (10) $ 405 Total Non-GAAP Adjustment (After-Tax) ,236 (661) (328) Non-GAAP Net Income (Loss) (102) (1) (1) Non-GAAP Basic Earning (Loss) per Share $ (0.19) $ (0.00) $ (0.00) $ 0.02 $ 0.04 $ 0.06 $ 0.02 $ 0.05 $ 0.03 $ 0.05 $ 0.14 Shares outstanding for Non-GAAP income (loss) per share reconciliation ('000) 526, , , , , , , , , , ,888 Non-GAAP Revenue, non-gaap Loss Before Income Taxes, non-gaap Net Loss, non-gaap Gross Profit, Adjusted EBITDA, and non-gaap Loss Per Share do not have a standardized meaning 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 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 BlackBerry. All Rights Reserved. 14

15 Amortization and Reconciliation Details ($M) CORE Charge (Recovery) Details FY 2016 Q1-17 Q2-17 Q3-17 Q4-17 FY 2017 Q1-18 Q2-18 Q3-18 Q4-18 FY 2018 Cost of Sales $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Research and Development Selling, General and Administration 9 (2) (2) (2) - (7) Total CORE Charges $ 11 $ (2) $ (2) $ (2) $ - $ (7) $ - $ - $ - $ - $ - RAP Charges Details (Pre-Tax) FY 2016 Q1-17 Q2-17 Q3-17 Q4-17 FY 2017 Q1-18 Q2-18 Q3-18 Q4-18 FY 2018 Cost of Sales $ 44 $ 7 $ 7 $ 5 $ 6 $ 25 $ 3 $ 3 $ 2 $ 3 $ 11 Research and Development (1) Selling, General and Administration Total RAP Charges $ 208 $ 23 $ 24 $ 23 $ 24 $ 95 $ 16 $ 16 $ 20 $ 26 $ 78 Amortization of Intangibles and PP&E Details FY 2016 Q1-17 Q2-17 Q3-17 Q4-17 FY 2017 Q1-18 Q2-18 Q3-18 Q4-18 FY 2018 In Cost of Sales Property, Plan and Equipment $ 51 $ 12 $ 12 $ 10 $ 9 $ 43 $ 7 $ 4 $ 5 $ 2 $ 18 Intangibles Assets Total in Cost of Sales In Operating Expenses Property, Plan and Equipment $ 73 $ 12 $ 8 $ 6 $ 7 $ 33 $ 5 $ 5 $ 3 $ 5 $ 18 Intangibles Assets Total in Operating Expenses Total Amortization Property, Plan and Equipment $ 124 $ 24 $ 20 $ 16 $ 16 $ 76 $ 12 $ 9 $ 8 $ 7 $ 36 Intangibles Assets Total Amortization Non-GAAP Revenue, non-gaap Loss Before Income Taxes, non-gaap Net Loss, non-gaap Gross Profit, Adjusted EBITDA, and non-gaap Loss Per Share do not have a standardized meaning 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 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 BlackBerry. All Rights Reserved. 15

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