BlackBerry IR Summary

Transcription

1 BlackBerry IR Summary June, 2016 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", "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 1 1

3 OUR VISION A connected world OUR MISSION To be the world s leading provider of end-to-end mobility solutions that are the most secure and trusted OUR VALUE PROPOSITION We enable you to confidently mobilize your infrastructure to be most competitive in the new paradigm BlackBerry 2 2

4 STRATEGY Delivering the only end-to-end and secure mobility platform BlackBerry 3 3

5 BUSINESS ACCOMPLISHMENTS The past 12 months Software & Licensing Market Leadership Mobility Solutions Strategic Initiatives Delivering Innovation & Security Delivering Innovation & Security Autonomous Vehicles: QNX Platform for ADAS IoT Platform: BlackBerry Radar Voice Encryption: SecuSUITE for Enterprise Trust and Credibility BlackBerry 10: Enhanced security release; NIAP certification submitted; Passport Silver First BlackBerry-secured Android: PRIV Secure Tablet for Gov t: SecuTABLET Expanding Addressable Market Forrester Wave Leader: EMM Cross-platform Software: Good Technology products fully integrated into suite offerings Forrester Wave Leader: EFSS Secure Messaging: AtHoc and Enterprise BBM Gartner MQ Visionary: EFSS New Cybersecurity Consulting services First and only: To achieve highest level of certification on ISO std, EAL4+, on ios and Android Cloud Opportunity: BlackBerry Enterprise Solutions on Microsoft Azure Marketplace BlackBerry 4 4

6 PROGRESS We are progressing toward the growth phase of our turnaround Laying the foundation for the turnaround Formulated a strategy around the company s core strength Healthy financial position Free cash flow positive Non-GAAP profitability Ability to execute on acquisitions Stabilize revenue Grow software revenue to offset SAF decline Make the Device (Mobility Solutions) business profitable Sustainable Profitability Channel expansion IoT & messaging traction Overall revenue growth BlackBerry 5 5

7 Total Addressable Market SOFTWARE & SERVICES STRATEGY Increasing the total addressable market for software TAM $17.6B Technology Solutions $6B TAM $4.9 B Secure Communications $5B TAM $525 M MDM Technology Solutions $1.6B Enterprise Solutions $1.6B EMM $1.7B Solution Offerings Expanded Enterprise Solutions $4B BlackBerry Projected 2019 EMM $2.6B

8 Growth + Profitability MOBILITY SOLUTIONS STRATEGY Focus on profitable growth and expanding our addressable market Device Software Licensing BlackBerry 10 Devices Gov t / Regulated Industries BlackBerry Android Secure Android for Enterprise BlackBerry Productivity and Security BlackBerry Smartphones BlackBerry 7 7

9 GO-TO-MARKET TRACTION Key success factors Re-allocating and Increasing resources in Growth Areas Quota-carrying sales headcount up 29% in Q1 17 vs. Q1 16 1,485 new employees, through hiring and acquisitions, in FY16; 80% in sales and engineering 366 channel partners ending FY15 1,500+ total channel partners ending FY16 New Enterprise Licenses: Increasing Mix of Cross-Platform FY15 FY16 Cross-platform / agnostic BlackBerry only BlackBerry 8 8

10 Our Management Team Marty Beard Chief Operating Officer James Yersh Chief Financial Officer Steve E. Zipperstein Chief Legal Officer Carl Wiese President, Global Sales James Mackey EVP, Corporate Development and Strategic Planning John Chen Chief Executive Officer and Executive Chair Ralph Pini Chief Operating Office, Acting General Manager Mobile Solutions Sandeep Chennakeshu President, Technology Solutions Billy Ho EVP, Enterprise Products and VAS Nita White-Ivy EVP, Human Resources Guy Miasnik President, AtHoc BlackBerry 9 9

11 Financial Highlights Expect positive free cash flow and positive EBITDA for the full 2017 fiscal year $600 $500 $400 $300 $200 $100 $0 $500 $400 $300 $200 $100 $0 ($100) ($200) Q1-15 Q2-15 Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Non-GAAP OpEx Non-GAAP Gross Margin Non-GAAP Operating Margin $1,200 $1,000 $800 $600 $400 $200 $0 $0.50 $0.30 $0.10 ($0.10) ($0.30) ($0.50) Q1-15 Q2-15 Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Non-GAAP Revenue Non-GAAP Earning/(Loss) $4,000 $3,500 $3,000 $2,500 $2,000 $1,500 $1,000 $500 $0 Q1-15 Q2-15 Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Cash, Cash Equivalents, and Investments >56% reduction in non-gaap OpEx from Q1-15 to Q1-17 Expect full year EPS to be approximately ($0.15) Stable Cash & Equivalents balance BlackBerry 10 10

12 Revenue (Millions) Non-GAAP Revenue Details 1,200 Record Software & Services revenue for Q1-17 Q1-17 Software and Services Revenue $166m, up 21% year on year Q1-17 Total Revenue $424m 1, $966 $916 $54 $62 $793 $57 $660 $658 $518 $421 $74 $557 $138 $365 $491 $486 $301 $74 $162 $424 $252 $153 $211 $173 $166 $143 $393 $433 $370 $106 $284 $269 $206 $221 $191 $152 Q1-15 Q2-15 Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Mobility Solutions Service Access Fee Software & Services Total Non-GAAP Revenue BlackBerry 11 11

13 Millions Millions Millions Non-GAAP Operating Segments Software & Services Mobility Solutions Service Access Fee $180 $160 $140 $120 $100 $80 $60 $40 $20 $0 $166 Revenue $32 Cost of Goods Sold $134 Gross Margin $98 Operating Expenses $37 Operating Income $180 $160 $140 $120 $100 $80 $60 $40 $20 $0 -$20 -$40 $152 Revenue $140 Cost of Goods Sold $12 Gross Margin $33 Operating Expenses -$21 Operating Income $120 $100 $80 $60 $40 $20 $0 $106 Revenue $26 Cost of Goods Sold $80 Gross Margin $2 Operating Expenses $78 Operating Income Expect software and services growth of around 30 percent Objective is to achieve operating profitability in Mobility Solutions in Q3 of the current fiscal year Expect quarterly software and services growth to offset the decline in SAF cumulatively for the full fiscal year BlackBerry 12 12

14 Balances $millions Free Cash Flow $millions Financial Discipline $4,000 $800 Cash balance of $2.53B Net cash position of $1.3B $3,500 $3,000 $2,500 $3,071 $2,569 $3,192 $2,658 $3,087 $3,098 $3,110 $3,266 $3,316 $3,353 $2,706 $2,624 $2,532 $600 $400 $200 $2,000 $0 $1,500 -$200 $1,000 -$400 $500 -$600 $0 Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 Q2-15 Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 -$800 Cash & Cash Equivalents Long-term Investments & Restricted Cash Short-term Investments Free Cash Flow BlackBerry 13 13

15 Financials

16 GAAP Income Statement $millions Q1-15 Q2-15 Q3-15 Q4-15 FY 2015 Q1-16 Q2-16 Q3-16 Q4-16 FY 2016 Q1-17 Software & Services $ 56 $ 62 $ 58 $ 75 $ 251 $ 137 $ 73 $ 155 $ 131 $ 496 $ 142 Mobility Solutions , Service Access Fee , Total GAAP Revenue , , Cost of Sales , , Inventory Write Down Supply Commitment (Recovery) (10) (7) (6) (10) (33) (2) 0 (1) 0 (3) 0 Total Cost of Sales , , Gross Profit , Research & Development Selling, Marketing and Admin Amortization Impairment of goodwill Impairment of long-lived assets Abandonment of long-lived assets Debentures Fair Value Adjustment (287) (157) (228) (5) (40) (430) (24) Total Operating Expenses , , GAAP Operating Income (Loss) 20 (198) (139) (106) (423) (104) (241) (223) (655) Investment Income (Loss), Net (26) (20) (21) (16) (12) (16) (15) (59) (15) Income (Loss) before Income Taxes (6) (218) (160) (1) (385) (120) (256) (282) (670) Income Taxes (Recovery) (29) (11) (12) (29) (81) 5 (30) (31) (18) (74) 0 GAAP Net Income (Loss) $ 23 $ (207) $ (148) $ 28 $ (304) $ 68 $ 51 $ (89) $ (238) $ (208) $ (670) Earning (Loss) per Share Basic $ 0.04 $ (0.39) $ (0.28) $ 0.05 $ (0.58) $ 0.13 $ 0.10 $ (0.17) $ (0.45) $ (0.40) $ (1.28) Earning (Loss) per Share Diluted $ (0.37) $ (0.39) $ (0.28) $ 0.05 $ (0.58) $ (0.10) $ (0.24) $ (0.17) $ (0.45) $ (0.86) $ (1.28) Weighted-average number of common shares outstanding (000's) Basic 526, , , , , , , , , , ,905 Diluted 658, , , , , , , , , , ,905 BlackBerry 15 15

17 Non-GAAP Reconciliation Non-GAAP Adjustments (Pre-Tax) Q1-15 Q2-15 Q3-15 Q4-15 FY 2015 Q1-16 Q2-16 Q3-16 Q4-16 FY 2016 Q1-17 Rockstar Sale Adjustment $ - $ - $ - $ (115) $ (115) $ - $ - $ - $ - $ - $ - Goodwill Impairment Charges LLA Impairment Charges Inventory Write-down Debentures Fair Value Adjustment (287) (157) (228) (5) (40) (430) (24) CORE Program Changes (6) 2 11 (2) RAP Changes Software Deferred Revenue Acquired Stock Compensation Expense Acquired Intangible Amortization Business Acquisition Costs Total Non-GAAP Adjustment (Pre-Tax) $ (39) $ 218 $ 181 $ 17 $ 377 $ (72) $ (117) $ 74 $ 220 $ 106 $ 669 Non-GAAP Adjustments (After-Tax) Q1-15 Q2-15 Q3-15 Q4-15 FY 2015 Q1-16 Q2-16 Q3-16 Q4-16 FY 2016 Q1-17 Rockstar Sale Adjustment $ - $ - $ - $ (115) $ (115) $ - $ - $ - $ - $ - $ - Goodwill Impairment Charges LLA Impairment Charges Inventory Write-down Debentures Fair Value Adjustment (287) (157) (228) (5) (40) (430) (24) CORE Program Changes (6) 2 11 (2) RAP Changes Software Deferred Revenue Acquired Stock Compensation Expense Acquired Intangible Amortization Business Acquisition Costs Total Non-GAAP Adjustment (After-Tax) $ (61) $ 214 $ 180 $ 16 $ 349 $ (72) $ (117) $ 74 $ 220 $ 106 $ 669 GAAP to non-gaap Gross Profit Q1-15 Q2-15 Q3-15 Q4-15 FY 2015 Q1-16 Q2-16 Q3-16 Q4-16 FY 2016 Q1-17 GAAP Revenue $ 966 $ 916 $ 793 $ 660 $ 3,335 $ 658 $ 490 $ 548 $ 464 $ 2,160 $ 400 Software Deferred Revenue Acquired Non-GAAP Revenue , , GAAP Cost of Sales , , Non-GAAP Adjustments to Cost of Sales (13) (10) - (2) (25) (21) (15) (5) (4) (45) (48) Non-GAAP Cost of Sales , , Non-GAAP Gross Profit , , BlackBerry 16 16

18 Non-GAAP Reconciliation Cont. Adjusted EBITDA Q1-15 Q2-15 Q3-15 Q4-15 FY 2015 Q1-16 Q2-16 Q3-16 Q4-16 FY 2016 Q1-17 GAAP Operating Income (Loss) $ 20 $ (198) $ (139) $ (106) $ (423) $ 89 $ 33 $ (104) $ (241) $ (223) $ (655) Non-GAAP Adjustments to Operating Income (39) (72) (117) Non-GAAP Operating Income (19) (84) (30) (21) (117) 14 Amortization Acquired Amotization Intangibles (9) (10) (10) (9) (38) (9) (11) (18) (28) (66) (28) Adjusted EBITDA Non-GAAP Net Income Reconciliation Q1-15 Q2-15 Q3-15 Q4-15 FY 2015 Q1-16 Q2-16 Q3-16 Q4-16 FY 2016 Q1-17 GAAP Net Income (Loss) $ 23 $ (207) $ (148) $ 28 $ (304) $ 68 $ 51 $ (89) $ (238) $ (208) $ (670) Total Non-GAAP Adjustment (After-Tax) (61) (72) (117) Non-GAAP Net Income (Loss) (38) (4) (66) (15) (18) (102) (1) Non-GAAP Basic Earning (Loss) per Share $ (0.07) $ 0.01 $ 0.06 $ 0.08 $ 0.08 $ (0.01) $ (0.13) $ (0.03) $ (0.03) $ (0.19) $ 0.00 Shares outstanding for Non-GAAP income (loss) per share reconciliation ('000) 526, , , , , , , , , , ,905 Non-GAAP Revenue, non-gaap Loss Before Income Taxes, non-gaap Net Loss, non-gaap Gross Profit, Adjusted EBITDA, and non-gaap Lost 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 17 17

19 Amortization and Reconciliation Details CORE Charges Details (Pre-Tax) Q1-15 Q2-15 Q3-15 Q4-15 FY 2015 Q1-16 Q2-16 Q3-16 Q4-16 FY 2016 Q1-17 Cost of Sales $ 12 $ 10 $ - $ 1 $ 23 $ - $ - $ - $ - $ - $ - Research and Development Selling, General and Administration (6) 2 9 (2) Total CORE Charges (Pre-Tax) $ 226 $ 33 $ 5 $ 58 $ 322 $ 9 $ 6 $ (6) $ 2 $ 11 $ (2) RAP Charges Details (Pre-Tax) Q1-15 Q2-15 Q3-15 Q4-15 FY 2015 Q1-16 Q2-16 Q3-16 Q4-16 FY 2016 Q1-17 Cost of Sales $ - $ - $ - $ - $ - $ 21 $ 14 $ 5 $ 4 $ 44 $ 7 Research and Development Selling, General and Administration Total RAP Charges (Pre-Tax) $ - $ - $ - $ - $ - $ 52 $ 79 $ 33 $ 180 $ 344 $ 25 Amortization of Intangibles and PP&E Details Q1-15 Q2-15 Q3-15 Q4-15 FY 2015 Q1-16 Q2-16 Q3-16 Q4-16 FY 2016 Q1-17 In Cost of Sales Property, Plan and Equipment $ 27 $ 16 $ 14 $ 16 $ 73 $ 16 $ 10 $ 13 $ 12 $ 51 $ 12 Intangibles Assets Total in Cost of Sales In Operating Expenses Property, Plan and Equipment $ 33 $ 28 $ 27 $ 23 $ 111 $ 20 $ 22 $ 16 $ 15 $ 73 $ 12 Intangibles Assets Total in Operating Expenses Total Amortization Property, Plan and Equipment $ 60 $ 44 $ 41 $ 39 $ 184 $ 36 $ 32 $ 29 $ 27 $ 124 $ 24 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 Lost 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 18 18

20 BlackBerry Stock BlackBerry s stock continues to outperform publicly traded EMM competition since Jan 2015 BlackBerry 19 19