Blackberry Limited · TSX:BB
Blackberry — Investor Day (2024)
37 slides from Blackberry's investor day presentation, 2024
Slide 1: Accelerating Value Creation
Accelerating Value Creation Unlocking the Potential of Two Powerful Franchises Tim Foote Chief Financial Officer, BlackBerry © 2024 BlackBerry. All Rights Reserved
Slide 2: Safe Harbor and Non-GAAP Financial Measures
Safe Harbor and Non-GAAP Financial Measures Safe Harbor Statement This presentation contains forward-looking statements which are made pursuant to the safe harbor provisions of applicable U.S. and Canadian securities laws, including statements regarding plans, strategies and objectives of BlackBerry
Slide 3: Clear Priorities as New CFO
Clear Priorities as New CFO Building on a solid foundation… …to accelerate value creation • High standards for external reporting • Clear capital allocation priorities with a and financial control focus on growth engines • Strong finance team culture built • Reduced investment in areas where around
Slide 4: Providing Greater Clarity for Investors
Providing Greater Clarity for Investors Taking meaningful steps to… Key Elements of Financial Separation Increase Enhance investors’ Allocated Costs for Each Division financial ability to value the transparency BlackBerry portfolio • Majority of costs fully separated, including most G&A • Small numb
Slide 5: Unlocking Value in Cybersecurity
Unlocking Value in Cybersecurity Tim Foote Chief Financial Officer, BlackBerry © 2024 BlackBerry. All Rights Reserved
Slide 6: Optimizing Our Valuable Cybersecurity Portfolio
Optimizing Our Valuable Cybersecurity Portfolio Secure Communications Endpoint Security Range of MDR and XDR managed service solutions to Highly secure, leading #1 Critical Events Highly secure encrypted address large UEM solution. Market- Management solution in voice and data solution Leading AI/ML
Slide 7: Building on Improving Fundamentals
Building on Improving Fundamentals Annual Recurring Revenue (ARR) Dollar-Based Net Retention Rate (DBNRR) $289 $285 88% $279 $273 $280 $279 87% 85% 82% 81% 81% Q1 FY24 Q2 FY24 Q3 FY24 Q4 FY24 Q1 FY25 Q2 FY25 Q1 FY24 Q2 FY24 Q3 FY24 Q4 FY24 Q1 FY25 Q2 FY25 ARR Stabilization DBNRR Improvement • ~80% o
Slide 8: Enhancing Cyber Profitability
Enhancing Cyber Profitability Significant Profit Improvement in Past 3 Years, Despite Revenue Headwinds Revenue Adj. EBITDA ($Mil) and Adj. Gross Margin (%) $418 $100 70% $378 64% 65% 66% ~$350-365 ~$345-365 ~$345-365 62% 60% $50 57% ~$30-40 ~$25-35 $- 50% $- 40% $(50) EBITDA Gross Margin $(40) 30%
Slide 9: Shifting Our Portfolio and Prudently Allocating Capital
Shifting Our Portfolio and Prudently Allocating Capital Cylance Secure Comms & IoT • Cylance required high levels of investment to close • Secure Communications is a stable, government- product gaps and remain competitive focused business generating $50M+ Adj. EBITDA • Significant progress made to d
Slide 10: Cybersecurity: In Summary
Cybersecurity: In Summary Cybersecurity division has achieved significant improvement in profitability At the same time, fundamentals have strengthened The Secure Communications business is both stable and profitable Immediate pivot in investment focus, streamlining investment in Cylance to drive gr
Slide 11: Accelerating Growth in IoT
Accelerating Growth in IoT Vito Giallorenzo Chief Financial Officer, IoT © 2024 BlackBerry. All Rights Reserved
Slide 12: QNX: Robust Financial Investment Case
QNX: Robust Financial Investment Case Large, Growing Commercial and Clear Segment Deep, Long-Standing Market Opportunities Technical Trends Leader with Unique Relationships with with Attractive Pushing the Industry Capabilities, IP, Leading Customers Economics in Our Direction and Track Record and P
Slide 13: The QNX Business Model: Illustrative Automotive Program
The QNX Business Model: Illustrative Automotive Program Pre-Production (~2-3 years) Vehicle ProductionVehicle (~7-10 years) Production (~ 7-10 years) Initial Negotiation, Safety Certification Vehicles Come Development, and and Performance Off the Production Integration Optimization Lines • Define te
Slide 14: Diversified Business Mix, Backed by a Sizeable Backlog
Diversified Business Mix, Backed by a Sizeable Backlog IoT FY24 Sales Mix ($215m) FY24 Royalty Backlog ($815m) Other 18% 2030+ 28% 2025-27 33% Asia-Pacific 27% Others Americas 2028-30 31% Cockpit 50% 39% 29% Transportation 82% IVI & EMEA Cluster 8% ADAS 23% 21% Central Compute 11% Geographic Diversi
Slide 15: Proven and Consistent IoT Revenue Growth
Proven and Consistent IoT Revenue Growth Track Record of Double-digit Revenue Growth US$ millions ~14% CAGR • Forecasted growth in line with past performance through 10% CAGR industry cycles • Upside impact from new platform $295- $260- 305 initiatives expected to be $225 material after FY27 $215 27
Slide 16: ~Double Adj. EBITDA
Clear Path to Adj. EBITDA Expansion Following Separation Adj. EBITDA Margin Growth Adj. EBITDA Growth Profile ($M) Revenue Double-digit revenue CAGR driven by base ~$295-305M of secured royalty backlog $75-80M Revenue COGS +80% gross margin driven by high mix of ~$225-235M development platform and r
Slide 17: In Summary
In Summary Large, Growing Commercial and Clear Segment Deep, Long-Standing Market Opportunities Technical Trends Leader with Unique Relationships with with Attractive Pushing the Industry Capabilities, IP, Leading Customers Economics in Our Direction and Track Record and Partners Established and Pro
Slide 18: Fueling Growth through Targeted Capital Management
Fueling Growth through Targeted Capital Management Tim Foote Chief Financial Officer, BlackBerry © 2024 BlackBerry. All Rights Reserved
Slide 19: Creating Standalone Divisions to Foster Growth and Efficiency
Creating Standalone Divisions to Foster Growth and Efficiency Progress to Date Separation Rationale • Virtually autonomous IoT and Cybersecurity • Reviewed lessons from prior strategic review in 2023 divisions now in place • Assets were considered difficult to understand and value, • New leadership
Slide 20: Optimizing IP Licensing and Central Corporate Costs
Optimizing IP Licensing and Central Corporate Costs IP Licensing Revenue ($Mil) and Adj. EBITDA (%) Corporate Segment Adj. EBITDA Impact $16 $16 $16 FY25E FY26E FY27E 65% 65% 65% -$40 -$35 FY25E FY26E FY27E -$48 IP Licensing Corporate Costs • Solid, investment-light, cash-generating division • Unall
Slide 21: Driving Significant Improvement in Profitability
Driving Significant Improvement in Profitability Expect A Return To Profitability In FY25 - From Significant Loss Position In FY23 Revenue ($Mil) and Adj. Gross Margin (%) Adj. EBITDA ($Mil) and Adj. EBITDA Margin (%) $100 20% $900 $853 85% ~$80-95 $80 $800 ~$655 ~$50-65 14% 15% $700 $656 $218¹ ~$59
Slide 22: Balance Sheet and Liquidity Provide Financial Resilience
Balance Sheet and Liquidity Provide Financial Resilience Significant Reduction in Gross Debt + Enhanced Liquidity Profile $365 • Issued 5-year maturity, 3% convertible debt • No additional debt maturities until 2029 • Remain net cash positive $200 $200 • Expect to return to positive operating cashfl
Slide 23: Enhancing Profitability and Cash Generation
Enhancing Profitability and Cash Generation Driving Stronger Profitability To Fuel Capital Deployment FY23 Q2 FY25 Change Immediate Priorities Adj. COGS 34% 34% Unchanged • Drive stronger cash flow generation - Streamline investments in Cylance Adj. R&D 28% 23% 500 bps improvement - Continue to deli
Slide 24: Key Takeaways
Key Takeaways Significant Considerable QNX and IoT progress made in progress made delivering both separation toward enterprise profitable growth; and streamlining profitability expect to be of IoT and Cyber and positive “Rule of 40” divisions cash flow company by FY27 Secure Streamlining Maintaining
Slide 25: BlackBerry. All Rights 2024 BlackBerry.
© 2024© BlackBerry. All Rights 2024 BlackBerry. All Reserved Rights Reserved
Slide 26: Compelling Investment Thesis
Compelling Investment Thesis Our Strong Product Portfolio Significant Progress in Our Cost Profile Improving Fundamentals Significant Progress Towards Positive Cashflow Focus and Optionality From Virtually Autonomous Divisions © 2024 BlackBerry. All Rights Reserved 26
Slide 27: BlackBerry. All Rights 2024 BlackBerry.
© 2024© BlackBerry. All Rights 2024 BlackBerry. All Reserved Rights Reserved
Slide 28: Today's Speakers
Today’s Speakers John Giamatteo is BlackBerry’s Chief Executive Officer and President of its Cybersecurity division. He John Giamatteo came to BlackBerry from McAfee where he was President and Chief Revenue Officer for over six CEO, years. Prior to that John served as Chief Operating Officer at AVG
Slide 29: Today's Speakers - IoT
Today’s Speakers - IoT Mattias Eriksson is President and General Manager of BlackBerry’s IOT Business Unit. The business Mattias Eriksson unit consists of BlackBerry Technology Solutions or BTS (BlackBerry® QNX®, BlackBerry Certicom®, President, BlackBerry Radar® and BlackBerry Jarvis ) and BlackBer
Slide 30: Today's Speakers – Cybersecurity
Today’s Speakers – Cybersecurity Nathan Jenniges Nathan Jenniges is Senior Vice President & General Manager for the BlackBerry Products with Senior Vice President & responsibility for product strategy, roadmaps, engineering, and development operations. Prior to General Manager BlackBerry, Nathan spe
Slide 31: Today's Speakers - Cybersecurity
Today’s Speakers - Cybersecurity Shiladitya Sircar is the SVP, Product Engineering & Data Science at BlackBerry, where he leads Cyber Security Platform R&D teams. In his role he is responsible for ML research and development for Shil Sircar BlackBerry Cylance Threat Intelligence Cloud, ZTNA, NDR and
Slide 32: Disclaimer
Disclaimer This presentation contains forward-looking statements which are made pursuant to the safe harbor provisions of applicable U.S. and Canadian securities laws, including statements regarding plans, strategies and objectives of BlackBerry Limited (the “Company”) as well as the financial perfo
Slide 33: Financial Disclosure Updates ($M)
Financial Disclosure Updates ($M) During the third quarter of fiscal 2025, the Company determined that it was preferable to present all the expenses associated with its facilities within General and administrative, whereas previously these costs were allocated amongst the functional expense areas of
Slide 34: Segment Financials ($M)
Segment Financials ($M) Segment Gross Margin FY23 FY24 Segment EBITDA FY23 FY24 Cybersecurity Cybersecurity Segment revenue $ 418 $ 378 Segment gross margin $ 240 $ 242 Segment cost of sales 178 136 Segment research & development 125 102 Segment gross margin 240 242 Segment sales and marketing 127 1
Slide 35: Segment Financials ($M) (Continued)
Segment Financials ($M) (Continued) Reconciliation of Segment EBITDA to Consolidated loss before income taxes FY23 FY24 Total Segment EBITDA $ (28) $ 77 Adjustments Stock compensation expense 31 33 Restructuring expenses 11 37 Less Corporate general & administrative 49 20 Amortization 105 59 Impairm
Slide 36: Non-GAAP Reconciliation ($M)
Non-GAAP Reconciliation ($M) Reconciliation of Adjusted EBITDA to Operating Reconciliation of Adjusted operating expense to income (loss) FY23 FY24 Q2FY25 Operating expense Q3FY24 Q4FY24 Q1FY25 Q2FY25 Operating income (loss) $ (725) $ (125) $ (21) Non-GAAP adjustments to operating income Operating e
Slide 37: Non-GAAP Reconciliation ($M) (Continued)
Non-GAAP Reconciliation ($M) (Continued) FY23 Q2FY25 FY23 Q2FY25 Cost of sales (as previously disclosed) $ 237 $ 51 Sales and marketing expense (as previously disclosed) $ 176 $ 34 Impact of change of accounting principle (9) (1) Impact of change of accounting principle (8) (1) Cost of sales (as ame