Blackberry Limited · TSX:BB
Blackberry — Q2 FY2020 Earnings Presentation
21 slides from Blackberry's earnings presentation, September 2019
Slide 1: BlackBerry Investor Presentation Q2 FY'20
BLACKBERRY INVESTOR PRESENTATION Q2 FY’20 BlackBerry Public investorinfo@blackberry.com
Slide 2: Safe Harbor Statement
SAFE HARBOR STATEMENT 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", "wi
Slide 3: Strategy
STRATEGY 3 © 2019 BlackBerry. All Rights Reserved. 3
Slide 4: Our Vision, Our Mission, Our Value Proposition
OUR VISION A connected world, in which you are safe and your data is yours OUR MISSION To be the world’s leading provider of the most trusted endpoint connectivity technologies OUR VALUE PROPOSITION BlackBerry provides the trusted foundation for the Internet of Things 4 © 2019 BlackBerry. All Rights
Slide 5: BlackBerry Strategy: Complete platform for a trusted Internet of Things
BLACKBERRY STRATEGY The complete platform for a trusted Internet of Things FY20 Growth FY19 Product portfolio established FY18 Software pivot complete FY15 Strategy formulated 5 Organic investments Inorganic investments © 2019 BlackBerry. All Rights Reserved. 5
Slide 6: BlackBerry Spark platform
BLACKBERRY STRATEGY The Internet of Things Bl ackBerry Spark A platform built on the integration and innovation of BlackBerry technologies To d e l i v e r t h e m o s t t r u s t e d e n d p o i n t c o m m u n i c a t i o n s f o r t h e I n t e r n e t o f T h i n g s Endpoint Artificial Asset Co
Slide 7: $22B Internet of Things TAM with 27% CAGR
BLACKBERRY STRATEGY BlackBerry operates in a $22B Internet of Things TAM, with a 27% CAGR Crisis Unified Endpoint Embedded Endpoint Communications Management Software Security $3B $3.2B $1.8B $14B MARKET SIZE MARKET SIZE MARKET SIZE MARKET SIZE 34% 9% 19% 30%+ CAGR CAGR CAGR CAGR … & TRUST IS THE #1
Slide 8: Pivotal moments of the past months
BLACKBERRY STRATEGY Pivotal moments of the past 12 months $1B Expanded from EoT to IoT AI / ML capabilities added $1B cybersecurity company Over 150 million cars Over half a billion endpoints Established BGS connected and protected 8 © 2019 BlackBerry. All Rights Reserved. 8
Slide 9: What Cylance brings to BlackBerry
BLACKBERRY CYLANCE What Cylance brings to BlackBerry Consumer 1,000+ and Net New Enterprise Channel Install Base Partners 20M+ 4,000+ Fixed Net New Endpoints Customers 300+ Pioneering Engineers AI Security and Data Technology Scientists 9 © 2019 BlackBerry. All Rights Reserved. 9
Slide 10: Adding AI capabilities for advanced IoT endpoint security
BLACKBERRY CYLANCE Adding artificial intelligence capabilities for advanced IoT endpoint security NUMBER OF ENDPOINTS Desktop Mobile Automotive GEMS All IoT Endpoints 10 © 2019 BlackBerry. All Rights Reserved. 10
Slide 11: Natural synergies for an advanced integration timeline
BLACKBERRY CYLANCE Natural synergies for an advanced integration timeline FY19 FY20 FY20 FY21 FY21 Expand Cylance into BlackBerry install base & introduce BlackBerry into Cylance install base Acquisition Operational AI / ML plus AI / ML plus Accretive completed synergies UEM QNX growth 11 © 2019 Bla
Slide 12: FY20 Operational Priorities
FY20 OPERATIONAL PRIORITIES We will continue to invest in our product and go-to-market Deliver BlackBerry Integrate BlackBerry Broaden reach in Expand into new Spark Cylance portfolio regulated verticals verticals 12 © 2019 BlackBerry. All Rights Reserved. 12
Slide 13: Financials
FINANCIALS 13 © 2019 BlackBerry. All Rights Reserved. 13
Slide 14: BlackBerry's Strategic Priorities in FY20
BLACKBERRY’S STRATEGIC PRIORITIES IN FY20 IoT BlackBerry Cylance Licensing • Increase market share in regulated • Continue revenue growth via new • Close pipeline opportunities for industry verticals customer acquisition and existing patent monetization with direct customers expansion and indirect c
Slide 15: BlackBerry's FY20 Financial Outlook
BLACKBERRY’S FY20 FINANCIAL OUTLOOK •Total company non-GAAP revenue growth of 23%-25% •Double-digit percentage increase in billings year-over-year •Total company non-GAAP profitability 15 © 2019 BlackBerry. All Rights Reserved. 15
Slide 16: Timeless Model Assumptions
Looking to the Future— TIMELESS MODEL ASSUMPTIONS Accelerated Growth From the IoT FY19 Results Timeless Model Recurring Software & Services Revenue1 91%2 ~90% Gross Margin1 78% ~80-85% Operating Income1 13% ~20-25% Adjusted EBITDA1 20% ~25-30% Notes: 1. All metrics shown above are on a Non-GAAP basi
Slide 17: GAAP Income Statement ($M)
GAAP INCOME STATEMENT ($M) Q1-19 Q2-19 Q3-19 Q4-19 FY 2019 Q1-20 Q2-20 IoT 126 137 149 145 355 136 133 BlackBerry Cylance - - - 2 204 32 35 Licensing 63 56 68 99 286 72 71 Software & Services $ 189 $ 193 $ 217 $ 246 $ 845 $ 240 $ 239 Other 24 17 9 9 46 7 5 Total GAAP Revenue 213 210 226 255 904 247
Slide 18: Non-GAAP Reconciliation ($M)
NON-GAAP RECONCILIATION ($M) Non-GAAP Adjustments (Pre-Tax and After-Tax) Q1-19 Q2-19 Q3-19 Q4-19 FY 2019 Q1-20 Q2-20 Debentures Fair Value Adjustment 28 (70) (69) (6) (117) (28) (23) Restructuring Charges 4 3 1 3 11 1 3 Software Deferred Revenue Acquired 4 4 2 2 12 20 17 Software Deferred Commissio
Slide 19: Non-GAAP Reconciliation ($M) (cont.)
NON-GAAP RECONCILIATION ($M) (CONT.) Adjusted EBITDA Q1-19 Q2-19 Q3-19 Q4-19 FY 2019 Q1-20 Q1-20 GAAP Operating Income (Loss) $ (65) $ 39 $ 58 $ 28 $ 60 $ (36) $ (43) Non-GAAP Adjustments to Operating Income 77 (22) (26) 30 59 41 45 Non-GAAP Operating Income 12 17 32 58 119 5 2 Amortization 41 38 37
Slide 20: Amortization and Reconciliation Details ($M)
AMORTIZATION AND RECONCILIATION DETAILS ($M) Restructuring Charges Details (Pre-Tax) Q1-19 Q2-19 Q3-19 Q4-19 FY 2019 Q1-20 Q2-20 Cost of Sales $ - $ 1 $ - $ 1 $ 2 $ 1 $ 1 Research and Development 2 - - - 2 - - Selling, Marketing and Administration 2 2 1 2 7 - 2 Total Resttructuring Charges $ 4 $ 3 $
Slide 21: Thank You
THANK YOU AS Pe