Blackberry Limited · TSX:BB
Blackberry — Investor Day (October 2024)
73 slides from Blackberry's investor day presentation, October 2024
Slide 1: Welcome & Opening Remarks
Welcome & Opening Remarks Martha Gonder Director, Investor Relations © 2024 BlackBerry. All Rights Reserved 1
Slide 2: Today's Agenda & Presenters
Today’s Agenda & Presenters 9:30 AM Welcome Martha Gonder 9:35 AM Strategic Overview John Giamatteo, CEO 10:00 AM IoT Business Update Mattias Eriksson Grant Courville 11:00 AM Cybersecurity John Giamatteo, CEO Ismael Valenzuela Business Updates Nathan Jenniges Shil Sircar Christoph Erdmann 11:40 AM
Slide 3: 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 4: Forging a New Future
Forging a New Future Positioning for Growth and Value Creation John Giamatteo Chief Executive Officer, BlackBerry President, BlackBerry Cybersecurity © 2024 BlackBerry. All Rights Reserved 4
Slide 5: BlackBerry. All Rights 2024 BlackBerry.
© 2024© BlackBerry. All Rights 2024 BlackBerry. All Reserved Rights Reserved 5
Slide 6: Areas of Focus
Areas of Focus 1 2 3 4 5 Strength of Cost Fundamental Cash Flow Strategic Capital Portfolio Savings Business Strength Profile Allocation Update © 2024 BlackBerry. All Rights Reserved 6
Slide 7: Our Strong Product Portfolio
1 Our Strong Product Portfolio IoT CYBERSECURITY Secure Communications #1 Critical Event Highly secure, leading Highly secure encrypted Management solution in UEM solution. Preferred voice and data solution US Federal Govt choice for on-premise trusted by NATO and Clear leader in Automotive: deploym
Slide 8: Significant Progress in Our Cost Profile
2 Significant Progress in Our Cost Profile Actions taken to drive cost run rate improvements of approximately: Q3 FY24 ~$50M • Rationalization efforts across laboratories Q4 FY24 ~$55M • Consolidation of Q1 FY25 ~$20M global facilities • Streamlining of Q2 FY25 ~$10M corporate infrastructure Total ~
Slide 9: Improving Fundamentals
3 Improving Fundamentals 4 QNX Royalty Backlog Cyber ARR and DBNRR US$ millions US$ millions $815 88% $289 87% $640 85% $285 $460¹ $279 $280 $279 82% 81% 81% $273 Q1 FY24 Q2 FY24 Q3 FY24 Q4 FY24 Q1 FY25 Q2 FY25 Q4 FY22* Q4 FY23 Q4 FY24 * FY=Fiscal Year; Currently in FY25 = Calendar Year March 1, 202
Slide 10: Significant Progress Towards Positive Cashflow
4 Significant Progress Towards Positive Cashflow Operating Cash Usage US$ millions Q2 FY24 Q3 FY24 Q4 FY24 Q1 FY25 Q2 FY25 -$15 -$15 -$13 -$31 Outlook: Positive operating cashflow by Q4 FY25 -$56 © 2024 BlackBerry. All Rights Reserved 10
Slide 11: Focus and Optionality From Virtually Autonomous Divisions
5 Focus and Optionality From Virtually Autonomous Divisions Divisional Delegated Tailoring IT Increased leadership decision systems focus & teams making autonomy © 2024 BlackBerry. All Rights Reserved 11
Slide 12: BlackBerry. All Rights 2024 BlackBerry.
© 2024© BlackBerry. All Rights 2024 BlackBerry. All Reserved Rights Reserved 12
Slide 13: Leading With Innovation
Leading With Innovation Extending our Market Position with Leading Technology Mattias Eriksson President, BlackBerry IoT © 2024 BlackBerry. All Rights Reserved 13
Slide 14: IoT: A Compelling Driver of Investment Valuation
IoT: A Compelling Driver of Investment Valuation Attractive Fundamentals Leading Market Position Large, Growing Commercial and Clear Segment Deep, Long-Standing Market Opportunity Technical Trends Leader with Unique Relationships with with Attractive Pushing the Industry Capabilities, IP, and Leadin
Slide 15: Significant Progress Since Last Analyst Summit
Significant Progress Since Last Analyst Summit Financial Progress1 ~$108M $815M +45% CCM³ 1H 1H25 Revenue Royalty Backlog2 1H25 Profitability (+15% YoY) (+27% YoY) Product/structural progress • Biggest product launch year in a decade in FY24 ‒ 1HFY25 progress across the board on commercial ramp • Re
Slide 16: 100+ Design Wins
Working with Industry-Leading Customers and Partners to Drive Innovation Developing industry-leading Leveraging dominant foundational EDGE Compute software 100+ Design Wins market position to win outsized share of future for Auto and GEM¹ applications In the Past 18 Months market growth Examples of
Slide 17: Significantly Larger Royalty Backlog
Significantly Larger Royalty Backlog QNX Royalty Backlog ($US Mil) Each project has significant lifetime value $815 with years-long revenue stream • Out of the ~$0.5 B+ in projects secured in the last 2 $640 years, less than $20M is hitting revenue in FY25 Backlog at Awards based on long term roadma
Slide 18: Positioned to Benefit From Powerful Industry Trends
Positioned to Benefit From Powerful Industry Trends Automotive: Higher Barriers to Entry and Cost of The Three Structural Macro Trends Failure than any other B2B IoT Devices <10 millisecond Up to 500M Latency Lines of Code 100-500 Watts Energy Consumption Hard Real-time Requirements Stringent Safety
Slide 19: In the Early Stages of the SDV Transformation (1 of 2)
In the Early Stages of the SDV Transformation with 10+ Years To Go (Slide 1 of 2) Today Software Developed Vehicle Trajectory for 2023 2028 2033 new vehicles (SDV) Maturity Assessment Mixed criticality Emerging Scaling Mature • Most facets of vehicle development still “emerging” in terms of maturity
Slide 20: In the Early Stages of the SDV Transformation (2 of 2)
In the Early Stages of the SDV Transformation with 10+ Years To Go (Slide 2 of 2) ECU/DCU Market by Domains, $ billions The Shift to more advanced EDGE 2025 2030 compute is ongoing $89 $82 • DCU market expected to grow more than 3.5x from 2025 to 2030 $29 $31 28% $61 • ADAS and Digital Cockpit are t
Slide 21: Architectural Shift is Benefitting QNX
In the Automotive SDV Transformation, the Architectural Shift is Benefitting QNX We are already winning an outsized share of the advanced architectures…and the share of the advanced architectures is growing! Electrical/Electronic (E/E) Architecture Types & Complexity Evolution E/E Architecture Devel
Slide 22: Investing to Capture the Integrated Software Opportunity
Investing to Capture the Large and Growing Integrated Software Opportunity for Some Leading Customers From Individual Sockets/Layers… …to Requests for Integrated Software Platform Vehicle Applications 3rd Party IVY Integration Integrated Software Platform & IVY QNX QNX Platform Middleware Cabin Soun
Slide 23: Addressable Market Remains Large and Growing
Addressable Market Remains Large and Growing SAM by IoT Core and Strategic Initiatives ($B) $5.9 ~34% IoT Total • IoT Core Serviceable Core SAM CAGR ’24-’28 Addressable Market (SAM)1 Strategic Investments growing at ~8-12% CAGR CY24- 26, reaching $2.1B by CY26 $3.5 • Strategic investments2 have the
Slide 24: Clear Strategy to Capitalize on Market Opportunities
Clear Strategy to Capitalize on Market Opportunities Leaders in Foundational Software for the Intelligent EDGE… Focused Market Long Term Targeted Business Unit Segments Commitments Core R&D Transformation High End, Mission Critical Deep IP, Partnerships Three Pillar Roadmap Operational Excellence •
Slide 25: What to Look For the Next 12 Months
What to Look For the Next 12 Months…Beyond the Financials • How is overall (auto) macro evolving and are we performing better than the overall market? • The most important leading indicator is the RT backlog…is it growing and does it contain important structural wins tied to our strategy? • Is there
Slide 26: Key Messages
Key Messages 1 The long-term investment thesis is as strong as ever 2 We have made significant progress in the last 18 months 3 Leading customers are asking us to do more…beyond “more sockets, more layers” 4 We have clear initiatives to advance critical work on both the product and go-to-market fron
Slide 27: QNX Foundational Software
QNX Foundational Software Trusted. Proven. Futureproof. October 2024 Grant Courville VP, Products and Strategy, BlackBerry IoT © 2024 BlackBerry. All Rights Reserved 27
Slide 28: Significant Progress Against Strategic Roadmap Priorities
Significant Progress Against Strategic Roadmap Priorities Innovation Innovation in Safety Reduce Developer at the Edge and Security Friction QNX 8.0 Commercial Release Safety Enhancements Cloud Enablement • Delivered high-performance scalable • Provided industry-first safety certified • Released QNX
Slide 29: The Automakers' Software Journey
The Automakers’ Software Journey From spending billions on in-house development… …to recognizing inherent challenges & complexity “Despite employing nearly 6,000 “German OEM steps up software engineers, European OEM failed to meet push with own operating system.” key timeline and performance goals.”
Slide 30: Reaching an Inflection Point in Value Creation Paradigm
Reaching an Inflection Point in Value Creation Paradigm Historical Focus: Current Focus: In-House Development Partnership Preference • 5+ years ago, industry realized that software could • Automakers desire standardized vehicle software create immense value over the lifecycle of the vehicle platform
Slide 31: Complexity Shifting From Hardware and Networks to Software
Complexity Shifting From Hardware and Networks to Software Distributed Domain – Centralized Vehicle – Centralized Many fixed functions – discrete ECUs Reduction in fixed function ECUs High performance centralized compute domains with zonal architecture Complexity Complexity Complexity Hardware Hardw
Slide 32: QNX: A Trusted Solution for Reliable Component Integration
QNX: A Trusted Solution for Reliable Component Integration Vehicle Level Pre-integrated, light-weight, Applications and certified software platform • Future-proof and high-performance • Scalable vehicle-wide for safety and Foundational Software Platform non-safety critical systems • In-vehicle, phys
Slide 33: Enabling Innovation Through Open Standards, Open Source, and Standard Tools
Enabling Innovation Through Open Standards, Open Source, and Standard Tools Supporting Industry Standard Tools, APIs, and Software • Supporting standard tools and languages like the GCC toolchain, Rust, Python, Ada, Eclipse and VS Code • Widespread APIs that most developers already know and use (e.g
Slide 34: Focus on Safety Strengthens BlackBerry Competitive Moat
Focus on Safety Strengthens BlackBerry Competitive Moat QNX: The Right Architecture, Challenges with The QNX Difference Processes, Culture, and Linux and Safety Experience to Put • Safety-first approach – it’s in our DNA • Huge churn, minimal results to date and • 25+ years in automotive and 100% Sa
Slide 35: Developing QNX Cloud-Enabled Products and Partner Integrations
Developing QNX Cloud-Enabled Products and Partner Integrations Traditional Future Cloud Focus Cloud Innovation Blurring the Line Between Back-End Embedded Development Process Physical and Digital to Deliver Systems Scale, Velocity, and Ecosystem Telematics High Automation Compute Global development
Slide 36: Looking Beyond Automotive
Looking Beyond Automotive QNX Trusted by Mission-Critical …Creating Opportunities to Extend the System Manufacturers Everywhere… QNX Value Proposition to Adjacent Markets • Four-decade software pedigree in complex, mission-critical systems • Industry reputation for top-tier engineering talent • Comp
Slide 37: Enabling Innovation at Scale in 2024 and Beyond
Enabling Innovation at Scale in 2024 and Beyond Innovation Innovation in Safety Reduce Developer at the Edge and Security Friction QNX 8.0 Portfolio Expansion Safety Enhancements QNX Everywhere • Develop high-value add-on products, • Provide QNX 8 safety OS, QNX 8 safety • Launch program to signific
Slide 38: QNX: The Trusted, Proven Solution for Next-Gen Systems
QNX: The Trusted, Proven Solution for Next-Gen Systems Dominant High-performance IP to enable Trusted partner in Experience, technology for solutions customer systems, markets where culture, and advanced underpinning platforms and safety, security, quality to support automotive safety-critical long-
Slide 39: Key Takeaways
Key Takeaways 1 Leader for mission-critical, safe and secure automotive software across the globe 2 Continuing to benefit from a highly defensible competitive moat built on decades of experience 3 Positioned for growth as the auto industry evolves toward greater reliance on high-performance computin
Slide 40: Strengthening Our Cybersecurity Business
Strengthening Our Cybersecurity Business Investor Day, October 2024 John Giamatteo Chief Executive Officer, BlackBerry President, BlackBerry Cybersecurity © 2024 BlackBerry. All Rights Reserved 40
Slide 41: Comprehensive, Highly Secure, & Extensively Certified Platform
Comprehensive, Highly Secure, & Extensively Certified Platform for Critical Communications & Cybersecurity Critical Mobile Crisis AI-Driven Communications Fortification Management Cybersecurity © 2024 BlackBerry. All Rights Reserved 41
Slide 42: Building on Our Secure Communications Foundation
Building on Our Secure Communications Foundation Critical Solutions & Market Opportunities Nathan Jenniges Senior Vice President & General Manager, Cybersecurity Products © 2024 BlackBerry. All Rights Reserved 42
Slide 43: Why Are We Talking About Secure Communications?
Why Are We Talking About Secure Communications? 1 2 3 4 5 Incubated assets Strong link to Uncovering Able to elevate to Strong, loyal, you have not BlackBerry renewed and higher decision defensible heard a lot about heritage and emerging market levels in customer base in awhile culture demands gover
Slide 44: A Changing World Creating Demand For Secure Communications
A Changing World Creating Demand For Secure Communications Cyber Attacks & IT Outages Espionage Global Conflicts Social Unrest Financial Instability Extreme Weather Lack of Critical Solutions Impacting Resiliency for Governments and Enterprises © 2024 BlackBerry. All Rights Reserved 44
Slide 45: BlackBerry Secure Communications – Together at the Right Time, Right Place
BlackBerry Secure Communications – Together at the Right Time, Right Place Key Customer Use Cases UEM SecuSUITE AtHoc Broad Device & OS Support ★ ★ ★ Secure Voice (1 to 1, Groups) ★ ★ ★ Secure Message (1 to 1, Groups) ★ ★ ★ On-Premise, Data Sovereignty ★ ★ ★ Secure Networks ★ ★ Secure Devices & Apps
Slide 46: BlackBerry UEM – Preferred Choice for Secure On-Premise MDM
BlackBerry UEM – Preferred Choice for Secure On-Premise Mobile Device Management Profit Driver Mobile Endpoints Overview Desktop Mobile Device • Acquired in 2015 (Good Technology) Management • Major contributor to Cybersecurity revenue Data Isolation & (MDM) • Strong focus on retention, efficiency &
Slide 47: BlackBerry SecuSUITE – Certified For Top-Secret Communications
BlackBerry SecuSUITE – Designed & Certified For Top-Secret Communications Growth Driver Dedicated encrypted Overview private communications • Acquired in 2014 (Secusmart), founded in 2007 • Strong German Government base via hardware solution network that runs over • Focus on new mobile app suite & g
Slide 48: BlackBerry AtHoc – Leader in Critical Event Management
BlackBerry AtHoc – Leader in Critical Event Management for Governments Growth Driver Prepare, respond, and Overview • Acquired in 2015, founded in 1999 recover from critical events • Strong customer base, still growing in US Government to minimize the impact on • Focus on adjacent growth, police/fir
Slide 49: Comprehensive Certifications & Diversely Approved Products
Comprehensive Certifications & Diversely Approved Products NEW NEW German BSI Approved FedRAMP High FIPS 140-2 Validated NIST Cryptographic Department of Defense for VS-NfD (Classified)1 20+ ATOs2 Cryptography123 Algorithm Validation Information Network Program (CAVP)1 Approved Products List German
Slide 50: Strong Foundation of Highly Satisfied & Loyal Customers
Strong Foundation of Highly Satisfied & Loyal Customers 80% 45% 45% 10% Preferred Choice North EMEA Asia Pacific National Military Government & Large Enterprise America Governments With $250k+ ARR UNITED STATES, CANADA, STRONG RETENTION GERMANY, MALAYSIA, AND MORE % mix of secure communications ARR
Slide 51: Solutions Recognized by Customers and Analysts
Solutions Recognized by Customers and Analysts Analyst Recognition “BlackBerry UEM Is “Best In Class Mobile AtHoc and SecuSmart recently Hands-Down The Device Management received stellar coverage in Tier 1 Best BYOD Solution” Solution” analyst reports. VP, IT Network Director of Delivery and Adminis
Slide 52: Secure Communications Spans Three Traditional Market Segments
Secure Communications Spans Three Traditional Market Segments $0.8B $2B $1.8B Addressable Addressable Addressable ~3% CAGR for on-premise solutions $6B TAM $21B TAM $19B TAM 7% CAGR 7% CAGR 12% CAGR (2023-2027) (2024-2030) (2023-2028) Unified Endpoint Management Critical Communications Market Physic
Slide 53: Finding Unique Opportunities To Deliver One Comprehensive Solution
Finding Unique Opportunities To Deliver One Comprehensive Solution National New Regulations Governments & Certifications Data State & Local Sovereignty Government Dark Police, Fire, & Sites Ambulance Finding New Greenfield Opportunities and Consolidation & Displacement Of Inferior Point Products © 2
Slide 54: Looking Forward
Looking Forward Products Customers Go to Market Secure Video Communication ($) Enhanced User Experiences “Secure Comms” Market Awareness Secure Generative AI ($) Optimized Secure Services New Certifications Expanded Security Integrations ($) Secure AI-Assisted Support Multi-Product Penetration Quant
Slide 55: Summary
Summary 1 Right Solutions At The Right Time 2 Great Core Customer Retention 3 Strong Growth Opportunities 4 Focused Investments To Expand 5 Operationally Efficient & Profitable © 2024 BlackBerry. All Rights Reserved 55
Slide 56: Driving Growth with SecuSUITE
Driving Growth with SecuSUITE Fortifying Modern Communications Dr. Christoph Erdmann Senior Vice President, SecuSmart © 2024 BlackBerry. All Rights Reserved 56
Slide 57: Evolution of SecuSmart
Evolution of SecuSmart Smart Security to Protect Mission-critical Communications • Founded in 2007 as Secusmart GmbH • Acquired by BlackBerry in 2014 • Today SecuSUITE is used by Governments globally First hardware Launch of SecuSUITE Founded Used in over deployment with the Acquisition for Governme
Slide 58: Securing Government Classified Work In Germany
Securing Government Classified Work In Germany Foundation • Samsung & Apple devices • Embedded secure hardware component • Separation of classified & personal SecuSUITE for • Secure classified data & apps Samsung Knox / iOS • Secure voice calling • Resell ready to go devices • Full OTA enrolment & p
Slide 59: Protection & Productivity For Any Government Communication
Protection & Productivity For Any Government Communication Growth Driver SecuSUITE for Government • Fully software-based solution Secure voice & messaging • Secure voice and messaging • Integrates with Telephone & Stops identity spoofing Conferencing • Independently approved for Keeps metadata secur
Slide 60: Advancing our Endpoint Security Capabilities
Advancing our Endpoint Security Capabilities Innovation in AI, Modernization, and the Shift to MDR Ismael Valenzuela VP, Threat Research & Intelligence © 2024 BlackBerry. All Rights Reserved 60
Slide 61: Evolution of Cylance Investment
Evolution of Cylance Investment Catch Up On EDR With Cloud-Native Solution Completed in 2022 with Optics v3 Rebuild Threat Research & Intelligence Rebuild & Expand AI/ML & Patent Engine Modernize Cylance Cloud Experience & Cost Efficiency Since 2023, focused investment toward higher growth opportuni
Slide 62: Unique Research That Fuels Awareness and Differentiates Our Services
Unique Research That Fuels Awareness and Differentiates Our Services Recent collaborative government research • Canadian Anti-Fraud Centre (CAFC) • Canadian Counter Ransomware Initiative (CRI) • Canadian National Cybercrime Coordination Centre (NC3) • US Cybersecurity and Infrastructure Security Age
Slide 63: Threat Landscape Driving Evolution Of AI Threat Prevention
Threat Landscape Driving Evolution Of AI Threat Prevention Quarterly Threat Research Report Increasingly Complicated Threat Landscape Unique Hashes Per Minute 52% Increase #1 Downloaded In unique malware from Q1 to Q2 Content for all of BlackBerry Mar 2023- Jun 2023- Sep 2023- Jan 2024- Apr 2024- Ma
Slide 64: Advancing our Endpoint Security Capabilities
Advancing our Endpoint Security Capabilities Innovation in AI, Modernization, and the Shift to MDR Shil Sircar SVP, Cylance Data Science & Engineering © 2024 BlackBerry. All Rights Reserved 64
Slide 65: Innovating in AI (again)
Innovating in AI (again) 18 New Machine Private Generative AI Learning (ML) Models Assistant In Last 18 Months For Customers Strong AI/ML Patent Portfolio PROCESS UNIVERSAL POWERSHELL ANOMALY SCRIPTS SUPPORTING • For EPP, EDR & MDR PIXIE BEHAVIOURAL WEAVER OMNI MODELS MODELS SIMILARITY SEEKER • Expl
Slide 66: AI Delivering Better Results Than Ever Before
…AI Delivering Better Results Than Ever Before Cylance Latest Product Generation Cylance Latest ML Models Flipped From Delivers Best Defense & Lowest Impact Worst to Best in False Positives in Last 2 Years Correct prediction of true positives Avoiding false positives simplifies IT management & lower
Slide 67: Strategic Decision To Focus On Managed Detection & Response Market
Strategic Decision To Focus On Managed Detection & Response (MDR) Market MDR is a 24x7x365 Security Operations Service operated by Cylance for customers that cannot staff it on their own. We hunt, detect, investigate, and collaboratively respond to attacks with them. Strategic Shift in 2023 ~$2B Sof
Slide 68: Executed On Modern, Competitive, Cloud-Native MDR Platform
Executed On Modern, Competitive, Cloud-Native MDR Platform Simplified, AI-Superpowered, Managed Security Platform Cloud Native Big Data Lake Optimized Threat Expanded Integrated Generative MDR With XDR Transformation Platform Intelligence AI/ML BlackBerry AI Assistant Launched Integrated multiple Tr
Slide 69: MDR Service Expanded To Other Endpoints & Security Integrations
MDR Service Expanded From Just CylanceENDPOINT To Other Endpoints & Security Integrations a Managed by Cylance SOC Experts 24/7 Man ged SOC or On-Demand 293% ROI From Forrester TEI Study ce Security Teams Cylan Expands se M n po Addressable MDR an Cylance AI es ag TAM From $0.2B to tR ed den $2B Thr
Slide 70: Driving Customer & Market Validation of Our Strategy and Execution
Driving Customer & Market Validation of Our Strategy and Execution Cylance received the NEW “Excellent performance, security, Gartner ® Peer Insights MDR Notable Vendor and simple to administer” ’23 & ‘24 Managed Detection And Response Chief Executive Officer in the IT Industry Customers' Choice Ser
Slide 71: Key Metrics Proof Points Of Execution Success
Key Metrics Proof Points Of Execution Success Improving Overall Customer Satisfaction Improving Cost Efficiency Renewal Rates Average Daily Cloud Spend ($M) $2.0 70% 54% Reduction Driven by Cloud-Native Transformation & Optimization in Last 18 Months $1.0 60% 50% $0.0 FY23 FY24 FY25 (FCST) 2023-03 2
Slide 72: Summary
Summary World Class Threat Research Differentiates Services & Fuels AI Delivering Unique, Patented Innovations & Proof Points With AI Executed On A Modern, Scalable MDR Cloud Data Service Improving Metrics In Customer Retention & Cost Efficiency Focused On MDR Growth Opportunity In Specific Market V
Slide 73: BlackBerry. All Rights 2024 BlackBerry.
© 2024© BlackBerry. All Rights 2024 BlackBerry. All Reserved Rights Reserved 73