Blackberry Limited · TSX:BB

Blackberry — Investor Day (2019)

34 slides from Blackberry's investor day presentation, 2019

  1. Slide 1: #BlackBerryTrust #Security #Privacy #Control

    #BlackBerryTrust #Security #Privacy #Control

  2. Slide 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”

  3. Slide 3: Strategic Update

    Strategic Update John Chen Executive Chairman & Chief Executive Officer #BlackBerryTrust = #Security #Privacy #Control © 2019 BlackBerry. All Rights Reserved. 3

  4. Slide 4: BlackBerry

    BlackBerry First presented in 2017. #BlackBerryTrust = #Security #Privacy #Control 2018 BlackBerry. All Rights Reserved. © 2019 4

  5. Slide 5: Investing and innovating to secure, protect and enable a trusted Internet of Things

    BlackBerry Investing and innovating to secure, protect and enable a trusted Internet of Things. #BlackBerryTrust = #Security #Privacy #Control 2018 BlackBerry. All Rights Reserved. © 2019 5

  6. Slide 6: Financial Update

    Financial Update Steven Capelli Chief Financial Officer #BlackBerryTrust = #Security #Privacy #Control © 2019 BlackBerry. All Rights Reserved. 6

  7. Slide 7: BlackBerry Has Undergone a Significant Shift in Business Model and Financial Profile

    BlackBerry Has Undergone a Significant Shift in Business Model and Financial Profile FY141 FY191 Software Handheld and Devices Revenue % YoY Services $6.8B and SAF $916M Handheld (38% decline) Software (5% decline) Devices and and SAF Services GM % 36% 78% Adjusted EBITDA $194M $186M %2 3% 20% FCF %

  8. Slide 8: Meeting Our Financial Commitments

    Meeting Our Financial Commitments Metrics Goals Result Total Non-GAAP Software FY19 Goal: and Services Revenue 8% - 10% growth ACHIEVED 10% Total Software and FY19 Goal: Services Billings Double-digit % growth ACHIEVED Double-digit Non-GAAP Earnings FY19 Goal: Per Share Positive ACHIEVED $0.24 Repor

  9. Slide 9: BlackBerry TAM

    BlackBerry TAM BlackBerry competes in a $22B TAM to secure, protect and enable the IoT. Communications Unified Endpoint Embedded Endpoint 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 ​Sources: IDC Enterprise Mob

  10. Slide 10: BlackBerry's FY20 Financial Outlook

    BlackBerry’s FY20 Financial Outlook Deliver on Total Company Non-GAAP Revenue Growth of 23% – 27% IoT BlackBerry Cylance Licensing Service Access Fees 12% 25% 5% $10M to to DECLINE to 16% $20M 30% GROWTH GROWTH #BlackBerryTrust = #Security #Privacy #Control 2018 BlackBerry. All Rights Reserved. © 20

  11. Slide 11: 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

  12. Slide 12: Looking to the Future—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

  13. Slide 13: Business Unit Overviews

    BlackBerry Business Unit Overviews Steve Rai Christopher Lee Deputy Chief Financial Officer Vice President, Finance #BlackBerryTrust = #Security #Privacy #Control © 2019 BlackBerry. All Rights Reserved. 13

  14. Slide 14: Business Unit Overviews

    Business Unit Overviews Overview of Deeper dive on BlackBerry’s the BlackBerry Business Units Cylance business unit #BlackBerryTrust = #Security #Privacy #Control 2018 BlackBerry. All Rights Reserved. © 2019 14

  15. Slide 15: BlackBerry

    BlackBerry #BlackBerryTrust = #Security #Privacy #Control © 2019 BlackBerry. All Rights Reserved. 15

  16. Slide 16: Enterprise Software and Services

    BlackBerry Business Unit Overview Enterprise Software and Services Products and Services FY20 Strategic Priorities Revenue and YoY Growth (US$ MM) A leader in secure communications • Increase market share in solutions, including: regulated industry verticals​ $423 • Enterprise Mobility Suite, which

  17. Slide 17: BlackBerry Technology Solutions

    BlackBerry Business Unit Overview BlackBerry Technology Solutions Products and Services FY20 Strategic Priorities Revenue and YoY Growth (US$ MM) BlackBerry Technology Solutions is • Expand design wins in ADAS, Digital comprised of: Cockpits and other new automobile $237 applications • BlackBerry QN

  18. Slide 18: Licensing

    BlackBerry Business Unit Overview Licensing Products and Services FY20 Strategic Priorities Revenue and YoY Growth (US$ MM) Licensing is comprised of the following: • Close pipeline opportunities for • IP licensing, which manages and patent monetization with direct and monetizes BlackBerry’s global

  19. Slide 19: Handheld Devices and Service Access Fees

    BlackBerry Business Unit Overview Handheld Devices and Service Access Fees Products and Services FY20 Strategic Priorities Revenue and YoY Growth (US$ MM) Handheld device revenue is derived • This is not part of the Company’s $884 through the sale of legacy devices. strategic focus going-forward $37

  20. Slide 20: Cylance

    BlackBerry Cylance #BlackBerryTrust = #Security #Privacy #Control © 2019 BlackBerry. All Rights Reserved. 20

  21. Slide 21: BlackBerry Cylance

    BlackBerry Business Unit Overview BlackBerry Cylance Products and Services FY20 Strategic Priorities Revenue and YoY Growth (US$ MM) A leading endpoint security platform • Continue revenue growth via new using AI and machine learning (ML). customer acquisition and existing Products include: customer

  22. Slide 22: Business Highlights

    Business Highlights 39 Months to Reach 80 17% Quarterly 4,000+ Fortune 500 Active Subscription $100M Revenue Revenue CAGR (1) Customers (1) Customers (2) 1. Quarterly revenue CAGR based on eleven quarters, from May 1, 2016 through January 31, 2019 2. As of January 31, 2019 #BlackBerryTrust = #Securi

  23. Slide 23: Attractive Business Model

    Attractive Business Model $ Subscription model, Contract terms are Pricing based on billed fully in advance 1 to 3 years number of endpoints #BlackBerryTrust = #Security #Privacy #Control 2018 BlackBerry. All Rights Reserved. © 2019 23

  24. Slide 24: Customer Growth and International Expansion

    Customer Growth and International Expansion Active Subscription Customers Domestic vs. International Revenue Split Domestic International ~4,000 >6x 8% 18% Customer Growth 92% 82% ~650 April 30, 2016 January 31, 2019 April 30, 2017 January 31, 2019 #BlackBerryTrust = #Security #Privacy #Control 2018

  25. Slide 25: Strong Revenue and Gross Margin Growth

    Strong Revenue and Gross Margin Growth Total Revenue and Non-GAAP Gross Margin1 US$M 20 Percentage 50 point 80% 17% improvement in GM% 75% Quarterly 40 Revenue CAGR 70% 30 65% 60% 20 55% 50% 10 45% 0 40% Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Subscription Services Non-GAAP

  26. Slide 26: Improving Operating Leverage

    Improving Operating Leverage Non-GAAP Operating Expenses (1) % of Revenue Non-GAAP Operating Loss (2) / Free Cash Flow (3) % of Revenue 250% General & Administrative (54%) (52%) 32% Research & Development (57%) Sales & Marketing 68% (78%) 143% (130%) 18% 125% 20% 46% Free Cash Flow 37% 150% Operatin

  27. Slide 27: Closing Comments

    Closing Comments #BlackBerryTrust = #Security #Privacy #Control © 2019 BlackBerry. All Rights Reserved. 27

  28. Slide 28: Opportunity For Long Term Growth

    Opportunity For Long Term Growth W E H AV E T H E E X P E R I E N C E T O D E L I V E R O N O U R C O M M I T M E N T S • Investing in growth Accelerate Growth Sustainable Revenue Opportunities • Opportunities to lead in large markets Growth • Innovating and investing Long-Term Value Capture the Fut

  29. Slide 29: Appendix

    Appendix #BlackBerryTrust = #Security #Privacy #Control © 2019 BlackBerry. All Rights Reserved. 29

  30. Slide 30: GAAP to Non-GAAP Reconciliation

    GAAP to Non-GAAP Reconciliation 9 MONTHS ENDED FY19 FY18 JAN19 Q1’17 Q2’17 Q3’17 Q4’17 Q1’18 Q2’18 Q3’18 Q4’18 Q1’19 Q2’19 Q3’19 GAAP Total Gross Profit 40,668 86,659 90,020 4,991 8,036 12,747 14,894 17,513 22,054 23,389 23,703 26,824 29,892 33,304 Equity-based compensation 466 663 733 111 110 114 1

  31. Slide 31: GAAP to Non-GAAP Reconciliation (cont'd.)

    GAAP to Non-GAAP Reconciliation (cont’d.) 9 MONTHS ENDED FY19 FY18 JAN19 GAAP Sales & Marketing Expense 107,589 108,529 93,048 Equity-based compensation 3,392 3,184 2,741 Non-GAAP Sales & Marketing Expense 104,197 105,345 90,307 Non-GAAP Sales & Marketing Expense as a % of Total Revenue 150% 79% 68%

  32. Slide 32: GAAP to Non-GAAP Reconciliation (cont'd.)

    GAAP to Non-GAAP Reconciliation (cont’d.) 9 MONTHS ENDED FY19 FY18 JAN19 Net Cash Used in Operating Activities (81,334) (62,162) (64,549) Less: Purchase of Property and Equipment (9,023) (9,755) (5,032) Free Cash Flow (90,357) (71,917) (69,581) Free Cash Flow Margin (%) -130% -54% -52% 69,405 133,93

  33. Slide 33: Financial Q&A

    Financial Q&A John Chen Executive Chairman & Chief Executive Officer #BlackBerryTrust = #Security #Privacy #Control © 2019 BlackBerry. All Rights Reserved. 33

  34. Slide 34: #BlackBerryTrust #Security #Privacy #Control

    #BlackBerryTrust #Security #Privacy #Control #BlackBerryTrust = #Security #Privacy #Control © 2019 BlackBerry. All Rights Reserved. 34

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