Blackberry Limited · TSX:BB

Blackberry — Investor Day (October 2024)

37 slides from Blackberry's investor day presentation, Oct 16, 2024

1. Slide 1: Accelerating Value Creation

   © 2024 BlackBerry. All Rights Reserved Accelerating Value Creation Tim Foote Chief Financial Officer, BlackBerry Unlocking the Potential of Two Powerful Franchises

2. Slide 2: Safe Harbor and Non-GAAP Financial Measures

   © 2024 BlackBerry. All Rights Reserved 2 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

3. Slide 3: Clear Priorities as New CFO

   © 2024 BlackBerry. All Rights Reserved 3 Clear Priorities as New CFO • High standards for external reporting and financial control • Strong finance team culture built around top talent • Commitment to supporting enterprise- wide cost reduction efforts • Clear capital allocation priorities with a foc

4. Slide 4: Providing Greater Clarity for Investors

   © 2024 BlackBerry. All Rights Reserved 4 by presenting BlackBerry’s financials in four subcomponents: 1) IoT 2) Cybersecurity 3) IP Licensing 4) Corporate Providing Greater Clarity for Investors Improving Investors’ Ability to Understand and Appropriately Value the BlackBerry Franchise Increase fina

5. Slide 5: Unlocking Value in Cybersecurity

   © 2024 BlackBerry. All Rights Reserved Unlocking Value in Cybersecurity Tim Foote Chief Financial Officer, BlackBerry

6. Slide 6: Optimizing Our Valuable Cybersecurity Portfolio

   © 2024 BlackBerry. All Rights Reserved 6 • Profitable, stable business with solid long-term growth prospects • Clear go-to-market synergies driven by focus on government customers • Cash generator for higher growth parts of business Secure Communications Endpoint Security Highly secure, leading UEM

7. Slide 7: Building on Improving Fundamentals

   © 2024 BlackBerry. All Rights Reserved 7 ARR Stabilization • ~80% of Cyber revenue is ratable & recurring • Prior period headwinds driven by Cylance customer churn • Stabilization in past year driven by UEM business DBNRR Improvement • Demonstrated ability to retain and upsell customers • Significan

8. Slide 8: Enhancing Cyber Profitability

   © 2024 BlackBerry. All Rights Reserved 8 l rr . ll i t r Enhancing Cyber Profitability • Gross margin improving but still below target • Results impacted by subscale Cylance business, higher-than- industry adj. R&D (~29%), and hardware component of traditional Secusmart offering • Achieved ~$100 mil

9. Slide 9: Shifting Our Portfolio and Prudently Allocating Capital

   © 2024 BlackBerry. All Rights Reserved 9 Shifting Our Portfolio and Prudently Allocating Capital • Secure Communications is a stable, government- focused business generating $50M+ Adj. EBITDA • Likewise, BlackBerry has significant growth opportunity with QNX – a clear market leader with secular tail

10. Slide 10: Cybersecurity: In Summary

    © 2024 BlackBerry. All Rights Reserved 10 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, stre

11. Slide 11: Accelerating Growth in IoT

    © 2024 BlackBerry. All Rights Reserved Accelerating Growth in IoT Vito Giallorenzo Chief Financial Officer, IoT

12. Slide 12: QNX: Robust Financial Investment Case

    © 2024 BlackBerry. All Rights Reserved 12 QNX: Robust Financial Investment Case Established and Profitable Global Leader, Capturing Share in a Growing Market Large, Growing Market Opportunities with Attractive Economics Commercial and Technical Trends Pushing the Industry in Our Direction Clear Segm

13. Slide 13: The QNX Business Model: Illustrative Automotive Program

    © 2024 BlackBerry. All Rights Reserved 13 The QNX Business Model: Illustrative Automotive Program Initial Negotiation, Development, and Integration • Define technical requirements • Support customer building software • Complete integration and testing using reference hardware Pre-production Program

14. Slide 14: Diversified Business Mix, Backed by a Sizeable Backlog

    © 2024 BlackBerry. All Rights Reserved 14 Diversified Business Mix, Backed by a Sizeable Backlog Other 18% Transportation 82% IoT FY24 Sales Mix ($215m) Americas 50% EMEA 23% Asia-Pacific 27% FY24 Royalty Backlog ($815m) Cockpit 29% Central Compute 11% IVI & Cluster 8% Others 31% 2030+ 28% 2025-27 3

15. Slide 15: Proven and Consistent IoT Revenue Growth

    © 2024 BlackBerry. All Rights Reserved 15 Proven and Consistent IoT Revenue Growth $178 $206 $215 $225 - 235 $260- 270 $295- 305 FY22 FY23 FY24 FY25E FY26E FY27E US$ millions 10% CAGR Track Record of Double-digit Revenue Growth • Forecasted growth in line with past performance through industry cycle

16. Slide 16: Clear Path to Adj. EBITDA Expansion Following Separation

    © 2024 BlackBerry. All Rights Reserved 16 Clear Path to Adj. EBITDA Expansion Following Separation Adj. EBITDA Margin Growth ~Double Adj. EBITDA over 3 Years Delivering Strong Adj. EBITDA Expansion through Revenue and Margin Growth Adj. EBITDA Adj. EBITDA Amort. Amort. G&A G&ASales/Mktg Sales/Mktg R

17. Slide 17: In Summary

    © 2024 BlackBerry. All Rights Reserved 17 In Summary Established and Profitable Global Leader, Capturing Share in a Growing Market Large, Growing Market Opportunities with Attractive Economics Commercial and Technical Trends Pushing the Industry in Our Direction Clear Segment Leader with Unique Capa

18. Slide 18: Fueling Growth through Targeted Capital Management

    © 2024 BlackBerry. All Rights Reserved Fueling Growth through Targeted Capital Management Tim Foote Chief Financial Officer, BlackBerry

19. Slide 19: Creating Standalone Divisions to Foster Growth and Efficiency

    © 2024 BlackBerry. All Rights Reserved 19 Separation Rationale • Reviewed lessons from prior strategic review in 2023 • Assets were considered difficult to understand and value, with suboptimal financial profile • Process did not maximize shareholder value Key Objectives of Program • Increase focus

20. Slide 20: Optimizing IP Licensing and Central Corporate Costs

    © 2024 BlackBerry. All Rights Reserved 20 IP Licensing • Solid, investment-light, cash-generating division • 3-year revenue tied to run-off of legacy deals; potential upside as IP acquirer ramps up monetization activity • Potential for further cash generation, including $30 million of guaranteed cas

21. Slide 21: Capitalizing on Strategy to Drive Top-Line and Bottom-Line

    © 2024 BlackBerry. All Rights Reserved 21 $656 $635 $218 66% 62% 71% 73% 74% 60% 65% 70% 75% 80% 85% $- $100 $200 $300 $400 $500 $600 $700 $800 $900 FY23 FY24 FY25E FY26E FY27E Revenue ($Mil) and Adj. Gross Margin (%) Expect A Return To Profitability In FY25 - From Significant Loss Position In FY23

22. Slide 22: Balance Sheet and Liquidity Provide Financial Resilience

    © 2024 BlackBerry. All Rights Reserved 22 Balance Sheet and Liquidity Provide Financial Resilience $365 $200 $200 FY23 FY24 FY25 Significant Reduction in Gross Debt Reduced gross debt by $165M in January 2024 Strong Balance Sheet Supports Clear Capital Allocation Priorities Enhanced Liquidity Profil

23. Slide 23: Enhancing Profitability and Cash Generation

    © 2024 BlackBerry. All Rights Reserved 23 Enhancing Profitability and Cash Generation ChangeQ2 FY25FY23 Unchanged34%34%Adj. COGS 500 bps improvement23%28%Adj. R&D 300 bps improvement22%25%Adj. S&M 300 bps improvement23%26%Adj. G&A 1,100 bps improvement-3%-14%Adj. Op Inc. Pursuing Disciplined Capital

24. Slide 24: Key Takeaways

    © 2024 BlackBerry. All Rights Reserved 24 Key Takeaways Significant progress made in both separation and streamlining of IoT and Cyber divisions Considerable progress made toward enterprise profitability and positive cash flow QNX and IoT delivering profitable growth; expect to be “Rule of 40” compa

25. Slide 25: ights Reserved

    © 2024 BlackBerry. All Rights Reserved© 2024 BlackBerry. All ights Reserved

26. Slide 26: Compelling Investment Thesis

    © 2024 BlackBerry. All Rights Reserved 26 Our Strong Product Portfolio Significant Progress in Our Cost Profile Improving Fundamentals Significant Progress Towards Positive Cashflow Focus and Optionality From Virtually Autonomous Divisions Compelling Investment Thesis

27. Slide 27: ights Reserved

    © 2024 BlackBerry. All Rights Reserved© 2024 BlackBerry. All ights Reserved

28. Slide 28: Today's Speakers

    © 2024 BlackBerry. All Rights Reserved© 2024 BlackBerry. All ights Reserved John Giamatteo is BlackBerry’s Chief Executive Officer and President of its Cybersecurity division. He came to BlackBerry from McAfee where he was President and Chief Revenue Officer for over six years. Prior to that John se

29. Slide 29: Today's Speakers - IoT

    © 2024 BlackBerry. All Rights Reserved© 2024 BlackBerry. All ights Reserved Mattias Eriksson President, BlackBerry IoT Mattias Eriksson is President and General Manager of BlackBerry’s IOT Business Unit. The business unit consists of BlackBerry Technology Solutions or BTS (BlackBerry® QNX®, BlackBer

30. Slide 30: Today's Speakers - Cybersecurity

    © 2024 BlackBerry. All Rights Reserved© 2024 BlackBerry. All ights Reserved Today’s Speakers – Cybersecurity Nathan Jenniges Senior Vice President & General Manager Cybersecurity Products Nathan Jenniges is Senior Vice President & General Manager for the BlackBerry Products with responsibility for p

31. Slide 31: Today's Speakers - Cybersecurity

    © 2024 BlackBerry. All Rights Reserved© 2024 BlackBerry. All ights Reserved Shil Sircar Senior VP, Cylance Data Science & Product Engineering Ismael Valenzuela VP, Cylance Threat Research & Intelligence Today’s Speakers - Cybersecurity Shiladitya Sircar is the SVP, Product Engineering & Data Science

32. Slide 32: Disclaimer

    © 2024 BlackBerry. All Rights Reserved 32 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

33. Slide 33: Financial Disclosure Updates ($M)

    © 2024 BlackBerry. All Rights Reserved 33 Financial Disclosure Updates ($M) Impact of change in accounting principle on previously issued financial statements FY23 (as previously disclosed) Impact of change FY23 (under new principle) FY24 (as previously disclosed) Impact of change FY24 (under new pr

34. Slide 34: Segment Financials ($M)

    © 2024 BlackBerry. All Rights Reserved 34 Segment Financials ($M) Segment information is based upon the internal reporting used by the Chief Operating Decision Maker to make decisions and assess the performance of the Company; see Appendix for reconciliation of segment information to consolidated re

35. Slide 35: Segment Financials ($M) (Continued)

    © 2024 BlackBerry. All Rights Reserved 35 Segment Financials ($M) (Continued) Segment information is based upon the internal reporting used by the Chief Operating Decision Maker to make decisions and assess the performance of the Company; see Appendix for reconciliation of segment information to con

36. Slide 36: Non-GAAP Reconciliation ($M)

    © 2024 BlackBerry. All Rights Reserved 36 Non-GAAP Reconciliation ($M) FY23 FY24 Q2FY25 Operating income (loss) (725)$ (125)$ (21)$ Non-GAAP adjustments to operating income Stock compensation expense 31 33 7 Restructuring charges 11 37 1 Debentures fair value adjustment (138) 3 - Acquired intangible

37. Slide 37: Non-GAAP Reconciliation ($M) (Continued)

    © 2024 BlackBerry. All Rights Reserved 37 Non-GAAP Reconciliation ($M) (Continued) FY23 Q2FY25 Cost of sales (as previously disclosed) 237$ 51$ Impact of change of accounting principle (9) (1) Cost of sales (as amended) 228 50 Stock compensation expense 3 1 Adjusted cost of sales 225$ 49$ Revenue 65

BlackBerry — Investor Day (October 2024) on 6ix