blackberry ir summary · pdf fileir summary blackberry public ... and readers should not place...

June, 2016

BlackBerry IR Summary

BlackBerry Public

[email protected]

BlackBerry 1

1

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", "intend", "believe", and similar

expressions, are intended to identify forward-looking statements. Forward-looking statements are based on

estimates and assumptions made by BlackBerry Limited in light of its experience and its perception of historical

trends, current conditions and expected future developments, as well as other factors that BlackBerry believes

are appropriate in the circumstances. Many factors could cause BlackBerry's actual results, performance or

achievements to differ materially from those expressed or implied by the forward-looking statements, including

those described in the "Risk Factors" section of BlackBerry's Annual Information Form, which is included in its

Annual Report on Form 40-F (copies of which filings may be obtained at www.sedar.com or www.sec.gov).

These factors should be considered carefully, and readers should not place undue reliance on BlackBerry's

forward-looking statements. BlackBerry has no intention and undertakes no obligation to update or revise any

forward-looking statements, whether as a result of new information, future events or otherwise, except as

required by law.

BlackBerry and related trademarks, names and logos are the property of BlackBerry Limited and are registered

and/or used in the U.S. and countries around the world. All other marks are the property of their respective

owners. BlackBerry is not responsible for any third-party products or services

Safe Harbor

BlackBerry 2

2

OUR VISION A connected world

OUR MISSION To be the world’s leading provider of end-to-end mobility solutions that are the

most secure and trusted

OUR VALUE PROPOSITION We enable you to confidently mobilize your infrastructure to be most competitive in

the new paradigm

BlackBerry 3

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STRATEGY Delivering the only end-to-end and secure mobility platform

BlackBerry 4

4

BUSINESS ACCOMPLISHMENTS The past 12 months

Delivering Innovation & Security

• Autonomous Vehicles: QNX Platform for ADAS

• IoT Platform: BlackBerry Radar

• Voice Encryption: SecuSUITE for Enterprise Soft

war

e &

Lic

en

sin

g Delivering Innovation & Security

• BlackBerry 10: Enhanced security release; NIAP certification submitted; Passport Silver

• First BlackBerry-secured Android: PRIV

• Secure Tablet for Gov’t: SecuTABLET

Mo

bili

ty S

olu

tio

ns

Trust and Credibility

• Forrester Wave Leader: EMM

• Forrester Wave Leader: EFSS

• Gartner MQ Visionary: EFSS

• First and only: To achieve highest level of certification on ISO std, EAL4+, on iOS and Android

Mar

ket

Lead

ersh

ip

Expanding Addressable Market

• Cross-platform Software: Good Technology products fully integrated into suite offerings

• Secure Messaging: AtHoc and Enterprise BBM

• New Cybersecurity Consulting services

• Cloud Opportunity: BlackBerry Enterprise Solutions on Microsoft Azure Marketplace

Stra

tegi

c In

itia

tive

s

BlackBerry 5

5

PROGRESS We are progressing toward the growth phase of our turnaround

Laying the foundation for the turnaround Formulated a strategy

around the company’s core strength

Healthy financial position Free cash flow positive Non-GAAP profitability Ability to execute on acquisitions

Sustainable Profitability • Channel expansion • IoT & messaging traction • Overall revenue growth

Stabilize revenue Grow software revenue to offset

SAF decline • Make the Device (Mobility

Solutions) business profitable

BlackBerry 6

6

SOFTWARE & SERVICES STRATEGY Increasing the total addressable market for software

2012

Projected 2019 2015

MDM

EMM $1.7B

EMM $2.6B

Secure Communications

$5B

Technology Solutions $6B

TAM $525 M

TAM $4.9 B

TAM $17.6B

Technology Solutions $1.6B

Enterprise Solutions $1.6B

Enterprise Solutions $4B

Solution Offerings Expanded

Tota

l Ad

dre

ssab

le M

arke

t

BlackBerry 7

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MOBILITY SOLUTIONS STRATEGY Focus on profitable growth and expanding our addressable market

BlackBerry 10 Devices

• Gov’t / Regulated Industries

BlackBerry Android

• Secure Android for Enterprise

Device Software Licensing

BlackBerry Smartphones

BlackBerry Productivity and Security

Gro

wth

+ P

rofita

bili

ty

BlackBerry 8

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GO-TO-MARKET TRACTION Key success factors

366 channel partners ending FY15

1,500+ total channel partners ending FY16

New Enterprise Licenses: Increasing Mix of Cross-Platform

Cross-platform / agnostic

BlackBerry only

Re-allocating and Increasing resources in Growth Areas

• Quota-carrying sales headcount up 29% in Q1’17 vs. Q1’16

• 1,485 new employees, through hiring and acquisitions, in FY16;

80% in sales and engineering

FY15 FY16

BlackBerry 9

9

Our Management Team

Billy Ho

EVP, Enterprise

Products and VAS

Steve E.

Zipperstein

Chief Legal Officer

Carl Wiese

President, Global

Sales

Nita White-Ivy

EVP, Human

Resources

James Yersh

Chief Financial

Officer

Ralph Pini

Chief Operating

Office, Acting

General Manager

Mobile Solutions

Marty Beard

Chief Operating

Officer

Sandeep Chennakeshu

President, Technology

Solutions

John Chen

Chief Executive

Officer and

Executive Chair

James Mackey

EVP, Corporate

Development and

Strategic Planning

Guy Miasnik

President, AtHoc

BlackBerry 10

10

Financial Highlights • Expect positive free cash flow and positive EBITDA for the full 2017 fiscal year

>56% reduction in non-GAAP OpEx

from Q1-15 to Q1-17

Expect full year EPS to be

approximately ($0.15)

Stable Cash &

Equivalents balance

($200)

($100)

$0

$100

$200

$300

$400

$500

$0

$100

$200

$300

$400

$500

$600

Q1-15 Q2-15 Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17

Non-GAAP OpEx Non-GAAP Gross Margin

Non-GAAP Operating Margin

($0.50)

($0.30)

($0.10)

$0.10

$0.30

$0.50

$0

$200

$400

$600

$800

$1,000

$1,200

Q1-15 Q2-15 Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17

Non-GAAP Revenue Non-GAAP Earning/(Loss)

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

$4,000

Q1-15 Q2-15 Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17

Cash, Cash Equivalents, and Investments

BlackBerry 11

11

• Record Software & Services

revenue for Q1-17

• Q1-17 Software and Services

Revenue $166m, up 21% year on

year

• Q1-17 Total Revenue $424m

Non-GAAP Revenue Details

$393 $433 $370

$284 $269 $206 $221 $191 $152

$518 $421

$365

$301 $252

$211 $173 $143

$106

$54 $62

$57

$74 $138

$74 $162

$153

$166

$966 $916

$793

$660 $658

$491

$557

$486 $424

-

200

400

600

800

1,000

1,200

Q1-15 Q2-15 Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17

Re

ven

ue

(Mill

ion

s)

Mobility Solutions Service Access Fee Software & Services Total Non-GAAP Revenue

BlackBerry 12

12

Non-GAAP Operating Segments

$106

$26

$80

$2

$78

$0

$20

$40

$60

$80

$100

$120

Revenue Cost ofGoodsSold

GrossMargin

OperatingExpenses

OperatingIncome

Mill

ion

s

Service Access Fee

$166

$32

$134

$98

$37

$0

$20

$40

$60

$80

$100

$120

$140

$160

$180


GrossMargin

OperatingExpenses

OperatingIncome

Mill

ion

s

Software & Services

$152 $140

$12 $33

-$21 -$40

-$20

$0

$20

$40

$60

$80

$100

$120

$140

$160

$180


GrossMargin

OperatingExpenses

OperatingIncome

Mill

ion

s

Mobility Solutions

• Expect software and services growth of around 30 percent • Objective is to achieve operating profitability in Mobility Solutions in Q3 of the current fiscal year • Expect quarterly software and services growth to offset the decline in SAF cumulatively for the full fiscal year

BlackBerry 13

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-$800

-$600

-$400

-$200

$0

$200

$400

$600

$800

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

$4,000

Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 Q2-15 Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17

Free

Cas

h F

low

$m

illio

ns

Bal

ance

s $

mill

ion

s

Cash & Cash Equivalents Short-term Investments

Long-term Investments & Restricted Cash Free Cash Flow

$2,532

• Cash balance of $2.53B

• Net cash position of $1.3B

Financial Discipline

$3,071 $3,192

$2,658

$3,087 $3,098 $3,110

$3,266 $3,316 $3,353

$2,706 $2,624 $2,569

Financials

BlackBerry 15

15

GAAP Income Statement $millions Q1-15 Q2-15 Q3-15 Q4-15 FY 2015 Q1-16 Q2-16 Q3-16 Q4-16 FY 2016 Q1-17

Software & Services 56$ 62$ 58$ 75$ 251$ 137$ 73$ 155$ 131$ 496$ 142$

Mobility Solutions 392 433 370 284 1,479 269 206 220 190 885 152

Service Access Fee 518 421 365 301 1,605 252 211 173 143 779 106

Total GAAP Revenue 966 916 793 660 3,335 658 490 548 464 2,160 400

Cost of Sales 502 491 365 311 1,669 329 301 304 251 1,186 200

Inventory Write Down 23 7 24 41 95 21 4 9 3 36 46

Supply Commitment (Recovery) (10) (7) (6) (10) (33) (2) 0 (1) 0 (3) 0

Total Cost of Sales 515 491 383 342 1,731 348 305 312 254 1,219 246

Gross Profit 451 425 410 318 1,604 310 185 236 210 941 154

Research & Development 237 186 154 134 711 139 122 100 108 469 89

Selling, Marketing and Admin 400 195 171 138 904 173 186 175 179 712 129

Amortization 81 75 74 68 298 65 67 68 77 277 54

Impairment of goodwill 0 0 0 0 0 0 0 0 0 0 57

Impairment of long-lived assets 0 0 0 0 0 0 0 0 0 0 501

Abandonment of long-lived assets 0 0 0 34 34 1 5 2 127 136 3

Debentures Fair Value Adjustment (287) 167 150 50 80 (157) (228) (5) (40) (430) (24)

Total Operating Expenses 431 623 549 424 2,027 221 152 340 451 1,164 809

GAAP Operating Income (Loss) 20 (198) (139) (106) (423) 89 33 (104) (241) (223) (655)

Investment Income (Loss), Net (26) (20) (21) 105 38 (16) (12) (16) (15) (59) (15)

Income (Loss) before Income Taxes (6) (218) (160) (1) (385) 73 21 (120) (256) (282) (670)

Income Taxes (Recovery) (29) (11) (12) (29) (81) 5 (30) (31) (18) (74) 0

GAAP Net Income (Loss) 23$ (207)$ (148)$ 28$ (304)$ 68$ 51$ (89)$ (238)$ (208)$ (670)$

Earning (Loss) per Share Basic 0.04$ (0.39)$ (0.28)$ 0.05$ (0.58)$ 0.13$ 0.10$ (0.17)$ (0.45)$ (0.40)$ (1.28)$

Earning (Loss) per Share Diluted (0.37)$ (0.39)$ (0.28)$ 0.05$ (0.58)$ (0.10)$ (0.24)$ (0.17)$ (0.45)$ (0.86)$ (1.28)$

Weighted-average number of common shares outstanding (000's)

Basic 526,742 527,218 528,090 528,685 527,684 529,235 526,314 525,103 524,627 526,303 521,905

Diluted 658,228 527,218 528,090 543,556 527,684 670,539 667,321 525,103 524,627 651,303 521,905

BlackBerry 16

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Non-GAAP Reconciliation Non-GAAP Adjustments (Pre-Tax) Q1-15 Q2-15 Q3-15 Q4-15 FY 2015 Q1-16 Q2-16 Q3-16 Q4-16 FY 2016 Q1-17

Rockstar Sale Adjustment -$ -$ -$ (115)$ (115)$ -$ -$ -$ -$ -$ -$

Goodwill Impairment Charges - - - - - - - - - - 57

LLA Impairment Charges - - - - - - - - - - 501

Inventory Write-down - - - - - - - - - - 41


CORE Program Changes 226 33 5 58 322 9 6 (6) 2 11 (2)

RAP Changes - - - - - 52 79 33 180 344 25

Software Deferred Revenue Acquired - - - - - - 1 9 23 33 24

Stock Compensation Expense 13 8 14 14 49 14 14 14 17 60 12

Acquired Intangible Amortization 9 10 10 9 38 9 11 18 28 66 28

Business Acquisition Costs - - 2 1 3 1 - 11 10 22 7

Total Non-GAAP Adjustment (Pre-Tax) (39)$ 218$ 181$ 17$ 377$ (72)$ (117)$ 74$ 220$ 106$ 669$

Non-GAAP Adjustments (After-Tax) Q1-15 Q2-15 Q3-15 Q4-15 FY 2015 Q1-16 Q2-16 Q3-16 Q4-16 FY 2016 Q1-17

Rockstar Sale Adjustment -$ -$ -$ (115)$ (115)$ -$ -$ -$ -$ -$ -$

Goodwill Impairment Charges - - - - - - - - - - 57

LLA Impairment Charges - - - - - - - - - - 501

Inventory Write-down - - - - - - - - - - 41


CORE Program Changes 204 29 4 57 294 9 6 (6) 2 11 (2)

RAP Changes - - - - - 52 79 33 180 344 25


Stock Compensation Expense 13 8 14 14 49 14 14 14 17 60 12

Acquired Intangible Amortization 9 10 10 9 38 9 11 18 28 66 28

Business Acquisition Costs - - 2 1 3 1 - 11 10 22 7

Total Non-GAAP Adjustment (After-Tax) (61)$ 214$ 180$ 16$ 349$ (72)$ (117)$ 74$ 220$ 106$ 669$

GAAP to non-GAAP Gross Profit Q1-15 Q2-15 Q3-15 Q4-15 FY 2015 Q1-16 Q2-16 Q3-16 Q4-16 FY 2016 Q1-17

GAAP Revenue 966$ 916$ 793$ 660$ 3,335$ 658$ 490$ 548$ 464$ 2,160$ 400$


Non-GAAP Revenue 966 916 793 660 3,335 658 491 557 487 2,193 424

GAAP Cost of Sales 515 491 383 342 1,731 348 305 312 254 1,219 246

Non-GAAP Adjustments to Cost of Sales (13) (10) - (2) (25) (21) (15) (5) (4) (45) (48)

Non-GAAP Cost of Sales 502 481 383 340 1,706 327 290 307 250 1,174 198

Non-GAAP Gross Profit 464 435 410 320 1,629 331 201 250 237 1,019 226

BlackBerry 17

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Non-GAAP Reconciliation Cont.’

Adjusted EBITDA Q1-15 Q2-15 Q3-15 Q4-15 FY 2015 Q1-16 Q2-16 Q3-16 Q4-16 FY 2016 Q1-17

GAAP Operating Income (Loss) 20$ (198)$ (139)$ (106)$ (423)$ 89$ 33$ (104)$ (241)$ (223)$ (655)$

Non-GAAP Adjustments to Operating Income (39) 218 181 132 492 (72) (117) 74 220 106 669

Non-GAAP Operating Income (19) 20 42 26 69 17 (84) (30) (21) (117) 14

Amortization 191 171 170 162 694 164 163 162 127 616 72

Acquired Amotization Intangibles (9) (10) (10) (9) (38) (9) (11) (18) (28) (66) (28)

Adjusted EBITDA 163 181 202 179 725 172 68 114 78 433 58

Non-GAAP Net Income Reconciliation Q1-15 Q2-15 Q3-15 Q4-15 FY 2015 Q1-16 Q2-16 Q3-16 Q4-16 FY 2016 Q1-17

GAAP Net Income (Loss) 23$ (207)$ (148)$ 28$ (304)$ 68$ 51$ (89)$ (238)$ (208)$ (670)$

Total Non-GAAP Adjustment (After-Tax) (61) 214 180 16 349 (72) (117) 74 220 106 669

Non-GAAP Net Income (Loss) (38) 7 32 44 45 (4) (66) (15) (18) (102) (1)

Non-GAAP Basic Earning (Loss) per Share (0.07)$ 0.01$ 0.06$ 0.08$ 0.08$ (0.01)$ (0.13)$ (0.03)$ (0.03)$ (0.19)$ 0.00$

Shares outstanding for Non-GAAP income (loss) per

share reconciliation ('000) 526,742 537,959 540,400 543,556 542,123 529,235 526,314 525,103 524,627 526,303 521,905

Non-GAAP Revenue, non-GAAP Loss Before Income Taxes, non-GAAP Net Loss, non-GAAP Gross Profit, Adjusted EBITDA, and non-GAAP Lost Per Share do not have

a standardized meaning prescribed by GAAP and thus are not comparable to similarly titled measures presented by other issuers. The Company believes that the

presentation of these non-GAAP measures enables the Company and its shareholders to better assess the Company's operating results relative to its operating

results in prior periods and improves the comparability of the information presented. This non-GAAP information should not be considered as a substitute for, or

superior to, measures of financial performance prepared in accordance with GAAP. You are encouraged to review the Company's filings on SEDAR and EDGAR.

The company makes no commitment to update the information above subsequently.

BlackBerry 18

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Amortization and Reconciliation Details CORE Charges Details (Pre-Tax) Q1-15 Q2-15 Q3-15 Q4-15 FY 2015 Q1-16 Q2-16 Q3-16 Q4-16 FY 2016 Q1-17

Cost of Sales 12$ 10$ -$ 1$ 23$ -$ -$ -$ -$ -$ -$

Research and Development 41 19 4 6 70 2 - - - 2 -

Selling, General and Administration 173 4 1 51 229 7 6 (6) 2 9 (2)

Total CORE Charges (Pre-Tax) 226$ 33$ 5$ 58$ 322$ 9$ 6$ (6)$ 2$ 11$ (2)$

RAP Charges Details (Pre-Tax) Q1-15 Q2-15 Q3-15 Q4-15 FY 2015 Q1-16 Q2-16 Q3-16 Q4-16 FY 2016 Q1-17

Cost of Sales -$ -$ -$ -$ -$ 21$ 14$ 5$ 4$ 44$ 7$

Research and Development - - - - - 13 14 2 18 47 2

Selling, General and Administration - - - - - 18 51 26 158 253 16

Total RAP Charges (Pre-Tax) -$ -$ -$ -$ -$ 52$ 79$ 33$ 180$ 344$ 25$

Amortization of Intangibles and PP&E Details Q1-15 Q2-15 Q3-15 Q4-15 FY 2015 Q1-16 Q2-16 Q3-16 Q4-16 FY 2016 Q1-17

In Cost of Sales

Property, Plan and Equipment 27$ 16$ 14$ 16$ 73$ 16$ 10$ 13$ 12$ 51$ 12$

Intangibles Assets 83 80 82 78 323 83 86 81 38 288 6

Total in Cost of Sales 110 96 96 94 396 99 96 94 50 339 18

In Operating Expenses



Total in Operating Expenses 81 75 74 68 298 65 67 68 77 277 54

Total Amortization



Total Amortization 191 171 170 162 694 164 163 162 127 616 72

Non-GAAP Revenue, non-GAAP Loss Before Income Taxes, non-GAAP Net Loss, non-GAAP Gross Profit, Adjusted EBITDA, and non-GAAP Lost Per Share do not have

a standardized meaning prescribed by GAAP and thus are not comparable to similarly titled measures presented by other issuers. The Company believes that the

presentation of these non-GAAP measures enables the Company and its shareholders to better assess the Company's operating results relative to its operating

results in prior periods and improves the comparability of the information presented. This non-GAAP information should not be considered as a substitute for, or

superior to, measures of financial performance prepared in accordance with GAAP. You are encouraged to review the Company's filings on SEDAR and EDGAR.

The company makes no commitment to update the information above subsequently.

BlackBerry 19

19

BlackBerry’s stock continues

to outperform publicly traded

EMM competition since Jan

2015

BlackBerry Stock

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