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What changed in BLACKBERRY Ltd's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of BLACKBERRY Ltd's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+421 added−405 removedSource: 10-K (2024-04-04) vs 10-K (2023-03-31)

Top changes in BLACKBERRY Ltd's 2024 10-K

421 paragraphs added · 405 removed · 309 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

54 edited+28 added−25 removed53 unchanged
Biggest changeChen California, USA Chief Executive Officer; Executive Chair/Director Marjorie Dickman Washington D.C., USA Chief Government Affairs and Public Policy Officer Global Director and Associate General Counsel, IoT and Automated Driving Policy, Intel (2017-2020) Mattias Eriksson Illinois, USA President, IoT Senior Vice President and Head of Product, HERE Technologies (2019-2020); Senior Vice President, Head of Core Map Group, HERE Technologies (2016-2019) John Giamatteo Texas, USA President, Cybersecurity President and Chief Revenue Officer, McAfee (2013-2020) Phil Kurtz Ontario, Canada Chief Legal Officer and Corporate Secretary Vice President, Deputy General Counsel and Corporate Secretary (2021-2022); Vice President, Deputy General Counsel and Assistant Corporate Secretary (2015-2021) Steve Rai Ontario, Canada Chief Financial Officer Deputy Chief Financial Officer (2019), Vice President and Corporate Controller (2014-2019) Nita White-Ivy California, USA Chief Human Resources Officer Mark Wilson California, USA Chief Marketing Officer Human Capital The Company’s 3,181 regular employees, contract workers and student workers as of February 28, 2023 work as a team in 20 countries worldwide, with approximately 53% in Canada, 27% in the U.S., and 20% outside of North America.
Biggest changeName and Residence Current Position with Company Principal Occupation During the Last Five Years (other than Current Position with Company) Jennifer Armstrong-Owen Washington, USA Senior Vice President and Chief People Officer Senior Vice President, People, OfferUp (2023-2024); Senior Vice President, People, SeekOut (2021-2023); Vice President, People, Chef Software (2018-2020) Marjorie Dickman Washington D.C., USA Chief Government Affairs and Public Policy Officer Global Director and Associate General Counsel, IoT and Automated Driving Policy, Intel (2017-2020) Mattias Eriksson Illinois, USA President, IoT Senior Vice President and Head of Product, HERE Technologies (2019-2020) John Giamatteo Texas, USA Chief Executive Officer; President, Cybersecurity; Director President and Chief Revenue Officer, McAfee (2013-2020) Phil Kurtz Ontario, Canada Chief Legal Officer and Corporate Secretary Vice President, Deputy General Counsel and Corporate Secretary (2021-2022); Vice President, Deputy General Counsel and Assistant Corporate Secretary (2015-2021) Steve Rai Ontario, Canada Chief Financial Officer Deputy Chief Financial Officer (2019) Human Capital The Company’s 2,647 regular employees, contract workers and student workers as of February 29, 2024 work as a team in 18 countries worldwide, with approximately 55% in Canada, 19% in the U.S., and 26% outside of North America.
The Company licenses BlackBerry QNX and BlackBerry Certicom technology and provides professional engineering services to OEM customers in the automotive, mobile and other embedded software markets via a direct sales force and indirectly through channel partnerships. The licenses are primarily monetized as royalties on units shipped and through project development seats, tools and maintenance fees.
IoT The Company licenses BlackBerry QNX and BlackBerry Certicom technology and provides professional engineering services to OEM customers in the automotive, mobile and other embedded software markets via a direct sales force and indirectly through channel partnerships. The licenses are primarily monetized as royalties on units shipped and through project development seats, tools and maintenance fees.
Competitive Strengths Key competitive factors important to the Company across its businesses include product features (including security features), relative price and performance, product quality and reliability, compatibility across ecosystems, service and support, and corporate reputation. The Company believes that it delivers the broadest set of security capabilities and visibility in the market, covering users, devices, networks, apps and data.
Key competitive factors important to the Company across its businesses include product features (including security features), relative price and performance, product quality and reliability, compatibility across ecosystems, service and support, and corporate reputation. The Company believes that it delivers the broadest set of security capabilities and visibility in the market, covering users, devices, networks, apps and data.
BlackBerry IVY allows automakers to safely access a vehicle’s sensor data, normalize it, and apply machine learning at the edge to generate and share predictive insights and inferences. Automakers and developers will be able to use this information to create responsive in-vehicle services that enhance driver and passenger experiences.
BlackBerry IVY allows automakers to safely access a vehicle’s sensor data, normalize it, and apply machine learning at the edge to generate and share predictive insights and inferences. Automakers and developers will be able to use this information to create responsive in-vehicle applications and services that enhance driver and passenger experiences.
To broadly protect the Company’s inventions, the Company has a team of in-house patent attorneys and also consults with outside patent attorneys who interact with employees, review invention disclosures and prepare patent applications on a broad array of core technologies and competencies.
To broadly protect the Company’s inventions, the Company has a team of in-house patent attorneys and also consults 9 with outside patent attorneys who interact with employees, review invention disclosures and prepare patent applications on a broad array of core technologies and competencies.
Solutions include leading security capabilities at each level of the platform in order to address 8 the needs of enterprise IT departments and end users for securing devices, applications, content and work data at rest and in transit.
Solutions include leading security capabilities at each level of the platform in order to address the needs of enterprise IT departments and end users for securing devices, applications, content and work data at rest and in transit.
The BlackBerry Spark UEM Suite includes leading unified endpoint management, secure business productivity, application containerization, secure collaboration and digital rights management capabilities. BlackBerry UEM has earned National Information Assurance Partnership (“NIAP”) certification and is an approved mobile device management solution on the U.S. Department of Defense Information Network’s Approved Product List.
BlackBerry UEM endpoint management includes leading unified endpoint management, secure business productivity, application containerization, secure collaboration and digital rights management capabilities. BlackBerry UEM has earned National Information Assurance Partnership (“NIAP”) certification and is an approved mobile device management solution on the U.S. Department of Defense Information Network’s Approved Product List.
None of the Company’s employees in Canada or the United States are represented by a labour union; however, employees of certain foreign subsidiaries in Europe are represented by works councils. The Company offers employees a fair, equitable and competitive total rewards program, designed to recognize and reward both individual and company performance.
None of the Company’s employees in Canada or the United States are represented by a labour union; however, employees of certain foreign subsidiaries in Europe are represented by works councils. The Company offers employees an equitable and competitive total rewards program, designed to recognize and reward both individual and company performance.
BlackBerry employees are passionate, mobilized and empowered by their involvement in corporate-run community initiatives to actively participate in volunteer activities and environmentally friendly initiatives where they live and work. Together with its team of community-minded employees, the Company believes there is great potential to make lasting local impacts. Available Information Our internet address is www.blackberry.com.
BlackBerry employees are passionate regarding their involvement in corporate-run community initiatives to actively participate in volunteer activities and environmentally friendly initiatives where they live and work. Together with its team of community-minded employees, the Company believes there is great potential to make lasting local impacts. Available Information Our internet address is www.blackberry.com.
In fiscal 2022, these programs enabled the Company to achieve carbon neutrality across its Scope 1, Scope 2 and material Scope 3 greenhouse gas emissions and the Company maintained its carbon neutral status as at the end of fiscal 2023.
In fiscal 2022, these programs enabled the Company to achieve carbon neutrality across its Scope 1, Scope 2 and calculated Scope 3 greenhouse gas emissions and the Company maintained its carbon neutral status as at the end of fiscal 2024.
BlackBerry’s UES Technology, including the BlackBerry Cyber Suite, competes with various types of providers, including: traditional signature-based antivirus vendors and identity management; vendors whose business focuses almost solely on EPP; EDR vendors, which primarily focus on continuous monitoring and human response to advanced security threats; companies that provide endpoint systems management; and large network security providers, which have entered the market primarily through acquisition.
The Company’s Cylance cybersecurity technology competes with various types of providers, including: traditional signature-based antivirus vendors and identity management; vendors whose business focuses almost solely on EPP; EDR vendors, which primarily focus on continuous monitoring and human response to advanced security threats; companies that provide endpoint systems management; and large network security providers, which have entered the market primarily through acquisition.
Additionally, detection and response decisions are pushed down to the endpoint, minimizing response latency so that a minor security event can be addressed before it becomes a widespread incident. BlackBerry Protect has earned Federal Risk and Authorization Management Program (“FedRAMP”) authorization.
Additionally, detection and response decisions are pushed down to the endpoint, minimizing response latency so that a minor security event can be addressed before it becomes a widespread incident. CylanceENDPOINT’s Endpoint Protection Platform (EPP) has earned Federal Risk and Authorization Management Program (“FedRAMP”) authorization.
As a result, the Company owns rights to an array of patented and patent pending technologies which include, but are not limited to, cybersecurity, cryptography, machine learning, artificial intelligence, operating systems, acoustics, messaging, enterprise software, automotive subsystems, networking infrastructure and wireless communications. As of February 28, 2023, the Company owned approximately 37,500 worldwide patents and applications.
As a result, the Company owns rights to an array of patented and patent pending technologies which include, but are not limited to, cybersecurity, cryptography, machine learning, artificial intelligence, operating systems, acoustics, messaging, enterprise software, automotive subsystems, networking infrastructure and wireless communications. As of February 29, 2024, the Company owned approximately 6,200 worldwide patents and applications.
Sales, Marketing, Distribution and Customers The Company primarily generates revenue from the licensing of enterprise software and sales of associated services, including its endpoint management and cybersecurity solutions, BlackBerry QNX software for the embedded market, technology licensing and professional consulting services.
Go to Market The Company primarily generates revenue from the licensing of enterprise software and sales of associated services, including its endpoint management and cybersecurity solutions, BlackBerry QNX software for the embedded market, technology licensing and professional consulting services.
The Company owns rights to an array of patented and patent pending technologies which include, but are not limited to, operating systems, networking infrastructure, acoustics, messaging, enterprise software, automotive subsystems, cybersecurity, cryptography and wireless communications. As of February 28, 2023, the Company owned approximately 37,500 worldwide patents and applications.
The Company owns rights to an array of patented and patent pending technologies which include, but are not limited to, operating systems, networking infrastructure, acoustics, messaging, enterprise software, automotive subsystems, cybersecurity, cryptography and wireless communications. As of February 29, 2024, the Company owned approximately 6,200 worldwide patents and applications.
The Company licenses the BlackBerry Spark platform, including its individual components and complementary third-party applications, through a geographically-dispersed direct sales force, value-added resellers, managed security service providers and alliance partners. The Company continues to build its global partner programs to bolster its direct sales and marketing efforts.
Cybersecurity The Company licenses its Cybersecurity products, including complementary third-party applications, through a geographically-dispersed direct sales force, value-added resellers, managed security service providers and alliance partners. The Company continues to build its global partner programs to bolster its direct sales and marketing efforts.
IoT The IoT business consists of BlackBerry Technology Solutions (“BTS”) and BlackBerry IVY. The principal component of BTS is BlackBerry QNX, a global provider of real-time operating systems, hypervisors, middleware, development tools, and professional services for connected embedded systems in the automotive, medical, industrial automation and other markets.
The principal component of BTS is BlackBerry QNX, a global provider of real-time operating systems, hypervisors, middleware, development tools, and professional services for connected embedded systems in the automotive, medical, industrial automation and other markets.
In addition, our filings with the SEC may be accessed through the SEC’s website at www.sec.gov and our filings with the Canadian Securities Administrators (“CSA”) may be accessed through the CSA’s System for Electronic Document Analysis and Retrieval (“SEDAR”) at www.sedar.com.
In addition, our filings with the SEC may be accessed through the SEC’s website at www.sec.gov and our filings with the Canadian Securities Administrators (“CSA”) may be accessed through the CSA’s System for Electronic Document Analysis and Retrieval (“SEDAR+”) at www.sedarplus.ca.
The Company is honored to have the efforts of our talented and dedicated employees recognized through numerous awards, including Forbes Canada’s Best Employers (2022), Best & Brightest Companies to Work for in the Nation (2016-2022), Best & Brightest Companies to Work for in Wellness (2016-2022), Canada’s Top Employers for Young People (2021-2023), Canada’s Greenest Employers (2016-2022), Great Place to Work Germany (2022), Great Place to Work – Ireland’s Best Workplaces in Tech (2022), and Singapore Health Award (2022), among others.
The Company is honored to have the efforts of our talented and dedicated employees recognized through numerous awards, including Forbes Canada’s Best Employers (2022-2023), Best & Brightest Companies to Work for in the Nation (2016-2023), Best & Brightest Companies to Work for in Wellness (2016-2023), Canada’s Top Employers for Young People (2021-2024), and Canada’s Greenest Employers (2016-2023), among others.
The Company is also subject to numerous international trade laws and regulations, including, without limitation, tariffs, trade sanctions, export controls and technology transfer restrictions, as well as anti-corruption legislation such as the U.S. Foreign Corrupt Practices Act and Canada’s Corruption of Foreign Public Officials Act.
The Company is also subject to numerous international trade laws and regulations, including, without limitation, tariffs, trade sanctions, export controls and technology transfer restrictions, as well as anti-corruption legislation such as the U.S.
The primary development platform for BlackBerry QNX-based systems is the QNX® Software Development Platform (SDP), which includes the QNX Neutrino Realtime Operating System and the QNX Momentics® Tool Suite. The QNX SDP is complemented by QNX® Hypervisor, QNX® OS for Safety, QNX® Hypervisor for Safety, QNX® Acoustics Management Platform and QNX® Platform for Digital Cockpits and other products.
The primary development platform for BlackBerry QNX-based systems is the QNX Software Development Platform, which includes the QNX Neutrino real-time operating system and the QNX Momentics® Tool Suite. The QNX SDP is complemented by QNX Hypervisor, QNX® OS for Safety, QNX® Hypervisor for Safety, QNX Sound and other QNX products.
BlackBerry Dynamics offers a best-in-class development platform and secure container for mobile applications, including the Company’s own enterprise applications such as BlackBerry® Work and BlackBerry® Connect for secure collaboration. The BlackBerry Spark platform also includes BBM Enterprise, an enterprise-grade secure instant messaging solution for messaging, voice and video.
BlackBerry Dynamics offers a best-in-class development platform and secure container for mobile applications, including the Company’s own enterprise applications such as BlackBerry® Work and BlackBerry® Connect for 5 secure collaboration. BlackBerry Workspaces is a secure Enterprise File Sync and Share (EFSS) solution. BBM Enterprise is an enterprise-grade secure instant messaging solution for messaging, voice and video.
The Company has formalized a number of policies to reflect its commitment to responsible business practices, including a Privacy Policy, Supplier Code of Conduct, Human Rights Policy, Equal Employment Policy and Supplier Diversity Policy, and periodically issues a corporate responsibility report.
The Company has formalized a number of policies to reflect its commitment to responsible business practices, including a Privacy Policy, Supplier Code of Conduct, Human Rights Policy, Supplier Diversity Policy, Health and Safety Policy and Environment and Sustainability Policy, and periodically issues an ESG report.
The Company also announced its entry into a new patent sale agreement with Malikie Innovations Limited for the sale of a similar portfolio of non-core patent assets for $170 million in cash on closing, an additional $30 million in cash by no later than the third anniversary of closing and potential future royalties in the aggregate amount of up to $900 million (the “Malikie Transaction”).
In May 2023, the Company completed the sale of a portfolio of non-core patent assets to Malikie Innovations Limited for $170 million in cash on closing, an additional $30 million in cash by no later than the third anniversary of closing and potential future royalties in the aggregate amount of up to $700 million (the “Malikie Transaction”).
Additionally, the Company is subject to domestic and international laws relating to environmental protection and the proliferation of hazardous substances. In parts of Europe, North America, Latin America and the Asia-Pacific region, the Company is obligated to comply with substance restrictions, packaging regulations, energy efficiency ratings and certain product take-back and recycling requirements, principally for the BlackBerry Radar business.
In parts of Europe, North America, Latin America and the Asia-Pacific region, the Company is obligated to comply with substance restrictions, packaging regulations, energy efficiency ratings and certain product take-back and recycling requirements, principally for the BlackBerry Radar business. The U.S.
Furthermore, the Company may be subject to a variety of local laws unknown to the Company in foreign jurisdictions where customers are located. 10 Any actual or perceived failure to comply with these requirements may result in, among other things, revocation of required licenses or registrations, loss of approved status, private litigation, regulatory or governmental investigations, administrative enforcement actions, sanctions, civil and criminal liability, and constraints on the Company’s operations.
Any actual or perceived failure to comply with these requirements may result in, among other things, revocation of required licenses or registrations, loss of approved status, private litigation, regulatory or governmental investigations, administrative enforcement actions, sanctions, civil and criminal liability, and constraints on the Company’s operations.
BlackBerry Certicom’s offerings include its managed public key infrastructure (“PKI”) platform, key management and provisioning technology that helps customers to protect the integrity of their silicon chips and devices from the point of manufacturing through the device life cycle.
BlackBerry Certicom leverages patented elliptic curve cryptography to provide device security, anti-counterfeiting and product authentication solutions. BlackBerry Certicom’s offerings include its managed public key infrastructure (“PKI”) platform, key management and provisioning technology that helps customers to protect the integrity of their silicon chips and devices from the point of manufacturing through the device life cycle.
BlackBerry IVY supports multiple vehicle operating systems and hardware, as well as multi-cloud deployments in order to ensure compatibility across vehicle models and brands. The Company recently announced the first design win for BlackBerry IVY and expects to release the platform for general availability in May 2023, with in-vehicle installations to begin during the 2025 model year.
BlackBerry IVY supports multiple operating systems and hardware platforms, as well as multi-cloud deployments, in order to ensure compatibility across vehicle models and brands. The Company announced the first design win for BlackBerry IVY in January 2023 and released the platform for general availability in May 2023.
To support BlackBerry UES products, the Company offers the BlackBerry Endpoint ISV Technology Integration program featuring an application programming interface (“API”) development platform that enables developers and ISVs to develop robust extensible security integrations for BlackBerry UES, creating results-based offerings for targeted use cases.
To support Cylance Cybersecurity products, the Company offers the BlackBerry Endpoint ISV Technology Integration program featuring an application programming interface (“API”) development platform that enables developers and ISVs to develop robust extensible security integrations, creating results-based offerings for targeted use cases. Completed integrations are shared with the user community and promoted to market partners and AWS Marketplace opportunities.
These solutions include the Neutrino® operating system and the BlackBerry QNX® CAR platform, the most advanced embedded software platform for the autonomous vehicle market, as well as other products designed to alleviate the challenges of compliance with ISO 26262, the automotive industry’s functional safety standard.
These solutions include the BlackBerry QNX real-time operating system, QNX® Hypervisor for Safety and QNX® Software Development Platform (SDP), as well as other products designed to alleviate the challenges of compliance with ISO 26262, the automotive industry’s functional safety standard.
Employees are supported in their growth and development through the Company’s tuition and educational reimbursement programs, subsidies for professional association memberships, a global mentorship program, career planning resources, and various training programs.
The Company encourages employees to broaden their scope and understanding of the business, and to build additional skills to attain their career aspirations. Employees are supported in their growth and development through the Company’s tuition and educational reimbursement programs, subsidies for professional association memberships, a global mentorship program, career planning resources, and various training programs.
Additionally, the Company’s secure automotive over-the-air software update management service allows OEMs to manage the life cycle of the software and security in their vehicles. BlackBerry QNX is also a preferred supplier of embedded systems for companies building medical devices, train-control systems, industrial robots, hardware security modules, building automation systems, green energy solutions, and other mission-critical applications.
BlackBerry QNX is also a preferred supplier of embedded systems for companies building medical devices, train-control systems, industrial robots, hardware security modules, building automation systems, green energy solutions, and other mission-critical applications.
BlackBerry QNX is recognized for attaining the highest levels of security certifications and approvals for many of its embedded products and is the leader in safety-certified, secure and reliable software for the automotive industry.
Department of Homeland Security, among other governmental bodies. BlackBerry AtHoc helps to protect more than 75% of U.S. government personnel. IoT BlackBerry QNX is recognized for attaining the highest levels of security certifications and approvals for many of its embedded products and is the leader in safety-certified, secure and reliable software for the automotive industry.
The U.S. Dodd-Frank Wall Street Reform and Consumer Protection Act also requires the Company to comply with certain due diligence and disclosure obligations with respect to the use of conflict minerals.
Dodd-Frank Wall Street Reform and Consumer Protection Act also requires the Company to comply with certain due diligence and disclosure obligations with respect to the use of conflict minerals. Furthermore, the Company may be subject to a variety of local laws unknown to the Company in foreign jurisdictions where customers are located.
The Company also offers incident response, compromise assessment and containment services to assist clients with forensic analysis, state of existing systems and remediation of attacks. The BlackBerry UES Suite natively integrates with BlackBerry® UEM and also works with UEM solutions from other vendors. The BlackBerry Spark UEM Suite includes the Company’s BlackBerry UEM, BlackBerry® Dynamics™ and BlackBerry® Workspaces solutions.
The Company also offers incident response, compromise assessment and containment services to assist clients with forensic analysis, state of existing systems and remediation of attacks.
The Company was incorporated under the Business Corporations Act (Ontario) (“OBCA”) on March 7, 1984 and commenced operations at that time. The Company has amalgamated with several of its wholly-owned subsidiaries, the last amalgamation occurring through the filing of articles of amalgamation under the OBCA on November 4, 2013.
The Company was incorporated under the Business Corporations Act (Ontario) (“OBCA”) and has amalgamated with several of its wholly-owned subsidiaries, the last occurring through the filing of articles of amalgamation under the OBCA on November 4, 2013. The Company’s common shares trade under the ticker symbol “BB” on the New York Stock Exchange (“NYSE”) and the Toronto Stock Exchange (“TSX”).
The Company offers career development and growth in many forms such as job shadowing, job rotation, stretch assignments, enhanced scope or responsibility, networking, lateral movement, promotions, and volunteering. The Company encourages opportunities for employees to broaden their scope and understanding of the business, and to build additional skills to attain their career aspirations.
The Company believes career development is unique and personal for each employee. The Company offers career development and growth in many forms such as job shadowing, job rotation, stretch assignments, enhanced scope or responsibility, networking, lateral movement, promotions, and volunteering.
BlackBerry SecuSUITE technology has been certified to be compliant with the Common Criteria protection profile for VoIP applications and SIP servers. It has also earned NIAP certification and NATO Communications and Information Agency security accreditation, and has been placed on the National Security Agency’s Commercial Solutions for Classified Program component list of products certified for use on classified systems.
It has also earned NIAP certification and NATO Communications and Information Agency security accreditation, and has been placed on the National Security Agency’s Commercial Solutions for Classified Program component list of products certified for use on classified systems. The BlackBerry AtHoc platform is both mobile and scalable, integrating with legacy systems and supporting on-premise and cloud-based deployments.
The Company does not expect that the sale of its portfolio of primarily legacy patents under the Malikie Transaction will negatively impact its strategy of protecting its new innovations through patent filings. 9 It is the Company’s general practice to enter into confidentiality and non-disclosure agreements with its employees, consultants, contract manufacturers, customers, potential customers and others to attempt to limit access to, and distribution of, its proprietary information.
It is the Company’s general practice to enter into confidentiality and non-disclosure agreements with its employees, consultants, contract manufacturers, customers, potential customers and others to attempt to limit access to, and distribution of, its proprietary information.
Product Design, Engineering and Research and Development The Company’s research and development (“R&D”) strategy seeks to drive innovation to continuously enhance the Company’s product portfolio and introduce exciting solutions to the market. The Company dedicates a major portion of its R&D investments to the development of software products and services for its Cybersecurity and IoT solutions.
The Company dedicates a major portion of its R&D investments to the development of software products and services for its Cybersecurity and IoT solutions.
BlackBerry SecuSUITE is a certified, multi-OS voice and text messaging solution with advanced encryption, anti-eavesdropping and continuous authentication capabilities, providing a maximum level of security on conventional mobile devices for government and businesses. 5 BlackBerry AtHoc and BlackBerry Alert are secure, networked critical event management solutions that enable people, devices and organizations to exchange critical information in real time during business continuity and life safety operations.
BlackBerry SecuSUITE is a certified, multi-OS voice and text messaging solution with advanced encryption, anti-eavesdropping and continuous authentication capabilities, providing a maximum level of security on conventional mobile devices for government and businesses.
This landscape of growing vulnerability and accountability has created opportunities for secure communications platforms, endpoint cybersecurity and management solutions, embedded systems, enterprise applications, analytic tools and related services that help enterprises to secure their connected endpoints, enhance functional safety, maintain data privacy and demonstrate compliance with applicable regulations. 4 Strategy The Company is widely recognized for its intelligent security software and services and believes that it delivers the broadest set of security capabilities in the market to connect, protect and manage IoT endpoints.
At the same time, a shortage of talented cybersecurity professionals means that existing security operations teams struggle to contend with the velocity of cyberattacks and the complexity and demands of many available solutions. 4 This landscape of growing vulnerability and accountability has created opportunities for secure communications platforms, endpoint cybersecurity and management solutions, embedded systems, enterprise applications, analytic tools and related services that help enterprises to secure their connected endpoints, enhance functional safety, maintain data privacy and demonstrate compliance with applicable regulations.
The platforms securely connect with a diverse set of endpoints to distribute emergency mass notifications, improve personnel accountability and facilitate the bidirectional collection and sharing of data within and between organizations. BlackBerry AtHoc serves the requirements of the public sector market while BlackBerry Alert targets the commercial sector.
The platform securely connects with a diverse set of endpoints to distribute emergency mass notifications, improve personnel accountability and facilitate the bidirectional collection and sharing of data within and between organizations. IoT The IoT business consists of BlackBerry Technology Solutions (“BTS”), BlackBerry Radar® and BlackBerry IVY®.
Based in Waterloo, Ontario, the Company leverages artificial intelligence (“AI”) and machine learning to deliver innovative solutions in the areas of cybersecurity, safety and data privacy, and is a leader in the areas of endpoint security, endpoint management, encryption, and embedded systems.
Based in Waterloo, Ontario, the Company has two core divisions, each addressing large and growing market opportunities. Its Cybersecurity division is a pioneer in the use of artificial intelligence (“AI”) and machine learning to deliver innovative solutions in the areas of cybersecurity and data privacy. It is a leader in endpoint security, endpoint management, secure communications and critical event management.
The Spark platform is also differentiated by the inclusion of a sophisticated network operations center in the BlackBerry infrastructure. The Company pioneered the use of this architecture to route messages reliably and efficiently to and from mobile devices, and over time has expanded capabilities to enable end-to-end secure communications between endpoints and applications and enterprise networks.
The Company pioneered the use of this architecture to route messages reliably and efficiently to and from mobile devices, and over time has expanded capabilities to enable end-to-end secure communications between endpoints and applications and enterprise networks. BlackBerry SecuSUITE technology has been certified to be compliant with the Common Criteria protection profile for VoIP applications and SIP servers.
The Company does not tolerate, condone, or ignore workplace discrimination or harassment or any unlawful behavior and investigates all complaints regarding such conduct in a timely manner. The Company believes career development is unique and personal for each employee.
The Company is committed to maintaining a respectful and productive work environment free from discrimination and harassment, supported by training in unconscious bias and inclusive language. The Company does not tolerate, condone, or 11 ignore workplace discrimination or harassment or any unlawful behavior and investigates all complaints regarding such conduct in a timely manner.
Name of Subsidiary Jurisdiction of Incorporation or Organization BlackBerry Corporation Delaware, U.S.A. BlackBerry UK Limited England and Wales Cylance Inc. Delaware, U.S.A. Secusmart GmbH Duesseldorf, Germany Security Software Industry As the digital transformation of enterprises continues to advance, workforces are becoming more decentralized, mobile and remote, and data and applications are increasingly migrating to the cloud.
Secusmart GmbH Duesseldorf, Germany Industry Background: Large and growing market opportunities Cybersecurity As the digital transformation of enterprises continues to advance, workforces are becoming more decentralized, mobile and remote, and data and applications are increasingly migrating to the cloud.
The BlackBerry AtHoc and BlackBerry Alert platforms are mobile and scalable, integrate with legacy systems and support on-premise and cloud-based deployments. With available incident management and encrypted end-to-end instant messaging capabilities, the platforms offer a suite of secure crisis communication services to meet the growing number of use cases for emergency or mass notifications.
With available incident management and encrypted end-to-end instant messaging capabilities, the platform offers a suite of secure crisis communication services to meet the growing number of use cases for emergency or mass notifications. BlackBerry AtHoc has received FedRAMP certification and is the leading provider of network-centric, interactive crisis communication to the U.S. Department of Defense and the U.S.
The platform is differentiated through its use of a zero-trust architecture that uniquely combines intelligent security with a user experience that requires little to no support from end users or IT administrators, simplifying management and reducing costs. 7 The BlackBerry Cyber Suite leverages Cylance AI, machine learning and automation to provide improved cyber threat prevention and remediation, and can help users to understand risks, make contextual decisions and dynamically apply policy controls with no user interruption, mitigating risks before they materialize.
The Cylance cybersecurity solutions leverage Cylance AI, machine learning and automation to provide improved cyber threat prevention and remediation, and can help users to understand risks, make contextual decisions and dynamically apply policy controls with no user interruption, mitigating risks before they materialize.
BlackBerry QNX is a trusted supplier of operating systems, hypervisors, development tools and support to automotive OEMs and Tier 1 vendors and to the general embedded market. BlackBerry QNX technology is embedded in over 215 million vehicles. Competition The Company is engaged in markets that are highly competitive and rapidly evolving.
BlackBerry QNX is a trusted supplier of operating systems, hypervisors, development tools and support to automotive OEMs and Tier 1 vendors and to the general embedded market. The Company recently announced a number of new products that it believes will enable it to maintain its strong market position and open up new potential revenue streams.
ITEM 1. BUSINESS The Company The Company provides intelligent security software and services to enterprises and governments around the world. The Company secures more than 500 million endpoints including more than 215 million vehicles.
ITEM 1. BUSINESS The Company: A heritage of innovation Founded in 1984, the Company is a leading provider of intelligent security software and services to enterprises, governments and leading OEMs around the world. Its products secure 17 of the G20 governments and enable more than 235 million vehicles.
Products and Services The Company has multiple products and services from which it derives revenue, which are structured in three groups: Cybersecurity, IoT (collectively with Cybersecurity, “Software and Services”) and Licensing and Other. Cybersecurity The Cybersecurity business consists of BlackBerry Spark, BlackBerry® SecuSUITE® and BlackBerry® AtHoc®.
Products and Services: Addressing market needs and opportunities The Company has a rich pedigree in innovation and has developed a range of products and services that assist customers in addressing their needs as their industries evolve, which are structured in three groups: Cybersecurity, IoT (collectively with Cybersecurity, “Software & Services”) and Licensing and Other.
Information about our Executive Officers The Company made one executive officer appointment during fiscal 2023, naming Phil Kurtz as Chief Legal Officer.
Information about our Executive Officers The Company made two executive officer appointments during fiscal 2024, naming John Giamatteo as Chief Executive Officer and President, Cybersecurity and Jennifer Armstrong-Owen as Senior Vice President and Chief People Officer.
The Company’s common shares trade under the ticker symbol “BB” on the New York Stock Exchange (“NYSE”) and the Toronto Stock Exchange (“TSX”). Intercorporate Relationships The Company has four material subsidiaries, all of which are wholly-owned, directly or indirectly, by the Company in each case as at February 28, 2023.
Intercorporate Relationships The Company has four material subsidiaries, all of which are wholly-owned, directly or indirectly, by the Company in each case as at February 29, 2024. Name of Subsidiary Jurisdiction of Incorporation or Organization BlackBerry Corporation Delaware, U.S.A. BlackBerry UK Limited England and Wales Cylance Inc. Delaware, U.S.A.
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The Company leverages its extensive technology portfolio to offer best-in-class cybersecurity, safety and reliability to enterprise customers primarily in government and regulated industries, to small and medium-sized businesses, and to original equipment manufacturers (“OEMs”) in automotive, medical, industrial and other core verticals.
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The Company’s IoT division is a leader in embedded software where the Company believes it is the world’s leading automotive foundational software supplier. Its customers include leading automotive OEMs and Tier 1 suppliers that use its products in vehicles, as well as top medical OEMs.
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The Company’s goal is to offer smarter security solutions that are more effective, require fewer resources to support and produce a better return on investment for customers than competing offerings.
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The Company’s solutions are implemented into all the top 10 automotive OEMs, top 7 Tier 1 suppliers, 24 of the 25 top EV OEMs, and 9 of the 10 top medical OEMs.
Removed
To achieve this vision, the Company continues to extend the functionality of its AI-focused BlackBerry Spark® software platform and safety-certified QNX® Neutrino® real time operating system and is commercializing its new BlackBerry IVY™ intelligent vehicle data platform.
Added
IoT The world is rapidly moving to one where everyone and everything can be intelligently connected at the edge. This evolution is being enabled by the proliferation of IoT devices, increasing device sophistication and compute power, and powerful software that can bring these devices to life.
Removed
The Company’s go-to-market strategy focuses principally on generating revenue from enterprise software and services as well as from embedded software designs with leading OEMs and Tier 1 suppliers. The Company intends to drive revenue growth and to achieve margins that are consistent with those of other enterprise software companies.
Added
Industries of all types, from automotive and manufacturing to healthcare and robotics, are experiencing the profound impact of this evolution, as intelligent edge devices deliver unprecedented capabilities by making immediate, context-aware decisions locally.
Removed
The Company’s core secure software and services offering is its BlackBerry Spark software platform, which integrates a unified endpoint security (“UES”) layer with BlackBerry unified endpoint management (“UEM”) to enable secure endpoint communications in a zero-trust environment.
Added
The Company believes the benefits of the intelligent edge are real and immense, promising enhanced security, reduced latency, and rigorous efficiency, and position the intelligent edge as a technological pillar that it expects will shape the digital landscape of the future.
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BlackBerry UES is a set of complementary cybersecurity products offering endpoint protection platform (“EPP”), endpoint detection and response (“EDR”), mobile threat defense (“MTD”), zero-trust network access (“ZTNA”) and user and entity behavior analytics (“UEBA”) capabilities.
Added
This rapid evolution can be attributed to increasing connectivity, decreasing sensor and hardware component costs, and continuous innovation that leverages edge data. The associated surge in data generation and computing power at the edge is creating new ways for businesses to provide impactful applications that rely on real-time data processing and insights.
Removed
The BlackBerry Spark platform is informed by the Company’s AI and machine learning capabilities, continuous innovations, professional cybersecurity services and threat research, industry partnerships and academic collaborations.
Added
As a result, software-defined IoT devices are improving safety, security, and reliability by allowing for dynamic updates, which enables greater flexibility to scale and adapt to evolving customer demands or industry requirements.
Removed
The platform features industry-leading threat prevention modules to help organizations cope with the significant growth of cyberattacks and operates on a single agent across all endpoints, administered from a single console, leveraging a single crowd-sourced threat data lake and managed in one cloud environment.
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While all industries are experiencing the shift toward the intelligent edge, the Company believes these trends are most prevalent in the automotive industry, as evidenced by the growth and complexity of software-defined vehicles (“SDVs”).
Removed
BlackBerry Spark solutions are available through the BlackBerry® Cyber Suite and the BlackBerry Spark® Unified Endpoint Management Suite, which are also marketed together as the BlackBerry Spark® Suite, offering the Company’s most comprehensive range of tailored cybersecurity and endpoint management options.
Added
Powered by continual advancements in IoT hardware such as the move from microcontrollers to microprocessors, modern vehicles increasingly operate on highly sophisticated and interconnected software stacks and the data produced by vehicles is proliferating at a rapid rate.
Removed
The BlackBerry UES Suite offers leading Cylance® AI and machine learning-based cybersecurity solutions, including: CylancePROTECT®, an EPP and available MTD solution that uses an automated, prevention-first approach to protect against the execution of malicious code on an endpoint; CylanceOPTICS®, an EDR solution that provides both visibility into and prevention of malicious activity on an endpoint; CylanceGUARD®, a managed detection and response solution that provides 24/7 threat hunting and monitoring; CylanceGATEWAY™, an AI-empowered ZTNA solution, and CylancePERSONA™, a UEBA solution that provides continuous authentication by validating user identity in real time.
Added
The entire automotive value chain, from OEMs to Tier 1 suppliers, will need foundational software to capture, synthesize, analyze and monetize this massive volume of real-time data to develop innovative solutions that deliver safer, more efficient and more fulfilling driving experiences. These trends are not just present in automotive, but are also being seen in industrial automation, healthcare and robotics.
Removed
BlackBerry UEM is a central software component of the Company’s secure communications platform, offering a “single pane of glass”, or unified console view, for managing and securing devices, applications, identity, content and endpoints across all leading operating systems.
Added
The Company further believes that increased and evolving regulatory requirements as well as consumer expectations will create further demand for high-performance SDVs and other IoT devices. With increasing compute capabilities and system complexity, there is an imperative for high-performance foundational software that maintains the highest level of functional safety and security of systems at the edge.
Removed
In addition to BlackBerry QNX, BTS includes BlackBerry Certicom® cryptography and key management products, and the BlackBerry Radar® asset monitoring solution. BlackBerry Certicom leverages patented elliptic curve cryptography to provide device security, anti-counterfeiting and product authentication solutions.
Added
Cybersecurity The Cybersecurity business consists of Cylance® cybersecurity and BlackBerry unified endpoint management (“UEM”) solutions, collectively known as BlackBerry Spark, SecuSUITE® and BlackBerry® AtHoc®.
Removed
In the fourth quarter of fiscal 2022, the Company announced its entry into a patent sale agreement with Catapult IP Innovations (“Catapult”) for the sale of substantially all of the Company’s non-core patent assets.
Added
BlackBerry’s Cylance cybersecurity solutions include: CylanceENDPOINT™, an integrated endpoint security solution that leverages the Cylance AI model and OneAlert EDR console, to prevent, detect and remediate cyber threats at the endpoint, including on mobile; CylanceGUARD®, a managed detection and response solution that provides 24/7 threat hunting and monitoring, as well as integrated critical event management communications during a cyber incident; CylanceEDGE™, an AI-powered continuous authentication zero trust network access solution that provides secure access to applications and data loss prevention; and CylanceINTELLIGENCE™, a contextual cyber threat intelligence service.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

55 edited+14 added−21 removed138 unchanged
Biggest changeEconomic weakness or inflation resulting directly or indirectly from the COVID-19 pandemic and the invasion of Ukraine, as well as higher interest rates implemented in response to inflation and resulting fears of recession, may negatively impact consumer demand for automobiles and is contributing to reduced spending on and longer sales cycles for cybersecurity solutions, which in turn may continue to adversely affect the Company’s business, results of operations and financial condition on a consolidated basis.
Biggest changeChallenging macroeconomic conditions, including as a result of geopolitical events, public health crises, automotive labor disruptions, disruptions in global supply chains, increases in inflation and interest rates, have negatively impacted and may in the future negatively impact consumer demand for automobiles and sales cycles and spending on cybersecurity solutions, and in turn have materially affected the Company’s business, results of operations and financial condition in certain periods.
The complexity of the technology involved and the inherent uncertainty of commercial, class action, securities, employment and other litigation 16 increases these risks. In recognition of these considerations, the Company may enter into settlements resulting in material expenditures, the payment of which could have a material adverse effect on the Company’s business, results of operation and financial condition.
The complexity of the 16 technology involved and the inherent uncertainty of commercial, class action, securities, employment and other litigation increases these risks. In recognition of these considerations, the Company may enter into settlements resulting in material expenditures, the payment of which could have a material adverse effect on the Company’s business, results of operation and financial condition.
If the network and product security measures implemented by the Company or its partners, including third-party data 14 center operators, cloud service providers and product manufacturers are breached, or perceived to be breached, or if the confidentiality, integrity or availability of the Company’s data, including intellectual property and legally protected personal data, is compromised, the Company could be exposed to significant litigation, service disruptions, investigation and remediation costs, regulatory sanctions, fines and contractual penalties.
If the network and product security measures implemented by the Company or its partners, including third-party data center operators, cloud service providers and product manufacturers are breached, or perceived to be breached, or if the confidentiality, integrity or availability of the Company’s data, including intellectual property and legally protected personal data, is compromised, the Company could be exposed to significant litigation, service disruptions, investigation and remediation costs, regulatory sanctions, fines and contractual penalties.
The Company’s revenues can change from one quarter to the next, including due to unexpected developments late in a quarter, such as lower-than-anticipated demand for the Company’s products and services, issues with new product or service introductions, an internal systems failure, or challenges with one of the Company’s distribution channels or other partners (including licensees and manufacturers).
The Company’s revenues can change from one quarter to the next, including due to unexpected developments late in a quarter, such as lower-than-anticipated demand for the Company’s products and services, issues with new product or service 23 introductions, an internal systems failure, or challenges with one of the Company’s distribution channels or other partners (including licensees and manufacturers).
In addition, any such event could materially damage the Company’s reputation, which is built in large measure on the security and reliability of BlackBerry products and services, and could result in the loss of investor confidence, channel partners, competitive advantages, revenues and customers, including the Company’s most significant government and regulated enterprise customers.
In addition, any such event could materially damage the 14 Company’s reputation, which is built in large measure on the security and reliability of BlackBerry products and services, and could result in the loss of investor confidence, channel partners, competitive advantages, revenues and customers, including the Company’s most significant government and regulated enterprise customers.
Goodwill represents the excess of the acquisition price over the fair value of identifiable net assets acquired. Under U.S. GAAP, the Company tests goodwill for impairment annually, during the fourth quarter, or more frequently if events or changes in 20 circumstances indicate that the asset may be impaired.
Goodwill represents the excess of the acquisition price over the fair value of identifiable net assets acquired. Under U.S. GAAP, the Company tests goodwill for impairment annually, during the fourth quarter, or more frequently if events or changes in circumstances indicate that the asset may be impaired.
Significant judgment is required in determining its worldwide liability for income, indirect and other taxes, as well as potential penalties and interest. In the ordinary course of the Company’s business, there are many transactions and calculations where the ultimate tax determination is uncertain.
Significant judgment is required in determining its worldwide liability for income, indirect and other taxes, as well as potential penalties and interest. In the ordinary course of the Company’s business, there are many 20 transactions and calculations where the ultimate tax determination is uncertain.
The aggregate proceeds that the Company ultimately receives from the Malikie Transaction are expected to be less than $900 million. The Company may not be able to obtain rights to use third-party software and is subject to risks related to the use of open source software.
The aggregate proceeds that the Company ultimately receives from the Malikie Transaction are expected to be less than $900 million. 18 The Company may not be able to obtain rights to use third-party software and is subject to risks related to the use of open source software.
The Company’s inability to address these risks could adversely affect the Company’s business, results of operations and financial condition. The Company’s business is subject to risks inherent in foreign operations, including fluctuations in foreign currencies. Sales outside of North America account for a significant portion of the Company’s revenue.
The Company’s inability to address these risks could adversely affect the Company’s business, results of operations and financial condition. 22 The Company’s business is subject to risks inherent in foreign operations, including fluctuations in foreign currencies. Sales outside of North America account for a significant portion of the Company’s revenue.
There can be no assurance that the Company will be successful in implementing its sales and distribution strategy. See also the Risk Factor entitled “The Company’s success depends on its relationships with resellers and distributors”. 13 The Company faces intense competition.
There can be no assurance that the Company will be successful in implementing its sales and distribution strategy. See also the Risk Factor entitled “The Company’s success depends on its relationships with resellers and distributors”. The Company faces intense competition.
If the Company is unable to promote a compelling value proposition to customers and its efforts to sell or upsell software or services as described above are not successful, its results of operations could be materially impacted.
If the Company is unable to promote a compelling value 12 proposition to customers and its efforts to sell or upsell software or services as described above are not successful, its results of operations could be materially impacted.
For smaller or simpler deployments, the switching costs and time are relatively minor compared to traditional enterprise software deployments and such a customer may more easily decide not to renew with the Company and switch to a competitor’s offerings.
For smaller or simpler deployments, the switching costs and time are relatively minor compared to traditional enterprise software deployments and as such a customer may more easily decide not to renew with the Company and switch to a competitor’s offerings.
In addition, the Company typically 17 receives limited advance notice of changes in features and functionality of operating systems and platforms, and therefore the Company may be forced to divert resources from its preexisting product roadmap to accommodate these changes.
In addition, the Company typically receives limited advance notice of changes in features and functionality of operating systems and platforms, and therefore the Company may be forced to divert resources from its preexisting product roadmap to accommodate these changes.
Changes in the law may weaken the Company’s ability to collect 18 royalty revenue for licensing its patents. Similarly, licensees of the Company’s patents may fail to satisfy their obligations to pay royalties, or may contest the scope and extent of their obligations.
Changes in the law may weaken the Company’s ability to collect royalty revenue for licensing its patents. Similarly, licensees of the Company’s patents may fail to satisfy their obligations to pay royalties, or may contest the scope and extent of their obligations.
In addition, governmental authorities may require access to limited data stored 21 by the Company through lawful access demands and capabilities, which could subject the Company to legal liability, unforeseen compliance cost and negative publicity.
In addition, governmental authorities may require access to limited data stored by the Company through lawful access demands and capabilities, which could subject the Company to legal liability, unforeseen compliance cost and negative publicity.
Network disruptions or other business interruptions could have a material adverse effect on the Company’s business and harm its reputation. The Company’s operations rely to a significant degree on the efficient and uninterrupted operation of complex technology systems and networks, which are in some cases integrated with those of carrier partners, cloud service providers, and third-party data centre operators.
Network disruptions or other business interruptions could have a material adverse effect on the Company’s business and harm its reputation. The Company’s operations rely to a significant degree on the efficient and uninterrupted operation of complex technology systems and networks, which are in some cases integrated with those of cloud service providers and third-party data centre operators.
If any such events or circumstances arise, the Company may be required to record an impairment charge in the value of its goodwill. In the fourth quarter of fiscal 2023, the Company recorded the Fiscal 2023 Impairment Charge. For additional information, see Note 3 to the Consolidated Financial Statements.
If any such events or circumstances arise, the Company may be required to record an impairment charge in the value of its goodwill. In the fourth quarter of fiscal 2024, the Company recorded the Fiscal 2024 Goodwill Impairment Charge. For additional information, see Note 3 to the Consolidated Financial Statements.
The Company’s network operations and technology systems are potentially vulnerable to damage or interruption from a variety of sources, including by fire, earthquake, power loss, telecommunications or computer systems failure, cyber attack, human error, terrorist acts, war, and the threatened or actual suspension of BlackBerry services at the request of a government for alleged non-compliance with local laws or other events.
The Company’s network operations and technology systems are potentially vulnerable to damage or interruption from a variety of sources, including by fire, earthquake, power loss, telecommunications or computer systems failure, cyberattack, human error, terrorist acts, war, and the threatened or actual suspension of BlackBerry services at the request of a government for alleged non-compliance with local laws or other events.
The increased number of third party applications on the Company’s network may also enhance the risk of network disruption or cyber attack for the Company. There may also be system or network interruptions if new or upgraded systems are defective or not installed properly, or if data centre operators fail to meet agreed service levels.
The increased number of third-party applications on the Company’s network may also enhance the risk of network disruption or cyberattack for the Company. There may also be system or network interruptions if new or upgraded systems are defective or not installed properly, or if data centre operators fail to meet agreed service levels.
The Company’s offices and remote working locations 23 have historically experienced, and are projected to continue to experience, climate-related events including drought, heat waves, ice storms, power shortages, and wildfires and resultant air quality impacts.
From time to time, the Company’s offices and remote working locations have historically experienced, and are projected to continue to experience, climate-related events including drought, heat waves, ice storms, power shortages, and wildfires and resultant air quality impacts.
ITEM 1A. RISK FACTORS Investors in the Company’s securities should carefully consider the following risks, as well as the other information contained in MD&A (as defined below) and elsewhere in this Annual Report on Form 10-K for the fiscal year ended February 28, 2023.
ITEM 1A. RISK FACTORS Investors in the Company’s securities should carefully consider the following risks, as well as the other information contained in MD&A (as defined below) and elsewhere in this Annual Report on Form 10-K for the fiscal year ended February 29, 2024.
Responding to proxy contests, media campaigns and other tactics by activist shareholders would be costly and time-consuming, disrupt the Company’s operations and divert the attention of the Board and senior management from the pursuit of the Company’s business strategies, which could adversely affect the Company’s results of operations, financial condition and prospects.
Responding to proxy contests, media campaigns and other tactics by activist shareholders would be costly and time-consuming, disrupt the Company’s operations and divert the attention of the Board and senior management from the pursuit of the Company’s strategies, which could adversely affect the Company’s business.
Real or perceived defects, errors or vulnerabilities in the Company’s software and services, or the failure of the Company’s platform solutions to detect or prevent cyber incidents, could result in the delay or denial of their market acceptance and may harm the Company’s reputation, financial condition and results of operations.
Real or perceived defects, errors or vulnerabilities in the Company’s software and services, or the failure of the Company’s platform solutions to detect or prevent cyber incidents, could result in the delay or denial of their market acceptance and may harm the Company’s financial condition, results of operations and reputation as a security solutions vendor.
These activities involve significant challenges and risks, including: that they may not advance the Company’s strategic objectives or generate satisfactory synergies or return on investment; that the Company may have difficulty integrating and managing new employees, business systems, development teams and product offerings; the potential loss of key employees of an acquired business; additional demands on the Company’s management, resources, systems, procedures and controls; disruption of the Company’s ongoing business; and diversion of management’s attention from other business concerns. 22 Acquisitions, investments or other strategic collaborations or partnerships may involve significant commitments of financial and other resources of the Company.
These activities involve significant challenges and risks, including: that they may not advance the Company’s strategic objectives or generate satisfactory synergies or return on investment; that the Company may have difficulty integrating and managing new employees, business systems, development teams and product offerings; the potential loss of key employees of an acquired business; additional demands on the Company’s management, resources, systems, procedures and controls; disruption of the Company’s ongoing business; and diversion of management’s attention from other business concerns.
The Company’s ability to maintain and expand its market reach, particularly with small and medium-sized businesses, is increasingly dependent on establishing, developing and maintaining relationships with third party resellers and channel partners.
The Company’s ability to maintain and expand its market reach, particularly with small and medium-sized businesses, is increasingly dependent on establishing, developing and maintaining relationships with third party resellers and channel partners, especially in its Cybersecurity business.
For more details, please refer to the discussion of foreign exchange and income taxes in the Company’s MD&A for the fiscal year ended February 28, 2023.
For more details, please refer to the discussion of foreign exchange and income taxes in the Company’s MD&A for the fiscal year ended February 29, 2024.
Regardless of whether patent or other intellectual property infringement claims against the Company have any merit, they could: • adversely affect the Company’s relationships with its customers; • be time-consuming and expensive to evaluate and defend, including in litigation or other proceedings; • result in negative publicity for the Company; 19 • divert management’s attention and resources; • cause product delays or stoppages; • subject the Company to significant liabilities; • require the Company to develop possible workaround solutions that may be costly and disruptive to implement; and • require the Company to cease certain activities or to cease selling its products and services in certain markets.
Regardless of whether patent or other intellectual property infringement claims against the Company have any merit, they could: • adversely affect the Company’s relationships with its customers; • be time-consuming and expensive to evaluate and defend, including in litigation or other proceedings; • result in negative publicity for the Company; • divert management’s attention and resources; • cause product delays or stoppages; • subject the Company to significant liabilities; • require the Company to develop possible workaround solutions that may be costly and disruptive to implement; and • require the Company to cease certain activities or to cease selling its products and services in certain markets. 19 In addition, any such claim may require the Company to enter into costly royalty agreements or obtain a license for the intellectual property rights of third parties.
The 12 Company’s future success depends upon its ability to enhance and integrate its current products and services, including the BlackBerry Spark Suite, to provide for their compatibility with evolving industry standards and operating systems, to address competing technologies and products developed by other companies, and to continue to develop and introduce new products and services offering enhanced performance and functionality on a timely basis at competitive prices.
The Company’s future success depends upon its ability to enhance and integrate its current products and services, to provide for their compatibility with evolving industry standards and operating systems, to address competing technologies and evolving security threats, and to continue to develop and introduce new products and services offering enhanced performance and functionality on a timely basis at competitive prices.
The Company must obtain and maintain certain product approvals and certifications from governmental authorities, regulated enterprise customers and network carrier partners in order to remain competitive, meet contractual requirements and enable its customers to meet their certification needs.
The Company must obtain and maintain certain product approvals and certifications from governmental authorities, regulated enterprise customers and third-party standards bodies in order to remain competitive, meet contractual requirements and enable 13 its customers to meet their certification needs.
If the Malikie Transaction is completed successfully, the consideration payable to the Company from the sale of its non-core patent portfolio will include potential future royalty payments.
The consideration payable to the Company from the sale of its non-core patent portfolio in the Malikie Transaction is expected to include potential future royalty payments.
While the Company maintains cybersecurity insurance, the Company’s coverage may be insufficient to cover all losses or types of claims that may arise from cyber incidents, and any incidents may result in the loss of, or increased costs of, the Company’s insurance. The Company’s business could be negatively affected as a result of actions of activist shareholders.
While the Company maintains cybersecurity insurance, the Company’s coverage may be insufficient to cover all losses or types of claims that may arise from cyber incidents, and any incidents may result in the loss of, or increased costs of, the Company’s insurance.
GAAP may be negatively affected to the extent that any indebtedness, such as the 1.75% Debentures, are accounted for by the Company at fair value and include embedded derivatives which fluctuate in value from period to period.
GAAP may be negatively affected to the extent that any indebtedness is accounted for by the Company at fair value and includes embedded derivatives which fluctuate in value from period to period.
Perceived uncertainties as to the Company’s future direction as a result of shareholder activism could also result in the loss of potential business opportunities and may make it more difficult to attract and retain qualified personnel and business partners. The Company’s success depends on its continuing ability to attract new personnel, retain existing key personnel and manage its staffing effectively.
Perceived uncertainties as to the Company’s future direction as a result of shareholder activism could also result in the loss of potential business opportunities and may make it more difficult to attract and retain qualified personnel and partners.
Periods of volatility in the overall market and in the market price of the Company’s securities may prompt securities class action litigation against the Company which, if not resolved swiftly, can result in substantial costs and a diversion of management’s attention and resources.
The stock market in general, and the securities of technology companies in particular, have often experienced extreme price and volume fluctuations. Periods of volatility in the market price of the Company’s securities may prompt securities class action litigation against the Company which, if not resolved swiftly, can result in substantial costs and a diversion of management’s attention and resources.
The Company may not be able to maintain or expand its customer base for its software and services offerings to grow revenue or achieve sustained profitability. The Company has focused its strategy on software and services to grow revenue and generate sustainable profitability, including by commercializing the BlackBerry Spark Suite and its component solutions.
Risks Related to the Company’s Business The Company may not be able to maintain or expand its customer base for its software and services offerings to grow revenue or achieve sustained profitability. The Company has focused its strategy on software and services to grow revenue and generate sustainable profitability.
Furthermore, some of the features and functionality in the Company’s products and services require interoperability with APIs of other operating systems, and if operating system providers decide to restrict the Company’s access to their APIs, that functionality would be lost and the Company’s business could be impaired.
Furthermore, some of the features and functionality in the Company’s products and services require interoperability with APIs of other operating systems, and if operating system providers decide to restrict the Company’s access to their APIs, that functionality would be lost and the Company’s business could be impaired. 17 Operating system providers have included, and may continue to include, features and functionality in their operating systems that are comparable to elements of the Company’s products and services, thereby making the Company’s platform less valuable.
Such attempts may intensify as a by-product of Russia’s invasion of Ukraine. The Company devotes significant resources to network security, encryption and authentication technologies and other measures, including security policies and procedures, vulnerability testing and awareness training, to mitigate cyber risk to its systems, endpoints and data.
The Company devotes significant resources to network security, encryption and authentication technologies and other measures, including security policies and procedures, vulnerability testing and awareness training, to mitigate cyber risk to its systems, endpoints and data.
The Company has experienced network events in the past, and any future outage in a network or system or other unanticipated problem that leads to an interruption or disruption of BlackBerry services could have a material adverse effect on the Company’s business, results of operations and financial condition, and could adversely affect the Company’s longstanding reputation for reliability.
Any future outage in a network or system or other unanticipated problem that leads to an interruption or disruption of BlackBerry services, however, could have a material adverse effect on the Company’s business, results of operations and financial condition, and could adversely affect the Company’s reputation. The Company may not be successful in fostering an ecosystem of third-party application developers.
Competition for such people is intense, continuous, and increasing in the industries in which the Company participates, and the Company has experienced solicitations of its employees by its competitors.
Competition for such people is intense, continuous, and increasing in the industries in which the Company participates, and the Company has experienced solicitations of its employees by its competitors. Competition for highly skilled personnel is intense, especially in the Waterloo and Ottawa, Ontario areas, where the Company has a substantial presence and need for highly skilled personnel.
Risks Related to the Company’s Business The Company may not be able to enhance, develop, introduce or monetize products and services for the enterprise market in a timely manner with competitive pricing, features and performance.
If these reports are negative, less frequent or less positive than reports on the Company’s competitors’ products, the Company’s competitive position may be harmed. The Company may not be able to enhance, develop, introduce or monetize products and services for the enterprise market in a timely manner with competitive pricing, features and performance.
A breach of any of these covenants could result in a default under the Company’s outstanding indebtedness, which would have a material adverse effect on the Company’s business, results of operations and financial condition.
A breach of any of these covenants could result in a default under the Company’s outstanding indebtedness, which would have a material adverse effect on the Company’s business, results of operations and financial condition. The Company faces substantial asset risk, including the potential for charges related to its long-lived assets and goodwill.
The impact of potential incremental obligations may vary based on the jurisdiction, but regulatory changes could impact whether the Company enters, maintains or expands its presence in a particular market, and whether the Company must dedicate additional resources to comply with these obligations.
The impact of potential incremental obligations may vary based on the jurisdiction, but regulatory changes could impact whether the Company enters, maintains or expands its presence in a particular market, and whether the Company must dedicate additional resources to comply with these obligations. 21 Various countries have enacted laws and regulations, adopted controls, license or permit requirements, and restrictions on the export, import, and use of products or services that contain encryption technology.
The revised draft legislative proposals are generally intended to apply in respect of taxation years beginning on or after October 1, 2023. The Company will continue to monitor the BEPS and interest deductibility limitation proposals and any impact on the Company, which may result in an increase in future taxes and an adverse effect on the Company.
The Company will continue to monitor the BEPS and interest deductibility limitation proposals and any impact on the Company, which may result in an increase in future taxes and an adverse effect on the Company.
Adverse macroeconomic and geopolitical conditions have had and may continue to have a material adverse effect on the Company’s business, results of operations and financial condition. The COVID-19 pandemic and ensuing global semiconductor shortage have had and may continue to have a material adverse impact on production-based royalties for the Company’s QNX automotive software business.
Adverse macroeconomic and geopolitical conditions have had and may continue to have a material adverse effect on the Company’s business, results of operations and financial condition.
Any failure by the Company to attract and retain key employees could have a material adverse effect on the Company’s business, results of operations and financial condition. In addition, during periods of internal reorganization, the Company may experience losses of business continuity and accumulated knowledge, internal compliance gaps or other inefficiencies, including litigation claims by terminated employees.
In addition, during periods of internal reorganization, such as the Company’s ongoing business separation, the Company may experience losses of business continuity and accumulated knowledge, internal compliance gaps or other inefficiencies, including litigation claims by terminated employees.
The Company’s ability to grow software and services revenue is also dependent on its ability to expand its distribution capabilities with partners, resellers and licensees and its ability to maintain a qualified direct sales force, which requires significant time and resources, including investment in systems and training.
IoT revenue recognition is also subject to delays in the development of embedded software platforms and the manufacture of new vehicles by automotive OEMs. The Company’s ability to grow software and services revenue is dependent in part on its ability to maintain a qualified direct sales force, which requires significant time and resources, including investment in systems and training.
If these reports are negative, less frequent or less positive than reports on the Company’s competitors’ products, the Company’s competitive position may be harmed. The occurrence or perception of a breach of the Company’s network cybersecurity measures or an inappropriate disclosure of confidential or personal information could significantly harm its business.
The occurrence or perception of a breach of the Company’s network cybersecurity measures or an inappropriate disclosure of confidential or personal information could significantly harm its business.
Any of the foregoing infringement claims and related litigation could have a significant adverse impact on the Company’s business and operating results, as well as the Company’s ability to generate future revenues and profits. See also “Legal Proceedings” in this Annual Report on Form 10-K.
Such licenses may not be available or they may not be available on commercially reasonable terms. Any of the foregoing infringement claims and related litigation could have a significant adverse impact on the Company’s business and operating results, as well as the Company’s ability to generate future revenues and profits.
Competition for highly skilled personnel is intense, especially in the San Francisco Bay area and in the Waterloo, Ontario area, where the Company has a substantial presence and need for highly skilled personnel. The Company is also substantially dependent on the continued service of its existing engineering personnel because of the complexity and specialization of its products and services.
The Company is also substantially dependent on the continued service of its existing engineering personnel because of the complexity and specialization of its products and services.
There can be no assurance that the Company would be able to restructure or refinance the 1.75% Debentures on terms as favourable as those currently in place.
There can be no assurance that the Company would be able to restructure or refinance the Notes on terms as favourable as those currently in place. The Notes are subject to restrictive and other covenants that may limit the discretion of the Company and its subsidiaries with respect to certain business matters.
Canada has not yet released any domestic legislation in respect of the introduction of the global minimum tax. In November 2022, the Department of Finance Canada released for public comment revised draft legislative proposals which, if enacted, may limit the deductibility of interest and financing expenses for Canadian tax purposes.
In November 2023, the Department of Finance (Canada) released revised draft legislative proposals which, if enacted, may limit the deductibility of interest and financing expenses for Canadian tax purposes. The revised draft legislative proposals are generally intended to apply in respect of taxation years beginning on or after October 1, 2023.
Risks Related to Assets, Indebtedness and Taxation The Company has incurred indebtedness, which could adversely affect its operating flexibility and financial condition. The Company has, and may from time to time in the future have, third-party debt service obligations pursuant to its outstanding indebtedness, which currently includes $365 million aggregate principal amount of 1.75% Debentures maturing on November 13, 2023.
The Company has, and may from time to time in the future have, third-party debt service obligations pursuant to its outstanding indebtedness, which currently includes $200 million aggregate principal amount of 3.00% Senior Convertible Notes maturing on February 15, 2029 (the “Notes”).
Environmental events may negatively affect the Company. A significant portion of the Company’s personnel, including a majority of its senior leadership team, is based in California, in areas known for seismic activity and wildfires. The Company also has operations in numerous locations around the world that expose the Company to additional diverse environmental risks.
Environmental events may negatively affect the Company. The Company has operations in numerous locations around the world that expose the Company to additional diverse environmental risks.
Standards for identifying, measuring and reporting ESG matters continue to evolve, including requirements for ESG-related disclosures that may be required of public companies by the securities and other applicable regulators.
Standards for identifying, measuring and reporting ESG matters continue to evolve, including regulatory requirements such as the Securities and Exchange Commission’s recently-published final rules on climate-related disclosures .
For larger deployments, particularly with enterprise customers in highly regulated industries such as financial services, government, healthcare and transportation, the Company is subject to risks related to increased customer bargaining power, longer sales cycles, regulatory changes, compliance with procurement requirements and contractual performance covenants, and enhanced customer support obligations.
When dealing with automotive, government or large regulated enterprise customers in particular, the Company is subject to risks related to increased customer bargaining power and pricing pressure, extended evaluation periods, regulatory changes, compliance with procurement requirements, complex approval systems, and unanticipated administrative delays.
Removed
Further, although recent attacks on prominent enterprises have increased market awareness of the importance of cybersecurity, if the general level of cyberattacks declines or customers perceive that it has declined, the Company’s ability to attract new customers and expand its sales to existing customers could be harmed.
Added
Further, the Company’s future success depends in part on the growth, if any, in the markets for endpoint security software and embedded solutions, including in software-defined vehicles.
Removed
The Company must invest significant time and resources in providing ongoing value to these customers and in enhancing its reputation as an enterprise software vendor.
Added
If the recent growth trends in these markets do not continue due to security incidents, technological challenges, lack of customer acceptance, weakening economic conditions or other reasons, demand for the Company’s products, and those of its competitors, could be negatively affected. The Company’s sales cycles can be long and unpredictable and its sales efforts require considerable time and expense.
Removed
If these efforts fail, or if the Company’s customers do not renew for other reasons, or if they renew on terms less favourable to the Company, the Company’s revenue may decline and its results of operations could be materially impacted.
Added
For many customers, licensing the Company’s Cybersecurity or IoT solutions represents a significant strategic decision and, as a result, sales cycles can be long and unpredictable, particularly during times of economic uncertainty.
Removed
Publicly-traded companies have increasingly become subject to campaigns by investors seeking to advocate certain governance changes or corporate actions such as financial or operational restructuring, asset divestitures or even sales of the entire company.
Added
The Company’s business could be negatively affected as a result of its business unit separation and cost reduction initiatives.
Removed
Activist shareholders have publicly advocated for certain governance and strategic changes at the Company in the past, and the Company could be subject to additional shareholder activity or demands in the future.
Added
The separation of the Company’s IoT and Cybersecurity businesses into standalone divisions and the streamlining of the Company’s centralized functions is intended to enhance operational focus and flexibility for each business, to drive improved profitability, and to increase optionality for the Company to optimize shareholder value.
Removed
Given the challenges the Company has encountered in its business in recent years, the Company’s current strategic direction or leadership may not satisfy such shareholders who may attempt to promote or effect changes.
Added
If the separation is not managed effectively, it may not provide these intended benefits and may result in a disruption of the Company’s operations, an inability to retain or recruit key personnel, and the impairment of customer relationships.
Removed
If individuals are elected to the Board with a specific agenda to increase short-term shareholder value, it may adversely affect or undermine the Company’s ability to implement its strategic initiatives.
Added
Further, if the separation is not conducted in manner or on a timeline that meets investor expectation, the Company may be subject to shareholder activism advocating for governance or strategic changes at the Company.
Removed
In addition, the Company’s ability to hire and retain qualified personnel may be negatively impacted by the Company’s policies with respect to remote, on-site or hybrid work arrangements, as these may not meet the needs or expectations of employees or may be perceived as less favourable compared to other companies’ policies.
Added
The business separation is expected to result in each division performing corporate functions that have historically been performed on a centralized basis, including certain legal, finance, human resources, marketing and IT functions, which may require each division to increase its investment in these administrative functions.
Removed
The invasion of Ukraine by Russia and resulting global sanctions against Russia have exacerbated the disruption of automotive supply chains and its impact on the Company’s business.
Added
Additionally, the integration of the Cybersecurity and IoT businesses has enabled them to share economies of scope and scale in costs, systems and vendor relationships, and their separation may result in each division paying higher charges for third-party services. The Company’s success depends on its continuing ability to attract new personnel, retain existing key personnel and manage its staffing effectively.
Removed
Although the Company does not believe that inflation had a direct effect on its operations in fiscal 2023, higher interest rates implemented in response to inflation contributed to the non-cash goodwill and long-lived asset impairment charges of $476 million (the “Fiscal 2023 Impairment Charge”) recorded by the Company in the fourth quarter of the year.
Added
Any failure by the Company to attract and retain key employees could have a material adverse effect on the Company’s business, results of operations and financial condition.
Removed
As the Company moves to handle increased data traffic and support more applications or services, the risk of disruption and the expense of maintaining a resilient and secure network services capability may significantly increase. The Company may not be successful in fostering an ecosystem of third-party application developers.
Added
The Company has experienced network events, including those arising from third-party applications, in the past, none of which had a material impact on us.
Removed
Operating system providers have included, and may continue to include, features and functionality in their operating systems that are comparable to elements of the Company’s products and services, thereby making the Company’s platform less valuable.
Added
See also “Legal Proceedings” in this Annual Report on Form 10-K. Risks Related to Assets, Indebtedness and Taxation The Company has incurred indebtedness, which could adversely affect its operating flexibility and financial condition.
Removed
In addition, any such claim may require the Company to enter into costly royalty agreements or obtain a license for the intellectual property rights of third parties. Such licenses may not be available or they may not be available on commercially reasonable terms.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeThe Company’s other significant leased properties include the following: • Ottawa facility, located in Ontario, Canada, totaling approximately 147,000 square feet; • Mississauga facility, located in Ontario, Canada, totaling approximately 75,000 square feet; • San Ramon facility, located in California, United States, totaling approximately 50,000 square feet; • Brampton facility, located in Ontario, Canada, totaling approximately 6,706 square feet; and • Cambridge facility, located in Ontario, Canada, totaling approximately 5,107 square feet. 24 The following table sets forth the location and approximate square footage of the Company’s leased facilities as of February 28, 2023: (Square feet in thousands) Location North America 1,050 Europe, Middle East and Africa 60 Asia Pacific 27 Total 1,137
Biggest changeThe following table sets forth the location and approximate square footage of the Company’s leased facilities as of February 29, 2024: (Square feet in thousands) Location North America 899 Europe, Middle East and Africa 42 Asia Pacific 66 Total 1,007
The Company also operates facilities in the United States, Asia-Pacific, Europe and the Middle East for engineering, sales, marketing, research and development, our data center, and operations, among other general and administrative purposes.
The remaining lease term is approximately three years with the option to renew for an additional three years. Company also operates facilities in the United States, Asia-Pacific, Europe and the Middle East for engineering, sales, marketing, research and development, our data center, and operations, among other general and administrative purposes.
ITEM 2. PROPERTIES The Company’s headquarters are located in Waterloo, Ontario, Canada. The Company’s main campus in Waterloo consists of three leased buildings with approximately 479,000 square feet. The remaining lease term is approximately two years with the option to renew for an additional five years.
ITEM 2. PROPERTIES The Company’s headquarters are located in Waterloo, Ontario, where the campus consists of one leased building with approximately 148,000 square feet. The remaining lease term is approximately one year with the option to renew for an additional five years. The Company’s other significant leased property is its Ottawa, Ontario facility at approximately 147,000 square feet.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

6 edited+2 added−0 removed23 unchanged
Biggest changeBase Period 2/28/2018 2/28/2019 2/28/2020 2/28/2021 2/26/2022 2/28/2023 BlackBerry Limited $ 100.00 $ 71.66 $ 42.59 $ 82.78 $ 56.59 $ 31.96 S&P TSX Capped Composite 100.00 103.60 105.31 116.95 136.81 130.94 S&P 500/Information Technology 100.00 104.35 130.35 192.96 227.26 200.27 This performance graph shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, regardless of any general incorporation language in such filing. 26 Ownership and Exchange Controls There is currently no law, governmental decree or regulation in Canada that restricts the export or import of capital, or which would affect the remittance of dividends, interest or other payments by us to non-resident holders of the Company’s common shares, other than withholding tax requirements.
Biggest changeBase Period 2/28/2019 2/28/2020 2/28/2021 2/26/2022 2/28/2023 2/29/2024 BlackBerry Limited $ 100.00 $ 59.43 115.52 78.97 44.60 31.95 S&P TSX Capped Composite 100.00 101.65 112.88 132.05 126.39 133.53 S&P Software & Services Select Industry Index 100.00 106.99 174.50 157.20 130.57 168.21 S&P 500 Information Technology Index 100.00 124.92 184.92 217.79 191.92 302.25 26 This performance graph shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, regardless of any general incorporation language in such filing.
Resident Holder at any time at which such common share is listed on a “designated stock exchange,” within the meaning of the Tax Act (which includes the TSX and NYSE) unless, at any particular time during the 60-month period that ends at that time, both of the 27 following conditions are met concurrently: (a) 25% or more of the issued shares of any class of the capital stock of the Company were owned by or belonged to one or any combination of (i) the U.S.
Resident Holder at any time at which such common share is listed on a “designated stock exchange,” within the meaning of the Tax Act (which includes the TSX and NYSE) unless, at any particular time during the 60-month period that ends at that time, both of the following conditions are met concurrently: (a) 25% or more of the issued shares of any class of the capital stock of the Company were owned by or belonged to one or any combination of (i) the U.S.
Resident Holder is not entitled to relief under the Treaty. Generally, a common share of a particular U.S. Resident Holder will not be “taxable Canadian property” of such U.S.
Resident Holder is not entitled to relief under the Treaty. 27 Generally, a common share of a particular U.S. Resident Holder will not be “taxable Canadian property” of such U.S.
Unregistered Sales of Equity Securities The Company had no unregistered sales of equity securities during fiscal 2023 that were not previously reported. Share Repurchases The Company did not repurchase any shares during fiscal 2023.
Unregistered Sales of Equity Securities The Company had no unregistered sales of equity securities during fiscal 2024 that were not previously reported. Share Repurchases The Company did not repurchase any shares during fiscal 2024.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES The Company’s common shares are listed and posted for trading on the NYSE and the TSX under the symbol “BB”. On February 28, 2023, there were 1,019 registered holders of record of our common shares.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES The Company’s common shares are listed and posted for trading on the NYSE and the TSX under the symbol “BB”. On February 29, 2024, there were 1,049 registered holders of record of our common shares.
Stock Performance Graph The following graph shows the cumulative total shareholder return of $100 invested in the common shares compared to the S&P/TSX Composite index, and the peer group index (S&P 500 Information Technology index) for the period of February 28, 2018 to February 28, 2023.
The following graph shows the cumulative total shareholder return of $100 invested in the common shares compared to the S&P/TSX Capped Composite index, the peer group index (S&P Software & Services Select Industry Index) and the previous peer group index (S&P 500 Information Technology Index) for the period of February 28, 2019 to February 29, 2024.
Added
Stock Performance Graph In fiscal 2024, the Company adopted a total shareholder return metric for performance-based restricted share unit awards granted in the fourth quarter of fiscal 2024 and the S&P Software & Services Select Industry Index was selected as the most appropriate comparator index for the Company based on the characteristics of its constituents.
Added
Ownership and Exchange Controls There is currently no law, governmental decree or regulation in Canada that restricts the export or import of capital, or which would affect the remittance of dividends, interest or other payments by us to non-resident holders of the Company’s common shares, other than withholding tax requirements.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

180 edited+68 added−50 removed31 unchanged
Biggest changeThe words “expect”, “anticipate”, “estimate”, “may”, “will”, “should”, “could”, “intend”, “believe”, “target”, “plan” and similar expressions are intended to identify forward-looking statements in this Annual Report on Form 10-K, including in the sections in Part I, Item 1 “Business” entitled “Products and Services - IoT”, “Products and Services - Licensing and Other”, “Intellectual Property” and “Human Capital”, and in the sections of this MD&A entitled “Business Overview - COVID-19”, “Business Overview - Russia Ukraine Conflict”, “Non-GAAP Financial Measures - Key Metrics - Annual Recurring Revenue”, “Non-GAAP Financial Measures - Key Metrics - TCV Billings”, “Results of Operations - Fiscal year ended February 28, 2023 28 compared to fiscal year ended February 28, 2022 - Revenue - Revenue by Segment”, “Results of Operations - Three months ended February 28, 2023 compared to the three months ended February 28, 2022 - Revenue - Revenue by Segment” and “Financial Condition - Contractual and Other Obligations”.
Biggest changePrivate Securities Litigation Reform Act of 1995 and applicable Canadian securities laws, including statements relating to: • the Company’s plans, strategies and objectives, including its intentions to increase and enhance its product and service offerings and to patent new innovations; • the Company’s expectations with respect to enhancing operational focus and flexibility, driving improved profitability, and increasing optionality for optimizing shareholder value through the full separation of its principal business units; • the Company’s expectations with respect to its revenue, non-GAAP EPS and adjusted EBITDA in the first quarter of fiscal 2025 and fiscal 2025 as a whole, annual recurring revenue of the Company’s Cybersecurity division and cash usage in the first quarter of fiscal 2025, non-GAAP operating expenses for fiscal 2025 and non-GAAP EPS and cash flow in the fourth quarter fiscal 2025; • the Company’s estimates of purchase obligations and other contractual commitments; and • the Company’s expectations with respect to the sufficiency of its financial resources. 28 The words “expect”, “anticipate”, “estimate”, “may”, “will”, “should”, “could”, “intend”, “believe”, “target”, “plan” and similar expressions are intended to identify forward-looking statements in this Annual Report on Form 10-K, including in the sections in Part I, Item 1 “Business” entitled “Products and Services - IoT”, “Products and Services - Licensing and Other”, “Intellectual Property” and “Human Capital”, and in the sections of this MD&A entitled, “Non-GAAP Financial Measures - Key Metrics - Cybersecurity Annual Recurring Revenue”, “Results of Operations - Fiscal year ended February 29, 2024 compared to fiscal year ended February 28, 2023 - Revenue - Revenue by Segment”, “Results of Operations - Fiscal year ended February 29, 2024 compared to fiscal year ended February 28, 2023 - Operating Expenses”, “Results of Operations - Fiscal year ended February 29, 2024 compared to fiscal year ended February 28, 2023 - Net Income (Loss)” and “Financial Condition - Contractual and Other Obligations”.
Recurring software product revenue is comprised of subscription and term licenses, maintenance arrangements, royalty arrangements and perpetual licenses recognized ratably under ASC 606. Total software and services revenue is comprised of recurring product revenue, non-recurring product revenue and professional services.
Recurring software product revenue is comprised of subscription and term licenses, maintenance arrangements, royalty arrangements and perpetual licenses recognized ratably under ASC 606. Total Software & Services revenue is comprised of recurring product revenue, non-recurring product revenue and professional services.
Intangible assets are comprised of patents, licenses and acquired technology.
Intangible assets are comprised of patents, licenses and acquired technology.
GAAP Revenue $ 88 $ 53 $ 10 $ 151 $ — $ 151 Cost of sales 36 10 4 50 1 51 Gross margin (1) $ 52 $ 43 $ 6 $ 101 $ (1) $ 100 Operating expenses 599 599 Investment income, net (6) (6) Loss before income taxes $ (493) For the Year Ended February 28, 2023 (in millions) Cybersecurity IoT Licensing and Other Segment Totals Reconciling Items Consolidated U.S.
GAAP Revenue $ 88 $ 53 $ 10 $ 151 $ — $ 151 Cost of sales 36 10 4 50 1 51 Gross margin (1) $ 52 $ 43 $ 6 $ 101 $ (1) $ 100 Operating expenses 599 599 Investment income, net 6 6 Loss before income taxes $ (493) 33 For the Year Ended February 28, 2023 (in millions) Cybersecurity IoT Licensing and Other Segment Totals Reconciling Items Consolidated U.S.
As a result, the Company considers it appropriate and reasonable to provide, in addition to U.S. GAAP measures, supplementary non-GAAP financial measures that exclude certain items from the presentation of its financial results. 34 Reconciliation of non-GAAP based measures with most directly comparable U.S.
As a result, the Company considers it appropriate and reasonable to provide, in addition to U.S. GAAP measures, supplementary non-GAAP financial measures that exclude certain items from the presentation of its financial results. Reconciliation of non-GAAP based measures with most directly comparable U.S.
Based in Waterloo, Ontario, the Company leverages artificial intelligence and machine learning to deliver innovative solutions in the areas of cybersecurity, safety and data privacy, and is a leader in the areas of endpoint security, endpoint management, encryption and embedded systems.
Based in Waterloo, Ontario, the Company leverages artificial intelligence (“AI”) and machine learning to deliver innovative solutions in the areas of cybersecurity, safety and data privacy, and is a leader in the areas of endpoint security, endpoint management, encryption, and embedded systems.
In the Company’s internal reports, management evaluates the performance of the Company’s business on a non-GAAP basis by excluding the impact of certain items below from the Company’s U.S. GAAP financial results.
In the Company’s internal reports, management evaluates the performance of the Company’s business on a non-GAAP basis by excluding the impact of certain items from the Company’s U.S. GAAP financial results.
Goodwill Impairment During the fourth quarter of fiscal 2023, as part of its process for setting the annual operating plan for fiscal 2024, the Company updated its estimates of long-term future cash flows to reflect lower revenue and EBITDA growth rate expectations and a reduction in revenue multiples used in the valuation of the BlackBerry Spark reporting unit.
Goodwill Impairment During the fourth quarter of fiscal 2024, as part of its process for setting the annual operating plan for fiscal 2025, the Company updated its estimates of long-term future cash flows to reflect lower revenue and EBITDA growth rate expectations and a reduction in revenue multiples used in the valuation of the BlackBerry Spark reporting unit.
Readers are cautioned that annual recurring revenue (“ARR”), dollar-based net retention rate (“DBNRR”), Cybersecurity total contract value (“TCV”) billings, recurring revenue percentage and QNX royalty backlog do not have any standardized meaning and are unlikely to be comparable to similarly titled measures reported by other companies.
Readers are cautioned that Cybersecurity annual recurring revenue (“ARR”), Cybersecurity dollar-based net retention rate (“DBNRR”), Cybersecurity total contract value (“TCV”) billings, recurring software product revenue percentage and QNX royalty backlog do not have any standardized meaning and are unlikely to be comparable to similarly titled measures reported by other companies.
Readers should carefully review Part I, Item 1A “Risk Factors” and other documents filed from time to time with the Securities and Exchange Commission (“SEC”) and other securities regulators. A number of factors may materially affect our business, financial condition, operating results and prospects.
Readers should carefully review Part I, Item 1A “Risk Factors” and other documents filed by the Company from time to time with the Securities and Exchange Commission (“SEC”) and other securities regulators. A number of factors may materially affect our business, financial condition, operating results and prospects.
The Company believes that these non-GAAP financial measures and non-GAAP ratios provide management, as well as readers of the Company’s financial statements, with a consistent basis for comparison across accounting periods and is useful in helping management and readers understand the Company’s operating results and underlying operational trends.
The Company believes that these non-GAAP financial measures and non-GAAP ratios provide management, as well as readers of the Company’s financial statements, with a consistent basis for comparison across accounting periods and are useful in helping management and readers understand the Company’s operating results and underlying operational trends.
Please refer to our MD&A included in our Annual Report on 10-K for the fiscal year ended February 28, 2022 for a comparative discussion of our fiscal 2022 financial results as compared to our fiscal 2021 financial results, which is incorporated herein by reference.
Please refer to our MD&A included in our Annual Report on 10-K for the fiscal year ended February 28, 2023 for a comparative discussion of our fiscal 2023 financial results as compared to our fiscal 2022 financial results, which is incorporated herein by reference.
Amortization included in Cost of Sales The decrease in amortization expense relating to certain property, plant and equipment and certain intangible assets employed in the Company’s service operations of $2 million was due to the lower cost base of assets.
Amortization included in Cost of Sales The decrease in amortization expense relating to certain property, plant and equipment and certain intangible assets employed in the Company’s service operations of $4 million was due to the lower cost base of assets.
Additional information about the Company can be found on SEDAR at www.sedar.com and on the SEC’s website at www.sec.gov. Cautionary Note Regarding Forward-Looking Statements This Annual Report on Form 10-K contains forward-looking statements within the meaning of certain securities laws, including under the U.S.
Additional information about the Company can be found on SEDAR+ at www.sedarplus.ca and on the SEC’s website at www.sec.gov. Cautionary Note Regarding Forward-Looking Statements This Annual Report on Form 10-K contains forward-looking statements within the meaning of certain securities laws, including under the U.S.
Gross Margin by Segment See “Business Overview - Segment Reporting” and “Fiscal 2023 Summary Results of Operations” for information about the Company’s operating segments and the basis of operating segment results.
Gross Margin by Segment See “Business Overview - Segment Reporting” and “Fiscal 2024 Summary Results of Operations” for information about the Company’s operating segments and the basis of operating segment results.
This is not indicative of the Company’s core operating performance, and may not be meaningful when comparing the Company’s operating performance against that of prior periods. • Restructuring charges .
This was not indicative of the Company’s core operating performance, and may not be meaningful when comparing the Company’s operating performance against that of prior periods. • Restructuring charges .
Gross Margin by Segment See “Business Overview” and “Fiscal 2023 Summary Results of Operations” for information about the Company’s operating segments and the basis of operating segment results.
Gross Margin by Segment See “Business Overview” and “Fiscal 2024 Summary Results of Operations” for information about the Company’s operating segments and the basis of operating segment results.
A decline in the Company’s performance, the Company’s market capitalization and future changes to the Company’s assumptions and estimates used in the LLA impairment test, particularly the expected future cash flows, remaining useful life of the primary asset and terminal value of the asset group, may result in further impairment charges in future periods of some or all of the assets on the Company’s balance sheet.
Continued declines in the Company’s performance, the Company’s market capitalization and future changes to the Company’s assumptions and estimates used in the LLA impairment test, particularly the expected future cash flows, remaining useful life of the primary asset and terminal value of the asset group, may result in further impairment charges in future periods of some or all of the assets on the Company’s balance sheet.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) should be read together with the consolidated financial statements and the accompanying notes (the “Consolidated Financial Statements”) of BlackBerry Limited, for the fiscal year ended February 28, 2023.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) should be read together with the consolidated financial statements and the accompanying notes (the “Consolidated Financial Statements”) of BlackBerry Limited, for the fiscal year ended February 29, 2024.
GAAP-based measures to adjusted measures for the three months and year ended February 28, 2023. 32 The following tables reconcile the Company’s segment results for the three months and year ended February 28, 2022 to consolidated U.S. GAAP results: For the Three Months Ended February 28, 2022 (in millions) Cybersecurity IoT Licensing and Other Segment Totals Reconciling Items Consolidated U.S.
GAAP-based measures to adjusted measures for the three months and year ended February 29, 2024. The following tables reconcile the Company’s segment results for the three months and year ended February 28, 2023 to consolidated U.S. GAAP results: For the Three Months Ended February 28, 2023 (in millions) Cybersecurity IoT Licensing and Other Segment Totals Reconciling Items Consolidated U.S.
Forward-looking statements are based on estimates and assumptions made by the Company in light of its experience and its perception of historical trends, current conditions and expected future developments, as well as other factors that the Company believes are appropriate in the circumstances, including but not limited to, the Company’s expectations regarding its business, strategy, opportunities and prospects, the launch of new products and services, general economic conditions, the ongoing COVID-19 pandemic, competition, and the Company’s expectations regarding its financial performance.
Forward-looking statements are based on estimates and assumptions made by the Company in light of its experience and its perception of historical trends, current conditions and expected future developments, as well as other factors that the Company believes are appropriate in the circumstances, including but not limited to, the Company’s expectations regarding its business, strategy, opportunities and prospects, the launch of new products and services, general economic conditions, competition, the Company’s expectations regarding its financial performance, and the Company’s expectations regarding the planned separation of its businesses.
The increase in net loss of $746 million was primarily due to an increase in operating expenses, as described above in “Operating Expenses”, a decrease in revenue as described above in “Revenue by Segment” and a decrease in gross margin percentage, as described above in “Consolidated Gross Margin Percentage”.
The decrease in net loss of $604 million was primarily due to a decrease in operating expenses, as described above in “Operating Expenses” and an increase in revenue as described above in “Revenue by Segment”, partially offset by a decrease in gross margin percentage, as described above in “Consolidated Gross Margin Percentage”.
The decrease in net income of $639 million was primarily due to an increase in operating expenses, as described above in “Operating Expenses”, a decrease in revenue as described above in “Revenue by Segment” and a decrease in gross margin percentage as described above in “Consolidated Gross Margin Percentage”.
The increase in adjusted net income of $29 million was primarily due to an increase in revenue as described above in 53 “Revenue by Segment”, an increase in gross margin percentage, as described above in “Consolidated Gross Margin Percentage” and a decrease in operating expenses, as described above in “Operating Expenses”.
Taking these factors into account and based on its current financial projections, the Company believes its financial resources, together with expected future operating cash generating and operating expense reduction activities, should be sufficient to meet funding requirements for current financial commitments and future operating expenditures not yet committed, and should provide the necessary financial capacity for the foreseeable future.
Based on its current financial projections, the Company believes its financial resources, together with expected future operating cash generating and operating expense reduction activities, should be sufficient to meet funding requirements for current financial commitments and future operating expenditures not yet committed, and should provide the necessary financial capacity for the foreseeable future.
GAAP basis in the fourth quarter of 2023 and 2021 do not include the dilutive effect of the Debentures as to do so would be anti-dilutive. Diluted loss per share on a U.S.
GAAP basis in the fourth quarter of 2024 and 2023 do not include the dilutive effect of the Debentures or Notes as to do so would be anti-dilutive. Diluted loss per share on a U.S.
Investing Activities During the fiscal year ended February 28, 2023, cash flows provided by investing activities were $176 million and included cash provided by transactions involving the acquisitions of restricted short-term, short-term and long-term investments, net of the proceeds on sale or maturity in the amount of $200 million and proceeds on sale of property, plant and equipment of $17 million, partially offset by intangible asset additions of $34 million, and acquisitions of property, plant and equipment of $7 million.
During fiscal 2023, cash flows provided by investing activities were $176 million and included cash flows used in transactions involving the acquisitions of short-term and long-term investments, net of the proceeds on sale or maturity in the amount of $200 million and proceeds on sale of property, plant and equipment of $17 million, partially offset by intangible asset additions of $34 million and acquisitions of property, plant and equipment of $7 million.
GAAP based measures for the three months ended February 28, 2023, February 28, 2022 and February 28, 2021 Readers are cautioned that adjusted gross margin, adjusted gross margin percentage, adjusted operating expense, adjusted net income (loss), adjusted income (loss) per share, adjusted research and development expense, adjusted selling, marketing and administrative expense, adjusted amortization expense, adjusted operating income (loss), adjusted EBITDA, adjusted operating income (loss) margin percentage, adjusted EBITDA margin percentage and free cash flow (usage) and similar measures do not have any standardized meaning prescribed by U.S.
GAAP based measures for the three months ended February 29, 2024, February 28, 2023 and February 28, 2022 Readers are cautioned that adjusted gross margin, adjusted gross margin percentage, adjusted operating expense, adjusted net income (loss), adjusted earnings (loss) per share, adjusted research and development expense, adjusted sales and marketing expense, adjusted general and administrative expense, adjusted amortization expense, adjusted operating income (loss), adjusted EBITDA, adjusted operating income (loss) margin percentage, adjusted EBITDA margin percentage and free cash flow (usage) and similar measures do not have any standardized meaning prescribed by U.S.
Results of Operations - Fiscal year ended February 28, 2023 compared to fiscal year ended February 28, 2022 Revenue Revenue by Segment Comparative breakdowns of revenue by segment are set forth below.
Results of Operations - Fiscal year ended February 29, 2024 compared to fiscal year ended February 28, 2023 Revenue Revenue by Segment Comparative breakdowns of revenue by segment are set forth below.
GAAP basis for fiscal 2021 does not include the dilutive effect of the Debentures (as defined below) as to do so would be anti-dilutive. Diluted loss per share on a U.S. GAAP basis for fiscal 2023, fiscal 2022 and fiscal 2021 does not include the dilutive effect of stock-based compensation as to do so would be anti-dilutive.
GAAP basis for fiscal 2024 does not include the dilutive effect of the Debentures and the Notes as to do so would be anti-dilutive. Diluted loss per share on a U.S. GAAP basis for fiscal 2024, fiscal 2023, and fiscal 2022 does not include the dilutive effect of stock-based compensation as to do so would be anti-dilutive.
GAAP Accounting Standards Codification Section 280 based on the “management” approach. The management approach designates the internal reporting used by the CODM for making decisions and assessing performance of the Company’s reportable operating segments. See “Business Overview - Segment Reporting” for a description of the Company’s operating segments, as well as Note 12 to the Consolidated Financial Statements.
GAAP Accounting Standards Codification Section 280 based on the “management” approach. The management approach designates the internal reporting used by the CODM for making decisions and assessing performance of the Company’s reportable operating segments. See Note 12 to the Consolidated Financial Statements for a description of the Company’s operating segments.
Comparative breakdowns of certain key metrics for the three months ended February 28, 2023 and February 28, 2022 are set forth below.
Comparative breakdowns of certain key metrics for the three months ended February 29, 2024 and February 28, 2023 are set forth below.
The decrease was primarily due to a decrease in revenue from BlackBerry Spark and Licensing and Other, partially offset by an increase in revenue from BlackBerry QNX and Secusmart due to the reasons discussed above in “Revenue by Segment”, as much of the Company’s cost of sales does not significantly fluctuate based on business volume.
The increase was primarily due to the completed Malikie Transaction and an increase in revenue from Secusmart, partially offset by a decrease in revenue from BlackBerry Spark due to the reasons discussed above in “Revenue by Segment”, as much of the Company’s cost of sales does not significantly fluctuate based on business volume.
GAAP-based measures to adjusted measures for the three months ended February 28, 2023, November 30, 2022, February 28, 2022 and February 28, 2021. U.S.
GAAP-based measures to adjusted measures for the three months ended February 29, 2024, November 30, 2023, February 28, 2023 and February 28, 2022. U.S.
The Company’s net effective income tax rate also reflects the geographic mix of earnings in jurisdictions with different income tax rates. Net Income (Loss) The Company’s net loss for the fourth quarter of fiscal 2023 was $495 million, or $0.85 basic and diluted loss per share on a U.S.
The Company’s net effective income tax rate also reflects the geographic mix of earnings in jurisdictions with different income tax rates. Net Income (Loss) The Company’s net loss for the fourth quarter of fiscal 2024 was $56 million, or $0.10 basic and diluted loss per share on a U.S.
GAAP-based measures to adjusted measures for the three months and year ended February 28, 2022. Financial Highlights The Company had approximately $487 million in cash, cash equivalents and investments as of February 28, 2023 (Fiscal 2022 - $770 million).
GAAP-based measures to adjusted measures for the three months and year ended February 28, 2023. Financial Highlights The Company had approximately $298 million in cash, cash equivalents and investments as of February 29, 2024 (Fiscal 2023 - $487 million).
(2) Adjusted EBITDA margin % is calculated by dividing adjusted EBITDA by revenue. 38 Adjusted operating income (loss), adjusted EBITDA, adjusted operating income (loss) margin percentage and adjusted EBITDA margin percentage for the fiscal years ended February 28, 2023, February 28, 2022 and February 28, 2021 are reflected in the table below.
(2) Adjusted EBITDA margin % is calculated by dividing adjusted EBITDA by revenue. 39 Adjusted operating income (loss), adjusted EBITDA, adjusted operating income (loss) margin percentage and adjusted EBITDA margin percentage for the fiscal years ended February 29, 2024, February 28, 2023 and February 28, 2022 are reflected in the table below.
GAAP results: For the Three Months Ended February 28, 2023 (in millions) Cybersecurity IoT Licensing and Other Segment Totals Reconciling Items Consolidated U.S.
GAAP results: For the Three Months Ended February 29, 2024 (in millions) Cybersecurity IoT Licensing and Other Segment Totals Reconciling Items Consolidated U.S.
The Company’s QNX royalty backlog was approximately $640 million at the end of the fourth quarter of fiscal 2023 and increased compared to approximately $560 million at the end of the first quarter of fiscal 2023.
The Company’s QNX royalty backlog was approximately $815 million at the end of the fourth quarter of fiscal 2024 and increased compared to approximately $640 million at the end of the fourth quarter of fiscal 2023.
GAAP basic earnings (loss) per share for the three months ended February 28, 2023, February 28, 2022 and February 28, 2021 to adjusted net income (loss) and adjusted basic earnings (loss) per share is reflected in the table below: For the Three Months Ended (in millions, except per share amounts) February 28, 2023 February 28, 2022 February 28, 2021 Basic loss per share Basic earnings per share Basic earnings (loss) per share Net income (loss) $ (495) $(0.85) $ 144 $0.25 $ (315) $(0.56) Restructuring charges 7 — — Stock compensation expense 10 5 17 Debentures fair value adjustment (26) (165) 258 Acquired intangibles amortization 15 22 32 Goodwill impairment charge 245 — — LLA impairment charge 231 — 22 Adjusted net income (loss) $ (13) $(0.02) $ 6 $0.01 $ 14 $0.02 Reconciliation of U.S.
GAAP basic earnings (loss) per share for the three months ended February 29, 2024, February 28, 2023 and February 28, 2022 to adjusted net income (loss) and adjusted basic earnings (loss) per share is reflected in the table below: For the Three Months Ended (in millions, except per share amounts) February 29, 2024 February 28, 2023 February 28, 2022 Basic earnings (loss) per share Basic loss per share Basic earnings per share Net income (loss) $ (56) $(0.10) $ (495) $(0.85) $ 144 $0.25 Restructuring charges 20 7 — Stock compensation expense 5 10 5 Debentures fair value adjustment — (26) (165) Acquired intangibles amortization 8 15 22 Goodwill impairment charge 35 245 — LLA impairment charge 4 231 — Adjusted net income (loss) $ 16 $0.03 $ (13) $(0.02) $ 6 $0.01 Reconciliation of U.S.
GAAP measures for the years ended February 28, 2023, February 28, 2022 and February 28, 2021 A reconciliation of the most directly comparable U.S.
GAAP based measures for the years ended February 29, 2024, February 28, 2023 and February 28, 2022 A reconciliation of the most directly comparable U.S.
GAAP net cash provided by (used in) operating activities for the three months ended February 28, 2023, February 28, 2022 and February 28, 2021 to free cash flow (usage) is reflected in the table below: For the Three Months Ended (in millions) February 28, 2023 February 28, 2022 February 28, 2021 Net cash provided by (used in) operating activities $ (7) $ 10 $ 51 Acquisition of property, plant and equipment (2) (2) $ (3) Free cash flow (usage) $ (9) $ 8 $ 48 Reconciliation of U.S.
GAAP net cash provided by (used in) operating activities for the three months ended February 29, 2024, February 28, 2023 and February 28, 2022 to free cash flow (usage) is reflected in the table below: For the Three Months Ended (in millions) February 29, 2024 February 28, 2023 February 28, 2022 Net cash provided by (used in) operating activities $ (15) $ (7) $ 10 Acquisition of property, plant and equipment (2) (2) $ (2) Free cash flow (usage) $ (17) $ (9) $ 8 40 Reconciliation of U.S.
Income Taxes For the fourth quarter of fiscal 2023, the Company’s net effective income tax expense rate was approximately 0% (fourth quarter of fiscal 2022 - net effective income tax expense rate of approximately 1%).
Income Taxes For the fourth quarter of fiscal 2024, the Company’s net effective income tax expense rate was approximately 8% (fourth quarter of fiscal 2023 - net effective income tax expense rate of approximately 0%).
GAAP financial measures for the three months ended February 28, 2023, February 28, 2022 and February 28, 2021 to adjusted financial measures is reflected in the table below: For the Three Months Ended (in millions) February 28, 2023 February 28, 2022 February 28, 2021 Gross margin $ 100 $ 124 $ 152 Stock compensation expense 1 1 1 Adjusted gross margin $ 101 $ 125 $ 153 Gross margin % 66.2 % 67.0 % 72.4 % Stock compensation expense 0.7 % 0.6 % 0.5 % Adjusted gross margin % 66.9 % 67.6 % 72.9 % Reconciliation of U.S.
GAAP financial measures for the three months ended February 29, 2024, February 28, 2023 and February 28, 2022 to adjusted financial measures is reflected in the table below: For the Three Months Ended (in millions) February 29, 2024 February 28, 2023 February 28, 2022 Gross margin $ 129 $ 100 $ 124 Stock compensation expense — 1 1 Adjusted gross margin $ 129 $ 101 $ 125 Gross margin % 74.6 % 66.2 % 67.0 % Stock compensation expense — % 0.7 % 0.6 % Adjusted gross margin % 74.6 % 66.9 % 67.6 % Reconciliation of U.S.
The Company’s net effective income tax rate reflects the change in unrecognized income tax benefits, if any, and the fact that the Company has a significant valuation allowance against its deferred tax assets, and in particular, the change in fair value of the Debentures, amongst other items, was offset by a corresponding adjustment of the valuation allowance.
The Company’s net effective income tax rate reflects the change in unrecognized income tax benefits, if any, and the fact that the Company has a significant valuation allowance against its deferred tax assets, and in particular, the change in loss carry forwards, research and development credits, amongst other items, was offset by a corresponding adjustment of the valuation allowance.
Business Overview The Company provides intelligent security software and services to enterprises and governments around the world. The Company secures more than 500 million endpoints including more than 215 million vehicles.
Business Overview The Company provides intelligent security software and services to enterprises and governments around the world. The Company secures more than 235 million vehicles.
The Company recognized adjusted net loss of $103 million, or adjusted loss of $0.18 per share, on a non-GAAP basis in fiscal 2023 (fiscal 2022 - adjusted net loss of $55 million and adjusted loss of $0.10 per share). See “Non-GAAP Financial Measures” below.
The Company recognized adjusted net income of $31 million, or adjusted income of $0.05 per share, on a non-GAAP basis in fiscal 2024 (fiscal 2023 - adjusted net loss of $103 million and adjusted loss of $0.18 per share). See “Non-GAAP Financial Measures” below.
For the Three Months Ended (in millions) February 28, 2023 February 28, 2022 February 28, 2021 Operating income (loss) $ (499) $ 146 $ (313) Non-GAAP adjustments to operating income (loss) Restructuring charges 7 — — Stock compensation expense 10 5 17 Debentures fair value adjustment (26) (165) 258 Acquired intangibles amortization 15 22 32 Goodwill impairment charge 245 — — LLA impairment charge 231 — 22 Total non-GAAP adjustments to operating income (loss) 482 (138) 329 Adjusted operating income (loss) (17) 8 16 Amortization 20 34 49 Acquired intangibles amortization (15) (22) (32) Adjusted EBITDA $ (12) $ 20 $ 33 Revenue $ 151 $ 185 $ 210 Adjusted operating income (loss) margin % (1) (11%) 4% 8% Adjusted EBITDA margin % (2) (8%) 11% 16% ______________________________ (1) Adjusted operating income (loss) margin % is calculated by dividing adjusted operating income (loss) by revenue.
For the Three Months Ended (in millions) February 29, 2024 February 28, 2023 February 28, 2022 Operating income (loss) $ (56) $ (499) $ 146 Non-GAAP adjustments to operating income (loss) Restructuring charges 20 7 — Stock compensation expense 5 10 5 Debentures fair value adjustment — (26) (165) Acquired intangibles amortization 8 15 22 Goodwill impairment charge 35 245 — LLA impairment charge 4 231 — Total non-GAAP adjustments to operating income (loss) 72 482 (138) Adjusted operating income (loss) 16 (17) 8 Amortization 13 20 34 Acquired intangibles amortization (8) (15) (22) Adjusted EBITDA $ 21 $ (12) $ 20 Revenue $ 173 $ 151 $ 185 Adjusted operating income (loss) margin % (1) 9% (11%) 4% Adjusted EBITDA margin % (2) 12% (8%) 11% ______________________________ (1) Adjusted operating income (loss) margin % is calculated by dividing adjusted operating income (loss) by revenue.
Income Taxes For fiscal 2023, the Company’s net effective income tax expense rate was approximately 2% (fiscal 2022 - net effective income tax expense of approximately 37%).
Income Taxes For fiscal 2024, the Company’s net effective income tax expense rate was approximately 23% (fiscal 2023 - net effective income tax expense rate of approximately 2%).
Cash flows for the fiscal year ended February 28, 2023 compared to the fiscal year ended February 28, 2022 were as follows: For the Fiscal Years Ended (in millions) February 28, 2023 February 28, 2022 Change February 28, 2021 Change Net cash flows provided by (used in): Operating activities $ (263) $ (28) $ (235) $ 82 $ (110) Investing activities 176 207 (31) (65) 272 Financing activities 6 10 (4) (227) 237 Effect of foreign exchange gain (loss) on cash and cash equivalents (3) (1) (2) 2 (3) Net increase (decrease) in cash and cash equivalents $ (84) $ 188 $ (272) $ (208) $ 396 Operating Activities The increase in net cash flows used in operating activities of $235 million primarily reflects the net changes in working capital and includes the payment of the $165 million U.S. securities class actions settlement.
Cash flows for the fiscal year ended February 29, 2024 compared to the fiscal year ended February 28, 2023 were as follows: For the Fiscal Years Ended (in millions) February 29, 2024 February 28, 2023 Change February 28, 2022 Change Net cash flows provided by (used in): Operating activities $ (3) $ (263) $ 260 $ (28) $ (235) Investing activities 46 176 (130) 207 (31) Financing activities (165) 6 (171) 10 (4) Effect of foreign exchange loss on cash and cash equivalents — (3) 3 (1) (2) Net increase (decrease) in cash and cash equivalents $ (122) $ (84) $ (38) $ 188 $ (272) Operating Activities The decrease in net cash flows used in operating activities of $260 million primarily reflects the net changes in working capital and includes the payment of the $165 million U.S. securities class actions settlement in fiscal 2023.
The Company believes that restructuring costs relating to employee termination benefits, facilities and other costs pursuant to the Cost Optimization Program to reduce its annual expenses amongst R&D, infrastructure and other functions do not reflect expected future operating expenses, are not indicative of the Company’s core operating performance, and may not be meaningful when comparing the Company’s operating performance against that of prior periods. • Stock compensation expenses .
The Company believes that restructuring costs relating to employee termination benefits, facilities, streamlining the Company’s centralized corporate functions into Cybersecurity and IoT specific teams and other costs pursuant to the programs to reduce its annual expenses amongst R&D, infrastructure and other functions do not reflect expected future operating expenses, are not indicative of the Company’s core operating performance, and may not be meaningful when comparing the Company’s operating performance against that of prior periods • Stock compensation expenses .
The analysis requires significant judgment, including estimation of future cash flows, which is dependent on internal forecasts, estimation of the long-term rates of revenue growth for the Company’s reporting units, estimation of the useful life over which cash flows will occur, terminal growth rates, profitability measures, and determination of the discount rates for the reporting units.
The analysis requires significant judgment, including estimation of future cash flows, which is dependent on internal forecasts, estimation of the long-term rates of revenue growth for the Company’s reporting units, estimation of the useful life over which cash flows will occur, estimation of the total amount of variable consideration to be received under royalty arrangements, terminal growth rates, profitability measures, and determination of the discount rates for the reporting units.
The Company’s net effective income tax rate also reflects the geographic mix of earnings in jurisdictions with different income tax rates. Net Income (Loss) The Company’s net loss for fiscal 2023 was $734 million, or $1.27 basic loss per share and $1.35 diluted loss per share on a U.S.
The Company’s net effective income tax rate also reflects the geographic mix of earnings in jurisdictions with different income tax rates. Net Income (Loss) The Company’s net loss for fiscal 2024 was $130 million, or $0.22 basic and diluted loss per share on a U.S.
On March 30, 2023, the Company announced financial results for the three months and fiscal year ended February 28, 2023, which included certain non-GAAP financial measures and non-GAAP ratios, including adjusted gross margin, adjusted gross margin percentage, adjusted operating expense, adjusted net income (loss), adjusted income (loss) per share, adjusted research and development expense, adjusted selling, marketing and administrative expense, adjusted amortization expense, adjusted operating income (loss), adjusted EBITDA, adjusted operating income (loss) margin percentage, adjusted EBITDA margin percentage and free cash flow (usage).
On April 3, 2024, the Company announced financial results for the three months and fiscal year ended February 29, 2024, which included certain non-GAAP financial measures and non-GAAP ratios, including adjusted gross margin, adjusted gross margin percentage, adjusted operating expense, adjusted net income (loss), adjusted earnings (loss) per share, adjusted research and development expense, adjusted sales and marketing expense, adjusted general and administrative expense, adjusted amortization expense, adjusted operating income (loss), adjusted EBITDA, adjusted operating income (loss) margin percentage, adjusted EBITDA margin percentage and free cash flow (usage).
Cybersecurity ARR was approximately $298 million in the fourth quarter of fiscal 2023 and decreased compared to $313 million in the third quarter of fiscal 2023 and decreased compared to $347 million in the fourth quarter of fiscal 2022 primarily due to customer churn in the BlackBerry Spark business.
Cybersecurity ARR was approximately $280 million in the fourth quarter of fiscal 2024 and increased compared to $273 million in the third quarter of fiscal 2024 and decreased compared to $298 million in the fourth quarter of fiscal 2023 primarily due to customer churn in the BlackBerry Spark business.
For purposes of comparability, the Company’s non-GAAP financial measures for the three months ended and year ended February 28, 2021 have been updated to conform to the current year’s presentation. • Debentures fair value adjustment . The Company has elected to measure its outstanding 1.75% Debentures at fair value in accordance with the fair value option under U.S. GAAP.
For purposes of comparability, the Company’s non-GAAP financial measures for the three months ended and years ended February 28, 2023 and February 28, 2022 have been updated to conform to the current year’s presentation. 34 • Debentures fair value adjustment . The Company elected to measure the Debentures at fair value in accordance with the fair value option under U.S.
Adjusted net loss was $13 million in the fourth quarter of fiscal 2023 (fourth quarter of fiscal 2022 - adjusted net income of $6 million).
Adjusted net income was $16 million in the fourth quarter of fiscal 2024 (fourth quarter of fiscal 2023 - adjusted net loss of $13 million).
The Company’s net effective income tax rate reflects the change in unrecognized income tax benefits, if any, and the fact that the Company has a significant valuation allowance against its deferred tax assets, and in particular, the change in fair value of the 1.75% Debentures, amongst other items, was offset by a corresponding adjustment of the valuation allowance.
The Company’s net effective income tax rate reflects the change in unrecognized income tax benefits, if any, and the fact that the Company has a significant valuation allowance against its deferred tax assets, and in particular, the change in loss carry forwards, research and development credits, amongst other items, was offset by a corresponding adjustment of the valuation allowance.
The decrease was primarily due to a decrease in revenue from BlackBerry Spark and Secusmart due to the reasons discussed above in “Revenue by Segment” as much of the Company’s cost of sales does not significantly fluctuate based on business volume.
The increase was primarily due to an increase in revenue from BlackBerry QNX and Licensing and Other due to the reasons discussed above in “Revenue by Segment” as much of the Company’s cost of sales does not significantly fluctuate based on business volume.
The weighted average number of shares outstanding was 571 million common shares for basic earnings per share and 631 million common shares for diluted loss per share for the fiscal year ended February 28, 2022.
The weighted average number of shares outstanding was 579 million common shares for basic loss per share and 639 million common shares for diluted loss per share for the fiscal year ended February 28, 2023.
Each period, the fair value of the 1.75% Debentures is recalculated and resulting non-cash income and charges from the change in fair value from non-credit components of the 1.75% Debentures are recognized in income. The amount can vary each period depending on changes to the Company’s share price, share price volatility and credit indices.
GAAP. Each period, the fair value of the Debentures was recalculated and the resulting non-cash income and charges from the change in fair value from non-credit components of the Debentures were recognized in income. The amount varied each period depending on changes to the Company’s share price, share price volatility and credit indices.
GAAP operating expense (income) for the three months ended February 28, 2023, November 30, 2022, February 28, 2022 and February 28, 2021 to adjusted operating expense is reflected in the table below: For the Three Months Ended (in millions) February 28, 2023 November 30, 2022 February 28, 2022 February 28, 2021 Operating expense (income) $ 599 $ 111 $ (22) $ 465 Restructuring charges 7 — — — Stock compensation expense 9 8 4 16 Debentures fair value adjustment (1) (26) (56) (165) 258 Acquired intangibles amortization 15 22 22 32 Goodwill impairment charge 245 — — — LLA impairment charge 231 — — 22 Adjusted operating expense $ 118 $ 137 $ 117 $ 137 ______________________________ (1) See “Fiscal 2023 Summary Results of Operations - Financial Highlights - Debentures Fair Value Adjustment”. 35 Reconciliation of U.S.
GAAP operating expense (income) for the three months ended February 29, 2024, November 30, 2023, February 28, 2023 and February 28, 2022 to adjusted operating expense is reflected in the table below: For the Three Months Ended (in millions) February 29, 2024 November 30, 2023 February 28, 2023 February 28, 2022 Operating expense (income) $ 185 $ 138 $ 599 $ (22) Restructuring charges 20 9 7 — Stock compensation expense 5 7 9 4 Debentures fair value adjustment (1) — (13) (26) (165) Acquired intangibles amortization 8 9 15 22 Goodwill impairment charge 35 — 245 — LLA impairment charge 4 11 231 — Adjusted operating expense $ 113 $ 115 $ 118 $ 117 ______________________________ (1) See “Fiscal 2024 Summary Results of Operations - Financial Highlights - Debentures Fair Value Adjustment”.
Operating Expenses The table below presents a comparison of research and development, selling, marketing and administration, and amortization expenses for the quarter ended February 28, 2023, compared to the quarter ended November 30, 2022 and the quarter ended February 28, 2022.
Operating Expenses The table below presents a comparison of research and development, sales and marketing, general and administrative, and amortization expenses for the quarter ended February 29, 2024, compared to the quarter ended November 30, 2023 and the quarter ended February 28, 2023.
Total Software and Services product revenue, excluding professional services, was approximately 90% recurring in the fourth quarter of fiscal 2023 and increased compared to approximately 80% recurring in the third quarter of fiscal 2023 and fourth quarter of fiscal 2022.
Total Software & Services product revenue, excluding professional services, was approximately 90% recurring in the fourth quarter of fiscal 2024 and increased compared to approximately 70% recurring in the third quarter of fiscal 2024 due to product mix and was consistent with the fourth quarter of fiscal 2023.
For the Three Months Ended (in millions) February 28, 2023 February 28, 2022 Change Cybersecurity Annual Recurring Revenue $ 298 $ 347 $ (49) Cybersecurity Dollar-Based Net Retention Rate 81 % 91 % (10 %) Cybersecurity Total Contract Value Billings $ 107 $ 125 $ (18) Recurring Software Product Revenue ~ 90% ~ 80 % 10 % Annual Recurring Revenue The Company defines ARR as the annualized value of all subscription, term, maintenance, services, and royalty contracts that generate recurring revenue as of the end of the reporting period.
For the Three Months Ended (in millions) February 29, 2024 February 28, 2023 Change Cybersecurity Annual Recurring Revenue $ 280 $ 298 $ (18) Cybersecurity Dollar-Based Net Retention Rate 85 % 81 % 4 % Cybersecurity Total Contract Value Billings $ 91 $ 107 $ (16) Recurring Software Product Revenue Percentage ~ 90% ~ 90 % — % QNX Royalty Backlog $ 815 $ 640 $ 175 Cybersecurity Annual Recurring Revenue The Company defines ARR as the annualized value of all subscription, term, maintenance, services, and royalty contracts that generate recurring revenue as of the end of the reporting period.
In fiscal 2023, the Company recognized revenue of $656 million and incurred a net loss of $734 million, or $1.27 basic loss per share and $1.35 diluted loss per share on a U.S. GAAP basis (fiscal 2022 - revenue of $718 million and net income of $12 million, or $0.02 basic earnings per share and $0.31 diluted loss per share).
In fiscal 2024, the Company recognized revenue of $853 million and incurred a net loss of $130 million, or $0.22 basic and diluted loss per share on a U.S. GAAP basis (fiscal 2023 - revenue of $656 million and net loss of $734 million, or $1.27 basic loss per share and $1.35 diluted loss per share).
GAAP financial measures for the years ended February 28, 2023, February 28, 2022 and February 28, 2021 to adjusted financial measures is reflected in the table below: For the Fiscal Years Ended (in millions) February 28, 2023 February 28, 2022 February 28, 2021 Gross margin $ 419 $ 467 $ 643 Stock compensation expense 3 4 5 Adjusted gross margin $ 422 $ 471 $ 648 Gross margin % 63.9 % 65.0 % 72.0 % Stock compensation expense 0.4 % 0.6 % 0.6 % Adjusted gross margin % 64.3 % 65.6 % 72.6 % Operating expense $ 1,144 $ 469 $ 1,750 Restructuring charges 11 — 2 Stock compensation expense 28 26 47 Debentures fair value adjustment (1) (138) (212) 372 Acquired intangibles amortization 82 115 129 Goodwill impairment charge 245 — 594 LLA impairment charge 235 — 43 Litigation settlement 165 — — Adjusted operating expense $ 516 $ 540 $ 563 ______________________________ (1) See “Fiscal 2023 Summary Results of Operations - Financial Highlights - Debentures Fair Value Adjustment”.
GAAP financial measures for the years ended February 29, 2024, February 28, 2023 and February 28, 2022 to adjusted financial measures is reflected in the table below: For the Fiscal Years Ended (in millions) February 29, 2024 February 28, 2023 February 28, 2022 Gross margin $ 520 $ 419 $ 467 Stock compensation expense 3 3 4 Adjusted gross margin $ 523 $ 422 $ 471 Gross margin % 61.0 % 63.9 % 65.0 % Stock compensation expense 0.3 % 0.4 % 0.6 % Adjusted gross margin % 61.3 % 64.3 % 65.6 % Operating expense $ 645 $ 1,144 $ 469 Restructuring charges 37 11 — Stock compensation expense 30 28 26 Debentures fair value adjustment (1) 3 (138) (212) Acquired intangibles amortization 38 82 115 Goodwill impairment charge 35 245 — LLA impairment charge 15 235 — Litigation settlement — 165 — Adjusted operating expense $ 487 $ 516 $ 540 ______________________________ (1) See “Fiscal 2024 Summary Results of Operations - Financial Highlights - Debentures Fair Value Adjustment”. 37 Reconciliation of U.S.
Consolidated Gross Margin Percentage Consolidated gross margin percentage decreased by 1.1%, to approximately 63.9% of consolidated revenue in fiscal 2023 (fiscal 2022 - 65.0%).
Consolidated Gross Margin Percentage Consolidated gross margin percentage decreased by 2.9%, to approximately 61.0% of consolidated revenue in fiscal 2024 (fiscal 2023 - 63.9%).
The decrease was primarily due to lower revenue recognized over the three months ended February 28, 2023 compared to the three months ended February 28, 2022, offset by an increase in days sales outstanding to 75 days at the end of the fourth quarter of fiscal 2023 from 67 days at the end of the fourth quarter of fiscal 2022.
The increase was primarily due to higher revenue recognized over the three months ended February 29, 2024 compared to the three months ended February 28, 2023, and an increase in days sales outstanding to 100 days at the end of the fourth quarter of fiscal 2024 from 75 days at the end of the fourth quarter of fiscal 2023.
The Company considers TCV billings to be a useful metric because billings drive deferred revenue, which is an important indicator of the health and visibility of the business, and represents a significant percentage of future revenue.
Cybersecurity Total Contract Value Billings The Company defines Cybersecurity TCV billings as amounts invoiced less credits issued. The Company considers Cybersecurity TCV billings to be a useful metric because billings drive deferred revenue, which is an important indicator of the health and visibility of the business, and represents a significant percentage of future revenue.
Refer to Part I, Item 1A “Risk Factors” in this Annual Report on form 10-K for a discussion of these factors and other risks.
See Note 6 to the Consolidated Financial Statements for a description of the terms of the Notes. Refer to Part I, Item 1A “Risk Factors” in this Annual Report on form 10-K for a discussion of these factors and other risks.
Results of Operations - Three months ended February 28, 2023 compared to the three months ended February 28, 2022 The following section sets forth certain unaudited consolidated statements of operations data, which is expressed in millions of dollars, except for share and per share amounts and as a percentage of revenue, for the three months ended February 28, 2023, February 28, 2022 and February 28, 2021: For the Three Months Ended (in millions, except for share and per share amounts) February 28, 2023 February 28, 2022 Change February 28, 2021 Change Revenue $ 151 $ 185 $ (34) $ 210 $ (25) Gross margin 100 124 (24) 152 (28) Operating expenses 599 (22) 621 465 (487) Investment income (loss), net 6 (1) 7 — (1) Income (loss) before income taxes (493) 145 (638) (313) 458 Provision for income taxes 2 1 1 2 (1) Net income (loss) $ (495) $ 144 $ (639) $ (315) $ 459 Earnings (loss) per share - reported Basic $ (0.85) $ 0.25 $ (1.10) $ (0.56) $ 0.81 Diluted (1) $ (0.85) $ (0.03) $ (0.82) $ (0.56) $ 0.53 Weighted-average number of shares outstanding (000’s) Basic 581,493 575,883 566,089 Diluted (1) 581,493 636,716 566,089 ______________________________ (1) Diluted loss per share on a U.S.
The following section sets forth certain unaudited consolidated statements of operations data for the three months ended February 29, 2024, February 28, 2023 and February 28, 2022: For the Three Months Ended (in millions, except for share and per share amounts) February 29, 2024 February 28, 2023 Change February 28, 2022 Change Revenue $ 173 $ 151 $ 22 $ 185 $ (34) Gross margin 129 100 29 124 (24) Operating expenses 185 599 (414) (22) 621 Investment income (loss), net 4 6 (2) (1) 7 Income (loss) before income taxes (52) (493) 441 145 (638) Provision for income taxes 4 2 2 1 1 Net income (loss) $ (56) $ (495) $ 439 $ 144 $ (639) Earnings (loss) per share - reported Basic $ (0.10) $ (0.85) $ 0.75 $ 0.25 $ (1.10) Diluted (1) $ (0.10) $ (0.85) $ 0.75 $ (0.03) $ (0.82) Weighted-average number of shares outstanding (000’s) Basic 587,523 581,493 575,883 Diluted (1) 587,523 581,493 636,716 ______________________________ (1) Diluted loss per share on a U.S.
The weighted average number of shares outstanding was 576 million common shares for basic earnings per share and 637 million common shares for diluted loss per share for the fourth quarter of fiscal 2022.
The weighted average number of shares outstanding was 588 million common shares for basic and diluted loss per share for the fourth quarter of fiscal 2024. The weighted average number of shares outstanding was 581 million common shares for basic and diluted loss per share for the fourth quarter of fiscal 2023.
For the Three Months Ended (in millions) February 28, 2023 February 28, 2022 Change February 28, 2021 Change Revenue by Segment Cybersecurity $ 88 $ 122 $ (34) $ 122 $ — IoT 53 52 1 38 14 Licensing and Other 10 11 (1) 50 (39) $ 151 $ 185 $ (34) $ 210 $ (25) % Revenue by Segment Cybersecurity 58.3 % 65.9 % 58.1 % IoT 35.1 % 28.1 % 18.1 % Licensing and Other 6.6 % 6.0 % 23.8 % 100.0 % 100.0 % 100.0 % Cybersecurity The decrease in Cybersecurity of $34 million was primarily due to a decrease of $19 million relating to product revenue in Secusmart, a decrease of $13 million relating to product revenue in BlackBerry Spark and a decrease of $4 million relating to professional services.
For the Three Months Ended (in millions) February 29, 2024 February 28, 2023 Change February 28, 2022 Change Revenue by Segment Cybersecurity $ 92 $ 88 $ 4 $ 122 $ (34) IoT 66 53 13 52 1 Licensing and Other 15 10 5 11 (1) $ 173 $ 151 $ 22 $ 185 $ (34) % Revenue by Segment Cybersecurity 53.2 % 58.3 % 65.9 % IoT 38.2 % 35.1 % 28.1 % Licensing and Other 8.6 % 6.6 % 6.0 % 100.0 % 100.0 % 100.0 % 48 Cybersecurity The increase in Cybersecurity revenue of $4 million was primarily due to an increase of $5 million relating to product revenue in Secusmart and an increase of $1 million in professional services, partially offset by a decrease of $2 million relating to product revenue in BlackBerry Spark.
GAAP basis are set forth in the following table: For the Three Months Ended (in millions) February 28, 2023 February 28, 2022 Change February 28, 2021 Change Revenue by Geography North America $ 84 $ 100 $ (16) $ 141 $ (41) Europe, Middle East and Africa 46 66 (20) 53 13 Other regions 21 19 2 16 3 $ 151 $ 185 $ (34) $ 210 $ (25) % Revenue by Geography North America 55.6 % 54.0 % 67.1 % Europe, Middle East and Africa 30.5 % 35.7 % 25.2 % Other regions 13.9 % 10.3 % 7.7 % 100.0 % 100.0 % 100.0 % 48 North America Revenue The decrease in North America revenue of $16 million was primarily due to a decrease of $8 million relating to professional services and a decrease of $8 million in product revenue in BlackBerry Spark, partially offset by an increase of $2 million in BlackBerry QNX development seats revenue.
GAAP basis are set forth in the following table: For the Three Months Ended (in millions) February 29, 2024 February 28, 2023 Change February 28, 2022 Change Revenue by Geography North America $ 91 $ 84 $ 7 $ 100 $ (16) Europe, Middle East and Africa 45 46 (1) 66 (20) Other regions 37 21 16 19 2 $ 173 $ 151 $ 22 $ 185 $ (34) % Revenue by Geography North America 52.6 % 55.6 % 54.0 % Europe, Middle East and Africa 26.0 % 30.5 % 35.7 % Other regions 21.4 % 13.9 % 10.3 % 100.0 % 100.0 % 100.0 % North America Revenue The increase in North America revenue of $7 million was primarily due to an increase of $5 million in Licensing and Other revenue due to the reasons discussed above in “Revenue by Segment”, an increase of $3 million in BlackBerry QNX development seats revenue, an increase of $2 million in BlackBerry QNX royalty revenue and an increase of $2 million in product revenue in Radar, partially offset by a decrease of $7 million in product revenue in BlackBerry Spark.
Fiscal 2023 Summary Results of Operations The following table sets forth certain consolidated statements of operations data, as well as certain consolidated balance sheet data, as at and for the fiscal years ended February 28, 2023, February 28, 2022, and February 28, 2021: As at and for the Fiscal Years Ended (in millions, except for share and per share amounts) February 28, 2023 February 28, 2022 Change February 28, 2021 Change Revenue $ 656 $ 718 $ (62) $ 893 $ (175) Gross margin 419 467 (48) 643 (176) Operating expenses 1,144 469 675 1,750 (1,281) Investment income (loss), net 5 21 (16) (6) 27 Income (loss) before income taxes (720) 19 (739) (1,113) 1,132 Provision for (recovery of) income taxes 14 7 7 (9) 16 Net income (loss) $ (734) $ 12 $ (746) $ (1,104) $ 1,116 Earnings (loss) per share - reported Basic $ (1.27) $ 0.02 $ (1.97) Diluted $ (1.35) $ (0.31) $ (1.97) Weighted-average number of shares outstanding (000’s) Basic 578,654 570,607 561,305 Diluted (1) 639,487 631,440 561,305 ______________________________ (1) Diluted loss per share on a U.S.
Fiscal 2024 Summary Results of Operations The following table sets forth certain consolidated statements of operations data for the fiscal years ended February 29, 2024, February 28, 2023, and February 28, 2022: As at and for the Fiscal Years Ended (in millions, except for share and per share amounts) February 29, 2024 February 28, 2023 Change February 28, 2022 Change Revenue $ 853 $ 656 $ 197 $ 718 $ (62) Gross margin 520 419 101 467 (48) Operating expenses 645 1,144 (499) 469 675 Investment income, net 19 5 14 21 (16) Income (loss) before income taxes (106) (720) 614 19 (739) Provision for income taxes 24 14 10 7 7 Net income (loss) $ (130) $ (734) $ 604 $ 12 $ (746) Earnings (loss) per share - reported Basic $ (0.22) $ (1.27) $ 0.02 Diluted $ (0.22) $ (1.35) $ (0.31) Weighted-average number of shares outstanding (000’s) Basic 584,543 578,654 570,607 Diluted (1) 584,543 639,487 631,440 ______________________________ (1) Diluted loss per share on a U.S.
For the Fiscal Years Ended (in millions) February 28, 2023 February 28, 2022 February 28, 2021 Operating loss $ (725) $ (2) $ (1,107) Non-GAAP adjustments to operating loss Restructuring charges 11 — 2 Stock compensation expense 31 30 52 Debentures fair value adjustment (138) (212) 372 Acquired intangibles amortization 82 115 129 Goodwill impairment charge 245 — 594 LLA impairment charge 235 — 43 Litigation settlement 165 — — Total non-GAAP adjustments to operating loss 631 (67) 1,192 Adjusted operating income (loss) (94) (69) 85 Amortization 105 176 198 Acquired intangibles amortization (82) (115) (129) Adjusted EBITDA $ (71) $ (8) $ 154 Revenue $ 656 $ 718 $ 893 Adjusted operating income (loss) margin % (1) (14 %) (10 %) 10 % Adjusted EBITDA margin % (2) (11 %) (1 %) 17 % ______________________________ (1) Adjusted operating income (loss) margin % is calculated by dividing adjusted operating income (loss) by revenue.
For the Fiscal Years Ended (in millions) February 29, 2024 February 28, 2023 February 28, 2022 Operating loss $ (125) $ (725) $ (2) Non-GAAP adjustments to operating loss Restructuring charges 37 11 — Stock compensation expense 33 31 30 Debentures fair value adjustment 3 (138) (212) Acquired intangibles amortization 38 82 115 Goodwill impairment charge 35 245 — LLA impairment charge 15 235 — Litigation settlement — 165 — Total non-GAAP adjustments to operating loss 161 631 (67) Adjusted operating income (loss) 36 (94) (69) Amortization 59 105 176 Acquired intangibles amortization (38) (82) (115) Adjusted EBITDA $ 57 $ (71) $ (8) Revenue $ 853 $ 656 $ 718 Adjusted operating income (loss) margin % (1) 4 % (14 %) (10 %) Adjusted EBITDA margin % (2) 7 % (11 %) (1 %) ______________________________ (1) Adjusted operating income (loss) margin % is calculated by dividing adjusted operating income (loss) by revenue.
Revenue by Geography Comparative breakdowns of the geographic regions are set forth in the following table: For the Fiscal Years Ended (in millions) February 28, 2023 February 28, 2022 Change February 28, 2021 Change Revenue by Geography North America $ 350 $ 413 $ (63) $ 633 $ (220) Europe, Middle East and Africa 222 234 (12) 197 37 Other regions 84 71 13 63 8 $ 656 $ 718 $ (62) $ 893 $ (175) % Revenue by Geography North America 53.4 % 57.5 % 70.9 % Europe, Middle East and Africa 33.8 % 32.6 % 22.1 % Other regions 12.8 % 9.9 % 7.0 % 100.0 % 100.0 % 100.0 % North America Revenue The decrease in North America revenue of $63 million was primarily due to a decrease of $28 million in product revenue in BlackBerry Spark, a decrease of $23 million in Licensing and Other revenue due to the reasons discussed above in “Revenue by Segment” and a decrease of $17 million relating to professional services, partially offset by an increase of $7 million in BlackBerry QNX royalty revenue.
Revenue by Geography Comparative breakdowns of the geographic regions are set forth in the following table: For the Fiscal Years Ended (in millions) February 29, 2024 February 28, 2023 Change February 28, 2022 Change Revenue by Geography North America $ 556 $ 350 $ 206 $ 413 $ (63) Europe, Middle East and Africa 172 222 (50) 234 (12) Other regions 125 84 41 71 13 $ 853 $ 656 $ 197 $ 718 $ (62) % Revenue by Geography North America 65.2 % 53.4 % 57.5 % Europe, Middle East and Africa 20.2 % 33.8 % 32.6 % Other regions 14.6 % 12.8 % 9.9 % 100.0 % 100.0 % 100.0 % North America Revenue The increase in North America revenue of $206 million was primarily due to an increase of $228 million in Licensing and Other revenue due to the reasons discussed above in “Revenue by Segment”, an increase of $4 million in BlackBerry QNX development seat revenue and an increase of $4 million relating to product revenue in AtHoc, partially offset by a decrease of $20 million in product revenue in BlackBerry Spark and a decrease of $13 million in professional services. 43 Europe, Middle East and Africa Revenue The decrease in Europe, Middle East and Africa revenue of $50 million was primarily due to a decrease of $38 million relating to product revenue in Secusmart, a decrease of $15 million in product revenue in BlackBerry Spark and a decrease of $3 million in BlackBerry QNX development seat revenue, partially offset by an increase of $6 million in BlackBerry QNX royalty revenue.
Common Shares Outstanding On March 28, 2023, there were 582 million voting common shares, options to purchase 0.5 million voting common shares, 20 million restricted share units and 2 million deferred share units outstanding. In addition, 60.8 million common shares are issuable upon conversion in full of the 1.75% Debentures, as described in Note 6 to the Consolidated Financial Statements.
Common Shares Outstanding On April 1, 2024, there were 589 million voting common shares, options to purchase 0.2 million voting common shares, 19 million restricted share units and 1 million deferred share units outstanding. In addition, 51.5 million common shares are issuable upon conversion in full of the Notes, as described in Note 6 to the Consolidated Financial Statements.
See Part 1, Item 1A “Risk Factors - The market price of the Company’s common shares is volatile”. The current macroeconomic environment and competitive dynamics continue to be challenging to the Company’s business and the Company cannot be certain of the duration of these conditions and their potential impact on the Company’s future financial results and cash flows.
The current macroeconomic environment and competitive dynamics continue to be challenging to the Company’s business and the Company cannot be certain of the duration of these conditions and their potential impact on the Company’s future financial results and cash flows.
A comparative summary of cash, cash equivalents, and investments is set out below: As at (in millions) February 28, 2023 February 28, 2022 Change February 28, 2021 Change Cash and cash equivalents $ 295 $ 378 $ (83) $ 214 $ 164 Restricted cash equivalents and restricted short-term investments 27 28 (1) 28 — Short-term investments 131 334 (203) 525 (191) Long-term investments 34 30 4 37 (7) Cash, cash equivalents, and investments $ 487 $ 770 $ (283) $ 804 $ (34) The table below summarizes the current assets, current liabilities, and working capital of the Company: As at (in millions) February 28, 2023 February 28, 2022 Change February 28, 2021 Change Current assets $ 743 $ 1,043 $ (300) $ 1,006 $ 37 Current liabilities 729 397 332 429 (32) Working capital $ 14 $ 646 $ (632) $ 577 $ 69 Current Assets The decrease in current assets of $300 million at the end of fiscal 2023 from the end of fiscal 2022 was primarily due to decreases in short term investments of $203 million, a decrease in cash and cash equivalents of $83 million, a decrease in accounts receivable, net of allowance of $18 million, a decrease of $13 million in other receivables and a decrease income taxes receivable of $6 million, partially offset by an increase in other current assets of $23 million.
A comparative summary of cash, cash equivalents, and investments is set out below: As at (in millions) February 29, 2024 February 28, 2023 Change February 28, 2022 Change Cash and cash equivalents $ 175 $ 295 $ (120) $ 378 $ (83) Restricted cash and cash equivalents 25 27 (2) 28 (1) Short-term investments 62 131 (69) 334 (203) Long-term investments 36 34 2 30 4 Cash, cash equivalents, and investments $ 298 $ 487 $ (189) $ 770 $ (283) The table below summarizes the current assets, current liabilities, and working capital of the Company: As at (in millions) February 29, 2024 February 28, 2023 Change February 28, 2022 Change Current assets $ 508 $ 743 $ (235) $ 1,043 $ (300) Current liabilities 356 729 (373) 397 332 Working capital $ 152 $ 14 $ 138 $ 646 $ (632) Current Assets The decrease in current assets of $235 million at the end of fiscal 2024 from the end of fiscal 2023 was primarily due to a decrease in other current assets of $135 million, a decrease in cash and cash equivalents of $120 million and a decreases in short term investments of $69 million, partially offset an increase in accounts receivable, net of allowance of $79 million, an increase of $9 million in other receivables and an increase of income taxes receivable of $1 million.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

11 edited+0 added−0 removed5 unchanged
Biggest changeThe Company has also issued 1.75% Debentures with a fixed interest rate as described in Note 6 to the Consolidated Financial Statements. The fair value of the 1.75% Debentures will fluctuate with changes in prevailing interest rates. Consequently, the Company is exposed to interest rate risk as a result of the 1.75% Debentures.
Biggest changeThe Company also has significant financing components within certain revenue contracts with customers and is exposed to interest rate risk as a result of discounting the future payments from customers with a fixed interest rate. The Company has also issued Notes with a fixed interest rate, as described in Note 6 to the Consolidated Financial Statements.
The Company makes this assessment by considering available evidence including changes in general market conditions, specific industry and individual company data, the length of time and the extent to which the fair value has been less than cost, the financial condition, the near-term prospects of the individual investment and the Company’s ability and intent to hold the debt securities to maturity. 58
The Company makes this assessment by considering available evidence including changes in general market conditions, specific industry and individual company data, the length of time and the extent to which the fair value has been less than cost, the financial condition, the near-term prospects of the individual investment and the Company’s ability and intent to hold the debt securities to maturity. 59
The majority of the Company’s revenue in fiscal 2023 was transacted in U.S. dollars. Portions of the revenue were denominated in Canadian dollars, euros and British pounds. Expenses, consisting mainly of salaries and certain other operating costs, were incurred primarily in Canadian dollars, but were also incurred in U.S. dollars, euros and British pounds.
The majority of the Company’s revenue in fiscal 2024 was transacted in U.S. dollars. Portions of the revenue were denominated in Canadian dollars, euros and British pounds. Expenses, consisting mainly of salaries and certain other operating costs, were incurred primarily in Canadian dollars, but were also incurred in U.S. dollars, euros and British pounds.
Further, the recognition of the gains and losses related to these instruments may not coincide with the timing of gains and losses related to the underlying economic exposures and, therefore, may adversely affect the Company’s financial condition and operating results. Interest Rate Cash and cash equivalents and investments are invested in certain instruments of varying maturities.
Further, the recognition of the gains and losses related to these instruments may not coincide with the timing of gains and losses related to the underlying economic exposures and, therefore, may adversely affect the Company’s financial condition and operating results. 58 Interest Rate Cash and cash equivalents and investments are invested in certain instruments with fixed interest rates of varying maturities.
If overall foreign currency exchanges rates to the U.S. dollar uniformly weakened or strengthened by 10% related to the Company’s net monetary asset or liability balances in foreign currencies at February 28, 2023 or February 28, 2022 (after hedging activities), the impact to the Company would be immaterial.
If overall foreign currency exchange rates to the U.S. dollar uniformly weakened or strengthened by 10% related to the Company’s net monetary asset or liability balances in foreign currencies at February 29, 2024 or February 28, 2023 (after hedging activities), the impact to the Company would be immaterial.
The Company establishes an allowance for credit losses (“ACL”) that corresponds to the specific credit risk of its customers, historical trends and economic circumstances. The ACL as at February 28, 2023 was $1 million (February 57 28, 2022 - $4 million).
The Company establishes an allowance for credit losses (“ACL”) that corresponds to the specific credit risk of its customers, historical trends and economic circumstances. The ACL as at February 29, 2024 was $6 million (February 28, 2023 - $1 million).
At February 28, 2023, approximately 19% of cash and cash equivalents, 24% of accounts receivables and 36% of accounts payable were denominated in foreign currencies (February 28, 2022 – 37%, 23% and 30%, respectively). These foreign currencies primarily include the Canadian dollar, euro and British pound.
At February 29, 2024, approximately 19% of cash and cash equivalents, 25% of accounts receivables and 59% of accounts payable were denominated in foreign currencies (February 28, 2023 – 19%, 24% and 36%, respectively). These foreign currencies primarily include the Canadian dollar, euro and British pound.
Consequently, the Company is exposed to interest rate risk as a result of holding investments of varying maturities. The fair value of investments, as well as the investment income derived from the investment portfolio, will fluctuate with changes in prevailing interest rates.
Consequently, the Company is exposed to interest rate risk as a result of holding investments of varying maturities and the significant financing components within certain revenue contracts with customers. The fair value of investments, as well as the investment income derived from the investment portfolio, will fluctuate with changes in prevailing interest rates.
There was one customer that comprised 12% of the Company’s revenue in fiscal 2023 (fiscal 2022 - one customer that comprised 11%). Market values are determined for each individual security in the investment portfolio. The Company assesses declines in the value of individual investments for impairment.
There was one customer that comprised 27% of the Company’s revenue in fiscal 2024 due to the completed Malikie Transaction (fiscal 2023 - one customer that comprised 12%). Market values are determined for each individual security in the investment portfolio. The Company assesses declines in the value of individual investments for impairment.
There were two customers that comprised more than 10% of accounts receivable as at February 28, 2023 (February 28, 2022 - no customer that comprised more than 10%). As at February 28, 2023, the percentage of the Company’s receivable balance that was past due decreased by 7.9% compared to February 28, 2022.
There were two customers that comprised more than 10% of accounts receivable as at February 29, 2024 (February 28, 2023 - two customers comprised more than 10%). As at February 29, 2024, the percentage of the Company’s receivable balance that was past due increased by 7.3% compared to February 28, 2023.
The Company does not currently utilize interest rate derivative instruments to hedge its investment portfolio or changes in the market value of the 1.75% Debentures. Credit and Customer Concentration The Company, in the normal course of business, monitors the financial condition of its customers and reviews the credit history of each new customer.
The Company is exposed to interest rate risk as a result of the Notes. The Company does not currently utilize interest rate derivative instruments. Credit and Customer Concentration The Company, in the normal course of business, monitors the financial condition of its customers and reviews the credit history of each new customer.

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