BB - Earnings call transcript Q4 2021

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Operator

Good afternoon and welcome to the BlackBerry Fourth Quarter and Fiscal Year 2021 Results Conference Call. My name is Sethi, and I will be your conference moderator for today's call. [Operator Instructions] As a reminder, this conference is being recorded for replay purposes. I would now like to turn today's call over to Tim Foote, BlackBerry Investor Relations. Please go ahead.

Tim Foote

Sethi. you, Thank welcome conference and fourth fiscal quarter Good to earnings call. XXXX afternoon BlackBerry's on are Officer, With Chief call the me today John and Executive Executive Chen; Chief Rai. Financial Steve Officer, and Chair a our read review forward-looking will Steve note After business results. I and cautionary update, financial statements, regarding John provide the will

Information the A via a to then brief will public general We webcast the available blackberry.com This the call-in session. on blackberry.com. open website. via will and section Q&A also be call for numbers replay in Investor available at call the is

today Some to of model, intend, the as constitute of securities statements forward-looking and harbor statements believe safe and indicate and we'll applicable pursuant such expression. be by made We'll will, and words Canadian making laws. expect, are should, provisions similar US statements the forward-looking using

Forward-looking the based are other its conditions by well developments, and Company experience relevant. assumptions of as in and historical annual statements made are and on including Company materially believes its in the include current cause that differ performance the the trends, future perception of are Many estimates expected factors light as to These implied those factors forward-looking expressed results the or risk COVID-XX that or pandemic. could Company's by Company's factors MD&A, actual the the factors filings from and statements. discussed

or The place You update the forward-looking no any has Company statements. and except reliance intention law. should no as forward-looking undue to revise not Company's required statements, undertakes obligation on by

of reference numbers during As in call, will their the summary quarterly is our non-GAAP John Steve and results. customary

are press blackberry.com earlier non-GAAP the EDGAR, and GAAP published see with available to between which I'll websites. that, the And on supplement and and turn call the John. earnings For reconciliation SEDAR today, release please over our numbers,

John Chen

for you I'll Tim. quarter. with for us thank today. afternoon, And everybody. begin three Thanks headlines joining the Good

is headline licensing. first The

managed to portfolio, company's portion entered negotiation the we primarily This continue with yet licensing with into has explain a company the to Spark, associated reached secure and and agreement event be due a binding party networking. of management The American revenue company licensing the These Patents owned accounting and are and software and BlackBerry Steve ongoing. and to being will and activities negotiations communication devices, these mobile strategic by expected. quarter definitive quarter, BlackBerry. of which rules, messaging related retain results will business, the patents. not limits sale patent its services than wireless for IVY, use rights in exclusive because critical of in including company's The later. QNX, to an lower negotiations North will

headline services. and is The software second

a despite This headwinds shortage. quarter, BTS. chip sequential we production -- continuing from a for Spark vehicle continuous slight had revenue global improvement saw good a quarter and the from BTS recovery

and billing a grew year strongly Software are of Services back now and ago. level to the

The is BlackBerry later. are automakers progressing and in headline developments touch Tier third I'll some exciting with on well of the IVY; discussions One

with to as in cash software million. positive of million. came ending and $X.XX; was operations and Services $XX Now others business cash BlackBerry more million, XX our gross was million, at commentary turn now $XX revenue from and Software margin earnings I'll revenue XX%, company $XXX Services. Total details. share me total let generated and was $XXX of the investment XXX; $XXX XX; into was licensing was XXX; February per reported starting get million,

serve silence learning. achieved combining AI ways. plus acquired in We currently is and safeguard We this Internet with technologies Our the the security years security. XX such two Things ongoing machine of expertise, intelligence newly our by expertise strategy market to different of with as

as such cyber is The large, and particularly provide government, security highly verticals enterprise healthcare. regulated to financial for first services

Trust Zero our with communications and networks Architecture. endpoints, protect we Here,

The embed and to technology safety second to to endpoint. the is security provide

and QX Here, will the and reporting paths our major in this installed to and XXX two starting provide QNX and opportunities. into digital as get marketplace. the perspective to markets. Overtime opportunity today. is of This but two who smart large print Investment powerfully drive very help launched from across that focus the we radio infrastructure is smart BlackBerry. when have intersect BlackBerry Cybersecurity AWS separate We these million city new addressed BTS. growing over and market a From the I report partnership America month and cybersecurity will louder strategy management includes which our is with growth addresses recognize services on we starting message early. The a this namely lines a QNX to intend is Cybersecurity Again software quarter out road and base IVY today, communicating mentioned and revenue line market tremendous this in critical and management UK the for financial convergence, end, campaign the fast significant obviously automotive. North cars largely currently on event will mobility need endpoint and branding too be the a

driven operating software competitors Grade next Linux, generation UES and endpoint along analytics We Spark, platform a with data Secusmart. BTS Our vehicle leading security vendors. competitors and market. UEM other and providers systems. these embedded proprietary with address the as markers including notable including UEM Notable fully addresses our and Android as main well ATHOC AI integrated auto

this these businesses help ID into and the and products end-to-end opportunity BlackBerry while change car. an performance going of safety better the functional QNX of highest to offer the security harnessing will insight believe data investors greater in forward. Our and solution will gain provide level We that

at from expected ARR related low remained this past last X%. Services customer based quarter approximately $XXX around metrics. Dollar last Moving to -- down pandemic quarter BTS. Software rate on slightly million, was sequentially on impact to Net net from to and improved to as retention primarily due XX% quarter. churn due XX%

on Now BTS. moving to

is of As largest by reminder, QNX a far BTS. component the

global improvement would impact quarter design last win, chain. and production saw will from the the chips shortage be during how auto royalties. long we for not It's in supply at anticipated least impact on This call, clear despite volumes design on QNX continued revenue last. both fully what its we the is improvement based not production based it and challenges earnings As

we However, from continue the upcoming fiscal to expect improvement BTS year. in

of mid Our are point. new it returning by fiscal by the pre rate year to overcome run by that normal plan on pandemic challenges revenue that per -- $XX assumes quarter million fiscal around

XXXX. little Analytics, grow driven safety will as critical systems of a recent of car points Assist number the or which car. Systems deploy on by mention certification, the of Strategy which are I'll is higher estimated be beyond be a application This Looking wins, of Advanced to that leading These require expansion short-term give this embedded They and chips strategy in ADAS this firm as real mainly compute data large gateway. strength the with in there a highest an and factors by and data will to points headwinds, some level estimated support well research Driver system focusing power. on increasingly Both safety, QNX shortly play for increasing validation trend. ASP

in the hypervisor, highest by During Safety. its the in quarter, our critical way of which safety the the announced enhancement certified level Functional its is position one the to strengthened leadership to software. We only QNX market,

autonomous design been venture GEM. XX in QNX GAC, Vision-Scar. happened number technology design maps, will well Hyundai Black QNX -- its a X is at its selected and Furthermore, future Communication also automaker. general, operating as by of leading a system Overall driving new the latest in on for also duty be Aptiv that or auto embedded using with It business that new Chinese to QNX Sony, and trucks. heavy XX market a demonstrated has Scania quarter, its These also wins wins with heavy and primary driverless in which trucks QNX has selected of The revenue between auto Technology vehicle next machine the the for including sorry latest Channel on Also, growth. plant Postal be system a the positioning surgery company. of critical USPS, Baidu will the include equipment cluster from component predominantly manufacturing medical announcements The connected instrument a from We into generation GE and our, developments wins was a is CES in A were announced the confirmed generation digital built designs. joint designed States energy Service. on wins device Processing at Motional, QNX system be ADAS control and United eye electrical -- Mail announced and vehicle. Sony models heart vehicle leading AI QNX GEM next their

world's together XX wins increase growth. the design from years, the from Top to positioned growth next with top the electrical will that of EV We last now annual which around XX% are vehicle the we Deloitte and sorry, wins and or wins the This the Honda. QNX is design XX% over quarter the estimated by In report global benefit -- with -- of have CAGR, OEMs EV Toyota vehicle reports, rate including the XX an XX is growth sales delighted recent production. win for to this of to recent have XX compound global well way be represent electric XX

OEM very December, the provide positive. announcement with been now you in update ID. an me on Let Since from the response has

have under potential be NDA a with how it. to of been now. of had showing Many this developers We automakers cases right cases number are and created and pleased use already discussion has and on held build many developed app platform once use leading progressed workshops been this discussions can -- are able has Most these so shared far. of have many discussed the

includes helped to way, investment recently an adopt of $XXX,XXX through use a and XXXXs Portfolio ID, Fund. will program of million and repair share the the repair initiative. of made To or app as development ecosystem, BlackBerry shortly the the ID quarter new the vehicle without group right the is ecosystem by development However, intend already in program, to of with with startups. well OEMs fund drive we as to case We startups. company data led that centralized a support of an by activate a safety in analyst a a have an access We and fund. AWS major the we This R&D of to $XX vehicle identified announced IP. stage OEM. safety the potential as one either executive to innovation ID solution and has also investment securely to the team. will grow ID sharing the problem from The the AWS leading credit, creation ID by start adoption compromising us hundreds Innovation starting joining can insight this shops [Garner], early develop guidance up

ID company, the We an also to are IVY shape to community. Focus input and the have cases. use development the expertise name soon sign auto Their provided compliment will one. on are top Technology and by up to leading specific unveil insurance advise Council Advisory already first as the Among well telcos. industry verticals tier as Company OEMs designed defining

total ID very estimate be in but data the that hardware market, because as data report, Google, Microsoft, rather We well, billion announcement, well year vehicle or car these of and competition for well growing. to $XXX cloud not do and our Ford million market and and to the our to market and IVY large will recognize available as McKinsey such announced ID Bosch, data, is be and announcement value. both analytics is competition in $XXX region as system that major is but vehicle Following as operating to per this add competitive, amendments their positioned. agnostic. players feel opportunity going We see XXXX. by as partner The data the we market TAM, monetizing the

to OEM Access with While expect ID. the Early working we version of we release already in October,

We should start to we of also February next expect the ship, in product shipping year.

Spark. to on moving Now

nine months. a we Spark The suite strongly cycles launched suite As sale our May October. sequentially. our reminder, in cyber grew are Pipeline in for and typical a new suites only Spark

of So fiscal the a second good expecting XXXX. we're half

key suite. base Unify adding Spark, upsell we or We Across both strength our continue and and year, all Spark, This renewal UEM Security see will start to focusing cyber in in install UES. to new we on to the start logos assess upgrading verticals. Endpoint for

some share you. names me Let with

as the United Some Commerce, Continental the Government, the Corp just wins. the the and London the Development IRS, States with Canada These Scottish to Department as US QX well police, Marine included well Services, a Police Bank, as of name as Bell businesses few. Scottish Metro

was customer that mention none front, managed impacted SolarWinds negatively breach. NDR must guard On of I the our by service service recent the

of Optics, additional launch example safeguard we or that and [Indiscernible]. early demonstrated provides this product [Indiscernible] was EDR about The customer on Exchange that our of actors While are we product I'm will Identify products ETP subject, Server. strict month XTR on excited of our control can sponsored and attack fed state this has leveraging Microsoft response, part upcoming strategy. protects detection important threat. from protection. two our We're our extended

our this we be due hunting. expand released and is based X.X. for quarter, richer content That to first cloud triage The and and product EDR data threat coming query provide alert Optics

will The offer on-prem SaaS second the network the be environment is to as that zero well access as our to BlackBerry gateway first product applications. trust both

enabling and While silence detection for AI response. faster

our at next analyst day virtual detail more month. provide will We

Finally ATHOC. words about and a brief Secusmart

opportunity as event with management used by the of governments and made to of position new a a announced US for security government by BlackBerry We integration now of the quarter in needs fiscal We Alert in on such have ATHOC Secusmart see level is features Secusmart the but Microsoft enterprise the text highest world, around Now. is, political most had recently, for including the Teams, it's this enterprise, and that communication. strong been with progress technology tailored a Alert, expertise in voice end protecting offering still federal public federal we our government Service XX% significant XX the following the just year. over worldwide, pleased product. sector, the additional with and ATHOC employees.

of the have Fujitsu. win, over in call to sale, turn including Steve already early details performance. we more Steve? to stage our the much provide enterprise financial it's recorded While our I'll about

Steve Rai

the year adjust quarter longer the we a in unless John. non-GAAP Thank be starting you, that the GAAP for and noted. of Please Please our We non-GAAP conformed of table margin refer be for of quarter fiscal company performance acquired. release details. will non-GAAP the terms our will going will that My no and revenue comments $XXX XX%. revenue means GAAP company million This fiscal for press Fourth revenue forward the supplemental on and financial non-GAAP to and quarter $XXX first will deferred gross comparatives GAAP total quarter note was otherwise new same GAAP be the revenue total fourth total million. and revenue accordingly. delivered company

excludes recognized Our acquired quarter deferred $XXX includes Fourth software $X expenses of stock $X non-GAAP a expense gross compensation revenue were operating million. margin million. not but million and

impairment non-GAAP Our of to this earnings acquired acquired income rationalization stock non-GAAP deferred compensation $XX expense cash million net and million million million. debentures, Fourth and by in convertible $XX remote non- was quarter high on market amortization operating the expense, expenses assets, to models. non of which million value fourth quarter. adjustment exclude shares to to adjustment income operating $XX million quarter. the to in is is fair commissions long-term during due Needless volatility of the estate a the due intangibles. quarter for $XX $XX were $X accounting $XXX software real transition share in million and in the working in GAAP $X.XX exceptionally largely driven Non-GAAP per trading say the company's conditions. volume fourth due was primarily

Our will adjusted revenue in provide adjustments non-GAAP million I breakdown excluding now a this the EBITDA quarter. $XX previously quarter, the of our was mentioned.

million. $XXX Services and was revenue Software

services was in the recurring of the XX%. remained to with revenue product The product XX% of Software the comprising range XX% total software approximately professional of proportion balance. revenue

due because been We in have the revenue revenue believe negotiations quarter. software only cybersecurity but been contingent negotiations relating been other John's to Therefore, would earlier, and as lines, to ongoing not to could revenue the treated licensing $XX mentioned activities also that higher. revenue million licensing future from completed comments deferred Further BTS. and new and was have sale, in progress. have report potential to negotiations, year, in been fourth fiscal revenue to limited two have had the additional for quarter regarding we a would and services John transactions in periods. As not been the intend Licensing

equivalents performance; XX, $XX and during sheet increase cash, balance $XXX at an flow our cash investments million to of moving were quarter. February total Now XXXX, million cash and the

position increased at and million flow was capital free $XX John. cash to my cash now $XX Fourth of was million. back comment. I'll call cash million and the quarter to the $XXX net end operations Our generated $X quarter. the expenditures were million concludes That from turn

John Chen

Steve. Thank you,

on for and year, it's is fiscal upcoming this services on For and focus software software our services primary growth. --

cash portfolio at this Therefore, make but at Steve will on As I revenue outlook discussed, parts negotiation you basis. that comments will patent starting making that on will we of will a today outlook a moving today revenue GAAP moving, the lot mentioned to revenue of still plans Because the earlier, year. be provide not to we we I make year be so it's regarding licensing this ongoing fiscal that. non any any full will time, and unable give adjustment but some have a we're color some end, the

course. full in million. and in range million. to GAAP to digit revenue will of GAAP resulting XX% year us, $XXX to all is BTS UEM, of my in year growth which X% million million $XXX million a XXX. revenue include UES, the for BTS full up, represents a jumbled growth XXXX. I revenue both fiscal fiscal of $XXX so resulting revenue to to notes of, software GAAP range range we This million. the And to year $XXX got ATHOC the total and $XXX billings in range expected in year double GAAP yes, Secusmart, in XXX, to from certainly the have for total cybersecurity rate of Cybersecurity, between XXXX, oh, million XXX expected of XXX services the anticipate software sorry, is for services $XXX and and

the BTS, fiscal around we to half ongoing For both the half. in negotiation the outlook. regarding of revenue there's first discussed, the year the than that cybersecurity licensing stronger uncertainty and portfolio we patent Because of second anticipate be the revenue

However, continue modeling in we appreciating not complete, will be would scenario or full which an model And maybe region not of it million year range does of for half. to for we conservative $XX sales regulatory that that review first have most the in we million to limited that $XX million. In happen be assume $XXX expect the in be purpose, revenue per does sales, this the and revenue licensing the scenario, to negotiation quarter. outlook useful therefore

However, we be believe beneficial of our that the will to the completion shareholders. transaction

you the year. any course Spark significant made We had on products our from forward. challenges, technology executing and strong Despite has XX years market. XX major up a on update This In has That's roadmap, bringing to particular, suite step developments. will other last year navigate. an unusual of been challenging to and Cyber we new the

with as We go-to-market on partnership, the also as make significant progress perspective. well the strategic both technology

partnership for AWS call to now particular been Operator? Q&A. would open Our the always standout. obviously like with that I has a IVY

Operator

[Operator Instructions] For our first from Genuity. question, we have Mike Canaccord Walkley

MikeWalkley

that? or majority it John, really the and me you just little going the portion negotiations a guys. first Should the won't it portfolio the of all a just the complete gauge just revenue it I trying Is question your vast congrats to for is is any for on you of to forward? trying whole year Hey, you licensing better. understand busy and sale portfolio have announcements the guess licensing just

JohnChen

Well, major our it's portfolio. portion of a

cover areas. three said I As we major

communications and Our cellular, networking. wireless

it's relevant, all that our the not all and and business, part in all it's we technology security retained encryption patent. of software and useful the and strategic us but the today the to finance So things embedded

MikeWalkley

on guidance, then two divisions. Okay, great my it to great. question, follow And just out up would be break the the of

how the assuming the Now, might in the growth on cybersecurity you stronger? it's think and one can us given auto, is, XX% will the X% recovery grow? to which I'm BTS think divisions about areas maybe any two help you grow but color different two BTS

JohnChen

Yes.

think it's revenue. because I

both digit growth one it's me let expect based And because percentage BTS. Spark all, we revenue, BTS. growth expect single double First we of standpoint growth we double billings, percentage thing, in in digit revenue and From clarify expect with digit subscription Spark.

you So a expecting to are of have in growth because recovery. strong right BTS

MikeWalkley

growth and great. billings digit would double the Yes, be

Okay. Thank you.

Operator

have For our Chan question, from Daniel next we Securities. TD

DanielChan

John. Hi,

to expect Just that royalties we come the the you patent get take from will the structure licensing one a to question that deal about a for sale. portion fees Should of the how is you're ongoing a maybe of deal? or time -- buyer more hoping you're

JohnChen

early, numbers this a there goes will on. the one is a I majority of for come the deal of There in of give but tail you time years. multiple that is details can

DanielChan

Okay.

you making Now, so selling what's in you past the that consider now entire for you mentioned had the that's it? offers different portfolio,

JohnChen

our one There Because I think have an and entire are includes thing a in BTS, so which cybersecurity two is of QNX. ongoing reasons; sell we in business IVY to wrong there's number the portfolio. -- of an is business really and much ongoing course,

unwise for those selling portfolios will be extremely think the and for the shareholders. company I

we're the connected willing with was I think is that the by able -- parties us address to are used portfolio today. part being not to get that So, team

a So it point out just of worked friendly business from view.

DanielChan

thoughts deploy more, that this capital. through if And I will deal on any if does go you one how just may,

JohnChen

have we an product our cyber like and of ambition all in have in our we're to couple cyber. invest we going Yes, caught lost going integrations. in we're and And know to -- because we invest up. both I of have years

you being more us So see aggressive.

intelligence everywhere. In ran it ad New saw Times. I on just an fact, today, security we ad today, York An

very as, high. is the not are going we're barrier winner, people And in step to point. no spending at winner huge this both go well after so and clear no resources market. it's and a up market. just to the that And entries a And huge, And

capture we should businesses. some to be able new So

themselves, OEM, vehicle And you somebody that. like or with else, we're invest to very in is very it important. work to ID, every So of in build us going somebody heavily work data course, platform, they all important then on whether we're with invest it's

this in is AWS with relationship our case, a big plus. So

to businesses So those are in. going the we're two that invest

Operator

question, Chowdhry Trip we have next Equities. our For from Global

TripChowdhry

did very they Congratulation Very also It challenging on with that you wondering have be good innovation I not created like automobile started Apple bringing popularity the economy or and was two reflect economy something if we not think thought three have product could market with Apple with and been? you have do a of also in platform will a and your year. in is very venture will look those upon speed and solid iOS. speculative money very, money and equity in is dollar is put venture also also next about patent capitalists you seed lines. I of follow better economy questions stake app got do billion but applications could a but Apple light. have take applications quarter, at completely, like the and capitalists iOS be just Apple platform. creates Have the just it on or fund its may spectacular a be what launched Apple also provide and million moving very Two strategy exactly and fund year but is at preview, protection that called one but each a the John. in In the you the prime market platform then for we is know I products execution, along are those your a for beneficiary. have Any it's difference which company $XX up that innovation also the have you sub differentiation is question. provide fourth provide it each When Apple Apple which really solid startups those which it today you to company app had but thoughts it that would have quick or be little the of could was intellectual you IVY the multi that every will the the mean it along much jumpstart you developers you you property a October, on -- you make thought

JohnChen

Okay, great. you. Thank

So and without million up this $XX could good it we cases could platform, very fund any of build will you applications be we believe and not we we in application we put data that initially will make objective sure to use adopted. vehicle so a everybody be objectives data only is build that sticky, solid did, although analytics not and

build I a think there are that partner maybe platform the same AWS of more a and forth like which I build with to so other work in is help with haven't will data questions AWS a through people the to company our we steps that in with having time of also of then company and also xyz start out that free so and work $XX at but they of application will the help. could support have it the tasks are help and and the to the now is vertical advisory and and added provide which this secure -- my technology run that the lot going ID I and and bed industry but interested lot of other stickiness their said ourselves we and technology through the didn’t answer I have applications they tools pull so some the what development. but lesson early got or see on startups an council them test working a get will bring going VCs and BlackBerry --for twice a we are is navigate help important we and to pipeline million even is vertical the To group in benefit being so all go of I be won't that build business and trying identify startup learn know-how enablement that to IVY people and with encouraged usage have after so to they cloud working both a funder co to establish navigate want We have to how and them as provide could lot your funds the case them. the course cloud the some are majority we offer that AWS $XXX,XXX that experience that learn company be their in initially could we I from to AWS have target this the limited on the established like ideas that QNX that forward. could

going of see is owning in. that we company part to that that as to it, concerned, we're own touch ourselves company people's unless don't think the I IP, that invest we're we let IP As far going other IP

I don't them they could to we know whether help to could obviously refer filing. them help IP but So you -- I protect

a that do knows people to We have well. very how of this lot

TripChowdhry

good John. Very

know, property patents are you and today As goal. the new intellectual

intellectual Second time the was patents. I counted more than I it property portfolio had question was XX,XXX regarding have. you The last

JohnChen

XX,XXX to be exact.

TripChowdhry

Oh, amazing. wow, that's

XX,XXX to of patents Now, negotiations, sold the Just we figures, details I -- be very a about but ballpark? difficult the talking know or of put Half or XX,XXX are will XX,XXX? it's your which ongoing ballpark

JohnChen

answer. I do this, to guess not to the provide

part of that. our Sorry negotiation. it's about Because

cellular on not now. messaging, networking, all security, probably our included. was and I messaging, And And IVY, cellular beliefs I and networking, one, and QNX, so then, put separated am The this you jeez best the network obviously, out messaging, are and for and team. could I get missing the cellular category encryption, messaging and so categories,

Operator

For our RBC Treiber Markets. we question, Paul next from Capital have

PaulTreiber

so good afternoon. and much Hey, thanks

the the for sale? speaking, at in that in through, all, $XXX license million patent that have away? revenue patent this [Indiscernible] past $XXX licensing that does think revenue licensing basis. the the patent revenue, the with think said continued goes in if go you should goes year, conversely, And On sales, So patent just million of doesn't -- is sale eventually $XXX all happen being we expect you does million what the to I on it sale that if the the hypothetically if the

JohnChen

It's that's good, Paul, a question. good

an is unusual So this year.

a tail about of reasonably the a have the through, followed we to number we will talk sale time gain, record a through, let's as if up by years. license goes seven big -- So one goes will pattern

will pattern year one other be big stuff it now, not year then actually the the but some So the are couple the zero, with quite I on. XXXX. go will will of do being through will will more to and first If in small. not through, go with but us, right quarters that zero, so negotiation to unable as If most them be going still it negotiated pattern be go recurring not fiscal does because sale is this are pattern low, sales it away not be of there

is So away. but the it frozen, a won't go pipeline basically

that then So target have Is licensing. if will a go million two, may your pattern we year pattern the the suffer And quarters. couple three for to not sale through, resume of does I question? did bit make then the -- a I little first $XXX answer

PaulTreiber

no, helpful flow similarly very be with would think numbers. Yes, aligned revenue those that's and cash I the

JohnChen

Unfortunately, the aligned. flow cash will similarly be

PaulTreiber

be gone with would the finance cost big is, equity has cost since say, of through And Okay, the having in like that's lower. your very capital, gone is of second theory this your would stock picture through rally that helpful. one then

And question seeing equity cost at you it equity how strategy, of having the the more more these contemplated enthusiasm, is have newfound could so levels enhance this of or issuing seeing cash? sort more capital,

JohnChen

various our only thing we have group. idea M&A we and we specific the that principle our just of am won't question. that's a least strategic sheets. banks make some is from open, and on constant at thing. are It's that any planning no I that sure Yes, a we to mean, bankers good I on working shareholders group, the there's we're been some we not today But do conversation when not, balance keep dilute usage. in the I like The do. money intentionally to won't won't our with

over when raise way, X% once convert okay, by could attractive. to money, with keep the let's then premium the delusion So so are me you up, a up my do people, get it? say, come you to what your see t Because x of people going very have you percent I XX% But a to that head. XX%, and you hanging I and say asking

very kind equity. I'm I terms think I I out are I attractive not explain kind And so level guess of at how there I about just don't of your of know whether it. know there. answer question, it. against this And

sure the but a that we to have that wanted targeted use help make business So, I could first.

PaulTreiber

the And ask strategic plan. your same to way another for is maybe question

significant don't acquisition a require that on You or capital deployment to execute have. of that current plan you

JohnChen

I XX% The growth does We plan to do. X% any No. not you, gave acquisition. assume

Operator

question, Markets. Capital Steep Paul next Scotia we from have For our

PaulSteep

it's situation think recognizing John, with deploying would that growth like is assume knew you somewhat if being, with type the how earlier. would answered becomes quick strategic some or I capital? it do I we challenging transformative -- I to to this follow guess licensing, you I John, do proceeds, accelerate but of related. with M&A in about But the it think just Hey, I proceeds, guess look the envision That's business, point have up. question. materially a the would that we

JohnChen

love depending the it's Paul, on is is. really I do. will to really that. the your always I somehow answer It there, Yes. to target really do question out

us. also And there's car, But That there space, any question could be I in for auto mind. had question in, our tech target. people and position some But our be specific into to IVY, target, of the need I are think But terms thing. today, positioned revenue. on the with no especially list of silencer at. stuff there the make we interesting put usage, we're could in specific doing that QNX will rate go technology space, is a growth further be with might the auto acquisition, in those go to have have is so a I target that what they a a very And answer your priority will a to think with names we affordability. of a I My we don't in of usage look well always

PaulSteep

cash is as transpire not, will the your may or with aside how why put patent we it sale just be respect to to comments you Okay, back call. just the whatever in of us flow, earlier us context. the Can and to EBITDA know you're help dialing set occur in going then related, think free and I let's the case should be level but about might guiding not I maybe spend? talk about

the is but increased talked stock R&D But I and I got about comp isn't looked spot accelerating the XX% know to and growth. then spend, actually XX%. based up offset marking best at it's you I year-on-year I think in when sales look there, it. know maybe QX

you're that no? net might or dipping and think in little go negative a we we should actually So bit

JohnChen

No. That's not our intent.

reasonably give EPS in you, and plan so number am the I and that I just mean We have sales unable is and a Sales provided and guidance part large I mostly to only you're shifting cash flow right; know because marketing you of our marketing. hires field guidance much. the I licensing

So this real there we to in didn't But --, not reduce we want are to so your go was the question it at estate. going are to G&A, we into reduction point. also to intended reduction answer however, take taking

an roughly consolidation by a pandemic that XX% down And XX% working a see involvement. on kind then will had impairment hoteling in save infrastructures. permanent maintain don't from mentioned then all up about to the rather will Company. real some have fund that productivity to go-to-market. offices. will Tech lot charge estate after cut decided XXX% will to want the our be and we We're of fund members engineering real have have We this But many remotely personality some that because of going notice from we to you to some to IT in to And think work $XX from some I are provide especially basis, we we of XX%. level way, million Steve going team our we of will footprint software and that so we're because and maybe then you estate save go them decided money we If we mostly related we And want company, of money of to over there.

PaulSteep

automotive. decisions get that overnight, in there a ask to on pause or in don't people going just chips in with a What are one. of of like, bit clarifying we had difficult, projects you is made terms last it's I John, respect and still overall forward one just I relating but situation broader base, Can a comment, a maybe or moving of all vacuum past obviously, quick Great. these a but on. the sort mood, Japan and in obviously,

JohnChen

other have. design Toyota, a wins name big EV, some the have So Honda, far trucks things we in wins and Scania we -- and other really in Sweden XX that with with wins in quarter

chip the still in just when that hit far I'm -- this it vibrant the factories will reduction half Then said few standpoint. overcome. following us. GM issues So eventually now. of very be win has from And space Ford shutdowns of auto assume year, is stated I second right that publicly a will and the GM shortages design they

in in a absorbed production that immediately we being recovering we in when continue But the do the as future. So will obviously us that's we'll do in then somewhat. our we wins I since design think that the more planning revenue and affect mode, And hoping bit. some little It it's that assume said the kicked win QNX we today, then services. why to license we does professional have developed we're

our year So in $XXX the problem shortage this guidance affect ends will problem million year. that XXX assume plant problem, of mid to million for shutdown

know we the shut a is we plant minimize I'm If that's ground, by Now, Not then somehow down that. stake the that prolonged, it in recovery. Obviously to will as hoping every to that model But best just can. and way. prolong have somewhere. you as our

Operator

Lee Steven from have James. Raymond we Next,

StevenLee

gross these revenues? are corporate average? profitable for margin, How than John. your Hey, example, higher Is the licensing

JohnChen

But be is yes, to percentage. Yes, higher which first the is is in the answer corporate or level. revenue, other the expect significant a by couple of number quarters the painful was way going we low one it's because low than

StevenLee

Okay.

through So, goes is your could for the turn patent example? negative John, EBITDA sale

JohnChen

to I offset that do services to could growth some will EBITDA Yes, didn't be and I it it. registering -- our I'm EBITDA and if in software hoping EPS go negatively, am going we start will calculate hoping go negative. negative. But

Operator

don't of And to John this turn CEO have Chair remarks. further over like for any BlackBerry at closing I'd Executive back Chen, We time. questions call to and

John Chen

in very company. Thank the any you you thank don't all interest remarks. your you. I for much. And Thank have

a keep very will BTS. of separate we And us the growth will do we interesting here. the will Revenue and lines, we'll in know way We come two you year believe especially ahead in Spark and when either growth mostly I billing. from could already licensing, posted. go software it out know our have services global some We

And you so a all Thank today's evening. I'm sorry as and the great Coast. in being late for have in very much attending evening call the East

Operator

you for This call. your Thank participation. today's concludes

You disconnect. may now

Tim Foote	Senior Director of Finance
John Chen	Executive Chairman and Chief Executive Officer
Steve Rai	Chief Financial Officer
Mike Walkley	Canaccord Genuity
Daniel Chan	TD Securities
Trip Chowdhry	Global Equities Research
Paul Treiber	RBC Capital Markets
Paul Steep	Scotia Capital Markets
Steven Lee	Raymond James

BlackBerry Limited (BB) 31 Mar 212021 Q4 Earnings call transcript