6-K 1 q419pressrelease.htm 6-K Document
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________________________________________________________
FORM 6-K
_________________________________________________________________
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 under
the Securities Exchange Act of 1934
For the month of, March 2019
_________________________________________________________________  
Commission File Number 1-38232
_________________________________________________________________  
BlackBerry Limited
(Translation of registrant’s name into English)
_________________________________________________________________ 
2200 University Avenue East, Waterloo, Ontario, Canada N2K 0A7
(Address of principal executive offices)
_________________________________________________________________ 
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40F:
Form 20-F  ¨            Form 40-F  x
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):  ¨
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):  ¨

DOCUMENTS INCLUDED AS PART OF THIS REPORT
Document
 
1
BlackBerry Reports Record Software and Services Revenue in Fourth Quarter and Fiscal Year 2019
2
BlackBerry Supplemental Financial Information







Document 1
bluelogoa04.jpg
March 29, 2019
FOR IMMEDIATE RELEASE

BlackBerry Reports Record Software and Services Revenue in Fourth Quarter and Fiscal Year 2019
Fiscal Year 2019
•
Record high fiscal year 2019 total non-GAAP Software and Services revenue of $857 million and total GAAP Software and Services revenue of $845 million
•
Fiscal year 2019 total non-GAAP Software and Services revenue growth of 10% year-over-year, at the high-end of the previously provided outlook of 8% to 10%
•
Fiscal year 2019 total GAAP Software and Services revenue growth of 13% year-over-year
•
Fiscal year 2019 total Software and Services billings grew double-digits year-over-year
•
Fiscal year 2019 non-GAAP earnings per basic and diluted share of $0.24 versus $0.14 in fiscal year 2018
•
Fiscal year 2019 GAAP earnings per basic share of $0.17 and GAAP earnings per diluted share of $0.00
•
Total cash, cash equivalents, short-term and long-term investments was $1.0 billion as of February 28, 2019
•
Fiscal year 2019 free cash flow generated of $83 million, as reported
Fourth Quarter Fiscal 2019
•
Fourth quarter fiscal 2019 total company non-GAAP revenue of $257 million, or 8% growth year-over-year; total company GAAP revenue of $255 million, or 9% growth year-over-year
•
Record high fourth quarter fiscal 2019 total non-GAAP Software and Services revenue of $248 million; total GAAP Software and Services revenue of $246 million
•
Fourth quarter fiscal 2019 total non-GAAP Software and Services revenue growth of 14% year-over-year; fourth quarter fiscal 2019 total GAAP Software and Services revenue growth of 16% year-over-year
•
Fourth quarter fiscal 2019 Non-GAAP earnings per basic and diluted share of $0.11; GAAP earnings per basic share of $0.09 and GAAP earnings per diluted share of $0.08
•
Fourth quarter fiscal 2019 free cash flow of $20 million, before considering the impact of acquisition and integration expenses, restructuring costs and legal proceedings; free cash flow of $18 million, as reported





WATERLOO, Ont. - March 29, 2019 - BlackBerry Limited (NYSE: BB; TSX: BB) today reported financial results for the three months and the twelve months ended February 28, 2019 (all figures in U.S. dollars and U.S. GAAP, except where otherwise indicated).
Fourth Quarter Fiscal 2019 Results
•
Total company non-GAAP revenue for the fourth quarter of fiscal 2019 was $257 million, up 8% year-over-year. Total company GAAP revenue for the fourth quarter of fiscal 2019 was $255 million, up 9% year-over-year. Total non-GAAP Software and Services revenue of $248 million, up 14% year-over-year. Total GAAP Software and Services revenue was $246 million, up 16% year-over-year. Approximately 93% of fourth quarter non-GAAP Software and Services revenue (excluding IP licensing and professional services) was recurring after including perpetual licenses that are now recognized ratably. Non-GAAP gross margin was 82% and GAAP gross margin was 81%.
•
Non-GAAP operating income was $58 million, and positive for the twelfth consecutive quarter. GAAP operating income was $28 million. Non-GAAP earnings per share was $0.11 (basic and diluted). GAAP net earnings was $0.09 per basic share and a GAAP net earnings of $0.08 per diluted share. GAAP net income includes $18 million for acquired intangibles amortization expense, $14 million in stock compensation expense, $8 million in acquisition and integration charges, a benefit of $6 million related to the fair value adjustment on the debentures, and other amounts as summarized in a table below.
•
Total cash, cash equivalents, short-term and long-term investments was $1.0 billion as of February 28, 2019. Free cash flow, before considering the impact of acquisition and integration expenses, restructuring costs and legal proceedings, was positive $20 million. Cash generated from operations was $21 million and capital expenditures were $3 million. Excluding $605 million in the face value of the company’s debt, the net cash balance at the end of the quarter was $400 million.

“We delivered on all of our fiscal 2019 financial commitments and created a solid foundation for continued profitable revenue growth in fiscal 2020,” said John Chen, Executive Chairman and CEO, BlackBerry. “I am pleased to note that BlackBerry is recognized as a $1 billion plus revenue company in security software. The combination of BlackBerry Cylance’s lightweight AI and machine learning cybersecurity capabilities with BlackBerry Spark, our secure communications platform, will make our endpoint management and embedded software products stronger and more essential for enterprises to generate value from the Internet of Things.”
Outlook
BlackBerry will provide fiscal year 2020 outlook in connection with the quarterly earnings announcement on its earnings conference call. The earnings call transcript will be made available on our website and on SEDAR.






Reconciliation of GAAP revenue, gross margin, gross margin percentage, income before income taxes, net income and basic earnings per share to Non-GAAP revenue, gross margin, gross margin percentage, income before income taxes, net income and basic earnings per share for the three months ended February 28, 2019:
Q4 Fiscal 2019 Non-GAAP Adjustments
 
For the Three Months Ended February 28, 2019
(in millions, except for per share amounts)
 
Income statement location
 
Revenue
 
Gross margin (before taxes)
 
Gross margin % (before taxes)
 
Income before income taxes
 
Net income
 
Basic earnings per share
As reported
 
 
$
255

 
$
206

 
80.8
%
 
$
32

 
$
51

 
$
0.09

Debentures fair value adjustment(2)
Debentures fair value adjustment
 
—

 
—

 
—
%
 
(6
)
 
(6
)
 
 
Restructuring charges (3)
Cost of sales
 
—

 
1

 
0.4
%
 
1

 
1

 
 
Restructuring charges (3)
Selling, marketing and administration
 
—

 
—

 
—
%
 
2

 
2

 
 
Software deferred revenue acquired (4)
Revenue
 
2

 
2

 
0.1
%
 
2

 
2

 
 
Stock compensation expense (5)
Cost of sales
 
—

 
1

 
0.4
%
 
1

 
1

 
 
Stock compensation expense (5)
Research and development
 
—

 
—

 
—
%
 
3

 
3

 
 
Stock compensation expense (5)
Selling, marketing and administration
 
—

 
—

 
—
%
 
10

 
10

 
 
Acquired intangibles amortization (6)
Amortization
 
—

 
—

 
—
%
 
18

 
18

 
 
Business acquisition and integration costs (7)
Selling, marketing and administration
 
—

 
—

 
—
%
 
8

 
8

 
 
Settlements, net (8)
Arbitration awards and settlements, net
 
—

 
—

 
—
%
 
(9
)
 
(9
)
 
 
Acquisition income tax recoveries (9)
Income taxes
 
—

 
—

 
—
%
 
—

 
(21
)
 
 
 
 
 
$
257

 
$
210

 
81.7
%
 
$
62

 
$
60

 
$
0.11

Note: Non-GAAP revenue, non-GAAP gross margin, non-GAAP gross margin percentage, non-GAAP income before income taxes, non-GAAP net income and non-GAAP basic earnings per share do not have a standardized meaning prescribed by GAAP and thus are not comparable to similarly titled measures presented by other issuers. The Company believes that the presentation of these non-GAAP measures enables the Company and its shareholders to better assess the Company’s operating results relative to its operating results in prior periods and improves the comparability of the information presented. Investors should consider these non-GAAP measures in the context of the Company’s GAAP results.
(1)
During the fourth quarter of fiscal 2019, the Company reported GAAP gross margin of $206 million or 80.8% of revenue. Excluding the impact of stock compensation expense and restructuring charges included in cost of sales and software deferred revenue acquired included in revenue, non-GAAP gross margin was $210 million, or 81.7% of revenue.
(2)
During the fourth quarter of fiscal 2019, the Company recorded the Q4 Fiscal 2019 Debentures Fair Value Adjustment of $6 million. This adjustment was presented on a separate line in the Consolidated Statements of Operations.
(3)
During the fourth quarter of fiscal 2019, the Company incurred restructuring charges of approximately $3 million, of which $1 million was included in cost of sales, and $2 million was included in selling, marketing and administration expense.
(4)
During the fourth quarter of fiscal 2019, the Company recorded software deferred revenue acquired but not recognized due to business combination accounting rules of $2 million, which was included in Enterprise software and services revenue.
(5)
During the fourth quarter of fiscal 2019, the Company recorded stock compensation expense of $14 million, of which $1 million was included in cost of sales, $3 million was included in research and development, and $10 million was included in selling, marketing and administration expense.
(6)
During the fourth quarter of fiscal 2019, the Company recorded amortization of intangible assets acquired through business combinations of $18 million, which was included in amortization expense.




(7)
During the fourth quarter of fiscal 2019, the Company recorded business acquisition and integration costs incurred through business combinations of $8 million, which was including in selling, marketing and administration expenses.
(8)
During the fourth quarter of fiscal 2019, the Company recorded net settlements of $9 million, which was presented on a separate line in the Consolidated Statements of Operations.
(9)
During the fourth quarter of fiscal 2019, the Company recorded income tax recoveries related to the acquisition of Cylance Inc. of $21 million, which was included in provision for (recovery of) income taxes.
Supplementary Geographic Revenue Breakdown
 
BlackBerry Limited
(United States dollars, in millions)
Revenue by Region
 
 
For the Quarters Ended
 
 
February 28, 2019
 
November 30, 2018
 
August 31, 2018
 
May 31, 2018
 
February 28, 2018
North America
 
$
176

 
69.0
%
 
$
151

 
66.8
%
 
$
133

 
63.3
%
 
$
139

 
65.3
%
 
$
147

 
63.1
%
Europe, Middle East and Africa
 
61

 
23.9
%
 
56

 
24.8
%
 
53

 
25.3
%
 
52

 
24.4
%
 
63

 
27.0
%
Latin America
 
1

 
0.4
%
 
1

 
0.4
%
 
3

 
1.4
%
 
2

 
0.9
%
 
4

 
1.7
%
Asia Pacific
 
17

 
6.7
%
 
18

 
8.0
%
 
21

 
10.0
%
 
20

 
9.4
%
 
19

 
8.2
%
Total
 
$
255

 
100.0
%
 
$
226

 
100.0
%
 
$
210

 
100.0
%
 
$
213

 
100.0
%
 
$
233

 
100.0
%
Supplementary Revenue by Product and Service Type Breakdown

BlackBerry Limited
(United States dollars, in millions)
Revenue by Product and Service Type
 
U.S. GAAP
 
Adjustments
 
Non-GAAP
 
For the Three Months Ended
 
For the Three Months Ended
 
For the Three Months Ended
 
February 28, 2019
 
February 28, 2018
 
February 28, 2019
 
February 28, 2018
 
February 28, 2019
 
February 28, 2018
Enterprise software and services (1)
$
92

 
$
108

 
$
2

 
$
6

 
$
94

 
$
114

BlackBerry Technology Solutions
55

 
46

 
—

 
—

 
55

 
46

Licensing, IP and other
99

 
58

 
—

 
—

 
99

 
58

Handheld devices
—

 
2

 
—

 
—

 
—

 
2

SAF
9

 
19

 
—

 
—

 
9

 
19

Total
$
255

 
$
233

 
$
2

 
$
6

 
$
257

 
$
239


(1)
For the three months ended February 28, 2019, Enterprise software and services U.S. GAAP revenue, adjustments to Enterprise software and services revenue, and Enterprise software and services non-GAAP revenue include $2 million, $1 million and $3 million of BlackBerry Cylance revenue, respectively.







Reconciliation of GAAP revenue, gross margin, gross margin percentage, income before income taxes, net income and basic earnings per share to Non-GAAP revenue, gross margin, gross margin percentage, income before income taxes, net income and basic earnings per share for the year ended February 28, 2019:
Fiscal 2019 Non-GAAP Adjustments
 
For the Year Ended February 28, 2019
(in millions, except for per share amounts)
 
Income statement location
 
Revenue
 
Gross margin (before taxes)
 
Gross margin % (before taxes)
 
Net income before income taxes
 
Net income
 
Basic earnings per share
As reported
 
 
$
904

 
$
698

 
77.2
%
 
$
77

 
$
93

 
$
0.17

Debentures fair value adjustment (2)
Debentures fair value adjustment
 
—

 
—

 
—
%
 
(117
)
 
(117
)
 
 
Restructuring charges (3)
Cost of sales
 
—

 
2

 
0.2
%
 
2

 
2

 
 
Restructuring charges (3)
Research and development
 
—

 
—

 
—
%
 
2

 
2

 
 
Restructuring charges (3)
Selling, marketing and administration
 
—

 
—

 
—
%
 
7

 
7

 
 
Software deferred revenue acquired (4)
Revenue
 
12

 
12

 
0.3
%
 
12

 
12

 
 
Stock compensation expense (5)
Cost of sales
 
—

 
4

 
0.5
%
 
4

 
4

 
 
Stock compensation expense (5)
Research and development
 
—

 
—

 
—
%
 
12

 
12

 
 
Stock compensation expense (5)
Selling, marketing and administration
 
—

 
—

 
—
%
 
52

 
52

 
 
Acquired intangibles amortization (6)
Amortization
 
—

 
—

 
—
%
 
82

 
82

 
 
Business acquisition and integration costs (7)
Selling, marketing and administration
 
—

 
—

 
—
%
 
12

 
12

 
 
Settlements, net (8)
Arbitration awards and settlements, net
 
—

 
—

 
—
%
 
(9
)
 
(9
)
 
 
Acquisition income tax recoveries (9)
Income taxes
 
—

 
—

 
—
%
 
—

 
(21
)
 
 
Adjusted
 
 
$
916

 
$
716

 
78.2
%
 
$
136

 
$
131

 
$
0.24


Note: Non-GAAP revenue, non-GAAP gross margin, non-GAAP gross margin percentage, non-GAAP income before income taxes, non-GAAP net income and non-GAAP income per share do not have a standardized meaning prescribed by GAAP and thus are not comparable to similarly titled measures presented by other issuers. The Company believes that the presentation of these non-GAAP measures enables the Company and its shareholders to better assess the Company’s operating results relative to its operating results in prior periods and improves the comparability of the information presented. Investors should consider these non-GAAP measures in the context of the Company’s GAAP results.
(1)
During fiscal 2019, the Company reported GAAP gross margin of $698 million or 77.2% of revenue. Excluding the impact of the restructuring charges and stock compensation expense and software deferred revenue acquired included in revenue, the non-GAAP gross margin was $716 million, or 78.2% of revenue.
(2)
During fiscal 2019, the Company recorded the Fiscal 2019 Debentures Fair Value Adjustment of $117 million, which was presented on a separate line in the Consolidated Statements of Operations.
(3)
During fiscal 2019, the Company incurred charges related to the restructuring of approximately $11 million, of which $2 million was included in cost of sales, $2 million was included in research and development, and $7 million was included in selling, marketing and administration expense.
(4)
During fiscal 2019, the Company recorded software deferred revenue acquired but not recognized due to business combination accounting rules of $12 million, which was included in Enterprise software and services revenue.
(5)
During fiscal 2019, the Company recorded stock compensation expense of $68 million, of which $4 million was included in cost of sales, $12 million was included in research and development, and $52 million was included in selling, marketing and administration expenses.




(6)
During fiscal 2019, the Company recorded amortization of intangible assets acquired through business combinations of $82 million, which was included in amortization expense.
(7)
During fiscal 2019, the Company recorded business acquisition and integration costs incurred through business combinations of $12 million, which was including in selling, marketing and administration expenses.
(8)
During fiscal 2019, the Company recorded net settlements of $9 million, which was presented on a separate line in the Consolidated Statements of Operations.
(9)
During fiscal 2019, the Company recorded income tax recoveries related to the acquisition of Cylance Inc. of $21 million, which was included in provision for (recovery of) income taxes.
Supplementary Revenue by Product and Service Type Breakdown
 
BlackBerry Limited
(United States dollars, in millions)
Revenue by Product and Service Type
 
US GAAP
 
Adjustments
 
Non-GAAP
 
For the Years Ended
 
For the Years Ended
 
For the Years Ended
 
February 28, 2019
 
February 28, 2018
 
February 28, 2019
 
February 28, 2018
 
February 28, 2019
 
February 28, 2018
Enterprise software and services (1)
$
355

 
$
388

 
$
12

 
$
35

 
$
367

 
$
423

BlackBerry Technology Solutions
204

 
163

 
—

 
—

 
204

 
163

Licensing, IP and other
286

 
196

 
—

 
—

 
286

 
196

Handheld devices
13

 
64

 
—

 
—

 
13

 
64

SAF
46

 
121

 
—

 
—

 
46

 
121

Total
$
904

 
$
932

 
$
12

 
$
35

 
$
916

 
$
967


(1)
For the fiscal year ended February 28, 2019, Enterprise software and services U.S. GAAP revenue, adjustments to Enterprise software and services revenue, and Enterprise software and services non-GAAP revenue include $2 million, $1 million and $3 million of BlackBerry Cylance revenue, respectively.







Conference Call and Webcast
A conference call and live webcast will be held today beginning at 8 a.m. ET, which can be accessed by dialing 1- 877-682-6267 or by logging on at http://ca.blackberry.com/company/investors/events.html. A replay of the conference call will also be available at approximately 11 a.m. ET by dialing 1-800-585-8367 and entering Conference ID #8519329 and at the link above.

About BlackBerry
BlackBerry enables the Enterprise of Things by providing the technology that allows endpoints to trust one another, communicate securely, and maintain privacy.
 
Based in Waterloo, Ontario, BlackBerry was founded in 1984 and operates globally. The Company trades under the ticker symbol “BB” on the Toronto Stock Exchange and the New York Stock Exchange. For more information visit BlackBerry.com, and follow the company on LinkedIn, Twitter and Facebook.

Investor Contact:
BlackBerry Investor Relations
+1-519-888-7465
investor_relations@blackberry.com

Media Contact:
BlackBerry Media Relations
(519) 597-7273
mediarelations@blackberry.com

###

This news release contains forward-looking statements within the meaning of certain securities laws, including under the U.S. Private Securities Litigation Reform Act of 1995 and applicable Canadian securities laws, including statements regarding: the Company’s plans, strategies and objectives and the anticipated benefits of its strategic initiatives including the acquisition of Cylance, and its intentions to enhance its product and service offerings.

The words “expect”, “anticipate”, “estimate”, “may”, “will”, “should”, “could”, “intend”, “believe”, “target”, “plan” and similar expressions are intended to identify these forward-looking statements. Forward-looking statements are based on estimates and assumptions made by BlackBerry in light of its experience, historical trends, current conditions and expected future developments, as well as other factors that BlackBerry believes are appropriate in the circumstances. Many factors could cause BlackBerry’s actual results, performance or achievements to differ materially from those expressed or implied by the forward-looking statements, including the following risks: BlackBerry’s ability to enhance, develop, introduce or monetize products and services for the enterprise market in a timely manner with competitive pricing, features and performance; BlackBerry’s ability to maintain or expand its customer base for its software and services offerings to grow revenue or achieve sustained profitability; the intense competition faced by BlackBerry; the occurrence or perception of a breach of BlackBerry’s network or product security measures or an inappropriate disclosure of confidential or personal information; risks related to BlackBerry’s continuing ability to attract new personnel, retain existing key personnel and manage its staffing effectively; BlackBerry’s dependence on its relationships with resellers and channel partners; risks related to acquisitions, divestitures, investments and other business initiatives, which may negatively affect BlackBerry’s results of operations; risks related to BlackBerry’s products and services being dependent upon interoperability with rapidly changing systems provided by third parties; the risk that failure to protect BlackBerry’s intellectual property could harm its ability to compete effectively and BlackBerry may not earn the revenues it expects from intellectual property rights; the risk that BlackBerry could be found to have infringed on the intellectual property rights of others; the risk that litigation against BlackBerry may result in adverse outcomes; risks related to the use and management of user data and personal information, which could give rise to liabilities as a result of legal, customer and other third-party requirements; BlackBerry’s ability to obtain rights to use third-party software; the risk that network disruptions or other business interruptions could have a material adverse effect on BlackBerry’s business and harm its reputation; BlackBerry’s ability to generate revenue and profitability through the licensing of security software and services or the BlackBerry brand to device manufacturers; the substantial asset risk faced by BlackBerry, including the potential for charges related to its long-lived assets and goodwill; risks related to BlackBerry’s indebtedness, which could adversely affect its operating flexibility and financial condition; risks related to government regulations applicable to BlackBerry’s products and services, including products containing encryption capabilities, which could negatively impact




BlackBerry’s business; risks related to foreign operations, including fluctuations in foreign currencies; risks associated with any errors in BlackBerry’s products and services, which can be difficult to remedy and could have a material adverse effect on BlackBerry’s business; risks related to the failure of BlackBerry’s suppliers, subcontractors, channel partners and representatives to use acceptable ethical business practices or comply with applicable laws; BlackBerry’s reliance on third parties to manufacture and repair its hardware products; risks related to fostering an ecosystem of third-party application developers; risks related to regulations regarding health and safety, hazardous materials usage and conflict minerals, and to product certification risks; risks related to tax provision changes, the adoption of new tax legislation, or exposure to additional tax liabilities; risks related to the fluctuation of BlackBerry’s quarterly revenue and operating results; the volatility of the market price of BlackBerry’s common shares; and risks related to adverse economic and geopolitical conditions.

These risk factors and others relating to BlackBerry are discussed in greater detail in BlackBerry’s Annual Information Form, which is included in its Annual Report on Form 40-F and the “Cautionary Note Regarding Forward-Looking Statements” section of BlackBerry’s MD&A (copies of which filings may be obtained at www.sedar.com or www.sec.gov). All of these factors should be considered carefully, and readers should not place undue reliance on BlackBerry’s forward-looking statements. Any statements that are forward-looking statements are intended to enable BlackBerry’s shareholders to view the anticipated performance and prospects of BlackBerry from management’s perspective at the time such statements are made, and they are subject to the risks that are inherent in all forward-looking statements, as described above, as well as difficulties in forecasting BlackBerry’s financial results and performance for future periods, particularly over longer periods, given the ongoing transition in BlackBerry’s business strategy and the rapid technological changes, evolving industry standards, intense competition and short product life cycles that characterize the industries in which BlackBerry operates. BlackBerry has no intention and undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.

###




BlackBerry Limited
Incorporated under the Laws of Ontario
(United States dollars, in millions except share and per share amounts) (unaudited)

Consolidated Statements of Operations 
 
 
For the Three Months Ended
 
For the Years Ended
 
 
February 28, 2019
 
November 30, 2018
 
February 28, 2018
 
February 28, 2019
 
February 28, 2018
Revenue
 
$
255

 
$
226

 
$
233

 
$
904

 
$
932

Cost of sales
 
49

 
56

 
56

 
206

 
262

Gross margin
 
206

 
170

 
177

 
698

 
670

Gross margin %
 
80.8
%
 
75.2
%
 
76.0
%
 
77.2
%
 
71.9
%
Operating expenses
 
 
 
 
 
 
 
 
 
 
Research and development
 
52

 
55

 
58

 
219

 
239

Selling, marketing and administration
 
109

 
91

 
131

 
406

 
467

Amortization
 
31

 
33

 
37

 
136

 
153

Debentures fair value adjustment
 
(6
)
 
(69
)
 
(34
)
 
(117
)
 
191

Impairment of long-lived assets
 
—

 
—

 
—

 
—

 
11

Loss on sale, disposal and abandonment of long-lived assets
 
1

 
2

 
2

 
3

 
9

Arbitration awards and settlements, net
 
(9
)
 
—

 
—

 
(9
)
 
(683
)
 
 
178

 
112

 
194

 
638

 
387

Operating income (loss)
 
28

 
58

 
(17
)
 
60

 
283

Investment income, net
 
4

 
2

 
3

 
17

 
123

Income (loss) before income taxes
 
32

 
60

 
(14
)
 
77

 
406

Provision for income taxes
 
(19
)
 
1

 
(4
)
 
(16
)
 
1

Net income (loss)
 
$
51

 
$
59

 
$
(10
)
 
$
93

 
$
405

Earnings (loss) per share
 
 
 
 
 
 

 
 
 
 
Basic
 
$
0.09

 
$
0.11

 
$
(0.02
)
 
$
0.17

 
$
0.76

Diluted
 
$
0.08

 
$
(0.01
)
 
$
(0.06
)
 
$
0.00

 
$
0.74

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

 
 
 
 
Basic
 
547,272

 
540,406

 
536,594

 
540,477

 
532,888

Diluted
 
615,593

 
600,906

 
597,094

 
616,467

 
545,886

Total common shares outstanding (000s)
 
547,358

 
547,084

 
536,734

 
547,358

 
536,734






BlackBerry Limited
Incorporated under the Laws of Ontario
(United States dollars, in millions) (unaudited)

Consolidated Balance Sheets
 
 
As at
 
 
February 28, 2019
 
February 28, 2018
Assets
 
 
 
 
Current
 
 
 
 
Cash and cash equivalents
 
$
548


$
816

Short-term investments
 
368


1,443

Accounts receivable, net
 
194

 
151

Other receivables
 
19

 
71

Income taxes receivable
 
9

 
26

Other current assets
 
56

 
38

 
 
1,194

 
2,545

Restricted cash and cash equivalents
 
34


39

Long-term investments
 
55


55

Other long-term assets
 
28

 
28

Deferred income tax assets
 
2

 
3

Property, plant and equipment, net
 
85

 
64

Goodwill
 
1,463

 
569

Intangible assets, net
 
1,068

 
477

 
 
$
3,929

 
$
3,780

Liabilities
 
 
 
 

Current
 
 
 
 

Accounts payable
 
$
48

 
$
46

Accrued liabilities
 
192

 
205

Income taxes payable
 
17

 
18

Deferred revenue, current
 
214

 
142

 
 
471

 
411

Deferred revenue, non-current
 
136

 
53

Other long-term liabilities
 
19

 
23

Long-term debt
 
665

 
782

Deferred income tax liabilities
 
2

 
6

 
 
1,293

 
1,275

Shareholders’ equity
 
 
 
 
Capital stock and additional paid-in capital
 
2,688

 
2,560

Deficit
 
(32
)
 
(45
)
Accumulated other comprehensive loss
 
(20
)
 
(10
)
 
 
2,636

 
2,505

 
 
$
3,929

 
$
3,780






BlackBerry Limited
Incorporated under the Laws of Ontario
(United States dollars, in millions) (unaudited)

Consolidated Statements of Cash Flows
 
For the Years Ended
  
February 28, 2019
 
February 28, 2018
Cash flows from operating activities
 
 
 
Net income
$
93

 
$
405

Adjustments to reconcile net income to net cash provided by operating activities:

 

Amortization
149

 
177

Deferred income taxes
(25
)
 
(7
)
Stock-based compensation
67

 
49

Impairment of long-lived assets
—

 
11

Non-cash consideration received from contracts with customers
(46
)
 
—

Loss on sale, disposal and abandonment of long-lived assets
3

 
9

Debentures fair value adjustment
(117
)
 
191

Other long-term assets
—

 
(18
)
Other long-term liabilities
(12
)
 
5

Other
3

 
(6
)
Net changes in working capital items:
 
 
 
Accounts receivable, net
(9
)
 
49

Other receivables
52

 
(44
)
Inventories
—

 
23

Income taxes receivable
17

 
2

Other assets
(1
)
 
16

Accounts payable
(15
)
 
(82
)
Accrued liabilities
(21
)
 
(36
)
Income taxes payable
(2
)
 
4

Deferred revenue
(36
)
 
(44
)
Net cash provided by operating activities
100

 
704

Cash flows from investing activities
 
 
 
Acquisition of long-term investments
(2
)
 
(27
)
Proceeds on sale or maturity of long-term investments
2

 
77

Acquisition of property, plant and equipment
(17
)
 
(15
)
Proceeds on sale of property, plant and equipment
1

 
3

Acquisition of intangible assets
(32
)
 
(30
)
Business acquisitions, net of cash acquired
(1,402
)
 
—

Acquisition of short-term investments
(2,895
)
 
(3,499
)
Proceeds on sale or maturity of short-term investments
3,970

 
2,861

Net cash used in investing activities
(375
)
 
(630
)
Cash flows from financing activities
 
 
 
Issuance of common shares
5

 
8

Common shares repurchased
—

 
(18
)
Net cash provided by (used in) financing activities
5

 
(10
)
Effect of foreign exchange gain (loss) on cash, cash equivalents, restricted cash, and restricted cash equivalents
(3
)
 
6

Net increase (decrease) in cash, cash equivalents, restricted cash, and restricted cash equivalents during the period
(273
)
 
70

Cash, cash equivalents, restricted cash, and restricted cash equivalents, beginning of period
855

 
785

Cash, cash equivalents, restricted cash, and restricted cash equivalents, end of period
$
582

 
$
855

 
 
 
 
As at
February 28, 2019
 
February 28, 2018
Cash and cash equivalents
$
548

 
$
816

Restricted cash and cash equivalents
$
34

 
$
39

Short-term investments
$
368

 
$
1,443

Long-term investments
$
55

 
$
55





Document 2
BlackBerry Investor Relations Income Statement Summary
GAAP Income Statement
(Three Months Ended)
 
Q1 FY18
 
Q2 FY18
 
Q3 FY18
 
Q4 FY18
 
FY18
 
Q1 FY19
 
Q2 FY19
 
Q3 FY19
 
Q4 FY19
 
FY19
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Enterprise software and services
 
$
92

 
$
91

 
$
97

 
$
108

 
$
388

 
$
79

 
$
88

 
$
96

 
$
92

 
$
355

BlackBerry Technology Solutions
 
36

 
38

 
43

 
46

 
163

 
47

 
49

 
53

 
55

 
204

Licensing, IP & other
 
32

 
56

 
50

 
58

 
196

 
63

 
56

 
68

 
99

 
286

Software and services
 
160

 
185

 
190

 
212

 
747

 
189

 
193

 
217

 
246

 
845

Handheld devices
 
37

 
16

 
9

 
2

 
64

 
8

 
5

 
—

 
—

 
13

Service access fees
 
38

 
37

 
27

 
19

 
121

 
16

 
12

 
9

 
9

 
46

Revenue
 
235

 
238

 
226

 
233

 
932

 
213

 
210

 
226

 
255

 
904

Cost of sales
 
85

 
63

 
58

 
56

 
262

 
52

 
49

 
56

 
49

 
206

Gross margin
 
150

 
175

 
168

 
177

 
670

 
161

 
161

 
170

 
206

 
698

Operating expenses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Research and development
 
61

 
60

 
60

 
58

 
239

 
61

 
51

 
55

 
52

 
219

Selling, marketing and administration
 
109

 
110

 
118

 
131

 
467

 
100

 
106

 
91

 
109

 
406

Amortization
 
40

 
39

 
37

 
37

 
153

 
37

 
35

 
33

 
31

 
136

Impairment of long-lived assets
 
—

 
11

 
—

 
—

 
11

 
—

 
—

 
—

 
—

 
—

Loss on sale, disposal and abandonment of long-lived assets
 
1

 
3

 
2

 
2

 
9

 
—

 
—

 
2

 
1

 
3

Debentures fair value adjustment
 
218

 
(70
)
 
77

 
(34
)
 
191

 
28

 
(70
)
 
(69
)
 
(6
)
 
(117
)
Arbitration awards (charges) and settlements, net
 
(815
)
 
—

 
132

 
—

 
(683
)
 
—

 
—

 
—

 
(9
)
 
(9
)
Total operating expenses
 
(386
)
 
153

 
426

 
194

 
387

 
226

 
122

 
112

 
178

 
638

Operating income (loss)
 
536

 
22

 
(258
)
 
(17
)
 
283

 
(65
)
 
39

 
58

 
28

 
60

Investment income (loss), net
 
136

 
1

 
(17
)
 
3

 
123

 
6

 
5

 
2

 
4

 
17

Income (loss) before income taxes
 
672

 
23

 
(275
)
 
(14
)
 
406

 
(59
)
 
44

 
60

 
32

 
77

Provision for (recovery of) income taxes
 
1

 
4

 
—

 
(4
)
 
1

 
1

 
1

 
1

 
(19
)
 
(16
)
Net income (loss)
 
$
671

 
$
19

 
$
(275
)
 
$
(10
)
 
$
405

 
$
(60
)
 
$
43

 
$
59

 
$
51

 
$
93

Earnings (loss) per share
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic earnings (loss) per share
 
$
1.26

 
$
0.04

 
$
(0.52
)
 
$
(0.02
)
 
$
0.76

 
$
(0.11
)
 
$
0.08

 
$
0.11

 
$
0.09

 
$
0.17

Diluted earnings (loss) per share
 
$
1.23

 
$
(0.08
)
 
$
(0.52
)
 
$
(0.06
)
 
$
0.74

 
$
(0.11
)
 
$
(0.04
)
 
$
(0.01
)
 
$
0.08

 
$
0.00

Weighted-average number of common shares outstanding (000s)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic
 
531,096

 
531,381

 
532,496

 
536,594

 
532,888

 
536,964

 
537,299

 
540,406

 
547,272

 
540,477

Diluted
 
544,077

 
591,881

 
532,496

 
597,094

 
545,886

 
536,964

 
597,799

 
600,906

 
615,593

 
616,467

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-GAAP Adjustments (Three Months Ended, Pre-Tax and After Tax)
 
Q1 FY18
 
Q2 FY18
 
Q3 FY18
 
Q4 FY18
 
FY18
 
Q1 FY19
 
Q2 FY19
 
Q3 FY19
 
Q4 FY19
 
FY19
LLA impairment charge
 
$
—

 
$
11

 
$
—

 
$
—

 
$
11

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

Selective patent abandonment
 
1

 
2

 
—

 
2

 
4

 
—

 
—

 
—

 
—

 
—

Debentures fair value adjustment
 
218

 
(70
)
 
77

 
(34
)
 
191

 
28

 
(70
)
 
(69
)
 
(6
)
 
(117
)
Restructuring charges
 
16

 
16

 
20

 
26

 
78

 
4

 
3

 
1

 
3

 
11

Software deferred revenue acquired
 
9

 
11

 
9

 
6

 
35

 
4

 
4

 
2

 
2

 
12

Stock compensation expense
 
13

 
12

 
12

 
13

 
49

 
18

 
21

 
15

 
14

 
68

Acquired intangibles amortization
 
25

 
24

 
23

 
22

 
95

 
22

 
22

 
20

 
18

 
82

Business acquisition and integration
 
11

 
1

 
1

 
—

 
14

 
1

 
(2
)
 
5

 
8

 
12

Arbitration awards (charges) and settlements, net
 
(954
)
 
—

 
149

 
(1
)
 
(806
)
 
—

 
—

 
—

 
(9
)
 
(9
)
Legacy royalty adjustments
 
—

 
—

 
—

 
1

 
1

 
—

 
—

 
—

 
—

 
—

Acquisition income tax recoveries
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
(21
)
 
(21
)
Total Non-GAAP Adjustments
 
$
(661
)
 
$
7

 
$
291

 
$
35

 
$
(328
)
 
$
77

 
$
(22
)
 
$
(26
)
 
$
9

 
$
38

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 




 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-GAAP Gross Profit
 
Q1 FY18
 
Q2 FY18
 
Q3 FY18
 
Q4 FY18
 
FY18
 
Q1 FY19
 
Q2 FY19
 
Q3 FY19
 
Q4 FY19
 
FY19
GAAP revenue
 
$
235

 
$
238

 
$
226

 
$
233

 
$
932

 
$
213

 
$
210

 
$
226

 
$
255

 
$
904

Software deferred revenue acquired
 
9

 
11

 
9

 
6

 
35

 
4

 
4

 
2

 
2

 
12

Non-GAAP revenue
 
244

 
249

 
235

 
239

 
967

 
217

 
214

 
228

 
257

 
916

Total cost of sales
 
85

 
63

 
58

 
56

 
262

 
52

 
49

 
56

 
49

 
206

Non-GAAP adjustments to cost of sales
 
(4
)
 
(4
)
 
(3
)
 
(5
)
 
(16
)
 
(1
)
 
(2
)
 
(1
)
 
(2
)
 
(6
)
Non-GAAP Gross Profit
 
$
163

 
$
190

 
$
180

 
$
188

 
$
721

 
$
166

 
$
167

 
$
173

 
$
210

 
$
716

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Adjusted EBITDA
 
Q1 FY18
 
Q2 FY18
 
Q3 FY18
 
Q4 FY18
 
FY18
 
Q1 FY19
 
Q2 FY19
 
Q3 FY19
 
Q4 FY19
 
FY19
GAAP operating income (loss)
 
$
536

 
$
22

 
$
(258
)
 
$
(17
)
 
$
283

 
$
(65
)
 
$
39

 
$
58

 
$
28

 
$
60

Non-GAAP adjustments to operating income (loss)
 
(522
)
 
7

 
274

 
36

 
(205
)
 
77

 
(22
)
 
(26
)
 
30

 
59

Non-GAAP operating income
 
14

 
29

 
16

 
19

 
78

 
12

 
17

 
32

 
58

 
119

Amortization
 
51

 
45

 
42

 
39

 
177

 
41

 
38

 
37

 
33

 
149

Acquired intangibles amortization
 
(25
)
 
(24
)
 
(23
)
 
(22
)
 
(95
)
 
(22
)
 
(22
)
 
(20
)
 
(18
)
 
(82
)
Adjusted EBITDA
 
$
40

 
$
50

 
$
35

 
$
36

 
$
160

 
$
31

 
$
33

 
$
49

 
$
73

 
$
186

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Reconciliation from GAAP Net Income (Loss) to Non-GAAP Net Income and Non-GAAP Earnings per Share
 
Q1 FY18
 
Q2 FY18
 
Q3 FY18
 
Q4 FY18
 
FY18
 
Q1 FY19
 
Q2 FY19
 
Q3 FY19
 
Q4 FY19
 
FY19
GAAP net income (loss)
 
$
671

 
$
19

 
$
(275
)
 
$
(10
)
 
$
405

 
$
(60
)
 
$
43

 
$
59

 
$
51

 
$
93

Total Non-GAAP adjustments (three months ended, after-tax)
 
(661
)
 
7

 
291

 
35

 
(328
)
 
77

 
(22
)
 
(26
)
 
9

 
38

Non-GAAP Net Income
 
$
10

 
$
26

 
$
16

 
$
25

 
$
77

 
$
17

 
$
21

 
$
33

 
$
60

 
$
131

Non-GAAP Earnings per Share
 
$
0.02

 
$
0.05

 
$
0.03

 
$
0.05

 
$
0.14

 
$
0.03

 
$
0.04

 
$
0.06

 
$
0.11

 
$
0.24

Shares outstanding for Non-GAAP earnings per share reconciliation
 
531,096

 
531,381

 
532,496

 
536,594

 
532,888

 
536,964

 
537,299

 
540,406

 
547,272

 
540,477

Non-GAAP revenue, non-GAAP income before income taxes, non-GAAP net income, non-GAAP gross profit, adjusted EBITDA and non-GAAP earnings per share do not have a standardized meaning prescribed by GAAP and thus are not comparable to similarly titled measures presented by other issuers. The Company believes that the presentation of these non-GAAP measures enables the Company and its shareholders to better assess the Company’s operating results relative to its operating results in prior periods and improves the comparability of the information presented. This non-GAAP information should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. You are encouraged to review the Company’s filings on SEDAR and EDGAR. The Company makes no commitment to update the information above subsequently.




BlackBerry Investor Relations Pre-Tax Restructuring Details
 
 
Q1 FY18
 
Q2 FY18
 
Q3 FY18
 
Q4 FY18
 
FY18
 
Q1 FY19
 
Q2 FY19
 
Q3 FY19
 
Q4 FY19
 
FY19
Cost of sales
 
$
3

 
$
3

 
$
2

 
$
3

 
$
11

 
$
—

 
$
1

 
$
—

 
$
1

 
$
2

Research and development
 
3

 
1

 
1

 
—

 
5

 
2

 
—

 
—

 
—

 
2

Selling, marketing and administration
 
10

 
12

 
17

 
23

 
62

 
2

 
2

 
1

 
2

 
7

Total restructuring charges
 
$
16

 
$
16

 
$
20

 
$
26

 
$
78

 
$
4

 
$
3

 
$
1

 
$
3

 
$
11

BlackBerry Investor Relations Amortization of Intangibles and Property, Plant and Equipment Details
 
 
Q1 FY18
 
Q2 FY18
 
Q3 FY18
 
Q4 FY18
 
FY18
 
Q1 FY19
 
Q2 FY19
 
Q3 FY19
 
Q4 FY19
 
FY19
Cost of sales amortization
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Property, plant and equipment
 
$
7

 
$
4

 
$
5

 
$
2

 
$
18

 
$
2

 
$
1

 
$
2

 
$
1

 
$
6

Intangible assets
 
4

 
2

 
—

 
—

 
6

 
2

 
2

 
2

 
1

 
7

Total in cost of sales
 
11

 
6

 
5

 
2

 
24

 
4

 
3

 
4

 
2

 
13

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating expenses amortization
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Property, plant and equipment
 
5

 
5

 
3

 
5

 
18

 
3

 
3

 
4

 
4

 
14

Intangible assets
 
35

 
34

 
34

 
32

 
135

 
34

 
32

 
29

 
27

 
122

Total in operating expenses amortization
 
40

 
39

 
37

 
37

 
153

 
37

 
35

 
33

 
31

 
136

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total amortization
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Property, plant and equipment
 
12

 
9

 
8

 
7

 
36

 
5

 
4

 
6

 
5

 
20

Intangible assets
 
39

 
36

 
34

 
32

 
141

 
36

 
34

 
31

 
28

 
129

Total amortization
 
$
51

 
$
45

 
$
42

 
$
39

 
$
177

 
$
41

 
$
38

 
$
37

 
$
33

 
$
149

The information above is supplied to provide meaningful supplemental information regarding the Company’s operating results because such information excludes amounts that are not necessarily related to its operating results. The Company believes that the presentation of these non-GAAP measures enables the Company and its shareholders to better assess the Company’s operating results relative to its operating results in prior periods and improves the comparability of the information presented. This non-GAAP information should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. You are encouraged to review the Company’s filings on SEDAR and EDGAR. The Company makes no commitment to update the information above subsequently.

SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 
 
BlackBerry Limited
 
(Registrant)
 
Date:
 
March 29, 2019
 
 
By: 
 
         /s/ Steven Capelli
 
Name: 
Steven Capelli
Title:
Chief Financial Officer