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Revenue and Segment Disclosures
 6 Months Ended
Aug. 31, 2021
Segment Reporting [Abstract]  
Revenue and Segment Disclosures REVENUE AND SEGMENT DISCLOSURES
The Company reports segment information based on the “management” approach. The management approach designates the internal reporting used by the CODM for making decisions and assessing performance as a source of the Company’s reportable operating segments. In the first quarter of fiscal 2022, the CODM, who is the Executive Chair and CEO of the Company, began making decisions and assessing the performance of the Company using three operating segments, whereas the CODM previously made decisions and assessed the performance of the Company as a single operating segment.
The CODM does not evaluate operating segments using discrete asset information. The Company does not specifically allocate assets to operating segments for internal reporting purposes.
Segment Disclosures
The Company is now organized and managed as three operating segments: Cyber Security, IoT, and Licensing and Other. Prior year information has been restated to conform to the current year presentation of the Company’s segment information.
The following table shows information by operating segment for the three and six months ended August 31, 2021 and August 31, 2020:
 For the Three Months Ended
Cyber SecurityIoTLicensing and OtherSegment Totals
August 31, 2021August 31, 2020August 31, 2021August 31, 2020August 31, 2021August 31, 2020August 31, 2021August 31, 2020
Segment revenue$120 $120 $40 $31 $15 $108 $175 $259 
Segment cost of sales49 46 7 6 6 7 62 59 
Segment gross margin (1)
$71 $74 $33 $25 $9 $101 $113 $200 
For the Six Months Ended
Cyber SecurityIoTLicensing and OtherSegment Totals
August 31, 2021August 31, 2020August 31, 2021August 31, 2020August 31, 2021August 31, 2020August 31, 2021August 31, 2020
Segment revenue$227 $239 $83 $60 $39 $166 $349 $465 
Segment cost of sales95 93 14 12 12 15 121 120 
Segment gross margin (1)
$132 $146 $69 $48 $27 $151 $228 $345 
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(1) A reconciliation of total segment gross margin to consolidated totals is set forth below.
Cyber Security consists of the Company’s BlackBerry Spark® software platform, BlackBerry® AtHoc, BlackBerry® Alert and SecuSUITE. The BlackBerry Spark platform is a comprehensive offering of security software products and services, including the BlackBerry Spark® Unified Endpoint Security Suite and the BlackBerry Spark® Unified Endpoint Management (“UEM”) Suite, which are also marketed together as the BlackBerry Spark® Suites, offering the Company’s broadest range of tailored cybersecurity and endpoint management options. The BlackBerry Spark UES Suite includes revenue from the Company’s Cylance® artificial intelligence and machine learning-based platform consisting of BlackBerry® Protect, BlackBerry® Optics, BlackBerry® Persona, BlackBerry® Gateway, BlackBerry® Guard managed services and other cybersecurity applications. In addition, the Company offers the BlackBerry Cyber Suite, a UEM-agnostic version of its BlackBerry Spark UES Suite. The BlackBerry Spark UEM Suite includes the Company’s BlackBerry® UEM, BlackBerry® Dynamics™, and BlackBerry® Workspaces solutions. Cyber Security revenue is generated predominantly through software licenses, commonly bundled with support, maintenance and professional services.
IoT consists of BlackBerry QNX®, BlackBerry Certicom®, BlackBerry Radar®, BlackBerry IVY™ and other IoT applications. IoT revenue is generated predominantly through software licenses, commonly bundled with support, maintenance and professional services.
Licensing and Other consists of the Company’s intellectual property arrangements and settlement awards. Other consists of the Company’s legacy service access fees (“SAF”) business.
The following table reconciles total segment gross margin for the three and six months ended August 31, 2021 and August 31, 2020 to the Company’s consolidated totals:
 Three Months EndedSix Months Ended
August 31, 2021August 31, 2020August 31, 2021August 31, 2020
Total segment gross margin$113 $200 228 $345 
Adjustments (1):
Less: Cost of sales1 1 2 3 
Less:
Research & development58 57 115 114 
Selling, marketing and administration 83 79 156 169 
Amortization45 46 91 92 
Impairment of long-lived assets— 21 — 21 
Impairment of goodwill— — — 594 
Debentures fair value adjustment67 18 63 19 
Investment loss, net1 5 3 5 
Consolidated loss before income taxes$(142)$(27)$(202)$(672)
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(1) The CODM reviews segment information on an adjusted basis, which excludes certain amounts as described below:
Stock compensation expenses - Equity compensation is a non-cash expense and does not impact the ongoing operating decisions taken by the Company’s management.
Revenue
The Company disaggregates revenue from contracts with customers based on geographical regions, timing of revenue recognition, and the major product and service types, as discussed above in “Segment Disclosures”.
The Company’s revenue, classified by major geographic region in which the Company’s customers are located, was as follows:
 Three Months EndedSix Months Ended
 August 31, 2021August 31, 2020August 31, 2021August 31, 2020
North America (1)
$101 $195 $212 $345 
Europe, Middle East and Africa57 48 102 89 
Other regions17 16 35 31 
Total $175 $259 $349 $465 
North America (1)
57.7 %75.3 %60.8 %74.2 %
Europe, Middle East and Africa32.6 %18.5 %29.2 %19.1 %
Other regions9.7 %6.2 %10.0 %6.7 %
Total 100.0 %100.0 %100.0 %100.0 %
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(1) North America includes all revenue from the Company’s intellectual property arrangements, due to the global applicability of the patent portfolio and licensing arrangements thereof.
Revenue, classified by timing of recognition, was as follows:
 Three Months Ended Six Months Ended
August 31, 2021August 31, 2020August 31, 2021August 31, 2020
Products and services transferred over time$107 $125 $213 $241 
Products and services transferred at a point in time68 134 136 224 
Total$175 $259 $349 $465 
Revenue contract balances
The following table sets forth the activity in the Company’s revenue contract balances for the six months ended August 31, 2021:
Accounts ReceivableDeferred RevenueDeferred Commissions
Opening balance as at February 28, 2021$188 $294 $21 
Increases due to invoicing of new or existing contracts, associated contract acquisition costs, or other314 256 10 
Decrease due to payment, fulfillment of performance obligations, or other(376)(306)(13)
Decrease, net(62)(50)(3)
Closing balance as at August 31, 2021$126 $244 $18 
Transaction price allocated to the remaining performance obligations
The table below discloses the aggregate amount of the transaction price allocated to performance obligations that are unsatisfied or partially unsatisfied as at August 31, 2021 and the time frame in which the Company expects to recognize this revenue. The disclosure includes estimates of variable consideration, except when the variable consideration is a sales-based or usage-based royalty promised in exchange for a license of intellectual property.
As at August 31, 2021
Less than 12 Months12 to 24 MonthsThereafterTotal
Remaining performance obligations$213 $36 $15 $264 
Revenue recognized for performance obligations satisfied in prior periods
For the three and six months ended August 31, 2021, no revenue was recognized for performance obligations satisfied in a prior period (three and six months ended August 31, 2020 - nil and $1 million of revenue was recognized relating to performance obligations satisfied in a prior period).
Property, plant and equipment, intangible assets, operating lease ROU assets and goodwill, classified by geographic region in which the Company’s assets are located, were as follows:
 As at
 August 31, 2021February 28, 2021
Property, Plant and Equipment, Intangible Assets, Operating Lease ROU Assets and GoodwillTotal AssetsProperty, Plant and Equipment, Intangible Assets, Operating Lease ROU Assets and GoodwillTotal Assets
Canada$252 $467 $289 $504 
United States1,364 1,845 1,411 1,963 
Other28 320 31 351 
$1,644 $2,632 $1,731 $2,818 
Information About Major Customers
There was one customer that comprised 12% and no other customer that comprised more than 10% of the Company’s revenue in the three and six months ended August 31, 2021, respectively (three and six months ended August 31, 2020 - one customer that comprised 40% and 34% of the Company’s revenue, respectively).