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Revenue and Segment Disclosures
 9 Months Ended
Nov. 30, 2024
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. The CODM, who is the CEO of the Company, makes decisions and assesses the performance of the Company using three operating segments.
During the third quarter of fiscal 2025, the CODM added the segment EBITDA as a measure of profit or loss used under the “management” approach in reviewing the results of the Company’s operating segments to its existing measure of profit or loss of segment gross margin. Prior period comparatives have been recast to reflect the change in metric, including the significant operating expenses included within that metric, and the change in presentation relating to expenses associated with its facilities as disclosed in Note 1.
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
With the Cylance business being presented as a discontinued operations as discussed in Note 2, the Company is organized and managed as three operating segments: Secure Communications (formerly Cybersecurity), IoT, and Licensing.
The following table shows information by operating segment for the three and nine months ended November 30, 2024 and November 30, 2023:
 For the Three Months Ended
Secure CommunicationsIoTLicensingSegment Totals
November 30,November 30,November 30,November 30,
20242023202420232024202320242023
Segment revenue$74 $91 $62 $55 $7 $6 $143 $152 
Segment cost of sales20 23 9 8 2 1 31 32 
Segment gross margin (1)
$54 $68 $53 $47 $5 $5 $112 $120 
Segment research and development11 12 16 15 — — 27 27 
Segment sales and marketing12 15 11 10 — — 23 25 
Segment general and administrative10 9 9 10 1 6 20 25 
Less amortization included in the above1 1 1 — 2 3 4 4 
Total Segment EBITDA (1)
$22 $33 $18 $12 $6 $2 $46 $47 
For the Nine Months Ended
Secure CommunicationsIoTLicensingSegment Totals
November 30,November 30,November 30,November 30,
20242023202420232024202320242023
Segment revenue$205 $212 $170 $149 $16 $245 $391 $606 
Segment cost of sales67 62 28 24 5 150 100 236 
Segment gross margin (1)
$138 $150 $142 $125 $11 $95 $291 $370 
Segment research and development36 44 47 49 — — 83 93 
Segment sales and marketing34 45 32 31 — — 66 76 
Segment general and administrative30 35 25 32 5 19 60 86 
Less amortization included in the above3 4 2 2 6 8 11 14 
Total Segment EBITDA (1)
$41 $30 $40 $15 $12 $84 $93 $129 
______________________________
(1) A reconciliation of total segment gross margin and segment EBITDA to consolidated totals is set forth below.
Secure Communications consists of BlackBerry® UEM, BlackBerry® AtHoc® and BlackBerry® SecuSUITE®. The Company’s endpoint management platform includes BlackBerry® UEM, BlackBerry® Dynamics™, and BlackBerry® Workspaces solutions. Secure Communications 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 consists of the Company’s intellectual property arrangements and settlement awards.
The following table reconciles total segment gross margin for the three and nine months ended November 30, 2024 and November 30, 2023 to the Company’s consolidated totals:
 Three Months EndedNine Months Ended
November 30, 2024November 30, 2023November 30, 2024November 30, 2023
Total segment gross margin$112 $120 $291 $370 
Adjustments (1):
Stock compensation expense— 1 2 3 
Less:
Research & development27 29 85 98 
Sales and marketing23 25 68 77 
General and administrative38 45 111 133 
Amortization4 6 14 22 
Impairment of long-lived assets1 9 4 9 
Prior Debentures fair value adjustment— (13)— 3 
Investment income, net— (5)(8)(15)
Consolidated income from continuing operations before income taxes$19 $23 $15 $40 
______________________________
(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.

 Three Months EndedNine Months Ended
November 30, 2024November 30, 2023November 30, 2024November 30, 2023
Total Segment EBITDA$46 $47 $93 $129 
Adjustments (1):
Stock compensation expense4 7 16 25 
Restructuring expenses7 9 16 17 
Less
Corporate general and administrative expense9 10 31 24 
Amortization6 7 19 26 
Impairment of long-lived assets1 9 4 9 
Prior Debentures fair value adjustment— (13)— 3 
Investment income— (5)(8)(15)
Consolidated income from continuing operations before income taxes$19 $23 $15 $40 
______________________________
(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.
Restructuring expenses - Restructuring costs relate to employee termination benefits, facilities, streamlining many of the Company’s centralized corporate functions into Secure Communications (previously Cybersecurity) and IoT specific teams, and other costs pursuant to programs to reduce the Company’s annual expenses amongst R&D, infrastructure and other functions do not reflect expected future operating expenses, are not indicative of the
Company’s core operating performance, and may not be meaningful when comparing the Company’s operating performance against that of prior periods.
Patent Sale
On May 11, 2023, the Company completed the sale of certain non-core patent assets to Malikie Innovations Limited for $170 million in cash on closing, an additional $30 million in fixed consideration due by no later than the third anniversary of closing and variable consideration in the form of future royalties in the aggregate amount of up to $700 million (the “Malikie Transaction”). Pursuant to the terms of the Malikie Transaction, the Company received a license back to the patents sold, which relate primarily to mobile devices, messaging and wireless networking.
In the first quarter of fiscal 2024, the Company recognized revenue of $218 million and cost of sales of $147 million related to intellectual property sold. As at November 30, 2024, the remaining financing component on the patent sale was $6 million and will be recognized as interest income over the payment terms.
The Company estimated variable consideration from future royalty revenues using an expected value method including inputs from both internal and external sources related to patent monetization activities and cash flows, and constrained the recognition of that variable consideration based on the Company’s accounting policies and critical accounting estimates as described in Note 1. The present value of variable consideration recognized as revenue was $23 million and the amount of variable consideration constrained was $210 million. The Company evaluates its conclusions as to whether the constraints are still applicable on an ongoing basis, and will make updates when it observes a sufficient amount of evidence that amounts of variable consideration are no longer subject to constraint or the estimated amount of variable consideration has changed.
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 EndedNine Months Ended
 November 30, 2024November 30, 2023November 30, 2024November 30, 2023
North America (1)
$63 $62 $177 $418 
Europe, Middle East and Africa53 47 141 116 
Other regions27 43 73 72 
Total $143 $152 $391 $606 
North America (1)
44.1 %40.8 %45.3 %69.0 %
Europe, Middle East and Africa37.0 %30.9 %36.0 %19.2 %
Other regions18.9 %28.3 %18.7 %11.9 %
Total 100.0 %100.0 %100.0 %100.0 %
______________________________
(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 Nine Months Ended
November 30, 2024November 30, 2023November 30, 2024November 30, 2023
Products and services transferred over time$62 $60 $182 $179 
Products and services transferred at a point in time81 92 209 427 
Total$143 $152 $391 $606 
Revenue contract balances
The following table sets forth the activity in the Company’s revenue contract balances for the nine months ended November 30, 2024:
Accounts and Other ReceivableDeferred RevenueDeferred Commissions
Opening balance as at February 29, 2024$234 $162 $15 
Increases due to invoicing of new or existing contracts, associated contract acquisition costs, or other403 355 15 
Decrease due to payment, fulfillment of performance obligations, or other(411)(375)(16)
Decrease, net(8)(20)(1)
Closing balance as at November 30, 2024$226 $142 $14 
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 November 30, 2024 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.
The disclosure excludes estimates of variable consideration relating to potential future royalty revenues from the Malikie Transaction, which have been constrained based on the Company’s accounting policies and critical accounting estimates and as described under “Patent Sale” in this Note 11.
As at November 30, 2024
Less than 12 Months12 to 24 MonthsThereafterTotal
Remaining performance obligations$133 $3 $6 $142 
Revenue recognized for performance obligations satisfied in prior periods
For the three and nine months ended November 30, 2024, revenue of nil and $2 million respectively, was recognized relating to performance obligations satisfied in a prior period (three and nine months ended November 30, 2023 - $1 million and $32 million respectively).
Assets by Geography
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
 November 30, 2024February 29, 2024
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$76 $357 $78 $342 
United States455 841 467 923 
Other28 111 29 130 
$559 $1,309 $574 $1,395 
Information About Major Customers
There was one customer that comprised 18% of the Company’s revenue and one customer that comprised 15% of the Company’s revenue in the three and nine months ended November 30, 2024, respectively (three and nine months ended November 30, 2023 - two customers that comprised 29% of the Company’s revenue and one customer that comprised 37% of the Company’s revenue, due to the completed Malikie Transaction