Q3 2021 BlackBerry Ltd Earnings Call

Ladies and gentlemen, todays conference is scheduled to begin shortly please continue to standby. Thank you for your patience.

[music].

David David and I will be your conference moderator for today's call John.

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I would now like to turn today's call over to Tim put Blackberry Investor Relations. Please go ahead.

Thank you David Good afternoon, and welcome to Blackberry third quarter fiscal Twentytwenty, one earnings come from school.

With me on the call today are executive Chairman and Chief Executive Officer, John Chen and Chief Financial Officer, Steve right. Okay.

Oh from every dollar cautionary note regarding forward looking statements John will provide a business sounds like Steve will review the financial results.

And the goal for a brief Q and ice session.

This call was a payable to the general public arc home and numbers and.

And with calls and even faster information section about Brito coal.

A replay will also be available on the block free Dot com website.

As noted in our press release earlier this alternate sites will be shying during todays live webcast here.

These slides for like the recent Blackberry only be announcements.

And I used to be north from above cost joining by the cold and numbers. The slides are available for you to access on the Investor information section, but free Dot com.

Some other statements, we'll be making today constitute forward looking statements and amazed pursuant to the safe Harbor provisions for collectable, U.S. and Canadian Securities laws and.

And wouldn't indicate forward looking statements by using words, such as expect will should model and tightened me and similar.

Forward looking statements are based on estimates and assumptions made by the company and lots of his experience and its perception of historical trends current conditions and expected future developments.

Well, there's other factors that the company believes I rather than.

Many factors could cause the company's actual results or performance to differ materially from those expressed or implied by the forward looking statements. These factors include the risk factors discussed and the company's on new fundings, and M.D. and I, including the cave at night and team pandemic.

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

As is customary joining the call John and Steve will reference non-GAAP numbers, and that's summary of our quarterly results from.

For a reconciliation between our GAAP and non-GAAP numbers. Please see the earnings press release and supplement published earlier today, which are available on Edgar and SEDAR and part Brito cool website and.

With us and turn the call over to John Thank.

Thank you Tim good.

Good afternoon everybody.

Two day I like to keep the financial and business updates relatively brief because I like to spend a little bit more time discussing our recent Blackberry Ivy announcement.

[noise] this third fiscal quarter, we continued to build on the momentum from our second quarter delivering results in line with on outlook we provided.

We delivered sequential revenue growth both in D. total software and services there.

Section and as well as Bts.

We continue to live in a positive EPS and positive free cash flow growth this quarter.

That's very reported total revenue and company revenue of 224 million.

Software and services revenue came in at 168 million and 168 license was 656 million gross margin was 70% earnings per share was positive two cents cash generated from operations was 29 million total and in cash and investment and November Thirtyth.

Was 757 million.

Oh, sorry, if I missed my this is commentary with the software and services group.

He AR was approximately $475 million.

Dollar base net retention rate was 90%.

Net customer churn and reduced to around 1%.

Spark is the combination of <unk> as a reminder is a combination of all you yeah and you, yes to unify endpoint security offerings. This quarter, we made good progress and both the government and financial services verticals with customer wins, including U.S. on me you as opposed to service the IRS the dips.

Comment on energy and department of Justice as well as Raymond James.

And now shows and maybe just on actual sorry, Citibank, the German Windus Bank, the bank of India, and the government of Rwanda.

In addition, we have customer wins, and other verticals, including healthcare and manufacturing.

Excuse me, we continue to see progress and upgrading Blackberry you young customer to the food Spark Street.

Are you, adding how are you, yes, Sweet example into quarter, including Deutsche Bank Deutsche Boerse on virtually one and multiple ministry of the Dutch government.

Significantly during the quarter, we release Blackberry cyber suite.

Our AI powered Cypress suite, which combines our industry, leading DPP E R and empty on product.

Is further strengthened by the continuous authentication and the mobile threat defense capabilities decide this week is hardly competitive against both traditional and the nexgen player and the cyber security and market.

This has been validated by 451 research and other industry experts.

Cyber suite brings together the best of Blackberry and silence technology.

Further cypress, we will be available and the version and integrate with all major you yemm offerings, including Microsoft Intune.

We wears workspace one.

Mobile I and that's why it's Ivy and mass free 60.

These integration will allow blackberry to provide additional security to use on a rifle you yeah.

So I wish we could only be and the market for a month, but early interest and strong both in the new logo and existing customer base with significant pipeline growth this past quarter.

Cyber suites, obviously allows us to give out prospect and customer greater options for increasing to and cyber security while protecting their you yeah on the investment.

And the reseller these technology enhancement and positive customer receptivity, we really and turn step on our investment in sales and marketing to compete more aggressively.

Before I move to Bts I'd like to highlight the security sales indications we have achieved.

This quarter Blackberry, you, yet achieved the national security and agency and I'd say commercial.

Commercial solutions for classified program approval.

This adds to the portfolio U.S. government. So occasions, we have receipt flow back are you yeah, including the NIAP certification. The department of Defense Information network approval product list, which I think we talked about last quarter.

Call I and Dash, Hcl, and all that Cheyenne IPO.

Net Ram.

It's 140 twos 140 dashed true no.

No other software vendors and the cyber security space. That's been awarded most acute security service station by the U.S. government Denbury.

That Barry achieving and lets say certification comes at a time and most of our major competitors have been identified having on the booties set up being exploited by net should buy nation state anchors, they should give our customer and Pos back a higher degree of comfort about the cyber security protection.

We see from Blackberry.

Now moving on to Bts QNX, the largest simple in the Bts reported sequential revenue growth.

Your next remain on track to be back to its normal run rate by early next fiscal year.

And a quarter, we have 17 new designs one seven.

Ah design wins, sorry, six in auto and 11 and and generally embedded market.

Our expansion into Jim continues which were diverse wins, including a controller system for power turbine.

And next generation satellite receiver system, and a railroad traffic management system from the so soon on subway.

In auto we have design wins and full kinetic car thing electric vehicle.

The wins included instrument instrument clusters, and a couple of them and domain controller, a handful of them in eight on its design.

Advanced fibrosis, sorry event services speak.

Speaking on the electric vehicles, we are very pleased to share with you our strong position in the market.

QNX now has design wins with 19 on the top 25 electric vehicle Oems, which together had 61% other easy market in the first half of this calendar year.

We're working hard to recruit the remaining six.

Moving on to secure communication, which includes AD hoc and cecchi smart.

Secure communication and had a strong quarter.

This strength was primarily due to ongoing transition to remote working we had cash which has been obviously greatly and a salary to bite at Penn Danny.

And how has some strategic wins this quarter, including the California Department of corrections and rehabilitation.

A rehab.

On the correction and rehab.

As well as the California Department of Justice.

I believe that no one now can claim to poverty and ties stay on California.

On a notable renewals and upsells on that how in the quarter, including the United States Army Navy as well as the Air Force.

As well as the Federal Aviation administration have a day, we also review of and the U.S. Defense Intelligence Agency U.S. Department of course on the energy Treasury and I'll get I'll get cultural that's relative FEMA Federal Emergency management agency.

Finally, I want to touch on licensing revenue for the quarter, who came in at 56 million assets before the majority of the licensing revenue comes from IP licensing business.

As I mentioned at the beginning of the call I'd like to spend some time discussing Blackberry I Ivy, which we are very excited about.

[noise] modern cars continue generate huge amount of data I think you all agree and know the auto industry is not prepare to capture and create value on the analytics because these state or it's difficult to call a collector and interact with without very costly integrations.

Right very armies mission is to make it easy to gather securely transport and analyze these state or in a standard and a cost efficient way across multiple brands and models on a common platform.

This will allow the developers' ecosystem to use the data to provide intelligent insights and application on a global scale.

We have entered a enter into a multiyear exclusive co development and co marketing agreement with eight Ws.

This type of agreement it's rare.

And I'm very and eight Ws engineer happy and working very closely to jointly build the platform.

Under the terms of our agreement Blackberry, we real Blackberry will own order commercial relationships with customers and we'll share revenues with eight ws.

Each side contributors to key capabilities required.

On the back very side, Blackberry QNX brings over 20 years of auto industry experience as price relationship as well as the huge footprint of over 175 million cars.

We are a trusted leader with a deep knowledge of automotive safety and security software system.

He WSS is the world's largest cloud provider with a vast developer community and I was standing expertise and consumer experience interfaces as well as I O T.

Combined we're able to provide a full end to end platform.

We expect and ecosystem on apps and services developed on the Blackberry IP platform over time, we will work with VW and a proven due to a successful developer communities to help drive to process.

With Blackberry Ivy, we are creating a recurring revenue data on this as well.

Recurring revenue model that is targeting revenue on a usage as well as a subscription base.

And important differences between Blackberry Ivy and competitors in this space is that we allow the OEM to on the data.

And with that the relationship with their customers.

We already and discussion with some automakers will granted early assets and we have received positive initial feedback.

The target is to be in the 2023 auto models.

2023 years motto with possibly potentially some professional services prior to it.

While it is too early for us to provide a revenue outlook. We are confident that Blackberry IP addresses a very large market opportunity they will greatly increase our EPS speed.

With that let me turn the call would you seek to provide more details about our financial performance.

Thank you John.

My comments on our financial performance for the first.

Sorry for the fiscal quarter will be and non-GAAP terms unless otherwise noted please refer to the supplemental table and the press release for the GAAP and non-GAAP details.

We delivered third quarter non-GAAP total company revenue of $224 million and GAAP total company revenue of $218 million.

Third quarter total company gross margin was 17%.

Our non-GAAP gross margin include software deferred revenue acquired but not recognized of $6 million and excludes stock compensation expense of 1 million.

Third quarter operating expenses were 142 million.

Our our non-GAAP.

Operating expenses exclude 32 million and amortization of acquired intangibles 11 million and stock compensation expense Fourmillion for software deferred commissions expense acquired and 95 million fair value adjustment on the convertible debentures, which is a noncash accounting adjustment driven by market.

Conditions.

Third quarter non-GAAP operating income was $14 million and third quarter non-GAAP net income was $11 million.

Non-GAAP earnings per share was two cents and the quarter.

Our adjusted EBITDA was 31 million this quarter, excluding the non-GAAP adjustments previously mentioned.

And I will now provide a breakdown of our revenue in the quarter.

Software and services revenue was 168 million.

Software product revenue remained in the and the range of 80% to 85% of the total with professional services comprising the balance.

The proportion of software product revenue that is recurring with approximately 83% due to product mix.

The decrease.

Greece and they are this quarter similar to the prior quarter is primarily due to bts.

We include QNX royalties and our our our metric to give a total company field.

We expect to see the impact of Colby on.

On a our our normalized early next fiscal year as we returned to our normal revenue run rate there.

Licensing and other revenue was 56 million.

Now moving to our balance sheet and cash flow performance.

Total cash cash equivalents and investments were $757 million at November Thirtyth 2020.

On a decrease of 220 million during the quarter.

This is mainly due to the early redemption of the 605 million of convertible debentures.

And issuance of 365 million new convertible debentures on September Onest.

This represented a 240 million reduction and debt financing.

Partially offset by cash generated and the period.

Our our net cash position increased to 392 million at the end of the quarter.

And third quarter free cash flow was $27 million.

And cash generated from operations was $29 million with capital expenditures of $2 million.

That concludes my comments and I'll now turn the call back to John.

Thank you Steve before I provide our outlook for the remaining of the current fiscal year I'd like to highlight some noteworthy partnership in addition to the Blackberry Ivy that we're very excited about on.

This quarter, we partner with zone to provide a blackberry secure version of zone.

Which is highly secure way to hold virtual meetings and this new work from anywhere and environment. It provides increased protection from corporate data leakage as well as cyber threats.

And a quarter of a rice and launch their business Internet secure offering which includes stock back very smart Avi anti virus product and Cisco umbrella security services. This new product is aimed at a rice and large numbers small and medium sized business customer.

During the quarter, we announced the integration of AD hoc with both Microsoft team and service now and now platform team.

Team as most of you know is the market leader and collaboration software with over 115, 115 hundred 15 million daily active user.

And and now platform at 51% of the ITC service management market.

This integration will further enhance and house reach and ability of enterprise to protect their assets.

I'll now move on to our outlook. We continue to expect total company revenue for the year to be around 950 million as we indicated last quarter.

We expect licensing revenue, we finished the fiscal year little stronger than previously indicated.

We expect revenue for Bts and continue to grow sequentially in the fourth quarter and as we talk about assets to return to its normal run rate early next fiscal year.

This quarter, we continue to make good progress we delivered solid financial expert on outlook.

We have developed exciting new business model, the recurring revenue model for QNX and.

Well as partnership, which why aligned and we deliver industry leading products as per our road map.

With that I'd like to turn the call over to our operator to conduct the Q and a session. Please David.

Yes, and we will now begin the question and answer session.

Ask a question you May press star one on your telephone keypad. If you are using and speaker phone. Please make sure. Your mute function is turned off to allow your signal to reach our equipment.

And press Star one to ask a question, we'll pause for just a moment to allow everyone and opportunity to signal for questions.

Request that you limit yourself to one question and one follow up.

Our first question today will be from Daniel Chan with TD Securities. Your line is open.

Hi, guys for taking my Hi.

Thanks for taking my question and the I don't know if you guys mentioned that north from missed it did you provide a metric on the billings growth.

No. We did not we you didn't miss it we haven't provided.

Okay.

And then on the other art declining Steve you talked about how it's declining because of Bts can you just remind us what your including their from Bts and why that's causing it to drop.

The numbers, but.

But but sure.

So the.

We are a are ours and total company.

Metric well from for software and services be the.

The QNX.

Part of it we include a it's basically a trailing four quarters that that feed into into that metric. So there is a lag.

And it.

So let's start with the Covance.

Impacted that we've been discussing consistently that's that's got a lagged effect on making it back and enter the metric as we move forward and recover.

Ben.

Your next question comes from the line of Mike Walkley with Canaccord Genuity. Your line is open.

Yeah and.

Great. Thanks, John Thanks for taking my questions and trust wishes to every day on the call for the holiday season and to stay healthy.

Due to the two great. Thank you Yeah. Just just a question for me just just building on Ivy Hill on lots and lots of interest and excitement around it yeah I.

I know you're not sizing it yet because its early days, John but you know as.

And as you've shared longer term getting to kind of Sps into the high teens to $20 per car. How does this help close the gap if things go really well how do you see ASP per per car developing over time.

And as I said, we don't really have all I'll.

And of the revenue are laid out yet because the earliest we will get the revenue I believe is the.

Model year 2023, so.

So.

We do expect is to help close the gap in a very small increase ASV is a very big way and it has to do a lot to do with not only to base price.

Platform to collect sensor daters and.

And analyzed it bill that the action and a cloud and.

Oh, yes, good day and take advantage of all these sensor data is.

And the combination of those sensor data is due to make certain decisions.

Decisions and.

Right and I had a real time on a long term, but are you also depending a lot on how many application could we spin up.

So.

And and the OEM is going to build the application the tier one will go down application using our platform and and so other third parties. So if there are more applications and obviously there are more instances.

That could increase our ASP per vehicle.

So.

We're very hopeful that this not only have a recurring part.

Part of it but it's also bring us.

A good chunk of revenue going forward.

Great. Thanks, John and just my follow up question kind of longer term also with with Blackberry you guys have launched several new.

Different software security modules as you look at your sales force what do they feeding back to you and turns their ability to land and expand on customers and what are the leading with and what are some of the upsell opportunities that there that they're excited about the with these new modules that you watch over the last several quarters.

Yeah, So first off on the product side.

On cyber security suite.

It's a very timely offering.

To the market because of all the hacks and the run and it really is going on right now.

We.

Happy and invited to more cases nowadays.

Cost of on the environment and the attention switch true.

Cyber protection and other hacking that's going on out there.

So so for example, and knock on wood, we [laughter], we haven't been.

We haven't been that's essentially.

I guess intruded yet that's not to say this is not a challenge or this is just to say its state sales the affair at this point.

So on a medium term when we Oh sales force are very focused on upgrading.

Or OEM base, which accounts for.

Depending on who you listen to Oh.

In terms of analysts industry analysts and somewhere between 9% to 12% on the market share so m. space.

So we are very busy upgrading that so there is seldom day you, yes on top that you yeah.

And then you know very soon and literally were talking and months, we will release our.

Are you yet pass on on.

On to.

The competitors.

Yeah, I'm really jar into and mobile I and.

Airwatch and Ivy and mass we 60.

Not all at the same time by the way sequentially.

Well, we'll probably go to the side with Microsoft Force.

So thats another aspect of it.

And the fact that we are so that's the part that bought us at cyber security.

Right.

So that should keep us busy for the next couple of years.

And give us a lot of opportunities going out to the market.

Okay and just just one that's all question and I'll pass the line just just on the U.S. going to other new Iot platforms.

What is the feedback or interest level for that and if you see it and even able to offer those similar capabilities for the mobile market.

Does the interest levels on reasonably high and I mean, I don't have flow specific.

[music].

Uh huh.

Quantitative answer to your question, but you know when I, when I speak to customers and make or groups of customers. At the same time are they all think dynamics and still give them and ability to protect occur and investment who have whatever you yet on that they already invested in if you are happy and comfortable with the.

On the pros and cons on each of the vendors and but did they could and uses Blackberry security, which we believe is the best.

Yes. It is the best said a bunch in terms of technology and I laid all all the certification we got from governments and so obviously, we have the best technology, and and protection and cyber protection. So that gave them the best simple world without having to.

Rip all day, and that's been which of course there is no.

Thats, a no big hurry to do that even if they wanted to do it and a long time. So that this this how to add value to what they have and.

Keep the investment so so everybody is happy about.

And he said that choice to look at.

Okay.

Well, that's what it is true that for the year and thanks for taking my questions.

Sure. Thank you.

Your next question comes from the line of trip Chowdhry with Global Equities Research. Your line is so high true.

True Hello, Doug Hello, John This is this quarter was phenomenal both from an execution point of view and from partnership point, though for your two strongest companies I'm on it that Lewis and zone.

My question is more on the.

Oh I'd be brought home.

And then do you think the developers and get behind all flow three and 4 million.

And that the excitement and the going up opportunity is very strong and I was hoping that you know they put stock up like you think the imagination on your platform sometime and 2021 do you think that these neuberger expense.

I mean good question. Thank you true I you know.

I know that we will have a beta version and be ready and third quarter and next year third quarter on quarter, sorry, I'll quarter third quarter and.

It does it's a September September day, we will have eight.

Hey develop.

Version, and we're hoping to have a development version and before that so I would say please be safe to say that about midyear next year.

The application provider will be able to lead our hands on that.

Beautiful and upsell and comes off well from Oems, So easy OEM you didn't on NIM them.

Most people can you name a few Oh that you think you can keep an eye on as we move forward and see what kind of applications and hold true and basing your platform.

Well I don't think day.

They will appreciate you mean naming them.

And I might so about I would say does a day initial groups of company that we have been in contact with and have gotten positive feedback. It's a if it's in a group of about 20 people 20 different Oh, we and.

So you're obviously day not not all 20, we signed up but I will commit to the following thing you know as we getting.

Customer sign up.

Oh, we will try to make.

Make a public announcement.

Doug.

When when obviously the customer has to agree agree to it but.

Both.

Amazon and us very excited and.

You know is very busy and making presentation and getting strong feedback today.

Beautiful and from correlations and on the best.

Thank you.

Your next question comes from the line of Paul Treiber with RBC capital markets. Your line Hi, Paul I have on Hi, John Good evening, Hi, Good evening couple.

A couple of follow up questions on the Amazon relationship.

I know you're not going on detail than revenue per can you speak to the and the details of the partnership itself in terms of maybe the duration of the exclusivity period, and then maybe the magnitude of Amazon's commitment for co development in co marketing and and also it relates that and the agreement allow you to open it up from Amazon to other cloud providers at some point.

And in the future.

Yes, so we agreed.

On multiple number of years.

Net.

We will be exclusive with.

Using my using the Amazon cloud.

And developing that product they will be exclusive with us they will not market or develop with and then any other party.

With the same and the auto sector and in the same area of data platform and analytical platform. So it's a very broad agreement.

It does allow us to open it up for other cloud.

But we probably won't do that until this particular, one is done on not.

Not not meaning to exclusive period just on his as he said the product out and presenting to the customer.

It's a co development and co marketing agreement exclusively in both dimension.

And as I pointed out.

Blackberry will hold a commercial relationship meaning that we would try and sac.

The deal with the OEM, what a tier one.

On the application provider will lean on the help of VW assets to get the ecosystem up and going with us.

They have a lot of engineers assigned to this.

Now if you will I will refer you to a number on keynote speaker at the eight up U.S. Reinvent conference. It's public information on that starting with any Jessie the CEO.

And and how he described.

Our relationship with VW as as well as to handle day I O T where he made his keynote he specific expense.

Quite a bit on time on how that this particular this relationship. So you could see that they're very serious serious as not only come from the cloud side, but it comes on the Iot T side also and Amazon.

All right. Thank you for those detailed and very interesting secondly on.

I'm just looking at the the transition and work from home globally, and all the uptake of various cyber security and and you know other applications and you know how do you how do you see Blackberry benefiting from not and and also or how high Blackberry benefited from that trend and income.

You dovetail that against the net revenue retention and the quarter you know what's been driving the net revenue tension and tell I think a little bit in the quarter.

Versus its transition to work from home.

Yeah.

So you did the I can only tell you that they you year on license would.

We're doing well and initially of the ER and.

And the covert Nike shutdown, because a lot about customers and wanted to expand there are a number of licenses to to cover everybody to work from home and work remotely.

So you know most of our customers on larger institution on in the banking industry as well as in the.

And the government and so the volume so quite high.

And at that time, and now gradually shifted to two other areas one and the secure voice technology area and say we work we move from home both government and all the regulated industry sectors are seriously looking at the secure voice.

And then and then the emergency alert systems and now I think is used to be that are reasonably focus by user of recently focus and the government space, but now the the its now expanded to a medium to larger enterprise, where do you want to be able to reach share their employees and.

Other constituents. So so we see very good pick up in those areas that that clearly has benefited from the.

Unfortunately, the pandemic situation, but the depending on mix situation drove the.

Realization on all secure communications this very important so there we see a lot.

And then of course.

The other thing indirect effect on on cyber cyber Sweet Although you know, we just released a cyber suite.

And.

As you know we have been behind and easy on but we believe we all caught up and we ran and other cats to show that so you should see some revenue start coming from from those area. So.

So those those are kind of.

Yes, the area and related to that where we're from remote.

And then just reading between the lines and when you didn't mention was and legacy silence business. The so is that day should we well that's part of the type of sweet sorry.

Sorry, sorry, Oh, sorry that was a net.

Attention and.

Yeah. The slight drop there is that is that driven from just the older cyber.

Silence products and maybe some churn there.

That number it's the total company and number.

So it's not it's not just the so called the older site side on its product. It's a it is a combination of our enterprise product.

Okay. Thanks for taking my question John.

Your next question comes from the line of Todd Coupland with C. I can see your lines open I talked about hey, there John and good evening.

Wanted to ask you I just wanted to ask you about the Q4 outlook.

950, 950, so million for the year. So it's a I don't know 20 million or so higher than where street is for the year. According to Factset and then you called out IP being higher so.

I'm wondering within that mix.

And we'll software and services or be up sequentially, yes.

Yes.

Okay.

And can you sort of clarify.

And Matt.

I always gotten and probably lawyers and I.

And says that it is my expectation and a car model that is up sequentially.

And can you characterize sort of the puts and takes within that I know, there's a few pieces and the bucket. They are just just a models that loop for us on that.

Yeah, we believe secure communication will continue to do well.

It's a combination of a AD hoc and cecchi smart.

And we believe that you yam would be relatively flat.

Bts will have a sequential quarter.

And those on a kind of the major major pieces.

Yes, okay.

And you know you've talked in the past about sort of coal bed slowing new customers deciding and as you're maybe for free I guess enterprise decisions just broadly I know there were some other questions about this earlier, but as you are thinking about the next fiscal year.

Is there a is there enough loosening now.

And sort of.

Post the vaccine et cetera, where you can start to see some of those enterprise decisions loosen up can you just talk about your your thinking on that are there for the next year or so.

Yeah.

Our assumption is day will they will lose lose and up and we are in the process on building out.

And new operating plan O Aoki for next year.

So our assumption that it will lose on up and get back to normal from the auto sector point of view, we already start seeing that.

So we will start seeing it also on on the commercial side.

And I'm reasonably sure on cyber security is like I said earlier, it's a topic that everybody want to talk about.

And so we have to kind of double down on that on the cells.

In terms of reaching the market place.

And we all along and a number of products and and channel programs, and which I didnt for that but in the interest of time I Didnt put it in my script, but we have a very robust channel program that combined the silence and and and Blackberry Channel program together. So so there are a few things that we're doing.

We believe will both seed of growth and be able to execute for the growth next year.

Okay.

And last question, if it's I guess, it's not really stock specific.

Two certainly my thesis, but just curious.

I've seen a few major tech companies come out and say back to the office by September you know work three days and the office you can still working from home have you have you decided how you're thinking about Blackberry from that perspective once once that opportunity is there.

No we have not decided so.

September of next year seems to be a little far away.

And well, let me put say we would've been talk is we wouldn't be speak and at least on that are free times before that.

So but were open well, we're open minded I I'm on applicator ER and the old fashion Guy I'm advocated that we should be together to build the business together to build the team.

Inputs and that's that's just me.

But I also recognize the fact that you know there are some reality and and a and there are a day or people, who like the flexibility so as long as it doesn't lose productivity I'm willing to try a couple of things yes.

Okay. Okay.

I appreciate your comments thanks very much thank you.

Your next question comes from the line of Steven Li with Raymond James Your line is open I say.

Hi, Good day.

John just a clarification first the 950 outlook that's a your non-GAAP revenue number correct.

Yes, that's the non-GAAP revenue number yes, correct, okay, and and you you'd expect that bts to grow sequentially and and you said a enterprise software is about to grow a little bit sequentially in Q4.

Yes that that's what I said, okay, all right and John on on Ivy.

Do you see idea the I'd be tied at all to come get to some of the RMR, Georgia or would you expect it to be in the same range.

Oh, no intensity in terms of the SP, yes.

So.

Hi.

I I'm, hoping [laughter] I'm, hoping is higher then okay, I I and other be fair and let me let me let me.

You know maybe reset here and for the following so you know that outcome and module, whether its hypervisor eight daus clusters cockpit.

Hi ranges anywhere from that low single digit dollars true.

Literally.

High single digit on double low double digit dollars from module.

So yeah. So so that's the that's a range I would expect it to be more towards the higher and note that spectrum.

So when I when I said, Oh, no earlier than I was thinking about <unk>.

So so this compare to Ivy I, just will be a lot more.

Right, Okay, and then and but you were split that we the HW assets.

Yes, I will have to have a revenue split was eight other that's correct. Okay got it okay. Thanks, a lot John.

Now I would like to turn the call back over to John Chen Executive Chair and CEO of Blackberry for closing remarks on thank you. Thank you. Thank you David So thank you very much every growth you attending today's call and I and I know, it's up and you know.

This is we have this thing now on the on your on early evening on most of your early evening, if you're on the East coast I apologize for that and I am sheltering and the West Coast and B, We had our board meeting today. So so this is one reason why are we doing it at this hour I hope and not overly and convenient you you all.

Yeah.

Before I sign off on I do wish you and your family, a very safe and happy holidays, and I hope to see each and every one of you and puts the next year. So with that have a good day. Thank you.

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

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