Q1 2022 BlackBerry Ltd Earnings Call
Total reported reporting perspective, beginning this quarter, we will provide revenue and gross margin by business unit as well as other selected metrics.
We believe that this additional color will how we invest to gain better understanding of the underlying performance on our business units ultimately driving showed on values.
<unk>.
So let me start by reviewing with you of the Iot business unit.
This business, which is primary and <unk> X, but also includes IV Sodecom John.
Dar.
Had a good strong quarter.
Revenue came in at 43 million, which represented increasing 48% year over year on <unk>.
A year ago as the pandemic.
For the headquarter.
Gross margin was for 84%.
Iot AAR was $86 million.
This growth and both revenue and was achieved despite the fact that we have global chip shortage. The shortage continues to be a significant significant factor and the auto market and the near term and it's no doubt currently impacting the production driven revenue on <unk> X.
The scale of the impact varies by region and by OEM and the impact looks to be greatest and North America and less so in Europe and Asia.
1 of our largest customer and in North America has indicated that production in Q2 will be impacted on may be impacted by up to 50%, but others are less severe.
Generally speaking Q2 appears to be the low point with Q fee Q3, improving and Q4 further still.
The impact also looks to be smaller than debt of the pandemic last years.
So currently we don't see and need to change our revenue outlook for the year, but we will continue to assess the impact with our customer and we'll update you again next quarter.
Just as a reminder of Iot revenue outlook remains at $180 million to $200 million for the fiscal year.
In contrast to the production base royalties, however revenue from design activities I E. The developers the developer seats and professional services is strong and.
Unlike Q1 of last fiscal year, when Covid, let's becoming a major issue confidence on our OEM appears high and we've seen a lot of design activities and progress.
We are particularly particularly pleased with 2 design wins. This quarter first first first 1 was with Volvo group.
Selected 2 and that's our choice.
And on hybrid devices that stand for real time operating system sorry, guys.
And hypervisor on a whole truck basis, meaning that our technology will power multiple and ecu's for all of the truck.
Second we further strengthen our position and the EV market with a design win with the Shanghai based <unk> and modal and.
<unk> okay.
Our trough.
And the Q&A for Oss and hydro device that will power their all electric <unk> <unk> SUV vehicle.
In total this quarter, we had 28, new design wins with 17, and auto and 11 and Jim The General General embedded market.
And in auto along those we just mentioned notable design wins also includes Bosch and this young.
And these design wins spanned hypervisor digital cockpits multiple socket 8 hours.
Platform and high definition maps.
On the GM front, the wider range of application, 1 and the quarter for.
For the surgical robotic arm industrial and <unk> printers, as well as nuclear power station.
So design wins, such as the Bogo demonstrate to key secular trends that <unk> nx business benefits strong.
The first 1 is the consolidation of lower compute power and you see us towards a number of fewer numbers higher powered chips debt such as the on version VA and the X $86.64 bit chipsets.
It is on these higher powered chips that <unk> operates and is this consolidation continues.
It gives <unk> ever more opportunity and the car.
Secondarily, there is a on the second point.
And trend. It is there is a trend of increasing software content per vehicle.
Particularly and safety critical system, such as <unk> Gateway and digital cockpits.
This is of course, <unk> shine with the highest level of safety certification and has a stronger competitive strongest competitive advantage.
On strategy to focus on safety critical system.
Which we put in place and a number of years ago and allow the business to benefit from these trends ultimately leading to a higher average revenue per car.
This strategy is delivering higher value design wins and with the royalty revenue backlog for.
For backlog metrics is calculated using current contracted price.
And future production and volume estimates provided by the customer when the design is awarded.
Important to note that this is a customer's estimate.
The backlog increased from $450 million last Q1 to $490 million.
First quarter.
This is a 9% increase year on year, despite the pressure that the pressure on new auto designs over the last 12 months.
Strategy analytics, a leading independent research firm recently published at <unk> software and it's not embedded and over 195 million vehicles that is up from 175 million confirmed the year before.
Now for a brief update on progress with IV.
Driving the IV on maturity forward remains 1 of our key priorities and we are working closely with AWS to achieve this.
Product development remains on track and in line with the roadmap.
We remain on target for the early assets version to be available in October.
And for the production versions to start shipping next February.
Customer discussion and workshops are continuing and we remain positive on how things are progressing.
This quarter and additional 5 automakers and gauge to explore IV.
And this means that we're now engaged and most almost all of our major <unk> customers.
We recently announced the launch of the IV Advisory Council.
Industry leaders on a number of key verticals and sign up including tell us telecommunications on a big 3 telephone company and Canada Geico insurance are you see a lot on television commercial here apps and severance which is for voice recognition auto business.
Development of relevant and exciting new use cases for IV platform remains a key priority.
And we believe that the council greatly assist us with this.
Delivering rather and maps and experience for by a higher engagement model with both the consumer as well as the enterprise.
Last quarter, we launched the IV innovation fund established to invest and startup adopting the IV.
John.
<unk> and as Greg responds on the market and we have reviewed over 200 prospective customers.
We recently announced our first investment and exciting startup called Electra vehicle and <unk>.
Most other startups and our battery management space Electra aimed to not only analyze activity, but you also actively manage the battery operation using artificial intelligence.
Vehicles census data on IV will feed their AI driven platform dynamically determining factors, such as driving behavior and environmental condition to optimize battery performance.
In summary, <unk> is progressing well and we remain very focused on the various element to need to make this a strong growth business and for <unk>.
Now, let me move to our cyber security business units.
This business unit includes our spark endpoint security and endpoint management products.
As well as AD hoc that clearly critical event management software and <unk> smart secure voice and text product.
GAAP revenue for the quarter was 107 million as.
As mentioned during our last earnings call, we now switch to GAAP revenue GAAP base revenue only.
Gross margin was 57%.
With $364 million and dollar based net retention was 494% 94.
Over the last couple of years and prevailing the prevailing narrative narrative has been debt detection and remediation and the most important part of cyber security.
However.
The founding principle assigned and and 1 of our main reasons that we acquired.
As for prevention is far better and pure and.
And Thats why we are a market leader and ETP.
Stopping threats before they execute.
And start doing harm is clearly a better strategy and trying to shut them down afterwards.
This quarter, we demonstrated strategy clearly with our next generation <unk> product named protect.
Rocking the dockside read somewhere.
And lead to us for either cause for the colonial pipeline cyber incidents.
In fact.
The 2015 version on protect also blocked most of the very end of the same ransomware.
Obviously 6 years ahead of his time.
We do have the most mature AI engine in this space and the ability to block <unk> ransomware years ahead of time without the needs for update.
Back on it.
This shows the power of our prevention for our strategy.
Flotek was also shown to prevent other high profile threats, such as a candy rent somewhere low value rebel and others.
In addition to large enterprise customers. This AI driven and automated protection also resonate with small and medium sized customers that don't have the resources to establish the sox, meaning the security operation centers.
We see strong sequential growth in SMB and <unk> pipeline of around 18%.
In the quarter, we announced 2 significant new products, both of which are part of the extended detection and response on <unk>, our strategy and at the latest evolve.
Market from Edr.
The first part of his factories gateway.
With employee base remotely and non India office, as well as mobile becoming more prevalent.
The traditional boat and capsule model of network assets is no longer efficient or effective in fact, VP and users once authenticated orphan assets.
For the entire network, including on Prem and all of the SaaS application for the lane for Dan's passion.
Blackberry Gateway, it's a zero trust network access product that uses and finance AI to continuously authenticate network activity.
The cloud AI and valley over 30 risk factor or we name it factors.
Such as downloading behavior, DNS scary time, low day et cetera to determine unusual activity.
The second product releases quarters uptick free point out is our latest version of our endpoint detection and response.
<unk>.
On Navy Edr.
With this new version the AI driven engine remains at both the edge and and the cloud.
Allowing near real time responses, both offline and online.
This continues to be a differentiator for us.
However, importantly, this new cloud enabled product will allow event data to be stored centrally and a cloud based data lake.
This together with a new search engine and a query language allows spreads hunters to gain greater visibility.
Switching to the sales phone OEM.
<unk> revenue in Q, and what's down year over year in part due to the work from home ramp up debt.
And that we have sold last year, but didn't repeat.
Let me reassure you that the <unk> remains an important part of our fiber business and we remain fully committed to it.
In the quarter, we continue to secure business with a highly regulated customers.
Let me start with financial services and financial services included this Rishi <unk> J.
Bank of China, Banque de France and.
And a union bank of India.
And the government and healthcare that we conduct business with the government of Canada and <unk>.
UK NHS health services.
University Health Network, Canada, the United States Department of Energy and Department of Commerce.
The Netherlands Ministry of General Affairs.
The Australia and department of Environmental and Energy also the White House Communication and agency U S Department of State Department of Treasury, and the United States Department of Defense.
Also and government in the United States Federal government, we have increased the number of AD hoc cloud sat around users by 6% sequentially.
From a market perspective this quarter, we gained new business through a partnership we recently announced with Verizon.
With Verizon and Vodafone as well as tellers.
With Microsoft we have integrated our critical event management product alert with Microsoft teams for.
Further as we've communicated and the path.
And <unk>.
Outside of the suite, our <unk> platform is on target to integrated into and by the end of August.
This quarter, we significantly step up on our sales hiring.
The market for high quality talent as competitive and he has taken a low longer term so on head count.
But we currently expect to and Q2 was around 23% more sales rep than it had started the year.
This expanded reach will help blackberry to be and more competitive bake offs where on.
Our products and said well.
And with the recent increase on sales hiring many of which stock during Q2 billings growth is slightly to be more heavily weighted to the back half of the year. Therefore.
Revenue is likely to be at a low end of our 495% to $515 million range that we gave last quarter.
Moving onto licenses revenue for the quarter was $24 million, which was better than expected because some business came in early <unk>.
Gross margin was 75%.
The negotiation for the sale of a large portion of the patent portfolio are ongoing and good progress has been made in fact, we have started negotiating the definitive agreement.
Revenue for Q2 is slightly to be and the range of 10% to $15 million for the IP as stated last quarter. So this has not changed this is due to the monetization activities being limited by the ongoing negotiations.
In terms of on a full year outlook for the licensing business shifted sales not complete we expect revenue to be around $100 million.
Let me now headed.
And the call with you Steve.
Thanks, John.
And so my comments on our financial performance 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.
As John mentioned earlier, starting this quarter, we are no longer and adjusting GAAP revenue for deferred revenue acquired.
Moving to GAAP and non-GAAP revenue will be the same going forward and comparatively have been conformed accordingly.
We delivered first quarter total company revenue of $174 million.
First quarter total company gross margin was 66%.
Our non-GAAP gross margin excludes stock compensation expense of $1 million.
First quarter operating expenses were $138 million.
Our non-GAAP operating expenses exclude $32 million and amortization of acquired intangibles 6 million and stock conference.
And a $4 million fair value adjustment on.
Debentures, which is a noncash accounting adjustment largely driven by market conditions.
Sure.
First quarter non-GAAP operating loss was $23 million.
And the first quarter non-GAAP net loss was $27 million.
GAAP earnings per share was a <unk> <unk> loss and the corner.
And our adjusted EBITDA was negative $6 million this quarter, excluding the non-GAAP adjustments previously mentioned.
I will now provide a breakdown of our revenue on the quarter.
Cyber security revenue was $107 million and Iot revenue was $43 million.
Software product revenue remained and the 80% to 85% on the total with professional services comprising the balance.
The recurring portion of software product revenue was approximately 90%.
Licensing and other revenue as John mentioned was 24 and.
This is a little higher than expected and deals came in early.
The monetization activity remains limited while negotiations for potential IP sales continue.
Now moving to our balance sheet and cash flow performance.
<unk> cash cash equivalents and investments were $769 million at May 31, and 2021 a.
A decrease of $35 million during the quarter.
Our net cash position decreased to 404 million at the end of the quarter.
First quarter free cash flow was negative $35 million.
Cash generated from operations was negative $33 million and capital expenditures for $2 million.
Bear in mind, and first quarter of our fiscal year typically has a higher cash requirement due to payment of annual bonuses and other demands at this time.
That concludes my comments and I'll now turn the call back to John.
And thank you for Ste.
And before the Q&A.
I'd like to update everybody on our few things, although we have organized along the go to market lines.
They're on a number of future high growth opportunities set a blackberry lap is working on that actually harnessed the power of bolt on entire technology portfolio.
The supplying our AI ml engine and Iot.
1. Good example is this is using <unk> and the par.
We have made on remember at CES a couple of years ago. We demonstrated an early version of how cusano technology that identifies and appropriate assets for the use of behaviors can be applied to drivers and other vehicles.
We also demonstrated how protected ETP can be used for protected connected cars from cyber threats.
And they are just 2 other a number of potential use cases that we're currently looking at.
The second is our data lake drawing data for on an ever increasing number of sources allow for greater visibility and determination of the real level of risk accounts and organization. Essentially this is obviously essential to zero trust applications.
This is a price not only to xdr, but also the increasing sensor rich auto environment.
On a must drive and smart cities.
This centralization of data and insights for our data lake and enable a whole new business model and the future.
The third area is related to the recent U S. ASP on sample of software Bureau, and materials, the executive orders that aim to secure the software supply chain.
This guidance in light of the recent incidents, including solar wind and.
And the colonial pipeline threat intrusions, combining products from our Iot products, including our <unk> closed scanning two's <unk> embedded operating system and on southern comfort apology.
With our prevention for its AI, driven and cyber security product and services means spec very offers a comprehensive approach to this issue.
We have begun working closely with various government and center setting bodies.
So before we open the line for Q&A I'd like to summarize the key messages again.
Hi, Sal software and services business around our key market opportunity and strengthen our strengthening our management team and our progress.
<unk> made solid progress this year this quarter sorry, we are pleased with our strong design activities and our pipeline of new design wins that saw royalty revenue backlog increased year over year.
We continue to demonstrate real progress of IV with tangible and staff.
Such as the launch of and Advisory Council and then as far as the first investment by the innovation funnel.
We launched 2 new and important products, thus far on our <unk> strategy and the AI driven and prevention first approach continues to be our focus.
We're also increasing head count sales head count and pipeline is growing particularly for our new UAS products.
Our main focus is on growing the topline and therefore, we continue to increase investment in both on software business unit as we see double digit billing growth this year.
Finally, we remain optimistic about a successful conclusion to the negotiation and our patent portfolio and sale.
And with that I would like to ask Jesse to open the lines and for Q&A. Please.
Thank you speakers participants we will now begin the question and answer session.
To ask a question over the phone any price Starkey followed by the number 1 on your telephone keypad.
And if youre using a speaker phone. Please make sure your mute button turned off and will appear.
Signal to reach our equipment.
Again, Chris.
Star 1 to ask a question will.
We'll pause for just a moment to allow everyone an opportunity to signal for questions.
Once that you limit yourself to 1 question and 1 follow on.
Speakers for first question is from the line of Daniel Chen of TD Securities. Your line is now open.
Alright.
John.
So you stated that your Q and ex royalty revenue backlog increased to $4.90 from $4.50 last year over what period of time do you expect that backlog to be recognized over.
Typically.
And the highest usually is 4 to 7 years.
And typically its peak it for.
And then and start.
Moving down towards the end of the lifecycle of a car.
Sometime it extended multi on debt.
Okay. That's helpful. Thanks, and then you also talked about the IV Advisory Council can you talk about the level of commitment partners have agreed to as part of the accounts on whether you plan to include major Oems on it.
Yes, okay.
Great Great question, but before I answer that question.
And 1 more comment on the backlog because I have also in current some feedback regarding debt outback low numbers very conservative I would tell you that it is on a conservative side.
And we get it from directly from the OEM when we win the design win and they gave us the estimate.
We also have not included professional services backlog and developer seats backlogs. So in the future when we have a very solid and methodology.
So that we just on kind of do and much of a guessing and we get a very grounded set of math.
You will see that back non number to go up and <unk>.
<unk> you all debt, we're going to include debt, but that may take a couple of quarters.
And it goes back to answer your question.
Regarding the Advisory Council.
They are they are there to help us to define use cases, particularly and the vertical that they operate in that the IV it could be a great help.
And.
I don't want to exclude any OEM, but I don't think OEM would want to do that day. They tend to do it 1 on 1 with us directly because this is.
Obviously value add that they don't want to.
They don't really share so.
Our proprietary to themselves I hope that makes sense.
It does thank you.
Sure.
Next question is from the line of Mike Walkley of Canaccord. Your line is now.
Hi, Mike Hey, John.
John Thanks for taking my question.
I was hoping you could update us on Blackberry Juliet strategy I.
And I know theres, some tough comps because of the pandemic from last year, but just update us on the strategy and it's still.
A large piece of your cyber security business unit.
Yes.
And that's a very good that's a good question so.
Let's see our spot platform is composed of OEM and <unk> and <unk>.
<unk> is very strategic to us because it and our gateway to a lot of our major customers who are.
Completely rely on us on security.
So.
So.
<unk> strategy is continue to expand our footprint in the regulated industry.
And we're on the more price sensitive and.
Canada Nonregulated industries.
We want to make sure that our <unk> platform, which is our endpoint security platform also connect and run on it and obviously 1 of the largest installed base outside of my my space here outside of the regulated.
And it's Microsoft into and so this is why.
And that we're excited about effect that will have into and released.
Ah connected.
We leased and.
And and Novartis I believe yes on.
And in August so.
So basically the strategy has continued to expand the footprint that we have in the vertical like financial healthcare and government, that's very important to us.
With the OEM with its roadmap the roadmap is highly geared towards.
Security and.
Institute and certifications and on.
Appliance and sofa.
And then and then the and then the bring your own device of BYOB.
And then.
And that's still kind of and a roadmap of OEM focus on and then yes of course expanding on the other other cyber security and.
Hi, viral virus stuff. So that's our major that's our strategy of how we approach for market.
Okay now that's very helpful and just my follow up question just on the gross.
Gross margin by division and thanks for the updated business metrics.
And how should we think about growth and trends for the business over time.
Typically on the cyber security business, and where could those gross margins get to over time as the business ramps and any reason.
Following a bit sequentially.
Yes.
I think eventually you answered a question is that especially on cyber security and where we're trying to go to the enterprise software.
Our timeless model and.
So we have not.
Deviated from that.
So the gross margin ought to be maybe heightened competitive, but they get the high volume growth somewhere between 75% to 80%.
I think that will be a very good target to shoot for.
And for the cyber business.
And.
And what needs to happen to maybe get there from where you are today with what would be that timeframe you think.
The timeframe.
I think.
Probably a year out.
And you want me to guest at a base that on because if you recall, we actually have a lot of.
Increase of head count.
Feet on the street.
This quarter.
In fact, our quarter ends in August.
Some of them have seen is committed to sign on and is yet to start.
And with that.
Hi, Keith and the time for 9 to 12 months 6 to 9 months getting up the speed and.
At the same time.
Total <unk>.
The pipeline.
And to make the sales cycle work.
I think about a year out I should see some.
Good results.
And this class of.
Incoming.
Team members share.
Okay and Thats helpful. Thanks for taking my questions.
John.
Yes.
Next question is from the line of Paul Treiber of RBC capital markets. Your line Hey, John.
And yes.
Thanks, Lynn and good afternoon.
Just a question on sales and you mentioned in the outlook.
Mark and <unk>.
Bookings doubled.
Double digit bookings growth for the year, how should we think about the ramp on the trajectory over the year.
Hi.
Okay.
I actually didn't get Paul I missed <unk> words.
Thank you for your mind looking bookings growth.
And we think about bookings growth over this coming year on.
How should we think about the ramp over the year and relative to where we are now.
Yes.
Said earlier also.
And we just recently.
A lot of increase of head counts and sales.
On the booking lead to be back ended this year.
And then continue on for next year, obviously, so I don't know whether Thats the question Youre asking for.
And in the rate of growth there.
And we're following problem, Okay, and where do you expect to go to and yes, we do on bookings, we do expect it towards the end of the year, we do expect it to double digit.
Percentage growth.
Okay. That's helpful.
On cyber security revenue and.
For this quarter based on net debt number is the historical numbers and GAAP numbers.
And I did take a step down I think you mentioned <unk> can you just elaborate on what you saw customers and viewing and the Ams and I think purchased last year to date churn off the day.
And just elaborate on what happened there.
No I think is quite.
In general.
Steady and stable.
And we didn't see the growth that we're hoping for but it will be forthcoming because.
We just released the Edr products and we talk about cloud cloud the cloud version the latest optics free.
We just released all these new products.
A couple of quarter ago actually a quarter ago. So.
And.
So we're seeing that pipeline being built up and.
And that's looking for them to the <unk>.
Coming to being billings and business so.
We don't why don't I don't see any major movement, 1 way or the other.
Good day people are interested.
And Edr.
And I believe that they should be interested more and protect.
That's our job to make sure that that message come across and the benefit of that can be demonstrated and I definitely could demonstrate 1 thing you can look at.
The Blackberry Blackberry finance product combo.
None of these major.
Viruses, yes, none of these major viruses and actually hit our user base touch wood.
And so.
Anyway that tells you the power of our product.
Okay. Thank you I'll pass line.
John.
Next question is from the line of trip Chowdhry from Global Equities Research. Your line is now.
Hi, John Thank you very good execution on the product front.
<unk> first.
Regarding the battery management system.
Wondering if this is definitely on incremental.
Market for you.
There are 3 box software business models that we hadn't looked at that could be a design win.
Production part of it and the software and subscription.
Subscription part of the software that is running and managing the batteries. So among the key thing is it's all the components or is it only the software and subscription.
And then the battery management software back <unk> is running.
Yeah.
So thank you for that.
So first of all.
Sure.
It's a little early for me to answer the question I have a preference.
The preference is a usage base.
Revenue on a monthly subscription type revenue that will be my preference.
Of course that will have to.
That would have to be and agreement with the OEM.
So demonstrating that and IV.
It's on IV use cases I was wanted to.
And most important thing that we need to do and the next.
Free to 6 months, there is a demo being put together.
And it would not be.
Available until probably the end of this calendar year.
As we as full engineering team just started working on it.
And in the meantime, we will try to figure out of the question the answer to the question that you posed.
Again, I have I have a strong preference for this to be either usage based on monthly recurring base.
Wonderful the second question I hire for regarding the your exceptional machine learning models do you have and definitely currently your silence machine learning AI models work with only your product.
And youre exploring or do you think that mix of business and so.
And you open up your machine learning model.
Other Oems are 2 other Isps and then.
And for connection John.
For <unk> and API, because your product mix of Gateway security.
That is very normal and again, that's another incremental revenue on if I could.
And.
GAAP Halloween and uptime.
And since you have the best screening models available.
Net licensing or any other business model that can get more revenue for you and your thoughts on backward, but and I appreciate it and again very good execution on the product front.
Thank you.
And we haven't thought about.
Licensing those models to other.
Application, maybe I will say however, we are licensing debt.
On licensing is a wrong word sorry.
We are embedding.
John.
The lightweight agent and Iot devices.
<unk>.
Like medical equipment and industrial equipment.
So and some of those other technology, we have with the mobile threat detection.
And I and prevention also uses the model so it's being used.
Current weighted from a business perspective, we didn't think about licensing and why we could explore that but were dropped for a more focused on doing and bedding and endpoints.
Very good thank you very much John sure. Thank you.
Next question is from the line of Paul steep from Scotia Capital. Your line is now open and.
Hi, John can you maybe either just 1 maybe for both you and Steve and I will just make it 1.1 question you can parse it up as you like here can you give us some context around the cost base. Obviously, you disclosed last quarter that you had 3497 employees globally and then <unk>.
Earlier in this call you talked about increasing the number of reps by 23% at the end of Q2, So I'm just trying to.
Square up how we wanted to think about your cost base may be going forward and whether you've just incrementally shifted resources or is this like net new adds that we should all be thinking that.
Temporarily going to get added and then.
Productivity as you pointed out earlier.
Yes.
We have not.
John any major.
Or even minor reduction in force we have move.
Some resources around mall for a functional.
Investment reasons, not now for a reduction of people so.
He is probably best for you can think about as incremental.
That's helpful.
Maybe just the last 1 as well and.
In terms of new cyber security products, obviously, you're talking a bit given the team time to ramp up maybe talk to us a little bit about what youre seeing from inbound client interest because you've launched.
<unk>, a number of products and on a bit of a role here in terms of new product launches and that's it. Thanks.
Sure.
And assuming you are talking about the fiber side, yes, sorry, cyber okay alright.
<unk>.
Probably most of the conversation.
Center around the protect product.
The I would say, if I think about and the larger.
<unk>.
Opportunities and.
And sites that we have.
1.
The key winning product it is to protect so this is why you heard me said.
A number of times on the call today and.
And we're going to double down on the protect side because there is a differentiator for us and in addition to that.
On the AI ml model that we have could be embedded in it and that it without having to be updated its been valid for a very long time. So.
So thats, probably the largest opportunities when you think of our large installation.
And now what we're trying to do is to is to position the xdr product and we talk about the new 1 for gateway and.
And.
That provided zero Trust architecture, so enterprise, especially like government on its extremely interested in that.
So those 2 areas.
Thank you.
Sure. Thank you.
Thank you for participants I'll now turn the call back over to John Chen Executive Chair and CEO of Blackberry for closing remarks.
Thank you Jessie and thanks, everybody for joining us I know, it's late in the East coast. So.
And so I wanted to just.
Hopefully you all you are doing well and.
Some of you who are.
And at our annual shareholder meeting yesterday and are looking forward to speaking with you folks soon.
Have a great evening.
Thank you speakers that concludes today's conference call. Thank you all for joining you may now disconnect.
Yes.
And.
[music].
No.
Yes.
John.