Q4 2024 BlackBerry Ltd Earnings Call
MJ: Good afternoon, and welcome to the BlackBerry fourth quarter and full fiscal year 2024 results conference call. My name is MJ, and I will be your conference moderator for today's call. During the presentation, all participants will be in a listen-only mode.
Good afternoon, and welcome to the Blackberry fourth quarter and full fiscal year 'twenty 'twenty four results conference call. My name is M. Jay and I will be your conference moderator for today's call during.
During the presentation, all participants will be in a listen only mode. We will be facilitating a brief question and answer session towards the end of the conference.
MJ: We will be facilitating a brief question-and-answer session towards the end of the call. Should you need assistance during the call, please signal a conference specialist by pressing star zero. As a reminder, this conference is being recorded for replay purposes. I would now like to turn today's call over to Tim Foote, CFO, Cybersecurity Division and Head of Investor Relations. Tim, please go ahead. Thank you, MJ.
M. Jay: Should you need assistance during the call. Please signal a conference specialist by pressing star zero as.
As a reminder, this conference is being recorded for replay purposes.
Tim: I would now like to turn today's call over to Tim foot CFO Cyber Security Division and head of Investor Relations. Tim. Please go ahead.
Tim Foote: Thank you and good afternoon, everyone and welcome to Blackberrys fourth quarter and full fiscal year 'twenty 'twenty four earnings conference call.
Tim Foote: Good afternoon, everyone, and welcome to BlackBerry's fourth quarter and full fiscal year 2024 earnings conference call. Joining me on today's call is BlackBerry's Chief Executive Officer, John Giamatteo, and Chief Financial Officer, Steve Rai. After I read our cautionary note regarding forward-looking statements, John will provide a business update, and Steve will review the financial results. We will then open the call for a brief Q&A session. This call is available to the general public via call-in numbers and via webcast in the investor information section at blackberry.com. A replay will also be available on the BlackBerry.com website.
Tim: Joining me on today's call is blackberries, Chief Executive Officer, John G M, a tire and Chief Financial Officer, Steve right.
None: After I read our cautionary note regarding forward looking statements John will provide a business update and Steve will review the financial results.
None: Now to the cold for a brief Q&A session.
<unk> is available to the general public Park Colin numbers.
None: The webcast in the Investor information section.
None: As a result call.
None: A replay will also be available on the Blackberry Com website.
Tim Foote: Some of the statements we'll be making today constitute forward-looking statements and are made pursuant to the safe harbor provisions of applicable US and Canadian securities laws. We will indicate forward-looking statements by using words such as expect, will, should, model, intend, believe, and similar expressions. Forward-looking statements are based on estimates and assumptions made by the company in light of its experience and its perception of historical trends, current conditions, and expected future developments, as well as other factors that the company believes are relevant. Many factors could cause the company's actual results or performance to differ materially from those expressed or implied by the forward-looking statement. These factors include the risk factors discussed in the company's annual filings and MD&A. You should not place undue reliance on the company's forward-looking statements.
None: Some of the statements, we'll be making today constitute forward looking statements made pursuant to the safe Harbor provisions of applicable U S and Canadian Securities laws.
None: We'll indicate forward looking statements by using words, such as expect will should model intends believes and similar expressions.
None: We're looking statements are based on estimates and assumptions made public company in light of its experience and its perception of historical trends current conditions and expected future development as well.
There's other factors that the company believes are relevant.
None: 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 in the company's annual filings and empty at night.
None: Should not place undue reliance on the company's forward looking statements any forward looking statements are made only as of today and the company has no intention to take.
Tim Foote: Any forward-looking statements are made only as of today, and the company has no intention and undertakes no obligation to update or revise any of them, except as required by law. As is customary, during the call, John and Steve will reference non-GAAP numbers in their summary of our quarterly results. For a reconciliation between our GAP and non-GAP numbers, please see the earnings press release published earlier today, which is available on the EDGA, CedarPlus, and BlackBerry.com websites. And with that, I'll turn the call over to John.
None: No obligation to update or revise any of them, except as required by law.
None: As is customary joined the cool shell and Steve will reference non-GAAP numbers and a summary of our quarterly results for.
None: A reconciliation between our GAAP and non-GAAP numbers. Please see the earnings press release published earlier today, which is available on the Edgar SEDAR and Blackberry Dot Com website.
None: With that authentic alerts to Joe.
Tim Foote: Terrific. Thanks, Tim.
Joe: Terrific. Thanks, Tim and thank you all for joining us today.
John Joseph Giamatteo: And thank you all for joining us today. BlackBerry delivered a solid quarter where we either met or exceeded expectations and, in the process, set a number of new records. We beat expectations for earnings per share and, given our laser focus on profitable growth, further improved operating cash flow as we said we would. In fact, this quarter, we more than halved operating cash usage, and despite being prudent and measured with our top-line outlook, we expect to be both cash flow and EBITDA positive this coming fiscal year. In the quarter, our IoT business recorded its best ever quarter for revenue. Despite the delays automakers have experienced with their software development programs, we also achieved our strongest year for adding royalty backlog from new design work. This design win momentum has driven an all time high QNX royalty backlog of approximately 815 million, or 27% year over year growth. On the cyber side, we saw a very important data point with ARR stabilizing and even growing a little sequentially. We believe this demonstrates the impact of the many improvements the team has been enacting recently.
Joe: Blackberry delivered a solid quarter, where we either met or exceeded expectations and in the process.
Joe: A number of new records.
Joe: We beat expectations for earnings per share.
Joe: And given our laser focus on profitable growth further.
Joe: Further improved operating cash flow as we said we would.
Joe: In fact, this quarter, we more than halved operating cash usage and despite being prudent and measured with our top line outlook, we expect to be both cash flow and EBIT positive this coming fiscal year.
Joe: In the quarter, our Iot business recorded its best ever quarter for revenue.
Joe: Despite that they are the.
Joe: The delays automakers have experience with their software development programs. We also achieved our strongest year for adding royalty backlog from new design wins.
Joe: This design win momentum has driven an all time high Q N X royalty backlog of approximately $815 million or 27% year over year growth.
Joe: On the cyber side, we saw a very important data point with a are stabilizing and even growing a little sequentially.
Joe: We believe this demonstrates the impact of the many improvements the team has been enacting recently.
John Joseph Giamatteo: Cyber also recorded solid year-over-year growth from a revenue standpoint as well. So, let me start my review with the IoT business unit. As you know, the QNX business benefits from its strong multi-year customer relationship. Given this long-term horizon, the key metric for the health of the business is the royalty backlog.
Joe: Ciber also recorded solid year over year growth on from a revenue standpoint as well.
Joe: So let me start my review with the Iot business unit.
Joe: As you know the Q N X business benefits from its strong multi year customer relationships.
Joe: Given this long time horizon, a key metric for the health of the business is royalty backlog.
John Joseph Giamatteo: This gives a view on estimated lifetime royalty revenue from the design wins that we have secured. And this metric has never been better, reaching approximately $815 million this past quarter. As I mentioned, it was a strong year for adding new backlog from design wins, surpassing last year. And this past quarter, we secured a number of design wins that contributed to this achievement. Within automotive, we continue to dominate the digital cockpit domain, and among the winners was Hyundai Mobis, who selected the QNX hypervisor to enable mixed criticality in the cockpit without sacrificing performance. Beyond our core RTOS, we recorded a design win with a Japanese OEM for our acoustics middleware that will enable audio in the digital cockpit across a range of vehicles. Outside of the automotive industry, we have a strong and growing position in a number of general embedded markets. Specially Medical
This gives a view on estimated lifetime royalty revenue from the design wins that we have secured.
Joe: And this metric has never been better reaching approximately $815 million this past quarter.
Joe: As I mentioned it was a strong year for adding new backlog from design wins, surpassing last year.
Joe: And this past quarter, we secured a number of design wins that contributed to this achievement.
Joe: Within automotive, we continue to dominate the digital cockpit domain and among the wins was Hyundai mobius.
Who selected the Q&A hypervisor to enable mixed criticality and the cockpit without sacrificing performance.
Joe: Beyond our core our TASS, we recorded a design win with a Japanese OEM for our acoustics middleware that will enable audio and the digital cockpit across a range of vehicles.
Joe: Outside of automotive, we have a strong and growing position in a number of general embedded markets, especially medical.
John Joseph Giamatteo: Among the wins this quarter was one of the five largest medical OEMs in the world who selected the QNX RTOS as the foundation for a next-generation medical imaging machine for assessing blood and heart health. We also secured a win with a leading U.S.-based OEM, where our QNX real-time operating system will provide a secure, reliable platform for their fifth-generation surgical robot. In other applications, our QNX real-time operating system has been selected for use in a digital display for recreational power sport vehicles, demonstrating the potential for BlackBerry to expand into new verticals as the edge becomes progressively more intelligent.
Joe: Among the wins this quarter was one of the five largest medical Oems in the world, who selected the queue and ask our task as the foundation for our next generation medical imaging machine for assessing blood and heart health.
Joe: We also secured a win with a leading U S based OEM, where our Q1 actual real time operating system will provide a secure reliable platform for their fifth generation surgical robot.
In other applications or Q N X real time operating system has been selected for use in a digital display for recreational power sport vehicles.
Joe: Demonstrating the potential for Blackberry to expand into new verticals as the edge becomes progressively more intelligent.
Joe: So moving to the quarter's financials.
John Joseph Giamatteo: We delivered revenue at the top end of our guidance range. Revenue came in at $66 million, representing 20% sequential and 25% year-over-year growth. Gross margin remained at a very strong 85%.
Joe: We delivered revenue at the top end of our guidance range revenue came in at 66 million, representing 20% sequential and 25% year over year growth.
Joe: Gross margin remained at a very strong 85%.
John Joseph Giamatteo: Revenue growth was primarily driven by automotive and very strong QNX development seat revenue, which is relatively lumpy from quarter to quarter and reflects the strength of the recent new design window. Within automotive, the digital cockpit and ADAS remain the largest revenue drivers, and royalties and professional services were broadly in line with the strong quarter we recorded in Q3. In January, we had a very successful CES event in Las Vegas. Our booth was incredibly busy, and we held many productive meetings with current and potential customers. In addition, we made a number of very important product announcements. The first was the launch of our next generation QNX operating system, SDP 8.0. This offers a very significant step change in performance on high-powered silicon, scaling almost linearly, even up to 64 cores.
Joe: Revenue growth was primarily driven by automotive and very strong Q N X development seat revenue.
Joe: Which is relatively lumpy from quarter to quarter and reflects the strength of the recent new design wins.
Joe: Within automotive the digital cockpit and a dash remained our largest revenue drivers.
Joe: And royalties and professional services were broadly in line with the strong quarter, we recorded in Q3.
Joe: In January we had a very successful CES event in Las Vegas.
Joe: Our booth was incredibly busy and we held many productive meetings with current and potential customers.
Joe: In addition, we made a number of very important product announcements.
The first was the launch of our next generation <unk> operating system S. D. P. Eight gateau.
Joe: This offers a very significant step change in performance on high powered silicon scaling almost linearly EBIT up to 64 cores.
John Joseph Giamatteo: This allows BlackBerry to offer performance similar to and, in some cases, better than Linux without the fundamental open source safety limitations and Future Proof Software Designs as new, more powerful chips become available. We see this as a significant step in expanding our competitive moat in our core safety critical use case, while also expanding our addressable market into non-safety critical as well. The industry response since CES has been very encouraging, including engaging this past quarter with one of the world's leading automotive chip suppliers to purchase our SDP 8.0 development tool. Another key announcement was that our hypervisor has joined our RTOS in being available in the cloud. In addition, we made some announcements regarding our various middleware offerings. The Mobility and Harmony Consortium selected IVY for its Project X electrical vehicle platform.
Joe: This allows blackberry to offer performance similar to and in some cases better than Linux without the fundamental open source safety limitations.
Joe: Future proves software designs as new more powerful chips become available.
Joe: We see this as a significant step in expanding our competitive moat and our core safety critical use case.
Joe: While also expanding our addressable market into non safety critical as well.
Joe: The industry response since CES has been very encouraging including engaging this past quarter with one of the world's leading automotive chip suppliers to purchase our S. D. P. Eight dot O development tools.
Joe: Another key announcement was that our hybrid via a hypervisor has joined our our toss in being available in the cloud.
Joe: This allowed us to lantus to develop the world's first digital twin of their digital cockpit, allowing their software development teams to collaborate from anywhere around the world greatly reducing the need for physical hardware and significantly increasing productivity.
Joe: In addition, we made some announcements regarding our various middleware offerings.
Joe: The most are the mobility in harmony consortium selected IV for its project X electrical vehicle platform.
John Joseph Giamatteo: In addition, we launched QNX Sound, a complete audio and acoustics platform that enables software-defined audio experiences without the need for heavy and expensive hardware in the car, and we've already recorded our first design win with a major European automaker. Now, moving to the outlook for the IoT business. Due to the timing for potential upcoming design wins, we expect Q1 to be relatively quiet for potential new development seat sales compared to this past quarter. In addition, as we've spoken about throughout the past fiscal year, the auto industry continues to face material delays in software-defined vehicle programs. While this clearly presents challenges for the near term, it actually represents potential upside for the long term view for the business. In order to address delays in developing next-generation software defined platforms for their vehicles, automakers are increasingly discussing the potential for greater support from BlackBerry to help them address undifferentiated software development tasks.
Further we launched Q&A sound, a complete audio and acoustics platform that enables software defined audio experiences without the need for heavy and expensive hardware in the car.
Joe: And we've already recorded our first design win with a major European automaker.
Joe: So moving to the outlook for the Iot business.
Joe: Due to the timing for potential upcoming design wins, we expect Q1 to be relatively quiet for potential new development seat sales compared to this past quarter.
Joe: In addition, as we've spoken about throughout the past fiscal year.
Joe: Auto industry continues to face material delays and software defined vehicle programs.
Joe: Well, there's clearly presents challenges for the near term it actually represents potential upside to the long term view for the business.
Joe: And it did in order to address delays in developing next generation software defined platforms for their vehicles automakers are increasingly discussing the potential for greater support from Blackberry to help them solve undifferentiated software development tasks.
John Joseph Giamatteo: In fact, rather than OEMs attempting to address this themselves, having a trusted expert like BlackBerry handle the complex integration of middleware on top of the RTOS, Freezing up their development teams to focus on the differentiating experiences further up the stack, allowing BlackBerry to create what is sometimes referred to as a vehicle OS, has the potential to greatly simplify and accelerate software development while allowing automakers to retain full control over their platform.
Joe: In fact, rather than Oems attempting to address this themselves having a trusted expert like back Blackberry handle the complex integration of middleware on top of the art toss.
Joe: Frees up their development teams to focus on the differentiating experiences further up the stack.
Joe: Allowing blackberry to create what is sometimes referred to as a vehicle for Wes.
Joe: Has the potential to greatly simplify and accelerate software development, while allowing automakers to retain full control over their platform.
John Joseph Giamatteo: In addition, we're expanding our professional services team to provide greater support to our customers in integrating our software into their development projects. So with all these dynamics in mind, we expect revenue for Q1 to be in the range of $48 to $52 million, which is approximately 11% year-over-year growth at the midpoint. For the fiscal year, we expect revenue to be in the range of $220 to $235 million.
Further we're expanding our professional services team to provide greater support to our customers in integrating our software into their development projects.
So with all of these dynamics in mind, we expect revenue for Q1 to be in the range of $48 million to $52 million, which is approximately 11% year over year growth at the midpoint.
Joe: For the fiscal year, we expect revenue to be in the range of $220 million to $235 million.
John Joseph Giamatteo: Now, let me turn to the Cybersecurity Division. Revenue for the quarter beat expectations and came in at $92 million, representing 5% year-over-year growth. The strength this quarter came from our SPARK product group, that is, Cylamps and UEM. Now we consider annual recurring revenue, or ARR, to be one of the key indicators for our cyber business. As outlined during our last earnings call, this quarter we delivered stabilization of ARR on a sequential basis. In fact, AR even increased slightly by 3% to 280 million. DBNRR also increased by 3 percentage points sequentially to 85%.
Joe: Now, let me turn to the cyber Security Division.
Joe: Revenue for the quarter beat expectations and came in at $92 million, representing 5% year over year growth.
Joe: The strength this quarter came from our spark product group that is silence and uhm.
Joe: Now, we consider annual recurring revenue or <unk> to be one of the key indicators for our cyber business.
As outlined during our last earnings call. This quarter, we delivered stabilization of a or on a sequential basis in.
Joe: In fact, a or even increased slightly by 3% to $280 million.
Joe: D. B N R. R also increased by three percentage points sequentially to 85%.
John Joseph Giamatteo: These small but very important steps in the right direction for these key metrics illustrate the impact that a number of the improvements we've made are having within the business. In fact, the CEM and UEM renewal rates have been improving, and the past two quarters have been the best renewal rates in the past four years. In particular, this was a strong quarter for our Sitelands Guard managed service offering as well as net new logos. We see Silance Guard as being a driver for growth this coming year, and we're doubling down on this and other areas where we have demonstrated we are winning. During the quarter, we successfully deployed a number of products and services that were part of the significant deal with the Malaysian government that we announced in November.
Joe: These small but very important steps in the right direction for these key metrics illustrate the impact that a number of the improvements we've made are having within the business.
Joe: In fact, the CGM and U M renewal rates have been improving and the past two quarters have been the best renewal rates in the past four years.
In particular this was a strong quarter for our site land scarred managed service offering as well as net new logos.
We see silence guard as being a driver for growth this coming year, and we're doubling down on this and other areas, where we have demonstrated we are winning.
Joe: During the quarter, we successfully deployed a number of products and services that were part of the significant deal with the Malaysian government that we announced in November.
John Joseph Giamatteo: In addition, you may have seen that last week we were proud to officially open our Cybersecurity Center of Excellence in Kuala Lumpur. This center will provide a wide range of globally recognized training courses that will help Malaysia grow a skilled cyber security workforce. So some examples of the wins for the Cyber Division this quarter included renewals and upsells with leading government agencies such as the U.S. Air Force and Department of Homeland Security, as well as wins across the globe, such as the Netherlands Police, UK's National Crime Agency, Greater Manchester Police, and British Transport Police, and Financial Services in addition to major U.S. and Canadian banks.
Joe: In addition, you may have seen that last week, we were proud to officially open our cyber security center of excellence in Kuala Lumpur.
This center will provide a wide range of globally recognized training courses that will help Malaysia grow as skilled cyber security workforce.
Joe: So some examples of the wins for the Cyber Division this quarter included renewals and Upsells with leading government agencies, such as the U S Air Force.
Joe: Parkman of homeland security as well as wins across the globe.
Joe: Such as the Netherlands Police U K 's National Crime Agency.
Joe: Greater Manchester police.
And British transport police.
Joe: In financial services. In addition to major U S and Canadian banks.
John Joseph Giamatteo: We secured business with Swisserich and Julius Baer in Switzerland and the Bank of India. So moving now to the outlook for the cybersecurity business, from a longer-term standpoint, the addressable market for security software is so large, and our customers' needs so diverse, that no single vendor is in a position to dominate this market. Despite any near-term dynamics, we see significant opportunities for growth for our cybersecurity business in the years ahead. That said, in the near term, given the ongoing budget constraints of some of the leading government customers, which is a large portion of our customer base, we take a prudent view on both the timing and ability to close large deals that can drive near-term revenue, as was the case in Q1 of last year. For our enterprise and mid market customer base, security remains a mission critical priority, and we see a broadly unchanged, although somewhat challenging macroeconomic environment compared to recent quarters.
Joe: We secured business with Swire Sharif and Julius Baer in Switzerland, and the bank of India.
Joe: So moving now to the outlook for the cyber security business from a longer term standpoint, the addressable market for security software is so large and our customers need so diverse that no single vendor is in a position to dominate this market.
Despite any near term dynamics, we see significant opportunities for growth for our cyber security business in the years ahead.
Joe: That said in the near term given the ongoing budget constraints or some of the leading government customers, which is a large portion of our customer base, we take a prudent view on both the timing and ability to close large deals that can drive near term revenue as.
Joe: Was the case in Q1 of last year.
Joe: For our enterprise and mid market customer base security remains a mission critical priority and we see a broadly unchanged, although somewhat challenging macroeconomic environment compared to recent quarters.
John Joseph Giamatteo: This consistent backdrop gives us confidence that we can continue to stabilize our core recurring revenue base, and we expect ARR to be flat sequentially into Q1. Consequently, we expect a more predictable revenue stream as we head through this new fiscal year. Allowing for a smaller impact from large, lumpy government deals and the ongoing macroeconomic environment, we expect revenue for the first quarter to be in the range of $78 to $82 million and for the full year to be in the range of $350 to $365 million. So, touching briefly on licensing, revenue for the quarter came in stronger than expected at $15 million. Looking to the coming fiscal year, we expect revenue to be approximately $4 million in each of the four quarters. So now, I will turn the call over to Steve, who will provide you with a little more color on our financials. Steve
Joe: This consistent backdrop gives us confidence that we can continue to stabilize our core recurring revenue base.
Joe: And we expect <unk> to be flat sequentially into Q1.
Joe: Therefore, we expect a more predictable revenue stream as we head through this new fiscal year.
So, allowing for a smaller impact from large lumpy government deals and the ongoing ongoing macroeconomic environment. We expect revenue for the first quarter to be in the range of $78 million to $82 million and for the full year to be in the range of 350 to 300.
Joe: And $65 million.
Joe: So touching briefly on licensing revenue for the quarter came in stronger than expected and $15 million.
Joe: Looking to the coming fiscal year, we expect revenue to be approximately $4 million in each of the four quarters.
Joe: So now let me turn the call over to Steve who will provide you a little more color on our financials.
Joe: Steve.
Steve Rai: Thank you, John. As always, my comments on our financial performance will be in non-GAAP terms unless otherwise specified. Total company revenue for the quarter was $173 million. IOT revenue was $66 million. Cybersecurity revenue was $92 million, and licensing revenue was $15 million.
Thank you John.
Steve: As always my comments on our financial performance will be in non-GAAP terms, unless otherwise noted.
Total company revenue for the quarter was $173 million.
Iot revenue was $66 million cyber.
Steve: Cyber secure cyber security revenue was $92 million and licensing revenue was $15 million.
Steve Rai: The percentage of software product revenue that was recurring increased to approximately 90%, total company gross margin improved to 75%, while operating expenses decreased to $113 million. Non-GAAP operating expenses exclude a $35 million goodwill impairment charge. 20 million of restructuring expenses and $8 million in amortization of acquired intangibles. $5 million in stock compensation expense, and 4 million in impairment of long-lived death. Both non-GAAP operating profit and net profit for the fourth quarter were $16 million. BlackBerry delivered three cents of non-GAAP basic earnings per share for the quarter, beating expectations.
Steve: The percentage of software product revenue that was recurring increased to approximately 19%.
Steve: Total company gross margin improved to 75%.
Steve: While operating expenses decreased to $113 million.
Steve: non-GAAP operating expenses exclude.
Steve: A 35 million goodwill impairment charge.
Steve: $20 million of restructuring expenses.
Steve: 8 million in amortization of acquired intangibles.
Steve: $5 million and stock compensation expense.
Steve: And $4 million and impairment of long lived assets.
Steve: Both non-GAAP operating profit and net profit for the fourth quarter were $16 million.
Steve: Blackberry delivered three of non-GAAP basic earnings per share for the quarter, beating expectations.
Steve Rai: Adjusted EBITDA, excluding the non-GAAP adjustments previously mentioned, was $21 million. Total cash, cash equivalents, and investments increased to $298 million as of February 29. Cash used by operating activities more than halved sequentially to $15 million. As a reminder, two quarters ago, this was $56 million, and Q3 was $31 million. Traditionally, Q1 is a seasonal low for cash flow driven by the Annual Billings and Payments Profile.
Steve: Adjusted EBITDA, excluding the non-GAAP adjustments previously mentioned was $21 million.
Steve: Total cash cash equivalents and investments increased to 298 million as at February 29.
Steve: Cash used by operating activities more than halved sequentially to $15 million.
Steve: As a reminder, two quarters ago. This was $56 million in Q3 was $31 million.
Steve: Yeah.
Steve: Traditionally Q1 is our seasonal low for cash flow driven by the annual billings and payments profile.
Steve Rai: Therefore, we would expect a sequential increase in operating cash usage, but a year-on-year improvement after factoring in the impact of the sale of our non-core patent portfolio in Q1 of last year. We expect EPS for Q1 to be in the range of negative four to negative six cents and adjusted EBITDA to be in the range of negative 15 to negative 25 million. For the full fiscal year 2025, we expect EPS to be in the range of negative two to negative six cents and adjusted EBITDA to be in the range of breakeven to positive $10 million. We also expect to exit the year with both positive EPS and positive operating cash flow in Q4. This quarter, we recorded a $35 million non-cash accounting impairment of goodwill for the SPARC reporting unit.
Steve: Therefore, we would expect a sequential increase in operating cash usage. However, a year on year improvement after factoring in the impact of the sale of our non core patent portfolio in Q1 of last year.
We expect EPS for Q1 to be in the range of negative four to negative <unk>.
Steve: And adjusted EBITDA to be in the range of negative <unk> 15 to negative $25 million.
Steve: For the full fiscal year 2025, we expect EPS to be in the range of negative two to negative <unk>.
Steve: And adjusted EBITDA to be in the range of breakeven to positive $10 million.
Steve: We also expect to exit the year with both positive EPS and positive operating cash flow in Q4.
Steve: Yeah.
Steve: This.
Steve: We recorded a 35 million noncash accounting impairment of goodwill for the spark reporting unit.
Steve Rai: This represents a non-cash charge of $0.06 to GAAP earnings per share. In accordance with accounting rules, we were required to perform a goodwill impairment review by determining Fair Value for all reporting units, the total of which is required to reconcile to our market cap. Further details will be disclosed in our Form 10 case. As we announced during the past quarter, we successfully completed a $200 million five-year convertible debt rate. The level of interest in the offering was high, and we were able to achieve competitive rates. As a result, we were able to fully repay the $150 million of short-term extension debentures that had been in place since the previous debentures matured last November. With this long-term financing in place, BlackBerry has a solid balance sheet, and we are well positioned to execute on our strategy. That concludes my comments, and I'll turn it back to John.
This represents a noncash charge of six to GAAP earnings per share.
Steve: In accordance with accounting rules, we were required to perform a goodwill impairment review by determining.
Fair value for all reporting units the total of which is required to reconcile to our market cap.
Steve: Further details will be disclosed in our Form 10-K.
Steve: As we announced during the past quarter, we successfully completed a $200 million five year convertible debt raise.
Steve: The level of interest in the offering was high and we were able to achieve competitive rates.
Steve: As a result, we were able to fully repay the $150 million of short term extension debentures that had been in place since the previous debentures matured last November.
Steve: With this long term financing in place Blackberry has a solid balance sheet and we are well positioned to execute on our strategy.
Steve: That concludes my comments and I'll turn it back to John.
John Joseph Giamatteo: Thank you, Steve. Okay, so, as Steve mentioned, we are currently executing on our strategy to establish two profitable standalone divisions. During the quarter, we provided an update on actions we expected to take, and I can confirm that we delivered as planned. We have appointed divisional leaders, such as finance, HR, and legal, and those leaders are currently building out their teams to address the specific needs of the businesses they support.
John Joseph Giamatteo: Thank you Steve.
John Joseph Giamatteo: Okay sorry.
John Joseph Giamatteo: As Steve mentioned.
John Joseph Giamatteo: We are currently executing.
John Joseph Giamatteo: On our strategy to establish two profitable standalone divisions.
John Joseph Giamatteo: During the quarter, we provided an update on actions, we expect it to take and I can confirm that we delivered as planned.
John Joseph Giamatteo: We have appointed divisional leaders.
John Joseph Giamatteo: Such as finance HR and legal and those leaders are currently building out their teams to address the specific needs of the businesses they support.
John Joseph Giamatteo: In regards to cost, you may recall that during Q3, we executed on approximately $50 million of run rate savings, predominantly within the cybersecurity business, and including approximately 200 headcount reductions. During this past quarter, we went further and took actions that will enable an additional $55 million worth of savings. Approximately $35 million of this came from cyber security, the cyber security business, and $20 million came from our central GNA function.
John Joseph Giamatteo: In regards to cost you may recall that during Q3, we executed on approximately $50 million of run rate savings predominantly within the cyber security business and including approximately 200 head count reductions.
John Joseph Giamatteo: During this past quarter. We went further and took actions that will enable an additional $55 million worth of savings.
John Joseph Giamatteo: Approximately 35 million of this came from cyber security the cyber security business and 20 million came from our central G&A functions.
John Joseph Giamatteo: We understand how important it is for shareholders to see the benefits of these cost reductions starting to show in the P&L. So, in order to make it easier to track the cost improvements, starting this quarter, we are reporting sales and marketing separately from general and administrative. This new split aligns to how we're tracking towards our long-term targets as a percentage of revenue. Also, we think it is helpful to provide a cost run rate from before we started the reductions described as a baseline for comparison. Without getting into too many various one-time puts and takes in the reporting op-ecs for Q1 and Q2 of this past year, we consider the average of the two to be a fair baseline to use.
John Joseph Giamatteo: We understand how important it is for shareholders to see the benefits of these cost reductions starting to realize in the P&L.
John Joseph Giamatteo: So in order to make it easier to track the cost improvements starting this quarter, we are reporting sales and marketing.
John Joseph Giamatteo: Lee from general and administrative.
John Joseph Giamatteo: This new split aligns to how we're tracking towards our long term targets as a percentage of revenue.
John Joseph Giamatteo: Also we think it is helpful to provide a cost run rate from before we started the reductions described as a baseline for comparison.
John Joseph Giamatteo: And without getting into too many various one time puts and takes in the reporting Opex for Q1 and Q2 of this past year, we consider the average of the two to be a fair baseline to use.
John Joseph Giamatteo: Non-GAAP APEX for Q1 was $145 million and Q2 $114 million, giving an average of $130 million a quarter. This past quarter, non-GAAP OPEX was $113 million, that is $17 million lower than the $130 million baseline, or $68 million lower on an annualized basis. This shows that the actions we've taken are already having a significant effect, although it will take time for them to fully reflect in the run rate. We expect the average quarterly OPEX run rate for this coming fiscal year to be approximately $110 million. That is approximately $80 million lower than the baseline on an annualized basis. This reconciles to the $105 million of savings by allowing for timing, Reductions in fixed costs of goods sold in addition to OPEC, and incremental targeted investments, particularly in our IoT business. In addition to the savings outlined, we are working towards further incremental run rate reductions. And as you can expect, these will take a little longer to action due to having more complex dependencies like systems or process efficiency.
non-GAAP Opex for Q1 was $145 million in Q2 $114 million.
John Joseph Giamatteo: Giving an average of $130 million a quarter.
John Joseph Giamatteo: This past quarter non-GAAP Opex was $113 million that is $17 million lower than the $130 million baseline were $68 million lower on an annualized basis.
John Joseph Giamatteo: This shows that the actions we've taken are already having a significant effect.
John Joseph Giamatteo: Although you can expect it will take time for them to fully reflect in the run rate.
John Joseph Giamatteo: We expect the average quarterly Opex run rate for this coming fiscal year to be approximately $110 million.
John Joseph Giamatteo: That is approximately $80 million lower than the baseline on an annualized basis.
John Joseph Giamatteo: This reconciles to the $105 million of savings by allowing for timing.
John Joseph Giamatteo: Reductions in fixed cost of goods sold in addition to Opex.
John Joseph Giamatteo: And incremental targeted investments, particularly in our Iot business.
John Joseph Giamatteo: In addition to the savings outlined we are working towards further incremental run rate reductions and as you can expect these will take a little longer to action due to having more complex dependencies like systems our process efficiencies.
John Joseph Giamatteo: Given the impact of the various cost reductions, we are modeling for positive operating cash flow and adjusted EBITDA for fiscal year 2025. So, before we open the lines for Q&A, let me quickly summarize the key messages. This was a solid quarter for BlackBerry in which we set a number of new records. The IOT business recorded its best ever quarter for revenue. It had its best ever year for adding new backlog from design wins and its highest ever royalty backlog of approximately $815 million. Cyber ARR stabilized as we said it would, in fact, showing some modest sequential growth, and revenue for the quarter grew 5% year over year. In addition to the positive news for the top line, we're also very focused on the bottom line. We executed on a number of significant cost-saving actions that build on those from the previous quarter and are helping drive positive EBITDA and cash flow this coming fiscal year. So that concludes my prepared remarks. So MJ, why don't I turn it over to you so we can open the lines for Q&A?
John Joseph Giamatteo: Given the impact of the various cost reductions we are modeling for positive operating cash flow and adjusted EBITDA for fiscal year 2025.
John Joseph Giamatteo: So before we open the lines for Q&A.
None: Let me quickly summarize the key messages.
None: This was a solid quarter for Blackberry, and which we set a number of new records.
None: The Iot business recorded its best ever quarter for revenue.
None: Its best ever year for adding new backlog from design wins.
None: And its highest ever royalty backlog of approximately $815 million.
None: Cyber AAR are stabilized as we said it would in fact, showing some modest sequential growth.
None: And revenue for the quarter grew 5% year over year.
None: In addition to the positive news for the top line. We're also very focused on the bottom line.
None: We executed on a number of significant cost saving actions.
None: That build on those from the previous quarter and are helping drive positive EBITDA and cash flow this coming fiscal year.
None: So that concludes my prepared remarks, so M. J why don't I turn it over to you. So we can open the lines for Q&A.
MJ: Thank you, sir. We will now begin the question and answer session. To ask a question, please press star 1 on your telephone keypad. Please make sure your line is unmuted.
M. J: Thank you Sir we will now begin the question and answer session to ask a question. Please press star one on your telephone keypad.
M. J: Please make sure. Your line is on muted again Thats star one to ask a question.
MJ: Again, that's Star 1 to ask a question. We request that you limit yourself to one question and one follow-up. We'll pause for just a moment to allow everyone an opportunity to signal for questions. Our first question today will be from Mike Walkley with Canaccord Genuity. Please go ahead. Great. Thank you.
M. J: We request that you limit yourself to one question and one follow up.
M. J: Well pause for just a moment to allow everyone an opportunity to signal for questions.
M. J: Our first question today will be from Mike Walkley with Canaccord Genuity. Please go ahead.
Thomas Michael Walkley: Great. Thank you.
Thomas Michael Walkley: Hey, John just I, just wanted to delve in a little bit to the.
Thomas Michael Walkley: Hey John, just, just wanted to say...
Thomas Michael Walkley: <unk> on the cyber security business.
John Joseph Giamatteo: Delving a little bit into BlackBerry.com. Yeah, absolutely, Mike. Hey, we're really pleased. You know, it's been a long journey to get our ARR to where we started to stabilize and pivot for growth. So a lot of heavy lifting in the product and in our customer engagement activities.
Thomas Michael Walkley: The endpoint market is still over 40% legacy legacy solutions and it sounds like silence was part of the improvement. This quarter can you just talk about how blackberries position relative to some of the legacy players and how you see maybe growth in this segment over the course of the year.
None: Yes, absolutely Mike.
None: Hey, we're really pleased.
It's been a long journey to get <unk> to where we are.
None: Sorry to stabilize in and pivoting for growth. So a lot of heavy lifting in the product and in our customer engagement activities. So so we're pleased that we're kind of starting to see that stabilize as we think about future growth.
John Joseph Giamatteo: So we're pleased that we're kind of starting to see that stabilize. As we think about, you know, future growth, you still think there's a tremendous amount out there. You know, when you think about the legacy endpoint providers, like the Trelix of the world, like the Trend Micros of the world, like the Broadcom Symantec install base, there's a lot of opportunity that's, we think, up for grabs for a next-generation endpoint capability along the lines of what we offer in Silance. So it was actually showing a lot of new logos, albeit smaller logos, but And between that and our guard platform, we're, you know, cautiously optimistic about opportunities to move that in the right direction in the next fiscal year. And just for my follow-up question, on the IoT business, you have a strong close to the year and a lot of records in that strong royalty.
None: We still think there's a tremendous amount out there when you think about the the legacy endpoint providers.
None: Like the <unk> of the world like the trend micro's of the world like the Broadcom Symantec.
None: Installed base, there's a lot of opportunity that we think up for grabs for a next generation endpoint capability along the lines of what we offer in silence. So.
None: It was actually telling a lot of a lot of new logos small, albeit small smaller logos, but a lot of new logos over the course of the last quarter and between that and our guard platform where.
None: So I'm cautiously optimistic for opportunities to move that in the right direction in the next fiscal year.
Great. Thanks, and then just for my follow up question on the Iot business and a strong close to the year and a lot of records and that strong royalty backlog that you've laid out some delays in the guidance kind of suggest maybe mid single digit growth this year.
Unknown Speaker: Unknown Speaker 0
Unknown Speaker: You know, the backlog that you've laid out some delays, and the guidance kind of suggests maybe mid-single-digit growth this year.
Unknown Speaker: You know, based on your conversation with customers and some of these delays, are these multi-year delays, you know, as you talk about the opportunity to grow that backlog, or do you see things kind of ramping up this year and picking up in calendar 25?
None: Based on your conversation with customers and some of these delays.
None: Are these multiyear delays.
None: You talked about the opportunity to grow that backlog or do you see things kind of ramping through this year and picking up in calendar 'twenty five.
Unknown Speaker: [inaudible]
John Joseph Giamatteo: Yeah, we have not seen the delays that we talked about last quarter, like for like a kind of a four quarter shift, six quarter shift, we have not seen that improve yet. You know, so I just the complexity of the software defined vehicles, and the skill sets of the OEMs. And, you know, it's not their core competency, getting these things out. It's a little more of a complex and a little more of a challenge. I will tell you, we're doing everything we can to help them. One of the things we're going to do more of in our engineering at the edge with our customers to help them do some of that integration with their development projects. But, you know, we were trying to be a little cautious because we're not seeing the floodgates wide open at this point. We're still seeing some sluggishness in getting those new software defined vehicle programs launched.
Yeah, we have not.
None: The the delays that we talked about last quarter or.
None: Got kind of a four quarter shift six quarter shift we have not seen that improve yet.
None: So.
None: The complexity of the software defined vehicles, the skill sets of the Oems and no. It's not their core competency getting these things out is a is a little more of a complex and a little more channels I will tell you. We're doing everything we can to help them one of the as I mentioned, we're going to increase more than our engineering.
None: At the edge with our customers to help them do some of that integration with their development projects, but.
We're trying to be a little cautious because we're not seeing the floodgates wide.
None: Wide open at this point.
None: We're still seeing some sluggishness and getting those those new software defined vehicle programs launched.
John Joseph Giamatteo: That's why we're being a little...
Alright, well, that's why we're being a little that's why we're being somewhat cautious and prudent about it based on what we're seeing.
John Joseph Giamatteo: We're being somewhat cautious and prudent about it based on what we're seeing.
Thomas Michael Walkley: Thanks for taking my two questions and congrats on the cost execution.
None: Understood. Thanks for taking my two questions and congrats on the execution.
John Joseph Giamatteo: Thanks, Mike.
None: Thanks, Mike.
William Kerwin: Thank you. The next question is from William Kerwin with Morningstar. Please go ahead. Hi everyone.
None: Thank you. The next question is from William Cohen with Morningstar. Please go ahead.
Unknown Executive: Hi, everyone. Thanks for letting me get a question and maybe just to keep it on the Iot business, obviously, a lot of positive announcements.
John Joseph Giamatteo: Thanks for letting me ask a question. And maybe just to keep it on the IoT business, obviously, there were a lot of positive announcements at CES. Just curious, you know, how those have been received so far over the course of the past three months? And, you know, are they already gaining some traction in the pipeline as you look going forward? And just, you know, maybe as a follow-up to that, you know, the path to get towards kind of a double-digit growth profile in this business? Understand it's still growing, but you know, slower than you would probably like. Thank you. Yeah, yeah.
Unknown Executive: Yes, just curious how those have been received so far over the course of the past three months and you know are they already gaining some traction in the pipeline as you look going forward.
None: Just maybe as a follow up to that.
None: Getting back towards kind of a double digit growth profile in this business understand it's still growing but.
None: Slower than you would probably like to thank you, yes, yes.
John Joseph Giamatteo: Thanks, William. Um, yeah, so a couple of things. The product, the pipeline is just exciting. SDP 8.0, you know; it was a buzz at CES as we were walking through that. It's a step change in capability that really, I think, puts us in a strong position. And it's actually, you know, to have one of the leading chip suppliers buy some development tools is a strong kind of statement about the impact of that. You know, the acoustics capability, you know, the cloud capability, the fact that we got a couple of design wins there, we're supporting Stellantis in their efforts to leverage the cloud to be much more productive in their process. Pipeline's growing nicely. We're excited about the base level platform and with RTOS and ADAS, but now these other capabilities just put us in that much stronger position. So we're excited about the pipeline for the future. To your point, we wish some of this stuff would, some of that $815 million backlog would roll off a little bit faster than it's been. But we think when that stuff opens up, it's gonna be a really good opportunity to drive some business model leverage into the business.
None: Thanks William.
None: Yeah. So.
None: A couple a couple of things.
None: The product pipeline is just exciting SDP eight donahoe.
None: You know it was a buzz at the at CES as we were walking through that it's a step change in capability that really I think it puts us in a strong position and it's actually you have to have one of the leading chip suppliers.
None: By some development towards a strong statement to the impact of that the.
None: The acoustics capability the clock.
None: <unk> capability. The fact that we got a couple of design wins, there were supporting the Lantus.
None: And their efforts to leverage the cloud to be much more productive in their process.
None: Pipeline is growing nicely we're excited about.
None: The base level platform and with our toss in a desperate now these other capabilities just.
None: Puts us in and that much more of a stronger position. So we're excited about the pipeline for the future to your point.
None: We wish some of this stuff.
None: Some of that $815 million backlog would roll off a little bit faster than that than its been but.
We think when when when that stuff opens up it's going to be a really good opportunity to to drive some business model leverage into into the business.
William Kerwin: And if I could just tack one more on, obviously, some good progress on the cost savings already, you know, just curious if you could cut and talk through why you think the targets that you've laid out are the right size for the business and how you see the progress going forward, you know, longer term past fiscal 25. Thanks.
None: Awesome that makes sense and if I could just ask one more on obviously some good progress on the cost savings already and I'm. Just curious if you could talk through you know why you think you know the targets that you've laid out are the right size for the business and.
None: And how you see the progress going forward, you know I guess longer term pass a fiscal 'twenty five.
John Joseph Giamatteo: Yeah, great question. I, you know, to me, it's kind of a twofold impact from the cost side of things. One thing that really helped us clarify where we're investing and how is just to have embarked on our strategy that split into two divisions that really kind of forces us to look and say, where are we? Where are we investing? Where can we, you know, back off from that?
None: Yeah great.
Great question.
None: For me, it's it's a it's kind of a twofold.
None: Impact from the cost side of things one I think that really helped us clarify where we're investing and how is just how do we embarked on our strategy to split into two divisions that really kind of makes us forces us to look and say where are we where are we investing where can we.
John Joseph Giamatteo: In fact, we had some, you know, some really renowned industry consultants provide us with some advice on some benchmarking on where we are and where the industry is. So, you know, we kind of target the right levels and the right benchmarks for that. So I think that's one aspect of it. I think the other is that you can see a lot of it came out of cyber. So I think right sizing cyber, getting the efficiencies out of cyber that we think were there, I think I mentioned in the past, cyber grew throughout five or six different acquisitions over the years. So there was a lot of, you know, R&D rationalization that we thought was not going to impact the innovation cycle but at the same time improve the overall business. So I think between working with consultants on the split of into two divisions, as well as some really focused efficiencies on the cyber side, we kind of feel like we're landing at the right place right now from a cost standpoint.
None: Back off of that in fact, we had some you know some really a renowned industry consultants provide us some advice with some benchmarking on where we are and where the industry is so.
None: We kind of target the right levels and the right benchmark for that so I think that's one aspect of it I think the other is.
None: So you can see a lot of it came out a cyber so I think right sizing side, we're getting the efficiencies out of cyber that we think we're there I think I had mentioned in the past.
None: Cyber group trout, five or six different acquisitions over the years. So there was a lot of R&D rationalization.
None: That we thought was not going to impact.
None: The innovation cycle, but at the same time improve the overall business. So I think between working with consultants on the split of.
None: Into two divisions as well as some really focused the efficiencies on the cyber side, we kind of feel like we're landing at the right place right now from a cost standpoint.
William Kerwin: Awesome. Thanks so much and congrats on the Beat Discord.
None: Awesome. Thanks, so much and congrats on the beat this quarter.
Paul Michael Treiber: The next question comes from Paul Treiber with RBC Capital Markets. Please go ahead. Thanks very much, and good afternoon.
None: Thank you. The next question comes from Paul Treiber with RBC capital markets. Please go ahead.
Paul Michael Treiber: Oh, thanks, very much and good afternoon.
Paul Michael Treiber: It's helpful that I think next quarter you're breaking out sales and marketing from G&A. You touched on the split of the company into IoT and cyber. What do we expect in terms of the disclosures around segmented profitability between IoT and cyber and in the time frame? Yeah, thanks, Paul. So, you know, obviously, there's a lot of activity internally at play, both from a separation, business separation standpoint, and from a cost streamlining and restructuring standpoint. So, you know, the benchmarks that we've kind of given on a total company basis, I appreciate the desire to kind of have a, you know, basically a full P&L for each of the business units, but we're not in a position to But, you know, on that, we would ask you to just, you know, stay tuned as we work towards that.
Paul Michael Treiber: Yeah. It's helpful that I think next quarter, you're breaking out sales and marketing from G&A you touched on the split of the company into Iot and cyber.
What can we expect in terms of the.
Paul Michael Treiber: It was around segmented profitability bye bye, but between Iot and cyber and the timeframe for that.
None: Yes, Thanks Paul.
None: So.
None: Obviously, theres a theres a lot.
Unknown Executive: Of activity internally at play bolster our separation business separation standpoint and from a from.
None: From a cost streamlining and restructuring standpoint so.
Paul Michael Treiber: The the markers that we've kind of given on a total company basis I appreciate.
Paul Michael Treiber: You know the the desire to kind of have a.
Paul Michael Treiber: Basically a full P&L for each of the business units, where we're not in a position.
Paul Michael Treiber: To provide that.
None: At this time.
But.
None: All of that we would ask you to just stay tuned as we as we work to.
Steve Rai: Paul, it's a good question. Kind of feel like you said, think of it as the breakdown between sales and marketing and G&A. That's, that's a down payment on giving you more transparency into our overall cost structure. And as Steve articulated, in the quarters ahead, we'll, I think we'll be in a better position to kind of take that to the next level. So hang in there with us, and we'll provide you with updates as we go throughout the year.
None: Towards that.
None: Paul It's a good it's a good question.
None: I kind of feel like you said think of it as the breakout of sales and marketing and G&A. That's that's a down payment on giving you more transparency to our overall cost structure and as Steve articulated in the quarters ahead.
None: Well I think we'll be in a better position to kind of take that for the next level. So hang in there with us and we'll.
None: We'll provide you updates as we go throughout the year.
Paul Michael Treiber: Okay, and my second question just relates to future opportunities for cost savings. I mean, also with that, you know, what's the timeframe that you're targeting to make those announcements? And does that also relate to the split of those segments? So we may get everything at once. And then can you also elaborate on the nature of those of those reductions that you're talking about? I'll start there. I mean, there's a number of structural items, you know, ranging from corporate, you know, legal entity structures, which, which we've talked about before, just in terms of simplifying, you know, IT systems, the supporting back office infrastructure, you know, from a particularly from an IT standpoint, you know, So, I, you know, we'll, obviously, actively looking at how to go about that and formulating the plans to execute on those. We'll be able to squeeze some of those types of items out this year, but, but by and large, that's probably going to go beyond this fiscal year.
None: Okay and my second question.
None: As it relates to the to the future opportunities for cost savings and then also with that.
None: What's the timeframe that you're.
Targeting to make those announcements.
None: And does that also relate to the split of those segments. So we may get everything out at once.
None: And then could you also elaborate on like the nature.
None: Of those of those reductions that youre considering.
None: Maybe I'll start there I mean, there's a number.
None: There's a number of structural.
None: Items.
Ranging from.
None: <unk>.
None: Corporate legal entity structures, which which we've.
None: <unk> talked about before just in terms of simplifying.
None: E systems the.
None: The supporting back office infrastructure.
None: From a particularly from a from an it standpoint.
None: Those types of things are bigger.
None: Bigger rocks.
None: And you know about.
None: That doesn't happen overnight.
None: Well, we'll obviously actively looking at how to go about that and formulating the plans to execute on those.
None: We will be able to squeeze some.
None: Those types of items.
None: Out.
None: This year, but but by and large that that's probably going to go that will go beyond.
Steve Rai: And I'll tie it there to that.
None: This fiscal.
None: And are they asking for that.
John Joseph Giamatteo: I'd answer that, Paul, just... you know, from November of last year to now. We did some heavy lifting on $105 million worth of real cost that's coming out. We're starting to see it, you know, in the run rate. And that's, you know, heavy lifting on things that, you know, structural, you know, we talked about facilities. I think last time we closed down, we're rationalizing our labs, we're, you know, fine-tuning our go-to-market and cyber, we're doing a lot of those things underpinned by a $105 million heavy lift. The next week, we're not. We're going to But you know, those are, like I said, those are a little trickier, as Steve said, that's a little trickier, you know, they're a little more intertwined, there's more dependencies, so we have to be a little more careful and a little more thoughtful about how we proceed on that so we don't, you know, disrupt, you know, some of the momentum that we have in the But we'll, you know, be cautious about it, and we'll provide you with updates as we go throughout the year.
None: Add to that Paul just.
Yeah.
November of last year to now.
None: We did some heavy lifting on $105 million worth of real cost Thats coming out we're starting to see it in the.
None: In the in the run rate.
None: And that's heavy lifting on things that.
None: Structural we've talked about facilities I think last time, when we that we closed that were rationalizing our labs were.
None: Fine tuning our go to market the cyber we're doing a lot of those things underpin to $105 million of heavy lift. The next peak, we're not we're going to continue to focus and we think there's still more opportunities to be more efficient.
None: But those are our like I said those are a little those seats that are a little trickier, because they're a little more intertwined theres more dependencies.
None: We've got to be a little more careful and a little more thoughtful how we proceed on that not to.
None: Disrupt some of them the momentum that we have in the business. So a lot of work that's done in the last six months, we still have a lot more to do.
None: But we'll be.
None: Be cautious about it and we'll provide you updates as we go throughout the year.
None: Thank you.
None: Thank you as a reminder to ask a question you May Press Star then one.
None: Seeing no further questions in the queue I would like to turn the call back over to John <unk> CEO of Blackberry for closing remarks.
John Joseph Giamatteo: Terrific. Thank you. Thank you Andre.
John Joseph Giamatteo: Just hey, thanks, everybody for for being part of the call today.
MJ: Thank you. As a reminder, to ask a question, you may press star, then 1. Since there are no further questions in the queue, I would like to turn the call back over to John Giamatteo, CEO of BlackBerry, for closing remarks.
We are as we've talked about solid quarter for the company.
John Joseph Giamatteo: In many many ways.
John Joseph Giamatteo:
John Joseph Giamatteo: Set new records will be on the Iot, It's it's really encouraging to see the cyber business stabilizing and the opportunities that we have in front, we're executing really well on the.
John Joseph Giamatteo: Terrific. Thank you. Thank you, MJ.
Our strategy to split this company into two divisions and marching towards profitability on both of them.
John Joseph Giamatteo: Hey, thanks everybody for being part of the call today. We are, as we talked about, a solid quarter for the company in many, many ways, setting new records with the IOT. It's really encouraging to see the cyber business stabilizing and the opportunities that we have in front of us. We're executing really well on our strategy to split this company into two divisions and marching towards profitability on both of them. And, you know, we're pleased with the progress that we've made thus far, and we're really going to look forward to and commit to providing you all with more transparent updates as we go throughout the fiscal year. So thanks for being on the call with us today, and we'll talk to you next quarter.
John Joseph Giamatteo: And where.
None: We're pleased with the progress that we've made thus far and we're going to look forward and committed to providing you all more transparent updates as we go throughout the fiscal year. So thanks for being on the call with us today and.
None: We will talk to you.
None: Next quarter.
None: This concludes today's call. Thank you for your participation you may now disconnect your lines.
None: Okay.
None: [music].
MJ: This concludes today's call. Thank you for your participation. You may now disconnect your lines. ??? ??? ??? ??? ??? ??? ??? ??? ??