BlackBerry Reports Q4 Fiscal 2017 Results Above Analyst Consensus Revenue and EPS EstimatesNetworking, Picture Gallery Friday, 31. March 2017
WATERLOO, ONTARIO — (Marketwired) — 03/31/17 — BlackBerry Limited (NASDAQ: BBRY)(TSX: BB), a global software leader in securing, connecting and mobilizing enterprises, today reported financial results for the three months and fiscal year ended February 28, 2017 (all figures in U.S. dollars and U.S. GAAP, except where otherwise indicated).
Non-GAAP revenue for the fourth quarter of fiscal 2017 was $297 million with GAAP revenue of $286 million. Approximately 80% of the fourth quarter Software & Services segment revenue (excluding IP licensing and professional services) was recurring. BlackBerry had over 3,500 enterprise customer orders in the quarter.
Non-GAAP operating income was $13 million, and non-GAAP earnings per share was $0.04. GAAP net loss for the quarter was $47 million, or ($0.09) per basic share. GAAP operating loss was $57 million, which includes $28 million in amortization of acquired intangibles, $25 million in restructuring charges, a benefit of $16 million of fair value adjustment related to the debentures and other amounts as summarized in a table below.
Total cash, cash equivalents, short-term and long-term investments increased by $89 million to approximately $1.7 billion as of February 28, 2017. This reflects free cash flow of $16 million, which includes cash flow from operations of $19 million. Excluding $605 million in the face value of the Company–s debt, the net cash balance at the end of the quarter was approximately $1.1 billion. There were no purchase orders with contract manufacturers at the end of the fourth quarter, compared to $35 million at the end of the third quarter and down from $162 million a year ago.
“I am pleased to report that our Q4 results came in at or above expectations in all major metrics,” said John Chen, Executive Chairman and CEO, BlackBerry. “In the quarter, we continued to grow our mix of software and services revenue across the company. In turn, this allowed us to expand our operating margin and report positive free cash flow. In addition, our balance sheet continues to strengthen and benefit from reduced capital requirements with our focus on software and licensing.”
“In our areas of strategic focus, we are executing well and gaining traction,” continued Chen. “In our enterprise business, we had one of our best-ever software billings quarters, driven by strength across regulated and non-regulated industries. Enhancing our position in public sector, we recently achieved FedRAMP certification for the U.S. government. In IOT appliances, we won new business and secured six new customer trials for Radar. We demonstrated our autonomous driving technology platform at CES 2017. In mobile software licensing, we signed our third major agreement, and we now have global coverage. We are entering the next phase in sub-licensing our secure software to a variety of new mobile endpoints. We also entered the CPaaS market with the launch of our BBM Enterprise Software Development Kit, which will expand our addressable opportunity in a high growth segment.”
“Looking ahead to fiscal 2018, we expect to grow at or above the overall market in our software business. We also expect to be profitable on a non-GAAP basis and to generate positive free cash flow for the full year.”
Reconciliation of the Company–s segment results to the consolidated results:
(United States dollars, in millions)
Reconciliation of GAAP revenue, gross margin, gross margin percentage, loss before income taxes, net loss and loss per share to Non-GAAP revenue, gross margin, gross margin percentage, income before income taxes, net income and income per share:
(United States dollars, in millions except per share data)
Note: Non-GAAP revenue, non-GAAP gross margin, non-GAAP gross margin percentage, non-GAAP income before income taxes, non-GAAP net income and non-GAAP income per share do not have a standardized meaning prescribed by GAAP and thus are not comparable to similarly titled measures presented by other issuers. The Company believes that the presentation of these non-GAAP measures enables the Company and its shareholders to better assess the Company–s operating results relative to its operating results in prior periods and improves the comparability of the information presented. Investors should consider these non-GAAP measures in the context of the Company–s GAAP results.
Supplementary Geographic Revenue Breakdown
Conference Call and Webcast
A conference call and live webcast will be held beginning at 8 a.m. ET, which can be accessed by dialing 1-844-309-0607 or by logging on at . A replay of the conference call will also be available at approximately 11 a.m. ET by dialing 1-855-859-2056 or 1-404-537-3406 and entering Conference ID #66409061 or by clicking the link above.
BlackBerry is a mobile-native security software and services company dedicated to securing people, devices, processes and systems for today–s enterprise. Based in Waterloo, Ontario, the company was founded in 1984 and operates in North America, Europe, Asia, Middle East, Latin America and Africa. The Company trades under the ticker symbols “BB” on the Toronto Stock Exchange and “BBRY” on the NASDAQ. For more information, visit .
This news release contains forward-looking statements within the meaning of certain securities laws, including under the U.S. Private Securities Litigation Reform Act of 1995 and applicable Canadian securities laws, including statements regarding: BlackBerry–s plans, strategies and objectives, including BlackBerry–s expectations regarding anticipated demand for, and the timing of, product and service offerings, including its device software; BlackBerry–s expectations regarding its capital requirements in connection with the implementation of its new Mobility Solutions strategy; BlackBerry–s expectations with respect to the strength of its financial resources; BlackBerry–s expectations regarding total software and services revenue growth; and BlackBerry–s expectations regarding its non-GAAP earnings per share and free cash flow.
The words “expect”, “anticipate”, “estimate”, “may”, “will”, “should”, “could”, “intend”, “believe”, “target”, “plan” and similar expressions are intended to identify these forward-looking statements. Forward-looking statements are based on estimates and assumptions made by BlackBerry in light of its experience and its perception of historical trends, current conditions and expected future developments, as well as other factors that BlackBerry believes are appropriate in the circumstances, including but not limited to, BlackBerry–s expectations regarding its business, strategy, opportunities and prospects, including its ability to implement meaningful changes to address its business challenges, the launch of new products and services, general economic conditions, product pricing levels and competitive intensity, and BlackBerry–s expectations regarding the cash flow generation of its business and the sufficiency of its financial resources. Many factors could cause BlackBerry–s actual results, performance or achievements to differ materially from those expressed or implied by the forward-looking statements, including the following risks: BlackBerry–s ability to enhance, develop, introduce or monetize products and services for the enterprise market in a timely manner with competitive pricing, features and performance; BlackBerry–s ability to maintain or expand its customer base for its software and services offerings to grow revenue, achieve sustained profitability or offset the decline in BlackBerry–s service access fees; the intense competition faced by BlackBerry;
risks related to BlackBerry–s ability to attract new personnel, retain existing key personnel and manage its staffing effectively; BlackBerry–s dependence on its relationships with resellers and distributors; the occurrence or perception of a breach of BlackBerry–s security measures, or an inappropriate disclosure of confidential or personal information; the risk that sales to large enterprise customers and to customers in highly regulated industries and governmental entities can be highly competitive and require compliance with stringent regulation; risks related to BlackBerry–s products and services being dependent upon the interoperability with rapidly changing systems provided by third parties; BlackBerry–s ability to successfully generate revenue and profitability through the licensing of security software and services or the BlackBerry brand to device manufacturers; the risk that network disruptions or other business interruptions could have a material adverse effect on BlackBerry–s business and harm its reputation; risks related to acquisitions, divestitures, investments and other business initiatives; the risk that failure to protect BlackBerry–s intellectual property could harm its ability to compete effectively and BlackBerry may not earn the revenues it expects from intellectual property rights; BlackBerry–s reliance on third parties to manufacture and repair its hardware products; BlackBerry–s ability to obtain rights to use software or components supplied by third parties; the substantial asset risk faced by BlackBerry, including the potential for additional charges related to its long-lived assets and goodwill; the risk that BlackBerry–s ability to maintain or increase its liquidity; risks related to BlackBerry–s indebtedness; the risk that BlackBerry could be found to have infringed on the intellectual property rights of others; the risk that litigation against BlackBerry may result in adverse outcomes; risks related to government regulations applicable to BlackBerry–s products and services, including products containing encryption capabilities; risks related to the use and management of user data and personal information; risks related to foreign operations, including fluctuations in foreign currencies; risks associated with any errors in BlackBerry–s products and services; the risk of a negative impact on BlackBerry–s business as a result of actions of activist shareholders;
risks related to fostering an ecosystem of third-party application developers; risks related to the failure of BlackBerry–s suppliers, subcontractors, third-party distributors and representatives to use acceptable ethical business practices or comply with applicable laws; risks related to health and safety and hazardous materials usage regulations, and product certification risks; costs and other burdens associated with regulations regarding conflict minerals; risks related to BlackBerry possibly losing its foreign private issuer status under U.S. federal securities laws; the potential impact of copyright levies in numerous countries; risks related to tax provision changes, the adoption of new tax legislation, or exposure to additional tax liabilities; risks related to the fluctuation of BlackBerry–s quarterly revenue and operating results; the volatility of the market price of BlackBerry–s common shares; risks related to adverse economic and geopolitical conditions; market and credit risk associated with BlackBerry–s cash, cash equivalents and short-term or long-term investments; the risk that future issuances of common shares by BlackBerry will be dilutive to existing shareholders; and the potential consequences for BlackBerry–s shareholders in the United States if BlackBerry is or was a passive foreign investment company. These risk factors and others relating to BlackBerry are discussed in greater detail in BlackBerry–s Annual Information Form, which is included in its Annual Report on Form 40-F and the “Cautionary Note Regarding Forward-Looking Statements” section of BlackBerry–s MD&A (copies of which filings may be obtained at or ). All of these factors should be considered carefully, and readers should not place undue reliance on BlackBerry–s forward-looking statements. BlackBerry has no intention and undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.
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