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Blackberry (NYSE:BB) 2025 Conference Transcript

2025-11-18 15:22

Summary of BlackBerry Conference Call Company Overview - BlackBerry has redefined its focus into two main divisions: QNX (embedded software) and secure communications, along with a significant IP portfolio [2][2][2] QNX Business Insights - QNX is a rapidly growing segment, powering over 255 million cars globally, with strong positions among the largest OEMs and EV makers [3][3][3] - The value proposition includes foundational software for safety, security, and high performance, particularly in applications like digital cockpit and ADAS [3][3][3] - BlackBerry is expanding its offerings by providing middleware solutions in collaboration with partners [4][4][4] Automaker Engagement - Many automakers initially attempted to develop their own software but often returned to BlackBerry due to challenges in integrating complex software systems [5][5][5] - BlackBerry is seeing increased demand for additional services from automakers, indicating a strong market position [6][6][6] Revenue Opportunities - The average selling price (ASP) per vehicle is expected to increase due to the launch of the next-generation operating system, SDP8, which supports high-performance chips [7][8][8] - BlackBerry has secured design wins that promise higher ASPs, with a focus on software integration to relieve OEMs of complex tasks [9][9][9] Economic Discussions with Automakers - The sales approach emphasizes value rather than just price increases, ensuring long-term partnerships with OEMs [11][11][11] - The ASP is anticipated to rise as BlackBerry provides more value through advanced software solutions [12][12][12] Market Conditions and Future Outlook - Despite macroeconomic uncertainties, there are positive signs of growth in the automotive sector, with OEMs increasing their project scopes and guidance [15][15][15] - BlackBerry's pipeline is reported to be the strongest in a long time, indicating optimism for future growth [15][15][15] GEMS Segment - BlackBerry is investing in the General Embedded Market (GEMS), focusing on safety-critical and high-performance applications, particularly in medical devices and industrial automation [22][22][22] - The company aims to diversify its revenue streams while maintaining a strong position in the automotive sector [23][23][23] Leadership Changes - John Wall has been appointed as President of the QNX division, bringing over 30 years of industry experience [27][27][27] Secure Communications Business - The secure communications segment has stabilized and is now a reliable source of revenue and profit, with a focus on mission-critical communications [28][28][28] - This segment complements the growth trajectory of QNX, providing a steady cash flow to support further investments [29][29][29] Financial Performance - BlackBerry reported a significant increase in cash flow, transitioning from a cash burn of $57 million to a positive cash flow of $60 million in recent quarters [38][38][38] - The company expects to generate over $70 million in cash this fiscal year, strengthening its balance sheet [38][38][38] Capital Allocation Strategy - The primary focus for cash allocation is on R&D investments for QNX and potential share buybacks, reflecting confidence in the company's valuation [39][39][39] - BlackBerry is open to strategic acquisitions that align with its growth story, although the criteria for such investments will be stringent [40][40][40]