Blackberry (BB) FY Conference August 13, 2025 09:00 AM ET Speaker0Welcome everyone to this Wednesday session. I'm King C Crane, a software analyst here at Canaccord Genuity. With me I have the BlackBerry management team, John G. Mateo, CEO and Tim Foote, CFO. Thanks for being here.Speaker1Thank you, Kingsley.Speaker2Thank you, Kingsley.Speaker0So let's kick it off. You reported earnings back in June. What stood out most to you in the quarter? How would you characterize, you know, the state of the business a ...

Core Viewpoint - BlackBerry is struggling to find its footing after transitioning from a smartphone manufacturer to a provider of IoT and cybersecurity software, facing challenges in saturated markets [1][2]. Group 1: Company Overview - BlackBerry was once a leader in the smartphone market but lost its position to competitors like Apple and Android [1]. - The company has shifted focus to IoT and cybersecurity software but continues to face difficulties in expanding its market presence [1]. Group 2: Growth Drivers - BlackBerry's growth has been primarily driven by two acquisitions: QNX, an embedded operating system for vehicles, and Cylance, a cybersecurity company [4][6]. - The QNX segment saw a 10% year-over-year revenue increase in fiscal 2025, contributing 44% to BlackBerry's total revenue [5]. - The company launched BlackBerry IVY, a cloud-based connected-vehicle platform, co-developed with Amazon Web Services [4]. Group 3: Financial Performance - In fiscal 2025, revenue from the secured communications segment, which includes cybersecurity services, decreased by 4% year-over-year but still represented 51% of total revenue [7]. - Licensing revenue plummeted by 90% in fiscal 2025, accounting for only 5% of total revenue due to the sale of most of its patent portfolio [8]. Group 4: Future Outlook - BlackBerry anticipates revenue between $508 million and $538 million for fiscal 2026, indicating a potential 2% decline at the midpoint [9]. - The company expects a 10% to 14% decrease in secured communications revenue due to the sale of Cylance's assets, while QNX is projected to grow by 10% [9]. - Analysts predict a revenue increase of 9% and an 18% rise in adjusted EBITDA for fiscal 2027 as QNX and SecuSmart attract new customers [10]. Group 5: Valuation and Investment Considerations - BlackBerry's enterprise value stands at $2.2 billion, trading at four times this year's sales and 27 times forward adjusted EBITDA [11]. - If the company meets analysts' expectations, shares could rise by 16% over the next 12 months, but any setbacks in its main segments could lead to a decline in stock value [12].