BlackBerry Reports Preliminary Q4 and Full Fiscal Year 2023 Results

BlackBerry today provided a business update and announced selected, unaudited preliminary financial results for the three months ended February 28, 2023 (all figures in U.S. dollars and U.S. GAAP, except where otherwise indicated).

“Macro challenges were a key factor for BlackBerry’s Cybersecurity business unit this quarter, with elongated sales cycles in government causing some large deals to slip into later quarters,” said John Chen, Executive Chairman & CEO, BlackBerry.

“The IoT business unit closed the year strongly, and we expect to deliver year over year revenue growth of approximately 16%, in line with outlook. Given the current macro backdrop, BlackBerry’s management has taken proactive steps this quarter to both balance investments and manage costs to drive towards profitable growth.”

Preliminary Fourth Quarter Fiscal 2023 Financial Results

Total company revenue expected to be approximately $151 million.
IoT revenue expected to be approximately $53 million.
Cybersecurity revenue expected to be approximately $88 million.
Cybersecurity billings expected to increase sequentially for third quarter in a row to approximately $107 million.
Licensing and Other revenue expected to be approximately $10 million.
BlackBerry’s results are expected to include a material non-cash, one-time goodwill impairment charge for the Spark reporting unit. The amount is currently being determined but is expected to be up to $440 million. This assessment is required in accordance with accounting rules and is primarily driven by the broad-based stock market decline this past calendar year and corresponding impact on our market capitalization at the test date.

Preliminary Fiscal Year 2023 Financial Results

Total company revenue expected to be approximately $656 million.
IoT revenue expected to be approximately $206 million.
Cybersecurity revenue expected to be approximately $418 million.
Cybersecurity billings expected to be approximately $401 million.
Licensing and Other revenue expected to be approximately $32 million.

Fourth quarter and full-year fiscal year 2023 revenue for BlackBerry’s IoT business unit is expected to be in line with the outlook provided previously, representing approximately 16% year-over-year revenue growth.

Fourth quarter and full-year fiscal year 2023 revenue for BlackBerry’s Cybersecurity business unit is expected to be lower than the outlook provided during our Q3 FY23 earnings call, primarily due to certain large government deals under negotiation not closing in the quarter, but rather slipping into fiscal year 2024.

BlackBerry has seen an elongation in deal cycles in the government vertical, including additional deal reviews and approvals. Given the anticipated product mix of the slipped deals, it is expected that this causes a significant impact on in-quarter revenue recognition.

BlackBerry Management is currently reviewing its long-term targets for the Cybersecurity business unit and intends to provide revised targets on, or before, its Analyst Day on May 17^th, 2023.

Preliminary Financial Results

The preliminary financial results for the fourth quarter and full year ended February 28, 2023, are unaudited estimates, and are based on information available to management as of the date of this release and are subject to potential further material changes upon completion of the Company’s standard year-end closing procedures.

In preparing this information, management has made subjective estimates about the appropriateness of certain reported amounts and disclosures.

BlackBerry’s actual financial results for the three months and year ended February 28, 2023, have not yet been finalized and remain subject to the completion of management’s final review and our other closing procedures, as well as the completion of the audit of our annual financial statements.

These preliminary estimated results do not represent a comprehensive statement of all financial results for the three months and year ended February 28, 2023.

Readers are cautioned that Cybersecurity billings does not have any standardized meaning and is unlikely to be comparable to similarly titled measures reported by other companies.