BlackBerry Reports a loss of $130 million for Fiscal 2021 Third Quarter

BlackBerry reported its Third Quarter Fiscal Year 2021 Results today, with revenue falling 18% to $218 million, compared with analysts’ estimate of $219.7 million. Net loss widened to $130 million, or 23 cents per share, in the third quarter ended Nov. 30 from $32 million, or 7 cents per share, a year earlier, owing to fair-value adjustments to long-term debt.

The company delivered third quarter non-GAAP total company revenue of $224 million and GAAP total company revenue of $218 million. Third quarter total company gross margin was 70%, while non-GAAP gross margin includes software deferred revenue acquired but not recognized of $6 million and excludes stock compensation expense of $1 million.

Third quarter operating expenses were $142 million. Non-GAAP operating expenses exclude $32 million in amortization of acquired intangibles, $11 million in stock compensation expense, $4 million for software deferred commissions expense acquired and $95 million fair value adjustment on the convertible debentures, which is a non-cash accounting adjustment driven by market conditions.

Third quarter non-GAAP operating income was $14 million and third quarter non-GAAP net income was $11 million. Non-GAAP earnings per share was $0.02 in the quarter. Adjusted EBITDA was $31 million this quarter, excluding the non-GAAP adjustments previously mentioned.

Software and Services revenue was $168 million. Software Product revenue remained in the range of 80% to 85% of the total, with Professional Services comprising the balance. The proportion of Software Product revenue that is recurring was approximately 83% due to product mix. The decrease in ARR this quarter similar to the prior quarter is primarily due to BTS. Licensing and Other revenue was $56 million.

Total cash, cash equivalents and investments were $757 million at November 30, 2020, a decrease of $220 million during the quarter. This is mainly due to the early redemption of the $605 million of convertible debentures and issuance of $365 million of new convertible debentures on September 1st. This represented a $240 million reduction in debt financing, partially offset by cash generated in the period.

Net cash position increased to $392 million at the end of the quarter. Third quarter free cash flow was $27 million and cash generated from operations was $29 million, with capital expenditures of $2 million.

“We are pleased to report solid financial results this quarter, delivering sequential software and services revenue growth in line with our outlook. This quarter we delivered exciting new technology releases, especially our AI-driven BlackBerry Cyber Suite. We also made significant progress with partnerships,” Said John Chen, Executive Chairman & CEO, BlackBerry.
“Our recently-announced multi-year, exclusive partnership with AWS to co-develop and co-market BlackBerry IVY, is both strategic and unique. This new platform will create a recurring-revenue business, bringing together BlackBerry’s extensive experience and footprint in embedded automotive with AWS’ unparalleled cloud reach, consumer experience and interface.”

Third Quarter Business Highlights & Strategic Announcements

AWS and BlackBerry join forces to accelerate innovation with new intelligent vehicle data platform, BlackBerry IVY.
BlackBerry QNX has design wins with 19 of the top 25 Electric Vehicle OEMs, who together have 61% of EV market.
BlackBerry unveils industry’s first Unified Endpoint Security (UES) solution for AI-powered Cybersecurity, BlackBerry Cyber Suite. Cyber Suite will Integrate with all leading UEMs, including Microsoft Intune.
BlackBerry launches industry’s first user behaviour AI technology for Cybersecurity, BlackBerry Persona Desktop.
BlackBerry launches new AI-powered Mobile Threat Defense (MTD) solution to protect against mobile malware and phishing attacks, BlackBerry Protect Mobile.
BlackBerry Unified Endpoint Manager (UEM) software has achieved National Security Agency (NSA) Commercial Solutions for Classified Program (CSfC) approval.
Announced new global BlackBerry Partner Program that combines the award-winning BlackBerry Enterprise Partner Program and BlackBerry Cylance Partner Programs into one unified comprehensive structure.
BlackBerry uncovered massive hack-for-hire group, BAHAMUT, targeting governments, businesses, human rights groups and influential individuals.
Launched QNX OS for Safety 2.2, a new release of the trusted, safety-certified operating system certified by the independent auditors at TÜV Rheinland to IEC 61508 SIL3 (Industrial), ISO 26262 ASIL D (Automotive), and IEC 62304 Class C (Medical devices) functional safety standards.