UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________________
FORM 10-K
☒
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the fiscal year ended February 28, 2025
OR
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the transition period from to
Commission file number 001-38232
______________________________________________________
BlackBerry Limited
(Exact name of registrant as specified in its charter)
Canada
98-0164408
(State or other jurisdiction of incorporation or
organization)
(I.R.S. Employer Identification No.)
2200 University Ave East
Waterloo
Ontario
Canada
N2K 0A7
(Address of Principal Executive Offices)
(Zip Code)
(519) 888-7465
Registrant’s telephone number, including area code
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Shares
BB
New York Stock Exchange
Common Shares
BB
Toronto Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes x No o
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
Yes o No x
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to
file such reports); and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted
pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period
that the registrant was required to submit such files).
Yes x No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller
reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”,
“smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer
x
Accelerated filer
☐
Non-accelerated filer
o
Smaller reporting company
☐
Emerging growth company
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period
for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
o
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the
effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C.
7262(b)) by the registered public accounting firm that prepared or issued its audit report. x
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the
registrant included in the filing reflect the correction of an error to previously issued financial statements. o
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-
based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to
§240.10D-1(b). o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No x
The aggregate market value of voting stock held by non-affiliates of the registrant on August 31, 2024, the last business day of
the registrant’s most recently completed second fiscal quarter, based on the closing price of the common shares as reported by
the New York Stock Exchange, was approximately $1.4 billion. The registrant had 596,233,826 shares of common shares
issued and outstanding as of March 28, 2025.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant’s proxy statement for its 2025 Annual Meeting of Shareholders are incorporated by reference into Part
III of this Annual Report on Form 10-K to the extent stated herein. Such proxy statement will be filed with the Securities and
Exchange Commission within 120 days after the registrant’s fiscal year ended February 28, 2025.
BLACKBERRY LIMITED
TABLE OF CONTENTS
Page No.
PART I
Item 1
Business
4
Item 1A
Risk Factors
12
Item 1B
Unresolved Staff Comments
23
Item 1C
Cybersecurity
23
Item 2
Properties
24
Item 3
Legal Proceedings
25
Item 4
Mine Safety Disclosures
25
PART II
Item 5
Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities
26
Item 6
[Reserved]
28
Item 7
Management's Discussion and Analysis of Financial Condition and Results of Operation
28
Item 7A
Quantitative and Qualitative Disclosures about Market Risk
63
Item 8
Financial Statements and Supplementary Data
64
Item 9
Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
114
Item 9A
Controls and Procedures
114
Item 9B
Other Information
114
Item 9C
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
114
Part III
Item 10
Directors, Executive Officers and Corporate Governance
115
Item 11
Executive Compensation
117
Item 12
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters
117
Item 13
Certain Relationships and Related Transactions, and Director Independence
117
Item 14
Principal Accounting Fees and Services
118
PART IV
Item 15
Exhibit and Financial Statement Schedules
119
Item 16
Form 10-K Summary
120
Signatures
121
3
Unless the context otherwise requires, all references to the “Company” and “BlackBerry” include BlackBerry Limited and its
subsidiaries.
PART I
ITEM 1. BUSINESS
The Company: A heritage of innovation
Founded in 1984, the Company is a leading provider of intelligent software and services to enterprises, governments and
leading OEMs around the world. Its products enable more than 255 million vehicles and secure 17 of the G20 governments.
Based in Waterloo, Ontario, the Company has two core divisions, each addressing large and growing market opportunities.
The Company’s QNX division is a leader in embedded software where the Company believes it is the world’s leading
automotive foundational software supplier. Its customers include leading automotive OEMs and Tier 1 suppliers that use its
products in vehicles, as well as top medical OEMs. The Company’s solutions are implemented into all the top 10 automotive
OEMs, top 7 Tier 1 suppliers, 24 of the 25 top EV OEMs, and 9 of the 10 top medical OEMs.
The Company’s Secure Communications division delivers operational resiliency with a comprehensive, highly secure, and
extensively certified product portfolio for mobile fortification, mission-critical communications and critical events
management.
The Company was incorporated under the Business Corporations Act (Ontario) (“OBCA”) and has amalgamated with several
of its wholly-owned subsidiaries, the last occurring through the filing of articles of amalgamation under the OBCA on
November 4, 2013. The Company’s common shares trade under the ticker symbol “BB” on the New York Stock Exchange
(“NYSE”) and the Toronto Stock Exchange (“TSX”).
Cylance Sale
On February 3, 2025, the Company completed the sale of its Cylance endpoint security assets and related liabilities to Arctic
Wolf Network, Inc. (“Arctic Wolf”) for $160.0 million of cash, subject to certain adjustments of approximately $39.1 million,
and 5.5 million common shares of Arctic Wolf. As a result of the Cylance sale, it is no longer reported alongside UEM,
SecuSuite and AtHoc as the Cybersecurity segment, and those three businesses are now reported separately from Cylance as the
Secure Communications segment. The financial results of Cylance are presented as discontinued operations and are included in
“loss from discontinued operations, net of tax” in the Consolidated Statements of Operations and have been removed from the
presentation of results from continuing operations. Prior period comparatives in the financial statements, and throughout this
Annual Report on Form 10-K where applicable, have been recast to reflect this change.
Intercorporate Relationships
The Company has three material subsidiaries, all of which are wholly-owned, directly or indirectly, by the Company in each
case as at February 28, 2025.
Name of Subsidiary
Jurisdiction of Incorporation or Organization
BlackBerry Corporation
Delaware, U.S.A.
BlackBerry UK Limited
England and Wales
Secusmart GmbH
Duesseldorf, Germany
Industry Background
QNX
The world is rapidly moving to one where everyone and everything can be intelligently connected at the edge. This evolution is
being enabled by the proliferation of devices in the Internet of Things, increasing device sophistication and compute power, and
powerful software that can bring these devices to life. Industries of all types, from automotive and manufacturing to healthcare
and robotics, are experiencing the profound impact of this evolution, as intelligent edge devices deliver unprecedented
capabilities by making immediate, context-aware decisions locally. The Company believes the benefits of the intelligent edge
are real and immense, promising enhanced security, reduced latency, and rigorous efficiency, and position the intelligent edge
as a technological pillar that it expects will shape the digital landscape of the future.
This rapid evolution can be attributed to increasing connectivity, decreasing sensor and hardware component costs, and
continuous innovation that leverages edge data. The associated surge in data generation and computing power at the edge is
creating new ways for businesses to provide impactful applications that rely on real-time data processing and insights. As a
4
result, software-defined connected devices are improving safety, security, and reliability by allowing for dynamic updates,
which enables greater flexibility to scale and adapt to evolving customer demands or industry requirements.
While all industries are experiencing the shift toward the intelligent edge, the Company believes these trends are most prevalent
in the automotive industry, as evidenced by the growth and complexity of software-defined vehicles (“SDVs”). Powered by
continual advancements in computing hardware such as the move from microcontrollers to microprocessors, modern vehicles
increasingly operate on highly sophisticated and interconnected software stacks and the data produced by vehicles is
proliferating at a rapid rate. The entire automotive value chain, from OEMs to Tier 1 suppliers, will need foundational software
to capture, synthesize, analyze and monetize this massive volume of real-time data to develop innovative solutions that deliver
safer, more efficient and more fulfilling driving experiences. These trends are not just present in automotive, but are also being
seen in industrial automation, healthcare and robotics. The Company further believes that increased and evolving regulatory
requirements as well as consumer expectations will create further demand for high-performance SDVs and other IoT devices.
With increasing compute capabilities and system complexity, there is an imperative for high-performance foundational software
that maintains the highest level of functional safety and security of systems at the edge.
Secure Communications
The secure communications industry is a critical component of the broader security software market, encompassing a wide
range of solutions designed to safeguard sensitive voice, messaging, and data transmissions from unauthorized interference.
The escalating frequency and sophistication of cyberattacks, exemplified by high-profile incidents like those attributed to the
Salt Typhoon group, highlight the vulnerabilities in traditional communication networks and promote demand for secure
communications solutions. In parallel, ongoing digital transformation and the prevalence of mobile and decentralized
workforces, together with the global proliferation of privacy and data protection regulations, also drive reliance on digital
communication tools and the adoption of secure communication practices.
Secure Voice, Messaging and Conferencing
Governments, militaries, and enterprises operate in dynamic environments where the confidentiality, integrity, and availability
of communications are crucial. Secure voice, messaging, and conferencing systems ensure that sensitive information is
transmitted and received without unauthorized interception or access. For governments and militaries, this is vital for national
security, operational integrity, and the protection of classified information. For enterprises, secure communications are relied
upon to safeguard intellectual property, financial data, and personal information of employees and partners. By implementing
secure voice, messaging, and conferencing solutions, these entities can foster trust, ensure compliance with regulatory
requirements, and maintain the privacy of their strategic communications.
Critical Events Management
Critical events management solutions enable organizations to prepare for, respond to, and recover from a wide range of
emergencies and crises. These solutions are essential for maintaining operational continuity, ensuring community safety, and
minimizing the impact of unexpected events through networked mass communications in real time.
In an era of growing concern over severe climate-related events, escalating geopolitical tensions, and supply chain insecurity,
governments and other large organizations are investing in solutions to elevate preparedness and heighten proactive
engagement.
Unified Endpoint Management
Unified endpoint management (UEM) solutions have become integral to modern enterprise mobility and security strategies.
UEM platforms offer a centralized approach to managing and securing a diverse fleet of devices, applications, and content.
They enable organizations to protect data, enforce security policies, and provide secure access to corporate resources from any
location.
Demand for UEM solutions is driven by the challenges of managing a growing fleet of endpoints while ensuring data security
and compliance with regulations. Key trends include the integration of artificial intelligence and machine learning to enhance
device management capabilities, the adoption of Bring Your Own Device policies to improve employee productivity, and the
shift towards cloud-based UEM solutions for greater scalability and flexibility.
Products and Services: Addressing market needs and opportunities
The Company has a rich pedigree in innovation and has developed a range of products and services that assist customers in
addressing their needs as their industries evolve, which are structured in three divisions: QNX, Secure Communications and
Licensing.
5
QNX
The QNX division consists of QNX®, BlackBerry Radar®, BlackBerry® Certicom® and BlackBerry IVY®.
With 45 years of embedded software expertise and a rich intellectual property portfolio, QNX is an industry leader whose high-
performance foundational software enables major automakers and industrial giants alike to unlock transformative applications,
drive new revenue streams and launch innovative business models, all without sacrificing safety, security and reliability. QNX
is a trusted supplier of operating systems, hypervisors, frameworks and development tools that help reduce hardware
dependency while enabling new possibilities in high-performance computing, standards-based virtualization technologies, and
cloud enablement.
QNX offers a growing portfolio of safety-certified, secure and reliable platform solutions and is focused on achieving design
wins with automotive OEMs, Tier 1 vendors and automotive semiconductor suppliers. These solutions include the BlackBerry
QNX real-time operating system, QNX® Hypervisor for Safety and QNX® Software Development Platform (SDP), as well as
other products designed to alleviate the challenges of compliance with ISO 26262, the automotive industry’s functional safety
standard. The QNX pre-certified microkernel operating system is specifically tailored for safety-critical embedded systems and
toolchains that are pre-qualified for building these systems. The QNX Hypervisor for Safety prevents safety systems from
potential impact of malfunction in other systems. These products help drive a faster time to market and also reduce developer
friction.
QNX is also a preferred supplier of embedded systems for companies building medical devices, rail systems, industrial
automation solutions, hardware security modules, building automation systems, green energy solutions, and other mission-
critical applications. QNX collaborates closely with customers to understand their specific requirements and more quickly and
effectively develop solutions to meet their evolving needs.
BlackBerry Radar is a family of asset monitoring and telematics solutions for the transportation and logistics industry. The
BlackBerry Radar solution includes devices and secure cloud-based dashboards for tracking containers, trailers, chassis,
flatbeds and heavy machinery, for reporting locations and sensor data, and for enabling custom alerts and fleet management
analytics.
BlackBerry Certicom leverages patented elliptic curve cryptography to provide device security, anti-counterfeiting and product
authentication solutions to protect vehicles, critical infrastructure and IoT deployments from product counterfeiting, re-
manufacturing and unauthorized network access.
BlackBerry IVY is an emerging intelligent vehicle data platform that allows automakers to safely access a vehicle’s sensor data,
normalize it, and apply machine learning at the edge to generate and share predictive insights and inferences. Automakers and
developers can use this information to create responsive in-vehicle applications and services that enhance driver and passenger
experiences.
The QNX division also provides engineering consulting services, including services to assist OEM customers to bring their
products to market on time, as well as services to ensure compliance with relevant functional safety standards.
Secure Communications
The Secure Communications division consists of BlackBerry UEM solutions, BlackBerry SecuSUITE and BlackBerry AtHoc.
The Company’s endpoint management offerings include BlackBerry® UEM, BlackBerry® Dynamics™, BlackBerry®
Workspaces, and BlackBerry Messenger (BBM®) Enterprise. BlackBerry UEM employs a containerized approach to manage
and secure devices, third party and custom applications, identity, content and endpoints across all leading operating systems, as
well as providing regulatory compliance tools. BlackBerry Dynamics offers a best-in-class development platform and secure
container for mobile applications, including the Company’s own enterprise applications such as BlackBerry® Work and
BlackBerry® Connect for secure collaboration. BlackBerry Workspaces is a secure Enterprise File Sync and Share (EFSS)
solution. BBM Enterprise is an enterprise-grade secure instant messaging solution for messaging, voice and video.
BlackBerry SecuSUITE is a certified, multi-OS voice and text messaging solution with advanced encryption, anti-
eavesdropping and continuous authentication capabilities, providing a maximum level of security on conventional mobile
devices for government and businesses.
BlackBerry AtHoc is a secure, networked critical event management solution that enables people, devices and organizations to
exchange critical information in real time during business continuity and life safety operations. The platform securely connects
with a diverse set of endpoints to distribute emergency mass notifications, improve personnel accountability and facilitate the
bidirectional collection and sharing of data within and between organizations.
The Secure Communications division also provides enterprise consulting services, including platform-agnostic strategies to
address mobility-based challenges, providing expert deployment support, end-to-end delivery (from system design to user
training), application consulting, and experienced project management.
6
Licensing
The Licensing division is responsible for the management and monetization of the Company’s global patent portfolio. The
patent portfolio continues to provide a competitive advantage in the Company’s core product areas as well as providing
leverage in the development of future technologies and licensing programs in both core and adjacent vertical markets. The
Company owns rights to an array of patented and patent pending technologies which include, but are not limited to, operating
systems, networking infrastructure, acoustics, messaging, enterprise software, automotive subsystems, cybersecurity,
cryptography and wireless communications. As of February 28, 2025, the Company owned approximately 6,300 worldwide
patents and applications.
Go to Market
The Company primarily generates revenue from the licensing of enterprise software and sales of associated services, including
its QNX embedded software platforms, solutions and services, Secure Communications solutions and services and technology
licensing. The Company focuses on strategic industries with vertical-specific use cases, including regulated enterprise markets
such as automotive, government, financial services, transportation, healthcare, and other adjacent markets where high-
performance, foundational embedded software platforms and solutions are important, such as robotics, medical devices, and
industrial automation (“General Embedded Market” or “GEM”).
QNX
The Company licenses QNX and BlackBerry Certicom technology and provides professional engineering services to OEM
customers in the automotive and GEM software markets via a direct sales force and indirectly through channel partnerships.
The licenses are primarily monetized as royalties on units shipped and through project development seats, tools and
maintenance fees.
The Company markets and sells its BlackBerry Radar secure asset monitoring products and services to enterprise users through
its internal sales force as well as through third party distribution channels.
Secure Communications
The Company licenses its Secure Communications products, including complementary third-party applications, through a
geographically-dispersed direct sales force, value-added resellers and alliance partners. The Company continues to build its
global partner programs to bolster its direct sales and marketing efforts.
Seasonality
The Company experiences seasonal patterns in its revenue, primarily due to QNX customers placing a higher percentage of
orders in the second half of the fiscal year as compared to the first half of the fiscal year. This gives rise, in turn, to similar
seasonality in the Company’s operating margin and operating cash flow, the latter of which is also impacted by variable
incentive plan payments in the first half of the fiscal year.
Competition and Competitive Strengths
The Company is engaged in markets that are highly competitive and rapidly evolving. Frequent new product introductions and
changes to endpoints, operating systems, applications, security threats, industry standards and the overall technology landscape
result in continuously evolving customer requirements. The Company competes with a broad range of vendors in each of its
businesses. See Part 1, Item 1A “Risk Factors - The Company faces intense competition”.
Key competitive factors important to the Company across its businesses include product features (including security features),
relative price and performance, product quality and reliability, compatibility across ecosystems, service and support, and
corporate reputation.
The Company’s Secure Communications portfolio is also differentiated by the inclusion of a sophisticated network operations
center in its infrastructure. The Company pioneered the use of this architecture to route messages reliably and efficiently to and
from mobile devices, and over time has expanded capabilities to enable end-to-end secure communications between endpoints
and applications and enterprise networks.
QNX
Trusted by the world’s leading automakers, QNX technology is embedded in more than 255 million vehicles, a year-over-year
increase of 20 million and an increase of 80 million since 2020. QNX continues to win an outsized share of advanced SDV
architectures and is now working with:
•
16 of the top 20 global OEMs for cockpit solutions (in production or development, MPU based);
•
15 of the top 20 global OEMs for Advanced Driver Assistance Systems (ADAS) Solutions (representing 80%+ of
global light passenger vehicle volumes); and
7
•
100% of all internationally approved Commercial Level 3 Highly Automated Driving (HAD) vendors.
The QNX strategic roadmap investments are focused on three pillars: (1) innovation at the edge, (2) innovation in safety and
security and (3) reduction of developer friction – all underpinned by a cloud-first embedded development strategy. Consistent
with this roadmap, the division recently announced a number of new products and initiatives that it believes will enable it to
maintain its strong market position and open up new potential revenue streams.
At CES 2025, alongside Vector and TTTech Auto, QNX announced a multi-year, global undertaking to collaborate, develop
and market a foundational vehicle software platform that will automakers to shift their focus from cumbersome and costly
software integration to delivering innovative consumer-facing applications that build brand loyalty, differentiation and value.
Pre-integrated, lightweight and certified to the automotive industry’s highest functional safety (ISO 26262 ASIL D) and
security (ISO 21434) standards, this platform will be able to scale vehicle-wide, making it easier for automakers to accelerate
their SDV development efforts while optimizing costs.
The division also recently introduced QNX® Cabin, a pre-integrated digital cockpit software reference implementation that
provides a development framework for designing digital cockpit systems. It emphasizes software portability and cloud-first
development, aiming to reduce development costs and accelerate time-to-market for OEMs. Built on ISO 26262 ASIL D-
certified software, QNX Cabin enables the development of complex digital cockpit features, such as instrument clusters, audio,
and driver information displays, ensuring a cohesive end-user experience.
Also at CES 2025, the division announced the launch of QNX Everywhere, an initiative offering easy access to QNX software
for non-commercial use for students, academic and research organizations, and hobbyists, helping to boost skills across the
global developer ecosystem, supporting the advancement of embedded automotive software innovation. QNX Container
support was also announced and will provide a standards-based environment for the deployment, execution, and management of
container technology on QNX-based devices, enabling customers to leverage the benefits of container technology as well as the
safety, security and reliability provided by the QNX microkernel architecture.
The QNX division competes principally with other providers of embedded foundational software, including Linux open-source
operating systems.
Secure Communications
BlackBerry UEM includes leading unified endpoint management, secure business productivity, application containerization,
secure collaboration and digital rights management capabilities. BlackBerry UEM has earned National Information Assurance
Partnership (“NIAP”) certification and is an approved mobile device management solution on the U.S. Department of Defense
Information Network’s Approved Product List. With the BlackBerry UEM, the Company competes with other MDM and
UEM providers.
BlackBerry SecuSUITE technology has been certified to be compliant with the Common Criteria protection profile for VoIP
applications and SIP servers. It has also earned NIAP certification and NATO Communications and Information Agency
security accreditation, and has been placed on the National Security Agency’s Commercial Solutions for Classified Program
component list of products certified for use on classified systems.
The BlackBerry AtHoc platform is both mobile and scalable, integrating with legacy systems and supporting on-premise and
cloud-based deployments. With available incident management and encrypted end-to-end instant messaging capabilities, the
platform offers a suite of secure crisis communication services to meet the growing number of use cases for emergency or mass
notifications. BlackBerry AtHoc has received FedRAMP certification and is the leading provider of network-centric, interactive
crisis communication to the U.S. Department of Defense and the U.S. Department of Homeland Security, among other
governmental bodies. BlackBerry AtHoc helps to protect more than 75% of U.S. government personnel.
Product Design, Engineering and Research and Development
The Company’s research and development (“R&D”) strategy seeks to drive innovation to continuously enhance the Company’s
product portfolio and introduce exciting solutions to the market that target customer needs while also remaining highly
competitive. The Company makes significant investments to support its offerings and is committed to hiring and retaining top
talent.
The Company dedicates a major portion of its R&D investments to the development of software products and services for its
QNX and Secure Communications solutions. Solutions include leading security capabilities at each level of the platform in
order to address the needs of enterprise IT departments and end users for securing devices, applications, content and work data
at rest and in transit.
The Company’s investment in longer term research is, in part, supported by taking advantage of specific government financial
assistance programs where available. For additional information, see Note 11 to the Consolidated Financial Statements.
8
Third Party Software Developers
The primary development platform for BlackBerry QNX-based systems is the QNX Software Development Platform, which
includes the QNX Neutrino real-time operating system and the QNX Tool Suite featuring the QNX Toolkit for Visual Studio
Code and the Momentics® integrated development environment. The QNX SDP is complemented by a portfolio of products
including QNX Hypervisor, QNX OS for Safety, QNX Hypervisor for Safety, QNX Sound, QNX Cabin, IVY and other QNX
products.
The Company offers the BlackBerry Development Platform, an enterprise-grade toolset which enables application developers
and ISVs to build secure, powerful and customized solutions for almost every use case and to commercialize them on the
BlackBerry® Marketplace for Enterprise Software, which contains over 100 enterprise applications and solutions. The platform
includes the BlackBerry Dynamics software development kit (“SDK”), which allows developers to integrate BlackBerry
security into their enterprise applications, resulting in a managed application where corporate data is isolated and protected at
all times, both while at rest and in transit. The platform also includes SDKs for BlackBerry UEM, BlackBerry Workspaces,
BlackBerry AtHoc and other products.
In addition, the Company maintains the BlackBerry AtHoc Development Partner Program, which invites partners to integrate
with the BlackBerry AtHoc service and allows them to create alerts based on more event types or to leverage alerting
capabilities based on critical events from within other systems.
Intellectual Property
The protection of intellectual property is an important part of the Company’s operations. The policy of the Company is to apply
for patents and to acquire or seek other appropriate proprietary or statutory protection when it develops valuable new or
improved technology. The Company believes that the rapid pace of technological change in the industries in which the
Company operates makes patent and trade secret protection important, and that this protection must be supported by other
means including the ability to attract and retain qualified personnel, new product introductions and frequent product
enhancements.
The Company believes that its patent portfolio continues to provide a competitive advantage in its core product areas as well as
provide leverage in the development of future technologies. The Company does not believe that it is dependent upon a single
patent or even a few patents and instead primarily depends upon its extensive know-how, innovative culture, and technical
leadership.
The Company protects its technology through a combination of patents, designs, copyrights, trade secrets, confidentiality
procedures and contractual arrangements. The Company seeks to patent key concepts, components, protocols, processes and
other inventions that it considers to have commercial value or that will likely give the Company a technological advantage.
Although the Company applies for patent protection primarily in Canada, Europe and the United States, the Company has filed,
and will continue to file, patent applications in other countries where there exists a strategic technological or business reason to
do so. To broadly protect the Company’s inventions, the Company has a team of in-house patent attorneys and also consults
with outside patent attorneys who interact with employees, review invention disclosures and prepare patent applications on a
broad array of core technologies and competencies. As a result, the Company owns rights to an array of patented and patent
pending technologies which include, but are not limited to, cybersecurity, cryptography, machine learning, artificial
intelligence, operating systems, acoustics, messaging, enterprise software, automotive subsystems, networking infrastructure
and wireless communications. As of February 28, 2025, the Company owned approximately 6,300 worldwide patents and
applications.
It is the Company’s general practice to enter into confidentiality and non-disclosure agreements with its employees, consultants,
contract manufacturers, customers, potential customers and others to attempt to limit access to, and distribution of, its
proprietary information. In addition, the Company generally enters into agreements with employees that include an assignment
to the Company of all intellectual property developed in the course of employment.
The Company does not rely primarily on patents or other intellectual property rights to protect or establish its market position;
however, it is prepared to enforce its intellectual property rights in certain technologies when attempts to negotiate mutually
agreeable licenses are not successful. The Company also enters into inbound licensing agreements related to technology and
intellectual property rights, including agreements to obtain rights that may be necessary to produce and sell products.
9
Environmental, Social and Governance
The Company observes the highest ethical standards in its operations and has adopted policies and practices that require the
same of its business partners. The Company’s business is based on trust, and the Company maintains its position as a global
leader in data security and privacy by developing new technologies, complying with established and evolving regulatory
frameworks, acting with integrity and adhering to responsible business practices. See also “Ethical Business Conduct and Code
of Business Standards and Principles” in this Annual Report on Form 10-K.
The Company is committed to operating in a sustainable way that respects the environment, the Company’s employees and
business partners, and the communities in which the Company operates around the world. To honor this commitment, the
Company maintains a variety of programs to identify, execute and maintain sustainable initiatives and to reduce its greenhouse
gas emissions and other direct and indirect environmental impacts. The Company also seeks to make a positive impact in the
communities in which it operates by investing in strategic charitable partnerships, supporting charitable endeavours by
employees, and building community relationships through local offices.
The Company has formalized a number of policies to reflect its commitment to responsible business practices, including a
Privacy Policy, Supplier Code of Conduct, Human Rights Policy, Supplier Diversity Policy, Health and Safety Policy and
Environment and Sustainability Policy, and periodically issues an ESG report. Through the report, the Company provides
visibility on its environmental, social and governance initiatives such as mitigating its corporate carbon footprint and reducing
greenhouse gas emissions and improving water sanitation. These documents and policies relating to the Company’s corporate
responsibility initiatives can be viewed on the Company’s website at https://investors.blackberry.com/governance-documents
and are not incorporated by reference in this Annual Report on Form 10-K.
Foreign and domestic laws and regulations apply to many aspects of the Company’s business.
The Company collects and uses a wide variety of information for various purposes in its business, including to help ensure the
integrity of its services and to provide features and functionality to customers. This aspect of the Company’s business is subject
to a broad array of evolving privacy and data protection laws, including the European Union’s General Data Protection
Regulation, the proposed Canadian Consumer Privacy Protection Act, regional privacy frameworks such as the Asia-Pacific
Economic Cooperation Privacy Framework, and national and state laws within the United States, including the California
Privacy Rights Act. These laws impose strict operational requirements and can provide for significant penalties for non-
compliance. Elements of these evolving laws and regulations, as well as their interpretation and enforcement, remain unclear
and the Company may be required to modify its practices to comply with them in the future.
The Company is also subject to numerous international trade laws and regulations, including, without limitation, tariffs, trade
sanctions, export controls and technology transfer restrictions, as well as anti-corruption legislation such as the U.S. Foreign
Corrupt Practices Act and Canada’s Corruption of Foreign Public Officials Act.
Additionally, the Company is subject to domestic and international laws relating to environmental protection and the
proliferation of hazardous substances. In parts of Europe, North America, Latin America and the Asia-Pacific region, the
Company is obligated to comply with substance restrictions, packaging regulations, energy efficiency ratings and certain
product take-back and recycling requirements, principally for the BlackBerry Radar business. The U.S. Dodd-Frank Wall
Street Reform and Consumer Protection Act also requires the Company to comply with certain obligations with respect to the
use of so-called “conflict minerals” (which currently include the metals gold, tantalum, tin, and tungsten). In its procurement
activities, the Company engages with its suppliers to conduct due diligence into the source of any conflict minerals that are
necessary to the functionality or production of the Company’s hardware products, principally for the BlackBerry Radar
business.
Any actual or perceived failure to comply with applicable legal requirements may result in, among other things, revocation of
required licenses or registrations, loss of approved status, private litigation, regulatory or governmental investigations,
administrative enforcement actions, sanctions, civil and criminal liability, and constraints on the Company’s operations. It is
also possible that current or future laws or regulations could be interpreted or applied in a manner that would prohibit, alter, or
impair the Company’s existing or planned products and services, or that could require the Company to undertake costly, time-
consuming or otherwise burdensome compliance measures.
Information about Executive Officers
The Company made one executive officer appointment during fiscal 2025, naming Tim Foote as Chief Financial Officer.
The following table sets forth the name, province or state, and country of residence of each executive officer of the Company
and their respective positions and offices held with the Company and their principal occupations during the last five years.
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Name and Residence
Current Position with
Company
Principal Occupation During the Last Five Years (other
than Current Position with Company)
Jennifer Armstrong-Owen
Washington, USA
Senior Vice President and
Chief People Officer
Senior Vice President, People, OfferUp (2023-2024); Senior
Vice President, People, SeekOut (2021-2023); Vice President,
People, Chef Software (2018-2020)
Mattias Eriksson
Illinois, USA
President, IoT
Senior Vice President and Head of Product, HERE
Technologies (2019-2020)
Tim Foote
Texas, USA
Chief Financial Officer
Chief Financial Officer, Cybersecurity (2024); Vice President,
Investor Relations (2016-2024)
John Giamatteo
Texas, USA
Chief Executive Officer;
President, Secure
Communications; Director
President and Chief Revenue Officer, McAfee (2013-2020)
Phil Kurtz
Ontario, Canada
Chief Legal Officer and
Corporate Secretary
Vice President, Deputy General Counsel and Corporate
Secretary (2021-2022); Vice President, Deputy General
Counsel and Assistant Corporate Secretary (2015-2021)
Human Capital
The Company’s 1,820 regular employees, contract workers and student workers as of February 28, 2025 work as a team in 16
countries worldwide, with approximately 58% in Canada, 15% in the U.S., and 27% outside of North America. None of the
Company’s employees in Canada or the United States are represented by a labour union; however, employees of certain foreign
subsidiaries in Europe are represented by works councils.
The Company offers employees an equitable and competitive total rewards program, designed to recognize and reward both
individual and company performance. The Company provides a range of financial and benefit programs such as its employee
share purchase program, employee recognition programs, retirement savings plans, family-friendly leave policies, health and
wellness programs, employee and family assistance program, as well as corporate discounts, all designed to support the overall
wellness of the Company’s employees and their families.
The Company embraces a diverse and inclusive workplace, providing a welcoming environment in which every individual is
valued and respected, regardless of race, gender, sexual orientation, gender identity, religion, age, veteran status, disability
status or any other protected element of diversity. The Company does not tolerate, condone, or ignore workplace discrimination
or harassment or any unlawful behavior, and is committed to maintaining a respectful and productive work environment for all
individuals. The Company strives to maintain an environment where people are valued, have a sense of belonging, and feel
they can bring their authentic selves to work, every day.
The Company believes career development is unique and personal for each employee. The Company offers career development
and growth in many forms such as job shadowing, job rotation, stretch assignments, enhanced scope or responsibility,
networking, lateral movement, and promotions. The Company encourages employees to broaden their scope and understanding
of the business, and to build additional skills to attain their career aspirations. Employees are supported in their growth and
development through the Company’s tuition and educational reimbursement program, subsidies for professional association
memberships, career planning resources, and partnerships with various industry networks. The Company invests in a paid co-op
and intern student program, supporting the personal and professional development of the next generation of BlackBerry talent.
Building upon its culture of teamwork, the Company is a proud and committed civic leader. BlackBerry employees are
passionate regarding their involvement in corporate-run community initiatives to actively participate in volunteer activities and
environmentally friendly initiatives where they live and work. Together with its team of community-minded employees, the
Company believes there is great potential to make lasting local impacts.
Available Information
The Company’s internet address is www.blackberry.com. The Company’s website is included in this Annual Report on Form
10-K as an inactive textual reference only. Information contained on the Company’s website is not incorporated by reference in
this Annual Report on Form 10-K.
Access to the Company’s Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K,
supplemental financial information, earnings press releases, and amendments to these reports filed with or furnished to the SEC
may be obtained free of charge as soon as is reasonably practical after we electronically file or furnish them through the
Investors section of the Company’s website at www.blackberry.com/ca/en/company/investors. In addition, the Company’s
filings with the SEC may be accessed through the SEC’s website at www.sec.gov and the Company’s filings with the Canadian
Securities Administrators (“CSA”) may be accessed through the CSA’s System for Electronic Data Analysis and Retrieval
(“SEDAR+”) at www.sedarplus.ca. Except for the documents specifically incorporated by reference in this Annual Report on
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Form 10-K, information contained on the SEC or CSA websites is not incorporated by reference in this Annual Report on Form
10-K and should not be considered to be a part of the Annual Report. All statements made in any of the Company’s securities
filings, including all forward-looking statements or information, are made as of the date of the document in which the statement
is included, and we do not assume or undertake any obligation to update any of those statements or documents unless we are
required to do so by applicable law.
ITEM 1A. RISK FACTORS
Investors in the Company’s securities should carefully consider the following risks, as well as the other information contained
in MD&A (as defined below) and elsewhere in this Annual Report on Form 10-K for the fiscal year ended February 28, 2025.
Any of the following risks, in whole or in part, could materially and adversely impact the Company’s business, financial
condition and operating results. The risks and uncertainties described below are not the only ones the Company faces.
Additional risks and uncertainties, including those of which the Company is unaware or the Company currently deems
immaterial, may also have a material adverse effect on the Company’s business, financial condition and results of operations
Risks Related to the Company’s Business
The Company may not be able to maintain or expand its customer base for its software and services offerings to grow
revenue or achieve sustained profitability.
The Company has focused its strategy on software and services to grow revenue and generate sustainable profitability. For the
Company to increase its software and services revenues, it must continually grow its customer base by attracting new customers
or, in the case of existing customers, deploying software and services across additional users. The Company also needs to sell
additional software and services over time to the same customers, or have customers upgrade their level of service. If the
Company is unable to promote a compelling value proposition to customers and its efforts to sell or upsell software or services
as described above are not successful, its results of operations could be materially impacted.
Existing customers that purchase the Company’s software and services have no contractual obligation to renew their
subscriptions or purchase additional solutions after the initial subscription or contract period. The Company’s customers’
expansion and renewal rates may decline or fluctuate as a result of a number of factors, including the perceived need for such
additional software and services, the level of satisfaction with the Company’s software and services, features or functionality,
the reliability of the Company’s software and services, the Company’s customer support, customer budgets and other
competitive factors, such as pricing and competitors’ offerings.
Further, the Company’s future success depends in part on the growth, if any, in the markets for secure communications software
and embedded solutions. If growth trends in the Company’s target markets do not continue or are delayed due to security
incidents, technological challenges, lack of customer acceptance, weakening economic conditions or other reasons, demand for
the Company’s products, and those of its competitors, could be negatively affected.
The Company faces intense competition.
The Company is engaged in markets that are highly competitive and rapidly evolving, and has experienced, and expects to
continue to experience, intense competition from a number of companies. No technology has been exclusively or commercially
adopted as the industry standard for many of the products and services offered by the Company. Accordingly, both the nature of
the competition and the scope of the business opportunities afforded by the markets in which the Company competes are
uncertain.
The Company’s competitors, including new market entrants, may implement new technologies before the Company does,
deliver new products and services earlier, or provide products and services that are disruptive or that are attractively priced or
enhanced or better quality compared to those of the Company, making it more difficult for the Company to win or preserve
market share.
Some of the Company’s competitors have greater name recognition, larger customer bases and significantly greater financial,
technical, marketing, public relations, sales, distribution and other resources than the Company does. In particular, some of the
Company’s competitors may be able to leverage their relationships with enterprise customers based on other products or
incorporate functionality into existing products to gain business in a manner that discourages users from purchasing the
Company’s solutions, including by selling at zero or negative margins, product bundling or offering closed technology
platforms. In the automotive sector, some of the Company’s OEM and Tier 1 customers have accelerated internal development
of embedded solutions. In addition, competition may intensify as the Company’s competitors enter into business combinations
or alliances and established companies in other market segments expand to become competitive with the Company’s business.
The impact of the competition described above could result in fewer customer orders, loss of market share, pressure to reduce
prices, commoditization of product and service categories in which the Company participates, reduced revenue and reduced
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margins. If the Company is unable to compete successfully, there could be a material adverse effect on the Company’s business,
results of operations and financial condition.
The Company must obtain and maintain certain product approvals and certifications from governmental authorities, regulated
enterprise customers and third-party standards bodies in order to remain competitive, meet contractual requirements and enable
its customers to meet their certification needs. Failure to obtain or maintain such approvals or certifications for the Company’s
products on a timely basis, or at all, could have a material adverse effect on the Company’s competitive position, particularly in
government markets. In addition, independent industry analysts often issue reports regarding endpoint security solutions and the
perception of the Company’s solutions in the marketplace, especially as compared to those of the Company’s competitors, may
be significantly influenced by these reports. If these reports are negative, less frequent or less positive than reports on the
Company’s competitors’ products, the Company’s competitive position may be harmed.
The Company may not be able to enhance, develop, introduce or monetize its products and services in a timely manner
with competitive pricing, features and performance.
The industries in which the Company competes are characterized by rapid technological change, frequent new product
introductions, frequent market price reductions, constant improvements in features and short product life cycles. The
Company’s future success depends upon its ability to enhance and integrate its current products and services, to provide for
their compatibility with evolving industry standards and operating systems, to address competing technologies and evolving
security threats, and to continue to develop and introduce new products and services offering enhanced performance and
functionality on a timely basis at competitive prices
The process of developing new technology is complex and uncertain, and involves time, substantial costs and risks, which are
further magnified when the development process integrations with third-party platforms. The development of next-generation
technologies that utilize new and advanced features involves making predictions regarding market adoption of such
technologies. The Company may be required to commit significant resources to developing new products, software and services
before knowing whether such investment will result in products or services that the market will accept.
The Company’s inability, for technological or other reasons, some of which may be beyond the Company’s control, to enhance,
develop, introduce and monetize products and services in a timely manner, or at all, in response to changing market conditions
or customer requirements could have a material adverse effect on the Company’s business, results of operations and financial
condition or could result in its products and services not achieving market acceptance or becoming obsolete. In addition, if the
Company fails to deliver a compelling customer experience or accurately predict emerging technological trends and the
changing needs of customers and end users, or if the features of its new products and services do not meet the demands of its
customers or are not sufficiently differentiated from those of its competitors, the Company’s business, results of operations and
financial condition could be materially harmed.
Significant changes in government customer demand or procurement requirements could have an adverse effect on the
Company’s business and results of operations.
The Company’s Secure Communications business depends, to a significant degree, on sales to government organizations.
Demand from government organizations is often unpredictable and subject to budgetary uncertainty and to reductions or delays
in funding authorizations or procurement processes. Government demand and payment for the Company’s products and
services may also be impacted by changes in the political and administrative environment, including cost-cutting initiatives and
changes in leadership, policies or priorities, and by shifting government attitudes towards the Company and the territories in
which it operates. Such changes could cause governments and governmental agencies to delay or refrain from purchasing the
Company’s solutions or otherwise have an adverse effect on the Company’s business and results of operations.
Sales to government entities and performance on classified contracts may require the Company to obtain personnel security
clearances and facility clearances, and there is no guarantee that the Company will be able to obtain or maintain such
clearances. In addition, government product requirements are often technically complex and the Company may be required to
make costly changes to its products to meet such requirements without any assurance that such changes will generate a sale or
improve the efficacy of its products.
The Company’s sales cycles can be long and unpredictable and its sales efforts require considerable time and expense.
For many customers, licensing the Company’s solutions represents a significant strategic decision and, as a result, sales cycles
can be long and unpredictable, particularly during times of rising economic or geopolitical uncertainty. When dealing with
automotive, government or large regulated enterprise customers, the Company is subject to risks related to increased customer
bargaining power and pricing pressure, extended evaluation periods, regulatory changes, compliance with procurement
requirements, complex approval systems, and unanticipated administrative delays. QNX revenue recognition is also subject to
delays in the advancement of software-defined vehicle programs and the manufacture of new vehicles by automotive OEMs.
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The Company’s ability to grow software and services revenue is dependent in part on its ability to maintain a qualified direct
sales force, which requires significant time and resources, including investment in systems and training. There can be no
assurance that the Company will be successful in implementing its sales and distribution strategy. See also the Risk Factor
entitled “The Company’s success depends in part on its relationships with resellers and distributors”.
The occurrence or perception of a breach of the Company’s network cybersecurity measures or an inappropriate
disclosure of confidential or personal information could significantly harm its business
The Company is continuously exposed to cyber threats through the actions of outside parties, such as hacking, viruses, and
other malicious software, denial of service attacks, industrial espionage and other methods designed to breach the Company’s
network or data security. The Company is also exposed to risk as a result of process, coding or human errors and through
attempts by third parties to fraudulently induce employees to provide access to confidential or personal information. Although
malicious attempts to gain unauthorized access to such information affect many companies across various industries, the
Company is at a relatively greater risk of being specifically targeted because of its reputation for security and the nature of its
network operations.
The Company devotes significant resources to network security, encryption and authentication technologies and other
measures, including security policies and procedures, vulnerability testing and awareness training, to mitigate cyber risk to its
systems, endpoints and data. In addition, the Company engineers novel security and reliability features, deploys software
updates to address vulnerabilities, and maintains a security infrastructure that protects the integrity of the Company’s network,
products and services. The Company also mitigates risk by actively monitoring external threats, reviewing best practices and
implementing appropriate internal controls, including incident response plans. However, the techniques used to obtain
unauthorized access or to disable or degrade service are constantly evolving and becoming more sophisticated in nature, and
frequently are not recognized or identified until after they have been deployed against a target. The Company may not be able
to anticipate these techniques, to implement adequate preventative measures or to identify and respond to them in a timely
manner, and the Company’s efforts to do so may have a material adverse impact on the Company’s operating margins, the user
experience or compatibility with third party products and services.
Although to date the Company has not experienced any material financial or other losses relating to technology failure,
cyberattacks or security breaches, there is no assurance that the Company will not experience material loss or damage in the
future. If the network and product security measures implemented by the Company or its partners, including third-party data
center operators, cloud service providers and product manufacturers are breached, or perceived to be breached, or if the
confidentiality, integrity or availability of the Company’s data, including intellectual property and legally protected personal
data, is compromised, the Company could be exposed to significant litigation, service disruptions, investigation and
remediation costs, regulatory sanctions, fines and contractual penalties. In addition, any such event could materially damage the
Company’s reputation, which is built in large measure on the security and reliability of BlackBerry products and services, and
could result in the loss of investor confidence, channel partners, competitive advantages, revenues and customers, including the
Company’s most significant government and regulated enterprise customers. While the Company maintains cybersecurity
insurance, the Company’s coverage may be insufficient to cover all losses or types of claims that may arise from cyber
incidents, and any incidents may result in the loss of, or increased costs of, the Company’s insurance.
The Company’s success depends on its continuing ability to attract new personnel, retain existing key personnel and
manage its staffing effectively.
The Company’s success is largely dependent on its continuing ability to identify, attract, develop, motivate and retain skilled
employees, including members of its executive team, top research developers and experienced salespeople with specialized
knowledge. Competition for such people is intense, continuous, and increasing in the industries in which the Company
participates, and the Company has experienced solicitations of its employees by its competitors.
Competition for highly skilled personnel is intense, especially in the Waterloo and Ottawa, Ontario areas, where the Company
has a substantial presence and need for highly skilled personnel. The Company is also substantially dependent on the continued
service of its existing engineering personnel because of the complexity and specialization of its products and services.
To attract and retain critical personnel, the Company may experience increased compensation costs that are not offset by
increased productivity or higher prices for the Company’s products and services. Also, the Company’s financial results and
share price performance (particularly for senior employees for whom equity-based compensation is a key element of their total
compensation), among other factors, may impact the Company’s ability to attract new, and retain existing, employees. Any
failure by the Company to maintain appropriate staffing, develop effective business continuity and succession programs,
mitigate turnover and effectively utilize employees with the right mix of skills and experience across the functions necessary to
14
meet the current and future needs of its business could have a material adverse effect on the Company’s business, results of
operations and financial condition.
A failure or perceived failure of the security features of the Company’s solutions could materially adversely affect the
Company’s reputation, financial condition and results of operations.
The Company’s products and services frequently involve the transmission, processing and storage of data, including
proprietary, confidential and personally-identifiable information, and a security compromise, misconfiguration or malfunction
involving the Company’s software could result in such information being accessible to attackers or other third parties. Real or
perceived security breaches against a customer using the Company’s solutions could cause damage or disruption to the
customer and subject the Company to liability, and may result in the customer and the public believing that the Company’s
solutions are ineffective.
Additionally, the Company’s products and services are highly complex and may contain design defects, bugs or security
vulnerabilities that are difficult to detect and correct. Such internal defects and a variety of external factors, including
misconfigurations or errors introduced through collaborations with the Company’s engineering partners, could impair the
effectiveness of the Company’s solutions.
Real or perceived defects, errors or vulnerabilities in the Company’s software and services could result in the delay or denial of
their market acceptance and may harm the Company’s financial condition, results of operations and reputation as a security
solutions vendor. If errors are discovered, correcting them could require significant expenditures by the Company and the
Company may not be able to successfully correct them in a timely manner or at all.
Adverse macroeconomic and geopolitical conditions, including trade policies, have had and may continue to have a
material adverse effect on the Company’s business, results of operations and financial condition.
Challenging macroeconomic conditions, including as a result of geopolitical events, changes to international trade policies,
public health crises, automotive labour disruptions, disruptions in global supply chains, and changes in inflation and interest
rates, have negatively impacted and may in the future negatively impact consumer demand for automobiles and secure
communications solutions, as well as sales cycles, and in turn have materially affected and may continue to materially affect the
Company’s business, results of operations and financial condition. Such economic factors and uncertainties are beyond the
Company’s control and the Company has no comparative advantage in forecasting their effects.
Additionally, the imposition of new tariffs, border taxes or other barriers to trade that directly or indirectly impact the
Company’s automotive or other customers could have a material adverse effect on the Company’s results of operations. For
example, since February 2025, the U.S. presidential administration has imposed or threatened to impose new tariffs on imported
products from Canada, Mexico, China and other countries, including most notably tariffs on imports of steel, aluminum and
automobiles. The administration has also proposed, or is in the process of, increasing current tariffs and imposing additional
tariffs on other imported goods. Such U.S. tariffs, and any new or additional retaliatory tariffs that may be taken by Canada or
other countries in response, may adversely affect the operations of the Company’s customers and, consequently, demand for the
Company’s solutions. The Company is closely monitoring this evolving situation but there can be no assurance that the
Company will be able to mitigate the impacts of any trade measures, which could be material to the Company’s business
operations or harm the Company’s competitive position.
Litigation against the Company may result in adverse outcomes.
In the course of its business, the Company is subject to potential litigation claims and enforcement actions arising from its
public disclosure. Given the highly competitive and dynamic industry in which the Company operates and the evolution of the
Company’s business strategy over time, the Company’s financial results may not follow any past trends, making it difficult to
predict the Company’s financial results. Consequently, actual results may differ materially from those expressed or implied by
the Company’s forward-looking statements and may not meet the expectations of analysts or investors, which can contribute to
the volatility of the market price of the Company’s common shares.
In addition, the Company receives general commercial claims related to the conduct of its business and the performance of its
products and services, including employment claims, claims for breaches of contractual covenants and other litigation claims,
which may potentially include claims relating to improper use of, or access to, personal data. Liability claims related to product
defects, bugs or vulnerabilities could give rise to class action litigation or to the withdrawal of certifications, and the Company
may be subject to such claims either directly or indirectly through indemnities that it provides to certain of its customers. The
Company’s exposure to product liability risk may increase as the Company continues to commercialize its software innovations
for autonomous and connected vehicles.
15
Litigation resulting from these claims and from actions asserted by the Company could be costly and time-consuming and could
divert the attention of management and key personnel from the Company’s business operations. The complexity of the
technology involved and the inherent uncertainty of commercial, class action, securities, employment and other claims
increases these risks. In recognition of these considerations, the Company may enter into settlements resulting in material
expenditures, the payment of which could have a material adverse effect on the Company’s business, results of operation and
financial condition. Similarly, if the Company is unsuccessful in its defence of material litigation claims, the Company may be
faced with significant monetary damages or injunctive relief against it that could have a material adverse effect on the
Company’s business, BlackBerry brand, results of operations and financial condition. Administrative or regulatory actions
against the Company or its employees could also have a material adverse effect on the Company’s business, BlackBerry brand,
results of operations and financial condition. See Note 11 to the Consolidated Financial Statements for information regarding
certain legal proceedings in which the Company is involved.
Network disruptions or other business interruptions could have a material adverse effect on the Company’s business
and harm its reputation.
The Company’s operations rely to a significant degree on the efficient and uninterrupted operation of complex technology
systems and networks, which are in some cases integrated with those of cloud service providers and third-party data centre
operators. The Company’s network operations and technology systems are potentially vulnerable to damage or interruption
from a variety of sources, including by fire, earthquake, power loss, telecommunications or computer systems failure,
cyberattack, human error, terrorist acts, war, and the threatened or actual suspension of BlackBerry services at the request of a
government for alleged non-compliance with local laws or other events. The increased number of third-party applications on the
Company’s network may also enhance the risk of network disruption or cyberattack for the Company. There may also be
system or network interruptions if new or upgraded systems are defective or not installed properly, or if data centre operators
fail to meet agreed service levels.
The Company has experienced network events, including those arising from third-party applications, in the past, none of which
had a material impact on us. Any future outage in a network or system or other unanticipated problem that leads to an
interruption or disruption of BlackBerry services, however, could have a material adverse effect on the Company’s business,
results of operations and financial condition, and could adversely affect the Company’s reputation.
The Company may not be successful in fostering an ecosystem of third-party application developers.
The Company believes decisions by customers to purchase its products depend and will depend in part on the availability and
compatibility of software applications and services that are developed and maintained by third-party developers. The Company
may not be able to convince third parties to develop and maintain applications for its secure communications software and
embedded solutions platforms. The loss of, or inability to maintain these developer relationships may materially and adversely
affect the desirability of the Company’s products and, hence, the Company’s revenue from the sale of its products.
The Company’s success depends in part on its relationships with resellers and channel partners.
The Company’s ability to maintain and expand its market reach depends in part on establishing, developing and maintaining
relationships with third party resellers and channel partners, especially in its Secure Communications business.
If the Company is not able to effectively identify and establish new relationships with successful resellers and channel partners,
or to maintain or enhance existing relationships without giving rise to conflicts between channels, or if the Company’s partners
do not act in a manner that will promote the success of the Company’s products and services, the Company’s business, results
of operations and financial condition could be materially adversely affected.
Many resellers and channel partners sell products and services of the Company’s competitors and may terminate their
relationships with the Company with limited or no notice and limited or no penalty. If the Company’s competitors offer their
products and services to the resellers and channel partners on more favorable contractual or business terms, have more products
and services available, or those products and services are, or are perceived to be, in higher demand by end users, or are more
lucrative for the resellers and channel partners, there may be continued pressure on the Company to reduce the price of its
products and services, or those resellers and channel partners may stop offering the Company’s products or de-emphasize the
sale of its products and services in favor of the Company’s competitors, which could have a material adverse effect on the
Company’s business, results of operations and financial condition.
The Company’s products and services are dependent upon interoperability with rapidly changing systems provided by
third parties.
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The Company’s platform depends on interoperability with solutions offered by silicon vendors and other software vendors,
such as those provided by Apple, Google and Microsoft, as well as by automotive OEMs. If the Company fails to support
timely integrations with third-party solutions, the Company’s business and reputation could suffer. This could further disrupt
the Company’s product roadmap and cause it to delay introduction of planned products and services, features and functionality,
which could harm the Company’s business. Furthermore, some of the features and functionality in the Company’s products and
services require interoperability with APIs from other vendors, and if these vendors decide to restrict the Company’s access to
their APIs, that functionality would be lost and the Company’s business could be impaired.
The Company uses artificial intelligence solutions, which may expose it to operational challenges, legal liability,
reputational harm and regulatory concerns.
The Company incorporates novel uses of artificial intelligence (“AI”) technologies, including generative AI, into its operations.
The introduction of generative AI, an emerging technology in the early stages of commercial use, into the Company’s
operations may result in new or enhanced governmental or regulatory scrutiny, litigation, confidentiality, ethical concerns, or
other complications that could adversely affect the Company’s business, reputation, or financial results. Known risks of
generative AI currently include risks related to accuracy, bias, toxicity, privacy and security and data provenance. For example,
AI technologies, including generative AI, may create content that appears correct but is factually inaccurate or flawed, or
contains copyrighted or other protected material, and if the Company uses this flawed or protected content to its detriment or
the owners of such copyrighted material seek to enforce their rights, the Company may be exposed to brand or reputational
harm, competitive harm and/or legal liability.
The technologies underlying AI and its uses are the subject of ongoing review by various governmental and regulatory
agencies, and various jurisdictions in the U.S., the European Union and elsewhere are applying, or are considering applying,
their cybersecurity and data protection laws to AI or are considering general legal frameworks for AI. Any actual or perceived
failure to comply with these laws, regulations or ethical standards could include significant penalties and reputational harm.
Risks Related to Intellectual Property and Technology Licensing
Failure to protect the Company’s intellectual property could harm its ability to compete effectively and the Company
may not earn the revenues it expects from intellectual property rights.
The Company’s commercial success is highly dependent upon its ability to protect its proprietary technology. The Company
relies on a combination of patents, copyrights, trademarks, trade secrets, confidentiality procedures and contractual provisions
to protect its proprietary rights, all of which offer only limited protection. Despite the Company’s efforts, the steps taken to
protect its proprietary rights may not be adequate to preclude misappropriation of its proprietary information or infringement of
its intellectual property rights. Detecting and protecting against the unauthorized use of the Company’s products, technology
proprietary rights, and intellectual property rights is expensive, difficult and, in some cases, impossible. Litigation may be
necessary in the future to enforce or defend the Company’s intellectual property rights and could result in substantial costs and
diversion of management resources, either of which could harm the Company’s business, financial condition and results of
operations, and there is no assurance that the Company will be successful. Further, the laws of certain countries in which the
Company’s products and services are sold or licensed do not protect intellectual property rights to the same extent as the laws
of Canada or the United States.
With respect to patent rights, the Company cannot be certain whether any of its pending patent applications will result in the
issuance of patents or whether the examination process will require the Company to narrow its claims. Furthermore, any patents
issued could be challenged, invalidated or circumvented and may not provide proprietary protection or a competitive advantage.
In addition, a number of the Company’s competitors and other third parties have been issued patents, and may have filed patent
applications or may obtain additional patents and proprietary rights, for technologies similar to those that the Company has
made or may make in the future. Public awareness of new technologies often lags behind actual discoveries, making it difficult
or impossible to know all relevant patent applications at any particular time. Consequently, the Company cannot be certain that
it was the first to develop the technology covered by its pending patent applications or that it was the first to file patent
applications for the technology. In addition, the disclosure in the Company’s patent applications may not be sufficient to meet
the statutory requirements for patentability in all cases. As a result, there can be no assurance that the Company’s patent
applications will result in patents being issued.
While the Company enters into confidentiality and non-disclosure agreements with its employees, consultants, contract
manufacturers, customers, potential customers and others to attempt to limit access to, and distribution of, proprietary and
confidential information, it is possible that:
17
•
some or all of its confidentiality agreements will not be honored;
•
third parties will independently develop equivalent technology or misappropriate the Company’s technology or
designs;
•
disputes will arise with the Company’s strategic partners, customers or others concerning the ownership of intellectual
property;
•
unauthorized disclosure or use of the Company’s intellectual property, including source code, know-how or trade
secrets will occur; or
•
contractual provisions may not be enforceable.
In addition, the Company expends significant resources to patent and manage the intellectual property it creates with the
expectation that it will generate revenues by incorporating that intellectual property in its products or services. The Company
also monetizes its patent assets through outbound licensing. Changes in the law may weaken the Company’s ability to collect
royalty revenue for licensing its patents. Similarly, licensees of the Company’s patents may fail to satisfy their obligations to
pay royalties, or may contest the scope and extent of their obligations. Finally, the royalties the Company can obtain to
monetize its intellectual property may decline because of the evolution of technology, changes in the selling price of products
using licensed patents, or the difficulty of discovering infringements.
The consideration payable to the Company from the sale of its non-core patent portfolio in the Malikie Transaction is expected
to include potential future royalty payments. The royalties, if any, that may be earned by the Company from the Malikie
Transaction in any particular fiscal year or in the aggregate over the term of the royalty arrangement are difficult to predict,
particularly given that any such royalties will depend entirely upon the business success of a third party. The aggregate
proceeds that the Company ultimately receives from the Malikie Transaction are expected to be less than $900 million.
The Company is subject to risks related to the use of open source software may not be able to obtain rights to use third-
party software.
Certain software that the Company uses may be subject to open source licenses. Use and distribution of open source software
may entail greater risks than use of third-party commercial software, as open source licensors generally do not provide
warranties or other contractual protections regarding infringement claims or the quality of the code. Some open source licenses
contain requirements that the Company make available source code for modifications or derivative works created by the
Company based upon the type of open source software used. If the Company combines its proprietary solutions with open
source software in a certain manner, the Company could, under certain of the open source licenses, face claims from third
parties claiming ownership of or demanding the public release of the source code of the Company’s proprietary solutions, or
demanding that the Company offer its solutions to users at no cost. This could allow the Company’s competitors to create
similar solutions with lower development effort and time and ultimately could result in a loss of revenue to the Company. The
Company could also be subject to litigation by parties claiming that what the Company believes to be licensed open source
software infringes their intellectual property rights.
The terms of many open source licenses have not been interpreted by U.S. courts, and there is a risk that such licenses could be
construed in a manner that could impose unanticipated conditions or restrictions on the Company’s ability to commercialize its
products and services. In such an event, the Company could be exposed to litigation or reputational damage, and could be
required to obtain licenses from third parties in order to continue offering its products and services or to re-engineer its products
or services, or discontinue their sale in the event re-engineering cannot be accomplished on a timely basis, any of which could
materially and adversely affect the Company’s business and operating results.
Certain of the Company’s products include intellectual property that is licensed from third parties. The termination of any of
these licenses, or the failure of such third parties to adequately maintain, protect or update their software or intellectual property
rights, could delay the Company’s ability to offer its products while the Company seeks to implement alternative technology
offered by other sources (which may not be available on commercially reasonable terms) or develop such technology internally
(which would require significant unplanned investment on the Company’s part). The use of third-party software in the
Company’s products could also expose the Company and its customers to security vulnerabilities.
The Company could be found to have infringed on the intellectual property rights of others.
Companies in the software and technology industries, including some of the Company’s current and potential competitors, own
large numbers of patents, copyrights, trademarks and trade secrets and frequently engage in litigation based on allegations of
infringement or other violations of intellectual property rights. Although the Company believes that third-party software
included in the Company’s products is licensed from the entity holding the intellectual property rights and that its products do
not infringe on the rights of third parties, third parties have and are expected to continue to assert infringement claims against
18
the Company in the future. The Company may be subject to these types of claims either directly or indirectly through
indemnities that it provides to certain of its customers, partners and suppliers against these claims.
Many intellectual property infringement claims are brought by entities whose business model is to obtain patent-licensing
revenues from operating companies such as the Company. Because such entities do not typically generate their own products
or services, the Company cannot deter their claims based on counterclaims that they infringe patents in the Company’s portfolio
or by entering into cross-licensing arrangements.
Regardless of whether patent or other intellectual property infringement claims against the Company have any merit, they
could:
•
adversely affect the Company’s relationships with its customers;
•
be time-consuming and expensive to evaluate and defend, including in litigation or other proceedings;
•
result in negative publicity for the Company;
•
divert management’s attention and resources;
•
cause product delays or stoppages;
•
subject the Company to significant liabilities;
•
require the Company to develop possible workaround solutions that may be costly and disruptive to implement; and
•
require the Company to cease certain activities or to cease selling its products and services in certain markets.
In addition, any such claim may require the Company to enter into costly royalty agreements or obtain a license for the
intellectual property rights of third parties. Such licenses may not be available or they may not be available on commercially
reasonable terms.
Any of the foregoing infringement claims and related litigation could have a significant adverse impact on the Company’s
business and operating results, as well as the Company’s ability to generate future revenues and profits. See also “Legal
Proceedings” in this Annual Report on Form 10-K.
Risks Related to Assets, Indebtedness and Taxation
The Company has incurred indebtedness, which could adversely affect its operating flexibility and financial condition.
The Company has, and may from time to time in the future have, third-party debt service obligations pursuant to its outstanding
indebtedness, which currently includes $200 million aggregate principal amount of 3.00% Senior Convertible Notes maturing
on February 15, 2029 (the “Notes”). The degree to which the Company is leveraged could have important consequences,
including that:
•
the Company’s ability to obtain additional debt financing may be limited; and
•
a portion of the Company’s cash flow from operations or other capital resources will be dedicated to the payment of
the principal of, and/or interest on, indebtedness, thereby reducing funds available for working capital, capital
expenditures, strategic initiatives or other business purposes.
If the Company cannot maintain an adequate cash balance or positive cash flow from operations, the Company may be unable
to pay amounts due under its outstanding indebtedness or to fund other liquidity needs and it may be required to refinance all or
part of its then existing indebtedness, sell assets, reduce or delay capital expenditures or seek to raise additional capital, any of
which could have a material adverse effect on the Company’s business, results of operations and financial condition. There can
be no assurance that the Company would be able to restructure or refinance the Notes on terms as favourable as those currently
in place.
The Notes are subject to restrictive and other covenants that may limit the discretion of the Company and its subsidiaries with
respect to certain business matters. A breach of any of these covenants could result in a default under the Company’s
outstanding indebtedness, which would have a material adverse effect on the Company’s business, results of operations and
financial condition.
The Company faces asset risk, including the potential for charges related to certain investments, long-lived assets and
goodwill.
As partial consideration for the sale of its Cylance endpoint security assets and liabilities to Arctic Wolf, the Company received
common shares of Arctic Wolf as well as a covenant from Arctic Wolf to make a subsequent cash payment to the Company of
19
approximately $40 million one year following the closing. The common shares of Arctic Wolf are illiquid securities without a
public market and, as such, they cannot be readily sold or exchanged for cash and they may be difficult to value accurately. The
Company may not be able to sell these shares at desired times or prices, which could negatively impact its financial condition
and results of operations. Additionally, the Company is exposed to risk related to potential non-payment of the deferred cash
consideration from Arctic Wolf.
The Company’s long-lived assets include items such as the Company’s network infrastructure, operating lease right-of-use
assets and certain intellectual property. Under U.S. GAAP, the Company reviews its long-lived assets for impairment when
events or changes in circumstances indicate the carrying value may not be recoverable. The Company’s ability to generate
sufficient cash flows to fully recover the current carrying value of these assets depends on the successful execution of its
strategies. If it is determined that sufficient future cash flows do not exist to support the current carrying value, the Company
will be required to record an impairment charge for long-lived assets in order to adjust the value of these assets to the newly
established estimated value.
Goodwill represents the excess of the acquisition price over the fair value of identifiable net assets acquired. Under U.S. GAAP,
the Company tests goodwill for impairment annually, during the fourth quarter, or more frequently if events or changes in
circumstances indicate that the asset may be impaired. These events and circumstances may include a significant change in
legal factors or in the business climate, a significant decline in the Company’s share price, an adverse action or assessment by a
regulator, unanticipated competition, a loss of key personnel, significant disposal activity and the testing of recoverability for a
significant asset group. If any such events or circumstances arise, the Company may be required to record an impairment charge
in the value of its goodwill.
Tax provision changes, the adoption of new tax legislation or exposure to additional tax liabilities could materially
impact the Company’s financial condition.
The Company is subject to income, indirect (such as sales tax, sales and use tax and value-added tax) and other taxes in Canada,
the United States and numerous other foreign jurisdictions. Significant judgment is required in determining its worldwide
liability for income, indirect and other taxes, as well as potential penalties and interest. In the ordinary course of the Company’s
business, there are many transactions and calculations where the ultimate tax determination is uncertain. Although the Company
believes that its tax estimates are reasonable, there can be no assurance that the final determination of any tax audits will not be
materially different from that which is reflected in historical income, indirect and other tax provisions and accruals. Should
additional taxes or penalties and interest be assessed as a result of an audit, litigation or changes in tax laws, there could be a
material adverse effect on the Company’s current and future results and financial condition. In addition, there is a risk of
recoverability of future deferred tax assets.
The Company’s future effective tax rate will depend on the relative profitability of the Company’s domestic and foreign
operations, the statutory tax rates and taxation laws of the related tax jurisdictions, the tax treaties between the countries in
which the Company operates, the timing of the release, if any, of the valuation allowance, and the relative proportion of
research and development incentives to the Company’s profitability.
Under U.S. federal income tax laws, if a company is, or for any past period was, a passive foreign investment company
(“PFIC”), there could be adverse U.S. federal income tax consequences to U.S. shareholders even if the Company is no longer a
PFIC. While the Company does not believe that it is currently a PFIC, there can be no assurance that the Company was not a
PFIC in the past and will not be a PFIC in the future.
Risks Related to Regulation
The use and management of user data and personal information could give rise to liabilities as a result of legal, customer
and other third-party requirements.
User data and personal information is increasingly subject to new and amended legislation and regulations in numerous
jurisdictions around the world that are intended to protect the privacy and security of personal information, as well as the
collection, storage, transmission, use and disclosure of such information.
The interpretation of privacy and data protection laws and their application to the Internet and mobile communications in a
number of jurisdictions is unclear and evolving. There is a risk that these laws may be interpreted and applied in conflicting
ways from country to country and in a manner that is not consistent with the Company’s current data protection practices.
Complying with these varying international requirements could cause the Company to incur additional costs and change the
Company’s business practices. In addition, because the Company’s services are accessible worldwide, certain foreign
jurisdictions may claim that the Company is required to comply with their laws, even where the Company has no local entity,
employees, or infrastructure. Non-compliance could result in penalties or significant legal liability and the Company’s
business, results of operations and financial condition may be adversely affected.
20
The Company’s customers, partners and members of its ecosystem may also have differing expectations or impose territorial or
other requirements for the collection, hosting, processing and transmittal of user data or personal information in connection
with BlackBerry products and services. Such expectations or requirements could subject the Company to additional costs,
liabilities or negative publicity, and limit its future growth. In addition, governmental authorities may require access to limited
data stored by the Company through lawful access demands and capabilities, which could subject the Company to legal
liability, unforeseen compliance cost and negative publicity. Even a perception that the Company’s products or practices do not
adequately protect users’ privacy or data collected by the Company, made available to the Company or stored in or through the
Company’s products, or that they are being used by third parties to access personal or consumer data, could impair the
Company’s sales or its reputation.
Government regulations applicable to the Company’s products and services, including products containing encryption
capabilities, could negatively impact the Company’s business.
Certain government regulations applicable to the Company’s products and services may provide opportunities for competitors
or limit growth. The impact of potential incremental obligations may vary based on the jurisdiction, but regulatory changes
could impact whether the Company enters, maintains or expands its presence in a particular market, and whether the Company
must dedicate additional resources to comply with these obligations.
Various countries have enacted laws and regulations, adopted controls, license or permit requirements, and restrictions on the
export, import, and use of products or services that contain encryption technology. In addition, from time to time, governmental
agencies have proposed additional regulations relating to encryption technology, such as requiring certification, notifications,
review of source code, or the escrow and governmental recovery of private encryption keys. Governmental regulation of
encryption technology, including the regulation of imports or exports, could harm the Company’s sales in one or more
jurisdictions and adversely affect the Company’s revenues. Complying with such regulations could also require the Company
to devote additional research and development resources to change the Company’s software or services or alter the methods by
which the Company makes them available, which could be costly. In addition, failure to comply with such regulations could
result in penalties, costs and restrictions on import or export privileges or adversely affect sales to government agencies or
government funded projects.
Environmental, social and governance (“ESG”) expectations and standards expose the Company to risks that could
adversely affect the Company’s reputation and performance.
Regulatory requirements and standards for identifying, measuring and reporting ESG matters continue to evolve in many of the
jurisdictions in which the Company operates. If the Company’s ESG practices or disclosures do not meet evolving investor or
other stakeholder expectations and standards, then the reputation of the Company, its ability to attract or retain employees, and
its attractiveness as an investment, business partner, acquiror or service provider could be negatively impacted. Further, the
Company’s failure or perceived failure to pursue or fulfill ESG objectives or to satisfy applicable reporting standards on a
timely basis, or at all, could have similar negative impacts or expose the Company to government enforcement actions and
private litigation
At the same time, “anti-ESG” sentiment has recently gained momentum across the U.S., as evidenced most notably by state
legislative actions, investor initiatives, and an executive order opposing diversity, equity and inclusion (“DEI”) programs in the
private sector. Anti-ESG and anti-DEI-related policies, legislation, initiatives, litigation, and scrutiny could result in the
Company facing additional compliance obligations, becoming the subject of investigations or enforcement actions, or
sustaining reputational harm.
Failure of the Company’s suppliers, subcontractors, channel partners and representatives to use acceptable ethical
business practices or to comply with applicable laws could negatively impact the Company’s business.
The Company expects its suppliers, subcontractors, licensees and other partners to operate in compliance with applicable laws,
rules and regulations regarding working conditions, labour and employment practices, environmental compliance, anti-
corruption, and patent and trademark licensing, as detailed in the Company’s Supplier Code of Conduct. However, the
Company does not directly control their labour and other business practices. If one of the Company’s suppliers or
subcontractors violates applicable labour, anti-corruption or other laws, or implements labour or other business practices that
are regarded as unethical, or if a supplier or subcontractor fails to comply with procedures designed by the Company to adhere
to existing or proposed regulations, the delivery of BlackBerry products could be interrupted, orders could be canceled,
relationships could be terminated, the Company’s reputation could be damaged, and the Company may be subject to liability.
Any of these events could have a negative impact on the Company’s business, results of operations and financial condition.
21
General Risk Factors
Acquisitions, divestitures, investments and other business initiatives may negatively affect the Company’s results of
operations.
The Company actively evaluates opportunities to acquire or invest in businesses, assets, products, services and technologies.
Any such strategic transactions involve significant challenges and risks, including: that they may not advance the Company’s
strategic objectives or generate satisfactory synergies or return on investment; that the Company may have difficulty integrating
and managing new employees, business systems, development teams and product offerings; the potential loss of key employees
of an acquired business; additional demands on the Company’s management, resources, systems, procedures and controls; and
disruption of the Company’s ongoing business. In addition, acquisitions may involve unanticipated costs and liabilities,
including possible litigation and new or increased regulatory exposure, which are not covered by the indemnity or escrow
provisions, if any, of the relevant acquisition agreements.
As business circumstances dictate, the Company may also decide to divest itself of assets or businesses, as in the case of the
sale of the Cylance endpoint security assets to Arctic Wolf. The Company may not be successful in identifying or managing the
risks involved in any divestiture, including its ability to negotiate or collect a reasonable purchase price for the assets, potential
liabilities that may continue to apply to the Company following the divestiture, potential tax implications, business disruption,
employee issues or other matters. The Company’s inability to address these risks could adversely affect the Company’s
business, results of operations and financial condition.
The Company’s business is subject to risks inherent in foreign operations, including fluctuations in foreign currencies.
Sales outside of North America account for a significant portion of the Company’s revenue. The Company maintains offices in
a number of foreign jurisdictions and intends to continue to pursue growth in select international markets. The Company is
subject to a number of risks associated with its foreign operations that may increase liability and costs, lengthen sales cycles and
require significant management attention. These risks include:
•
compliance with the laws and regulations of Canada, the United States and other countries that apply to the Company’s
international operations, including import and export legislation, trade sanctions, lawful access, and privacy, anti-
corruption and consumer protection laws;
•
reliance on third parties to establish and maintain foreign operations;
•
instability in economic or political conditions;
•
foreign exchange controls and cash repatriation restrictions;
•
tariffs and other trade barriers;
•
increased credit risk and difficulties in collecting accounts receivable;
•
potential adverse tax consequences;
•
uncertainties of laws and enforcement relating to the protection of intellectual property;
•
litigation in foreign court systems;
•
cultural and language differences; and
•
difficulty in managing a geographically dispersed workforce.
In addition, the Company is exposed to foreign exchange risk as a result of transactions in currencies other than its U.S. dollar
functional currency. The majority of the Company’s revenue is denominated in U.S. dollars; however, some revenue, and a
substantial portion of operating costs and capital expenditures are incurred in other currencies, primarily Canadian dollars,
euros and British Pounds. For more details, please refer to the discussion of foreign exchange and income taxes in the
Company’s MD&A for the fiscal year ended February 28, 2025.
All of the above factors may have a material adverse effect on the Company’s business, results of operations and financial
condition and there can be no assurance that the policies and procedures implemented by the Company to address or mitigate
these risks will be successful, that Company personnel will comply with them, or that the Company will not experience these
factors in the future.
Environmental events may negatively affect the Company.
The Company has operations in numerous locations around the world that expose the Company to additional diverse
environmental risks. A significant natural disaster, such as an earthquake, fire or flood could have a material adverse impact on
the Company’s business and operations and could cause the Company to incur costs to repair damages to its facilities,
22
equipment and infrastructure. From time to time, the Company’s offices and remote working locations have historically
experienced, and are projected to continue to experience, climate-related events including drought, heat waves, ice storms,
power shortages, and wildfires and resultant air quality impacts. The increasing frequency and impact of extreme weather
events on the infrastructure of the Company and its suppliers, as well as public infrastructure, have the potential to disrupt the
business of the Company, its suppliers and its customers.
Although the Company maintains incident management and disaster response plans, they may prove to be inadequate in the
event of a major disruption caused by a natural disaster or geopolitical incident and the Company may be unable to continue its
operations and may endure system interruptions, reputational harm, delays in its development activities, lengthy interruptions in
service, breaches of data security and loss of critical data, and the Company’s insurance may not cover such events or may be
insufficient to compensate the Company for the potentially significant losses it may incur.
The Company expects its quarterly revenue and operating results to fluctuate.
The Company’s revenues can change from one quarter to the next, including due to unexpected developments late in a quarter,
such as lower-than-anticipated demand for the Company’s products and services, issues with new product or service
introductions, an internal systems failure, or challenges with one of the Company’s distribution channels or other partners
(including licensees and manufacturers).
Gross margins on the Company’s products and services vary across product lines and can change over time as a result of
product transitions, pricing and configuration changes, and cost fluctuations. In addition, the Company’s gross margin and
operating margin percentages, as well as overall profitability, may be materially adversely impacted as a result of a shift in
product/service, geographic or channel mix, component cost increases, price competition, or the introduction of new products
and services, including those that have higher cost structures or reduced pricing.
The market price of the Company’s common shares is volatile.
The market price of the Company’s outstanding common shares has been and continues to be volatile. The market price of the
Company’s shares may fluctuate significantly in response to the risks described elsewhere in these Risk Factors, as well as
numerous other factors, many of which are beyond the Company’s control, including: (i) announcements by the Company or its
competitors of new products and services, acquisitions, customer wins or strategic partnerships; (ii) forward-looking financial
guidance provided by the Company, any updates to this guidance, or the Company’s failure to meet this guidance; (iii) quarterly
and annual variations in operating results, which are difficult to forecast, and the Company’s financial results not meeting the
expectations of analysts or investors; (iv) recommendations by securities analysts or changes in earnings estimates; (v) the
performance of other technology companies or the increasing market share of such companies; (vi) results of existing or
potential litigation; (vii) market rumours; (viii) trading in derivative securities based on the Company’s common shares; or (ix)
speculative trading that is not primarily motivated by Company announcements or the condition of the Company’s business. In
addition, dilutive share issuances could adversely affect the market price of the Company’s outstanding common shares.
In addition, broad market and industry factors may decrease the market price of the Company’s common shares, regardless of
the Company’s operating performance. The stock market in general, and the securities of technology companies in particular,
have often experienced extreme price and volume fluctuations. Periods of volatility in the market price of the Company’s
securities may prompt securities class action litigation against the Company which, if not resolved swiftly, can result in
substantial costs and a diversion of management’s attention and resources. See also the Risk Factor entitled “Litigation against
the Company may result in adverse outcomes” and the “Legal Proceedings” section in this Annual Report on Form 10-K.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 1C. CYBERSECURITY
Cybersecurity Risk Management and Strategy
The Company’s cybersecurity risk management program is an integral part of its overall enterprise risk management efforts.
The Company manages cybersecurity risks within its products and services, infrastructure and corporate resources using a
framework that is based on applicable regulations, industry standards and recognized best practices designed to safeguard the
confidentiality, integrity, and availability of its information assets. Through this framework, the Company devotes appropriate
resources to monitoring, identifying, assessing and responding to cybersecurity threats and incidents, including those associated
with its use of third-party software, applications, services, and cloud infrastructure.
To mitigate risk to its systems, endpoints and data, the Company evaluates internal and external threat intelligence, deploys
encryption and authentication technologies and other protective measures, maintains security policies and procedures, and
conducts awareness training. The Company also conducts penetration and vulnerability testing and other risk assessments,
23
implements appropriate internal controls, and engages independent third-party auditors to evaluate its compliance with security
industry standards.
The Company’s incident response team, comprised of representatives from the Company’s information technology, information
security, product security, engineering, communications, privacy and legal groups, is responsible for addressing actual and
potential security threats and other security incidents and implementing the Company’s incident response plan. The Company’s
incident response plan includes processes and procedures for assessing potential internal and external threats, escalation,
activation and notification, crisis management, and post-incident recovery.
The readiness of the incident response team is promoted through table-top exercises and threat simulations, including during the
fiscal year ended February 28, 2025. The Company also conducts mandatory training of all employees on its security and data
privacy practices and policies and periodically sends simulated phishing emails to employees to build resilience.
In addition, the Company maintains specific policies and practices to mitigate third party security risks, including a process for
evaluating the security controls of vendors and service providers who exchange data with the Company or have access to or
integrate with the Company’s systems. At the same time, the Company’s control over the security posture of third parties is
limited and there can be no assurance that any vendor or service provider of the Company will not experience a compromise or
failure in the information assets under its control.
For the years covered by this report, the Company did not identify any security threats or incidents that have materially affected
or are reasonably likely to materially affect its business strategy, results of operations or financial condition. However, like all
other enterprises, the Company faces known and unknown cybersecurity risks and threats that are not fully mitigated. While
the Company works continuously to enhance its security programs and risk management efforts, it discovers vulnerabilities
from time to time and there can be no assurance that the Company has not experienced an undetected cybersecurity incident or
that it will not experience material loss or damage from an incident in the future.
Cybersecurity Governance
The Board has overall responsibility for the Company’s enterprise risk management program, including cybersecurity risk, and
the Audit and Risk Management Committee assists the Board with this oversight. The Company’s internal audit function
reports to the Audit and Risk Management Committee and, among other things, provides independent assurance on the
Company’s risk management activities and internal controls related to cybersecurity risk. For more information, see Part 3,
Item 10 “Directors, Executive Officers and Corporate Governance – Enterprise Risk Management”.
Management’s cybersecurity programs operate under the leadership of the Company’s Chief Information Security Officer
(“CISO”), who oversees a team of information and product security professionals and monitors the prevention, detection,
mitigation and remediation of cybersecurity risks. The CISO provides quarterly updates to the Board on the advancing maturity
of the Company’s cybersecurity program, including reports on security controls coverage and effectiveness, secure software
development and product security, vulnerability testing and remediation, and security operations. The updates also include
reports on improvements to processes, technology and governance to mitigate residual cybersecurity risk.
ITEM 2. PROPERTIES
The Company’s headquarters are located in Waterloo, Ontario, where the campus consists of one leased building with
approximately 148,200 square feet. The remaining lease term is approximately six years with the option to renew for an
additional five years. The Company’s other significant leased property is its Ottawa, Ontario facility at approximately 147,000
square feet. The remaining lease term is approximately two years with the option to renew for an additional three years.
Company also operates facilities in the United States, Asia-Pacific, Europe and the Middle East for engineering, sales,
marketing, research and development, the Company’s data center, and operations, among other general and administrative
purposes.
The following table sets forth the location and approximate square footage of the Company’s leased facilities as of February 28,
2025:
(Square feet in thousands)
Location
North America
622
Europe, Middle East and Africa
33
Asia Pacific
78
Total
733
24
ITEM 3. LEGAL PROCEEDINGS
See Note 11 to the Consolidated Financial Statements for information regarding certain legal proceedings in which the
Company is involved.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
25
PART II
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
ISSUER PURCHASES OF EQUITY SECURITIES
The Company’s common shares are listed and posted for trading on the NYSE and the TSX under the symbol “BB”.
On February 28, 2025, there were 1,063 registered holders of record of the Company’s common shares.
Unregistered Sales of Equity Securities
The Company had no unregistered sales of equity securities during fiscal 2025 that were not previously reported.
Share Repurchases
The Company did not repurchase any shares during fiscal 2025 and the Company does not currently have a share repurchase
program or approvals from the Board to commence a share repurchase program.
Stock Performance Graph
The following graph shows the cumulative total shareholder return of $100 invested in the common shares compared to the
S&P/TSX Capped Composite index and the peer group index (S&P Software & Services Select Industry Index) for the period
of February 28, 2020 to February 28, 2025.
The performance of the Company’s common shares as set out in the graph is based upon historical data and is not indicative of,
nor intended to forecast, future performance of the Company’s common shares. The graph lines merely connect measurement
dates and do not reflect fluctuations between those dates.
Base
Period
2/28/2020
2/26/2021
2/28/2022
2/28/2023
2/29/2024
2/28/2025
BlackBerry Limited
$
100.00
$
194.39
132.88
75.05
53.77
91.10
S&P TSX Capped
Composite
100.00
111.05
129.90
124.34
131.36
156.14
S&P Software & Services
Select Industry Index
100.00
163.09
146.93
122.03
157.22
179.19
This performance graph shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the
“Exchange Act”) or otherwise subject to the liabilities of that section nor shall it be deemed incorporated by reference in any
filing under the Securities Act of 1933 or the Exchange Act, regardless of any general incorporation language in such filing.
26
Ownership and Exchange Controls
There is currently no law, governmental decree or regulation in Canada that restricts the export or import of capital, or which
would affect the remittance of dividends, interest or other payments by us to non-resident holders of the Company’s common
shares, other than withholding tax requirements.
There is currently no limitation imposed by Canadian law or by the Company’s articles or by-laws on the right of non-residents
to hold or vote the Company’s common shares, other than those imposed by the Investment Canada Act (Canada) and the
Competition Act (Canada). These acts will generally not apply except where control of an existing Canadian business or
company, which has Canadian assets or revenue, or enterprise value (as applicable) over a certain threshold, is acquired and
will not apply to trading generally of securities listed on a stock exchange.
Certain Canadian Federal Income Tax Considerations for U.S. Residents
The following is a summary of the principal Canadian federal income tax considerations generally applicable under the Income
Tax Act (Canada) (together with the regulations thereto, the “Tax Act”) to a beneficial holder of the Company’s common shares
who, for the purposes of the Tax Act and the Canada-United States Income Tax Convention (1980) (the “Treaty”), and at all
relevant times, (i) is not and is not deemed to be a resident in Canada, (ii) is a resident of the United States for the purposes of
the Treaty and is entitled to the full benefits thereunder, (iii) holds all common shares as capital property, (iv) deals at arm’s
length with and is not affiliated with the Company, and (v) does not use or hold and is not deemed to use or hold the common
shares in connection with a business carried on in Canada (each such holder, a “U.S. Resident Holder”). This summary is not
generally applicable to a U.S. Resident Holder that is: (i) an insurer carrying on an insurance business in Canada and elsewhere,
or (ii) an “authorized foreign bank,” each as defined in the Tax Act. Such U.S. Resident Holders should consult their own tax
advisors.
Generally, a U.S. Resident Holder’s common shares will be considered to be capital property of a U.S. Resident Holder
provided the U.S. Resident Holder does not hold such shares in the course of carrying on a business of trading or dealing in
securities and has not acquired them in one or more transactions considered to be an adventure or concern in the nature of trade.
This summary is based upon the current provisions of the Tax Act, the current administrative policies and assessing practices of
the Canada Revenue Agency published in writing prior to the date hereof, and the Treaty. This summary takes into account all
specific proposals to amend the Tax Act publicly announced by or on behalf of the Minister of Finance (Canada) prior to the
date hereof (the “Tax Proposals”), and assumes that all Tax Proposals will be enacted in the form proposed. However, no
assurances can be given that the Tax Proposals will be enacted as proposed, or at all. This summary does not otherwise take into
account or anticipate any changes in law or administrative policy or assessing practice whether by legislative, administrative or
judicial action or decision, nor does it take into account tax legislation or considerations of any province, territory or foreign
jurisdiction, which may differ from those discussed herein.
This summary is of a general nature only and is not intended to be, and should not be construed to be, legal, business or tax
advice to any particular holder or prospective holder of the Company’s common shares, and no opinion or representation with
respect to the tax consequences to any holder or prospective holder of the common shares is made. Accordingly, holders and
prospective holders of the Company’s common shares should consult their own tax advisors with respect to the income tax
consequences of purchasing, owning and disposing of the common shares in their particular circumstances.
Dividends
Dividends paid or credited, or deemed to be paid or credited, on the Company’s common shares to a U.S. Resident Holder will
be subject to Canadian withholding tax at the rate of 25% of the gross amount of the dividends, subject to reduction under the
provisions of the Treaty. Under the Treaty, the rate of Canadian withholding tax applicable to a U.S. Resident Holder that is the
beneficial owner of dividends is generally reduced to 15% of the gross amount of the dividends, and, if such U.S. Resident
Holder is a company that owns at least 10% of the Company’s voting shares at the time of the dividends, the rate of Canadian
withholding tax is reduced to 5% of the gross amount of the dividends. U.S. Resident Holders who may be eligible for a
reduced rate of withholding tax on dividends pursuant to the Treaty should consult with their own tax advisors with respect to
taking all appropriate steps in this regard.
Disposition of Common Shares
A U.S. Resident Holder who disposes or is deemed to dispose of a common share will not be subject to tax under the Tax Act
on any capital gain realized on such disposition, unless the common share constitutes “taxable Canadian property,” within the
meaning of the Tax Act, of the U.S. Resident Holder at the time of the disposition and the U.S. Resident Holder is not entitled
to relief under the Treaty.
Generally, a common share of a particular U.S. Resident Holder will not be “taxable Canadian property” of such U.S. Resident
Holder at any time at which such common share is listed on a “designated stock exchange,” within the meaning of the Tax Act
(which includes the TSX and NYSE) unless, at any particular time during the 60-month period that ends at that time, both of the
27
following conditions are met concurrently: (a) 25% or more of the issued shares of any class of the capital stock of the
Company were owned by or belonged to one or any combination of (i) the U.S. Resident Holder, (ii) persons with whom the
U.S. Resident Holder did not deal at arm’s length for purposes of the Tax Act, and (iii) partnerships in which the U.S. Resident
Holder or a person described in (ii) holds a membership interest directly or indirectly through one or more partnerships; and (b)
more than 50% of the fair market value of the common share was derived, directly or indirectly, from one or any combination
of: (i) real or immovable property situated in Canada, (ii) “Canadian resource properties” (as defined in the Tax Act), (iii)
“timber resource properties” (as defined in the Tax Act), and (iv) options in respect of, or interests in, or for civil law rights in,
property described in any of (b)(i) to (iii), whether or not the property exists. A common share may also be deemed to be
“taxable Canadian property” in certain circumstances as set out in the Tax Act. In the case of a U.S. Resident Holder to whom a
common share of the Company represents “taxable Canadian property”, under the Treaty, such a U.S. Resident Holder will
generally not be subject to tax under the Tax Act on a capital gain realized on the disposition of such share unless the value of
such share is derived principally from real property situated in Canada (within the meaning of the Treaty).
In the event that a common share is “taxable Canadian property,” within the meaning of the Tax Act, to a U.S. Resident Holder
at the time of disposition, such U.S. Resident Holder should consult its own tax advisor as to the Canadian federal income tax
consequences of the disposition.
ITEM 6. [RESERVED]
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) should be
read together with the consolidated financial statements and the accompanying notes (the “Consolidated Financial Statements”)
of BlackBerry Limited, for the fiscal year ended February 28, 2025. The Consolidated Financial Statements are presented in
U.S. dollars and have been prepared in accordance with U.S. GAAP. All financial information in this MD&A is presented in
U.S. dollars, unless otherwise indicated.
Readers should carefully review Part I, Item 1A “Risk Factors” and other documents filed by the Company from time to time
with the Securities and Exchange Commission (“SEC”) and other securities regulators. A number of factors may materially
affect our business, financial condition, operating results and prospects. These factors include but are not limited to those set
forth in Part I, Item 1A “Risk Factors” and elsewhere in this Annual Report on Form 10-K. Any one of these factors, and other
factors that we are unaware of, or currently deem immaterial, may cause our actual results to differ materially from recent
results or from our anticipated future results. Please refer to our MD&A included in our Annual Report on 10-K for the fiscal
year ended February 29, 2024 for a comparative discussion of our fiscal 2024 financial results as compared to our fiscal 2023
financial results, which is incorporated herein by reference. Additional information about the Company can be found on
SEDAR+ at www.sedarplus.ca and on the SEC’s website at www.sec.gov.
Cylance Sale
On February 3, 2025, the Company completed the sale of its Cylance endpoint security assets and related liabilities to Arctic
Wolf Network, Inc. (“Arctic Wolf”) for $160.0 million of cash, subject to certain adjustments of approximately $39.1 million,
and 5.5 million common shares of Arctic Wolf. As a result of the Cylance sale, it is no longer reported alongside UEM,
SecuSuite and AtHoc as the Cybersecurity segment, and those three businesses are now reported separately from Cylance as the
Secure Communications segment. The financial results of Cylance are presented as discontinued operations and are included in
“loss from discontinued operations, net of tax” in the Consolidated Statements of Operations and have been removed from the
presentation of results from continuing operations. Prior period comparatives in the financial statements, and throughout this
Annual Report on Form 10-K where applicable, have been recast to reflect this change
Cautionary Note Regarding Forward-Looking Statements
This Annual Report on Form 10-K 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
relating to:
•
the Company’s plans, strategies and objectives, including its intentions to increase and enhance its product and
service offerings and to patent new innovations;
•
the Company’s expectations with respect to its revenue, segment adjusted EBITDA, adjusted Corporate general and
administrative costs, adjusted EBITDA, non-GAAP EPS and operating cash flow in the first quarter of fiscal 2026,
and these items for fiscal 2026 as a whole;
•
the Company’s estimates of purchase obligations and other contractual commitments; and
•
the Company’s expectations with respect to the sufficiency of its financial resources.
28
The words “expect”, “anticipate”, “estimate”, “may”, “will”, “should”, “could”, “intend”, “believe”, “target”, “plan” and
similar expressions are intended to identify forward-looking statements in this Annual Report on Form 10-K, including in the
sections in Part I, Item 1 “Business” entitled “The Company: A heritage of innovation”, “Industry Background - QNX”,
“Competition and Competitive Strengths - QNX”, “Intellectual Property” and “Human Capital”, and in the sections of this
MD&A entitled, “Results of Operations - Fiscal year ended February 28, 2025 compared to fiscal year ended February 29, 2024
- Revenue - Revenue by Segment”, “Results of Operations - Fiscal year ended February 28, 2025 compared to fiscal year ended
February 29, 2024 - Gross Margin and Adjusted EBITDA by Segment”, “Results of Operations - Fiscal year ended February
28, 2025 compared to fiscal year ended February 29, 2024 - Operating Expenses - General and Administrative Expenses”,
“Results of Operations - Fiscal year ended February 28, 2025 compared to fiscal year ended February 29, 2024 - Net Loss ”,
and “Financial Condition - Contractual and Other Obligations”. Forward-looking statements are based on estimates and
assumptions made by the Company in light of its experience and its perception of historical trends, current conditions and
expected future developments, as well as other factors that the Company believes are appropriate in the circumstances,
including but not limited to, the Company’s expectations regarding its business, strategy, opportunities and prospects, the
launch of new products and services, general economic conditions, competition, the Company’s expectations regarding its
financial performance, and the Company’s expectations regarding the planned separation of its businesses. Many factors could
cause the Company’s actual results, performance or achievements to differ materially from those expressed or implied by the
forward-looking statements, including, without limitation, the risk factors discussed in Part I, Item 1A “Risk Factors” in this
Annual Report on Form 10-K.
All of these factors should be considered carefully, and readers should not place undue reliance on the Company’s forward-
looking statements. Any statements that are forward-looking statements are intended to enable the Company’s shareholders to
view the anticipated performance and prospects of the Company from management’s perspective at the time such statements are
made, and they are subject to the risks that are inherent in all forward-looking statements, as described above, as well as
difficulties in forecasting the Company’s financial results and performance for future periods, particularly over longer periods,
given changes in technology and the Company’s business strategy, evolving industry standards, intense competition and short
product life cycles that characterize the industries in which the Company operates. See the “Strategy” subsection in Part I, Item
1 “Business” of this Annual Report on Form 10-K.
The Company 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.
Business Overview
The Company provides enterprises and governments the intelligent software and services that power the world around us.
Based in Waterloo, Ontario, the Company’s high-performance foundational software enables major automakers and industrial
giants alike to unlock transformative applications, drive new revenue streams and launch innovative business models, all
without sacrificing safety, security, and reliability. With a deep heritage in Secure Communications, BlackBerry delivers
operational resiliency with a comprehensive, highly secure, and extensively certified portfolio for mobile fortification, mission-
critical communications, and critical events management. The Company’s common shares trade under the ticker symbol “BB”
on the New York Stock Exchange and the Toronto Stock Exchange. The Company was incorporated under the Business
Corporations Act (Ontario) on March 7, 1984.
The Company continued to execute on its strategy in fiscal 2025 and announced the following significant achievements:
Products and Innovation:
•
QNX announced that its embedded technology powers more than 255 million vehicles;
•
QNX launched its General Embedded Development Platform to accelerate developer innovation for embedded
systems;
•
QNX introduced a software-defined functional safety platform for industrial automation in collaboration with Intel;
•
QNX added QNX® Containers to support operating system virtualization and containerization on QNX-based devices;
•
BlackBerry UEM placed in the upper-right quadrant as a 2024 Gartner® Peer Insights™ Customers’ Choice for
Unified Endpoint Management tools; and
•
The Company announced that BlackBerry AtHoc is “in process” to become the first critical events management
solution to obtain FedRAMP high authorization.
Customers and Partners:
•
The Company completed the sale of its Cylance endpoint security assets to Arctic Wolf;
•
QNX collaborated with Microsoft to make QNX SDP 8.0 available in the Microsoft Azure cloud environment;
•
QNX announced a multi-year collaboration with Vector and TTTech Auto to develop and market a vehicle software
platform that pre-integrates the QNX OS with other leading middleware components;
•
QNX partnered with Pi Square Technologies to train software engineers across India as part of QNX Everywhere
ecosystem expansion strategy;
29
•
QNX extended its relationship with AMD to support a wider range of adaptive computing devices used in robotic
systems and other embedded devices;
•
QNX was selected by Hyundai Mobis to power its next-generation digital cockpit platform;
•
QNX partnered with ETAS to jointly sell and market software solutions for SDVs; and
•
QNX was selected by FERNRIDE for its safety-certified autonomous terminal tractor solution; and
•
BlackBerry announced the Government of Canada’s investment in the Malaysia Cybersecurity Center of Excellence.
Environmental, Sustainability and Corporate Governance:
•
Appointed Lori O’Neill, an experienced corporate director and financial expert, to the Board of Directors;
•
Appointed Lisa Bahash, an automotive OEM and Tier 1 supplier veteran, to the Board of Directors; and
•
Appointed Tim Foote as Chief Financial Officer.
Fiscal 2025 Summary Results of Operations
The following table sets forth certain consolidated statements of operations data for the fiscal years ended February 28,
2025, February 29, 2024, and February 28, 2023:
As at and for the Fiscal Years Ended
(in millions, except for share and per share amounts)
February 28, 2025
February 29, 2024
Change
February 28, 2023
Change
Revenue
$
534.9 $
759.1 $
(224.2) $
526.3 $
232.8
Gross margin
394.9
490.7
(95.8)
366.6
124.1
Operating expenses
394.1
479.7
(85.6)
573.4
(93.7)
Investment income, net
7.7
18.8
(11.1)
5.0
13.8
Income (loss) before income taxes
8.5
29.8
(21.3)
(201.8)
231.6
Provision for income taxes
17.0
24.2
(7.2)
13.7
10.5
Income (loss) from continuing operations
(8.5)
5.6
(14.1)
(215.5)
221.1
Loss from discontinued operations (1)
(70.5)
(135.8)
65.3
(518.9)
383.1
Net loss
$
(79.0) $
(130.2) $
51.2 $
(734.4) $
604.2
Earnings (loss) per share - reported
Basic
$
(0.13) $
(0.22)
$
(1.27)
Diluted
$
(0.13) $
(0.22)
$
(1.35)
Weighted-average number of shares
outstanding (000’s)
Basic
591,470
584,543
578,654
Diluted (1)
591,470
592,497
639,487
______________________________
(1) As a result of the Cylance sale, it is no longer reported alongside UEM, SecuSuite and AtHoc as the Cybersecurity segment,
and those three businesses are now reported separately from Cylance as the Secure Communications segment. The financial
results of Cylance are presented as “loss from discontinued operations, net of tax” in the Consolidated Statements of
Operations and have been removed from the presentation of results from continuing operations. Prior period comparatives
have been recast to reflect this change.
(2) Diluted loss per share on a U.S. GAAP basis for fiscal 2025 and 2024 do not include the dilutive effect of the Debentures (as
defined below in “Debt Financing and Other Funding Sources”) as to do so would be anti-dilutive. Diluted loss per share on
a U.S. GAAP basis for fiscal 2025 and fiscal 2023 do not include the dilutive effect of stock-based compensation as to do so
would be anti-dilutive. See Note 9 to the Consolidated Financial Statements for the fiscal year ended February 28, 2025 for
calculation of the dilutive weighted average number of shares outstanding.
30
The following section sets forth certain consolidated statements of operations data for the three months ended February 28,
2025, February 29, 2024 and February 28, 2023:
For the Three Months Ended
(in millions, except for share and per share amounts)
February 28, 2025
February 29, 2024
Change
February 28, 2023
Change
Revenue
$
141.7 $
152.9 $
(11.2) $
123.6 $
29.3
Gross margin
104.1
122.2
(18.1)
89.8
32.4
Operating expenses
112.1
134.7
(22.6)
191.0
(56.3)
Investment income, net
1.6
4.0
(2.4)
6.2
(2.2)
Loss before income taxes
(6.4)
(8.5)
2.1
(95.0)
86.5
Provision for income taxes
1.4
3.9
(2.5)
1.9
2.0
Loss from continuing operations
(7.8)
(12.4)
4.6
(96.9)
84.5
Income (loss) from discontinued
operations (1)
0.4
(43.8)
44.2
(398.0)
354.2
Net loss
$
(7.4) $
(56.2) $
48.8 $
(494.9) $
438.7
Earnings (loss) per share - reported
Basic
$
(0.01) $
(0.10) $
0.09 $
(0.85) $
0.75
Diluted (2)
$
(0.01) $
(0.10) $
0.09 $
(0.81) $
0.71
Weighted-average number of shares
outstanding (000’s)
Basic
594,267
587,523
581,493
Diluted (2)
594,267
587,523
642,327
______________________________
(1)
As a result of the Cylance sale, it is no longer reported alongside UEM, SecuSuite and AtHoc as the Cybersecurity
segment, and those three businesses are now reported separately from Cylance as the Secure Communications
segment. The financial results of Cylance are presented as “loss from discontinued operations, net of tax” in the
Consolidated Statements of Operations and have been removed from the presentation of results from continuing
operations. Prior period comparatives have been recast to reflect this change.
(2)
Diluted loss per share on a U.S. GAAP basis in the fourth quarter of 2025 and 2024 do not include the dilutive effect
of the Debentures as to do so would be anti-dilutive. Diluted loss per share on a U.S. GAAP basis in the fourth quarter
of 2025, 2024 and 2023 do not include the dilutive effect of stock-based compensation as to do so would be anti-
dilutive.
The following tables show information by operating segment for the three months and years ended February 28, 2025 and
February 29, 2024. The Company reports segment information in accordance with U.S. GAAP ASC Section 280 based on the
“management” approach. The management approach designates the internal reporting used by the Chief Operating Decision
Maker (“CODM”) for making decisions and assessing performance of the Company’s reportable operating segments. The
measure of segment profit or loss disclosed by the Company in the Consolidated Financial Statements under the “management”
approach in reviewing the results of the Company’s operating segments is segment adjusted gross margin. Additionally below,
management uses the additional measures of segment profit or loss used by the CODM which is segment adjusted EBITDA a
non-GAAP financial measure. Also note the change in presentation relating to expense reclassification as disclosed in Note 1
to the Consolidated Financial Statements. See Note 13 to the Consolidated Financial Statements for a description of the
Company’s operating segments.
31
For the Three Months Ended
(in millions)
Secure Communications
QNX
Licensing
Segment Totals
Feb 28
Feb 29
Change
Feb 28
Feb 29
Change
Feb 28
Feb 29
Change
Feb 28
Feb 29
Change
2025
2024
2025
2024
2025
2024
2025
2024
Segment revenue
$ 67.3 $ 71.6 $ (4.3) $ 65.8 $ 65.9 $ (0.1) $ 8.6 $ 15.4 $ (6.8) $ 141.7 $ 152.9 $ (11.2)
Segment cost of
sales
24.5 18.9
5.6 11.1
9.7
1.4
1.6
1.4
0.2 37.2 30.0
7.2
Segment adjusted
gross margin
$ 42.8 $ 52.7 $ (9.9) $ 54.7 $ 56.2 $ (1.5) $ 7.0 $ 14.0 $ (7.0) $ 104.5 $ 122.9 $ (18.4)
Segment research
and development
9.1 11.6 (2.5) 13.1 16.0 (2.9)
—
—
— 22.2 27.6 (5.4)
Segment sales and
marketing
12.0 13.4 (1.4) 14.5 12.3
2.2
—
—
— 26.5 25.7
0.8
Segment general
and administrative
9.7 11.6 (1.9)
8.5 10.8 (2.3)
7.8
3.6
4.2 26.0 26.0
—
Less amortization
included in the
above
0.6
1.0 (0.4)
0.6
0.6
—
2.2
2.3 (0.1)
3.4
3.9 (0.5)
Segment adjusted
EBITDA
$ 12.6 $ 17.1 $ (4.5) $ 19.2 $ 17.7 $ 1.5 $ 1.4 $ 12.7 $ (11.3) $ 33.2 $ 47.5 $ (14.3)
For the Years Ended
(in millions)
Secure Communications
QNX
Licensing
Segment Totals
Feb 28
Feb 29
Change
Feb 28
Feb 29
Change
Feb 28
Feb 29
Change
Feb 28
Feb 29
Change
2025
2024
2025
2024
2025
2024
2025
2024
Segment revenue
$ 272.6 $ 283.8 $ (11.2) $ 236.0 $ 215.4 $ 20.6
$ 26.3
$ 259.9 $ (233.6) $ 534.9 $ 759.1 $ (224.2)
Segment cost of
sales
92.7
80.7
12.0
38.8
33.8
5.0
6.1
150.9
(144.8) 137.6
265.4
(127.8)
Segment adjusted
gross margin
$ 179.9 $ 203.1 $ (23.2) $ 197.2 $ 181.6 $ 15.6
$ 20.2
$ 109.0 $ (88.8) $ 397.3 $ 493.7 $ (96.4)
Segment research
and development
44.2
56.1
(11.9)
59.9
64.5
(4.6)
—
—
—
104.1
120.6
(16.5)
Segment sales and
marketing
46.4
58.2
(11.8)
46.6
43.4
3.2
—
—
—
93.0
101.6
(8.6)
Segment general
and administrative 40.2
47.2
(7.0)
33.9
43.1
(9.2)
13.4
23.2
(9.8)
87.5
113.5
(26.0)
Less amortization
included in the
above
3.2
4.4
(1.2)
2.3
2.9
(0.6)
9.0
9.7
(0.7)
14.5
17.0
(2.5)
Segment adjusted
EBITDA
$ 52.3
$ 46.0
$ 6.3
$ 59.1
$ 33.5
$ 25.6
$ 15.8
$ 95.5
$ (79.7) $ 127.2 $ 175.0 $ (47.8)
32
The following tables reconcile the Company’s segment gross margin for the three months and year ended February 28, 2025 to
consolidated U.S. GAAP results:
For the Three Months Ended February 28, 2025
(in millions)
Secure Communications
QNX
Licensing
Segment Totals
Reconciling
Items
Consolidated
U.S. GAAP
Revenue
$
67.3 $
65.8 $
8.6 $
141.7 $
— $
141.7
Cost of sales
24.5
11.1
1.6
37.2
0.4
37.6
Gross margin (1)
$
42.8 $
54.7 $
7.0 $
104.5 $
(0.4) $
104.1
Operating expenses
112.1
112.1
Investment income, net
1.6
1.6
Loss before income taxes
$
(6.4)
For the Year Ended February 28, 2025
(in millions)
Secure Communications
QNX
Licensing
Segment Totals
Reconciling
Items
Consolidated
U.S. GAAP
Revenue
$
272.6 $
236.0 $
26.3 $
534.9 $
— $
534.9
Cost of sales
92.7
38.8
6.1
137.6
2.4
140.0
Gross margin (1)
$
179.9 $
197.2 $
20.2 $
397.3 $
(2.4) $
394.9
Operating expenses
394.1
394.1
Investment income, net
7.7
7.7
Income before income taxes
$
8.5
______________________________
(1) See “Non-GAAP Financial Measures” for a reconciliation of selected U.S. GAAP-based measures to adjusted measures for
the three months and year ended February 28, 2025.
The following tables reconcile the Company’s segment gross margin results for the three months and year ended February 29,
2024 to consolidated U.S. GAAP results:
For the Three Months Ended February 29, 2024
(in millions)
Secure Communications
QNX
Licensing
Segment Totals
Reconciling
Items
Consolidated
U.S. GAAP
Revenue
$
71.6 $
65.9 $
15.4 $
152.9 $
— $
152.9
Cost of sales
18.9
9.7
1.4
30.0
0.7
30.7
Gross margin (1)
$
52.7 $
56.2 $
14.0 $
122.9 $
(0.7) $
122.2
Operating expenses
134.7
134.7
Investment income, net
4.0
4.0
Loss before income taxes
$
(8.5)
For the Year Ended February 29, 2024
(in millions)
Secure Communications
QNX
Licensing
Segment Totals
Reconciling
Items
Consolidated
U.S. GAAP
Revenue
$
283.8 $
215.4 $
259.9 $
759.1 $
— $
759.1
Cost of sales
80.7
33.8
150.9
265.4
3.0
268.4
Gross margin (1)
$
203.1 $
181.6 $
109.0 $
493.7 $
(3.0) $
490.7
Operating expenses
479.7
479.7
Investment income, net
18.8
18.8
Income before income taxes
$
29.8
______________________________
33
(1) See “Non-GAAP Financial Measures” for a reconciliation of selected U.S. GAAP-based measures to adjusted measures for
the three months and year ended February 29, 2024.
The following table reconciles total segment adjusted EBITDA for the three months and year ended February 28, 2025 and
February 29, 2024 to the Company’s consolidated totals:
Three Months Ended
For the Years Ended
February 28, 2025
February 29, 2024
February 28, 2025
February 29, 2024
Total Segment Adjusted EBITDA
$
33.2 $
47.5 $
127.2 $
175.0
Adjustments (1):
Stock compensation expense
4.3
4.8
20.6
28.8
Restructuring expenses
11.4
18.4
26.1
35.9
Less:
Corporate general and administrative expense
12.1
9.3
43.0
33.3
Amortization
5.7
6.4
24.3
31.3
Impairment of long-lived assets
4.9
4.7
9.6
15.3
Impairment of goodwill
—
15.9
—
15.9
Prior Debentures fair value adjustment
—
0.5
—
3.5
Litigation settlement
2.8
—
2.8
—
Investment income
(1.6)
(4.0)
(7.7)
(18.8)
Consolidated income (loss) from continuing operations
before income taxes
$
(6.4) $
(8.5) $
8.5 $
29.8
______________________________
(1) The CODM reviews segment information on an adjusted EBITDA basis, which excludes certain amounts as described
below:
Stock compensation expenses - Equity compensation is a non-cash expense and does not impact the ongoing
operating decisions taken by the Company’s management.
Restructuring expenses - Restructuring costs relate to employee termination benefits, facilities, streamlining many
of the Company’s centralized corporate functions into Secure Communications (formerly “Cybersecurity”) and
QNX (formerly “IoT”) specific teams, and other costs pursuant to programs to reduce the Company’s annual
expenses amongst R&D, infrastructure and other functions do not reflect expected future operating expenses, are
not indicative of the Company’s core operating performance, and may not be meaningful when comparing the
Company’s operating performance against that of prior periods.
Financial Highlights
The Company had approximately $410.3 million in cash, cash equivalents and investments as of February 28, 2025 (Fiscal
2024 - $298.2 million).
In fiscal 2025, the Company recognized revenue of $534.9 million and incurred a net loss of $79.0 million, or 0.13 basic and
diluted loss per share on a U.S. GAAP basis (fiscal 2024 - revenue of $759.1 million and net loss of $130.2, or 0.22 basic loss
and diluted loss per share). The Company recognized net loss from continuing operations of $8.5 million, or $0.01 basic and
diluted loss per share on a U.S. GAAP basis for fiscal 2025 (fiscal 2024 - net income from continuing operations of $5.6
million, or $0.01 basic and diluted earnings per share).
The Company recognized adjusted net income of $12.5 million, or adjusted income of $0.02 per share, on a non-GAAP basis in
fiscal 2025 (fiscal 2024 - adjusted net income of $30.6 million and adjusted income of $0.05 per share). See “Non-GAAP
Financial Measures” below. Adjusted net income from continuing operations was $57.6 million in fiscal 2025 or $0.10 adjusted
basic earnings per share from continuing operations (fiscal 2024 - adjusted net income from continuing operations of $116.0
million, or $0.20 adjusted basic earnings per share from continuing operations).
34
Non-GAAP Financial Measures
The Consolidated Financial Statements have been prepared in accordance with U.S. GAAP, and information contained in this
MD&A is presented on that basis. On April 2, 2025, the Company announced financial results for the three months and fiscal
year ended February 28, 2025, which included certain non-GAAP financial measures and non-GAAP ratios, including adjusted
gross margin, adjusted gross margin percentage, adjusted operating expense, adjusted income (loss) from continuing operations,
adjusted net income (loss), adjusted earnings (loss) per share, adjusted research and development expense, adjusted sales and
marketing expense, adjusted general and administrative expense, adjusted amortization expense, adjusted operating income
(loss), adjusted EBITDA, adjusted EBITDA from continuing and discontinued operations, adjusted segment EBITDA, adjusted
operating income (loss) margin percentage, adjusted EBITDA margin percentage and free cash flow (usage).
In the Company’s internal reports, management evaluates the performance of the Company’s business on a non-GAAP basis by
excluding the impact of certain items from the Company’s U.S. GAAP financial results. The Company believes that these non-
GAAP financial measures and non-GAAP ratios provide management, as well as readers of the Company’s financial
statements, with a consistent basis for comparison across accounting periods and are useful in helping management and readers
understand the Company’s operating results and underlying operational trends. For purposes of comparability, the Company’s
non-GAAP financial measures for the three months ended and years ended February 29, 2024 and February 28, 2023 have been
updated to conform to the current year’s presentation and discontinued operations.
•
Prior Debentures fair value adjustment. The Company elected to measure the Prior Debentures (as defined below) at
fair value in accordance with the fair value option under U.S. GAAP. Each period, the fair value of the Prior
Debentures was recalculated and the resulting non-cash income and charges from the change in fair value from non-
credit components of the Prior Debentures were recognized in income. The amount varied each period depending on
changes to the Company’s share price, share price volatility and credit indices. This was not indicative of the
Company’s core operating performance, and may not be meaningful when comparing the Company’s operating
performance against that of prior periods.
•
Restructuring charges. The Company believes that restructuring costs relating to employee termination benefits,
facilities, streamlining many of the Company’s centralized corporate functions into Secure Communications (formerly
“Cybersecurity”) and QNX (formerly “IoT”) specific teams, and other costs pursuant to programs to reduce the
Company’s annual expenses amongst R&D, infrastructure and other functions do not reflect expected future operating
expenses, are not indicative of the Company’s core operating performance, and may not be meaningful when
comparing the Company’s operating performance against that of prior periods.
•
Stock compensation expenses. Equity compensation is a non-cash expense and does not impact the ongoing operating
decisions taken by the Company’s management.
•
Amortization of acquired intangible assets. When the Company acquires intangible assets through business
combinations, the assets are recorded as part of purchase accounting and contribute to revenue generation. Such
acquired intangible assets depreciate over time and the related amortization will recur in future periods until the assets
have been fully amortized. This is not indicative of the Company’s core operating performance, and may not be
meaningful when comparing the Company’s operating performance against that of prior periods.
•
Long-lived asset impairment charge. The Company believes that long-lived asset impairment charges (“LLA
impairment charge”) do not reflect expected future operating expenses, are not indicative of the Company’s core
operating performance, and may not be meaningful when comparing the Company’s operating performance against
that of prior periods.
•
Goodwill impairment charge. The Company believes that goodwill impairment charges do not reflect expected future
operating expenses, are non-cash, and may not be meaningful when comparing the Company’s operating performance
against that of prior periods.
•
Litigation settlements. The Company believes that litigation settlements do not reflect expected future operating
expenses, are not indicative of the Company’s core operating performance, and may not be meaningful when
comparing the Company’s operating performance against that of prior periods.
On a U.S. GAAP basis, the impacts of these items are reflected in the Company’s income statement. However, the Company
believes that the provision of supplemental non-GAAP measures allows investors to evaluate the financial performance of the
Company’s business using the same evaluation measures that management uses, and is therefore a useful indication of the
Company’s performance or expected performance of future operations and facilitates period-to-period comparison of operating
performance. As a result, the Company considers it appropriate and reasonable to provide, in addition to U.S. GAAP measures,
supplementary non-GAAP financial measures that exclude certain items from the presentation of its financial results.
35
Reconciliation of non-GAAP based measures with most directly comparable U.S. GAAP based measures for the three
months ended February 28, 2025, February 29, 2024 and February 28, 2023
Readers are cautioned that adjusted gross margin, adjusted gross margin percentage, adjusted operating expense, adjusted
income (loss) from continuing operations, adjusted net income (loss), adjusted earnings (loss) per share, adjusted research and
development expense, adjusted sales and marketing expense, adjusted general and administrative expense, adjusted
amortization expense, adjusted operating income (loss), adjusted EBITDA, adjusted EBITDA from continuing and discontinued
operations, adjusted segment EBITDA, adjusted operating income (loss) margin percentage, adjusted EBITDA margin
percentage and free cash flow (usage) and similar measures do not have any standardized meaning prescribed by U.S. GAAP
and are therefore unlikely to be comparable to similarly titled measures reported by other companies.
A reconciliation of the most directly comparable U.S. GAAP financial measures for the three months ended February 28, 2025,
February 29, 2024 and February 28, 2023 to adjusted financial measures is reflected in the table below:
For the Three Months Ended (in millions)
February 28, 2025
February 29, 2024
February 28, 2023
Gross margin
$
104.1
$
122.2
$
89.8
Stock compensation expense
0.4
0.7
0.7
Adjusted gross margin
$
104.5
$
122.9
$
90.5
Gross margin %
73.5 %
79.9 %
72.7 %
Stock compensation expense
0.2 %
0.5 %
0.5 %
Adjusted gross margin %
73.7 %
80.4 %
73.2 %
Reconciliation of U.S. GAAP operating expense for the three months ended February 28, 2025, November 30, 2024, February
29, 2024 and February 28, 2023 to adjusted operating expense is reflected in the table below:
For the Three Months Ended (in millions)
February 28, 2025
November 30, 2024
February 29, 2024
February 28, 2023
Operating expense
$
112.1 $
92.7 $
134.7 $
191.0
Restructuring charges
11.4
6.1
18.4
5.9
Stock compensation expense
3.9
4.1
4.1
7.1
Prior Debentures fair value adjustment
—
—
0.5
(25.4)
Acquired intangibles amortization
1.7
1.8
1.8
3.5
Litigation settlements
2.8
—
—
—
Goodwill impairment charge
—
—
15.9
112.1
LLA impairment charge
4.9
1.0
4.7
—
Adjusted operating expense
$
87.4 $
79.7 $
89.3 $
87.8
36
Reconciliation of U.S. GAAP loss from continuing operations, U.S. GAAP net income (loss) and U.S. GAAP basic earnings
(loss) per share for the three months ended February 28, 2025, February 29, 2024 and February 28, 2023 to adjusted income
(loss) from continuing operations, adjusted net income (loss) and adjusted basic earnings (loss) per share is reflected in the table
below:
For the Three Months Ended (in millions, except per share amounts)
February 28, 2025
February 29, 2024
February 28, 2023
Basic
earnings
(loss)
per share
Basic
earnings
(loss)
per share
Basic
earnings
(loss)
per share
Loss from continuing operations
$
(7.8)
$(0.01)
$
(12.4)
$(0.02)
$
(96.9)
$(0.17)
Restructuring charges
11.4
18.4
5.9
Stock compensation expense
4.3
4.8
7.8
Prior Debentures fair value adjustment
—
0.5
(25.4)
Acquired intangibles amortization
1.7
1.8
3.5
Litigation settlements
2.8
—
—
Goodwill impairment charge
—
15.9
112.1
LLA impairment charge
4.9
4.7
—
Adjusted income from continuing operations
$
17.3
$0.03
$
33.7
$0.06
$
7.0
$0.01
Net income (loss)
$
(7.4)
$(0.01)
$
(56.2)
$(0.10)
$
(494.9)
$(0.85)
Restructuring charges
11.4
18.4
5.9
Stock compensation expense
4.3
5.6
10.5
Prior Debentures fair value adjustment
—
0.5
(25.4)
Acquired intangibles amortization
1.7
8.6
14.4
Litigation settlements
2.8
—
—
Goodwill impairment charge
—
34.8
245.4
LLA impairment charge
4.9
4.7
231.0
Adjusted net income (loss)
$
17.7
$0.03
$
16.4
$0.03
$
(13.1)
$(0.02)
37
Reconciliation of U.S. GAAP research and development, sales and marketing, general and administrative, and amortization
expense for the three months ended February 28, 2025, February 29, 2024 and February 28, 2023 to adjusted research and
development, sales and marketing, general and administrative, and amortization expense is reflected in the table below:
For the Three Months Ended (in millions)
February 28, 2025
February 29, 2024
February 28, 2023
Research and development
$
23.2 $
28.9 $
33.1
Stock compensation expense
1.2
1.6
1.8
Adjusted research and development expense
$
22.0 $
27.3 $
31.3
Sales and marketing
$
27.1 $
26.0 $
28.7
Stock compensation expense
0.7
0.3
0.9
Adjusted sales and marketing expense
$
26.4 $
25.7 $
27.8
General and administrative
$
50.0 $
54.0 $
35.8
Restructuring charges
11.4
18.4
5.9
Stock compensation expense
2.0
2.2
4.4
Adjusted general and administrative expense
$
36.6 $
33.4 $
25.5
Amortization
$
4.1 $
4.7 $
6.7
Acquired intangibles amortization
1.7
1.8
3.5
Adjusted amortization expense
$
2.4 $
2.9 $
3.2
Reconciliation of non-GAAP based measures with most directly comparable U.S. GAAP based measures for the years
ended February 28, 2025, February 29, 2024 and February 28, 2023
A reconciliation of the most directly comparable U.S. GAAP financial measures for the years ended February 28, 2025,
February 29, 2024 and February 28, 2023 to adjusted financial measures is reflected in the table below:
For the Fiscal Years Ended (in millions)
February 28, 2025
February 29, 2024
February 28, 2023
Gross margin
$
394.9
$
490.7
$
366.6
Stock compensation expense
2.4
3.0
3.0
Adjusted gross margin
$
397.3
$
493.7
$
369.6
Gross margin %
73.8 %
64.6 %
69.7 %
Stock compensation expense
0.5 %
0.4 %
0.5 %
Adjusted gross margin %
74.3 %
65.0 %
70.2 %
Operating expense
$
394.1
$
479.7
$
573.4
Restructuring charges
26.1
35.9
10.2
Stock compensation expense
18.2
25.8
24.4
Prior Debentures fair value adjustment
—
3.5
(137.4)
Acquired intangibles amortization
7.0
11.0
13.8
Litigation settlements
2.8
—
165.0
Goodwill impairment charge
—
15.9
112.1
LLA impairment charge
9.6
15.3
3.5
Adjusted operating expense
$
330.4
$
372.3
$
381.8
38
Reconciliation of U.S. GAAP income (loss) from continuing operations, U.S. GAAP net income (loss) and U.S. GAAP basic
earnings (loss) per share for the years ended February 28, 2025, February 29, 2024 and February 28, 2023 to adjusted income
(loss) from continuing operations, adjusted net income (loss) and adjusted basic earnings (loss) per share is reflected in the table
below:
For the Fiscal Years Ended (in millions, except per share amounts)
February 28, 2025
February 29, 2024
February 28, 2023
Basic
earnings
(loss) per
share
Basic
earnings
(loss) per
share
Basic
loss per
share
Income (loss) from continuing operations
$
(8.5) $ (0.01) $
5.6 $
0.01 $
(215.5) $ (0.37)
Restructuring charges
26.1
35.9
10.2
Stock compensation expense
20.6
28.8
27.4
Prior Debentures fair value adjustment
—
3.5
(137.4)
Acquired intangibles amortization
7.0
11.0
13.8
Litigation settlements
2.8
—
165.0
Goodwill impairment charge
—
15.9
112.1
LLA impairment charge
9.6
15.3
3.5
Adjusted income (loss) from continuing operations
$
57.6
$0.10
$
116.0
$0.20
$
(20.9)
$(0.04)
Net loss
$
(79.0)
$(0.13)
$
(130.2)
$(0.22)
$
(734.4)
$(1.27)
Restructuring charges
26.1
35.9
10.2
Stock compensation expense
25.6
33.1
31.4
Prior Debentures fair value adjustment
—
3.5
(137.4)
Acquired intangibles amortization
27.4
38.2
82.0
Litigation settlements
2.8
—
165.0
Goodwill impairment charge
—
34.8
245.4
LLA impairment charge
9.6
15.3
234.5
Adjusted net income (loss)
$
12.5
$0.02
$
30.6
$0.05
$
(103.3)
$(0.17)
39
Reconciliation of U.S GAAP research and development, sales and marketing, general and administrative, and amortization
expense for the years ended February 28, 2025, February 29, 2024 and February 28, 2023 to adjusted research and
development, sales and marketing, general and administrative, and amortization expense is reflected in the table below:
For the Fiscal Years Ended (in millions)
February 28, 2025
February 29, 2024
February 28, 2023
Research and development
$
108.8 $
127.1 $
134.2
Stock compensation expense
5.3
7.3
7.4
Adjusted research and development expense
$
103.5 $
119.8 $
126.8
Sales and marketing
$
95.5 $
104.0 $
102.6
Stock compensation expense
2.8
2.5
2.7
Adjusted sales and marketing expense
$
92.7 $
101.5 $
99.9
General and administrative
$
159.7 $
187.2 $
172.0
Restructuring charges
26.1
35.9
10.2
Stock compensation expense
10.1
16.0
14.3
Adjusted general and administrative expense
$
123.5 $
135.3 $
147.5
Amortization
$
17.7 $
26.7 $
27.4
Acquired intangibles amortization
7.0
11.0
13.8
Adjusted amortization expense
$
10.7 $
15.7 $
13.6
40
Adjusted operating income, adjusted EBITDA, adjusted operating income margin percentage and adjusted EBITDA margin
percentage for the three months ended February 28, 2025, February 29, 2024 and February 28, 2023 are reflected in the table
below.
For the Three Months Ended (in millions)
February 28, 2025
February 29, 2024
February 28, 2023
Operating loss
$
(8.0) $
(12.5) $
(101.2)
Non-GAAP adjustments to operating loss
Restructuring charges
11.4
18.4
5.9
Stock compensation expense
4.3
4.8
7.8
Prior Debentures fair value adjustment
—
0.5
(25.4)
Acquired intangibles amortization
1.7
1.8
3.5
Litigation settlements
2.8
—
—
Goodwill impairment charge
—
15.9
112.1
LLA impairment charge
4.9
4.7
—
Total non-GAAP adjustments to operating loss
25.1
46.1
103.9
Adjusted operating income
17.1
33.6
2.7
Amortization
5.7
6.4
9.0
Acquired intangibles amortization
(1.7)
(1.8)
(3.5)
Adjusted EBITDA
$
21.1
$
38.2 $
8.2
Revenue
$
141.7
$
152.9 $
123.6
Adjusted operating income margin % (1)
12%
22%
2%
Adjusted EBITDA margin % (2)
15%
25%
7%
______________________________
(1) Adjusted operating income margin % is calculated by dividing adjusted operating income by revenue.
(2) Adjusted EBITDA margin % is calculated by dividing adjusted EBITDA by revenue.
41
Adjusted operating income (loss), adjusted EBITDA, adjusted operating income (loss) margin percentage and adjusted
EBITDA margin percentage for the fiscal years ended February 28, 2025, February 29, 2024 and February 28, 2023 are
reflected in the table below.
For the Fiscal Years Ended (in millions)
February 28, 2025
February 29, 2024
February 28, 2023
Operating income (loss)
$
0.8
$
11.0
$
(206.8)
Non-GAAP adjustments to operating income (loss)
Restructuring charges
26.1
35.9
10.2
Stock compensation expense
20.6
28.8
27.4
Prior Debentures fair value adjustment
—
3.5
(137.4)
Acquired intangibles amortization
7.0
11.0
13.8
Litigation settlements
2.8
—
165.0
Goodwill impairment charge
—
15.9
112.1
LLA impairment charge
9.6
15.3
3.5
Total non-GAAP adjustments to operating income (loss)
66.1
110.4
194.6
Adjusted operating income (loss)
66.9
121.4
(12.2)
Amortization
24.3
31.3
36.5
Acquired intangibles amortization
(7.0)
(11.0)
(13.8)
Adjusted EBITDA
$
84.2
$
141.7
$
10.5
Revenue
$
534.9
$
759.1
$
526.3
Adjusted operating income (loss) margin % (1)
13%
16%
(2%)
Adjusted EBITDA margin % (2)
16%
19%
2%
______________________________
(1) Adjusted operating income (loss) margin % is calculated by dividing adjusted operating income (loss) by revenue.
(2) Adjusted EBITDA margin % is calculated by dividing adjusted EBITDA by revenue.
42
Adjusted EBITDA from continuing and discontinued operations for the fiscal years ended February 28, 2025, February 29,
2024 and February 28, 2023 are reflected in the table below.
For the Fiscal Years Ended (in millions)
February 28, 2025
February 29, 2024
February 28, 2023
Net loss
$
(79.0)
$
(130.2)
$
(734.4)
Non-GAAP adjustments to operating loss
Restructuring charges
26.1
35.9
10.2
Stock compensation expense
25.6
33.1
31.4
Prior Debentures fair value adjustment
—
3.5
(137.4)
Acquired intangibles amortization
27.4
38.2
82.0
Litigation settlements
2.8
—
165.0
Goodwill impairment charge
—
34.8
245.4
LLA impairment charge
9.6
15.3
234.5
Total non-GAAP adjustments to net loss
91.5
160.8
631.1
Adjusted operating income (loss)
12.5
30.6
(103.3)
Amortization
44.7
58.5
104.7
Acquired intangibles amortization
(27.4)
(38.2)
(82.0)
Investment income, net
(7.7)
(18.8)
(5.0)
Provision for income taxes from continuing and discontinued
operations
17.2
24.2
13.7
Adjusted EBITDA from continuing and discontinued
operations
$
39.3
$
56.3
$
(71.9)
The Company uses free cash flow (usage) when assessing its sources of liquidity, capital resources, and quality of earnings. The
Company believes that free cash flow (usage) is helpful in understanding the Company’s capital requirements and provides an
additional means to reflect the cash flow trends in the Company’s business.
Reconciliation of U.S. GAAP net cash provided by (used in) operating activities for the three months ended February 28, 2025,
February 29, 2024 and February 28, 2023 to free cash flow (usage) is reflected in the table below:
For the Three Months Ended (in millions)
February 28, 2025
February 29, 2024
February 28, 2023
Net cash provided by (used in) operating activities
$
42.0 $
(14.7) $
(6.9)
Acquisition of property, plant and equipment
(0.5)
(1.6) $
(2.0)
Free cash flow (usage)
$
41.5 $
(16.3) $
(8.9)
43
Reconciliation of U.S. GAAP net cash provided by (used in) operating activities for the years ended February 28, 2025,
February 29, 2024 and February 28, 2023 to free cash flow (usage) is reflected in the table below:
For the Fiscal Years Ended (in millions)
February 28, 2025
February 29, 2024
February 28, 2023
Net cash provided by (used in) operating activities
$
16.5
$
(3.5) $
(262.2)
Acquisition of property, plant and equipment
(3.1)
(7.1)
(7.3)
Free cash flow (usage)
$
13.4
$
(10.6) $
(269.5)
For the year ended February 28, 2023, free cash usage includes $165.0 million paid in relation to a legal settlement.
Key Metrics
The Company regularly monitors a number of financial and operating metrics, including the following key metrics, in order to
measure the Company’s current performance and estimated future performance. Readers are cautioned that Secure
Communications annual recurring revenue (“ARR”), Secure Communications dollar-based net retention rate (“DBNRR”) and
QNX royalty backlog do not have any standardized meaning and are unlikely to be comparable to similarly titled measures
reported by other companies.
Comparative breakdowns of certain key metrics for the three months ended February 28, 2025 and February 29, 2024 are set
forth below.
For the Three Months Ended (in millions)
February 28, 2025
February 29, 2024
Change
Secure Communications Annual Recurring Revenue
$
208
$
202
$
6
Secure Communications Dollar-Based Net Retention Rate
93 %
91 %
2%
QNX Royalty Backlog
$
865
$
815
$
50
Secure Communications Annual Recurring Revenue
The Company defines ARR as the annualized value of all subscription, term, maintenance, services, and royalty contracts that
generate recurring revenue as of the end of the reporting period. The Company uses ARR as an indicator of business
momentum for the Secure Communications business.
Secure Communications ARR was approximately $208 million in the fourth quarter of fiscal 2025 and decreased compared to
$215 million in the third quarter of fiscal 2025 and increased compared to $202 million in the fourth quarter of fiscal 2024
primarily due to customer churn in the UEM business.
Secure Communications Dollar-Based Net Retention Rate
The Company calculates the Secure Communications DBNRR as of period end by first calculating the Secure Communications
ARR from the customer base as at 12 months prior to the current period end (“Prior Period ARR”). The Company then
calculates the Secure Communications ARR for the same cohort of customers as at the current period end (“Current Period
ARR”). The Company then divides the Current Period ARR by the Prior Period ARR to calculate the DBNRR. The Company
uses DBNRR as an indicator of business momentum for the Secure Communications business.
Secure Communications DBNRR was 93% in the fourth quarter of fiscal 2025 and decreased compared to 95% in the third
quarter of fiscal 2025 and increased compared to 91% in the fourth quarter of fiscal 2024.
QNX Royalty Backlog
The Company defines the royalty backlog of its QNX business as estimated future revenue from variable forecasted royalties
related to the QNX business. The estimation of forecasted royalties is based on QNX’s royalty rates and on projections of
anticipated volumes that are based on historical shipping experience and current customer projections that management believes
are reasonable over the lifetime of a design. The QNX royalty backlog is calculated annually based on current projections of
volumes and may not be indicative of actual future revenue. The revenue that the Company will recognize is subject to several
factors, including actual volumes and potential terminations or modifications to customer contracts.
QNX royalty backlog was approximately $865 million at the end of the fourth quarter of fiscal 2025 and increased compared to
approximately $815 million at the end of the fourth quarter of fiscal 2024.
44
Results of Operations - Fiscal year ended February 28, 2025 compared to fiscal year ended February 29, 2024
Revenue
Revenue by Segment
Comparative breakdowns of revenue by segment are set forth below.
For the Fiscal Years Ended
(in millions)
February 28, 2025
February 29, 2024
Change
February 28, 2023
Change
Revenue by Segment
Secure Communications
$
272.6
$
283.8
$
(11.2) $
288.2
$
(4.4)
QNX
236.0
215.4
20.6
205.7
9.7
Licensing
26.3
259.9
(233.6)
32.4
227.5
$
534.9
$
759.1
$
(224.2) $
526.3
$
232.8
% Revenue by Segment
Secure Communications
51.0 %
37.4 %
54.8 %
QNX
44.1 %
28.4 %
39.1 %
Licensing
4.9 %
34.2 %
6.1 %
100.0 %
100.0 %
100.0 %
Secure Communications
The decrease in Secure Communications revenue of $11.2 million was primarily due to a decrease of $34.9 million relating to
up-front components of revenue recognized in fiscal 2024 on the Company’s long term agreement with the Government of
Malaysia and a decrease of $19.1 million in BlackBerry UEM product revenue, partially offset by an increase of $32.1 million
relating to product revenue in Secusmart, an increase of $7.9 million increase in professional services revenue and an increase
of $2.7 million in BlackBerry AtHoc.
The Company previously stated that it expected Secure Communications revenue to be in the range of $267 million to $271
million for fiscal 2025 as a whole. Secure Communications revenue was $272.6 million for fiscal 2025.
The Company expects Secure Communications revenue to be in the range of $50 million to $54 million in the first quarter of
fiscal 2026, and for the full year to be in the range of $230 million to $240 million in fiscal 2026.
QNX
The increase in QNX revenue of $20.6 million was primarily due to an increase of $22.1 million in BlackBerry QNX royalty
revenue and an increase of $6.3 million in BlackBerry Radar revenue, partially offset by a decrease of $4.9 million in
BlackBerry QNX development seat revenue and a decrease of $1.7 million in professional services.
The Company previously stated that it expected QNX revenue to be in the range of $230 million to $235 million for fiscal 2025
as a whole. QNX revenue for fiscal 2025 was $236.0 million.
The Company expects QNX revenue to be in the range of $51 million to $55 million in the first quarter of fiscal 2026. The
Company previously stated that it expects QNX revenue to be in the range of $260 million to $270 million for fiscal 2026 as a
whole. The Company now expects QNX revenue to be in the range of $250 million to $270 million for fiscal 2026 as a whole
due to the uncertain impact of new U.S. tariffs and global retaliatory tariffs on QNX’s automotive customers.
Licensing
The decrease in Licensing revenue of $233.6 million was primarily due to $217.7 million associated with the Company’s patent
sale in the first quarter of fiscal 2024, which was a one time-event, and a decrease of $15.9 million in revenue from the
Company’s other intellectual property licensing arrangements.
The Company previously stated that it expected Licensing revenue to be approximately $20 million for fiscal 2025 as a whole.
Licensing revenue was $26.3 million for fiscal 2025 due to the timing of new licensing deals.
The Company expects Licensing revenue to be approximately $6 million in each of the four quarters of fiscal 2026.
45
Total BlackBerry Revenue
The Company previously stated that it expected total BlackBerry revenue to be in the range of $517 million to $526 million in
fiscal 2025 as a whole. Total BlackBerry revenue was $534.9 million and was higher due to the total impact of each of the
Company’s operating segments exceeding the top end of the Company’s expectation ranges.
The Company expects total BlackBerry revenue to be approximately $107 million to $115 million in the first quarter of fiscal
2026, and for the full year to be in the range of $504 million to $534 million in fiscal 2026.
Revenue by Geography
Comparative breakdowns of the geographic regions are set forth in the following table:
For the Fiscal Years Ended
(in millions)
February 28, 2025
February 29, 2024
Change
February 28, 2023
Change
Revenue by Geography
North America
$
248.7
$
496.9
$
(248.2) $
261.7
$
235.2
Europe, Middle East and Africa
188.6
159.0
29.6
203.1
(44.1)
Other regions
97.6
103.2
(5.6)
61.5
41.7
$
534.9
$
759.1
$
(224.2) $
526.3
$
232.8
% Revenue by Geography
North America
46.5 %
65.5 %
49.7 %
Europe, Middle East and Africa
35.3 %
20.9 %
38.6 %
Other regions
18.2 %
13.6 %
11.7 %
100.0 %
100.0 %
100.0 %
North America Revenue
The decrease in North America revenue of $248.2 million was primarily due to $217.7 million associated with the Company’s
patent sale in the first quarter of fiscal 2024, which was a one time-event, a decrease of $17.6 BlackBerry UEM licensing
revenue, a decrease of $15.9 million in revenue from the Company’s other intellectual property licensing arrangements and a
decrease of $8.4 million in BlackBerry QNX development seat revenue, partially offset by an increase of $8.8 million in
BlackBerry QNX royalty revenue and an increase of $5.8 million in BlackBerry Radar.
Europe, Middle East and Africa Revenue
The increase in Europe, Middle East and Africa revenue of $29.6 million was primarily due to an increase of $32.0 million
relating to product revenue in Secusmart and an increase of $3.2 million in BlackBerry QNX royalty revenue, partially offset by
a decrease of $4.3 million in professional services revenue.
Other Regions Revenue
The decrease in Other regions revenue of $5.6 million was primarily due to a decrease of $34.9 million relating to up-front
components of revenue recognized in fiscal 2024 on the Company’s long term agreement with the Government of Malaysia,
partially offset by an increase of $11.7 million professional services revenue, an increase of $10.2 million in BlackBerry QNX
royalty revenue and an increase of $3.3 million in BlackBerry QNX development seat revenue.
46
Gross Margin
Consolidated Gross Margin
Consolidated gross margin decreased by $95.8 million to approximately $394.9 million in fiscal 2025 (fiscal 2024 - $490.7
million). The decrease was primarily due to the patent sale in the first quarter of fiscal 2024, which was a one-time event, and a
lower gross margin from Secusmart due to change in product mix, partially offset by an increase in revenue from BlackBerry
QNX due to the reasons discussed above in “Revenue by Segment”, as the cost of sales for most software and services products
does not significantly fluctuate based on business volume.
Consolidated Gross Margin Percentage
Consolidated gross margin percentage increased by 9.2%, to approximately 73.8% of consolidated revenue in fiscal 2025 (fiscal
2024 - 64.6%). The increase was primarily due to a change in mix specifically a lower gross margin contribution from
Licensing, which had a lower relative gross margin percentage in fiscal 2024 due to the patent sale, and a higher gross margin
contribution from BlackBerry QNX.
Gross Margin and Adjusted EBITDA by Segment
See “Business Overview” and “Fiscal 2025 Summary Results of Operations” for information about the Company’s operating
segments and the basis of operating segment results.
For the Year Ended
(in millions)
Secure Communications
QNX
Licensing
Segment Totals
Feb 28
Feb 29
Change
Feb 28
Feb 29
Change
Feb 28
Feb 29
Change
Feb 28
Feb 29
Change
2025
2024
2025
2024
2025
2024
2025
2024
Segment revenue
$ 272.6 $ 283.8 $ (11.2) $ 236.0 $ 215.4 $ 20.6
$ 26.3
$ 259.9 $ (233.6) $ 534.9 $ 759.1 $ (224.2)
Segment cost of
sales
92.7
80.7
12.0
38.8
33.8
5.0
6.1
150.9
(144.8)
137.6
265.4
(127.8)
Segment gross
margin
$ 179.9 $ 203.1 $ (23.2) $ 197.2 $ 181.6 $ 15.6
$ 20.2
$ 109.0 $ (88.8)
$ 397.3 $ 493.7 $ (96.4)
Segment research
and development
44.2
56.1
(11.9)
59.9
64.5
(4.6)
—
—
—
104.1
120.6
(16.5)
Segment sales and
marketing
46.4
58.2
(11.8)
46.6
43.4
3.2
—
—
—
93.0
101.6
(8.6)
Segment general
and administrative 40.2
47.2
(7.0)
33.9
43.1
(9.2)
13.4
23.2
(9.8)
87.5
113.5
(26.0)
Less amortization
included in the
above
3.2
4.4
(1.2)
2.3
2.9
(0.6)
9.0
9.7
(0.7)
14.5
17.0
(2.5)
Segment adjusted
EBITDA
$ 52.3
$ 46.0
$ 6.3
$ 59.1
$ 33.5
$ 25.6
$ 15.8
$ 95.5
$ (79.7)
$ 127.2 $ 175.0 $ (47.8)
47
Secure Communications
The decrease in Secure Communications gross margin of $23.2 million was primarily due to a change in mix, specifically a
decrease in gross margin contribution from Secusmart software licenses, which had a higher relative gross margin percentage in
fiscal 2024 due to up-front components of revenue recognized on the Company’s long-term agreement with the Government of
Malaysia.
The decrease in Secure Communications gross margin percentage of 6% was primarily due to the same reasons discussed
above.
The increase in Secure Communications adjusted EBITDA of $6.3 million was primarily due to decreases in salaries and
benefits expense, partially offset by the reasons discussed above in “Revenue by Segment”.
The Company previously stated that it expected Secure Communications adjusted EBITDA to be in the range of $43 million to
$45 million for fiscal 2025 as a whole. Secure Communications adjusted EBITDA was $52.3 million for fiscal 2025 as a whole
due to lower than expected salaries and benefits expense and revenue exceeding the top end of the Company’s expectation
ranges.
The Company expects Secure Communications adjusted EBITDA to be in the range of $34 million to $44 million in fiscal 2026
and to be in the range of $3 million to $6 million in the first quarter of fiscal 2026.
QNX
The increase in QNX gross margin of $15.6 million was primarily due to the reasons discussed above in “Revenue by
Segment”, partially offset by an increase in cost of sales related to Radar hardware devices.
QNX gross margin percentage of 84% was consistent with fiscal 2024.
The increase in QNX adjusted EBITDA of $25.6 million was primarily due to the reasons discussed above in “Revenue by
Segment”, a decrease in facilities costs, a decrease in consulting costs and a benefit from claims filed with the Ministry of
Innovation, Science and Economic Development Canada relating to its Strategic Innovation Fund (“SIF”) program’s investment
in BlackBerry QNX.
The Company previously stated that it expected QNX adjusted EBITDA to be in the range of $48 million to $50 million in
fiscal 2025. QNX adjusted EBITDA was $59.1 million in fiscal 2025 due to SIF claims, lower than expected salaries and
benefits expense, lower cost of sales due to product mix and revenue exceeding the top end of the Company’s expectation
ranges.
The Company previously stated that it expected QNX adjusted EBITDA margin percentage to be approximately 18% in fiscal
2025. QNX adjusted EBITDA margin percentage was 25% due to the reasons noted above.
The Company expects QNX adjusted EBITDA to be in the range of $55 million to $60 million in fiscal 2026 and to be in the
range of $2 million to $6 million in the first quarter of fiscal 2026.
Licensing
The decrease in Licensing gross margin of $88.8 million was primarily due to the patent sale in the first quarter of fiscal 2024,
which had a lower relative gross margin percentage due to the cost basis of the sold assets which was de-recognized.
The increase in Licensing gross margin percentage of 35% was primarily due to the same reason discussed above.
The decrease in Licensing adjusted EBITDA of $79.7 million was primarily due to the same reason discussed above and an
increase in credit loss provision that was subsequently written off, partially offset by a decrease in legal expense.
The Company previously stated that it expected Licensing adjusted EBITDA to be approximately $16 million in fiscal 2025.
Licensing adjusted EBITDA was $15.8 million in fiscal 2025.
The Company previously stated that it expected Licensing adjusted EBITDA margin percentage to be approximately 65% in
fiscal 2025. Licensing adjusted EBITDA was 60% in fiscal 2025 due to the reasons noted above.
The Company expects Licensing adjusted EBITDA to be approximately $20 million in fiscal 2026 and to be approximately $5
million in each of the four quarters of fiscal 2026.
The Company previously stated that it expected the negative impact to adjusted EBITDA from its Corporate functions to be
approximately $48 million in fiscal 2025. The negative impact to adjusted EBITDA from the Corporate functions was $43.0
million in fiscal 2025 and $12.1 million in the fourth quarter of fiscal 2025.
48
Operating Expenses
The table below presents a comparison of research and development, sales and marketing, general and administrative, and
amortization expense for fiscal 2025 compared to fiscal 2024 and fiscal 2024 compared to fiscal 2023.
For the Fiscal Years Ended
(in millions)
February 28, 2025
February 29, 2024
Change
February 28, 2023
Change
Revenue
$
534.9
$
759.1
$
(224.2) $
526.3
$
232.8
Operating expenses
Research and development
108.8
127.1
(18.3)
134.2
(7.1)
Sales and marketing
95.5
104.0
(8.5)
102.6
1.4
General and administrative
159.7
187.2
(27.5)
172.0
15.2
Amortization
17.7
26.7
(9.0)
27.4
(0.7)
Impairment of goodwill
—
15.9
(15.9)
112.1
(96.2)
Impairment of long-lived assets
9.6
15.3
(5.7)
3.5
11.8
Gain on sale of property, plant and
equipment, net
—
—
—
(6.0)
6.0
Debentures fair value adjustment
—
3.5
(3.5)
(137.4)
140.9
Litigation settlements
2.8
—
2.8
165.0
(165.0)
Total
$
394.1
$
479.7
$
(85.6) $
573.4
$
(93.7)
Operating Expense as % of Revenue
Research and development
20.3%
16.7%
25.5%
Sales and marketing
17.9%
13.7%
19.5%
General and administrative
29.9%
24.7%
32.7%
Amortization
3.3%
3.5%
5.2%
Impairment of goodwill
—%
2.1%
21.3%
Impairment of long-lived assets
1.8%
2.0%
0.7%
Gain on sale of property, plant and
equipment, net
—%
—%
(1.1%)
Debentures fair value adjustment
—%
0.5%
(26.1%)
Litigation settlements
0.5%
—%
31.4%
Total
73.7%
63.2%
108.9%
See “Non-GAAP Financial Measures” for a reconciliation of selected U.S. GAAP-based measures to adjusted measures for the
years ended February 28, 2025, February 29, 2024 and February 28, 2023.
49
U.S. GAAP Operating Expenses
Operating expenses decreased by $85.6 million, or 17.8% in fiscal 2025 compared to fiscal 2024. The decrease was primarily
due to a decrease of $34.9 million in salaries and benefits, a decrease of $15.9 million in goodwill impairment, a decrease of
$9.9 million in facilities costs, a decrease of $9.8 million in restructuring costs, a decrease of $9.0 million in amortization
expense, a decrease of $8.9 million in legal expenses, a decrease of $8.7 million in consulting cost, a decrease of $7.6 million in
stock compensation expense and a decrease of $5.7 million in impairment of long-lived assets, partially offset by an increase of
$19.1 million related to the release of an accrued liability relating to the Company’s legacy mobile device business in fiscal
2024 which did not recur and an increase of $10.8 million in variable incentive plan cost, and an increase of $5.3 million in the
Company’s deferred share unit costs.
Adjusted Operating Expenses
Adjusted operating expenses decreased by $41.9 million, or 11.3%, to $330.4 million in fiscal 2025, compared to $372.3
million in fiscal 2024. The decrease was primarily attributable to a decrease of $34.9 million in salaries and benefits, a decrease
of $11.7 million in legal expenses, a decrease of $9.9 million in facilities costs, a decrease of $8.9 million in amortization
expense and a decrease of $8.7 million in consulting cost, partially offset by an increase of $19.1 million related to the release
of an accrued liability relating to the Company’s legacy mobile device business in fiscal 2024 which did not recur, an increase
of $10.8 million in variable incentive plan cost, an increase of $5.3 million in the Company’s deferred share unit costs.
Research and Development Expenses
Research and development expenses consist primarily of salaries and benefits for technical personnel, new product
development costs, travel, office and building costs, infrastructure costs and other employee costs.
Research and development expenses decreased by $18.3 million, or 14.4% in fiscal 2025 compared to fiscal 2024. The decrease
was primarily attributable to a decrease of $9.4 million in salaries and benefits expenses, a decrease of $7.1 million in
consulting cost, and an increase in benefits of $3.0 million from SIF claims filed.
Adjusted research and development expenses decreased by $16.3 million, or 13.6%, to $103.5 million in fiscal 2025 compared
to $119.8 million in fiscal 2024. The decrease was primarily due to the same reasons described above on a U.S. GAAP basis.
Sales and Marketing Expenses
Sales and marketing expenses consist primarily of marketing, advertising and promotion, salaries and benefits, information
technology costs and travel expenses.
Sales and marketing expenses decreased by $8.5 million, or 8.2% in fiscal 2025 compared to fiscal 2024. The decrease was
primarily due to a decrease of $8.1 million in salaries and benefits and a decrease of $2.5 million in sales incentive plan costs.
Adjusted sales and marketing expenses decreased by $8.8 million, or 8.7%, to $92.7 million in fiscal 2025 compared to $101.5
million in fiscal 2024. The decrease was primarily due to same reasons described above on a U.S. GAAP basis.
General and Administrative Expenses
General and administration expenses consist primarily of salaries and benefits, external advisory fees, information technology
costs, office and related staffing infrastructure costs.
General and administrative expenses decreased by $27.5 million, or 14.7%, in fiscal 2025 compared to fiscal 2024. The
decrease was primarily due to a decrease of $17.4 million in salaries and benefits expenses, a decrease of $9.9 million in
facilities cost, a decrease of $9.8 million in restructuring costs, a decrease of $8.6 million in legal expenses and a decrease of
$5.9 million in stock based compensation expense, partially offset by an increase of $19.1 million related to the release of an
accrued liability relating to the Company’s legacy mobile device business in fiscal 2024 which did not recur and an increase of
$5.3 million in the Company’s deferred share unit cost.
Adjusted general and administrative expenses decreased by $11.8 million, or 8.7%, to $123.5 million in fiscal 2025 compared
to $135.3 million in fiscal 2024. The decrease was primarily due to a decrease of $17.4 million in salaries and benefits
expenses, a decrease of $11.3 million in legal expenses, and a decrease $9.9 million in facilities costs, partially offset an
increase of $19.1 million related to the release of an accrued liability relating to the Company’s legacy mobile device business
in fiscal 2024 which did not recur and an increase of $5.3 million in the Company’s deferred unit share cost.
The Company expects adjusted Corporate general and administrative costs to be approximately $10 million in the first quarter
of fiscal 2026 and approximately $40 million in fiscal 2026 as a whole.
50
Amortization Expense
The table below presents a comparison of amortization expense relating to property, plant and equipment and intangible assets
recorded as amortization or cost of sales for fiscal 2025 compared to fiscal 2024 and fiscal 2024 compared to fiscal 2023.
Intangible assets are comprised of patents, licenses and acquired technology.
For the Fiscal Years Ended
(in millions)
Included in Operating Expense
February 28, 2025
February 29, 2024
Change
February 28, 2023
Change
Property, plant and equipment
$
7.1 $
9.1 $
(2.0) $
9.4 $
(0.3)
Intangible assets
10.7
17.7
(7.0)
18.0
(0.3)
Total
$
17.8 $
26.8 $
(9.0) $
27.4 $
(0.6)
Included in Cost of Sales
February 28, 2025
February 29, 2024
Change
February 28, 2023
Change
Property, plant and equipment
$
0.5 $
0.8 $
(0.3) $
2.8 $
(2.0)
Intangible assets
6.0
3.7
2.3
6.3
(2.6)
Total
$
6.5 $
4.5 $
2.0 $
9.1 $
(4.6)
Amortization included in Operating Expense
The decrease in amortization expense included in operating expense of $9.0 million was primarily due to the lower cost base of
acquired technology assets.
Adjusted amortization expense decreased by $5.0 million to $10.7 million in fiscal 2025 compared to $15.7 million in fiscal
2024 due to the same reasons described above.
Amortization included in Cost of Sales
The increase in amortization expense relating to certain property, plant and equipment and certain intangible assets employed in
the Company’s service operations of $2.0 million was due to an increase in patent amortization expense included in cost of
sales.
Investment Income, Net
Investment income, net, which includes the interest expense from the Debentures, decreased by $11.1 million to investment
income, net of $7.7 million in fiscal 2025 compared to investment income, net of $18.8 million in fiscal 2024. The decrease in
investment income, net was primarily due to a lower yield on cash and investments and the impact of observable price changes
on non-marketable equity investments without readily determinable fair value.
Income Taxes
For fiscal 2025, the Company’s net effective income tax expense rate was approximately 27% (fiscal 2024 - net effective
income tax expense rate of approximately 23%). The Company’s net effective income tax rate reflects the change in
unrecognized income tax benefits, if any, and the fact that the Company has a significant valuation allowance against its
deferred tax assets, and in particular, the change in loss carry forwards, research and development credits, amongst other items,
was offset by a corresponding adjustment of the valuation allowance. The Company’s net effective income tax rate also reflects
the geographic mix of earnings in jurisdictions with different income tax rates.
51
Net Loss From Continuing Operations
The Company’s loss from continuing operations for fiscal 2025 was $8.5 million, or $0.01 basic and diluted loss per share from
continuing operations on a U.S. GAAP basis (fiscal 2024 - income from continuing operations of $5.6 million, or $0.01 basic
and diluted earnings per share from continuing operations). The decrease in income of $14.1 million from continuing operations
was primarily due to a decrease in revenue as described above in “Revenue by Segment”, partially offset by a decrease in
operating expenses, as described above in “Operating Expenses” and an increase in gross margin percentage, as described
above in “Consolidated Gross Margin Percentage”.
Adjusted income from continuing operations was $57.6 million in fiscal 2025 or $0.10 adjusted basic earnings per share from
continuing operations (fiscal 2024 - adjusted income from continuing operations of $116.0 million, or $0.20 adjusted basic
earnings per share from continuing operations). The decrease in adjusted income from continuing operations of $58.4 million
was primarily due to the same reasons described above on a U.S. GAAP basis.
Net Loss
The Company’s net loss for fiscal 2025 was $79.0 million, or $0.13 basic and diluted loss per share on a U.S. GAAP basis
(fiscal 2024 - net loss of $130.2 million, or $0.22 basic and diluted loss per share). The decrease in net loss of $51.2 million was
primarily due to a decrease in loss from discontinued operations, a decrease in operating expenses, as described above in
“Operating Expenses” and an increase in gross margin percentage, as described above in “Consolidated Gross Margin
Percentage”, partially offset by a decrease in revenue as described above in “Revenue by Segment”.
Adjusted net income was $12.5 million in fiscal 2025 or $0.02 adjusted basic earnings per share (fiscal 2024 - adjusted net
income of $30.6 million, or $0.05 adjusted basic earnings per share). The decrease in adjusted net income of $18.1 million was
primarily due to the same reasons described above on a U.S. GAAP basis.
The Company previously stated that it expected total Company adjusted EBITDA from continuing operations to be in the range
of $60 million to $70 million in fiscal 2025 and total Company adjusted EBITDA from continuing operations to be in the range
of $10 million to $20 million in the fourth quarter of fiscal 2025. Total Company adjusted EBITDA from continuing operations
was $84.2 million fiscal 2025 due to each of the Company’s operating segments exceeding the top end of the Company’s
expectation ranges and lower than expected salaries and benefits expense. Total Company adjusted EBITDA from continuing
operations was $21.1 million in the fourth quarter of fiscal 2025.
The Company previously stated that it expected non-GAAP EPS to be in the range of ($0.01) and $0.01 in the fourth quarter of
fiscal 2025 and non-GAAP EPS to be in the range of ($0.02) to breakeven for fiscal 2025. Non-GAAP EPS was $0.03 in the
fourth quarter of fiscal 2025 and $0.02 for fiscal 2025.
The Company expects adjusted EBITDA to be in the range of break-even to $7 million in the first quarter of fiscal 2026 and to
be in the range of $69 million to $84 million in fiscal 2026 as a whole.
The Company expects non-GAAP EPS to be in the range of ($0.01) to breakeven in the first quarter of fiscal 2026 and to be in
the range of $0.08 to $0.10 in fiscal 2026 as a whole.
The Company expects operating cash usage to be in the range of $20 million to $30 million in the first quarter of fiscal 2026
and to deliver positive operating cash flow of approximately $35 million for fiscal 2026.
The Company does not provide a reconciliation of expected adjusted EBITDA and expected non-GAAP basic EPS for the first
quarter and full fiscal year 2026 to the most directly comparable expected GAAP measures because it is unable to predict with
reasonable certainty, among other things, restructuring charges and impairment charges and, accordingly, a reconciliation is not
available without unreasonable effort. These items are uncertain, depend on various factors, and could have a material impact
on GAAP reported results for the guidance period.
The weighted average number of shares outstanding was 591 million common shares for basic and diluted loss per share for the
fiscal year ended February 28, 2025. The weighted average number of shares outstanding was 585 million common shares for
basic loss per share and 592 million common shares for diluted loss per share for the fiscal year ended February 29, 2024.
Common Shares Outstanding
On March 28, 2025, there were 596 million voting common shares, options to purchase 0.1 million voting common shares, 11
million restricted share units and 1.6 million deferred share units outstanding. In addition, 51.5 million common shares are
issuable upon conversion in full of the Notes (as defined below), as described in Note 7 to the Consolidated Financial
Statements.
The Company has not paid any cash dividends during the last three fiscal years.
52
Results of Operations - Three months ended February 28, 2025 compared to the three months ended February 29, 2024
Revenue
Revenue by Segment
Comparative breakdowns of revenue by product and service on a U.S. GAAP basis are set forth below.
For the Three Months Ended
(in millions)
February 28, 2025
February 29, 2024
Change
February 28, 2023
Change
Revenue by Segment
Secure Communications
$
67.3
$
71.6
$
(4.3) $
60.8
$
10.8
QNX
65.8
65.9
(0.1)
52.2
13.7
Licensing
8.6
15.4
(6.8)
10.7
4.7
$
141.7
$
152.9
$
(11.2) $
123.7
$
29.2
% Revenue by Segment
Secure Communications
47.5 %
46.8 %
49.2 %
QNX
46.4 %
43.1 %
42.2 %
Licensing
6.1 %
10.1 %
8.6 %
100.0 %
100.0 %
100.0 %
Secure Communications
The decrease in Secure Communications revenue of $4.3 million was primarily due to a decrease of $11.9 million relating to
BlackBerry UEM product revenue, partially offset by an increase of $2.9 million in professional services revenue, an increase
of $2.1 million relating to product revenue in Secusmart and an increase of $0.9 million in BlackBerry AtHoc.
The Company previously stated that it expected Secure Communications revenue in the fourth quarter of fiscal 2025 to be in the
range of $62 million to $66 million. Secure Communications revenue in the fourth quarter of fiscal 2025 was $67.3 million.
QNX
QNX revenue in the fourth quarter of fiscal 2025 was consistent with the revenue in the fourth quarter of fiscal 2024. The
increase of $1.9 million in BlackBerry QNX royalty revenue and the increase of $2.1 million in BlackBerry Radar was offset by
a decrease of $2.7 million in BlackBerry QNX development seat revenue and $1.3 million in professional services revenue.
The Company previously stated that it expected QNX revenue in the fourth quarter of fiscal 2025 to be in the range of $60
million to $65 million. QNX revenue in the fourth quarter of fiscal 2025 was $65.8 million.
Licensing
The decrease in Licensing revenue of $6.8 million was primarily due to a decrease in revenue from the Company’s intellectual
property licensing arrangements.
The Company previously stated that it expected revenue from intellectual property licensing to be approximately $4 million in
each of the four quarters of fiscal 2025. Revenue from intellectual property licensing was approximately $8.6 million in fourth
quarter of fiscal 2025 due to the timing of new licensing deals.
Total BlackBerry Revenue
The Company previously stated that it expected the total BlackBerry revenue to be in the range of $126 million to $135 million
in the fourth quarter of fiscal 2025. Total BlackBerry revenue was $141.7 million in the fourth quarter of fiscal 2025 primarily
due to better than expected Licensing revenue.
53
U.S. GAAP Revenue by Geography
Comparative breakdowns of the geographic regions on a U.S. GAAP basis are set forth in the following table:
For the Three Months Ended
(in millions)
February 28, 2025
February 29, 2024
Change
February 28, 2023
Change
Revenue by Geography
North America
$
70.2
$
78.4
$
(8.2) $
66.2
$
12.2
Europe, Middle East and Africa
47.8
42.8
5.0
41.3
1.5
Other regions
23.7
31.7
(8.0)
16.1
15.6
$
141.7
$
152.9
$
(11.2) $
123.6
$
29.3
% Revenue by Geography
North America
49.5 %
51.3 %
53.5 %
Europe, Middle East and Africa
33.7 %
28.0 %
33.4 %
Other regions
16.8 %
20.7 %
13.1 %
100.0 %
100.0 %
100.0 %
North America Revenue
The decrease in North America revenue of $8.2 million was primarily due to a decrease of $6.8 million in the Company’s
intellectual property licensing arrangements, a decrease of $2.9 million in BlackBerry UEM product revenue and a decrease of
$2.2 million in BlackBerry QNX development seats revenue, partially offset by an increase of $2.0 million in BlackBerry Radar
and an increase of $1.4 million in BlackBerry AtHoc.
Europe, Middle East and Africa Revenue
The increase in Europe, Middle East and Africa revenue of $5.0 million was primarily due to an increase of $2.5 million
relating to product revenue in Secusmart and an increase of $2.2 million in BlackBerry QNX royalty revenue.
Other Regions Revenue
The decrease in Other regions revenue of $8.0 million was primarily due to a decrease of $9.3 million in BlackBerry UEM
product revenue and a decrease of $0.9 million in BlackBerry QNX development seats revenue, partially offset by an increase
of $2.0 million in professional services.
Gross Margin
Consolidated Gross Margin
Consolidated gross margin decreased by $18.1 million to approximately $104.1 million in the fourth quarter of fiscal 2025
(fourth quarter of fiscal 2024 - $122.2 million). The decrease was primarily due to a decreases in revenue from Licensing due to
the reasons discussed above in “Revenue by Segment” and lower gross margin from Secusmart due to change in product mix,
as the cost of sales for most software and services products does not significantly fluctuate based on business volume.
Consolidated Gross Margin Percentage
Consolidated gross margin percentage decreased by 6.4%, to approximately 73.5% of consolidated revenue in the fourth quarter
of fiscal 2025 (fourth quarter of fiscal 2024 - 79.9%). The decrease was primarily due to a lower gross margin contribution
54
from Secusmart due to change in product mix and a decrease in contribution in gross margin from Licensing due to the reasons
discussed above in “Revenue by Segment”.
Gross Margin and Adjusted EBITDA by Segment
See “Business Overview - Segment Reporting” and “Fiscal 2025 Summary Results of Operations” for information about the
Company’s operating segments and the basis of operating segment results.
For the Three Months Ended
(in millions)
Secure Communications
QNX
Licensing
Segment Totals
Feb 28
Feb 29
Change
Feb 28
Feb 29
Change
Feb 28
Feb 29
Change
Feb 28
Feb 29
Change
2025
2024
2025
2024
2025
2024
2025
2024
Segment revenue
$ 67.3 $ 71.6 $ (4.3) $ 65.8 $ 65.9 $ (0.1) $ 8.6 $ 15.4 $ (6.8) $ 141.7 $ 152.9 $ (11.2)
Segment cost of
sales
24.5 18.9
5.6 11.1
9.7
1.4
1.6
1.4
0.2 37.2 30.0
7.2
Segment gross
margin
$ 42.8 $ 52.7 $ (9.9) $ 54.7 $ 56.2 $ (1.5) $ 7.0 $ 14.0 $ (7.0) $ 104.5 $ 122.9 $ (18.4)
Segment research
and development
9.1 11.6 (2.5) 13.1 16.0 (2.9)
—
—
— 22.2 27.6
(5.4)
Segment sales and
marketing
12.0 13.4 (1.4) 14.5 12.3
2.2
—
—
— 26.5 25.7
0.8
Segment general and
administrative
9.7 11.6 (1.9)
8.5 10.8 (2.3)
7.8
3.6
4.2 26.0 26.0
—
Less amortization
included in the
above
0.6
1.0 (0.4)
0.6
0.6
—
2.2
2.3 (0.1)
3.4
3.9
(0.5)
Segment adjusted
EBITDA
$ 12.6 $ 17.1 $ (4.5) $ 19.2 $ 17.7 $ 1.5 $ 1.4 $ 12.7 $ (11.3) $ 33.2 $ 47.5 $ (14.3)
Secure Communications
The decrease in Secure Communications gross margin of $9.9 million was primarily due to the reasons discussed above in
“Revenue by Segment” and a lower gross margin contribution from Secusmart due to change in product mix.
The decrease in Secure Communications gross margin percentage of 10% was due to the same reasons discussed above.
The decrease in Secure Communications adjusted EBITDA of $4.5 million was primarily due to the reasons discussed above in
“Revenue by Segment”, partially offset by the decreases in salaries and benefits expense.
The Company previously stated that it expected Secure Communications adjusted EBITDA to be in the range of $4 million to
$6 million in the fourth quarter of fiscal 2025. Secure Communications adjusted EBITDA was $12.6 million in the fourth
quarter of fiscal 2025 due to decreases in salaries and benefits expense, lower cost of sales due to product mix and revenue
exceeding the top end of the Company’s expectation ranges.
QNX
The decrease in QNX gross margin of $1.5 million was primarily due to an increase in cost of sales related to BlackBerry Radar
hardware devices.
The decrease in QNX gross margin percentage of 2% was due to the same reason discussed above.
The increase in QNX adjusted EBITDA of $1.5 million was primarily due to the reasons discussed above in “Revenue by
Segment” and a benefit from SIF claims.
The Company previously stated that it expected QNX adjusted EBITDA to be in the range of $8 million to $10 million in the
fourth quarter of fiscal 2025. QNX adjusted EBITDA was $19.2 million in the fourth quarter of fiscal 2025 due to SIF claims,
lower than expected salaries and benefits expense and revenue exceeding the top end of the Company’s expectation ranges.
55
Licensing
The decrease in Licensing gross margin of $7.0 million was primarily due to the reasons discussed above in “Revenue by
Segment”.
The decrease in Licensing gross margin percentage of 10% was due to the same reasons discussed above.
The decrease in Licensing adjusted EBITDA of $11.3 million was primarily due to the reasons discussed above in “Revenue by
Segment” and an increase in credit loss provision that was subsequently written off.
The Company previously stated that it expected Licensing adjusted EBITDA to be approximately $3 million in the fourth
quarter of fiscal 2025. Licensing adjusted EBITDA was $1.4 million in the fourth quarter of fiscal 2025 due to the reasons
noted above.
Operating Expenses
The table below presents a comparison of research and development, sales and marketing, general and administrative, and
amortization expenses for the quarter ended February 28, 2025, compared to the quarter ended November 30, 2024 and the
quarter ended February 29, 2024. The Company believes it is meaningful to provide a sequential comparison between the fourth
quarter of fiscal 2025 and the third quarter of fiscal 2025.
For the Three Months Ended
(in millions)
February 28, 2025
November 30, 2024
February 29, 2024
February 28, 2023
Revenue
$
141.7
$
143.6
$
152.9
$
123.6
Operating expenses
Research and development
23.2
27.9
28.9
33.1
Sales and marketing
27.1
23.4
26.0
28.7
General and administrative
50.0
36.4
54.0
35.8
Amortization
4.1
4.4
4.7
6.7
Impairment of long-lived assets
4.9
0.6
4.7
—
Impairment of goodwill
—
—
15.9
112.1
Debentures fair value adjustment
—
—
0.5
(25.4)
Litigation settlements
2.8
—
—
—
Total
$
112.1
$
92.7
$
134.7
$
191.0
Operating Expense as % of Revenue
Research and development
16.4%
19.4%
18.9%
26.8%
General and administrative
19.1%
16.3%
17.0%
23.2%
Sales and marketing
35.3%
25.3%
35.3%
29.0%
Amortization
2.9%
3.1%
3.1%
5.4%
Impairment of long-lived assets
3.5%
0.4%
3.1%
—%
Impairment of goodwill
—%
—%
10.4%
90.7%
Debentures fair value adjustment
—%
—%
0.3%
(20.6%)
Litigation settlements
2.0%
—%
—%
—%
Total
79.1%
64.6%
88.1%
154.5%
See “Non-GAAP Financial Measures” for a reconciliation of selected U.S. GAAP-based measures to adjusted measures for the
three months ended February 28, 2025, November 30, 2024, February 29, 2024 and February 28, 2023.
U.S. GAAP Operating Expenses
Operating expenses increased by $19.4 million, or 20.9% in the fourth quarter of fiscal 2025, compared to $92.7 million in the
third quarter of fiscal 2025 primarily due to an increase of $5.3 million in restructuring cost, an increase of $4.9 million credit
loss provision that was subsequently written off, an increase of $4.3 million in impairment of long-lived assets, an increase of
$2.9 million in the Company’s deferred share unit cost and an increase of $2.8 million in legal expense, partially offset by a
decrease of $4.7 million in variable incentive plan costs.
56
Operating expenses decreased by $22.6 million, or 16.8% in the fourth quarter of fiscal 2025, compared to $134.7 million in the
fourth quarter of fiscal 2024. The decrease was primarily attributable to a decrease of $15.9 million in goodwill impairment, a
decrease of $7.0 million in restructuring costs, decrease of $5.3 million salaries and benefits, the increase in benefits of $3.0
million in SIF claims filed, a decrease of $1.6 million in consulting cost, and a decrease of $1.6 million in facilities costs,
partially offset by an increase of $4.7 million in credit loss provision that was subsequently written off and an increase of $4.7
million in the Company’s deferred share unit cost.
Adjusted Operating Expenses
Adjusted operating expenses increased by $7.7 million, or 9.7%, to $87.4 million in the fourth quarter of fiscal 2025 compared
to $79.7 million in the third quarter of fiscal 2025. The increase was primarily due to an increase of $4.9 million in credit loss
provision that was subsequently written off, an increase of $2.9 million in the Company’s deferred share unit cost and an
increase of $0.9 million in marketing and advertising cost, partly offset by a decrease of $1 million in salaries and benefits.
Adjusted operating expenses decreased by $1.9 million, or 2.1%, to $87.4 million in the fourth quarter of fiscal 2025, compared
to $89.3 million in the fourth quarter of fiscal 2024. The decrease was primarily attributable to a decrease of $5.3 million in
salaries and benefits costs, the increase in benefits of $3.0 million in SIF claims filed, a decrease of $1.6 million in consulting
cost and a decrease of $1.6 million in facilities costs, partially offset by an increase of $4.7 million in credit loss provision that
was subsequently written off and an increase of $4.7 million in the Company’s deferred share unit cost.
Research and Development Expenses
Research and development expenses consist primarily of salaries and benefits costs for technical personnel, new product
development costs, travel expenses, office and building costs, infrastructure costs and other employee costs.
Research and development expenses decreased by $5.7 million, or 19.7%, in the fourth quarter of fiscal 2025 compared to the
fourth quarter of fiscal 2024, primarily due to the increase in benefits of $3.0 million in SIF claims filed, a decrease of $1.4
million in consulting cost and a decrease of $1.2 million in salaries and benefit cost.
Adjusted research and development expenses decreased by $5.3 million, or 19.4%, to $22.0 million in the fourth quarter of
fiscal 2025 compared to $27.3 million in the fourth quarter of fiscal 2024, primarily due to the same reasons described above on
a U.S. GAAP basis.
Sales and Marketing Expenses
Sales and marketing expenses consist primarily of marketing, advertising and promotion, salaries and benefits, information
technology costs and travel expenses.
Sales and marketing expenses increased by $1.1 million, or 4.2% in fiscal 2025, in the fourth quarter of fiscal 2025 compared to
the fourth quarter of fiscal 2024, primarily due to an increase of $0.7 million in variable incentive plan costs and an increase of
$0.4 million in stock compensation expense.
Adjusted sales and marketing expenses increased by $0.7 million, or 2.7%, to $26.4 million in the fourth quarter of fiscal 2025
compared to $25.7 million in the fourth quarter of fiscal 2024, primarily due to an increase of $0.7 million in variable incentive
plan costs.
General and Administrative Expenses
General and administration expenses consist primarily of salaries and benefits, external advisory fees, information technology
costs, office and related staffing infrastructure costs.
General and administrative expenses decreased by $4.0 million, or 7.4%, in the fourth quarter of fiscal 2025 compared to the
fourth quarter of fiscal 2024. The decrease was primarily due to a decrease of $7.0 million in restructuring costs, a decrease of
$4.1 million in salaries and benefits costs and a decrease of $1.6 million in facilities costs, partially offset by an increase of $4.7
million in credit loss provision that was subsequently written off and an increase of $4.7 million in the Company’s deferred
share unit cost.
Adjusted general and administrative expenses increased by $3.2 million, or 9.6%, to $36.6 million in the fourth quarter of fiscal
2025 compared to $33.4 million in the fourth quarter of fiscal 2024. The increase was primarily due to an increase of $4.7
million in credit loss provision that was subsequently written off and an increase of $4.7 million in the Company’s deferred
share unit cost, partially offset by a decrease of $4.1 million in salaries and benefits costs and a decrease of $1.6 million in
facilities costs.
57
Amortization Expense
The table below presents a comparison of amortization expense relating to property, plant and equipment and intangible assets
recorded as amortization or cost of sales for the quarter ended February 28, 2025 compared to the quarter ended February 29,
2024 and for the quarter ended February 29, 2024 compared to the quarter ended February 28, 2023. Intangible assets are
comprised of patents, licenses and acquired technology.
For the Three Months Ended
(in millions)
Included in Operating Expense
February 28, 2025
February 29, 2024
Change
February 28, 2023
Change
Property, plant and equipment
$
1.4 $
2.0 $
(0.6) $
2.2 $
(0.2)
Intangible assets
2.7
2.8
(0.1)
4.5
(1.7)
Total
$
4.1 $
4.8 $
(0.7) $
6.7 $
(1.9)
Included in Cost of Sales
February 28, 2025
February 29, 2024
Change
February 28, 2023
Change
Property, plant and equipment
$
0.1 $
0.2 $
(0.1) $
0.7 $
(0.5)
Intangible assets
1.5
1.4
0.1
1.6
(0.2)
Total
$
1.6 $
1.6 $
— $
2.3 $
(0.7)
Amortization included in Operating Expense
The decrease in amortization expense included in operating expense of $0.7 million was primarily due to the lower cost base of
acquired technology assets.
Adjusted amortization expense decreased by $0.5 million to $2.4 million in the fourth quarter of fiscal 2025 compared to $2.9
million in the fourth quarter of fiscal 2024 due to the same reasons discussed above on a U.S. GAAP basis.
Amortization included in Cost of Sales
Amortization expense relating to certain property, plant and equipment and intangible assets employed in the Company’s
service operations was $1.6 million in the fourth quarter of fiscal 2025 and was consistent with the fourth quarter of fiscal 2024.
Investment Income, Net
Investment income, net, which includes the interest expense from the Debentures, decreased by $2.4 million to investment
income, net of $1.6 million in the fourth quarter of fiscal 2025 compared to investment income, net of $4.0 million in the fourth
quarter of fiscal 2024. The decrease in investment income, net is primarily due to a lower yield on cash and investments.
Income Taxes
For the fourth quarter of fiscal 2025, the Company’s net effective income tax expense rate was approximately 23% (fourth
quarter of fiscal 2024 - net effective income tax expense rate of approximately 7%). The Company’s net effective income tax
rate reflects the change in unrecognized income tax benefits, if any, and the fact that the Company has a significant valuation
allowance against its deferred tax assets, and in particular, the change in loss carry forwards, research and development credits,
amongst other items, was offset by a corresponding adjustment of the valuation allowance. The Company’s net effective
income tax rate also reflects the geographic mix of earnings in jurisdictions with different income tax rates.
Net Loss From Continuing Operations
The Company’s loss from continuing operations for the fourth quarter of fiscal 2025 was $7.8 million, or $0.01 basic and
diluted loss from continuing operations per share on a U.S. GAAP basis (fourth quarter of fiscal 2024 - loss from continuing
operations of $12.4 million, or $0.02 basic and diluted loss from continuing operations per share). The increase in loss from
continuing operations of $4.6 million was primarily due to a decrease in revenue, as described above in “Revenue by Segment”
and a decrease in gross margin percentage, as described above in “Consolidated Gross Margin Percentage”, partially offset by a
decrease in operating expenses, as described above in “Operating Expenses”.
Adjusted income from continuing operations was $17.3 million in the fourth quarter of fiscal 2025 or $0.03 adjusted basic
earnings from continuing operations per share (fourth quarter of fiscal 2024 - adjusted income from continuing operations of
$33.7 million or $0.06 adjusted basic earnings from continuing operations per share). The decrease in adjusted income from
continuing operations of $16.4 million was primarily due to the same reasons describe above on a U.S. GAAP basis.
58
Net Loss
The Company’s net loss for the fourth quarter of fiscal 2025 was $7.4 million, or $0.01 basic and diluted net loss per share on a
U.S. GAAP basis (fourth quarter of fiscal 2024 - net loss of $56.2 million, or $0.10 basic and diluted net loss per share). The
decrease in net loss of $48.8 million was primarily due to a decrease in loss from discontinued operations and a decrease in
operating expenses, as described above in “Operating Expenses”, partially offset by a decrease in revenue, as described above
in “Revenue by Segment” and a decrease in gross margin percentage, as described above in “Consolidated Gross Margin
Percentage”.
Adjusted net income was $17.7 million in the fourth quarter of fiscal 2025 or $0.03 adjusted basic earnings per share (fourth
quarter of fiscal 2024 - adjusted net income of $16.4 million or $0.03 adjusted basic earnings per share). The decrease in
adjusted net income of $1.3 million was primarily due to the same reasons describe above on a U.S. GAAP basis.
The weighted average number of shares outstanding was 594 million common shares for basic and diluted loss per share for the
fourth quarter of fiscal 2025. The weighted average number of shares outstanding was 588 million common shares for basic and
diluted loss per share for the fourth quarter of fiscal 2024.
Financial Condition
Liquidity and Capital Resources
Cash, cash equivalents, and investments increased by $112.1 million to $410.3 million as at February 28, 2025 from $298.2
million as at February 29, 2024, primarily due to the cash proceeds received from the sale of the Company’s Cylance business
to Arctic Wolf and cash generated from operations.
A comparative summary of cash, cash equivalents, and investments is set out below:
As at
(in millions)
February 28, 2025
February 29, 2024
Change
February 28, 2023
Change
Cash and cash equivalents
$
266.7 $
175.1 $
91.6 $
295.7 $
(120.6)
Restricted cash and cash equivalents
13.6
25.4
(11.8)
26.6
(1.2)
Short-term investments
71.1
62.0
9.1
131.2
(69.2)
Long-term investments
58.9
35.7
23.2
34.0
1.7
Cash, cash equivalents, and investments
$
410.3 $
298.2 $
112.1 $
487.5 $
(189.3)
The table below summarizes the current assets, current liabilities, and working capital of the Company:
As at
(in millions)
February 28, 2025
February 29, 2024
Change
February 28, 2023
Change
Current assets
$
591.5 $
507.5 $
84.0 $
743.5 $
(236.0)
Current liabilities
344.3
356.9
(12.6)
729.0
(372.1)
Working capital
$
247.2 $
150.6 $
96.6 $
14.5 $
136.1
Current Assets
The increase in current assets of $84.0 million at the end of fiscal 2025 from the end of fiscal 2024 was primarily due to an
increase in cash and cash equivalents of $91.6 million, an increase in other receivable of $27.0 million and an increase of $9.1
million in short-term investments, partially offset by a decrease of $25.0 million in account receivable, net of credit loss, a
decrease of $11.6 million in assets held for sale, current, a decrease of $5.1 million in other current assets and a decrease of $2.0
million in income taxes receivable.
At February 28, 2025, other receivables was $48.4 million, an increase of $27.0 million from February 29, 2024. The increase
was primarily due to an increase of $38.6 million related to the present value of the Arctic Wolf delayed cash payment
consideration, partially offset by a decrease of $13.2 million related to a certain receivable reclassified from short-term to long-
term receivables.
At February 28, 2025, accounts receivable, net of allowance was $173.7 million, a decrease of $25.0 million from February 29,
2024. The decrease was primarily due to lower revenue recognized over the three months ended February 28, 2025 compared to
the three months ended February 29, 2024, partially offset by an increase in days sales outstanding to 102.1 days at the end of
the fourth quarter of fiscal 2025 from 100.4 days at the end of the fourth quarter of fiscal 2024.
59
At February 28, 2025, other current assets was $30.0 million, a decrease of $5.1 million from February 29, 2024. The decrease
was primarily due to a decrease of $2.2 million in prepaid software maintenance.
At February 28, 2025, income taxes receivable was $1.6 million, a decrease of $2.0 million from February 29, 2024. The
decrease was primarily due to tax refunds received.
Current Liabilities
The decrease in current liabilities of $12.6 million at the end of fiscal 2025 from the end of fiscal 2024 was primarily due to a
decrease in the deferred revenue associated with the sale of Cylance of $49.3 million and a decrease of $2.9 million in income
taxes payable, partially offset by an increase of $14.3 million in accounts payable, an increase of $12.8 million in deferred
revenue, current, and an increase in accrued liabilities of $12.5 million.
At February 28, 2025, income taxes payable was $25.5 million, reflecting a decrease of $2.9 million compared to February 29,
2024, which was primarily due to a change in the quarterly tax provision and installments made during the period.
At February 28, 2025, accounts payable was $31.1 million, reflecting an increase of $14.3 million from February 29, 2024,
which was primarily due to timing of payments of accounts payable.
At February 28, 2025, deferred revenue, current was $161.5 million, which reflects an increase of $12.8 million compared to
February 29, 2024 that was attributable to a $7.6 million increase in deferred revenue, current related to BlackBerry UEM, and
an increase of $6.9 million in deferred revenue, current related to BlackBerry QNX.
At February 28, 2025, accrued liabilities was $126.2 million, reflecting an increase of $12.5 million compared to February 29,
2024, which was primarily attributable to an increase of $16.3 million in variable incentive plan accrual, partially offset by a
decrease of $4.6 million in operating lease liability, current.
Cash flows for the fiscal year ended February 28, 2025 compared to the fiscal year ended February 29, 2024 were as follows:
For the Fiscal Years Ended
(in millions)
February 28, 2025
February 29, 2024
Change
February 28, 2023
Change
Net cash flows provided by (used in):
Operating activities
$
16.5 $
(3.5) $
20.0 $
(262.2) $
258.7
Investing activities
60.7
46.6
14.1
175.2
(128.6)
Financing activities
3.1
(165.1)
168.2
6.0
(171.1)
Effect of foreign exchange loss on cash
and cash equivalents
(0.5)
0.2
(0.7)
(2.9)
3.1
Net increase (decrease) in cash and cash
equivalents
$
79.8 $
(121.8) $
201.6 $
(83.9) $
(37.9)
Operating Activities
The increase in net cash flows provided by operating activities of $20 million primarily reflects the net changes in working
capital.
Investing Activities
During the fiscal year ended February 28, 2025, cash flows provided by investing activities were $60.7 million and included
cash proceeds of $79.8 million from disposal of discontinued operations, partially offset by cash flows used in transactions
involving the acquisitions of short-term and long-term investments, net of the proceeds on sale or maturity in the amount of
$9.0 million, intangible asset additions of $7.0 million, and acquisitions of property, plant and equipment of $3.1 million.
During fiscal 2024, cash flows provided by investing activities were $46.6 million and included cash flows used in transactions
involving the acquisitions of short-term and long-term investments, net of the proceeds on sale or maturity in the amount of
$67.5 million, partially offset by intangible asset additions of $13.8 million and acquisitions of property, plant and equipment of
$7.1 million.
Financing Activities
The increase in cash flows provided by financing activities was $168.2 million for fiscal 2025 due to the net effect of
redemption of the 2020 Debentures and issuance of Extension Debentures partially offset by the issuance of the Notes, each as
defined below, which did not recur.
60
Debt Financing and Other Funding Sources
See Note 7 to the Consolidated Financial Statements for a description of the Company’s $200.0 million aggregate principal
amount of 3.00% senior convertible unsecured notes issued in January 2024 (the “Notes”), the $365.0 million aggregate
principal amount of convertible debentures issued in September 2020, which matured in November 2023 (the “2020
Debentures”), and the $150.0 million aggregate principal amount of convertible debentures issued in November 2023, which
matured in February 2024 (the “Extension Debentures” and, collectively with the Notes and the 2020 Debentures, the
“Debentures” and the “2020 Debentures” and, collectively with the Extension Debentures, the “Prior Debentures”).
The Company has $13.5 million in collateralized outstanding letters of credit in support of certain leasing arrangements entered
into in the ordinary course of business. See Note 4 to the Consolidated Financial Statements for further information concerning
the Company’s restricted cash.
Cash, cash equivalents, and investments were approximately $410.3 million as at February 28, 2025. The Company’s
management remains focused on maintaining appropriate cash balances, efficiently managing working capital balances and
managing the liquidity needs of the business. Based on its current financial projections, the Company believes its financial
resources, together with expected future operating cash generation and operating expense reduction activities, should be
sufficient to meet funding requirements for current financial commitments and future operating expenditures not yet committed,
and should provide the necessary financial capacity for the foreseeable future.
Contractual and Other Obligations
The following table sets out aggregate information about the Company’s contractual and other obligations and the periods in
which payments are due as at February 28, 2025:
(in millions)
Total
Short-term
(next 12 months)
Long-term
(>12 months)
Operating lease obligations
$
48.6 $
18.2 $
30.4
Purchase obligations and commitments
40.2
40.2
—
Debt interest and principal payments
224.0
6.0
218.0
Total
$
312.8 $
64.4 $
248.4
Total contractual and other obligations as at February 28, 2025 decreased by approximately $31.4 million as compared to the
February 29, 2024 balance of approximately $344.2 million, which was attributable to a decrease in operating lease obligations
and a decrease in purchase obligations and commitments.
The Company does not have any material off-balance sheet arrangements.
Accounting Policies and Critical Accounting Estimates
Accounting Policies
See Note 1 to the Consolidated Financial Statements for a description of the Company’s significant accounting policies.
Critical Accounting Estimates
The preparation of the consolidated financial statements requires management to make estimates and assumptions with respect
to the reported amounts of assets, liabilities, revenue and expenses and the disclosure of contingent assets and liabilities.
The Company’s critical accounting estimates are those estimates that involve a significant level of uncertainty at the time the
estimate was made, and changes in them have had or are reasonably likely to have a material effect on the Company’s financial
condition or results of operations. Accordingly, actual results could differ materially from the Company’s estimates. The
Company’s estimates are based on past experience and other assumptions that it believes is reasonable under the circumstances,
and the Company evaluates these estimates on an ongoing basis. The Company’s critical accounting estimates have been
reviewed and discussed with the Company’s Audit & Risk Management Committee and are set out below.
Valuation of Long-Lived Assets
The Company’s determination of its asset groups, its primary asset and its remaining useful life, and estimated cash flows are
significant factors in assessing the recoverability of the Company’s assets for the purposes of LLA impairment testing. The
current macroeconomic environment and competitive dynamics continue to be challenging to the Company’s business and the
Company cannot be certain of the duration of these conditions and their potential impact on the Company’s future financial
results and cash flows. The Company’s share price can be affected by, among other things, changes in industry or market
conditions, including the effect of competition, changes in the Company’s results of operations, changes in the Company’s
forecasts or market expectations relating to future results, and the Company’s strategic initiatives and the market’s assessment
61
of any such factors. See Part 1, Item 1A “Risk Factors - The market price of the Company’s common shares is volatile”. A
decline in the Company’s performance, future changes to the Company’s assumptions and estimates used in the LLA
impairment test, particularly the expected future cash flows, remaining useful life of the primary asset and terminal value of the
asset group, may result in further impairment charges in future periods of some or all of the assets on the Company’s balance
sheet. Although it does not affect the Company’s cash flow, an impairment charge to earnings has the effect of decreasing the
Company’s earnings or increasing the Company’s losses, as the case may be.
Valuation of Goodwill Reporting Units
In the annual impairment test, the analysis requires significant judgment, including estimation of future cash flows, which is
dependent on internal forecasts, estimation of the long-term rates of revenue growth for the Company’s reporting units,
estimation of the useful life over which cash flows will occur, terminal growth rates, profitability measures, and determination
of the discount rates for the reporting units. The carrying value of the Company’s assets was assigned to reporting units using
reasonable methodologies based on the asset type. When the carrying value of a reporting unit exceeds its fair value, goodwill
of the reporting unit is considered to be impaired and written down to its fair value. Different judgments could yield different
results.
During the third quarter of fiscal 2025 and in connection with the plans to sell the Cylance business, the Company reorganized
its reporting structure resulting in its BlackBerry Spark reporting unit being disaggregated into two separate reporting units:
UEM and Cylance. In accordance with ASC 350 Intangibles - Goodwill and Other, the Company conducted a valuation of the
individual reporting units and allocated the goodwill associated with the previous BlackBerry Spark reporting unit to the UEM
and Cylance reporting units using a relative fair value approach. The valuations of the reporting units were based on a
combination of the income approach using a discounted future cash flow model, a market-based approach, and estimated exit
value approaches for Cylance using the same critical accounting estimates as disclosed in Note 1 to the Consolidated Financial
Statements. The analysis requires significant judgment, including estimation of future cash flows, which is dependent on
internal forecasts, estimation of the long-term rates of revenue growth for the Company’s reporting units, estimation of the
useful life over which cash flows will occur, terminal growth rates, profitability measures, and determination of the discount
rates for the reporting units. Following the assignment of assets, liabilities, and goodwill to the UEM and Cylance reporting
units, the Company compared the carrying values of the reporting units against their fair values and determined no impairment
was present in either reporting unit. Different judgments could yield different results.
Valuation Allowance Against Deferred Tax Assets
The Company regularly assesses the need for a valuation allowance against its deferred tax assets. A valuation allowance is
required for deferred tax assets if it is more likely than not that all or some portion of the asset will not be realized. All available
evidence, both positive and negative, that may affect the realization of deferred tax assets must be identified and considered in
determining the appropriate amount of the valuation allowance. There have been no changes in the Company’s judgement in
determining the valuation allowance for the fiscal year ended February 28, 2025. Additionally, for interim periods, the
estimated annual effective tax rate should include the valuation allowance for current year changes in temporary differences and
losses or income arising during the year. For interim periods, the Company needs to consider the valuation allowance that it
expects to recognize at the end of the fiscal year as part of the estimated annual effective tax rate. During interim quarters, the
Company uses estimates including pre-tax results and ending position of temporary differences as at the end of the fiscal year to
estimate the valuation allowance that it expects to recognize at the end of the fiscal year. This accounting treatment has no
effect on the Company’s actual ability to utilize deferred tax assets to reduce future cash tax payments. Different judgments
could yield different results. There have been no changes to the method with which the Company estimates the valuation
allowance for the interim quarters during the fiscal year ended February 28, 2025.
Revenue Recognition
Variable consideration is included in the transaction price if, in the Company’s judgment, it is probable that a significant future
reversal of cumulative revenue recognized under the contract will not occur. Any estimates, including any constraints on
variable consideration, are evaluated at each reporting period. To the extent the transaction price in a contract with a customer
includes variable consideration, the Company estimates the amount of variable consideration that should be included in the
price utilizing either the expected value method or the most likely amount method, depending on the nature of the variable
consideration. The Company also estimates whether and how much variable consideration is subject to constraint if it cannot
conclude it is probable that a significant reversal in revenue will not occur, due to factors such as: the consideration being
highly susceptible to factors outside the Company’s influence, the period of time before the variable consideration is resolved,
the Company’s previous experience with similar contracts, the Company’s history of price concessions or changing of payment
terms, and whether there is a large number and broad range of possible variable consideration amounts. Apart from future
revenues from the Malikie Transaction which are constrained, there have been no material changes to the Company’s
assumptions or estimates on any material variable consideration for the fiscal year ended February 28, 2025.
62
Judgment is required to determine the SSP for each distinct performance obligation. The Company’s products and services
often have observable SSP when the Company sells a promised product or service separately to similar customers. A
contractually stated price or list price for a good or service may be the SSP of that good or service. However, in instances where
SSP is not directly observable, the Company determines the SSP by maximizing observable inputs and using an adjusted
market assessment approach using information that may include market conditions and other observable inputs from the
Company’s pricing team, including historical SSP.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company is engaged in operating and financing activities that generate risk in three primary areas:
Foreign Exchange
The Company is exposed to foreign exchange risk as a result of transactions in currencies other than its functional currency, the
U.S. dollar. The majority of the Company’s revenue in fiscal 2025 was transacted in U.S. dollars. Portions of the revenue were
denominated in Canadian dollars, euros and British pounds. Expenses, consisting mainly of salaries and certain other operating
costs, were incurred primarily in Canadian dollars, but were also incurred in U.S. dollars, euros and British pounds. At February
28, 2025, approximately 19.0% of cash and cash equivalents, 29.0% of accounts receivables and 71.0% of accounts payable
were denominated in foreign currencies (February 29, 2024 – 19%, 25% and 59%, respectively). These foreign currencies
primarily include the Canadian dollar, euro and British pound. As part of its risk management strategy, the Company maintains
net monetary asset and/or liability balances in foreign currencies and engages in foreign currency hedging activities using
derivative financial instruments, including currency forward contracts and currency options. The Company does not use
derivative instruments for speculative purposes. If overall foreign currency exchange rates to the U.S. dollar uniformly
weakened or strengthened by 10% related to the Company’s net monetary asset or liability balances in foreign currencies at
February 28, 2025 or February 29, 2024 (after hedging activities), the impact to the Company would be immaterial.
The Company regularly reviews its currency forward and option positions, both on a stand-alone basis and in conjunction with
its underlying foreign currency exposures. Given the effective horizons of the Company’s risk management activities and the
anticipatory nature of the exposures, there can be no assurance these positions will offset more than a portion of the financial
impact resulting from movements in currency exchange rates. Further, the recognition of the gains and losses related to these
instruments may not coincide with the timing of gains and losses related to the underlying economic exposures and, therefore,
may adversely affect the Company’s financial condition and operating results.
Interest Rate
Cash and cash equivalents and investments are invested in certain instruments with fixed interest rates of varying maturities.
Consequently, the Company is exposed to interest rate risk as a result of holding investments of varying maturities and the
significant financing components within certain revenue contracts with customers. The fair value of investments, as well as the
investment income derived from the investment portfolio, will fluctuate with changes in prevailing interest rates. The Company
also has significant financing components within certain revenue contracts with customers and is exposed to interest rate risk as
a result of discounting the future payments from customers with a fixed interest rate. The Company also has outstanding Notes
with a fixed interest rate, as described in Note 7 to the Consolidated Financial Statements. The Company is exposed to interest
rate risk as a result of the Notes. The Company does not currently utilize interest rate derivative instruments.
Credit and Customer Concentration
The Company, in the normal course of business, monitors the financial condition of its customers and reviews the credit history
of each new customer. The Company establishes an allowance for credit losses (“ACL”) that corresponds to the specific credit
risk of its customers, historical trends and economic circumstances. The ACL as at February 28, 2025 was $6.6 million
(February 29, 2024 - $6.0 million). There were two customers that comprised more than 10% of accounts receivable as at
February 28, 2025 (February 29, 2024 - two customers comprised more than 10%). As at February 28, 2025, the percentage of
the Company’s receivable balance that was past due decreased by 0.1% compared to February 29, 2024. Although the
Company actively monitors and attempts to collect on its receivables as they become due, the risk of further delays or
challenges in obtaining timely payments of receivables from resellers and other distributor partners exists. The occurrence of
such delays or challenges in obtaining timely payments could negatively impact the Company’s liquidity and financial
condition. There was one customer that comprised 14% of the Company’s revenue in fiscal 2025 (fiscal 2024 - one customer
that comprised 27%).
Market values are determined for each individual security in the investment portfolio. The Company assesses declines in the
value of individual investments for impairment. The Company makes this assessment by considering available evidence
including changes in general market conditions, specific industry and individual company data, the length of time and the extent
to which the fair value has been less than cost, the financial condition, the near-term prospects of the individual investment and
the Company’s ability and intent to hold the debt securities to maturity.
63
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Page No.
Report of Independent Registered Public Accounting Firm
(PCAOB ID 271)
##
Consolidated Balance Sheets
For the Years Ended February 28, 2025 and February 29, 2024
68
Consolidated Statements of Shareholders’ Equity
For the Years Ended February 28, 2025, February 29, 2024 and February 28, 2023
69
Consolidated Statements of Operations
For the Years Ended February 28, 2025, February 29, 2024 and February 28, 2023
70
Consolidated Statements of Comprehensive Income (Loss)
For the Years Ended February 28, 2025, February 29, 2024 and February 28, 2023
71
Consolidated Statements of Cash Flows
For the Years Ended February 28, 2025, February 29, 2024 and February 28, 2023
72
Notes to the Consolidated Financial Statements
73
64
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Shareholders of BlackBerry Limited
Opinions on the Financial Statements and Internal Control over Financial Reporting
We have audited the accompanying consolidated balance sheets of BlackBerry Limited and its subsidiaries (the
Company) as of February 28, 2025 and February 29, 2024, and the related consolidated statements of operations,
of comprehensive income (loss), of shareholders’ equity and of cash flows for each of the three years in the period
ended February 28, 2025, including the related notes (collectively referred to as the consolidated financial
statements). We also have audited the Company’s internal control over financial reporting as of February 28, 2025,
based on criteria established in Internal Control ‒ Integrated Framework (2013) issued by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO).
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the
financial position of the Company as of February 28, 2025 and February 29, 2024, and the results of its operations
and its cash flows for each of the three years in the period ended February 28, 2025 in conformity with accounting
principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all
material respects, effective internal control over financial reporting as of February 28, 2025, based on criteria
established in Internal Control ‒ Integrated Framework (2013) issued by the COSO.
Basis for Opinions
The Company’s management is responsible for these consolidated financial statements, for maintaining effective
internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial
reporting, included in Management’s Report on Internal Control over Financial Reporting, appearing under Item 9A
of the Company’s 2025 Annual Report on Form 10-K. Our responsibility is to express opinions on the Company’s
consolidated financial statements and on the Company’s internal control over financial reporting based on our
audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United
States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.
federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the
PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free
of material misstatement, whether due to error or fraud, and whether effective internal control over financial
reporting was maintained in all material respects.
Our audits of the consolidated financial statements included performing procedures to assess the risks of material
misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures
that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts
and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting
principles used and significant estimates made by management, as well as evaluating the overall presentation of
the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an
understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and
testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our
audits also included performing such other procedures as we considered necessary in the circumstances. We
believe that our audits provide a reasonable basis for our opinions.
65
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles. A company’s internal control over financial reporting
includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance
with generally accepted accounting principles, and that receipts and expenditures of the company are being made
only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s
assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may
become inadequate because of changes in conditions, or that the degree of compliance with the policies or
procedures may deteriorate.
Critical Audit Matters
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated
financial statements that was communicated or required to be communicated to the audit committee and that (i)
relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our
especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter
in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by
communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the
accounts or disclosures to which it relates.
Impairment Tests of Goodwill for the UEM and Cylance Reporting Units
As described in Notes 1, 3, 4 and 5 to the consolidated financial statements, the Company’s goodwill balance was
$472.5 million as of February 28, 2025. A significant portion of the goodwill related to the UEM and Cylance
reporting units (reporting units). Management conducts a goodwill impairment test annually on December 31, or
more frequently if events or changes in circumstances indicate goodwill may be impaired. In the impairment test,
management compares the carrying value of a reporting unit, including goodwill, to its fair value. When the carrying
value of a reporting unit exceeds its fair value, goodwill of the reporting unit is considered to be impaired and written
down to its fair value. During the third quarter, the Company conducted a valuation of the reporting units in
connection with the plans to sell the Cylance business. Management utilized one of the following valuation
techniques to determine the fair values of the reporting units: the income approach using a discounted future cash
flow model or an estimated exit value approach. Estimating the fair value of a reporting unit using a discounted
future cash flow model required significant judgment by management, including estimation of future cash flows,
which is dependent on estimation of the long-term rates of revenue growth and profitability measures. Estimating
the fair value of a reporting unit using an estimated exit value approach required significant judgment by
management, including the estimation of significant unobservable inputs used by management related to the fair
values of the common shares and delayed cash payment. Based on the results of the impairment tests related to
goodwill, management concluded that the fair values of the reporting units exceeded the carrying values and no
impairment was present.
The principal considerations for our determination that performing procedures relating to the impairment tests of
goodwill for the reporting units is a critical audit matter are (i) the significant judgment by management when
determining the fair values of the UEM and Cylance reporting units using a discounted future cash flow model and
estimated exit value approach; (ii) a high degree of auditor judgment, subjectivity and effort in performing
procedures and evaluating management’s significant assumptions related to long-term rates of revenue growth and
profitability measures in the discounted future cash flow model; (iii) a high degree of auditor judgment, subjectivity
and effort in performing procedures and evaluating significant unobservable inputs used by management related to
the fair values of common shares and delayed cash payment in the estimated exit value approach, and (iv) the audit
effort involved the use of professionals with specialized skill and knowledge.
66
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our
overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of
controls relating to management’s goodwill impairment tests for the reporting units, including controls over the
determination of their fair values. These procedures also included, among others, (i) testing management’s process
for estimating the fair value of the reporting unit which is determined using a discounted future cash flow model; (ii)
testing the completeness and accuracy of underlying data used in the discounted future cash flow model; (iii)
evaluating the appropriateness of the discounted future cash flow model; and (iv) evaluating the reasonableness of
the significant assumptions used by management related to long-term rates of revenue growth and profitability
measures in the discounted future cash flow model. Evaluating management’s assumptions related to long-term
rates of revenue growth and profitability measures involved assessing whether the assumptions used by
management were reasonable considering consistency with (i) the current and past performance of the reporting
unit; (ii) external market and industry data; and (iii) evidence obtained in other areas of the audit. Professionals with
specialized skill and knowledge were used to assist in the evaluation of the appropriateness of the Company’s
discounted future cash flow model. The procedures for estimating the fair value of the reporting unit which is
determined using the estimated exit value approach included (i) the involvement of professionals with specialized
skill and knowledge to assist in evaluating the reasonableness of the fair values of common shares and delayed
cash payment by developing an independent range of fair values using external market and industry data, and
evidence obtained in other areas of the audit; and (ii) testing the completeness and accuracy of underlying data
used in the independent range of fair values.
/s/PricewaterhouseCoopers LLP
Chartered Professional Accountants, Licensed Public Accountants
Toronto, Canada
April 2, 2025
We have served as the Company's auditor since 2020.
67
BlackBerry Limited
Incorporated under the Laws of Ontario
(United States dollars, in millions)
Consolidated Balance Sheets
As at
February 28, 2025
February 29, 2024
Assets
Current
Cash and cash equivalents (note 4)
$
266.7
$
175.1
Short-term investments (note 4)
71.1
62.0
Accounts receivable, net of allowance of $6.6 and $6.0, respectively (note 5 and note 13)
173.7
198.7
Other receivables (note 5)
48.4
21.4
Income taxes receivable
1.6
3.6
Other current assets (note 5)
30.0
35.1
Assets held for sale, current (note 3)
—
11.6
591.5
507.5
Restricted cash and cash equivalents (note 4)
13.6
25.4
Long-term investments (note 4)
58.9
35.7
Other long-term assets (note 5)
76.5
54.8
Operating lease right-of-use assets, net (note 12)
22.0
31.8
Property, plant and equipment, net (note 5)
13.4
21.2
Intangible assets, net (note 5)
47.3
57.5
Goodwill (note 5)
472.4
474.5
Assets held for sale, non-current (note 3)
—
186.6
$
1,295.6
$
1,395.0
Liabilities
Current
Accounts payable
$
31.1
$
16.8
Accrued liabilities (note 5)
126.2
113.7
Income taxes payable (note 6)
25.5
28.4
Deferred revenue, current (note 13)
161.5
148.7
Liabilities held for sale, current (note 3)
—
49.3
344.3
356.9
Deferred revenue, non-current (note 13)
5.6
14.6
Operating lease liabilities (note 12)
28.7
37.8
Other long-term liabilities
1.8
3.2
Long-term notes (note 7)
195.3
194.1
Liabilities held for sale, non-current (note 3)
—
13.3
575.7
619.9
Commitments and contingencies (note 11)
Shareholders’ equity
Capital stock and additional paid-in capital
Preferred shares: authorized unlimited number of non-voting, cumulative, redeemable and retractable
—
—
Common shares: authorized unlimited number of non-voting, redeemable, retractable Class A
common shares and unlimited number of voting common shares
Issued and outstanding - 596,230,655 voting common shares (February 29, 2024 - 589,232,539)
2,976.4
2,947.7
Deficit
(2,237.3)
(2,158.3)
Accumulated other comprehensive loss (note 10)
(19.2)
(14.3)
719.9
775.1
$
1,295.6
$
1,395.0
See notes to consolidated financial statements.
On behalf of the
Board:
John Giamatteo
Lisa Disbrow
Director
Director
68
BlackBerry Limited
(United States dollars, in millions)
Consolidated Statements of Shareholders’ Equity
Capital Stock
and Additional
Paid-in Capital
Deficit
Accumulated
Other
Comprehensive
Loss
Total
Balance as at February 28, 2022
$
2,868.6 $
(1,293.7) $
(19.0) $
1,555.9
Net loss
—
(734.4)
—
(734.4)
Other comprehensive loss
—
—
(4.7)
(4.7)
Stock-based compensation (note 8)
33.9
—
—
33.9
Shares issued:
Exercise of stock options (note 8)
0.3
—
—
0.3
Employee share purchase plan (note 8)
5.8
—
—
5.8
Balance as at February 28, 2023
2,908.6
(2,028.1)
(23.7)
856.8
Net loss
—
(130.2)
—
(130.2)
Other comprehensive income
—
—
9.4
9.4
Stock-based compensation (note 8)
33.1
—
—
33.1
Shares issued:
Exercise of stock options (note 8)
0.3
—
—
0.3
Redemption of deferred share units ("DSUs") (note 8)
0.9
—
0.9
Employee share purchase plan (note 8)
4.8
—
—
4.8
Balance as at February 29, 2024
2,947.7
(2,158.3)
(14.3)
775.1
Net loss
—
(79.0)
—
(79.0)
Other comprehensive loss
—
—
(4.9)
(4.9)
Stock-based compensation (note 8)
25.6
—
—
25.6
Shares issued:
Employee share purchase plan (note 8)
3.1
—
—
3.1
Balance as at February 28, 2025
$
2,976.4 $
(2,237.3) $
(19.2) $
719.9
See notes to consolidated financial statements.
69
BlackBerry Limited
(United States dollars, in millions, except per share data)
Consolidated Statements of Operations
For the Years Ended
February 28, 2025
February 29, 2024
February 28, 2023
Revenue (note 13)
$
534.9 $
759.1 $
526.3
Cost of sales
140.0
268.4
159.7
Gross margin
394.9
490.7
366.6
Operating expenses
Research and development
108.8
127.1
134.2
Sales and marketing
95.5
104.0
102.6
General and administrative
159.7
187.2
172.0
Amortization
17.7
26.7
27.4
Impairment of goodwill (note 4)
—
15.9
112.1
Impairment of long-lived assets (note 4)
9.6
15.3
3.5
Gain on sale of property, plant and equipment, net
—
—
(6.0)
Prior Debentures fair value adjustment (note 7)
—
3.5
(137.4)
Litigation settlements (note 11)
2.8
—
165.0
394.1
479.7
573.4
Operating income (loss)
0.8
11.0
(206.8)
Investment income, net (note 4 and note 7)
7.7
18.8
5.0
Income (loss) before income taxes
8.5
29.8
(201.8)
Provision for income taxes (note 6)
17.0
24.2
13.7
Income (loss) from continuing operations
(8.5)
5.6
(215.5)
Gain from disposal of discontinued operation, net of tax (note 3)
10.2
—
—
Loss from discontinued operations, net of tax (note 3)
(80.7)
(135.8)
(518.9)
Net loss
$
(79.0)
(130.2)
(734.4)
Earnings (loss) per share (note 9)
Basic earnings (loss) per share from continuing operations
$
(0.01)
0.01
(0.37)
Total basic loss per share
$
(0.13)
(0.22)
(1.27)
Diluted earnings (loss) per share from continuing operations
$
(0.01)
0.01
(0.54)
Total diluted loss per share
$
(0.13)
(0.22)
(1.35)
See notes to consolidated financial statements.
70
BlackBerry Limited
(United States dollars, in millions)
Consolidated Statements of Comprehensive Income (Loss)
For the Years Ended
February 28, 2025
February 29, 2024
February 28, 2023
Net loss
$
(79.0) $
(130.2) $
(734.4)
Other comprehensive income (loss)
Net change in fair value and amounts reclassified to net loss from
derivatives designated as cash flow hedges during the year (note 10)
(2.2)
1.3
(0.9)
Foreign currency translation adjustment
(2.7)
1.6
(5.8)
Actuarial gains associated with other post-employment benefit
obligations
—
0.5
0.4
Net change in fair value from instrument-specific credit risk on the
Debentures during the year (note 7)
—
6.0
1.6
Other comprehensive income (loss)
(4.9)
9.4
(4.7)
Comprehensive loss
$
(83.9) $
(120.8) $
(739.1)
See notes to consolidated financial statements.
71
BlackBerry Limited
(United States dollars, in millions)
Consolidated Statements of Cash Flows
For the Years Ended
February 28, 2025
February 29, 2024
February 28, 2023
Cash flows from operating activities
Net loss
$
(79.0) $
(130.2) $
(734.4)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Amortization
44.7
58.5
104.7
Stock-based compensation
25.6
33.1
33.9
Gain on disposal of discontinued operation (note 3)
(10.4)
—
—
Impairment of goodwill (note 4)
—
34.8
245.4
Impairment of long-lived assets (note 4)
9.6
15.3
234.5
Intellectual property disposed of by sale (note 13)
—
147.2
—
Gain on sale of property, plant and equipment, net
—
—
(6.0)
Prior Debentures fair value adjustment (note 7)
—
3.5
(137.4)
Operating leases
(10.8)
(13.7)
(15.1)
Other
2.3
2.3
6.0
Net changes in working capital items
Accounts receivable, net of allowance
25.0
(78.8)
17.8
Other receivables
11.7
(9.2)
12.8
Income taxes receivable
2.0
(0.5)
5.6
Other assets
(16.0)
(54.3)
(0.5)
Accounts payable
14.2
(7.4)
2.9
Accrued liabilities
6.4
(20.3)
(11.8)
Income taxes payable
(2.9)
8.7
8.8
Deferred revenue
(5.9)
7.5
(29.4)
Net cash provided by (used in) operating activities
16.5
(3.5)
(262.2)
Cash flows from investing activities
Acquisition of long-term investments
—
(1.6)
(2.9)
Acquisition of property, plant and equipment
(3.1)
(7.1)
(7.3)
Proceeds on sale of property, plant and equipment
—
—
17.1
Acquisition of intangible assets
(7.0)
(13.8)
(33.6)
Cash proceeds from disposal of discontinued operation (note 3)
79.8
—
—
Acquisition of short-term investments
(154.9)
(154.4)
(514.4)
Proceeds on sale or maturity of short-term investments
145.9
223.5
716.3
Net cash provided by investing activities
60.7
46.6
175.2
Cash flows from financing activities
Issuance of common shares
3.1
5.9
6.1
Payment of finance lease liability
—
—
(0.1)
Maturities of 2020 Debentures and Extension Debentures (note 7)
—
(515.0)
—
Proceed from Issuance of Extension Debentures and Notes (note 7)
—
344.0
—
Net cash provided by (used in) financing activities
3.1
(165.1)
6.0
Effect of foreign exchange loss on cash, cash equivalents, restricted cash, and restricted cash
equivalents
(0.5)
0.2
(2.9)
Net increase (decrease) in cash, cash equivalents, restricted cash, and restricted cash
equivalents during the year
79.8
(121.8)
(83.9)
Cash, cash equivalents, restricted cash, and restricted cash equivalents, beginning of year
200.5
322.3
406.2
Cash, cash equivalents, restricted cash, and restricted cash equivalents, end of year
$
280.3
$
200.5
$
322.3
See notes to consolidated financial statements.
72
1.
BLACKBERRY LIMITED AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND CRITICAL
ACCOUNTING ESTIMATES
BlackBerry Limited (the “Company”) provides enterprises and governments the intelligent software and services that
power the world around us. Based in Waterloo, Ontario, the Company’s high-performance foundational software enables
major automakers and industrial giants alike to unlock transformative applications, drive new revenue streams and launch
innovative business models, all without sacrificing safety, security, and reliability. With a deep heritage in Secure
Communications, BlackBerry delivers operational resiliency with a comprehensive, highly secure, and extensively
certified portfolio for mobile fortification, mission-critical communications, and critical events management. The
Company’s common shares trade under the ticker symbol “BB” on the New York Stock Exchange and the Toronto Stock
Exchange.
Basis of Presentation and Preparation
The consolidated financial statements include the accounts of all subsidiaries of the Company with intercompany
transactions and balances eliminated on consolidation. All of the Company’s subsidiaries are wholly owned. These
consolidated financial statements have been prepared by management in accordance with United States generally accepted
accounting principles (“U.S. GAAP”) on a basis consistent for all periods presented. During the year, the Company
completed the sale of Cylance endpoint security assets, as further discussed in Note 3.
Certain of the comparative figures have been reclassified to conform to the current year’s presentation, including assets
and liabilities held for sale and discontinued operations, as further discussed in Note 3, and facilities discussed below. The
Company reclassified all expenses associated with its facilities within General and administrative expenses, whereas
previously these costs were allocated amongst the functional areas line item expenses of the business based on
assumptions of usage of those facilities by the functional areas.
The impact of the change on previously issued financial statements was as follows for the years ended February 29, 2024
and February 28, 2023:
For the Years Ended
For the Years Ended
Revised
Revised
February 29,
2024
Impact of
change
February 29,
2024
February 28,
2023
Impact of
change
February 28,
2023
Cost of sales
332.7
(8.6)
324.1
237.0
(9.8)
227.2
Gross margin
520.0
8.6
528.6
418.9
9.8
428.7
Research and development
185.7
(12.6)
173.1
207.3
(12.9)
194.4
Sales and marketing
171.0
(7.1)
163.9
176.2
(7.8)
168.4
General and administrative
180.6
28.3
208.9
163.6
30.5
194.1
Cybersecurity
Segment cost of sales
141.6
(5.8)
135.8
184.8
(7.1)
177.7
Segment gross margin
235.8
5.8
241.6
233.0
7.1
240.1
IoT
Segment cost of sales
36.3
(2.5)
33.8
37.0
(2.2)
34.8
Segment gross margin
179.1
2.5
181.6
168.7
2.2
170.9
The Company is organized and managed as three reportable segments: Secure Communications (formerly
“Cybersecurity”), QNX (formerly “IoT”) and Licensing, as further discussed in Note 13.
BlackBerry Limited
Notes to the Consolidated Financial Statements
In millions of United States dollars, except share and per share data, and except as otherwise indicated
73
Risks and Uncertainties
The Company’s assumptions and estimates about future cash flows, economic uncertainty and changes in industry or
market conditions resulted in the Company making significant judgments related to its estimates and assumptions
concerning the impairment of goodwill, indefinite-lived intangible assets, certain operating lease right-of-use (“ROU”)
assets and associated property, plant and equipment.
As of the date of issuance of the financial statements, the Company is not aware of any additional events or circumstances
which would require it to update its estimates, judgments, or revise the carrying value of its assets or liabilities. These
estimates may change, as new events occur and additional information is obtained, and such changes will be recognized in
the consolidated financial statements as soon as they become known. Actual results could differ from these estimates and
any such differences may be material to the Company’s financial statements.
Significant Accounting Policies and Critical Accounting Estimates
Use of estimates
The preparation of the consolidated financial statements requires management to make estimates and assumptions with
respect to the reported amounts of assets, liabilities, revenue and expenses and the disclosure of contingent assets and
liabilities. Significant areas requiring the use of management estimates relate to revenue-related estimates including
variable consideration, standalone selling price (“SSP”), estimated customer life, right of return and customer incentive
commitments, fair value of reporting units in relation to actual or potential goodwill impairment, fair value of the
Debentures (as defined in Note 7), fair value of share-based liability awards, fair value of long-lived assets in relation to
actual or potential impairment, the Company’s long-lived asset groupings, estimated useful lives of property, plant and
equipment and intangible assets, provision (or recovery) of income taxes, realization of deferred income tax assets and the
related components of the valuation allowance, allowance for credit losses, incremental borrowing rates in determining
the present value of lease liabilities, the determination of reserves for various litigation claims, and the fair value of
common shares received in a private company as consideration in the sale of the Cylance business. Actual results could
differ from these estimates, which were based upon circumstances that existed as of the date of the consolidated financial
statements, February 28, 2025.
The significant accounting policies used in these U.S. GAAP consolidated financial statements are as follows:
Foreign currency translation
The U.S. dollar is the functional and reporting currency of the Company and substantially all of the Company’s
subsidiaries.
Foreign currency denominated assets and liabilities of the Company and its U.S. dollar functional currency subsidiaries
are translated into U.S. dollars. Accordingly, monetary assets and liabilities are translated using the exchange rates in
effect as at the consolidated balance sheet dates, and revenue and expenses are translated at the rates of exchange
prevailing when the transactions occurred. Remeasurement adjustments are included in income. Non-monetary assets and
liabilities are translated at historical exchange rates.
Foreign currency denominated assets and liabilities of the Company’s non-U.S. dollar functional currency subsidiary is
translated into U.S. dollars at the exchange rates in effect as at the consolidated balance sheet dates. Revenue and
expenses are translated using daily exchange rates. Exchange gains or losses arising from the translation of foreign
currency denominated assets and liabilities are included as a currency translation adjustment within accumulated other
comprehensive loss (“AOCL”).
BlackBerry Limited
Notes to the Consolidated Financial Statements
In millions of United States dollars, except share and per share data, and except as otherwise indicated
74
Cash and cash equivalents
Cash and cash equivalents consist of balances with banks and liquid investments with maturities of three months or less at
the date of acquisition.
Accounts receivable, net of allowance
The accounts receivable balance reflects invoiced and accrued revenue and is presented net of an allowance for credit
losses. The Company expects the majority of its accounts receivable balances to continue to come from large customers as
it sells the majority of its software products and services through resellers and other distribution partners, rather than
directly to end users. The Company establishes current expected credit losses (“CECL”) for pools of assets with similar
risk characteristics by evaluating historical levels of credit losses, current economic conditions that may affect a
customer’s ability to pay, and creditworthiness of significant customers. When specific customers are identified as no
longer sharing the same risk profile as their current pool, they are removed from the pool and evaluated separately. The
Company, in the normal course of business, monitors the financial condition of its customers and reviews the credit
history of each new customer. When the Company becomes aware of a specific customer’s inability to meet its financial
obligations to the Company (such as in the case of bankruptcy filings or material deterioration in the customer’s operating
results or financial position, and payment experiences), the Company records a specific credit loss provision to reduce the
customer’s related accounts receivable to its estimated net realizable value. If circumstances related to specific customers
change, the Company’s estimates of the recoverability of accounts receivable balances could be further adjusted.
Investments
The Company’s cash equivalents and investments, other than publicly issued equity securities and non-marketable equity
investments without readily determinable fair value, consist of money market and other debt securities, which are
classified as available-for-sale for accounting purposes and are carried at fair value. Unrealized gains and losses, net of
related income taxes, are recorded in AOCL until such investments mature or are sold. The Company uses the specific
identification method of determining the cost basis in computing realized gains or losses on available-for-sale
investments, which are recorded in investment income. The Company does not exercise significant influence with respect
to any of these investments. Publicly issued equity securities are recorded at fair value and revalued at each reporting
period with changes in fair value recorded through investment income. The Company elects to record non-marketable
equity investments without readily determinable fair value at cost minus impairment, and adjusted for any changes
resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer. The
Company reassesses each reporting period that its non-marketable equity investments without readily determinable fair
value continue to qualify for this treatment.
Investments with maturities at the time of purchase of three months or less are classified as cash equivalents. Investments
with maturities of one year or less (but which are not cash equivalents), public equity investments and any investments
that the Company intends to hold for less than one year are classified as short-term investments. Investments with
maturities in excess of one year, non-marketable equity investments without readily determinable fair value and
investments that the Company does not intend to sell are classified as long-term investments.
BlackBerry Limited
Notes to the Consolidated Financial Statements
In millions of United States dollars, except share and per share data, and except as otherwise indicated
75
Allowance for Credit Losses on Available-for-sale Debt Securities
At each reporting period, the Company evaluates its available-for-sale debt securities at the individual security level to
determine whether there is a decline in the fair value below its amortized cost basis (an impairment). In circumstances
where the Company intends to sell, or is more likely than not required to sell, the security before it recovers its amortized
cost basis, the difference between fair value and amortized cost is recognized as a loss in the consolidated statement of
operations, with a corresponding write-down of the security’s amortized cost. In circumstances where neither condition
exists, the Company then evaluates whether a decline is due to credit-related factors. The factors considered in
determining whether a credit loss exists can include the extent to which fair value is less than the amortized cost basis,
changes in the credit quality of the underlying issuer, credit ratings actions, as well as other factors. To determine the
portion of a decline in fair value that is credit-related, the Company compares the present value of the expected cash flows
of the security discounted at the security’s effective interest rate to the amortized cost basis of the security. A credit-
related impairment is limited to the difference between fair value and amortized cost, and recognized as an allowance for
credit loss on the consolidated balance sheet with a corresponding adjustment to net income. Any remaining decline in fair
value that is non-credit related is recognized in other comprehensive income (loss), net of tax. Improvements in expected
cash flows due to improvements in credit are recognized through reversal of the credit loss and corresponding reduction in
the allowance for credit loss.
Derivative financial instruments
The Company uses derivative financial instruments, including forward contracts and options, to hedge certain foreign
currency exposures. The Company does not use derivative financial instruments for speculative purposes.
The Company records all derivative instruments at fair value on the consolidated balance sheets. The fair value of these
instruments is calculated based on notional and exercise values, transaction rates, market quoted currency spot rates,
forward points, volatilities and interest rate yield curves. The accounting for changes in the fair value of a derivative
depends on the intended use of the derivative instrument and the resulting designation.
For derivative instruments designated as cash flow hedges, the derivative’s gain or loss is initially reported as a
component of AOCL, net of tax, and subsequently reclassified into income in the same period or periods in which the
hedged item affects income. In order for the Company to receive hedge accounting treatment, the cash flow hedge must be
highly effective in offsetting changes in the fair value of the hedged item and the relationship between the hedging
instrument and the associated hedged item must be formally documented at the inception of the hedge relationship. Hedge
effectiveness is formally assessed, both at hedge inception and on an ongoing basis, to determine whether the derivatives
used in hedging transactions are highly effective in offsetting changes in the value of the hedged items and whether they
are expected to continue to be highly effective in future periods.
The Company formally documents relationships between hedging instruments and associated hedged items. This
documentation includes: identification of the specific foreign currency asset, liability or forecasted transaction being
hedged; the nature of the risk being hedged; the hedge objective; and the method of assessing hedge effectiveness. If an
anticipated transaction is deemed no longer likely to occur, the corresponding derivative instrument is de-designated as a
hedge and any associated unrealized gains and losses in AOCL are recognized in income at that time. Any future changes
in the fair value of the instrument are recognized in current income.
For any derivative instruments that do not meet the requirements for hedge accounting, or for any derivative instruments
for which hedge accounting is not elected, the changes in fair value of the instruments are recognized in income in the
current period and will generally offset the impact to income as a result of changes in the U.S. dollar value of the
associated asset, liability or forecasted transaction.
BlackBerry Limited
Notes to the Consolidated Financial Statements
In millions of United States dollars, except share and per share data, and except as otherwise indicated
76
Property, plant and equipment, net
Property, plant and equipment are stated at cost, less accumulated amortization and impairment. Amortization is provided
using the following rates and methods:
Leasehold improvements and other
Straight-line over terms between 5 and 15 years
BlackBerry operations and other information technology
Straight-line over terms between 3 and 5 years
Manufacturing, repair and research and development
equipment
Straight-line over terms between 1 and 5 years
Furniture and fixtures
Declining balance at 30% per annum
For amortization on ROU assets, see the Company’s accounting policy on leases below and Note 12 for the remaining
lease terms of leases.
Leases
Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future
minimum lease payments over the lease term at the commencement date. As most of the Company’s leases do not provide
an implicit discount rate, the Company primarily uses its incremental borrowing rate, based on the information available
at the commencement date of the lease, in determining the present value of future payments. The Company’s incremental
borrowing rate requires significant judgment and is determined based on the rate of interest that the Company would have
to pay to borrow an amount equal to the lease payments on a collateralized basis over a similar term in a similar economic
environment. The operating lease ROU asset includes any lease payments made, lease incentives and initial direct costs
incurred. The lease terms include options to extend or terminate the lease when it is reasonably certain that the Company
will exercise that option. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease
term. In some cases, the Company has index-based variable lease payments for which an estimated rate is applied to the
initial lease payment to determine future lease payment amounts.
The Company has building, car and data center lease agreements with lease and non-lease components that are accounted
for separately. For lease terms of 12 months or less on the commencement date, the Company recognizes the lease
payments as lease cost on a straight-line basis over the lease term. The Company recognizes sublease income on a
straight-line basis over the sublease term in its consolidated statements of operations.
See Note 12 for additional information related to the Company’s leases.
Goodwill
Goodwill represents the excess of the acquisition price in a business combination over the fair value of identifiable net
assets acquired. Goodwill is allocated at the date of the business combination. Goodwill is not amortized but is tested for
impairment annually on December 31 or more frequently if events or changes in circumstances indicate the asset may be
impaired. These events and circumstances may include a significant change in legal factors or in the business climate, a
significant decline in the Company’s share price, an adverse action or assessment by a regulator, unanticipated
competition, a loss of key personnel, significant disposal activity and the testing of recoverability for a significant asset
group.
In the annual impairment test, the Company first assesses whether it is more likely than not that an impairment is present
in goodwill based upon qualitative factors including macroeconomic factors, industry trends, cost factors, overall financial
performance and the Company’s share price and resultant market value capitalization in comparison to its book value. If
the Company determines that it is more likely than not that impairment exists in one of its reporting units, it then conducts
an analysis of the carrying value of the reporting unit, including goodwill, compared with its fair value. The estimated fair
value is determined utilizing multiple approaches based on the nature of the reporting units being valued. In its analysis,
the Company utilizes multiple valuation techniques, including the income approach using a discounted future cash flow
model, market-based approaches, and the asset value approach. The analysis requires significant judgment, including
estimation of future cash flows, which is dependent on internal forecasts, estimation of the long-term rates of revenue
growth for the Company’s reporting units, estimation of the useful life over which cash flows will occur, terminal growth
rates, profitability measures, and determination of the discount rates for the reporting units. The carrying value of the
Company’s assets is assigned to reporting units using reasonable methodologies based on the asset type. When the
BlackBerry Limited
Notes to the Consolidated Financial Statements
In millions of United States dollars, except share and per share data, and except as otherwise indicated
77
carrying value of a reporting unit exceeds its fair value, goodwill of the reporting unit is considered to be impaired and
written down to its fair value. Different judgments could yield different results.
Intangible assets
Intangible assets with definite lives are stated at cost, less accumulated amortization and impairment. Amortization is
provided on a straight-line basis over the following terms:
Acquired technology
Between 3 and 10 years
Intellectual property
Between 1 and 25 years
Other acquired intangibles
Between 2 and 10 years
Acquired technology consists of intangible assets acquired through business acquisitions. Intellectual property consists of
patents (including purchased and internally generated patents and maintenance fees). Other acquired intangibles include
items such as customer relationships and brand. The useful lives of intangible assets are evaluated at least annually to
determine if events or circumstances warrant a revision to their remaining period of amortization. Legal, regulatory and
contractual factors, the effects of obsolescence, demand, competition and other economic factors are potential indicators
that the useful life of an intangible asset may be revised.
Impairment of long-lived assets
The Company reviews long-lived assets (“LLA”) such as property, plant and equipment, intangible assets with finite
useful lives and ROU assets for impairment whenever events or changes in circumstances indicate that the carrying value
of the asset or asset group may not be recoverable. These events and circumstances may include significant decreases in
the market price of an asset or asset group, significant changes in the extent or manner in which an asset or asset group is
being used by the Company or in its physical condition, a significant change in legal factors or in the business climate, a
history or forecast of future operating or cash flow losses, significant disposal activity, a significant decline in the
Company’s share price, a significant decline in revenue or adverse changes in the economic environment.
The LLA impairment test requires the Company to identify its asset groups and test impairment of each asset group
separately. Determining the Company’s asset groups and related primary assets requires significant judgment by
management. Different judgments could yield different results. The Company’s determination of its asset groups, its
primary asset and its remaining useful life, and estimated cash flows are significant factors in assessing the recoverability
of the Company’s assets for the purposes of LLA impairment testing. The Company’s share price can be affected by,
among other things, changes in industry or market conditions, including the effect of competition, changes in the
Company’s results of operations, changes in the Company’s forecasts or market expectations relating to future results, and
the Company’s strategic initiatives and the market’s assessment of any such factors.
When indicators of impairment exist, LLA impairment is tested using a two-step process. The Company performs a cash
flow recoverability test as the first step, which involves comparing the asset group’s estimated undiscounted future cash
flows to the carrying value of its net assets. If the net cash flows of the asset group exceed the carrying value of its net
assets, LLA are not considered to be impaired. If the carrying value exceeds the net cash flows, there is an indication of
potential impairment and the second step of the LLA impairment test is performed to measure the impairment amount.
The second step involves determining the fair value of the asset group. Fair values are determined using valuation
techniques that are in accordance with U.S. GAAP, including the market approach, income approach and cost approach. If
the carrying value of the asset group’s net assets exceeds its fair value, then the excess represents the maximum amount of
potential impairment that will be allocated to LLA in the asset group, with the limitation that the carrying value of each
separable asset cannot be reduced to a value lower than its individual fair value. The total impairment amount allocated is
recognized as a non-cash impairment loss.
The Company reviews any changes in events and circumstances that have occurred on a quarterly basis to determine if
indicators of LLA impairment exist.
Assets held for sale and discontinued operations
When certain criteria are met, the Company reclassifies assets and related liabilities as held for sale at the lower of their
carrying value or fair value less costs to sell and, if material, presents them separately on the Company’s consolidated
balance sheets. If the carrying value exceeds the fair value less costs to sell, a loss is recognized. Assets classified as held
for sale are no longer amortized. Comparative figures are reclassified to conform to the current year’s presentation. If an
BlackBerry Limited
Notes to the Consolidated Financial Statements
In millions of United States dollars, except share and per share data, and except as otherwise indicated
78
asset previously classified as held for sale is returned to held in use, it is recorded at the lower of its carrying value at the
time it was classified as held for sale, adjusted for amortization which would have had been recorded during the period it
was classified as held for sale, and its fair value.
When the Company has disposed of or classified as held for sale a component of the Company, and certain criteria are
met, the results of operations of the component, including any loss recognized, are reported separately on the consolidated
statements of operations as discontinued operations. Discontinued operations are presented if the component’s operations
and cash flows have been, or will be, eliminated from the Company and the Company will not have significant continuing
involvement in the operations of the component after the disposal. Earnings (loss) per share amounts for both continuing
operations and discontinued operations are presented separately on the consolidated statements of operations and income
(loss) from continuing operations. Comparative figures are reclassified to conform to the current year’s presentation.
Convertible debentures
The Company has recognized the Notes (as defined in Note 7) as a single liability instrument measured at amortized cost.
Debt issuance costs related to the Notes have been recorded as a direct deduction from the face amount of the Notes and
are amortized using the effective interest method.
The Company elected to measure its Extension Debentures (as defined in Note 7) and 2020 Debentures (as defined in
Note 7) at fair value in accordance with the fair value option. Each period, the fair value of the Extension Debentures and
2020 Debentures was recalculated and resulting gains and losses from the change in fair value of the Extension
Debentures and 2020 Debentures associated with non-credit components were recognized in income, while the change in
fair value associated with credit components were recognized in AOCL and subsequently released from AOCL upon
maturity.
Extension Debentures
The fair value of the Extension Debentures was determined using the significant inputs of principal value, interest rate
spreads and curves, and the market price and volatility of the Company’s common shares.
2020 Debentures
The fair value of the 2020 Debentures was determined using the significant inputs of principal value, interest rate spreads
and curves, any observable trades of the 2020 Debentures that occurred during the period, the market price and volatility
of the Company’s common shares, and the significant Level 3 inputs related to credit spread and the implied discount of
the 2020 Debentures at issuance.
Revenue recognition
The Company recognizes revenue when control of the promised products or services are transferred to customers, in an
amount that reflects the consideration that the Company expects to receive in exchange for those products and services.
Revenue is recognized through the application of the following steps: (i) identification of the contract, or contracts, with a
customer; (ii) identification of the performance obligations in the contract; (iii) determination of the transaction price; (iv)
allocation of the transaction price to the performance obligations in the contract; and (v) recognition of revenue when (or
as) the Company satisfies a performance obligation.
A contract exists with a customer when both parties have approved the contract, commitments to performance and rights
of each party (including payment terms) are identified, the contract has commercial substance and collection of
substantially all consideration is probable for goods and services that are transferred.
Performance obligations promised in a contract are identified based on the goods and services that will be transferred to
the customer that are both capable of being distinct, whereby the customer can benefit from the good or service either on
its own or together with other available resources, and are distinct in the context of the contract, whereby the transfer of
the good or service is separately identifiable from other promises in the contract. If these criteria are not met, the promised
goods and services are accounted for as a combined performance obligation.
The transaction price is determined based on the consideration the Company expects to be entitled to in exchange for
transferring promised goods and services to the customer, excluding amounts collected on behalf of third parties such as
sales taxes. Determining the transaction price requires significant judgment. To the extent the transaction price includes
variable consideration, the Company estimates the amount of variable consideration that should be included in the
transaction price utilizing either the expected value method or the most likely amount method depending on the nature of
the variable consideration.
BlackBerry Limited
Notes to the Consolidated Financial Statements
In millions of United States dollars, except share and per share data, and except as otherwise indicated
79
Contracts that contain multiple performance obligations require an allocation of the transaction price to each performance
obligation based on a relative SSP. The Company’s method for allocation of consideration to be received and its method
of estimation of SSP are described below under “Significant judgments”.
For each of the Company’s major categories of revenue, the following paragraphs describe the applicable specific revenue
recognition policy, and when the Company satisfies its performance obligations.
Nature of products and services
The Company is organized and managed as three operating segments. The Company has multiple products and services
from which it derives revenue, which are structured in three groups: Secure Communications, QNX and Licensing.
Prior to the third quarter of fiscal 2025, the Company’s Secure Communications segment included the Company’s
Cylance® cybersecurity solutions business and was reported as the Cybersecurity segment. See Note 3 for further
information.
Secure Communications
The Secure Communications business consists of BlackBerry unified endpoint management (“UEM”) solutions,
SecuSUITE® and BlackBerry® AtHoc®.
BlackBerry UEM
The Company’s unified endpoint management offerings include BlackBerry® UEM, BlackBerry® Dynamics™,
BlackBerry® Workspaces, and BlackBerry Messenger (BBM®) Enterprise. BlackBerry UEM employs a containerized
approach to manage and secure devices, third party and custom applications, identity, content and endpoints. The
Company generates software license revenue from both term subscription and perpetual license contracts, both of which
are commonly bundled with support, maintenance and professional services.
If the licensed software in a contract requires access to the Company’s proprietary secure network infrastructure in order
to function, revenue from term subscription contracts is recognized over time, ratably over the term, and revenue from
perpetual license contracts is recognized over time, ratably over the expected customer life, which in most cases the
Company has estimated to be four years. If access to the Company’s proprietary network infrastructure is not required for
the software to function, revenue associated with both term subscription and perpetual licenses contracts is recognized at a
point in time upon delivery of the software. Generally, most of the Company’s UEM software products sold require
access to the Company’s proprietary secure network infrastructure in order to function, and therefore the associated
revenue is recognized over time, ratably over either the subscription term or expected customer life as described above.
BlackBerry SecuSUITE
SecuSUITE revenue is generated from software license products associated with secure communications and the
associated hardware. Similar to BlackBerry UEM products, if the licensed software requires access to the Company’s
proprietary secure network infrastructure, revenue from the contract is recognized over time, ratably over the expected
term or over the customer life, if licensed on a perpetual basis. If access to the Company’s proprietary network
infrastructure is not required, revenue associated with the license is recognized at a point in time upon delivery of the
software. Revenue from the hardware is recognized once title and the significant risks and rewards of ownership of the
products are transferred to the customer, which occurs when control transfers at date of shipment.
BlackBerry AtHoc
BlackBerry AtHoc generates revenue from networked critical event management solutions through perpetual and term
subscriptions which include technical support, as well as associated professional services. The licensed software in most
contracts requires access to the Company’s proprietary secure network infrastructure in order to function, specifically
through AtHoc’s secure platform which is included within the Company’s data center. The Company recognizes the
license revenue over the term of the contract beginning on the commencement date of each contract, the date that services
are made available to customers.
QNX
QNX consists of BlackBerry® QNX®, BlackBerry Radar®, BlackBerry® Certicom®, and BlackBerry IVY®. QNX
revenue is generated predominantly through software licenses, commonly bundled with support, maintenance and
professional services.
BlackBerry Limited
Notes to the Consolidated Financial Statements
In millions of United States dollars, except share and per share data, and except as otherwise indicated
80
BlackBerry QNX software license revenue from both term subscription and perpetual contracts is recognized at a point in
time when the software is made available to the customer for use, as the software has standalone functionality and the
license is distinct in the context of the contract. The licenses for certain software embedded into hardware such as
automotive digital cockpit systems and advanced driver-assistance systems are sold as a sales-based royalty where
intellectual property is the predominant item to which the royalty relates, and are recognized based on actual volumes and
underlying sales by the customer of the hardware with the embedded software shipped by the customer, except in cases
where the customer makes a non-refundable prepayment related to its future royalties, in which case consideration is fixed
and recognized immediately.
Revenue from technical support is recognized over the support period. Revenue from professional services is recognized
as the customer simultaneously receives and consumes the benefits provided by the Company’s performance as the
services are provided. This can be on a proportional performance basis, or over the term of the contract. Revenue from
software maintenance services is recognized over the length of the maintenance period, with an average term of one year.
Licensing
Licensing includes revenue from the Company’s intellectual property licensing arrangements and settlement awards.
The Company’s outbound patent licensing agreements provide for license fees that may be a single upfront payment or
multiple payments representing all or a majority of the licensing revenue that will be payable to the Company. These
agreements may be perpetual or term in nature and grant (i) a limited non-exclusive, non-transferable license to certain of
the Company’s patents, (ii) a covenant not to enforce patent rights against the licensee, and (iii) the release of the licensee
from certain claims.
The Company examines intellectual property agreements on a case-by-case basis to determine whether the intellectual
property contains distinct performance obligations with standalone functionality and whether the Company is the principal
or agent in the transaction. Significant judgment is applied in assessing contractual terms which could impact the timing
and amount of revenue recognition. Revenue from patent licensing agreements is often recognized for the transaction
price either when the license has been transferred to the customer or based upon subsequent sales by the customer in the
case of sales-based royalty licenses where the license of intellectual property is the predominant item to which the royalty
relates. As part of these agreements the Company may also recognize revenue relating to the sale and assignment of
patents.
The Company recognizes revenue related to consideration that may result from a negotiated agreement with a licensee
that utilized the Company’s IP prior to signing a patent license agreement with the Company or from the resolution of a
disagreement or arbitration with a licensee over the specific terms of an existing license agreement. The Company may
also recognize revenue related to consideration for past patent royalties in connection with the settlement of patent
litigation where there was no prior patent license agreement.
See Note 13 for further information, including revenue by major product and service types.
Significant judgments in revenue recognition
The Company’s contracts with customers often include promises to transfer multiple products and services to a customer.
Determining whether products and services are considered distinct performance obligations that should be accounted for
separately versus together may require significant judgment.
Variable consideration is included in the transaction price if, in the Company’s judgment, it is probable that a significant
future reversal of cumulative revenue recognized under the contract will not occur. Any estimates, including any
constraints on variable consideration, are evaluated at each reporting period. To the extent the transaction price in a
contract with a customer includes variable consideration, the Company estimates the amount of variable consideration that
should be included in the price utilizing either the expected value method or the most likely amount method, depending on
the nature of the variable consideration. The Company also estimates whether and how much variable consideration is
subject to constraint if it cannot conclude it is probable that a significant reversal in revenue will not occur, due to factors
such as: the consideration being highly susceptible to factors outside the Company’s influence, the period of time before
the variable consideration is resolved, the Company’s previous experience with similar contracts, the Company’s history
of price concessions or changing of payment terms, and whether there is a large number and broad range of possible
variable consideration amounts.
Judgment is required to determine the SSP for each distinct performance obligation. The Company’s products and
services often have observable SSP when the Company sells a promised product or service separately to similar
BlackBerry Limited
Notes to the Consolidated Financial Statements
In millions of United States dollars, except share and per share data, and except as otherwise indicated
81
customers. A contractually stated price or list price for a good or service may be the SSP of that good or service.
However, in instances where SSP is not directly observable, the Company determines the SSP by maximizing observable
inputs and using an adjusted market assessment approach using information that may include market conditions and other
observable inputs from the Company’s pricing team, including historical SSP.
Judgment is required to determine in certain agreements if the Company is the principal or agent in the arrangement. The
Company considers factors such as, but not limited to, which party can direct the usage of the product or service, which
party obtains substantially all the remaining benefits and which party has the ability to establish the selling price.
Significant judgment is required to determine the estimated customer life used in perpetual license contracts that require
access to the Company’s proprietary secure network infrastructure to function. The Company uses historical experience
regarding the length of the technology upgrade cycle and the expected life of the product to draw this conclusion.
Revenue contract balances
Timing of revenue recognition may differ from the timing of invoicing to customers. Contract assets are generated when
contractual billing schedules differ from revenue recognition timing. An unbilled receivable is recorded in instances when
revenue is recognized prior to invoicing, and amounts collected in advance of services being provided are recorded as
deferred revenue. Contract assets and liabilities are presented net as either a single contract asset or contract liability.
Certain sales commissions are considered incremental and recoverable costs of obtaining a contract with a customer. The
Company’s capitalized commissions are recorded as other current assets and other long-term assets and are recognized
immediately or amortized proportionally, based on the satisfaction of the related performance obligations, and are
included in sales and marketing expenses. The Company has applied the practical expedient to expense sales commission
as incurred if the amortization period would have been for one year or less. The practical expedient was applied to sales
commissions allocated to professional services, as these contracts are generally for one year or less. See Note 13 for
further information on the Company’s contract balances.
Payment terms and conditions vary by contract type although standard billing terms are that payment is due upon receipt
of invoice, generally payable within 30 to 60 days. In instances where the timing of revenue recognition differs from the
timing of invoicing, the Company has determined that contracts generally do not include a significant financing
component if the period between when the payment is received and when the Company transfers the promised goods or
services to the customer will be one year or less. To the extent the Company determines that there is a significant
financing component in a contract with a customer, it determines the impact of the time value of money in adjusting the
transaction price to account for the income associated with the financing component by estimating the discount rate that
would be reflected in a separate financing transaction between the customer and the Company at contract inception, based
upon the credit characteristics of the customer receiving financing in the contract.
Income taxes
The Company uses the liability method of income tax allocation to account for income taxes. Deferred income tax assets
and liabilities are recognized based upon temporary differences between the financial reporting and income tax bases of
assets and liabilities and measured using enacted income tax rates and tax laws that will be in effect when the differences
are expected to reverse. The Company records a valuation allowance to reduce deferred income tax assets to the amount
that is more likely than not to be realized. The Company considers both positive evidence and negative evidence, to
determine whether, based upon the weight of that evidence, a valuation allowance is required. Judgment is required in
considering the relative impact of negative and positive evidence.
Significant judgment is also required in evaluating the Company’s uncertain income tax positions and provisions for
income taxes. Liabilities for uncertain income tax positions are recognized based on a two-step approach. The first step is
to evaluate whether an income tax position has met the recognition threshold by determining if the weight of available
evidence indicates that it is more likely than not to be sustained upon examination. The second step is to measure the
income tax position that has met the recognition threshold as the largest amount that is more than 50% likely of being
realized upon settlement. The Company continually assesses the likelihood and amount of potential adjustments and
adjusts the income tax provisions, income taxes payable and deferred income taxes in the period in which the facts that
give rise to a revision become known. The Company recognizes interest and penalties related to uncertain income tax
positions as interest expense, which is then netted and reported within investment income.
The Company uses the flow-through method to account for investment tax credits (“ITCs”) earned on eligible scientific
research and experimental development expenditures. Under this method, the ITCs are recognized as a reduction to
income tax expense.
BlackBerry Limited
Notes to the Consolidated Financial Statements
In millions of United States dollars, except share and per share data, and except as otherwise indicated
82
Research and development
Research costs are expensed as incurred. Development costs for licensed software to be sold, leased or otherwise
marketed are subject to capitalization beginning when a product’s technological feasibility has been established and
ending when a product is available for general release to customers. The Company’s products are generally released soon
after technological feasibility has been established and therefore costs incurred subsequent to achievement of
technological feasibility are not significant and have been expensed as incurred. The Company does not currently have
any capitalized research and development costs other than those identified through business combinations as in-process
research and development included within intangible assets, net, which were recorded at their fair values and began
amortizing when the related technology became available for general release to customers.
Comprehensive income (loss)
Comprehensive income (loss) is defined as the change in net assets of a business enterprise during a period from
transactions and other events and circumstances from non-owner sources and includes all changes in equity during a
period, except those resulting from investments by owners and distributions to owners. The Company’s reportable items
of comprehensive income (loss) are the cumulative translation adjustment resulting from its non-U.S. dollar functional
currency subsidiary as described under the foreign currency translation policy above, cash flow hedges as described above
in derivative financial instruments, changes in the fair value of available-for-sale investments as described in Note 4,
changes in fair value from instrument-specific credit risk on the 2020 Debentures and Extension Debentures as described
in Note 7 and Note 10, and actuarial gains or losses associated with certain other post-employment benefit obligations.
Realized gains or losses on available-for-sale investments are reclassified into investment income using the specific
identification basis.
Earnings (loss) per share
Earnings (loss) per share is calculated based on the weighted average number of common shares outstanding during the
fiscal year. The treasury stock method is used for the calculation of the dilutive effect of stock options. The if-converted
method is used for the calculation of the dilutive effect of the Debentures.
Stock-based compensation plans
The Company has stock-based compensation plans. Awards granted under the plans are detailed in Note 8(b).
The Equity Incentive Plan (the “Equity Plan”) was adopted during fiscal 2014. The Equity Plan provides for grants of
incentive stock options and restricted share units (“RSUs”) to officers and employees of the Company or its subsidiaries.
RSUs may be either time-based (“TBRSUs”) or time- and performance-based (“PBRSUs”). The number of common
shares authorized for awards under the Equity Plan is 60,875,000 common shares. Any shares that are subject to options
or TBRSUs granted under the Equity Plan are counted against this limit as one share for every option or TBRSU, as
applicable, and any shares that are subject to PBRSUs granted under the Equity Plan are counted against this limit at the
maximum performance attainment (which is generally 1.5 shares for every PBRSU). Awards previously granted under the
Equity Plan that expire or are forfeited, or settled in cash, or are sold to cover withholding tax requirements are counted as
one share added to the shares available under the Equity Plan. There are approximately 27.4 million shares in the equity
pool available for future grants under the Equity Plan as at February 28, 2025.
RSUs are redeemed for common shares issued by the Company or the cash equivalent on the vesting dates established by
the Board or the Compensation, Nomination and Governance Committee of the Board. The RSUs granted under the
Equity Plan generally vest over a three-year period, either in equal annual installments or on the third anniversary date.
For PBRSUs, the Company estimates its achievement against the performance goals, which are based on the Company’s
business plan approved by the Board and total shareholder return. The estimated achievement is updated for the
Company’s outlook for the fiscal year as at the end of each fiscal quarter. Compensation cost will only be recognized to
the extent that performance goals are expected to be achieved. The Company classifies RSUs as equity instruments as the
Company has the ability and intent to settle the awards in common shares. The compensation expense for standard RSUs
is calculated based on the fair value of each RSU as determined by the closing value of the Company’s common shares on
the business day of the grant date. The Company recognizes compensation expense over the vesting period of the RSU.
The Company expects to settle RSUs, upon vesting, through the issuance of new common shares from treasury.
The Company has a Deferred Share Unit Plan (the “DSU Plan”), originally approved by the Board on December 20, 2007,
under which each independent director is credited with Deferred Share Units (“DSUs”) in satisfaction of all or a portion of
the cash fees otherwise payable to them for serving as a director of the Company. Each independent director’s annual
retainer will be entirely satisfied in the form of DSUs. Within a specified period after a director ceases to be a member of
BlackBerry Limited
Notes to the Consolidated Financial Statements
In millions of United States dollars, except share and per share data, and except as otherwise indicated
83
the Board, DSUs will be redeemed for cash with the redemption value of each DSU equal to the weighted average trading
price of the Company’s shares over the five trading days preceding the redemption date. Alternatively, the Company may
elect to redeem DSUs by way of shares purchased on the open market or issued by the Company.
DSUs are accounted for as liability-classified awards and are awarded on a quarterly basis. These awards are measured at
their fair value on the date of issuance and remeasured at each reporting period until settlement.
Advertising costs
The Company expenses all advertising costs as incurred. These costs are included in sales and marketing expenses.
Government subsidies
The Company recognizes government subsidies as a reduction to operating expenses in the consolidated statement of
operations when there is reasonable assurance the Company will receive the amount and has complied with the
conditions, if any, attached to the government subsidies.
2.
ADOPTION OF ACCOUNTING POLICIES
Accounting Standards Adopted During Fiscal 2025
In November 2023, the Financial Accounting Standards Board (the “FASB”) issued ASU 2023-07 on the topic of segment
reporting. The standard requires additional disclosures for segment reporting. These requirements include: (i) disclosure
of significant expenses that are regularly provided to the Chief Operating Decision Maker (“CODM”) and included within
each reported measure of segment profit or loss (collectively referred to as the “significant expense principle”); (ii)
disclosure of an amount for other segment items (equal to the difference between segment revenue less segment expenses
disclosed under the significant expense principle and each reported measure of segment profit or loss) by reportable
segment and a description of their composition; (iii) annual disclosure of a reportable segment’s profit or loss and assets
currently required by Topic 280 in interim periods; (iv) clarification that, if the CODM uses more than one measure of a
segment's profit or loss in assessing segment performance and deciding how to allocate resources, a public entity may
report those additional measures of segment profit or loss; (v) disclosure of the title and position of the CODM and an
explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance
and deciding how to allocate resources; and (vi) requiring a public entity that has a single reportable segment provide all
the disclosures required by the amendments in this ASU, and all existing segment disclosures in Topic 280. The guidance
is effective for annual periods beginning after December 15, 2023 and interim periods within fiscal years beginning after
December 15, 2024. The Company early adopted this guidance in the first quarter of fiscal 2025 and has provided the
applicable disclosures in Note 13.
Accounting Pronouncements Not Yet Adopted
In December 2023, the FASB issued ASU 2023-09 “Income Taxes (Topic 740): Improvements to Income Tax
Disclosures” on the topic of income taxes. The standard requires additional disclosure for income taxes. These
requirements include: (i) requiring a public entity to disclose specific categories in the rate reconciliation; (ii) disclosure of
additional information for reconciling items that meet a quantitative threshold (if the effect of those reconciling items is
equal to or greater than 5% of the amount computed by multiplying pretax income or loss by the applicable statutory
income tax rate); (iii) annual disclosure of the amount of income taxes paid (net of refunds received) disaggregated by
federal (national), state, and foreign taxes; (iv) annual disclosure of the amount of income taxes paid (net of refunds
received) disaggregated by individual jurisdictions in which income taxes paid (net of refunds received) is equal to or
greater than 5% of total income taxes paid (net of refunds received); (v) annual disclosure of income (or loss) from
continuing operations before income tax expense (or benefit) disaggregated between domestic and foreign; and (vi) annual
disclosure of income tax expense (or benefit) from continuing operations disaggregated by federal (national), state, and
foreign. For public entities, the guidance is effective for annual periods beginning after December 15, 2024. The Company
will adopt this guidance in fiscal 2026 and is in the process of evaluating the new requirements. As a result, the Company
has not yet determined the impact this new ASU will have on its disclosures.
In November 2024, the FASB issued ASU 2024-03 to amend the codification on “Expense Disaggregation
Disclosure” (Subtopic 220-40): Income Statement - Reporting Comprehensive Income”. The standard requires additional
disclosure on specific expense categories included in the expense captions presented on the statements of operations. The
guidance is effective for annual periods beginning after December 15, 2026, and interim periods within fiscal years
beginning after December 15, 2027. The Company will adopt this guidance in fiscal 2028 and is in process of evaluating
BlackBerry Limited
Notes to the Consolidated Financial Statements
In millions of United States dollars, except share and per share data, and except as otherwise indicated
84
the new requirements. As a result, the Company has not yet determined the impact this new ASU will have on its
disclosures.
3.
DISCONTINUED OPERATIONS
On December 15, 2024 the Company entered into an Equity and Asset Purchase Agreement (the “Equity and Asset
Purchase Agreement”) with Arctic Wolf Networks, Inc. (“Arctic Wolf”) whereby Arctic Wolf would acquire the
Company’s Cylance endpoint security assets and related liabilities.
On February 3, 2025, the Company completed the sale of Cylance endpoint security assets and related liabilities to Arctic
Wolf for $160.0 million of cash, subject to certain adjustments of approximately $39.1 million, and 5.5 million common
shares of Arctic Wolf, pursuant to the equity and asset purchase agreement. The proceeds at closing were a combination
of $79.8 million in net cash after purchase price adjustments, and equity in Arctic Wolf with an estimated fair value of
$24.6 million. The Company’s determination of the fair value of the common shares of Arctic Wolf required the use of
significant unobservable inputs relating to the current and future operations of Arctic Wolf, and as a result, the non-
marketable equity investment was classified as Level 3. The Equity and Asset Purchase Agreement requires a subsequent
cash payment to the Company of approximately $41.1 million one year following the closing. This deferred consideration
has been initially recorded at fair value at the date of close, and included as “Other Receivables” in the Consolidated
Balance Sheets. In connection with the sale, the Company recognized a gain on disposal of discontinued operation before
taxes of 10.4 million.
Assets Held for Sale
The following table sets forth the aggregate carrying amounts of assets and liabilities classified as held for sale relating to
the discontinued operation of Cylance as of February 29, 2024:
For the Year Ended
February 29, 2024
Assets
Other current assets
11.6
Total currents assets of discontinued operations
11.6
Other long-term assets
2.3
Operating lease right-of-use assets, net
0.5
Intangible assets, net
96.8
Goodwill
87.0
Total long-term assets of discontinued operations
186.6
Liabilities
Accounts payable
0.1
Accrued liabilities
3.7
Deferred revenue, current
45.5
Total current liabilities of discontinued operations
49.3
Deferred revenue, non-current
13.3
Total long-term liabilities of discontinued operations
13.3
BlackBerry Limited
Notes to the Consolidated Financial Statements
In millions of United States dollars, except share and per share data, and except as otherwise indicated
85
The financial results of Cylance are presented as “loss from discontinued operations, net of tax” in the Consolidated
Statements of Operations and have been removed from the presentation of results from continuing operations. The
following table represents the financial results of Cylance for the years ended February 28, 2025, February 29, 2024 and
February 28, 2023:
For the Years Ended
February 28, 2025
February 29, 2024
February 28, 2023
Revenue
$
71.2 $
93.6 $
129.6
Cost of sales
42.8
55.7
67.6
Gross margin
28.4
37.9
62.0
Operating expenses
Research and development
30.4
46.0
60.2
Sales and marketing
42.5
59.9
65.8
General and administrative
15.7
21.7
22.4
Amortization
20.5
27.2
68.2
Impairment of long-lived assets
—
—
231.0
Impairment of goodwill
—
18.9
133.3
Gain on disposal of discontinued operation
(10.4)
—
—
98.7
173.7
580.9
Operating loss
(70.3)
(135.8)
(518.9)
Provision for income taxes
0.2
—
—
Net loss from discontinued operations, net of tax
$
(70.5) $
(135.8) $
(518.9)
Basic loss per share from discontinued operations
$
(0.12) $
(0.23) $
(0.90)
Diluted loss per share from discontinued operations
$
(0.12) $
(0.23) $
(0.81)
The following table represents the amortization, stock-based compensation (representing the significant non-cash
operating item) and acquisition of property, plant and equipment of the discontinued operations for the years ended
February 28, 2025, February 29, 2024 and February 28, 2023:
For the Years Ended
February 28, 2025
February 29, 2024
February 28, 2023
Amortization
$
20.5 $
27.2 $
68.2
Stock based compensation
$
5.0 $
4.3 $
3.7
Acquisition of property, plant and equipment
$
— $
— $
—
4.
FAIR VALUE MEASUREMENTS, CASH, CASH EQUIVALENTS AND INVESTMENTS
Fair Value
The Company defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an
orderly transaction between market participants at the measurement date. When determining the fair value measurements
for assets and liabilities required to be recorded at fair value, the Company considers the principal or most advantageous
market in which it would transact and considers assumptions that market participants would use in pricing the asset or
liability, such as inherent risk, non-performance risk and credit risk. The Company applies the following fair value
hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value into three levels:
•
Level 1 - Unadjusted quoted prices at the measurement date for identical assets or liabilities in active markets.
•
Level 2 - Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar
assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets
that are not active; or other inputs that are observable or can be corroborated by observable market data.
BlackBerry Limited
Notes to the Consolidated Financial Statements
In millions of United States dollars, except share and per share data, and except as otherwise indicated
86
•
Level 3 - Significant unobservable inputs that are supported by little or no market activity.
The fair value hierarchy also requires the Company to maximize the use of observable inputs and minimize the use of
unobservable inputs when measuring fair value.
The Company’s cash and cash equivalents, accounts receivable, other receivables, accounts payable and accrued liabilities
are carried at amounts that approximate their fair values (Level 2 measurement) due to their short maturities.
Recurring Fair Value Measurements
In determining the fair value of investments held, the Company primarily relies on an independent third-party valuator for
the fair valuation of securities. The Company also reviews the inputs used in the valuation process and assesses the
pricing of the securities for reasonableness after conducting its own internal collection of quoted prices from brokers. Fair
values for all investment categories provided by the independent third-party valuator that are in excess of 0.5% from the
fair values determined by the Company are communicated to the independent third-party valuator for consideration of
reasonableness. The independent third-party valuator considers the information provided by the Company before
determining whether a change in their original pricing is warranted.
For a description of how the fair values of the Extension Debentures and 2020 Debentures were determined, see the
“Convertible debentures” accounting policies in Note 1. The Extension Debentures are classified as Level 2 and the 2020
Debentures are classified as Level 3.
Non-Recurring Fair Value Measurements
Upon the occurrence of certain events, the Company re-measures the fair value of non-marketable equity investments for
which it utilizes the measurement alternative, and long-lived assets, including property, plant and equipment, operating
lease ROU assets, intangible assets and goodwill if an impairment or observable price adjustment is recognized in the
current period.
Non-Marketable Equity Investments Measured Using the Measurement Alternative
Non-marketable equity investments measured using the measurement alternative include investments in privately held
companies without readily determinable fair values in which the Company does not own a controlling interest or have
significant influence. The estimation of fair value used in the fair value measurements required the use of significant
unobservable inputs, and as a result, the fair value measurements were classified as Level 3.
Goodwill Impairment
During the third quarter of fiscal 2025 and in connection with the plans to sell the Cylance business, the Company
reorganized its reporting structure resulting in its BlackBerry Spark reporting unit being disaggregated into two separate
reporting units: UEM and Cylance. In accordance with ASC 350 Intangibles - Goodwill and Other, the Company
conducted a valuation of the individual reporting units and allocated the goodwill associated with the previous BlackBerry
Spark reporting unit to the UEM and Cylance reporting units using a relative fair value approach. The valuations of the
reporting units were based on a combination of the income approach using a discounted future cash flow model, a market-
based approach, and estimated exit value approaches for Cylance using the same critical accounting estimates as disclosed
in Note 1. Following the assignment of assets, liabilities, and goodwill to the UEM and Cylance reporting units, the
Company compared the carrying values of the reporting units against their fair values and determined no impairment was
present in either reporting unit.
During the year ended February 28, 2025, there were no goodwill impairment charges. In its annual goodwill impairment
test in the fourth quarter of fiscal 2025, the Company’s estimates indicated the fair values of all its reporting units
substantially exceeded their carrying values, such carrying values were expected to be recovered, and there was no
goodwill impairment.
During the year ended February 29, 2024, the Company recorded a goodwill impairment charge of $34.8 million in the
BlackBerry Spark reporting unit, which was included within the Company’s Cybersecurity segment as disclosed in Note
13. The estimated fair values of the Company’s other reporting units substantially exceeded their carrying values as at the
annual goodwill impairment test date. The portion of the BlackBerry Spark goodwill impairment charge allocated to the
Cylance reporting unit was based on the same proportion determined in the third quarter of fiscal 2025 in determining the
Cylance discontinued operations and assets held for sale for the year ended February 29, 2024. The allocation of the
BlackBerry Spark goodwill impairment charge was $15.9 million to the UEM reporting unit of and $18.9 million to the
Cylance reporting unit.
BlackBerry Limited
Notes to the Consolidated Financial Statements
In millions of United States dollars, except share and per share data, and except as otherwise indicated
87
During the year ended February 28, 2023, the Company recorded a goodwill impairment charge of $245.4 million in the
BlackBerry Spark reporting unit, which was included within the Company’s Cybersecurity segment as disclosed in Note
13. The estimated fair values of the Company’s other reporting units substantially exceeded their carrying values as at the
annual goodwill impairment test date. The portion of the BlackBerry Spark goodwill impairment charge allocated to the
Cylance reporting unit was based on the same proportion determined in the third quarter of fiscal 2025 in determining
discontinued operations and assets held for sale for the year ended February 28, 2023. The allocation of the BlackBerry
Spark goodwill impairment charge was $112.1 million to the UEM reporting unit of and $133.3 million to the Cylance
reporting unit.
Impairment of Long-Lived Assets (“LLA”)
During the year ended February 28, 2025, the Company exited certain leased facilities and recorded a pre-tax and after-tax
impairment charge of $9.6 million consisting of $6.9 million related to operating lease ROU assets for certain facilities
and $2.7 million related to property, plant and equipment. The impairment was determined by comparing the fair value of
the impacted ROU asset to the carrying value of the asset as of the impairment measurement date, as required under ASC
Topic 360, Property, Plant, and Equipment, using Level 3 inputs. The fair value of the ROU asset was based on the
estimated sublease income for certain facilities taking into consideration the estimated time period it will take to obtain a
sublessor, the applicable discount rate and the sublease rate, which are considered unobservable inputs. The Company
conducts an evaluation of the related liabilities and expenses and revises its assumptions and estimates as appropriate as
new or updated information becomes available. These ROU impaired assets are classified within Level 3 of the fair value
hierarchy.
During the year ended February 29, 2024, the Company exited certain leased facilities and recorded a pre-tax and after-tax
impairment charge of $7.5 million consisting of $6.9 million related to operating lease ROU assets for certain facilities
and $0.6 million related to property, plant and equipment. The Company also conducted regular reviews of the individual
patents, both organically generated and acquired, comprising its patent portfolio. As a result of this review, for the year
ended February 29, 2024, the Company determined it had an indicator of impairment, as it had ceased enforcement and
abandoned the legal right and title to patents with a cost of $15.3 million, accumulated amortization $7.5 million, and net
book value of $7.8 million, which is classified as an impairment of long-lived assets on the Company’s consolidated
statements of operations.
During the year ended February 28, 2023, the Company recorded a non-cash, pre-tax and after-tax impairment charge of
$234.5 million consisting of $231.0 million related to the Company’s UES asset group, which was primarily composed of
intangible assets recognized on the acquisition of Cylance and was included within the Company’s Cybersecurity segment
as disclosed in Note 12, and $3.5 million related to operating lease ROU assets for certain leased facilities that were exited
during the fiscal year. None of the Company’s other asset groups demonstrated indicators of potential impairment.
BlackBerry Limited
Notes to the Consolidated Financial Statements
In millions of United States dollars, except share and per share data, and except as otherwise indicated
88
Cash, Cash Equivalents and Investments
The components of cash, cash equivalents and investments by fair value level as at February 28, 2025 were as follows:
Cost Basis (1)
Unrealized
Gains
Unrealized
Losses
Fair Value
Cash and
Cash
Equivalents
Short-term
Investments
Long-term
Investments
Restricted
Cash and
Cash
Equivalents
Bank balances
$ 223.7 $
— $
— $ 223.7 $ 223.7 $
— $
— $
—
Other investments
23.3
4.9
—
28.2
—
—
28.2
—
247.0
4.9
—
251.9
223.7
—
28.2
—
Level 1:
Equity securities
10.0
—
(10.0)
—
—
—
—
—
Level 2:
Term deposits, and
certificates of deposits
39.3
—
—
39.3
—
30.1
—
9.2
Bearer deposit notes
10.3
—
—
10.3
7.3
3.0
—
—
Commercial paper
55.5
—
—
55.5
27.8
27.7
—
—
Non-U.S. promissory notes
9.8
—
—
9.8
7.9
1.9
—
—
Non-U.S. government
sponsored enterprise notes
9.3
—
—
9.3
—
4.9
—
4.4
Corporate notes/bonds
3.5
—
—
3.5
—
3.5
—
—
127.7
—
—
127.7
43.0
71.1
—
13.6
Level 3:
Equity investments in
private companies
30.7
1.2
(1.2)
30.7
—
—
30.7
—
$ 415.4 $
6.1 $
(11.2) $ 410.3 $ 266.7 $
71.1 $
58.9 $
13.6
______________________________
(1) Cost basis for other investments includes the effect of returns of capital and impairment.
BlackBerry Limited
Notes to the Consolidated Financial Statements
In millions of United States dollars, except share and per share data, and except as otherwise indicated
89
The components of cash, cash equivalents and investments by fair value level as at February 29, 2024 were as follows:
Cost Basis (1)
Unrealized
Gains
Unrealized
Losses
Fair Value
Cash and
Cash
Equivalents
Short-term
Investments
Long-term
Investments
Restricted
Cash and
Cash
Equivalents
Bank balances
$
96.2 $
— $
— $
96.2 $
96.2 $
— $
— $
—
Other investments
29.6
6.1
—
35.7
—
—
35.7
—
125.8
6.1
—
131.9
96.2
—
35.7
—
Level 1:
Equity securities
10.0
—
(10.0)
—
—
—
—
—
Level 2:
Term deposits, and
certificates of deposits
21.5
—
—
21.5
—
—
—
21.5
Bearer deposit notes
53.1
—
—
53.1
28.4
24.7
—
—
Commercial paper
46.8
—
—
46.8
14.7
32.1
—
—
Non-U.S. promissory notes
35.4
—
—
35.4
30.2
5.2
—
—
U.S. treasury bills
9.5
—
—
9.5
5.6
—
—
3.9
166.3
—
—
166.3
78.9
62.0
—
25.4
$ 302.1 $
6.1 $
(10.0) $ 298.2 $ 175.1 $
62.0 $
35.7 $
25.4
______________________________
(1) Cost basis for other investments includes the effect of returns of capital and impairment.
As at February 28, 2025, the Company had non-marketable equity investments without readily determinable fair value of
$58.9 million (February 29, 2024 - $35.7 million) including common shares of Arctic Wolf related to the sale of Cylance
as further discussed in Note 3. During the year ended February 28, 2025, there was a $0.2 million impairment recognized
relating to non-marketable equity investments without readily determinable fair value (February 29, 2024 and February
28, 2023 - nil). During the year ended February 28, 2025, the Company recorded upward adjustments of $1.2 million and
downward adjustments of $2.4 million to the carrying value of certain non-marketable equity investments without readily
determinable fair value resulting from observable price changes in orderly transactions for identical or similar securities
which have been included in investment income, net on the Company’s consolidated statements of operations. As of
February 28, 2025, the Company has recorded a cumulative impairment of $3.0 million to the carrying value of certain
other non-marketable equity investments without readily determinable fair value (February 29, 2024 - $3.0 million).
There were no realized gains or losses on available-for-sale securities for the year ended February 28, 2025 (February 29,
2024 and February 28, 2023 - nil).
The Company has restricted cash and cash equivalents, consisting of cash and securities pledged as collateral to major
banking partners in support of the Company’s requirements for letters of credit and a performance bond that the Company
was required to post to support a government contract. These letters of credit support certain leasing arrangements entered
into in the ordinary course of business and are for terms ranging from one month to seven years. The Company is legally
restricted from accessing these funds during the term of the leases for which the letters of credit have been issued and
during the term of the government contract; however, the Company can continue to invest the funds and receive
investment income thereon.
BlackBerry Limited
Notes to the Consolidated Financial Statements
In millions of United States dollars, except share and per share data, and except as otherwise indicated
90
The following table provides a reconciliation of cash, cash equivalents, restricted cash, and restricted cash equivalents as
at February 28, 2025, February 29, 2024 and February 28, 2023 from the consolidated balance sheets to the consolidated
statements of cash flows:
As at
February 28,
2025
February 29,
2024
February 28,
2023
Cash and cash equivalents
$
266.7 $
175.1 $
295.7
Restricted cash and cash equivalents
13.6
25.4
26.6
Total cash, cash equivalents, restricted cash, and restricted cash
equivalents presented in the consolidated statements of cash flows
$
280.3 $
200.5 $
322.3
The contractual maturities of available-for-sale investments as at February 28, 2025 and February 29, 2024 were as
follows:
As at
February 28, 2025
February 29, 2024
Cost Basis
Fair Value
Cost Basis
Fair Value
Due in one year or less
$
127.7 $
127.7 $
166.4 $
166.4
No fixed maturity
10.0
—
10.0
—
$
137.7 $
127.7 $
176.4 $
166.4
As at February 28, 2025 and February 29, 2024, the Company had no available-for-sale debt securities with continuous
unrealized losses.
5. CONSOLIDATED BALANCE SHEET DETAILS
Accounts Receivable, Net of Allowance
The allowance for credit losses as at February 28, 2025 was $6.6 million (February 29, 2024 - $6.0 million).
The Company recognizes current estimated credit losses (“CECL”) for accounts receivable. The CECL for accounts
receivable are estimated based on days past due and region for each customer in relation to a representative pool of assets
consisting of a large number of customers with similar risk characteristics that operate under similar economic
environments. The Company determined the CECL by estimating historical credit loss experience based on the past due
status and region of the customers, adjusted as appropriate to reflect current conditions and estimates of future economic
conditions. When specific customers are identified as no longer sharing the same risk profile as their current pool, they are
removed from the pool and evaluated separately. The Company also has long-term accounts receivable included in Other
Long-term Assets. The CECL for long-term accounts receivable is estimated using the probability of default method and
the default exposure due to limited historical information. The exposure of default is represented by the assets’ amortized
carrying amount at the reporting date.
The following table sets forth the activity in the Company’s allowance for credit losses:
Carrying Amount
Beginning balance as of February 28, 2023
$
1.4
Prior period provision for expected credit losses
4.6
Ending balance of the allowance for credit loss as at February 29, 2024
6.0
Current period provision for expected credit losses
5.3
Write-offs charged against the allowance
(4.7)
Ending balance of the allowance for credit loss as at February 28, 2025
$
6.6
The allowance for credit losses as at February 28, 2025 consists of $1.1 million (February 29, 2024 - $1.4 million) relating
to CECL estimated based on days past due and region and $5.5 million (February 29, 2024 - $4.6 million) relating to
specific customers that were evaluated separately.
BlackBerry Limited
Notes to the Consolidated Financial Statements
In millions of United States dollars, except share and per share data, and except as otherwise indicated
91
There were two customers that comprised more than 10% of accounts receivable as at February 28, 2025 (February 29,
2024 - two customers comprised more than 10%).
Other Receivables
As at
February 28, 2025
February 29, 2024
Arctic Wolf Delayed Cash Payment (note 3)
$
38.6 $
—
Other
9.8
21.4
48.4
21.4
As at February 28, 2025 and February 29, 2024, other receivables included items such as claims filed with the Ministry of
Innovation, Science and Economic Development Canada relating to its Strategic Innovation Fund program’s investment in
BlackBerry QNX, among other items, none of which were greater than 5% of the current assets balance as at the balance
sheet dates.
Other Current Assets
As at February 28, 2025 and February 29, 2024, other current assets included items such as the current portion of deferred
commissions and prepaid expenses, among other items, none of which were greater than 5% of the current assets balance
as at the balance sheet dates.
Property, Plant and Equipment, Net
Property, plant and equipment comprised the following:
As at
February 28, 2025
February 29, 2024
Cost
BlackBerry operations and other information technology
$
80.6 $
85.4
Leasehold improvements and other
10.5
15.2
Furniture and fixtures
4.6
6.3
Manufacturing, repair and research and development equipment
2.2
2.4
97.9
109.3
Accumulated amortization and impairment
84.5
88.1
Net book value
$
13.4 $
21.2
For the year ended February 28, 2025, amortization expense related to property, plant and equipment amounted to
$7.6 million (February 29, 2024 - $9.9 million; February 28, 2023 - $12.2 million).
BlackBerry Limited
Notes to the Consolidated Financial Statements
In millions of United States dollars, except share and per share data, and except as otherwise indicated
92
Intangible Assets, Net
Intangible assets comprised the following:
As at February 28, 2025
Cost
Accumulated
Amortization
Net Book
Value
Acquired technology
$
29.8 $
29.1 $
0.7
Other acquired intangibles
40.4
38.0
2.4
Intellectual property
110.4
66.2
44.2
$
180.6 $
133.3 $
47.3
As at February 29, 2024
Cost
Accumulated
Amortization
Net Book
Value
Acquired technology
$
29.8 $
26.1 $
3.7
Other acquired intangibles
40.4
34.0
6.4
Intellectual property
110.1
62.7
47.4
$
180.3 $
122.8 $
57.5
For the year ended February 28, 2025, amortization expense related to intangible assets amounted to $16.7 million
(February 29, 2024 - $21.4 million; February 28, 2023 - $24.3 million).
Total additions to intangible assets in fiscal 2025 amounted to $7.0 million (fiscal 2024 - $13.8 million) and primarily
consisted of payments for intellectual property relating to patent maintenance, registration and license fees.
For the year ended February 28, 2025, the Company recorded $0.5 million in impairment charges related to patent
abandonment (fiscal 2024 - $7.8 million).
Based on the carrying value of the identified intangible assets, as at February 28, 2025, and assuming no subsequent
impairment of the underlying assets, the annual amortization expense for each of the five succeeding years is expected to
be as follows: fiscal 2026 - $10.7 million; fiscal 2027 - $5.7 million; fiscal 2028 - $5.1 million; fiscal 2029 - $4.0 million
and fiscal 2030 - $3.5 million.
BlackBerry Limited
Notes to the Consolidated Financial Statements
In millions of United States dollars, except share and per share data, and except as otherwise indicated
93
The weighted average remaining useful lives of the intangible assets are as follows:
As at
February 28, 2025
February 29, 2024
Acquired technology
0.3 years
1.3 years
Other acquired intangibles
0.6 years
1.6 years
Intellectual property
5.7 years
6.1 years
Goodwill
Changes to the carrying amount of goodwill during the fiscal years ended February 28, 2025 and February 29, 2024 were
as follows:
Carrying Amount
Carrying amount as at February 28, 2023
$
489.0
Goodwill impairment charge (note 4)
(15.9)
Effect of foreign exchange on non-U.S. dollar denominated goodwill
1.4
Carrying amount as at February 29, 2024
474.5
Effect of foreign exchange on non-U.S. dollar denominated goodwill
(2.1)
Carrying amount as at February 28, 2025
$
472.4
Other Long-term Assets
As at February 28, 2025 and February 29, 2024, other long-term assets included long-term receivables related to
intellectual property sold (see Note 13 under the heading “Patent Sale”), long-term receivables, and the long-term portion
of deferred commission, among other items, none of which were greater than 5% of the total assets balance.
Accrued Liabilities
Accrued liabilities comprised the following:
As at
February 28, 2025
February 29, 2024
Operating lease liabilities, current (note 12)
$
15.0 $
19.6
Variable incentive accrual
31.0
15.1
Restructuring programs, current portion
9.2
20.0
Other
71.0
59.0
$
126.2 $
113.7
Other accrued liabilities include accrued director fees, accrued vendor liabilities, payroll withholding taxes and accrued
royalties, among other items, none of which were greater than 5% of the current liabilities balance in any of the periods
presented.
BlackBerry Limited
Notes to the Consolidated Financial Statements
In millions of United States dollars, except share and per share data, and except as otherwise indicated
94
Restructuring
During fiscal 2025 and fiscal 2024, the Company commenced restructuring programs with the objectives of reducing its
annual costs and expenses relating to Secure Communications. Other charges and cash costs may occur as programs are
implemented or changes are completed.
The following table sets forth the activity in the Company’s restructuring program liabilities for fiscal 2025 and fiscal
2024:
Employee
Termination
Benefits
Facilities
Costs
Total
Balance as at February 28, 2023
$
1.9 $
1.0 $
2.9
Charges incurred
30.9
6.4
37.3
Cash payments made
(16.0)
(3.1)
(19.1)
Balance as at February 29, 2024
16.8
4.3
21.1
Charges incurred
21.3
4.8
26.1
Cash payments made
(31.0)
(5.8)
(36.8)
Balance as at February 28, 2025
$
7.1 $
3.3 $
10.4
Current portion
$
7.1 $
2.1 $
9.2
Long-term portion
—
1.2
1.2
$
7.1 $
3.3 $
10.4
The long-term portion of the restructuring liabilities is recorded at fair value, determined by measuring the remaining
payments at present value using an effective interest rate of 5.3%, and the Company recorded interest expense over time
to arrive at the total face value of the remaining payments.
The restructuring charges included employee termination benefits and facilities costs. Total charges incurred in fiscal
2025 and fiscal 2024 were $26.1 million and $37.3 million, respectively, recorded within General and administrative on
the Consolidated Statements of Operations.
BlackBerry Limited
Notes to the Consolidated Financial Statements
In millions of United States dollars, except share and per share data, and except as otherwise indicated
95
6.
INCOME TAXES
The difference between the amount of the provision for (recovery of) income taxes and the amount computed by
multiplying income (loss) before income taxes by the statutory Canadian tax rate is reconciled as follows:
For the Years Ended
February 28, 2025
February 29, 2024
February 28, 2023
Statutory Canadian tax rate (1)
26.5 %
26.5 %
26.5 %
Expected provision for (recovery of) income taxes
$
2.3
$
7.9
$
(53.5)
Differences in income taxes resulting from:
Valuation allowance
1.6
(3.3)
23.3
Investment tax credits
(8.1)
(10.0)
(10.5)
Change in unrecognized income tax benefits
(0.1)
(1.1)
0.7
Foreign tax rate differences
5.9
4.5
10.1
Non-deductible permanent differences
8.8
7.7
5.4
Goodwill de-recognition
—
4.2
29.7
Prior period adjustments
(0.4)
8.6
4.0
Other differences
7.0
5.7
4.5
$
17.0
$
24.2
$
13.7
______________________________
(1) Our Canadian corporate tax rate is comprised of a basic Part I federal tax rate of 38%, net 15% after federal tax abatement and
general tax reduction, plus the additional provincial tax of 11.5%.
For the Years Ended
February 28, 2025
February 29, 2024
February 28, 2023
Income (loss) before income taxes:
Canadian
$
(9.1) $
(18.3) $
(128.0)
Foreign
17.6
48.1
(73.8)
$
8.5 $
29.8 $
(201.8)
BlackBerry Limited
Notes to the Consolidated Financial Statements
In millions of United States dollars, except share and per share data, and except as otherwise indicated
96
The provision for (recovery of) income taxes consists of the following:
For the Years Ended
February 28, 2025
February 29, 2024
February 28, 2023
Current
Canadian
$
5.3 $
2.2 $
0.4
Foreign
11.7
22.0
13.3
$
17.0 $
24.2 $
13.7
Deferred income tax assets and liabilities consist of the following temporary differences:
As at
February 28, 2025
February 29, 2024
Assets
Property, plant, equipment and intangibles assets
$
263.3 $
257.6
Non-deductible reserves
21.3
36.9
Minimum taxes
206.7
206.7
Research and development
410.5
402.4
Tax loss carryforwards
474.7
513.6
Other
141.3
124.9
Deferred income tax assets
1,517.8
1,542.1
Valuation allowance
1,517.2
1,519.7
Deferred income tax assets net of valuation allowance
0.6
22.4
Liabilities
Property, plant, equipment and intangibles assets
0.6
22.4
Deferred income tax liabilities
0.6
22.4
Net deferred income tax asset (liability)
$
— $
—
The Company regularly assesses the need for a valuation allowance against its deferred tax assets. In making that
assessment, the Company considers both positive and negative evidence related to the likelihood of realization of the
deferred tax assets to determine, based on the weight of available evidence, whether it is more likely than not that some or
all of the deferred tax assets will be realized.
In evaluating the need for a valuation allowance, the Company noted that there had been three years of cumulative losses,
including fiscal 2025. In fiscal 2025, the Company saw a decrease in the deferred tax valuation allowance of $2.5 million
(February 29, 2024 - increase of $27.6 million). As a result, the deferred tax valuation allowance had an ending balance of
$1,517.2 million (February 29, 2024 - $1,519.7 million). This accounting treatment has no effect on the Company’s ability
to utilize deferred tax assets to reduce future cash tax payments. The Company will continue to assess the likelihood that
the deferred tax assets will be realizable at each reporting period and the valuation allowance will be adjusted accordingly.
BlackBerry Limited
Notes to the Consolidated Financial Statements
In millions of United States dollars, except share and per share data, and except as otherwise indicated
97
The Company’s total unrecognized income tax benefits as at February 28, 2025 and February 29, 2024 were $19.5 million
and $19.6 million, respectively. A reconciliation of the beginning and ending amount of unrecognized income tax benefits
that, if recognized, would affect the Company’s effective income tax rate is as follows:
For the Years Ended
February 28, 2025
February 29, 2024
February 28, 2023
Unrecognized income tax benefits, opening balance
$
19.6 $
20.6 $
19.9
Increase for income tax positions of current year
0.2
1.0
0.7
Settlement of tax positions
(0.3)
(2.0)
—
Unrecognized income tax benefits, ending balance
$
19.5 $
19.6 $
20.6
As at February 28, 2025, $19.1 million of the unrecognized tax benefits have been netted against deferred income taxes
and $0.4 million has been recorded within income taxes payable on the Company’s consolidated balance sheets.
A summary of open tax years by major jurisdiction is presented below:
Jurisdiction
Canada (1)
Fiscal 2016 - 2025
United States (2)
Fiscal 2022 - 2025
United Kingdom
Fiscal 2024 - 2025
Germany
Fiscal 2020 - 2025
______________________________
(1) Includes federal as well as provincial jurisdictions, as applicable.
(2) Pertains to federal tax years. Certain state jurisdictions remain open from fiscal 2020 through fiscal 2025.
The Company is subject to ongoing examination by tax authorities in the jurisdictions in which it operates. The Company
regularly assesses the status of these examinations and the potential for adverse outcomes to determine the adequacy of
the provision for income taxes, as well as the provisions for indirect and other taxes and related penalties and interest. The
Company believes it is reasonably possible that approximately nil of its gross unrecognized income tax benefits will be
realized in the next twelve months. While the final resolution of these audits is uncertain, the Company believes the
ultimate resolution of these audits will not have a material adverse effect on its consolidated financial position, liquidity or
results of operations.
The Company recognizes interest and penalties related to unrecognized income tax benefits as interest expense that is
netted and reported within investment income, net. The amount of interest accrued as at February 28, 2025 was
approximately $3.0 million (February 29, 2024 - approximately $2.9 million). The amount of penalties accrued as at
February 28, 2025 was nil (February 29, 2024 - nil).
BlackBerry Limited
Notes to the Consolidated Financial Statements
In millions of United States dollars, except share and per share data, and except as otherwise indicated
98
As at February 28, 2025, the Company has the following net operating loss carryforwards and tax credits, which are
scheduled to expire in the following years:
Year of Expiry
Net Operating Losses
Research and Development
Tax Credits (1)
Minimum Taxes
2029
$
— $
— $
1.1
2030
—
—
107.8
2031
—
11.5
71.7
2032
27.4
0.7
22.2
2033
80.5
132.7
0.2
2034
85.5
123.9
0.1
2035
81.0
51.9
3.6
2036
249.0
39.7
—
2037
492.5
23.7
—
2038
199.3
17.3
—
2039
13.1
14.6
—
2040
3.3
12.9
—
2041
—
8.3
—
2042
—
10.5
—
2043
181.6
13.6
—
2044
—
12.8
—
2045
—
9.6
—
Indefinite
417.9
20.9
—
$
1,831.1 $
504.6 $
206.7
______________________________
(1) Includes federal, provincial and state balances.
7.
DEBENTURES
3.00% Convertible Senior Notes
On January 29, 2024, the Company issued $200.0 million aggregate principal amount of 3.00% senior convertible
unsecured notes(the “Notes” and, collectively with the Extension Debentures and 2020 Debentures, the “Debentures”) in
an offering to qualified institutional buyers in accordance with Rule 144A under the Securities Act of 1933, as amended.
The Notes are due on February 15, 2029 unless earlier converted, redeemed, or repurchased. Each $1,000 principal
amount of the Notes is convertible into 257.5826 common shares of the Company based on the initial conversion rate, for
a total of 52 million common shares at a price of $3.88 per share, subject to adjustments. Prior to the close of business on
the business day immediately preceding November 15, 2028, the Notes will be convertible only upon satisfaction of
certain conditions and during certain periods, and thereafter, at any time until the close of business on the second
scheduled trading day immediately preceding February 15, 2029. The Company may satisfy any conversions of the Notes
by paying or delivering, as the case may be, cash, its common shares or a combination of cash and its common shares, at
the Company’s election (or, in the case of any Notes called for redemption that are converted during the related
redemption period, solely its common shares). Covenants associated with the Notes include general corporate
maintenance, existence and reporting requirements. The Notes will bear interest at a rate of 3.00% per annum, payable
semi-annually in arrears on February 15 and August 15 of each year, beginning on August 15, 2024.
The Company has recorded the Notes, including the debt itself and all embedded derivatives, at cost less debt issuance
costs of $6.0 million and present the Notes as a single hybrid financial instrument. No portion of the embedded derivatives
required bifurcation from the host debt contract.
BlackBerry Limited
Notes to the Consolidated Financial Statements
In millions of United States dollars, except share and per share data, and except as otherwise indicated
99
The following table summarizes the change in the Notes for the fiscal year ended February 28, 2025 from their date of
issuance:
As at
February 28, 2025
Balance as at February 29, 2024
$
194.1
Amortization of debt issuance costs
1.2
Balance as at February 28, 2025
$
195.3
The Company’s estimate of the fair value of the Notes as at February 28, 2025 is approximately $289.5 million (February
28, 2024 - $204.0 million).
Extension Debentures and 2020 Debentures
On November 17, 2023, the Company issued $150.0 million aggregate principal amount of 1.75% extendible convertible
unsecured debentures (the “Extension Debentures”) in a private placement to certain controlled affiliates of Fairfax
Financial Holdings Limited (“Fairfax”). The Company used the net proceeds from the issuance of the Extension
Debentures, together with cash on hand, to repay its outstanding $365.0 million aggregate principal amount of 1.75%
unsecured convertible debentures (the “2020 Debentures” and, collectively with the Extension Debentures, the “Prior
Debentures”) at maturity on November 13, 2023. Aside from the maturity date, the terms of the Extension Debentures
were substantially identical to those of the 2020 Debentures, except that the Extension Debentures were not listed on any
stock exchange and did not involve an indenture trustee. The Extension Debentures matured and were repaid on
February 15, 2024.
Due to the conversion option and other embedded derivatives within the Prior Debentures, the Company elected to record
the Prior Debentures, including the debt itself and all embedded derivatives, at fair value and presented the Prior
Debentures as a single hybrid financial instrument. No portion of the fair value of the Prior Debentures was recorded as
equity.
Each period, the fair value of the Prior Debentures was recalculated and resulting gains and losses from the change in fair
value of the Prior Debentures associated with non-credit components were recognized in income, while the change in fair
value associated with credit components was recognized in accumulated other comprehensive loss (“AOCL”). The fair
value of the 2020 Debentures was determined using the significant Level 2 inputs interest rate curves, the market price
and volatility of the Company’s listed common shares, and the significant Level 3 inputs related to credit spread and the
implied discount of the 2020 Debentures at issuance. The fair value of the Extension Debentures was determined using
observable interest rate curves, and the market price and volatility of the Company’s common shares.
The following table shows the impact of the changes in fair value of the 2020 Debentures for the years ended February 28,
2025, February 29, 2024 and February 28, 2023:
For the Years Ended
February 28,
2025
February 29,
2024
February 28,
2023
Income associated with the change in fair value from non-credit components
recorded in the consolidated statements of operations
$
— $
2.4 $
137.4
Income associated with the change in fair value from instrument-specific credit
components recorded in AOCL
—
—
1.6
Realized losses associated with the change in fair value from credit
components recorded in the consolidated statements of operations on maturity
of the Extension Debentures and 2020 Debentures
—
(6.0)
—
Realized losses associated with the change in fair value from credit
components released from AOCL on maturity of the Extension Debentures and
2020 Debentures
—
5.9
—
Total decrease in the fair value of the Extension Debentures and 2020
Debentures
$
— $
2.3 $
139.0
BlackBerry Limited
Notes to the Consolidated Financial Statements
In millions of United States dollars, except share and per share data, and except as otherwise indicated
100
For the year ended February 28, 2025, the Company recorded interest expense related to the Debentures of $6.0 million,
which has been included in investment income, net on the Company’s consolidated statements of operations (fiscal 2024 -
$5.6 million; fiscal 2023 - $6.4 million). The Company is required to make semi-annual interest-only payments of
approximately $3.0 million during the remaining term the Notes are outstanding.
Fairfax, a related party under U.S. GAAP due to its beneficial ownership of common shares in the Company after taking
into account potential conversion of the Extension Debentures and the 2020 Debentures, respectively, owned the full
principal amount of the Extension Debentures and $330.0 million principal amount of the 2020 Debentures. As such, the
payment of interest on the Prior Debentures, and their repayment, to Fairfax represented related party transactions.
8.
CAPITAL STOCK
(a)
Capital Stock
The Company is authorized to issue an unlimited number of voting common shares, an unlimited number of non-voting,
redeemable, retractable Class A common shares and an unlimited number of non-voting, cumulative, redeemable,
retractable preferred shares. As at February 28, 2025 and February 29, 2024, there were no Class A common shares or
preferred shares outstanding.
The following details the changes in issued and outstanding common shares for the years ended February 28, 2025,
February 29, 2024 and February 28, 2023:
Capital Stock and
Additional Paid-in Capital
Stock
Outstanding
(000s)
Amount
Common shares outstanding as at February 28, 2022
576,228 $
2,868.6
Exercise of stock options
97
0.3
Common shares issued for restricted share unit settlements
4,872
—
Stock-based compensation
—
33.9
Common shares issued for employee share purchase plan
960
5.8
Common shares outstanding as at February 28, 2023
582,157
2,908.6
Exercise of stock options
106
0.3
Common shares issued for restricted share unit settlements
5,636
—
Stock-based compensation
—
33.1
Common shares issued on the redemption of deferred share units
297
0.9
Common shares issued for employee share purchase plan
1,037
4.8
Common shares outstanding as at February 29, 2024
589,233
2,947.7
Exercise of stock options
12
—
Common shares issued for restricted share unit settlements
5,823
—
Stock-based compensation
—
25.6
Common shares issued for employee share purchase plan
1,163
3.1
Common shares outstanding as at February 28, 2025
596,231 $
2,976.4
The Company had 596 million voting common shares outstanding, 0.1 million options to purchase voting common shares,
11 million RSUs and 1.6 million DSUs outstanding as at March 28, 2025. In addition, 51.5 million common shares are
issuable upon conversion in full of the Notes as described in Note 7.
BlackBerry Limited
Notes to the Consolidated Financial Statements
In millions of United States dollars, except share and per share data, and except as otherwise indicated
101
(b)
Stock-based Compensation
Restricted share units
The Company recorded compensation expense with respect to RSUs of approximately $25.6 million in the year ended
February 28, 2025 (February 29, 2024 - $33.1 million; February 28, 2023 - $33.6 million).
A summary of RSU activity during fiscal 2025 is shown below:
RSUs Outstanding
Number
(000’s)
Weighted
Average
Grant Date
Fair Value
Average
Remaining
Contractual
Life in Years
Aggregate
Intrinsic
Value
(millions)
Balance as at February 29, 2024
16,301 $
4.30
Granted during the year
4,494
1.53
Vested during the year
(5,825)
5.02
Forfeited/cancelled during the year
(3,466)
4.04
Balance as at February 28, 2025
11,504 $
2.95
1.50 years
$
54
Expected to vest February 28, 2025
9,508 $
2.87
1.53 years
$
45
The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the aggregate closing share
price of the Company’s common shares on February 28, 2025 that would have been received by RSU holders if all RSUs
had been vested on February 28, 2025).
Tax deficiencies incurred by the Company related to the RSUs vested were nil for the year ended February 28, 2025
(February 29, 2024 - tax deficiency of nil; February 28, 2023 - tax deficiency of nil).
As at February 28, 2025, there was $21.8 million of unrecognized compensation expense related to RSUs that will be
expensed over the vesting period, which, on a weighted average basis, results in a period of approximately 1.40 years.
During the year ended February 28, 2025, there were 4,494,083 RSUs granted (February 29, 2024 - 8,097,408), all of
which will be settled upon vesting by the issuance of new common shares.
During the year ended February 28, 2025, the weighted average fair value for RSUs granted was $1.53 (February 29, 2024
- $3.51; February 28, 2023 - $4.29). During the year ended February 28, 2025, the fair value of RSUs that vested was
$29.2 million (February 29, 2024 - $38.1 million; February 28, 2023 - $39.6 million).
Deferred share units (“DSUs”)
The Company issued 542,449 DSUs and redeemed 292,923 DSUs during the year ended February 28, 2025. There were
1.6 million DSUs outstanding as at February 28, 2025 (February 29, 2024 - 1.4 million). The Company had a liability of
$7.7 million in relation to the DSU Plan as at February 28, 2025 (February 29, 2024 - $3.8 million) included in accrued
liabilities.
BlackBerry Limited
Notes to the Consolidated Financial Statements
In millions of United States dollars, except share and per share data, and except as otherwise indicated
102
9.
EARNINGS (LOSS) PER SHARE
The following table sets forth the computation of basic and diluted earnings (loss) per share:
For the Years Ended
February 28, 2025
February 29, 2024
February 28, 2023
Net income (loss) from continuing operations for basic and diluted
earnings (loss) per share available to common shareholders
$
(8.5) $
5.6 $
(215.5)
Less: Debentures fair value adjustment (1) (2)
—
—
(137.4)
Add: interest expense on Debentures (1) (2)
—
—
6.4
Net income (loss) from continuing operations for diluted earnings
(loss) per share available to common shareholders
$
(8.5) $
5.6 $
(346.5)
Net loss for basic and diluted loss per share available to common
shareholders
(79.0)
(130.2)
(734.4)
Less: Debentures fair value adjustment (1) (2)
—
—
(137.4)
Add: interest expense on Debentures (1) (2)
—
—
6.4
Net loss for diluted loss per share available to common shareholders
$
(79.0) $
(130.2) $
(865.4)
Weighted average number of shares outstanding (000’s) - basic
591,470
584,543
578,654
Effect of dilutive securities (000’s)
Stock-based compensation (3) (4)
—
7,954
—
Conversion of 2020 Debentures (1) (2)
—
—
60,833
Weighted average number of shares and assumed conversions (000’s)
diluted
591,470
592,497
639,487
Earnings (loss) per share - reported
Basic earnings (loss) per share from continuing operations
$
(0.01) $
0.01 $
(0.37)
Total basic loss per share
$
(0.13) $
(0.22) $
(1.27)
Diluted earnings (loss) per share from continuing operations
$
(0.01) $
0.01 $
(0.54)
Total diluted loss per share
$
(0.13) $
(0.22) $
(1.35)
______________________________
(1) The Company has not presented the dilutive effect of the Debentures using the if-converted method in the calculation
of diluted loss per share for the years ended February 28, 2025 and February 29, 2024, as to do so would be
antidilutive. See Note 7 for details on the Debentures.
(2) The Company has presented the dilutive effect of the 2020 Debentures using the if-converted method, assuming
conversion at the beginning of the fiscal year for the year ended February 28, 2023. Accordingly, to calculate diluted
loss per share, the Company adjusted net income (loss) by eliminating the fair value adjustment made to the 2020
Debentures and interest expense incurred on the 2020 Debentures in the year ended February 28, 2023, and added the
number of shares that would have been issued upon conversion to the diluted weighted average number of shares
outstanding. See Note 7 for details on the 2020 Debentures.
(3) The Company has not presented the dilutive effect of in-the-money options and RSUs that will be settled upon vesting
by the issuance of new common shares in the calculation of diluted loss per share for the years ended February 28,
2025 and February 28, 2023 as to do so would be antidilutive.
(4) The Company has presented the dilutive effect of in-the-money options and RSUs that will be settled upon vesting by
the issuance of new common shares in the calculation of diluted loss per share for the year ended February 29, 2024.
BlackBerry Limited
Notes to the Consolidated Financial Statements
In millions of United States dollars, except share and per share data, and except as otherwise indicated
103
10. ACCUMULATED OTHER COMPREHENSIVE LOSS
The changes in AOCL by component net of tax, for the years ended February 28, 2025, February 29, 2024 and February
28, 2023 were as follows:
As At
February 28, 2025
February 29, 2024
February 28, 2023
Cash Flow Hedges
Balance, beginning of period
$
0.3 $
(1.0) $
(0.1)
Other comprehensive loss before reclassification
(3.3)
1.0
(3.2)
Amounts reclassified from AOCL into net income (loss)
1.1
0.3
2.3
Accumulated net unrealized losses on derivative instruments
designated as cash flow hedges
$
(1.9) $
0.3 $
(1.0)
Foreign Currency Cumulative Translation Adjustment
Balance, beginning of period
$
(14.0) $
(15.6) $
(9.8)
Other comprehensive income (loss)
(2.7)
1.6
(5.8)
Foreign currency cumulative translation adjustment
$
(16.7) $
(14.0) $
(15.6)
Change in Fair Value From Instrument-Specific Credit Risk On
Debentures
Balance, beginning of period
$
— $
(6.0) $
(7.6)
Other comprehensive income before reclassification
—
—
1.6
Amounts reclassified from AOCL into net income (loss)
—
6.0
—
Change in fair value from instruments-specific credit risk on
Debentures
$
— $
— $
(6.0)
Other Post-Employment Benefit Obligations
Balance, beginning of period
$
(0.6) $
(1.1) $
(1.5)
Other comprehensive income
—
0.5
0.4
Actuarial losses associated with other post-employment benefit
obligations
$
(0.6) $
(0.6) $
(1.1)
Accumulated Other Comprehensive Loss, End of Period
$
(19.2) $
(14.3) $
(23.7)
During the year ended February 28, 2025, $1.1 million in losses (pre-tax and post-tax) associated with cash flow hedges
were reclassified from AOCL into general and administrative expenses (February 29, 2024 - $0.3 million in losses).
During the year ended February 28, 2025, nil in losses (pre-tax and post-tax) associated with change in fair value from
instrument-specific credit risk on debentures were reclassified from AOCL into general and administrative expenses
(February 29, 2024 - $6.0 million in losses).
11.
COMMITMENTS AND CONTINGENCIES
(a)
Letters of Credit
The Company had $13.5 million in collateralized outstanding letters of credit in support of certain leasing arrangements
entered into in the ordinary course of business as of February 28, 2025. The Company has posted a performance bond as
collateral to support a government contract for the term of the agreement. See the discussion of restricted cash in Note 4.
BlackBerry Limited
Notes to the Consolidated Financial Statements
In millions of United States dollars, except share and per share data, and except as otherwise indicated
104
(b) Contingencies
Litigation
The Company is involved in litigation in the normal course of its business, both as a defendant and as a plaintiff. The
Company is subject to a variety of claims (including claims related to patent infringement, purported class actions and
other claims in the normal course of business) and may be subject to additional claims either directly or through
indemnities against claims that it provides to certain of its partners and customers. In particular, the industry in which the
Company competes has many participants that own, or claim to own, intellectual property, including participants that have
been issued patents and may have filed patent applications or may obtain additional patents and proprietary rights for
technologies similar to those used by the Company in its products. The Company has received, and may receive in the
future, assertions and claims from third parties that the Company’s products infringe on their patents or other intellectual
property rights. Litigation has been, and will likely continue to be, necessary to determine the scope, enforceability and
validity of third-party proprietary rights or to establish the Company’s proprietary rights. Regardless of whether claims
against the Company have merit, those claims could be time-consuming to evaluate and defend, result in costly litigation,
divert management’s attention and resources and subject the Company to significant liabilities.
Management reviews all of the relevant facts for each claim and applies judgment in evaluating the likelihood and, if
applicable, the amount of any potential loss. Where a potential loss is considered probable and the amount is reasonably
estimable, provisions for loss are made based on management’s assessment of the likely outcome. Where a range of loss
can be reasonably estimated with no best estimate in the range, the Company records the minimum amount in the range.
The Company does not provide for claims for which the outcome is not probable or claims for which the amount of the
loss cannot be reasonably estimated. Any settlements or awards under such claims are provided for when reasonably
determinable.
As of February 28, 2025, with the exception of the Canadian employment class action settlement discussed below, there
are no other material claims for which the Company has assessed the potential loss as both probable to result and
reasonably estimable; therefore, no accrual has been made. Further, there are claims outstanding for which the Company
has assessed the potential loss as reasonably possible to result; however, an estimate of the amount of loss cannot
reasonably be made. There are many reasons that the Company cannot make these assessments, including, among others,
one or more of the following: the early stages of a proceeding does not require the claimant to specifically identify the
patent claims that have allegedly been infringed or the products that are alleged to infringe; damages sought are
unspecified, unsupportable, unexplained or uncertain; discovery has not been started or is incomplete; the facts that are in
dispute are highly complex; the difficulty of assessing novel claims; the parties have not engaged in any meaningful
settlement discussions; the possibility that other parties may share in any ultimate liability; and the often slow pace of
litigation.
The Company has included the following summaries of certain of its legal proceedings though they do not meet the test
for accrual described above.
Between October and December 2013, several purported class action lawsuits and one individual lawsuit were filed
against the Company and certain of its former officers in various jurisdictions in the U.S. and Canada alleging that the
Company and certain of its officers made materially false and misleading statements regarding the Company’s financial
condition and business prospects and that certain of the Company’s financial statements contain material misstatements.
The individual lawsuit was voluntarily dismissed and a Stipulation of Settlement was executed in respect of the
consolidated U.S. class actions effective June 7, 2022; see “Litigation Settlements - U.S. Class Actions” below in this
Note 11.
On July 23, 2014, the plaintiff in the putative Ontario class action (Swisscanto Fondsleitung AG v. BlackBerry Limited, et
al.) filed a motion for class certification and for leave to pursue statutory misrepresentation claims. On November 17,
2015, the Ontario Superior Court of Justice issued an order granting the plaintiffs’ motion for leave to file a statutory
claim for misrepresentation. On December 2, 2015, the Company filed a notice of motion seeking leave to appeal this
ruling. On November 15, 2018, the Court denied the Company’s motion for leave to appeal the order granting the
plaintiffs leave to file a statutory claim for misrepresentation. On February 5, 2019, the Court entered an order certifying a
class comprised persons (a) who purchased BlackBerry common shares between March 28, 2013, and September 20,
2013, and still held at least some of those shares as of September 20, 2013, and (b) who acquired those shares on a
Canadian stock exchange or acquired those shares on any other stock exchange and were a resident of Canada when the
shares were acquired. Notice of class certification was published on March 6, 2019. The Company filed its Statement of
Defence on April 1, 2019. Discovery is proceeding and the Court has not set a trial date.
BlackBerry Limited
Notes to the Consolidated Financial Statements
In millions of United States dollars, except share and per share data, and except as otherwise indicated
105
Other contingencies
As at February 28, 2025, the Company has recognized $20.5 million (February 29, 2024 - $17.2 million) in funds from
claims filed with the Ministry of Innovation, Science and Economic Development Canada relating to its Strategic
Innovation Fund (“SIF”) program’s investment in BlackBerry QNX. A portion of this amount may be repayable in the
future under certain circumstances if certain terms and conditions are not met by the Company, which is not probable at
this time.
(c) Litigation Settlements
Parker
On March 17, 2017, a putative employment class action was filed against the Company in the Ontario Superior Court of
Justice (Parker v. BlackBerry Limited). The Statement of Claim alleged that actions the Company took when certain of its
employees decided to accept offers of employment from Ford Motor Company of Canada amounted to a wrongful
termination of the employees’ employment with the Company. The claim sought (i) an unspecified quantum of statutory,
contractual, or common law termination entitlements; (ii) punitive or breach of duty of good faith damages of $20.0
million, Canadian dollars or such other amount as the Court may find appropriate, (iii) pre- and post- judgment interest,
(iv) attorneys’ fees and costs, and (v) such other relief as the Court may deem just. The Court granted the plaintiffs’
motion to certify the class action on May 27, 2019. The Company commenced a motion for leave to appeal the
certification order on June 11, 2019. The Court denied the motion for leave to appeal on September 17, 2019. The
Company filed its Statement of Defence on December 19, 2019. The parties participated in a mediation on November 9,
2022, which did not result in an agreement. The matter had a trial date of June 2, 2025. The parties attended a pre-trial
conference on December 4, 2024. At a further pre-trial conference on January 24, 2025, the parties reached a settlement in
principle for approximately $2.8 million or $4.0 million Canadian dollars inclusive of all fees and costs. On February 18,
2025, the parties signed the minutes of settlement. On March 10, 2025, the Company paid the settlement amount into a
trust held by the plaintiffs’ counsel. The settlement is subject to approval by the Court. The Company expects the
settlement to be complete before the end of fiscal 2026.
U.S. Class Actions
On April 6, 2022, through a mediator, the Company agreed in principle to pay $165.0 million to settle the consolidated
U.S. class actions (see “Litigation” above in this Note 11). The Stipulation of Settlement was executed effective June 7,
2022. On June 29, 2022, the Company paid $1.0 million of the settlement amount and the remaining $164.0 million was
paid on September 6, 2022. On September 29, 2022, the Court granted final approval of the settlement and entered final
judgment.
(d) Indemnifications
The Company enters into certain agreements that contain indemnification provisions under which the Company could be
subject to costs and damages, including in the event of an infringement claim against the Company or an indemnified
third party. Such intellectual property infringement indemnification clauses are generally not subject to any dollar limits
and remain in effect for the term of the Company’s agreements. To date, the Company has not encountered material costs
as a result of such indemnifications.
The Company has entered into indemnification agreements with its current and former directors and executive officers.
Under these agreements, the Company agreed, subject to applicable law, to indemnify its current and former directors and
executive officers against all costs, charges and expenses reasonably incurred by such individuals in respect of any civil,
criminal or administrative action that could arise by reason of their status as directors or officers. The Company maintains
liability insurance coverage for the benefit of the Company, and its current and former directors and executive officers.
The Company has not encountered material costs as a result of such indemnifications in fiscal 2025.
12.
LEASES
The Company has operating and finance leases primarily for corporate offices, research and development facilities, data
centers and certain equipment. The Company’s leases have remaining lease terms of between one year and six years, some
of which may include options to extend the lease for up to 10 years, and some of which may include options to terminate
the lease within three months.
BlackBerry Limited
Notes to the Consolidated Financial Statements
In millions of United States dollars, except share and per share data, and except as otherwise indicated
106
The components of lease expense were as follows:
For the Years Ended
February 28, 2025
February 29, 2024
February 28, 2023
Operating lease cost, included in general and administrative
$
13.1 $
17.8 $
19.6
Supplemental cash flow information related to leases was as follows:
For the Years Ended
February 28, 2025
February 29, 2024
February 28, 2023
Cash used in operating activities related to operating lease
payments
$
20.6 $
27.8 $
32.4
During the year ended February 28, 2025, the Company entered into $7.5 million (February 29, 2024 - $13.1 million) in
lease obligations and recognized a corresponding ROU asset of $7.5 million (February 29, 2024 - $13.1 million).
During the year ended February 28, 2025, the Company incurred losses of $6.9 million (February 29, 2024 - $6.9 million;
February 28, 2023 - $3.5 million) on LLA impairment of ROU assets, as described in Note 4. The Company also had
sublease income during the year ended February 28, 2025 of $3.9 million (February 29, 2024 - $3.6 million; February 28,
2023 - $3.2 million) and incurred short-term lease costs of $2.3 million (February 29, 2024 - $2.5 million; February 28,
2023 - $2.2 million).
Supplemental consolidated balance sheet information related to leases was as follows:
As at
February 28, 2025
February 29, 2024
Operating leases
Operating lease assets
Operating lease ROU assets
$
22.0 $
31.8
Operating lease liabilities
Accrued liabilities
$
15.0 $
19.6
Operating lease liabilities
28.7
37.8
Total operating lease liabilities
$
43.7 $
57.4
As at
February 28, 2025
February 29, 2024
Weighted average remaining lease term
Operating leases
3.2 years
3.2 years
Weighted average discount rate
Operating lease
4.2 %
3.9 %
BlackBerry Limited
Notes to the Consolidated Financial Statements
In millions of United States dollars, except share and per share data, and except as otherwise indicated
107
Maturities of undiscounted lease liabilities were as follows:
As at
February 28, 2025
Operating Leases
Fiscal year 2026
$
18.2
Fiscal year 2027
13.0
Fiscal year 2028
10.8
Fiscal year 2029
2.7
Fiscal year 2030
2.0
Thereafter
1.9
Total future minimum lease payments
48.6
Less:
Imputed interest
(4.9)
Total
$
43.7
13. REVENUE AND SEGMENT DISCLOSURES
The Company reports segment information based on the “management” approach. The management approach designates
the internal reporting used by the CODM for making decisions and assessing performance as a source of the Company’s
reportable operating segments. The CODM, who is the CEO of the Company, makes decisions and assesses the
performance of the Company using three operating segments.
The CODM does not evaluate operating segments using discrete asset information. The Company does not specifically
allocate assets to operating segments for internal reporting purposes.
Segment Disclosures
With the sale of the Cylance business, and the classification of the business as discontinued operations as discussed in
Note 3, the Company is organized and managed as three operating segments: Secure Communications (formerly
“Cybersecurity”), QNX (formerly “IoT”), and Licensing. Prior period comparatives have been recast to reflect this change
in reportable operating segments.
The Company disaggregates revenue from contracts with customers based on geographical regions, timing of revenue
recognition, and the major product and service types as described in Note 1.
The following table shows information by reportable operating segment for the fiscal year ended February 28, 2025:
For the Year Ended
Secure
Communications
QNX
Licensing
Segment Totals
Segment revenue
$
272.6 $
236.0 $
26.3
$
534.9
Segment cost of sales
92.7
38.8
6.1
137.6
Segment gross margin (1)
$
179.9 $
197.2 $
20.2
$
397.3
______________________________
(1) A reconciliation of total segment gross margin to consolidated pre-tax income from continuing operations is set forth
below.
BlackBerry Limited
Notes to the Consolidated Financial Statements
In millions of United States dollars, except share and per share data, and except as otherwise indicated
108
The following table shows information by reportable operating segment for the years ended February 29, 2024 and
February 28, 2023:
For the Years Ended
Secure Communications
QNX
Licensing
Segment Totals
Feb 29
Feb 28
Feb 29
Feb 28
Feb 29
Feb 28
Feb 29
Feb 28
2024
2023
2024
2023
2024
2023
2024
2023
Segment revenue
$ 283.8 $ 288.2 $ 215.4 $ 205.7 $ 259.9 $
32.4 $ 759.1 $ 526.3
Segment cost of sales
80.7
110.4
33.8
34.8
150.9
11.5
265.4
156.7
Segment gross margin (1)
$ 203.1 $ 177.8 $ 181.6 $ 170.9 $ 109.0 $
20.9 $ 493.7 $ 369.6
______________________________
(1) A reconciliation of total segment gross margin to consolidated pre-tax income (loss) from continuing operations is set
forth below.
Secure Communications consists of BlackBerry® UEM, BlackBerry® AtHoc® and BlackBerry® SecuSUITE®. The
Company’s endpoint management platform includes BlackBerry® UEM, BlackBerry® Dynamics™, and BlackBerry®
Workspaces solutions. Secure Communications revenue is generated predominantly through software licenses, commonly
bundled with support, maintenance and professional services.
QNX consists of BlackBerry® QNX®, BlackBerry® Certicom®, BlackBerry Radar®, BlackBerry IVY® and other QNX
applications. QNX revenue is generated predominantly through software licenses, commonly bundled with support,
maintenance and professional services.
Licensing consists of the Company’s intellectual property arrangements and settlement awards.
The following table reconciles segment gross margin for the fiscal year ended February 28, 2025, February 29, 2024 and
February 28, 2023 to the Company’s consolidated totals:
For the Years Ended
February 28, 2025
February 29, 2024
February 28, 2023
Total segment gross margin
$
397.3 $
493.7
$
369.6
Adjustments (1):
Stock compensation
2.4
3.0
3.0
Less:
Research & development
108.8
127.1
134.2
Sales and marketing
95.5
104.0
102.6
General and administrative
159.7
187.2
172.0
Amortization
17.7
26.7
27.4
Impairment of goodwill
—
15.9
112.1
Impairment of long-lived assets
9.6
15.3
3.5
Gain on sale of property, plant and equipment, net
—
—
(6.0)
Prior Debentures fair value adjustment
—
3.5
(137.4)
Litigation settlement
2.8
—
165.0
Investment income, net
(7.7)
(18.8)
(5.0)
Income (loss) from continuing operations before
income taxes
$
8.5 $
29.8
$
(201.8)
______________________________
(1) The CODM reviews segment gross margin information on an adjusted basis, which excludes Stock compensation
expenses - which is a non-cash expense and is not included in the CODM’s measure of segment gross margin when
evaluating performance and allocating resources to the segment.
BlackBerry Limited
Notes to the Consolidated Financial Statements
In millions of United States dollars, except share and per share data, and except as otherwise indicated
109
Patent Sale
On May 11, 2023, the Company completed its patent sale with Malikie and sold certain non-core patent assets for
$170.0 million in cash on closing, an additional $30.0 million in fixed consideration due by no later than the third
anniversary of closing and variable consideration in the form of future royalties in the aggregate amount of up to
$700.0 million (the “Malikie Transaction”). Pursuant to the terms of the Malikie Transaction, the Company received a
license back to the patents sold, which relate primarily to mobile devices, messaging and wireless networking.
In the first quarter of fiscal 2024, the Company recognized revenue of $217.7 million and cost of sales of $147.2 million
related to intellectual property sold. The Company estimated variable consideration from future royalty revenues using an
expected value method including inputs from both internal and external sources related to patent monetization activities
and cash flows, and constrained the recognition of that variable consideration based on the Company’s accounting policies
and critical accounting estimates as described in Note 1. The variable consideration recognized as revenue was
$22.9 million and the amount of variable consideration constrained was $210.4 million. The Company evaluates its
conclusions as to whether the constraints are still applicable on an ongoing basis, and will make updates when it observes
a sufficient amount of evidence that amounts of variable consideration are no longer subject to constraint or the estimated
amount of variable consideration has changed.
Revenue
The Company disaggregates revenue from contracts with customers based on geographical regions, timing of revenue
recognition, and the major product and service types, as discussed above in “Segment Disclosures”.
The Company’s revenue, classified by major geographic region in which the Company’s customers are located, was as
follows:
For the Years Ended
February 28, 2025
February 29, 2024
February 28, 2023
North America (1)
$
248.7
46.5 % $
496.9
65.5 % $
261.7
49.7 %
Europe, Middle East and Africa
188.6
35.3 %
159.0
20.9 %
203.1
38.6 %
Other regions
97.6
18.2 %
103.2
13.6 %
61.5
11.7 %
Total
$
534.9
100.0 % $
759.1
100.0 % $
526.3
100.0 %
______________________________
(1) North America includes all revenue from the Company’s intellectual property arrangements, due to the global
applicability of the patent portfolio and licensing arrangements thereof.
BlackBerry Limited
Notes to the Consolidated Financial Statements
In millions of United States dollars, except share and per share data, and except as otherwise indicated
110
Revenue, classified by timing of recognition, was as follows:
For the Years Ended
February 28, 2025
February 29, 2024
February 28, 2023
Products and services transferred over time
$
246.9 $
210.0 $
245.7
Products and services transferred at a point in time
288.0
549.1
280.6
Total
$
534.9 $
759.1 $
526.3
Revenue contract balances
The following table sets forth the activity in the Company’s revenue contract balances for the fiscal year ended February
28, 2025:
Accounts
Receivable
Deferred
Revenue
Deferred
Commissions
Opening balance as at February 29, 2024
$
255.1 $
163.3 $
15.1
Increases due to invoicing of new or existing contracts, associated
contract acquisition costs, or other
668.9
528.3
20.2
Decrease due to payment, fulfillment of performance obligations, or
other
(684.0)
(524.5)
(20.7)
Increase (decrease), net
(15.1)
3.8
(0.5)
Closing balance as at February 28, 2025
$
240.0 $
167.1 $
14.6
Current portion
$
173.7 $
161.5 $
8.3
Long-term portion
66.3
5.6
6.3
$
240.0 $
167.1 $
14.6
Transaction price allocated to the remaining performance obligations
The table below discloses the aggregate amount of the transaction price allocated to performance obligations that are
unsatisfied or partially unsatisfied as at February 28, 2025 and the time frame in which the Company expects to recognize
this revenue. The disclosure includes estimates of variable consideration, except when the variable consideration is a
sales-based or usage-based royalty promised in exchange for a license of intellectual property.
The disclosure excludes estimates of variable consideration relating to future royalty revenues from the Malikie
Transaction, which have been constrained based on the Company’s accounting policies and critical accounting estimates
as described in Note 1 and under “Patent Sale” in this Note 13.
As at February 28, 2025
Less than 12
Months
12 to 24 Months
Thereafter
Total
Remaining performance obligations
$
161.5 $
2.7 $
2.9 $
167.1
Revenue recognized for performance obligations satisfied in prior periods
For the fiscal year ended February 28, 2025, $2.4 million in revenue was recognized relating to performance obligations
satisfied in a prior period as a result of certain variable consideration no longer being subject to constraint (fiscal year
ended February 29, 2024 - $12.2 million; fiscal year ended February 28, 2023 - $0.6 million).
BlackBerry Limited
Notes to the Consolidated Financial Statements
In millions of United States dollars, except share and per share data, and except as otherwise indicated
111
Property, plant and equipment, intangible assets, operating lease ROU assets and goodwill, classified by geographic
region in which the Company’s assets are located, were as follows:
As at
February 28, 2025
February 29, 2024
Property, Plant and
Equipment, Intangible
Assets, Operating
Lease ROU Assets and
Goodwill
Total Assets
Property, Plant and
Equipment, Intangible
Assets, Operating
Lease ROU Assets and
Goodwill
Total Assets
Canada
$
68.2 $
462.7 $
78.8 $
342.4
United States
459.4
752.7
478.0
922.5
Other
27.5
80.2
28.2
130.1
$
555.1 $
1,295.6 $
585.0 $
1,395.0
Information About Major Customers
There was one customer that comprised 14% of the Company’s revenue in fiscal 2025 (fiscal 2024 - one customer that
comprised 27%; fiscal 2023 - one customer that comprised 12%).
14. CASH FLOW AND ADDITIONAL INFORMATION
(a)
Certain consolidated statements of cash flow information related to interest and income taxes paid is summarized as
follows:
For the Years Ended
February 28, 2025
February 29, 2024
February 28, 2023
Interest paid during the year
$
6.0 $
5.6 $
6.4
Income taxes paid during the year
13.3
9.6
2.2
Income tax refunds received during the year
1.1
1.2
5.1
(b)
Additional Information
Advertising expense, which includes media, agency and promotional expenses totaling $16.8 million is included in sales
and marketing expenses for the fiscal year ended February 28, 2025. (February 29, 2024 - $22.4 million; February 28,
2023 - $28.7 million)
General and administrative expenses for the fiscal year ended February 28, 2025 included $0.4 million with respect to
foreign exchange gain, net of foreign exchange hedging (February 29, 2024 - $0.3 million foreign exchange losses, net of
foreign exchange hedging; February 28, 2023 - $0.2 million foreign exchange gains, net of foreign exchange hedging).
Foreign exchange
The Company is exposed to foreign exchange risk as a result of transactions in currencies other than its functional
currency, the U.S. dollar. The majority of the Company’s revenue in fiscal 2025 was transacted in U.S. dollars. Portions
of the revenue were denominated in Canadian dollars, euros and British pounds. Other expenses, consisting mainly of
salaries and certain other operating costs, were incurred primarily in Canadian dollars, but were also incurred in U.S.
dollars, euros and British pounds. At February 28, 2025, approximately 19% of cash and cash equivalents, 29% of
accounts receivable and 71% of accounts payable were denominated in foreign currencies (February 29, 2024 – 19%, 25%
and 59%, respectively). These foreign currencies primarily include the Canadian dollar, euro and British pound. As part of
its risk management strategy, the Company maintains net monetary asset and/or liability balances in foreign currencies
and engages in foreign currency hedging activities using derivative financial instruments, including currency forward
contracts and currency options. The Company does not use derivative instruments for speculative purposes.
BlackBerry Limited
Notes to the Consolidated Financial Statements
In millions of United States dollars, except share and per share data, and except as otherwise indicated
112
Interest rate risk
Cash and cash equivalents and investments are invested in certain instruments with fixed interest rates of varying
maturities. Consequently, the Company is exposed to interest rate risk as a result of holding investments of varying
maturities and the significant financing components within certain revenue contracts with customers. The fair value of
investments, as well as the investment income derived from the investment portfolio, will fluctuate with changes in
prevailing interest rates. The Company also has significant financing components within certain revenue contracts with
customers and is exposed to interest rate risk as a result of discounting the future payments from customers with a fixed
interest rate. The Company also has outstanding Notes with a fixed interest rate, as described in Note 7. The Company is
exposed to interest rate risk as a result of the Notes. The Company does not currently utilize interest rate derivative
instruments.
Credit risk
The Company is exposed to market and credit risk on its investment portfolio. The Company is also exposed to credit risk
with customers, as described in Note 5. The Company reduces this risk from its investment portfolio by investing in
liquid, investment-grade securities and by limiting exposure to any one entity or group of related entities. As at February
28, 2025, no single issuer represented more than 47% of the total cash, cash equivalents and investments (February 29,
2024 - no single issuer represented more than 30% of the total cash, cash equivalents and investments), with the largest
such issuer representing bearer deposits, term deposits and cash balances with one of the Company’s banking
counterparties.
In addition, as partial consideration for the sale of its Cylance endpoint security assets and liabilities to Arctic Wolf, as
described in Note 3, the Company is owed a delayed cash payment of approximately $41.1 million one year following the
closing. The Company is exposed to risk related to potential non-payment of the deferred cash consideration from Arctic
Wolf.
Liquidity risk
Cash, cash equivalents, and investments were approximately $410.3 million as at February 28, 2025. As partial
consideration for the sale of its Cylance endpoint security assets and liabilities to Arctic Wolf, the Company received
common shares of Arctic Wolf with an estimated fair value of $24.6 million. The common shares of Arctic Wolf are
illiquid securities without a public market and, as such, they cannot be readily sold or exchanged for cash. The Company
may not be able to sell these shares at desired times or prices, which could negatively impact its financial condition and
results of operations.
The Company’s management remains focused on efficiently managing working capital balances and managing the
liquidity needs of the business. Based on its current financial projections, the Company believes its financial resources,
together with expected future operating cash generating and operating expense reduction activities, should be sufficient to
meet funding requirements for current financial commitments and future operating expenditures not yet committed, and
should provide the necessary financial capacity for the foreseeable future.
BlackBerry Limited
Notes to the Consolidated Financial Statements
In millions of United States dollars, except share and per share data, and except as otherwise indicated
113
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE.
Not applicable.
ITEM 9A. CONTROLS AND PROCEDURES.
As of February 28, 2025, the Company carried out an evaluation, under the supervision and with the participation of the
Company’s management, including the Company’s Chief Executive Officer and its Chief Financial Officer, of the effectiveness
of the design and operation of the Company’s disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e)
under the U.S. Exchange Act. Based on that evaluation, the Chief Executive Officer and the Chief Financial Officer have
concluded that, as of such date, the Company’s disclosure controls and procedures were effective to give reasonable assurance
that the information required to be disclosed by the Company in reports that it files or submits under the U.S. Exchange Act is
(i) recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and
(ii) accumulated and communicated to management, including its principal executive and principal financial officers, or persons
performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
Management’s Report on Internal Control Over Financial Reporting
Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting.
Internal control over financial reporting is defined in Rule 13a-15(f) and 15d-15(f) under the U.S. Exchange Act as a process
designed by, or under the supervision of, the Company’s principal executive and principal financial officers and effected by the
Board, management and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with U.S. GAAP and includes those policies and
procedures that:
•
pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and
dispositions of the assets of the Company;
•
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial
statements in accordance with U.S. GAAP, and that receipts and expenditures of the Company are being made
only in accordance with authorizations of management and directors of the Company; and
•
provide reasonable assurance regarding the prevention or timely detection of unauthorized acquisitions, use or
dispositions of the Company’s assets that could have a material effect on the Company’s financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Projections of any evaluation of effectiveness to future periods are subject to the risks that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Management assessed the effectiveness of the Company’s internal control over financial reporting as of February 28, 2025. In
making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway
Commission (COSO) in its Internal Control-Integrated Framework (2013). Based on this assessment, management concluded
that, as of February 28, 2025, the Company’s internal control over financial reporting was effective.
The effectiveness of the Company’s internal control over financial reporting as of February 28, 2025 has been audited by
PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which appears herein.
Changes in Internal Control Over Financial Reporting
During the three months ended February 28, 2025, no changes were made to the Company’s internal control over financial
reporting that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over
financial reporting.
ITEM 9B. OTHER INFORMATION
Rule 10b5-1 and Non-Rule 10b5-1 Trading Arrangements
During the three months ended February 28, 2025, none of the Company’s officers or directors adopted or terminated trading
arrangements for the sale of the Company’s common shares.
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable.
114
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
A list of the Company’s executive officers appears in Part I, Item 1 to this Annual Report on Form 10-K.
The information required by this item will be included in the Company’s 2025 Proxy Statement, which will be filed with the
SEC within 120 days after the end of the Company’s fiscal year ended February 28, 2025, and is incorporated herein by
reference.
Audit and Risk Management Committee
The Audit and Risk Management Committee’s purpose is to provide assistance to the Board in fulfilling its legal and fiduciary
obligations with respect to matters involving the accounting, auditing, financial reporting, internal control, and legal compliance
and risk management functions of the Company and its subsidiaries. It is the objective of the Audit and Risk Management
Committee to maintain free and open means of communications among the Board, the independent auditors and the financial
and senior management of the Company. The full text of the Audit and Risk Management Committee’s Charter can be viewed
on the Company’s website at https://www.blackberry.com/ca/en/company/investors/corporate-governance-global.
Applicable securities laws require that, subject to certain exceptions, all members of the Audit and Risk Management
Committee be “independent” under Sections 1.4 and 1.5 of National Instrument 52-110 of the Canadian Securities
Administrators - Audit Committees and the rules and regulations of the NYSE, and “financially literate”, meaning that the
committee member has the ability to read and understand a set of financial statements that present a breadth and level of
complexity of accounting issues that are generally comparable to those issues reasonably expected to be raised by the
Company’s financial statements. Ms. Disbrow (Chair), Ms. O’Neill and Mr. Wouters are the members of the Audit and Risk
Management Committee, and each is an independent director of the Company and financially literate, based on his or her
education and experience as described below. The Audit and Risk Management Committee has also developed, in conjunction
with the Company’s Chief Financial Officer and other accounting personnel, an orientation and continuing education program
that will provide the new members of the Audit and Risk Management Committee with additional information and
understanding about the accounting and financial presentation issues underlying the Company’s financial statements.
The members of the Audit and Risk Management Committee bring significant skill and experience to their responsibilities
including professional experience in accounting, business, management and governance, and finance. The specific education
and experience of each member that is relevant to the performance of his or her responsibilities as such member of the Audit
and Risk Management Committee are set out below:
Lisa Disbrow (Chair) – Ms. Disbrow has a BA from the University of Virginia, an MA from The George Washington
University in International Relations, and an MS from The National War College in National Strategy. Ms. Disbrow serves on
the President’s Export Council and is a Commissioner on the Congressional Planning, Programming, Budgeting & Execution
Reform Commission. Ms. Disbrow is also the Chair of the NobleReach Foundation, as well as a director of CACI International
Inc, Mercury Systems and SparkCognition, Inc. In addition, she is a Senior Fellow at the Johns Hopkins University Applied
Physics Lab and the Vice Chair of the National Defense Industrial Association. Previously, she served over 30 years in senior
civilian and military positions in the U.S. government, and was the Senate-confirmed Under Secretary of the United States Air
Force. She also served as Acting Secretary of the U.S. Air Force and was the Senate-confirmed chief financial officer of the Air
Force, as the Assistant Secretary for Financial Management and Comptroller.
Lori O’Neill – Ms. O’Neill has a BComm (Honours) from Carleton University and is a holder of the CPA, CA designation, the
U.S. CPA designation and the ICD.D designation from the Institute of Corporate Directors. Ms. O’Neill is a FCPA, FCA,
corporate director and independent financial consultant and currently serves on the boards of Constellation Software Inc. and
Calian Group Ltd. She has served as a director of numerous public and private technology companies, Crown corporations and
non-profit organizations. Previously, Ms. O’Neill was a leader in the Canadian national technology, media and communications
audit practice at Deloitte LLP, where she served for 24 years.
The Hon. Wayne Wouters – Mr. Wouters has a BComm (Honours) from the University of Saskatchewan and an MA in
economics from Queen’s University. From 2009 to 2014, Mr. Wouters was the Clerk of the Privy Council of Canada and held
the roles of Deputy Minister to the Prime Minister, Secretary to the Cabinet and Head of the Public Service. Prior to his tenure
as Clerk, Mr. Wouters was Secretary of the Treasury Board of Canada and served in deputy ministerial and other senior
positions in the Canadian public service. He is a Strategic and Policy Advisor to McCarthy Tétrault LLP and a director of
Canadian Utilities Limited and Foran Mining Corporation, and a former director of Champion Iron Limited. He was inducted
by the Prime Minister as a member of the Privy Council in 2014 and was he was invested into the Order of Canada as an officer
in 2017. Mr. Wouters has extensive experience with economic policy and international trade matters, which included oversight
of multi-billion dollar budgets on behalf of the Government of Canada.
115
The Board has also determined that each of Ms. Disbrow and Ms. O’Neill is an audit committee financial expert within the
meaning of General Instruction B(8)(a) of Form 10-K under the U.S. Securities Exchange Act of 1934, as amended. The SEC
has indicated that the designation of a person as an audit committee financial expert does not make such person an “expert” for
any purpose, impose any duties, obligations or liability on such person that are greater than those imposed on members of the
Audit Committee and the Board who do not carry this designation or affect the duties, obligations or liability of any other
member of the audit committee or the Board.
Enterprise Risk Management
The Company recognizes that risks are associated with delivering on its strategy and achieving its corporate objectives.
Managing these risks is an essential part of the Company’s business and the Company aims to promote a culture of risk
management and compliance at all levels in the organization. The Company has defined and implemented an approach to
manage its exposure to risk, consisting of: (i) a risk management framework to regularly identify, assess, treat, monitor and
report on current and potential risks, and (ii) a governance structure that clearly defines the responsibilities of the Board, the
senior leadership team, employees and other stakeholders to support the risk management framework. This approach to
enterprise risk management is integral to the Company’s business activities and is designed to:
•
promote effective corporate governance and decision-making by enabling the consistent identification and evaluation
of risk on a consolidated basis;
•
ensure that risks are managed proactively and appropriately in the context of the Company’s strategy and objectives;
•
support the development of internal controls;
•
facilitate the reliability and transparency of financial and operational reporting;
•
assist in compliance with laws, regulations, policies, and contracts; and
•
reduce harm to financial performance and safeguard the Company’s assets.
Risk Management Framework Policy and Risk Appetite
The Company’s risk management framework policy defines responsibilities for the identification, assessment, management and
reporting of risks, and sets out expectations for ownership, resource assignment and compliance. The scope of the framework
embraces internal functions as well as those activities for which the Company engages support from third parties.
To support the risk management framework and risk oversight activities, the Company maintains a risk appetite statement that
defines, by category of risk, the Company’s tolerance for risk-taking having regard to potential rewards and overall business
strategies and objectives. The Company’s four risk categories are: (i) strategy and innovation, (ii) operations, (iii) legal,
compliance and reputation, and (iv) financial management and reporting. The Company’s risk profile is assessed against the
risk appetite statement, which is reviewed and updated as the Company’s business strategy and operating environment evolve.
Risk Governance and Oversight
The Company utilizes a “three lines of defence” governance structure to define how the responsibility for risk management
activities is assigned:
•
The first line of defence for managing risks resides with the management of each business group. Risk exposures are
identified and mitigated at a granular level through various ongoing management activities including business
planning, operations management, reporting, and process improvement projects.
•
Oversight of business unit management is provided by the second line of defence, the Security Risk and Compliance
Committee (“SRCC”), which meets at least quarterly and is supported by various compliance, security and control
functions. The SRCC is composed of manager representatives from each major business group and provides strategic
direction by defining key policies, identifying emerging risk trends, and sponsoring training.
•
The internal audit function comprises the third line of defence, providing independent assurance of the effectiveness of
the Company’s risk management activities and internal controls related to (i) financial reporting and integrity and (ii)
other areas of risk as assigned by the Audit and Risk Management Committee from time to time, including
cybersecurity risk. The internal audit function may also review the governance structures and mandates of the first two
lines of defence.
Additional governance and oversight is provided by the Risk Management and Compliance Council (“RMCC”), a council of
internal senior leaders which oversee the risk management activities undertaken by business group management and the SRCC.
The RMCC reviews the Company’s risk dashboard and monitors remediation activities to address gaps. The RMCC also
approves the risk appetite statement and promotes a culture of risk management and compliance across the Company. The
RMCC meets at least quarterly with the Chief Risk Officer serving as the Chair. Phil Kurtz, the Company’s Chief Legal
116
Officer and Corporate Secretary, serves as the Chief Risk Officer and reports to the Audit and Risk Management Committee, at
least quarterly, on the activities of the RMCC.
The Board is ultimately responsible for overseeing the Company’s risk identification, assessment, management, monitoring and
reporting activities. The Audit and Risk Management Committee assists the Board with the oversight of enterprise risk
management at the Company, including risk assessment, risk compliance, the internal audit function and the controls, processes
and policies used to manage the Company’s risk. The Compensation, Nomination and Governance Committee of the Board also
assists the Board with the oversight of risk management and controls with respect to the Company’s compensation policies and
practices, including the administration of the Company’s equity-based compensation plans.
The Company also includes risks related to climate change and other environmental, social and governance considerations as
part of its enterprise risk management process.
Ethical Business Conduct and Code of Business Standards and Principles
The Company maintains and follows a written code of business standards and principles (the “Code”) that applies to, and is
acknowledged annually by, all of the directors, officers and employees of the Company. The Code is a statement of principles
designed to promote a culture of integrity and to help ensure that the Company operates its business in an ethical and legally-
compliant manner. The Code incorporates by reference a number of policies and guidelines, including the Company’s
Prevention of Improper Payments Policy and Insider Trading Policy, that provide guidance to employees concerning business
choices, decisions and behaviours. The Code expressly provides that acknowledgment of the Code is a condition of
employment, as is completion of all assigned training related to the Code and related policies and guidelines.
The Board, through the Audit and Risk Management Committee, receives reports on compliance with the Code, including
regarding the Company’s annual program to have employees acknowledge that they have read, understand and will comply
with the Code. The Company maintains a whistleblower program and makes whistleblower reporting available to employees
and external parties via a web and telephone hotline-based system supplied and operated by a third party that specializes in such
reporting systems. The system allows individuals to make whistleblower reports, including anonymously, to the Company or
directly to the Chair of the Audit and Risk Management Committee via the BlackBerry EthicsLink system and enables the
Company or the Chair of the Audit and Risk Management Committee, as appropriate, to follow up directly with the reporter
while maintaining his or her anonymity. Employees are advised of the whistleblower program as part of the Company’s annual
Code acknowledgement program. Management reports on the status of whistleblower reports to the Audit and Risk
Management Committee at its quarterly meetings.
In addition, the Board is responsible for overseeing, directly and through its committees, an appropriate compliance program for
the Company. The RMCC and SRCC oversee and assist management in maintaining the Company’s compliance program and
policies. Phil Kurtz, the Company’s Chief Legal Officer and Corporate Secretary, reports to the Audit and Risk Management
Committee at least quarterly on compliance matters in his capacity as Chair of the RMCC.
The Code is available on the Company’s website at https://investors.blackberry.com/governance-documents, or upon request to
the Corporate Secretary of the Company at its executive office, 2200 University Avenue East, Waterloo, Ontario, N2K 0A7. If
the Company makes any substantive amendments to the Code or grants any waiver, including any implicit waiver, from a
provision of the Code to the Chief Executive Officer or Chief Financial Officer, the Company will disclose the nature of the
amendment or waiver on that website or in a report on Form 8-K. The Company did not grant any such waiver in fiscal 2025.
ITEM 11. EXECUTIVE COMPENSATION
The information required by this item will be included in the Company’s 2025 Proxy Statement, which will be filed with the
SEC within 120 days after the end of the Company’s fiscal year ended February 28, 2025, and is incorporated herein by
reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
The information required by this item will be included in the Company’s 2025 Proxy Statement, which will be filed with the
SEC within 120 days after the end of the Company’s fiscal year ended February 28, 2025, and is incorporated herein by
reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
The information required by this item will be included in the Company’s 2025 Proxy Statement, which will be filed with the
SEC within 120 days after the end of the Company’s fiscal year ended February 28, 2025, and is incorporated herein by
reference.
117
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
The information required by this item will be included in the Company’s 2025 Proxy Statement, which will be filed with the
SEC within 120 days after the end of the Company’s fiscal year ended February 28, 2025, and is incorporated herein by
reference.
118
PART IV
ITEM 15. EXHIBIT AND FINANCIAL STATEMENT SCHEDULES
Financial Statements and Schedules
The financial statements filed as part of this filing are listed on the Index to Consolidated Financial Statements in Item 8.
Financial statement schedules have been omitted since they either are not required, not applicable, or the information is
otherwise included in the Consolidated Financial Statements and accompanying notes in Item 8.
Exhibits
Exhibit
Number
Description of Exhibit
3.1
Articles of Amalgamation of the Registrant (incorporated by reference to Exhibit 4.2 to the Registrant’s
Registration Statement on Form S-8 (File No. 333-192986), filed with the SEC on December 20, 2013)
3.2
Amended and Restated By-law No. A3 of the Registrant (incorporated by reference to Document 1 in the
Registrant’s Report on Form 6-K, furnished to the SEC on May 15, 2014)
3.3
Amended and Restated By-law No. A4 of the Registrant (incorporated by reference to Document 2 in the
Registrant’s Report on Form 6-K, furnished to the SEC on June 13, 2014)
4.1
Specimen Common Share Certificate (incorporated by reference to Exhibit 4.1 to the Registrant’s Registration
Statement on Form S-8 (File No. 333-192986), filed with the SEC on December 20, 2013)
4.2
Description of Registered Securities (incorporated by reference to Exhibit 4.3 to the Registrant’s Annual
Report on Form 10-K (File No. 001-38232), filed with the SEC on April 7, 2020)
4.3
Indenture dated January 29, 2024 (incorporated by reference to Exhibit 4.1 to the current report on Form 8-K
filed by the Company on January 29, 2024)
4.4
Form of 3.00% Convertible Senior Note due February 15, 2029 (included in Exhibit 4.3)
10.1
Amended and Restated BlackBerry Limited Equity Incentive Plan (incorporated by reference to Exhibit 10.1
to the Registrant’s Annual Report on Form 10-K (File No. 001-38232), filed with the SEC on April 4, 2024)
10.2†
Amended and Restated Deferred Share Unit Plan for Directors (incorporated by reference to Exhibit 10.2 to
the Registrant’s Annual Report on Form 10-K (File No. 001-38232), filed with the SEC on April 7, 2020)
10.3
Form of restricted share unit agreement (incorporated by reference to Exhibit 10.1 to the Registrant’s Annual
Report on Form 10-K (File No. 001-38232), filed with the SEC on April 4, 2024)
10.4
Form of performance based restricted share unit agreement (incorporated by reference to Exhibit 10.1 to the
Registrant’s Annual Report on Form 10-K (File No. 001-38232), filed with the SEC on April 4, 2024)
10.5†
Form of indemnification agreement for directors and executive officers (incorporated by reference to Exhibit
10.5 to the Registrant’s Annual Report on Form 10-K (File No. 001-38232), filed with the SEC on April 7,
2020)
10.6*†
Employment agreement with John J. Giamatteo, dated December 8, 2023 (incorporated by reference to
Exhibit 10.1 to the Registrant’s Current Report on Form 8-K (File No. 001-38232), filed with the SEC on
December 12, 2023) and amended change in control provision letter, dated August 21, 2024
10.7*†
Employment agreement with Tim Foote, dated July 26, 2024 (incorporated by reference to Exhibit 10.1 to the
Registrant’s Current Report on Form 8-K (File No. 001-38232), filed with the SEC on July 29, 2024) and
amended change in control provision letter, dated September 6, 2024
10.8*†
Employment agreement with Mattias Eriksson, dated April 13, 2021 (incorporated by reference to Exhibit
10.3 to the Registrant’s Quarterly Report on Form 10-Q filed with the SEC on June 24, 2022) and amended
change in control provision letter, dated September 6, 2024
10.9*†
Employment agreement with Phil Kurtz, dated June 27, 2022 (incorporated by reference to Exhibit 10.9 to the
Registrant’s Annual Report on Form 10-K (File No. 001-38232), filed with the SEC on April 4, 2024) and
amended change in control provision letter, dated September 6, 2024
10.10*†
Employment agreement with Jennifer Armstrong-Owen, dated January 8, 2024 and amended change in
control provision letter, dated September 6, 2024
10.11
Patent Sale Agreement with Malikie Innovations Limited, dated March 20, 2023, including Exhibit A-1
thereto, Exhibit A-2 thereto and Exhibit B-1 thereto (incorporated by reference to Exhibits 10.11, 10.11 1,
10.11 2 and 10.11 3 to the Registrant’s Annual Report on Form 10-K (File No. 001-38232) filed with the SEC
on April 4, 2023)
119
10.12
Equity and Asset Purchase Agreement, dated December 15, 2024, by and among BlackBerry Limited,
BlackBerry UK Limited, Arctic Wolf Networks, Inc. and Arctic Wolf Networks International, Inc., together
with exhibits and schedules thereto (certain schedules and information within exhibits and schedules omitted
pursuant to Regulation S-K Item 601(a)(5) and Item 601(b(2)(ii)) (incorporated by reference to Exhibit 10.1 to
the Registrant’s Quarterly Report on Form 10-Q filed with the SEC on December 20, 2024)
10.13*†
Employment separation agreement with Marjorie Dickman, dated February 28, 2025
19*
Insider Trading Policy
21*
List of subsidiaries
23.1*
Consent of PricewaterhouseCoopers LLP
31.1*
Certification of Chief Executive Officer pursuant to Securities Exchange Act of 1934 Rule 13a-14(a)
31.2*
Certification of Chief Financial Officer pursuant to Securities Exchange Act of 1934 Rule 13a-14(a)
32.1††
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 2002
32.2††
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 2002
97.1
Clawback Policy (incorporated by reference to Exhibit 97.1 to the Registrant’s Annual Report on Form 10-K
(File No. 001-38232), filed with the SEC on April 4, 2024)
101*
XBRL Instance Document – the document does not appear in the interactive data file because its XBRL tags
are embedded within the Inline XBRL document
101*
Inline XBRL Taxonomy Extension Schema Document
101*
Inline XBRL Taxonomy Extension Calculation Linkbase Document
101*
Inline XBRL Taxonomy Extension Definition Linkbase Document
101*
Inline XBRL Taxonomy Extension Label Linkbase Document
101*
Inline XBRL Taxonomy Extension Presentation Linkbase Document
104
Cover Page Interactive Data File – formatted as Inline XBRL and contained in Exhibit 101
______________________________
* Filed herewith
† Management contract or compensatory plan or arrangement
†† Furnished (and not filed) herewith pursuant to Item 601(b)(32)(ii) of the SEC’s Regulation S-K
ITEM 16. FORM 10-K SUMMARY
None.
120
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) the Securities Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned, thereto duly authorized.
BLACKBERRY LIMITED
Date: April 2, 2025
By:
/s/ John Giamatteo
Name:
John Giamatteo
Title:
Chief Executive Officer
By:
/s/ Tim Foote
Name:
Tim Foote
Title:
Chief Financial Officer (Principal Financial and
Accounting Officer)
121
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following
persons on behalf of the Registrant and in the capacities and on the dates indicated.
DIRECTORS
SIGNATURE
CAPACITY
DATE
/s/ PHILIP BRACE
Chair and Director
April 2, 2025
Philip Brace
/s/ LISA BAHASH
Director
April 2, 2025
Lisa Bahash
/s/ LISA DISBROW
Director
April 2, 2025
Lisa Disbrow
/s/ JOHN J. GIAMATTEO
Director and Chief Executive Officer (Principal
Executive Officer)
April 2, 2025
John J. Giamatteo
/s/ RICHARD LYNCH
Director
April 2, 2025
Richard Lynch
/s/ LORI O’NEILL
Director
April 2, 2025
Lori O’Neill
/s/ WAYNE WOUTERS
Director
April 2, 2025
Wayne Wouters
122