BLACKBERRY Ltd Q4 FY2025 Earnings Call

Good morning, and welcome to the BlackBerry Fourth Quarter and Fiscal Year 2025 Results Conference Call. My name is Rob, and I'll be your conference moderator for today's call. During the presentation, all participants will be in a listen-only mode. We will be facilitating a brief question-and-answer session towards the end of the conference. As a reminder, this conference is being recorded for replay purposes. I would now like to turn today's call over to Martha Gonder, Director of Investor Relations, BlackBerry. Please go ahead.

Thank you, Rob. Good morning, everyone, and welcome to BlackBerry's fourth quarter and full fiscal year 2025 earnings conference call. Joining me on today's call is BlackBerry's Chief Executive Officer, John Giamatteo, and Chief Financial Officer, Tim Foote. After I read our cautionary note regarding forward-looking statements, John will provide a business update and Tim will review the financial results. We will then open the call for a brief Q&A session. This call is available to the general public via call-in numbers and via webcast in the Investor Information section at blackberry.com. A replay will also be available on the blackberry.com website. Some of the statements we'll be making today constitute forward-looking statements and are made pursuant to the safe harbor provisions of applicable US and Canadian securities laws. We'll indicate forward-looking statements by using words such as expect, will, should, model, intend, believe, and similar expressions. 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 relevant. Many factors could cause the company's actual results or performance to differ materially from those expressed or implied by the forward-looking statements. These factors include the risk factors that are discussed in the company's annual filings and MD&A. You should not place undue reliance on the company's forward-looking statements. Any forward-looking statements are made only as of today, and the company has no intention and undertakes no obligation to update or revise any of them except as required by law. As customary, during the call, John and Tim will reference non-GAAP numbers in their summary of quarterly results. For a reconciliation between our GAAP and non-GAAP numbers, please see the earnings press release published earlier today, which is available on the EDGAR, SEDAR+, and blackberry.com websites. Additionally, unless otherwise noted, the numbers John and Tim reference will be for continuing operations only, that is excluding the results of the Cylance business, which are included within discontinued operations. And with that, let me now turn the call over to John.

Thanks, Martha, and thanks to everyone for joining today's call. This past quarter marked another significant step forward in what was a transformative year for BlackBerry. We closed the win-win transaction with Arctic Wolf for the sale of Cylance, and through solid execution by the team, we finished the year with another strong quarter that beat expectations across the board. Total company revenue beat the top-end of our guidance range at $141.7 million. Revenue for the QNX division beat guidance at $65.8 million. Likewise, the Secure Communications division finished the year strongly, also beating the top-end of guidance at $67.3 million. And finally, Licensing had a better-than-expected quarter as well, beating guidance at $8.6 million. In terms of profitability, BlackBerry beat guidance for adjusted EBITDA, coming in at $21.1 million, and EPS, which includes discontinued operations for both the fourth quarter and the full fiscal year 2025, beat guidance and expectations at positive $0.03 and positive $0.02 respectively. Then finally, BlackBerry's cash performance also beat expectations. Total cash and investments increased by $144 million, driven by a significant increase in operating cash flow to $42 million and the collection of the initial tranche of cash from the Cylance deal of approximately $80 million. As I mentioned, at the start of February, we closed the Cylance transaction with Arctic Wolf. Last summer, the new management team performed a deep dive into BlackBerry's various businesses. And once we identified the financial challenges that Cylance was presenting to the cybersecurity division, and with it, Blackberry as a whole, we moved quickly to find a solution. I'm very proud of the team's hard work that made this deal happen and close so quickly. At close, BlackBerry received approximately $80 million of cash and 5.5 million common shares. Additionally, BlackBerry retained its pioneering AI/ML endpoint security patents as well as tax losses that we expect will provide a significant shield for future profits generated by our US entities. We were delighted that so many of our colleagues in the Cylance business were able to find a new home in Arctic Wolf as part of the transaction. With the deal successfully closed, we've switched our focus to fiscal year 2026 and beyond. We performed a thorough review of all aspects of the cost structure in our new Secure Communications division that includes UEM, AtHoc, and Secusmart. This review aimed at refocusing the business more clearly on addressing its narrower, more common customer base while optimizing our cost structure in the process. The cost reduction actions of the past quarter build on others that we've executed over the past year. When we began this process, we said our target was to remove approximately $150 million of costs from our run rate, and I'm delighted to report that we've now exceeded that goal. As a result of this hard work, BlackBerry's profitability has transformed. Total company adjusted EBITDA was $39.3 million for the year when including Cylance, a $54 million improvement year-over-year when controlling for the patent sale in early fiscal year 2024. Let me now go into further detail at the divisional level. Earlier this week, QNX celebrated its 45th anniversary. QNX's leadership position in safety-critical foundational software cannot be replicated overnight. Instead, it has taken decades of working with the biggest names in the auto industry and beyond to establish the competitive moat that this business enjoys today. Notwithstanding the various challenges for the auto industry, the largest market segment for QNX, the team continued to drive results throughout 2025 and finished the year with Q4 revenue beating expectations at $65.8 million. Royalty revenue continued to be strong in Q4, albeit slightly lower sequentially, offset by the strongest quarter of the year for development seat revenue, while services remained relatively constant. Despite the delay in software development across automotive that have deferred both the start of existing and the award of new designs, QNX's royalty backlog grew yet again year-over-year to approximately $865 million. The growth in backlog demonstrates that QNX continues to add future expected royalty revenue from new designs at a faster rate than is currently recognized in the P&L. We believe this is a solid indicator of the ongoing health of this business. During the quarter, we continued to demonstrate our leadership in automotive by securing design wins with a number of leading OEMs and Tier 1 suppliers primarily for ADAS and cockpit domain controllers. QNX is powered by strong multi-year secular tailwinds. We continue to invest in the business to capture these opportunities. This includes both driving go-to-market penetration, particularly in verticals adjacent to automotive, and bringing exciting new products to market that our broad customer base is asking for. Our next-generation version of the QNX platform, SDP 8.0, and our cloud-based digital cockpit development solution, QNX Cabin, are two of these products, and both are gaining traction in the market. Another top 10 global auto OEM made a multi-year commitment to the QNX Cabin solution, building on wins with similar industry leaders in the prior two quarters. SDP 8.0 is also building momentum with significant progress across Q4, across automotive, medical, industrial, rail, and robotic verticals. As mentioned, we see significant opportunities outside of automotive. The QNX code base used in medical, industrial, and other general embedded applications is almost identical to that in automotive. Meaning that we can truly leverage our technology investments across a broader addressable market. To help drive this growth, we recently launched the QNX General Embedded Development Platform, designed to accelerate the time to market for high-performance, scalable, and secure embedded systems. We are also building out our team, adding sales professionals to drive this go-to-market push. This past quarter, we secured several new logo design wins with customers in medical equipment, rail, and aerospace and defense. QNX is a leading brand in automotive, and BlackBerry is very much leaning into this brand as part of our efforts to drive top-line growth in fiscal year '26 and beyond. Going forward, the IoT division will now be referred to as QNX, more clearly reflecting the key driver within it. There was no better place to lead with the brand than at the CES trade show in Las Vegas, and the team did a magnificent job in making QNX shine with the booth sporting the bold new color scheme. We also showcased new product developments centered around helping customers shorten and simplify cycles and time to market. In particular, we highlighted the expansion of QNX's vehicle platform. This vehicle OS aims to take the heavy lifting of integrating non-differentiated parts of the software stack off the OEM's plates, leaving them to focus on the application layer that their customers see and interact with. Leading middleware providers TTTech and Vector confirmed a multi-year collaboration with BlackBerry on this exciting new platform. We also announced a partnership with Microsoft Azure for SDP 8.0 in the cloud. This expands options for customers that already includes running QNX on AWS. Overall, 2025 was a solid year of progress for QNX in a difficult environment, consistently achieving or beating the top-end of guidance throughout the fiscal year and continuing to grow the royalty backlog. Moving over to Secure Communications. This was another very solid quarter of execution for the division, despite a significant amount of time spent by the team that was dedicated to both the Arctic Wolf transaction and the review of our cost structure. Revenue exceeded the top end of guidance at $67.3 million for Q4. In the quarter, UEM secured new business with a number of government agencies including the US Air Force and a number of multi-year commitments with leading banks and law firms. Quarterly revenue for UEM increased sequentially. Year-over-year revenue for Q4 was down, however, partially as a result of a tough comparison in the same quarter the year before as a result of the upfront revenue portion of the large deal with the Malaysian government. Likewise, for the same reason, revenue for UEM for the full fiscal year was slightly lower as well. Speaking of the Malaysian government contract, this past quarter, we were delighted to expand our relationship by signing an extension to our existing deal that increased both the contract length and number of licenses. The Malaysian government remains a strong case study for deployment of the full Secure Communications portfolio and is one we are working to replicate. AtHoc, our critical events management solution, also had a solid quarter and full year, with revenue increasing both year-over-year in Q4 and for the full fiscal year. This past quarter, we secured expansions and renewals with key US government agencies, including the Department of Homeland Security, US Department of the Treasury, and the US Missile Defense Agency. Secusmart, our military-grade encrypted voice and data solution, had a solid fiscal 2025, with revenue increasing year-over-year. Given the significant portion of upfront revenue recognition, revenue can vary from quarter-to-quarter depending on the timing of new deals, as evidenced by Q4 being sequentially lower. Annual recurring revenue, or ARR, for Secure Comms decreased by $7 million or 3% sequentially to $208 million, although it was up $6 million or 3% year-over-year. The dollar-based net retention rate, or DBNRR, decreased marginally 2 percentage points sequentially to 93%, but was 2 percentage points higher than in Q4 of the prior year. Particularly pleasing is the continued strength in AtHoc's dollar-based net retention rate, which remains north of 100%. This past fiscal year saw a significant transformation for the Secure Communication division, with both the sale of the Cylance business and significant restructuring to right-size the cost structure. That said, the team has remained laser-focused and delivered a very solid year with both reliable revenue, significantly improved profitability, and stable underlying metrics. Touching briefly on Licensing, Licensing revenue came in above guidance at $8.6 million, driven by stronger-than-expected revenue from pre-existing arrangements. For a year of significant change, I'm pleased that BlackBerry as a whole was able to maintain focus and deliver a solid top-line of $534.9 million. As we move into fiscal year 2026, I am confident that the team will continue to deliver results. And with that, let me now turn the call over to our CFO, Tim, who will provide further details on our financials.

Thank you, John, and good morning, everyone. As John mentioned, revenue for QNX in the quarter exceeded the top-end of guidance at $65.8 million and came in at $236 million for the full fiscal year. QNX gross margins in the quarter remained strong at 83% and for the full fiscal year were 84%. Adjusted EBITDA in the quarter was $19.2 million, or 29% of revenue, and $59.1 million, or 25% of revenue, for the full fiscal year. Revenue for Secure Communications in the quarter was $67.3 million, or $272.6 million for the full fiscal year. Gross margins in Q4 were 64%, and for the full fiscal year 2025, 66%, both lower primarily as a result of revenue mix. Adjusted EBITDA for Secure Communications in the quarter was $12.6 million, or 19% of revenue, significantly beating the top-end of the guidance range, with the division's operating expenses being $2 million lower than the prior quarter. Adjusted EBITDA for Secure Comms for the full year was 19% of revenue at $52.3 million, a stark comparison year-over-year from the cybersecurity division, which included Cylance, that had a significantly negative adjusted EBITDA in fiscal 2024. Secure Communications is a solid source of both EBITDA and cash flow generation for BlackBerry as a whole. Finally, our Licensing division delivered stronger-than-expected revenue at $8.6 million. Q4 adjusted EBITDA for Licensing was $1.4 million as a result of the resolution of a legacy contract dispute that caused a one-time bad debt expense, driving higher-than-expected OpEx. For the full year, Licensing delivered strong results, with total revenue of $26.3 million and generating adjusted EBITDA of $15.8 million. The adjusted operating costs for the significantly streamlined corporate functions came in at $12.1 million in Q4 and $43 million for the full fiscal year. The costs were higher-than-expected due primarily to a $3 million charge for revaluing deferred stock units given the strong BlackBerry share price performance in the quarter. Pulling this all together and primarily due to product mix, as I described, total company gross margin in the quarter decreased both sequentially and year-over-year. However, total company gross margin for the full fiscal year improved 9 percentage points to 74%. In Q4, total company adjusted EBITDA beat the top-end of our guidance range at $21.1 million, representing 15% of revenue. For the full fiscal year, adjusted EBITDA for the total company, including Cylance, was $39.3 million. Adjusted net income, including discontinued operations, for Q4 was $17.7 million, and adjusted EPS beat expectations at $0.03. For the full fiscal year, adjusted net income, including discontinued operations, was $12.5 million, and adjusted EPS also beat expectations at $0.02. BlackBerry exits FY '25 in a solidly profitable position, a significantly different company compared to this time last year. A few points on the accounting relating to the Cylance sale. As John mentioned, at closing, we received approximately $80 million in cash, the first of two tranches, as well as 5.5 million common shares in Arctic Wolf. The shares are recorded at estimated fair value under accounting rules, the method determining which can be highly judgmental for private companies. Our estimate is conservative, and we've recorded them at a value of $24.6 million. The second tranche of cash of approximately $41 million receivable next January will initially be recorded at $38.6 million in the books due to the discounting for the time value of money. This past quarter, the company meaningfully strengthened its balance sheet. Cash from operations was $42 million, significantly exceeding expectations, and $57 million better than in the same quarter of the prior year. In fact, excluding the patent sale proceeds in Q1 of FY '24, this was the strongest operating cash flow performance since Q4 of fiscal 2021. Total cash and investments increased by $144 million during the quarter as a result of the Cylance sale proceeds and the strong operating cash flow to $410 million. This means that BlackBerry now has a solid net cash position in excess of $200 million. This healthy cash balance and a strong plan to generate cash in FY '26 and beyond provides BlackBerry with significant optionality. Turning now to financial outlook for the first fiscal quarter and the full fiscal year. We expect revenue for QNX in Q1 to be in the range of $51 million to $55 million, and for EBITDA to be in the range of $2 million to $6 million. Due to the timing of auto programs, we typically see sequential growth throughout the fiscal year with Q1 being the low point. For the full fiscal year, we see an uncertain backdrop within automotive. Given the recent tariff changes and particularly automotive tariffs, like others in the industry, we're currently uncertain of the impact this could have on our business. While we currently don't see that tariffs will directly impact our products and services, we do expect some indirect effects on BlackBerry due to impacts to our customers, including supply chains and macroeconomic demand, although these effects are currently difficult to model. That said, because we work with almost all major OEMs across the globe, we are mitigated to some extent from US-specific impacts given that approximately 50% of QNX's revenue comes from outside North America. Due to this uncertainty, we are reiterating the top-end of our guidance range provided at our Investor Day in October, but expanding the bottom-end, such that we expect revenue in the range of $250 million to $270 million for the full year, or 10% growth at the midpoint. Despite this broader range, we continue to expect full year adjusted EBITDA to be in the range of $55 million to $60 million, or 22% margin at the midpoint. We are taking a prudent view on the Secure Comms division. Given the uncertainty in its core government markets at this time, this includes the potential impact of changes in administrations in the US and in Canada, Germany, and elsewhere. We're obviously tracking the ever-changing landscape. And while we haven't yet seen any material impacts, we're keeping a close eye on things. These changes could potentially cause disruption in the short term, but could also present opportunities in the long run through further consolidation of products and vendors. Given this backdrop, we expect revenue to be in the range of $50 million to $54 million in the first quarter, and for EBITDA to be between $3 million to $6 million. For the full year, we expect revenue to be in the range of $230 million to $240 million. Currently, ARR represents a significant portion of this expected range at $208 million. Adjusted EBITDA is expected to be between $34 million and $44 million, a 17% margin at the midpoint. Profitability for the Secure Communications division remains the top priority. We are increasing our expectations for revenue for our Licensing division to be approximately $6 million each quarter, up from the prior $4 million expectation, with EBITDA of approximately $5 million per quarter. We expect adjusted corporate costs to be approximately $10 million a quarter or $40 million for the full fiscal year. So, at a total company level, we expect revenue in Q1 of between $107 million and $115 million, and adjusted EBITDA in the range of breakeven to positive $7 million. For non-GAAP EPS, we expect it to be between minus $0.01 to breakeven in the first quarter. For the full fiscal year, we expect total revenue for BlackBerry to be in the range of $504 million to $534 million, adjusted EBITDA between $69 million and $84 million, with adjusted EPS between $0.08 and $0.10. Finally, in terms of cash, as in the past, Q1 is expected to be a seasonal low for cash flow, driven by the billings and payments profile. Therefore, we expect an operating cash usage for Q1 in the range of $20 million to $30 million. However, for the full fiscal year, we expect to deliver positive operating cash flow at around $35 million. This figure includes the number of one-time factors that decreased what would otherwise have been a stronger conversion of EBITDA into operating cash flow. The one-time factors, totaling approximately $20 million, include payment of multiple years of already accrued corporate income tax in Europe, the ongoing cash cost of restructured facilities that we have exited but the lease hasn't yet expired, as well as the tail end of severance costs from actions taken this past year, particularly in international locations where the process takes longer. These impacts will gradually drop off as the year goes on, and the second half of this fiscal year is expected to deliver solid operating cash flow. In addition to operating cash flow, we will also add approximately $40 million from the second tranche of cash from the Cylance sale, meaning a further $75 million of cash will be added to the balance sheet this coming fiscal year. And with that, let me now turn the call back over to John.

Thanks for the summary, Tim. And before we move to Q&A, let me quickly summarize the key takeaways from this past year. Fiscal year 2025 was truly transformative for BlackBerry. We identified and swiftly addressed the challenges that the Cylance business presented for the company through a win-win transaction with Arctic Wolf. We increased focus and external visibility by increasing the level of autonomy in each of our divisions and providing their EBITDA as part of our financial statements. And finally, we evaluated our capital allocation priorities, shifting focus to our core growth driver of QNX and reducing our cost run rate by more than $150 million. This transformation positions BlackBerry as a profitable cash-flow-positive company heading into the new fiscal year. So, let's now move to Q&A.

Thank you. We will now begin the question-and-answer session. And our first question will be from Paul Treiber with RBC Capital Markets. Please proceed with your questions.

Thanks very much, and good morning. Just a question on tariffs and what you've seen or heard from auto OEMs. Can you just elaborate on some of the comments you made in your prepared remarks? And if you had any comments from OEMs in terms of changing production or other changes to new vehicle introductions as a result of the uncertainty around tariffs?

At this point, we have not encountered any substantial conversations with our large customers indicating a significant supply chain issue. We communicate with them daily and stay updated on all developments. A large portion, over 50%, of our revenue is derived from sources outside the US, which offers us some insulation from this situation. However, it is a very dynamic environment, and we have not received any signals of a major downturn in the supply chain at this time.

Just a follow-up just in regards to the overall uncertainty in the market, but looking at US federal, can you just remind us again how large US federal is as a percent of Secure Communications? And then, just speak to, if you've heard from any agencies either cutting seats or looking to cut seats at this point?

US federal is a substantial portion. I would say probably 20%, 25% of our overall Secure Comms business comes with the US federal business. And we have not seen any material impact. In fact, I think sometimes we certainly see some uncertainties where some of our renewals and our contracts were coming down the line, and they decided to move forward with them because I think the nature of the products that we provide are secure mission-critical communications. So, I think they're very careful and cautious before they cut things like that. There's a lot of other waste and things for them to focus on. So, another area that we watch very, very closely, but we haven't seen any material impact to that part of our business primarily because the nature of what we provide to them is mission-critical. And those are things I think they're a little bit more cautious about.

Thanks for that clarification. I'll pass the line.

Good morning. I have two questions about QNX. First, what are the OEMs indicating regarding the time it will take to adapt to the impact of tariffs?

I think, Todd, they're still navigating their way, quite honestly. So, they're kind of taking direction from what's happening in the marketplace. Like I said, there's nobody that's kind of flagged, 'Hey, we're going to have a material downtick in our overall supply chain and volumes throughout the year.' But certainly the uncertainty of everything is something that has them on alert. Let's put it that way. But nobody, like I said, has raised the flag of a material downturn. It's just everybody trying to read the tea leaves on where this thing is going in the future and what the impact will be.

And in terms of your own guide, what have you assumed in terms of how long it'll take to work through the tariff overlay?

So, what I'd say, Todd, is it's pretty difficult to model right now. I mean, obviously, we've broadened our range to reflect the uncertainty right now. We've kept the top-end in line with what we presented at Investor Day back in October. We still see a path to that. But clearly, there's some uncertainty. So, we broadened the range a little bit. So, yeah, right now, it's a little bit difficult to model.

Okay. My second question relates to the 50% of your business is outside the US. Could you just talk about those regions and what the levers or drivers to that business in the coming year? Thanks a lot.

Yeah. I would say, Todd, we're bullish about the prospects and the momentum, the conversations that we're having with our customers outside the US and, obviously, quite frankly, inside the US. But this whole vehicle OS initiative that we're working with a lot of our OEMs, particularly in Europe, where they're looking for us to do more for them, how we can support them more, how we can bring more value and provide more technology and services. So, I would say, the conversations that we're having with the industry in general is very robust and very strategic. We're at the center of what they are planning for strategically, and I think it sets us up for some interesting opportunities in the future.

And I'll just add to that, that one of the key focuses for this current fiscal year that we're going into is expanding beyond automotive. So, we're investing heavily in what we call the GEM, general embedded market, opportunity, which is adjacent verticals such as medical and industrial. We see massive opportunity as well. So that's another way of continuing to diversify this business and expand the total addressable market, which obviously in a period of volatility is a good thing.

Thank you. I think you are executing very well like a startup and have made significant progress over the past year. I have two comments. First, everyone is discussing tariffs, and I believe we can position Blackberry more like the new steel company. Looking ahead, every vehicle is becoming software-defined, and QNX is at the forefront of this shift. Since most of these companies are based in North America, if positioned correctly, the impact of tariffs on QNX could be less severe. Second, as Tim mentioned, expanding QNX into adjacent markets is a smart strategy. Robotics and physical AI seem to be gaining momentum, and QNX, being a real-time operating system, could find a place in this new field. Those are my two comments, and I would like to know your thoughts. Congratulations on your dedication to revitalizing BlackBerry. Thank you.

Thank you, Trip. I appreciate your comments. As Tim mentioned, we are making significant investments in the GEM space for our QNX business this year. We're discovering some exciting prospects as we adapt our SDP 8.0 platform with minimal modifications for different market segments. We've been focusing on go-to-market strategies, enhancing our brand, and hiring sales professionals to strengthen relationships. This will be a key focus for us in the upcoming fiscal year, along with deepening our connections with our automotive customers. That is an essential part of our plans moving forward.

Good morning. Thanks for taking the questions. Maybe to start bigger picture, John, hoping you could just double-click on the vehicle OS initiative in terms of what you're seeing initially with OEMs in terms of scope. In other words, could it maybe expand the number of addressable models with a given customer or something similar to that? And then, from a content standpoint, just your ability and maybe early learnings around what the content opportunity might look like relative to your current royalty opportunity per vehicle? Thank you.

Thank you, Luke, for your question. We see significant opportunities in both of those areas. Many OEMs are exploring their own software solutions and experimenting with different platforms, including Linux, but they often return to us for support in expanding their models and planning for the future. This trend is evident in both the US and Europe, where OEMs are increasingly reaching out to us for assistance. Additionally, as vehicles become more sophisticated and incorporate more content and DCUs, we anticipate more instances of QNX being integrated into each vehicle produced. This is a trend that we expect to continue growing. While it is a gradual process—not something that will produce immediate results in the current fiscal year—this development aligns with the strengths of our QNX brand and capabilities, solidifying our position in the market.

Okay.

If I could just add a couple of comments on there. I mean, totally agree with all of that and I would just add that this is an ask that's coming from the OEMs to do more. And to be able to take some of that heavy-lifting of pre-integrating a bunch of undifferentiated parts of the stack on their behalf, this is something that they really want us to help with. Working with people like TTTech and Vector to make sure that we get a really solid native experience, and a platform is something that really is going to help OEMs focus on the areas of the stack that they really need to be focusing on, and that's the application layer. And to your point about the content per vehicle opportunity, this could be a significant transformation. We obviously need to secure some of this business, so I want to just caution, we're still in the early innings on this. But, clearly, if we're providing our components, our middleware components, as well as reselling some of our partners' components, that could be a significant step up in terms of content per vehicle.

That is all good color. Well, yeah, I'll stay tuned, and I appreciate the additional color there, Tim. For my second question, just relative to DOGE risks and new administrations that you mentioned in a couple of countries, just how should we think about either, I don't know if this is a major factor, cancellability of Secure Communications contracts across your various business lines, or maybe more importantly, just typical contract terms and materiality of renewals in any given year? And just guardrails or rules of thumb we can think of? Thank you.

We are closely monitoring the situation with various dynamics at play. I want to highlight a few key points. Many of our contracts with governments worldwide are long-term, including our agreement in Canada and our strong position with the German government. In the US, we are deeply integrated into essential mission-critical communications. Therefore, it seems unlikely that they would abruptly change their approach to save a bit of money. In fact, there could be potential for us to consolidate our position, as we play a critical role, which may allow us to replace other vendors and grow our presence with some of our solutions. It's a long process, but our established relationships with these governments worldwide should benefit us during uncertain times.

I'll leave it there. Thank you.

Thank you. I would now like to turn the call back over to John Giamatteo, CEO of BlackBerry for closing remarks.

Thank you, Rob. And, thanks for everybody for joining the call. Very excited about the progress that BlackBerry is making, and the transformation that we've executed in the past fiscal year. And we feel we're very well set up for future growth and future acceleration as we go into the next fiscal year. So, thanks for your interest. Thanks for joining, and we'll see you next time.

This concludes today's call. Thank you for your participation. You may now disconnect.