BLACKBERRY Ltd 10-Q, filed Jun 30, 2023

BLACKBERRY Ltd (BB)

10-Q 2023-06-30 For: 2023-05-31

Added on April 08, 2026

About this 10-Q

BLACKBERRY Ltd filed this 10-Q on June 30, 2023, covering the quarter ended May 31, 2023.

Headline figures

Quarter ended May 31, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $373M; up 122.0% from $168M a year earlier
Net loss: $11M; compared with a net loss of $181M a year earlier
Diluted EPS: -$0.02; compared with -$0.35 a year earlier

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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


Large accelerated filer	x	Accelerated filer	☐
Non-accelerated filer	o	Smaller reporting company	☐
		Emerging growth company	☐


BLACKBERRY LIMITED

TABLE OF CONTENTS
		Page No.
PART I	FINANCIAL INFORMATION
Item 1	Financial Statements
	Consolidated Balance Sheets as of May 31, 2023 (unaudited) and February 28, 2023	5
	Consolidated Statements of Shareholders' Equity - Three Months Ended May 31, 2023 and 2022 (unaudited)	6
	Consolidated Statements of Operations - Three Months Ended May 31, 2023 and 2022 (unaudited)	7
	Consolidated Statements of Comprehensive Loss - Three Months Ended May 31, 2023 and 2022 (unaudited)	8
	Consolidated Statements of Cash Flows - Three Months Ended May 31, 2023 and 2022 (unaudited)	9
	Notes to the Consolidated Financial Statements	10
Item 2	Management's Discussion and Analysis of Financial Condition and Results of Operations	28
Item 3	Quantitative and Qualitative Disclosures about Market Risk	47
Item 4	Controls and Procedures	48

PART II	OTHER INFORMATION
Item 1	Legal Proceedings	48

Item 6	Exhibits	48
Signatures		50


	As at
	May 31, 2023		February 28, 2023
Assets
Current
Cash and cash equivalents (note 2)	$	358	$	295
Short-term investments (note 2)	158		131
Accounts receivable, net of allowance of $6 and $1, respectively (note 3)	117		120
Other receivables (note 3)	8		12

Income taxes receivable	3		3
Other current assets (note 3)	52		182
	696		743
Restricted cash and cash equivalents (note 2)	27		27
Long-term investments (note 2)	35		34
Other long-term assets (note 3)	60		8

Operating lease right-of-use assets, net	44		44
Property, plant and equipment, net (note 3)	24		25
Goodwill (note 3)	596		595
Intangible assets, net (note 3)	192		203

	$	1,674	$	1,679
Liabilities
Current
Accounts payable	$	21	$	24
Accrued liabilities (note 3)	128		143
Income taxes payable (note 4)	21		20
Debentures (note 5)	389		367
Deferred revenue, current (note 10)	177		175
	736		729
Deferred revenue, non-current (note 10)	26		40
Operating lease liabilities	52		52
Other long-term liabilities	1		1



	815		822
Commitments and contingencies (note 9)
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 - 583,237,331 voting common shares (February 28, 2023 - 582,157,203)	2,920		2,909
Deficit	(2,039)		(2,028)
Accumulated other comprehensive loss (note 8)	(22)		(24)
	859		857
	$	1,674	$	1,679


John S. Chen			Lisa Disbrow
Director			Director


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


	Three Months Ended May 31, 2023
	Capital Stock and Additional Paid-in Capital		Deficit		Accumulated Other Comprehensive Loss		Total























Balance as at February 28, 2023	$	2,909	$	(2,028)	$	(24)	$	857
Net loss	—		(11)		—		(11)
Other comprehensive income	—		—		2		2
Stock-based compensation (note 6)	9		—		—		9
Shares issued:


Employee share purchase plan (note 6)	2		—		—		2
Balance as at May 31, 2023	$	2,920	$	(2,039)	$	(22)	$	859


	Three Months Ended May 31, 2022
	Capital Stock and Additional Paid-in Capital		Deficit		Accumulated Other Comprehensive Loss		Total























Balance as at February 28, 2022	$	2,869	$	(1,294)	$	(19)	$	1,556
Net loss	—		(181)		—		(181)
Other comprehensive loss	—		—		(1)		(1)

Stock-based compensation	8		—		—		8
Shares issued:


Employee share purchase plan	3		—		—		3
Balance as at May 31, 2022	$	2,880	$	(1,475)	$	(20)	$	1,385


	Three Months Ended
	May 31, 2023		May 31, 2022
Revenue (note 10)	$	373	$	168
Cost of sales	194		64

Gross margin	179		104

Operating expenses
Research and development	54		53
Selling, marketing and administration	99		82
Amortization	15		27



Debentures fair value adjustment (note 5)	22		(46)
Litigation settlement (note 9)	—		165
	190		281
Operating loss	(11)		(177)
Investment income (loss), net (note 2 and note 5)	3		(1)
Loss before income taxes	(8)		(178)
Provision for income taxes (note 4)	3		3


Net loss	$	(11)	$	(181)
Loss per share (note 7)
Basic	$	(0.02)	$	(0.31)
Diluted	$	(0.02)	$	(0.35)


	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	$	85	$	—	$	—	$	85	$	83	$	—	$	—	$	2
Other investments	29		6		—		35		—		—		35		—
	114		6		—		120		83		—		35		2
Level 1:

Equity securities	10		—		(10)		—		—		—		—		—


Level 2:
Term deposits and certificates of deposits	53		—		—		53		31		—		—		22
Bankers’ acceptances/bearer deposit notes	106		—		—		106		106		—		—		—
Commercial paper	172		—		—		172		84		85		—		3
Non-U.S. promissory notes	83		—		—		83		32		51		—		—


Non-U.S. treasury bills/notes	22		—		—		22		22		—		—		—

Corporate notes/bonds	22		—		—		22		—		22		—		—
	458		—		—		458		275		158		—		25





	$	582	$	6	$	(10)	$	578	$	358	$	158	$	35	$	27


	Carrying Amount

Beginning balance as of February 28, 2022	$	4
Prior period provision for expected credit losses	1
Write-offs charged against the allowance	(4)
Ending balance of the allowance for credit loss as at February 28, 2023	1

Current period provision for expected credit losses	5


Ending balance of the allowance for credit loss as at May 31, 2023	$	6


	As at May 31, 2023
	Cost		Accumulated Amortization		Net Book Value
Acquired technology	$	900	$	830	$	70
Other acquired intangibles	386		322		64
Intellectual property	124		66		58
	$	1,410	$	1,218	$	192


	As at February 28, 2023
	Cost		Accumulated Amortization		Net Book Value
Acquired technology	$	900	$	824	$	76
Other acquired intangibles	386		318		68
Intellectual property	123		64		59
	$	1,409	$	1,206	$	203


	Carrying Amount
Carrying amount as at February 28, 2022	$	844
Goodwill impairment charge	(245)
Effect of foreign exchange on non-U.S. dollar denominated goodwill	(4)
Carrying amount as at February 28, 2023	595


Effect of foreign exchange on non-U.S. dollar denominated goodwill	1
Carrying amount as at May 31, 2023	$	596


	Three Months Ended
	May 31, 2023			May 31, 2022
North America (1)	$	317		$	89
Europe, Middle East and Africa	37			60
Other regions	19			19

Total	$	373		$	168

North America (1)	85.0		%	53.0		%
Europe, Middle East and Africa	9.9		%	35.7		%
Other regions	5.1		%	11.3		%
Total	100.0		%	100.0		%


	Accounts and Other Receivable		Deferred Revenue		Deferred Commissions
Opening balance as at February 28, 2023	$	120	$	215	$	17
Increases due to invoicing of new or existing contracts, associated contract acquisition costs, or other	396		127		6
Decrease due to payment, fulfillment of performance obligations, or other	(347)		(139)		(6)

Increase (decrease), net	49		(12)		—
Closing balance as at May 31, 2023	$	169	$	203	$	17


	For the Three Months Ended (in millions)
	Cybersecurity						IoT						Licensing and Other						Segment Totals
	May 31,				Change		May 31,				Change		May 31,				Change		May 31,				Change
	2023		2022				2023		2022				2023		2022				2023		2022
Segment revenue	$	93	$	113	$	(20)	$	45	$	51	$	(6)	$	235	$	4	$	231	$	373	$	168	$	205
Segment cost of sales	37		53		(16)		9		8		1		147		2		145		193		63		130
Segment gross margin	$	56	$	60	$	(4)	$	36	$	43	$	(7)	$	88	$	2	$	86	$	180	$	105	$	75


	Capital Stock and Additional Paid-in Capital
	Stock Outstanding (000s)	Amount
Common shares outstanding as at February 28, 2023	582,157	$	2,909
Exercise of stock options	52	—
Common shares issued for restricted share unit settlements	461	—
Stock-based compensation	—	9






Common shares issued for employee share purchase plan	567	2
Common shares outstanding as at May 31, 2023	583,237	$	2,920


	For the Three Months Ended
	Cybersecurity				IoT			Licensing and Other		Segment Totals
	May 31,					May 31,				May 31,				May 31,
	2023		2022			2023		2022		2023		2022		2023		2022
Segment revenue	$	93	$	113		$	45	$	51	$	235	$	4	$	373	$	168
Segment cost of sales	37		53			9		8		147		2		193		63
Segment gross margin (1)	$	56	$	60		$	36	$	43	$	88	$	2	$	180	$	105


	As at May 31, 2023
	Less than 12 Months		12 to 24 Months		Thereafter		Total
Remaining performance obligations	$	177	$	11	$	15	$	203


	For the Three Months Ended (in millions, except for share and per share amounts)
	May 31, 2023		May 31, 2022		Change
Revenue	$	373	$	168	$	205
Gross margin	179		104		75
Operating expenses	190		281		(91)
Investment income (loss), net	3		(1)		4
Loss before income taxes	(8)		(178)		170
Provision for income taxes	3		3		—
Net loss	$	(11)	$	(181)	$	170
Loss per share - reported
Basic	$	(0.02)	$	(0.31)
Diluted	$	(0.02)	$	(0.35)

Weighted-average number of shares outstanding (000’s)
Basic	582,812		576,877
Diluted (1)	582,812		637,710












	For the Three Months Ended May 31, 2023
	(in millions)
	Cybersecurity		IoT		Licensing and Other		Segment Totals		Reconciling Items		Consolidated U.S. GAAP
Revenue	$	93	$	45	$	235	$	373	$	—	$	373
Cost of sales	37		9		147		193		1		194
Gross margin (1)	$	56	$	36	$	88	$	180	$	(1)	$	179
Operating expenses									190		190
Investment income, net									(3)		(3)
Loss before income taxes											$	(8)












	For the Three Months Ended May 31, 2022
	(in millions)
	Cybersecurity		IoT		Licensing and Other		Segment Totals		Reconciling Items		Consolidated U.S. GAAP
Revenue	$	113	$	51	$	4	$	168	$	—	$	168
Cost of sales	53		8		2		63		1		64
Gross margin (1)	$	60	$	43	$	2	$	105	$	(1)	$	104
Operating expenses									281		281
Investment loss, net									1		1
Loss before income taxes											$	(178)


For the Three Months Ended (in millions)	May 31, 2023			May 31, 2022




Gross margin	$	179		$	104



Stock compensation expense	1			1
Adjusted gross margin	$	180		$	105

Gross margin %	48.0		%	61.9		%



Stock compensation expense	0.3		%	0.6		%
Adjusted gross margin %	48.3		%	62.5		%


For the Three Months Ended (in millions, except per share amounts)	May 31, 2023			May 31, 2022
			Basic earnings (loss) per share			Basic loss per share
Net loss	$	(11)	$(0.02)	$	(181)	$(0.31)


Restructuring charges	5			1
Stock compensation expense	9			7
Debentures fair value adjustment	22			(46)

Acquired intangibles amortization	10			23




Litigation settlement	—			165

Adjusted net income (loss)	$	35	$0.06	$	(31)	$(0.05)


	For the Three Months Ended (in millions)
	Included in Operating Expense
	May 31, 2023		May 31, 2022		Change
Property, plant and equipment	$	3	$	4	$	(1)
Intangible assets	12		23		(11)
Total	$	15	$	27	$	(12)

	Included in Cost of Sales
	May 31, 2023		May 31, 2022		Change

Intangible assets	1		2		(1)


	As at (in millions)
	May 31, 2023		February 28, 2023		Change
Cash and cash equivalents	$	358	$	295	$	63
Restricted cash and cash equivalents	27		27		—
Short-term investments	158		131		27
Long-term investments	35		34		1
Cash, cash equivalents, and investments	$	578	$	487	$	91


	(in millions)
	Total		Short-term (next 12 months)		Long-term (>12 months)
Operating lease obligations	$	81	$	25	$	56
Purchase obligations and commitments	92		92		—
Debt interest and principal payments	369		369		—
Total	$	542	$	486	$	56


Exhibit Number						Description of Exhibit





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



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


	BLACKBERRY LIMITED

Date: June 29, 2023	By:	/s/ John Chen
	Name:	John Chen
	Title:	Chief Executive Officer

	By:	/s/ Steve Rai
	Name:	Steve Rai
	Title:	Chief Financial Officer (Principal Financial and Accounting Officer)


Date: June 29, 2023			/s/ John Chen
			Name: John Chen
			Title: Chief Executive Officer


Date: June 29, 2023			/s/ Steve Rai
			Name: Steve Rai
			Title: Chief Financial Officer