10-Q 1 bbry-20240531.htm 10-Q bbry-20240531
5/31/2024False2025Q10001070235--02-28590,171,424590,171,424589,232,539589,232,539590,171,424589,232,539590,171,424589,232,539562,9482,1581477642421188112,9572,200157422,9092,028248571111112229992222,9202,03922859P1MP1Yhttp://fasb.org/us-gaap/2024#GeneralAndAdministrativeExpensexbrli:sharesiso4217:USDiso4217:USDxbrli:sharesbbry:operatingSegmentxbrli:pure00010702352024-03-012024-05-3100010702352024-06-2400010702352024-05-3100010702352024-02-290001070235us-gaap:CommonStockIncludingAdditionalPaidInCapitalMember2024-02-290001070235us-gaap:RetainedEarningsMember2024-02-290001070235us-gaap:ComprehensiveIncomeMember2024-02-290001070235us-gaap:RetainedEarningsMember2024-03-012024-05-310001070235us-gaap:ComprehensiveIncomeMember2024-03-012024-05-310001070235us-gaap:CommonStockIncludingAdditionalPaidInCapitalMember2024-03-012024-05-310001070235us-gaap:CommonStockIncludingAdditionalPaidInCapitalMember2024-05-310001070235us-gaap:RetainedEarningsMember2024-05-310001070235us-gaap:ComprehensiveIncomeMember2024-05-310001070235us-gaap:CommonStockIncludingAdditionalPaidInCapitalMember2023-02-280001070235us-gaap:RetainedEarningsMember2023-02-280001070235us-gaap:ComprehensiveIncomeMember2023-02-2800010702352023-02-280001070235us-gaap:RetainedEarningsMember2023-03-012023-05-3100010702352023-03-012023-05-310001070235us-gaap:ComprehensiveIncomeMember2023-03-012023-05-310001070235us-gaap:CommonStockIncludingAdditionalPaidInCapitalMember2023-03-012023-05-310001070235us-gaap:CommonStockIncludingAdditionalPaidInCapitalMember2023-05-310001070235us-gaap:RetainedEarningsMember2023-05-310001070235us-gaap:ComprehensiveIncomeMember2023-05-3100010702352023-05-310001070235us-gaap:DemandDepositsMember2024-05-310001070235us-gaap:DemandDepositsMember2024-03-012024-05-310001070235us-gaap:OtherInvestmentsMember2024-05-310001070235us-gaap:OtherInvestmentsMember2024-03-012024-05-310001070235bbry:BankBalancesandOtherInvestmentsDomain2024-05-310001070235bbry:BankBalancesandOtherInvestmentsDomain2024-03-012024-05-310001070235us-gaap:EquitySecuritiesMemberus-gaap:FairValueInputsLevel1Member2024-05-310001070235us-gaap:EquitySecuritiesMemberus-gaap:FairValueInputsLevel1Member2024-03-012024-05-310001070235us-gaap:BankTimeDepositsMemberus-gaap:FairValueInputsLevel2Member2024-05-310001070235us-gaap:BankTimeDepositsMemberus-gaap:FairValueInputsLevel2Member2024-03-012024-05-310001070235us-gaap:BankersAcceptanceMemberus-gaap:FairValueInputsLevel2Member2024-05-310001070235us-gaap:BankersAcceptanceMemberus-gaap:FairValueInputsLevel2Member2024-03-012024-05-310001070235us-gaap:CommercialPaperMemberus-gaap:FairValueInputsLevel2Member2024-05-310001070235us-gaap:CommercialPaperMemberus-gaap:FairValueInputsLevel2Member2024-03-012024-05-310001070235us-gaap:FairValueInputsLevel2Memberbbry:NonUsGovernmentPromissoryNotesMember2024-05-310001070235us-gaap:FairValueInputsLevel2Memberbbry:NonUsGovernmentPromissoryNotesMember2024-03-012024-05-310001070235us-gaap:FairValueInputsLevel2Memberbbry:NonUsTreasuryBillsNotesMember2024-05-310001070235us-gaap:FairValueInputsLevel2Memberbbry:NonUsTreasuryBillsNotesMember2024-03-012024-05-310001070235us-gaap:FairValueInputsLevel2Memberus-gaap:USTreasurySecuritiesMember2024-05-310001070235us-gaap:FairValueInputsLevel2Memberus-gaap:USTreasurySecuritiesMember2024-03-012024-05-310001070235us-gaap:FairValueInputsLevel2Member2024-05-310001070235us-gaap:FairValueInputsLevel2Member2024-03-012024-05-310001070235us-gaap:FairValueInputsLevel3Memberus-gaap:OtherInvestmentsMember2024-05-310001070235us-gaap:FairValueInputsLevel3Memberus-gaap:OtherInvestmentsMember2024-03-012024-05-310001070235us-gaap:DemandDepositsMember2024-02-290001070235us-gaap:DemandDepositsMember2023-03-012024-02-290001070235us-gaap:OtherInvestmentsMember2024-02-290001070235us-gaap:OtherInvestmentsMember2023-03-012024-02-290001070235bbry:BankBalancesandOtherInvestmentsDomain2024-02-290001070235bbry:BankBalancesandOtherInvestmentsDomain2023-03-012024-02-290001070235us-gaap:EquitySecuritiesMemberus-gaap:FairValueInputsLevel1Member2024-02-290001070235us-gaap:EquitySecuritiesMemberus-gaap:FairValueInputsLevel1Member2023-03-012024-02-290001070235us-gaap:BankTimeDepositsMemberus-gaap:FairValueInputsLevel2Member2024-02-290001070235us-gaap:BankTimeDepositsMemberus-gaap:FairValueInputsLevel2Member2023-03-012024-02-290001070235us-gaap:BankersAcceptanceMemberus-gaap:FairValueInputsLevel2Member2024-02-290001070235us-gaap:BankersAcceptanceMemberus-gaap:FairValueInputsLevel2Member2023-03-012024-02-290001070235us-gaap:CommercialPaperMemberus-gaap:FairValueInputsLevel2Member2024-02-290001070235us-gaap:CommercialPaperMemberus-gaap:FairValueInputsLevel2Member2023-03-012024-02-290001070235us-gaap:FairValueInputsLevel2Memberbbry:NonUsGovernmentPromissoryNotesMember2024-02-290001070235us-gaap:FairValueInputsLevel2Memberbbry:NonUsGovernmentPromissoryNotesMember2023-03-012024-02-290001070235us-gaap:FairValueInputsLevel2Memberus-gaap:USTreasurySecuritiesMember2024-02-290001070235us-gaap:FairValueInputsLevel2Memberus-gaap:USTreasurySecuritiesMember2023-03-012024-02-290001070235us-gaap:FairValueInputsLevel2Member2024-02-290001070235us-gaap:FairValueInputsLevel2Member2023-03-012024-02-2900010702352023-03-012024-02-290001070235srt:MinimumMember2024-03-012024-05-310001070235srt:MaximumMember2024-03-012024-05-310001070235us-gaap:TechnologyEquipmentMember2024-05-310001070235us-gaap:TechnologyEquipmentMember2024-02-290001070235bbry:LeaseholdImprovementsAndOtherMember2024-05-310001070235bbry:LeaseholdImprovementsAndOtherMember2024-02-290001070235us-gaap:FurnitureAndFixturesMember2024-05-310001070235us-gaap:FurnitureAndFixturesMember2024-02-290001070235bbry:ManufacturingEquipmentResearchAndDevelopmentEquipmentAndToolingMember2024-05-310001070235bbry:ManufacturingEquipmentResearchAndDevelopmentEquipmentAndToolingMember2024-02-290001070235bbry:AcquiredTechnologyMember2024-05-310001070235bbry:OtherAcquiredTechnologyMember2024-05-310001070235us-gaap:IntellectualPropertyMember2024-05-310001070235bbry:AcquiredTechnologyMember2024-02-290001070235bbry:OtherAcquiredTechnologyMember2024-02-290001070235us-gaap:IntellectualPropertyMember2024-02-290001070235us-gaap:OneTimeTerminationBenefitsMember2023-02-280001070235us-gaap:FacilityClosingMember2023-02-280001070235us-gaap:OneTimeTerminationBenefitsMember2023-03-012024-02-290001070235us-gaap:FacilityClosingMember2023-03-012024-02-290001070235us-gaap:OneTimeTerminationBenefitsMember2024-02-290001070235us-gaap:FacilityClosingMember2024-02-290001070235us-gaap:OneTimeTerminationBenefitsMember2024-03-012024-05-310001070235us-gaap:FacilityClosingMember2024-03-012024-05-310001070235us-gaap:OneTimeTerminationBenefitsMember2024-05-310001070235us-gaap:FacilityClosingMember2024-05-310001070235bbry:SeniorConvertibleNotesMember2024-05-310001070235bbry:SeniorConvertibleNotesMember2024-03-012024-05-310001070235bbry:SeniorConvertibleNotesMember2024-02-290001070235bbry:A2020DebenturesMember2023-11-130001070235bbry:A2020DebenturesMember2023-03-012023-11-300001070235bbry:A2020DebenturesMember2024-03-012024-05-310001070235bbry:A2020DebenturesMember2023-03-012023-05-310001070235us-gaap:SubsequentEventMemberbbry:VotingCommonStockMember2024-06-240001070235us-gaap:SubsequentEventMemberus-gaap:EmployeeStockOptionMember2024-06-240001070235us-gaap:SubsequentEventMemberus-gaap:RestrictedStockUnitsRSUMember2024-06-240001070235us-gaap:SubsequentEventMemberbbry:DeferredStockUnitMember2024-06-240001070235bbry:A175DebentureMember2024-03-012024-05-310001070235us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2024-02-290001070235us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2023-02-280001070235us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2024-03-012024-05-310001070235us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2023-03-012023-05-310001070235us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2024-05-310001070235us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2023-05-310001070235us-gaap:AccumulatedTranslationAdjustmentMember2024-02-290001070235us-gaap:AccumulatedTranslationAdjustmentMember2023-02-280001070235us-gaap:AccumulatedTranslationAdjustmentMember2024-03-012024-05-310001070235us-gaap:AccumulatedTranslationAdjustmentMember2023-03-012023-05-310001070235us-gaap:AccumulatedTranslationAdjustmentMember2024-05-310001070235us-gaap:AccumulatedTranslationAdjustmentMember2023-05-310001070235us-gaap:AccumulatedGainLossFinancialLiabilityFairValueOptionAttributableToParentMember2024-05-310001070235us-gaap:AccumulatedGainLossFinancialLiabilityFairValueOptionAttributableToParentMember2023-05-310001070235bbry:OtherPostEmploymentBenefitObligationsMember2024-05-310001070235bbry:OtherPostEmploymentBenefitObligationsMember2023-05-310001070235us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-05-310001070235us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-05-310001070235bbry:CybersecurityMember2024-03-012024-05-310001070235bbry:CybersecurityMember2023-03-012023-05-310001070235bbry:IoTMember2024-03-012024-05-310001070235bbry:IoTMember2023-03-012023-05-310001070235bbry:LicensingAndOtherMember2024-03-012024-05-310001070235bbry:LicensingAndOtherMember2023-03-012023-05-310001070235us-gaap:OperatingSegmentsMember2024-03-012024-05-310001070235us-gaap:OperatingSegmentsMember2023-03-012023-05-310001070235us-gaap:MaterialReconcilingItemsMember2024-03-012024-05-310001070235us-gaap:MaterialReconcilingItemsMember2023-03-012023-05-3100010702352023-05-110001070235srt:NorthAmericaMember2024-03-012024-05-310001070235srt:NorthAmericaMember2023-03-012023-05-310001070235us-gaap:EMEAMember2024-03-012024-05-310001070235us-gaap:EMEAMember2023-03-012023-05-310001070235bbry:OtherRegionsMember2024-03-012024-05-310001070235bbry:OtherRegionsMember2023-03-012023-05-310001070235us-gaap:TransferredOverTimeMember2024-03-012024-05-310001070235us-gaap:TransferredOverTimeMember2023-03-012023-05-310001070235us-gaap:TransferredAtPointInTimeMember2024-03-012024-05-310001070235us-gaap:TransferredAtPointInTimeMember2023-03-012023-05-310001070235us-gaap:AccountsReceivableMember2024-02-290001070235bbry:DeferredRevenueMember2024-02-290001070235bbry:DeferredCommissionMember2024-02-290001070235us-gaap:AccountsReceivableMember2024-03-012024-05-310001070235bbry:DeferredRevenueMember2024-03-012024-05-310001070235bbry:DeferredCommissionMember2024-03-012024-05-310001070235us-gaap:AccountsReceivableMember2024-05-310001070235bbry:DeferredRevenueMember2024-05-310001070235bbry:DeferredCommissionMember2024-05-310001070235bbry:LessThan12MonthsMember2024-05-310001070235bbry:A12To24MonthsMember2024-05-310001070235bbry:After24MonthsMember2024-05-310001070235country:CA2024-05-310001070235country:CA2024-02-290001070235country:US2024-05-310001070235country:US2024-02-290001070235bbry:OtherCountriesMember2024-05-310001070235bbry:OtherCountriesMember2024-02-290001070235bbry:OneCustomerMemberus-gaap:SalesRevenueNetMemberus-gaap:CustomerConcentrationRiskMember2024-03-012024-05-310001070235bbry:OneCustomerMemberus-gaap:SalesRevenueNetMemberus-gaap:CustomerConcentrationRiskMember2023-03-012023-05-31


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 ________________________
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended May 31, 2024

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
WaterlooOntarioCanada
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 classTrading Symbol(s)Name of each exchange on which registered
Common SharesBBNew York Stock Exchange
Common SharesBBToronto Stock Exchange

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 

1



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.
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 is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ☐   No  x

The registrant had 590,173,164 common shares issued and outstanding as of June 24, 2024.
 

2




BLACKBERRY LIMITED
TABLE OF CONTENTS
Page No.
PART I FINANCIAL INFORMATION
Item 1Financial Statements
Consolidated Balance Sheets as of May 31, 2024 (unaudited) and February 29, 2024
Consolidated Statements of Shareholders' Equity - Three Months Ended May 31, 2024 and 2023 (unaudited)
Consolidated Statements of Operations - Three Months Ended May 31, 2024 and 2023 (unaudited)
Consolidated Statements of Comprehensive Loss - Three Months Ended May 31, 2024 and 2023 (unaudited)
Consolidated Statements of Cash Flows - Three Months Ended May 31, 2024 and 2023 (unaudited)
Notes to the Consolidated Financial Statements
Item 2Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3Quantitative and Qualitative Disclosures about Market Risk
Item 4Controls and Procedures
PART IIOTHER INFORMATION
Item 1Legal Proceedings
Item 5Other Information
Item 6Exhibits
Signatures

3




Unless the context otherwise requires, all references to the “Company” and “BlackBerry” include BlackBerry Limited and its subsidiaries.

PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
4


BlackBerry Limited
Incorporated under the Laws of Ontario
(United States dollars, in millions) (unaudited)
Consolidated Balance Sheets
 As at
 May 31, 2024February 29, 2024
Assets
Current
Cash and cash equivalents (note 2)$143 $175 
Short-term investments (note 2)86 62 
Accounts receivable, net of allowance of $5 and $6, respectively (note 3)
148 199 
Other receivables (note 3)21 21 
Income taxes receivable 3 4 
Other current assets (note 3)57 47 
458 508 
Restricted cash and cash equivalents (note 2)17 25 
Long-term investments (note 2)37 36 
Other long-term assets (note 3)59 57 
Operating lease right-of-use assets, net27 32 
Property, plant and equipment, net (note 3)19 21 
Intangible assets, net (note 3)145 154 
Goodwill (note 3)561 562 
$1,323 $1,395 
Liabilities
Current
Accounts payable $6 $17 
Accrued liabilities (note 3)112 117 
Income taxes payable (note 4)29 28 
Deferred revenue, current (note 10)174 194 
321 356 
Deferred revenue, non-current (note 10)32 28 
Operating lease liabilities33 38 
Other long-term liabilities1 3 
Long-term notes (note 5)194 194 
581 619 
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 - 590,171,424 voting common shares (February 29, 2024 - 589,232,539)
2,957 2,948 
Deficit(2,200)(2,158)
Accumulated other comprehensive loss (note 8)(15)(14)
742 776 
$1,323 $1,395 
See notes to consolidated financial statements.

On behalf of the Board: 
John GiamatteoLisa Disbrow
DirectorDirector
5


BlackBerry Limited
(United States dollars, in millions) (unaudited)
Consolidated Statements of Shareholders’ Equity

Three Months Ended May 31, 2024
Capital Stock
and Additional
Paid-in Capital
DeficitAccumulated
Other
Comprehensive Loss
Total
Balance as at February 29, 2024$2,948 $(2,158)$(14)$776 
Net loss— (42)— (42)
Other comprehensive loss— — (1)(1)
Stock-based compensation (note 6)8 — — 8 
Shares issued:
Employee share purchase plan (note 6)1 — — 1 
Balance as at May 31, 2024$2,957 $(2,200)$(15)$742 

Three Months Ended May 31, 2023
Capital Stock
and Additional
Paid-in Capital
DeficitAccumulated
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 compensation9 — — 9 
Shares issued:
Employee share purchase plan2 — — 2 
Balance as at May 31, 2023$2,920 $(2,039)$(22)$859 

See notes to consolidated financial statements.
6


BlackBerry Limited
(United States dollars, in millions, except per share data) (unaudited)
Consolidated Statements of Operations
 
 Three Months Ended
 May 31, 2024May 31, 2023
Revenue (note 10)$144 $373 
Cost of sales48 194 
Gross margin96 179 
Operating expenses
Research and development42 54 
Sales and marketing38 45 
General and administrative40 54 
Amortization12 15 
Impairment of long-lived assets (note 2)3  
Debentures fair value adjustment (note 5) 22 
135 190 
Operating loss(39)(11)
Investment income, net (note 2 and note 5)5 3 
Loss before income taxes(34)(8)
Provision for income taxes (note 4)8 3 
Net loss$(42)$(11)
Loss per share (note 7)
Basic$(0.07)$(0.02)
Diluted$(0.07)$(0.02)
See notes to consolidated financial statements.
7


BlackBerry Limited
(United States dollars, in millions) (unaudited)
Consolidated Statements of Comprehensive Loss
 
 Three Months Ended
 May 31, 2024May 31, 2023
Net loss$(42)$(11)
Other comprehensive income (loss)
Net change in fair value and amounts reclassified to net loss from derivatives designated as cash flow hedges during the three months ended, net of income taxes of nil (May 31, 2023 - income taxes of nil) (note 8) 1 
Foreign currency translation adjustment(1)1 
Other comprehensive income (loss)(1)2 
Comprehensive loss$(43)$(9)
See notes to consolidated financial statements.
8


BlackBerry Limited
(United States dollars, in millions) (unaudited)
Consolidated Statements of Cash Flows
 Three Months Ended
  May 31, 2024May 31, 2023
Cash flows from operating activities
Net loss$(42)$(11)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Amortization13 16 
Stock-based compensation8 9 
Impairment of long-lived assets (note 2)3  
Intellectual property disposed of by sale 147 
Debentures fair value adjustment (note 5) 22 
Operating leases(2)(1)
Other(3) 
Net changes in working capital items
Accounts receivable, net of allowance51 3 
Other receivables 4 
Income taxes receivable1  
Other assets(13)(62)
Accounts payable(11)(3)
Accrued liabilities(5)(14)
Income taxes payable1 1 
Deferred revenue(16)(12)
Net cash provided by (used in) operating activities(15)99 
Cash flows from investing activities
Acquisition of long-term investments (1)
Acquisition of property, plant and equipment(1)(2)
Acquisition of intangible assets(1)(8)
Acquisition of short-term investments(49)(66)
Proceeds on sale or maturity of short-term investments25 39 
Net cash used in investing activities(26)(38)
Cash flows from financing activities
Issuance of common shares1 2 
Net cash provided by financing activities1 2 
Net increase (decrease) in cash, cash equivalents, restricted cash, and restricted cash equivalents during the period(40)63 
Cash, cash equivalents, restricted cash, and restricted cash equivalents, beginning of period200 322 
Cash, cash equivalents, restricted cash, and restricted cash equivalents, end of period$160 $385 
See notes to consolidated financial statements.
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 (unaudited)





1.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND CRITICAL ACCOUNTING ESTIMATES
Basis of Presentation and Preparation
These interim consolidated financial statements have been prepared by management in accordance with United States generally accepted accounting principles (“U.S. GAAP”). They do not include all of the disclosures required by U.S. GAAP for annual financial statements and should be read in conjunction with the audited consolidated financial statements of BlackBerry Limited (the “Company”) for the year ended February 29, 2024 (the “Annual Financial Statements”), which have been prepared in accordance with U.S. GAAP. In the opinion of management, all normal recurring adjustments considered necessary for fair presentation have been included in these interim consolidated financial statements. Operating results for the three months ended May 31, 2024 are not necessarily indicative of the results that may be expected for the full year ending February 28, 2025. The consolidated balance sheet at February 29, 2024 was derived from the audited Annual Financial Statements but does not contain all of the footnote disclosures from the Annual Financial Statements.
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. Actual results could differ from these estimates and any such differences may be material to the Company’s consolidated financial statements.
Certain of the comparative figures have been reclassified to conform to the current year’s presentation.
The Company is organized and managed as three reportable operating segments: Cybersecurity, IoT (collectively, “Software & Services”), and Licensing and Other, as further discussed in Note 10.
Significant Accounting Policies and Critical Accounting Estimates
There have been no material changes to the Company’s accounting policies or critical accounting estimates from those described in the Annual Financial Statements.
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; (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 it did not have a material impact on its disclosures.
10

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 (unaudited)





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.
2.    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.
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.
When the Company concludes that there is a significant financing component included within a contract with a customer due to timing differences between the fulfillment of certain performance obligations and the receipt of payment for those performance obligations, the Company determines the present value of the future consideration utilizing 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.
For a description of how the fair value of the 2020 Debentures (as defined in Note 5) was determined, see the “Convertible debentures” accounting policies in Note 1 to the Annual Financial Statements.
11

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 (unaudited)





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.
Impairment of Long-Lived Assets
During the three months ended May 31, 2024, the Company exited certain leased facilities and recorded a pre-tax and after-tax impairment charge of $3 million related to the operating lease right-of-use (“ROU”) assets and property, plant and equipment associated with those facilities (three months ended May 31, 2023 - nil). 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. The fair value measurement of ROU impaired assets is classified as Level 3.

Cash, Cash Equivalents and Investments
The components of cash, cash equivalents and investments by fair value level as at May 31, 2024 were as follows:
Cost Basis (1)
Unrealized
Gains
Unrealized
Losses
Fair ValueCash and
Cash
Equivalents
Short-term
Investments
Long-term
Investments
Restricted Cash and Cash Equivalents
Bank balances$92 $ $ $92 $92 $ $ $ 
Other investments28 6  34   34  
120 6  126 92  34  
Level 1:
Equity securities10  (10)     
Level 2:
Term deposits, and certificates of deposits13   13    13 
Bankers' acceptances/bearer deposit notes12   12 12    
Commercial paper89   89 28 61   
Non-U.S. promissory notes26   26 11 15   
Non-U.S. treasury bills4   4    4 
U.S. treasury bills10   10  10   
154   154 51 86  17 
Level 3:
Other investments2 1  3   3  
$286 $7 $(10)$283 $143 $86 $37 $17 
______________________________
(1) Cost basis for other investments includes the effect of returns of capital and impairment.
12

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 (unaudited)





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 ValueCash and
Cash
Equivalents
Short-term
Investments
Long-term
Investments
Restricted Cash and Cash Equivalents
Bank balances$96 $ $ $96 $96 $ $ $ 
Other investments30 6  36   36  
126 6  132 96  36  
Level 1:
Equity securities10  (10)     
Level 2:
Term deposits, and certificates of deposits21   21    21 
Bearer deposit notes53   53 28 25   
Commercial paper47   47 15 32   
Non-U.S. promissory notes35   35 30 5   
U.S. treasury bills10   10 6   4 
166   166 79 62  25 
$302 $6 $(10)$298 $175 $62 $36 $25 
______________________________
(1) Cost basis for other investments includes the effect of returns of capital and impairment.
As at May 31, 2024, the Company had non-marketable equity investments without readily determinable fair value of $37 million (February 29, 2024 - $36 million). During the three months ended May 31, 2024, the Company recorded an upward adjustment of $1 million to the carrying value of a certain non-marketable equity investment 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 May 31, 2024, the Company has recorded a cumulative impairment of $3 million to the carrying value of certain other non-marketable equity investments without readily determinable fair value (February 29, 2024 - $3 million).
There were no realized gains or losses on available-for-sale securities for the three months ended May 31, 2024 and May 31, 2023.
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. These letters of credit support certain leasing arrangements entered into in the ordinary course of business. The letters of credit are for terms ranging from one month to one year. The Company is legally restricted from accessing these funds during the term of the leases for which the letters of credit have been issued; however, the Company can continue to invest the funds and receive investment income thereon.
The following table provides a reconciliation of cash, cash equivalents, restricted cash, and restricted cash equivalents as at May 31, 2024 and February 29, 2024 from the consolidated balance sheets to the consolidated statements of cash flows:
As at
May 31, 2024February 29, 2024
Cash and cash equivalents$143 $175 
Restricted cash and cash equivalents17 25 
Total cash, cash equivalents, restricted cash, and restricted cash equivalents presented in the consolidated statements of cash flows
$160 $200 
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 (unaudited)





The contractual maturities of available-for-sale investments as at May 31, 2024 and February 29, 2024 were as follows:
As at
May 31, 2024February 29, 2024
Cost BasisFair ValueCost BasisFair Value
Due in one year or less $154 $154 $166 $166 
No fixed maturity 10  10  
$164 $154 $176 $166 
As at May 31, 2024 and February 29, 2024, the Company had no available-for-sale debt securities with continuous unrealized losses.
3.    CONSOLIDATED BALANCE SHEET DETAILS
Accounts Receivable, Net of Allowance
The current estimated credit losses (“CECL”) for accounts receivable as at May 31, 2024 was $5 million (February 29, 2024 - $6 million).
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 
Prior period provision for expected credit losses5 
Ending balance of the allowance for credit loss as at February 29, 20246 
Current period recovery for expected credit losses (1)
Ending balance of the allowance for credit loss as at May 31, 2024$5 
The allowance for credit losses as at May 31, 2024 consists of $1 million (February 29, 2024 - $1 million) relating to CECL estimated based on days past due and region and $4 million (February 29, 2024 - $5 million) relating to specific customers that were evaluated separately.
There was one customer that comprised more than 10% of accounts receivable as at May 31, 2024 (February 29, 2024 - two customers comprised more than 10%).
Other Receivables
As at May 31, 2024 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.
14

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 (unaudited)





Other Current Assets
As at May 31, 2024 and February 29, 2024, other current assets included 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
 May 31, 2024February 29, 2024
Cost
BlackBerry operations and other information technology$86 $85 
Leasehold improvements and other14 15 
Furniture and fixtures6 6 
Manufacturing, repair and research and development equipment2 3 
108 109 
Accumulated amortization89 88 
Net book value$19 $21 
Intangible Assets, Net
Intangible assets comprised the following:
 As at May 31, 2024
 CostAccumulated
Amortization
Net Book
Value
Acquired technology$900 $851 $49 
Other acquired intangibles386 337 49 
Intellectual property110 63 47 
$1,396 $1,251 $145 
As at February 29, 2024
CostAccumulated
Amortization
Net Book
Value
Acquired technology$900 $846 $54 
Other acquired intangibles386 334 52 
Intellectual property111 63 48 
$1,397 $1,243 $154 
For the three months ended May 31, 2024, amortization expense related to intangible assets amounted to $11 million (three months ended May 31, 2023 - $13 million).
Total additions to intangible assets for the three months ended May 31, 2024 amounted to $1 million (three months ended May 31, 2023 - $2 million). During the three months ended May 31, 2024, additions to intangible assets primarily consisted of payments for intellectual property relating to patent maintenance, registration and license fees.
Based on the carrying value of the identified intangible assets as at May 31, 2024, and assuming no subsequent impairment of the underlying assets, the annual amortization expense for the remainder of fiscal 2025 and each of the five succeeding years is expected to be as follows: fiscal 2025 - $32 million; fiscal 2026 - $36 million; fiscal 2027 - $32 million; fiscal 2028 - $18 million; fiscal 2029 - $6 million and fiscal 2030 - $3 million
15

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 (unaudited)





Goodwill
Changes to the carrying amount of goodwill during the three months ended May 31, 2024 were as follows:
Carrying Amount
Carrying amount as at February 28, 2023$595 
Goodwill impairment charge(35)
Effect of foreign exchange on non-U.S. dollar denominated goodwill2 
Carrying amount as at February 29, 2024562 
Effect of foreign exchange on non-U.S. dollar denominated goodwill(1)
Carrying amount as at May 31, 2024$561 
Other Long-term Assets
As at May 31, 2024 and February 29, 2024, other long-term assets included long-term receivables related to intellectual property sold in fiscal 2024, see Note 10 under the heading “Patent Sale”, other 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 is comprised of the following:
 As at
 May 31, 2024February 29, 2024
Operating lease liabilities, current20 20 
Restructuring program liabilities, current portion11 20 
Other81 77 
$112 $117 
Other accrued liabilities included current and accrued director fees, accrued vendor liabilities, variable incentive accrual, 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.
Restructuring
During fiscal 2023 and fiscal 2024, the Company commenced restructuring programs with the objectives of reducing its annual costs and expenses relating to the Cybersecurity business, and later separating and streamlining the Company’s centralized corporate functions into Cybersecurity and IoT specific teams such that the businesses may operate independently and on a profitable and cash flow positive basis. The reduction of overall Company costs will include rationalizing and streamlining existing central administrative functions, right-sizing cost structures within both business units including R&D and outsourced contracting, changes to overall product portfolio offerings and geographies the Company operates in and optimizing related support functions and organizational structure. Other charges and cash costs may occur as programs are implemented or changes are completed.
16

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 (unaudited)





The following table sets forth the activity in the Company’s restructuring program liabilities:
Employee
Termination
Benefits
Facilities
Costs
Total
Balance as at February 28, 20232 1 3 
Charges incurred31 6 37 
Cash payments made(16)(3)(19)
Balance as at February 29, 202417 4 21 
Charges incurred5 3 8 
Cash payments made(15)(2)(17)
Balance as at May 31, 2024
$7 $5 $12 
Current portion$7 $4 $11 
Long-term portion 11
$7 $5 $12 
The long-term portion of the restructuring liabilities is recorded at present value, determined by measuring the remaining payments at present value using an effective interest rate of 5.7%, 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 to better align the Company’s general and administrative and R&D cost profiles to its market competitors, create a more focused sales force and improve profitability and cash flow. Total charges incurred for the three months ended May 31, 2024 and May 31, 2023 were $8 million and $5 million, respectively, recorded within General and administrative on the Consolidated Statements of Operations.
4.    INCOME TAXES
For the three months ended May 31, 2024, the Company’s net effective income tax expense rate was approximately 24% compared to a net effective income tax expense rate of 38% for the three months ended May 31, 2023. The Company’s income tax rate reflects the change in unrecognized income tax benefit, if any, and the fact that the Company has a significant valuation allowance against its deferred income tax assets; in particular, any change in loss carry forwards or research and development credits, amongst other items, is 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.
The Company’s total unrecognized income tax benefits as at May 31, 2024 were $20 million (February 29, 2024 - $20 million). As at May 31, 2024, $20 million of the unrecognized income tax benefits have been netted against deferred income tax assets and nil has been recorded within income taxes payable on the Company’s consolidated balance sheets.
The Company is subject to ongoing examination by tax authorities in certain 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. While the final resolution of 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.
5.    DEBENTURES
3.00% Convertible Senior Notes
On January 29, 2024, the Company issued $200 million aggregate principal amount of 3.00% senior convertible unsecured notes (the “Notes” and, collectively with the “2020 Debentures” (as defined below), 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
17

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 (unaudited)





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 had recorded the Notes, including the debt itself and all embedded derivatives, at cost less debt issuance costs of $6 million and presents the Notes as a single hybrid financial instrument. No portion of the embedded derivatives required bifurcation from the host debt contract.
The following table summarizes the change in the Notes for the three months ended May 31, 2024:
Carrying Amount
Balance as at February 29, 2024194 
Amortization of debt issuance costs 
Balance as at May 31, 2024$194 
2020 Debentures
On September 1, 2020, Hamblin Watsa Investment Counsel Ltd., in its capacity as investment manager of Fairfax Financial Holdings Limited (“Fairfax”), and another institutional investor invested in the Company through a $365 million private placement of debentures (the “2020 Debentures”). The 2020 Debentures matured on November 13, 2023.
Due to the conversion option and other embedded derivatives within the 2020 Debentures, the Company elected to record the 2020 Debentures, including the debt itself and all embedded derivatives, at fair value and presented the 2020 Debentures as a single hybrid financial instrument. No portion of the fair value of the 2020 Debentures was recorded as equity.
Each period, the fair value of the 2020 Debentures was recalculated and resulting gains and losses from the change in fair value of the 2020 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 following table shows the impact of the changes in fair value of the Debentures for the three months ended May 31, 2024 and May 31, 2023:    
Three Months Ended
  May 31, 2024May 31, 2023
Charge associated with the change in fair value from non-credit components recorded in the consolidated statements of operations $ $(22)
Total increase in the fair value of the 2020 Debentures $ $(22)
For the three months ended May 31, 2024, the Company recorded interest expense related to the Debentures of $2 million, which has been included in investment income, net on the Company’s consolidated statements of operations (three months ended May 31, 2023 - $2 million).
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 2020 Debentures, owned $330 million principal amount of the 2020 Debentures. As such, the payment of interest on the 2020 Debentures to Fairfax represented a related party transaction.
18

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 (unaudited)





6.    CAPITAL STOCK
The following details the changes in issued and outstanding common shares for the three months ended May 31, 2024:
 Capital Stock and
Additional Paid-in Capital
 Stock
Outstanding
(000s)
Amount
Common shares outstanding as at February 29, 2024589,233 $2,948 
Common shares issued for restricted share unit settlements383 — 
Stock-based compensation— 8 
Common shares issued for employee share purchase plan555 1 
Common shares outstanding as at May 31, 2024590,171 $2,957 
The Company had 590 million voting common shares outstanding, 0.2 million options to purchase voting common shares, 18 million RSUs and 1 million DSUs outstanding as at June 24, 2024. In addition, 51.5 million common shares are issuable upon conversion in full of the Notes as described in Note 5.
7.    LOSS PER SHARE
The following table sets forth the computation of basic and diluted loss per share:
 Three Months Ended
 May 31, 2024May 31, 2023
Net loss for basic and diluted loss per share available to common shareholders$(42)$(11)
Weighted average number of shares outstanding (000’s) - basic and diluted (1)(2)
589,821 582,812 
Loss per share - reported
Basic
$(0.07)$(0.02)
Diluted
$(0.07)$(0.02)
______________________________
(1) The Company has not presented the dilutive effect of the Notes or 2020 Debentures using the if-converted method in the calculation of diluted loss per share for the three months ended May 31, 2024 and May 31, 2023, as to do so would be antidilutive. See Note 5 for details on the Notes and 2020 Debentures.
(2) 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 three months ended May 31, 2024 and May 31, 2023, as to do so would be antidilutive.
19

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 (unaudited)





8.    ACCUMULATED OTHER COMPREHENSIVE LOSS
The changes in AOCL by component net of tax, for the three months ended May 31, 2024 and May 31, 2023 were as follows:
Three Months Ended
May 31, 2024May 31, 2023
Cash Flow Hedges
Balance, beginning of period$ $(1)
Amounts reclassified from AOCL into net loss 1 
Accumulated net unrealized gains on derivative instruments designated as cash flow hedges$ $ 
Foreign Currency Cumulative Translation Adjustment
Balance, beginning of period$(14)$(16)
Other comprehensive income (loss)(1)1 
Foreign currency cumulative translation adjustment$(15)$(15)
Change in Fair Value From Instrument-Specific Credit Risk On Debentures
Change in fair value from instruments-specific credit risk on Debentures
$ $(6)
Other Post-Employment Benefit Obligations
Actuarial losses associated with other post-employment benefit obligations$ $(1)
Accumulated Other Comprehensive Loss, End of Period$(15)$(22)

9.    COMMITMENTS AND CONTINGENCIES
(a)Letters of Credit
The Company had $17 million in collateralized outstanding letters of credit in support of certain leasing arrangements entered into in the ordinary course of business as of May 31, 2024. See the discussion of restricted cash in Note 2.
(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.
20

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 (unaudited)





As of May 31, 2024, there are no material claims outstanding 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 the consolidated U.S. class actions Stipulation of Settlement was executed effective June 7, 2022.
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.
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 alleges 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 seeks (i) an unspecified quantum of statutory, contractual, or common law termination entitlements; (ii) punitive or breach of duty of good faith damages of CAD$20 million, or such other amount as the Court finds appropriate, (iii) pre- and post- judgment interest, (iv) attorneys’ fees and costs, and (v) such other relief as the Court deems 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 Court has set a trial date of June 2, 2025, and scheduled a pre-trial conference on December 4, 2024. Discovery is proceeding.
Other contingencies
As at May 31, 2024, the Company has recognized $17 million (February 29, 2024 - $17 million) in funds from claims filed with the Ministry of Innovation, Science and Economic Development Canada relating to its Strategic Innovation Fund 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)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.
21

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 (unaudited)





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 the current period.
10.    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
The Company is organized and managed as three operating segments: Cybersecurity, IoT, and Licensing and Other.
The following table shows information by operating segment for the three months ended May 31, 2024 and May 31, 2023:
 For the Three Months Ended
CybersecurityIoTLicensing and OtherSegment Totals
May 31,May 31,May 31,May 31,
20242023202420232024202320242023
Segment revenue$85 $93 $53 $45 $6 $235 $144 $373 
Segment cost of sales35 37 10 9 2 147 47 193 
Segment gross margin (1)
$50 $56 $43 $36 $4 $88 $97 $180 
______________________________
(1) A reconciliation of total segment gross margin to consolidated totals is set forth below.
Cybersecurity consists of BlackBerry® UEM and Cylance® cybersecurity solutions (collectively, BlackBerry Spark®), BlackBerry® AtHoc® and BlackBerry® SecuSUITE®. The Company’s Cylance AI and machine learning-based platform consists of CylanceENDPOINT™, CylanceMDR™, CylanceEDGE™, CylanceINTELLIGENCE™ and other cybersecurity applications. The Company’s endpoint management platform includes BlackBerry® UEM, BlackBerry® Dynamics™, and BlackBerry® Workspaces solutions. Cybersecurity revenue is generated predominantly through software licenses, commonly bundled with support, maintenance and professional services.
IoT consists of BlackBerry® QNX®, BlackBerry® Certicom®, BlackBerry Radar®, BlackBerry IVY® and other IoT applications. IoT revenue is generated predominantly through software licenses, commonly bundled with support, maintenance and professional services.
Licensing and Other consists of the Company’s intellectual property arrangements and settlement awards.
22

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 (unaudited)





The following table reconciles total segment gross margin for the three months ended May 31, 2024 and May 31, 2023 to the Company’s consolidated totals:
 Three Months Ended
May 31, 2024May 31, 2023
Total segment gross margin$97 $180 
Adjustments (1):
Less: Stock compensation1 1 
Less:
Research & development42 54 
Sales and marketing38 45 
General and administrative40 54 
Amortization12 15 
Impairment of long-lived assets3  
Debentures fair value adjustment 22 
Investment income, net(5)(3)
Loss before income taxes$(34)$(8)
______________________________
(1) The CODM reviews segment information on an adjusted 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.
Patent Sale
On May 11, 2023, the Company completed its previously announced patent sale with Malikie and sold certain non-core patent assets for $170 million in cash on closing, an additional $30 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 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 $218 million and cost of sales of $147 million related to intellectual property sold. As at May 31, 2024, the remaining financing component on the patent sale was $9 million and will be recognized as interest income over the payment terms.
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 present value of variable consideration recognized as revenue was $23 million and the amount of variable consideration constrained was $210 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.
23

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 (unaudited)





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:
 Three Months Ended
 May 31, 2024May 31, 2023
North America (1)
$68 $317 
Europe, Middle East and Africa47 37 
Other regions29 19 
Total $144 $373 
North America (1)
47.2 %85.0 %
Europe, Middle East and Africa32.7 %9.9 %
Other regions20.1 %5.1 %
Total 100.0 %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.
Revenue, classified by timing of recognition, was as follows:
 Three Months Ended
May 31, 2024May 31, 2023
Products and services transferred over time$78 $85 
Products and services transferred at a point in time66 288 
Total$144 $373 
Revenue contract balances
The following table sets forth the activity in the Company’s revenue contract balances for the three months ended May 31, 2024:
Accounts and Other ReceivableDeferred RevenueDeferred Commissions
Opening balance as at February 29, 2024$255 $222 $21 
Increases due to invoicing of new or existing contracts, associated contract acquisition costs, or other134 123 5 
Decrease due to payment, fulfillment of performance obligations, or other(182)(139)(7)
Decrease, net(48)(16)(2)
Closing balance as at May 31, 2024$207 $206 $19 
24

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 (unaudited)





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 May 31, 2024 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 potential future royalty revenues from the patent sale to Malikie, which have been constrained based on the Company’s accounting policies and critical accounting estimates and as described under “Patent Sale” in this Note 10.
As at May 31, 2024
Less than 12 Months12 to 24 MonthsThereafterTotal
Remaining performance obligations$174 $16 $16 $206 
Revenue recognized for performance obligations satisfied in prior periods
For the three months ended May 31, 2024, revenue of nil was recognized relating to performance obligations satisfied in a prior period (three months ended May 31, 2023 - $9 million as a result of certain variable consideration no longer being subject to constraint).
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
 May 31, 2024February 29, 2024
Property, Plant and Equipment, Intangible Assets, Operating Lease ROU Assets and GoodwillTotal AssetsProperty, Plant and Equipment, Intangible Assets, Operating Lease ROU Assets and GoodwillTotal Assets
Canada$73 $338 $78 $342 
United States649 883 662 923 
Other30 102 29 130 
$752 $1,323 $769 $1,395 
Information About Major Customers
There was one customer that comprised 13% of the Company’s revenue in the three months ended May 31, 2024 (three months ended May 31, 2023 - one customer that comprised 58% of the Company’s revenue, due to the completed Malikie Transaction).
25

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 (unaudited)





11.    CASH FLOW AND ADDITIONAL INFORMATION
(a)    Certain consolidated statements of cash flow information related to interest and income taxes paid is summarized as follows:
 Three Months Ended
 May 31, 2024May 31, 2023
Interest paid during the period$2 $2 
Income taxes paid during the period7 2 
Income tax refunds received during the period  
(b)    Additional Information
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 the first quarter of 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 May 31, 2024, approximately 21% of cash and cash equivalents, 22% of accounts receivable and 76% 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.
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 has also issued Notes with a fixed interest rate, as described in Note 5. 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 3. 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 May 31, 2024, no single issuer represented more than 30% 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 bankers’ acceptances, bearer deposits, term deposits and cash balances with one of the Company’s banking counterparties.
Liquidity risk
Cash, cash equivalents, and investments were approximately $283 million as at May 31, 2024. 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.
26

ITEM 2. 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 unaudited interim consolidated financial statements and the accompanying notes (the “Consolidated Financial Statements”) of BlackBerry Limited for the three months ended May 31, 2024, included in Part I, Item 1 of this Quarterly Report on Form 10-Q, as well as the Company’s audited consolidated financial statements and accompanying notes and MD&A for the fiscal year ended February 29, 2024 (the “Annual MD&A”). The Consolidated Financial Statements are presented in U.S. dollars and have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”). All financial information in this MD&A is presented in U.S. dollars, unless otherwise indicated.
Additional information about the Company, which is included in the Company’s Annual Report on Form 10-K for the fiscal year ended February 29, 2024 (the “Annual Report”), can be found on SEDAR+ at www.sedarplus.ca and on the SEC’s website at www.sec.gov.
Cautionary Note Regarding Forward-Looking Statements
This MD&A 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 enhancing operational focus and flexibility, driving improved profitability, and increasing optionality for optimizing shareholder value through the full separation of its principal business units;
the Company’s expectations with respect to its revenue, non-GAAP EPS and adjusted EBITDA in the second quarter of fiscal 2025 and fiscal 2025 as a whole, annual recurring revenue of the Company’s Cybersecurity division and non-GAAP operating expenses for fiscal 2025 and non-GAAP EPS and cash flow in the fourth quarter fiscal 2025;
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.
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 MD&A, including in the sections entitled “Business Overview”, “Business Overview - Products and Services”, “Business Overview - Business Separation” “Non-GAAP Financial Measures - Key Metrics”, “Results of Operations - Three months ended May 31, 2024 compared to the three months ended May 31, 2023 - Revenue - Revenue by Segment”, “Results of Operations - Three months ended May 31, 2024 compared to the three months ended May 31, 2023 - 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 ongoing 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 the Annual Report.
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 the Annual Report.
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.
27

Business Overview
The Company provides intelligent security software and services to enterprises and governments around the world. The Company secures more than 235 million vehicles. Based in Waterloo, Ontario, the Company leverages artificial intelligence (“AI”) and machine learning to deliver innovative solutions in the areas of cybersecurity, safety and data privacy, and is a leader in the areas of endpoint security, endpoint management, encryption, and embedded systems.
The Company has two core divisions, Cybersecurity and IoT, each addressing large and growing market opportunities.
The Company’s Cybersecurity division is a pioneer in the use of artificial intelligence (“AI”) and machine learning to deliver innovative solutions in the areas of cybersecurity and data privacy. It is a leader in next-generation endpoint security, endpoint management, secure communications and critical event management.
The Company’s IoT division provides embedded software solutions and the Company believes it is the world’s leading automotive foundational software supplier. Its customers include major 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 of the top ten automotive OEMs, top seven Tier 1 suppliers, 24 of the 25 top EV OEMs, and nine of the ten top medical OEMs.
The Company primarily generates revenue from the licensing of enterprise software and sales of associated services, including its endpoint management and cybersecurity solutions, BlackBerry QNX® software for the embedded market, technology licensing and professional consulting services. The Company focuses on strategic industries with vertical-specific use cases, including regulated enterprise markets such as financial services, government, healthcare, professional services and transportation, and other markets where embedded software and critical infrastructure are important, such as utilities, mining and manufacturing.
Products and Services
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 groups: Cybersecurity, IoT (collectively with Cybersecurity, “software and services”) and Licensing and Other.
Cybersecurity
The Cybersecurity business consists of Cylance® cybersecurity and BlackBerry unified endpoint management (“UEM”) solutions, collectively known as BlackBerry Spark, SecuSUITE® and BlackBerry® AtHoc®.
BlackBerry’s Cylance cybersecurity solutions include: CylanceENDPOINT™, an integrated endpoint security solution that leverages the Cylance AI model and OneAlert EDR console, to prevent, detect and remediate cyber threats at the endpoint, including on mobile; CylanceMDR™, a managed detection and response solution that provides 24/7 threat hunting and monitoring, as well as integrated critical event management communications during a cyber incident; CylanceEDGE™, an AI-powered continuous authentication zero trust network access solution that provides secure access to applications and data loss prevention; and CylanceINTELLIGENCE™, a contextual cyber threat intelligence service. The Company also offers incident response, compromise assessment and containment services to assist clients with forensic analysis, state of existing systems and remediation of attacks. These solutions are designed to provide a continuous state of resilience for the Company’s customers and support the outcomes they require by: (i) complementing, extending, or fully managing security capabilities with the Company’s experts and extended technology ecosystem, (ii) enabling the workforce in a way that is fast, easy and satisfying, while providing security visibility, controls and peace of mind; and (iii) reducing complexity and overhead costs associated with security operations.
The Company’s UEM 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, improves personnel accountability and facilitates the bidirectional collection and sharing of data within and between organizations.
28

IoT
The IoT business consists of BlackBerry Technology Solutions (“BTS”), BlackBerry Radar® and BlackBerry IVY®.
The principal component of BTS is BlackBerry QNX, a global provider of real-time operating systems, hypervisors, middleware, development tools, and professional services for connected embedded systems in the automotive, medical, industrial automation and other markets. A recognized leader in automotive software, BlackBerry 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.
BlackBerry QNX is also a preferred supplier of embedded systems for companies building medical devices, train-control systems, industrial robots, hardware security modules, building automation systems, green energy solutions, and other mission-critical applications. BlackBerry QNX collaborates closely with customers to understand their specific requirements and more quickly and effectively develop solutions to meet their evolving needs.
In addition to BlackBerry QNX, BTS includes BlackBerry® Certicom® cryptography and key management products.
BlackBerry Certicom leverages patented elliptic curve cryptography to provide device security, anti-counterfeiting and product authentication solutions. BlackBerry Certicom’s offerings include its managed public key infrastructure (“PKI”) platform, key management and provisioning technology that helps customers to protect the integrity of their silicon chips and devices from the point of manufacturing through the device life cycle. BlackBerry Certicom’s secure key provisioning, code signing and security credential management system services protect next-generation connected cars, critical infrastructure and IoT deployments from product counterfeiting, re-manufacturing and unauthorized network access.
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.
The Company has partnered with Amazon Web Services, Inc. (“AWS”) to develop and market BlackBerry IVY, an intelligent vehicle data platform leveraging BlackBerry QNX’s automotive capabilities. BlackBerry IVY 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 will be able to use this information to create responsive in-vehicle applications and services that enhance driver and passenger experiences. BlackBerry IVY supports multiple operating systems and hardware platforms, as well as multi-cloud deployments, in order to ensure compatibility across vehicle models and brands.
The BlackBerry Cybersecurity and IoT groups are complemented by the enterprise and cybersecurity consulting services offered by the Company’s BlackBerry® Professional Services business. BlackBerry Professional Services provides 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. The Company’s cybersecurity consulting services and tools, combined with its other security solutions, help customers identify the latest cybersecurity threats, test for vulnerabilities, develop risk-appropriate mitigations, maintain IT security standards and techniques, and defend against the risk of future attacks.
29

Licensing and Other
Licensing and Other consists primarily of the Company’s patent licensing business.
The Company’s Licensing business 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.
Recent Developments
The Company continued to execute on its strategy in fiscal 2025 and announced the following significant achievements during and subsequent to the most recent quarter:
Products and Innovation:
Launched CylanceMDR, an expert driven and AI-powered Managed Detection and Response (MDR) solution, including an innovative “On-Demand” solution;
Introduced Cylance Assistant, a generative AI cybersecurity advisor that will help organizations speed up decision-making and stop more threats faster with fewer resources;
Announced that BlackBerry UEM placed in the upper-right quadrant as a 2024 Gartner® Peer Insights™ Customers’ Choice for Unified Endpoint Management tools; and
Announced that The Tolly Group identified CylanceENDPOINT as detecting up to 25 percent more threats and with up to eight times less system impact than competitors.
Customers and Partners:
Announced a partnership between ETAS and BlackBerry QNX to jointly sell and market software solutions to provide the safe and secure foundation for the Software-Defined Vehicle (SDV); and
Announced a collaboration with AMD to advance foundational precision and control for the robotics industry by enabling new levels of low latency and jitter, and repeatable determinism.
Environmental, Sustainability and Corporate Governance:
Nominated Lori O’Neill, an experienced corporate director and financial expert for election to its Board of Directors.

Business Separation
On December 11, 2023, the Company announced that it intends to pursue a full separation of the IoT and Cybersecurity businesses, including the separation and streamlining of the Company’s centralized corporate functions into business-unit specific teams, with a view to establishing each business as an independently-operated, profitable and cashflow-positive division. The Company intends for the separation to enhance the operational focus and flexibility for each business, drive improved profitability, and increase optionality for the Company to optimize shareholder value. On February 12, 2024, the Company announced its progress in separation and provided targets in respect to annualized net profit improvements to be achieved through a combination of cost reductions and margin expansion, identified previously achieved annualized cost savings in the third quarter of fiscal 2024, and provided guidance regarding expected improvements in operating cash flow in fiscal 2025. On April 3, 2024, the Company disclosed that it had taken action in fiscal 2024 to reduce annualized expenditures by approximately $105 million and is working towards further run rate reductions.
30

First Quarter Fiscal 2025 Summary Results of Operations
The following table sets forth certain consolidated statements of operations data for the quarter ended May 31, 2024 compared to the quarter ended May 31, 2023 under U.S. GAAP:
 
For the Three Months Ended
(in millions, except for share and per share amounts)
 May 31, 2024May 31, 2023Change
Revenue $144 $373 $(229)
Gross margin96 179 (83)
Operating expenses135 190 (55)
Investment income, net
Loss before income taxes(34)(8)(26)
Provision for income taxes
Net loss$(42)$(11)$(31)
Loss per share - reported
Basic $(0.07)$(0.02)
Diluted$(0.07)$(0.02)
Weighted-average number of shares outstanding (000’s)
Basic589,821 582,812 
Diluted (1)
589,821 582,812 
______________________________
(1)Diluted loss per share on a U.S. GAAP basis for the first quarter of fiscal 2025 and the first quarter of fiscal 2024 does not include the dilutive effect of the Debentures (as defined in “Financial Condition - 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 the first quarter of fiscal 2025 and the first quarter of fiscal 2024 does not include the dilutive effect of stock-based compensation as to do so would be anti-dilutive. See Note 7 to the Consolidated Financial Statements for the Company’s calculation of the diluted weighted average number of shares outstanding.
The following table shows information by operating segment for the three months ended May 31, 2024 and May 31, 2023. The Company reports segment information in accordance with U.S. GAAP Accounting Standards Codification Section 280 based on the “management” approach. The management approach designates the internal reporting used by the Chief Operating Decision Maker for making decisions and assessing performance of the Company’s reportable operating segments. See Note 10 to the Consolidated Financial Statements for a description of the Company’s operating segments.
 
For the Three Months Ended
(in millions)
CybersecurityIoTLicensing and OtherSegment Totals
May 31,ChangeMay 31,ChangeMay 31,ChangeMay 31,Change
20242023202420232024202320242023
Segment revenue$85 $93 $(8)$53 $45 $$$235 $(229)$144 $373 $(229)
Segment cost of sales35 37 (2)10 147 (145)47 193 (146)
Segment gross margin$50 $56 $(6)$43 $36 $$$88 $(84)$97 $180 $(83)
31

The following table reconciles the Company’s segment results for the three months ended May 31, 2024 to consolidated U.S. GAAP results:
 For the Three Months Ended May 31, 2024
(in millions)
CybersecurityIoTLicensing and OtherSegment TotalsReconciling ItemsConsolidated U.S. GAAP
Revenue$85 $53 $$144 $— $144 
Cost of sales 35 10 47 48 
Gross margin (1)
$50 $43 $$97 $(1)$96 
Operating expenses