BlackBerry Reports Fiscal Year 2019 Second Quarter Results

 

 

BlackBerry today has announced their Fiscal Year 2019 Second quarter results and BlackBerry is still on a roll!

BlackBerry reporter a non-GAAP total company revenue of $214 million and a GAAP total revenue of $210 million. They also reported a total non-GAAP software and service revenue of $197 million which is up 1% year-over-year, and a total GAAP software and services revenue was $193 million which is up 4% year-over-year. Now the great part of this part of the report is to see that approximately 81% of second quarter software and services revenue was recurring! This means BlackBerry is obtaining customers via the BlackBerry Software and services they offer and they are keeping those customers! They saw a record high quarterly revenue for BlackBerry Technology Solutions, which was driven by growth in the automotive vertical! BlackBerry also reported a Non-GAAP gross margin of 78% and a GAAP gross margin of 77%.

“In the quarter, we exceeded our financial expectations driven by sequential growth in both our BlackBerry Technology Solutions and Enterprise Software and Services businesses” said John Chen, Executive Chairman and CEO, BlackBerry. “I am very encouraged by BlackBerry’s leadership opportunities in the fast-growing Enterprise of Things, and by our strategy to capitalize on these significant future opportunities with BlackBerry Spark, our platform to securely communicate and collaborate between smart endpoints.”

It is exciting to see BlackBerry still doing well and to see that thier strategy is working! Check out the full press release below to see the break down of the finacial results!

 

 

 

Press Release

BlackBerry Reports Fiscal Year 2019 Second Quarter Results

 

September 28, 2018

•       Non-GAAP total company revenue of $214 million; GAAP total company revenue of $210 million

•       Non-GAAP total software and services revenue of $197 million; GAAP total software and services revenue of $193 million

•       Total software and services billings grew double-digits from the prior year period

•       Record high quarterly revenue for BlackBerry Technology Solutions, driven by growth in the automotive vertical

•       Non-GAAP gross margin of 78%; GAAP gross margin of 77%

Waterloo, Ontario – BlackBerry Limited (NYSE: BB; TSX: BB) today reported financial results for the three months ended August 31, 2018 (all figures in U.S. dollars and U.S. GAAP, except where otherwise indicated).

Second Quarter Fiscal 2019 Results

•        Total company non-GAAP revenue for the second quarter of fiscal 2019 was $214 million with GAAP revenue of $210 million.  Total non-GAAP software and services revenue of $197 million, up 1% year-over-year.  Total GAAP software and services revenue was $193 million, up 4% year-over-year.  Approximately 81% of second quarter software and services revenue (excluding IP licensing and professional services) was recurring.  Non-GAAP gross margin was 78% and GAAP gross margin was 77%.

•        Non-GAAP operating income was $17 million, and positive for the tenth consecutive quarter. GAAP operating income was $39 million. Non-GAAP earnings per share was $0.04 (basic and diluted). GAAP net income for the quarter was $0.08 per basic share and a GAAP net loss of $0.04 per diluted share. GAAP net income includes $22 million for acquired intangibles amortization expense, $21 million in stock compensation expense, $3 million in restructuring charges, a benefit of $70 million related to the fair value adjustment on the debentures, and other amounts as summarized in a table below. 

•        Total cash, cash equivalents, short-term and long-term investments was $2.4 billion as of August 31, 2018.  Free cash flow, before considering the impact of restructuring and legal proceedings, was positive $37 million.  Cash generated from operations was $31 million and capital expenditures were $4 million. Excluding $605 million in the face value of the company’s debt, the net cash balance at the end of the quarter was $1.7 billion.

“In the quarter, we exceeded our financial expectations driven by sequential growth in both our BlackBerry Technology Solutions and Enterprise Software and Services businesses” said John Chen, Executive Chairman and CEO, BlackBerry.  “I am very encouraged by BlackBerry’s leadership opportunities in the fast-growing Enterprise of Things, and by our strategy to capitalize on these significant future opportunities with BlackBerry Spark, our platform to securely communicate and collaborate between smart endpoints.”

Outlook

BlackBerry re-affirms its outlook for fiscal 2019, as follows:

•        Total company software and services billings growth is expected to be double-digits

•        Total software and services revenue growth of between 8% to 10% year-over-year

•        Non-GAAP EPS is expected to be positive

•        Free cash flow is expected to be positive for the full year, before considering the impact of restructuring and legal proceedings

 

Reconciliation of GAAP revenue, gross margin, gross margin percentage, income before income taxes, net income and basic earnings per share to Non-GAAP revenue, gross margin, gross margin percentage, income before income taxes, net income and basic earnings per share for the three months ended August 31, 2018:

Q2 Fiscal 2019 Non-GAAP Adjustments   For the Three Months Ended August 31, 2018

(in millions, except for per share amounts)

  Income statement location   Revenue   Gross margin (before taxes)   Gross margin % (before taxes)   Income before income taxes   Net income   Basic earnings per share
As reported       $210       $161     76.7%       $44       $43       $0.08  
Debentures fair value adjustment (2) Debentures fair value adjustment           —%     (70)     (70)      
Restructuring charges (3) Cost of sales       1     0.4%     1     1      
Restructuring charges (3) Selling, marketing and administration           —%     2     2      
Software deferred revenue acquired (4) Revenue   4     4     0.5%     4     4      
Stock compensation    expense (5) Cost of sales       1     0.4%     1     1      
Stock compensation

expense (5)

Research and development           —%     3     3      
Stock compensation

expense (5)

Selling, marketing and administration           —%     17     17      
Acquired intangibles amortization (6) Amortization           —%     22     22      
Business acquisition and integration costs recovered (7) Selling, marketing and administration           —%     (2)     (2)      
Adjusted       $214       $167     78.0%       $22       $21       $0.04  

Note: Non-GAAP revenue, non-GAAP gross margin, non-GAAP gross margin percentage, non-GAAP income before income taxes, non-GAAP net income and non-GAAP basic earnings per share do not have a standardized meaning prescribed by GAAP and thus are not comparable to similarly titled measures presented by other issuers. The Company believes that the presentation of these non-GAAP measures enables the Company and its shareholders to better assess the Company’s operating results relative to its operating results in prior periods and improves the comparability of the information presented. Investors should consider these non-GAAP measures in the context of the Company’s GAAP results.

(1)        During the second quarter of fiscal 2019, the Company reported GAAP gross margin of $161 million or 76.7% of revenue. Excluding the impact of restructuring charges and stock compensation expense included in cost of sales and software deferred revenue acquired included in revenue, the non-GAAP gross margin was $167 million, or 78.0% of revenue.

(2)        During the second quarter of fiscal 2019, the Company recorded the Q2 Fiscal 2019 Debentures Fair Value Adjustment of $70 million. This adjustment was presented on a separate line in the Consolidated Statements of Operations.

(3)        During the second quarter of fiscal 2019, the Company incurred restructuring charges of approximately $3 million, of which $1 million was included in cost of sales and $2 million was included in selling, marketing and administration expense.

(4)        During the second quarter of fiscal 2019, the Company recorded software deferred revenue acquired but not recognized due to business combination accounting rules of $4 million, which was included in enterprise software and services revenue.

(5)        During the second quarter of fiscal 2019, the Company recorded stock compensation expense of $21 million, of which $1 million was included in cost of sales, $3 million was included in research and development, and $17 million was included in selling, marketing and administration expense.

(6)        During the second quarter of fiscal 2019, the Company recorded amortization of intangible assets acquired through business combinations of $22 million, which was included in amortization expense.

(7)        During the second quarter of fiscal 2019, the Company recorded business acquisition and integration costs recovered through business combinations of $2 million, which was included in selling, marketing and administration expense.

Supplementary Geographic Revenue Breakdown

BlackBerry Limited

(United States dollars, in millions)

Revenue by Region

    For the Quarters Ended
    August 31, 2018   May 31, 2018   February 28, 2018   November 30, 2017   August 31, 2017
North America     $133     63.3%       $139     65.3%       $147     63.1%       $133     58.9%       $133     55.9%  
Europe, Middle East and Africa   53     25.3%     52     24.4%     63     27.0%     69     30.5%     76     31.9%  
Other regions   24     11.4%     22     10.3%     23     9.9%     24     10.6%     29     12.2%  
Total     $210     100.0%       $213     100.0%       $233     100.0%       $226     100.0%       $238     100.0%  


Supplementary Revenue by Product and Service Type Breakdown

BlackBerry Limited

(United States dollars, in millions)

Revenue by Product and Service Type

  US GAAP   Adjustments   Non-GAAP
  For the Three Months Ended   For the Three Months Ended   For the Three Months Ended
  August 31, 2018   August 31, 2017   August 31, 2018   August 31, 2017   August 31, 2018   August 31, 2017
Enterprise software and services   $88       $91       $4       $11       $92       $102  
BlackBerry Technology Solutions 49     38             49     38  
Licensing, IP and other 56     56             56     56  
Handheld devices 5     16             5     16  
SAF 12     37             12     37  
Total   $210       $238       $4       $11       $214       $249  

 

 

Conference Call and Webcast

A conference call and live webcast will be held today beginning at 8 a.m. ET, which can be accessed by dialing 1- 866-393-4306 or by logging on at http://ca.blackberry.com/company/investors/events.html. A replay of the conference call will also be available at approximately 11 a.m. ET by dialing 1-800-585-8367 and entering Conference ID #7069667 and at the link above.

About BlackBerry

BlackBerry is an enterprise software and services company focused on securing and managing IoT endpoints. The company does this with BlackBerry Secure, an end-to-end Enterprise of Things platform, comprised of its enterprise communication and collaboration software and safety-certified embedded solutions.

Based in Waterloo, Ontario, BlackBerry was founded in 1984 and operates in North America, Europe, Asia, Australia, Middle East, Latin America and Africa. The Company trades under the ticker symbol “BB” on the Toronto Stock Exchange and the New York Stock Exchange. For more information visit BlackBerry.com, and follow the company on LinkedIn, Twitter and Facebook.

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Brad

Editor in Chief at BerryReporter
Brad is the Editior-in-Chief for berryreporter.com and he is a BlackBerry abuser. He loves to share his news and knowledge in the BlackBerry world through his post and his Podcast "The Berry Report". When he is not using a BlackBerry device he likes to play video games, watch movies ,tv shows, sports, or exploring other mobile platforms. Feel free to follow him on twitter @BlackBerryBrad or Add him to BBM Pin:BBBrad

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