BlackBerry Limited (NASDAQ:BBRY)(TSX:BB), a global leader in secure mobile communications, today reported financial results for the three months ended May 31, 2016 (all figures in U.S. dollars and U.S. GAAP, except where otherwise indicated).
- Company begins reporting multiple business segments: Software and Services, Service Access Fees (SAF) and Mobility Solutions. Mobility Solutions includes BlackBerry smartphones and device software licensing
- Non-GAAP total revenue of $424 million
- Non-GAAP software and services revenue of $166 million
- Non-GAAP gross margin of 53%
- Tenth consecutive quarter of positive adjusted EBITDA
- Cash and investments balance of $2.5 billion at the end of the first fiscal quarter
- Unveiled BlackBerry Radar, a new end-to-end asset tracking system based on the company's IoT platform, for trucking companies and private fleet operators
- BlackBerry named a "Leader" in the Forrester Wave for enterprise file sync and share for hybrid solutions
- After the quarter, BlackBerry named a "Leader" in the Gartner Magic Quadrant for Enterprise Mobility Management Suites
- New Enterprise Partner Program launched globally to stimulate growth and drive profit for partners
- Pentagon Force Protection Agency chooses AtHoc to protect Department of Defense leadership, staff, and visitors in times of crisis
Non-GAAP revenue for the first quarter of fiscal 2017 was $424 million with GAAP revenue of $400 million. The non-GAAP revenue breakdown for the quarter was approximately 39% for software and services, 25% for service access fees (SAF), and 36% for mobility solutions.
BlackBerry had approximately 3,300 enterprise customer wins in the quarter. Approximately 74% of the first quarter software revenue was recurring.
Non-GAAP operating income was $14 million, and non-GAAP net income was $0.00 per share for the first quarter. GAAP net loss for the quarter was $670 million, or $(1.28) per basic share. Basic GAAP net loss reflects a non-cash, long lived asset impairment charge of $501 million, a $57 million goodwill impairment charge, inventory write-down of $41 million, $28 million in amortization of acquired intangibles, stock compensation expense of $12 million, purchase accounting deferred revenue write-down of $24 million, $23 million in restructuring charges, $7 million related to acquisition costs, and a non-cash credit of $24 million for our convertible debt. The impact of these adjustments on GAAP net income and earnings per share is summarized in a table below.
Total cash, cash equivalents, short-term and long-term investments was $2.5 billion as of May 31, 2016. This reflects a use of free cash of $65 million, which includes negative $61 million of cash flow from operations. Cash flow from operations before working capital adjustments was negatively impacted by the inventory impairment and excluding the charges, would have been positive. Excluding $1.25 billion in the face value of our debt, the net cash balance at the end of the quarter was $1.3 billion. Purchase orders with contract manufacturers totaled approximately $150 million at the end of the first quarter, compared to $162 million at the end of the fourth quarter and down from $238 million in the year ago quarter.
"BlackBerry is differentiated by cross-platform market leadership in software, an end-to-end secure mobility platform and a strong financial foundation. Our Q1 results highlight these attributes. Excluding IP licensing, we have more than doubled our software revenue on a year-over-year basis for the second consecutive quarter, driven by our EMM, secure messaging and QNX embedded software businesses. In our Mobility Solutions business, our objective is to achieve operating profitability in the short term," said John Chen, Executive Chairman and CEO, BlackBerry.
"Our current plan calls for continued investments to expand our addressable markets and drive sustainable profitability and revenue growth. For the full fiscal year, we are on track to deliver 30 percent revenue growth in software and services. Based on a more efficient operating model, we expect a non-GAAP EPS loss of around 15 cents, compared to the current consensus of a 33 cent loss. We also expect to generate positive free cash flow for the full year."
The Company anticipates maintaining a strong cash position and further reallocating additional resources to go-to-market and product development areas as it continues to execute on its strategy of positive adjusted EBITDA for the full 2017 fiscal year.
Conference Call and Webcast
A conference call and live webcast will be held beginning at 8 am ET, which can be accessed by dialing 1-844-309-0607 or by logging on athttp://ca.blackberry.com/company/investors/events.html. A replay of the conference call will also be available at approximately 11 am ET by dialing 1-855-859-2056 or 1-404-537-3406 and entering Conference ID # 15218824 or by clicking the link above.
BlackBerry is securing a connected world, delivering innovative solutions across the entire mobile ecosystem and beyond. We secure the world's most sensitive data across all end points - from cars to smartphones - making the mobile-first enterprise vision a reality. Founded in 1984 and based in Waterloo, Ontario, BlackBerry operates offices in North America, Europe, Middle East and Africa, Asia Pacific and Latin America. The Company trades under the ticker symbols "BB" on the Toronto Stock Exchange and "BBRY" on the NASDAQ. For more information, visitwww.BlackBerry.com.