BlackBerry Limited

Good morning and welcome to the BlackBerry Fiscal Year 2020 Third Quarter Results Conference Call. My name is Jack and I will be your conference moderator for today's call. During the presentation, all participants will be in a listen-only mode. We will be facilitating a brief question and answer session towards the end of the conference. Should you need assistance during the call, please signal a conference specialist by pressing star zero. As a reminder, this conference is being recorded for replay purposes. And I'd like to turn the call over to Christopher Lee, Vice President of Finance. Please go ahead, sir.

Thank you, Jack. Welcome to the BlackBerry Fiscal Year 2020 Third Quarter Results Conference Call. With me on the call today are Executive Chairman and Chief Executive Officer John Chen and Chief Financial Officer Steve Ray. After I read our cautionary note regarding forelooking statements, John will provide a business update and Steve will then review the financial results. We will then open the call for a brief Q&A session. This call is available to the general public via call-in numbers and via webcast in the investor information section at blackberry.com. A replay will also be available on the blackberry.com website. Some of the statements we'll be making today constitute forward-looking statements and are made pursuant to the safe harbor provisions of applicable U.S. and Canadian securities laws. We'll indicate forward-looking statements by using words such as expect, will, should, model, intend, believe, and similar expressions. Forward-looking statements are based on estimates and assumptions made by the company in light of its experience and its perception of historical trends, current conditions, and expected future developments, as well as any other factors that the company believes are relevant. Many factors could cause the company's actual results or performance to differ materially from those expressed or implied by the forward-looking statements, including the risk factors that are discussed in the company's annual information form, which is included in our annual report on Form 40F and in our MD&A. You should not place undue reliance on the company's forward-looking statements. The company has no intention and undertakes no obligation to update or revise any forward-looking statements except as required by law. As is customary during the call, John and Steve will reference non-GAAP numbers in their summary of our quarterly results. For a reconciliation between our GAAP and non-GAAP numbers, please see the earnings press release and supplement published earlier today. I will now turn the call over to John.

Thanks, Chris. Good morning, everybody, and welcome to our call. As a reminder, I will be using a referencing non-GAAP numbers in my summary of quarterly results, unless otherwise stated. Let me start. I'm encouraged by our progress in the third quarter as revenue grew sequentially in all of our software businesses. The total company revenue was $280 million, growing 23% year-over-year. Total software and services revenue was $275 million. It grew to 26% year-over-year. This is a new record high for the quarter. We also record double-digit percentage billing growth in the same period. Software and services revenue growth, excluding silence, was 9% sequentially. Earnings per share came in at positive 3 cents and reported free cash flow was a positive $37 million. We continue to invest in product development and go to market to drive long-term sustainable growth. Let's move in the business segment and provide you some commentary. Let's start with the IoT business. IoT revenue grew 8% sequentially. With an IoT, both BTS and ESS the enterprise software solutions, reported sequential growth in billings and revenue. In BTS, QNX, the largest part of BTS, continued to perform well. In the quarter, we had a total of 31 design wins, of which 11 were in the automotive market and 20 were in the general embedded market. Within the general embedded market, we are experiencing good demand in the industrial vertical, as noted last quarter Grove in the general embedded market has been a stated strategic objective and priority for us this fiscal year. There were several very positive developments in the quarter that aligned with BlackBerry QNX's strategic goal of increasing output and volume in the auto sectors. These developments also extend our market leadership in automotive. I'd like to share a few of them with you. First, I will highlight Hyundai Ultron, a leader in electronic control software, has selected BlackBerry QNX for two design wins. One is in the ADARS design, which is Advanced Driver Assist, and as well as their autonomous driving platform. This is meaningful because it's a meaningful tier one relationship that provides BlackBerry QNX an opportunity to work directly with Hyundai. Hyundai happened to be the sixth largest auto OEM in the world, and its affiliate, and we also could work, extend the work with its affiliate for the first time. In addition to winning the traditional OEMs, we are also winning with emerging smart-ups, and I think, thank you. This is, quit this, sneak this work in here. Smart-up, like smart start-up, Anyway, as an example, Arrival, an electric commercial OEM based in the UK, has chosen BlackBerry QNX as the safe and secure foundation, again, for the ADAR features in the self-driving vehicles. In a quarter, we also entered into a partnership with ETOS to develop a safely critical platform using AutoSign Adaptive Standard. Bosch the world's largest automotive supplier and the parent of ETOS, decided to join forces with BlackBerry to develop this common software platform that will enable the production of safe and secure connected and autonomous vehicles for the future. Let me give a brief update on the radar business. In a quarter, we added 15 new customers, including an initial order of 2,000 units from CP Rail, And we're very pleased with that, obviously. And we had repeated purchases from a number of our customers, including Lowe's, Faxavan, and Bimbo's Bakeries. We're also starting to explore expansion in the Europe and Middle East arena. Now a few comments on our enterprise software and services business progress. The sales team is getting back into form and operating with better discipline and accountability. The team has restored a normal cadence in managing the pipeline. and converting the pipeline to billings. As a result, our pipeline increased nicely in both numbers of opportunity and dollar size since the second fiscal quarter. Revenue for UEM, Ad Hoc, and SecuSMART all grew sequentially. These included a contribution for our new continuous authentication product, BlackBerry Intelligent Services, we name it BIS. BIS is gaining traction in the market as evident by high-profile wins such as the Department of National Defense in Canada and Julius Baer Group. Julius Baer Group is one of the oldest and largest banking institutions in Switzerland. And as a reminder, we only released this product in August. Next, on the customer front, our regulated industry business remained healthy and stable. We added a number of new local wins in a comparative situation across federal government agencies worldwide, including in Canada, Germany, Panama, Poland, Romania, Saudi Arabia, as well as the United States. Furthermore, in the United States State Agency, we won the Alaskan Army National Guard and the California Department of Technology, just to name a few. We also achieved notable progress in financial services and energy verticals with wins like Bank of China, the Suho Bank, Great Eastern Life Assurance. Great Eastern Life Assurance happened to be the largest life insurance company in Singapore and Malaysia. We also won Scottish Power. I'm obviously naming just a few of our new wins. On the US National Security Fund, we partnered with Kaki International and to provide the first secure and certified mobile communication applications utilizing BlackBerry Secchi Suite secure voice and secure tax technology. The initial target market will be more than 4 million United States government-issued cell phones. Our application meets the NSA's stringent commercial solution for classified program requirements and is the only solution of its kind in the FedRAMP certification. Lastly, on the product front, we introduced Silence Protect for mobile endpoints. This mobile threat defense, which now referred to from now on as MTD, this MTD product integrates AI endpoint security capabilities from Cylance and as far as the endpoint management functionality from UDM. This second generation MTD product, which we deliver only eight months after the close of our acquisition, demonstrate a collaborative teamwork of the two development teams. The teams work very well together to execute a common product roadmap and share the same vision. We have a total of 14, one four, 14 beta customer, which includes several top multinational financial institution and notable telecommunication companies. They all have shared very positive feedback. In fact, we received our first customer order during the quarter. Spark, Our secure IoT platform is progressing well with the addition of these two products, the MTD product I just mentioned and the BIS product I mentioned earlier. Moving on to our licensing business. Revenue increased double-digit percentage year-over-year growth, which is slightly ahead of our expectation for the quarter. We maintained a full-year outlook that we provided last quarter for our licensing business. Now on to the BlackBerry sign-in business. Revenue increased 13% year-over-year, 1.3%, ARR was 171 million, up 15%, 1.5, year-over-year. Our dollar-based net retention rate was 99%. And we ended the quarter with 20% year-over-year growth in active subscription customers. We anticipate stronger growth in the future as we have now released an enhanced endpoint detection and response, the EDR technology product, as well as a single-agent platform. The lack of these features in the path have prevented us from winning more deals as well as larger-sized deals, of course, until now. By adding BlackBerry resources, we were able to deliver both products at the end of the third quarter, which are the Optics 2.4, which is the EDR product that I mentioned earlier, shipped in October this year, followed by the release of our single-agent platform, our internal codename called KAKUN, last month. These new products improve our capacity to address our customer cybersecurity needs across the entire spectrum. Sidense Endpoint Security is best known for its AI-driven prediction and production. Our team has won a number of new deals in competitive environments, which are with the enterprise-sized customers. I will name a few for you, such as the MBank Group in Malaysia, the International Container Terminal Services in the Philippines, the AES Corporation, Deloitte, and Molex. in the United States. In the quarter, we also released our managed service offering, Sidelines Guard. Market demand and pipeline has been strong, especially in the SMB, small, medium, business sector. The complete offering of these products and services will no doubt help drive stronger revenue growth next year. Before I turn the call over to Steve, let me make a couple of comments regarding the Sidelines integration. but continue to be ahead in the joint integration efforts. We're achieving the product development synergies we discussed when we announced the acquisition, including the MTD product, which I discussed earlier, as well as CASE that integrated QNX and Sidense technologies together, both of which will be demonstrated at CES in three weeks. Both customer and industry analysts have told us our product meets the needs of a large, addressable market of both fixed and mobile endpoint, where management and security for endpoints are now converging. We are now ready to increase sales and marketing synergies, as well as partner cost selling. Given the operational efficiency gains so far, we remain comfortable that Sidelines will be accretive in fiscal 2021. With that, let me turn the call over to Steve Ray to provide more details about our financial performance.