BlackBerry Limited

Good morning and welcome to the BlackBerry second quarter fiscal year 2021 results conference call. My name is James 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 Tim Foote, Investor Relations. Please go ahead.

Thank you, James. Good morning and welcome to BlackBerry's second quarter fiscal 2021 earnings conference call. With me today on the call are Executive Chair and Chief Executive Officer John Chen and Chief Financial Officer Steve Ray. After I read our cautionary note regarding forward-looking statements, John will provide a business update, and Steve will 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 is 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 US and Canadian securities laws. We'll indicate forward-looking statements by using words such as expect, will, should, model, intend, belief, 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 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. These factors include the risk factors that are discussed in the company's annual filings and MD&A, including the COVID-19 pandemic. 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. which are available on the EDGAR, CEDAR, and BlackBerry.com websites. And with that, I'll turn the call over to John.

Thanks, Tim. Good morning, everybody, and thank you for joining us. And I hope everybody is safe and well. This past quarter, we delivered strong revenue and EPS results, beating expectations, despite of the continued challenge related to the COVID-19. I will start with financial highlights in a quarter and then move on to the business commentary. As usual, I will reference our financial performance in the non-GAAP numbers. BlackBerry report total revenue of $266 million, increasing both sequentially and year-over-year. The core Spark platform performs well, maintaining the work-from-anywhere momentum from Q1. QNX continued to be negatively impacted by the temporary slowdown in the auto production, but we are seeing signs of recovery. More of this later. As we mentioned during our first quarter earnings call, we anticipated licensing to have a strong second quarter, and it did, reporting revenue of $108 million. Second quarter total company billings show strong sequential growth in all parts of the business except for QNX, which remained flat sequentially. Gross margin increased by six percentage points sequentially to 78% due to the revenue mix. Earnings per share came in at 11 cents. Cash generated from operation was 31 million. Total ending cash and investment as of August 31st was 977,977. The company continues to be financially healthy and in strong position to focus on our long-term strategy. Let me start now by providing business commentary with the software and services group. Revenue for the quarter was $158 million. ARR was approximately $486 million. Dollar-based net retention was 92%. Net customer turn was approximately 3%. Billings growth was strong sequentially at 23%. As I mentioned earlier, the core component of the software and services group is Spark. The Spark suite combines BlackBerry Unified Endpoint Management, the UEM, and Unified Endpoint Security, the UES. We combine the two products in one single pane of glass. The Spark suite will launch at the end of our first fiscal quarter, and since then, customer interest has been strong and demand is growing. In a quarter, a number of high-profile customers purchases our smart suite, including the United States Air Force, which upgraded over 90,000 users from UEM to a smart suite. Other wins, including UK Ministry of Defense, the Royal Canadian Mint, Banco de Mexico, New Zealand Ministry of Foreign Affairs, Foreign Affairs and Trade, sorry, New Zealand Ministry of Foreign Trade, Rolls-Royce, Lloyds Bank, Society General, and Mitsubishi. just to name a few of them. Given this early success in upgrading customer to our Spark Suite, we are optimistic about being able to secure a significant number of further upgrades from the rest of our installed base. In parallel, we're also aggressively targeting new logos and more on that later also. BlackBerry continues to have the trust of governments around the world. During the quarter, our UEM Suite was added to the Department of Defense Information Network approved product list, they call it APL. BlackBerry is the only UEM vendor that has achieved this level of approval to date. This achievement is based on the completion of cybersecurity and interoperability certifications. This approvals will provide us better access and a more streamlined approval process. This should naturally lead to a greater revenue opportunity going forward. The latest release of UEM has also recently achieved the very important IAP certification accreditation. We have recognized the strong industry-wide demand for Managed Detect and Response Services, known as MDR. Frost and Sullivan recently estimated MDR market to have a CAGR, a compounded annual growth rate of 16%, and for annual revenue to reach about $2 billion. by about 2024. Our MDR offering, we call it GARD, while relatively new, continues to perform well. To take advantage of this opportunity, we plan to greatly enhance our channel programs. Certified partners will be able to deliver managed service and threat hunting on the AI-driven cybersecurity solution, greatly increasing our scale. This will differentiate us against our major competitors who prefer to provide all the services themselves. Moving on to BTS, as you know, much of the BTS business is reliant on the strength of the auto industry. The largest piece of the BTS business is QNX. We have recently seen some recovery in the production volumes from the very low level during our first fiscal quarter. This makes us optimistic that the BTS business will show sequential revenue improvement and could be close to normal early next fiscal year. Despite auto production volumes being down and moderate, QNX continued to win new designs and develop significant partnerships. In the quarter, we have 19 new designs win, five in auto and 14 in a generally embedded market. We call it JAM. Alongside infotainment, the new auto wins in the quarter include design for digital carpet, instrument cluster, and domain controller. which all typically has higher ASPs, or average selling price. The new GEM wins include design for next generation blood analyzer, next generation factory robotics, and also with Schneider Electric for its solar solution gateway. Furthermore, we are pleased to announce that together with DSAE, DSAE SV Automotive, we have developed the autonomous driving domain controller for Xpeng. Xpeng Moto's new P7 is a high-performance electric vehicle. Xpeng, as some of you may know, has recently been listed successfully on the New York Stock Exchange and is one of China's leading electric vehicle manufacturers. QNX will also be used by StratVision, an industry leader in AI-based camera perception technology, in a number of the next-generation ADARs, that's advanced driver assist, and autonomous vehicle system from sub-career automakers. QNX remains in a very strong position for the medium and long-term, despite its short-term macro challenges. I'm moving on to Ad Hoc, our critical event management platform that helps protect people and keep businesses up and running. This market is large and growing, and our technology is already well-proven in the federal government sector. We see significant growth opportunities within both federal, as well as state government, as well as in the enterprise. New wins in the quarter include the New York Stock Exchange, the Office of the Director of National Intelligence, and the Edmonton Police Services. During the quarter, we were awarded a new authority to operate, or ATO, for the US Department of Transportation, bringing the total to 14, for the BlackBerry Ad Hoc FedRAM Cloud. This was also a strong quarter for our high-security Secchi Suite voice and messaging offerings, where we both strengthened our position in the United States and extended our leadership position in Germany. Major wins in the quarter included the United States Department of Homeland Security, the U.S. Internal Revenue Services, and the United States Federal Emergency Management Agency, FEMA, These contracts were publicly awarded through our partner, CACI, C-A-C-I. Secchi Suite also received a Government of Canada security certification, clearing the way for us to provide this technology to the Canadian government at large. Including Canada, BlackBerry Secchi Suite, Secchi Smart Technology, is now used by 17 governments around the world. We have spoken about our focus on go-to-market for some quarters now. So go-to-market has many components, and it's taken time to get all of them optimized. Bringing in some new talent is just part of the process, and we did that successfully along with making sure mindsets and incentives aligned to our growth plans. Equally as important, we have also re-ran our customer success and marketing programs, as well as our partnership and channel programs. A good example of the progress we have made, I'd like to cite one in the channel program site. As you all recall, in our device days, making hardware, we have strong relationship with telcos, and they are becoming increasingly interested now in our UEM, UES, and ad hoc products. We recently announced a partnership with TELUS to resell the secure ad hoc critical event management solution across Canada. This partnership has previously announced partnership with Bell and Vodafone. So things are coming together nicely across all the components of our go-to-market. We are now seeing results and an increase in both business pipeline and new business pipeline conversion rates. Moving on to the licensing and others, revenue for the quarter was $108 million, as I mentioned earlier. The majority of licensing revenue comes from our IT licensing business. So with that, let me turn the call over to Steve to provide more detail about our financial performance.