BlackBerry Limited

Good afternoon and welcome to the BlackBerry third quarter fiscal year 2021 results conference call. My name is David 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. I would now like to turn today's call over to Tim Foote, BlackBerry Investor Relations. Please go ahead.

Thank you, David. Good afternoon and welcome to BlackBerry's third quarter fiscal 2021 earnings conference call. With me on the call today are Executive Chair and Chief Executive Officer John Chen and Chief Financial Officer Steve Ray. After I read our cautionary notes 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. The replay will also be available on the blackberry.com website. As noted in our press release earlier this afternoon, slides will be shown during today's live webcast. These slides relate to the recent BlackBerry IB announcement. For those of you not on the webcast but joining via the call-in numbers, the slides are available for you to access on the investor information section at blackberry.com. Some of the statements we'll be making today constitute forward-looking statements and are made pursuant to the safe harbour provisions of applicable US and Canadian securities laws. We will indicate forward-looking statements by using words such as expect, will, should, model, intend, believe and similar. 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 a 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. Thank you, Jim.

Good afternoon, everybody. Today, I'd like to keep the financial and business updates relatively brief because I'd like to spend a little bit more time discussing our recent BlackBerry IV announcement. This third fiscal quarter, we continue to build on the momentum from our second quarter, delivering results in line with our outlook we provided. We delivered sequential revenue growth, both in the total software and services section as well as BTS. We continue to deliver positive EPS and positive free cash flow this quarter. BlackBerry reported total revenue, company revenue of $224 million. Software and services revenue came in at $168 million, $168 million. License was $56 million. Closed margin was 70%. Earnings per share was positive $0.02. Cash generated from operation was $29 million. Total ending cash and investment at November 30th was $757 million. I'll start my business commentary with the software and services group. AR was approximately $475 million. Dollar-based net retention rate was 90%. Net customer churn reduced to around 1%. SPARC is the combination of, as a reminder, is a combination of our UEM and UES, the Unified Endpoint Security offerings. This quarter, we made good progress in both the government and financial services verticals with customer wins, including U.S. Army, U.S. Postal Service, the IRS, the Department of Energy, and Department of Justice, as well as Raymond James International. City Bank, the German Bundesbank, the Bank of India, and the government of Rwanda. In addition, we have customer wins in other verticals, including healthcare and manufacturing. We continue to see progress in upgrading BlackBerry UEM customer to the full SparkStreet. i.e., adding our UES suite. Example in the quarter, including Deutsche Bank, Deutsche Börse, Converge One, and multiple ministries of the Dutch government. Significantly during the quarter, we released BlackBerry Cyber Suite, our AI-powered cyber suite, which combines our industry-leading EPP, EDR, and MDR products. is further strengthened by the continuous authentication and the mobile threat defense capabilities. This CyberSuite is highly competitive against both traditional and the next-gen player in the cybersecurity market. This has been validated by 451 Research and other industry experts. CyberSuite brings together the best of BlackBerry and Sideline technology. Further, CyberSuite will be available in version They integrate with all major UEM offerings, including Microsoft Intern, VMware's Workspace ONE, Mobile Ion, as well as IBM Maps 360. This integration will allow BackBerry to provide additional security to users of our rival UEMs. Cyber Street has only been in the market for a month, but early interest is strong, both in the new logo and existing customer base. with significant pipeline growth this past quarter. CyberStreet obviously allows us to give our prospect and customer greater options for increasing their cybersecurity while protecting their UEM investment. As a result of these technology enhancement and positive customer receptivity, we will in turn step up our investment in sales and marketing to compete more aggressively. Before I move to VTS, I'd like to highlight the security certifications we have achieved. This quarter, BlackBerry UEM achieved the National Security Agency, NSA, commercial solution for classified program approval. This adds to the portfolio of U.S. government certifications we have received for BlackBerry UEM, including the NIAP certification, the Department of Defense Information Network approval product list, which I think we talked about last quarter, called IN-APL or dash IN-APL. FedRAMP, FIPS 140-2. No other software vendor in the cybersecurity space has been awarded more security certification by the U.S. government than BlackBerry. BlackBerry achieving NSA certification comes at a time when most of our major competitors have been identified having vulnerabilities that are being exploited by nation-state hackers. This should give our customer and prospect a higher degree of comfort about the cybersecurity protection they receive from BlackBerry. Now moving on to BTS. QNX, the largest component of BTS, reports sequential revenue growth. QNX remain on track to be back to its normal run rate by early next fiscal year. In the quarter, we have 17 new designs, one seven, design wins, sorry, six in auto, and 11 in generally embedded market. Our expansion in the GEM continues, with diverse wins, including a controller system for power turbines, a next-generation satellite receiver system, and a rail traffic management system from the Seoul-Seonnam subway. In auto, we have design wins in both kinetic cars and electric vehicles. The wins included instrument clusters, a couple of them in domain controller, a handful of them in ADOS designs, the advanced driverless systems. Speaking of electric vehicles, we are very pleased to share with you our strong position in the EV market. QNX now has design wins with 19 of the top 25 electric vehicle OEMs, which together had 61% of the EV market in the first half of this calendar year. We are working hard to recruit the remaining six. Moving on to secure communication, which includes ad hoc and SecuSMART. Secure communication had a strong quarter. This strength was primarily due to ongoing transition to remote working, which has been obviously greatly accelerated by the pandemic. Ad hoc has some strategic win this quarter, including the California Department of Correction and Rehabilitation, or Rehab, Department of Correction and Rehab, as well as the California Department of Justice, I believe that no one now can claim to power the entire state of California. Other notable renews and upsells from Ad Hoc in the quarter, including the United States Army, Navy, as well as the Air Force, as well as the Federal Aviation Administration, FAA. We also renew within the U.S. Defense Intelligence Agency, U.S. Department of Energy, Treasury, and Agricultural, as well as the FEMA, Federal Emergency Management Agency. Finally, I want to touch on licensing. Revenue for the quarter came in at $56 million. That's before the majority of the licensing revenue comes from our IP licensing business. As I mentioned at the beginning of the call, I'd like to spend some time discussing BackBerry IV, which we are very excited about. Modern cars continue to generate a huge amount of data. I think you all agree and know. The auto industry is not prepared to capture and create value from the analytics because these data is difficult to collect and interact with without very costly integrations. BlackBerry iLeaf's mission is to make it easy to gather, securely transport, and analyze these data in a standard and a cost-efficient way across multiple brands and models on a common platform. This will allow the developer's ecosystem to use the data to provide intelligent insight and application on a global scale. We have entered into a multi-year exclusive co-development and co-marketing agreement with AWS. This type of agreement is rare. BlackBerry and AWS Engineer have been working very closely to jointly build the platform. Under the terms of our agreement, BlackBerry will own all the commercial relationships with customers and will share revenues with AWS. Each side contributes the key capabilities required. On the BackBerry side, BackBerry QNX brings over 20 years of auto industry experience, as well as relationship, as well as a huge footprint of over 175 million cars. We are a trusted leader with a deep knowledge of automotive safety and security software systems. AWS is the world's largest cloud provider with a vast developer community and outstanding expertise in consumer experience, interfaces, as well as IoT. Combined, we're able to provide a full end-to-end platform. We expect an ecosystem of apps and services developed on the BlackBerry IP platform over time. We will work with AWS a proven due to a successful developer communities to help drive the process. With BlackBerry IV, we're creating a recurring revenue data business, recurring revenue model that is, targeting revenue on a usage as well as a subscription base. An important difference between BlackBerry IV and competitors in this space is that we allow the OEM to own the data and with that, the relationship with their customers. We are already in discussion with some automakers who were granted early SF, and we have received positive initial feedback. The target is to be in the 2023 auto model, or 2023 years model, with possibly potentially some professional services prior to it, While it is too early for us to provide a revenue outlook, we are confident that BlackBerry IV addresses a very large market opportunity that will greatly increase our ESP. With that, let me turn the call over to Steve to provide more details about our financial performance.