BlackBerry Limited

Good afternoon and welcome to the BlackBerry third quarter fiscal year 2025 results conference call. My name is Alicia and I'll be your conference moderator for today's call. During the presentation, all the 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 Martha Gonder, Director of Investor Relations, BlackBerry. Please go ahead.

Thank you Alicia. Good afternoon everyone and welcome to BlackBerry's third quarter fiscal year 2025 earnings conference call. Joining me on today's call is BlackBerry's Chief Executive Officer John Giammatteo and Chief Financial Officer Tim Foote. After I read our cautionary note regarding forward-looking statements, John will provide a business update and Tim 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 will also be available on blackberry.com website. Some of the statements we will 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 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. as well as risks associated with our ability to consummate the sale of the Cylance business on the timeline anticipated or at all. You should not place undue reliance on the company's forward-looking statements. Any forward-looking statements are made only as of today. The company has no intention and undertakes no obligation to update or revise any of them, except as required by law. As is customary during the call, John and Tim 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 price release published earlier today, which is available on the EDGAR, Cedar Plus, and BlackBerry.com websites. Additionally, given that we've entered into a definitive agreement for the sale of Silance, in accordance with GAAP accounting rules, Silance's results will now be shown as a discontinued operation and its assets and liabilities as held for sale. Therefore, when referencing results for the cybersecurity division and BlackBerry in total, John and Tim will be referring to the results of both continuing and discontinued operations. We believe that this will be helpful to investors, especially given that the silence agreement was entered into after the end of the quarter. And with that, let me now turn the call over to John.

Thanks, Martha. And thanks to everyone for joining today's call. This past quarter marked a significant inflection point for BlackBerry. We delivered solid top line performance for our IoT and cybersecurity divisions, both of which exceeded the top end of our guidance ranges. This strong top line and continued focus on cost control and efficiency has enabled the company to pivot back to profitability recording both positive EBITDA and EPS in the quarter. BlackBerry was able to convert this profitability into a return to positive operating and free cash flow generation for the first time since Q3 of fiscal year 2022, when controlling for the impact of the Maliki sale last fiscal Q1. That means this is the first time in 12 quarters that BlackBerry has generated both positive operating and free cash flow. In fact, excluding the Maliki transaction, year to date for Q1 to Q3, operating cash flow is $136 million better this year than last. This strong performance illustrates just how far we've come as a company in the past year. In addition, as we announced earlier this week, we've signed a definitive agreement with Arctic Wolf for the sale of Cylance. This deal, which is subject to closing conditions, will quickly address the challenges of the Cylance financial profile and simultaneously further strengthen our balance sheet. This is a transformational move for BlackBerry that aligns with our clear strategic direction we outlined at our recent investor day and places the company on a strong trajectory going forward. So let me begin by reviewing what was another good quarter for our IoT division. IOT overcame the ongoing difficult backdrop in the automotive space to deliver revenue of 62 million above the top end of our guidance range. This represents 13% year over year and sequential growth. The strength this past quarter was predominantly driven by both royalties and development seat licenses. Automotive was the strongest performer, led by revenue from both the digital cockpit and advanced driver assistance systems, or ADAS. In terms of design wins, the two largest this past quarter were with leading automakers. The first was with a German luxury automaker for the QNX hypervisor to form the foundation of a digital cockpit software stack on a next generation chipset that will be used across a full range of vehicles. The second was with one of Asia's largest auto OEMs for the QNX operating system to be deployed in the ADAS domain. We continue to see strong traction for our next generation version of QNX operating system, SDP 8.0. Despite having only been launched earlier this year, prior to Q3, we had already secured a number of exciting partnerships and design wins. At Investor Day in October, we announced that more than 10 leading silicon vendors have already committed to supporting SDP-8. The momentum is absolutely building. This past quarter, we secured one of our largest ever gem wins with one of the leading industrial automation OEMs who elected to upgrade from version 7 to version 8. This design is for a high-performance OS to be used in a number of industrial use cases. The data point illustrates the significant market opportunity that we have in verticals outside of automotive. In fact, we made significant progress across medical, industrial, and rail verticals This past quarter in rail, we secured a number of net new logos, including universal signaling and progress rail. We are also pleased with the customer reception of our QNX cabin offering. As a reminder, this is a platform that allows for QNX development in the cloud and the creation of a digital twin of a vehicle's digital cockpit. In the quarter, we made a huge step forward by securing an order for this subscription-based product from a major Japanese OEM. They will start by developing their next generation cockpit with a cloud-first approach to drive down time to market, as well as achieve scale and cost efficiency. In addition, we are continuing discussions with a number of other leading auto OEMs. I'm very proud of the results for IoT. The solid growth in the face of a challenging backdrop reflects QNX's strong position in the markets we address. Let me now move over to our cybersecurity division. This was a really good quarter for cyber as well. We delivered revenue of $93 million, exceeding the top end of our guidance range we provided last quarter. Cyber achieved 7% sequential revenue growth when including Cylance, or 10% for the secure communications division that is UEM, Ad Hoc, and SecuSmart collectively. On a year-over-year basis, the division had a tough compare due to significant revenue relating to the large multi-year deal with the Malaysian government that we secured this time last year. Within the secure communications division, UEM endpoint management had a solid quarter recording both sequential and year over year growth. We secured a number of wins this past quarter within our core government sector and also large deals with financial services. These included renewals and expansions with leading global banks, including German bank KFW. Other deals included the Scottish Police, Johns Hopkins University, and the Dutch Water Ministry. Ad hoc also had a solid quarter. It continued to demonstrate its strong position in the US federal government by securing a significant renewal and expansion with the Department of Homeland Security. Other wins included the U.S. Department of Justice. We're further strengthening Ad Hoc's competitive position with a number of new product enhancements, including new alert approval workflows and native Android and iOS applications. Moving over to SecuSmart, we've been pleased with our ability to grow outside of Germany, where we leverage our software-based version of the product. However, Q3's solid performance was largely driven by some strong renewals within the German market, where we have strong relationships with a number of government agencies. The annual recurring revenue or ARR metric for cybersecurity, including Cylance, remained largely stable, recording a small sequential increase and a 3% increase on a year-over-year basis to $281 million. For secure communications, that is excluding Cylance, the increase was even more pronounced, where ARR increased by 3% sequentially and 8% year-over-year to $215 million. The dollar-based net retention rate, or DBNRR, for cybersecurity continued to improve, increasing by two percentage points sequentially and eight percentage points year-over-year to 90%. Similar to ARR, DBNRR for secure communications division is much stronger. The dollar-based net retention rate for this past quarter was 95%. So in summary, this was a really solid quarter for the cybersecurity division where we beat expectations. As we head towards the close of the silence deal with Arctic Wolf, we are focusing our attention on the operational strategy for our secure communications business and maximizing the growth engines within it. Turning now briefly to IP licensing. Revenue came in slightly better than guidance at $7 million, which drove a sequential improvement in gross margin to 71%. This revenue continues to relate largely to legacy deals that predate the sale of our non-core portion of the portfolio to Maliki. So bringing this all together, this past quarter, BlackBerry delivered revenue of $162 million, exceeding the upper end of the previously provided guidance range. Total company gross margins improved both sequentially and year over year to 74%. With that, let me now turn the call over to our CFO, Tim, who will provide further details on our financials.