BlackBerry Limited

Good morning and welcome to the BlackBerry fourth quarter and fiscal year 2025 results conference call. My name is Rob and I'll 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 Let's enter today's call over to Martha Gonder, Director of Investor Relations, BlackBerry. Please go ahead.

Thank you, Rob. Good morning, everyone, and welcome to BlackBerry's fourth quarter and full 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 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. will 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. You should not place undue reliance on the company's forward-looking statements. Any forward-looking statements are made only as of today and the company has no intention and undertakes no obligation to update or revise any of them except as required by law. As customary, during the call, John and Tim will reference non-GAAP numbers in their summary of quarterly results. For a reconciliation between our GAAP and non-GAAP numbers, please see the earnings press release published earlier today, which is available on the EDGAR, Cedar Plus, and BlackBerry.com websites. Additionally, unless otherwise noted, the numbers John and Tim reference will be for continuing operations only. That is excluding the results of Silance Business, which are included within discontinued operations. 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 another significant step forward in what was a transformative year for BlackBerry. We closed the win-win transaction with Arctic Wolf for the sale of Cylance. And through solid execution by the team, we finished the year with another strong quarter that beat expectations across the board. Total company revenue beat the top end of our guidance range at 141.7 million. Revenue for the QNX division beat guidance at 65.8 million. Likewise, the secure communications division finished the year strongly, also beating the top end of guidance at 67.3 million. And finally, licensing had a better than expected quarter as well, beating guidance at 8.6 million. In terms of profitability, BlackBerry beat guidance for adjusted EBITDA coming in at 21.1 million. And EPS, which includes discontinued operations for both the fourth quarter and the full fiscal year 2025, beat guidance and expectations at positive 3 cents and positive 2 cents, respectively. Then finally, BlackBerry's cash performance also beat expectations. Total cash and investments increased by 144 million, driven by a significant increase in operating cash flow to 42 million, and the collection of the initial tranche of cash from the Cylance deal of approximately 80 million. As I mentioned, at the start of February, we closed the Cylance transaction with Arctic Wolf. Last summer, the new management team performed a deep dive into BlackBerry's various businesses. And once we identified the financial challenges that Cylance was presenting to the cybersecurity division, and with it, BlackBerry as a whole, we moved quickly to find a solution. I'm very proud of the team's hard work that made this deal happen and close so quickly. At close, BlackBerry received approximately $80 million of cash and 5.5 million common shares. Additionally, BlackBerry retained its pioneering AI ML endpoint security patents, as well as tax losses that we expect will provide a significant shield for future profits generated by our US entities. We were delighted that so many of our colleagues in the Cylance business were able to find a new home in Arctic Wolf as part of the transaction. With the deal successfully closed, we've switched our focus to fiscal year 2026 and beyond. We performed a thorough review of all aspects of the cost structure in our new secure communications division, that includes UEM, Ad Hoc, and SecuSmart. This review aimed at refocusing the business more clearly on addressing its narrower, more common customer base, optimizing our cost structure in the process. The cost reduction actions of the past quarter build on others that we've executed over the past year. When we began this process, we said our target was to remove approximately $150 million of costs from our run rate, and I'm delighted to report that we've now exceeded that goal. As a result of this hard work, BlackBerry's profitability has transformed. Total company adjusted EBITDA was $39.3 million for the year when including Silance, a $54 million improvement year over year when controlling the patent sale in early fiscal year 2024. Let me now go into further detail at the divisional level. Earlier this week, QNX celebrated its 45th anniversary. QNX's leadership position in safety critical foundational software cannot be replicated overnight. Instead, it has taken decades of working with the biggest names in the auto industry and beyond to establish the competitive moat that this business enjoys today. Notwithstanding the various challenges for the auto industry, the largest market segment for QNX, the team continued to drive results throughout 2025 and finished the year with Q4 revenue beating expectations at 65.8 million. Royalty revenue continued to be strong in Q4, albeit slightly lower sequentially, offset by the strongest quarter of the year for development seat revenue, while services remained relatively constant. Despite the delay in software development across automotive that have deferred both the start of existing and the award of new designs, QNX royalty backlog grew yet again year over year to approximately 865 million. The growth in backlog demonstrates that QNX continues to add future expected royalty revenue from new designs at a faster rate that is currently recognizing in the P&L. We believe this is a solid indicator of ongoing future health of this business. During the quarter, we continue to demonstrate our leadership in automotive by securing design wins with a number of leading OEMs and tier one suppliers, primarily for ADAS and cockpit domain controllers. Punix is powered by strong multi-year secular tailwinds. We continue to invest in the business to capture these opportunities. This includes both driving go-to-market penetration, particularly in verticals adjacent to automotive, and bringing exciting new products to market that our broad customer base is asking for. Our next generation version of the QNX platform, SDP 8.0, and our cloud-based digital cockpit development solution, QNX Cabin, are two of these products, and both are gaining traction in the market. Another top 10 global auto OEM made a multi-year commitment to the QNX cabin solution, building on wins with similar industry leaders in the prior two quarters. SDP 8.0 is also building momentum with significant progress across Q4, across automotive, medical, industrial, rail, and robotic verticals. As mentioned, we see significant opportunities outside of automotive. The QNX code base used in medical, industrial, and other general embedded applications is almost identical to that in automotive, meaning that we can truly leverage our technology investments across a broader addressable market. To help drive this growth, we recently launched the QNX General Embedded Development Platform, designed to accelerate the time to market for high performance, scalable, and secure embedded systems. We are also building out our team, adding sales professionals to drive this go-to-market push. This past quarter, we secured several new logo design wins with customers in medical equipment, rail, and aerospace and defense. Punix is a leading brand in automotive, and BlackBerry is very much leaning into this brand as part of our efforts to drive top-line growth in fiscal year 26 and beyond. Going forward, the IoT division will now be referred to as QNX, more clearly reflecting the key driver within it. There was no better place to lead with the brand than at the CES trade show in Las Vegas, and the team did a magnificent job in making QNX shine with the booth sporting the bold new color scheme. We also showcased new product developments centered around helping customers shorten and simplify cycle and time to market. In particular, we highlighted the expansion of the QNX's vehicle platform. This vehicle OS aims to take the heavy lifting of integrating non-differentiated parts of the software stack off the OEM's plates. leaving them to focus on the application layer that their customers see and interact with. Leading middleware providers, TT Tech and Vector, confirmed a multi-year collaboration with BlackBerry on this exciting new platform. We also announced a partnership with Microsoft Azure for SDP 8.0 in the cloud. This expands options for customers that already includes running QNICs on AWS. Overall, 2025 was a solid year of progress for QNICs in a difficult environment, consistently achieving or beating the top end of guidance throughout the fiscal year and continuing to grow the royalty backlog. Moving over to secure communications. This was another very solid quarter of execution for the division, despite a significant amount of time by the team that was dedicated to both Arctic Wolf transaction and the review of our cost structure. Revenue exceeded the top end of guidance at $67.3 million for Q4. In the quarter, UEM secured new business with a number of government agencies, including the US Air Force, and a number of multi-year commitments with leading banks and law firms. Quarterly revenue for UEM increased sequentially. Year-over-year revenue for Q4 was down, however, partially as a result of a tough compare in the same quarter the year before as a result of the upfront revenue portion of the large deal with the Malaysian government. Likewise, for the same reason, revenue for UEM for the full fiscal year was slightly lower as well. Speaking of the Malaysian government contract, this past quarter, we were delighted to expand our relationship signing an extension to our existing deal that increased both the contract length and number of licenses. The Malaysian government remains a strong case study for deployment of the full secure communications portfolio and is one we are working to replicate. Ad hoc, our critical events management solution also had a solid quarter and full year, with revenue increasing both year over year in Q4 and for the full fiscal year. This past quarter, we secured expansions and renewals with key U.S. government agencies, including the Department of Homeland Security, U.S. Department of the Treasury, and the U.S. Missile Defense Agency. SecuSMART, our military-grade encrypted voice and data solution, had a solid fiscal 2025 with revenue increasing year over year. Given the significant portion of upfront revenue recognition, revenue can vary from quarter to quarter depending on the timing of new deals, as evidenced by Q4 being sequentially lowered. Annual recurring revenue or ARR for secure comms decreased by 7 million or 3% sequentially to 208 million, although it was up 6 million or 3% year over year. The dollar base net retention rate or DBNRR decreased marginally two percentage points sequentially to 93%, but was two percentage points higher than in Q4 of the prior year. Particularly pleasing is the continued strength in Ad Hoc's dollar base net retention rate, which remains north of 100%. This past fiscal year saw a significant transformation for the Secure Communications Division, with both the sale of the Cylance business and significant restructuring to right-size the cost structure. That said, the team has remained laser focused and delivered a very solid year with both reliable revenue, significantly improved profitability, and stable underlying metrics. Touching briefly on licensing, licensing revenue came in above guidance at $8.6 million, driven by a stronger than expected revenue from pre-existing arrangements. For a year of significant change, I'm pleased that BlackBerry as a whole was able to maintain focus and deliver a solid top line of $534.9 million. As we move into fiscal year 2026, I am confident that the team will continue to deliver results. And with that, let me now turn the call over to our CFO, Tim, who will provide further details on our financials.