BlackBerry Limited

Good morning and welcome to the BlackBerry first quarter fiscal year 2027 results conference call. My name is Betsy 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 Suzanne Spira, Senior Director of Investor Relations, BlackBerry. Please go ahead.

Thank you, Betsy. Good morning, everyone, and welcome to BlackBerry's Fiscal First Quarter 2027 Earnings Conference Call. Joining me on today's call is BlackBerry's Chief Executive Officer, John Giamatteo, 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. As part of today's webcast, presentation slides will be displayed. The slides are also available on the investor information section at blackberry.com as will the replay of today's call. 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 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 is customary during the call, John and Tim will reference certain non-GAAP numbers in their summary of our quarterly results. For 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. And with that, let me now turn the call over to John.

Thanks, Suzanne. and good morning and thank everyone for joining today's call. We're excited to report a strong start to the fiscal year. Last quarter, we talked about turning the page from cost restructuring to value creation through profitable growth. And this quarter, we delivered exactly that. In Q1, we saw a rock solid execution across both QNX and secure communications with both businesses delivering rule of 40 performance during the quarter, reflecting a combination of healthy growth and strong profitability. In QNX, we continue to benefit from the long-term trends we've discussed for several quarters, including software-defined vehicles, centralized compute, the general embedded market, and physical AI. In secure communications, we continue to see stabilizing fundamentals combined with tailwinds from growing government demand and the impact of large customer wins. Total company revenue came in at 153 million, well above the high end of our guidance. Adjusted EBITDA more than doubled year over year, and we achieved positive gap net income for the fifth consecutive quarter. We also continue to generate positive operating and free cash flow despite Q1 being a seasonal low. We're proud of the quarter, but also recognize that we're still early in this next chapter with more work to do. It is important to remember our focus is on driving long-term shareholder value. not managing to individual quarters. Let me start my review of the quarter with the QNX business. This was another Rule 40 quarter for QNX. Revenue came in significantly above the top end of guidance at approximately 72 million, representing 26% year over year growth. This performance was driven by strength across all components of QNX, including development licenses, professional services, and royalties. I want to call out one number in particular. Development license revenue in Q1 was the highest it has been in eight quarters. And this really matters because development licenses are one of the earliest indications of future growth. with customers investing in tools as they begin developing new software platforms on QNX. Customers typically buy these tools at the very start of a program, years before a vehicle reaches production and royalties begin. What's more, these are predominantly tools for our new SDP8 platform. So a strong quarter today builds the foundation for royalty revenue of the future. During the quarter, we secured new design wins across both automotive and gem. In automotive, the wins span geographies and domains. In ADAS, we secured a new design win with a leading European automaker that is developing a safety platform on powerful Qualcomm Snapdragon SOCs. We also secured a win with a Tier 1 supplier for a driver monitoring system to be built on a Texas Instrument chipset used by a Japanese OEM. Additionally, we added a significant design win for SDP-8 with a commercial vehicle OEM to provide the foundation for a multi-domain architecture across cockpit, ADAS, and centralized compute. In the quarter, we secured a strategically important sale of SDP-8 development tools to a US-based software developer supplying a major Asian OEM. This is a strong commitment to developing on our latest QNX platform for the long term. In GEM, we continued to see traction with wins that included a significant royalty commitment by a leading semiconductor equipment manufacturer, as well as expanding an existing medical diagnostics relationship with Luminix through a platform upgrade to our latest SDPA technology. Taken together, these wins demonstrate solid progress in expanding both the scale of QNX adoption and the value delivered per deployment. Looking beyond the quarter, we remain confident in the long-term opportunities in front of us. That confidence is grounded in the multiple long-term growth drivers we see across QNX, many of which are in their early stages. and have the potential to create significant shareholder value over time. The first growth driver is GEM. While representing a minority of QNX's revenue and backlog today, it remains our fastest growing segment and significantly expands our long-term opportunity beyond automotive into robotics, industrial automation, medical devices and other safety critical applications. who are particularly excited about the long-term opportunity in physical AI. As intelligent machines become increasingly autonomous and operate around people, the requirements for safety, security, reliability, and real-time determinism become even more important. Unlike probabilistic AI systems, QNX technology is deterministic and Safety Certified, which is exactly why it is so hard to replicate and why customers trust it for systems where failure is not an option. In many ways, automotive has been a proving ground for the demands of physical AI. Modern vehicles are essentially robots on wheels and QNX has established itself as a trusted platform supporting many of the industry's most advanced Autonomous and Safety Critical Systems. The second growth driver is AlloyCore. We continue to make encouraging progress in discussions with customers and remain confident of securing our first design win this fiscal year. While we're not ready to declare victory yet, we continue to believe AlloyCore represents a significant opportunity for BlackBerry over the long term. What makes AlloyCore exciting is that it is expected to expand our role from operating system provider to platform provider, substantially increasing our software content per vehicle, expanding our average selling price by multiples, and driving meaningful backlog growth. As with our core QNX business, Design wins and backlog are expected to come first, and royalty revenue build over time as programs move into production, reinforcing the long-term visibility of the business. Our strategic partnerships with NVIDIA, Qualcomm, Arm, and other Silicon ecosystem leaders continue to strengthen our position in next-generation intelligent systems. These relationships are important sales channels for QNX and help position us for future growth across all physical AI and gem markets. Taken together, we believe these growth drivers significantly expand the long-term opportunity for QNX and reinforce our confidence in the future trajectory of the business. Turning to secure communications, which delivered its strongest quarter in years. For the first quarter, revenue was approximately $74 million, exceeding the top end of guidance and delivering 24% year-over-year growth. Annual recurring revenue, or ARR, stabilized sequentially but grew more than 5% year-over-year to $220 million. And our dollar-based net retention rate, or DBNRR, was healthy at 92%. We're pleased that the secure communications business stands on a much more stable foundation today than it did just a couple of years ago. We continue to see encouraging trends in customer retention, recurring revenue, and government demand for secure communication solutions. This past quarter demonstrated what can happen when a stable underlying business is combined with a significant government win. Governments around the world continue to prioritize digital sovereignty, cybersecurity modernization, and secure communications infrastructure, creating favorable demand conditions for our solutions. In Q1, this showed up in revenue from the significant expansion and multi-year extension with Shared Services Canada that we discussed last quarter, driving our strongest performance in several years. As part of the new deal, the Canadian government is meaningfully scaling its deployment of SecuSmart's encrypted voice data and video solution. In line with the digital sovereignty trend, This deployment on a sovereign architecture contributed significant in-quarter revenue recognition. It's important to recognize that large government deals like this tend to have long sales cycles and don't happen every quarter. Outsized growth and profitability such as this past quarter are typically followed by more normalized quarters. Overall, secure communications continues to evolve from a business once viewed as a headwind into a stable, growing business with meaningful upside when large government opportunities are successfully converted. In addition to the large deal with Shared Services Canada, we secured a number of renewals, expansions, and new logos primarily across government, defense, and regulated industries. In North America, we secured deals with the U.S. Air Force, U.S. Cyber Command, the U.S. Senate, the U.S. Secret Service, and the White House Communications Agency. In EMEA, we secured wins across government and defense, including BAE Systems, the UK's National Crime Agency and Metropolitan Police Service, the Bavarian State Tax Office, and GIZ, the German Society for International Cooperation, as well as the Saudi National Bank and Bank de France. Taken together, These wins reflect steady demand in highly sensitive mission-critical environments. Touching briefly on licensing, for the first quarter, licensing revenue was solid and came in at $7 million, ahead of guidance due to the better-than-expected revenue from pre-existing arrangements, as well as a number of new one-time licensing deals. as we continue to see positive momentum with customers across QNX and secure communications as we move into Q2. Within QNX, demand remains healthy in both automotive and gem with strong customer engagement and a growing design wind pipeline. In secure communications, the business remains supported by structural tailwinds and while some churn remains, it's much lower than in prior quarters. Overall, we are very pleased with our start to fiscal year 2027 and the progress reflected in the quarter. While neither QNX nor secure communications will grow in a perfectly straight line, what matters most is the long-term trajectory of the business, and we're encouraged by what we see. Demand across our markets remains healthy. Customer engagement is strong, and our backlog continues to expand, giving us confidence in our outlook and in the disciplined execution that gets us there. With that, let me now turn the call over to Tim, who will provide further details on our financials.