The FINANCIAL — BlackBerry Limited an enterprise software and services company focused on securing and managing IoT endpoints, on March 28 reported financial results for the three months and twelve months ended February 28, 2018 (all figures in U.S. dollars and U.S. GAAP, except where otherwise indicated).
Fourth Quarter Fiscal 2018 Results
Total company non-GAAP revenue for the fourth quarter of fiscal 2018 was $239 million with GAAP revenue of $233 million. Total software and services revenue of $218 million (non-GAAP) and $212 million (GAAP) broke the record set last quarter. Approximately 70% of fourth quarter software and services revenue (excluding IP licensing and professional services) was recurring. BlackBerry had approximately 3,500 enterprise customer orders in the quarter.
Non-GAAP operating income was $19 million, and non-GAAP earnings per share was $0.05 (basic and diluted). GAAP operating loss was $17 million. GAAP net loss for the quarter was $0.02 per basic share and $0.06 per diluted share. GAAP net income includes $28 million in restructuring charges, $22 million in acquired intangibles amortization expense, a benefit of $34 million related to the fair value adjustment on the debentures, and other amounts as summarized in a table below.
Total cash, cash equivalents, short-term and long-term investments were approximately $2.4 billion as of February 28, 2018. Free cash flow was $31 million, before considering the costs related to restructuring and transition from the hardware business as well as the net impact of arbitration awards and damages. Cash generated from operations was $35 million and capital expenditures were $4 million. Excluding $605 million in the face value of the company’s debt, the net cash balance at the end of the quarter was approximately $1.7 billion.
“I am very pleased with our execution. We achieved another record quarter in software and services revenue as we grew across all three of our software businesses. We also generated positive non-GAAP EPS and cash flow from operations for the fiscal year,” said John Chen, Executive Chairman and CEO, BlackBerry. “Customers and partners recognize our technology innovation and market leadership. BlackBerry’s market opportunities in unified endpoint management and embedded software are significant and synergistic, and our innovation and execution give us confidence to be a leader in the Enterprise of Things.”
Fourth Quarter Fiscal 2018 Business and Financial Highlights
Software and services revenue of $218 million (non-GAAP) and $212 million (GAAP), breaking the record set last quarter
Gross margin of 79% (non-GAAP) and 76% (GAAP), breaking the record set last quarter
Operating income of $19 million (non-GAAP) and operating loss of $17 million (GAAP); positive non-GAAP operating income for the eighth consecutive quarter
Secured several notable new BlackBerry QNX design wins and partnerships, including with Baidu and NVIDIA
Launched BlackBerry Jarvis, a binary static analysis Software-as-a-Service (SaaS) tool that can help automakers secure the software supply chain
Expanded BlackBerry Radar partnership with Fleet Complete to their BigRoad Freight program, which supports over 500,000 drivers
Announced a new partnership with Pana-Pacific to make BlackBerry Radar available to more than 2,800 commercial vehicle dealers in North America
After the quarter closed, announced BlackBerry Enterprise BRIDGE, which provides customers a highly secure way to seamlessly use native Microsoft mobile apps from within BlackBerry Dynamics
After the quarter closed, entered into a multi-year agreement with Jaguar Land Rover to develop and license BlackBerry QNX and Certicom technology for their next-generation vehicles
Fiscal 2018 Financial Highlights
Total non-GAAP software and services revenue of $782 million, an increase of 14% year-over-year
Total GAAP software and services revenue of $747 million, an increase of 20% year-over-year
Non-GAAP EPS of $0.14 (per basic and diluted share), an increase from $0.06 in fiscal 2017
GAAP EPS of $0.76 per basic share and $0.74 per diluted share
Free cash flow of $47 million, before considering the costs related to restructuring and transition from the hardware business as well as the net impact of arbitration awards and damages
Fiscal 2019 Outlook
BlackBerry’s outlook for fiscal 2019 is as follows:
Total company software and services billings growth is expected to be double-digits
Non-GAAP EPS is expected to be positive
Free cash flow is expected to be positive for the full year, before considering the impact of restructuring and legal proceedings
