BlackBerry announces Q1 Fiscal 2016 Results

Right on schedule, BlackBerry has now announced their Q1 Fiscal 2016 financial results for the period ending May 30th, 2015. Last quarter, Executive Chairman and CEO John Chen noted "The second half of our turnaround focuses on stabilization of revenue with sustainable profitability and cash generation" and this report offers up a look at how well that focus has played out for BlackBerry.

Q1 Highlights

  • Software and technology licensing revenue of $137 million, a 150% increase over Q1 FY15
  • Positive free cash flow of $123 million in the quarter
  • Cash and investments balance of $3.32 billion at the end of the fiscal quarter, an increase of $50 million over Q4 FY15
  • Non-GAAP loss of ($0.05) per share, improving on a loss per share of ($0.11) in Q1 FY15
  • Basic GAAP earnings of $0.13 per share
  • Non-GAAP operating loss of ($7) million, improving on a non-GAAP operating loss of ($41) million in Q1 FY15
  • Non-GAAP gross margin of 50.3% and GAAP gross margin of 47.1%
  • Adjusted EBITDA of $157 million, a 5% increase over Q1 FY15
  • Acquired WatchDox, a leader in high-security document synchronization, sharing and management
  • Launched the BlackBerry Leap in April, with availability in 22 markets
  • Entered into joint development deals with Wistron and Compal for devices, in addition to the Company's existing partnership with Foxconn

Revenue for the first quarter of fiscal 2016 was $658 million. The revenue breakdown for the quarter was approximately 40% for hardware, 38% for services and 21% for software and technology licensing. BlackBerry had 2,600 enterprise customer wins in the quarter. Approximately 45% of the licenses associated with these deals are cross-platform. During the first quarter, the Company recognized hardware revenue on approximately 1.1 million BlackBerry smartphones with an ASP of $240.

Press Release

BlackBerry Reports Strong Software Revenue and Positive Cash Flow for the Fiscal 2016 First Quarter

WATERLOO, ONTARIO--(Marketwired - June 23, 2015) - BlackBerry Limited (NASDAQ:BBRY)(TSX:BB), a global leader in mobile communications, today reported financial results for the three months ended May 30, 2015 (all figures in U.S. dollars and U.S. GAAP, except where otherwise indicated).

Q1 Highlights

  • Software and technology licensing revenue of $137 million, a 150% increase over Q1 FY15
  • Positive free cash flow of $123 million in the quarter
  • Cash and investments balance of $3.32 billion at the end of the fiscal quarter, an increase of $50 million over Q4 FY15
  • Non-GAAP loss of ($0.05) per share, improving on a loss per share of ($0.11) in Q1 FY15
  • Basic GAAP earnings of $0.13 per share
  • Non-GAAP operating loss of ($7) million, improving on a non-GAAP operating loss of ($41) million in Q1 FY15
  • Non-GAAP gross margin of 50.3% and GAAP gross margin of 47.1%
  • Adjusted EBITDA of $157 million, a 5% increase over Q1 FY15
  • Acquired WatchDox, a leader in high-security document synchronization, sharing and management
  • Launched the BlackBerry Leap in April, with availability in 22 markets Entered into joint development deals with Wistron and Compal for devices, in addition to the Company's existing partnership with Foxconn

Q1 Results

Revenue for the first quarter of fiscal 2016 was $658 million. The revenue breakdown for the quarter was approximately 40% for hardware, 38% for services and 21% for software and technology licensing. BlackBerry had 2,600 enterprise customer wins in the quarter. Approximately 45% of the licenses associated with these deals are cross-platform. During the first quarter, the Company recognized hardware revenue on approximately 1.1 million BlackBerry smartphones with an ASP of $240.

Non-GAAP loss for the first quarter was ($28) million, or ($0.05) per share, compared to a loss of ($0.11) per share in the same year-ago period. GAAP basic net income for the quarter was $68 million, or $0.13 per basic share. Basic GAAP net income includes non-cash income associated with the change in the fair value of the debentures of $157 million (the "Q1 Fiscal 2016 Debentures Fair Value Adjustment") and pre-tax charges of $61 million related to restructuring. The impact of these adjustments on GAAP net income and earnings per share is summarized in a table below.

Total cash, cash equivalents, short-term and long-term investments was $3.32 billion as of May 30, 2015. The cash balance increased $50 million in the first quarter. Excluding $1.25 billion in the face value of our debt, the net cash balance at the end of the quarter was $2.07 billion. Purchase orders with contract manufacturers totaled approximately $238 million at the end of the first quarter, compared to $394 million at the end of the fourth quarter. Operating cash flow was $134 million with free cash flow (operating cash flow minus capital expenditures) of $123 million.

In Q1, BlackBerry completed its acquisition of WatchDox, a leading provider of secure enterprise file-sync-and-share (EFSS) solutions that allows users to protect, share and work with their files on Android, iOS, Windows Phone, BlackBerry and PCs. WatchDox will be integrated into BlackBerry's BES12 Enterprise Mobility Management solution, extending the company's ability to secure communications end-to-end from voice, text, messaging and data to now include documents.

In addition to BlackBerry's existing partnership with Foxconn, the Company also entered into joint development and manufacturing agreements with Wistron Corporation and Compal Electronics. These agreements will reduce the time to market of new devices, streamline the supply chain, leverage greater economies of scale and enable resource and fixed asset reductions for greater business efficiency - which are all significant steps toward BlackBerry achieving profitability in its devices business.

"I am pleased with the strong performance of our software and technology business. This is key to BlackBerry's future growth," said Executive Chairman and CEO John Chen. "Our financials reflect increased investments to sales and customer support for our software business. In addition, we are taking steps to make the handset business profitable. We believe these actions are prudent and necessary to grow the business and we believe the remaining milestones in our strategic plan are achievable."

Conference Call and Webcast

A conference call and live webcast will be held beginning at 8 am ET, which can be accessed by dialing 1-877-795-3635 or by logging on at http://ca.blackberry.com/company/investors/events.html. A replay of the conference call will also be available at approximately 11 am ET by dialing 1-647-436-0148 and entering pass code 8517132# or by clicking the link above. This replay will be available until 11 am ET July 9th, 2015.

About BlackBerry

A global leader in mobile communications, BlackBerry® revolutionized the mobile industry when it was introduced in 1999. Today, BlackBerry aims to inspire the success of our millions of customers around the world by continuously pushing the boundaries of mobile experiences. Founded in 1984 and based in Waterloo, Ontario, BlackBerry operates offices in North America, Europe, Middle East and Africa, Asia Pacific and Latin America. The company trades under the ticker symbols "BB" on the Toronto Stock Exchange and "BBRY" on the NASDAQ. For more information, visit www.blackberry.com.

Read the full financial breakdown