Blackberry (BB) 27th Annual Needham Growth Conference summary

Strategic transformation and portfolio focus

• Divested Cylance business to Arctic Wolf, improving financial profile and focusing on core secure communications and IoT segments.

• Streamlined operations into two autonomous business units: IoT (QNX) and secure comms, clarifying market positioning.

• Maintained key assets such as IP and tax losses, and secured a stake in Arctic Wolf, with potential future upside.

• QNX powers over 230 million cars globally, with strong relationships across all major OEMs and chipmakers.

• Secure comms business (UEM, AtHoc, SecuSmart) delivers high margins and stable cash flow, with governments as major clients.

Financial performance and cost management

• Achieved a $150 million cost reduction and returned to positive cash flow after burning $50 million per quarter a year ago.

• Improved operating income margin and delivered first positive operating cash flow in three years.

• Reduced gross debt by $165 million and now holds net cash, with a strong balance sheet for capital deployment.

• Focused spending on core businesses, closed facilities, and streamlined R&D to drive profitability.

• Ongoing cost reduction efforts continue as part of annual operating planning.

Growth drivers and business outlook

• QNX backlog exceeds $800 million, with revenue expected to roll through at near 100% margins over 5–10 years.

• Royalty backlog for QNX has grown at a 30% CAGR, driven by increased software and compute in vehicles.

• Expanding QNX use cases into medical and industrial automation, leveraging functional safety and performance strengths.

• Licensing business offers upside potential, with a profit share deal that could gross up to $700 million.

• Exploring share buybacks, tuck-in M&A, and further vertical expansion as capital allocation options.