Blackberry (BB) Investor Day 2024 summary

Strategic transformation and business focus

• Shifted to two autonomous divisions: IoT (QNX) and Cybersecurity, eliminating non-core activities to drive clarity and focus.

• Cost rationalization efforts, including facility reductions and cloud spend cuts, have saved $135 million in the past 10 months.

• Capital allocation is pivoting away from heavy investment in Cylance toward QNX and secure communications, prioritizing profitability and growth.

• Secure communications (UEM, AtHoc, Secusmart) now form a stable, profitable core, while Cylance investment will be streamlined.

• Optionality and focus from divisional autonomy enable better capital deployment and future growth opportunities.

IoT (QNX) division: Market position and growth

• QNX leads automotive software, powering over 255 million vehicles and working with all top global automakers.

• Royalty backlog has grown from $560 million in FY23 to $815 million in FY24, with only a third expected to convert in the next three years.

• Revenue is projected to grow at a 14% CAGR, reaching $295–$305 million by FY27, with EBITDA margins expanding from 18% to 26%.

• R&D investment cycle is peaking, with future focus shifting toward sales, marketing, and expansion into adjacent verticals like industrial and medical.

• QNX is evolving from a component provider to a foundational platform, integrating offerings like IVY and QNX Sound, and expanding cloud and open-source initiatives.

Cybersecurity division: Portfolio and financial outlook

• Secure communications (UEM, AtHoc, Secusmart) represent three-quarters of cyber revenue, with high renewal rates and strong government/enterprise focus.

• Cylance, while innovative in AI/ML, remains unprofitable and will see reduced investment; strategic alternatives are being considered.

• Cyber division has moved from a $79 million loss in FY23 to breakeven in FY24, targeting $30–$40 million EBITDA by FY27.

• Cost reductions in cyber include narrowing R&D focus, sales/marketing streamlining, and facility exits.

• Growth in secure communications is driven by new software-only products, expanded certifications, and targeted go-to-market strategies.