Blackberry (BB) KeyBanc Capital Markets Technology Leadership Forum summary

Company structure and leadership

• Operates two main divisions: IoT (led by QNX in automotive and adjacent industries) and cybersecurity, each with distinct customer bases and sales cycles.

• QNX is a leader in safety-certified, high-performance foundational software, especially in automotive, with expansion into rail, medical, and industrial sectors.

• Recent leadership changes include a new CFO and a new CEO, with a focus on cost reduction and shareholder value.

• Significant cost reductions achieved, removing $125 million from a $600 million top-line business in six months.

• Progress made in separating the two divisions to better align with their unique market needs.

Cybersecurity product evolution and focus

• Four key cybersecurity products: Cylance (endpoint security), UEM (unified endpoint management), AtHoc (critical event management), and Secusmart (NSA-level cryptographic voice product).

• Cylance has maintained a strong AI/ML foundation, with recent investments in MDR (managed detection and response) and XDR (extended detection and response) capabilities.

• MDR offerings have expanded, including on-demand and Pro versions, enabling support for non-Cylance endpoints and integration with over 300 data sources.

• Refocused R&D on core strengths in data science and AI, leveraging Databricks for backend infrastructure to reduce costs and complexity.

• Discontinued less scalable projects and concentrated on high-retention, high-engagement managed services.

Financial and operational performance

• ARR and dollar-based net retention have shown sequential improvement over the last two quarters.

• Managed services, especially MDR and XDR, are driving significant upsell opportunities, with MDR Pro providing a 15% uplift on endpoint licenses.

• Focus on achieving cash flow positivity through further cost optimization without harming business fundamentals.

• Large government contracts, such as with Malaysia, highlight success in enterprise and public sector sales.

• Cash burn has been significantly reduced year-over-year, though market appreciation of these changes is still lagging.