BlackBerry Limited has reported financial results for the three months ended 30 May, 2015 (all figures in US dollars and US GAAP, except where otherwise indicated).
Q1 highlights include:
* 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.
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.”