BlackBerry Ltd Q2 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Kingsley Crane - Canaccord Genuity Group Inc - Analyst : Hi. Thanks so much for taking the question. Congrats on the continued execution. First question, what magnitude of opportunity does QNX containers and the HaleyTek integration and launch open up on that side of the business? How can we think about new product unlocking design wins?

Question: Kingsley Crane - Canaccord Genuity Group Inc - Analyst : Awesome. That's good to hear. And then on the financials, just our Q3 guidance implies a modest sequential increase for cyber before a markedly sharper increase in Q4. I think that's historically been a seasonally lighter quarter. So just anything that we should consider there this year would be helpful.

Question: Kingsley Crane - Canaccord Genuity Group Inc - Analyst : Perfect. Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 26, 2024 / 9:30PM, BB.TO - Q2 2025 BlackBerry Ltd Earnings Call

Question: Luke Junk - Robert W. Baird & Co - Analyst : Good afternoon. Thanks for taking questions. First, just a question related to the EBITDA progression, reaching breakeven sooner than I expected in the quarter, a great achievement. Just trying to reconcile that with the full year EBITDA guidance being maintained in the range of breakeven to $10 million. Is there something in timing we should be considering or some sort of offset in the back half? I guess if I look at the OpEx trajectory, it seems to be coming down quicker than you had anticipated, and that would seem to suggest maybe some upside to the full year?

Question: Luke Junk - Robert W. Baird & Co - Analyst : It does. And then second, just hoping you could just double-click on the organizational changes in IVY and integrating that more into the QNX organization on a go-forward basis, just relative to retaining key talent there while also reducing cost? Maybe if you could just kind of square the balancing of those two things.

Question: Luke Junk - Robert W. Baird & Co - Analyst : Understood. I'll leave it at that.

Question: Paul Treiber - RBC Capital Markets - Analyst : Thanks so much for taking questions. Could you provide an update on the separation process? I think last quarter, you mentioned you're working through splitting up some of the IT systems and reorganizing that and just changes to the organizational structure. What's remaining to go from an operational perspective here?

Question: Paul Treiber - RBC Capital Markets - Analyst : That's helpful to understand. As you sort of untangle the two organizations, are you seeing structural differences in profitability between the two? How should we think about that here?

Question: Paul Treiber - RBC Capital Markets - Analyst : Sure. Just one last one for me. Just on cyber, it does look like that the mix of license revenue was higher this quarter. Was that the primary driver of one of the major drivers of the upside relative to guidance? And then how do we think about that from a timing point of view? Was that -- is it catch up from prior quarters? Was it pull forward from future quarters versus your expectations?

Question: Daniel Chan - TD Cowen - Analyst : Hi. Thanks for taking questions. Any potential impact from the proposed ban of Chinese auto software and hardware? And maybe not just in the US, but the potential of it expanding to other countries?

Question: Daniel Chan - TD Cowen - Analyst : Thanks for that. And then the delayed or canceled programs, design programs that you're seeing now, how should we think about those impacting the potential royalty revenue in several years?

Question: Daniel Chan - TD Cowen - Analyst : Thanks. Just a couple of questions on cybersecurity, if I may. The ARR kind of reverse trajectory kind of improved in Q1 and in this quarter, kind of declined sequentially. What changed over the last three months to reverse that momentum? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 26, 2024 / 9:30PM, BB.TO - Q2 2025 BlackBerry Ltd Earnings Call

Question: Daniel Chan - TD Cowen - Analyst : Thanks. And last one for me. Nice to see the net revenue retention improving. Is it improving because the churn is getting better? Or are you doing a better job with the upsell and cross-sell? Any color would be helpful.

Question: Daniel Chan - TD Cowen - Analyst : Great. Thank you very much.

Question: Trip Chowdhry - Global Equities Research LLC - Analyst : Thank you. A very exciting quarter. I think the way I look at your company is a very underappreciated start-up. Why I say that is, in every business you are, there is so much opportunity to create and shape the new and the new future based on the technologies and the platforms you have. I was just thinking if your team is thinking on these three emerging opportunities that, I think, if you have a different narrative and a different perspective, you could be doing a lot better versus if I'm looking at other analysts' questions, they are very backward looking because they're thinking BlackBerry from a very traditional sense versus if you look at the Black way as a start-up, which is not well understood,. Let me give a point, two, three points here. First, there's an emergence of generative AI devices. There's only one instance right now where Jony Ive and OpenAI are trying to create those devices. And if we can fast forward, it could be no less popular than iPhones down the road. I'm extrapolating, but that's one new thing that has emerged over the last three, four months. Second, when you think in terms of generative AI and videos models that are coming, including small language models and now a lot of intelligence is being done on Intel AI PCs, for exampl. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 26, 2024 / 9:30PM, BB.TO - Q2 2025 BlackBerry Ltd Earnings Call Now as in the prepared remarks, you talked about UEM product being very good for on-premises if we extrapolate it because you have a wonderful CEO came from McAfee, that is an opportunity when you have AIs and there is so much they call it, injection that is prone injections that are happening. It is just old paradigm in a new situation. So something that is dead is getting exciting now. The only thing that -- there are many others we can go offline. But the way I'm thinking is we should be looking at BlackBerry as a startup, attacking new problems with the technologies, and the experiences you have. So Tim, since I happen to know you very well, and you're one of the most sharpest, I would say, technologist CFOs, I was thinking if you have thought about it and what are your initial views on it? Of course, this industry is being created right in front of our eyes. I really want BlackBerry to go and capture it. So that's all from me and congratulations on a nice quarter.

Question: Trip Chowdhry - Global Equities Research LLC - Analyst : You are phenomenal. Thank you so much.

Question: Steven Li - Raymond James Financial Inc - Analyst : Hello, thanks. John, I'm not sure if I misheard you. But on cyber, I think I heard you say more customers are adopting your managed services offering.

Question: Steven Li - Raymond James Financial Inc - Analyst : Got it. That's all. Thanks, John.