BlackBerry Reports Non-GAAP Profitability and Positive Cash Flow for the Fiscal 2015 Fourth Quarter
Reports GAAP Profitability, Software Revenue Grows 24% Sequentially
WATERLOO, ONTARIO--(Marketwired - March 27, 2015) - BlackBerry Limited (NASDAQ:BBRY)(TSX:BB), a global leader in mobile communications, today reported financial results for the three months and fiscal year ended February 28, 2015 (all figures in U.S. dollars and U.S. GAAP, except where otherwise indicated).
Q4 Highlights
- Normalized positive cash flow of $76 million in the quarter, reversing normalized cash use of ($784) million in Q4 FY14
- Cash and investments balance of $3.27 billion at the end of the fiscal quarter, an increase of $608 million over Q4 FY14 and matching the highest balance in company history
- Non-GAAP earnings of $0.04 per share, reversing a loss per share of ($0.08) in Q4 FY14
- Non-GAAP operating income of $2 million reversing an operating loss of ($156) million in Q4 FY14
- Non-GAAP gross margin of 48.3% and GAAP gross margin of 48.2%, with a third consecutive quarter of positive hardware gross margin
- Software revenue of $67 million, a 20% increase over Q4 FY14
- Announced a partnership with Google to support Android for Work
- Launched the BlackBerry Classic in December, with support for the Classic and the previously-released Passport by major carriers, including Telus, Bell, Rogers, AT&T, Verizon, Vodafone and Orange
- Completed the acquisition of Secusmart, a leader in high-security voice and text encryption
- After the quarter at Mobile World Congress, announced the full-touch BlackBerry Leap and unveiled the upcoming BlackBerry device portfolio
- Also at Mobile World Congress, announced the BlackBerry Experience Suite software portfolio that brings BlackBerry's productivity, communication, collaboration and security across all smartphone and tablets running iOS®, Android™, and Windows®
- Other product announcements at Mobile World Congress included BES 12 Cloud, integration of WorkLife and SecuSUITE with Samsung KNOX, and Vodafone Germany's rollout of Secusmart technology
Q4 Results
Revenue for the fourth quarter of fiscal 2015 was approximately $660 million, including a negative $12 million impact from currency fluctuation. The revenue breakdown for the quarter was approximately 42% for hardware, 47% for services and 10% for software. During the fourth quarter, the Company recognized hardware revenue on approximately 1.3 million BlackBerry smartphones. Approximately 1.6 million BlackBerry smartphones were sold through to end customers, with an ASP of $211 compared to $180 in the previous quarter.
Non-GAAP profit for the fourth quarter was $20 million, or $0.04 per share, compared to earnings of $0.01 per share last quarter. GAAP net income for the quarter was $28 million, or $0.05 per share. GAAP net income includes a non-cash charge associated with the change in the fair value of the debentures of $50 million (the "Q4 Fiscal 2015 Debentures Fair Value Adjustment"), investment income of $115 million related to the Rockstar sale (the "Rockstar Sale Adjustment") and pre-tax charges of $58 million related to the restructuring program. 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 $3.27 billion as of February 28, 2015. The cash balance increased $156 million in the fourth quarter, including net gains of $80 million related to acquisitions and divestitures during the quarter. Aggregate contractual obligations amounted to approximately $1.3 billion as at February 28, 2015, compared to $1.6 billion at the end of the third quarter. Purchase orders with contract manufacturers totaled approximately $394 million at the end of the fourth quarter, compared to $565 million at the end of the third quarter. Excluding the impact of foreign exchange, operating cash flow was $205 million with free cash flow (operating cash flow minus capital expenditures) of $189 million.
"Our focus this past year was on getting our financial house in order while creating a multi-year growth strategy and investing in our product portfolio. We now have a very good handle on our margins, and our product roadmaps have been well received," said Executive Chairman and CEO John Chen. "The second half of our turnaround focuses on stabilization of revenue with sustainable profitability and cash generation."
Outlook
The Company continues to anticipate positive free cash flow. The Company is expanding its distribution capability, and expects traction from these efforts to manifest some time in fiscal 2016. The company continues to target sustainable non-GAAP profitability some time in fiscal 2016.
Conference Call and Webcast
A conference call and live webcast will be held beginning at 8 am ET, which can be accessed by dialing 1-888-503-8168 or by logging on at
Investor Events - Canada A replay of the conference call will also be available at approximately 10 am ET by dialing 1-647-436-0148 and entering pass code 8015758# or by clicking the link above. This replay will be available until midnight ET April 10th, 2015.
