BlackBerry Ltd (BB) 2023 Q1 法說會逐字稿

Good afternoon and welcome to the BlackBerry First Quarter Fiscal Year 2023 Results Conference Call. My name is Brent, and I will be your conference moderator for today's call. (Operator Instructions).

下午好，歡迎參加 BlackBerry 2023 財年第一季度業績電話會議。我的名字是布倫特，我將擔任今天電話會議的主持人。 （操作員說明）。

As a reminder, this conference is being recorded for replay purposes. I would now like to turn today's call over to Tim Foote, Vice President of BlackBerry Investor Relations. Please go ahead.

提醒一下，正在錄製本次會議以供重播。我現在想將今天的電話轉給黑莓投資者關係副總裁 Tim Foote。請繼續。

Thank you, Brent. Good afternoon, and welcome to Blackberry's First Quarter Fiscal 2023 Earnings Conference Call. With me on the call today are Executive Chair and Chief Executive Officer, John Chen; and Chief Financial Officer, Steve Rai. After I read our cautionary note regarding forward-looking statements, John will provide a business update, and Steve will review the financial results. We will then open the call for a brief Q&A session. This call is available to the general public via call-in numbers and via webcast in the Investor Information section at blackberry.com. A replay will also be available on the blackberry.com website.

謝謝你，布倫特。下午好，歡迎參加 Blackberry 2023 財年第一季度收益電話會議。今天與我通話的還有執行主席兼首席執行官 John Chen；和首席財務官 Steve Rai。在我閱讀我們關於前瞻性陳述的警示說明後，約翰將提供業務更新，史蒂夫將審查財務結果。然後，我們將打開電話進行簡短的問答環節。公眾可通過電話號碼和 blackberry.com 的“投資者信息”部分的網絡廣播向公眾提供此電話。 blackberry.com 網站上也將提供重播。

Some of the statements we'll be making today constitute forward-looking statements and are made pursuant to the safe harbor provisions of applicable U.S. and Canadian securities laws. We'll indicate forward-looking statements by using words such as expect, will, should, model, intend, believe and similar expressions. Forward-looking statements are based on estimates and assumptions made by the company in light of its experience and its perception of historical trends, current conditions and expected future developments as well as other factors that the company believes are relevant. Many factors could cause the company's actual results or performance to differ materially from those expressed or implied by the forward-looking statements. These factors include the risk factors that are discussed in the company's annual filings and MD&A. You should not place undue reliance on the company's forward-looking statements.

我們今天將做出的一些陳述構成前瞻性陳述，並且是根據適用的美國和加拿大證券法的安全港條款做出的。我們將使用諸如期望、將、應該、模型、打算、相信和類似的表達方式來表明前瞻性陳述。前瞻性陳述是基於公司根據其經驗和對歷史趨勢、當前狀況和預期未來發展的看法以及公司認為相關的其他因素做出的估計和假設。許多因素可能導致公司的實際結果或業績與前瞻性陳述中明示或暗示的結果或業績存在重大差異。這些因素包括公司年度申報和 MD&A 中討論的風險因素。您不應過分依賴公司的前瞻性陳述。

Any forward-looking statements are made only as of today, and the company has no intention and undertakes no obligation to update or revise any of them, except as required by law. As is customary during the call, John and Steve will reference non-GAAP numbers in their summary of our quarterly results. For a reconciliation between our GAAP and non-GAAP numbers, please see the earnings press release published earlier today, which is available on the EDGAR, SEDAR and blackberry.com websites. And with that, I'll turn the call over to John.

任何前瞻性陳述僅在今天作出，公司無意且不承擔更新或修改任何前瞻性陳述的義務，除非法律要求。按照電話會議的慣例，約翰和史蒂夫將在他們的季度業績摘要中引用非公認會計準則數字。有關我們的 GAAP 和非 GAAP 數字之間的核對，請參閱今天早些時候發布的收益新聞稿，該新聞稿可在 EDGAR、SEDAR 和 blackberry.com 網站上找到。有了這個，我會把電話轉給約翰。

Thanks, Tim. Good afternoon, everybody, and thanks for joining the call. I must first apologize. After speaking for 2 days, because we had our AGM and Board meeting, my throat is a little sketchy. So I apologize for that.

謝謝，蒂姆。大家下午好，感謝您加入電話會議。我必須先道歉。講了兩天后，因為我們有年度股東大會和董事會會議，我的喉嚨有點粗略。所以我為此道歉。

Anyway, this quarter, we built on the momentum from fiscal '22 and continue to execute it well, delivering solid year-over-year revenue growth. Total Software and Services revenue was $164 million, representing a 9% year-over-year.

無論如何，本季度，我們在 22 財年的勢頭基礎上繼續保持良好的執行力，實現了穩健的同比收入增長。軟件和服務總收入為 1.64 億美元，同比增長 9%。

Let me first start my review today with the IoT business unit. Despite a tough macro environment for auto, we delivered revenue of $51 million, which represents 19% year-over-year growth. Gross margin came in at 84%. IoT ARR was $94 million, increasing 9% year-over-year. We recorded strong revenue from preproduction development seats and professional services, setting yet another quarterly record for the third quarter in a row. As you know, this is not only a positive for the current year, but also a strong indicator of future revenue once the design enter into production.

讓我首先從物聯網業務部門開始我今天的回顧。儘管汽車的宏觀環境艱難，但我們實現了 5100 萬美元的收入，同比增長 19%。毛利率為 84%。物聯網 ARR 為 9400 萬美元，同比增長 9%。我們記錄了來自預生產開發座位和專業服務的強勁收入，連續第三個季度再創季度記錄。如您所知，這不僅是對本年度的利好，也是設計投入生產後未來收入的有力指標。

Our strength in securing new design wins have driven a year-over-year increase in our royalty revenue backlog, which is now at approximately $560 million, 5-6-0, a 14% increase from a year ago. Further, the number of vehicles with QNX Software embedded has increased year-over-year from over $195 million to over $215, 2-1-5, million.

我們在獲得新設計勝利方面的實力推動了我們的特許權使用費積壓收入同比增長，目前約為 5.6 億美元，5-6-0，比一年前增長 14%。此外，嵌入 QNX 軟件的車輛數量逐年增加，從超過 1.95 億美元增加到超過 215、2-1-5 百萬美元。

I'm pleased with the strength of our design wins, once again allow us to overcome the impact of the headwind that the auto industry is currently facing. These headwinds include COVID-related lockdowns in China, supply chain issues, the Ukraine war, inflation and rising interest rates.

我很高興我們的設計勝利，再次讓我們克服汽車行業目前面臨的逆風的影響。這些不利因素包括中國與 COVID 相關的封鎖、供應鏈問題、烏克蘭戰爭、通貨膨脹和利率上升。

On the supply chain front, the situation appears to be showing some signs of stabilization. While the economic issues will impact the overall auto market, demand for higher-end models and electric vehicle appears to be holding up.

在供應鏈方面，情況似乎顯示出一些穩定的跡象。儘管經濟問題將影響整個汽車市場，但對高端車型和電動汽車的需求似乎依然存在。

As mentioned, QNX continued to perform well in terms of securing new design wins. In the quarter, we gained a total of 14 new design wins with 9 in auto and 5 in the general embedded market. We are a market leader in ADAS, advanced driver assist, that is, and Digital Cockpits, both fast-growing safety-critical domains. In fact, Strategy Analytics, a leading independent auto analyst, estimate a 3-year CAGR for ADAS market to be 29% and Digital Cockpit to be 40%. And within those domains, we plan to grow even faster than that as we continue to win market share.

如前所述，QNX 在確保新設計獲勝方面繼續表現良好。本季度，我們共獲得 14 項新設計大獎，其中 9 項在汽車領域，5 項在通用嵌入式市場。我們是 ADAS、高級駕駛輔助和數字駕駛艙的市場領導者，這兩個領域都是快速增長的安全關鍵領域。事實上，領先的獨立汽車分析師 Strategy Analytics 估計，ADAS 市場的 3 年復合年增長率為 29%，數字駕駛艙為 40%。在這些領域內，隨著我們繼續贏得市場份額，我們計劃以更快的速度增長。

In the quarter, we had a number of large design wins in Digital Cockpit. In addition to wins with leading Tier 1 Bosch and Visteon, we secured a win with a global automaker based in North America as well as BICV, a leading Chinese Tier 1 for an augmented reality, AI and hologram-enabled Digital Cockpit to be deployed in Renault (inaudible) latest fully electric sedan. That's quite a bit of technology. Furthermore, despite lockdown challenges, we were able to secure a number of new design wins with major Chinese automakers, including autonomous drive design with Great Wall Motor and others.

在本季度，我們在數字駕駛艙中獲得了多項大型設計勝利。除了贏得領先的 1 級博世和偉世通，我們還贏得了一家位於北美的全球汽車製造商以及 BICV，這是中國領先的 1 級增強現實、人工智能和全息數字駕駛艙，將部署在雷諾（聽不清）最新的全電動轎車。這是相當多的技術。此外，儘管面臨封鎖挑戰，我們還是能夠與中國主要汽車製造商取得多項新設計的勝利，包括與長城汽車等公司的自動駕駛設計。

Outside of auto, this quarter our QNX Hypervisor -- sorry, QNX Hypervisor, was precertified by the independent auditor at TÜV Rheinland to the highest level of safety for medical device software. We continue to make progress in medical design wins. And a good example in the quarter was for a dialysis machine with a major technology customer base in India.

在汽車之外，本季度我們的 QNX 管理程序——抱歉，QNX 管理程序，已由 TÜV Rheinland 的獨立審計員預先認證為醫療設備軟件的最高安全級別。我們繼續在醫療設計方面取得進展。本季度的一個很好的例子是在印度擁有主要技術客戶群的透析機。

Let me now provide you with an update on the progress we're making with IVY. As previously mentioned, we have received more proof-of-concept or POC trial requests than we could currently handle, and we continue to receive more. This is a strong indicator that IVY is a product with the right strategy, in the right place at the right time. In the quarter, we commenced a number of POCs, which include leading global automakers and Tier 1s. Engagement so far has been positive and some of the learnings are helping guide our product development. Product development is advancing well, and our June release now supports an even wider range of sensors and hardware.

現在讓我向您介紹我們在 IVY 方面取得的最新進展。如前所述，我們收到的概念驗證或 POC 試用請求比我們目前所能處理的要多，而且我們將繼續收到更多。這是一個強有力的指標，表明 IVY 是一款具有正確策略的產品，在正確的時間出現在正確的地點。在本季度，我們啟動了多項 POC，其中包括全球領先的汽車製造商和一級供應商。到目前為止，參與度一直是積極的，其中一些經驗正在幫助指導我們的產品開發。產品開發進展順利，我們 6 月發布的版本現在支持更廣泛的傳感器和硬件。

We are also progressing well with developers' tools. Progress is also being made of the application ecosystem side, and we currently engage with multiple potential partners. These partners enable a wide variety of exciting use cases, including AI-driven battery management, predictive maintenance and user-based insurance just to name a few. And a number of them are being considered for inclusion in the current POCs. Overall, we continue to be excited by the potential opportunity for IVY and are pleased with our progress this quarter.

我們在開發者工具方面也進展順利。應用生態系統方面也正在取得進展，我們目前正在與多個潛在合作夥伴進行接觸。這些合作夥伴支持各種令人興奮的用例，包括 AI 驅動的電池管理、預測性維護和基於用戶的保險等等。其中一些正在考慮納入當前的 POC。總體而言，我們繼續對 IVY 的潛在機會感到興奮，並對我們本季度的進展感到滿意。

Now moving on to cybersecurity. This was a solid quarter for the cybersecurity business unit. Revenue came in at $113 million, 1-1-3, a 6% growth year-over-year. Buildings on a total contract value basis was $89 million, a 16% year-over-year increase. Gross margin was 53%, ARR was 3-3-4, $334 million, dollar-based net retention rate was 88%. This number, of course, does not include new logo wins nor certain perpetual license wins in government. With the elevated cyber threat levels, we see a strong demand environment at present.

現在轉向網絡安全。對於網絡安全業務部門來說，這是一個穩健的季度。收入為 1.13 億美元，1-1-3，同比增長 6%。建築總合同價值為 8900 萬美元，同比增長 16%。毛利率為 53%，ARR 為 3-3-4，3.34 億美元，基於美元的淨保留率為 88%。當然，這個數字不包括新徽標的獲得，也不包括政府獲得的某些永久許可。隨著網絡威脅級別的提高，我們目前看到了強勁的需求環境。

Given this backdrop, we continue to invest in go to market. In the quarter, we added net new -- net direct quarter carrying headcount. We are pleased with how these additions to the team are ramping up. And of course, it will take a few quarters for them to reach full productivity.

在這種背景下，我們繼續投資上市。在本季度，我們增加了淨新 - 淨直接季度攜帶人數。我們很高興團隊中的這些新成員正在增加。當然，他們需要幾個季度才能達到完全的生產力。

During the past quarter, we also expanded our channel presence. We added Midis Group, a partner with over 5,000 employees and a presence in over 70 countries across the Middle East, Europe and Africa. This significantly expand our reach in those markets. Midis brings a lot of experience in cyber, having been distributed with McAfee, Symantec and Trend Micro which also made a number of enhancements to our managed service -- managed security service provider or MSSP program.

在上個季度，我們還擴大了渠道影響力。我們增加了 Midis Group，這是一個擁有 5,000 多名員工的合作夥伴，業務遍及中東、歐洲和非洲的 70 多個國家/地區。這顯著擴大了我們在這些市場的影響力。 Midis 帶來了豐富的網絡經驗，已與 McAfee、Symantec 和 Trend Micro 一起分發，這也對我們的託管服務 - 託管安全服務提供商或 MSSP 計劃進行了許多增強。

As growth in our Guard MDR solution has shown, this is a very large demand -- there's a very large demand for managed service in cybersecurity and MSSP allow us to greatly scale out our go-to-market. During the quarter, we secured a number of new logo wins, mainly displacing legacy vendors. The legacy vendors market remains a very large opportunity for BlackBerry, and we have been running a number of targeted campaigns. In particular, this quarter, we saw a number of customers move from a (inaudible) sorry, to CylancePROTECT.

正如我們 Guard MDR 解決方案的增長所表明的那樣，這是一個非常大的需求——網絡安全領域對託管服務的需求非常大，而 MSSP 使我們能夠大大擴展我們的市場。在本季度，我們贏得了一些新的標誌，主要是取代了傳統供應商。傳統供應商市場對黑莓來說仍然是一個非常大的機會，我們一直在開展一些有針對性的活動。特別是，本季度，我們看到許多客戶從（聽不清）抱歉轉向 CylancePROTECT。

CylancePROTECT works very well in this context and its lightweight agent is both quick and easy to deploy. We continue to compete head-to-head and win against other next-gen cyber players. A good example of a win this past quarter was of a major U.S.-based medical industry customer with deployments of tens of thousands of endpoints in a direct head-to-head competition against cloud strength. The customers select BlackBerry because they were impressed by the effectiveness of our product, especially against the Log4j and Coveris as well as our high level of customer service.

CylancePROTECT 在這種情況下工作得很好，它的輕量級代理既快速又易於部署。我們將繼續與其他下一代網絡玩家正面交鋒並取勝。上個季度獲勝的一個很好的例子是美國一家主要的醫療行業客戶部署了數万個端點，與雲實力進行了直接的正面競爭。客戶之所以選擇 BlackBerry，是因為他們對我們產品的有效性印象深刻，尤其是對 Log4j 和 Coveris 以及我們高水平的客戶服務。

Our cyber products received further external validation in a recent minor attack evaluations. Our cyber suite of solution was 100% successful in preventing both a (inaudible) and sandworm attacks very early in each scenario and critically before any damages occurred.

我們的網絡產品在最近的一次輕微攻擊評估中獲得了進一步的外部驗證。我們的網絡解決方案套件在每個場景中很早就並且在任何損害發生之前都能夠 100% 成功地防止（聽不清）和沙蟲攻擊。

Let me now provide an update for UEM. This quarter, we secured renewal with some of our largest customers, including the U.S. Air Force, U.S. Navy, U.S. Special Ops Command, the Canadian Senate, the Supreme Court of Canada and the Royal Canadian Mint. We booked a great amount of business with law enforcement agency in the quarter, such as with the U.K. Serious Fraud Office, the London and Manchester Police Services as well as the Vancouver Police Department. We were pleased to both increase the number of UEM license and deploy additional products to these customers.

現在讓我提供有關 UEM 的更新。本季度，我們與一些最大的客戶達成了續約，包括美國空軍、美國海軍、美國特種作戰司令部、加拿大參議院、加拿大最高法院和加拿大皇家鑄幣廠。我們在本季度與執法機構預訂了大量業務，例如英國嚴重欺詐辦公室、倫敦和曼徹斯特警察局以及溫哥華警察局。我們很高興能夠增加 UEM 許可證的數量並為這些客戶部署額外的產品。

In addition to government, we secure, renew and upsell a number of leading financial services customers, including leading banks MUFG -- I believe they are the largest Japanese bank. Mizuho and Sumitomo Mitsui Banking Corporation, 3 of the large Japan's 4 largest banks.

除了政府之外，我們還獲得、續訂和追加銷售許多領先的金融服務客戶，包括領先的銀行 MUFG——我相信他們是日本最大的銀行。瑞穗和三井住友銀行，日本4大銀行中的3家。

Switzerland's Julius Baer Group, First Citizens Bank and Liberty Bank in the United States as well as other leading banks in both Germany and Canada. As we mentioned previously, given the competitive market, we continue to strengthen our UEM product offering, and we're pleased to partner with Google to add support for enterprise running Chrome OS and Chrome browser, support that Microsoft Intune does not offer. According to IDC, Chrome OS recently overtook macOS as the #2 desktop OS with more than 10% market share, and Chrome is also the world's leading browser with approximately 70% market share.

瑞士的瑞士寶盛集團、美國的第一公民銀行和自由銀行以及德國和加拿大的其他領先銀行。正如我們之前提到的，鑑於競爭激烈的市場，我們將繼續加強我們的 UEM 產品供應，我們很高興與 Google 合作，增加對運行 Chrome OS 和 Chrome 瀏覽器的企業的支持，這是 Microsoft Intune 不提供的支持。根據 IDC 的數據，Chrome OS 最近以超過 10% 的市場份額超過 macOS 成為排名第二的桌面操作系統，Chrome 也是全球領先的瀏覽器，市場份額約為 70%。

The strength of our UEM offering continues to be recognized. And last month, IDC MarketScape named BlackBerry as a leader in UEM for the third year in a row. Among other items, they highlight a wide range of government and industrial security and compliance certification that BlackBerry UEM host. These certifications help BlackBerry maintain a strong position in core regulated markets.

我們 UEM 產品的優勢繼續得到認可。上個月，IDC MarketScape 連續第三年將黑莓評為 UEM 的領導者。除其他項目外，它們還重點介紹了 BlackBerry UEM 主持的廣泛的政府和工業安全與合規認證。這些認證幫助黑莓在受監管的核心市場中保持強勢地位。

And now a brief word about licensing. In the quarter, licensing revenue was $4 million, and gross margin was 50%. Earlier this month, we issued a press release updating the status of the proposed sale of the legacy portion of our patent portfolio. The buyer Catapult is working to secure their financing, and we look forward to the completion of the transaction. At the same time, as we are no longer under exclusivity with Catapult, we are free to explore new options as they come our way. We will provide more details as and when appropriate.

現在簡要介紹一下許可。本季度，許可收入為 400 萬美元，毛利率為 50%。本月早些時候，我們發布了一份新聞稿，更新了我們專利組合遺留部分的擬議出售狀態。買家 Catapult 正在努力確保他們的融資，我們期待交易的完成。同時，由於我們不再受 Catapult 的排他性，我們可以自由地探索新的選擇。我們將在適當的時候提供更多詳細信息。

Let me now hand over to Steve, who will provide additional color on our financial results for the quarter.

現在讓我交給史蒂夫，他將為我們本季度的財務業績提供額外的色彩。

Thank you, John. As usual, my comments on our financial performance this past quarter will be in non-GAAP terms, unless otherwise noted. Also, please refer to the supplemental table in the press release for the GAAP and non-GAAP details.

謝謝你，約翰。像往常一樣，除非另有說明，否則我對上一季度財務業績的評論將採用非公認會計原則。此外，有關 GAAP 和非 GAAP 詳細信息，請參閱新聞稿中的補充表格。

Total company revenue for the quarter was $168 million. First quarter total company gross margin was 63%. Our non-GAAP gross margin excludes stock compensation expense of $1 million. First quarter operating expenses were $132 million. Our non-GAAP operating expenses exclude $23 million in amortization of acquired intangibles, $1 million of restructuring expenses, $165 million relating to a onetime litigation settlement of a matter dating back to 2013, $6 million in stock compensation expense and $46 million fair value gain on the convertible debentures.

本季度公司總收入為 1.68 億美元。第一季度公司總毛利率為63%。我們的非公認會計原則毛利率不包括 100 萬美元的股票補償費用。第一季度運營費用為 1.32 億美元。我們的非公認會計原則運營費用不包括 2300 萬美元的收購無形資產攤銷、100 萬美元的重組費用、與可追溯至 2013 年的一次性訴訟和解有關的 1.65 億美元、600 萬美元的股票補償費用和 4600 萬美元的公允價值收益可轉換債券。

This quarter, non-GAAP operating loss was $27 million and non-GAAP net loss was $31 million. The GAAP basic loss per share of $0.31 was primarily driven by the onetime impact of the litigation settlement. Non-GAAP loss per share was $0.05 in the quarter. Our adjusted EBITDA was negative $21 million, excluding the non-GAAP adjustments previously mentioned.

本季度，非美國通用會計準則運營虧損為 2700 萬美元，非美國通用會計準則淨虧損為 3100 萬美元。每股 0.31 美元的 GAAP 基本虧損主要是由於訴訟和解的一次性影響。本季度非 GAAP 每股虧損為 0.05 美元。不包括前面提到的非公認會計原則調整，我們調整後的 EBITDA 為負 2100 萬美元。

I will now provide a breakdown of our revenue in the quarter. Cybersecurity revenue was $113 million and IoT revenue was $51 million. Software product revenue remained in the range of 80% to 85% of the total, with professional services making up the balance. The recurring portion of software product revenue remains at approximately 80%. Licensing and other revenue was $4 million.

我現在將提供本季度收入的明細。網絡安全收入為 1.13 億美元，物聯網收入為 5100 萬美元。軟件產品收入佔總收入的比重保持在 80% 至 85% 之間，其中專業服務收入佔總收入的比重。軟件產品收入的經常性部分保持在大約 80%。許可和其他收入為 400 萬美元。

I'll now move to our balance sheet and cash flow performance. Total cash, cash equivalents and investments were $721 million as of May 31, 2022. Our net cash position was $356 million. Q1 is traditionally a seasonal high for use of cash given the payment of annual bonuses and other annual items, and together with the ongoing investment in the business, free cash usage was $43 million. Cash used by operations was $42 million and capital expenditures were $1 million.

我現在將轉到我們的資產負債表和現金流表現。截至 2022 年 5 月 31 日，現金、現金等價物和投資總額為 7.21 億美元。我們的淨現金頭寸為 3.56 億美元。鑑於支付了年度獎金和其他年度項目，第一季度傳統上是現金使用的季節性高峰，加上對業務的持續投資，自由現金使用量為 4300 萬美元。運營使用的現金為 4200 萬美元，資本支出為 100 萬美元。

That concludes my comments, and I'll now turn it back to John.

我的評論到此結束，我現在將其轉回給 John。

Thank you, Steve.

謝謝你，史蒂夫。

Before we commence our Q&A session, let me first provide a current year outlook. There's no change from our previous guidance. We continue to expect through fiscal year '23 revenue for the IoT business unit to be in the range of $200 million to $210 million, and revenue for the cybersecurity business unit to be broadly in line with the fiscal year '22, with about 8% to 12% year-over-year billings growth.

在我們開始我們的問答環節之前，讓我先提供一個今年的展望。我們之前的指導沒有變化。我們繼續預計 23 財年物聯網業務部門的收入將在 2 億美元至 2.1 億美元之間，網絡安全業務部門的收入將與 22 財年大致持平，約為 8%比去年同期增長 12%。

I'd like to thank everybody who attended our recent Analyst Day. I think it was May 12. For those who were able to join, we provided a 3- and 5-year revenue target for BlackBerry. We expect the total company revenue, excluding the IVY, to grow with a 5-year CAGR of approximately 13% with revenue of $886 million in FY '25 and $1.2 billion in FY '27.

我要感謝所有參加我們最近的分析師日的人。我想是 5 月 12 日。對於那些能夠加入的人，我們為黑莓提供了 3 年和 5 年的收入目標。我們預計公司總收入（不包括常春藤）將以約 13% 的 5 年復合年增長率增長，25 財年收入為 8.86 億美元，27 財年收入為 12 億美元。

Breaking this down by business unit, while the IoT TAM is expected to grow in the range of 8% to 12% over the next 3 years, we expect to grow IoT revenue at a 5-year CAGR of approximately 20%. This doubled the industry growth rate. This faster than market growth rate is primarily driven by the market share gain in our core safety critical auto domains.

按業務部門細分，雖然物聯網 TAM 預計在未來 3 年內增長 8% 至 12%，但我們預計物聯網收入將以 5 年復合年增長率約為 20% 的速度增長。這使行業增長率翻了一番。這一高於市場的增長率主要是由我們核心安全關鍵汽車領域的市場份額增加所推動的。

In addition to auto, we also expect growth from adjacent verticals, particularly medical and industrial, broadening our addressable market. We estimate revenue in the FY '25 to be approximately $307 million and approximately $443 million in FY '27. This model is still -- is partially built on the multiyear revenue backlog from already confirmed designs and a line of sight to upcoming potential new design wins. It is important to note that these IoT targets do not include any revenue from IVY, which then becomes upside to the story.

除了汽車，我們還預計相鄰垂直行業的增長，特別是醫療和工業，擴大了我們的潛在市場。我們估計 25 財年的收入約為 3.07 億美元，27 財年約為 4.43 億美元。這種模式仍然 - 部分建立在已經確認的設計的多年收入積壓和即將到來的潛在新設計勝利的視線之上。需要注意的是，這些物聯網目標不包括來自 IVY 的任何收入，這對故事有利。

For cyber, given the strong market condition, our technology portfolio and the road map, we expect revenue to grow with a 5-year CAGR of approximately 10%. The cyber business unit includes both the more mature endpoint management products as well as the higher growth endpoint security products. We target cybersecurity revenue of $579 million in FY '25 and $770 million in FY '27. We expect operating leverage for the business, expanding gross margin by over 100 basis points per year on average and trending towards our 20% operating margin by FY '27. Given the investment we're making, we expect moderately negative EPS and cash flow this current fiscal year, approximately -- approaching EPS and cash flow breakeven in FY '24 and becoming EPS and cash flow positive from FY '25 onwards.

對於網絡，鑑於強勁的市場狀況、我們的技術組合和路線圖，我們預計收入將以 5 年復合年增長率約為 10% 的速度增長。網絡業務部門包括更成熟的端點管理產品以及更高增長的端點安全產品。我們的目標是 25 財年的網絡安全收入為 5.79 億美元，27 財年為 7.7 億美元。我們預計該業務的運營槓桿，平均每年將毛利率擴大 100 個基點以上，到 27 財年將趨向於 20% 的運營利潤率。鑑於我們正在進行的投資，我們預計本財年的每股收益和現金流量為適度負值，大約 - 接近 24 財年的每股收益和現金流盈虧平衡，並從 25 財年開始變為正的每股收益和現金流量。

We expect the 2 markets to converge and our position in both IoT and cybersecurity will place us in a very strong position to capitalize on these growing market trends.

我們預計這兩個市場將會融合，我們在物聯網和網絡安全方面的地位將使我們處於非常有利的地位，可以利用這些不斷增長的市場趨勢。

So let me summarize the key takeaway from the quarter. One, this was a good quarter where we delivered year-over-year revenue growth in both our IoT and Cyber business unit; two, we set another quarterly record for design activities in IoT, offsetting the impact of macro headwinds on auto production; three, on the cyber side, we recorded solid double-digit billings growth and continue to make progress in expanding our market reach.

因此，讓我總結一下本季度的主要收穫。第一，這是一個不錯的季度，我們的物聯網和網絡業務部門的收入都實現了同比增長；二是物聯網設計活動再創季度記錄，抵消了宏觀逆風對汽車生產的影響；三，在網絡方面，我們錄得兩位數的穩健增長，並在擴大我們的市場範圍方面繼續取得進展。

One final point. This quarter, we released our first ESG report with highlights including BlackBerry achieving carbon neutrality. For those who haven't seen it yet, a copy can be downloaded from our website.

最後一點。本季度，我們發布了第一份 ESG 報告，其中包括黑莓實現碳中和等亮點。對於那些還沒有看過的人，可以從我們的網站下載一份副本。

That concludes my remarks. Brent, can you please open the line for Q&A?

我的發言到此結束。布倫特，你能打開問答熱線嗎？

(Operator Instructions) Your first question comes from the line of Paul Treiber with RBC Capital Markets.

（操作員說明）您的第一個問題來自 RBC Capital Markets 的 Paul Treiber。

First question, can you connect the dots between -- in the cyber business between the decline in ARR versus the very healthy billings growth in the quarter. And more specifically, was there any contribution from perpetual license like SecuSUITE in the quarter?

第一個問題，您能否在網絡業務中將 ARR 下降與本季度非常健康的賬單增長之間的點聯繫起來。更具體地說，像 SecuSUITE 這樣的永久許可證在本季度是否有任何貢獻？

Yes. Actually, your second question answers somewhat partially the first question. We had a good SecuSUITE quarter selling to the government and it's perpetual because of the way the government purchase the technology. And so that did not fully reflect it obviously, and it cannot be reflected on the ARR. There was some minor churn for the UEM mid-market, which we have identified last quarter. So the combination of those 2 explain the delta.

是的。實際上，您的第二個問題在某種程度上回答了第一個問題。我們有一個很好的 SecuSUITE 季度向政府銷售，並且由於政府購買技術的方式，它是永久性的。所以這顯然沒有完全反映，也不能反映在 ARR 上。 UEM 中端市場出現了一些輕微的流失，我們在上個季度已經確定了這一點。所以這兩者的結合解釋了增量。

That's helpful. And second question, just on the patent sale, and not so much in the details you mentioned you can't disclose -- obviously, negotiations are ongoing. But if the sale doesn't go through and you don't find a third party. I mean, would you revert back to IP licensing? Or are you -- you're definitely going to go through with the sale. You just have to find the right buyer and the right price.

這很有幫助。第二個問題，只是關於專利銷售，而不是你提到的你不能透露的細節——顯然，談判正在進行中。但是，如果銷售沒有通過並且您找不到第三方。我的意思是，你會恢復 IP 許可嗎？或者你是 - 你肯定會完成銷售。你只需要找到合適的買家和合適的價格。

I believe for simplicity of our company's story and the focus, we should find a buyer, and I believe we will find a buyer. But we will not shy away from monetizing ourselves. We do have our team standby and ready. So -- but my first priority is a secure buyer. And there has been other people that have approached, but I still believe that Catapult will get it done.

我相信為了我們公司的故事和重點的簡單性，我們應該找到買家，我相信我們會找到買家。但我們不會迴避將自己貨幣化。我們確實有我們的團隊待命並準備就緒。所以 - 但我的首要任務是安全的買家。還有其他人已經接近，但我仍然相信 Catapult 會完成它。

Your next question is from the line of Trip Chowdhry with Global Equities.

您的下一個問題來自 Trip Chowdhry with Global Equities。

Always exciting to hear about IVY. 2 questions I have. First is regarding the chip supply position. Do you think because of the depression in cryptos, some chip capacity may have been released and that may be easing out the chip shortage that automotive industry is facing. Are you seeing something to that effect?

聽到關於常春藤的消息總是令人興奮。我有2個問題。首先是關於芯片供應位置。您是否認為由於加密貨幣的蕭條，可能已經釋放了一些芯片產能，這可能會緩解汽車行業面臨的芯片短缺問題。你看到有這種效果嗎？

Seeing the chip shortages. So I think it's the fact that crypto currency is currently depressed, does that free up chips?

看到芯片短缺。所以我認為這是加密貨幣目前低迷的事實，這會釋放籌碼嗎？

I am not I'm not good enough to answer your question there, Trip. I'm not a big crypto fan. I got you. So I don't follow that very closely. I know it's very depressed at this point. And I don't know the relationship with that. I'm sure there are some with the chip shortages issue. So sorry, I can't answer that question.

我不是我不夠好，無法在那裡回答你的問題，特里普。我不是加密貨幣的忠實粉絲。我接到你了。所以我沒有密切關注這一點。我知道在這一點上它非常沮喪。我不知道這與它的關係。我敢肯定有一些芯片短缺的問題。很抱歉，我無法回答這個問題。

Second question I had is regarding the IVY platform, and it's -- and you're getting insurance -- auto insurers on top of it. I was wondering what kind of use cases can you think about that can evolve over a period of time? And that's all from me.

我遇到的第二個問題是關於 IVY 平台的，它是——而且你正在獲得保險——汽車保險公司在它之上。我想知道你能想到什麼樣的用例可以在一段時間內發展？這就是我的全部。

That's a very good question. I -- so we have, in our partnership, at least one if not two organization as specialized this area -- in the insurance area, for example. The big thing about the insurance area with auto is pay-as-you-go kind of a usage-based insurance model. And then the other one is a redefinition of how the insurance -- kind of related to the first one, how they were calculated and it's particularly more meaningful in the fleet management side of the equation. So other use cases, there's a lot of use cases in IVY or IVY could host a lot of use cases. Of course, we told you guys about battery management. The whole area of predictive maintenance are huge. And every OEM will want to get their hands around the trader, around the actions that could generate, whether it's physically or over-the-air update. So we're seeing a lot of interest of a lot of different use cases and auto as a wallet, there's also a lot of financial technology around it. And so this exciting time for IVY.

這是一個非常好的問題。我——因此，在我們的合作夥伴關係中，至少有一個（如果不是兩個）組織專門從事這一領域——例如，在保險領域。汽車保險領域最大的特點是現收現付的一種基於使用的保險模式。然後另一個是對保險的重新定義——與第一個保險有關，它們是如何計算的，這在等式的車隊管理方面特別有意義。所以其他用例，IVY 中有很多用例，或者 IVY 可以承載很多用例。當然，我們向你們介紹了電池管理。預測性維護的整個領域是巨大的。並且每個 OEM 都希望了解交易者，了解可能產生的行為，無論是物理更新還是無線更新。因此，我們看到很多不同的用例和汽車作為錢包引起了很多興趣，周圍還有很多金融技術。所以這對 IVY 來說是激動人心的時刻。

(Operator Instructions)

（操作員說明）

Your next question comes from the line of Todd Coupland with CIBC.

您的下一個問題來自與 CIBC 的 Todd Coupland。

I had a couple of questions. First on IoT. You talked about how you're seeing the supply chain ease. Could you just talk about what you're seeing that's changed since you gave the last update.

我有幾個問題。首先是物聯網。您談到了您如何看待供應鏈的簡化。您能否談談自上次更新以來您所看到的變化。

Yes. On the supply chain side, the OEMs around the world, they finally have a good strategy. And then as each of them has their own strategy, but I see it more suited to high-end cars being built, that they are able to manage their supply chain issue and build and release cars that hold more value to them. So high-end car being built, of course, there is a constant demand of electric vehicle particularly given today's environment with a the gas price and the environment. So -- and the good thing about us is QNX is typically embedded in the high-end cars more so than the lower-end models. And in addition to that, we have a strong footprint, 24 of the top 25 production volume producer, they're users QNX of the EV that is of the electric vehicle world. So as sales volume goes up, although still a small percentage of total vehicles sold, I think it's like 12% right now, that we're seeing the volume uptick. So it's -- it's a good trend for us.

是的。在供應鏈方面，世界各地的主機廠，他們終於有了一個好的戰略。然後因為他們每個人都有自己的戰略，但我認為它更適合正在製造的高端汽車，他們能夠管理他們的供應鏈問題並製造和發布對他們更有價值的汽車。如此高端的汽車正在製造，當然，尤其是考慮到當今的環境以及汽油價格和環境，對電動汽車的需求是不斷的。所以——我們的好處是 QNX 通常嵌入在高端汽車中，而不是低端車型。除此之外，我們擁有強大的足跡，前 25 大生產商中有 24 家是電動汽車世界的 EV 的用戶 QNX。因此，隨著銷量的增加，雖然在總銷量中仍然佔很小的比例，但我認為現在大約有 12%，我們看到銷量在增加。所以它 - 這對我們來說是一個很好的趨勢。

But it's -- I guess it's not material enough to move the IoT guide for the year.

但它 - 我想這還不足以推動今年的物聯網指南。

No, no, because there is a headwind. We had a little delay on some of the stuff when China has a lockdown because of COVID. And then, of course, now, as you all read, and you guys probably know this very well, that the interest rate uptick is causing a little bit of a demand slowdown for new vehicle purchases. And so those are all factors that we still need to confront with. And so our strategy is we see a strong design win rate. We're winning a lot of new design win and they typically come with license, developer license and some professional services revenue. We're strong enough in those areas that covers the shortfall on production or slowdown of production if there is any. So we believe that our guidance is still good. And I hope I'm wrong on the conservative side. But I think our guidance is still good. And there's a mix shifted a little bit.

不，不，因為有逆風。當中國因新冠疫情而封鎖時，我們在一些事情上稍有延遲。然後，當然，現在，正如你們所讀到的，你們可能很清楚這一點，利率上升導致新車購買需求略有放緩。所以這些都是我們仍然需要面對的因素。所以我們的策略是我們看到一個強大的設計勝率。我們贏得了很多新設計的勝利，它們通常伴隨著許可證、開發者許可證和一些專業服務收入。我們在那些彌補生產不足或生產放緩（如果有的話）的領域足夠強大。所以我們相信我們的指導還是不錯的。我希望我在保守方面是錯誤的。但我認為我們的指導仍然很好。並且有一些變化。

Okay. That's helpful. And then my second question had to do on the cyber business. You talked about modest churn in SMBs. And you talked about that for a couple of quarters. What I was wondering is we're starting to see an enterprise staff being given auctions of BlackBerry UEM versus, let's say, a competitor. And I'm just wondering if you're seeing that in other enterprise. And does that give you some concern that the churn might bleed into larger businesses? Just talk about that trend.

好的。這很有幫助。然後我的第二個問題是關於網絡業務的。您談到了中小企業的適度流失。你談了幾個季度。我想知道的是，我們開始看到企業員工被拍賣黑莓 UEM 與比方說競爭對手。我只是想知道您是否在其他企業中看到了這一點。這是否讓您擔心流失可能會流入更大的企業？只談這個趨勢。

Yes. Currently, we haven't seen that. So this is important that we continue to work on our products and partnerships, which I talked about. So far, the UEM churn is usually in the nonregulated space and is a small -- more small, medium enterprise. So for the very large one, we have continuous renewal and particularly the government world. So no, I haven't seen that as a major trend at all. Even banks so far have been okay, knock on wood.

是的。目前，我們還沒有看到。因此，重要的是我們繼續致力於我們的產品和合作夥伴關係，我談到了這一點。到目前為止，UEM 流失通常是在不受監管的領域，並且是一家小型企業——更多的是中小型企業。因此，對於非常大的一個，我們不斷更新，尤其是政府世界。所以不，我根本沒有將其視為主要趨勢。到目前為止，即使銀行還不錯，敲木頭。

Your next question comes from the line of Daniel Chan with TD Securities.

您的下一個問題來自道明證券的 Daniel Chan。

Just wondering if you can provide some color on the drivers behind the 14% increase in the QNX backlog. Is that due to a recovery of production volumes, extension of some programs or higher ASP? Just any color on that would be helpful.

只是想知道您是否可以為 QNX 積壓增加 14% 背後的驅動因素提供一些顏色。是因為產量回升、某些項目的延期或更高的平均售價？上面的任何顏色都會有幫助。

Yes. It's the result of the design wins we've been telling you folks every quarter. And so we have a very strict guideline and formula of what get counted, what didn't get counted. And we're very conservative on that. But this is as a result of what the OEM told us that this is the volume you should expect in future years on the total program. And we sometimes do a discount on it, sometimes we took it as is. And so -- and it was accumulation of those offsetting obviously the runoff which is the -- which is the royalty we got in the last 12 months, and that results a 14% increase.

是的。這是我們每個季度都告訴你們的設計勝利的結果。所以我們有一個非常嚴格的指導方針和公式來計算什麼被計算在內，什麼沒有被計算在內。我們對此非常保守。但這是由於 OEM 告訴我們的，這是您在未來幾年對整個項目的預期數量。我們有時會打折，有時我們會照原樣接受。所以——顯然是那些抵消了徑流的人的積累——這是我們在過去 12 個月中獲得的版稅，結果增加了 14%。

Okay. That's helpful. And then I wanted to ask a question on the patent sale. You said you would explore options as they come in. I just want to know like whether you guys are actively looking for other options? Like are you actually going back to other bits you had in your initial process or are you starting from the beginning again?

好的。這很有幫助。然後我想問一個關於專利銷售的問題。你說你會在他們進來時探索選項。我只是想知道你們是否在積極尋找其他選擇？就像您實際上是要回到初始過程中的其他部分還是要從頭開始？

No, no. Not at all. In fact, we're being approached by others. I'm not actively looking for or starting from square one. As I said I want to make sure that the shareholder knows that we're not just stuck with one option, but we do expect to see, and we would like to see the previously announced deal with Catapult to happen. But what we're basically saying is we've been getting calls. And we are now responding to the calls because now the exclusivity has expired.

不，不。一點也不。事實上，我們正在被其他人接近。我不是在積極尋找或從第一方開始。正如我所說，我想確保股東知道我們不僅堅持一種選擇，而且我們確實希望看到，我們希望看到之前宣布的與 Catapult 的交易發生。但我們基本上說的是我們一直在接到電話。我們現在正在響應電話，因為現在排他性已經到期。

There are no further questions at this time. I would like to turn the call back over to Mr. John Chen, Executive Chair and CEO of BlackBerry for closing remarks.

目前沒有其他問題。我想將電話轉回給黑莓執行主席兼首席執行官 John Chen 先生的閉幕詞。

Thank you, Brent. Thank you, everybody, for joining us. I realize it's late back east. And looking forward to speaking with you all again soon. And have a good day -- have a good evening.

謝謝你，布倫特。謝謝大家加入我們。我意識到回到東方已經很晚了。並期待很快再次與大家交談。祝你有美好的一天——祝你有個美好的夜晚。

Ladies and gentlemen, this concludes today's call. Thank you for your participation. You may now disconnect.

女士們，先生們，今天的電話會議到此結束。感謝您的參與。您現在可以斷開連接。