BlackBerry updates on progress to separate IoT and Cybersecurity

BlackBerry Limited “provided an update on the previously announced process to separate its IoT and Cybersecurity businesses as standalone divisions, and drive the Company towards profitability and positive cash flow. As previously outlined, in the prior quarter BlackBerry took actions that, once fully realized, will reduce the annual cost run rate by approximately $50 million. These actions were largely focused on the Cybersecurity business and included approximately 200 headcount reductions. During the current quarter, BlackBerry is taking further actions to streamline its cost structure. Within the Cybersecurity business, additional headcount reductions are expected to generate annualized savings of approximately $27 million and non-headcount actions an incremental $8 million. Efficiencies have been identified in all functions, but in particular within cost of goods sold and research and development. Backed by solid, industry-typical levels of R&D investment, the Cybersecurity business is executing on its exciting product roadmap in a focused and efficient manner. Within G&A functions, actions are being taken during the current quarter to realize annualized run rate savings of approximately $20 million. As part of these savings, BlackBerry has exited 6 of its 36 global office locations, including San Ramon, California, which are expected to realize annualized savings of approximately $7 million. Other reductions in force are expected to realize annualized savings of approximately $13 million. Costs associated with these actions in the current quarter are expected to total approximately $12 million. In the current fiscal year, operating cash usage in Q2 was $56 million and improved significantly to $31 million in Q3. As previously outlined, BlackBerry expects a further sequential reduction in operating cash usage for the current, fourth quarter. Given the cost-reduction actions taken, as outlined above, and anticipated further operating efficiencies during FY25, BlackBerry expects to maintain a positive net cash position throughout the coming fiscal year, despite the first fiscal quarter being a seasonal low for cash, and to be operating cashflow positive by Q4 FY25.”