Okay, we'll go ahead and kick it off here. I'm Luke Junk. I cover vehicle technology and mobility for Baird. We're very pleased to have BlackBerry with us today. We'll be focusing most of today's discussion on the auto market, where the company software is used in over 225 million vehicles on the road today. Related results are reported in the company's IoT segment, where we had trailing twelve-month sales of just over $200 million. Joining us for the conversation today, we have John Wall, who's SVP and Head of BlackBerry QNX, and Tim Foote, Investor Relations and newly CFO of the company's cybersecurity segment as well. We do have 30 minutes for the conversation, so you can send any questions that you've got via the web portal, and I should be able to work those in. With that, we'll just jump right into the conversation. So, maybe to launch us off here, John, I introduced you as the SVP of BlackBerry QNX. Maybe if you can just expand on your role at BlackBerry to help frame the conversation today. Yeah, sure. Thank you, Luke. So yeah, so I'm responsible for engineering, I'm responsible for products, I'm responsible for engineering services, and basically the strategic direction of the company. While I'm not responsible for sales, I do spend a lot of time with the customers and with our salespeople traveling all over the world. So I guess you could also call me the chief evangelist of QNX. Good stuff. Well, with that, why don't we jump into the conversation? So maybe I think it makes sense to start big picture here. You know, clearly there's been some well-publicized software delays, other things that automakers are working through in the past couple of years. Just, John, how do you see the auto software market evolving in terms of, you know, given what's happened, OEMs doing it themselves versus partnering with the supplier like QNX? And what are customers telling you about their pain points that are causing these delays that we're seeing right now? Yeah, that's a great question. I think, you know, we've seen the evolution of the carmakers going from, you know, providing a specification to a Tier 1, getting a box back, putting that box in the vehicle. The box works or it doesn't work, Tier 1 accepts the liability and the warranties, to the carmakers now doing a lot more of that software integration within the vehicle. And to your point, we've seen that there's been challenges in the industry. There's been delays. I think we're at an inflection point within the industry. I think the automakers have had an opportunity to try their hand at this. I think there is some lesson learned that are very interesting that we see. You know, we have the privilege of working with almost every OEM in the world, whether it's in APAC, North America, or EMEA, and we're seeing very similar trends across all of them, and that is that most of the challenges exist at the low-level software. It's really the integration from several suppliers, including QNX, where they're struggling, and I think they've come to the conclusion that this is a layer of software that's perhaps not really differentiating to their brand. It doesn't contribute to features within the vehicle. It does from the perspective that it needs to work, but I think they're realizing that where they're spending some of their efforts is not really adding value to the brand. And so I think there's an opportunity, and I think there's a willingness now for more partnership with companies like QNX to maybe take on more, more of building out this software platform within the vehicle. Maybe there's a recognition that since this is non-differentiating software, that there's an opportunity maybe for OEMs to cooperate on this and to be able to build out a platform that'll allow them to go a lot faster on the features that they wanna provide to their customers. So again, keeping a bigger picture, we just think you mentioned this, you know, potential inflection point that we're seeing in the approach to software. Just what are you seeing right now in terms of RFQs and award activity, and just how is it translating real time into the business development environment for QNX? Yeah, I think there's a number of things that are very interesting. As I mentioned, I think there is a request for a more fulsome platform coming from a supplier. Obviously, QNX, being an operating system, is an ideal company to be doing this, but, I mean, they're reaching out to many companies to do this. But I believe we're in the best position to do it. We're also seeing a big move towards cloud development. During CES, we made an announcement with Stellantis, where Stellantis is doing a big part of their software development for what they call their digital cockpit, which is their, you know, infotainment system, cabin environment, and they're doing a lot of that development in the cloud. This is, you know, they're talking about efficiencies of 100 x of magnitude doing this approach. So we're seeing that this is becoming something very important. This is something QNX has invested in the last year. We have our operating system in the cloud, we have our hypervisor in the cloud, so we're supporting these activities. And we believe that this is another way that the OEMs and just software in general is going to be developed more in the cloud, which reduces a lot of complexity. Why don't we pivot? I think that's a great transition point to go a little more bottoms up here and actually talk about the software itself in terms of RTOS and hypervisor. Maybe if we could start right now, out in the market with QNX 8.0, just what should investors know about that release in terms of capability and performance? I think that you've said one of the markets that you're looking at is just trying to rival Linux in terms of performance capability. Is that right, John? Yeah, absolutely. So, you know, if we take a few years and we look at who our competitors are or were within this space, it would be the traditional RTOSs of the world, so the Green Hills, Wind River, PikeOS, et cetera. As we see higher performance compute come into the vehicle, now we're starting to see SoCs with 4 cores, 8 cores, 12 cores, 16 cores. So we're seeing a massive increase in the amount of compute power within the vehicle. QNX was always developed to be multi-core aware, so the existing product is multi-core aware. It scales very well on existing chipsets. But if you start to look into the future, where you're gonna see 12, 16, 32 cores, that's where we decided, "Okay, we're not scaling as well as Linux is with our current offering." So we spent three years doing some very, very deep surgery on the operating system. The premise was to not change the operating system from an interface perspective so that customers could easily migrate to this product, but to target Linux as the performance metrics that we believe we're competing with Linux these days. We're not competing with the traditional RTOSs from the past. And so we very much had Linux in mind from a performance metrics. Everything we did, all the measurements we did with our product, was all against what Linux could do. We're very happy to say, with SDP8, which is our latest operating system, we scale almost 1-to-1 as the core count increases, and this base puts us right in line with what Linux can do. Guys, everybody knows Linux is used in data centers, and it's used on big iron in the cloud. We're now able to provide that type of performance, so you're able to extract every ounce of power that you've paid for in your SoC. We're also able to do that while maintaining the highest level of functional safety and our security pedigree. We have that advantage that we have the functional safety certifications, that we can be used in the vehicle where life-critical situations are involved, accelerating, steering, braking, et cetera. And the important part is that our product portfolio is all built on that operating system, so the hypervisor is built on the operating system. The operating system for safety is built on the operating system. So it permeates through, that performance enhancement permeates through all our products. I think, another thing that is contemplated in the current release is containers. Is that right? And if so, can you expand on both the, maybe the software side of it for folks that may be not be as familiar with containers and then just what it means from a sort of a market appetite for that sort of application, John? Yeah, great. Yes, so containers is basically how workloads are managed in cloud environments. So people that are familiar with containers or familiar with Docker, which is a common container used with Linux, knows that's how workloads are managed. What a container allows you to do is it allows you to kinda create a mini environment for your applications while leveraging the underlying operating system. So a little bit different from virtualization. With virtualization, you're actually running an entire operating system in a guest that's virtualized, whereas with a container, you may be running a subset of different components of the operating system while leveraging the underlying kernel. So as a workload management, as we start thinking about SDV and the future of SDVs and how you're gonna be looking to bring dynamic workloads into the car and to be clear, we're not there yet. Cars are still very static, especially when it comes to safety systems. Containers become important on how you move those workloads, potentially from the cloud to the car, how you manage them. So one of the things that we did is we looked at the value of containers. First thing we wanted to do was make sure we kept common tooling. We didn't wanna create a whole new tool chain, so we're OCI compliant, which is the general tools that are out there used for Linux. So all those tools will apply. But what we have done is we're making sure that our containers are safety certified, functionally safety certified, so that we can guarantee freedom of interference of these containers of other systems within the vehicle. This is going to be very important when you start to think about dynamic workloads within the vehicle in mixed criticality. How do you manage new workloads? And this is really the nirvana of selling services to the vehicles. How can I take a vehicle that has an existing software platform, existing features, and be able to sell new features for within the vehicle that were not even contemplated when that vehicle was built? Being able to manage these workloads in a safe way is critical, and we believe containers and virtualization are gonna play a big part of doing that. What about actually getting this tech into the hands of customers? It was, I think, in January, they released or announced the general availability of the software development kit. I realize it's kinda early right now, but maybe if you can just speak to that opening up the opportunity set and sort of the initial engagement with customers. Yeah, I mean, we without going into specifics, we are already working with some silicon partners that have some pretty big iron coming out, you know, with the next iteration this year, and so they're already on board. We've enabled many, many customers, even before the launch of SDP 8.0, to get feedback. But in particular, we've worked with a couple of silicon partners that have some really high-performance systems that they're going to be rolling out in the next year, and the feedback has been really, really good. We have other design wins that we're in the process of securing this year, but this is an evolutionary move. This, you know, we can't really move people mid-program, you know? It's very difficult to, from mid-program, to say, "Hey, here's a whole new software platform that, for you." Even though it's very similar, it's risky. So it's really going to be for the evolution of the next two to three years of the programs we're gonna start winning from this point forward. And then in, you know, in terms of how customers engage with your product, you talked a little about QNX in the cloud. One of the things that you announced at CES this year is also the QNX Hypervisor being available in the cloud. And just, can we talk about what that means? And I think you've also said that it's POSIX compliant, so if you can just double-click on that from a development standpoint as well, John. The first iteration that we did is we put the operating system in the cloud, and, you know, we've had many customers using that for testing, for some development. Getting the hypervisor in the cloud has been very pivotal because the first—what we're seeing from our customers is some of the first development that they really wanna do in the cloud is the digital cockpit. So we've enabled that by providing our hypervisor in the cloud. Our hypervisor is an extension of the operating system. It's exactly the same as our operating system, but it has virtualization extensions. So what we've done specifically is not just provide the hypervisor in the cloud, we provided the hypervisor in the cloud, but also with an Android integration. So we've been working very closely with Google to provide a VirtIO interface to Android, which basically means it's a standardized interface to how Android talks to the hardware. So we create these VirtIO shared frameworks that allows graphics to be shared, audio to be shared, all the different peripherals of the system to be shared. So we provided that. We've provided sound, we've provided graphics, we've provided input, USB. So we're providing all kind of the foundation for building a digital cockpit in the cloud, and now the customer can take this, and they can skin it and add whatever flavor they wanna add for their use. But they have almost, they have a fully almost binary-compatible image of what they wanna build in the car, in the cloud. And if you saw that press release from Stellantis that we did during CES, you know, the speed that they claim that they can gain by doing this is enormous, and we're getting a lot of interest in this. I think the hypervisor has been pivotal to being able to enable that environment in the cloud, and it also allows us to provide much more of an experience. We have a product now called QNX Sound that provides acoustics as well as branded audio. These are all things that you can prototype now in the cloud. Bringing it back, a little near term, in terms of current trends, maybe John or Tim for this question. So, you've given some additional disclosure. I think it's just helpful to understand where the IoT business and where QNX is right now. You know, historically speaking, you've spoken to the idea that royalty should be about 60% of revenue in IoT, but right now it's actually around 44%. That would imply that there's a significant amount of development work ongoing right now. Can you just talk about what that means for the near-term opportunity for QNX royalties that come over the next, I don't know, 12-18 months, maybe? Yeah, great question, Luke. So I think we've said a few times, and particularly at last earnings, I mean, we're very close to the end of this quarter, so I'm not gonna comment in any way, shape, or form on this current quarter. But where we've pivoted, the stuff that John's been outlining, which all these secular trends of greater penetration into cars, greater number of cars that are accessible or addressable to QNX, and the fact that we're selling greater number of layers of software in each of the domains that we address, means that design wins are becoming progressively larger. And we saw last year that our backlog number, which, as a reminder, a lot of people are probably familiar with, but the backlog relates purely to the royalty element. So you outlined there that typically that's around about 60% of the revenue. That piece, the backlog for that, was growing around about 20% year-on-year on a full year basis. So that's clearly growing very well. But right now, we're over-indexing on the early-stage revenue because these designs get bigger. So in isolation, each of these new designs kind of roughly follows that traditional pattern, but we just got a lot more of them in the early stage right now. So to your point, as a leading indicator, the fact that we are currently skewed towards the early-stage revenue means that in the fullness of time, some of these larger designs will move into production, and then we'll start to see the royalties come online. So it feels like this is not a quarter-to-quarter business. There will be some volatility, particularly because the revenue right now is so heavily skewed to those early-stage revenues, which are a bit more lumpy, Luke. You'll see a little bit of that, but it's all pointing in the right direction for the longer term. Well, yeah, speaking of that longer term, and I wanna leave some time for IVY and some overall dynamics in the business as well, but maybe just to put a finer point on the discussion around QNX, just, John, I'd be curious to get your updated view, given this inflection that you're seeing right now in terms of how customers are ultimately approaching software and vehicle. Just how far QNX can go from your point of view in the car as an OS for compute, as a, you know, just trends to a more centralized state overall in vehicle? Yeah, I think that, you know, when I talk about the inflection point, I see a large opportunity for QNX. And I think the opportunity is to offer more layers of software and to actually get to what you would call a vehicle OS. You know, we've hesitated to talk about that because we're just one supplier amongst many. You know, a very important one because we're the, you know, we're the interface to the chip. We're the operating system, kind of the buck stops with us, and I think that that is the opportunity. I think the OEMs that we've been able to work with directly have recognized the value that we bring and recognized the expertise. And also our positioning, you know, the way, the way we look at, at BlackBerry and QNX is we kind of look at ourselves as being Switzerland. You know, we're not associated with anybody that's competing with any of our customers. You know, unlike when we were. When QNX was owned by Harman, we were owned by Tier 1, so trying to sell to other Tier 1s was challenging. So we're, we're in a very good position. I think we're well trusted, and I think that from a, a capabilities perspective, many of the OEMs are looking to us as being the company that can kind of bring this together. You know, even though it's not necessarily all our software, we will be developing more software and more layers, as we did with IVY, as we did with QNX Sound. But also being the front end of maybe some set of third-party software that we would integrate and sell as a package to the OEMs, to give them a platform that is easier for them to develop on. So I feel really strong, and I feel really comfortable with where we're at right now. I think the challenges in automotive have. They're not good for anybody. They create headwinds, and they create projects being delayed, but I think it's also opened up a lot of eyes to maybe what the next steps are to not end up in this situation again. Well, that's a good pivot point here. Let's talk about IVY. You know, John or Tim, feel free to address this. Maybe just to level set everyone for folks that might not be familiar, just what IVY is, and then if we could talk about the interest pipeline that you're seeing right now relative to maybe booking additional customers in the near term. Or maybe if we look at it sort of on a different perspective, what's holding customers back from bookings? You got the first booking at CES, you announced it last year, and now, you know, I think there's a lot of anticipation for what's next in IVY. So I'll take the first part of the question, and Tim can take the second part of the question. So what is IVY? So IVY is a joint development between BlackBerry and AWS to create a middleware layer within the vehicle that helps normalize, vehicle sensors and vehicle signals, into something that can be consumed by an application or a cloud application. So it could be an edge application, or it could be a cloud application. The idea with IVY was to be able to provide that normalized interface and to do some processing on the edge to provide insights into vehicles based on their sensors, instead of sending all the data up to the cloud and having the cloud do the processing, which consumes a lot of bandwidth. So the idea is edge processing and normalization of data. The normalization of data is really important because if you want to grow an ecosystem around automotive, you would ideally like to create similar APIs regardless of the car brand, so that somebody who's looking to write applications for the car would have a larger potential volume of opportunity to sell their application. So that's really the thinking behind that, and obviously, partnering with Amazon. You know, Amazon is a behemoth at creating ecosystems, and so the idea was to try to grow that ecosystem around IVY. So in terms of level of interest, I mean, we've everything in automotive, as you'll know, Luke, it takes time, right? None of this is a quick decision. But once you're in, you're in for the long haul really, because a design will be in production for 5+ years, typically speaking. So and then you, then you've potentially got next generations that follow on from that. So right now, I'd say the biggest barrier, to answer your question, is that OEMs have tried to address this problem themselves, and they've invested time and effort into doing this, and ultimately to relinquish the work or stand back from the work that they've already done and take on an outside supplier, it takes a bit of convincing. Also, IVY is an early-stage product. We do have design wins, so it is, it's a battle. It's a ready-to-go product. But it's not as proven out as QNX, which has been in the market for many, many years. So, what we've said so far is that we are still in the proof of concept phase with a number of meaningful OEMs, but it probably taking longer than we possibly would have anticipated, but we still feel optimistic about the future of IVY. So on that one, I think I'll just say, stay tuned, and we'll keep you posted on developments with that. In terms of driving that interest, how important should we view development partnerships for IVY? So, you know, you've demoed a number of, I think, pretty cool applications that you can do with the data, be it, you know, like Michelin with tire-related data or something like that, and it seems like the innovation cycle is just a lot faster here. Is this a sort of a chicken versus egg proposition of, you know, if you can push the sort of just number of, you know, applications for IVY, that that's gonna get more customer interest and comfort ultimately? Yeah, absolutely. I mean, ultimately, the ecosystem, and we, we have a fund, which has been seeding some of these smaller players, but it's not only those ones that are building on top of IVY. There's a significant ecosystem already in place, and it's a quick way of demonstrating to an OEM that if you go this route, you've got some off-the-shelf, applications that you can deploy almost from day one. And it's also a powerful way of demonstrating how easy it is to use IVY versus the very disparate, bespoke, OEM-driven, platform. So I was talking to one of the application partners at CES, and they told me that when they were trying to deploy their product on an in-house, OEM-driven data platform, if you like, it was taking months, and they moved over to do it on IVY, and you're talking days and weeks. So that simplification, the normalization, the way that it's a standard platform, means that not only can you play across lots of different OEMs, which is something we've said a number of times, but it just to even attack one OEM, it's just that much easier. The interface with IVY is much simpler. John, anything you want to add to that? Yeah, I mean, I think that that's absolutely true, and I think the ecosystem partners that we have really demonstrate. I mean, to Tim's point, so there are some very interesting things right off the shelf that you can use right away. So that's been helpful, but it's also, I think, it's more how it demonstrates the ease in which you can add new applications. And so the feedback has been, you know, if we try to plumb this into customer's platform, we can spend six months doing it. With IVY, we can do it in a couple of weeks, and that's because we've done the plumbing of IVY in a generic way that it's very easy for the applications to take advantage of those signals. I think one other thing that I would add is that as we start moving more towards this vehicle platform, IVY will be part of this integration of the vehicle platform, and this will be another step where the OEMs have tried to do something on their own, have realized the effort to maintain. It's not just the effort to build, it's the effort to maintain the platform as you go forward and to grow the platform as you go forward, has a cost, and I'm not sure that it's money well spent, where I believe they should be focused on the applications that use IVY to generate money for, you know, either through their data or through applications. Well, we've got a couple minutes left here. I don't want to ignore the fact that there's also just some overall change going on at the company right now in terms of setting up IoT and cybersecurity as standalone divisions, some cost actions that really aren't touching the IoT business. I guess the first question, John, would be your perspective on those changes. My impression is that it's not really impacting your day-to-day life that much. Is that right? No, it's not impacting my day-to-day at all, you know, from an engineering perspective, resources and that, we're not impacted. I think we're potentially impacted positively by having a little bit more control and being able to do some things going forward. We've announced a program called QNX Everywhere, where we're gonna make QNX available for free for non-commercial use, and we're gonna gradually open source QNX, and I think that's very important. I think that, you know, that type of freedom is very welcomed, and so while there are things going on, they're largely not affecting IoT. And then, Tim, I think we've got time for one more question here. Just maybe if we could, talk about expectations for timeline and progress markers towards kind of the future state of BlackBerry and maybe even entertaining some strategic alternatives down the road. Yeah. Awful lot to unpack there in the space of, like, a minute. But, let me just say, we're very aware that John's business is in a great position with great secular trends that are pushing it in the right direction. The cybersecurity business, while it has an enormous opportunity, there have been, obviously, some challenges on that side of the house. And overall, BlackBerry as a company is has been losing money, so we need to address that. So part of this overall thing is to take out cost. We've said that in our second quarter, we took out $50 million from the run rate, and we announced during this quarter that we're taking out a further $55 million. So these are significant reductions in cost, primarily coming out of R&D and also G&A, which are areas that don't necessarily have a significant impact on the top line, so just to reassure on that side of things, but certainly move us towards cash flow positive, and we said we expect to get there in the coming fiscal. So significant change from that side, but also not neglecting the fact that because these businesses are very different, that we're looking to move them to be more self-sustaining, much more standalone. To John's point, much more autonomy to make decisions, move quickly. So your final question is around about, okay, well, when could this company look different? I think whilst we're working through this process, we're very open to every. All options remain on the table. It's not necessarily deferred. However, I think in terms of the biggest objective here is to maximize shareholder value, if there were to be any change to how BlackBerry looks. So to that end, to have two profitable cash flow positive businesses could be an advantage there. But, let's just say that nothing's ruled out at this point. Yeah. Well, I'll leave it there. We went a couple minutes into overtime, but I think it was good, some important information there. So, we'll leave it there. John, Tim, thank you for the presentation today, and thanks to everyone that joined us as well. Thanks, Luke. Thanks, Luke.