All right, we're going to get rolling here. I'm Todd Coupland from CIBC. Welcome to the BlackBerry session. From BlackBerry, we have John Wall, who's President of QNX. He's on my left. To his left is Tim Foote, Chief Financial Officer. John has been with QNX since 1993, if I did my research. Yikes. Left in 1997, rejoined in 1998, and has been there ever since 1998. Tim has been with BlackBerry since 2016. Tim was made the CFO in February of 2024. Welcome, John and Tim. Thank you. Suzanne Spira, who's IR lead, just recently joined BlackBerry. She's sitting at the table on the right here. Gentlemen, welcome. We look forward to this conversation and getting into why BlackBerry's been doing so well this year. It's great to be here, Todd. Thank you. Yeah. Thank you. Tim, why don't we start with you? Over the past year, BlackBerry has transitioned to profitable growth, and positioned as a software company, which is QNX led. Can you frame out what the business is today and what's changed, and what are the biggest drivers recently, and how will that look like over the next few years? Yeah, great. It's really good to be here, especially with the fireplace that you put here for a fireside chat. That's great. BlackBerry's been on a real journey. Anyone who's looked at BlackBerry in the past, maybe been in the stock in the past, I think now is a great time to re-look at the story. I think it's fundamentally a different company from where we were. I think over the last couple of years, we've been in the first part of the story for us on this journey, which has been really about value creation through getting the cost structure right. We've had to make some really difficult decisions. We sold off an asset called Cylance. We've taken out a huge amount of cost out of the profile, more than $150 million out of the run- rate. Like you said, Todd, we've pivoted the company from one which was loss-making, burning significant amount of cash, to one that's now solidly profitable. We've had eight consecutive quarters of improving GAAP net income, and also generating cash. We generated $50 million of operating cash flow this past fiscal year. That value creation has been about increasing profitability, but really, if you look at it on a declining to now fairly flat top line. Where we're going now as a company is really value creation through a significantly growing top line and the operating leverage that comes from that. All the way through this period, our QNX business, which John's going to talk about in a lot more depth, that's been growing nicely, and it's actually started to accelerate. It's a business really with the wind at its back. It's got some great technology, a world-class team, and some really strong secular tailwinds. We'll get into that in a lot more detail. The other side of the business, which is just shy of half of the revenue, is in our secure communications business, which is really the heritage of BlackBerry, if you like. It's about how do you secure mission-critical communications. That has now pivoted back to growth as well. Yeah. There's a couple of tailwinds in there. Digital sovereignty, which is a real buzz thing at the moment, but also defense spending. Both of those are catalysts for that side of the business. Actually, we're guiding to the first year of top-line growth for Secure Communications in the last six years. You put it together, you look at BlackBerry as a whole now. You've got the QNX business, like you said, QNX led is our number one focus, growing, accelerating, and generating a lot of opportunity. You've also got the Secure Communications and our licensing business, which we don't really talk a lot about. Yeah. All three of those are now growing and adding value through profitability and cash flow. Tim, to set up the conversation, it's a numbers-oriented crowd. Frame up what revenue growth and EBITDA margin should investors expect for the company overall? If you look at the QNX division, we delivered 14% growth, top line growth, this past fiscal year. It was a Rule of 40 division overall. We continue to see acceleration at the top end of our range, which is our target. We go from 14%-15% growth. Secure Comms is somewhere between 4%-8% year-on-year growth, and our licensing business is relatively flat. You put that all together, we're now back into modest single-digit growth as a total company, but profitable as a whole. When you look at cash flow, I mentioned we generated $50 million of operating cash flow. That's going to double this year to $100 million. We have made a conscious decision this year to reinvest the incremental EBITDA that's coming out of the QNX business back into it. I think when we get into the opportunities that we see, the organic opportunities we see, they're really very exciting, and I think right now that's a great place to deploy capital. John, let's talk about QNX here for those of the people in the audience here who may not be as familiar. Just describe what is QNX for auto, what is QNX for general embedded, and give an overview of BlackBerry's. Sure role there. Sure. The good news is QNX for auto and QNX for GEM are the same thing, which makes the GEM market very exciting for us. What we do is we provide what we call foundational software for mission-critical applications where functional safety and the highest level of security is required. We make an operating system and we make a virtualization system, and then we build on top of that platform. What we don't do is we don't get into the application space. We play a very horizontal role in the car where we could underpin the digital cockpit, safety features, ADAS features, autonomous drive features. Just about every high-performance compute platform in the vehicle is available to us. Now what we're seeing in the general embedded market is the same things that we've seen in automotive, which is the need for higher performance compute, the need for more speed. We're seeing that in the other markets. The whole physical AI world where we're talking about cooperative robots requiring that same safety, same determinism, security. We're really seeing that growing in the GEM market, so we feel we have a very strong opportunity there. Cooperative robots. I'm going to work that into our research. What are the main levers for QNX growth right now? There are several main levers. I would say expanding in the GEM market is all upside for us. Yeah. We're 80% automotive today, so a big opportunity there. The other opportunity is in automotive, there's still more sockets to be won. The automotive market is just starting to mature in this high-performance compute. There were a lot of challenges. We've seen that in the automotive market, but we're starting to see that mature and move forward. There's also the ability for us to sell more. We recently made an announcement that we're working with a German car company called Vector. Vector is a very well-known software company that's supplying to most of the automotive world. We're building a platform together that is one plus one is three. Yeah. We're building out a platform where the ASP is going to be significantly higher than an operating system or virtualization solution. Yeah. I do want to talk about Alloy Kore. We'll come back to that and Vector in a moment. One question we often get from investors though is software in the vehicle has been a trend that's been growing for quite a long time. Yeah. Why hasn't QNX been growing at 15% a year for the last few years? We have been winning, I would say, for the last six years, but car companies have had trouble getting to production. The way our business model is structured is 30%-40% of our revenue is development seats and services, but the bulk of our revenue is when the cars ship. If the cars are not shipping and programs get delayed, then we don't see the revenue. Yeah. This is what I'm talking about when I'm saying the car makers are now maturing. They're understanding the software. They understand where they should be playing in the software stack, should be much more focused on the applications and things that their customers can see. We've seen all the struggles in the past few years. Now we're seeing things are getting into production. Your backlog is $950 million. It's grown rapidly the last few years. Should the backlog growth match the revenue growth? Should those two come together over time? Actually, we talked about that. I'll let Tim handle that one. Okay, fair enough. Yeah. Our backlog, just to paint the picture for anyone who's less familiar, that is the royalty piece that John was talking about, the production-based piece, and that's closing in on a billion dollars now worth of backlog of estimated future revenue to come from that. That has been growing quickly. I think now we're getting to a law of big numbers kind of situation, the way I look at it is, well, how much goes into backlog each year versus how much we're taking out to recognize in the P&L? This past year, we put in twice as much as we took out. For me, that's a really strong indication of future growth. Clearly, if you keep doing that perpetually, then in theory, your royalty revenue's going to double over time. That's what I'm really focused on. It means that this business has got a line of sight that a lot of software companies do not enjoy. Yeah. We've got line of sight to know what our royalty revenue at least is going to be for the next two, three, four even five more years. It is a very solid aspect to this business. It's very sticky. Once you get into a design, you tend to generate revenue from it for 5 to 10 years, which is a luxury that others don't. Tim, investors ask this question all the time. How solid is that backlog? Is it contractual? You mentioned it's royalties and that's obviously tied to vehicle production. Should investors be worried whether or not you're actually going to get that backlog or not over time? Clearly, it's estimated, so it's not guaranteed, right? Yeah. Churn, we monitor churn of the backlog. It's a relatively low number. One of the good things really is we're not single-threaded. The QNX business really works with everyone in the industry, and we've seen some big shifts. Electric vehicles, for instance, have obviously shifted out to where they previously thought. What's happened is you see a growth in hybrid and a continuation of internal combustion engine, ICE, programs. When you're kind of as ubiquitous as QNX, if one's losing, be it a type of powertrain or a single OEM, it tends to be that the others are kind of winning. We kind of ride with the wave. Yeah, there is obviously some churn. It's wrong to say there isn't, but generally speaking, it's pretty low. What's the split in the backlog between automotive and GEM, and how will that shift over the next couple of years? It's kind of mirroring, as John said, if you took a typical quarter, it's kind of 80/20 in favor of automotive, and the backlog kind of mirrors that as well. Over time, we actually think GEM's going to become a bigger portion of the pie. The interesting thing is it's going to have to run pretty quick because we still see growth coming out of automotive, and pretty significant growth. Like when we get into the Alloy Kore conversation, the ASP difference there is huge. Yeah. I mean, we've got a couch. We haven't announced our first design win, but we are in active pricing conversations with customers, and they haven't kicked us out of the building, but we're talking multiples higher. Not just 10%, 20%, 30%, we're talking like 4x, 5x, 6x potentially. If automotive continues to grow, GEM may not instantly become 30%, 40%, 50%. Yeah That doesn't matter. It's all growth and it's all upside to the story. That's a good transition. Maybe for the audience, describe what Alloy Kore is and why are the OEMs interested in it? Alloy Kore specifically for automotive is a foundation layer of software that provides everything an ECU requires to support a function. It has virtualization capabilities, it does diagnostics, it does logging, it does communication. These are all the things that are essential to any ECU going into a car. The idea here is that we provide this on the hardware of choice, and it accomplishes three things. First of all, it separates the OEM's software from the hardware, meaning they can reuse their assets. Time to market, they can get to market much quicker because they're now focused on their application level, not what we call in the underwear of software that they really don't belong. It'll help them reduce the delays that they've experienced. When we looked at the market, when we looked at where the car makers were struggling, it was all at that layer. Yeah. It was all at that really low-level layer that it really requires specialized people to do that work. The good news with Alloy Kore was this is not a push for us into the market. This was a pull. We had developed Alloy Kore, it wasn't called Alloy Kore at the time, but six or seven years ago. The OEMs weren't prepared. They just said, Yeah, we'll do that. We won't need that from you. Now, the OEMs have come to us and said, We really need help with our platform. What they're looking for is they're looking for the ability to switch out hardware but always maintain that same level of abstraction to the hardware. I mean, you can think of it as iOS or Android for phones. Yeah. If the ASP for a QNX OS was $10, what would be the ASP for an Alloy Kore deployment? It's going to be anywhere between 2.5x to 5x more. Okay. You have a partner, I guess, or a pilot? Yeah program announced with Mercedes. Yep. Give us an update on how that's going and how would that would manifest itself to a design win and into the backlog if, in fact, they decide to go with you. Obviously, I can't talk about the specifics of the discussions with Mercedes, but I can tell you that from a technical perspective, it's the right solution. That's at the stage that we're at now. It's more of a negotiation. Yeah. Maybe think about it this way. If 90 million vehicles are produced globally, how much of the market is Alloy Kore appropriate for? Going forward, I would say probably most of the market. Yeah. There's going to be compute even in the least expensive vehicles will have some level of compute going forward. I mean, maybe not today, but they will in the future. Sir, one last follow-up on Alloy Kore. You get a design win now, when does that flow into the financial results? The programs that we're targeting are model year 2029 or 2030. Okay. There is still a subscription fee to the platform, so we will see development revenue, project-level revenue, but the royalties will start in 2029 or 2030. That shows up in backlog, I guess, now. Yeah, it does. It will. versus revenue in the next couple of years. Absolutely in terms of royalty revenue, that is. Yeah. We did have one investor question on this, wondering whether or not automation from AI can do any of that middleware instead of your offer. Can you just talk about the risk of automation from that? Yeah. Obviously we think about that. We use AI internally at QNX. We use it to do when we look at our engineers, we say 30% of the time they're being creative, 70% of the time they're doing work that's grunt work they don't want to do. We're using AI to help with that, to become more efficient. We're not using AI to do creative work at QNX. We're using engineers to do creative work. Even when we do, we allow the AI to help us with some of the more mundane work, we still always have a human in the loop, because when you're building safety, functionally safe software, highly secure software, you have to have a human in the loop. Yeah. The safety standards don't contemplate AI building it for you. We asked Claude, How long would it take you to build QNX? Claude told us it would take $12 billion and 10 years. Wow. So, an operating- It's not a hallucination, right? No. When you look at this platform, it's very complex. Yeah. You're not talking about an application, you're talking about an operating system, all the peripheral pieces, the file systems, networking, how we do the optimization of that networking in the context of the protocols for automotive. This requires a lot of expertise that's not in the open domain. Yeah. While we think about it, we look at it, our vision is to keep a strong offense, not to play defense against these things, because there's not much I can do about it. Yeah. In the discussions on Alloy Kore with the OEMs, do you find that they are back to reconsidering whether or not they should do this internally with the AI tools, or is it still full on interest in Alloy Kore? Full on interest. I've not heard anybody say they're going to use AI tools to try to do what we're doing. That doesn't mean they're not thinking that. Yeah we've not heard that. Yeah. Talk about your competitive position and the competitive environment with respect to QNX. Our main competitor, we used to talk about our main competitor being VxWorks, Green Hills, the other RTOSs out there. We don't see them in automotive very much. We see them in GEM, because they have a long incumbency there. Really when we're looking at our competitor in automotive, our competitor is Linux, and on the safety side, we have yet to see a compelling Linux solution. Yeah that makes any sense for the car makers. Yeah. It seems like your market share is, monopolistic seems too strong a word, but. Some have used that word. It is very high. It's very high. Sticky. Yeah. Let's talk about the GEM market. A lot of people are wondering what is QNX's exposure to the emergence of physical AI. Can you just talk about the potential there? Yeah. My marketing team has been harassing me for the last three years to come up with an AI story for QNX, and I just wasn't able to do it. I got a call from an IP company for silicon that said, Hey, you guys are the foundation of physical AI. Started thinking about it, okay, what does that mean? Well, everything we're talking about with AI today is typically in the digital realm, chatbots, developing code. Where AI is going in the future is going to be much more in the physical world. Yeah. Robots. When you think about autonomous drive for cars, it's really a robot on wheels. Yeah. We started thinking about that, and we started positioning the company in a way that we have a story around physical AI, and it's a compelling story, and it's really a true story about what we're doing in the field. It's really the timing, the cooperative robots, everybody moving to higher performance compute. It's really an inflection point, I think, in the last year and a half, for QNX. NVIDIA, we did a press release with NVIDIA where their IGX platform for robots is going to be based on QNX, very similar to what they're doing in automotive. The other chip makers have told us basically they're going to leverage their automotive software stacks for robotics. We're in a position where that's QNX. Yeah. That's a good transition, the NVIDIA announcement. What does that collaboration mean for you? How should investors think about the potential? I think it's Jensen that said this is a $4 trillion market, robotics. Obviously it's very good for us. We've been working with NVIDIA for 25 years. Same people. People tend to stick around at NVIDIA, very similar to QNX. They're very vested in QNX. We have meetings with them on a biweekly basis with the executives. I think it just opens up a whole new realm for us. I also think on the automotive side, they're starting to get more traction in the Level 4 driving. They use QNX. This is fabulous for QNX. Yeah. Any way to frame for investors, I guess the ASP in one of these products and how that might manifest itself in your financials over the next one to three years? I don't handle financial questions. We don't give that. Yeah Todd, simply because if we said it on average it's X dollars, when we go and talk to BMW or Ford tomorrow Yeah they're going to go, Well, hang on, I'm paying this. We don't give that. How we look at it, how we manage the business really is on a per instance basis, right? That is single digit dollars currently just for the bare bones operating system. The good news is we recently launched a new version of QNX operating system. Going from our Series 7x to 8.0. Significant uplift in performance, maybe John can talk about that. In terms of the ASP, it allows OEMs to be able to get a lot more bang for their buck out of the chip. They could potentially even do the same thing with a less expensive chip. There's a lot of value to be had, and therefore, we're able to command a significant premium. Now, we're not talking the multiples on Alloy Kore, but 30%-40% uplift is definitely what we've been seeing so far. That's another way of creating further value. John, did you want to speak? I think a couple of things make it difficult. Just add to what Tim said is, we do volume-based pricing. If somebody's building an MRI machine and they sell 10 of them. Yep The royalty's going to be different, it's going to be a meaningless number at the end of the day. I did want to comment on the SDP 8 Series 8.0 Of the operating system. We talked about competitors. This is where we had an Achilles heel with SDP 7x is performance-wise, scalability, looking forward to the next generation of compute, 16 cores, 32 cores, 64 cores. Our product did not scale. Yep. SDP8.0 Scales as well or better than Linux. Performance-wise, we match Linux, but we maintain safety, security. What's becoming more critical that we have not talked about when we've done these investor conferences is determinism. Right. The fact that we are a real-time operating system, when you start talking about robotics, factory floors, the difference between responding to something in 1 ms versus 15 ms is the difference between a disaster on a production floor. Yeah. That seems to be a line in the sand at the moment for the customers, isn't it? Absolutely. I think if you're looking at our push into GEM in particular, you're looking industrial automation, PLCs, it is an absolute line in the sand. They need that determinism. We had a very large design win in industrial automation just recently, this company did an analysis of all operating systems that were available to them, they said none of them could match QNX. We have about three minutes left, and I want to talk about Secure Comm a little bit, if we could. Tim, maybe for those less familiar with your Secure Comm business, maybe talk about the three units and its role within BlackBerry. Yeah. We have three product groups. One's called Unified Endpoint Management, which is about controlling the flow of sensitive data to an endpoint, typically a phone, but also a laptop and other devices. That's around about half of the revenue comes from that product. It's a very mature product, but I think it's now found a niche, and that is really high security, on-premise deployments. Really, we're the only show in town that's left in that space right now. That is really resonating. I mentioned digital sovereignty. The need to control your data within your geographical bounds is something many governments, including the Canadian government, are looking very strongly at, UEM is really perfect for that. We also have a product called Secusmart, which is encrypted voice and data, military-grade encryption. We're seeing a lot of traction with defense agencies right now for this product, but also general government. The third and final one is called AtHoc, which is a critical events management solution. It's a two-way communication if there's some kind of crisis and you need to communicate with your employees or wider population. It's like AMBER alerts on steroids. Yeah. Different profiles, different growth profiles through them. Like I mentioned, the defense tailwind and also digital sovereignty are really helping all three of those products. You recently did a really interesting deal with the Canadian government. Yeah where you expanded exactly in that way. Yeah. Should investors expect to see that kind of deal in other countries around the world? We certainly got a very strong pipeline of opportunities right now. Yeah. They're all kind of similar nature. A lot of them are with government. Like I mentioned, it's government that really want to control their data. They don't want to trust all their data to a hyperscaler, particularly a U.S.-based hyperscaler at this time. It's a kind of a renaissance for that business right now. A lot of investors wonder about QNX and Secure Comm, and they're together within BlackBerry. Maybe talk about, would you view both of them as still core to the company at this point? If not, why not? QNX, wonderful business. I think hopefully he's getting some of the enthusiasm we have for that business from this chat. It is our number one priority. Clearly, there aren't a lot of synergies between these two businesses. Right now, given the pivot we've done as a company, there's no burning platform here. However, we're not unaware of the potential benefits of having a pure play QNX-focused business. Right now, our core focus is on making sure that that Secure Comms business, as with the QNX business, is the best it can be, grow, and harness the opportunities that we see in front of us. If there are opportunities down the road for M&A, then obviously as a public company, we have to look at that. Great. Appreciate it. Thanks very much. Thank you. We'll end it there. Thank you.