John Chen, BlackBerry’s Chief Executive Officer discusses Q2 2015 earnings results in a conference call held on September 26, 2014.
Edited Transcript of BlackBerry (BBRY) Q2 2015 Earnings Conference Call..
Company: BlackBerry (BBRY)
Event Name: Q2 2015 Earnings Conference Call
Date: September 26, 2014, 08:00 AM ET
Good day, and welcome to the BlackBerry second quarter 2015 results conference call. Today’s conference is being recorded. At this time I would like to turn the conference over to Joe del Callar. Please go ahead sir.
Joe del Callar – Head of Investor Relations
Thank you, operator. Welcome everyone to BlackBerry’s fiscal 2015 second quarter results conference call. With me on the call today are Chief Executive Officer, John Chen and Chief Financial Officer, James Yersh. After I read our cautionary note regarding forward-looking statements, John will provide a business update and James will then review the second quarter results. We will then open up the call for questions.
In order to let as many people as possible ask questions, please limit yourself to one question. This call is available to the general public via call-in numbers and via webcast on the investor relations section at blackberry.com. The webcast can be accessed through your BlackBerry 10 smartphone, your personal computer, or your BlackBerry PlayBook tablet. A replay of the webcast will also be available on the blackberry.com website.
Some of the statements we will be making today constitute forward-looking statements and are made pursuant to the Safe Harbor provisions of the U.S. Private Securities Legislation Reform Act of 1995 and Canadian securities laws.
We will indicate forward-looking statements by using words such as expect, plan, anticipate, estimate, may, will, should, forecast, intend, believe, continue 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 appropriate under in the circumstances.
Many factors could cause the company’s actual results, performance, or achievements to differ materially from those expressed or implied by the forward-looking statements, including the risk factors relating to the company that are discussed in the Risk Factors section of our annual information form, which is included in the company’s annual report on Form 40-F and the company’s MD&A, copies of which filings may be obtained at www.blackberry.com.
These factors should be considered carefully and you should not place undue reliance on the company’s forward-looking statements. The company has no intention and undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
I will now turn the call over to John.
John Chen – CEO
Okay, thank you, Joe. Good morning everybody and welcome. Thank you for joining us. Let’s just start right into the quarter.
This quarter from all our key operating measures, was happened to be a very solid quarter. I like to highlight a few things that we were particularly pleased with.
The focus on margins enabled us to achieve a non-GAAP operating profit. Our non-GAAP loss per share narrowed down — significantly down to $0.02 a share which of course compare that to the $0.11 a share last quarter.
Our cash balance, we maintained at $3.1 billion and we dramatically lowered our use of our cash from normal operations to $36 million and may I remind you that was from $255 million cash use of last quarter. We added over a million new users to Blackberry 10 in the quarter.
And lastly, I am pleased to point out that the hardware business turned in a non-GAAP gross profit for the first time in five quarters which is slightly ahead of our expectation. This is, of course, directly as a result of our supply chain efficiencies, the improvement in our distribution channel and the strong focus on margin and of course much more work needs to be done and could be done there.
Revenue came in within our range, at the low end of our range. I like to spend a minute or so to just highlight a few factors that affected the revenue this quarter.
First, you know we are all as a team very focused on margin and so we have chose to turn down — and throughout the quarter a few lower margin deals.
Secondly, it’s our plan to aggressively shift our software business from the perpetual license to a subscription base. So as most of you were familiar with this know the fact that subscription although have a lower revenue in the current quarter but build a much larger and more repeatable revenue stream for future quarters.
We are definitely in the first half of what I refer to the eight quarters recovery and from a revenue standpoint we might not be at the lowest point but we are near the bottoming of those revenue. I will make some comments about that later this morning.
Now let me spend a little bit time on the growth part. We had obviously done with our workforce restructure portion of our plan that was a well leaked document and we are now making judicious investment in growth. Most specifically we are focusing on the following four areas.
So first let me start with hardware.
As I mentioned earlier we turned to profit this quarter. Last quarter, we successfully launched the Z3 as you may all know, I think it’s May 12, in Indonesia and since then 12 more countries had been launched including India, Philippines, the UAE and South Africa.
Demand of the products continues to be strong. In fact, I think our demand is pacing supply at this point –outpacing supply at this point. We have plans to roll out in 10 more countries beyond this point. We just – so that was about the Z3.