[spiller]

The problem is with Tim Long's statement about core software growth being 'sequentially' flat (meaning q on q). The reality is that he can't use the whole category to represent core, and he also should have realized that q4/14 to q1/15 was ALSO flat in terms of software Rev growth (whole category). There's something called seasonality, Mr. Long. You just flunked.

Posted via CB10

I listened to the CC and I kept heard core software 25% y/y. I'm not sure if they had the right numbers broken down to answer. If they are going to get back to Tim will Tim update his analysis with the correct numbers? When would we hear about this?

I also agree there is seasonality. But Chen made it sound like they would double software Rev in F2016. Without those licensing deals it seems like they would miss...but we won't know that until the back end loaded software revs are printed in q3 and q4.

My calls are taking a good beating down here. They were probably bought when the SP was around 9.50 AVG but I'm losing time value and my gambles on very short term calls were zeroed out. Probably 4% of my portfolio wiped this week. So I'm not doing any more short expiring calls! because on an ER I thought we'd see $10 by end of week and I buy the calls when the SP is $9 and I take a bath on on this BS we are seeing. 52 week low pretty much. I think we will see that low tomorrow and certainly on Tuesday is Greece defaults.






Posted via CB10

[RigoMonster]

Or they don't want to announce something that will make people wait and thus kill their device sales even more....i think we may hear more late July at the security meeting if they have some success securing android, or perhaps announce they can use hypervisor and full android /gps

Posted via CB10

I'm crossing my fingers and hope you are right. My view is that without a solution for the app gap, BlackBerry devices will remain below the 1% mark, notwithstanding innovative keyboard/hardware design or OS. I love my Passport, but the broader consumer market requires access to all apps as a threshold issue. Would be great if BlackBerry could pull off the one-two punch of devices and software!

Passport on AT&T

[bspence87]

OMFG yes this is so tiresome. BlackBerry has NOT given any numbers for CORE software so why are people INSISTING that they can do q over q comparisons? I think we know the answer....but all I can see is major revenue growth this last quarter. How about we compare q over q or Y over Y TECHNOLOGY LICENSING growth? That would be in the thousands, yet we don't know how it was booked before....You can't have one without the other.

The truth is that BlackBerry surprised them all by finding a major source of revenue that they all ignored, and instead of being impressed, they acted like a bunch of lazy spoiled brats. Those are buying opportunities in my books.

Posted via CB10

This is what I was thinking as well.
Who knows how much of that $54million was licensing before?
Or how much of the $66million in Q4 2015?

There definitely is some confusion going on here.

I will say though: I don't think Chen is stupid enough to say that they expect software revenue to double (100% YoY) and also say he expects software revenue to continue to grow at 20% YoY in the same CC.

Some simple math.. 20% growth for 4 consecutive quarters = 107% YoY.
I side with Morgan on this one, in believing that the analysts used confusing wording (bringing up year-old results and Q4 results in the same sentence) and caused Chen to answer unclearly.

[RigoMonster]

Your hopes are realized. You are wrong. To quote Chen:



The key phrase is "two quarters in a row". Cheers.

Honest question: what does the "year-over-year" reference mean? I read that to say that 15Q4 and 16Q1 each had double digit growth when compared to 14Q4 and 15Q1, hence occurring two quarters in a row. [For the record, I've been following the thread for a while, rarely post since I'm not a numbers person, and am long BBRY (added significantly to my position on Tuesday but looks like I pulled the trigger a little to soon).]

Passport on AT&T

[bungaboy]

App Gap?

[_dimi_]

Operator

We will take our next question from Amitabh Passi with UBS.
Amitabh Passi - UBS

If you could also clarify the same question that Tim asked for us, that would be helpful. Because I think the math we're all doing is, taking the $54 million last year, and if we see 20%, 25% growth we get the base business revenues somewhere between $65 million and $67 million. So I think that's what we're just trying to figure out. Relative to last quarter, was the base business flat to maybe modestly down? So it will be helpful if you can, whenever you get a chance, clarify that as well?
John Chen - Chief Executive Officer

Okay. We will clarify that. That is not the math. We did register growth quarter- to-quarter and quarter-over-quarter. So I have seen the numbers myself a number of times, so there must be something, classification that is not correct.

[BACK-2-BLACK]

Couldn't agree with you more, I believe since day 1 there's collusion with Chen and Watsa

Posted via CB10

Well, I certainly hope so!!

After all, Watsa searched and hired JC (brought him out of semi-retirement ) to remedy the situation.

If people are going to blame anyone....it should be the analysts and those bloggers that write half a$$ misinformed publications...

[BACK-2-BLACK]

.....How can analysts make projections if everything is confidential?.....

Posted via CB10

Exactly!!!

As a notable investment house or major media, why "try" to come up with a meaningful analysis if you don't have all the facts...and THEN publish it where you know your position will influence the market and other analysts?

I'll take a stab at it.... its about sensationalism..... with headlines (that dont make sense) to capture people, and at the end of the day, that is how those type of people make moneeeyyyy....

[W Hoa]

Honest question: what does the "year-over-year" reference mean? I read that to say that 15Q4 and 16Q1 each had double digit growth when compared to 14Q4 and 15Q1, hence occurring two quarters in a row.

I honestly think Chen misspoke. He was responding to Maynard Um of Wells Fargo and said:

I said earlier that our base core business, which are BES, are growing at about 20%, and we have seen that now two quarters of a row, looking at the pipeline, there's no reason to believe that we would not be able to grow 20% year-over-year.

which is certainly ambiguous and open to interpretation but Chen also says:

During the quarter, on the enterprise front, during the quarter, we had 2,600 enterprise customer wins, both new and existing, including many competitive wins. This is an increase of 400 over a quarter ago.

In two quarters they have a combined 'win rate' of 4,800 customers. You can see that the number has gone from 2,200 wins 15Q4 to an additional 2,600 wins this reported quarter. An increase of approximately 20% quarter over quarter.

We are seeing 20% increases quarter over quarter and Chen expects this pace to be maintained.

[Corbu]

Miscellaneous thoughts

I hate to read/report negative stories but I recently came across these two:

Governments Embrace Enterprise Mobility Management | StateTech Magazine

Dewand Neely, deputy CIO for desktop and support service for the state of Indiana, says the IT staff relies on MobileIron�s enterprise mobility management solution to support about 5,000 mobile users who run a mix of Apple iPhones, iPads and Android devices. Roughly two-thirds are state-owned, while the rest are personal devices. Neely says the state would have had difficulty making the transition from BlackBerry devices to the latest iOS and Android devices without the MobileIron platform.

Bank of England CIO: ?Beware of the cloud, beware of vendors? ? The Register

Also, Finch has created a data lab and a digital lab, whose remits are to �innovate�, essentially develop, test and prove ideas that work for the business. The digital lab is already working on a new mobile strategy to replace Blackberry.[sic]

I would really like to know what BlackBerry is doing/has done in cases such as these. I hope they are fighting the good fight as I am sure we would all hate to loose an account to MOBL or to any of our competitors... Hopefully, they are as passionate and committed as we are as shareholders.

I was also a bit distraught by these parts of the EC:

...and last but not least, the Royal Bank of Scotland, RBS. Since one of our competitors like to target us in their earnings call and said they are stealing our business, let me lob one their way, and hopefully I'll never do it again. I don't really want to get in the business of lobbing names around, especially these are good customers of ours.

But in the RBS case, RBS is a competitive displacement of MobileIron and a few other casualties. The other people haven't lobbed anything to us so we won't payback. RBS is an important win for us as it established BES as the corporate standard for mobile management. [...] By the way I think a few of our analyst friends out there will need to broaden their channel check because I started reading some of the stuff a little bit more. [...] We actually have a few more other key customer wins, switching away from these competitors. But we have not obtained permission to use their names on the call publicly.

Daniel Chen - Scotiabank
Okay. And then, my final question. Can you comment about your ranking in the recent Gartner review of the various EMM solutions?

John Chen - Chief Executive Officer
Well, could I comment on it? Well, my colleagues have sent blog and stuff. We are rather -- well, we obviously respect their independent view. We respectfully disagree with their view. I mean I don't know what else to say. I think we have a lot more installations and licenses then a lot of the competitors supposed to be in the Magic Quadrant. We have much broader set of technologies and improvements. One of the reasons I mentioned RBS, it was important for RBS to grant us the permission to use the name publicly and they were willing to take reference call on BYOD and stuff. So what Gartner has been saying is that we weren't able to point to anybody that would speak on our behalf.

A lot of our customers are in highly regulated industries that are not willing for us to use their name, especially in government agencies. And it's safe to say, most of all the Canadian government agency users are BES. But all these things are, unfortunately, I wasn't able to use. But I think with the RBS situation and other names that I have mentioned on the call, that Gartner should do their check and find out that we actually are quite competitive and are winning and in a lot of cases are winning against our competitors.

Granted and understood but quite frustrating. Given the general negativity of the market towards BlackBerry, I would sometimes wish that they adopt a more agressive stance (remember his "I Have a Message" bit?) and manage to get more recognition for their achievements by ramping up the PR/Communications side of things, by getting the word out (are blog postings enough?). Or am I mistaken? Would such a stance be premature as we are still in the transition which may well require a more modest/deceiving stance? Must one accept the incessant bashing that comes with the transition? Would there not be some clever, alternative way to create a "buzz", generate some interest?

I also submit that they should also have been better prepared to answer the questions that they invariably knew would be coming from the analysts on the software/licensing issue - especially knowing that our friends are always looking for the slightest trace of weakness to pounce...

JC may be playing coy and planning for the full 12 rounds. And we are merely getting to the 4th... He certainly knows much more than I do and I am not competent enough to play CEO. But I thought I would share these thoughts with you for now... Sorry for the long post. Cheers!

[rarsen]

From the Security files, am I the only one who is surprised that there are not more uproar on the regular and almost weekly occurrence of serious breaches of Security. Are we increasingly getting numb and dumb?

Stolen US government passwords leaked across Web | ZDNet
Security researcher casually drops Adobe Reader, Windows critical vulnerability bomb | ZDNet
Ransom malware costs $18 million in losses, says FBI | ZDNet

and modified but could come back "undocumented features" like:
Google removes "always listening" code from Chromium | ZDNet

[BrooklynBerryAddict]

Excellent point, Superfly_FR.

Just for the record, from:
http://forums.crackberry.com/bbry-f3...l#post11742055



I believe AirWatch has another 15,000+ customers as well. Plus all the other players out there...

If these numbers are true then the 4800 wins of the last 2 quarters is pretty impressive.

Posted via CB10

[Munx]

Your hopes are realized. You are wrong. To quote Chen:

The enterprise business which included BES and VAS, value-added services, and our QNX business, turned in double-digit growth year-over-year again, and it was two quarters in a row now.

The key phrase is "two quarters in a row". Cheers.

With all due respect, 20% YoY growth for two quarters in a row does not equal 20% quarter-over-quarter growth. Maybe this is a math issue?

[RigoMonster]

I honestly think Chen misspoke. He was responding to Maynard Um of Wells Fargo and said:

I said earlier that our base core business, which are BES, are growing at about 20%, and we have seen that now two quarters of a row, looking at the pipeline, there's no reason to believe that we would not be able to grow 20% year-over-year.

which is certainly ambiguous and open to interpretation but Chen also says:

During the quarter, on the enterprise front, during the quarter, we had 2,600 enterprise customer wins, both new and existing, including many competitive wins. This is an increase of 400 over a quarter ago.

In two quarters they have a combined 'win rate' of 4,800 customers. You can see that the number has gone from 2,200 wins 15Q4 to an additional 2,600 wins this reported quarter. An increase of approximately 20% quarter over quarter.

We are seeing 20% increases quarter over quarter and Chen expects this pace to be maintained.

Thanks W Hoa. Agree that a flat Q2Q does not make sense given the wins during the quarter. Definitely poor communication... they seemed to be fumbling to answer the software revenue questions all to avoid the IP license disclosure. Would have preferred that they had not disclose the Cisco name and given more clarity on the software and IP license breakdown. Hope they're not trying to hide the ball to avoid poor Q2Q performance... BlackBerry should clarify asap!

Passport on AT&T

[morganplus8]

Miscellaneous thoughts

I hate to read/report negative stories but I recently came across these two:

Governments Embrace Enterprise Mobility Management | StateTech Magazine


Bank of England CIO: ?Beware of the cloud, beware of vendors? ? The Register

First off, thanks for your efforts Corbu in bringing new information to the thread. When someone as dedicated as you asks a question, we should all try to answer it. I'll just make a few comments on the subject if I may:

Regarding the B of E statement, and article, Finch had this to say, "Finch admitted the work of creating a single data model is causing strains, with Choueiri's work “creating massive amounts of stress for my classic IT group,” (Finch said).

I would think that those in power at RBS had the same inclinations as Finch does, to create a safe environment for their data. I also think that BlackBerry removed that account from MOBL due to their hard work and value-added solutions. It wouldn't surprise me if a small company like BlackBerry, even though they are well known, had to jump through some huge hoops to secure a company like RBS. Chen is building out a sales force, a group that can take on large Enterprise and I believe we are going to see a consistent flow of business back to them over time. It has been pointed out to the thread that BB's enterprise package is not up and running in so many ways. Sometimes the best customers are the ones who tried to build their own ecosystem and failed, we'll learn more about this in the future I guess as BB ramps up their EP.

The Indiana case is a little different, it seems simplistic in some ways and something that BB could be all over now. I don't mind that everyone wants to grow their IT security organically making use of a simple layer of MOBL security and an in-house cloud solution to containerize their data. Again, at some point, there is a realization as RBS found it to be, that IT is not best suited to develop these kinds of solutions. I hope we will revisit this topic in 2 or 3 more quarters when BB has had a chance to build their force up and knock on competitors doors.

Hopefully others will join in here.

[spiller]

I'm crossing my fingers and hope you are right. My view is that without a solution for the app gap, BlackBerry devices will remain below the 1% mark, notwithstanding innovative keyboard/hardware design or OS. I love my Passport, but the broader consumer market requires access to all apps as a threshold issue. Would be great if BlackBerry could pull off the one-two punch of devices and software!

Passport on AT&T

Without SNAP and Android apps people are frustrated it doesn't have the apps. I have put SNAP on their BB10 phones and there is no longer the 'app gap'. Problem is I know the majority of people with BB10 don't know what SNAP is and many apps are missing from Amazon app store.

[DaSchwantz]

This is what I was thinking as well.
Who knows how much of that $54million was licensing before?
Or how much of the $66million in Q4 2015?

There definitely is some confusion going on here.

I will say though: I don't think Chen is stupid enough to say that they expect software revenue to double (100% YoY) and also say he expects software revenue to continue to grow at 20% YoY in the same CC.

Some simple math.. 20% growth for 4 consecutive quarters = 107% YoY.
I side with Morgan on this one, in believing that the analysts used confusing wording (bringing up year-old results and Q4 results in the same sentence) and caused Chen to answer unclearly.

Honestly, there aren't 2 sides...BlackBerry didn't give the numbers to break out q over q core software growth. Everything Chen said adds up, as you've indicated, so there's no reason to doubt what he says.. And on top of that we get a big chunk of extra licensing revs on top. Although I'm not calling anyone a troll, I reserve the right to slag these petulant, sloppy, lazy, analysts at will. If you happen to be here insisting that they're correct, you'll just make yourself look silly in the process.

Posted via CB10

[Munx]

I honestly think Chen misspoke. He was responding to Maynard Um of Wells Fargo and said:

I said earlier that our base core business, which are BES, are growing at about 20%, and we have seen that now two quarters of a row, looking at the pipeline, there's no reason to believe that we would not be able to grow 20% year-over-year.

which is certainly ambiguous and open to interpretation but Chen also says:

During the quarter, on the enterprise front, during the quarter, we had 2,600 enterprise customer wins, both new and existing, including many competitive wins. This is an increase of 400 over a quarter ago.

In two quarters they have a combined 'win rate' of 4,800 customers. You can see that the number has gone from 2,200 wins 15Q4 to an additional 2,600 wins this reported quarter. An increase of approximately 20% quarter over quarter.

We are seeing 20% increases quarter over quarter and Chen expects this pace to be maintained.

Do you also think Chen misspoke when he was reading his prepared statement:

"First, we expect our core software business in enterprise and BTS, which brought us by the way $247 million in revenue last year, will be growing at 20% year-over-year as a continued base business. "

When a CEO reads a prepared statement that core business is growing at 20% YoY, I take it at face value. Expecting quarterly growth of 20% is not correct.

We all want this company to succeed. I am swinging a very large long position and I like to keep well informed when I get this long. There is still plenty of upside here because the 20% YoY number that he provided is very very conservative for two reasons:

1. Q1 YoY core biz growth was around 24% (he's already ahead!).
2. Software growth is back end loaded, so my expectation is that YoY comparables will show increasing growth as we work through FY2016.

So we have lots of upside from current expectation in the core biz, then we have all the goodies on top of the $247M to look forward to:

"Then add on to that, our acquisition of Movirtu, Secusmart, and WatchDox will begin contributing later this year adding on top of that core growth that I mentioned. Then on top of that our licensing business which is somewhat variable, is off to a good start and will continue contribute meaningfully to the overall number . Here I have to say that we have a very deep pipeline but there are variabilities on when we could -- when the deal will be closed. We do expect it to be this year though, this fiscal year that is."

The numbers:

1. Core biz growth at 20% = $296.4M. Due to both the acceleration of growth expected in the latter half of the year, and the fact that FY2015 numbers increased throughout the year, I expect this number may actually reach $335M or more.
2. Licensing == $70M already booked with another large deal (let's call it $50M) to close this year.
3. Then Movitu, Secusmart and WatchDox need to bring in around $45M to hit the $500M figure.

[bbjdog]

Miscellaneous thoughts

I hate to read/report negative stories but I recently came across these two:

Governments Embrace Enterprise Mobility Management | StateTech Magazine


Bank of England CIO: ?Beware of the cloud, beware of vendors? ? The Register


I would really like to know what BlackBerry is doing/has done in cases such as these. I hope they are fighting the good fight as I am sure we would all hate to loose an account to MOBL or to any of our competitors... Hopefully, they are as passionate and committed as we are as shareholders.

I was also a bit distraught by these parts of the EC:





Granted and understood but quite frustrating. Given the general negativity of the market towards BlackBerry, I would sometimes wish that they adopt a more agressive stance (remember his "I Have a Message" bit?) and manage to get more recognition for their achievements by ramping up the PR/Communications side of things, by getting the word out (are blog postings enough?). Or am I mistaken? Would such a stance be premature as we are still in the transition which may well require a more modest/deceiving stance? Must one accept the incessant bashing that comes with the transition? Would there not be some clever, alternative way to create a "buzz", generate some interest?

I also submit that they should also have been better prepared to answer the questions that they invariably knew would be coming from the analysts on the software/licensing issue - especially knowing that our friends are always looking for the slightest trace of weakness to pounce...

JC may be playing coy and planning for the full 12 rounds. And we are merely getting to the 4th... He certainly knows much more than I do and I am not competent enough to play CEO. But I thought I would share these thoughts with you for now... Sorry for the long post. Cheers!

Your long post is always welcomed! I will assume that you are a little angry at this quarters conference. But we have to keep in mind that JC is walking a tight rope and can or can't say certain things. I also agree a lot with your point of view, but restrain from voicing. Cheers mate

[W Hoa]

When a CEO reads a prepared statement that core business is growing at 20% YoY, I take it at face value. Expecting quarterly growth of 20% is not correct.

When the CEO publicly states, for the record, that they have gained 1800 customers in a quarter and that the following quarter they have gained 2200 customers and that the following quarter after that they have gained an additional 2600 customers then yes, I see quarterly growth in the core business of 20% per quarter.

[DaSchwantz]

The numbers:

1. Core biz growth at 20% = $296.4M. Due to both the acceleration of growth expected in the latter half of the year, and the fact that FY2015 numbers increased throughout the year, I expect this number may actually reach $335M or more.
2. Licensing == $70M already booked with another large deal (let's call it $50M) to close this year.
3. Then Movitu, Secusmart and WatchDox need to bring in around $45M to hit the $500M figure.

Yes, correct. Q over q growth of core software from last quarter is irrelevant to the $500m target. The analysts insistence on having this figure broken out when Chen clearly couldn't do this due to contractual obligations just shows that they don't understand the numbers, and refuse to accept the possibility that there can be a new source of revenue that they haven't factored in. Sorry guys, time to get with the program...I know shifting your models from hardware to BES focused was hard for you, but Chen is two steps ahead. No need to get childish about it.

Posted via CB10

[Munx]

When the CEO publicly states, for the record, that they have gained 1800 customers in a quarter and that the following quarter they have gained 2200 customers and that the following quarter after that they have gained an additional 2600 customers then yes, I see quarterly growth in the core business of 20% per quarter.

1. 20% YoY growth = 20% growth when comparing like periods from year to year ie. FY 2106 revenue = $296.4M
2. 20% quarter over quarter = 20% growth compared to the previous quarter. ie. FY 2016 revenue = $354.3M

These are very different numbers and Chen is clearly guiding and stating (1), however he may ultimately achieve (2).

[Munx]

Yes, correct. Q over q growth of core software from last quarter is irrelevant to the $500m target. The analysts insistence on having this figure broken out when Chen clearly couldn't do this due to contractual obligations just shows that they don't understand the numbers, and refuse to accept the possibility that there can be a new source of revenue that they haven't factored in. Sorry guys, time to get with the program...I know shifting your models from hardware to BES focused was hard for you, but Chen is two steps ahead. No need to get childish about it.

Posted via CB10

Fully agree. The big number is $500M. The Street was totally taken by surprise with the licensing number and keyed in what they are perceiving as a weakness in quarter. I think Chen will continue to surprise.

[DaSchwantz]

1. 20% YoY growth = 20% growth when comparing like periods from year to year ie. FY 2106 revenue = $296.4M
2. 20% quarter over quarter = 20% growth compared to the previous quarter. ie. FY 2016 revenue = $354.3M

These are very different numbers and Chen is clearly guiding and stating (1), however he may ultimately achieve (2).

Well, and growth in customer wins is just that, not revenue growth. It does support Chen's statement about back-end loading though.

Posted via CB10

[W Hoa]

1. 20% YoY growth = 20% growth when comparing like periods from year to year ie. FY 2106 revenue = $296.4M
2. 20% quarter over quarter = 20% growth compared to the previous quarter. ie. FY 2016 revenue = $354.3M

These are very different numbers and Chen is clearly guiding and stating (1), however he may ultimately achieve (2).

Possibly. I'm interested in customer numbers right now. If BlackBerry continues with 20% growth in customer numbers next quarter (3100 new 'wins') it will be outstanding.