What changed in this filing

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Item 1A. Risk Factors

2025-04-02 compared with 2024-04-04 · 95 added, 112 removed, 227 unchanged (48% of the section changed)

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The Company has focused its strategy on software and services to grow revenue and generate sustainable profitability.

For the Company to increase its software and services revenues, it must continually grow its customer base by attracting new customers or, in the case of existing customers, deploying software and services across more endpoints or attracting additional users in such existing customers’ businesses.

The Company also needs to sell additional software and services over time to the same customers, or have customers upgrade their level of service.

If the Company is unable to promote a compelling value

proposition to customers and its efforts to sell or upsell software or services as described above are not successful, its results of operations could be materially impacted.

If the Company is unable to promote a compelling value proposition to customers and its efforts to sell or upsell software or services as described above are not successful, its results of operations could be materially impacted.

Existing customers that purchase the Company’s software and services have no contractual obligation to renew their subscriptions or purchase additional solutions after the initial subscription or contract period.

The Company’s customers’ expansion and renewal rates may decline or fluctuate as a result of a number of factors, including the perceived need for such additional software and services, the level of satisfaction with the Company’s software and services, features or functionality, the reliability of the Company’s software and services, the Company’s customer support, customer budgets and other competitive factors, such as pricing and competitors’ offerings.

For smaller or simpler deployments, the switching costs and time are relatively minor compared to traditional enterprise software deployments and as such a customer may more easily decide not to renew with the Company and switch to a competitor’s offerings.

Further, the Company’s future success depends in part on the growth, if any, in the markets for endpoint security software and embedded solutions, including in software-defined vehicles.

If the recent growth trends in these markets do not continue due to security incidents, technological challenges, lack of customer acceptance, weakening economic conditions or other reasons, demand for the Company’s products, and those of its competitors, could be negatively affected.

The Company’s sales cycles can be long and unpredictable and its sales efforts require considerable time and expense.

For many customers, licensing the Company’s Cybersecurity or IoT solutions represents a significant strategic decision and, as a result, sales cycles can be long and unpredictable, particularly during times of economic uncertainty.

When dealing with automotive, government or large regulated enterprise customers in particular, the Company is subject to risks related to increased customer bargaining power and pricing pressure, extended evaluation periods, regulatory changes, compliance with procurement requirements, complex approval systems, and unanticipated administrative delays.

IoT revenue recognition is also subject to delays in the development of embedded software platforms and the manufacture of new vehicles by automotive OEMs.

The Company’s ability to grow software and services revenue is dependent in part on its ability to maintain a qualified direct sales force, which requires significant time and resources, including investment in systems and training.

From time to time, the Company may choose to reorganize its go-to-market teams in an effort to better leverage its sales resources and improve customer service.

These reorganizations, which may include investments in educating the Company’s sales force, can cause short-term disruptions and may negatively impact sales.

There can be no assurance that the Company will be successful in implementing its sales and distribution strategy.

See also the Risk Factor entitled “The Company’s success depends on its relationships with resellers and distributors”.

Further, the Company’s future success depends in part on the growth, if any, in the markets for secure communications software and embedded solutions.

If growth trends in the Company’s target markets do not continue or are delayed due to security incidents, technological challenges, lack of customer acceptance, weakening economic conditions or other reasons, demand for the Company’s products, and those of its competitors, could be negatively affected.

The Company faces intense competition.

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In addition, competition may intensify as the Company’s competitors enter into business combinations or alliances and established companies in other market segments expand to become competitive with the Company’s business.

The impact of the competition described above could result in fewer customer orders, loss of market share, pressure to reduce prices, commoditization of product and service categories in which the Company participates, reduced revenue and reduced margins.

If the Company is unable to compete successfully, there could be a material adverse effect on the Company’s business, results of operations and financial condition.

The Company must obtain and maintain certain product approvals and certifications from governmental authorities, regulated enterprise customers and third-party standards bodies in order to remain competitive, meet contractual requirements and enable

its customers to meet their certification needs.

Failure to maintain such approvals or certifications for the Company’s current products or to obtain such approvals or certifications for any new products on a timely basis could have a material adverse effect on the Company’s competitive position.

Failure to obtain or maintain such approvals or certifications for the Company’s products on a timely basis, or at all, could have a material adverse effect on the Company’s competitive position, particularly in government markets.

In addition, independent industry analysts often issue reports regarding endpoint security solutions and the perception of the Company’s solutions in the marketplace, especially as compared to those of the Company’s competitors, may be significantly influenced by these reports.

If these reports are negative, less frequent or less positive than reports on the Company’s competitors’ products, the Company’s competitive position may be harmed.

The Company may not be able to enhance, develop, introduce or monetize products and services for the enterprise market in a timely manner with competitive pricing, features and performance.

The Company may not be able to enhance, develop, introduce or monetize its products and services in a timely manner with competitive pricing, features and performance.

The industries in which the Company competes are characterized by rapid technological change, frequent new product introductions, frequent market price reductions, constant improvements in features and short product life cycles.

The Company’s future success depends upon its ability to enhance and integrate its current products and services, to provide for their compatibility with evolving industry standards and operating systems, to address competing technologies and evolving security threats, and to continue to develop and introduce new products and services offering enhanced performance and functionality on a timely basis at competitive prices

The process of developing new technology is complex and uncertain, and involves time, substantial costs and risks, which are further magnified when the development process involves multiple operating platforms.

The development of next-generation technologies that utilize new and advanced features, including artificial intelligence and machine learning, involves making predictions regarding the willingness of the market to adopt such technologies over legacy solutions.

The process of developing new technology is complex and uncertain, and involves time, substantial costs and risks, which are further magnified when the development process integrations with third-party platforms.

The development of next-generation technologies that utilize new and advanced features involves making predictions regarding market adoption of such technologies.

The Company may be required to commit significant resources to developing new products, software and services before knowing whether such investment will result in products or services that the market will accept.

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In addition, if the Company fails to deliver a compelling customer experience or accurately predict emerging technological trends and the changing needs of customers and end users, or if the features of its new products and services do not meet the demands of its customers or are not sufficiently differentiated from those of its competitors, the Company’s business, results of operations and financial condition could be materially harmed.

Significant changes in government customer demand or procurement requirements could have an adverse effect on the Company’s business and results of operations.

The Company’s Secure Communications business depends, to a significant degree, on sales to government organizations.

Demand from government organizations is often unpredictable and subject to budgetary uncertainty and to reductions or delays in funding authorizations or procurement processes.

Government demand and payment for the Company’s products and services may also be impacted by changes in the political and administrative environment, including cost-cutting initiatives and changes in leadership, policies or priorities, and by shifting government attitudes towards the Company and the territories in which it operates.

Such changes could cause governments and governmental agencies to delay or refrain from purchasing the Company’s solutions or otherwise have an adverse effect on the Company’s business and results of operations.

Sales to government entities and performance on classified contracts may require the Company to obtain personnel security clearances and facility clearances, and there is no guarantee that the Company will be able to obtain or maintain such clearances.

In addition, government product requirements are often technically complex and the Company may be required to make costly changes to its products to meet such requirements without any assurance that such changes will generate a sale or improve the efficacy of its products.

The Company’s sales cycles can be long and unpredictable and its sales efforts require considerable time and expense.

For many customers, licensing the Company’s solutions represents a significant strategic decision and, as a result, sales cycles can be long and unpredictable, particularly during times of rising economic or geopolitical uncertainty.

When dealing with automotive, government or large regulated enterprise customers, the Company is subject to risks related to increased customer bargaining power and pricing pressure, extended evaluation periods, regulatory changes, compliance with procurement requirements, complex approval systems, and unanticipated administrative delays.

QNX revenue recognition is also subject to delays in the advancement of software-defined vehicle programs and the manufacture of new vehicles by automotive OEMs.

There can be no assurance that the Company will be successful in implementing its sales and distribution strategy.

See also the Risk Factor entitled “The Company’s success depends in part on its relationships with resellers and distributors”.

The occurrence or perception of a breach of the Company’s network cybersecurity measures or an inappropriate disclosure of confidential or personal information could significantly harm its business

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The Company is also exposed to risk as a result of process, coding or human errors and through attempts by third parties to fraudulently induce employees to provide access to confidential or personal information.

Although malicious attempts to gain unauthorized access to such information affect many companies across various industries, the Company is at a relatively greater risk of being specifically targeted because of its reputation for security and the nature of its network operations, and because the Company has been involved in the identification of organized cyber adversaries.

The Company devotes significant resources to network security, encryption and authentication technologies and other measures, including security policies and procedures, vulnerability testing and awareness training, to mitigate cyber risk to its systems, endpoints and data.

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If the network and product security measures implemented by the Company or its partners, including third-party data center operators, cloud service providers and product manufacturers are breached, or perceived to be breached, or if the confidentiality, integrity or availability of the Company’s data, including intellectual property and legally protected personal data, is compromised, the Company could be exposed to significant litigation, service disruptions, investigation and remediation costs, regulatory sanctions, fines and contractual penalties.

In addition, any such event could materially damage the

Company’s reputation, which is built in large measure on the security and reliability of BlackBerry products and services, and could result in the loss of investor confidence, channel partners, competitive advantages, revenues and customers, including the Company’s most significant government and regulated enterprise customers.

In addition, any such event could materially damage the Company’s reputation, which is built in large measure on the security and reliability of BlackBerry products and services, and could result in the loss of investor confidence, channel partners, competitive advantages, revenues and customers, including the Company’s most significant government and regulated enterprise customers.

While the Company maintains cybersecurity insurance, the Company’s coverage may be insufficient to cover all losses or types of claims that may arise from cyber incidents, and any incidents may result in the loss of, or increased costs of, the Company’s insurance.

The Company’s business could be negatively affected as a result of its business unit separation and cost reduction initiatives.

The separation of the Company’s IoT and Cybersecurity businesses into standalone divisions and the streamlining of the Company’s centralized functions is intended to enhance operational focus and flexibility for each business, to drive improved profitability, and to increase optionality for the Company to optimize shareholder value.

If the separation is not managed effectively, it may not provide these intended benefits and may result in a disruption of the Company’s operations, an inability to retain or recruit key personnel, and the impairment of customer relationships.

Further, if the separation is not conducted in manner or on a timeline that meets investor expectation, the Company may be subject to shareholder activism advocating for governance or strategic changes at the Company.

Responding to proxy contests, media campaigns and other tactics by activist shareholders would be costly and time-consuming, disrupt the Company’s operations and divert the attention of the Board and senior management from the pursuit of the Company’s strategies, which could adversely affect the Company’s business.

Perceived uncertainties as to the Company’s future direction as a result of shareholder activism could also result in the loss of potential business opportunities and may make it more difficult to attract and retain qualified personnel and partners.

The business separation is expected to result in each division performing corporate functions that have historically been performed on a centralized basis, including certain legal, finance, human resources, marketing and IT functions, which may require each division to increase its investment in these administrative functions.

Additionally, the integration of the Cybersecurity and IoT businesses has enabled them to share economies of scope and scale in costs, systems and vendor relationships, and their separation may result in each division paying higher charges for third-party services.

The Company’s success depends on its continuing ability to attract new personnel, retain existing key personnel and manage its staffing effectively.

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The Company is also substantially dependent on the continued service of its existing engineering personnel because of the complexity and specialization of its products and services.

Also, to the extent that the Company hires employees from mature public companies with significant financial resources, the Company may be subject to allegations that such employees have been improperly solicited, or that they have divulged proprietary or other confidential information or that their former employers own such employees’ inventions or other work product.

To attract and retain critical personnel, the Company may experience increased compensation costs that are not offset by increased productivity or higher prices for our products and services.

To attract and retain critical personnel, the Company may experience increased compensation costs that are not offset by increased productivity or higher prices for the Company’s products and services.

Also, the Company’s financial results and share price performance (particularly for senior employees for whom equity-based compensation is a key element of their total compensation), among other factors, may impact the Company’s ability to attract new, and retain existing, employees.

Any failure by the Company to attract and retain key employees could have a material adverse effect on the Company’s business, results of operations and financial condition.

In addition, during periods of internal reorganization, such as the Company’s ongoing business separation, the Company may experience losses of business continuity and accumulated knowledge, internal compliance gaps or other inefficiencies, including litigation claims by terminated employees.

If the Company does not maintain appropriate staffing, develop effective business continuity and succession programs, mitigate turnover and effectively utilize employees with the right mix of skills and experience across the functions necessary to meet the current and future needs of its business, the financial and operational performance of the Company could suffer.

A failure or perceived failure of the Company’s solutions to detect or prevent security vulnerabilities could materially adversely affect the Company’s reputation, financial condition and results of operations.

The techniques used by cyber adversaries to breach network and endpoint security measures are sophisticated and change frequently, and the Company’s products and services may not protect users against all cyberattacks.

At the same time, the Company’s products and services are highly complex and may contain design defects, bugs or security vulnerabilities that are

difficult to detect and correct.

Such internal defects and a variety of external factors, including misconfigurations, errors introduced through collaborations with the Company’s engineering partners or the failure of customers to address risks identified by our platform, could impair the effectiveness of the Company’s solutions and cause them to fail to secure endpoints and prevent attacks or function as intended.

In addition, the Company’s solutions may falsely indicate a cyber threat that does not actually exist, which may negatively impact customers’ trust in the Company’s solutions.

Real or perceived defects, errors or vulnerabilities in the Company’s software and services, or the failure of the Company’s platform solutions to detect or prevent cyber incidents, could result in the delay or denial of their market acceptance and may harm the Company’s financial condition, results of operations and reputation as a security solutions vendor.

If errors are discovered, correcting them could require significant expenditures by the Company and the Company may not be able to successfully correct them in a timely manner or at all.

Any failure by the Company to maintain appropriate staffing, develop effective business continuity and succession programs, mitigate turnover and effectively utilize employees with the right mix of skills and experience across the functions necessary to

meet the current and future needs of its business could have a material adverse effect on the Company’s business, results of operations and financial condition.

A failure or perceived failure of the security features of the Company’s solutions could materially adversely affect the Company’s reputation, financial condition and results of operations.

The Company’s products and services frequently involve the transmission, processing and storage of data, including proprietary, confidential and personally-identifiable information, and a security compromise, misconfiguration or malfunction involving the Company’s software could result in such information being accessible to attackers or other third parties.

Real or perceived security breaches against a customer using the Company’s solutions could cause damage or disruption to the customer and subject the Company to liability, and may result in the customer and the public believing that the Company’s solutions are ineffective, even if they were not implicated in failing to block the attack.

Further, a breach of an artificial intelligence and machine learning-based solution offered by another endpoint security provider could cause the market to lose confidence in next-generation security software generally, including the Company’s solutions.

The Company’s success depends on its relationships with resellers and channel partners.

The Company’s ability to maintain and expand its market reach, particularly with small and medium-sized businesses, is increasingly dependent on establishing, developing and maintaining relationships with third party resellers and channel partners, especially in its Cybersecurity business.

The Company makes training available to its partners and develops sales programs to incentivize them to promote and deliver the Company’s current and future products and services and to grow its user base.

If the Company is not able to effectively identify and establish new relationships with successful resellers and channel partners, or to maintain or enhance existing relationships without giving rise to conflicts between channels, or if the Company’s partners do not act in a manner that will promote the success of the Company’s products and services, the Company’s business, results of operations and financial condition could be materially adversely affected.

Many resellers and channel partners sell products and services of the Company’s competitors and may terminate their relationships with the Company with limited or no notice and limited or no penalty.

If the Company’s competitors offer their products and services to the resellers and channel partners on more favorable contractual or business terms, have more products and services available, or those products and services are, or are perceived to be, in higher demand by end users, or are more lucrative for the resellers and channel partners, there may be continued pressure on the Company to reduce the price of its products and services, or those resellers and channel partners may stop offering the Company’s products or de-emphasize the sale of its products and services in favor of the Company’s competitors, which could have a material adverse effect on the Company’s business, results of operations and financial condition.

Additionally, the Company’s products and services are highly complex and may contain design defects, bugs or security vulnerabilities that are difficult to detect and correct.

Such internal defects and a variety of external factors, including misconfigurations or errors introduced through collaborations with the Company’s engineering partners, could impair the effectiveness of the Company’s solutions.

Real or perceived defects, errors or vulnerabilities in the Company’s software and services could result in the delay or denial of their market acceptance and may harm the Company’s financial condition, results of operations and reputation as a security solutions vendor.

If errors are discovered, correcting them could require significant expenditures by the Company and the Company may not be able to successfully correct them in a timely manner or at all.

Adverse macroeconomic and geopolitical conditions, including trade policies, have had and may continue to have a material adverse effect on the Company’s business, results of operations and financial condition.

Challenging macroeconomic conditions, including as a result of geopolitical events, changes to international trade policies, public health crises, automotive labour disruptions, disruptions in global supply chains, and changes in inflation and interest rates, have negatively impacted and may in the future negatively impact consumer demand for automobiles and secure communications solutions, as well as sales cycles, and in turn have materially affected and may continue to materially affect the Company’s business, results of operations and financial condition.

Such economic factors and uncertainties are beyond the Company’s control and the Company has no comparative advantage in forecasting their effects.

Additionally, the imposition of new tariffs, border taxes or other barriers to trade that directly or indirectly impact the Company’s automotive or other customers could have a material adverse effect on the Company’s results of operations.

For example, since February 2025, the U.S.

presidential administration has imposed or threatened to impose new tariffs on imported products from Canada, Mexico, China and other countries, including most notably tariffs on imports of steel, aluminum and automobiles.

The administration has also proposed, or is in the process of, increasing current tariffs and imposing additional tariffs on other imported goods.

tariffs, and any new or additional retaliatory tariffs that may be taken by Canada or other countries in response, may adversely affect the operations of the Company’s customers and, consequently, demand for the Company’s solutions.

The Company is closely monitoring this evolving situation but there can be no assurance that the Company will be able to mitigate the impacts of any trade measures, which could be material to the Company’s business operations or harm the Company’s competitive position.

Litigation against the Company may result in adverse outcomes.

In the course of its business, the Company is subject to potential litigation claims and enforcement actions arising from its public disclosure.

The Company is committed to providing a high level of disclosure and transparency and provides commentary that highlights the trends and uncertainties that the Company anticipates.

Given the highly competitive and dynamic industry in which the Company operates and the evolution of the Company’s business strategy over time, the Company’s financial results may not follow any past trends, making it difficult to predict the Company’s financial results.

Consequently, actual results may differ materially from those expressed or implied by the Company’s forward-looking statements and may not meet the expectations of analysts or investors, which can contribute to the volatility of the market price of the Company’s common shares.

In addition, the Company receives general commercial claims related to the conduct of its business and the performance of its products and services, including product liability and warranty claims, employment claims, claims for breaches of contractual covenants and other litigation claims, which may potentially include claims relating to improper use of, or access to, personal data.

In addition, the Company receives general commercial claims related to the conduct of its business and the performance of its products and services, including employment claims, claims for breaches of contractual covenants and other litigation claims, which may potentially include claims relating to improper use of, or access to, personal data.

Liability claims related to product defects, bugs or vulnerabilities could give rise to class action litigation or to the withdrawal of certifications, and the Company may be subject to such claims either directly or indirectly through indemnities that it provides to certain of its customers.

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Litigation resulting from these claims and from actions asserted by the Company could be costly and time-consuming and could divert the attention of management and key personnel from the Company’s business operations.

The complexity of the

technology involved and the inherent uncertainty of commercial, class action, securities, employment and other litigation increases these risks.

The complexity of the technology involved and the inherent uncertainty of commercial, class action, securities, employment and other claims increases these risks.

In recognition of these considerations, the Company may enter into settlements resulting in material expenditures, the payment of which could have a material adverse effect on the Company’s business, results of operation and financial condition.

Similarly, if the Company is unsuccessful in its defense of material litigation claims, the Company may be faced with significant monetary damages or injunctive relief against it that could have a material adverse effect on the Company’s business, BlackBerry brand, results of operations and financial condition.

Similarly, if the Company is unsuccessful in its defence of material litigation claims, the Company may be faced with significant monetary damages or injunctive relief against it that could have a material adverse effect on the Company’s business, BlackBerry brand, results of operations and financial condition.

Administrative or regulatory actions against the Company or its employees could also have a material adverse effect on the Company’s business, BlackBerry brand, results of operations and financial condition.

See Note 11 to the Consolidated Financial Statements for information regarding certain legal proceedings in which the Company is involved.

Adverse macroeconomic and geopolitical conditions have had and may continue to have a material adverse effect on the Company’s business, results of operations and financial condition.

Challenging macroeconomic conditions, including as a result of geopolitical events, public health crises, automotive labor disruptions, disruptions in global supply chains, increases in inflation and interest rates, have negatively impacted and may in the future negatively impact consumer demand for automobiles and sales cycles and spending on cybersecurity solutions, and in turn have materially affected the Company’s business, results of operations and financial condition in certain periods.

Because all components of the Company’s budgeting and forecasting are dependent upon estimates of economic activity in the markets that the Company serves and demand for its products and services, economic uncertainties make it difficult to estimate future income and expenditures.

Network disruptions or other business interruptions could have a material adverse effect on the Company’s business and harm its reputation.

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The Company may not be successful in fostering an ecosystem of third-party application developers.

The Company believes decisions by customers to purchase its products, including the BlackBerry IVY platform, depend and will depend in part on the availability and compatibility of software applications and services that are developed and maintained by third-party developers.

The Company may not be able to convince third parties to develop and maintain applications for its cybersecurity software and embedded solutions platforms.

The Company believes decisions by customers to purchase its products depend and will depend in part on the availability and compatibility of software applications and services that are developed and maintained by third-party developers.

The Company may not be able to convince third parties to develop and maintain applications for its secure communications software and embedded solutions platforms.

The loss of, or inability to maintain these developer relationships may materially and adversely affect the desirability of the Company’s products and, hence, the Company’s revenue from the sale of its products.

The Company’s success depends in part on its relationships with resellers and channel partners.

The Company’s ability to maintain and expand its market reach depends in part on establishing, developing and maintaining relationships with third party resellers and channel partners, especially in its Secure Communications business.

The Company’s products and services are dependent upon interoperability with rapidly changing systems provided by third parties.

The Company’s platform depends on interoperability with operating systems, such as those provided by Apple, Google and Microsoft, as well as automotive OEMs.

Operating systems are upgraded frequently in response to consumer demand and, in order to maintain the interoperability of its platform, the Company may need to release new software updates at a much greater pace than a traditional enterprise software company that supports only a single platform.

In addition, the Company typically receives limited advance notice of changes in features and functionality of operating systems and platforms, and therefore the Company may be forced to divert resources from its preexisting product roadmap to accommodate these changes.

If the Company fails to enable IT departments to support operating system upgrades upon release, the Company’s business and reputation could suffer.

The Company’s platform depends on interoperability with solutions offered by silicon vendors and other software vendors, such as those provided by Apple, Google and Microsoft, as well as by automotive OEMs.

If the Company fails to support timely integrations with third-party solutions, the Company’s business and reputation could suffer.

This could further disrupt the Company’s product roadmap and cause it to delay introduction of planned products and services, features and functionality, which could harm the Company’s business.

Furthermore, some of the features and functionality in the Company’s products and services require interoperability with APIs of other operating systems, and if operating system providers decide to restrict the Company’s access to their APIs, that functionality would be lost and the Company’s business could be impaired.

Operating system providers have included, and may continue to include, features and functionality in their operating systems that are comparable to elements of the Company’s products and services, thereby making the Company’s platform less valuable.

The inclusion of, or the announcement of an intent to include, functionality perceived to be similar to that offered by the Company’s products and services in mobile or embedded operating systems may have an adverse effect on the Company’s ability to market and sell its products and services.

Furthermore, some of the features and functionality in the Company’s products and services require interoperability with APIs from other vendors, and if these vendors decide to restrict the Company’s access to their APIs, that functionality would be lost and the Company’s business could be impaired.

The Company uses artificial intelligence solutions, which may expose it to operational challenges, legal liability, reputational harm and regulatory concerns .

The Company incorporates novel uses of artificial intelligence (“AI”) technologies, including generative AI, into its operations.

The introduction of generative AI, an emerging technology in the early stages of commercial use, into the Company’s operations may result in new or enhanced governmental or regulatory scrutiny, litigation, confidentiality, ethical concerns, or other complications that could adversely affect the Company’s business, reputation, or financial results.

Known risks of generative AI currently include risks related to accuracy, bias, toxicity, privacy and security and data provenance.

For example, AI technologies, including generative AI, may create content that appears correct but is factually inaccurate or flawed, or contains copyrighted or other protected material, and if the Company uses this flawed or protected content to its detriment or the owners of such copyrighted material seek to enforce their rights, the Company may be exposed to brand or reputational harm, competitive harm and/or legal liability.

The technologies underlying AI and its uses are the subject of ongoing review by various governmental and regulatory agencies, and various jurisdictions in the U.S., the European Union and elsewhere are applying, or are considering applying, their cybersecurity and data protection laws to AI or are considering general legal frameworks for AI.

Any actual or perceived failure to comply with these laws, regulations or ethical standards could include significant penalties and reputational harm.

Risks Related to Intellectual Property and Technology Licensing

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The aggregate proceeds that the Company ultimately receives from the Malikie Transaction are expected to be less than $900 million.

The Company may not be able to obtain rights to use third-party software and is subject to risks related to the use of open source software.

Many of the Company’s products include intellectual property which must be licensed from third parties.

The termination of any of these licenses, or the failure of such third parties to adequately maintain, protect or update their software or intellectual property rights, could delay the Company’s ability to offer its products while the Company seeks to implement alternative technology offered by other sources (which may not be available on commercially reasonable terms) or develop such technology internally (which would require significant unplanned investment on the Company’s part).

The use of third-party software in the Company’s products could also expose the Company and its customers to security vulnerabilities.

In addition, certain software that the Company uses may be subject to open source licenses.

The Company is subject to risks related to the use of open source software may not be able to obtain rights to use third-party software.

Certain software that the Company uses may be subject to open source licenses.

Use and distribution of open source software may entail greater risks than use of third-party commercial software, as open source licensors generally do not provide warranties or other contractual protections regarding infringement claims or the quality of the code.

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In such an event, the Company could be exposed to litigation or reputational damage, and could be required to obtain licenses from third parties in order to continue offering its products and services or to re-engineer its products or services, or discontinue their sale in the event re-engineering cannot be accomplished on a timely basis, any of which could materially and adversely affect the Company’s business and operating results.

Certain of the Company’s products include intellectual property that is licensed from third parties.

The use of third-party software in the Company’s products could also expose the Company and its customers to security vulnerabilities.

The Company could be found to have infringed on the intellectual property rights of others.

Companies in the software and technology industries, including some of the Company’s current and potential competitors, own large numbers of patents, copyrights, trademarks and trade secrets and frequently engage in litigation based on allegations of infringement or other violations of intellectual property rights.

Although the Company believes that third-party software included in the Company’s products is licensed from the entity holding the intellectual property rights and that its products do not infringe on the rights of third parties, third parties have and are expected to continue to assert infringement claims against the Company in the future.

the Company in the future.

The Company may be subject to these types of claims either directly or indirectly through indemnities that it provides to certain of its customers, partners and suppliers against these claims.

As the Company continues to develop software products and expand its portfolio using new technology and innovation, its exposure to threats of infringement may increase.

Many intellectual property infringement claims are brought by entities whose business model is to obtain patent-licensing revenues from operating companies such as the Company.

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• a portion of the Company’s cash flow from operations or other capital resources will be dedicated to the payment of the principal of, and/or interest on, indebtedness, thereby reducing funds available for working capital, capital expenditures, strategic initiatives or other business purposes.

• the Company’s earnings under U.S.

GAAP may be negatively affected to the extent that any indebtedness is accounted for by the Company at fair value and includes embedded derivatives which fluctuate in value from period to period.

If the Company cannot maintain an adequate cash balance or positive cash flow from operations, the Company may be unable to pay amounts due under its outstanding indebtedness or to fund other liquidity needs and it may be required to refinance all or part of its then existing indebtedness, sell assets, reduce or delay capital expenditures or seek to raise additional capital, any of which could have a material adverse effect on the Company’s business, results of operations and financial condition.

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A breach of any of these covenants could result in a default under the Company’s outstanding indebtedness, which would have a material adverse effect on the Company’s business, results of operations and financial condition.

The Company faces substantial asset risk, including the potential for charges related to its long-lived assets and goodwill.

The Company faces asset risk, including the potential for charges related to certain investments, long-lived assets and goodwill.

As partial consideration for the sale of its Cylance endpoint security assets and liabilities to Arctic Wolf, the Company received common shares of Arctic Wolf as well as a covenant from Arctic Wolf to make a subsequent cash payment to the Company of

approximately $40 million one year following the closing.

The common shares of Arctic Wolf are illiquid securities without a public market and, as such, they cannot be readily sold or exchanged for cash and they may be difficult to value accurately.

The Company may not be able to sell these shares at desired times or prices, which could negatively impact its financial condition and results of operations.

Additionally, the Company is exposed to risk related to potential non-payment of the deferred cash consideration from Arctic Wolf.

The Company’s long-lived assets include items such as the Company’s network infrastructure, operating lease right-of-use assets and certain intellectual property.

Under United States generally accepted accounting principles (“U.S.

GAAP, the Company reviews its long-lived assets for impairment when events or changes in circumstances indicate the carrying value may not be recoverable.

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If any such events or circumstances arise, the Company may be required to record an impairment charge in the value of its goodwill.

In the fourth quarter of fiscal 2024, the Company recorded the Fiscal 2024 Goodwill Impairment Charge.

For additional information, see Note 3 to the Consolidated Financial Statements.

Tax provision changes, the adoption of new tax legislation or exposure to additional tax liabilities could materially impact the Company’s financial condition.

The Company is subject to income, indirect (such as sales tax, sales and use tax and value-added tax) and other taxes in Canada and numerous foreign jurisdictions.

The Company is subject to income, indirect (such as sales tax, sales and use tax and value-added tax) and other taxes in Canada, the United States and numerous other foreign jurisdictions.

Significant judgment is required in determining its worldwide liability for income, indirect and other taxes, as well as potential penalties and interest.

In the ordinary course of the Company’s business, there are many

transactions and calculations where the ultimate tax determination is uncertain.

In the ordinary course of the Company’s business, there are many transactions and calculations where the ultimate tax determination is uncertain.

Although the Company believes that its tax estimates are reasonable, there can be no assurance that the final determination of any tax audits will not be materially different from that which is reflected in historical income, indirect and other tax provisions and accruals.

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The Company’s future effective tax rate will depend on the relative profitability of the Company’s domestic and foreign operations, the statutory tax rates and taxation laws of the related tax jurisdictions, the tax treaties between the countries in which the Company operates, the timing of the release, if any, of the valuation allowance, and the relative proportion of research and development incentives to the Company’s profitability.

Canada, together with approximately 140 other countries comprising the Organization for Economic Co-Operation and Development (“OECD”) and the G20 Inclusive Framework on Base Erosion and Profit Shifting (“BEPS”), approved in principle in 2021 certain base erosion tax initiatives, including the introduction of a 15% global minimum tax which is intended to be effective in 2023.

In August 2023, the Department of Finance (Canada) released for public comment draft legislative proposals to implement the global minimum tax.

The draft legislative proposals are generally intended to apply in respect of fiscal years beginning on or after December 31, 2023.

In November 2023, the Department of Finance (Canada) released revised draft legislative proposals which, if enacted, may limit the deductibility of interest and financing expenses for Canadian tax purposes.

The revised draft legislative proposals are generally intended to apply in respect of taxation years beginning on or after October 1, 2023.

The Company will continue to monitor the BEPS and interest deductibility limitation proposals and any impact on the Company, which may result in an increase in future taxes and an adverse effect on the Company.

federal income tax laws, if a company is, or for any past period was, a passive foreign investment company (“PFIC”), there could be adverse U.S.

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Non-compliance could result in penalties or significant legal liability and the Company’s business, results of operations and financial condition may be adversely affected.

The Company’s customers, partners and members of its ecosystem may also have differing expectations or impose particular requirements for the collection, storage, processing and transmittal of user data or personal information in connection with BlackBerry products and services.

The Company’s customers, partners and members of its ecosystem may also have differing expectations or impose territorial or other requirements for the collection, hosting, processing and transmittal of user data or personal information in connection with BlackBerry products and services.

Such expectations or requirements could subject the Company to additional costs, liabilities or negative publicity, and limit its future growth.

In addition, governmental authorities may require access to limited data stored by the Company through lawful access demands and capabilities, which could subject the Company to legal liability, unforeseen compliance cost and negative publicity.

Even a perception that the Company’s products or practices do not adequately protect users’ privacy or data collected by the Company, made available to the Company or stored in or through the Company’s products, or that they are being used by third parties to access personal or consumer data, could impair the Company’s sales or its reputation and brand value.

Government regulations applicable to the Company’s products and services, including products containing encryption capabilities, could negatively impact the Company’s business.

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Environmental, social and governance (“ESG”) expectations and standards expose the Company to risks that could adversely affect the Company’s reputation and performance.

Standards for identifying, measuring and reporting ESG matters continue to evolve, including regulatory requirements such as the Securities and Exchange Commission’s recently-published final rules on climate-related disclosures .

Regulatory requirements and standards for identifying, measuring and reporting ESG matters continue to evolve in many of the jurisdictions in which the Company operates.

If the Company’s ESG practices or disclosures do not meet evolving investor or other stakeholder expectations and standards, then the reputation of the Company, its ability to attract or retain employees, and its attractiveness as an investment, business partner, acquiror or service provider could be negatively impacted.

Further, the Company’s failure or perceived failure to pursue or fulfill ESG objectives or to satisfy applicable reporting standards on a timely basis, or at all, could have similar negative impacts or expose the Company to government enforcement actions and private litigation

At the same time, “anti-ESG” sentiment has recently gained momentum across the U.S., as evidenced most notably by state legislative actions, investor initiatives, and an executive order opposing diversity, equity and inclusion (“DEI”) programs in the private sector.

Anti-ESG and anti-DEI-related policies, legislation, initiatives, litigation, and scrutiny could result in the Company facing additional compliance obligations, becoming the subject of investigations or enforcement actions, or sustaining reputational harm.

Failure of the Company’s suppliers, subcontractors, channel partners and representatives to use acceptable ethical business practices or to comply with applicable laws could negatively impact the Company’s business.

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Acquisitions, divestitures, investments and other business initiatives may negatively affect the Company’s results of operations.

The Company has acquired and continues to seek out opportunities to acquire or invest in, businesses, assets, products, services and technologies that expand, complement or are otherwise related to the Company’s business or provide opportunities for growth.

In addition, the Company is increasingly collaborating and partnering with third parties to develop technologies, products and services, as well as seek new revenue through partnering arrangements.

These activities involve significant challenges and risks, including:

The Company actively evaluates opportunities to acquire or invest in businesses, assets, products, services and technologies.

Any such strategic transactions involve significant challenges and risks, including:

that they may not advance the Company’s strategic objectives or generate satisfactory synergies or return on investment;

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additional demands on the Company’s management, resources, systems, procedures and controls;

disruption of the Company’s ongoing business;

and diversion of management’s attention from other business concerns.

Acquisitions, investments or other strategic collaborations or partnerships may involve significant commitments of financial and other resources of the Company.

If these fail to perform as expected, or if the Company fails to enter into and execute the transactions or arrangements needed to succeed, the Company may not be able to bring its products, services or technologies to market successfully or in a timely manner, which would have a material adverse impact on results of operations.

In addition, the acquisitions may involve unanticipated costs and liabilities, including possible litigation and new or increased regulatory exposure, which are not covered by the indemnity or escrow provisions, if any, of the relevant acquisition agreements.

As business circumstances dictate, the Company may also decide to divest itself of assets or businesses.

The Company may not be successful in identifying or managing the risks involved in any divestiture, including its ability to obtain a reasonable purchase price for the assets, potential liabilities that may continue to apply to the Company following the divestiture, potential tax implications, employee issues or other matters.

and disruption of the Company’s ongoing business.

In addition, acquisitions may involve unanticipated costs and liabilities, including possible litigation and new or increased regulatory exposure, which are not covered by the indemnity or escrow provisions, if any, of the relevant acquisition agreements.

As business circumstances dictate, the Company may also decide to divest itself of assets or businesses, as in the case of the sale of the Cylance endpoint security assets to Arctic Wolf.

The Company may not be successful in identifying or managing the risks involved in any divestiture, including its ability to negotiate or collect a reasonable purchase price for the assets, potential liabilities that may continue to apply to the Company following the divestiture, potential tax implications, business disruption, employee issues or other matters.

The Company’s inability to address these risks could adversely affect the Company’s business, results of operations and financial condition.

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These risks include:

• compliance with the laws of the United States, Canada and other countries that apply to the Company’s international operations, including import and export legislation, trade sanctions, lawful access, and privacy, anti-corruption and consumer protection laws;

• unexpected changes in foreign regulatory requirements;

• compliance with the laws and regulations of Canada, the United States and other countries that apply to the Company’s international operations, including import and export legislation, trade sanctions, lawful access, and privacy, anti-corruption and consumer protection laws;

• reliance on third parties to establish and maintain foreign operations;

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• potential adverse tax consequences;

• uncertainties of laws and enforcement relating to the protection of intellectual property or secured technology;

• uncertainties of laws and enforcement relating to the protection of intellectual property;

• litigation in foreign court systems;

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The Company has operations in numerous locations around the world that expose the Company to additional diverse environmental risks.

A significant natural disaster, such as an earthquake, fire or flood could have a material adverse impact on the Company’s business and operations and could cause the Company to incur costs to repair damages to its facilities, equipment and infrastructure.

equipment and infrastructure.

From time to time, the Company’s offices and remote working locations have historically experienced, and are projected to continue to experience, climate-related events including drought, heat waves, ice storms, power shortages, and wildfires and resultant air quality impacts.

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The Company expects its quarterly revenue and operating results to fluctuate.

introductions, an internal systems failure, or challenges with one of the Company’s distribution channels or other partners (including licensees and manufacturers).

The Company’s revenues can change from one quarter to the next, including due to unexpected developments late in a quarter, such as lower-than-anticipated demand for the Company’s products and services, issues with new product or service introductions, an internal systems failure, or challenges with one of the Company’s distribution channels or other partners (including licensees and manufacturers).

Gross margins on the Company’s products and services vary across product lines and can change over time as a result of product transitions, pricing and configuration changes, and cost fluctuations.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors