What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-04-02 compared with 2024-04-04 · 398 added, 320 removed, 1138 unchanged (39% of the section changed)

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Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors of BlackBerry Limited

To the Board of Directors and Shareholders of BlackBerry Limited

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of BlackBerry Limited and its subsidiaries (together, the Company) as of February 29, 2024 and February 28, 2023, and the related consolidated statements of operations, comprehensive income (loss), shareholders’ equity and cash flows for each of the three years in the period ended February 29, 2024, including the related notes (collectively referred to as the consolidated financial statements).

We have audited the accompanying consolidated balance sheets of BlackBerry Limited and its subsidiaries (the Company) as of February 28, 2025 and February 29, 2024, and the related consolidated statements of operations, of comprehensive income (loss), of shareholders’ equity and of cash flows for each of the three years in the period ended February 28, 2025, including the related notes (collectively referred to as the consolidated financial statements).

We also have audited the Company’s internal control over financial reporting as of February 28, 2025, based on criteria established in Internal Control ‒ Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

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Basis for Opinions

The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Report on Internal Control over Financial Reporting, appearing under Item 9A.

The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting appearing under Item 9A.

Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company’s internal control over financial reporting based on our audits.

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(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

and (iii) provide reasonable

assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

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The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Impairment Test of Goodwill for the BlackBerry Spark Reporting Unit

Impairment Tests of Goodwill for the UEM and Cylance Reporting Units

As described in Notes 1, 3, 4 and 5 to the consolidated financial statements, the Company’s goodwill balance was $472.5 million as of February 28, 2025.

A significant portion of the goodwill relates to the BlackBerry Spark reporting unit.

A significant portion of the goodwill related to the UEM and Cylance reporting units (reporting units).

Management conducts a goodwill impairment test annually on December 31, or more frequently if events or changes in circumstances indicate goodwill may be impaired.

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When the carrying value of a reporting unit exceeds its fair value, goodwill of the reporting unit is considered to be impaired and written down to its fair value.

Management utilizes multiple valuation techniques, which include the income approach using a discounted future cash flow model, among others in determining the fair value of a reporting unit.

Estimating the fair value of a reporting unit using a discounted future cash flow model requires significant judgment by management, including estimation of future cash flows, which is dependent on estimation of the long-term rates of revenue growth, terminal growth rate, profitability measures, and determination of the discount rate.

Based on the result of the impairment test related to goodwill, management concluded that the carrying value of the BlackBerry Spark reporting unit exceeded its fair value.

Management recorded a goodwill impairment charge of $35 million relating to the BlackBerry Spark reporting unit.

The principal considerations for our determination that performing procedures relating to the impairment test of goodwill for the BlackBerry Spark reporting unit is a critical audit matter are (i) the significant judgment by management when determining the fair value of the BlackBerry Spark reporting unit using a discounted future cash flow model;

(ii) a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating management’s significant assumptions related to long-term rates of revenue growth, terminal growth rate, profitability measures and the discount rate;

and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

During the third quarter, the Company conducted a valuation of the reporting units in connection with the plans to sell the Cylance business.

Management utilized one of the following valuation techniques to determine the fair values of the reporting units:

the income approach using a discounted future cash flow model or an estimated exit value approach.

Estimating the fair value of a reporting unit using a discounted future cash flow model required significant judgment by management, including estimation of future cash flows, which is dependent on estimation of the long-term rates of revenue growth and profitability measures.

Estimating the fair value of a reporting unit using an estimated exit value approach required significant judgment by management, including the estimation of significant unobservable inputs used by management related to the fair values of the common shares and delayed cash payment.

Based on the results of the impairment tests related to goodwill, management concluded that the fair values of the reporting units exceeded the carrying values and no impairment was present.

The principal considerations for our determination that performing procedures relating to the impairment tests of goodwill for the reporting units is a critical audit matter are (i) the significant judgment by management when determining the fair values of the UEM and Cylance reporting units using a discounted future cash flow model and estimated exit value approach;

(ii) a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating management’s significant assumptions related to long-term rates of revenue growth and profitability measures in the discounted future cash flow model;

(iii) a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating significant unobservable inputs used by management related to the fair values of common shares and delayed cash payment in the estimated exit value approach, and (iv) the audit effort involved the use of professionals with specialized skill and knowledge.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included testing the effectiveness of controls relating to management’s goodwill impairment test for the BlackBerry Spark reporting unit, including controls over the determination of its fair value.

These procedures also included, among others, (i) testing management’s process for determining the fair value of the BlackBerry Spark reporting unit;

These procedures included testing the effectiveness of controls relating to management’s goodwill impairment tests for the reporting units, including controls over the determination of their fair values.

These procedures also included, among others, (i) testing management’s process for estimating the fair value of the reporting unit which is determined using a discounted future cash flow model;

(ii) testing the completeness and accuracy of underlying data used in the discounted future cash flow model;

(iii) evaluating the appropriateness of the discounted future cash flow model;

and (iv) evaluating the reasonableness of the significant assumptions used by management related to long-term rates of revenue growth, terminal growth rate, profitability measures and the discount rate.

Evaluating management’s assumptions related to long-term rates of revenue growth and profitability measures involved assessing whether the assumptions used by management were reasonable considering consistency with (i) the current and past performance of the BlackBerry Spark reporting unit;

and (iv) evaluating the reasonableness of the significant assumptions used by management related to long-term rates of revenue growth and profitability measures in the discounted future cash flow model.

(ii) external market and industry data;

and (iii) evidence obtained in other areas of the audit.

Professionals with specialized skill and knowledge were used to assist in the evaluation of the (i) appropriateness of the Company’s discounted future cash flow model and (ii) reasonableness of the discount rate and terminal growth rate.

Professionals with specialized skill and knowledge were used to assist in the evaluation of the appropriateness of the Company’s discounted future cash flow model.

The procedures for estimating the fair value of the reporting unit which is determined using the estimated exit value approach included (i) the involvement of professionals with specialized skill and knowledge to assist in evaluating the reasonableness of the fair values of common shares and delayed cash payment by developing an independent range of fair values using external market and industry data, and evidence obtained in other areas of the audit;

and (ii) testing the completeness and accuracy of underlying data used in the independent range of fair values.

/s/ PricewaterhouseCoopers LLP

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Other current assets (note 5) 30.0 35.1

Assets held for sale, current (note 3) — 11.6

Restricted cash and cash equivalents (note 4) 13.6 25.4

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Property, plant and equipment, net (note 5) 13.4 21.2

Intangible assets, net (note 3 and note 4) 154 203

Goodwill (note 3 and note 4) 562 595

Intangible assets, net (note 5) 47.3 57.5

Goodwill (note 5) 472.4 474.5

Assets held for sale, non-current (note 3) — 186.6

$ 1,295.6 $ 1,395.0

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Income taxes payable (note 6) 25.5 28.4

Debentures (note 6) — 367

Deferred revenue, current (note 13) 161.5 148.7

Liabilities held for sale, current (note 3) — 49.3

Deferred revenue, non-current (note 13) 5.6 14.6

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Long-term notes (note 7) 195.3 194.1

Liabilities held for sale, non-current (note 3) — 13.3

Commitments and contingencies (note 11)

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Issued and outstanding - 596,230,655 voting common shares (February 29, 2024 - 589,232,539 )

2,976.4 2,947.7

Deficit ( 2,237.3 ) ( 2,158.3 )

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Balance as at February 28, 2022 $ 2,868.6 $ ( 1,293.7 ) $ ( 19.0 ) $ 1,555.9

Net income — 12 — 12

Net loss — ( 734.4 ) — ( 734.4 )

Other comprehensive loss — — ( 4.7 ) ( 4.7 )

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Net loss — ( 130.2 ) — ( 130.2 )

Other comprehensive loss — — ( 5 ) ( 5 )

Other comprehensive income — — 9.4 9.4

Stock-based compensation (note 8) 33.1 — — 33.1

Shares issued:

Exercise of stock options (note 8) 0.3 — — 0.3

Redemption of deferred share units ("DSUs") (note 8) 0.9 — 0.9

Employee share purchase plan (note 8) 4.8 — — 4.8

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Net loss — ( 79.0 ) — ( 79.0 )

Other comprehensive income — — 10 10

Other comprehensive loss — — ( 4.9 ) ( 4.9 )

Stock-based compensation (note 8) 25.6 — — 25.6

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Employee share purchase plan (note 8) 3.1 — — 3.1

Redemption of deferred share units ("DSUs") (note 7) 1 $ — $ — 1

Balance as at February 28, 2025 $ 2,976.4 $ ( 2,237.3 ) $ ( 19.2 ) $ 719.9

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Impairment of long-lived assets (note 4) 9.6 15.3 3.5

Gain on sale of property, plant and equipment, net (note 4) — ( 6 ) —

Debentures fair value adjustment (note 6) 3 ( 138 ) ( 212 )

Litigation settlement (note 10) — 165 —

Gain on sale of property, plant and equipment, net — — ( 6.0 )

Prior Debentures fair value adjustment (note 7) — 3.5 ( 137.4 )

Litigation settlements (note 11) 2.8 — 165.0

394.1 479.7 573.4

Operating loss ( 125 ) ( 725 ) ( 2 )

Operating income (loss) 0.8 11.0 ( 206.8 )

Investment income, net (note 4 and note 7) 7.7 18.8 5.0

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Provision for income taxes (note 6) 17.0 24.2 13.7

Net income (loss) $ ( 130 ) $ ( 734 ) $ 12

Income (loss) from continuing operations ( 8.5 ) 5.6 ( 215.5 )

Gain from disposal of discontinued operation, net of tax (note 3) 10.2 — —

Loss from discontinued operations, net of tax (note 3) ( 80.7 ) ( 135.8 ) ( 518.9 )

Net loss $ ( 79.0 ) ( 130.2 ) ( 734.4 )

Earnings (loss) per share (note 9)

Basic $ ( 0.22 ) $ ( 1.27 ) $ 0.02

Diluted $ ( 0.22 ) $ ( 1.35 ) $ ( 0.31 )

Basic earnings (loss) per share from continuing operations $ ( 0.01 ) 0.01 ( 0.37 )

Total basic loss per share $ ( 0.13 ) ( 0.22 ) ( 1.27 )

Diluted earnings (loss) per share from continuing operations $ ( 0.01 ) 0.01 ( 0.54 )

Total diluted loss per share $ ( 0.13 ) ( 0.22 ) ( 1.35 )

See notes to consolidated financial statements.

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February 28, 2025 February 29, 2024 February 28, 2023

Net income (loss) $ ( 130 ) $ ( 734 ) $ 12

Net loss $ ( 79.0 ) $ ( 130.2 ) $ ( 734.4 )

Other comprehensive income (loss)

Net change in fair value and amounts reclassified to net income (loss) from derivatives designated as cash flow hedges during the year (note 9) 1 ( 1 ) ( 1 )

Net change in fair value and amounts reclassified to net loss from derivatives designated as cash flow hedges during the year (note 10) ( 2.2 ) 1.3 ( 0.9 )

Foreign currency translation adjustment ( 2.7 ) 1.6 ( 5.8 )

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Other comprehensive income (loss) ( 4.9 ) 9.4 ( 4.7 )

Comprehensive income (loss) $ ( 120 ) $ ( 739 ) $ 6

Comprehensive loss $ ( 83.9 ) $ ( 120.8 ) $ ( 739.1 )

See notes to consolidated financial statements.

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Cash flows from operating activities

Net income (loss) $ ( 130 ) $ ( 734 ) $ 12

Adjustments to reconcile net income (loss) to net cash used in operating activities:

Net loss $ ( 79.0 ) $ ( 130.2 ) $ ( 734.4 )

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

Amortization 44.7 58.5 104.7

Stock-based compensation 25.6 33.1 33.9

Gain on sale of investment (note 3) — — ( 22 )

Gain on disposal of discontinued operation (note 3) ( 10.4 ) — —

Impairment of goodwill (note 4) — 34.8 245.4

Impairment of long-lived assets (note 4)

9.6 15.3 234.5

Intellectual property disposed of by sale (note 13) — 147.2 —

Gain on sale of property, plant and equipment, net (note 4) — ( 6 ) —

Debentures fair value adjustment (note 6) 3 ( 138 ) ( 212 )

Gain on sale of property, plant and equipment, net — — ( 6.0 )

Prior Debentures fair value adjustment (note 7) — 3.5 ( 137.4 )

Operating leases ( 10.8 ) ( 13.7 ) ( 15.1 )

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Deferred revenue ( 5.9 ) 7.5 ( 29.4 )

Net cash used in operating activities ( 3 ) ( 263 ) ( 28 )

Net cash provided by (used in) operating activities 16.5 ( 3.5 ) ( 262.2 )

Cash flows from investing activities

Acquisition of long-term investments — ( 1.6 ) ( 2.9 )

Proceeds on sale, maturity or distribution from long-term investments — — 35

Acquisition of property, plant and equipment ( 3.1 ) ( 7.1 ) ( 7.3 )

Proceeds on sale of property, plant and equipment (note 4) — 17 —

Proceeds on sale of property, plant and equipment — — 17.1

Acquisition of intangible assets ( 7.0 ) ( 13.8 ) ( 33.6 )

Cash proceeds from disposal of discontinued operation (note 3) 79.8 — —

Acquisition of short-term investments ( 154.9 ) ( 154.4 ) ( 514.4 )

Proceeds on sale or maturity of restricted short-term investments — — 24

Proceeds on sale or maturity of short-term investments 145.9 223.5 716.3

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Issuance of common shares 3.1 5.9 6.1

Payment of finance lease liability — — ( 0.1 )

Maturities of 2020 Debentures and Extension Debentures (note 7) — ( 515.0 ) —

Proceeds from issuance of Extension Debentures and Notes, net (note 6) 344 — —

Proceed from Issuance of Extension Debentures and Notes (note 7) — 344.0 —

Net cash provided by (used in) financing activities 3.1 ( 165.1 ) 6.0

Effect of foreign exchange loss on cash, cash equivalents, restricted cash, and restricted cash equivalents ( 0.5 ) 0.2 ( 2.9 )

Net increase (decrease) in cash, cash equivalents, restricted cash, and restricted cash equivalents during the period ( 122 ) ( 84 ) 188

Cash, cash equivalents, restricted cash, and restricted cash equivalents, beginning of period 322 406 218

Cash, cash equivalents, restricted cash, and restricted cash equivalents, end of period $ 200 $ 322 $ 406

Net increase (decrease) in cash, cash equivalents, restricted cash, and restricted cash equivalents during the year 79.8 ( 121.8 ) ( 83.9 )

Cash, cash equivalents, restricted cash, and restricted cash equivalents, beginning of year 200.5 322.3 406.2

Cash, cash equivalents, restricted cash, and restricted cash equivalents, end of year $ 280.3 $ 200.5 $ 322.3

See notes to consolidated financial statements.

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BLACKBERRY LIMITED AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND CRITICAL ACCOUNTING ESTIMATES

BlackBerry Limited (the “Company”) provides intelligent security software and services to enterprises and governments around the world.

The Company secures more than 235 million vehicles.

Based in Waterloo, Ontario, the Company leverages artificial intelligence (“AI”) and machine learning to deliver innovative solutions in the areas of cybersecurity, safety and data privacy, and is a leader in the areas of endpoint security, endpoint management, encryption, and embedded systems.

BlackBerry Limited (the “Company”) provides enterprises and governments the intelligent software and services that power the world around us.

Based in Waterloo, Ontario, the Company’s high-performance foundational software enables major automakers and industrial giants alike to unlock transformative applications, drive new revenue streams and launch innovative business models, all without sacrificing safety, security, and reliability.

With a deep heritage in Secure Communications, BlackBerry delivers operational resiliency with a comprehensive, highly secure, and extensively certified portfolio for mobile fortification, mission-critical communications, and critical events management.

The Company’s common shares trade under the ticker symbol “BB” on the New York Stock Exchange and the Toronto Stock Exchange.

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These consolidated financial statements have been prepared by management in accordance with United States generally accepted accounting principles (“U.S.

GAAP”) on a basis consistent for all periods presented, except as described in Note 2.

Certain of the comparative figures have been reclassified to conform to the current year’s presentation.

The Company is organized and managed as three reportable operating segments:

Cybersecurity, IoT (collectively, “Software & Services”), and Licensing and Other, as further discussed in Note 12.

GAAP”) on a basis consistent for all periods presented.

During the year, the Company completed the sale of Cylance endpoint security assets, as further discussed in Note 3.

Certain of the comparative figures have been reclassified to conform to the current year’s presentation, including assets and liabilities held for sale and discontinued operations, as further discussed in Note 3, and facilities discussed below.

The Company reclassified all expenses associated with its facilities within General and administrative expenses, whereas previously these costs were allocated amongst the functional areas line item expenses of the business based on assumptions of usage of those facilities by the functional areas.

The impact of the change on previously issued financial statements was as follows for the years ended February 29, 2024 and February 28, 2023:

For the Years Ended For the Years Ended

Revised Revised

February 29, 2024 Impact of change February 29, 2024 February 28, 2023 Impact of change February 28, 2023

Cost of sales 332.7 ( 8.6 ) 324.1 237.0 ( 9.8 ) 227.2

Gross margin 520.0 8.6 528.6 418.9 9.8 428.7

Research and development 185.7 ( 12.6 ) 173.1 207.3 ( 12.9 ) 194.4

Sales and marketing 171.0 ( 7.1 ) 163.9 176.2 ( 7.8 ) 168.4

General and administrative 180.6 28.3 208.9 163.6 30.5 194.1

Cybersecurity

Segment cost of sales 141.6 ( 5.8 ) 135.8 184.8 ( 7.1 ) 177.7

Segment gross margin 235.8 5.8 241.6 233.0 7.1 240.1

Segment cost of sales 36.3 ( 2.5 ) 33.8 37.0 ( 2.2 ) 34.8

Segment gross margin 179.1 2.5 181.6 168.7 2.2 170.9

The Company is organized and managed as three reportable segments:

Secure Communications (formerly “Cybersecurity”), QNX (formerly “IoT”) and Licensing, as further discussed in Note 13.

BlackBerry Limited

Notes to the Consolidated Financial Statements

In millions of United States dollars, except share and per share data, and except as otherwise indicated

Risks and Uncertainties

In fiscal 2024, assumptions and estimates about future cash flows, economic uncertainty, customer budgetary constraints, auto industry labor disruptions and inflation, development timelines for automotive OEM embedded software platforms, as well as higher interest rates implemented in response to inflation and resulting fears of recession, resulted in the Company making significant judgments related to its estimates and assumptions concerning the impairment of goodwill, indefinite-lived intangible assets, certain operating lease right-of-use (“ROU”) assets and associated property, plant and equipment.

The Company’s assumptions and estimates about future cash flows, economic uncertainty and changes in industry or market conditions resulted in the Company making significant judgments related to its estimates and assumptions concerning the impairment of goodwill, indefinite-lived intangible assets, certain operating lease right-of-use (“ROU”) assets and associated property, plant and equipment.

As of the date of issuance of the financial statements, the Company is not aware of any additional events or circumstances which would require it to update its estimates, judgments, or revise the carrying value of its assets or liabilities.

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Actual results could differ from these estimates and any such differences may be material to the Company’s financial statements.

Accounting Policies and Critical Accounting Estimates

Significant Accounting Policies and Critical Accounting Estimates

Use of estimates

The preparation of the consolidated financial statements requires management to make estimates and assumptions with respect to the reported amounts of assets, liabilities, revenue and expenses and the disclosure of contingent assets and liabilities.

Significant areas requiring the use of management estimates relate to revenue-related estimates including variable consideration, standalone selling price (“SSP”), estimated customer life, right of return and customer incentive commitments, fair value of reporting units in relation to actual or potential goodwill impairment, fair value of the Debentures (as defined in Note 6), fair value of share-based liability awards, fair value of long-lived assets in relation to actual or potential impairment, the Company’s long-lived asset groupings, estimated useful lives of property, plant and equipment and intangible assets, provision (or recovery) of income taxes, realization of deferred income tax assets and the related components of the valuation allowance, allowance for credit losses, incremental borrowing rates in determining the present value of lease liabilities and the determination of reserves for various litigation claims.

Significant areas requiring the use of management estimates relate to revenue-related estimates including variable consideration, standalone selling price (“SSP”), estimated customer life, right of return and customer incentive commitments, fair value of reporting units in relation to actual or potential goodwill impairment, fair value of the Debentures (as defined in Note 7), fair value of share-based liability awards, fair value of long-lived assets in relation to actual or potential impairment, the Company’s long-lived asset groupings, estimated useful lives of property, plant and equipment and intangible assets, provision (or recovery) of income taxes, realization of deferred income tax assets and the related components of the valuation allowance, allowance for credit losses, incremental borrowing rates in determining the present value of lease liabilities, the determination of reserves for various litigation claims, and the fair value of common shares received in a private company as consideration in the sale of the Cylance business.

Actual results could differ from these estimates, which were based upon circumstances that existed as of the date of the consolidated financial statements, February 28, 2025.

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dollar functional currency subsidiaries are translated into U.S.

Accordingly, monetary assets and liabilities are translated using the exchange rates in effect as at the consolidated balance sheet dates, and revenue and expenses are translated at the rates of exchange

BlackBerry Limited

Notes to the Consolidated Financial Statements

In millions of United States dollars, except share and per share data, and except as otherwise indicated

prevailing when the transactions occurred.

Remeasurement adjustments are included in income.

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Exchange gains or losses arising from the translation of foreign currency denominated assets and liabilities are included as a currency translation adjustment within accumulated other comprehensive loss (“AOCL”).

BlackBerry Limited

Notes to the Consolidated Financial Statements

In millions of United States dollars, except share and per share data, and except as otherwise indicated

Cash and cash equivalents

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For lease terms of 12 months or less on the commencement date, the Company recognizes the lease payments as lease cost on a straight-line basis over the lease term.

The Company recognizes sublease income on a straight-line basis over the sublease term in its consolidated statements of operations.

See Note 12 for additional information related to the Company’s leases.

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These events and circumstances may include a significant change in legal factors or in the business climate, a significant decline in the Company’s share price, an adverse action or assessment by a regulator, unanticipated competition, a loss of key personnel, significant disposal activity and the testing of recoverability for a significant asset group.

In the annual impairment test, the carrying value of the reporting unit, including goodwill, was compared with its fair value.

The estimated fair value was determined utilizing multiple approaches based on the nature of the reporting units being valued.

In its analysis, the Company utilized multiple valuation techniques, including the income approach using a discounted future cash flow model, market-based approaches, and the asset value approach.

In the annual impairment test, the Company first assesses whether it is more likely than not that an impairment is present in goodwill based upon qualitative factors including macroeconomic factors, industry trends, cost factors, overall financial performance and the Company’s share price and resultant market value capitalization in comparison to its book value.

If the Company determines that it is more likely than not that impairment exists in one of its reporting units, it then conducts an analysis of the carrying value of the reporting unit, including goodwill, compared with its fair value.

The estimated fair value is determined utilizing multiple approaches based on the nature of the reporting units being valued.

In its analysis, the Company utilizes multiple valuation techniques, including the income approach using a discounted future cash flow model, market-based approaches, and the asset value approach.

The analysis requires significant judgment, including estimation of future cash flows, which is dependent on internal forecasts, estimation of the long-term rates of revenue growth for the Company’s reporting units, estimation of the useful life over which cash flows will occur, terminal growth rates, profitability measures, and determination of the discount rates for the reporting units.

The carrying value of the Company’s assets was assigned to reporting units using reasonable methodologies based on the

The carrying value of the Company’s assets is assigned to reporting units using reasonable methodologies based on the asset type.

BlackBerry Limited

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In millions of United States dollars, except share and per share data, and except as otherwise indicated

When the carrying value of a reporting unit exceeds its fair value, goodwill of the reporting unit is considered to be impaired and written down to its fair value.

carrying value of a reporting unit exceeds its fair value, goodwill of the reporting unit is considered to be impaired and written down to its fair value.

Different judgments could yield different results.

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The Company reviews any changes in events and circumstances that have occurred on a quarterly basis to determine if indicators of LLA impairment exist.

Convertible debentures

The Company has recognized the Notes (as defined in Note 6) as a single liability instrument measured at amortized cost.

Debt issuance costs related to the Notes have been recorded as a direct deduction from the face amount of the Notes and will be amortized using the effective interest method.

Assets held for sale and discontinued operations

When certain criteria are met, the Company reclassifies assets and related liabilities as held for sale at the lower of their carrying value or fair value less costs to sell and, if material, presents them separately on the Company’s consolidated balance sheets.

If the carrying value exceeds the fair value less costs to sell, a loss is recognized.

Assets classified as held for sale are no longer amortized.

Comparative figures are reclassified to conform to the current year’s presentation.

BlackBerry Limited

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In millions of United States dollars, except share and per share data, and except as otherwise indicated

asset previously classified as held for sale is returned to held in use, it is recorded at the lower of its carrying value at the time it was classified as held for sale, adjusted for amortization which would have had been recorded during the period it was classified as held for sale, and its fair value.

When the Company has disposed of or classified as held for sale a component of the Company, and certain criteria are met, the results of operations of the component, including any loss recognized, are reported separately on the consolidated statements of operations as discontinued operations.

Discontinued operations are presented if the component’s operations and cash flows have been, or will be, eliminated from the Company and the Company will not have significant continuing involvement in the operations of the component after the disposal.

Earnings (loss) per share amounts for both continuing operations and discontinued operations are presented separately on the consolidated statements of operations and income (loss) from continuing operations.

Comparative figures are reclassified to conform to the current year’s presentation.

Convertible debentures

The Company has recognized the Notes (as defined in Note 7) as a single liability instrument measured at amortized cost.

Debt issuance costs related to the Notes have been recorded as a direct deduction from the face amount of the Notes and are amortized using the effective interest method.

The Company elected to measure its Extension Debentures (as defined in Note 7) and 2020 Debentures (as defined in Note 7) at fair value in accordance with the fair value option.

Each period, the fair value of the Extension Debentures and 2020 Debentures was recalculated and resulting gains and losses from the change in fair value of the Extension Debentures and 2020 Debentures associated with non-credit components were recognized in income, while the change in fair value associated with credit components were recognized in AOCL.

Extension Debentures

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To the extent the transaction price includes variable consideration, the Company estimates the amount of variable consideration that should be included in the transaction price utilizing either the expected value method or the most likely amount method depending on the nature of the variable consideration.

BlackBerry Limited

Notes to the Consolidated Financial Statements

In millions of United States dollars, except share and per share data, and except as otherwise indicated

Contracts that contain multiple performance obligations require an allocation of the transaction price to each performance obligation based on a relative SSP.

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The Company has multiple products and services from which it derives revenue, which are structured in three groups:

Cybersecurity, IoT and Licensing and Other.

Cybersecurity

Cybersecurity includes revenue from Cylance® cybersecurity and BlackBerry unified endpoint management (“UEM”) solutions (collectively, BlackBerry Spark®), BlackBerry® AtHoc® and SecuSUITE®.

Cybersecurity revenue is generated predominantly through software licenses, commonly bundled with support, maintenance and professional services.

BlackBerry Limited

Notes to the Consolidated Financial Statements

In millions of United States dollars, except share and per share data, and except as otherwise indicated

Cylance Cybersecurity

The BlackBerry Spark platform is a comprehensive offering of security software products and services, including the Cylance cybersecurity solutions and BlackBerry Unified Endpoint Management, offering the Company’s broadest range of tailored cybersecurity and endpoint management options.

The Cylance cybersecurity solutions include revenue from the Company’s artificial intelligence and machine learning-based platform consisting of CylanceENDPOINT™, CylanceGUARD®, CylanceEDGE™, CylanceINTELLIGENCE™ and other cybersecurity applications.

The Company generates software license revenue from term subscription products, which includes technical support, and any updates and upgrades.

The Company recognizes the license revenue over the term of the contract beginning on the commencement date of each contract, the date that services are made available to customers.

The Company’s software license and updates, to the extent made available, are not distinct in the context of the contract as they are critical to the ongoing usability of the solution and so fulfill a single promise to the customer in the contract.

The typical subscription term is one to three years.

The technical support is recognized over the support period, which will normally be the same term as the software license.

Revenue for hourly rate professional services arrangements is recognized as services are performed and revenue for fixed fee professional services is recognized on a proportional performance basis as the services are performed.

Secure Communications, QNX and Licensing.

Prior to the third quarter of fiscal 2025, the Company’s Secure Communications segment included the Company’s Cylance® cybersecurity solutions business and was reported as the Cybersecurity segment.

See Note 3 for further information.

Secure Communications

The Secure Communications business consists of BlackBerry unified endpoint management (“UEM”) solutions, SecuSUITE® and BlackBerry® AtHoc®.

BlackBerry UEM

The Company’s endpoint management platform includes BlackBerry® UEM, BlackBerry® Dynamics™ and BlackBerry® Workspaces solutions (which are often sold together as part of the BlackBerry UEM Suite), and BlackBerry Messenger (BBM®) Enterprise.

The Company’s unified endpoint management offerings include BlackBerry® UEM, BlackBerry® Dynamics™, BlackBerry® Workspaces, and BlackBerry Messenger (BBM®) Enterprise.

BlackBerry UEM employs a containerized approach to manage and secure devices, third party and custom applications, identity, content and endpoints.

The Company generates software license revenue from both term subscription and perpetual license contracts, both of which are commonly bundled with support, maintenance and professional services.

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SecuSUITE revenue is generated from software license products associated with secure communications and the associated hardware.

Similar to the Cylance cybersecurity and BlackBerry UEM products, if the licensed software requires access to the Company’s proprietary secure network infrastructure, revenue from the contract is recognized over time, ratably over the expected term or over the customer life, if licensed on a perpetual basis.

Similar to BlackBerry UEM products, if the licensed software requires access to the Company’s proprietary secure network infrastructure, revenue from the contract is recognized over time, ratably over the expected term or over the customer life, if licensed on a perpetual basis.

If access to the Company’s proprietary network infrastructure is not required, revenue associated with the license is recognized at a point in time upon delivery of the software.

Revenue from the hardware is recognized once title and the significant risks and rewards of ownership of the products are transferred to the customer, which occurs after the product has shipped.

Revenue from the hardware is recognized once title and the significant risks and rewards of ownership of the products are transferred to the customer, which occurs when control transfers at date of shipment.

BlackBerry AtHoc

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The Company recognizes the license revenue over the term of the contract beginning on the commencement date of each contract, the date that services are made available to customers.

IoT consists of BlackBerry Technology Solutions, BlackBerry Radar® and BlackBerry IVY™.

BlackBerry Technology Solutions includes revenue from BlackBerry® QNX®, BlackBerry Certicom® and other IoT applications.

IoT revenue is generated predominantly through software licenses, commonly bundled with support, maintenance and professional services.

QNX consists of BlackBerry® QNX®, BlackBerry Radar®, BlackBerry® Certicom®, and BlackBerry IVY®.

QNX revenue is generated predominantly through software licenses, commonly bundled with support, maintenance and professional services.

BlackBerry Limited

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Revenue from software maintenance services is recognized over the length of the maintenance period, with an average term of one year.

Licensing and Other

Licensing and Other includes revenue from the Company’s intellectual property licensing arrangements and settlement awards.

Other revenue consists of revenue associated with the Company’s legacy service access fees (“SAF”) business.

Licensing includes revenue from the Company’s intellectual property licensing arrangements and settlement awards.

The Company’s outbound patent licensing agreements provide for license fees that may be a single upfront payment or multiple payments representing all or a majority of the licensing revenue that will be payable to the Company.

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The Company may also recognize revenue related to consideration for past patent royalties in connection with the settlement of patent litigation where there was no prior patent license agreement.

Other includes revenue associated with the Company’s legacy SAF business, relating to subscribers utilizing the Company’s legacy BlackBerry 7 and prior operating systems, for which the Company ended support and maintenance as of January 4, 2022.

SAF revenue was recognized over time as the monthly service was provided.

In instances where the Company invoiced the SAF customer prior to performing the service, the pre-billing was recorded as deferred revenue.

See Note 13 for further information, including revenue by major product and service types.

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The Company also estimates whether and how much variable consideration is subject to constraint if it cannot conclude it is probable that a significant reversal in revenue will not occur, due to factors such as:

the consideration being highly susceptible to factors outside the Company’s influence, the period of time before

the consideration being highly susceptible to factors outside the Company’s influence, the period of time before the variable consideration is resolved, the Company’s previous experience with similar contracts, the Company’s history of price concessions or changing of payment terms, and whether there is a large number and broad range of possible variable consideration amounts.

Judgment is required to determine the SSP for each distinct performance obligation.

The Company’s products and services often have observable SSP when the Company sells a promised product or service separately to similar

BlackBerry Limited

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In millions of United States dollars, except share and per share data, and except as otherwise indicated

the variable consideration is resolved, the Company’s previous experience with similar contracts, the Company’s history of price concessions or changing of payment terms, and whether there is a large number and broad range of possible variable consideration amounts.

Judgment is required to determine the SSP for each distinct performance obligation.

The Company’s products and services often have observable SSP when the Company sells a promised product or service separately to similar customers.

A contractually stated price or list price for a good or service may be the SSP of that good or service.

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See Note 13 for further information on the Company’s contract balances.

Payment terms and conditions vary by contract type although standard billing terms are that payment is due upon receipt of invoice, payable within 30 to 60 days.

Payment terms and conditions vary by contract type although standard billing terms are that payment is due upon receipt of invoice, generally payable within 30 to 60 days.

In instances where the timing of revenue recognition differs from the timing of invoicing, the Company has determined that contracts generally do not include a significant financing component if the period between when the payment is received and when the Company transfers the promised goods or services to the customer will be one year or less.

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The second step is to measure the income tax position that has met the recognition threshold as the largest amount that is more than 50 % likely of being realized upon settlement.

The Company continually assesses the likelihood and amount of potential adjustments and adjusts the income tax provisions, income taxes payable and deferred income taxes in the period in which the facts that

BlackBerry Limited

Notes to the Consolidated Financial Statements

In millions of United States dollars, except share and per share data, and except as otherwise indicated

give rise to a revision become known.

The Company recognizes interest and penalties related to uncertain income tax positions as interest expense, which is then netted and reported within investment income.

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Under this method, the ITCs are recognized as a reduction to income tax expense.

BlackBerry Limited

Notes to the Consolidated Financial Statements

In millions of United States dollars, except share and per share data, and except as otherwise indicated

Research and development

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The number of common shares authorized for awards under the Equity Plan is 60,875,000 common shares.

Any shares that are subject to options granted under the Equity Plan are counted against this limit as 0.625 shares for every one option granted, any shares that are subject to TBRSUs granted under the Equity Plan are counted against this limit as one share for every TBRSU, and any shares that are subject to PBRSUs granted under the Equity Plan are counted against this limit at the maximum performance attainment (which is generally 1.5 shares for every PBRSU).

Awards previously granted under the Equity Plan that expire or are forfeited, or settled in cash, are added to the shares available under the Equity Plan.

Options forfeited will be counted as 0.625 shares to the shares available under the Equity Plan.

Shares issued as awards other than options that expire or are forfeited (i.e., RSUs), settled in cash or sold to cover withholding tax requirements are counted as one share added to the shares available under the Equity Plan.

Any shares that are subject to options or TBRSUs granted under the Equity Plan are counted against this limit as one share for every option or TBRSU, as applicable, and any shares that are subject to PBRSUs granted under the Equity Plan are counted against this limit at the maximum performance attainment (which is generally 1.5 shares for every PBRSU).

Awards previously granted under the Equity Plan that expire or are forfeited, or settled in cash, or are sold to cover withholding tax requirements are counted as one share added to the shares available under the Equity Plan.

There are approximately 27.4 million shares in the equity pool available for future grants under the Equity Plan as at February 28, 2025.

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Compensation cost will only be recognized to the extent that performance goals are expected to be achieved.

The Company classifies RSUs as equity instruments as the

BlackBerry Limited

Notes to the Consolidated Financial Statements

In millions of United States dollars, except share and per share data, and except as otherwise indicated

Company has the ability and intent to settle the awards in common shares.

The Company classifies RSUs as equity instruments as the Company has the ability and intent to settle the awards in common shares.

The compensation expense for standard RSUs is calculated based on the fair value of each RSU as determined by the closing value of the Company’s common shares on the business day of the grant date.

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Each independent director’s annual retainer will be entirely satisfied in the form of DSUs.

Within a specified period after a director ceases to be a member of the Board, DSUs will be redeemed for cash with the redemption value of each DSU equal to the weighted average trading price of the Company’s shares over the five trading days preceding the redemption date.

Within a specified period after a director ceases to be a member of

BlackBerry Limited

Notes to the Consolidated Financial Statements

In millions of United States dollars, except share and per share data, and except as otherwise indicated

the Board, DSUs will be redeemed for cash with the redemption value of each DSU equal to the weighted average trading price of the Company’s shares over the five trading days preceding the redemption date.

Alternatively, the Company may elect to redeem DSUs by way of shares purchased on the open market or issued by the Company.

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Accounting Standards Adopted During Fiscal 2025

The Company did not adopt any accounting standards during fiscal 2024 .

Accounting Pronouncements Not Yet Adopted

In November 2023, the Financial Accounting Standards Board (the “FASB”) issued ASU 2023-07 on the topic of segment reporting.

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(v) disclosure of the title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources;

(vi) requiring a public entity that has a single reportable segment provide all the disclosures required by the amendments in this ASU, and all existing segment disclosures in Topic 280.

and (vi) requiring a public entity that has a single reportable segment provide all the disclosures required by the amendments in this ASU, and all existing segment disclosures in Topic 280.

The guidance is effective for annual periods beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024.

The Company will adopt this guidance in fiscal 2025 and is in the process of evaluating the new requirements.

As a result, the Company has not yet determined the impact this new ASU will have on its disclosures.

BlackBerry Limited

Notes to the Consolidated Financial Statements

In millions of United States dollars, except share and per share data, and except as otherwise indicated

The Company early adopted this guidance in the first quarter of fiscal 2025 and has provided the applicable disclosures in Note 13.

Accounting Pronouncements Not Yet Adopted

In December 2023, the FASB issued ASU 2023-09 “Income Taxes (Topic 740):

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As a result, the Company has not yet determined the impact this new ASU will have on its disclosures.

In November 2024, the FASB issued ASU 2024-03 to amend the codification on “Expense Disaggregation Disclosure” (Subtopic 220-40):

Income Statement - Reporting Comprehensive Income”.

The standard requires additional disclosure on specific expense categories included in the expense captions presented on the statements of operations.

The guidance is effective for annual periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027.

The Company will adopt this guidance in fiscal 2028 and is in process of evaluating

BlackBerry Limited

Notes to the Consolidated Financial Statements

In millions of United States dollars, except share and per share data, and except as otherwise indicated

the new requirements.

As a result, the Company has not yet determined the impact this new ASU will have on its disclosures.

DISCONTINUED OPERATIONS

On December 15, 2024 the Company entered into an Equity and Asset Purchase Agreement (the “Equity and Asset Purchase Agreement”) with Arctic Wolf Networks, Inc.

(“Arctic Wolf”) whereby Arctic Wolf would acquire the Company’s Cylance endpoint security assets and related liabilities.

On February 3, 2025, the Company completed the sale of Cylance endpoint security assets and related liabilities to Arctic Wolf for $ 160.0 million of cash, subject to certain adjustments of approximately $ 39.1 million, and 5.5 million common shares of Arctic Wolf, pursuant to the equity and asset purchase agreement.

The proceeds at closing were a combination of $ 79.8 million in net cash after purchase price adjustments, and equity in Arctic Wolf with an estimated fair value of $ 24.6 million.

The Company’s determination of the fair value of the common shares of Arctic Wolf required the use of significant unobservable inputs relating to the current and future operations of Arctic Wolf, and as a result, the non-marketable equity investment was classified as Level 3.

The Equity and Asset Purchase Agreement requires a subsequent cash payment to the Company of approximately $ 41.1 million one year following the closing.

This deferred consideration has been initially recorded at fair value at the date of close, and included as “Other Receivables” in the Consolidated Balance Sheets.

In connection with the sale, the Company recognized a gain on disposal of discontinued operation before taxes of 10.4 million.

Assets Held for Sale

The following table sets forth the aggregate carrying amounts of assets and liabilities classified as held for sale relating to the discontinued operation of Cylance as of February 29, 2024:

For the Year Ended

February 29, 2024

Other current assets 11.6

Total currents assets of discontinued operations 11.6

Other long-term assets 2.3

Operating lease right-of-use assets, net 0.5

Intangible assets, net 96.8

Goodwill 87.0

Total long-term assets of discontinued operations 186.6

Accounts payable 0.1

Accrued liabilities 3.7

Deferred revenue, current 45.5

Total current liabilities of discontinued operations 49.3

Deferred revenue, non-current 13.3

Total long-term liabilities of discontinued operations 13.3

BlackBerry Limited

Notes to the Consolidated Financial Statements

In millions of United States dollars, except share and per share data, and except as otherwise indicated

The financial results of Cylance are presented as “loss from discontinued operations, net of tax” in the Consolidated Statements of Operations and have been removed from the presentation of results from continuing operations.

The following table represents the financial results of Cylance for the years ended February 28, 2025, February 29, 2024 and February 28, 2023:

For the Years Ended

February 28, 2025 February 29, 2024 February 28, 2023

Revenue $ 71.2 $ 93.6 $ 129.6

Cost of sales 42.8 55.7 67.6

Gross margin 28.4 37.9 62.0

Operating expenses

Research and development 30.4 46.0 60.2

Sales and marketing 42.5 59.9 65.8

General and administrative 15.7 21.7 22.4

Amortization 20.5 27.2 68.2

Impairment of long-lived assets — — 231.0

Impairment of goodwill — 18.9 133.3

Gain on disposal of discontinued operation ( 10.4 ) — —

98.7 173.7 580.9

Operating loss ( 70.3 ) ( 135.8 ) ( 518.9 )

Provision for income taxes 0.2 — —

Net loss from discontinued operations, net of tax $ ( 70.5 ) $ ( 135.8 ) $ ( 518.9 )

Basic loss per share from discontinued operations $ ( 0.12 ) $ ( 0.23 ) $ ( 0.90 )

Diluted loss per share from discontinued operations $ ( 0.12 ) $ ( 0.23 ) $ ( 0.81 )

The following table represents the amortization, stock-based compensation (representing the significant non-cash operating item) and acquisition of property, plant and equipment of the discontinued operations for the years ended February 28, 2025, February 29, 2024 and February 28, 2023:

For the Years Ended

February 28, 2025 February 29, 2024 February 28, 2023

Amortization $ 20.5 $ 27.2 $ 68.2

Stock based compensation $ 5.0 $ 4.3 $ 3.7

Acquisition of property, plant and equipment $ — $ — $ —

FAIR VALUE MEASUREMENTS, CASH, CASH EQUIVALENTS AND INVESTMENTS

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or other inputs that are observable or can be corroborated by observable market data.

BlackBerry Limited

Notes to the Consolidated Financial Statements

In millions of United States dollars, except share and per share data, and except as otherwise indicated

• Level 3 - Significant unobservable inputs that are supported by little or no market activity.

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Non-Recurring Fair Value Measurements

BlackBerry Limited

Notes to the Consolidated Financial Statements

In millions of United States dollars, except share and per share data, and except as otherwise indicated

lease ROU assets, intangible assets and goodwill if an impairment or observable price adjustment is recognized in the current period.

Upon the occurrence of certain events, the Company re-measures the fair value of non-marketable equity investments for which it utilizes the measurement alternative, and long-lived assets, including property, plant and equipment, operating lease ROU assets, intangible assets and goodwill if an impairment or observable price adjustment is recognized in the current period.

Non-Marketable Equity Investments Measured Using the Measurement Alternative

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Goodwill Impairment

During the fourth quarter of fiscal 2024, as part of its process for setting the annual operating plan for fiscal 2025, the Company updated its estimates of long-term future cash flows to reflect lower revenue and EBITDA growth rate expectations and a reduction in revenue multiples used in the valuation of the BlackBerry Spark reporting unit.

These changes in estimates, combined with the continued global economic uncertainty, customer budgetary constraints, and inflation, as well as higher interest rates implemented in response to inflation, and a broad-based stock market decline impacting the Company’s market capitalization, resulted in the recognition of a goodwill impairment charge of $ 35 million in the BlackBerry Spark reporting unit, which is included within the Company’s Cybersecurity segment as disclosed in Note 12.

Based on the results of the annual goodwill impairment test for the BlackBerry Spark reporting unit, based on the income approach using a discounted future cash flow model and market-based approaches, it was concluded that the carrying value exceeded its fair value, necessitating an impairment charge for the amount of excess and reducing the carrying value of goodwill.

The estimated fair values of the Company’s other reporting units substantially exceeded their carrying values as at the annual goodwill impairment test date, with the exception of the Intellectual Property reporting unit.

Assumptions and estimates about future cash flows and discount rates are complex and often subjective and require significant judgement.

The analysis is dependent on internal forecasts, estimation of the long-term rates of revenue growth for the Company’s reporting units, estimation of the useful life over which cash flows will occur, terminal growth rates, profitability measures, and determination of the discount rates for the reporting units.

During the year ended February 28, 2023, the Company recorded a goodwill impairment charge of $ 245 million in the BlackBerry Spark reporting unit, which is included within the Company’s Cybersecurity segment as disclosed in Note 12.

The estimated fair values of the Company’s other reporting units substantially exceeded their carrying values as at the annual goodwill impairment test date.

During the third quarter of fiscal 2025 and in connection with the plans to sell the Cylance business, the Company reorganized its reporting structure resulting in its BlackBerry Spark reporting unit being disaggregated into two separate reporting units:

UEM and Cylance.

In accordance with ASC 350 Intangibles - Goodwill and Other, the Company conducted a valuation of the individual reporting units and allocated the goodwill associated with the previous BlackBerry Spark reporting unit to the UEM and Cylance reporting units using a relative fair value approach.

The valuations of the reporting units were based on a combination of the income approach using a discounted future cash flow model, a market-based approach, and estimated exit value approaches for Cylance using the same critical accounting estimates as disclosed in Note 1.

Following the assignment of assets, liabilities, and goodwill to the UEM and Cylance reporting units, the Company compared the carrying values of the reporting units against their fair values and determined no impairment was present in either reporting unit.

During the year ended February 28, 2025, there were no goodwill impairment charges.

In its annual goodwill impairment test in the fourth quarter of fiscal 2025, the Company’s estimates indicated the fair values of all its reporting units substantially exceeded their carrying values, such carrying values were expected to be recovered, and there was no goodwill impairment.

During the year ended February 29, 2024, the Company recorded a goodwill impairment charge of $ 34.8 million in the BlackBerry Spark reporting unit, which was included within the Company’s Cybersecurity segment as disclosed in Note 13.

The estimated fair values of the Company’s other reporting units substantially exceeded their carrying values as at the annual goodwill impairment test date.

The portion of the BlackBerry Spark goodwill impairment charge allocated to the Cylance reporting unit was based on the same proportion determined in the third quarter of fiscal 2025 in determining the Cylance discontinued operations and assets held for sale for the year ended February 29, 2024.

The allocation of the BlackBerry Spark goodwill impairment charge was $ 15.9 million to the UEM reporting unit of and $ 18.9 million to the Cylance reporting unit.

BlackBerry Limited

Notes to the Consolidated Financial Statements

In millions of United States dollars, except share and per share data, and except as otherwise indicated

During the year ended February 28, 2023, the Company recorded a goodwill impairment charge of $ 245.4 million in the BlackBerry Spark reporting unit, which was included within the Company’s Cybersecurity segment as disclosed in Note 13.

The estimated fair values of the Company’s other reporting units substantially exceeded their carrying values as at the annual goodwill impairment test date.

The portion of the BlackBerry Spark goodwill impairment charge allocated to the Cylance reporting unit was based on the same proportion determined in the third quarter of fiscal 2025 in determining discontinued operations and assets held for sale for the year ended February 28, 2023.

The allocation of the BlackBerry Spark goodwill impairment charge was $ 112.1 million to the UEM reporting unit of and $ 133.3 million to the Cylance reporting unit.

Impairment of Long-Lived Assets (“LLA”)

During the year ended February 29, 2024, the Company exited certain leased facilities and recorded a pre-tax and after-tax impairment charge of $ 7 million, related to the ROU assets for those facilities.

During the year ended February 28, 2025, the Company exited certain leased facilities and recorded a pre-tax and after-tax impairment charge of $ 9.6 million consisting of $ 6.9 million related to operating lease ROU assets for certain facilities and $ 2.7 million related to property, plant and equipment.

The impairment was determined by comparing the fair value of the impacted ROU asset to the carrying value of the asset as of the impairment measurement date, as required under ASC Topic 360, Property, Plant, and Equipment, using Level 3 inputs.

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These ROU impaired assets are classified within Level 3 of the fair value hierarchy.

The Company conducts regular reviews of the individual patents, both organically generated and acquired, comprising its patent portfolio.

As a result of this review, for the year ended February 29, 2024, the Company determined it had an indicator of impairment, as it had ceased enforcement and abandoned the legal right and title to patents with a cost of $ 15 million, accumulated amortization of $ 7 million, and a net book value of $ 8 million, which is classified as an impairment of long-lived assets on the Company’s consolidated statements of operations.

During the year ended February 28, 2023, the Company recorded a non-cash, pre-tax and after-tax impairment charge of $ 235 million consisting of $ 231 million related to the Company’s UES asset group, which is primarily composed of intangible assets recognized on the acquisition of Cylance and is included within the Company’s Cybersecurity segment

During the year ended February 29, 2024, the Company exited certain leased facilities and recorded a pre-tax and after-tax impairment charge of $ 7.5 million consisting of $ 6.9 million related to operating lease ROU assets for certain facilities and $ 0.6 million related to property, plant and equipment.

The Company also conducted regular reviews of the individual patents, both organically generated and acquired, comprising its patent portfolio.

As a result of this review, for the year ended February 29, 2024, the Company determined it had an indicator of impairment, as it had ceased enforcement and abandoned the legal right and title to patents with a cost of $ 15.3 million, accumulated amortization $ 7.5 million, and net book value of $ 7.8 million, which is classified as an impairment of long-lived assets on the Company’s consolidated statements of operations.

During the year ended February 28, 2023, the Company recorded a non-cash, pre-tax and after-tax impairment charge of $ 234.5 million consisting of $ 231.0 million related to the Company’s UES asset group, which was primarily composed of intangible assets recognized on the acquisition of Cylance and was included within the Company’s Cybersecurity segment as disclosed in Note 12, and $ 3.5 million related to operating lease ROU assets for certain leased facilities that were exited during the fiscal year.

None of the Company’s other asset groups demonstrated indicators of potential impairment.

BlackBerry Limited

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In millions of United States dollars, except share and per share data, and except as otherwise indicated

as disclosed in Note 12 and $ 4 million related to operating lease ROU assets for certain leased facilities that were exited during the fiscal year.

None of the Company’s other asset groups demonstrated indicators of potential impairment.

During the year ended February 28, 2022, there were no LLA impairment charges.

Cash, Cash Equivalents and Investments

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promissory notes 9.8 — — 9.8 7.9 1.9 — —

treasury bills 10 — — 10 6 — — 4

government sponsored enterprise notes 9.3 — — 9.3 — 4.9 — 4.4

Corporate notes/bonds 3.5 — — 3.5 — 3.5 — —

127.7 — — 127.7 43.0 71.1 — 13.6

Equity investments in private companies 30.7 1.2 ( 1.2 ) 30.7 — — 30.7 —

$ 415.4 $ 6.1 $ ( 11.2 ) $ 410.3 $ 266.7 $ 71.1 $ 58.9 $ 13.6

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promissory notes 35.4 — — 35.4 30.2 5.2 — —

government sponsored enterprise notes 30 — — 30 10 20 — —

Corporate notes/bonds 15 — — 15 — 15 — —

treasury bills 9.5 — — 9.5 5.6 — — 3.9

166.3 — — 166.3 78.9 62.0 — 25.4

Other investments 2 4 — 6 — — 6 —

$ 302.1 $ 6.1 $ ( 10.0 ) $ 298.2 $ 175.1 $ 62.0 $ 35.7 $ 25.4

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(1) Cost basis for other investments includes the effect of returns of capital and impairment.

As at February 29, 2024, the Company had non-marketable equity investments without readily determinable fair value of $ 36 million (February 28, 2023 - $ 34 million).

During the year ended February 29, 2024, there was no impairment recognized relating to non-marketable equity investments without readily determinable fair value (February 28, 2023 and February 28, 2022 - nil ).

As at February 28, 2025, the Company had non-marketable equity investments without readily determinable fair value of $ 58.9 million (February 29, 2024 - $ 35.7 million) including common shares of Arctic Wolf related to the sale of Cylance as further discussed in Note 3.

During the year ended February 28, 2025, there was a $ 0.2 million impairment recognized relating to non-marketable equity investments without readily determinable fair value (February 29, 2024 and February 28, 2023 - nil ).

During the year ended February 28, 2025, the Company recorded upward adjustments of $ 1.2 million and downward adjustments of $ 2.4 million to the carrying value of certain non-marketable equity investments without readily determinable fair value resulting from observable price changes in orderly transactions for identical or similar securities which have been included in investment income, net on the Company’s consolidated statements of operations.

As of February 28, 2025, the Company has recorded a cumulative impairment of $ 3.0 million to the carrying value of certain other non-marketable equity investments without readily determinable fair value (February 29, 2024 - $ 3.0 million).

During the year ended February 28, 2022, the Company received a distribution from a non-marketable equity investment without readily determinable fair value in the amount of $ 35 million, which for accounting purposes, consisted of a return of capital of $ 13 million and a realized gain of $ 22 million included in investment income, net on the Company’s consolidated statements of operations.

There were no realized gains or losses on available-for-sale securities for the year ended February 28, 2025 (February 29, 2024 and February 28, 2023 - nil ).

These letters of credit support certain leasing arrangements entered into in the ordinary course of business.

The letters of credit are for terms ranging from one month to two years.

The Company is legally restricted from accessing these funds during the term of the leases for which the letters of credit have been issued;

The Company has restricted cash and cash equivalents, consisting of cash and securities pledged as collateral to major banking partners in support of the Company’s requirements for letters of credit and a performance bond that the Company was required to post to support a government contract.

These letters of credit support certain leasing arrangements entered into in the ordinary course of business and are for terms ranging from one month to seven years.

The Company is legally restricted from accessing these funds during the term of the leases for which the letters of credit have been issued and during the term of the government contract;

however, the Company can continue to invest the funds and receive investment income thereon.

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Prior period provision for expected credit losses 4.6

Write-offs charged against the allowance ( 4 )

Ending balance of the allowance for credit loss as at February 29, 2024 6.0

Current period provision for expected credit losses 5.3

Write-offs charged against the allowance ( 4.7 )

Ending balance of the allowance for credit loss as at February 28, 2025 $ 6.6

The allowance for credit losses as at February 29, 2024 consists of $ 1 million (February 28, 2023 - $ 1 million) relating to CECL estimated based on days past due and region and $ 5 million (February 28, 2023 - nil ) relating to specific customers that were evaluated separately.

The allowance for credit losses as at February 28, 2025 consists of $ 1.1 million (February 29, 2024 - $ 1.4 million) relating to CECL estimated based on days past due and region and $ 5.5 million (February 29, 2024 - $ 4.6 million) relating to specific customers that were evaluated separately.

BlackBerry Limited

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Other Receivables

As at February 29, 2024 and February 28, 2023, other receivables included items such as claims filed with the Ministry of Innovation, Science and Economic Development Canada relating to its Strategic Innovation Fund program’s investment in BlackBerry QNX, among other items, none of which were greater than 5% of the current assets balance.

Other Current Assets

Other current assets comprised the following:

February 28, 2025 February 29, 2024

Intellectual property $ — $ 141

As described in Note 12, on May 11, 2023, the Company completed its previously announced patent sale with Malikie Innovations Limited (“Malikie”) and recognized revenue of $ 218 million and cost of sales of $ 147 million, which is comprised of the carrying value of the intellectual property of $ 141 million referred to above and $ 6 million of capitalized costs during the first quarter of fiscal 2024 related to patent maintenance.

See Note 12 under the heading “Patent Sale”.

Other current assets also included the current portion of deferred commissions and prepaid expenses, among other items, none of which were greater than 5% of the current assets balance as at the balance sheet dates.

Arctic Wolf Delayed Cash Payment (note 3) $ 38.6 $ —

Other 9.8 21.4

As at February 28, 2025 and February 29, 2024, other receivables included items such as claims filed with the Ministry of Innovation, Science and Economic Development Canada relating to its Strategic Innovation Fund program’s investment in BlackBerry QNX, among other items, none of which were greater than 5% of the current assets balance as at the balance sheet dates.

Other Current Assets

As at February 28, 2025 and February 29, 2024, other current assets included items such as the current portion of deferred commissions and prepaid expenses, among other items, none of which were greater than 5% of the current assets balance as at the balance sheet dates.

Property, Plant and Equipment, Net

5 unchanged sentences

Manufacturing, repair and research and development equipment 2.2 2.4

Accumulated amortization 88 89

Accumulated amortization and impairment 84.5 88.1

Net book value $ 13.4 $ 21.2

1 unchanged sentence

February 28, 2023 - $ 12.2 million).

Sale of Property, Plant and Equipment, Net

During the year ended February 29, 2024, the Company had no sale of property, plant and equipment, net.

During the year ended February 28, 2023, the Company sold its corporate aircraft.

As a result, the Company recorded proceeds of approximately $ 17 million and incurred a gain on disposal of approximately $ 6 million (cost of $ 29 million, accumulated amortization of $ 18 million, and a net book value of approximately $ 11 million).

BlackBerry Limited

19 unchanged sentences

February 28, 2023 - $ 24.3 million).

Total additions to intangible assets in fiscal 2024 amounted to $ 14 million (fiscal 2023 - $ 34 million) and included additions related to patent maintenance classified as other current assets on the Company’s consolidated balance sheets.

During fiscal 2024, additions to intangible assets primarily consisted of payments for intellectual property relating to patent maintenance, registration and license fees.

For the year ended February 29, 2024, the Company recorded $ 8 million in impairment charges related to patent abandonments (fiscal 2023 - $ 231 million related to intangible assets previously recognized from the acquisition of Cylance), see Note 3 for further details.

Total additions to intangible assets in fiscal 2025 amounted to $ 7.0 million (fiscal 2024 - $ 13.8 million) and primarily consisted of payments for intellectual property relating to patent maintenance, registration and license fees.

For the year ended February 28, 2025, the Company recorded $ 0.5 million in impairment charges related to patent abandonment (fiscal 2024 - $ 7.8 million).

Based on the carrying value of the identified intangible assets, as at February 28, 2025, and assuming no subsequent impairment of the underlying assets, the annual amortization expense for each of the five succeeding years is expected to be as follows:

11 unchanged sentences

Intellectual property 5.7 years 6.1 years

Changes to the carrying amount of goodwill during the fiscal years ended February 29, 2024, February 28, 2023 and February 28, 2022 were as follows:

Changes to the carrying amount of goodwill during the fiscal years ended February 28, 2025 and February 29, 2024 were as follows:

Carrying Amount

Carrying amount as at February 28, 2023 $ 489.0

Effect of foreign exchange on non-U.S.

dollar denominated goodwill ( 5 )

Carrying amount as at February 28, 2022 844

Goodwill impairment charge (note 4) ( 15.9 )

4 unchanged sentences

dollar denominated goodwill ( 2.1 )

Goodwill impairment charge (note 3) ( 35 )

Carrying amount as at February 28, 2025 $ 472.4

Other Long-term Assets

As at February 29, 2024, other long-term assets included long-term receivables related to intellectual property sold (see Note 12 under the heading “Patent Sale”), long-term receivables, and the long-term portion of deferred commission, among other items, none of which were greater than 5% of the total assets balance.

As at February 28, 2023, other long-term assets included the long-term portion of deferred commission and long-term receivables, among other items, none of which were greater than 5% of the total assets balance.

As at February 28, 2025 and February 29, 2024, other long-term assets included long-term receivables related to intellectual property sold (see Note 13 under the heading “Patent Sale”), long-term receivables, and the long-term portion of deferred commission, among other items, none of which were greater than 5% of the total assets balance.

Accrued Liabilities

2 unchanged sentences

Operating lease liabilities, current (note 12)

$ 15.0 $ 19.6

Variable incentive accrual 31.0 15.1

Restructuring programs, current portion 9.2 20.0

Other accrued liabilities include accrued director fees, accrued vendor liabilities, variable incentive accrual, payroll withholding taxes and accrued royalties, among other items, none of which were greater than 5% of the current liabilities balance in any of the periods presented.

Other 71.0 59.0

$ 126.2 $ 113.7

Other accrued liabilities include accrued director fees, accrued vendor liabilities, payroll withholding taxes and accrued royalties, among other items, none of which were greater than 5% of the current liabilities balance in any of the periods presented.

BlackBerry Limited

2 unchanged sentences

Restructuring

During fiscal 2023 and fiscal 2024, the Company commenced restructuring programs with the objectives of reducing its annual costs and expenses relating to the Cybersecurity business, and later separating and streamlining the Company’s centralized corporate functions into Cybersecurity and IoT specific teams such that the businesses may operate independently and on a profitable and cash flow positive basis.

The reduction of overall Company costs will include rationalizing and streamlining existing central administrative functions, right-sizing cost structures within both business units including R&D and outsourced contracting, changes to overall product portfolio offerings and geographies the Company operates in, and optimizing related support functions and organizational structure.

During fiscal 2025 and fiscal 2024, the Company commenced restructuring programs with the objectives of reducing its annual costs and expenses relating to Secure Communications.

Other charges and cash costs may occur as programs are implemented or changes are completed.

12 unchanged sentences

The long-term portion of the restructuring liabilities is recorded at fair value, determined by measuring the remaining payments at present value using an effective interest rate of 5.3 %, and the Company recorded interest expense over time to arrive at the total face value of the remaining payments.

The restructuring charges included employee termination benefits and facilities costs to better align the Company’s general and administrative and R&D cost profiles to its market competitors, create a more focused sales force and improve profitability and cash flow.

The restructuring charges included employee termination benefits and facilities costs.

Total charges incurred in fiscal 2025 and fiscal 2024 were $ 26.1 million and $ 37.3 million, respectively, recorded within General and administrative on the Consolidated Statements of Operations.

6 unchanged sentences

Statutory Canadian tax rate (1)

26.5 % 26.5 % 26.5 %

Expected provision for (recovery of) income taxes $ 2.3 $ 7.9 $ ( 53.5 )

5 unchanged sentences

Non-deductible permanent differences 8.8 7.7 5.4

Goodwill impairment 9 65 —

Goodwill de-recognition — 4.2 29.7

Prior period adjustments ( 0.4 ) 8.6 4.0

1 unchanged sentence

$ 17.0 $ 24.2 $ 13.7

______________________________

(1) Our Canadian corporate tax rate is comprised of a basic Part I federal tax rate of 38 %, net 15 % after federal tax abatement and general tax reduction, plus the additional provincial tax of 11.5 %.

For the Years Ended

18 unchanged sentences

Minimum taxes 206.7 206.7

Debentures (note 6)

Research and development 410.5 402.4

10 unchanged sentences

In evaluating the need for a valuation allowance, the Company noted that there had been three years of cumulative losses, including fiscal 2025.

In fiscal 2024, the Company saw an increase in the deferred tax valuation allowance of $ 28 million (February 28, 2023 - increase of $ 125 million).

In fiscal 2025, the Company saw a decrease in the deferred tax valuation allowance of $ 2.5 million (February 29, 2024 - increase of $ 27.6 million).

As a result, the deferred tax valuation allowance had an ending balance of $ 1,517.2 million (February 29, 2024 - $ 1,519.7 million).

12 unchanged sentences

Unrecognized income tax benefits, ending balance $ 19.5 $ 19.6 $ 20.6

As at February 29, 2024, $ 20 million of the unrecognized tax benefits have been netted against deferred income taxes and nil has been recorded within income taxes payable on the Company’s consolidated balance sheets.

As at February 28, 2025, $ 19.1 million of the unrecognized tax benefits have been netted against deferred income taxes and $ 0.4 million has been recorded within income taxes payable on the Company’s consolidated balance sheets.

A summary of open tax years by major jurisdiction is presented below:

3 unchanged sentences

United Kingdom Fiscal 2024 - 2025

Germany Fiscal 2020 - 2025

______________________________

22 unchanged sentences

2035 81.0 51.9 3.6

2036 249.0 39.7 —

2037 492.5 23.7 —

2038 199.3 17.3 —

2039 13.1 14.6 —

2040 3.3 12.9 —

2042 — 10.5 —

2043 181.6 13.6 —

2044 — 12.8 —

Indefinite 417.9 20.9 —

3 unchanged sentences

3.00% Convertible Senior Notes

On January 29, 2024, the Company issued $ 200 million aggregate principal amount of 3.00% senior convertible unsecured notes (the “Notes”) in an offering to qualified institutional buyers in accordance with Rule 144A under the Securities Act of 1933, as amended.

The Company used the net proceeds of the issuance of the Notes principally to repay its outstanding $ 150 million aggregate principal amount of 1.75% extendible convertible unsecured debentures (the “Extension Debentures” and, collectively with the “2020 Debentures” (as defined below) and the Notes, the “Debentures”) at maturity on February 15, 2024 .

On January 29, 2024, the Company issued $ 200.0 million aggregate principal amount of 3.00% senior convertible unsecured notes(the “Notes” and, collectively with the Extension Debentures and 2020 Debentures, the “Debentures”) in an offering to qualified institutional buyers in accordance with Rule 144A under the Securities Act of 1933, as amended.

The Notes are due on February 15, 2029 unless earlier converted, redeemed, or repurchased.

4 unchanged sentences

The Notes will bear interest at a rate of 3.00 % per annum, payable semi-annually in arrears on February 15 and August 15 of each year, beginning on August 15, 2024 .

The Company has recorded the Notes, including the debt itself and all embedded derivatives, at cost less debt issuance costs of $ 6.0 million and present the Notes as a single hybrid financial instrument.

No portion of the embedded derivatives required bifurcation from the host debt contract.

BlackBerry Limited

1 unchanged sentence

In millions of United States dollars, except share and per share data, and except as otherwise indicated

Under specified events of default, the outstanding principal and any accrued and unpaid interest on the Notes will become immediately due and payable upon request of holders holding not less than 25 % of the principal amount of the Notes then outstanding.

During the occurrence of certain specific events of default, the Company may elect to cure such events of default by increasing the 3.00 % interest rate on the Notes by 0.25 % to 0.50 % per annum.

The Company may not redeem the Notes prior to February 22, 2027 , except in the event of certain tax law changes.

On or after February 22, 2027, the Company may redeem for cash all or a portion of the Notes, at the Company’s election, if the last reported sale price of the Company’s common shares has been at least 130% of the conversion price then in effect on each of at least 20 trading days (whether or not consecutive) during any 30 consecutive trading-day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption at a cash redemption price equal to 100% of the aggregate principal amount of the Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date.

If the Company undergoes a fundamental change, as defined in the indenture governing the Notes, subject to certain conditions the Company will be required to make an offer to repurchase for cash all of the outstanding Notes (or any portion thereof that a holder determines to sell to the Company) at a repurchase price equal to 100% of the principal amount of the Notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the fundamental change repurchase date.

In connection with certain corporate events or if the Company calls the Notes for redemption, the Company will, under certain circumstances, increase the conversion rate for noteholders who elect to convert their Notes in connection with such corporate event or convert their Notes called for redemption.

The Company has recorded the Notes, including the debt itself and all embedded derivatives, at cost less debt issuance costs of $ 6 million and present the Notes as a single hybrid financial instrument.

No portion of the embedded derivatives required bifurcation from the host debt contract.

The following table summarizes the change in the Notes for the fiscal year ended February 28, 2025 from their date of issuance:

February 28, 2025

Principal received as of January 29, 2024 200

Debt issuance costs paid ( 6 )

Balance as at February 29, 2024 $ 194.1

Amortization of debt issuance costs 1.2

Balance as at February 28, 2025 $ 195.3

The Company’s estimate of the fair value of the Notes as at February 28, 2025 is approximately $ 289.5 million (February 28, 2024 - $ 204.0 million).

Extension Debentures and 2020 Debentures

On November 17, 2023, the Company issued the Extension Debentures in a private placement to certain controlled affiliates of Fairfax Financial Holdings Limited (“Fairfax”).

The Company used the net proceeds from the issuance of the Extension Debentures, together with cash on hand, to repay its outstanding $ 365 million aggregate principal amount of 1.75% unsecured convertible debentures (the “2020 Debentures”) at maturity on November 13, 2023 .

On November 17, 2023, the Company issued $ 150.0 million aggregate principal amount of 1.75% extendible convertible unsecured debentures (the “Extension Debentures”) in a private placement to certain controlled affiliates of Fairfax Financial Holdings Limited (“Fairfax”).

The Company used the net proceeds from the issuance of the Extension Debentures, together with cash on hand, to repay its outstanding $ 365.0 million aggregate principal amount of 1.75% unsecured convertible debentures (the “2020 Debentures” and, collectively with the Extension Debentures, the “Prior Debentures”) at maturity on November 13, 2023 .

Aside from the maturity date, the terms of the Extension Debentures were substantially identical to those of the 2020 Debentures, except that the Extension Debentures were not listed on any stock exchange and did not involve an indenture trustee.

The Company used a portion of the proceeds from the issuance of the Notes to repay the Extension Debentures at maturity on February 15, 2024 .

Each $ 1,000 principal amount of Extension Debentures was convertible at any time prior to the third business day prior to the maturity date into 166.67 common shares of the Company, for a total of 25 million common shares at a price of $ 6.00 per share, subject to adjustments.

Covenants associated with the Extension Debentures included limitations on the

BlackBerry Limited

Notes to the Consolidated Financial Statements

In millions of United States dollars, except share and per share data, and except as otherwise indicated

Company’s total indebtedness.

Interest on the Extension Debentures was payable on the maturity date in arrears at a rate of 1.75 % per annum.

Under specified events of default, the outstanding principal and any accrued interest on the Extension Debentures become immediately due and payable upon request of holders holding not less than 25 % of the principal amount of the Extension Debentures then outstanding.

During an event of default, the interest rate would increase to 5.75 % per annum.

The Extension Debentures were subject to a change of control provision whereby the Company would be required to make an offer to repurchase the Extension Debentures at 115 % of par value if a person or group (not affiliated with Fairfax) acquired 35 % of the Company’s outstanding common shares, acquired all or substantially all of its assets, or if the Company merged with another entity and the Company’s existing shareholders hold less than 50 % of the common shares of the surviving entity.

Additionally, the Extension Debentures could not be converted to the extent that, after giving effect to the conversion, the holder would beneficially own or exercise control or direction over more than 19.99 % of the Company’s then issued and outstanding common shares.

Due to the conversion option and other embedded derivatives within the Extension Debentures, and consistent with the Company’s accounting for the 2020 Debentures, the Company had elected to record the Extension Debentures, including the debt itself and all embedded derivatives, at fair value and present the Extension Debentures as a single hybrid financial instrument.

No portion of the fair value of the Extension Debentures had been recorded as equity, nor would be if the embedded derivatives were bifurcated from the host debt contract.

Each period, the fair value of the Extension Debentures and 2020 Debentures were recalculated and resulting gains and losses from the changes in fair value of the Extension Debentures and 2020 Debentures associated with non-credit components were recognized in income, while the change in fair value associated with credit components was recognized in accumulated other comprehensive loss (“AOCL”).

The Extension Debentures matured and were repaid on February 15, 2024 .

Due to the conversion option and other embedded derivatives within the Prior Debentures, the Company elected to record the Prior Debentures, including the debt itself and all embedded derivatives, at fair value and presented the Prior Debentures as a single hybrid financial instrument.

No portion of the fair value of the Prior Debentures was recorded as equity.

Each period, the fair value of the Prior Debentures was recalculated and resulting gains and losses from the change in fair value of the Prior Debentures associated with non-credit components were recognized in income, while the change in fair value associated with credit components was recognized in accumulated other comprehensive loss (“AOCL”).

The fair value of the 2020 Debentures was determined using the significant Level 2 inputs interest rate curves, the market price and volatility of the Company’s listed common shares, and the significant Level 3 inputs related to credit spread and the implied discount of the 2020 Debentures at issuance.

The fair value of the Extension Debentures was determined using observable interest rate curves, and the market price and volatility of the Company’s common shares.

The following table summarizes the change in fair value of the Extension Debentures from their date of issuance, which also represents the total changes through earnings of items classified as Level 2 in the fair value hierarchy:

February 29, 2024

Principal received as of November 17, 2023 $ 150

Change in fair value of the Extension Debentures —

Maturity of the Extension Debentures on February 15, 2024 ( 150 )

Balance as at February 29, 2024 $ —

The following table summarizes the change in fair value of the 2020 Debentures for the years ended February 29, 2024 and February 28, 2023 which also represents the total changes through earnings of items classified as Level 3 in the fair value hierarchy:

February 29, 2024

Balance as at February 28, 2022 $ 507

Change in fair value of the 2020 Debentures ( 140 )

Balance as at February 28, 2023 367

Change in fair value of the 2020 Debentures ( 2 )

Maturity of the 2020 Debentures on November 13, 2023 ( 365 )

Balance as at February 29, 2024 $ —

BlackBerry Limited

Notes to the Consolidated Financial Statements

In millions of United States dollars, except share and per share data, and except as otherwise indicated

The following table shows the impact of the changes in fair value of the Extension Debentures and 2020 Debentures for the years ended February 29, 2024, February 28, 2023 and February 28, 2022:

The following table shows the impact of the changes in fair value of the 2020 Debentures for the years ended February 28, 2025, February 29, 2024 and February 28, 2023:

For the Years Ended

5 unchanged sentences

Total decrease in the fair value of the Extension Debentures and 2020 Debentures $ — $ 2.3 $ 139.0

BlackBerry Limited

Notes to the Consolidated Financial Statements

In millions of United States dollars, except share and per share data, and except as otherwise indicated

For the year ended February 28, 2025, the Company recorded interest expense related to the Debentures of $ 6.0 million, which has been included in investment income, net on the Company’s consolidated statements of operations (fiscal 2024 - $ 5.6 million;

2 unchanged sentences

Fairfax, a related party under U.S.

GAAP due to its beneficial ownership of common shares in the Company after taking into account potential conversion of the Extension Debentures, owned $ 330 million principal amount of the 2020 Debentures and $ 150 million principal amount of the Extension Debentures.

As such, the payment of interest on the Extension Debentures and such portion of the 2020 Debentures, and their repayment, to Fairfax represented related party transactions.

GAAP due to its beneficial ownership of common shares in the Company after taking into account potential conversion of the Extension Debentures and the 2020 Debentures, respectively, owned the full principal amount of the Extension Debentures and $ 330.0 million principal amount of the 2020 Debentures.

As such, the payment of interest on the Prior Debentures, and their repayment, to Fairfax represented related party transactions.

CAPITAL STOCK

2 unchanged sentences

As at February 28, 2025 and February 29, 2024, there were no Class A common shares or preferred shares outstanding.

BlackBerry Limited

Notes to the Consolidated Financial Statements

In millions of United States dollars, except share and per share data, and except as otherwise indicated

The following details the changes in issued and outstanding common shares for the years ended February 28, 2025, February 29, 2024 and February 28, 2023:

6 unchanged sentences

Stock-based compensation — 33.9

Common shares issued related to Exchange Shares 1,422 —

Common shares issued for employee share purchase plan 960 5.8

3 unchanged sentences

Stock-based compensation — 33.1

Common shares issued on the redemption of deferred share units 297 0.9

Common shares issued for employee share purchase plan 1,037 4.8

3 unchanged sentences

Stock-based compensation — 25.6

Common shares issued on the redemption of deferred share units 297 1

Common shares issued for employee share purchase plan 1,163 3.1

Common shares outstanding as at February 28, 2025 596,231 $ 2,976.4

Common shares (the “Exchange Shares”) were issued in connection with the Cylance acquisition, which was completed on February 21, 2019.

In lieu of cash, a portion of the consideration owed to certain Cylance shareholders was paid in equal installments of Exchange Shares on the first three anniversary dates of the closing.

The Company had 589 million voting common shares outstanding, 0.2 million options to purchase voting common shares, 19 million RSUs and 1 million DSUs outstanding as at April 1, 2024.

The Company had 596 million voting common shares outstanding, 0.1 million options to purchase voting common shares, 11 million RSUs and 1.6 million DSUs outstanding as at March 28, 2025.

In addition, 51.5 million common shares are issuable upon conversion in full of the Notes as described in Note 7.

15 unchanged sentences

Forfeited/cancelled during the year ( 3,466 ) 4.04

Balance as at February 29, 2024 16,301 $ 4.30 1.68 $ 45

Expected to vest February 29, 2024 13,491 $ 4.29 1.66 $ 38

Balance as at February 28, 2025 11,504 $ 2.95 1.50 years $ 54

Expected to vest February 28, 2025 9,508 $ 2.87 1.53 years $ 45

The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the aggregate closing share price of the Company’s common shares on February 28, 2025 that would have been received by RSU holders if all RSUs had been vested on February 28, 2025).

9 unchanged sentences

The Company issued 542,449 DSUs and redeemed 292,923 DSUs during the year ended February 28, 2025.

There were $ 1 million of DSUs redeemed for shares.

There were 1.6 million DSUs outstanding as at February 28, 2025 (February 29, 2024 - 1.4 million).

7 unchanged sentences

February 28, 2025 February 29, 2024 February 28, 2023

Net income (loss) for basic earnings (loss) per share available to common shareholders $ ( 130 ) $ ( 734 ) $ 12

Net income (loss) from continuing operations for basic and diluted earnings (loss) per share available to common shareholders $ ( 8.5 ) $ 5.6 $ ( 215.5 )

Debentures fair value adjustment (1) (2)

1 unchanged sentence

interest expense on Debentures (1) (2)

Net income (loss) from continuing operations for diluted earnings (loss) per share available to common shareholders $ ( 8.5 ) $ 5.6 $ ( 346.5 )

Net loss for basic and diluted loss per share available to common shareholders ( 79.0 ) ( 130.2 ) ( 734.4 )

Debentures fair value adjustment (1) (2)

interest expense on Debentures (1) (2)

Net loss for diluted loss per share available to common shareholders $ ( 79.0 ) $ ( 130.2 ) $ ( 865.4 )

Weighted average number of shares outstanding (000’s) - basic 591,470 584,543 578,654

584,543 578,654 570,607

Effect of dilutive securities (000’s)

Stock-based compensation (3) (4)

Conversion of 2020 Debentures (1) (2)

— 60,833 60,833

Weighted average number of shares and assumed conversions (000’s) diluted 591,470 592,497 639,487

Earnings (loss) per share - reported

$ ( 0.22 ) $ ( 1.27 ) $ 0.02

$ ( 0.22 ) $ ( 1.35 ) $ ( 0.31 )

Basic earnings (loss) per share from continuing operations $ ( 0.01 ) $ 0.01 $ ( 0.37 )

Total basic loss per share $ ( 0.13 ) $ ( 0.22 ) $ ( 1.27 )

Diluted earnings (loss) per share from continuing operations $ ( 0.01 ) $ 0.01 $ ( 0.54 )

Total diluted loss per share $ ( 0.13 ) $ ( 0.22 ) $ ( 1.35 )

______________________________

(1) The Company has not presented the dilutive effect of the Notes, Extension Debentures or 2020 Debentures using the if-converted method in the calculation of diluted loss per share for the year ended February 29, 2024, as to do so would be antidilutive.

(1) The Company has not presented the dilutive effect of the Debentures using the if-converted method in the calculation of diluted loss per share for the years ended February 28, 2025 and February 29, 2024, as to do so would be antidilutive.

See Note 7 for details on the Debentures.

(2) The Company has presented the dilutive effect of the 2020 Debentures using the if-converted method, assuming conversion at the beginning of the fiscal year for the years ended February 28, 2023 and February 28, 2022.

Accordingly, to calculate diluted loss per share, the Company adjusted net income (loss) by eliminating the fair value adjustment made to the 2020 Debentures and interest expense incurred on the 2020 Debentures in the years ended February 28, 2023 and February 28, 2022, and added the number of shares that would have been issued upon conversion to the diluted weighted average number of shares outstanding.

(2) The Company has presented the dilutive effect of the 2020 Debentures using the if-converted method, assuming conversion at the beginning of the fiscal year for the year ended February 28, 2023.

Accordingly, to calculate diluted loss per share, the Company adjusted net income (loss) by eliminating the fair value adjustment made to the 2020 Debentures and interest expense incurred on the 2020 Debentures in the year ended February 28, 2023, and added the number of shares that would have been issued upon conversion to the diluted weighted average number of shares outstanding.

See Note 7 for details on the 2020 Debentures.

(3) The Company has not presented the dilutive effect of in-the-money options and RSUs that will be settled upon vesting by the issuance of new common shares in the calculation of diluted loss per share for the years ended February 29, 2024, February 28, 2023 and February 28, 2022 as to do so would be antidilutive.

(3) The Company has not presented the dilutive effect of in-the-money options and RSUs that will be settled upon vesting by the issuance of new common shares in the calculation of diluted loss per share for the years ended February 28, 2025 and February 28, 2023 as to do so would be antidilutive.

(4) The Company has presented the dilutive effect of in-the-money options and RSUs that will be settled upon vesting by the issuance of new common shares in the calculation of diluted loss per share for the year ended February 29, 2024 .

BlackBerry Limited

24 unchanged sentences

During the year ended February 28, 2025, $ 1.1 million in losses (pre-tax and post-tax) associated with cash flow hedges were reclassified from AOCL into general and administrative expenses (February 29, 2024 - $ 0.3 million in losses).

During the year ended February 28, 2025, nil in losses (pre-tax and post-tax) associated with change in fair value from instrument-specific credit risk on debentures were reclassified from AOCL into general and administrative expenses (February 29, 2024 - $ 6.0 million in losses).

COMMITMENTS AND CONTINGENCIES

1 unchanged sentence

The Company had $ 13.5 million in collateralized outstanding letters of credit in support of certain leasing arrangements entered into in the ordinary course of business as of February 28, 2025.

The Company has posted a performance bond as collateral to support a government contract for the term of the agreement.

See the discussion of restricted cash in Note 4.

14 unchanged sentences

Any settlements or awards under such claims are provided for when reasonably determinable.

As of February 29, 2024, there are no material claims outstanding for which the Company has assessed the potential loss as both probable to result and reasonably estimable;

As of February 28, 2025, with the exception of the Canadian employment class action settlement discussed below, there are no other material claims for which the Company has assessed the potential loss as both probable to result and reasonably estimable;

therefore, no accrual has been made.

13 unchanged sentences

and Canada alleging that the Company and certain of its officers made materially false and misleading statements regarding the Company’s financial condition and business prospects and that certain of the Company’s financial statements contain material misstatements.

The individual lawsuit was voluntarily dismissed and the consolidated U.S.

class actions was settled;

see “Litigation Settlement” below in this Note 10.

The individual lawsuit was voluntarily dismissed and a Stipulation of Settlement was executed in respect of the consolidated U.S.

class actions effective June 7, 2022;

see “Litigation Settlements - U.S.

Class Actions” below in this Note 11.

On July 23, 2014, the plaintiff in the putative Ontario class action ( Swisscanto Fondsleitung AG v.

11 unchanged sentences

In millions of United States dollars, except share and per share data, and except as otherwise indicated

Other contingencies

As at February 28, 2025, the Company has recognized $ 20.5 million (February 29, 2024 - $ 17.2 million) in funds from claims filed with the Ministry of Innovation, Science and Economic Development Canada relating to its Strategic Innovation Fund (“SIF”) program’s investment in BlackBerry QNX.

A portion of this amount may be repayable in the future under certain circumstances if certain terms and conditions are not met by the Company, which is not probable at this time.

On March 17, 2017, a putative employment class action was filed against the Company in the Ontario Superior Court of Justice (Parker v.

BlackBerry Limited).

The Statement of Claim alleges that actions the Company took when certain of its employees decided to accept offers of employment from Ford Motor Company of Canada amounted to a wrongful termination of the employees’ employment with the Company.

The claim seeks (i) an unspecified quantum of statutory, contractual, or common law termination entitlements;

(ii) punitive or breach of duty of good faith damages of CAD$20 million, or such other amount as the Court finds appropriate, (iii) pre- and post- judgment interest, (iv) attorneys’ fees and costs, and (v) such other relief as the Court deems just.

The Statement of Claim alleged that actions the Company took when certain of its employees decided to accept offers of employment from Ford Motor Company of Canada amounted to a wrongful termination of the employees’ employment with the Company.

The claim sought (i) an unspecified quantum of statutory, contractual, or common law termination entitlements;

(ii) punitive or breach of duty of good faith damages of $20.0 million, Canadian dollars or such other amount as the Court may find appropriate, (iii) pre- and post- judgment interest, (iv) attorneys’ fees and costs, and (v) such other relief as the Court may deem just.

The Court granted the plaintiffs’ motion to certify the class action on May 27, 2019.

3 unchanged sentences

The parties participated in a mediation on November 9, 2022, which did not result in an agreement.

The Court has set a trial date of June 2, 2025, and scheduled a pre-trial conference on December 4, 2024.

Discovery is proceeding.

Other contingencies

As at February 29, 2024, the Company has recognized $ 17 million (February 28, 2023 - $ 17 million) in funds from claims filed with the Ministry of Innovation, Science and Economic Development Canada relating to its Strategic Innovation Fund (“SIF”) program’s investment in BlackBerry QNX.

A portion of this amount may be repayable in the future under certain circumstances if certain terms and conditions are not met by the Company, which is not probable at this time.

The matter had a trial date of June 2, 2025.

The parties attended a pre-trial conference on December 4, 2024.

At a further pre-trial conference on January 24, 2025, the parties reached a settlement in principle for approximately $ 2.8 million or $ 4.0 million Canadian dollars inclusive of all fees and costs.

On February 18, 2025, the parties signed the minutes of settlement.

On March 10, 2025, the Company paid the settlement amount into a trust held by the plaintiffs’ counsel.

The settlement is subject to approval by the Court.

The Company expects the settlement to be complete before the end of fiscal 2026.

Class Actions

On April 6, 2022, through a mediator, the Company agreed in principle to pay $ 165.0 million to settle the consolidated U.S.

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The Company has operating and finance leases primarily for corporate offices, research and development facilities, data centers and certain equipment.

The Company’s leases have remaining lease terms of between one year and six years , some of which may include options to extend the lease for up to 10 years, and some of which may include options to terminate the lease within one month .

BlackBerry Limited

11 unchanged sentences

During the year ended February 28, 2025, the Company incurred losses of $ 6.9 million (February 29, 2024 - $ 6.9 million;

February 28, 2022 - nil ) on LLA impairment of ROU assets, as described in Note 3.

February 28, 2023 - $ 3.5 million) on LLA impairment of ROU assets, as described in Note 4.

The Company also had sublease income during the year ended February 28, 2025 of $ 3.9 million (February 29, 2024 - $ 3.6 million;

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Fiscal year 2030 2.0

Thereafter 1.9

Total future minimum lease payments 48.6

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Segment Disclosures

The Company is organized and managed as three operating segments:

Cybersecurity, IoT, and Licensing and Other.

With the sale of the Cylance business, and the classification of the business as discontinued operations as discussed in Note 3, the Company is organized and managed as three operating segments:

Secure Communications (formerly “Cybersecurity”), QNX (formerly “IoT”), and Licensing.

Prior period comparatives have been recast to reflect this change in reportable operating segments.

The Company disaggregates revenue from contracts with customers based on geographical regions, timing of revenue recognition, and the major product and service types as described in Note 1.

The following table shows information by operating segment for the fiscal year ended February 29, 2024:

Cybersecurity IoT Licensing and Other Segment Totals

The following table shows information by reportable operating segment for the fiscal year ended February 28, 2025:

For the Year Ended

Secure Communications QNX Licensing Segment Totals

Segment revenue $ 272.6 $ 236.0 $ 26.3 $ 534.9

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______________________________

(1) A reconciliation of total segment gross margin to consolidated totals is set forth below.

(1) A reconciliation of total segment gross margin to consolidated pre-tax income from continuing operations is set forth below.

BlackBerry Limited

1 unchanged sentence

In millions of United States dollars, except share and per share data, and except as otherwise indicated

The following table shows information by operating segment for the fiscal year ended February 28, 2023 and February 28, 2022:

For the Year Ended

February 28, 2023 February 28, 2022

Cybersecurity IoT Licensing and Other Segment Totals Cybersecurity IoT Licensing and Other Segment Totals

The following table shows information by reportable operating segment for the years ended February 29, 2024 and February 28, 2023:

For the Years Ended

Secure Communications QNX Licensing Segment Totals

Feb 29 Feb 28 Feb 29 Feb 28 Feb 29 Feb 28 Feb 29 Feb 28

2024 2023 2024 2023 2024 2023 2024 2023

Segment revenue $ 283.8 $ 288.2 $ 215.4 $ 205.7 $ 259.9 $ 32.4 $ 759.1 $ 526.3

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______________________________

(1) A reconciliation of total segment gross margin to consolidated totals is set forth below.

Cybersecurity consists of BlackBerry® UEM and Cylance® cybersecurity solutions (collectively, BlackBerry Spark®), BlackBerry® AtHoc® and BlackBerry® SecuSUITE®.

The Company’s Cylance AI and machine learning-based platform consists of CylanceENDPOINT™, CylanceGUARD®, CylanceEDGE™, CylanceINTELLIGENCE™ and other cybersecurity applications.

(1) A reconciliation of total segment gross margin to consolidated pre-tax income (loss) from continuing operations is set forth below.

Secure Communications consists of BlackBerry® UEM, BlackBerry® AtHoc® and BlackBerry® SecuSUITE®.

The Company’s endpoint management platform includes BlackBerry® UEM, BlackBerry® Dynamics™, and BlackBerry® Workspaces solutions.

Cybersecurity revenue is generated predominantly through software licenses, commonly bundled with support, maintenance and professional services.

IoT consists of BlackBerry® QNX®, BlackBerry® Certicom®, BlackBerry Radar®, BlackBerry IVY® and other IoT applications.

IoT revenue is generated predominantly through software licenses, commonly bundled with support, maintenance and professional services.

Licensing and Other consists of the Company’s intellectual property arrangements and settlement awards.

Other consists of the Company’s legacy SAF business, which ceased operations on January 4, 2022.

BlackBerry Limited

Notes to the Consolidated Financial Statements

In millions of United States dollars, except share and per share data, and except as otherwise indicated

The following table reconciles total segment gross margin for the fiscal year ended February 29, 2024, February 28, 2023 and February 28, 2022 to the Company’s consolidated totals:

Secure Communications revenue is generated predominantly through software licenses, commonly bundled with support, maintenance and professional services.

QNX consists of BlackBerry® QNX®, BlackBerry® Certicom®, BlackBerry Radar®, BlackBerry IVY® and other QNX applications.

QNX revenue is generated predominantly through software licenses, commonly bundled with support, maintenance and professional services.

Licensing consists of the Company’s intellectual property arrangements and settlement awards.

The following table reconciles segment gross margin for the fiscal year ended February 28, 2025, February 29, 2024 and February 28, 2023 to the Company’s consolidated totals:

For the Years Ended

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Amortization 17.7 26.7 27.4

Impairment of long-lived assets 15 235 —

Impairment of goodwill — 15.9 112.1

Impairment of long-lived assets 9.6 15.3 3.5

Gain on sale of property, plant and equipment, net — — ( 6.0 )

Debentures fair value adjustment 3 ( 138 ) ( 212 )

Prior Debentures fair value adjustment — 3.5 ( 137.4 )

Litigation settlement 2.8 — 165.0

Investment income, net ( 7.7 ) ( 18.8 ) ( 5.0 )

Consolidated income (loss) before income taxes $ ( 106 ) $ ( 720 ) $ 19

Income (loss) from continuing operations before income taxes $ 8.5 $ 29.8 $ ( 201.8 )

______________________________

(1) The CODM reviews segment information on an adjusted basis, which excludes certain amounts as described below:

Stock compensation expenses - Equity compensation is a non-cash expense and does not impact the ongoing operating decisions taken by the Company’s management.

On May 11, 2023, the Company completed its previously announced patent sale with Malikie and sold certain non-core patent assets for $ 170 million in cash on closing, an additional $ 30 million in fixed consideration due by no later than the third anniversary of closing and variable consideration in the form of future royalties in the aggregate amount of up to $ 700 million (the “Malikie Transaction”).

(1) The CODM reviews segment gross margin information on an adjusted basis, which excludes Stock compensation expenses - which is a non-cash expense and is not included in the CODM’s measure of segment gross margin when evaluating performance and allocating resources to the segment.

BlackBerry Limited

Notes to the Consolidated Financial Statements

In millions of United States dollars, except share and per share data, and except as otherwise indicated

On May 11, 2023, the Company completed its patent sale with Malikie and sold certain non-core patent assets for $ 170.0 million in cash on closing, an additional $ 30.0 million in fixed consideration due by no later than the third anniversary of closing and variable consideration in the form of future royalties in the aggregate amount of up to $ 700.0 million (the “Malikie Transaction”).

Pursuant to the terms of the Malikie Transaction, the Company received a license back to the patents sold, which relate primarily to mobile devices, messaging and wireless networking.

In the first quarter of fiscal 2024, the Company recognized revenue of $ 217.7 million and cost of sales of $ 147.2 million related to intellectual property sold.

As at February 29, 2024, the remaining financing component on the patent sale was $ 10 million and will be recognized as interest income over the payment terms.

The Company estimated variable consideration from future royalty revenues using an expected value method including inputs from both internal and external sources related to patent monetization activities and cash flows, and constrained the recognition of that variable consideration based on the Company’s accounting policies and critical accounting estimates as described in Note 1.

The present value of variable consideration recognized as revenue was $ 23 million and the amount of variable consideration constrained was $ 210 million.

The variable consideration recognized as revenue was $ 22.9 million and the amount of variable consideration constrained was $ 210.4 million.

The Company evaluates its conclusions as to whether the constraints are still applicable on an ongoing basis, and will make updates when it observes a sufficient amount of evidence that amounts of variable consideration are no longer subject to constraint or the estimated amount of variable consideration has changed.

BlackBerry Limited

Notes to the Consolidated Financial Statements

In millions of United States dollars, except share and per share data, and except as otherwise indicated

The Company disaggregates revenue from contracts with customers based on geographical regions, timing of revenue recognition, and the major product and service types, as discussed above in “Segment Disclosures”.

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( 1) North America includes all revenue from the Company’s intellectual property arrangements, due to the global applicability of the patent portfolio and licensing arrangements thereof.

BlackBerry Limited

Notes to the Consolidated Financial Statements

In millions of United States dollars, except share and per share data, and except as otherwise indicated

Revenue, classified by timing of recognition, was as follows:

For the Year Ended

For the Years Ended

February 28, 2025 February 29, 2024 February 28, 2023

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Decrease due to payment, fulfillment of performance obligations, or other ( 684.0 ) ( 524.5 ) ( 20.7 )

Increase, net 135 7 4

Increase (decrease), net ( 15.1 ) 3.8 ( 0.5 )

Closing balance as at February 28, 2025 $ 240.0 $ 167.1 $ 14.6

Current portion $ 173.7 $ 161.5 $ 8.3

Long-term portion 66.3 5.6 6.3

$ 240.0 $ 167.1 $ 14.6

Transaction price allocated to the remaining performance obligations

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Remaining performance obligations $ 161.5 $ 2.7 $ 2.9 $ 167.1

BlackBerry Limited

Notes to the Consolidated Financial Statements

In millions of United States dollars, except share and per share data, and except as otherwise indicated

Revenue recognized for performance obligations satisfied in prior periods

1 unchanged sentence

fiscal year ended February 28, 2023 - $ 0.6 million).

BlackBerry Limited

Notes to the Consolidated Financial Statements

In millions of United States dollars, except share and per share data, and except as otherwise indicated

Property, plant and equipment, intangible assets, operating lease ROU assets and goodwill, classified by geographic region in which the Company’s assets are located, were as follows:

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Information About Major Customers

There was one customer that comprised 27 % of the Company’s revenue in fiscal 2024 due to the completed Malikie Transaction (fiscal 2023 - one customer that comprised 12 %;

There was one customer that comprised 14 % of the Company’s revenue in fiscal 2025 (fiscal 2024 - one customer that comprised 27 %;

fiscal 2023 - one customer that comprised 12 %) .

10 unchanged sentences

February 28, 2023 - $ 28.7 million)

General and administrative expenses for the fiscal year ended February 29, 2024 included nil with respect to foreign exchange gain, net of foreign exchange hedging (February 28, 2023 - nil ;

February 28, 2022 - $ 1 million).

General and administrative expenses for the fiscal year ended February 28, 2025 included $ 0.4 million with respect to foreign exchange gain, net of foreign exchange hedging (February 29, 2024 - $ 0.3 million foreign exchange losses, net of foreign exchange hedging;

February 28, 2023 - $ 0.2 million foreign exchange gains, net of foreign exchange hedging).

Foreign exchange

16 unchanged sentences

The Company also has significant financing components within certain revenue contracts with customers and is exposed to interest rate risk as a result of discounting the future payments from customers with a fixed interest rate.

The Company has also issued Notes with a fixed interest rate, as described in Note 6.

The Company also has outstanding Notes with a fixed interest rate, as described in Note 7.

The Company is exposed to interest rate risk as a result of the Notes.

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As at February 28, 2025, no single issuer represented more than 47 % of the total cash, cash equivalents and investments (February 29, 2024 - no single issuer represented more than 30 % of the total cash, cash equivalents and investments), with the largest such issuer representing bearer deposits, term deposits and cash balances with one of the Company’s banking counterparties.

The Company maintains Credit Support Annexes (“CSAs”) with several of its counterparties.

These CSAs require the outstanding net position of all contracts be made whole by the paying or receiving of collateral to or from the counterparties on a daily basis, subject to exposure and transfer thresholds.

As at February 29, 2024, the Company had no collateral posted or held with counterparties (February 28, 2023 - $ 1 million in collateral held).

In addition, as partial consideration for the sale of its Cylance endpoint security assets and liabilities to Arctic Wolf, as described in Note 3, the Company is owed a delayed cash payment of approximately $ 41.1 million one year following the closing.

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

Liquidity risk

Cash, cash equivalents, and investments were approximately $ 410.3 million as at February 28, 2025.

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 with an estimated fair value of $ 24.6 million.

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.

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.

The Company’s management remains focused on efficiently managing working capital balances and managing the liquidity needs of the business.

3 unchanged sentences

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 8. Financial Statements and Supplementary Data