What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2026-04-09 compared with 2025-04-02 · 330 added, 399 removed, 1137 unchanged (39% of the section changed)

43 unchanged sentences

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 Tests of Goodwill for the UEM and Cylance Reporting Units

Qualitative Goodwill Impairment Assessment

As described in Notes 1, 4 and 5 to the consolidated financial statements, the Company’s goodwill balance was $479.1 million as of February 28, 2026.

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.

In the impairment test, management compares the carrying value of a reporting unit, including goodwill, to its fair value.

Goodwill is tested for impairment annually, on December 31, or more frequently if events or changes in circumstances indicate that goodwill might be impaired.

In the annual impairment test, management first assesses whether it is more likely than not that an impairment is present in goodwill based upon qualitative factors (the qualitative goodwill impairment assessment).

If management 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.

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.

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.

As disclosed by management, management uses significant judgment in assessing the qualitative factors to be considered in the qualitative goodwill impairment assessment, 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.

The principal considerations for our determination that performing procedures relating to the qualitative goodwill impairment assessment is a critical audit matter are the significant judgment by management in assessing the qualitative factors in the qualitative goodwill impairment assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value;

and a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating audit evidence related to management’s qualitative goodwill impairment assessment of 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.

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 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 and profitability measures in the discounted future cash flow model.

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 reporting unit;

(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 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.

These procedures included testing the effectiveness of controls relating to management’s qualitative goodwill impairment assessment.

These procedures also included, among others, evaluating the reasonableness of management’s qualitative goodwill impairment assessment related to 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 by (i) considering current and past performance of the reporting units;

(ii) considering consistency with external market and industry data;

comparing share price trends and market value capitalization for the Company at various points during year to third party market data;

and (iv) considering consistency with evidence obtained in other areas of the audit.

/s/ PricewaterhouseCoopers LLP

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Other current assets (note 5) 42.2 30.0

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

Restricted cash and cash equivalents (note 4) 14.2 13.6

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Goodwill (note 5) 479.1 472.4

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

$ 1,245.2 $ 1,295.6

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Deferred revenue, current (note 13) 138.5 161.5

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

Deferred revenue, non-current (note 13) 14.1 5.6

2 unchanged sentences

Long-term notes (note 7) 196.5 195.3

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

Commitments and contingencies (note 11)

23 unchanged sentences

Net loss — ( 130.2 ) — ( 130.2 )

Other comprehensive loss — — ( 4.7 ) ( 4.7 )

Other comprehensive income — — 9.4 9.4

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

1 unchanged sentence

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

1 unchanged sentence

Net loss — ( 79.0 ) — ( 79.0 )

Other comprehensive income — — 9.4 9.4

Other comprehensive loss — — ( 4.9 ) ( 4.9 )

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

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) 3.1 — — 3.1

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

Net loss — ( 79.0 ) — ( 79.0 )

Other comprehensive loss — — ( 4.9 ) ( 4.9 )

Net income — 53.2 — 53.2

Other comprehensive income — — 8.0 8.0

Stock-based compensation (note 8) 23.1 — — 23.1

Share repurchase (note 8) ( 77.6 ) 16.9 — ( 60.7 )

Shares issued:

17 unchanged sentences

Impairment of long-lived assets (note 4) 2.1 9.6 15.3

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

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

1 unchanged sentence

369.9 394.1 479.7

Operating income (loss) 0.8 11.0 ( 206.8 )

Operating income 48.3 0.8 11.0

Investment income, net (note 4 and note 7) 10.7 7.7 18.8

Income (loss) before income taxes 8.5 29.8 ( 201.8 )

Income before income tax 59.0 8.5 29.8

Provision for income taxes (note 6) 5.8 17.0 24.2

2 unchanged sentences

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

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

Net income (loss) $ 53.2 ( 79.0 ) ( 130.2 )

Earnings (loss) per share (note 9)

Basic earnings (loss) per share from continuing operations $ 0.09 ( 0.01 ) 0.01

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

Total basic earnings (loss) per share $ 0.09 ( 0.13 ) ( 0.22 )

Diluted earnings (loss) per share from continuing operations $ 0.09 ( 0.01 ) 0.01

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

Total diluted earnings (loss) per share $ 0.09 ( 0.13 ) ( 0.22 )

See notes to consolidated financial statements.

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February 28, 2026 February 28, 2025 February 29, 2024

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

Net income (loss) $ 53.2 $ ( 79.0 ) $ ( 130.2 )

Other comprehensive income (loss)

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 )

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

Foreign currency translation adjustment 5.8 ( 2.7 ) 1.6

Actuarial gains associated with other post-employment benefit obligations — — 0.5

Net change in fair value from instrument-specific credit risk on the Debentures during the year (note 7) — 6.0 1.6

Net change in fair value from instrument-specific credit risk on the Prior Debentures during the year (note 7) — — 6.0

Other comprehensive income (loss) 8.0 ( 4.9 ) 9.4

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

Comprehensive income (loss) $ 61.2 $ ( 83.9 ) $ ( 120.8 )

See notes to consolidated financial statements.

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Cash flows from operating activities

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

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

Net income (loss) $ 53.2 $ ( 79.0 ) $ ( 130.2 )

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

Amortization 17.8 44.7 58.5

3 unchanged sentences

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 — — ( 6.0 )

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

13 unchanged sentences

Acquisition of long-term investments — — ( 1.6 )

Proceeds on sale, maturity or distribution from long-term investments 1.1 — —

Acquisition of property, plant and equipment ( 3.8 ) ( 3.1 ) ( 7.1 )

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

Acquisition of intangible assets ( 5.7 ) ( 7.0 ) ( 13.8 )

5 unchanged sentences

Issuance of common shares 2.5 3.1 5.9

Payment of finance lease liability — — ( 0.1 )

Common shares repurchased ( 60.7 ) — —

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

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

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

Net cash provided by (used in) financing activities ( 58.2 ) 3.1 ( 165.1 )

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

Effect of foreign exchange gain (loss) on cash, cash equivalents, restricted cash, and restricted cash equivalents 0.9 ( 0.5 ) 0.2

Net increase (decrease) in cash, cash equivalents, restricted cash, and restricted cash equivalents during the year 8.6 79.8 ( 121.8 )

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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.

With a deep heritage in Secure Communications, the Company 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.

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

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.

These estimates may change, as new events occur and additional information is obtained, and such changes will be recognized in the consolidated financial statements as soon as they become known.

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

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:

QNX, Secure Communications and Licensing, as further discussed in Note 13.

Significant Accounting Policies and Critical Accounting Estimates

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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 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.

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 performance-based RSUs, 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 entity as consideration in the sale of the Cylance business (as discussed in Note 3).

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, 2026.

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The accounts receivable balance reflects invoiced and accrued revenue and is presented net of an allowance for credit losses.

The Company expects the majority of its accounts receivable balances to continue to come from large customers as it sells the majority of its software products and services through resellers and other distribution partners, rather than directly to end users.

The Company establishes current expected credit losses (“CECL”) for pools of assets with similar risk characteristics by evaluating historical levels of credit losses, current economic conditions that may affect a customer’s ability to pay, and creditworthiness of significant customers.

17 unchanged sentences

Allowance for Credit Losses on Available-for-sale Debt Securities

At each reporting period, the Company evaluates its available-for-sale debt securities at the individual security level to determine whether there is a decline in the fair value below its amortized cost basis (an impairment).

In circumstances where the Company intends to sell, or is more likely than not required to sell, the security before it recovers its amortized cost basis, the difference between fair value and amortized cost is recognized as a loss in the consolidated statement of operations, with a corresponding write-down of the security’s amortized cost.

16 unchanged sentences

This documentation includes:

identification of the specific foreign currency asset, liability or forecasted transaction being hedged;

identification of the specific foreign currency forecasted transaction being hedged;

the nature of the risk being hedged;

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Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date.

As most of the Company’s leases do not provide an implicit discount rate, the Company primarily uses its incremental borrowing rate, based on the information available at the commencement date of the lease, in determining the present value of future payments.

The Company’s incremental borrowing rate requires significant judgment and is determined based on the rate of interest that the Company would have to pay to borrow an amount equal to the lease payments on a collateralized basis over a similar term in a similar economic environment.

As most of the Company’s leases do not provide an implicit discount rate, the Company primarily uses its estimated incremental borrowing rate, based on the information available at the commencement date of the lease, in determining the present value of future payments.

The Company’s estimated incremental borrowing rate requires significant judgment and is determined based on the rate of interest that the Company would have to pay to borrow an amount equal to the lease payments on a collateralized basis over a similar term in a similar economic environment.

The operating lease ROU asset includes any lease payments made, lease incentives and initial direct costs incurred.

2 unchanged sentences

In some cases, the Company has index-based variable lease payments for which an estimated rate is applied to the initial lease payment to determine future lease payment amounts.

The Company has building, car and data center lease agreements with lease and non-lease components that are accounted for separately.

The Company has building, vehicle and data center lease agreements with lease and non-lease components that are accounted for separately.

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.

17 unchanged sentences

Intangible assets

Intangible assets with definite lives are stated at cost, less accumulated amortization and impairment.

Intangible assets with finite useful lives are stated at cost, less accumulated amortization and impairment.

Amortization is provided on a straight-line basis over the following terms:

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Nature of products and services

The Company is organized and managed as three operating segments.

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

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

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.

QNX, Secure Communications and Licensing.

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

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

QNX software license revenue from both term subscription and perpetual contracts is recognized at a point in time when the software is made available to the customer for use, as the software has standalone functionality and the license is distinct in the context of the contract.

The licenses for certain software embedded into hardware such as automotive digital cockpit systems and advanced driver-assistance systems are sold as a sales-based royalty where intellectual property is the predominant item to which the royalty relates, and are recognized based on actual volumes and underlying sales by the customer of the hardware with the embedded software shipped by the customer, except in cases where the customer contractually commits to a certain volume or makes a non-refundable prepayment related to its future royalties, in which case consideration is fixed and recognized immediately.

Revenue from technical support is recognized over the support period.

Revenue from professional services is recognized as the customer simultaneously receives and consumes the benefits provided by the Company’s performance as the services are provided.

This can be on a proportional performance basis, or over the term of the contract.

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

Secure Communications

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

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

BlackBerry UEM

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

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

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.

If the licensed software in a contract requires access to the Company’s proprietary secure network infrastructure in order to function, revenue from term subscription contracts is recognized over time, ratably over the term, and revenue from perpetual license contracts is recognized over time, ratably over the expected customer life, which in most cases the Company has estimated to be four years.

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

If access to the Company’s proprietary network infrastructure is not required for the software to function, revenue associated with both term subscription and perpetual licenses contracts is recognized at a point in time upon delivery of the software.

Generally, most of the Company’s UEM software products sold require access to the Company’s proprietary secure network infrastructure in order to function, and therefore the associated revenue is recognized over time, ratably over either the subscription term or expected customer life as described above.

Generally, most of the Company’s UEM software products sold require access to the Company’s proprietary secure network infrastructure to function, and therefore the associated revenue is recognized over time, ratably over either the subscription term or expected customer life as described above.

BlackBerry SecuSUITE

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

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 when control transfers at date of shipment.

BlackBerry AtHoc

BlackBerry AtHoc generates revenue from networked critical event management solutions through perpetual and term subscriptions which include technical support, as well as associated professional services.

The licensed software in most contracts requires access to the Company’s proprietary secure network infrastructure in order to function, specifically through AtHoc’s secure platform which is included within the Company’s data center.

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.

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.

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

Like 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

BlackBerry Limited

1 unchanged sentence

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

BlackBerry QNX software license revenue from both term subscription and perpetual contracts is recognized at a point in time when the software is made available to the customer for use, as the software has standalone functionality and the license is distinct in the context of the contract.

The licenses for certain software embedded into hardware such as automotive digital cockpit systems and advanced driver-assistance systems are sold as a sales-based royalty where intellectual property is the predominant item to which the royalty relates, and are recognized based on actual volumes and underlying sales by the customer of the hardware with the embedded software shipped by the customer, except in cases where the customer makes a non-refundable prepayment related to its future royalties, in which case consideration is fixed and recognized immediately.

Revenue from technical support is recognized over the support period.

Revenue from professional services is recognized as the customer simultaneously receives and consumes the benefits provided by the Company’s performance as the services are provided.

This can be on a proportional performance basis, or over the term of the contract.

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

Revenue from 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

The licensed software in most contracts requires access to the Company’s proprietary secure network infrastructure to function, specifically through AtHoc’s secure platform which is included within the Company’s data center.

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.

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

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Significant judgments in revenue recognition

The Company’s contracts with customers often include promises to transfer multiple products and services to a customer.

The Company’s contracts with customers often include promises to transfer multiple products and services.

Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment.

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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

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.

However, in instances where SSP is not directly observable, the Company determines the SSP by maximizing observable

BlackBerry Limited

1 unchanged sentence

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

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

However, in instances where SSP is not directly observable, the Company determines the SSP by maximizing observable inputs and using an adjusted market assessment approach using information that may include market conditions and other observable inputs from the Company’s pricing team, including historical SSP.

inputs and using an adjusted market assessment approach using information that may include market conditions and other observable inputs from the Company’s pricing team, including historical SSP.

Judgment is required to determine in certain agreements if the Company is the principal or agent in the arrangement.

The Company considers factors such as, but not limited to, which party can direct the usage of the product or service, which party obtains substantially all the remaining benefits and which party has the ability to establish the selling price.

Significant judgment is required to determine the estimated customer life used in perpetual license contracts that require access to the Company’s proprietary secure network infrastructure to function.

The Company uses historical experience regarding the length of the technology upgrade cycle and the expected life of the product to draw this conclusion.

Revenue contract balances

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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, generally payable within 30 to 60 days.

Payment terms and conditions vary by contract type and geography although standard billing terms are that payment is due upon receipt of invoice, generally payable within the agreed upon payment terms.

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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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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Development costs for licensed software to be sold, leased or otherwise marketed are subject to capitalization beginning when a product’s technological feasibility has been established and ending when a product is available for general release to customers.

The Company’s products are generally released soon after technological feasibility has been established and therefore costs incurred subsequent to achievement of technological feasibility are not significant and have been expensed as incurred.

The Company does not currently have any capitalized research and development costs other than those identified through business combinations as in-process research and development included within intangible assets, net, which were recorded at their fair values and began amortizing when the related technology became available for general release to customers.

The Company’s products are generally released soon

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

after technological feasibility has been established and therefore costs incurred subsequent to achievement of technological feasibility are not significant and have been expensed as incurred.

The Company does not currently have any capitalized research and development costs.

Comprehensive income (loss)

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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 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 19.9 million shares in the equity pool available for future grants under the Equity Plan as at February 28, 2026.

RSUs are redeemed for common shares issued by the Company or the cash equivalent on the vesting dates established by the Board or the Compensation, Nomination and Governance Committee of the Board.

The RSUs granted under the Equity Plan generally vest over a three -year period, either in equal annual installments or on the third anniversary date.

For PBRSUs, the Company estimates its achievement against the performance goals, which are based on the Company’s business plan approved by the Board and total shareholder return.

The estimated achievement is updated for the Company’s outlook for the fiscal year as at the end of each fiscal quarter.

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

RSUs are redeemed for common shares issued by the Company or the cash equivalent on the vesting dates established by the Board or the Compensation Committee of the Board.

The RSUs granted under the Equity Plan generally vest over a three -year period, either in equal annual installments, equal quarterly installments, or on the third anniversary date of grant.

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

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The Company recognizes compensation expense over the vesting period of the RSU.

For PBRSUs, the Company estimates achievement against performance goals, which are based on Company operating metrics and targets pre-determined by the Board and on relative total shareholder return (“TSR”).

Performance on the operating metrics is measured over three successive one-year periods and TSR performance is measured across an overlapping three-year period.

For PBRSUs granted in fiscal 2026, the operating metrics are (i) adjusted EBITDA margin percentage and (ii) divisional revenue growth rates, and up to 200% of the target award may be earned upon achievement of the applicable operating and TSR targets.

The estimated achievement is updated for the Company’s outlook for the fiscal year as at the end of each fiscal quarter.

To determine the grant date fair value of the PBRSUs, a Monte Carlo simulation model is used.

The Company recognizes compensation expense for the PBRSUs over the three-year performance period based on the grant date fair value.

On a quarterly basis, management evaluates the probability that the threshold performance goals will be achieved, if at all, and the anticipated level of attainment to determine the amount of compensation expense to record in the consolidated statement of operations.

The Company expects to settle RSUs, upon vesting, through the issuance of new common shares from treasury.

The Company has a Deferred Share Unit Plan (the “DSU Plan”), originally approved by the Board on December 20, 2007, under which each independent director is credited with Deferred Share Units (“DSUs”) in satisfaction of all or a portion of the cash fees otherwise payable to them for serving as a director of the Company.

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

BlackBerry Limited

1 unchanged sentence

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.

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.

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 2026

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

The standard requires additional disclosures for segment reporting.

These requirements include:

(i) disclosure of significant expenses that are regularly provided to the Chief Operating Decision Maker (“CODM”) and included within each reported measure of segment profit or loss (collectively referred to as the “significant expense principle”);

(ii) disclosure of an amount for other segment items (equal to the difference between segment revenue less segment expenses disclosed under the significant expense principle and each reported measure of segment profit or loss) by reportable segment and a description of their composition;

(iii) annual disclosure of a reportable segment’s profit or loss and assets currently required by Topic 280 in interim periods;

(iv) clarification that, if the CODM uses more than one measure of a segment's profit or loss in assessing segment performance and deciding how to allocate resources, a public entity may report those additional measures of segment profit or loss;

(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;

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 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):

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09 “Income Taxes (Topic 740):

Improvements to Income Tax Disclosures” on the topic of income taxes.

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and (vi) annual disclosure of income tax expense (or benefit) from continuing operations disaggregated by federal (national), state, and foreign.

For public entities, the guidance is effective for annual periods beginning after December 15, 2024.

The Company will adopt this guidance in fiscal 2026 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.

The Company adopted this guidance for the year ended February 28, 2026, and applied the new disclosure requirements prospectively to the current annual period.

Prior period disclosures have not been adjusted to reflect the new disclosure requirements.

See Note 6 for further details.

Accounting Pronouncements Not Yet Adopted

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

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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.

The Company will adopt this guidance in fiscal 2028 and is in 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.

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

In July 2025, the FASB issued ASU 2025-05 to amend the guidance in “Financial Instruments—Credit Losses” (Topic 326).

The update provides targeted improvements and clarifications related to the recognition and measurement of expected credit losses, particularly for off-balance-sheet credit exposures and certain practical expedients.

The guidance is effective for fiscal years beginning after December 15, 2025, including interim periods within those fiscal years.

The Company will adopt this guidance in fiscal 2027 and does not expect the adoption to have a material impact on its results of operations, financial position and disclosures.

In November 2025, the FASB issued ASU 2025-09 to amend the guidance in “Derivatives and Hedging” (Topic 815).

The update provides targeted improvements intended to enhance the application of hedge accounting, including expanded eligibility of forecasted transactions, additional flexibility in measuring hedge effectiveness, and clarifications related to hedging non-financial items.

The guidance is effective for fiscal years beginning after December 15, 2026, including

BlackBerry Limited

1 unchanged sentence

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

interim periods within those fiscal years.

The Company will adopt this guidance in fiscal 2028 and has not yet determined the impact on its results of operations, financial position and disclosures.

In December 2025, the FASB issued ASU 2025-10 to amend the guidance in “Government Grants” (Topic 832).

The update provides recognition, measurement, presentation, and disclosure requirements for government grants, including guidance for grants related to an asset and grants related to income.

The amendments introduce two permitted approaches for asset-related grants:

a deferred income approach or a cost accumulation approach.

The guidance is effective for fiscal years beginning after December 15, 2028, including interim periods within those fiscal years.

The Company will adopt this guidance in fiscal 2030 and has not yet determined the impact on its results of operations, financial position and disclosures.

DISCONTINUED OPERATIONS

On February 3, 2025, the Company completed the sale of its Cylance assets and related liabilities to Arctic Wolf Networks, Inc.

(“Arctic Wolf”) for $ 160.0 million of cash, subject to certain adjustments of approximately $ 42.1 million, and 5.5 million common shares of Arctic Wolf.

The Company received $ 79.8 million on closing and was owed a delayed cash payment one year following the closing of $ 38.1 million which was paid on February 10, 2026.

In connection with the sale, the Company recognized a gain on disposal of discontinued operations before taxes of $ 10.4 million in the fourth quarter of fiscal 2025.

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:

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

For the Years Ended

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

February 28, 2025 February 29, 2024

Revenue $ 71.2 $ 93.6

6 unchanged sentences

Amortization 20.5 27.2

Impairment of long-lived assets — — 231.0

Impairment of goodwill — 18.9

Gain on disposal of discontinued operation ( 10.4 ) —

98.7 173.7 580.9

Operating loss ( 70.3 ) ( 135.8 )

3 unchanged sentences

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

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:

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 discontinued operations had no acquisition of property, plant and equipment for the years ended February 28, 2025 and February 29, 2024.

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

For the Years Ended

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

February 28, 2025 February 29, 2024

Amortization $ 20.5 $ 27.2

Stock based compensation $ 5.0 $ 4.3

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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The independent third-party valuator considers the information provided by the Company before determining whether a change in their original pricing is warranted.

For a description of how the fair values of the Extension Debentures and 2020 Debentures were determined, see the “Convertible debentures” accounting policies in Note 1.

The Extension Debentures are classified as Level 2 and the 2020 Debentures are classified as Level 3.

When the Company concludes that there is a significant financing component included within a contract with a customer due to timing differences between the fulfillment of certain performance obligations and the receipt of payment for those performance obligations, the Company determines the present value of the future consideration utilizing the discount rate that would be reflected in a separate financing transaction between the customer and the Company at contract inception based upon the credit characteristics of the customer receiving financing in the contract.

Non-Recurring Fair Value Measurements

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Non-marketable equity investments measured using the measurement alternative include investments in privately-held companies without readily determinable fair values in which the Company does not own a controlling interest or have significant influence.

The estimation of fair value used in the fair value measurements required the use of significant unobservable inputs, and as a result, the fair value measurements were classified as Level 3.

Goodwill Impairment

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.

Investments in privately-held companies are recorded at fair value on a non-recurring basis.

BlackBerry Limited

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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.

value of non-marketable equity investments are classified as Level 3 when the Company estimates fair value using significant unobservable inputs such as when the investment is remeasured due to impairment or observable price changes in the equity of an investee resulting from an orderly transaction for identical or similar investments of the same issuer.

Goodwill Impairment

During the years ended February 28, 2026, and February 28, 2025 there were no goodwill impairment charges.

In its annual goodwill impairment tests in the fourth quarter of fiscal 2026 and 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 at the time was part of the Cybersecurity operating segment.

The BlackBerry Spark reporting unit was subsequently bifurcated into the Cylance and UEM reporting units for the purposes of the sale of the Cylance business as discussed above.

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

The Cybersecurity operating segment subsequently became the Secure Communications operating 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 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.

During the year ended February 28, 2026, the Company exited certain leased facilities and recorded a pre-tax and after-tax impairment charge of $ 1.2 million and $ 0.9 million, respectively, relating to operating lease right-of-use (“ROU”) assets and property, plant and equipment associated with exiting such facilities and to the change in the extent or manner in which certain information technology assets are used (February 28, 2025 - $ 6.9 million and $ 2.7 million, respectively) .

The impairment was determined by comparing the fair value of the impacted long-lived assets 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.

The fair value of the ROU asset was based on the estimated sublease income for certain facilities taking into consideration the estimated time period it will take to obtain a sublessor, the applicable discount rate and the sublease rate, which are considered unobservable inputs.

The Company conducts an evaluation of the related liabilities and expenses and revises its assumptions and estimates as appropriate as new or updated information becomes available.

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

The fair value measurement of ROU impaired assets is classified as Level 3 of the fair value hierarchy.

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.

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 of $ 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.

BlackBerry Limited

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Cash, Cash Equivalents and Investments

The components of cash, cash equivalents and investments by fair value level as at February 28, 2025 were as follows:

The components of cash, cash equivalents and investments by fair value level and balance sheet classification as at February 28, 2026 were as follows:

Cost Basis (1)

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Bank balances $ 168.6 $ — $ — $ 168.6 $ 168.6 $ — $ — $ —

Other investments 23.3 4.9 — 28.2 — — 28.2 —

Investments in privately-held companies 51.5 2.4 ( 1.2 ) 52.7 — — 52.7 —

220.1 2.4 ( 1.2 ) 221.3 168.6 — 52.7 —

Equity securities 10.0 — ( 10.0 ) — — — — —

Term deposits, and certificates of deposits 49.7 — — 49.7 20.1 20.0 — 9.6

2 unchanged sentences

promissory notes 24.4 — — 24.4 24.4 — — —

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

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

treasury bills 13.3 — — 13.3 13.3 — — —

205.5 — — 205.5 106.1 85.2 — 14.2

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

Investments in privately-held companies 1.3 4.3 — 5.6 — — 5.6 —

1.3 4.3 — 5.6 — — 5.6 —

$ 426.9 $ 6.7 $ ( 1.2 ) $ 432.4 $ 274.7 $ 85.2 $ 58.3 $ 14.2

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

______________________________

(1) Cost basis for investments in privately-held companies includes the effect of returns of capital and impairment.

BlackBerry Limited

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

The components of cash, cash equivalents and investments by fair value level as at February 29, 2024 were as follows:

The components of cash, cash equivalents and investments by fair value level and balance sheet classification as at February 28, 2025 were as follows:

Cost Basis (1)

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Bank balances $ 223.7 $ — $ — $ 223.7 $ 223.7 $ — $ — $ —

Other investments 29.6 6.1 — 35.7 — — 35.7 —

Investments in privately-held companies 23.3 4.9 — 28.2 — — 28.2 —

247.0 4.9 — 251.9 223.7 — 28.2 —

4 unchanged sentences

promissory notes 9.8 — — 9.8 7.9 1.9 — —

treasury bills 9.5 — — 9.5 5.6 — — 3.9

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

Investments in privately-held companies 30.7 1.2 ( 1.2 ) 30.7 — — 30.7 —

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

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

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.

______________________________

(1) Cost basis for investments in privately-held companies includes the effect of returns of capital and impairment.

As at February 28, 2026, the Company had non-marketable equity investments without readily determinable fair value of $ 58.3 million (February 28, 2025 - $ 58.9 million) including common shares of Arctic Wolf received as partial consideration for the sale of its Cylance endpoint sec urity assets and liabilities to Arctic Wolf.

During the year ended February 28, 2026 the Company recorded $ 1.8 million in upward adjustment to the carrying value of 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 (February 28, 2025 - upward adjustments of $ 1.2 million and downward adjustments of $ 2.4 million and February 29, 2024 - nil ).

During the year ended February 28, 2026, the Company recorded a $ 2.3 million impairment on a certain investment which was subsequently sold at the carrying amount with no gain or loss recognized, (February 28, 2025 - $ 0.2 million and February 29, 2024 - nil ).

As of February 28, 2026, the Company has recorded a cumulative impairment of $ 5.3 million to the carrying value of certain other non-marketable equity investments without readily determinable fair value (February 28, 2025 - $ 3.0 million).

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 ).

There we re no realized gains or losses on a vailable-for-sale debt securities for the year ended February 28, 2026 (February 28, 2025 and February 29, 2024 - nil ).

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.

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 approximately six years.

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

BlackBerry Limited

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

been issued and during the term of the government contract;

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

The following table provides a reconciliation of cash, cash equivalents, restricted cash, and restricted cash equivalents as at February 28, 2026, February 28, 2025 and February 29, 2024 from the consolidated balance sheets to the consolidated statements of cash flows:

10 unchanged sentences

$ 205.5 $ 205.5 $ 137.7 $ 127.7

As at February 28, 2025 and February 29, 2024, the Company had no available-for-sale debt securities with continuous unrealized losses.

As at February 28, 2026 and February 28, 2025 the Company h ad no available-for-sale debt securities wit h continuous unrealized losses.

CONSOLIDATED BALANCE SHEET DETAILS

Accounts Receivable, Net of Allowance

The allowance for credit losses as at February 28, 2025 was $ 6.6 million (February 29, 2024 - $ 6.0 million).

The Company recognizes current estimated credit losses (“CECL”) for accounts receivable.

The CECL for accounts receivable are estimated based on days past due and region for each customer in relation to a representative pool of assets consisting of a large number of customers with similar risk characteristics that operate under similar economic environments.

The Company determined the CECL by estimating historical credit loss experience based on the past due status and region of the customers, adjusted as appropriate to reflect current conditions and estimates of future economic conditions.

When specific customers are identified as no longer sharing the same risk profile as their current pool, they are removed from the pool and evaluated separately.

The current estimated credit losses (“CECL”) for accounts receivable as at February 28, 2026 w as $ 3.4 million (February 28, 2025 - $ 6.6 million).

The Company also has long-term accounts receivable included in Other long-term assets.

The CECL for long-term accounts receivable is estimated using the probability of default method and the default exposure due to limited historical information.

The exposure of default is represented by the assets’ amortized carrying amount at the reporting date.

The exposure to default is represented by the assets’ amortized carrying amount at the reporting date.

The following table sets forth the activity in the Company’s allowance for credit losses:

2 unchanged sentences

Prior 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

Current period provision for expected credit losses 5.3

Current period recovery for expected credit losses ( 2.4 )

Write-offs charged against the allowance ( 0.8 )

1 unchanged sentence

The allowance for credit losses as at February 28, 2026 consists of $ 1.0 million (February 28, 2025 - $ 1.1 million) relating to CECL estimated based on days past due and region and $ 2.4 million (February 28, 2025 - $ 5.5 million) relating to specific customers that were evaluated separately.

Ther e were two customers that comprised more than 10% of accounts receivable as at February 28, 2026 (February 28, 2025 - two customers comprised more than 10%).

BlackBerry Limited

1 unchanged sentence

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

There were two customers that comprised more than 10% of accounts receivable as at February 28, 2025 (February 29, 2024 - two customers comprised more than 10%).

Other Receivables

February 28, 2026 February 28, 2025

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

Arctic Wolf delayed cash payment (1)

Other 7.5 9.8

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.

______________________________

(1) As partial consideration for the sale of its Cylance endpoint security assets and liabilities to Arctic Wolf, as described in Note 3, the Company was owed a cash payment one year following the closing which was paid on February 10, 2026.

As at February 28, 2026 and February 28, 2025, other receivables included items such as claims filed by QNX with the Ministry of Innovation , Science and Economic Development Canada relating to its Strategic Innovation Fund (“SIF”), among other items, none of which were greater than 5% of the current assets balance as at the balance sheet dates.

Other Current Assets

17 unchanged sentences

As at February 28, 2026

Cost Accumulated

Amortization Net Book

Gross Carrying Cost Accumulated

Amortization and Impairment Net Book

Acquired technology $ 29.8 $ 29.8 $ —

3 unchanged sentences

As at February 28, 2025

Cost Accumulated

Amortization Net Book

Gross Carrying Cost Accumulated

Amortization and Impairment Net Book

Acquired technology $ 29.8 $ 29.1 $ 0.7

4 unchanged sentences

February 29, 2024 - $ 21.4 million).

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, 2026, the Company has acquired technology and other acquired intangibles that are fully amortized but still in use.

Total additions to intangible assets in fiscal 2026 amounted to $ 5.7 million (fis cal 2025 - $ 7.0 million) and primarily consisted of payments for intellectual property relating t o patent maintenance and, registration fees.

For the year ended February 28, 2026, the Company recorded $ 0.4 million in impairment charges related to patent abandonment (fiscal 2025 - $ 0.5 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:

Based on the carrying value of the identified intangible assets, as at February 28, 2026, and assuming no subsequent impairmen t of the underlying assets, the annual amortization expense for each of the five succeeding years is expected to be as follows:

fiscal 2027 - $ 7.6 million;

13 unchanged sentences

Carrying amount as at February 29, 2024 $ 474.5

Goodwill impairment charge (note 4) ( 15.9 )

Effect of foreign exchange on non-U.S.

5 unchanged sentences

Other Long-term Assets

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.

As at February 28, 2026 and February 28, 2025, other long-term assets included long-term receivables related to intellectual property sold, l ong-term receivables relating to minimum royalty commitments from QNX customers , and the long-term portion of deferred commissions, among other items, none of which were greater than 5% of the total assets balance.

Accrued Liabilities

Accrued liabilities comprised the following:

Accrued liabilities is comprised of the following:

February 28, 2026 February 28, 2025

Operating lease liabilities, current (note 12)

$ 15.0 $ 19.6

Variable incentive accrual 36.5 31.4

Restructuring programs, current portion 9.2 20.0

Other 75.2 94.8

$ 111.7 $ 126.2

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.

Other accrued liabilities include operating lease liabilities, current, accrued restructuring expenses, current, 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 2025 and fiscal 2024, the Company commenced restructuring programs with the objectives of reducing its annual costs and expenses relating to Secure Communications.

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

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

The following table sets forth the activity in the Company’s restructuring program liabilities for fiscal 2026 and fiscal 2025:

Benefits Facilities

Benefits Facilities and Other

Balance as at February 29, 2024 $ 16.8 $ 4.3 $ 21.1

8 unchanged sentences

$ 6.3 $ 2.0 $ 8.3

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.

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.

______________________________

(1) Other charges primarily consist of costs associated with system transformation to streamline corporate functions into QNX and Secure Communications.

The long-term portion of the restructuring liabilities is recorded by measuring the remaining payments at present value using an effective interest ra te of 4.9 %, and the C ompany recorded interest expense over time to arrive at the total face value of the remaining payments.

The restructuring charges included employee termination benefits, facilities and other charges .

Total charges incurred in fiscal 2026, 2025 and 2024 wer e $ 15.7 million, $ 26.1 million and $ 37.3 million, respectively, recorded within General and administrative on the Consolidated Statements of Operations.

A reconciliation of the provision for income taxes to the amount computed by applying the 15 % (1) statutory Canadian federal income tax rate to income before income taxes after the adoption of ASU 2023-09 is as follows:

BlackBerry Limited

1 unchanged sentence

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

The difference between the amount of the provision for (recovery of) income taxes and the amount computed by multiplying income (loss) before income taxes by the statutory Canadian tax rate is reconciled as follows:

For the Year Ended

February 28, 2026

Amount Percent

Tax at Canadian Statutory Rate $ 8.9 15.0 %

Provincial taxes, net of federal tax effect (2)

( 0.1 ) ( 0.2 ) %

Foreign Tax Effects

United States

Foreign federal rate differences 0.4 0.7 %

State and local income taxes ( 0.5 ) ( 0.8 ) %

Prior period adjustment 0.4 0.7 %

Non-deductible compensation 1.1 1.9 %

Research and development tax credits ( 0.1 ) ( 0.2 ) %

Other ( 0.2 ) ( 0.3 ) %

Valuation allowance ( 2.1 ) ( 3.6 ) %

Foreign federal rate differences ( 0.3 ) ( 0.5 ) %

State and local income taxes 1.4 2.4 %

Korea 0.5 0.8 %

Other foreign jurisdictions 0.4 0.7 %

Changes in Valuation Allowances ( 3.4 ) ( 5.8 ) %

Investment Tax credits ( 3.3 ) ( 5.6 ) %

Nontaxable and Nondeductible items

Share-based payment awards 2.3 4.0 %

Others 0.2 0.3 %

Changes in Unrecognized Tax Benefits 0.2 0.3 %

Other Adjustments — — %

Effective Tax Rate $ 5.8 9.8 %

______________________________

(1) This represents the Canadian federal statutory income tax rate, which is 15 % after a 13 % general tax reduction and 10 % federal tax abatement are applied to the 38 % basic rate.

(2) Provincial taxes in Ontario made up the majority of the tax effect in this category.

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 Years Ended

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

February 28, 2025 February 29, 2024

Statutory Canadian tax rate (1)

12 unchanged sentences

______________________________

(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 %.

(1) This tax rate represents 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

4 unchanged sentences

$ 59.0 $ 8.5 $ 29.8

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 provision for (recovery of) income taxes consists of the following:

5 unchanged sentences

Deferred income tax assets and liabilities consist of the following temporary differences:

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

February 28, 2026 February 28, 2025

13 unchanged sentences

In making that assessment, the Company considers both positive and negative evidence related to the likelihood of realization of the deferred tax assets to determine, based on the weight of available evidence, whether it is more likely than not that some or all of the deferred tax assets will be realized.

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

In evaluating the need for a valuation allowance, the Compa ny noted a history of continuous cumulative losses.

In fiscal 2026, the Company saw a decrease in the deferred tax valuation allowance of $ 4.4 million (February 28, 2025 - decrease of $ 2.5 million).

As a result, the deferred tax valuation allowance had an ending balance of $ 1,512.8 million (February 28, 2025 - $ 1,517.2 million).

1 unchanged sentence

The Company will continue to assess the likelihood that the deferred tax assets will be realizable at each reporting period and the valuation allowance will be adjusted accordingly.

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’s total unrecognized income tax benefits as at February 28, 2026 and February 28, 2025 were $ 19.7 million and $ 19.5 million, respectively.

A reconciliation of the beginning and ending amount of unrecognized income tax benefits that, if recognized, would affect the Company’s effective income tax rate is as follows:

A reconciliation of the beginning and ending amount of unrecognized income tax b enefits that, if recognized, would affect the Company’s effective income tax rate is as follows:

For the Years Ended

4 unchanged sentences

Unrecognized income tax benefits, ending balance $ 19.7 $ 19.5 $ 19.6

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 s at February 28, 2026, $ 19.6 million of the unrecognized tax benefits have been netted against deferred income taxes and $ 0.1 million has been recorded within income taxes payable on the Company’s consolidated balance sheets.

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

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

8 unchanged sentences

Certain state jurisdictions remain open from fiscal 2022 through fiscal 2026.

We adopted ASU 2023-09 on a prospective basis for the year ended February 28, 2026 and have included the following table as a result of our adoption, which presents income taxes paid (net of refunds received) for the year ended February 28, 2026:

For the Year Ended

February 28, 2026

Canadian Federal $ —

Provincial ( 0.3 )

All other foreign 1.8

Income taxes, net of amounts refunded $ 21.5

The Company is subject to ongoing examination by tax authorities in the jurisdictions in which it operates.

The Company regularly assesses the status of these examinations and the potential for adverse outcomes to determine the adequacy of the provision for income taxes, as well as the provisions for indirect and other taxes and related penalties and interest.

The Company believes it is reasonably possible that approximately nil of its gross unrecognized income tax benefits will be realized in the next twelve months.

The Company believes it is reasonably possible that approxim ately nil of it s gross unrecognized income tax benefits will be realized in the next twelve months.

While the final resolution of these audits is uncertain, the Company believes the ultimate resolution of these audits will not have a material adverse effect on its consolidated financial position, liquidity or results of operations.

The Company recognizes interest and penalties related to unrecognized income tax benefits as interest expense that is netted and reported within investment income, net.

The amount of interest accrued as at February 28, 2025 was approximately $ 3.0 million (February 29, 2024 - approximately $ 2.9 million).

The amount of interest accrued as at February 28, 2026 was approximate ly $ 3.1 million (February 28, 2025 - approximately $ 3.0 million).

The amount of penalties accrued as at February 28, 2026 was nil (February 28, 2025 - nil ).

28 unchanged sentences

Each $ 1,000 principal amount of the Notes is convertible into 257.5826 common shares of the Company based on the initial conversion rate, for a total of 52 million common shares at a price of $ 3.88 per share, subject to adjustments.

Prior to the close of business on the business day immediately preceding November 15, 2028, the Notes will be convertible only upon satisfaction of certain conditions and during certain periods, and thereafter, at any time until the close of business on the second scheduled trading day immediately preceding February 15, 2029.

Prior to the close of business on the business day immediately preceding November 15, 2028, the Notes are convertible only upon satisfaction of certain conditions and during certain periods, and thereafter, at any time until the close of business on the second scheduled trading day immediately preceding February 15, 2029.

The Company may satisfy any conversions of the Notes by paying or delivering, as the case may be, cash, its common shares or a combination of cash and its common shares, at the Company’s election (or, in the case of any Notes called for redemption that are converted during the related redemption period, solely its common shares).

Covenants associated with the Notes include general corporate maintenance, existence and reporting requirements.

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.

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

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

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

2 unchanged sentences

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

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

The following table summarizes the change in the Notes for the fiscal year ended February 28, 2026:

February 28, 2026

13 unchanged sentences

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 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

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

Income associated with the change in fair value from non-credit components recorded in the consolidated statements of operations $ — $ 2.4 $ 137.4

Income associated with the change in fair value from instrument-specific credit components recorded in AOCL — — 1.6

Realized losses associated with the change in fair value from credit components recorded in the consolidated statements of operations on maturity of the Extension Debentures and 2020 Debentures — ( 6.0 ) —

Realized losses associated with the change in fair value from credit components released from AOCL on maturity of the Extension Debentures and 2020 Debentures — 5.9 —

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;

The following table shows the impact of the changes in fair value of the Prior Debentures for the year ended February 29, 2024:

February 29, 2024

Income associated with the change in fair value from non-credit components recorded in the consolidated statements of operations of the Prior Debentures $ 2.4

Realized losses associated with the change in fair value from credit components recorded in the consolidated statements of operations on maturity of the Prior Debentures ( 6.0 )

Realized losses associated with the change in fair value from credit components released from AOCL on maturity of the Prior Debentures 5.9

Total decrease in the fair value of the Prior Debentures $ 2.3

For the year ended February 28, 2026, the Company recorded interest expense related to the Notes of $ 6.0 million, which has been included in investment income, net on the Company’s consolidated statements of operations (fiscal 2025 - $ 6.0 million;

fiscal 2024 - $ 5.6 million).

3 unchanged sentences

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

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

CAPITAL STOCK

10 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 0.9

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

4 unchanged sentences

Common shares issued for employee share purchase plan 580 2.5

Share repurchase ( 15,550 ) ( 77.6 )

Common shares outstanding as at February 28, 2026 587,431 $ 2,924.4

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.

The Company had 588 million voting common shares outstanding, 13.7 million RSUs and 1.8 million DSUs outstanding as at April 6, 2026.

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

On May 8, 2025, the Company announced that it received acceptance from the Toronto Stock Exchange with respect to a normal course issuer bid (“NCIB”) share buyback program to purchase for cancellation up to 27.9 million common shares of the Company, or approximately 4.7 % of the outstanding public float at May 5, 2025.

The NCIB share buyback program commenced on May 12, 2025, and will terminate on the earliest of May 11, 2026, such date as the Company may determine, or the date on which the maximum number of common shares that may be purchased under the NCIB share buyback program has been reached.

The Company is not obligated to repurchase any common shares under the NCIB share buyback program.

During the year ended February 28, 2026, the Company repurchased 15.6 million common shares, at a cost of $ 60.7 million including $ 0.7 million in share buyback tax.

The Company recorded a reduction of $ 77.6 million to capital stock and the amount paid below the per share paid-in capital of the common shares of $ 16.9 million was recorded to deficit.

All common shares repurchased by the Company pursuant to the NCIB share buyback program have been canceled.

BlackBerry Limited

14 unchanged sentences

Forfeited/cancelled during the year ( 1,414 ) 3.00

Performance adjustment (1)

Balance as at February 28, 2026 13,745 $ 2.91 1.42 years $ 47

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

Expected to vest February 28, 2026

12,840 $ 2.88 1.45 years $ 44

______________________________

(1) The Company includes only the target number of PBRSUs in the granted amount.

During the period, actual performance results exceeded target for certain PBRSUs, resulting in incremental shares being earned.

These additional shares are presented separately as “Performance adjustment” to reflect the impact of the above-target performance.

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, 2026 that would have been received by RSU holders if all RSUs had been vested on February 28, 2026).

1 unchanged sentence

February 29, 2024 - tax deficiency of nil ).

As at February 28, 2025, there was $ 21.8 million of unrecognized compensation expense related to RSUs that will be expensed over the vesting period, which, on a weighted average basis, results in a period of approximately 1.40 years.

As at February 28, 2026, there was $ 29.0 million of unrecognized compensation expense related to RSUs that will be expensed over the vesting period, which, on a weighted average basis, results in a period of approximately 1.47 y ears.

During the year ended February 28, 2026, there were 9,648,700 RSUs granted (February 28, 2025 - 4,494,083 ), all of which will be settled upon vesting by the issuance of new common shares.

15 unchanged sentences

Net income (loss) from continuing operations for basic and diluted earnings (loss) per share available to common shareholders $ 53.2 $ ( 8.5 ) $ 5.6

Debentures fair value adjustment (1) (2)

— — ( 137.4 )

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 )

Net income (loss) for basic and diluted earnings (loss) per share available to common shareholders 53.2 ( 79.0 ) ( 130.2 )

Weighted average number of shares outstanding (000’s) - basic (1)

592,251 591,470 584,543

Effect of dilutive securities (000’s)

Stock-based compensation (2) (3)

Conversion of 2020 Debentures (1) (2)

5,334 — 7,954

Weighted average number of shares and assumed conversions (000’s) diluted 597,585 591,470 592,497

1 unchanged sentence

Basic earnings (loss) per share from continuing operations $ 0.09 $ ( 0.01 ) $ 0.01

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

Total basic earnings (loss) per share $ 0.09 $ ( 0.13 ) $ ( 0.22 )

Diluted earnings (loss) per share from continuing operations $ 0.09 $ ( 0.01 ) $ 0.01

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

Total diluted earnings (loss) per share $ 0.09 $ ( 0.13 ) $ ( 0.22 )

______________________________

(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 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 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 .

(1) The Company has not presented the dilutive effect of the Notes using the if-converted method in the calculation of diluted earnings (loss) per share for the years ended February 28, 2026, February 28, 2025 and February 29, 2024, as to do so would be antidilutive.

See Note 7 for details on the Notes.

(2) 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 earnings (loss) per share for the years ended February 28, 2026 and February 29, 2024.

(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 year ended February 28, 2025, as to do so would be antidilutive.

BlackBerry Limited

6 unchanged sentences

Balance, beginning of period $ ( 1.9 ) $ 0.3 $ ( 1.0 )

Other comprehensive loss before reclassification ( 3.3 ) 1.0 ( 3.2 )

Other comprehensive income (loss) before reclassification 1.9 ( 3.3 ) 1.0

Amounts reclassified from AOCL into net income (loss) 0.3 1.1 0.3

Accumulated net unrealized losses on derivative instruments designated as cash flow hedges $ ( 1.9 ) $ 0.3 $ ( 1.0 )

Accumulated net unrealized gain (loss) on derivative instruments designated as cash flow hedges $ 0.3 $ ( 1.9 ) $ 0.3

Foreign Currency Cumulative Translation Adjustment

4 unchanged sentences

Balance, beginning of period $ — $ — $ ( 6.0 )

Other comprehensive income before reclassification — — 1.6

Amounts reclassified from AOCL into net income (loss) — — 6.0

6 unchanged sentences

During the year ended February 28, 2026 , $ 0.3 million in losses (pre-tax and post-tax) associated with cash flow hedges were reclassified from AOCL into general and administrative expenses (February 28, 2025 - $ 1.1 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

32 unchanged sentences

The Company has included the following summaries of certain of its legal proceedings though they do not meet the test for accrual described above.

Between October and December 2013, several purported class action lawsuits and one individual lawsuit were filed against the Company and certain of its former officers in various jurisdictions in the U.S.

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 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.

Between October and December 2013, several purported class action lawsuits were filed against the Company and certain of its former officers in various jurisdictions in Canada alleging that certain of the Company’s financial statements contain material misstatements.

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

BlackBerry Limited, et al.

) filed a motion for class certification and for leave to pursue statutory misrepresentation claims.

BlackBerry Limited, et al.) filed a motion for class certification and for leave to pursue statutory misrepresentation claims.

On November 17, 2015, the Ontario Superior Court of Justice issued an order granting the plaintiffs’ motion for leave to file a statutory claim for misrepresentation.

4 unchanged sentences

The Company filed its Statement of Defence on April 1, 2019.

Discovery is proceeding and the Court has not set a trial date.

A mediation is scheduled for April 21-22, 2026.

Trial is set for January 11, 2027.

BlackBerry Limited

2 unchanged sentences

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.

As at February 28, 2026, the Company has recognize d $ 28.6 million (February 28, 2025 - $ 20.5 million) in funds from claims filed by QNX with the Ministry of Innovation, Science and Economic Development Canada relating to its SIF.

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.

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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.

The Company commenced a motion for leave to appeal the certification order on June 11, 2019.

The Court denied the motion for leave to appeal on September 17, 2019.

The Company filed its Statement of Defence on December 19, 2019.

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

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 February 18, 2025, the parties settled the matter for $ 2.8 million or CAD $ 4.0 million inclusive of all fees and costs, subject to Court approval.

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.

class actions (see “Litigation” above in this Note 11).

The Stipulation of Settlement was executed effective June 7, 2022.

On June 29, 2022, the Company paid $ 1.0 million of the settlement amount and the remaining $ 164.0 million was paid on September 6, 2022.

On September 29, 2022, the Court granted final approval of the settlement and entered final judgment.

On July 30, 2025, the Court held a settlement approval hearing and issued an order approving the settlement.

(d) Indemnifications

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The Company has not encountered material costs as a result of such indemnifications in fiscal 2026.

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 three months .

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 has operating leases primarily for corporate offices, vehicle, data center and research and development facilities.

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

The components of lease expense were as follows:

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Cash used in operating activities related to operating lease payments $ 17.5 $ 20.6 $ 27.8

During the year ended February 28, 2025, the Company entered into $ 7.5 million (February 29, 2024 - $ 13.1 million) in lease obligations and recognized a corresponding ROU asset of $ 7.5 million (February 29, 2024 - $ 13.1 million).

During the year ended February 28, 2026, the Company entered int o $ 3.4 million (February 28, 2025 - $ 7.5 million) in lease obligations and recognized a corresponding ROU asset of $ 3.4 million (February 28, 2025 - $ 7.5 million).

During the year ended February 28, 2026, the Company incurred losses of $ 1.2 million (February 28, 2025 - $ 6.9 million;

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February 29, 2024 - $ 2.5 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

Supplemental consolidated balance sheet information related to leases was as follows:

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Operating lease 4.5 % 4.2 %

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

Maturities of undiscounted lease liabilities were as follows:

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The Company does not specifically allocate assets to operating segments for internal reporting purposes.

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

Segment Disclosures

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 Company is organized and managed as three operating segments:

QNX, Secure Communications, and Licensing.

The following table shows information by reportable operating segment for the fiscal year ended February 28, 2026:

For the Year Ended

Secure Communications QNX Licensing Segment Totals

QNX Secure Communications Licensing Segment Totals

Segment revenue $ 268.0 $ 258.9 $ 22.2 $ 549.1

Segment cost of sales 45.4 77.2 6.1

Segment gross margin (1)

Segment adjusted gross margin (1)

$ 222.6 $ 181.7 $ 16.1 $ 420.4

______________________________

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

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

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

The following table shows information by reportable operating segment for the years ended February 28, 2025 and February 29, 2024:

For the Years Ended

Secure Communications QNX Licensing Segment Totals

QNX Secure Communications Licensing Segment Totals

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

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Segment cost of sales 38.8 33.8 92.7 80.7 6.1 150.9

Segment gross margin (1)

Segment adjusted gross margin (1)

$ 197.2 $ 181.6 $ 179.9 $ 203.1 $ 20.2 $ 109.0 $ 397.3 $ 493.7

______________________________

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

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

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

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

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

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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:

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 adjusted gross margin for the fiscal year ended February 28, 2026, February 28, 2025 and February 29, 2024 to the Company’s consolidated totals:

For the Years Ended

February 28, 2026 February 28, 2025 February 29, 2024

Total segment gross margin $ 397.3 $ 493.7 $ 369.6

Total segment adjusted gross margin $ 420.4 $ 397.3 $ 493.7

Adjustments (1) :

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Impairment of long-lived assets 2.1 9.6 15.3

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

Prior Debentures fair value adjustment — — 3.5

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Investment income, net 10.7 7.7 18.8

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

Consolidated income from continuing operations before income taxes $ 59.0 $ 8.5 $ 29.8

______________________________

(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.

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 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.

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”.

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

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

The Company’s revenue, classified by major geographic region in which the Company’s customers are located, was as follows:

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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.

( 1) North America includes all revenue from Licensing, due to the global applicability of the patent portfolio and licensing arrangements thereof.

BlackBerry Limited

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Decrease due to payment, fulfillment of performance obligations, or other ( 632.0 ) ( 522.9 ) ( 18.0 )

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

Decrease, net ( 37.4 ) ( 14.5 ) ( 0.3 )

Closing balance as at February 28, 2026 $ 202.6 $ 152.6 $ 14.3

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The disclosure includes estimates of variable consideration, except when the variable consideration is a sales-based or usage-based royalty promised in exchange for a license of intellectual property.

The disclosure excludes estimates of variable consideration relating to future royalty revenues from the Malikie Transaction, which have been constrained based on the Company’s accounting policies and critical accounting estimates as described in Note 1 and under “Patent Sale” in this Note 13.

The disclosure excludes estimates of variable consideration relating to future royalty revenues from the sale of certain non-core patent assets to Malikie Innovations Limited in May 2023, which have been constrained based on the Company’s accounting policies and critical accounting estimates.

As at February 28, 2026

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Revenue recognized for performance obligations satisfied in prior periods

For the fiscal year ended February 28, 2025, $ 2.4 million in revenue was recognized relating to performance obligations satisfied in a prior period as a result of certain variable consideration no longer being subject to constraint (fiscal year ended February 29, 2024 - $ 12.2 million;

For the fiscal year ended February 28, 2026, $ 2.3 million in revenue was recognized relating to performance obligations satisfied in a prior period (fiscal year ended February 28, 2025 - $ 2.4 million;

fiscal year ended February 29, 2024 - $ 12.2 million).

23 unchanged sentences

February 29, 2024 - $ 22.4 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).

General and administrative expenses for the fiscal year ended February 28, 2026 included $ 0.7 million with respect to foreign exchange gain, net of foreign exchange hedging (February 28, 2025 - $ 0.4 million foreign exchange gain, net of foreign exchange hedging;

February 29, 2024 - $ 0.3 million foreign exchange losses, net of foreign exchange hedging).

Foreign exchange

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As at February 28, 2026 , no single issuer represented more than 34 % of the total cash, cash equivalents and investments (February 28, 2025 - no single issuer represented more than 47 % 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.

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.

Cash, cash equivalents, and investments were $ 432.4 million as at February 28, 2026.

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 common shares of Arctic Wolf and investments in privately-held companies 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.

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

What changed 10-K

Item 8. Financial Statements and Supplementary Data