BlackBerry Limited (BB) Earnings Call Transcript & Summary

Ladies and gentlemen, please welcome BlackBerry Executive Chairman and CEO, John Chen.

Good morning. Good morning. Thank you very much for joining us. Actually, good morning and good evening. I'm sure there's some very interested parties joining us from London. Hi, Guys. So I want to, first, on behalf of the company, welcome you all to join us at the FY '24 Analyst Day. You will get a lot of information today, obviously, and it's from both the business unit president. And they will go into detail of their business, the future, the strategy behind it and more focusing on the next 3 years and our growth rate in there and where we grow and how we're going to grow and so. For me, I wanted to kick it off by reminding everybody of our strategy. We've been working on this strategy for the last 3 years. I think you have heard. We said it a number of times, whether it's the Analyst Day, Security Summit, AGMs. And you probably have seen these slides. So I'm going to pick 1 of the slides in here. I'll just give you a little background on this slide, just as a reminder, because I know most of you have seen it. You know this the combination of functionality, application and features of what -- how a smart enterprise in this particular thing is Smart City, how they function and interact. And I'll go into a little bit more detail of it, but I want to point out the fact that this is a combination of 2 of our business units out of the capability. You could see, obviously, a smart vehicle, the safety of that vehicle, and that's always from the IoT world, and there's a lot of application that's based on IV, the IV platforms. I think it's in the blue color if I'm not mistaken, yes. And then the black color ones are the one that is being responsible by a cybersecurity unit. And so this is a combination of how we think about the future strategy, how the market evolves, and how we participate in it and what we offer to the market. So we've been staying very consistent on this theme, this strategy for the last 3, 4, 5 years. And security and trust, as you probably know, I've been with the company 9-plus years now. From day 1, we've been building that. And of course, the first couple of years, we were building it around the cell phone. And then we build an ecosystem of endpoints and the security of management of those and security of that beyond that. And then we move into secure communications. And so you can see that it's been the same strategy for many, many years. And I think it's about to come to fruition about our results. So in the beginning of time, even about 4 years ago, I searched the web a lot about the word convergence because you got hearing some of the academicians -- academics people saying, was talking about convergence. It is absolutely logical that convergence needs to happen for the technology to be trusted, so to enable all these smart enterprises, hospitals, infrastructure, industrial, et cetera, et cetera. And so -- the good thing was most recently McKinsey had launched a report, had written a report -- I think it's April of '20 -- yes, April this year. They've launched a report talking about how to unlock the value of IoT. And on the basis into of that is really about how cybersecurity and IoT and OT are all coming together, and it's required by the market so that the IoT could really take on a much more advanced functions. So I picked out a few bullet points so that we share with you all. I mean this report is public, I believe. So I would encourage you all to take a look at it. It's pretty good report. And one other thing about the good report is about -- they delve into various parts of the technology stack and how that comes together to enable the IoT, is not just IoT itself. It's what comes together, the telecommunication, the connectivity. I have it on my next slide. So 61% of the IoT buyer or consider themselves to be the buyer, believe that the digital trust is the most important aspect of how they're going to make that decision. So -- and it's clear that if the cyber risk are being managed. So a good example is you know we are very much into auto space. The auto space is equipped with our safety certified operating systems. And we're building a middleware layer called IV with the help of Amazon and a whole host of application providers to transport and analyze data between EDGE and cloud and apply AI technology to it. So that enables a lot of the application of the slide that I had presented, the previous one. So then we now apply a lot of time when I speak to particularly now more government people, they have spoken to me about how do we know it's safe. Safe from what? Safe from cyber threats. And this is where the cyber group comes in. They're going to build a transport communication system on top of that, so that to ensure it's safe. And so -- and this is obviously not only about threat identification but threat hunting and handling and the secure communications of vehicles and endpoints and whatnot. So that's the trust that the cybersecurity with that they need to handle then if the industry could handle it, the survey said, it sounds like a family feel. When I said the survey said, in case you guys saw the TV show. How do I -- is that the spending will go up by 53%. And only because then they enable much more advanced and mission-critical applications. That's why, all right? So the TAM is already review in the video, and it's a $750 billion TAM in the calendar year 2030, according to the study. The exciting thing is we mentioned maybe a couple of times in the report as a participant on this ecosystems, but they have given us a very good line. So I think I have the permission to just to use it because it's a public document. Few companies such as BlackBerry set an intersection of cybersecurity and IoT are well positioned to marry the enterprise cybersecurity solution with the IoT platform. In fact, I know a lot of our customers are very much interested in the next step, which is the security of the OT. So we feel pretty good about how to engage the market. I mean a lot of times, strategy is all about you come up with a vision or whatever their big words are. And you know you have something that you could contribute, but you don't know how to connect with the market. And I think we're getting to the point that we now -- the market is mature enough and we know how to connect to the market. And that's what makes us exciting about what we're doing. Finally, I talk about an ecosystem. The reason why it's now, there are a whole bunch of reasons, right? One of the major reason is the ecosystem like their 5G+ ecosystem, their networking ecosystem. The hot topic of AI generative AI as a part of ecosystem demand an infrastructure that's reliable. And that's come back to our point, right? We are building that infrastructure layer. If you look at what we do as in totality, we have the operating system for the highest level of safety. That is embedded into IoT devices or the OT, new OT design devices. We have middleware that I talk about, we're going to try to build a middleware layer to transfer data inside the enterprise or inside the endpoint to the EDGE to the cloud and it met with various stages, apply AI technology to enable information, so we have that. We have supply chain, the secure building materials technology. So that's a development platform. We work with Amazon to have a development platform, either on cloud or on-premise. So other people claim that they have a full-grown development platform. We have a very reliable partner that could deliver that. And more to come, I'm sure. Then we have the cybersecurity, the Cylance technology for the endpoint threat detection, protection and handling. Then we have the defense layer called the UEM, the endpoint management technology. Then we have the secure communications on crisis management technology as well as voice and analog channels security. So the list just goes on. And if you see, we are the infrastructure of trust that we're building. And I think we have most all the components. We don't have it. We're probably going to partner with it. And so -- and then, of course, the AI technology, which was the sole reason that we acquired Cylance a number of years back. And they have a really great model in one of the very long-term model and very mature. So that will actually going to be the basic starting point of the data lake. So you could see that BlackBerry has -- most of all the ingredients that is required to build a sound trusted foundation of IoT convergence. And with that, I'd like to -- well, I'm sure that we will have more interaction. And I hope you enjoy the day today. I know the team had put in a ton of work. And with that, I'd like to introduce and invite up our cybersecurity business unit's President, John Giamatteo.

Thank you. Okay. Terrific. Well, welcome, everybody. And as John mentioned, the convergence between IoT and cyber, it's an exciting time for all of us here at BlackBerry. And we've got all the building blocks to make it happen. So I'm going to talk about the building block around cyber and give you all some more insights on to some of the exciting things that we're doing there to take that business to the next level and position us for this convergence that John has just talked about. So as John mentioned, my name is John Giamatteo, and I'm President of the cybersecurity business unit, and I'm pleased that all of you could join us here today. At last year's Summit, we talked about the strength of BlackBerry. The strength of our brand, the strength of our strategy and vision -- the strength of our portfolio, the strength of our partners and the power of our people and leveraging these unique strengths, we built a strong foundation upon which we will continue to build our future and deliver profitable growth. We are built to win in fiscal year '24. And over the course of the day, we are going to examine the strengths of this foundation, the progress that it has allowed us to make and discuss our path forward. Proactive cybersecurity strategies are rapidly becoming the foundation upon which today's large enterprises small- and medium-sized businesses and governments must stand. A breach or an attack can stop an organization in its tracks, bringing all commerce, processes and even basic communications to a grinding halt. To effectively serve and defend our customers, we must stand on an equally strong foundation. And I'm pleased to say the progress we have made over the past year in significantly improving many aspects of our business provides us a much stronger base, which we can confidently stand to drive growth in the market. But before I discuss this progress, I just want to take a few minutes to acknowledge some of the challenges that we faced. -- challenges that have required us to focus on those foundational aspects of the business that have presented headwinds for us in the past. On the portfolio side, we relate to market with EDR, and it led to a barrier to growth for the Cylance part of our business. But as a result, we have taken a step back and invested significantly in R&D to resolve this and bring a competitive solution like CylanceOPTICS to market. Our go-to-market motion underfocused on small- and medium-sized businesses, a segment of the market seemingly custom-made for our easy-to-use AI-driven solutions. Therefore, we've had to work hard to both add feet on the street as well as rebuild critical relationships with our channel partners and essential component needed to scale in this segment of the market. As part of this, we've also focused on the identification and retention of our top talent, while also infusing deep cybersecurity expertise and experience across all aspects of our business, including sales, product management, marketing, engineering and within our threat research and intelligence team. When taken in total, these challenges have effectively required us to undergo a reset of some of our priorities across the business to focus on those foundational improvements across the portfolio our go-to-market motion and even are very identity. Now BlackBerry has always stood for security, trust and innovation, as John talked about before. And you could see this reflected across the company's acquisition strategy over the last few years. However, bringing together multiple companies over the years, even ones with adjacent missions has required a focus on bringing our cybersecurity business unit together under a unifying identity. And while we do provide our customers with incredible endpoint protection and what we think of as traditional cybersecurity offerings, BlackBerry cybersecurity offers so much more than other endpoint security competitors. We're all about security with a capital S. Our cybersecurity business unit provides the first line of cyber defense with our industry-leading BlackBerry Unified Endpoint Management solution. We secure the endpoint, provide MDR and Zero Trust Network Access with our Cylance cybersecurity platform. We help organizations respond to and manage critical events, allowing our customers to ensure continuity of their business and safety and security of their employees. And finally, we provide the highest level of security for mission-critical communications for our SecuSUITE portfolio. If it matters, BlackBerry keeps it secure. This is our identity, and this is who we are, and it's an important mission and one that informs everything that we do. Now I'd like to spend the next few minutes giving you a view of the specific foundational improvements that we have made to the business over the past year, improvements that ensure we are built to win and to put us in a position to realize growth in the new fiscal year. This past year found us reembracing the Cylance name across our cybersecurity product portfolio, reintroducing a name to the market that while synonymous with BlackBerry's core values of security, trust and innovation more strongly resonates with CISOs and security professionals, those that remember the Cylance name and what it stands for in the market. The feedback that I've received from our customers and partners has been outstanding, and it's generating real excitement for our brand. This year finds us continuing this work, introducing simplification and driving further clarity for our customers. Previously, we positioned some 22 individual products to our cybersecurity customers around the world. And we've received feedback that this approach can sometimes be confusing, not just for our customers but also for our own sellers as they work to pitch the value that BlackBerry has to offer. So in response, we are repositioning our cybersecurity products to sharpen our focus on 7 key solution categories: CylanceENDPOINT, CylanceEDGE, CylanceGUARD, CylanceINTELLIGENCE, BlackBerry UEM, BlackBerry AtHoc and SecuSUITE, all with the goal of further simplifying the way that we talk about, pitch and package the solutions that we offer across the portfolio. Now speaking of the portfolio, the foundational enhancements the team has made over the past year have positioned us to really accelerate our ambitions in the market with much more to come as we move forward. On the endpoint side, fiscal year '23 saw the evolution and improved maturity of version 3 of both our PROTECT and OPTICS platforms with strong focus on improved quality, stability, on-time upgrades and enhanced performance. The team has been actively driving customers to both PROTECT version 3 and OPTICS version 3 with a good track record of success and adoption. Over 65% of our customers have now upgraded to PROTECT 3.0 with a significant number of customers upgrading to PROTECT 3.1 in its first 30 days in the market. This illustrates a strong rate of adoption for our latest versions of technology that we're bringing to market. We've improved our user experience with the rollout of one alert, saving our customers significant time and effort with a new unified alerting experience that condenses multiple screens of thousands of alerts to 1 screen with hundreds of alerts, making it easier to not only tune their environment but also to quickly identify threats. And along with the tremendous effort to drive cost efficiencies for EDR, we are unlocking upgrades and delivering the first new endpoint SKU in over 5 years with CylanceENDPOINT Pro, providing the latest capabilities of protecting EDR along with one alert. CylanceENDPOINT Pro also includes access to our recently announced monthly contextual threat intelligence reports known as CylanceINTELLIGENCE. This service provides our customers with a contextual and actionable cyber threat intelligence designed to keep them one step ahead of the adversary. This is amazing progress in the span of the year, and the team continues to build on this foundation with a focus on driving value and differentiation. As mentioned, this year, we'll find the convergence of PROTECT and OPTICS into a single agent, simplified install and update workflows and a new behavioral detection engine for EDR, greatly simplifying configuration and tuning. We'll also begin offering integration with AtHoc to provide automated incident communication paths, allowing our customers to more effectively communicate and mitigate risk in the event of a breach. This capability is unique to BlackBerry and stands as a real differentiator for us in the market. But as I mentioned, we are about much more than just stopping threats at the endpoint. Our customers are increasingly looking for new ways for their employees to safely access their applications and data wherever and whenever on their terms. We've expanded our Zero Trust Network Access use cases with numerous enhancements to CylanceGATEWAY and introduced our first data security capabilities with CylanceAVERT. This year, similar to endpoint, we will take the next step, bringing GATEWAY and AVERT together into a single CylanceEDGE solution with expanded use cases, including data security to cloud applications like Office 365. We are focused on building delightful experiences for our customers and users as well, while offering visibility and minor security controls, things like detecting lateral movement and data exfiltration in the cloud. CylanceEDGE also affords us the opportunity to disrupt the patchwork of legacy connectivity solutions, things like VPN at the exact right time as the market is ready to move. We also continue to see that we can no longer just sell software and expect our customers to get the most out of it by themselves. We are uncovering tremendous market growth delivering managed services directly ourselves with CylanceGUARD or through an array of MSP partners. In fact, our customer satisfaction and renewal rates on GUARD are double digits higher than those trying to go at it on their own with PROTECT and OPTICS. Particularly in the mid-market, GUARD is delivering world-class security outcomes, allowing our customers to focus on their business while we keep it secure. Fiscal year '23 found us launching version 2 of our GUARD platform, including our partnership with Exabeam, to offer managed XDR services. This year, we will continue to build on this progress, starting with the one core platform experience. One alert will bring our products together with other third-party products to deliver a single alert, investigate, communicate and respond experience. We're also building in CISO and analyst focused dashboards and delivering integration with BlackBerry AtHoc through a mobile alerting application as well. All of this to improve reporting, visibility and communications across the platform. These same capabilities will also extend to our partners through their multi-tenant console experience as well. So speaking of AtHoc, I firmly believe this is part of our portfolio, which provides us a unique differentiator against our competitors. This past year, we established this part of our business under a single general manager to provide the focus, strategy and scale that is needed to take it to the next level. Leveraging the strong foundation, this team is built with the federal government, you're going to start to see us expand our targets to include SLED, general enterprise and other markets around the world as we move throughout the year. Whether integrated into our Cylance cybersecurity platform to provide continuity of communications in the event of a cyber incident or as a stand-alone critical event management platform, AtHoc represents an essential and differentiated advantage for us in the market. Now no discussions of foundations would ever be complete without the mention of BlackBerry Unified Endpoint Management. This is the first line of cyber defense for our customers. And this part of our portfolio continues to represent the base upon which we all stand. Recognized this year by Gartner Peer Insights with their customer choice distinction and the only solution on the market to earn a spot in the upper right, UEM continues to offer the most secure mobility, application, and data experience on the planet. Over the course of the past year, we've maintained a high-quality product experience with UEM while also adding additional features and capabilities, expanding support to Chromebook use cases, improved administrative experiences and consistently delivering quality on-time updates for iOS and Android. And the building here continues as well. More than just a fresh coat of paint. This year will find us releasing new features and UI enhancements, all with a focus on identifying and delivering a product that will enable us to differentiate and attack the opportunities in the market. This year, you're going to see us go on the offensive with UEM with a reinvigoration, not only in the product, but also in our communications, our sales pitches, our campaigns and much, much more. Finally, I'd like to talk a little bit about SecuSUITE, providing the most secure, encrypted communications to governments and enterprises around the world. SecuSUITE represents yet another differentiator for us across the portfolio. Fiscal year '23 was a banner year for the Secusmart team as they continue to add new use cases, enabled support for the latest Samsung devices and extended the platform to iOS by developing a close partnership with Apple. And the push to build this business into new markets continues. With the launch of SecuSUITE for enterprise this past December, we now enable white glove single-day customer provisioning across Canada, [ Norway ] and EMEA, upon which we've already captured new customers in the U.S., Mexico and Australia. The foundational work that has been done across the portfolio this past year is impressive to say the least. We've simplified the way we approach these assets and remain laser-focused on driving growth in our UEM Core, upgrading our customers to CylanceENDPOINT Cylance, landing and expanding with CylanceEDGE, upgrading customers that need our help to CylanceGUARD, delivering world-class actionable threat information with CylanceINTELLIGENCE and leveraging our unique differentiators, BlackBerry AtHoc and SecuSUITE to aggressively expand into new market opportunities. The work to enhance, improve and deliver is never done. This new year will find our newly established product innovation centers, concentrating on exactly this work. These innovation centers focused each on UEM, Cylance, CEM and SecuSUITE find themselves standing on the strong foundation that has been established this past year to continue to build and deliver the next generation of cybersecurity solutions for our customers. Now another foundational element to our business, our go-to-market approach dictates how we inform interact with and influence our customers and prospects to choose Blackberry. In fiscal year '23, we've aggressively pivoted our overall go-to-market motion to focus on these parts of the market where we can win today. These mid-market and SMB sized organizations have provided us fertile ground upon which we are building our foundation. Across the portfolio, but particularly with CylanceGUARD, we offer an ideal fit for these customers, augmenting their staff and delivering the outcomes they require. As we enter the new fiscal year, SMBs and mid-market remain key segments of focus, particularly when it comes to net new logo acquisitions. This is something that's key to our goal of driving sequential ARR growth in the second half of this fiscal year. However, we can't drop the ball with our larger customers, especially when it comes to cross-sell, upsell opportunities and renewals. As we move forward, you'll see a renewed refreshed emphasis on these activities as we look to drive more parts of our portfolio into our existing customers while also meeting and exceeding their expectations in effort to secure their renewal. Additionally, by focusing on where we can win today, we're doubling down on specific verticals where we are seeing good momentum and success. The first vertical I want to mention is the public sector. I'm extremely proud of the work that we do with governments around the world, representing some 50% of our billings, these contracts span across our entire portfolio, and we're seeing this segment continue to grow, outpacing renewal rates for all other industry segments we serve. You're going to see us continue to focus here, taking advantage of the fact that these government contracts typically have longer terms, tend to be incredibly sticky, and provide us a rock solid and growing base of revenue. In fact, we have just recently closed a long-term deal for enterprise software and services across the entire portfolio with one of the G7 governments. Now beyond our success in the public sector, we're also demonstrating our ability to grow our addressable market in adjacent verticals. I'm incredibly proud of the momentum we're getting in health care and manufacturing. The solutions that we offer these customers today address their specific requirements in ways that our competitors just can't -- we offer support from multiple OSs across new and legacy systems, allowing these customers to effectively protect a wide variety of endpoints. And as illustrated in a recent independent test, CylanceENDPOINT achieved a market-leading 98.9% detection rate across both online and off-line tests, both states that are critical to these verticals. To put the 98.9% in perspective, this means our competitors missed 9x more malware at their best and a whopping 52x more malware at their worst. Further, these competing solutions require 100% CPU utilization and up to 6 hours to complete their scanning and blocking process. CylanceENDPOINT achieved the same with just 5% CPU utilization in only 27 minutes. Our solutions are extremely effective, incredibly light weight and immensely flexible, making them an ideal fit for these verticals. We're seeing great momentum with manufacturers around the world as they look to protect their operational technology environments. And we've just recently closed a multi-solution multi-year deal with one of the largest private health care systems in the United States on the strength of our performance. As we move forward, we will continue to expand our addressable market into other verticals like energy and oil and gas and transportation, ones that have similar pain points that our competitors can't address as well as we can. Now last year, we talked about the strength of our partners. An extension of our team, our partners act as a significant force multiplier in the market, greatly extending our reach, increasing our capabilities and helping us drive growth. Since then, we've made some foundational improvements here as well to increase our responsiveness, drive friction out of the system and more generally become easier to do business with. By moving to a more integrated approach across each geography, we have broken down our own silos to ensure a motion where our sales, renewal, channel and MSP teams are working together in a more coordinated fashion. This is a big shift from where we were last year. And we continue to build on this foundation with aggressive new plans and programs, allowing us to effectively engage with our existing partner base, while also developing new mutually beneficial relationships on opportunities that are exploring and expanding into telcos, OEMs and MSPs. Especially, this is especially important as we aggressively target kind of that mid-market space because partners are absolutely key to our success. So to talk a little bit more about this, I'd like to welcome Michael Crean, the Founder and CEO of one of our master MSP partners to the stage. Michael?

Great to see you.

Thanks John.

Thanks for being here again.

Thank you.

Let me just start off, Michael. We've had a long fruitful relationship over the last 8 years which I know has benefited both companies immensely. But maybe you just start by you providing a little bit of insight on to Solutions Granted, your business, your mission, your customers and what you're trying to achieve.

So Solutions Granted is a master managed security services provider, -- very simply put, we're an MSSP for the MSPs. We believe that our job and our mission is to protect the protectors. Our go-to-market strategy is working with these MSPs that are focused in the SMB space so that we can become the best team that they can provide to their clients. I always look at it like the idea of every heart surgeon is a doctor, but not every doctor is a heart surgeon. So we get the pleasure and joy of being the heart surgeon and being very specific and pragmatic about what we're doing and how we're going to protect them and their clients, and they have to be the general expert about everything. I'd rather have my job in there.

So tell me about some of the -- your customers, some of the pain points, some of the challenges that they're facing and how you guys solve them, the unique way that you scaled your business dramatically over the course of the last 6 or 7 years, I think the audience would love to hear a little more about it.

So I think a lot of the pain points that our MSPs are struggling with are very similar to a lot of other organizations out there. Cybersecurity talent is hard to come by. It's expensive. And there's not a lot of loyalty out there in the space today. We see people jumping from job to job. And when you bring that down into the SMB space, it gets even harder because now you're trying to bring in really great talent to not operate in a Monday through Friday, 8 to 5 scenario because the attacks happen 24 hours a day, 7 days a week, 365 days a year and business doesn't stop. So we are bringing them that 24/7, 365 operations, and that's security that we're offering. But more importantly, we're bringing it from here in the United States, which is something that's really important to the SMB space. They want to know that they're dealing with somebody that's here in the Continental United States that thinks the way they think, provide support the way they provide support, but also knows they can count on them in a way that is meaningful and purposeful.

That's fantastic. Providing that peace of mind locally here, somebody that they can rely on. Hey, I've got to ask the question because there's obviously a lot of vendors, a lot of technologies, a lot of choices for you as one of the largest MSPs and continuing to grow in your business. Why BlackBerry? Why did you choose BlackBerry and stayed with us throughout all of our journey over the course of the last 5 or 6 years.

So it's a really great question. I'm going to reference my son for a second. So my son several years ago, we're talking about New Year's resolution. He's 8 years old, and he calls it his New Year's revolution. 8 years ago, we looked at the marketplace and I was adamant about staying out of the endpoint space. In my opinion, all vendors suck, hated it. I did not want to put my name against it, I did not want to operate in the space because I didn't feel like I could do what was important to drive the success, not only for the my business, but my name, my legacy, but also for my customers. So we heard these rumblings. We heard this idea around Cylance and their AI. And I was very unsure that this was even possible. How could we possibly be protecting endpoints with AI when all we've known as signatures. So we got a little bit more curious and we looked into it and we started to understand, okay, well, maybe this is possible. So I took one of my endpoint engineers who is a huge Symantec fan, said, I'm going to send you to Ohio in February, and I know you're going to love it there because it's going to be incredibly enjoyable and let's see what you can learn and he fought me all the way to their until he came back. He was no longer drinking the cool, but he was back stroking through it. That's when I knew there was something special that we had because if I could change this person's mind by just giving an opportunity to learn to see something different, we could do it and we could put our name behind it, and we could be successful. And it was this beautiful relationship that came out of nowhere that I wasn't expecting in a space that I was refusing to get into. And here we are 8 years later, and it hasn't all been good. There's been some tough challenges along the way, but I will say, as I see the journey that BlackBerry and Cylance is on today, you go through this phase of relationship where it's this beautiful, wonderful, crazy, excited to get together in journey. Then you go through those tough times or maybe you don't appreciate one other as much, but I will tell you as we stand here today, I'm in love with where you guys are at. I'm happy to be a partner, and I'm happy that we're on this journey with you because I don't believe we would be the organization that we are today without you.

That's great. And we feel the same. Really, thank you for your partnership on it and just let your team know we got plenty more cool where that was from. Just keep bringing them bringing...

We're ready for the cool...

Fantastic. Hey, thanks for joining us here today. It's just great for the audience to hear from one of our most important partners around the world. We appreciate the partnership. We appreciate you being here, and we appreciate everything you do for the industry, protecting a lot of people around the country.

Thank you for giving us this opportunity. Thank you.

Okay. I've been talking about the foundation. We've been talking about our partners and our product -- let me talk a little bit about things on the marketing side. Now we already mentioned that we're simplifying how we approach our portfolio, reducing those 22 cybersecurity products down to 7 key solution areas. Built with close collaboration between our product management and product marketing teams, this approach will influence how we talk about the portfolio, focused on value and differentiation and how we package and deliver our offerings to our customers. We've also just recently launched a corporate level campaign, designed to more closely associate the BlackBerry brand with cybersecurity in the eyes of the market. A collaboration between our corporate and BU marketing teams, this campaign is focused on highlighting the disaster averted. -- by leveraging our solutions powered by Cylance AI. Targeting cybersecurity decision-makers and influencers across a wide range of verticals. I expect this campaign will represent a significant shift for us when it comes to public and industry perception. Let's take a quick look at the video. [Presentation]

This is a campaign that has been running, and I believe it's really going to have an impact for us in getting our perception, our brand out there on how closely associated our cybersecurity businesses with the BlackBerry brand. So finally, it's no secret that we've had our struggles with some of the industry analysts over the years. Negative perceptions and reports have impacted some of the relationships, particularly with larger customers. However, the focus and attention on this aspect of our business in fiscal year '23 is starting to really bear some fruit for us. We've experienced increasingly positive citations from Tier 1 analyst community across our entire portfolio. This is in large part due to the 2x increase in strategic inquiries from the market with these stakeholders over the past year alone. As we have proactively increased our engagement to keep analysts apprised of our direction and accomplishments and to seek ongoing feedback, we've seen a direct impact in our mentions and placements across various research. Specifically, we're being tracked as an emerging vendor in the MDR market as well as an established innovator within endpoint, one known for delivering a powerful combination of efficacy and efficiency to organizations. We've built a strong go-to-market engine in fiscal year '23. And as we enter this new year, this work will continue. Focusing on those parts of the market where we have the best chance to win, telling our story of the value and benefits that BlackBerry provides with one voice and directly engaging with our customers, partners and industry influencers to enable them as force multipliers for us in the market. Now we spent the past year focused on strengthening our foundation, as I talked about, enhancing our capabilities across the portfolio and simplifying the way we talk about and package our products, adjusting our go-to-market to concentrate on those markets where we can win today and stabilizing the organization while also infusing new talent with deep category expertise. And we continue to carefully review our cost structure to ensure that we are operating efficiently while maintaining a strong focus on profitable growth. I'm pleased to share, we are beginning to see that the strong foundation that we've established across all these parts of the business is having a positive impact with our customers, our partners and across our internal team. And while this progress to establish a strong foundation is great, we're not done. We continue to work to optimize across our portfolio and go-to-market focused as one team on execution and growth. Now our CFO, Steve Rai will provide color around our financials in his session later today. However, before we close, I do want to share a few key indicators that I track that will enable investors to follow our progress this year. The first will be our total contract value or TCV billings metric. This is a strong leading indicator for our business since contracts are typically built in advance with revenue following on a ratable basis. We expect billings this year to be between $430 million and $480 million, representing double-digit growth at the midpoint. Second is our ARR metric. This will show our ability to both retain our existing customer base, upsell and cross-sell our full product portfolio and capture net new logo customers. We expect to see ARR return to sequential growth in the second half of this fiscal year. And finally, we expect to deliver top line growth of approximately 5% at the midpoint of our outlook for fiscal year '24. We believe we're in a strong position to deliver significant improvements in our financials this fiscal year. This past year has found us leveraging the strengths of BlackBerry, as I mentioned. The strength of our brand, the strength of our strategy vision, the strength of our portfolio and our partners like Michael and the power of our great people to build a foundation as strong as the hardest bedrock. So thanks to this work, we are built to win, focused on providing value for our customers and delivering sustainable and profitable growth in fiscal year '24. Thank you. [Break]

Hello, and welcome back. I'm Christine Gadsby, Vice President of the Product Security Business Unit. I'm here for the cybersecurity business unit question-and-answer panel. We have a few questions we have come up with and then I have some submitted questions that I'll ask all of you. First, I'd like to introduce everybody else on the stage. Welcome back, John, from that session -- that was fantastic. We have Shishir Singh, EVP and CTO at Blackberry. Seated next to him, we have Ismael Valenzuela, VP of Threat Research and Intelligence. Sat next to him is Nathan, Nathan Jenniges, the VP of Cyber Security Products. And then finally, we have Kevin Easterwood, SVP of Field Marketing. So welcome, gentlemen. Thanks for coming today to talk to us. I'm going to start to share with you, I have a question in actually 2 parts. John talked a lot about some of our past efforts and innovations coming up in the next year or so. So the first part is, in the next year, looking at that, what are the most exciting things and why? And then for part 2 of that, can you take us on a little bit of a longer journey and talk more about the future things that you're excited about?

No, absolutely. Thank you. Thank you, Christine, for having me, and good morning, everyone, and thanks for joining. I'm going to talk about distinctly 4 parts. For the foundational part like John was talking about. The first one is about endpoint protection. The second one is endpoint detection response. The third one is about simplifying security operation and IT operations. And the last one about the cyber threat intelligence. Those are the 4 foundational areas where we have made tons of progress in the last 9 to 12 months, and I want to cover each one of them separately. On the first one, endpoint protection, 3.0. There are a couple of things we have done, which is really giving a lot of good results in customers' environment. The first one is releasing our latest and greatest AI/ML model, which is PE7D. And I can tell you, the number of false positives and number of false negatives, what we're getting if you just look at the virus total is 0. Compared to our competition, they are generating anywhere between 50 to 100. So that's the first part. The second part where the non-PE model, where we have got [ MemDev ], script control, dynamic libraries, those are all the easy ways where hackers actually come into environment. That's another area we have invested heavily, and we have got a really smart way of detecting the script control, which is all done, it's all cloud enabled, all of the scoring is done actually in the cloud, pushed back into the endpoint environment. That's the second one. And the third one is the one agent. John briefly mentioned about that. That's like a release vehicle for us. We are going to bring EPP, the endpoint protection and EDR together, but we are not going to stop there. We are going to bring much more advanced telemetry from network, from cloud so that we can get all of the intelligence from our customers' environment so that we can do a very effective incident management and response. So that's the first part. The second part is the EDR, the endpoint detection response, -- and John mentioned about this one we're late in the market. But sometimes, you can look back and really build some of the really cool stuff, what our competition haven't done it so far. So one of the things I'll tell you, in EDR, it's all about collecting data. It's all about collecting telemetry and the more you collect better you are, but sometimes it can get very expensive. So you can put a lot of smarter way of collecting data at the source itself so that customers know exactly that we are not collecting, we are not over collecting. We are collecting what matters to the customer most, right? It's a very, very lightweight and important part is that it is collecting what matters, right? The part here is that we have mapped all of that into MITRE framework. So all of the detection what we are seeing is our MITRE detection. What it means is that we are not depending on the IOCs. We are not depending on the signatures. What we are tracking is the behavior detection engine. So before anything happens bad, customers can actually go and find that out, and we can convict those pieces of software or milder. So that's the second part of it. And the last part on the EDR is bringing all of the telemetry in a one alert view. And John briefly mentioned about it. And that's the third part, which is a simplification of security and IT operation because that is where rubber meets the road, right? That is what customers are feeling the pain. And especially our mid-market customers where they feel they don't have enough resources to go and solve that problem. So bringing that one alert management view, and we are bringing on of that alerts, which is basically a combination of multiple events, you can click on one alert, and you can see the complete sequence of event what has happened, which is completely mapped to the MITRE. So what it means is that we have done a ground of design work to build our XDR platform. That's the foundation blocks for building the XDR, because in next year, the data is extremely dynamic. We should be able to pull data from different sources. So whatever we have seen in the first release of alert view, we are going to expand that for anything which is coming from the customer in pong? That's an important part of it. And the last one, I think Ismael's team has done a great job in providing the thought leadership and the innovation in our cyber threat intelligence, extremely verticalized, extremely based on geos and very applicable to customers' environment. Customers can read that and basically become much more proactive in protecting the threats, which matters to them. So those are the 4 areas. Sorry, I gave a long answer, but I think those are the 4 foundational blocks we have. We have been working on that.

And I know industry in general, where a lot of us are focused on the signal to noise, which you mentioned, right -- the signal has to be valuable. Otherwise, it's noise and then it's costing money rather than saving money or helping companies make money for that matter. So I think this is a really good segue Ismael to you. To talk a little bit about CylanceINTELLIGENCE being integrated into ENDPOINT Pro. This offering comes directly from that great work that you were mentioning that your team does. Can you tell us more about it?

Sure. So the -- what we're trying to do with CylanceINTELLIGENCE is to focus on quality, right? Because intelligence has been like one of these bad words for many years where people were just like asking for, hey, give me a list of IP addresses or malicious or domains. That's not really intelligence, right? That's what we call an IOC, an atomic indicator and the care of compromise. But it's very tactical, operational, it's not strategic. And what we have found is that customers at the people making decisions, CISOs, they need to inform the Board about what is my threat of my attack surface, right? What's my threat modeling. Why am I investing in cybersecurity, right? What are the threats that could really cause an impact to my business? And that's very dependent on location, as we said before. It's dependent on the industry you're working on and what's happening around you. So that's what really intelligence is about. It should be strategic. It should allow decision-makers to make business decisions based on that threat landscape. And that's what we're focusing on with CylanceINTELLIGENCE. So we have all the ingredients to make up that high-quality product. What we're doing is we have a bunch of telemetry coming out of our -- all of our global sensors that John mentioned in the cybersecured architecture, all the different products that we have, right telemetry coming from many different locations, not just U.S.-centric, many other organizations that just focus on a specific region. We have telemetry coming from all over the world. And we also have high talented professionals that have joined the team in the last year that are not just good at analyzing malware or reverse engineering threats, which we have some of the best in the industry, but also understand the context, the geopolitics and the motivations of attackers. And we're using all of this information to feed our products and services. So of course, our machine learning models, they get better because of our understanding of the threats, and that gets translated into what our customers get with our products. Also through managed services, obviously, they get access to all of these intelligence and information. But we also have large organizations, governments that they appreciate the quality of our intelligence. And they've been coming to us more than ever in the last few weeks, months, especially since we started to release the quarterly threat reports, global threat reports. As of today, we just learned that yesterday, there was a Congress member in the U.S. that was actually holding up our quarterly threat report talking about cybersecurity threats to critical infrastructure in the U.S. Congress that happened yesterday. So that shows how relevant our data is and how it helps decision-makers well, to make decisions, sound decisions.

And on the quarterly threat reports, we've moved to this new cadence. Instead of doing it once a year, and this was always one of our largest, if not the largest driver of engagement over the years. So we've moved to a quarterly basis in conjunction with Ismael's team, and we're hearing from our customers. In fact, after we released the first one back at the beginning of the year, we had customers reach out to us and say, oh, this is -- I've used this with the Board today. I've gone in and I've taken this. So it's really useful. It is more frequent now. So hopefully, everybody is taking advantage of that because it's just such a great, great asset.

And I do believe this is one of our key strengths. I was traveling last week on this and talking to someone who works for a very large enterprise company that is using data of ours from 2018 at their Board to drive huge value decisions, which, to me, I mean, I wasn't surprised, but I was I just took a step back to remind that there is value in that intelligence and it's incredibly valued to the market, especially right now in the industry where we really are looking at critical infrastructure. There is a pressure point happening there, which Shishir but brings me back to talking just generally about EDR. We -- I have a question here, where are we compared to the rest of the market? And how is that market evolving? I know we've covered that. Maybe you can add on to the topics we haven't talked for...

No. No, absolutely. I mean if you look at EDR market, EDR market has definitely started with the endpoint telemetry, right? But most of the vendors are looking for more signals from different threat surface. It could be network, it would be cloud. And I think that race is still on. I think everybody is still trying to get there so that they can provide the effective incident management. And I feel like we definitely have made tons of progress in the last 12, 14 months to build that XDR platform ground up, making sure we get a lot of these intelligence. And not only that, we depend on our own endpoint infrastructure, we should be able to coexist with customers' environment. I think that's the important part. We should be able to take telemetry from whatever they have because what is important for us is collecting the data lake or the collecting data in a unified way so that we can provide the AI/ML, which is kind of our DNA, right? That's what we do better, and that's what we want to focus on. So if you look at from the feature parity point of view, I think we have made tons of progress. I think the most important gap we had earlier was mapping the whole EDR telemetry to the MITRE data, the detection part of it. I think that part is released 3.2 already, customers are using it. They're very happy with that one. And the second part is, if you look at customer -- if you look at competitions, they do a lot of fine-tuning. It requires a lot of human to go and do configuration changes and all of that. For us, it's out of box, right? You don't need heavy configuration. You don't need any kind of training. You don't need fine-tuning all of that, right? And what we have got the feedback in the last 30 days that customers are able to actually knock off the 90% of the alert footie without any kind of custom configuration or anything like that, which is a huge progress we have made. And like I said, we are not going to stop here. We are going to definitely take our cloud EDGE strength and put that on the one agent release vehicle so that we can start getting the network telemetry, and we can start detecting the lateral movement because lateral movement is much more dangerous, and we need to start that before it starts doing damage to the customer's environment. right? The third threat surface is the cloud part of it. So we are also looking at attack service management and see how we can bring those telemetry into our XDR platform. So you will see our 3.3 release, which is going to come in the next 9 to 12 months is going to be very, very powerful. It will have all of the signals from all the threat surfaces I'm talking about, and it will build a truly managed XDR platform, whether it's managed by us, whether it's managed by partners like Mike just talked about, or we will land and expand in the large enterprise so that we can augment their stock as effectively as possible.

And that is an incredible efficiency point when people and resources are so expensive to come by. I mean, and I know we're having the industry in general, just a tough time hiring people. It's a tough market out there. So I want to close just really quickly Ismael on this sort of thought topic with the last question for you. And then we do have some analyst's submitted questions that I want to make sure we have time to get to. You've been with us not quite a year. Congratulations. You're almost there. incredible threat intelligence business that you've built for BlackBerry. Can you just quickly highlight some of the things that you brought to RSA recently and the outcomes that have come from that, what you've released?

Yes. So the first one is the focus on the global threat report. We released our second quarterly global threat report. We focus on some of the industries that John mentioned before, manufacturing, government, health care and missing one set forth [indiscernible] health care, government of financials. And the other one was the research that we did on MacOS threats. So we did a presentation there that we just got some feedback yesterday that was one of the most valued presentations at RSA on some of the new ransomware that we're seeing now attacking MacOS platforms and how we need to ensure that our -- that customers are protected against these new threats.

Love it. And all of that is available publicly to be downloaded and used at your leisure. Okay. So I do have a question from Lopez Research. So Shishir, we'll start with you and then maybe Nathan you can chime into this. Generative AI is all the rage in enterprise environments. But where is Blacker investing as it relates to AI?

Yes. I mean everyone is static about the generative artificial intelligence. Even those who haven't used any virtual AI assistants or have never seen artificial intelligence in normal life. But I do believe that people have to pay attention to these generative artificial intelligence. I can tell you, based on the media reports in the last 3 to 6 months after the ChatGPT was announced, they are close to 100 million users on this one, right? And if you just look back, if you look back the history of artificial intelligence, it started in 1997 and slowly became machine learning. It was all about making our machine intelligence so that it can perform much better. And then it started with neural networks, then it started the deep learning, all of that. The one common theme between all of these technology was natural language processing. It's called NLP. And I can tell you today, it's completely disrupted by generative artificial intelligence. And the model which is getting used is large language models. And the difference between NLP and LLM is the earlier NLP was all based on domain expertise. It was based on your process. You can train the models, you can make it much more intelligent, but it's point in time. Whereas the LLP, the -- sorry, LLM, the large language model is all about interpretation of the human context. So I can tell, hey Christine, can you take care of this for me. Other people will think, I don't know what I'm talking about, but you have the context. You know exactly what you're working on, and you can have a much better interpretation of that. That's what the large language model is doing. It can take a paragraph, it can make much better sense of it. And interesting part is that it doesn't need to be trained for over a period of time. Now coming back to what we are doing, as you know, AI/ML is our DNA, right? We have done a really robust model of releasing PE7D with a 99% of efficacy John already talked about it. We are actually exploring 3 areas. One is making sure our phishing detection of any form is much better based on some of the generative artificial intelligence. The second part, we are taking some of the penetration testing and all of that and using some of those models so that people can have much better result of reducing the time and we can get much better outcome. And the last one, which is very close to me is the attack surface management, the visualization of that one because we can give all of these to our SOC, our managed GUARD platform. And all of this -- all of a sudden, all of the junior SOC analysts, senior SOC analyst can take advantage of whatever Ismael is building because all of that is going into that platform, and they can just type a few sentences and they can get complete sequences of all the incident, what has happened based on the MITRE life cycle. So it's going to be extremely powerful. We are looking at this one very, very closely as we speak, we have a team who is exploring all of that, which I just talked about.

Nathan, you can briefly want to add on to that?

I'll add because as my colleagues will attest, I probably bring up ChatGPT and generative AI more than -- any disruptive technology. But starting with like understanding what customers need, right? How can we use these technologies to deliver better, whether it's things we do internally or things that are built into our products and services. I was at a CIO, CISO forum in last month and 25 people in the room, all verticals and sizes. And I was there to speak on our latest threat research. And it turned out, like, right at the beginning, it was clear that our audience wanted to talk about one thing, and that was ChatGPT, which we pivoted to and spent 2 hours on, and it was fascinating because the room was as diverse as you can imagine, from don't know what's going on to trying to block it, to trying to educate employees to some using it to provide better support. One brave soul there was already using it to generate code that was in production with customers. And so we're looking at a variety of things, both in the technology of how we build the product, but also in how we provide our services and our experiences to our customers. So we've got a lot of POCs. We're doing forums with customers. We want to make sure it's adding value, and we're not just throwing technology and for technology's sake.

Yes. And I will attest to that you is our constant conversation internally is a lot about that. Okay. I want to try and get 2 more quick questions in from Canaccord Genuity, one of my favorite products, we're going to talk a little bit about AtHoc. So the question is with Everbridge State of Florida's contract in flux given the accidental early morning alert incident, how does BlackBerry view AtHoc in terms of strategic importance.

Perfect because this turns into every customer meeting I'm in. We are at a crux of a critical point actually where we've got the right technology and the right market need. I look at the situation that's evolving with cyber threats. The attackers are now in our systems, right? They can be in your e-mail. They can be in your communication. They can be in your Slack channel. They could be there emulating, they could be they're trying to disrupt you, tort you and the need to have some way to have secure communication is more present than ever, especially now with degenerative AI. If they can get access to all the communication of someone, they can mimic that person and you don't even know. And so we have these conversations with CISOs all the time. And every time I ask them this question like you've done a tabletop exercise, what's top of mind communication comes out first. And AtHoc is the best product in the market. And we're the only company both that has physical security for this and the cybersecurity is bring these together, whether it's for the citizens of Florida during a hurricane or it's in the middle of a ransomware crisis where communication has to be secure and fast to keep the business resilient.

Yes. And as an internal employee who has been a long relationship with them, it is absolutely that fantastic. Okay. So the last question I have is for -- from Omdia cybersecurity. And it's as they're asking, please discuss BlackBerry's pivot to the mid-market. Why is this the best move for the company and its shareholders? And how are you reworking your enterprise-centric approach to sales, go to market, channel, et cetera. So Shishir, Nate, having you guys probably can all weigh on this a little bit, especially from the government and large enterprise. So sure, if you want to start and then...

Yes. I mean I can start, and please add more. See, our strategy is not just about mid-market. I mean John talked about, right? We have got a really good customer base, high end of enterprise and all of that. So I would say our strategy is a 3-phased approach. The first one is provide the right outcome for our customers, right? Make sure that we have got the right platform experience. It's not about point product solution because the biggest pain point is actually in the mid-market where they don't have the right resources to go and handle all of the threat landscape or the research and all of that. So we feel like there is a sweet spot, but that's not the complete focus area. Our focus area is we can provide customer outcome, either we manage for you or we will provide all API, all kind of ecosystem so that our partners can use that platform to help customers, right? So that's the second part of it. Third part is basically land and expand in the high end of the enterprise. Play a augmentation play, right? I mean I can tell you there are -- the amount of sellers fatigue they have, they don't have enough capacity to handle those kind of stuff. And everybody is looking for that unique platform, which can take use of automation, you can take use of the playbook of the SOC and all of that because AI ML is very mature and people should take advantage of that. And that's where we come in, right? So I'll let Nate add more, but I think that's the kind of strategy is.

Yes. I'll add that I think it's really important that you really understand the customers that you delight the most and why you delight them and the use cases that you're solving. And that lets you take those things and then apply them in those perils, whether it's how you solve things in a complex health care environment. Well, it's easier for us then to take that and go, okay, here's how we help you in this utilities space. And then also uncovered some new things like why we launched CylanceINTELLIGENCE, right? You look at that mid-market customer base that we do have. It is diverse. It is across verticals, across regions, and it has a cesspool of threats. And once we pulled all that out and launched the intelligence, it turns out that the top government's financials enterprises are really interested in that intelligence that's coming out of there. And so we're able to land into those because they're also the same people that are serving many of those mid-market customers. So...

Yes. And on the marketing side, I mean, one of the things we are focused on here is really how we talk to these different audiences because Shishir said, if you look across the portfolio, as John alluded to, we serve a lot of different types of audiences. But for Cylance and the Cylance cybersecurity platform, in particular, mid-market is just -- is a great area where we fit so well. So we're really focused on tuning how do we talk to these different types of audiences and these different types of buying centers. So making really great progress on that as well.

Yes. Amazing. Well, thank you for your time, gentlemen, today. Thanks for listening to the Q&A Summit for the -- for the question-and-answer portion of our cybersecurity business unit for the Analyst Summit and have a great day. Thank you.

Thank you. [Presentation]

Welcome to the IoT section of the Analyst Summit. My name is Mattias Eriksson. I run the IT business unit. It's my pleasure to kick off this part of our session today. The topics on the agenda. Wrapped with an introduction summary. I want to first of all, obviously, talk about our fiscal '23 achievements. I want to tie back to what we said we were going to do last year and explain a little bit what actually happened during last year. Secondly, I want to talk about the opportunities that we're chasing and the strategy that we explained quite frankly, in some detail last year, I want to particularly show the progress we did we made in the first year of this strategy. And last but not least, we have a lot on the table for fiscal '24. And I really want to highlight what you should be paying attention to over the next 12 months. Let's get started. But let's start with a brief recap. I have used this slide before. I used it last year. The heading is why are we investing in IoT. Quite frankly, this slide is exactly the same as it was last year. And if it wasn't, that is -- that would be a problem overall. And we go through the bullet points and recap a little bit what we're looking at here. So first of all, we are investing because this is a large growing market opportunity with attractive economics. This transition that we're seeing towards a software-defined advanced EDGE compute stack, it's not a fab. It is not a 1-year thing. This is a 10-year transition that we're chasing for many years to come. Secondly, we are the segment leader with unique capabilities, IP and track record. I made a big point of this last year. Essentially, as that stack becomes more sophisticated, the requirements for our core value proposition, performance, safety, security, reliability, those requirements increases the industry trends are pushing in our direction. Commercial trends and technical trends are driving the customers towards us. It's not like we're trying to sell something that they are not looking for themselves. And last but not least, this is a long-cycle business. We have, in this long-cycle business, long-standing deep relationships with industry-leading customers and partners, that is absolutely crucial for the innovation cycle that underlies everything that we do. Let's talk a little bit about fiscal '23. So last year, at the Analyst Summit, we made quite a big point about the terrible impact COVID had on a number of our customers and [indiscernible], quite frankly, everybody else in society. And obviously, we overcame as a society of that hurdle in the beginning of last year. Unfortunately, there were a number of other things affecting the macro environment during last fiscal year. And I tried to summarize the top 3 from my perspective, affecting our business on the right-hand side of this slide. So we began the year with quite significant impact still on the overall supply chains for the industries that we serve. That was partly resolved throughout the year and quite frankly, towards the end of the year, most of our customers did not list this as a major hurdle anymore. There are still a few that have some issues, but overall, the problem has been taken care of. Unfortunately, the second point on this list is what happened to the overall macroeconomic environment as a consequence partly of the COVID situation. There is -- there was last year, and there is today a significant macro issues overall. The inflation situation, I don't need to tell anyone about the associated rate increases across the world for various types of interest, quite frankly, not a good situation for last year, the second half. Last but not least, the crazy geopolitical situation, the situation with the land war in Europe, the situation with China, et cetera, et cetera. The backdrop for the macroeconomic environment coming out of the COVID situation wasn't ideal. In spite of all of that, in spite of all the contacts that we had last year, I'm very happy going back to the heading of this slide to say the team had a very significant achievement in fiscal year '23. You've seen the numbers, starting from the top, revenue $206 million, 16% growth year-on-year. This was profitable growth. You saw our gross margin at 81%. We significantly overachieved the internal operating margin targets that we had. This was also a record year in terms of the number of projects and customer commitments that we were executing on. And we executed on all these commitments throughout a very significant ramp without dropping a single commitment. Very, very important in a trust-based long-term business. Second section on the left-hand side of the slide here and probably the most important leading indicator of this business. So we talk about the royalty backlog. We talk about the commitments customers have made to us over a multiyear period. We get royalties from our customers as they ship their EDGE devices. Last year, we secured $265 million in gross net additions to that backlog. That was 141% year-on-year growth, very significant achievement. 94 design wins in total, 34 in auto, 60 in GEM, leading players in the various segments that we serve. We talked at [ CES ] about our first IV design wins. We had a great design win year overall last year. At the analyst limit last year and also in a couple of the subsequent sections, I talked about the ramp and the investments that we're making in the business. And there were sort of 2 components to this ramp. The first portion of the component was we came out of 2 years of COVID with quite frankly, significant capacity constraints across multiple functions. We have capacity constraints on the operational side. We have capacity constraints on the engineering side. We have capacity constraints on the go-to-market side. And then we -- in spite of those capacity constraints, we outlined a strategy that was very ambitious in terms of what we wanted to do with the team over the next several years. So we had an issue with capacity constraints, and we had an issue around investments. I'm very happy to quote that we made significant progress in both areas. We added 12% to our headcount in spite of the macro environment last year across multiple functions, very important for the long-term trajectory of this business. We established our first major R&D center outside of North America. Most of our R&D has historically been focused -- situated, I should say, based in North America. Last year, we made a strategic decision to broaden the talent acquisition area. And we established a center of excellence in Hyderabad. The entity is up and running. We have made our first hires. We have the leader, and it's a big topic for us for this year. Last section on the slide. We also made very significant progress on multiple structure items. Structural items. We introduced the concept of our 3-pillar road map, and you will hear more about that in John's presentation later today. We anchored that road map with customers. We started executing on that road map. And quite frankly, we even pulled in a couple of items in that multiyear road map that we started talking about last year. We made significant progress on our first execution leg for the go-to-market structural change that is needed over the next several years. I will come back to that in a couple of slides, very important for the long-term success of this business. And last but not least, we had a few strategic initiatives. IV is one of them. The work that we're doing with AWS on the cloud side is another one. We made significant progress in several of the strategic initiatives. In spite of some pretty nasty macro context, last year was a great year for the IoT business unit. This is last year's logo wall. As the heading says, the 94 design wins, prominent segment leaders, $265 million in gross royalty backlog additions, 141% growth year-on-year. What the slide doesn't say is that this is also a 91% growth vis-a-vis the biggest year we've ever had in the history of the business units. So on the most important leading indicator of this business, very significant progress in last fiscal year. I have said multiple times, we are blessed working with the best customers and partners in the industry. These are segment leaders. You see the logos. This is just this year's logo wall. It is not always pain free. The leaders in the segments that we serve, they clearly have very significant requirements. They push us, they complain, they drive us towards becoming better, but it's a critical component of our innovation cycle. Without our customers and partners, we would not be what we are. There is too many use cases to cover here today. I just want to call out one thing about this logo wall. So as you look at the core segments, our leadership in automotive and mobility, which by far is the leading segment in EDGE compute. If you look at medical, if you look at robotics, you can find on this single year logo wall, prominent players in those segments. And obviously, as I already hinted at, very important for our long-term innovation cycle. One thing that the slide doesn't call out, which is tied to what I said on the previous slide, is there is a significant underlying change in the go-to-market motion behind this logo slide. So as the EDGE compute component becomes more component for our customers and partners, as that EDGE compute component becomes software-defined, many of these OEMs that ship the EDGE devices, they're taking control over that software stack. What does that mean for us? Well, what it means for us is that we, as a foundational software player become more important for their long-term future. As we become more important for the long-term future, they want to talk directly to us. Historically, many of the contracts were signed as a Tier 2, as a Tier 3 as a component supplier in the value chain. -- that is changing very rapidly. We had a 55% increase in what we call Tier 1 for software, meaning the end customer, the OEMs shipping the EDGE device, signed the contract directly with us because they want to have us at the table, very important long term. This is the updated slide around the buying cycle and the backlog that I used last year. So on the left-hand side, you have the updated backlog graph. This is the royalty backlog that we are very proud of and that is very important for the long term of the business. On the right-hand side of the slide, you have a highly oversimplified description of the customers buying process. This is so important that I want to stress it again this year. So you think about how we make money. They're essentially 3 different components. At the development stage of an advanced EDGE device, we make money from development seeds from toolkits, from things that customers need to build that software stack. We also typically provide different types of services depending on the customer. That development cycle is long. It varies from 6 months to 3 years, as it is indicated in the slide. And after that development cycle is finished, they start shipping the EDGE device. And as they ship the EDGE device, and that typically lasts for many years, 3, 5, 7, 10, we have some exceptional cases in that tail. We get royalty. That's what's referenced in the left-hand side of the slide. That royalty is the backlog that we're talking about. This is a long life cycle business. This is not a quarterly business. And let me give you the most important stat for that. So when I referenced the $265 million in royalty gross backlog additions that we had last year, we don't get a single cent from that next year. There is a 2-year time lag from that. So the benefit from the great work we did on the design wins has a significant time lag. That is good from many perspectives, but it also has to be acknowledged in how you model this business and how you invest in this business on. Looking at the left-hand side, that is the updated graph. We had a similar one last year, $640 million currently sitting in the backlog, roughly 3x the overall revenue, but royalty is not all the revenue. So a very significant portion of our future sits in this backlog. Take note again about the big blob there hovering above 2026. Our go-to-market motion this year has a very significant focus on 2026. Most of the design wins that we have on the docket for this year are going to ship 2026 and beyond. So we need to have a short-term focus on what is happening this year, and we need to have a long-term focus on where this is going in a multiyear perspective. Great year for us in terms of the most important long-term indicator. Okay. Enough about fiscal '23. Let's talk a little bit about the opportunity, the strategy we have for that opportunity and the progress we made in the first execution year. And this first slide is also a recap slide and I hope most of you have seen this slide already. I'm going to go through it fairly quickly. These are the structural components underlying our business, the multiyear journey that we're on with the IoT business unit. So on the left-hand side, what are the fundamental drivers? Well, at the 30,000 feet view more IoT EDGE devices. Smarter IoT EDGE devices as they become smarter, they become software-defined. When they are software defined, the requirements that sits squarely in our value proposition, performance, safety, security, reliability become more important. A good example is the slide I used last year that I stole from Alex at SPD, a qualitative overview of how value creation is shifting for our most important segment, the automotive industry. So the slide as it's very difficult to see. At the bottom left-hand corner here, you have 2010 at the bottom right-hand corner, you have 2,035. It's a qualitative view of how OEMs will create value over the next 10, 15 years. And what can you see? Well, you can see that a significant portion of the OEM value creation for the core and IoT EDGE device, the most advanced IoT EDGE device is going to come from software. That is what the core trends mean on the left-hand side of this slide. How does that translate into dollars? Well, this is an updated version of the same TAM, SAM slide we had last year. We have shifted 3 years, shifted 1 year added 2026. It's a 3-year period. On the left-hand side of the slide, you have calendar year '23, which is this year. On the right-hand side of the left graph, you have calendar year '26. This is dollars. You can see that this year, we believe the TAM that we are chasing is roughly $1.5 billion. You remember how we divided that TAM. There was a dark blue piece that is what we call core, essentially the core software development platform that we have. There are a couple of other components, but essentially the core -- and then we have a light blue piece that we do not currently financially forecast, but our call options, strategic initiatives that might pay off big for us in the future. I visit squarely in that light blue portion of that graph. There are a couple of other initiatives that we haven't spoken much about, but IV, think of it as IV taking a big portion of that. The CAGR for that, the estimate that we made has not changed. We believe that over the next several years, beyond this fear period, the range of growth for the segments we serve is somewhere between 8% to 12%. Last year, because of some of the headwinds I already listed, we believe that CAGR was roughly 8%. We grew 16%. The market grew 8%. We're taking market share, as we said we were going to do in the last Analyst Summit. On the right-hand side, again, given the importance of the automotive segment. And I -- throughout the year, I got a number of questions around this notion of well is automotive really the leading segment. And is it really the cutting EDGE and EDGE compute? And I would just say the following. If you doubt that automotive is the leading IoT EDGE point at this point in time, just make a table, take the different segments, list how much compute do you have at the EDGE? How many sensors do you have? How many lines of code, how much interaction with the cloud do you have? How many requirements do you have on safety and security and reliability and so forth. There is no doubt. Automotive is the lead EDGE IoT endpoint. That's why we keep coming back to it. So on the right-hand side of this slide, you have a similar graph, but now instead of dollars, it's units. And we have called out a couple of subcomponents of compute at the EDGE, not all of them, by any means, but a couple of them, and we have called out the growth rates. So you have IVI, you have CDC, you've ADAS, your Gateway and Cluster. The graph basically shows exactly what we said last year. A couple of things have moved up a percentage point, maybe down 1 percentage point, the conclusion is the same. This is growing fast over many years to come. The lead segments are ADAS and digital compute. We are winning in both of those segments, and this is a journey that will continue for many years to come. Because that chart that I showed you has taken a lot of work from a lot of product managers, consolidating information from a lot of different reports. It's difficult to replicate if you don't have all of that data and the touch points with the customers that we have. So I want to try to give you a proxy. How do you validate what we're actually saying. And I decided to pull from Ian to take insights a couple of graphs that he used during April here this calendar year. On the left-hand side of this slide, you're going to have automotive growth of MPUs in volumes. On the right-hand side, you're going to have automotive growth of MPUs in value. And the heading is the important point. Historically, the QNX TAM for the edge compute segments were constrained by MCU dominance. If you don't have enough compute capacity, the stack is not sophisticated enough, you do not need QNX, that is changing, and it's changing very rapidly. So starting with the volume graph here. On the left-hand side of the slide, you have ECU volume in millions on the Y axis and you have 2020 and 2030 as the timeline. There are a couple of categories that Ian has called out. He has Gateway DC Zonal, he has legacy body, legacy chassis, legacy powertrain and so forth. And we serve that small blue thing that you have on the bottom that is growing very, very rapidly. The rest is the legacy ECU cluster in the car. Lots and lots of compute units that are not sophisticated enough to run QNX. If you change the view and you look at the value, taking into account that, quite frankly, already on the left-hand side here, this is growing very, very rapidly just from a small base. If you look at value, the picture changes very, very dramatically. This is now dollars, the same graph, and you can see that, that small dark blue piece that you had at the bottom, it is really getting to almost half of the overall dollar value for the car towards the end of the period here, which is 2030. This is the opportunity we're chasing. The sophisticated portion of the stack in the car today is digital cockpit and ADAS in which we're winning high-performance compute and the consolidation for the other domains. This is the opportunity that we're chasing. Okay. Let's talk about strategy. And last year, we introduced sort of a 4 component framework for the strategy. Strategy exists at multiple levels, you can slice and dice it in different ways. We chose 4 components. We said our strategy has the following 4 components, starting from the left. We are focused on very particular segments in this multiyear journey. We are in these segments striking long-term commitments towards critical customers, the leading customers in these segments. We are targeting our R&D to very specific areas that benefit the customers in these segments. And last but not least, we set up a new BU 18 months ago. And as we do that, there are a number of things that needs to happen with that BU. So in the first year of this 5-year strategy, how did we actually perform? I last year had a number of versions of this slide where I talked about the components and the various subcomponents. I'm not going to recap that for you. It's publicly available. What I want to focus on is what progress did we make in the first year of the strategy. So starting from the left, focused target markets. Automotive is the lead market. What was the situation? Well, we had a 90% plus win rate for strategic deals in automotive last year, a 140%year-on-year growth in design wins last year, a 55% growth in Tier 1 for software. Those are all great numbers for the first year of execution of our 5-year strategy. What about long-term commitments? Well, although we don't break down all the details, if you take our public data and you drill down, you can see that we are investing very, very heavily in R&D last year, but also this year. And that is deliberate. We are clearing the capacity gap, and we are driving the next phase of this 3-pillar roadmap. Very, very important in a long-cycle business to be ahead of the curve. It's actually 1 of the moats for this industry. It takes a long time before you get money out of the segments that we serve. You need to invest upfront to get money at the tail end. We deepened the development partnership with leaders. The 1 that is publicly announced at present is the next step with collaboration for AWS. We announced that at CES. You will hear much more about the cloud. John will talk about it in a second, but many, many more things are coming during the year. We established a Hyderabad CoE, and we are ramping that as we speak. So significant progress on the long-term commitment side. We're about targeted core R&D. John is going to touch upon specific items for each of these 3 pillars that we described last year. So I will just say the following. We established this 3-pillar roadmap, we got the roadmap validated with customers, and we actually, beyond execution, started pulling a couple of items in. That is great progress on a multiyear technology roadmap in the first year of execution. What about the BU transformation? So there are lots of topics to talk about here. It's tied to that notion of having a capacity constraint and then setting up a plan and both clear in the capacity constraint and then trying to deal with the plan itself. Let me call out an example. One of the biggest problems of this business is that we do not reach all the customers on a global scale, by industry segment at the point when they would benefit from talking to us. So we have aggressively scaled and we'll continue to scale this year, sales, business development and marketing. We had 12% net addition in talent across this year. We have set ourselves up for a good year this year, again, we grew and changed the focus of marketing by 40% last year, et cetera, et cetera. Very significant progress on the BU transformation piece in the first year of execution. Let's talk about the fiscal '24 focus. And I'm going to give you a couple of high-level bullet points and then you will hear a little bit more from John, a little bit more from Vito and then obviously, throughout the year, you will hear more and more about this year's focus. Let me start with the first one. So as part of that multiyear technology investments, the 3-pillar roadmap, we have this year, arguably the most important product launch here in the history of this business that we're running. We have, as the video that introduced this section of the analyst summit, we have early access announced, as you saw in the press release, and GA is scheduled for the next-generation microkernel. This is once-in-a-decade type of event, and John will come back and talk more about it. We announced [indiscernible] CES general availability for IVY. 2 years after starting development, we are at general availability. That's a very, very significant launch event for us this year. We announced the first version of our cloud offering at CES. If you have dove into the detail, you know that it is not comprehensive yet. We are getting so many requests around accelerating that at present that we are accelerating it at present. And there's more to come around cloud throughout this year. Biggest product year in a decade for us in fiscal '24. We will continue to go to market transformation this year. As I said, as the edge stack becomes more important, as it becomes more software-defined, whoever owns that edge device, they want to control the software stack. As they control the software stack, they want to talk to and have a contract signed with the parties building that stack. We provide the foundation of software a 55% year-on-year growth in the number of Tier 1 for software contracts that we're signing. Why is that exciting? Well, it's exciting because what happens is when you're signing directly with the person or the company that is shipping this device, you are at the table talking with the owners of that proposition for many years to come. There is a tremendous opportunity for us over the next several years to use that for upsell, cross-sell to help our customers more significantly to play the more sockets, more layers narrative that you've heard for quite some time from us. A good example of this is acoustics. And acoustics is a very, very interesting area for us that is undergoing significant change over the next several years. So we've had acoustics for a long time. John Wall and his team invested in this area many, many years ago, arguably ahead of the curve. But we -- today, when the change is happening, we have a very solid acoustics platform. It requires a seat at the table because it entails architectural change. If you don't have a Tier 1 for software contract with the customer, you're not going to leverage all the capabilities that we have. John is going to come back and talk more about Acoustics. So continued go-to-market transformation throughout fiscal '24. We will continue to scale engineering. We closed a significant portion of the capacity gap that we had in the engineering and service organization last year. This year, there is still work to be done on adding for the long-term 3-pillar roadmap. The Hyderabad CoE is a significant portion of that strategy. It gives us access to a much larger talent pool. It puts us closer to some of the customers that are leading in certain subsegments in Asia Pacific. We're sitting close to some of our partners in Hyderabad. We will probably be at 75 to 100 headcount in Hyderabad by the end of this year. And last but not least, we will continue to broaden and deepen the partnerships in the ecosystem. A lot of this is not public yet. We have some tremendous partnerships ongoing with leading players. We're taking that to the next level this year. I hope that we will be able to announce a couple of more things as this year comes along. Big focus for us. As a small player in multiple industries that are all global, it is critical that we are aligned across this evolving edge stack. And we are today, and we are doubling down on continuing that go-to-market emotion. So that was 4 bullet points on fiscal '24. Let me come back to the original slide. Why are we investing in IoT? Well, it's a large growing market opportunity with attractive economics. We are the segment leader with unique capabilities, IP and track record. Commercial and technical trends are pushing industries and customers towards our existing value proposition and last but not least, we are already working closely with the leading companies in the leading segments. And as I hope you saw from the fiscal '23 results, BlackBerry is taking market share, growing faster than the market and we're investing heavily in our multiyear growth. Thank you. And with that, it is my pleasure to introduce John Wall. John Wall is the Head of QNX, Product Engineering and Operations. John?

Thank you, Mattias. Hello, everybody. As Mattias mentioned, I'm John Wall, I head up the BlackBerry QNX division. And today, I'm going to be talking about our 3- to 5-year strategic roadmap and some of the progress that we've made. So when we think about our roadmap within our group, we think of innovation at the edge. We think of safety and security innovation. So we like to think that there is no safety without security. And then finally, we look at reduced developer friction. So I'll walk through what we've accomplished in FY '23 and what we're going to be doing in FY '24. So as Mattias mentioned, we have our QNX SDP NextGen microkernel that we've been working on for the last 2 or 3 years. This is by far the biggest project that we've undertaken within QNX, very, very important. We've had 2 early accesses. We've been working very closely with silicon partners and with strategic customers to get feedback. That's going very well. We announced a virtualization framework product that we did in co-development with Google. And the idea of this is to create industry standard VIRTIO interfaces to our hypervisor to provide standardized interfaces. And what this allows, it allows very easy integration of Android, Linux on our hypervisor. It also provides a level of separation of the software from the hardware. This is very important for our customers. They don't want to be tied to a hardware platform. They want to be able to pick and choose in the future what the best options are and this provides a level of separation that's very important. Another thing that we've been working on is performance optimization. We've been very focused on safety, security, robustness, real-time performance. But as the silicon starts to move more towards cloud like compute, performance is becoming very important to our customers. You want to be able to extract every last ounce of performance from that silicon. So we've created an engineering team whose only job is to look at performance and look at every component within our product to try to eke out that last piece of performance. So what do we have on the docket for this coming year? Well, again, SDP, QNX-SDP-8, our next-generation microkernel OS will be released commercially this year. I'll talk a little bit more about it in subsequent slide. We're looking at workload orchestration and containers. And this has a lot to do with what's happening in the cloud, how we're going to be moving workloads from the cloud to the car and vice versa. So we have a strategy around this that I'll talk in more detail a little in the next slides. We're going to be releasing an early access of our next-gen microkernel-based QNX Hypervisor, getting a lot of pull for this. So this is -- to Mattias' point, this is something that we are pulling in and something that I think is very, very exciting that probably a lot of people don't know that we have, which is our new software-defined audio acoustics product that we'll be announcing this year. And I think it's going to be revolutionary, very well aligned with what's happening in history around software-defined vehicle. The timing is right. We believe we have something very special here. On the safety and security innovation front, we safety certified the QNX virtualization frameworks. I talked about the collaboration with Google, Android. This is very important in mixed criticality systems. If you have a hypervisor, digital cockpit, you have a cluster that has a safety requirement, you have Android that does not have a safety requirement. However, you are sharing the same peripherals. This allows you to do it and be able to achieve functional safety levels. We've had multiple QNX OS for safety releases during the year. We ISO certified our C++ library -- runtime library to ASIL-D, very unique in the industry. We were working with Texas Instrument to create the thing that we call the Academy for Functional Safety. And this is actually not geared towards automotive. It's geared towards some of the other industries that we're looking at. So robotics, medical. And the idea is to provide kind of a self-serve access to the hardware, the software, functional safety requirements, functional safety guide to really give people a sense of what it is to create a safety-based program, and that's been very successful for us. And then finally, we increased our security analysis and response team. Security is top of mind for every 1 of our customers, a very important initiative. What do we have on the goal for this year? Safety-certified file system, safety-certified Certicom crypto, safety-qualified Rust tools, something that's in high demand now in automotive, a lot of safety programs use Rust as a programming language. We're working on a qualification kit to safety certify Lib C++ headers and templates to ASIL-D. This is very important as adaptive autos are, it gets more adopted into the industry. Lib C++ is basically the programming language. And headers and templates and in particular, are very hard to safety certify out of context. So we're creating a kit, a tool that will take a look at the customer's final product and provide them with all the safety artifacts, they need to safety certify the entire system. And then finally, very important, we are going to be gating plan of record, our ISO 21434 certification. This is to address things like the executive order to address things like UNECE WP.29 / R155. So a very important initiative. And then on the reducing of developer friction. Mattias touched on it. We have been able to put QNX OS and the safety OS in the cloud through AWS, very important. I have a slide that will talk about this in more detail. We also created an open source team. And a lot of people use open source on top of QNX, there's examples such as Lib Pro, Open SSL, Rust. So what we've done is we created a team whose job is to port, to optimize and to push it back into the community. So the community actually supports a QNX variant of that open source project. We've done that with Rust. We did the Rust support within QNX. We pushed that up to the community. The community took it, actually moved it to different versions of the operating system. So it's been a real success. What do we have next? So Mattias mentioned it as well. In the cloud, we are going to be putting our hypervisor, our dev tools. We're going to be working with Microsoft to get support on Azure. We're creating online on-demand training. We'll continue to port open source projects as an ongoing thing. And then we're going to grow the BlackBerry QNX ecosystem. So SDP 8. This is our next-generation operating system. This is probably the largest release of the operating system in the last 20 years. Most significant changes we made to the microkernel. The reason that we undertook this work is we see the next-generation hardware that's coming. We're seeing multi-core 4 cores, 8 cores, 16 cores. We're seeing cloud-like compute move to the edge. We need to have an operating system that scales 1 to 1 as the number of cores increase. With this operating system, we will maintain functional safety, we'll maintain security and we'll also maintain backwards compatibility, which is very important, while creating by far the highest performance operating system we have ever developed. Besides that, the beauty of our products and how we build our portfolio is this next-generation microkernel is the basis for the hypervisor for the QNX OS for safety and the QNX hypervisor for safety products. They will all benefit from this, and they will all have the performance increases. Early access is available now, commercial release is in December 2023. So cloud enablement. We announced in January 2023 the QNX RTOS version 7.1, running through the Amazon Cloud, runs on AWS EC2 powered by Graviton2 processors. That's ARM-based processors. Why is this important? Well, the #1 reason that is important is to provide a bit parity between the cloud and the embedded device. So you have the same software running on the edge, in the car, in the medical device as you do in the cloud. Why is this important? Well, it's important for scalability. The days of having a target in front of every engineer doing the development, it's just not tenable anymore. The projects are too large. There's too many software developers involved. The way to get scale is to put it in the cloud. Now the other aspect of why this is so important is collaboration. I've been involved in a lot of projects where 1 of the most difficult aspects of maintaining these large projects is having a unique configuration that is maintained across all sites. So the same hardware, the same software, the same tooling. By putting QNX in the cloud and you now are able to manage 1 configuration that is available to everybody. And this will really help time to market. It will really help in reducing configuration errors, tracking bugs that are based on configuration errors. This is the future of how software will be developed. Our customers are really pushing us on this so much so that if we look at our cloud enablement roadmap, we were looking at putting the QNX hypervisor in the cloud towards the back end of this year. We've had customers come to us and tell us they need it now. And so we are actually looking to put QNX in the cloud by the end of June, which has really been pulled in. We put some very good people on it. We've made it a priority. We also will be looking to put our tooling in the cloud. As part of our SDP 8 release, we're going to be moving to -- away from our Eclipse-based IDE and to VS Code for Microsoft, which is already cloud-enabled. And then we'll be working with the scaling partners to create a cloud-based CICD environment. Our approach to the tooling is to be very standards-based, be very open and to make sure that we are able to integrate our tooling into our customers' environment. Containers. So a big topic. As SDV becomes more prominent, a large part of software-defined vehicle is the cloud because the hope with software-defined vehicle is that you're going to be able to move workloads from the cloud to the car, from the car to the cloud. The idea is that when the car is shipped the car will improve over time as more applications are added to the vehicle. A lot of our customers are looking at containers as the way to do that. So there's many perceived benefits from containers, there's configuration simplification, development pipeline streamlining, isolation to an extent, and I'll talk a little bit more about that. Deployment simplification across multiple platforms, common control point, the run time itself, but the path to safety is unclear in the current form. So our plan -- we put a team together, dedicated resources. We're actively prototyping. We're attempting to balance the container construct, which is really a Linux construct with the microkernel design and safety. We want to stick to our mantra of standard-based approach. So we want to make sure that we reuse or that we adhere to the open container initiative. We want to be compliant to OCI. There's a lot of tooling out there that we want to be able to reuse. We don't want to reinvent the world or reinvent the wheel, sorry. But we want to leverage what's already out there. But we want to be very focused on creating containers and workload orchestration on QNX that adheres to functional safety requirements and that we are able to safety certify this to the highest level, ASIL-D. I expect that we will have something that we can share with our customers by the end of the year, the end of this calendar year. And then finally, as Mattias touched on, Acoustics. Our Acoustics team within BlackBerry QNX is actually very mature. They've been doing acoustics and automotive for 20 years. Our bread and butter is what we call QNX Acoustics for Voice. This is acoustic echo cancellation and noise reduction. So when you think of a hands-free call, this is the algorithm that gets rid of the noise, gets rid of the echo in the call. We've been doing this for many, many years, gold standard in the industry. We've expanded our portfolio to include other algorithms such as QNX in car communication. That's where you can be at the front of the vehicle and communicate to people in the back of the vehicle through microphones and speakers. QNX active sound design, that's engine sound enhancement for electric vehicles. We also have acoustic noise cancellation for lockup torque converter boom, cylinder deactivation. So those are algorithms. But the team for the last 15 years or no, last 10 years, I've been working on creating frameworks that bring these algorithms together because traditionally, in the past, these algorithms were all individual systems within the vehicle, individual hardware components that we're adding sound and removing sound from the vehicle and very difficult to tune. So they started to create a framework and tooling that would allow you to tune all these different algorithms, things that are adding sound, things that are taking sound away at a central location, central point. These algorithms are all very efficient. The idea is they would run the head unit. And there'd be plenty of processing power to run all these things. We also started looking at a QNX software audio management. We've developed QNX chimes and safety alerts, very important. That if you have a chime within the vehicle that says your Level 3 autonomous drive is disconnecting that we can guarantee that chime happened. But now with all these frameworks that we've created, we started thinking about software-defined audio. And we were doing this 4 or 5 years ago, we were going to customers and talking about, "Hey, imagine if you could have your entire acoustics and audio system within the vehicle in the head unit, reduction in wiring, reduction in mass, reduction in cost. The OEMs were intrigued, but it was still too early. They had their systems. They had their relationships with the branded audio partners. But now what we're seeing with the advent of software-defined vehicle is this is an area they're very interested in. Because if you start to think about branded audio within the vehicle. And as an OEM believe that you could sell branded audio within the vehicle as a downloadable module post sale or you can change the branded audio within your vehicle post sale. This is extremely powerful. It's extremely powerful, and it is a large cost reducer to the OEM. So this -- we're very excited about this. I think it's fair to say we never really looked at this as a big part of the business, and we're now seeing that this could be something pretty amazing. Next up, I'd like to introduce Vito Giallorenzo. Senior Vice President, General Manager, BlackBerry IVY.

Thank you, John.

Thank you, Vito.

So lots of great traction and great innovation coming out of John's team in our core QNX product line. And it's the same for IVY. So like Mattias and John before me, I'm going to talk about what we have done this year, what we've learned, what we're seeing in our customer engagement and what we are focusing for 2024. So we had great 2022, fiscal '23. We achieved a lot of key milestones for IV, both on a product and a go-to-market point of view. We have integrated it into leading commercially available platforms, Bosch cockpits, PATEO cockpits in China and also virtual Graviton platform with AWS, as John talked about. Extremely important and valuable in prototyping and design phase. So with those platforms and with a lot of our ecosystem partners, we have built very impactful demos, developer experiences, workshop that we have had with many customers and also public events, most recently at CES. Very impactful, very useful in extending our dialogues with existing OEM stakeholders, new stakeholders, new OEM, extending the pipeline. And very importantly, we've got our first design win with Dongfeng, a top EV OEM in China. Really leveraging the faster pace of innovation and decision-making in that region. So a very important milestone, obviously, great validation for our product, and we are working to execute on that this year. As Mattias mentioned, on the roadmap at co-development point of view with AWS, we reached an important milestone of releasing our general availability version of IVY this month -- at the end of this month. That's really the version that can be integrated and designed into a production vehicle system. With that launch, we've also commercially launched IVY fully with an upsell program into our existing QNX and AWS automotive sales base and forward. So at the same time, we're continuing with our strategy of proactively building an ecosystem of resellers, integrators and solution builders for IVY. This has proven to be a very valuable effort. We are focusing on small startups and large established incumbents like GEICO insurance or here [indiscernible] or Alexa. But it's really targeted to companies that offer solutions that automakers are planning to build and launching their systems. And companies that sold those problems with data and with AI. And that's where IVY can add value for it. We're also continuing to make targeted selected investments through our innovation fund. Most recently, we made an investment in a company called CEREBRUMX, data marketplace for vehicle data, targeting specifically insurance and fleet use cases, which, again, are a very important area of focus for many of the automakers we are prototyping IVY with. So with good successes, and we learned a lot. So what we learned and what we are seeing is that the need for IVY remains extremely robust, extremely strong for our customers despite the challenges that they are having in rolling out and achieving their software-defined vehicle transformations and the macro pressure that they're having. So the question for them it's not if, but it's only when they're going to install and run AI advanced data framework like IVY in their vehicles. But our edge-first approach remains unique in the market and remains pretty superior to both in-house alternatives or third-party cloud-only alternatives. We deliver superior total cost of ownership, superior privacy, responsiveness, reliability and integration efficiency that many of these solutions cannot offer all these packages together. And our ecosystem strategy has proven extremely helpful. That's why we're continuing with it. Just the ability not only obviously to inform our roadmap at our product early on, but also bring to customer end-to-end prototype an offering of IVY-powered solution has proven very, very valuable to them, and this really helped our go to market in the last few years. So I'm saying it -- why our edge-first approach resonates with customers and the challenges that they are having. So today, just a simple representation of what's still happening today in the current production. The vehicle edge remains complex. So there's a lot of integration that needs to happen at chipset level, hardware sensors, data signals type, OS, library, all of that needs to happen in that particular system before the data can be, again, integrated and utilized by the app. And this -- all these integrations need to happen every time the underlying system changes, for example, in a new model or the app needs to be changed, upgraded or a new app needs to be launched. What this process causes still is big delays in launching new services despite the cost that a lot of the automakers are incurring. They don't need to do everything in-house to control the data and the user and they're realizing that. And to this day, there is still too much integration, too length integration, which is causing slow progresses. And often, what we're seeing if not delays, but the projects are getting de-scoped to maybe a lower level of ambition in terms of software definition that they were hoping for, for those productions. How IVY helps? IVY software abstracts the entire vehicle edge. So once IVY is integrated in those systems, the integration point is a very simple software artifact. We call it synthetic sensor that is built in very familiar languages, C++ for embedded developers, python for app developers. Once that software sensor can dropped into a system through our console, it gather and processes the data from the sensor to generate the insight that the application needs, it could be the driver ID, it could be whether it is a child in the rear seat, could be the driving score for insurance purposes, the state of the battery, anything, any insight that the application needs to offer their solution. And this can be very easily, very quickly repeated also after the vehicle is shipped to up-to-date the application to add the new applications. Ultimately, what this translates into is removing that lengthy and expensive integration that happened before. At the same time, since IVY is a lightweight middleware tool that the automaker is in full control. The automaker remains in control of the data, the user experience, the user relationship, the IP solution stack up the layers. And with a better return on their investments. They can monetize the expensive hardware investments that they've made in their vehicles by running all that processing in the vehicle, so saving on cloud costs and maximizing their hardware investments. And at the same time, they take advantage of IVY flexible business model. So they can pay for IVY, not with big R&D costs upfront, but as they use it when they use it to power application. So that resonates very well. So we learned a lot. We had a good year. We continue to see a very good product market fit, what we are doing for 2024. Obviously, we're executing on the GA release that's going to come at the end of the month, but it doesn't stop here. We have a very reach and busy road map that we're going to continue to release quarterly to our customers. We are pairing that with a commercial launch and really IVY now with this GA release is moving from a business development type of go-to-market motion to a full sale motion integrated in our existing QNX sales motion and into the AWS-1. We are seeing really, really strong synergy with our QNX business. A lot of our customers who have chosen QNX for them, it's a natural extension as their program and their ambition in terms of data solution grow to add IVY on top of it. So we are definitely very optimistic about the actual opportunity there. As Mattias mentioned before, the sales cycles for these type of solutions and also for IVY, obviously, like for QNX, it's a very -- it's a long one. It's a long journey. It's 2, 3 years to revenue. So our focus this year is first to convert the current POC in design wins, but also very importantly, to see and continue to grow the pipeline of POCs for the future years and for the long-term opportunity that we continue to believe is going to be pretty big for IVY. At same time, we scale our market and our ecosystem footprint. We see big like with Bosch and PATEO, big value in our Tier 1 partnerships and also the value of the ecosystem solutions in prototyping and bringing end-to-end product to our customers. So lots going on, but really still feeling very strong about the opportunity we have with IVY, the momentum we have. And this concludes my presentation. And I think now we're moving to Q&A. Thank you.

So good afternoon. Hopefully, you've been enjoying the session so far. My name is Tim Foote, I'm the Vice President of Investor Relations here at BlackBerry. And I'm delighted to say we've got an interactive Q&A session now with the IoT team. So just a quick reintroduction, as everyone knows who you guys are, but we've got President of the BU, Mattias Eriksson. We have the Head of BlackBerry QNX, John Wall; and we have our General Manager of BlackBerry IVY, Vito Giallorenzo. Okay, guys. So let's pull up the questions. Okay. Technology. Okay. All right. So we're going to start with the microkernel, John. So you gave a lot of detail earlier about the new expanded microkernel. So the question we've got is, can you give some additional color around the significance of the microkernel for the business? Is this -- should we consider this a feature enhancement or is it really a step change?

No, it's definitely a step change. 3 years of R&D is not a feature. And the design goals that the team had were really constraining. They had to maintain functional safety, they had to maintain security and probably the hardest requirement to hit was they had to maintain backwards compatibility. And that's critical for our customers to be able to easily move to this next-generation operating system. We -- as little effort as possible. That's really hard design constraints when you tell somebody I want to have the fastest operating system in the world, which is what I told the team, probably been harping on the team for 5 years about this, that our ability to sell into the next 10, 15 years in automotive, in GEM, medical, robotics is based on us launching this operating system. And as you start to see more cloud-like compute move into the edge, 8 cores, 16 courses, 32 cores, customers are paying a lot of money for that hardware. They're paying a lot of money for that performance, and it's my job and the engineering team's job to make sure we can eke out every ounce of performance that, that hardware can provide. I think we're very bullish. We are seeing that we can scale 1 to 1 as the core increase or as close to 1 to 1 as possible. The performance numbers don't lie. They're amazing. And we have been able to stick to our tenants of backwards compatibility, safety and security. So I've been around at QNX for a long time. Other than the release of Nutrino in the 2000 timeframe this is the most significant thing we've done.

So I mean just following up on that, we obviously talk a lot about safety when we talk about QNX being our moat. But maybe we forget a little bit that performance is also another critical selling features of QNX.

It is. And when we talk about safety, if we don't, in concert with safety provide the type of performance that our customers expect and need, then we're opening the door to other players coming in because there's a reason to. And so that's why I talked about the performance team. I talked about what we're doing with SDP 8. And again, like I mentioned, that microkernel is also part of the hypervisor. It's part of our safety OS, it's part of our safety hypervisor. I mean this puts us in a position -- it's very hard to move away from software platforms. So it's our job to make sure that we don't give our customers a reason to want to move away from that platform. And performance is a huge part of that.

So can we kind of think of this almost as future-proofing? Because, as you said, so much more compute at the edge, multiple cores are moving away from 2, 4, 8 now up 16 and so on. Is this kind of a wave future-proofing QNX.

Yes. That's not the way I told it to the engineering team, but that's good. I think I was more direct with them that this is not something that we can take lightly that we see it coming in the beauty of our business and the beauty of our -- Mattias mentioned, we have the best customers and the best partners in the world. When you're working with NVIDIA and Qualcomm and some of these silicon partners, you get a lot of insight and you get a lot of insight early. And so we knew that the timing was right 2, 3 years ago to start working on this. So it's definitely future-proofing. That's the way I look at it.