BlackBerry Limited (BB) Earnings Call Transcript & Summary

Good afternoon, and welcome to the BlackBerry Annual General Meeting 2023. [Operator Instructions] I would now like to turn today's call over to John Chen, Executive Chairman and CEO.

Thank you. Thank you. Hello, everyone. I'm John Chen, Executive Officer -- Chief Executive Officer of Blackberry Limited and Executive Chair of the Board of Directors. On behalf of the Board and management, it's my pleasure to welcome you to the company's annual meeting of the shareholders. As we have done in recent years, we are hosting our meeting in a virtual-only format through a live audio webcast. We have found that the virtual format is more inclusive and many more shareholders have been able to join us virtually than previously at our in-person meetings. Even though the meeting is in the virtual format, procedure has been implemented to ensure that shareholders and proxy holders, regardless of their location will be able to participate in this meeting and engage with us. Registered shareholders and valid proxy holders were participating online will be able to listen to the meeting, submit questions and vote in real time. Nonregistered beneficial shareholders will also be able to submit questions through the online meeting platform. The secretary of the meeting will cover the procedures for all of this in just a moment. With that said, it is now my pleasure to introduce the member of the company's Board of Director who are in attendance on this webcast today. Mike Daniels, Tim Dattels, Lisa Disbrow, Dick Lynch, Laurie Smaldone Alsup, Prem Watsa and Wayne Wouters. In addition to the Board, we are also joined by Phil Kurtz, the Corporate Secretary and Chief Legal Officer of the company. The formal part of the meeting will be chaired by me, and we included my annual update on BlackBerry's strategy and performance. Following the completion of the formal business of the meeting, we will address questions submitted by shareholders. I would now like to call this meeting to order. And as Chair, I will ask Phil to act as the Secretary of the meeting. Phil will now go over the procedures and items of business for the meeting. Phil?

Thank you, John. I'd like to start by highlighting a couple of important procedural matters that apply to our virtual meeting relating to questions and voting. Questions can be submitted by any shareholder or proxy holder who logged in with a control number or user name using the messaging feature of our virtual interface. If you logged into the meeting as a guest without a control number, you will not be able to submit questions. Questions will not be displayed, but will be read or summarized as appropriate. Generally, questions will be addressed only during the Q&A session after the formal part of the meeting. However, questions related to procedural matters or that are directly related to an item of business may be addressed earlier. Voting on all matters will be conducted by electronic ballot. Registered shareholders and duly appointed proxy holders will be asked to vote on each item of business only after the presentation of all of the business items. In order to expedite the formal business of today's meeting, I will make all motions on all voting matters. When you're asked to vote, you'll receive a message on the virtual interface requesting you to register your votes. You'll only have a certain amount of time to do so when the polls are open. Final detailed voting results will be published on the Canadian Securities Administrators SEDAR website and the SEC's EDGAR website and on our website after the conclusion of the meeting. [ Services ] will act as scrutineer for the meeting today. I've received a declaration from Computershare confirming that the notice of this meeting was properly given to all of the shareholders entitled to receive notice and to the directors and auditors, together with the management proxy circular and form of proxy. Copies of the management proxy circular and other meeting materials are available on the company's profile on SEDAR and EDGAR as well as on the Envision website established for this meeting. I'm in receipt of the scrutineer's preliminary report stating that a quorum of shareholders is in attendance. The report shows that there are shareholders or proxy holders represented on this live webcast today holding 326,767,007 common shares of the company representing approximately 56.1% of the common shares issued and outstanding. I therefore declare this meeting of shareholders to be regularly called and properly constituted for the transaction of business. The first item of business is the presentation of the financial statements of the company for the fiscal year ended February 28, 2023. These include the consolidated balance sheets as of February 28, 2023, and February 28, 2022, and the related consolidated statements of shareholders' equity, operations and cash flows, together with the auditor's report. Copies of these documents have been mailed to the shareholders who requested them, and they're also available on SEDAR and EDGAR. The second item of business is the election of directors for the ensuing year. As determined by the Board, the number of directors to be elected today is 8. Information with each of the individuals nominated for the position of director of the company is set forth in the management proxy circular and each of the nominees has agreed to serve as a director if elected. As we have done at previous meetings, we'll be nominating and voting for individual directors, not a slate of directors. By-Law No. A4 of the company sets out a procedure requiring shareholders to provide advanced notice if they wish to nominate any person for election as a Director of the company. The company has not received notice in accordance with the bylaw from any shareholder intending to propose a nominee for election at this meeting. Since there are no other nominations, I move to elect the directors named in our proxy circular. Again, I remind you that voting on all matters to be acted on at the meeting will take place electronically after the presentation of all business items. The next item is the reappointment of our independent auditors. I move that PricewaterhouseCoopers LLP reappointed as the independent auditors of the company until the next Annual Meeting of Shareholders and that the Board of Directors of the company be authorized to fix their remuneration. The next item of business is the approval of unallocated entitlements under the company's deferred share unit plan, or DSU plan for directors. The maximum number of common shares of the company that may be issued under the DSU plan is expressed as a percentage, being 1%, of the company's total common shares that are outstanding. The DSU plan does not have a fixed maximum number of common shares issuable under it and is therefore continued to be -- considered to be another green plant. Under Toronto Stock Exchange rules, unallocated equity awards that remain available for grant under evergreen plans, are subject to shareholder approval every 3 years. Shareholders last approved the company's DSU plan in 2020. I move that the resolution to approve the unallocated awards under the DSU plan as set out in our circular be adopted. The final item of business is the approval of our annual nonbinding advisory resolution on executive compensation or say-on-pay vote. This resolution provides that on an advisory basis and without diminishing the role and responsibilities of the Board of Directors, shareholders accept the approach to executive compensation disclosed in the management proxy circular. During the past year, the Compensation, Nomination and Governance Committee engaged with consultants from Mercer to provide independent expert advice regarding executive compensation. In addition, the company led by Mike Daniels, the Chair of the CNG Committee, sought the views of many of its leading shareholders. As a result of these measures, the Board made a number of material changes, including substantially revising the compensation peer group to better reflect the company's profile, discontinuing discretionary executive authority with respect to short-term variable compensation and better aligning equity awards with long-term financial guidance. I move that the say-on-pay resolution be adopted. That concludes our review of all items to be voted on at this meeting. We'll now move to electronic voting on the items of business presented. As mentioned earlier, voting today will be conducted by electronic ballot. I will now take a moment to ask that the balloting be open to registered shareholders and appointed proxy holders. The polls are now open, and at this point, all registered holders and proxy holders who have properly logged in with their control number or user name and wish to vote will be able to see on the screen all motions brought forward at this meeting. Please register your votes by accessing the voting page and selecting the For or Withhold button next to the name of each proposed director and with respect to the reappointment of PricewaterhouseCoopers as the company's auditors and then by selecting the For, Against or Abstain button with respect to the approval of the unallocated entitlements under the DSU plan and the advisory vote on executive compensation. We will provide registered shareholders and proxy holders with another brief moment to complete their electronic ballots. Once the balloting closes, the voting page will disappear, and your votes will be submitted electronically -- automatically. [Voting]

The scrutineers have provided me with a preliminary report on the ballots. On the election of directors, all 8 nominees have been elected as directors of the company to hold office until the next annual meeting of the company in June 2024 or until their respective successors are elected or appointed. The motion to reappoint the auditors is also carried and PricewaterhouseCoopers LLP has been reappointed as the independent auditors of the company. The motion to approve the unallocated entitlements under the DSU plan is carried as well. Lastly, the say-on-pay resolution also passed with the support of a substantial majority of the votes cast. We're very pleased that our extensive investor outreach and the changes that we made to our compensation program during the past year have been well received by shareholders. As noted earlier, detailed voting results will be published on SEDAR and EDGAR and on our website after the conclusion of the meeting. It's now my pleasure to turn the meeting back over to John to provide an update on the company's business. But ahead of that, please note that John's presentation and the Q&A session later in the meeting may contain forward-looking statements. Shareholders should be aware that any forward-looking statements are made as of today based on certain assumptions and are subject to risks and uncertainties that could cause actual results, performance or achievements of the company to differ materially from those disclosed here today. We're adopting for this presentation the cautionary language regarding forward-looking statements that is set out in the company's annual report on Form 10-K, to which we refer you for additional details concerning the risks, uncertainties and assumptions relating to our forward-looking statements. Please note that the slides for John's presentation are available in the Investor Information section of the blackberry.com website and also here on the Lumi virtual interface. And now John will conclude the formal part of the meeting.

Okay. So please play the video that we prepared. [Presentation]

Okay. So I think the video pretty much cover my presentation. So welcome, everybody. I'm very excited to be here and to really talk through where the company has been and where the company is going. And if you notice, I put up the first slide said IoT and cybersecurity. And this is a slide that I hope is not or I hope it's familiar to you. I think our team has been using this particular slides for the last 3 years. And well, our team has been using -- people are correcting me right now in the room. I think I presented this 2 years ago at our AGM and maybe at our Security Summit also. But nevertheless, the key point is we've been on the strategy of IoT and cybersecurity as 2 really high-growth markets that will come together and to achieve what's the maximum potential of the smart world, so to speak. So I just want to remind you that this is not a new concept that we laid out. This concept, honestly speaking, the reason I used the 3 to 4 years prior, it really get completed with the acquisition of Cylance. We have always been doing the endpoint management as a company, whether it started with just mobile devices to expand it to all the end points and the support of the management of the endpoint, the creation of the security profile around it, et cetera, et cetera. And then we added to how the endpoints stop the threat. How do you make sure that the malware doesn't attack the collection of endpoint? Because we believe that without that, you don't have trust like the video said and without trust, you actually don't have a potential usage and reach the maximum potential of IoT of everything you guys want to talk about today, AI, the cloud, the connectivity, et cetera, et cetera, et cetera. So this has been the thesis of BlackBerry. It's been the thesis of BlackBerry for many years and I'm glad that we're starting to feel the traction in the market and well something to discuss a little later. So the first thing that you notice on the left-hand side, today, the IoT adoption of endpoints has a very, very high growth in percentage but not necessarily so much as the number of accounts then -- the slides clearly show you that in the year of 2025, you're expecting 27 billion IoT endpoints out there. And we see that in both the IT world and the OT world, and particularly in the OT world as device manufacturer, whether it's medical equipment or industrial equipment, et cetera, et cetera, are starting to modernize their devices that in the operation technology world to be Internet-enabled, to be smart enabled, to be able to interconnect with various elements on [ areas of ] endpoints and to create the potential of AI technology to make decisions on by machine. But you could see also that according to Atlantic Council, this is from Atlantic Council, I believe, research that this growth of the IoT endpoints is going to slow somewhat. And I was actually surprised that it's 12% CAGR because today, everybody -- virtually everybody in the industry is talking about endpoint exclusion. And again, the numbers are there. I believe the research does say something really meaningful. Because if you go to the right-hand side slide, it's really talking about the cost of the cybersecurity and this is obviously cost of ransomware, cost of malware, cost of interruption, denial services and the list goes on. And if you notice that it could really cost up to $90 trillion in the years to come. And so because of that cost being skyrocketed, that's actually why the slowdown of the IoT endpoints adoption. So what's the natural logical solution of this? The element of trust. On the left-hand side, you can see that many, many pillars regarding things that we know very well, like the cloud, the telecom, the semiconductors, the software providers. The provider -- the software, obviously, also provide the AI algorithm. And if you combine that those advantage in the IT and OT world, what is really missing like we talk about in a video, like I just spent 10 minutes on is that how do we trust the environment, how do we trust that the data being generated that drive all the action, whether it's machine or otherwise could be trustworthy. And this is the reason why. Somebody asked me a question, what do we expect to see BlackBerry in 10 years? Well, I hope if we can achieve what we said we're going to do in providing hypersecurity and trust elements to the communication of endpoints and the management and behavior of endpoints and to trust the data being generated that we have a really, really rightful place in the years to come -- near the decades to come. So hopefully, in the 10 years, we'll be doing -- we'll be known for the one day we provided all the trusted certificate, trusted authority to operate, trusted environment in the smart world. Here, you look at it as a city because the city is a clear way to look at all the endpoints interactions that are very -- from very different sources, asynchronously. So I think there are plenty to do, obviously, and this is a really, really exciting world to come. So let me switch gear to a little bit about FY '23, our accomplishment. First, on the financial accomplishment, we get hit a little bit of the macro. If you noticed 3 years ago from a revenue -- software services revenue, this does not include IT revenue. This clearly is the IoT revenue adding to the cybersecurity revenue. In the fiscal year '21, it was majorly impacted by COVID and the pandemic. It rebounded a year later. And then the macro setting with the interest rate hike. So we see a little decline there. But I really look at all these things short-term. I mean, we hope -- we wish we could have overcome some of the short-term, but the fact of the matter is we were not ready to overcome it at that time. And so however, if you look at the strategy that we laid out, I joined the company in 2013, late 2013, and we embark on switching from a consumer hardware-centric business on making cellphones to an enterprise software-centric world. And I just -- and so there are many reasons for it, and I don't want to belabor the point here, but you could see that since then, we have a pretty impressive 88% growth and has been doing reasonably well and become at least a key player in both the IoT world as well as in the cybersecurity world. And of course, we expected to even do better as time progresses. Some of these that's been covered in the video. Every year, we have an outside firm doing a vehicle count. And this is a net vehicle count of [ 20 million ] from a year ago, an additional [ 20 million ]. And -- and it's really important because in this world, billion -- 1 billion vehicle not dollar, 1 billion vehicles out there. A lot of them are low-end vehicles. Tim like the Tuk-Tuk, as an example, those, of course, doesn't have smart intelligent software platform in it. So -- but that's counted as one of the 1 billion vehicle count. So we have a pretty sizable market share, and it's gaining on a net basis. If you look at the vehicle count increase, it's 9% net, meaning that the retired vehicle replaced by the new vehicle, the new vehicle also in majority carrying using QNX technology. So it's exciting for us that we continue to gain market share in this environment. And it's being highlighted by the next box, which is the $640 million of backlog. That only represents 9 months is, in fact, you guys remember [indiscernible] this was a year ago, right? $460 million in backlog. Foote?

Yes, in Q1 the year before.

Right, right. In Q1, the year before. We then decided instead of making the announcement at AGM every year, we should align that -- of our fiscal year calendar, which was March 1. So this is a 9-month result of growth. So we're very -- we feel very good about it. And then, of course, the design wins, we have 94 design wins and 1/3 in auto, 2/3 in [indiscernible], which is set for generally embedded market, a general embedded market. And then in that general embedded market, you go to the next row, 9 out of 10 medical OEMs and then in the car, in the auto space, 24 of the top 25 EV OEMs by volume. The top 25 is by volume. And then, of course, we are famous for our safety certification, and we have 12 real-time operating system certification. We believe we are the #1 in the world. Moving to the cyber side. You heard from the video on a security certification point of view, we are #1 in the UEM. We have the largest malware by us absorbing and acquired Cylance and integrate that into the smart platform. And we have the highest authority to operate in CEM, which is critical event management and with 22 different countries using it. As the video has said 70% of the United States federal government employees are protected by our CEM. [indiscernible] Smart business secure voice and tax technology. Nathan loves it, as you saw it in the video, 22 countries using it and that count will go up next year. We had a lot of good pipelines in the picture. 17 of the G20 that actually came down by 1 from periods down because we have ceased our operation in Russia for all the obvious reasons. We combine the BlackBerry best endpoint management and the Cylance endpoint security into the Spark platform and we now recently -- and some of you who follow the stock knows that, we shuttle with it a little bit by the integration for at least 2, 3 years. I'm really, really pleased at the latest set of releases in the platform at high renewal rate is well received by the customers. We finally conquer our own problems, and it has a very high NPS rate. 80% is really high in the industry. So very pleased with the progress we are making and how we position ourselves on the future profitable growth. We all know that we spent a lot of money, over 30% of revenue on engineering. And it's kind of this company, like a lot of the technology companies are very focused on innovation. And a way to highlight our information is look at the patent, the patent granted and the patent applications in price. So -- so you see that we now currently have 8,000 patent family, spread around IVY, IoT and cybersecurity. We have 500 applications in the last year that was either approved or pending. And we will obviously continue this effort as one of the key efforts. Moving on to product releases, we have 46 products released and we counted relatively major, not just a revision updates. That's probably in the hundreds and of the 46% -- 46 product, 11 of them are IoT, the balance of them was cybersecurity. Car count, we already told you about this, 31% CAGR from counting it from a 2014-point of field to now. So again, something that we are very proud of. And with the backlog we have, touchwood, we believe this car count will continue to go up and outpace the market growth. And why? Because we're actually a lot more in the car now. And I can -- I don't want to go through everything here but these are all the applications and functions that we provide to the OEMs, the Tier 1 and others. In the auto space, if you see the red dots are the one that kind of 10 years ago, we started our campaign work. And it was hands-free telematics and infotainment. And as those become a little bit more commoditized, we have been investing and growing our footprint in a lot of the areas like smart battery management, body control, clusters, dashboards, cockpit, hypervisors, ADAS, OTA analysis goes on. And you could see the functionality level is also much higher and hoping that this will drive more usage in the car and a higher average selling price. And this is where a lot of you, I know, is interested and focus on ARPU. We are too. We're going to get the ARPU in both, have more copies deeper in the stack and a much more critical functionality like safety, for example. So the best days yet to come. This -- the video shown, we also get some industry accolade, the most impressive one that the most -- the one that's more satisfying to us is where the customer choice of UEM. I think you could do a lot of the analysts decided which quadrant you're in. It's based on that particular individual or small teams analysis could be right, could be wrong. But the customers are not. For them to take the time to vote for us independently, that tells you a lot, right? So we will treasure this very much. And so all the major partners. This is -- we pick one of each area. Now it's not because we only have 4 partners speaking good for us is that Seki Smart and QNX and IVY and UEM. This is how those 4 columns are. This is a slide that is in the slide deck. You'll be able to read it at your leisure. Another major effort is sustainability, and I know it's important to here all of us. And BlackBerry does it in multiple, multiple vectors. Obviously, we've been carbon neutral a year ago. We maintained our carbon neutrality. And you use a lot of cloud technology and so forth to reduce our carbon footprint. But also, we focus on research and spend research and partnership on other areas like the STEM education, like water treatment, clean water projects. And we published our ESG report the first time. And we also have very -- a big focus on diversity not only at the Board level, but as diversity and equitability at the rank and file level. And in fact, so much so that the diversity goal and the equitability goal is part of our bonus plan. On May 17, we hosted an Analyst Day where we laid out why we are bullish for the 3 years to come. And so we laid out our 3-year plans, and this is really a graphical summary of what we laid out on that day. We believe IoT will grow somewhere between 18% to 22% for the next 3 years on a CAGR basis and cyber will go somewhere between 9% to 12%. Over them, I believe, it is higher than the industry average of what they expected. Now the nice and exciting thing about our 3-year plan is, which I just presented to you, does not include what we call the upside potential. And there are 3 of them. And I think you -- once I finish this in the next 5 minutes, I hope you concluded that there are some -- some real opportunity there. The first one is on licensing. As you all know, we completed our internal project for Evergreen. We took our noncore portion of the -- it's over 30,000 patent family, and these are cell phone networking type patterns. We have [indiscernible] sold to KPI, a operating group out in Ireland, actually, for a sum total of $900 million. $200 million has been guaranteed with $170 million already remitted to us. And then there is a profit sharing scheme between us of the remaining $700 million. We wish I could tell you there's a really big pipeline behind it, but it might take a while. It will -- because it started the process, and they have as I said, they have a pretty good operating team driving that. We also -- the nice part of this arrangement of this transaction that fact where we got to keep all the ongoing revenue that for pre-existing arrangements -- from pre-existing arrangements. So this is why you still see a small number of revenue in IT on a quarterly basis from us. And this will allow BlackBerry, the company to pull all the resources and focus on IoT and cybersecurity and the convergence of it. And then the next thing is on IVY. This is our joint development project with Amazon, although we intended to be a cloud agnostic. This is the edge to cloud compute engine. The first application of this, this is not limited to auto only. But the first application of this is an auto probably because our deep roots in auto and our name and our reputation in there and partly because it's something that Amazon really were interested in exploring this particular market. The details of it, I don't have time today this morning to go over everything. But it's a very exciting project, making great progress, actually, I think I aspire that. In fact, we're expecting revenue in the next couple of years. We have built an ecosystem of application and use cases. We have made a number of venture-based investment ourselves to ensure that these applications and the latest version of that will appear on BlackBerry IVY first. So we definitely are very much leading the field. With an architecture, by the way, is now proven to be the right architecture, which is a combination of edge and cloud and other cloud-based only company are struggling to make a profit because the cloud cost is so high and the data volume is escalated on a daily basis. So us not only providing security and privacy with the edge compute engine and then whatever the application or the customer would like that those data to transmit from edge to cloud to create more AI-based knowledge, that's controllable. So we control both privacy and the control cost expenses. And we've been on track on a milestone on IVY. And lots of POC, lots of interest -- proof of concept that is. And we have won one customers, a Chinese firm for [indiscernible]. The third element of potential upside is that if you go to the Mackenzie operation reports, the earlier discussion that we had regarding why is the IoT endpoint growth slowdown to 12% CAGR and because of the cybersecurity needs, needs to be fulfilled first that's called the convergence. So I'll read the -- what Mackenzie had written. A few companies such as BlackBerry sit at the intersection of cybersecurity and IoT are well positioned to many enterprise -- to marry the enterprise cybersecurity solution with the IoT platforms. Of course, they wrote it. I would have wrote it more, more elegantly but appreciate that recognition. So those were the 3 upside to our 3-year plan that we announced to the world on May 17. A few words on a project Imperium, which we kicked off on May 1, both the Board and the management are driving this. I gave you the operating plan. We have a good 3-year plan that focused on growing and grow focus on profitability. And we believe that if we can achieve that, the share prices and the value of the company will greatly be enhanced and much value will be created. However, notwithstanding that, recognizing the fact that our stock has not performed for a number of months, years or quarters to what we expected, the fair value of our enterprise. We kicked off a project called Imperium projects. And the idea is to look at alternatives and options. If there are alternative options exist to enhance the shareholder value and obviously, focusing on the element of time versus execution risk. So we are hired -- the bank has hired 2 bankers, Morgan Stanley and [indiscernible]. We have law firm lined up, and we are reviewing our portfolio and looking at where the strength and where the weaknesses are. And this is to the extent that I could comment on, I thought that it will be important to all of you to know that we're not just sticking our head in the center to expect everything I laid out will go as smooth as a brand. We also want to make sure that we have -- if there are other ways to enhance shareholder value, we look at it. So that's a sum total -- I'm not going to report it on an ongoing basis. But as soon as the Board of Directors had approved and make some decision on the outcome or terminated a review, I will communicate that. So with that, I believe that's all the material that I have prepared. So before we address the questions from shareholders, Tim Foote, our VP of Investor Relations, will provide the details of the protocol for the question period. Tim?

Thank you, John. We will now address questions submitted by shareholders and their proxies who are in attendance on this webcast for approximately 15 minutes. Shareholders and proxy holders have had the opportunity to submit questions in advance and also have the opportunity to do so now using the instant messaging function on the Lumi portal. An important reminder, we are unable to receive questions from guests who have not logged in with a control number or user name. We will answer as many questions as we can in the time. And before answering, we will read out or summarize the question. Note that we will not address any questions that are redundant, offensive, not primarily related to our business or otherwise out of order. Further, we will not answer any questions relating to our Q1 fiscal year '24 earnings announcement, which takes place tomorrow. Please limit your questions to topics relating to today's presentation and keep your questions brief so that we can address a variety of questions in the time available. We will now give attendees a moment to submit their questions. Okay. So once we're doing that, we do have a couple of questions already in, John.

So the first is a question as to whether management has the possibility to implement an option incentive plan in the future like Tesla house. So I guess this is referring to the long-term incentive program.

We do have a long-term incentive program. In fact, we had a long-term incentive program before I came to the company 10 years ago. So it's called our RSU, Restricted Stock Unit program. And half of them is our time-based vesting and half of that is on the performance-based vesting. And one of the things that Phil mentioned earlier what the Board has done was to tie their performance space vesting to a 3-year period that is lined up with the 3-year plan that we communicated and the board had approved. So yes, we do.

Okay. Excellent. Okay. Next question. John, you mentioned how good you feel about the company right now and about the different segments of the business and the BlackBerry may be leading in some of those segments. Given that confidence, how do you consider revenues matching against that? The numerous positive bullet points but when do we expect to see those equate to shareholder growth?

Yes. In fact, our growth -- to be honest with you, our growth is not as good as we had expected. But that said, I think we have a very solid franchise here. So we've got really, really great technology. The fact that you could win with NATO. This is not -- it's gone through test after test. Because our stuff is so critical and high end, particularly when it comes to safety and security, that campaign takes a lot longer. It's not like a bank is a little bit more predictable in terms of the sales cycle of 9 months. A lot of our -- we provide security software to -- I won't tell you which country, do border patrol. They kick the tires for much longer. Sometimes it's very frustrating, very frustrating. And -- but because of the -- the ability of our technology or the advance of our technology, we ultimately win it, but it makes the predictability of the quarterly results, very, very difficult. But I think is still a good way to protect the franchise. These accounts, every company we want, this application. The fact that we have 70% of the federal employee of the United States of America rely on our CEM to keep safety. And these are systems that was triggered by the [indiscernible] shooting. These are real like saving things. And it should be well tested. And again, as I said, some of those timing is somewhat unpredictable. And then if you add the element of macroeconomics, which affects everybody, including us, that makes it even harder at that time. But no doubt, we will grow the business. In the last couple of quarters, we already start seeing some good sign on the cybersecurity billings. And all along, we have done well on the IoT auto side. So I know asking people to be patient is difficult because I'm kind of losing some of my patience too, but I am positive that we're on the right path. I think some of the upside potential like IVY and stuff takes some of our basic fundamental business challenges like in QNX as much as we are so successful with it, the revenue model is onetime, right? And IVY is supposed to create a more recurring. We love the onetime revenue. Nothing wrong with that, right? But we want to augment it with some recurring so that allows some predictability.

Okay. So we've got one more question here. If anyone else has questions, now is your time to submit. The last question, I'm not sure how much you could actually say on this one, John, but maybe there's a broader point. The question is, are there any other partnerships on the horizon?

Yes. Yes there are always -- one thing about the technology world is it is always people talking to people. And we, of course, have no exception to that. We would love to have some partnership. In fact, I would tell you that I would love to have and this is not telling you what's about to come, I would love to add some partnership with outside of North America -- where our reach is not as wide or deep. I think it will serve us well if it's outside of North America. No problem in North America, and we will continue to pursue those.

Okay. Well, thank you, John. That's the last of the questions that we have here. So I'll hand it back to you to wrap up the call.

Okay. then let me wrap it up. This ends today's meeting. Thank you, everybody, for attending. We look forward to welcome you again at next year's meeting. Have a great day.

BlackBerry Annual General Meeting 2023. You may now disconnect.