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Revenue and Segment Disclosures | 9 Months Ended
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Nov. 30, 2021
Segment Reporting [Abstract] |
Revenue and Segment Disclosures | REVENUE AND SEGMENT DISCLOSURES The Company reports segment information based on the “management” approach. The management approach designates the internal reporting used by the CODM for making decisions and assessing performance as a source of the Company’s reportable operating segments. In the first quarter of fiscal 2022, the CODM, who is the Executive Chair and CEO of the Company, began making decisions and assessing the performance of the Company using three operating segments, whereas the CODM previously made decisions and assessed the performance of the Company as a single operating segment. The CODM does not evaluate operating segments using discrete asset information. The Company does not specifically allocate assets to operating segments for internal reporting purposes. Segment Disclosures The Company is now organized and managed as three operating segments: Cybersecurity, IoT, and Licensing and Other. Prior year information has been restated to conform to the current year presentation of the Company’s segment information. The following table shows information by operating segment for the three and nine months ended November 30, 2021 and November 30, 2020:
| For the Three Months Ended
| Cybersecurity |  | IoT |  | Licensing and Other |  | Segment Totals |  |  |  |
| November 30, |  |  |  | November 30, |  |  |  | November 30, |  |  |  | November 30, |  |  |  |  |  |
| 2021 |  | 2020 |  |  |  | 2021 |  | 2020 |  |  |  | 2021 |  | 2020 |  |  |  | 2021 |  | 2020 |  |  |  |  |
Segment revenue | $ | 128 |  |  | $ | 130 |  |  |  |  | $ | 43 |  |  | $ | 32 |  |  |  |  | $ | 13 |  |  | $ | 56 |  |  |  |  | $ | 184 |  |  | $ | 218 |  |  |  |  |  |  |
Segment cost of sales | 52 |  |  | 53 |  |  |  |  | 8 |  |  | 6 |  |  |  |  | 6 |  |  | 9 |  |  |  |  | 66 |  |  | 68 |  |  |  |  |  |  |
Segment gross margin (1) | $ | 76 |  |  | $ | 77 |  |  |  |  | $ | 35 |  |  | $ | 26 |  |  |  |  | $ | 7 |  |  | $ | 47 |  |  |  |  | $ | 118 |  |  | $ | 150 |  |  |  |  |  |  |
| For the Nine Months Ended
| Cybersecurity |  | IoT |  | Licensing and Other |  | Segment Totals |  |  |  |
| November 30, |  |  |  | November 30, |  |  |  | November 30, |  |  |  | November 30, |  |  |  |  |  |
| 2021 |  | 2020 |  |  |  | 2021 |  | 2020 |  |  |  | 2021 |  | 2020 |  |  |  | 2021 |  | 2020 |  |  |  |  |  |
Segment revenue | $ | 355 |  |  | $ | 369 |  |  |  |  | $ | 126 |  |  | $ | 92 |  |  |  |  | $ | 52 |  |  | $ | 222 |  |  |  |  | $ | 533 |  |  | $ | 683 |  |  |  |  |  |  |
Segment cost of sales | 147 |  |  | 146 |  |  |  |  | 22 |  |  | 18 |  |  |  |  | 18 |  |  | 24 |  |  |  |  | 187 |  |  | 188 |  |  |  |  |  |  |
Segment gross margin (1) | $ | 208 |  |  | $ | 223 |  |  |  |  | $ | 104 |  |  | $ | 74 |  |  |  |  | $ | 34 |  |  | $ | 198 |  |  |  |  | $ | 346 |  |  | $ | 495 |  |  |  |  |  |  |
______________________________ (1) A reconciliation of total segment gross margin to consolidated totals is set forth below. Cybersecurity consists of the Company’s BlackBerry Spark® software platform, BlackBerry® AtHoc, BlackBerry® Alert and SecuSUITE. The BlackBerry Spark platform is a comprehensive offering of security software products and services, including the BlackBerry Spark® Unified Endpoint Security Suite and the BlackBerry Spark® Unified Endpoint Management (“UEM”) Suite, which are also marketed together as the BlackBerry Spark® Suites, offering the Company’s broadest range of tailored cybersecurity and endpoint management options. The BlackBerry Spark UES Suite includes revenue from the Company’s Cylance® artificial intelligence and machine learning-based platform consisting of BlackBerry® Protect, BlackBerry® Optics, BlackBerry® Persona, BlackBerry® Gateway, BlackBerry® Guard managed services and other cybersecurity applications. In addition, the Company offers the BlackBerry Cyber Suite, a UEM-agnostic version of its BlackBerry Spark UES Suite. The BlackBerry Spark UEM Suite includes the Company’s BlackBerry® UEM, BlackBerry® Dynamics™, and BlackBerry® Workspaces solutions. Cybersecurity revenue is generated predominantly through software licenses, commonly bundled with support, maintenance and professional services. IoT consists of BlackBerry QNX®, BlackBerry Certicom®, BlackBerry Radar®, BlackBerry IVY™ and other IoT applications. IoT revenue is generated predominantly through software licenses, commonly bundled with support, maintenance and professional services. Licensing and Other consists of the Company’s intellectual property arrangements and settlement awards. Other consists of the Company’s legacy service access fees (“SAF”) business. The following table reconciles total segment gross margin for the three and nine months ended November 30, 2021 and November 30, 2020 to the Company’s consolidated totals:
| Three Months Ended |  | Nine Months Ended
| November 30, 2021 |  | November 30, 2020 |  | November 30, 2021 |  | November 30, 2020
Total segment gross margin | $ | 118 |  |  | $ | 150 |  |  | 346 |  |  | $ | 495 |
Adjustments (1): |  |  |  |  |  |  |
Less: Cost of sales | 1 |  |  | 1 |  |  | 3 |  |  | 4 |
Less: |  |  |  |  |  |  |
Research & development | 57 |  |  | 53 |  |  | 172 |  |  | 167 |
Selling, marketing and administration | 77 |  |  | 83 |  |  | 233 |  |  | 252 |
Amortization | 42 |  |  | 45 |  |  | 133 |  |  | 137 |
Impairment of long-lived assets | — |  |  | — |  |  | — |  |  | 21 |
Impairment of goodwill | — |  |  | — |  |  | — |  |  | 594 |
Debentures fair value adjustment | (110) |  |  | 95 |  |  | (47) |  |  | 114 |
Investment income (loss), net | (25) |  |  | 1 |  |  | (22) |  |  | 6 |
Consolidated income (loss) before income taxes | $ | 76 |  |  | $ | (128) |  |  | $ | (126) |  |  | $ | (800) |
______________________________ (1) The CODM reviews segment information on an adjusted basis, which excludes certain amounts as described below: Stock compensation expenses - Equity compensation is a non-cash expense and does not impact the ongoing operating decisions taken by the Company’s management. Revenue The Company disaggregates revenue from contracts with customers based on geographical regions, timing of revenue recognition, and the major product and service types, as discussed above in “Segment Disclosures”. The Company’s revenue, classified by major geographic region in which the Company’s customers are located, was as follows:
| Three Months Ended |  | Nine Months Ended
| November 30, 2021 |  | November 30, 2020 |  | November 30, 2021 |  | November 30, 2020
North America (1) | $ | 101 |  |  | $ | 147 |  |  | $ | 313 |  |  | $ | 492 |
Europe, Middle East and Africa | 66 |  |  | 55 |  |  | 168 |  |  | 144 |
Other regions | 17 |  |  | 16 |  |  | 52 |  |  | 47 |
Total | $ | 184 |  |  | $ | 218 |  |  | $ | 533 |  |  | $ | 683 |
North America (1) | 54.9 | % |  | 67.5 | % |  | 58.7 | % |  | 72.0 | %
Europe, Middle East and Africa | 35.9 | % |  | 25.2 | % |  | 31.5 | % |  | 21.1 | %
Other regions | 9.2 | % |  | 7.3 | % |  | 9.8 | % |  | 6.9 | %
Total | 100.0 | % |  | 100.0 | % |  | 100.0 | % |  | 100.0 | %
______________________________ (1) North America includes all revenue from the Company’s intellectual property arrangements, due to the global applicability of the patent portfolio and licensing arrangements thereof. Revenue, classified by timing of recognition, was as follows:
| Three Months Ended |  | Nine Months Ended
| November 30, 2021 |  | November 30, 2020 |  | November 30, 2021 |  | November 30, 2020
Products and services transferred over time | $ | 111 |  |  | $ | 121 |  |  | $ | 324 |  |  | $ | 362 |
Products and services transferred at a point in time | 73 |  |  | 97 |  |  | 209 |  |  | 321 |
Total | $ | 184 |  |  | $ | 218 |  |  | $ | 533 |  |  | $ | 683 |
Revenue contract balances The following table sets forth the activity in the Company’s revenue contract balances for the nine months ended November 30, 2021:
| Accounts Receivable |  | Deferred Revenue |  | Deferred Commissions
Opening balance as at February 28, 2021 | $ | 188 |  |  | $ | 294 |  |  | $ | 21 |
Increases due to invoicing of new or existing contracts, associated contract acquisition costs, or other | 499 |  |  | 418 |  |  | 14 |
Decrease due to payment, fulfillment of performance obligations, or other | (549) |  |  | (477) |  |  | (18) |
Decrease, net | (50) |  |  | (59) |  |  | (4) |
Closing balance as at November 30, 2021 | $ | 138 |  |  | $ | 235 |  |  | $ | 17 |
Transaction price allocated to the remaining performance obligations The table below discloses the aggregate amount of the transaction price allocated to performance obligations that are unsatisfied or partially unsatisfied as at November 30, 2021 and the time frame in which the Company expects to recognize this revenue. The disclosure includes estimates of variable consideration, except when the variable consideration is a sales-based or usage-based royalty promised in exchange for a license of intellectual property.
| As at November 30, 2021
| Less than 12 Months |  | 12 to 24 Months |  | Thereafter |  | Total
Remaining performance obligations | $ | 206 |  |  | $ | 32 |  |  | $ | 13 |  |  | $ | 251 |
Revenue recognized for performance obligations satisfied in prior periods For the three and nine months ended November 30, 2021, $1 million of revenue was recognized for performance obligations satisfied in a prior period (three and nine months ended November 30, 2020 - $2 million of revenue was recognized relating to performance obligations satisfied in a prior period). Property, plant and equipment, intangible assets, operating lease ROU assets and goodwill, classified by geographic region in which the Company’s assets are located, were as follows:
| As at
| November 30, 2021 |  | February 28, 2021
| Property, Plant and Equipment, Intangible Assets, Operating Lease ROU Assets and Goodwill |  | Total Assets |  | Property, Plant and Equipment, Intangible Assets, Operating Lease ROU Assets and Goodwill |  | Total Assets
Canada | $ | 238 |  |  | $ | 443 |  |  | $ | 289 |  |  | $ | 504 |
United States | 1,337 |  |  | 1,815 |  |  | 1,411 |  |  | 1,963 |
Other | 28 |  |  | 341 |  |  | 31 |  |  | 351 |
| $ | 1,603 |  |  | $ | 2,599 |  |  | $ | 1,731 |  |  | $ | 2,818 |
Information About Major Customers There was one customer that comprised 14% and 11% of the Company’s revenue in the three and nine months ended November 30, 2021, respectively (three and nine months ended November 30, 2020 - one customer that comprised 13% and 27% of the Company’s revenue, respectively).

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 31 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8924-108599 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 34 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8981-108599 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8721-108599 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 40 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e9031-108599 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (f) -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8933-108599 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (e) -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8933-108599 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 26 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8844-108599 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 41 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e9038-108599 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (d) -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8933-108599 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 22 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8736-108599 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 42 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e9054-108599 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8657-108599 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8721-108599 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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