Good morning, and welcome to the BlackBerry Fourth Quarter and Full Fiscal Year 2026 Results Conference Call. My name is Betsy, and I will be your conference moderator for today's call. [Operator Instructions] As a reminder, this conference is being recorded for replay purposes. I would now like to turn today's call over to Suzanne Spera, Senior Director of Investor Relations, BlackBerry. Please go ahead.

Thank you, Betsy. Good morning, everyone, and welcome to BlackBerry's Fourth Quarter and Full Fiscal Year 2026 Earnings Conference Call. Joining me on today's call is Blackberry's Chief Executive Officer, John Giamatteo; and Chief Financial Officer, Tim Foote. After I read our cautionary note regarding forward-looking statements, John will provide a business update, and Tim will review the financial results. We will then open the call for a brief Q&A session. This call is available to the general public via call-in numbers and via webcast in the Investor Information section at blackberry.com. As part of today's webcast, presentation slides will be played. The slides are also available on the Investor Information section at blackberry.com as well the replay of today's call. Some of the statements we'll be making today constitute forward-looking statements and are made pursuant to the safe harbor provisions of applicable U.S. and Canadian securities laws. We'll indicate forward-looking statements by using words such as expect, will, should, model, indeed, believe and similar expressions. Forward-looking statements are based on estimates and presumptions made by the company in light of his experience and its -- of historical trends current conditions and expected future developments as well as other factors that the company believes are relevant. Many factors could cause the company's actual results or performance to differ materially from those expressed or implied by the forward-looking statements. These factors include the risk factors that are discussed in the company's annual filings and MD&A. You should not place undue reliance on the company's forward-looking statements. Any forward-looking statements are made only as of today, and the company has no intention and undertakes no obligation to update or revise any of them, except as required by law. As is customary during the call, John and Tim will reference non-GAAP numbers in their summary of our quarterly results. For a reconciliation between our GAAP and non-GAAP numbers, please see the earnings press release published earlier today, which is available on the EDGAR, SEDAR+ and blackberry.com websites. And with that, let me now turn the call over to John.

Thanks, Suzanne, and thanks to everyone for joining today's call. BlackBerry finished the fiscal year with another strong quarter, delivering double-digit top line growth and marking the eighth consecutive quarter of improving GAAP profitability, capping 2 full years of significant progress in the fundamentals of the business. When this new management team was appointed, we promised a turnaround to transform BlackBerry into a profitable growth company, and I'm pleased to report that we've done exactly that. These are not just data points or even a trend, but a consistent track record of delivery. The turnaround is complete, and the BlackBerry story is now a growth story. . QNX delivered another rule of 40 quarter, rounding out a rule of 40 year. We achieved the second consecutive record for revenue in the quarter, exceeding the top end of the guidance range at $78.7 million, representing 20% year-over-year growth. The nature of the business means -- building on a solid and underappreciated Q3, we believe QNX is as strong as ever. Revenue was driven by a record quarter for royalties and development revenue had its best quarter of the year. We are delighted to report that QNX royalty backlog continues to grow, increasing to approximately $950 million. We added significantly more into the backlog than we recognized in the P&L this year. The backlog provides QNX with a line of sight to ongoing multiyear durable revenue growth that few companies enjoy. Consistently adding backlog year after year, significantly above the rate it is recognized in the P&L is a key indicator of future revenue growth potential. This is not a business that is slowing down, but rather one that is compounding, powered by our continued leadership in automotive and growing momentum across physical AI, robotics, industrial, medical and emerging markets. The royalty…

Thank you, John, and good morning, everyone. Earlier, John described how both QNX and Secure Communications delivered stronger-than-expected revenue. This past quarter, we saw the impact of this year-over-year revenue growth in both divisions and for BlackBerry overall. QNX gross margins expanded by 1 percentage point to 84%, record revenues of $78.7 million. Further, this drove an 11% year-over-year growth in adjusted EBITDA for QNX to $21.4 million, representing 27% of revenue for the quarter. For the full year, QNX delivered $71 million of adjusted EBITDA or $0.26 of revenue, which together with the 14% revenue growth mean that QNX was a rule of 40 business, both for the quarter and the full fiscal year. The strong top line for secure comms also drove operating leverage, with gross margins expanding by 8 percentage points year-over-year in Q4 driven in part by stronger Secusmart software license revenue. This translated into a 27% adjusted EBITDA margin for secure comms growing to $19.5 million for Q4 and $56.1 million for the full year, well ahead of guidance from this time last year. Our licensing business contributed $6.3 million of adjusted EBITDA in the quarter and $21 million for the full year. This relatively passive income stream remains a solid source of both profitability and cash flow for BlackBerry. Adjusted operating costs, excluding amortization for our corporate functions, came in at $11.1 million in Q4 and $41 million for the full fiscal year. Tight cost control reduced corporate overhead by 5% year-over-year in fiscal year 2026. Pulling this all together, BlackBerry had a very strong fiscal quarter and solid fiscal year. Total company revenue grew 10% year-over-year in Q4 and 3% year-over-year for fiscal year 2026. For the quarter, year-over-year, gross margins expanded by approximately 5 percentage points to 78.2% and adjusted EBITDA margins…

Thanks for the summary, Tim. And before we move to Q&A, let me briefly summarize the key takeaways from this past year. BlackBerry's turnaround is complete and we are now firmly focused on growth and value creation. Over the past fiscal year, we delivered consistently improving fundamentals highlighted by a record revenue quarter for QNX. Today, QNX is a Rule of 40 business with growing backlog and strong sustained momentum. Secure Communications has returned to growth, supported by a demand environment for digital sovereignty that is both real and accelerating. Across the company, we are growing, generating meaningful cash and deploying it with discipline. We have a proven track record of execution, a clear strategy, and we are well positioned for the road ahead. So with that, let's now move to Q&A. So Betsy, if you can please open up the lines.

[Operator Instructions] The first question today comes from Kingsley Crane with Canaccord Genuity.

Really impressive results. this term physical AI is in vogue now, and you've been building capabilities in the gym space for years. I'm just curious if customers understand that automotive really can be a blueprint here and thinking about the distinction between deterministic action and probabilistic action, that seems important not just in auto, but also in other areas like general Robotics. Just curious on that.

Yes. Yes. That's really good perspective is. And that's something that we think has really resonating in the prospects and the pipeline that we're building in the robotics space and particularly in the GM space. The credibility that we have in the automotive space with autonomous and all the safety certified capabilities that we provide there really translates so well into an environment like physical AI and I think for that reason, we get a lot of looks at new opportunities that maybe others don't and maybe we wouldn't have had in the past. But we think the combination of leveraging that subject matter expertise, the building out of our go-to-market function and some of the partnerships that we have there, we're really starting to see some solid pipeline will -- it will take some time to convert it and to turn it into backlog and royalties and the rest of it, but we are very encouraged by the momentum that we see in that space. .

Thanks, John. Really helpful. And for Tim, look, the ASPs on the GEM wins are meaningfully higher than automotive. Could you just remind us of the delta between those? And would these opportunities in physical AI meaningfully expand that further?

Yes. Great question, Kingsley, and great to speak with you. Yes. So one of the things, obviously, is the volume equation. When you look at auto, you have some very significant volumes in terms of production runs. And you don't typically see that in GEM. But quite often in this space, particularly things like robotics and physical AI. Right now, it's speed to market, that's the most important thing as opposed to sort of driving gross margins for the OEMs themselves. So what we're seeing is less price sensitivity on that side of the house. What we see is, ultimately, the growth story is to have more instances of QNX running with more layers of software as well. And physical AI as John mentioned, being a really compelling safety critical use case is a really high-performance edge compute type environment that we really would excel in. So yes, we believe that as GEM starts to grow as a portion of the overall pie because it is growing pretty fast right now, that could be pretty accretive to our gross margins going forward.

The next question comes from Todd Coupland with CIBC.

I wanted to ask about Alloy Core. You talked about general availability later in the year, how meaningful this could be? How meaningful could this be to your backlog, maybe put that into the context of the $950 million you just reported. .

Yes. Todd, we -- I will tell you -- Tim and I talk about this all the time. We think this is one of the most underappreciated part of the business in terms of our -- the upside potential that we have to this current year because we're finding more and more OEMs are looking for us to do more and more of this kind of partnership with the likes of Vector. So we're -- the pipeline for that is growing significantly and we do think it can have a meaningful impact to the overall backlog. We're confident on rolling it out in time. And we're also confident in converting a number of opportunities that are pretty -- progressing really, really well. So it's hard to put a specific number on it and probably be inappropriate for me to do that. But I do think it can have a significant impact to that $950 million backlog and set us up even better for future growth in a place where we already have a lot of credibility.

And then in terms of robotics, exclude an automation, industrial automation, are you bucketing that in physical AI? Or is that a separate category? And then specifically on that, what does the pipeline look like? And how meaningful could that be to your backlog and growth in the coming year? .

Yes. Robotics, physical AI, we would -- when we think about the general embedded space, we think of really 3 categories that we've had great momentum on industrial automation, medical instrumentation. It's a really nice win this quarter with Johnson & Johnson. And then robotics and physical AI, we kind of bring that together. Today, it represents an overall 20% of our backlog-ish of our revenue. And we think the robotics component of it is probably going to be one of the faster-growing segments of those 3 verticals that we're focusing on. So we'll continue to provide updates on wins as we make further progress in this space. But between alloy core and the gym in those 3 verticals, we think the growth trajectory is very optimistic about the growth trajectory of those businesses.

[Operator Instructions] The next question comes from Paul Treiber with RBC Capital Markets.

You see the QNX backlog growth, it did improve to 10% this year, up from 6% last year. Could you walk through some of the drivers of that improved growth, whether it's obviously, new deals, but then also if there was any increases in any existing deals? And then what are some of the key categories that are seeing stronger growth or contributing to that growth?

Great. I'll start, Tim, you chip in. I think part of the growth in the backlog, Paul, is that like we built out the portfolio of QNX in a pretty comprehensive way. A few years ago was QNX SDP 7. Today, it's SDP 8, our next-generation capability Today, it's QNX cabin, which gives our OEM customers the ability to more cost effectively deploy their products. QNX Sound is another component of it. Alloy core is another component. So what was, I think, a more limited focus in the product is a much broader set of capability and some of the wins this quarter with a major OEM in North America, where we've kind of gone deeper and richer with some of these other capabilities. So having a broader portfolio within the auto space, has, I think, been really, really helpful. And then obviously, we've already talked a little bit about the GEM momentum in those 3 verticals. So the combination of all of that is I think what helped us resulted in a really strong backlog number for the year.

And then secondly, just on investments that you're making, looking at guidance, it implies 20% EBITDA margins at the midpoint basically flat despite revenue growth. So obviously, you're making investments. Could you walk through what are some of those larger investments? And then also if you still expect leverage of corporate overhead and other cost efficiencies?

Yes. Really good question. So ultimately, we've got very strong balance sheet, Paul. So what we're looking to do is obviously deploy that capital intelligently to drive growth. We see now, as John mentioned, we turn to a growth story. We see value creation going forward, coming primarily now from top line growth and the operating leverage that, that drives. So when we look at the QNX business, we see significant growth opportunities in many different ways. So obviously, backing the Alloy core opportunity driving forward with the full portfolio in the STPA launch, making sure we've got the right go-to-market for GEM. So we're backing all of those things. So looking at the QNX guide for the year, we're actually sort of holding EBITDA relatively flat, and that's a deliberate choice. We're making those investments in R&D and in sales and marketing to really drive that top line growth. Now going forward, we see opportunities then for further leverage to come in the future. But for this year, we're really focused on that. The other part you mentioned was the corporate overhead. I think we've done some tremendous heavy lifting over the last couple of years and taken out a significant amount of cost. Now we continue to take a very close look at every single dollar that we deploy across the business, but particularly in the corporate overhead. So when longer-term contracts are coming up for renewal, we're taking a hard look at those and seeing, do we really need it? Can we downsize it? Are there alternatives? So what I'd say you'd expect to see this year is actually a decrease, a further decrease in corporate overhead from, I think it's $41 million, maybe take $4 million or $5 million off of that going into the new year. But I don't think cutting cost is really now the main focus there. We've turned the page on that, Paul, and we're really looking to drive top line growth.

The next question comes from Steven Li with Raymond James.

A quick one. How did share count jump to 643? I'm drawing a blank here, Tim.

643. No, I don't think that's right. .

It's not -- I mean, the diluted share count was 643 for the Q4.

Now the share count should have come down. We're just scrambling to see what the numbers are. So -- we've gone from 590 basic down to 598 and that's really a function of the of the buyback to leave -- particularly...

On the diluted share count?

We need to take a look at that, Steve, and then come back to you. .

I would like to turn the call back over to John Giamatteo, CEO of BlackBerry for any closing remarks.

Terrific. Thank you, Betsy. Thanks, everybody, for being part of the call today. Before I wrap up, I just want to make a quick note that our QNX team is going to be in Boston on May 27 and 28 for the Robotics Summit and Expo, one of the industry's largest events. John Wall will be opening the conference as part of keynote there, and I'll also be on a panel with leaders from Amazon Robotics Universal Robots and Locus Robotics. The team will also be showcasing the latest of our QNX innovations and how we provide the trusted foundation that robotics and physical AI systems rely on to operate safely and predictably in the real world. So if you're in the air, please stop by. We'd love to see you there. And with that, thanks for joining today's call, and we'll see you all next time. .

This concludes today's call. Thank you for your participation. You may now disconnect.