Financial Analysis

COMMITMENTS AND CONTINGENCIES (a) Letters of Credit The Company had $14.2 million in collateralized outstanding letters of credit in support of certain leasing arrangements entered into in the ordinary course of business as of February 28, 2026. The Company has posted a performance bond as collateral to support a government contract for the term of the agreement. See the discussion of restricted cash in Note 4. (b) Contingencies Litigation The Company is involved in litigation in the normal course of its business, both as a defendant and as a plaintiff. The Company is subject to a variety of claims (including claims related to patent infringement, purported class actions and other claims in the normal course of business) and may be subject to additional claims either directly or through indemnities against claims that it provides to certain of its partners and customers. In particular, the industry in which the Company competes has many participants that own, or claim to own, intellectual property, including participants that have been issued patents and may have filed patent applications or may obtain additional patents and proprietary rights for technologies similar to those used by the Company in its products. The Company has received, and may receive in the future, assertions and claims from third parties that the Companys products infringe on their patents or other intellectual property rights. Litigation has been, and will likely continue to be, necessary to determine t …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

INCOME TAXES A reconciliation of the provision for income taxes to the amount computed by applying the 15% (1) statutory Canadian federal income tax rate to income before income taxes after the adoption of ASU 2023-09 is as follows: For the Year Ended February 28, 2026 Amount Percent Tax at Canadian Statutory Rate $ 8.9 15.0 % Provincial taxes, net of federal tax effect (2) (0.1) (0.2) % Foreign Tax Effects United States Foreign federal rate differences 0.4 0.7 % State and local income taxes (0.5) (0.8) % Prior period adjustment 0.4 0.7 % Non-deductible compensation 1.1 1.9 % Research and development tax credits (0.1) (0.2) % Other (0.2) (0.3) % Valuation allowance (2.1) (3.6) % Germany Foreign federal rate differences (0.3) (0.5) % State and local income taxes 1.4 2.4 % Korea 0.5 0.8 % Other foreign jurisdictions 0.4 0.7 % Changes in Valuation Allowances (3.4) (5.8) % Investment Tax credits (3.3) (5.6) % Nontaxable and Nondeductible items Share-based payment awards 2.3 4.0 % Others 0.2 0.3 % Changes in Unrecognized Tax Benefits 0.2 0.3 % Other Adjustments % Effective Tax Rate $ 5.8 9.8 % ______________________________ (1) This represents the Canadian federal statutory income tax rate, which is 15% after a 13% general tax reduction and 10% federal tax abatement are applied to the 38% basic rate. (2) Provincial taxes in Ontario made up the majority of the tax effect in this category. The difference between the amount of the provision for (recovery of) income taxes and the amou …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

LEASES The Company has operating leases primarily for corporate offices, vehicle, data center and research and development facilities. The Companys leases have remaining lease terms of between one month and ten years, some of which may inc lude options to extend the lease for up to 10 years, and some of which may include options to terminate the lease within three months. The components of lease expense were as follows: For the Years Ended February 28, 2026 February 28, 2025 February 29, 2024 Operating lease cost, included in general and administrative $ 8.9 $ 13.1 $ 17.8 Supplemental cash flow information related to leases was as follows: For the Years Ended February 28, 2026 February 28, 2025 February 29, 2024 Cash used in operating activities related to operating lease payments $ 17.5 $ 20.6 $ 27.8 During the year ended February 28, 2026, the Company entered int o $3.4 million (February 28, 2025 - $7.5 million) in lease obligations and recognized a corresponding ROU asset of $3.4 million (February 28, 2025 - $7.5 million). During the year ended February 28, 2026, the Company incurred losses of $1.2 million (February 28, 2025 - $6.9 million; February 29, 2024 - $6.9 million) on LLA impairment of ROU assets, as described in Note 4. The Company also had sublease income during the year ended February 28, 2026 of $3.9 million (February 28, 2025 - $3.9 million; February 29, 2024 - $3.6 million) and incurred short-term lease costs of $2.2 million (February 28, 2025 - $2.3 million …

LesseeOperatingLeasesTextBlock · excerpt; the full note is in the filing

DEBENTURES 3.00% Convertible Senior Notes On January 29, 2024, the Company issued $200.0 million aggregate principal amount of 3.00% senior convertible unsecured notes (the Notes and, collectively with the Extension Debentures and 2020 Debentures, the Debentures) in an offering to qualified institutional buyers in accordance with Rule 144A under the Securities Act of 1933, as amended. The Notes are due on February 15, 2029 unless earlier converted, redeemed, or repurchased. Each $1,000 principal amount of the Notes is convertible into 257.5826 common shares of the Company based on the initial conversion rate, for a total of 52 million common shares at a price of $3.88 per share, subject to adjustments. Prior to the close of business on the business day immediately preceding November 15, 2028, the Notes are convertible only upon satisfaction of certain conditions and during certain periods, and thereafter, at any time until the close of business on the second scheduled trading day immediately preceding February 15, 2029. The Company may satisfy any conversions of the Notes by paying or delivering, as the case may be, cash, its common shares or a combination of cash and its common shares, at the Companys election (or, in the case of any Notes called for redemption that are converted during the related redemption period, solely its common shares). Covenants associated with the Notes include general corporate maintenance, existence and reporting requirements. The Notes bear inter …

LongTermDebtTextBlock · excerpt; the full note is in the filing

Restructuring During fiscal 2025 and fiscal 2024, the Company commenced restructuring programs with the objectives of reducing its annual costs and expenses. Other charges and cash costs may occur as programs are implemented or changes are completed. The following table sets forth the activity in the Companys restructuring program liabilities for fiscal 2026 and fiscal 2025: Employee Termination Benefits Facilities and Other Charges (1) Total Balance as at February 29, 2024 $ 16.8 $ 4.3 $ 21.1 Charges incurred 21.3 4.8 26.1 Cash payments made (31.0) (5.8) (36.8) Balance as at February 28, 2025 7.1 3.3 10.4 Charges incurred 11.9 3.8 15.7 Cash payments made (12.7) (5.1) (17.8) Balance as at February 28, 2026 $ 6.3 $ 2.0 $ 8.3 Current portion $ 6.3 $ 0.7 $ 7.0 Long-term portion 1.3 1.3 $ 6.3 $ 2.0 $ 8.3 ______________________________ (1) Other charges primarily consist of costs associated with system transformation to streamline corporate functions into QNX and Secure Communications. The long-term portion of the restructuring liabilities is recorded by measuring the remaining payments at present value using an effective interest ra te of 4.9%, and the C ompany recorded interest expense over time to arrive at the total face value of the remaining payments. The restructuring charges included employee termination benefits, facilities and other charges . Total charges incurred in fiscal 2026, 2025 and 2024 wer e $15.7 million, $26.1 million and $37.3 million, respectively, recorded …

RestructuringAndRelatedActivitiesDisclosureTextBlock · excerpt; the full note is in the filing

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 Companys reportable operating segments. The CODM, who is the CEO of the Company, makes decisions and assesses the performance of the Company using three operating segments. 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 organized and managed as three operating segments: QNX, Secure Communications, and Licensing. The following table shows information by reportable operating segment for the fiscal year ended February 28, 2026: For the Year Ended QNX Secure Communications Licensing Segment Totals Segment revenue $ 268.0 $ 258.9 $ 22.2 $ 549.1 Segment cost of sales 45.4 77.2 6.1 Segment adjusted gross margin (1) $ 222.6 $ 181.7 $ 16.1 $ 420.4 ______________________________ (1) A reconciliation of total segment adjusted gross margin to consolidated pre-tax income from continuing operations is set forth below. The following table shows information by reportable operating segment for the years ended February 28, 2025 and February 29, 2024: For the Years Ended QNX Secure Communications Licensing Segment Totals Feb 28 Feb 29 Feb 28 Feb 29 Feb 28 Feb 29 Feb 28 Feb 29 2025 2 …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing

BLACKBERRY LIMITED AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND CRITICAL ACCOUNTING ESTIMATES BlackBerry Limited (the Company) provides enterprises and governments the intelligent software and services that power the world around us. Based in Waterloo, Ontario, the Companys high-performance foundational software enables major automakers and industrial giants alike to unlock transformative applications, drive new revenue streams and launch innovative business models, all without sacrificing safety, security, and reliability. With a deep heritage in Secure Communications, the Company delivers operational resiliency with a comprehensive, highly secure, and extensively certified portfolio for mobile fortification, mission-critical communications, and critical events management. The Companys common shares trade under the ticker symbol BB on the New York Stock Exchange and the Toronto Stock Exchange. Basis of Presentation and Preparation The consolidated financial statements include the accounts of all subsidiaries of the Company with intercompany transactions and balances eliminated on consolidation. All of the Companys subsidiaries are wholly owned. These consolidated financial statements have been prepared by management in accordance with United States generally accepted accounting principles (U.S. GAAP) on a basis consistent for all periods presented, except as described in Note 2. Certain of the comparative figures have been reclassified to conform to the current years p …

SignificantAccountingPoliciesTextBlock · excerpt; the full note is in the filing

COMMITMENTS AND CONTINGENCIES (a) Letters of Credit The Company ha d $14.2 million in collateralized outstanding letters of credit in support of certain leasing arrangements entered into in the ordinary course of business as of May 31, 2026. The Company has posted a performance bond as collateral to support a government contract for the term of the agreement. See the discussion of restricted cash in Note 2. (b) Contingencies Litigation The Company is involved in litigation in the normal course of its business, both as a defendant and as a plaintiff. The Company is subject to a variety of claims (including claims related to patent infringement, purported class actions and other claims in the normal course of business) and may be subject to additional claims either directly or through indemnities against claims that it provides to certain of its partners and customers. In particular, the industry in which the Company competes has many participants that own, or claim to own, intellectual property, including participants that have been issued patents and may have filed patent applications or may obtain additional patents and proprietary rights for technologies similar to those used by the Company in its products. The Company has received, and may receive in the future, assertions and claims from third parties that the Companys products infringe on their patents or other intellectual property rights. Litigation has been, and will likely continue to be, necessary to determine the s …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

INCOME TAXES For the three months ended May 31, 2026, the Companys net effective income tax expense rate was approximately 48% compared to a net effective income tax expense rate of 61% for the three months ended May 31, 2025. The Companys income tax rate reflects the change in unrecognized income tax benefit, if any, and the fact that the Company has a sign ificant valuation allowance against its deferred income tax assets; in particular, any change in loss carry forwards or research and development credits, amongst other items, is offset by a corresponding adjustment of the valuation allowance. The Companys net effective income tax rate also reflects the geographic mix of earnings in jurisdictions with different income tax rates. The Company records a valuation allowance to reduce deferred income tax assets to the amount that is more likely than not to be realized. The Company assesses the need for a valuation allowance on its deferred tax assets each reporting period. In assessing the realizability of deferred tax assets, the Company considers both positive and negative evidence, to determine whether, based upon the weight of that evidence, it is more likely than not that the Companys deferred tax assets will not be realized and a valuation allowance is required. This assessment involves significant judgment, particularly with respect to the relative impact of such evidence. All available evidence, both positive and negative, that may affect the realization of deferred tax …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

LONG-TERM NOTES On January 29, 2024, the Company issued $200.0 million aggregate principal amount of 3.00% senior convertible unsecured notes (the Notes) in an offering to qualified institutional buyers in accordance with Rule 144A under the Securities Act of 1933, as amended. The Notes are due on February 15, 2029 unless earlier converted, redeemed, or repurchased. Each $1,000 principal amount of the Notes is convertible into 257.5826 common shares of the Company based on the initial conversion rate, for a total of 52 million common shares at a price of $3.88 per share, subject to adjustments. Covenants associated with the Notes include general corporate maintenance, existence and reporting requirements. The Notes bear interest at a rate of 3.00% per annum, payable semi-annually in arrears on February 15 and August 15 of each year, beginning on August 15, 2024. Prior to the close of business on the business day immediately preceding November 15, 2028, the Notes will be convertible only upon satisfaction of specified conditions, including the trading price of the Companys common shares. The trading price condition is met during any calendar quarter commencing after March 31, 2024, if for at least 20 trading days (whether or not consecutive) within the 30 consecutive trading day period ending on the last trading day of the immediately preceding calendar quarter, the last reported sale price of the Companys common shares was greater than or equal to 130% of the applicable conve …

LongTermDebtTextBlock · excerpt; the full note is in the filing

Accounting Standards Adopted During Fiscal 2027 In July 2025, the FASB issued ASU 2025-05 to amend the guidance in Financial InstrumentsCredit Losses (Topic 326). The amendment provides guidance for entities that elect to apply the practical expedient when estimating expected credit losses on current accounts receivable and current contract assets arising from transactions under Topic 606, including those assets acquired in a transaction accounted for under Topic 805, business combinations. Under the practical expedient, entities assume that current conditions as of the balance sheet date do not change for the remaining life of the asset. ASU 2025-05 is effective for fiscal years beginning after December 15, 2025, including interim periods within those fiscal years. The Company adopted ASU 2025-05 in the first quarter of fiscal 2027 and has elected to apply the practical expedient prospectively. The adoption of this guidance did not have, and is not expected to have, a material impact on the Companys consolidated financial statements. Accounting Pronouncements Not Yet Adopted In November 2024, the FASB issued ASU 2024-03 to amend the codification on Expense Disaggregation Disclosure (Subtopic 220-40): Income Statement - Reporting Comprehensive Income. The standard requires additional disclosure on specific expense categories included in the expense captions presented on the statements of operations. The guidance is effective for annual periods beginning after December 15, 202 …

NewAccountingPronouncementsPolicyPolicyTextBlock · excerpt; the full note is in the filing

Restructuring During fiscal 2025 and fiscal 2024, the Company commenced restructuring programs with the objective of reducing its annual costs and expenses. Other charges and cash costs may occur as programs are implemented or changes are completed. The following table sets forth the activity in the Companys restructuring program liabilities: Employee Termination Benefits Facilities and Other Charges Total Balance as at February 28, 2025 $ 7.1 3.3 10.4 Charges incurred 11.9 3.8 15.7 Cash payments made (12.7) (5.1) (17.8) Balance as at February 28, 2026 6.3 2.0 8.3 Charges incurred (recovered) 0.8 (0.5) 0.3 Cash payments made (3.5) (0.4) (3.9) Balance as at May 31, 2026 $ 3.6 $ 1.1 $ 4.7 Current portion $ 3.6 $ 0.3 $ 3.9 Long-term portion 0.8 0.8 $ 3.6 $ 1.1 $ 4.7 The long-term portion of the restructuring liabilities is re corded by measuring the remaining payments at present value u sing an effective interest rate of 5.3%, and the Company recorded interest expense over time to arrive at the total face value of the remaining payments. The restructuring charges included employee termination benefits, facilities and other charges primarily associated with system transformation to streamline corporate functions into QNX and Secure Communications. Total charges incurred for the three months ended May 31, 2026 and May 31, 2025 were $0.3 million and $2.9 million, respectively, recorded within General and administrative on the Consolidated Statements of Operations. …

RestructuringAndRelatedActivitiesDisclosureTextBlock · excerpt; the full note is in the filing

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 Companys reportable operating segments. The CODM, who is the CEO of the Company, makes decisions and assesses the performance of the Company using three operating segments. 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 organized and managed as three operating segments: QNX, Secure Communications, and Licensing. The following table shows information by reportable operating segment for the three months ended May 31, 2026 and May 31, 2025: For the Three Months Ended QNX Secure Communications Licensing Segment Totals May 31, May 31, May 31, May 31, 2026 2025 2026 2025 2026 2025 2026 2025 Segment revenue $ 72.3 $ 57.5 $ 73.6 $ 59.5 $ 7.0 $ 4.7 $ 152.9 $ 121.7 Segment cost of sales 10.4 11.2 20.8 18.1 1.5 1.6 Segment adjusted gross margin (1) $ 61.9 $ 46.3 $ 52.8 $ 41.4 $ 5.5 $ 3.1 $ 120.2 $ 90.8 ______________________________ (1) A reconciliation of total segment adjusted gross margin to consolidated pre-tax income is set forth below. QNX consists of BlackBerry QNX, BlackBerry Radar, BlackBerry Certicom, and other QNX applications. QNX revenue is generated predominant …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND CRITICAL ACCOUNTING ESTIMATES Basis of Presentation and Preparation These interim consolidated financial statements have been prepared by management in accordance with United States generally accepted accounting principles (U.S. GAAP). They do not include all the disclosures required by U.S. GAAP for annual financial statements and should be read in conjunction with the audited consolidated financial statements of BlackBerry Limited (the Company) for the year ended February 28, 2026 (the Annual Financial Statements), which have been prepared in accordance with U.S. GAAP. In the opinion of management, all normal recurring adjustments considered necessary for fair presentation have been included in these interim consolidated financial statements. Operating results for the three months ended May 31, 2026 are not necessarily indicative of the results that may be expected for the full year ending February 28, 2027. The consolidated balance sheets as at February 28, 2026 were derived from the audited Annual Financial Statements but do not contain all of the footnote disclosures from the Annual Financial Statements. The preparation of the consolidated financial statements requires management to make estimates and assumptions with respect to the reported amounts of assets, liabilities, revenue and expenses and the disclosure of contingent liabilities. Actual results could differ from these estimates and any such differences may be mat …

SignificantAccountingPoliciesTextBlock · excerpt; the full note is in the filing