John Giamatteo: Yes. I think on this one, it’s — I think it’s going to be one of those things where as we go through the process, there is going to be some low-hanging fruit, some quick wins, some things that we can do really quickly that will save us some money, get the teams aligned, etc. And then there’ll be other ones that are going to take a little bit longer. But I think mid-calendar year, getting into a position where we can have the majority of the functions and capabilities within the two business units up and running and standalone, I think that would be success for us. I think there’ll be some straggling things. There might be some IT-related things that take a little bit longer to untangle and unwind and get them set up properly within the divisions, but that’s how we feel about IT. We want to move as fast as we possibly can.
Todd Copeland: That’s all for me. Thanks a lot.
John Giamatteo: Thanks, Todd.
Operator: The next question will come from Daniel Chan with TD Cowen. Please go ahead.
Daniel Chan: Yes. Thanks. John, I think your contract calls out some incentive for you to get the business to cash flow positive by Q1 fiscal 2025, which isn’t a lot of time considering how much work there is to do. So, appreciate that you highlighted some of the organic cost cuts that you’re thinking about. Just wondering if there are any other options you’re weighing at this point. In particular, your predecessor said he didn’t — he wasn’t really considering any asset sales to bring the business to profitability. Just wondering whether there are other options outside of the organic cost cuts you’re thinking about.
John Giamatteo: Yes. As I come into this, just a different fresh — new approach, not fresh, but just it’s, I want to look at all of our options. I think obviously, the organic things that you mentioned, Daniel, to me those are — that should be the majority of our time. Let’s streamline things, and let’s get the divisions up and running. That’s where the big money is going to be. At the same time, me coming in with a just a different perspective. I’ve been with the Company for a couple of years. I’ve come from this, so to take a look at some of the other assets that we have and decide whether or not do they make sense to be part of the Company, should — or is there opportunity to monetize it in some other way? The answer is yes.
I we’ll — my — I would be open to looking at all those kinds of things, but kind of in the spirit of 80%-20%, 80% of getting to cash flow positive is probably going to come from the organic stuff, but to the extent that we can find the 10%, 15%, 20% through some other things, that’s something we’ll absolutely take a look at.
Daniel Chan: That’s helpful. Thanks. Can you get to your targets just by cost cuts alone?
John Giamatteo: How about we’ll come back to you next quarter? I’d love to. But honestly, I’d love for us to get a little more growth out of the business. There’s two ways of getting to cash flow positive, and part of that is growth and part of that is taking the cost structure down. Obviously, since we — revenue has been a little bit lumpy, we’ve been focusing more on the cost side of things. But between trying to drive revenue, trying to focus on the cost, maybe looking at some of the assets, as you mentioned, all of these things go into the equation to get us to a better place a year from now.
Daniel Chan: Okay. That’s great. Maybe on the ARR a little bit. That metric continues to decline, and as you pointed out, it’s slowing, its declined. But I think the expectation was for that to have stabilized or even growing by now. What has been the source of its continued declines? And you called out, it’s stabilizing by next quarter. What’s giving you the confidence that it’s going to stabilize next quarter? Thank you.
John Giamatteo: Yes. We’ve had — from a stabilizing ARR perspective, we’ve had some — I would say, some churn that mostly has come from some of our UES customers, the smaller UES customers. We’ve had a little bit of UEM churn. So, renewal rates is something that we are focused on, and some of that will be improving the product, making it more stable. Our customers will stay with it. That’s part of the equation. The other is, some customers that maybe bet and said they’re going to move on, that — that’ll get flushed out. We’ll get to that low point. And I really do believe between the product stabilizing and the customers that maybe vocally said they were unhappy and have moved on, I think we’re really getting now to a point where we hit the — we’re bottoming out.
We’re hitting that point. And now as we get wins like Malaysia onto the board, that’ll start moving us in the other direction. We’ve had some other net new logo wins. That will start us moving in a better direction. So, I know we might be a quarter or so behind where we hope to be at this point, but I really am optimistic that we’re leveling that off and looking for — seeing prospects for growth as we go into next year.
Daniel Chan: Thanks, John.
John Giamatteo: All right. Thanks, Daniel.
Operator: This concludes our question-and-answer session. I would like to turn the conference back over to Mr. John Giamatteo, CEO of BlackBerry, for any closing remarks. Please go ahead, sir.
John Giamatteo: Perfect. Thank you, operator. So, let me just finish today just by reminding everybody that our IoT division will be showcasing a number of exciting developments in both QNX and IVY at CES in Las Vegas from January 9th to the 12th, as well as, we’ll be hosting the MotorTrend Software-Defined Vehicle Innovator Awards as well. So, there’ll be an investor-focused Q&A on Wednesday, January 10th, featuring members of the IoT leadership team. So, please look out for further details earlier in the new year on how you can join via live stream. So, thank you all for joining us here today, and I look forward to speaking to you again soon. Bye, everyone.
Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.
