Blackberry 2004 Annual Report Download - page 8

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Gross margins have continued to be strong and operating expenses have been declining sharply as a
percentage of sales. We have continued to invest heavily in research and development and in the global
expansion of our business. However, since the growth in expenses related to these investments is much lower
than RIM’s revenue growth rate, operating costs have declined as a percentage of sales. The combination of
these factors have led to a profitable year for RIM with earnings per share for fiscal 2004 of $0.62 versus a
loss per share of $(1.92) in the last fiscal year.
In January 2004, RIM completed an equity issue of approximately 12 million shares that raised over $900 million.
The proceeds from this offering increased the total cash resources on the balance sheet at the end of fiscal 2004 to
$1.49 billion. The strength of RIM’s balance sheet gives us the ability to fund capital expenditures, working capital
and expansion requirements as we move deeper into this high-growth stage of our business.
Going forward, we continue to expect leverage from our business model and anticipate continued revenue and
profitability growth in fiscal 2005.
RIM currently has approximately 2,200 employees around the world, with the majority based in our Waterloo,
Ontario headquarters. RIM also has offices in Ottawa and Mississauga in Canada, Dallas, Texas in the United
States, and in the United Kingdom, Germany, France, Italy, and Hong Kong. We plan to continue to hire and
grow our employee base to support our growth and global expansion efforts.
BlackBerry
The BlackBerry subscriber base surpassed one million users in the fourth quarter. These customers range
across a wide variety of industries including: government, which now represents in excess of 100,000 users;
financial services; real estate; legal; and many others. RIM also now has the majority of the largest carriers in
the world signed on as BlackBerry partners, and BlackBerry users can travel around the globe while having
access to their enterprise data and information.
RIM’s global carrier partnerships have been critical to BlackBerry’s success. Our carrier partners have
discovered that offering BlackBerry results in increased average revenue per user (ARPU) and lower churn in
their customer base, which are key metrics for measuring the profitability of their businesses. We support the
efforts of our carrier partners through the expansion of the number of applications supported both in the
enterprise and prosumer segments, through our BlackBerry Connect partnerships which will offer device
diversity to carriers and end-users, and through the continued global expansion of BlackBerry sales, service,
training and support.
Following the launch of our Mobile Data Service (MDS) last year we have seen meaningful growth with over
4,500 BlackBerry Enterprise ServersTM now passing MDS traffic. MDS allows corporate enterprise data to be
pushed to users’ handhelds using the same secure architecture that BlackBerry uses to deliver corporate email.
A broad array of applications are being enabled for our customers using MDS including Customer Relationship
Management systems such as those from Siebel Systems, Inc.; Sales Force Automation Systems such as
Salesforce.com; Enterprise Resource Planning systems such as SAP®; Web Services Platforms such as IBM
WebSphere®; vertical applications for industries such as real estate and healthcare; and efficient HTML
web-browsing capabilities.
BlackBerry Service
A hallmark of BlackBerry service has been its reliability and availability in times of crisis. This reliability has
earned us the trust and confidence of both our carrier partners and of end users. As we grow and expand the
BlackBerry subscriber base, and as BlackBerry becomes the standard on which large global carriers are
building their data offerings, it is essential that we continue to invest in maintaining this high level of service.