Blackberry 2005 Annual Report Download - page 8

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6
Finance & Administration
Fiscal 2005 was marked by strong revenue and earnings growth driven by increasing gross margins and
prudent cost management. While hardware represented the largest percentage of revenue last year, both
service and software revenue, particularly with the introduction of BlackBerry Enterprise Server v4.0 last
fall, are increasingly contributing to the top-line growth and margin expansion.
Net income in fiscal 2005 grew substantially. Diluted earnings per share for fiscal 2005 increased 252%
over the prior fiscal year. Factors contributing to this performance were strong revenue growth, increased
gross margins and effective operating expense management. Gross margin performance during the year
was impacted primarily by shifts in product mix and ongoing economies of scale in our hardware and
services businesses. We expect earnings to continue to grow in fiscal 2006.
Operating expenses decreased as a percentage of sales in
fiscal 2005 as top-line growth outpaced the growth in Sales,
Marketing & Administration and Research & Development
costs. We believe that leverage remains in RIM’s business
model to enable continued earnings growth going forward.
RIM has a strong balance sheet with approximately $1.7 billion
in cash and cash equivalents, short-term investments and
investments at year end and virtually no debt. Cash balances
continue to grow as we generate significant cash flow from
operations. During fiscal 2005 RIM generated over $200 million
in cash.
At the end of fiscal 2005, RIM had approximately 3,500
employees around the world. We continue to hire in key areas,
particularly in R&D and carrier support teams. In addition
to offices in Canada, RIM now has offices in the U.S., U.K.,
Germany, France, Italy, Hong Kong, Australia and Singapore.
BlackBerry Update
The doubling of the BlackBerry subscriber base to 2.5 million users in fiscal 2005 was driven by a number of
factors including new carrier launches, continued geographic expansion, new hardware and software product
offerings, new carrier marketing programs and the availability of value-added applications from BlackBerry
software partners.
There are now over 95 carriers selling BlackBerry in over 40 countries around the world. This is almost double
the number we had at this time last year and we expect to launch BlackBerry with upwards of 100 new carriers
this year. Carriers are increasingly recognizing that the high average revenue per user (ARPU) and low churn of
the average BlackBerry customer is good for their business and are devoting greater resources to the
promotion of BlackBerry in their enterprise and retail channels.
Enterprise Market
BlackBerry continues to be the leader in the enterprise market. At the end of fiscal 2005 there were
approximately 42,000 installations of BlackBerry Enterprise Servers and we expect this number to continue to
grow in fiscal 2006. The response to the new release of BlackBerry Enterprise Server v4.0 has been excellent,
and a high number of our existing customers have already upgraded to the new version. BlackBerry Enterprise
Server v4.0 offers enhanced manageability, ease of deployment and security features for IT managers and
increased functionality and ease-of-use for users.
01 02 03 04 05
Employee Growth
1256
1950 1847
2223
3555