Blackberry 2007 Annual Report Download - page 50

48
RESEARCH IN MOTION LIMITED
management’s discussion and analysis of financial
condition and results of operations continued
FOR THE THREE MONTHS AND FISCAL YEAR ENDED MARCH 3, 2007
Revenue
Revenue for the fourth quarter of fiscal 2007 was $930.4
million, an increase of $369.2 million, or 65.8%, from $561.2
million in the fourth quarter of fiscal 2006.
A comparative breakdown of the significant revenue
streams is set forth in the following table:
Q4 Fiscal 2007 Q4 Fiscal 2006 Change - Fiscal
2007/2006
Number of devices sold 2,029,000 1,118,000 911,000 81.5%
ASP $ 336 $ 350 $ (13)(3.8%)
Revenues
Devices $ 682,766 73.4% $ 390,961 69.7% $ 291,805 74.6%
Service 172,131 18.5% 116,672 20.8% 55,459 47.5%
Software 49,259 5.3% 28,968 5.2% 20,291 70.0%
Other 26,237 2.8% 24,618 4.3% 1,619 6.6%
$ 930,393 100.0% $ 561,219 100.0% $ 369,174 65.8%
Device revenue increased by $291.8 million, or 74.6%, to
$682.8 million, or 73.4% of consolidated revenue, in the fourth
quarter of fiscal 2007 compared to $391.0 million, or 69.7%,
of consolidated revenue in the fourth quarter of fiscal 2006.
This increase in device revenue over the prior year’s period
is attributable to the volume increase of 911,000 devices, or
81.5%, to approximately 2,029,000 devices sold in the fourth
quarter of fiscal 2007, compared to approximately 1,118,000
devices sold in the fourth quarter of fiscal 2006, partially
offset by a decrease of $13 or 3.8% in ASP to $336 in the
current quarter from $350 in the comparable period last year.
The Company estimates that a $10, or 3.0%, change
in overall ASP would result in a quarterly revenue change
of approximately $20 million, based upon the Company’s
volume of devices shipped in the fourth quarter of fiscal 2007.
Service revenue increased $55.4 million, or 47.5%, to $172.1
million and comprised 18.5% of consolidated revenue in the
fourth quarter of fiscal 2007, compared to $116.7 million, or
20.8%, of consolidated revenue in the fourth quarter of fiscal
2006. BlackBerry subscriber account additions increased
by net 1.0 million to approximately 8 million subscriber
accounts as at March 3, 2007 with approximately 28% of RIM’s
subscriber account base being outside of North America,
compared to an increase of net 625,000 during the fourth
quarter of fiscal 2006 to approximately 4.9 million subscriber
accounts as at March 4, 2006. The increase in subscriber
accounts in the fourth quarter of fiscal 2007 compared to
the third quarter of fiscal 2007 additions of approximately
net 875,000 primarily reflects the impact of the new product
launches.
Software revenue increased $20.3 million, or 70.0%, to
$49.3 million and comprised 5.3% of consolidated revenue in
the fourth quarter of fiscal 2007, compared to $29.0 million, or
5.2%, of consolidated revenue, in the fourth quarter of fiscal
2006.
Other revenue, which primarily includes accessories,
repair and maintenance programs and NRE, increased by
$1.6 million to $26.2 million in the fourth quarter of fiscal 2007
compared to $24.6 million in the fourth quarter of fiscal 2006.
The majority of the increase was attributable to increases in
sales of accessories and non-warranty repair revenue.
Gross Margin
Gross margin increased by $188.8 million, or 61.2%, to $497.4
million, or 53.5% of revenue, in the fourth quarter of fiscal
2007, compared to $308.5 million, or 55.0% of revenue, in the
same period of the previous fiscal year. The 1.5% decline in
consolidated gross margin percentage was primarily due to
a higher percentage of device shipments which comprised
73.4% of the total revenue mix in the fourth quarter of fiscal
2007 compared to 69.7% in the fourth quarter of fiscal 2006
as well as changes in the BlackBerry device mix. Gross
margin percentage for devices are generally lower than the
Company’s consolidated gross margin percentage. The
decrease in gross margin percentage relating to the increase