Blackberry 2009 Annual Report Download - page 21

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The following table sets forth certain consolidated statement
of operations data expressed as a percentage of revenue for
the periods indicated:
For the Fiscal Year Ended
February 28,
2009 March 1, 2008 Change 2009/2008 March 3, 2007 Change 2008/2007
Revenue 100.0% 100.0% -100.0% -
Cost of sales 53.9% 48.7% 5.2% 45.4% 3.3%
Gross margin 46.1% 51.3% (5.2%) 54.6% (3.3%)
Expenses
Research and development 6.2% 6.0% 0.2% 7.8% (1.8%)
Selling, marketing and administration 13.5% 14.7% (1.2%) 17.7% (3.0%)
Amortization 1.8% 1.8% -2.5% (0.7%)
21.5% 22.5% (1.0%) 28.0% (5.5%)
Income from operations 24.6% 28.8% (4.2%) 26.6% 2.2%
Investment income 0.7% 1.3% (0.6%) 1.7% (0.4%)
Income before income taxes 25.3% 30.1% (4.8%) 28.3% 1.8%
Provision for income taxes 8.2% 8.6% (0.4%) 7.5% 1.1%
Net income 17.1% 21.5% (4.4%) 20.8% 0.7%
Revenue for fiscal 2009 was $11.07 billion, an increase of $5.06
billion, or 84.1%, from $6.01 billion in fiscal 2008. The number
of BlackBerry devices sold increased by approximately 12.2
million, or 88.7%, to approximately 26.0 million in fiscal 2009,
compared to approximately 13.8 million in fiscal 2008. Device
revenue increased by $4.32 billion, or 90.6%, to $9.09 billion,
reflecting primarily the higher number of devices sold.
Service revenue increased by $541.9 million to $1.40 billion,
reflecting the increase of approximately 11 million net new
BlackBerry subscriber accounts since the end of fiscal 2008.
Software revenue increased by $17.5 million to $251.9 million
in fiscal 2009 and Other revenue increased by $175.3 million
to $321.0 million in fiscal 2009.
The Company’s net income for fiscal 2009 was $1.89
billion, an increase of $598.7 million, or 46.3%, compared
to net income of $1.29 billion in fiscal 2008. Basic earnings
per share (“basic EPS”) was $3.35 and diluted earnings per
share (“diluted EPS”) was $3.30 in fiscal 2009 compared to
$2.31 basic EPS and $2.26 diluted EPS in fiscal 2008, a 46.0%
increase when compared to fiscal 2008.
The $598.7 million increase in net income in fiscal 2009
primarily reflects an increase in gross margin in the amount of
$2.02 billion, resulting primarily from the increased number of
device shipments, which was partially offset by the decrease
of consolidated gross margin percentage and by an increase
of $1.33 billion in the Company’s investment in research and
development, selling, marketing and administration expenses
and provision for income taxes, which included the negative
impact of $99.7 million due to the significant depreciation of
the Canadian dollar relative to the U.S. dollar in the fiscal year.
See “Income Taxes”.
On February 11, 2009, the Company issued a press release
updating its forecast of its net new subscriber accounts and
reaffirming its financial guidance of its revenue, gross margin
and EPS for the fourth quarter of fiscal 2009. A copy of the
press release is available on SEDAR at www.sedar.com and on
the SEC’s website at www.sec.gov.
A more comprehensive analysis of these factors is
contained in “Results of Operations”.
Critical Accounting Policies and Estimates
General
The preparation of the Consolidated Financial Statements
requires management to make estimates and assumptions
with respect to the reported amounts of assets, liabilities,
revenues and expenses and the disclosure of contingent
assets and liabilities. These estimates and assumptions
are based upon management’s historical experience and
are believed by management to be reasonable under the
circumstances. Such estimates and assumptions are evaluated
on an ongoing basis and form the basis for making judgments
about the carrying values of assets and liabilities that are not
readily apparent from other sources. Actual results could
differ significantly from these estimates.